18/03/14 – Labour’s Energy Policy

Speaker: Shadow DECC Minister Julie Elliott MP

The All Party Parliamentary Group on Energy Costs

18 March 2014 – meeting notes

‘Labour’s Energy Policy’ with Shadow DECC Minister Julie Elliott MP

Ms. Elliott made the following points.

The key issues are the low carbon agenda, affordability and security of supply, all of which need to be balanced out.

She explained that the energy price freeze was not the main policy, rather Labour would use it as a mechanism while implementing changes to the market. Policy would be about:

  • Opening the market for supply,
  • Setting up a new energy watchdog, with the power to intervene in the market.
  • Setting up a security board which will look at supply.

Labour have a Green Paper out, which is seeking responses on the policy. The paper is consulting now prior to the election, with planning for implementation on a 20 month timescale if Labour are in power.

A decarbonised power sector is the target set for 2030, in which case companies need certainty so a general direction of travel needs to be set by policy.

She re-iterated Labour’s commitment to renewables and said that they will have a bigger role to play.

On the Energy Efficiency Green Paper, she pointed out that there is no Government funded scheme for these policies.

Housing stock is an issue which needs to be talked about, the stock is old and energy inefficient and hard to deal with.

The carbon floor price, which was likely to be frozen in the 2014 budget, was described as a revenue raising policy, which did not tackle the carbon issues. Labour would not have introduced the policy. Instead they would have gone for EUETS. She expressed the view that the carbon floor price policy was not allowing British industry to be competitive.

Next she addressed the levels of uncertainty in the market, setting out how this was not in the interest of much-needed investment, especially in light of the fact that there was a window on investment in turbine manufacture in the UK, which could soon be lost.

Questions

How would smaller suppliers be affected by policy proposals?

Plans are geared at opening up the market to smaller organisations, the party saw its policies as being very important to the market.

The UK market needs more transparency in order to create real competition, as in the US.

Lord Palmer agreed with the need for transparency.

How could policy deal with the point about un-burnable resources, (how to stop the 20% from being burnt) and how the issues of fuel poverty are reflected in the energy trilemma?

Labour’s policies to reform the energy market would have a price-levelling effect which would eliminate the hidden profits of energy companies and make things more transparent.

The Green Deal needs to be improved, the interest rates were too high, whilst the scheme was not enjoying enough take up.

She made other points about fuel poverty and the social aspects, that the private rented sector had the worst energy efficiency, whilst social housing tended to be more energy efficient.

Whilst welcoming the plan to separate elements of the market, there was a query as to the 20 month timetable, would that be long enough to achieve the goal?

Julie Elliot explained that the policies were already being discussed with the industry so that the period of implementation is much longer than the 20 month period following the election. 20 months would allow for the course of the Bill through Parliament.

How will smart meter technology and the information they provide help consumers, in particular, those who struggle to pay their bills?

Julie Elliot admitted that Smart Metering had received a bad press, but that its potential was enormous because of the amount of information it could generate. However, information was not enough, there also needed to be investment in energy efficiency in houses in order for people to truly benefit.

How much Russian gas is used in the UK? Labour previously supported the 2030 target for renewables, what is the position now?

It was noted that in the discussion Julie Elliot had not said that UK supply was from Russia. However, Gazprom supplies much of Europe (which impacts on the UK price of gas).

Labour did not support the 2030 target, instead it supported the de-carbonisation target. She emphasised the point that investors are not concerned with the 2030 target, their interest was in decarbonisation.

What will it take to see the big six (or others) create tariffs for collective switching?

Labour supports anything that provides a better deal. If the big six perceive a commercial benefit then they would probably introduce such tariffs. What was needed at present was a limited number of tariffs which could be compared, in order to allow people to switch. The market needed transparency and comparability.

How do you reach those who feel bamboozled by tariffs?

This is a difficult area, Julie Elliot gave the innovative example of a large social landlord in her constituency which would send out their advisors to explain and guide tenants through issues such as energy costs. She noted that 60% of the public do not switch providers.

At present, how much detail is there in the Labour Party’s re-design of the energy pool?

Julie Elliot didn’t have that information, but offered to get the portfolio holder (Tom Greatrex MP) to provide the answer to the question.