Energy Costs

Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 10th July 2008.

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Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells 10:30 am, 10th July 2008

What recent assessment he has made of the effects on the economy of changes in energy costs.

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Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

The latest assessment of economic developments and prospects was published in the "Financial Statement and Budget Report".

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Photo of David Heathcoat-Amory David Heathcoat-Amory Conservative, Wells

Will the Chancellor take a greater interest in the enormously increased targets for renewable energy, to which the Government are committed legally and by treaty law? Is he aware that if those commitments are met, they will impose huge extra costs on the taxpayer and the consumer? Is it wise to create fuel poverty and make British business uncompetitive in world markets through those commitments? Will the Chancellor do something about that now, because those commitments will endure for decades ahead?

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Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

One of the biggest threats that our economy and, as I said earlier, just about every other economy in the world faces is the high price of oil. I believe that that should act as an encouragement, a spur, to us to do more to generate our own electricity and to get our energy from non-carbon sources. That is important in terms not only of the environment but of security of supply. Self-evidently, a lot of the oil that we currently import comes from parts of the world that are not always politically stable. It is therefore necessary for us to do far more to generate renewable energy. As I understand it, that is also the policy of the right hon. Gentleman's party, although I accept that it is not his own personal preference and that he has a lot of concerns about that source of energy. For my part, however, I think that we need to do far more, not just here and in Europe, to obtain more renewable energy. I also believe that it is essential to replace our fleet of nuclear power stations.

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Photo of Stewart Hosie Stewart Hosie Shadow Chief Whip (Commons), Shadow Spokesperson (Treasury)

The Chancellor cannot be unaware of the damaging impact of rising fuel costs on the rural economy, particularly in relation to fuel oil and bottled gas for people who do not have mains electricity or gas. What plans does he have for the introduction of social tariffs for low-income households, particularly, but not only, in rural areas, which use fuel oil and bottled gas and which have experienced extraordinary rises in costs over the past two years?

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Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer

Of course I am well aware of the problems that people living in rural areas are facing because of high fuel prices. I am also aware of the particular problem that the hon. Gentleman has risen in relation to bottled gas. Although I am not in a position today to say that we can definitely do something about it, I understand the problem to which he refers and it is something that I will consider further.

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