13:13 Ed Davey (Liberal Democrat)

I wish to make progress and to talk about energy and climate change policy. My Department has three major objectives. The Department wants to ensure that energy is as affordable as possible for consumers and business; that we keep the lights on with energy security; and that we decarbonise the power sector. With the Energy Bill, the green deal and many other policies, we have the most coherent energy and climate change policy of any Government in Europe—and indeed of any Government in this country for many, many years. Our approach also tries to maximise the jobs and growth potential from our energy and climate change policies. We also try to ensure that the impact on the bills of consumers and businesses is as low as possible, and we have policies to try to meet the climate change challenge.

I am disappointed that my hon. Friend seeks to deny the science of climate change. He may have heard Sir John Beddington, the Government’s recently retired chief scientist and a very distinguished scientist, say that the science showing climate change was human-made was “unequivocal”. When it comes to science, I like to listen to the experts.

On prices, we have to drive a wedge between the rising global prices and the bills that people have to pay. We also have to rise to the climate change challenge. We need to recognise that the challenge is serious and that—contrary to what my hon. Friend suggests—the science tells us that we have to act.

Around 1 million people work in the green economy, and the support that we are giving to clean energy will fuel the rise in the area. Between now and 2020, the support we give to renewables will increase year on year to £7.6 billion—a tripling of the support for renewable energy and a record the Government can be proud of. We already have 110,00 jobs in the renewable energy sector directly, and 160,000 jobs in the supply chain. By 2020, we believe the sector will have more than 400,000 jobs.

We also have the prospect of a new generation of nuclear power stations. I am engaged in discussions with EDF for a proposed nuclear reactor at Hinkley Point C. If we reach agreement, it will result in more than 5,500 jobs during construction, more than 1,000 ongoing jobs at Hinkley Point C and more in the supply chain. Our proposals on carbon capture and storage—we have two preferred bidders, Peterhead in Aberdeenshire and White Rose in Yorkshire—will also result in lots of jobs and deliver a pathway to commercial CCS in the next decade, which will be very important in meeting our climate change targets.

We sometimes forget the oil and gas sector, perhaps because it is not as green as renewables, nuclear and CCS, but it will be essential as we make the transition from a fossil-fuel economy to a low-carbon economy. We will still need an awful lot of gas and oil during that process and in the next few decades. I am delighted to report to the House that investment in the North sea is booming. We are seeing record levels of investment in the North sea, which is good for our energy security as we do not have to import so much gas from other parts of the world. I hope that right hon. and hon. Members will welcome that.

I have made it clear that we will also support the development of shale gas. If it has potential—and we do not know that yet—it could be beneficial, especially to our energy security. We are going to need gas for many decades. It replaces coal, so it can help us to meet our climate change targets. At the moment, we have to import increasing amounts as the amount coming from the North sea is declining. If we can exploit shale gas commercially, that will make sense, and I hope that we can reach agreement on that. We are going about this in a way that is designed to keep the public with us. In other countries that have rushed headlong into it, the public have reacted very badly, leading to moratoriums and bans. We want to ensure that we think things through carefully, which will help us do it properly.

All our policies, whether on energy efficiency, renewables, new nuclear, CCS or oil and gas, add up to the proposition that my Department is about growth. We are seeing a lot of jobs created and we will see more in the future. However, I am also concerned about the bills and the cost of energy, and how those affect our constituents and industry. We have seen global gas prices increase dramatically. UK wholesale gas prices were 50% higher in the five years to 2011 than in the previous five, and they have continued to rise since then. That is the global context. People talk about the reduced price of gas in north America, but they forget to look at the price of gas in other markets, which has gone up significantly.

The impact of our climate change and energy policies has been to reduce household bills by 5%. By 2020, bills will be 11% less than they otherwise would have been. We know, of course, that energy prices are going up globally, but we have the policies to try to cushion people. As a result, people will pay lower bills than they otherwise would have done.

We must ensure that business energy costs are, through climate change policies, similar across the EU and the globe. One measure that the UK and the EU have pushed is the European carbon market, which is often known as the EU ETS. It is important that the EU ETS carbon price provides incentives and signals to the markets for investment in low carbon, and that it creates a level playing field for industries across the EU. I regret that the vote in the European Parliament on the back-loading proposals was lost by 19 votes. The proposals were part of the reform of the EU ETS. We need to do a lot better. I hope that the ENVI Committee in the European Parliament can come forward with another package so that we can reform the carbon market. That is in everyone’s interest, not just on climate change, but to ensure that we have competitive industries on a level playing field across the European Union.

I want to end by talking briefly about climate change. Some will say that we should put off action on climate change until we get to better financial times, and some will say that we should not be looking at this issue at the moment given our financial and economic problems. I reject those arguments completely. The science of climate change is unequivocal: we have to act now and we should have acted before. That is why we need to reform the EU ETS. It is about not just the back-loading proposals, but structural reform. I am working with fellow EU Ministers and have set up a like-minded group—the Green Growth group—to try to build a coalition at the European Council, so that we can achieve these vital reforms on climate change.

There has been a big debate during the passage of the Energy Bill—a carry-over Bill in the Queen’s Speech—on the proposal for a decarbonisation target, which has a role to play in tackling climate change. Of the general election manifestos from the Liberal Democrats, the Conservatives, the Labour party and even the Green party, guess how many mentioned a decarbonisation target for the power sector? Not a single one. When we published the draft Energy Bill in May 2012, it did not contain a decarbonisation target, and there was no decarbonisation target promised in the coalition agreement. Now we have one in the Bill. The Government have looked at the issue and put the target in the Bill. We are the first Government ever to do that, and it is a very strong move. We are an early mover. The Opposition want to carp at one or two details, but I am afraid that they fail to acknowledge what we have done and what we have delivered.

Does my right hon. Friend agree that, whether or not people are sceptical about climate change, reducing our reliance on fossil fuels and carbon is equally as important to energy security as it is to climate change? This policy is very important in making sure that we have energy security in this country.

My hon. Friend is absolutely spot on. I believe that the climate change science is unambiguous and that we have to act on that basis, but he is absolutely right: there are other reasons to invest in low carbon and energy efficiency. It is important that this country takes a lead on climate change by working with EU colleagues to reform the EU ETS and the European carbon market, by including the decarbonisation target in the Energy Bill, which we have done, and by taking various other measures. Other countries are looking at our measures on electricity market reform and our green deal because they believe that we are leading the way.

All those measures are critical in the run-up to 2015, which is when the climate change talks will take place in France, probably in Paris. During the climate change talks in Durban in 2011 the world agreed to sign a legally binding global treaty at the climate change talks in 2015. This will be a critical moment in the global battle against climate change. We need to ensure that our international legal obligations apply to everyone in the world, not just to Europe or the Kyoto protocol nations. Having agreed in Durban to do that in 2015, we now have to prepare the way to make it a success. Our work here and with the EU is critical because it will enable us to sign a treaty in 2015.

I am grateful to the Opposition for how they have debated energy policy over recent months, particularly on the Energy Bill. I have seen a desire to build a consensus, which is really important, because investment to tackle our energy challenges and climate change are, by their very nature, long term, and the investment framework that one builds needs to span not just one Parliament or one Government, but several Parliaments and Governments into the foreseeable future. Building a consensus is critical for successful policies that are as cheap and effective as possible. I look forward to hearing what the right hon. Member for Don Valley (Caroline Flint) has to say. I am sure that she wants to add to that consensus.

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14:05 Mrs Caroline Spelman (Meriden) (Con)

I support the Gracious Speech and commend the Secretary of State for Energy and Climate Change on the important measures that he has outlined, which will help the hard-working families in my west midlands constituency with the cost of living.

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15:21 Mike Crockart (Edinburgh West) (LD)

Energy education for consumers is also key. I have spoken in previous debates about the necessity of reducing energy use. Reduction is the one step that will not only help households to reduce their bills, but help us to achieve a greener future. To quote from the report by the Energy and Climate Change Committee,

“Demand-side measures…are potentially the cheapest methods of decarbonising our electricity system…reducing overall demand”.

The Government have a once-in-a-generation opportunity to decarbonise and ensure that there is a more competitive energy sector in the future. I am proud that we are seizing that opportunity while delivering policies to help families with the cost of living and investing in the future of our economy.

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15:52 David T. C. Davies (Monmouth) (Con)

May I turn to the comments made earlier about our energy policy by the Secretary of State for Energy and Climate Change, the right hon. Member for Kingston and Surbiton (Mr Davey)? That policy will have an impact on the cost of living for all householders and anyone who buys manufactured goods. I do not accept his premise that the science on climate change, on which our energy policies are based, is settled.

The theory is pretty simple: ever since we started industrialising at the end of the 1700s, we started pouring CO 2 into the atmosphere. As a result, the temperature across the world has warmed up and we must do something about it—that is the basic theory our energy policy follows. There are various flaws in that argument. The earth has always gone through cycles of warming and cooling. Coincidentally, at a time when we started to industrialise, we were coming out of a very cool period—a time referred to as a little ice age—when even the Thames used to freeze over. What is the total increase in temperature on which we are basing our policies and fears about climate change? According to all the statistics, it is just 0.7° C, yet some of that is clearly due to the fact that the earth was coming out of that cool period. Nobody can answer this simple question: how much of that 0.7° C is not down to CO 2 , but down to the natural warming that would have taken place anyway?

My hon. Friend is eloquently putting the case for those who doubt that global warming is down to climate change, and I am sure that many support his views, but does he agree that moving to a more renewable energy environment is important for energy security as much as anything else?

I really did not want to intervene, because I did not want to encourage the hon. Gentleman and give him an extra minute in which to continue coming out with this rubbish. I thought that the discussion on Europe was where we found the fruitcakes, but I am finding them this afternoon as well. Is he really suggesting that it is not rising gas prices that are increasing people’s fuel bills right now? It is not renewable energy, but the gas imports that are the problem.

I say to the Government that we need a proper cost-benefit analysis of our climate change policies before we embark on measures that will drive manufacturing elsewhere in an effort to solve a problem that quite possibly does not exist, and I say to the hon. Member for Brighton, Pavilion (Caroline Lucas) and to the hon. Member for North Antrim (Ian Paisley), who is no longer in his place but who also referred to me as a fruitcake, that it was the fruitcakes who warned against the euro 10 years ago. We were accused of being fruitcakes then, but the fruitcakes were right. Fruitcake is a cheap and reliable source of energy. I am for the fruitcakes. I am proud to be a fruitcake. Long may fruitcakes continue.

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16:05 Andrew Selous (South West Bedfordshire) (Con)

Nevertheless, because of the decisions that the Government have taken, it now costs people £7 less to fill up their cars than it would if we had gone ahead with all the price increases that Labour legislated to introduce before they left office. Also, we heard from the Secretary of State for Energy and Climate Change that our energy bills are 5% lower than they would have been, again because of the decisions we have taken. We know that Labour would have added £193 a year to our energy bills, because they would have funded the renewable heat incentive and carbon capture and storage through levies on people’s energy bills, whereas we are funding those things from general taxation.

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16:29 Caroline Lucas (Brighton, Pavilion) (Green)

I should like to concentrate on the final two words of the Gracious Speech, which, unfortunately, give the impression of having been tagged on the end, almost as an afterthought. Those words are “climate change”; I am sure that I will not disappoint the hon. Member for North East Somerset (Jacob Rees-Mogg) in what I am about to say.

The forthcoming legislative programme shows that the Government are failing in their first duty—to protect citizens—precisely by failing to address the causes of the worsening climate crisis. They are ignoring warnings, even from conservative bodies such as the World Bank, that without far more urgent and radical cuts in emissions, global temperatures will rise by an average 4° or more by the end of the century, with devastating impacts as a result.

If the throwaway line at the end of the Gracious Speech really does mean that progress on climate change will genuinely be part of the UK’s G8 presidency, then of course I welcome it, not least following reports that the Government have been blocking the attempts of the French and German Governments to give the issue a high priority.

However, for the Prime Minister to suggest that the Government are successfully taking sufficient action to deal with climate change is simply dishonest. I do not use that word lightly, but if we are to have a chance of avoiding the worst of climate change, politicians of all parties and countries will have to get a lot more honest—honest about the scale of the threat that we face and the scope of the changes that we need to make.

Just last week, for the first time in human history, the concentration of carbon dioxide in the atmosphere passed the milestone level of 400 parts per million. The last time so much greenhouse gas was in the air was several million years ago, when the Arctic was ice-free, savannahs spread across the Sahara desert and the sea level was up to 40 metres higher.

The difference between 399 and 400 parts per million may be small in its impact on the world’s living system, but it is overwhelming in its symbolism of our collective failure to put the future of the natural world and its people above immediate self-interest and to tell the truth and admit that reliance on fossil fuels is not compatible with the urgent action needed on climate change. Given the role that fossil fuel lobbyists play in influencing policy, including being seconded into Departments to draft it in the first place, I am also deeply disappointed that the Bill to introduce a register of lobbyists has been dropped from the Government’s plans.

If coalition Ministers are comfortable in their state of denial about the climate crisis and their cosy relationships with the fossil fuel industry, whose core business models are incompatible with keeping global warming below 2°, let it be on the record that young people in particular certainly are not. We can see that in the reaction to the Education Secretary’s attempts to remove climate change from the curriculum for the under-14s and we saw it last week when the fossil fuel divestment movement came in the shape of huge opposition to a new partnership between Oxford university and Shell—a partnership that would have been about getting yet more fossil fuels out of the ground. We see it, too, in the concern that I am sure is manifest in many hon. Members’ inboxes from people still lobbying for there to be a clear decarbonisation target in the Energy Bill, not just promises that that might be looked at in 2016.

If I am disappointed that we heard only one mention of climate change in the Gracious Speech, I am even more disappointed by the lack of meaningful action on fossil fuels. Ministers must be honest with themselves and the public and admit that, if we are serious about avoiding the worst impacts of climate change, the vast majority of fossil fuel reserves must be left in the ground.

Is the hon. Lady going to address the issue of why environmental groups will not support methods of generating electricity that do not produce carbon dioxide emissions, such as nuclear power?

Many people will suggest that carbon capture and storage is the way out of this problem. However, even if CCS were deployed in line with an idealised scenario by 2050, that would extend fossil fuel carbon budgets by only about 125 gigatonnes, which is equivalent to only 4% of the total global budget. CCS is not likely to come online in any serious way until at least 2030, by which point the carbon budget may well have been used up.

The implications of all this are clear. First, the decarbonisation target needs to be in place. We need to make sure that we do not have a second dash for gas. Most crucially, Ministers must require extractive companies to include the greenhouse gas emissions potential of fossil fuel reserves as part of an update on company reporting regulations. If they do not, there is a real risk that our financial markets will have a carbon bubble worth an estimated $16 trillion globally. Because we are so over-exposed in the UK given the global role played by London, our financial centre, in raising capital, there is great concern that companies are inflating their worth because of these reserves.

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18:18 Stephen Doughty (Labour)

The Secretary of State for Energy and Climate Change was unwilling to make a causal link between Government policies and food banks, but I will make that case and underpin it with evidence. Food banks in Wales trebled in the past year, and their use has increased by 118%. A survey by the Trussell Trust, which asked people why they accessed food banks, revealed that 45% did so because of benefit changes and delays; nearly 20% did so because they were on a low income; and one in 10 did so because they were in debt. My hon. Friend the Member for Swansea West (Geraint Davies) spoke earlier of the terrible increase in the use of payday loans. In Wales, from 2007 to 2012, payday loans rose from 17,000 to 30,000. What a sorry indictment.

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18:39 Hilary Benn (Labour)

We have had a good debate in which my right hon. Friend the Member for Don Valley (Caroline Flint) made a powerful and forensic opening speech, in sharp contrast to the contribution of the Secretary of State for Energy and Climate Change. By my reckoning, 40 Members have contributed to the debate. I suppose that traditionally one would say it has been a wide-ranging debate, but certainly that term has been given new meaning by some of the contributions we have heard today. The right hon. Member for Meriden (Mrs Spelman) referred to High Speed 2, and we heard about UKIP from my hon. Friends the Members for Lewisham West and Penge (Jim Dowd) and for Swansea West (Geraint Davies). We heard two very contrasting speeches on climate change from the hon. Member for Brighton, Pavilion (Caroline Lucas)—who is, I think, right; 400 parts per million is a significant moment—and from the hon. Member for Monmouth (David T. C. Davies), who railed against environmentalists in general.

What will be the consequences for those people? They will have less money to spend on food and heating and they will be at greater risk of ending up in debt to payday lenders or, even worse, loan sharks. There will also be rising council tax and rent arrears because, as the workers in the advice centre know better than almost anybody else, a lot of these people are desperate because they do not have the money. The Secretary of State for Energy and Climate Change said in his opening remarks that the Government were about protecting the vulnerable, but those are words that will ring very hollow with my constituents.

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18:49 The Secretary of State for Communities and Local Government (Mr Eric Pickles)

As the right hon. Member for Leeds Central (Hilary Benn) has said, this has been a full and wide-ranging debate, covering energy prices, climate change, housing policy, heavily fruited confectionery and a brief excursion into the world of J. R. R. Tolkien. The debate was opened by the Secretary of State for Energy and Climate Change, my right hon. Friend the Member for Kingston and Surbiton (Mr Davey) who, among other things, gave the House a masterclass on Professor Hills’ theory of fuel poverty. That clearly demonstrated that my right hon. Friend is completely on top of the job.

My hon. Friend and neighbour, the Member for Epping Forest (Mrs Laing), spoke about conviction politics. My hon. Friend the Member for Bury St Edmunds (Mr Ruffley) warned about an ever-closer union. My hon. Friends the Members for Brentford and Isleworth (Mary Macleod) and for North East Somerset (Jacob Rees-Mogg) spoke of the effect of interest rates on the cost of living. My hon. Friend the Member for Monmouth (David T. C. Davies) spoke about climate change and the lack of sustainable development in Middle Earth. My hon. Friend the Member for Halesowen and Rowley Regis (James Morris) made some telling points about the impact of fuel duty on the cost of living, and my hon. Friend the Member for Folkestone and Hythe (Damian Collins) talked about the need for co-operation between the private sector and local authorities.

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