15:34 Ed Davey (Liberal Democrat)

But it is also right that the Government are open about their social and environmental policies, which make up just under a 10th of the average bill. Our policies provide for immediate help for the most vulnerable with direct cuts to bills, as well as long-term savings on bills through energy-efficiency programmes and support for low-carbon energy that boosts energy security and tackles climate change. For example, the warm home discount cuts the bills of 2 million vulnerable households by £135. The energy company obligation provides permanent long-term savings on bills, including to the most vulnerable, by helping people to upgrade their homes and making them easier and cheaper to keep warm.

Support for cleaner energy increases our energy security and boosts investment in our thriving renewable energy industry, with tens of thousands of green jobs being created, but unlike the winter fuel payment, which provides around 12.5 million pensioners with help with their bills, and cold weather payments, which last year provided over £146 million to cut bills for the most vulnerable, policies such as the renewables obligation, ECO and the warm home discount are paid for directly by consumers through their bills, rather than through general taxation. So it is right that Government keep these social and environmental obligations paid for by energy bill payers under continuous review, and where we can act to reduce their impact on bills, while maintaining the integrity of our policy, we will, but as we do this, we must act responsibly. We must ensure— [Interruption.] We must ensure that the changes we make maintain the support provided to the most vulnerable, maintain the investment in clean energy and do not have a negative impact on our carbon reduction ambitions.

I have been clear from the start that support for low-carbon energy should not change, and it will not. The Government recognise that green energy investment incentives such as the renewables obligation, contracts for difference and feed-in tariffs are essential for investment in future home-grown clean energy generation. Without this low-carbon investment, energy security would be jeopardised as Britain would become ever more dependent on imported oil and gas, and energy bills in the future would be increasingly subject to high and volatile fossil fuel prices. The Government will also ensure that their overall approach will cut just as much carbon as planned. New measures, worth more than £540 million over three years, will boost energy efficiency even further by introducing new schemes for home-movers, landlords and public sector buildings.

Today’s announcement of cuts to energy bills is just part of the concerted action the Government are taking to help hard-working families, including through income tax cuts, the council tax freeze and the fuel duty freeze. This help for people with energy bills is being achieved while we maintain and extend support for the fuel-poor and continue to back green energy, and by boosting energy efficiency. I commend this statement to the House.

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15:43 Caroline Flint (Don Valley) (Lab)

It was the last Labour Government’s Energy and Climate Change Secretary who said that

Last week during Energy questions, I pressed the Minister of State, Department of Energy and Climate Change, the right hon. Member for Sevenoaks (Michael Fallon), on the insulation of solid wall properties in rural areas, and he made some comforting remarks. Further to the Secretary of State’s answer to the hon. Member for Arfon (Hywel Williams), may I be assured that the programme to insulate solid wall properties in rural areas will not be slowed down by what he has announced today?

The Leader of the Opposition hiked up energy prices when he was Secretary of State for Energy and Climate Change and is now trying to claim credit for keeping them at that hiked-up level. Unfortunately, we have heard the same clap-trap from the Secretary of State today as we heard from the Leader of the Opposition when he was Secretary of State. My constituents want the Government to source the cheapest energy rather than the greenest energy. When is the Secretary of State going to start doing that?

Does my right hon. Friend not think that problems with the energy market, such as those relating to long-term generating capacity, built up over many years but had been ignored, including when the Leader of the Opposition was Secretary of State for Energy and Climate Change?

My hon. Friend is absolutely right. One of the reasons why we have to increase investment so much over a relatively short time, which comes at a price, is the failure of the last Government to invest in energy infrastructure. People warned them, and warned the former Secretary of State for Energy and Climate Change, currently the Leader of the Opposition, to do something; he failed.

It would be worse than that: it would be the poor old consumers who did so, because the cost of capital would go up. There would also be a reduction in investment in green energy, which the Opposition claim to support, so the Opposition’s policy is both irresponsible and reckless.

This was discussed in a little more depth in oral questions to the Department of Energy and Climate Change last week. I made it clear that other Secretaries of State, particularly my right hon. Friend the Secretary of State for Business, Innovation and Skills, and I will look at what we can do to help people who are affected by npower’s redundancy package.

The Minister of State, Department of Energy and Climate Change, my right hon. Friend the Member for Sevenoaks (Michael Fallon), has been doing a huge amount of work on this. There will be a new code, or protocol, on working with industry to make sure that a lot of the policies that we have introduced, such as the “buy early” campaign, really help people who are off-grid in rural areas and who are dependent on fuel sources like oil.

The Energy Secretary talked about there being no need to alarm people, but I have never known a time when older people in my constituency were more alarmed, probably because of the £300 by which their bills have already gone up. Despite the cut to green energy levies, bills will still go up by £70, so those older people do not need alarming; they are already alarmed. Is it not time that the Secretary of State stood up to the energy companies and supported a price freeze?

I welcome the positive response to the Select Committee on Energy and Climate Change’s recommendation that some of the costs of the levies be transferred to general taxation, as a fairer way of funding those levies. What is being done to assist people in switching, and to ensure that they realise that that is now meant to be simpler, and the best way for them to get the best deal?

We approached the review with the intention of ensuring not only that we kept the support for the fuel-poor and the investment for green energy, but that it was carbon neutral. The package we have put together, not only with the energy efficiency investments we have announced today but with announcements that will be made in the autumn statement, will show that it is indeed carbon neutral.

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