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Energy Providers

This has been a useful debate and the statement we heard before it was extremely helpful. I thank the Secretary of State for acknowledging, in response to interventions from me and my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith), that the Department will engage with the issue of domestic fuel prices. I hope that the Minister will take that forward. To reinforce that message, it is estimated that 4 million people are not on the gas mains; they are losing out because they do not have access to dual tariffs and the rebates that go with them. Many are dependent on fuel oil for their central heating, but its price has gone up hugely and it is not coming down. It is important for the Government to understand that those people simply do not have an option. I have two further points on that. The first is about what the Government can do to ensure that fuel prices come down in a way comparable to other prices. A Library briefing shows the extent to which prices have gone up, with graphs demonstrating domestic fuel oil spiking way above all the other prices that none the less seem to get more attention. Secondly, technical innovation is important. I should perhaps declare an interest as one who, like many of my constituents, lives in a rural village and is dependent on fuel oil for central heating. One issue of concern—it is an old one—is the gas main. Since the privatisation of gas, the extension of the gas main has almost stopped, yet a significant number of communities, villages and towns could access gas if someone were prepared to connect them to the mains. Gas companies tend to say, ““Go and find us a market, and we will consider whether we will supply it””. The Government could do more to encourage the extension of the gas main. The Government could also help people to find alternative technologies—preferably renewable energy technologies, which are much more efficient. Most people do not want oil. They would much prefer a more environmentally friendly source, but they need help to find out what it is. At the moment, the technical innovation advisory services do not provide any useful answers. I really hope that the new Department will view that as something to which it could usefully devote its attention. The role of smart metering has been discussed in a valuable way, and I note that my hon. Friend the Member for Northavon (Steve Webb) put forward an interesting idea. I understand the issues raised in that context but, after all, competition and its effectiveness are also about information. The Secretary of State clearly acknowledged that the current system does not work very well. My hon. Friend put forward an idea that has merit, but we need to work together to try to find ways of giving people the real ability to make intelligent choices that will help them get the best fuel bills and make competition work more effectively. I shall be brief, as I want to give the Minister time to reply, but my other main point is about fuel poverty. According to NEA, the fuel poverty group, 5.2 million households now face fuel poverty. The figures on pensioners that my hon. Friend the Member for Northavon provided from a Library analysis were also pretty startling. It boils down to this: I do not know of anyone who is not concerned about their fuel bills, irrespective of whether they consider themselves fuel poor. An increasing proportion of almost every household's income is going on fuel bills. In the long run, we need a low-carbon energy system, but we need the transition to take place in circumstances in which people are not faced with violent peaks and troughs, which make it difficult for people to adjust. I thus wholly support the objectives of the new Department and the low-carbon strategy, but I urge the Government to help the industry bring on new low-carbon technologies faster. I hope that they will be able to achieve that, as it is what many people are looking for. I understand why the Secretary of State said that he wanted to proceed slowly, but the Government will have to look further into the law on regulation. It seems to me that if action is going to be taken to require energy companies to pass on changes to prices efficiently and to provide social tariffs, it will have to be done within the framework of new regulations for Ofgem. I do not see how the Government can achieve their objective otherwise. I also think that that would be a far better answer than windfall taxes, to which I have an inherent resistance. I believe that they damage the market in the long term, and discourage investment. Let me issue a plea that I consider important. The Minister has been responsible for this matter in the past. I was encouraged by the Prime Minister's comments to the Liaison Committee in July, which the Minister effectively reflected today. The Government have acknowledged—somewhat late in the day, but I welcome it—that we have passed the peak of oil and gas production from the United Kingdom North sea and that it will be more difficult to get the rest of it out. However, there is a lot of it out there, potentially nearly as much as we already have. I find it very encouraging that the Government now appear to understand that sudden tax changes and treating the industry as a revenue source is not the answer. What the industry needs is the confidence to invest in the long term in a highly competitive environment in which the North sea is very expensive. We have built up an infrastructure—especially in my part of the country, the north-east of Scotland—that is servicing the world in oil and gas and offshore technology and that is hugely valuable to the British economy in a variety of ways. I hope that the Government, through PILOT and in partnership, will ensure that we maximise our own production at the same time as moving towards a more low-carbon economy and more diversified energy provision. Climate change issues affect the rest of the world as well, and I hope that the Government will not allow us to adopt policies in this country that penalise the poorest countries in the world. We must recognise that what we do here must be in partnership with poor countries, and that we must enable them to cope with the real challenges that they face. In the last two weeks, the World Bank has pointed out that whereas at the beginning of the year 1 billion people were living on less than $1 a day, the figure is now 1.4 billion. Those people simply cannot cope unless we treat them as partners in the enterprise.