Oil Prices: Rural Consumers — Question

– in the House of Lords at 11:22 am on 29th January 2015.

Alert me about debates like this

Photo of The Earl of Courtown The Earl of Courtown Conservative 11:22 am, 29th January 2015

To ask Her Majesty’s Government what they are doing to ensure that the benefits of lower oil prices are passed on to consumers, particularly in rural areas.

Photo of Baroness Verma Baroness Verma The Parliamentary Under-Secretary of State for Energy and Climate Change

My Lords, Her Majesty’s Government have made it clear to energy providers that it is vital that the benefits of plunging oil prices are passed on quickly to consumers. In addition, we are well on the way to giving 17 of the most rural areas on the UK mainland a 5p per litre fuel duty rebate. The Scottish islands and the Isles of Scilly are already benefiting from this rebate. We continue to monitor price movements closely.

Photo of The Earl of Courtown The Earl of Courtown Conservative

My Lords, I thank the Minister for that reply. I was particularly glad to hear that the fuel rebate scheme is extended to remote areas of the UK. As my noble friend will be aware, though, the cost of travelling to work in rural areas—in places such as where I live in Gloucestershire—is 24% more than if you are travelling in urban areas. I was wondering if she would be able to extend this fuel rebate system so that it could cover areas such as where I live, where there are relatively higher fuel costs, which also affects people on lower incomes.

Photo of Baroness Verma Baroness Verma The Parliamentary Under-Secretary of State for Energy and Climate Change

My noble friend is of course right to raise the issue of people living in rural areas. There are a number of factors that account for fuel price differences in rural areas. Often as not, the transport costs are higher and there are fewer competitors in rural areas. My noble friend is right to raise this, and we have spoken to energy companies to ensure that where they can pass on the price reductions they are doing so, so that no one is left out in benefiting from reduced pricing.

Photo of Baroness Worthington Baroness Worthington Opposition Whip (Lords), Shadow Spokesperson (Energy and Climate Change)

My Lords, during this period of volatile fossil fuel prices, does the Minister agree that we need a real regulator, with real teeth? We should not have to resort to talking nicely to the companies. Is it not true that we should take Labour’s example and bring in a regulator with real teeth, extending its remit to cover all heating fuels, including oil delivered in rural areas?

Photo of Baroness Verma Baroness Verma The Parliamentary Under-Secretary of State for Energy and Climate Change

My Lords, the noble Baroness’s party had an opportunity for 13 years to change the regulator but did not. We believe that the regulator has been given enough powers to ensure that energy companies are performing and passing on savings. This Government have brought in greater competition. We believe that competition is what will drive down prices. Today we see 20 independent companies competing with the big six—which, of course, was a creation of the party opposite.

Photo of Lord Howell of Guildford Lord Howell of Guildford Conservative

My Lords, as and when energy and heating bills and so on do fall, because of far lower crude oil and gas prices, will my noble friend reject the idea that additional taxes, charges and green levies should be piled on to push the price up again?

Photo of Baroness Verma Baroness Verma The Parliamentary Under-Secretary of State for Energy and Climate Change

My Lords, my noble friend is right to say that we need to look at the impact of all policies, and that is what this Government have done. They have carefully looked at, and responded to, any negative impact of our policies. However, if we are to ensure that we move towards a cleaner environment, then some of those policies have to be met.

Photo of The Bishop of Leicester The Bishop of Leicester Convenor of the Lords Spiritual

My Lords, will the Minister tell us what Her Majesty’s Government are doing to ensure that those on low incomes and living in the coldest homes are able to benefit from renewable heating technologies?

Photo of Baroness Verma Baroness Verma The Parliamentary Under-Secretary of State for Energy and Climate Change

I am grateful to the right reverend Prelate for his question, because this Government have, through many measures, not only tried to respond to people living in very inefficient homes in urban areas, but also looked at how to reach out to people who are often off grid and help support them through the renewable heat incentive and other measures. I am very happy to write to the right reverend Prelate about a number of measures undertaken by this Government.

Photo of Lord Teverson Lord Teverson Chair, The Arctic Committee, Chair, The Arctic Committee

My Lords, there is numerically less fuel poverty in rural areas than in urban ones, but it is a deeper and greater problem in rural areas because of solid walls and reliance on oil rather than gas. Does the Minister agree with me that we should once more consider, as part of our infrastructure, extending the gas grid into more of those rural towns and areas so that the gap between urban and rural fuel prices can be squeezed back down again?

Photo of Baroness Verma Baroness Verma The Parliamentary Under-Secretary of State for Energy and Climate Change

Yes, and that is why this Government have undertaken a massive infrastructure programme to ensure that, where we can, and where companies are trying to ensure that all consumers benefit from on-grid electricity and gas, we can reach them. However, these are commercial decisions for companies and they need to be able to operate commercially to their own advantage, just as the Government have to create the environment in which those companies can operate. This Government have very much taken on board that 20% of our energy source is coming off by 2020 and we have done an awful lot to meet the gap that the previous Government failed to fill.

Photo of Lord Kinnock Lord Kinnock Labour

My Lords, on a related question, in view of the fall in oil prices that is taking place, is it not clear that since the revenues from North Sea oil are anticipated to be half of what was assumed as recently as last year, the economic policies of the Scottish National Party are completely devoid of any credibility whatsoever?

Photo of Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer Liberal Democrat

My Lords, one thing that rural areas have plenty of is agricultural waste. Could the Minister say a little more about the role that anaerobic digesters can play, because oil prices might surely go up again, but agricultural waste will continue?

Photo of Baroness Verma Baroness Verma The Parliamentary Under-Secretary of State for Energy and Climate Change

My noble friend is absolutely right. That is why this Government have pursued measures that provide a diverse range of supply, and anaerobic digesters play a very important part in that supply mix.