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House of Commons

Thursday 12 July 2012

The House met at half-past Ten o’clock

Prayers

[Mr Speaker in the Chair]

Oral Answers to Questions

Energy and Climate Change

The Secretary of State was asked—

Consumer Protection

1. Mr William Bain (Glasgow North East) (Lab): What steps he is taking to increase protection for consumers in the energy market. [116496]

The Secretary of State for Energy and Climate Change (Mr Edward Davey): As the independent regulator of the gas and electricity markets, Ofgem’s primary duty is to protect consumers, and it has consulted on proposals to improve consumer protection and competition in its retail market review. The Government have consulted on new powers for Ofgem to compel energy companies to provide redress to consumers who have lost out because of a regulatory breach.

Mr Bain: According to the Government’s own figures, fuel poverty in England is set to rise by 400,000 this year. In Scotland, more than one in four people are in fuel poverty, in Wales the figure is one in three and in Northern Ireland it is nearly one in two, yet 5 million customers are still being overcharged by the big six energy companies. When will the Government take the strong action that is needed with those companies to ensure that over-75s are always put on the cheapest tariffs—a change that would help 6,299 people in my constituency and 4 million pensioners across the country?

Mr Davey: The Government have consulted on how we can change the measure of fuel poverty so that it is more exact and so that we can ensure that we tackle the worst fuel poverty. The previous Government could not even measure fuel poverty properly. As regards ensuring that the big companies give a fairer deal, Ofgem’s retail market review is considering everything from standards of contact to improving billing and tariff simplification. Those and other measures will help people.

Mr John Baron (Basildon and Billericay) (Con): The Government have accepted the billing stakeholder group’s recommendation that information should be put on all energy bills, by this Christmas, detailing how much a customer could save if they were on that company’s cheapest standard direct debit tariff. Understandably, Ofgem cannot confirm whether it will implement that,

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so what will the Government do to raise the matter with the Prime Minister and the big six in any forthcoming deliberations?

Mr Davey: First, I thank the hon. Gentleman for all his work on this important issue. He has made a valuable contribution. We are raising the matter, because we take it very seriously. Ensuring that consumers have the right information so that they can switch to cheaper tariffs is very important.

Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): It is not just households that need better protection in the energy market. Small businesses are also consumers under pressure from soaring bills. In the debate on the Queen’s Speech on 16 May, my right hon. Friend the Member for Don Valley (Caroline Flint) asked the Secretary of State to end unfair roll-over contracts, stop small businesses being subject to six years of back-billing and ensure that energy companies act responsibly towards small firms that have fallen into difficulty. On that occasion, he was not able to give an answer. Now that he has had a chance to reflect on those issues, will he give an answer and indicate whether the Government are serious about Britain’s small businesses having support in the energy market if they are to help us to get out of recession?

Mr Davey: I am grateful to the hon. Gentleman for his question, but we will take no lectures about helping small businesses. We have done a huge amount across government to help small businesses, and, as he should know, Ofgem is looking into the issue.

Robert Halfon (Harlow) (Con): Sixty-five Members of Parliament of all parties have signed a Back-Bench motion calling for an Office of Fair Trading inquiry into the uncompetitive role of oil companies in keeping prices high at the pump. Will my right hon. Friend put pressure on the OFT to carry out that inquiry?

Mr Davey: My hon. Friend will know that my right hon. Friend the Secretary of State for Transport and I have been looking into that issue, but as a former competition Minister in the Department for Business, Innovation and Skills I am clear that independent competition authorities are critical to effective competition policy. I would not want to be seen to be putting undue political pressure on a valuable independent institution.

Consumer Credit

2. Mrs Mary Glindon (North Tyneside) (Lab): What assessment he has made of the potential effects on consumers of proposed changes to the Consumer Credit Act 1974 regarding early repayments and the green deal. [116497]

The Minister of State, Department of Energy and Climate Change (Gregory Barker): The hon. Lady raises an important issue and we have taken a lot of care over it. Any green deal provider will be able to charge additional penalties only if it is genuinely able to prove that it will suffer a loss as a result of a consumer’s decision to repay early. In addition, all consumers will have the ability to challenge any additional penalties, with recourse to the Financial Ombudsman Service where necessary.

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Mrs Glindon: Given that the Department’s own impact assessment predicts interest rates as high as 9.5% under the green deal, does the Minister think the added possibility of a hefty penalty for early repayment will help to present a compelling case to families hoping to bring their energy bills down?

Gregory Barker: I understand the hon. Lady’s worries, which are why we have considered the matter so carefully, but there is a balance to be struck. If there are not penalties for those who repay early, the rest of the market will bear the additional risk and lack of profit, pushing up the cost of green deal plans for everybody else. I hope the interest rates will be significantly lower than she said, but we think we have got the right balance between consumer protection and a dynamic market.

Electricity Generation

3. Dr Phillip Lee (Bracknell) (Con): What estimate he has made of likely capital costs for new electricity generating capacity under (a) contracts for difference and (b) a premium feed-in tariff. [116498]

The Minister of State, Department of Energy and Climate Change (Charles Hendry): The impact assessment published alongside the electricity market reform White Paper provides details of the capital costs of different approaches. The analysis shows that the cost of capital is lower under the contract for difference than under the premium feed-in tariff. The same low-carbon generation mix would cost £2.5 billion less to build under our chosen approach.

Dr Lee: Although I recognise that the contracts for difference model is cheaper than a premium feed-in tariff, I am somewhat concerned about its complexity, and potential investors share that concern. Will the Department consider revisiting the model to simplify it?

Charles Hendry: I assure my hon. Friend that we are always looking for measures that will simplify the structures, although I would draw attention to comments from EDF, a key investor, which says:

“The Contracts for Difference…which sits at the centre of the Bill, will be key to delivering investment that represents value for money, and protects consumers. It is a simple, transparent and proven instrument.”

Dr Alan Whitehead (Southampton, Test) (Lab): Does the Minister accept that the contracts for difference impact study was undertaken when the idea was that the state would be the counterparty to the CFD? Now that is no longer the case, will he provide a new impact assessment that compares the relative costs and advantages of CFDs and premium FITs before the proposal is finalised in the energy Bill?

Charles Hendry: I am grateful to the hon. Gentleman for the work that he and his fellow members of the Select Committee on Energy and Climate Change have done on the proposal and on alternative counterparty models. The Government have made one approach clear in the draft Bill, but we have also made it clear that

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a single counterparty model could work separately. If we propose different models, we will publish a separate impact assessment.

Renewables Obligation

4. Andrew George (St Ives) (LD): When he plans to announce the outcome of the renewables obligation banding review. [116499]

The Secretary of State for Energy and Climate Change (Mr Edward Davey): I plan to announce the outcome of the renewables obligation banding review very shortly.

Andrew George: To secure essential jobs and investment, the industry needs certainty, clarity and rational decisions based on evidence and not on emotion. That is especially true of wave energy in my constituency. Will the Secretary of State reassure the House that decisions will be clearly evidence-based?

Mr Davey: I pay tribute to my hon. Friend for his work on promoting renewable energy in his constituency and his county of Cornwall, particularly in respect of marine energy. I can reassure him that the Government will make decisions based on the evidence. We will crunch through the more than 4,000 responses we have had—an awful lot of evidence, including some substantial new evidence—and our decisions will reflect the evidence.

Caroline Lucas (Brighton, Pavilion) (Green): Does the Secretary of State share my concern about the mooted 25% cut to onshore wind support? Does he agree that it would disastrous for wind? Does he also agree that the recent announcement of a £1 billion loan from the Department for Business, Innovation and Skills to Petrobas for deep-sea drilling in the south Atlantic completely undermines any progress on renewable energy?

Mr Davey: I congratulate the hon. Lady on asking three questions, but I will not anticipate the announcement that we will make shortly. We support onshore wind—we believe it is a cost-competitive renewable technology, and it has an important place in decarbonisation and in a secure energy supply.

Chris Heaton-Harris (Daventry) (Con): As my right hon. Friend will know, if onshore wind is cost-competitive, it will not need support. If, as he has said in previous answers to me, of our 13GW target, 5GW have been built, 6GW are through the planning gate and 8GW are in planning in the summer of 2012, the level of subsidy is surely way too high.

Mr Davey: I have to disappoint my hon. Friend. The fact that we are supporting the industry is one reason why investment has come forward in large numbers. The 6GW that have been consented and the 6.5GW in the planning system would not necessarily go ahead if there were dramatic cuts in subsidies.

Caroline Flint (Don Valley) (Lab): In the year in which the solar industry was undermined, there are fears that the Government are turning their fire on the cheapest form of clean energy—onshore wind power—by proposing a cut of 25%. In the words of one industry

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expert, that would “kill dead” new wind developments. Perhaps some Government Members would like that. The Secretary of State has briefed the press that he does not support such a cut—neither do the Opposition—so why does he not stand up to his Conservative colleagues who want to kill off the British wind industry?

Mr Davey: I have to disappoint the right hon. Lady, because my Conservative colleagues and I are working very closely on this matter. Both Government parties support decarbonisation and understand the critical role that renewables can play, whereas under Labour renewable investment did not occur and we had one of the worst records in Europe. She will have to be patient, but we will make the announcement, and it will be a very good announcement.

Caroline Flint: The mixed messages coming from Government Members have blighted policy in this area. Investors, who want to bring new jobs and industries to this country, are crying out for certainty and confidence, but I am afraid the Secretary of State just does not get that. The message from the Government seems to be that Britain is closed for green business, which is why Vestas has scrapped its plans for a factory in Kent and Siemens is warning that its plans for a new factory and port complex could be put at risk too. Before any more firms axe jobs in Britain, will he tell us today, before the House rises, that the Government will scrap the 25% cut and get behind British low-carbon jobs once and for all?

Mr Davey: Once again, the facts do not support the right hon. Lady’s case. There has been a large increase in investment in renewables in the past year, which has created more than 20,000 jobs, and confidence in the sector is actually extremely high. When we make our announcement, I believe we will see billions of pounds of investment coming forward.

Generating Capacity

5. Peter Aldous (Waveney) (Con): What estimate he has made of the level of investment in generating capacity (a) under the existing renewables obligation and (b) in the future. [116500]

The Secretary of State for Energy and Climate Change (Mr Edward Davey): The renewables obligation has succeeded in providing support worth about £2 billion a year to renewable electricity in the UK. Industry announcements over the last financial year amounted to renewables investments totalling £6.9 billion, which potentially will support more than 20,800 jobs. We plan to publish details of the additional investment arising from the RO banding review shortly.

Peter Aldous: To maximise investment in the offshore renewables sector, it is important to provide investors with certainty on electricity market reform as soon as is possible. Will the Secretary of State confirm that progressing the draft energy Bill will be given the highest priority when the House returns and that he will take all other steps necessary to provide this certainty?

Mr Davey: My hon. Friend is absolutely right, and has been a champion of the offshore wind industry. I congratulate him on that. The draft energy Bill has been

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widely welcomed by many people in the offshore wind industry because they see that it contains the instruments needed. We are pressing ahead with the timetable in the White Paper that we published last July. I am grateful to the Energy and Climate Change Committee for how it has gone about is rapid pre-legislative scrutiny. We will look carefully at its report, and we hope to publish the full Bill in the autumn.

Mr David Hanson (Delyn) (Lab): Will the Minister welcome the creation of more than 100 jobs at Mostyn docks in my constituency, based on the development at Gwynt y Môr offshore wind farm off the north Wales coast, which was supported by the previous Labour Government? Will he recognise that wind farms and wind generation are not just about cheap electricity but about economic development? Will he therefore heed what my right hon. Friend the Member for Don Valley (Caroline Flint) said about supporting the wind industry both onshore and offshore?

Mr Davey: I agree with the right hon. Gentleman. It is very good news that jobs are being created. The story of onshore, offshore, the renewables industry and our energy policies generally is to bring forward new investment and jobs. We are proud of that, and will continue with that support.

Energy Efficiency

6. Kelvin Hopkins (Luton North) (Lab): What steps he is taking to help households improve their energy efficiency. [116501]

7. Heidi Alexander (Lewisham East) (Lab): What steps he is taking to help households improve their energy efficiency. [116502]

13. Lilian Greenwood (Nottingham South) (Lab): What steps he is taking to help households improve their energy efficiency. [116512]

The Minister of State, Department of Energy and Climate Change (Gregory Barker): Our flagship energy efficiency measure is the green deal, which is supported by the £1.3 billion per annum energy company obligation. We are making very good progress towards its introduction, which starts this autumn, and we expect roll-out to grow strongly in 2013 and beyond, bringing new entrants, greater competition, consumer choice and innovation to this growing market.

Kelvin Hopkins: A crash programme to insulate every home in Britain would save millions of people money on their fuel bills and keep them warm in the winter. It would also be billions of pounds cheaper than investing in nuclear power. Will the Government undertake a rigorous cost-benefit study of these alternatives?

Gregory Barker: The hon. Gentleman is absolutely right. Energy efficiency is a no-brainer. That is why we have given unprecedented importance and attention to it and for the first time have created within the Department an office of energy efficiency deployment. The green deal will involve a far greater range of interventions in

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people’s homes, unlike previous programmes, which were very limited, so I think the green deal will achieve the aims he seeks.

Heidi Alexander: May I bring to the Minister’s attention the excellent work done by Lewisham council in its insulation partnership, which has seen almost 3,000 homes receive cavity wall and loft insulation in the last six months? Given the difficulties that the Government have experienced in getting the energy companies to meet their household energy efficiency obligations, does he agree that local authorities have a vital role to play in ensuring that as many people as possible can benefit from lower fuel bills?

Gregory Barker: Absolutely. The hon. Lady makes a sound point, and that is exactly why I shall shortly be issuing new guidance to local authorities, under the Home Energy Conservation Act 1995, making it clear that I expect every single local authority to draw up a strategy to roll out the green deal to all parts of their areas. Local authorities and communities are key to the success of the green deal.

Lilian Greenwood: In the last five years of the Labour Government, 2,456 people in my constituency got help through Warm Front to make their homes more energy efficient and to cut their energy bills. Can the Minister explain why just 80 people in Nottingham South were helped last year?

Gregory Barker: I cannot give the hon. Lady a breakdown of that, but I can tell her—[Interruption.] I will happily write with more detail about Nottingham South, but I can say that we helped a large number of people through Warm Front last year. However, we need to do much more than we could possibly achieve under the relatively limited Warm Front programme, which experienced so many troubles when the Labour party was in government. The green deal is going to be transformational and offer not just the very poor but everyone the opportunity to retrofit their homes.

Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): We have been telling the Minister for months that, to be a success, the green deal must be a good deal. According to calculations confirmed by a spokesman in his Department, if we take the Government’s intended rate of interest—7.5%, which is lower than the highest rate under the impact assessment—a household taking out a green deal of £10,000 would have to pay back around £22,000 over a 25-year period, which is more than double the cost of paying for the measures up front. Does the Minister think that represents a good deal?

Gregory Barker: I do not think there is any division between the hon. Lady and myself in wanting a good deal. We can certainly agree on that, and that is why we have put so much time and effort into this transformational plan. However, the obsession with interest rates alone, to the exclusion of everything else, does not serve her well. I think that the Labour party is actually announcing that it would subsidise interest. That will cost consumers billions and force up everybody’s energy bills. Why do the Opposition not just come clean, say that they are going to subsidise interest and put everybody’s bills up, rather than doing what we are doing, which is coming forward with a progressive market solution?

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Luciana Berger: I thank the Minister for that response, but he need refer only to the contributions I made in debates on secondary legislation to know that there are many things in the green deal that we are concerned about, beyond the interest rate. With interest rates so high, there is a great risk that the public will not be interested in the green deal. We know from polling conducted by the Great British Refurb campaign that anything over 6% means that 90% of the British people will just not be interested. Indeed, the Department estimates that the number of homes being insulated next year will fall dramatically. Given that the green deal is meant to launch in October, why is the Minister not doing something about this now, to ensure that consumers really will get a good deal?

Gregory Barker: We are absolutely committed to giving consumers a good deal, which involves a high range of competition, new entrants and more choice. This is not some Stalinist five-year plan; this is a brand new market. It is perfectly valid to suggest that there should be subsidised interest rates, but let us hear how the Labour party is going to pay for that and how much Labour is going to put on consumer bills. We have a proposal for targeted support from the green investment bank, but the hon. Lady’s blanket approach, which does not understand economics, would be very costly for everybody and force up bills for families.

Renewable Energy

8. Mr Peter Lilley (Hitchin and Harpenden) (Con): What comparison he has made of the potential capital cost of meeting the Government’s 2020 renewable target using wind power backed up by open-cycle gas plants and meeting the same level of electricity demand using combined-cycle gas plants. [116503]

The Minister of State, Department of Energy and Climate Change (Charles Hendry): The capital costs of gas plant are slightly lower than those of onshore wind, although the operating costs are much higher and more unpredictable. An electricity supply reliant on gas would therefore be cheaper to build at present, but it would not offer the security of supply that the country needs. A responsible energy policy requires a diverse energy mix, combining gas, renewables, nuclear and fossil fuels with carbon capture.

Mr Lilley: I am grateful to my hon. Friend for his answer. Can I take it from the fact that he does not give specific figures that he agrees with the figures in the report by Professor Gordon Hughes, the professor of energy economics at Edinburgh university, “Why Is Wind Power So Expensive?”? The cost of providing a given amount of power by wind plus open-cycle gas turbines is greater than the cost of using efficient combined-cycle gas turbines by a factor of 10. Is that really something that the consumer can afford, if it saves only £500 million a year in operating costs?

Charles Hendry: I do not agree with Professor Hughes, and neither does the Committee on Climate Change or the Centre for Energy Policy and Technology at Imperial college. One of the main differences is the assessment of how much wind might be necessary, and we believe that the professor has overestimated that by a third, which

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automatically reduces the cost by £30 billion. Furthermore, he has not looked at the range of alternative back-up provisions, including interconnectors, or at the likely price of gas in the future.

Nic Dakin (Scunthorpe) (Lab): What steps are the Government taking to ensure that capital investment in wind monopiles will result in manufacturing taking place in the UK using UK steel, so that UK energy bill payers and UK taxpayers can fund UK jobs?

Charles Hendry: The hon. Gentleman raises a critical point. We have secured agreement with the offshore wind industry that it will work to ensure that 50% of the supply chain involves UK companies, compared with perhaps 10% in the early projects. We want this to be a real industrial policy that brings help to constituencies, such as his, that have a great industrial heritage. We want this to be a joined-up policy.

Green Deal

9. Damian Hinds (East Hampshire) (Con): What steps he is taking to ensure that small and medium-sized enterprises can participate in the green deal. [116505]

The Minister of State, Department of Energy and Climate Change (Gregory Barker): Small and medium-sized enterprises are key to the successful delivery of the green deal. To give them the help that they need to get started, we have given them special financial help to get the training that they need, and waived SME installer and assessor registration fees for the first two years of the green deal. We have also begun a series of regional green deal road shows aimed at explaining to SMEs exactly how they can access the market, and I am pleased to tell the House that they are proving highly popular.

Damian Hinds: Large installer companies will partner large financing companies to offer a seamless product to households. How will my hon. Friend promote white-labelled financing products so that small businesses in my constituency can do the same?

Gregory Barker: My hon. Friend is absolutely right to suggest that a lot of SMEs want to be green deal providers and offer that service in their own right to consumers, and it is vital that they should be able to do so. I am pleased to say that a number of commercial offers are now coming forward to create exactly that white-label proposition, and the Department is doing everything it can to facilitate that. We are also looking at other ways in which we can give confidence to the SME sector.

Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op): Given the current financial situation, SMEs are often reluctant to take on additional loan finance even if they are offered it. Would the Minister therefore accept that it is particularly important that the support for SMEs under the green deal should have a large element of either grant or long-term financial support, rather than deals that are attractive only in the short term?

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Gregory Barker: The hon. Gentleman is right to say that we must have an easy-to-access offer for SMEs. The good news is that that can take a number of different shapes and forms, depending on an SME’s needs and on the offer that they want to provide for their customers. It is early days yet, but some interesting models are being put forward, and we are keen to support anything that helps to increase SME take-up.

Energy Market

10. Graeme Morrice (Livingston) (Lab): What assessment he has made of the potential effects of the provisions of the draft Energy Bill on the competitiveness of the energy market. [116507]

20. Huw Irranca-Davies (Ogmore) (Lab): What assessment he has made of the potential effects of the provisions of the draft Energy Bill on the competitiveness of the energy market. [116519]

The Secretary of State for Energy and Climate Change (Mr Edward Davey): The draft Energy Bill focuses on encouraging greater investment and competition in the energy market as we make the transition to a low carbon future. The provisions in the Bill are about removing barriers to entry and allowing all forms of low carbon generation to come forward and compete on a level playing field. In addition to the provisions in the draft Bill, Ofgem has consulted on liquidity proposals and the Government have issued a call for evidence regarding the availability of long-term contracts for independent generators.

Graeme Morrice: I thank the Minister for his answer. A report by the Institute for Public Policy Research, a respected think-tank, shows that if the energy market was more competitive, efficiency savings alone would knock £70 a year off the average energy bill. So why will the Government not get behind Labour’s plan to break up the dominance of the big six by requiring them to sell power into a pool? That would allow new businesses to enter the market, increase competition and drive down energy bills for families and businesses.

Mr Davey: Because Labour’s plan would not work. The critical factor for independent generators—the new competitors in the current and future markets—is liquidity in the futures market, not in the day-ahead market. Liquidity in the day-ahead market has increased significantly, and the pool proposal that the right hon. Member for Don Valley (Caroline Flint) has made would be about the day-ahead market. So we have already sorted that problem, and Ofgem is focusing on managing auctions for the futures markets, which is where the competition issue is.

Huw Irranca-Davies: Yet the Secretary of State knows that the whole sector of independent generators is sceptical about whether the necessary radical reforms are enshrined within the energy market reform as currently proposed. Does he think he will need to go further to have a more fundamental shake-up of the electricity market so that his vision of a genuinely competitive market for the interests of business and individual consumers will actually happen?

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Mr Davey: The draft energy Bill is a fundamental shake-up of the electricity market, and it is widely recognised as such. That is why it has created such heated and interested debate. I have to say that I do not recognise the views the hon. Gentleman ascribes to independent generators. I have met groups of independent generators, and they welcome much of the Bill. They argued—and we listened—that more work needs to be done to ensure that finance is available, so we recently published a call for evidence to see whether we can make sure that the power purchase agreement market is as healthy as possible. That is another critical way in which we are trying to help competition.

Biomass-based Generation

11. Mr Barry Sheerman (Huddersfield) (Lab/Co-op): What steps he is taking to encourage biomass-based generation in appropriate and sustainable locations. [116509]

The Minister of State, Department of Energy and Climate Change (Charles Hendry): Alongside our bio-energy strategy, we have introduced the renewable heat incentive and are currently reviewing support levels for biomass electricity. We are introducing sustainability controls into financial incentives. We have reformed the planning system in England to promote sustainable development and to encourage local authorities to plan for renewables development in the right places.

Mr Sheerman: But does the Minister agree that there is enormous potential for biomass in this country, particularly because it is capable of being produced at the right size, volume and quantity in a location—and there is less resistance to that sort of biomass? The real problem comes when the biomass raw material is imported from South America and Africa and not grown in our own country.

Charles Hendry: The hon. Gentleman is absolutely right to highlight the benefits of biomass. In our estimate, in the areas of heat and electricity, biomass could account for 40% of the renewable energy that we need to achieve by 2020. We have to strike the right balance, as there are other uses for wood fuel in this country: it can be used in furniture and in panelling, which are important industries for this country. We believe it right to look at imported fuels as well, as long as they are sustainably produced.

Miss Anne McIntosh (Thirsk and Malton) (Con): Drax power station takes fast-growing crops, grown especially in Thirsk, Malton and Filey, and provides a great source of income to farmers in very difficult times. Will the Government and the Minister do all they can to promote biomass in preference to wind farms as a renewable and sustainable source of energy?

Charles Hendry: We do not have to be either/or; we need a balanced energy portfolio. I think biomass offers a very significant immediate carbon gain when we move from coal-fired generation to biomass generation. Some exciting developments are happening in that sector, but having wind in the right locations is an important part of the mix, too.

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Wind Farms

12. Julian Smith (Skipton and Ripon) (Con): What recent discussions he has had on the subsidy received by wind farm operators. [116510]

The Secretary of State for Energy and Climate Change (Mr Edward Davey): Throughout the renewables obligation banding review and the comprehensive review of feed-in tariffs, I have had discussions with many stakeholders and with my officials and ministerial colleagues on subsidies for wind farm generators.

Julian Smith: The Coates family near Skipton were recently offered a bribe of £275,000 to put one wind turbine on their farm. They also received late-night bullying calls from the company, ConEnergieKontor. This behaviour is happening right across North Yorkshire. Does the Minister agree that the only way to fix it is drastically to cut the subsidy paid to these companies?

Mr Davey: I do not agree with my hon. Friend’s last point, but I would say that any bullying tactics by developers are completely unacceptable, and I join him in condemning them. The wind industry generally is committed to a good standard of community consultation and to providing community benefit. If my hon. Friend would like to send me the details of what he raised with me, I will take them up with RenewableUK. I do not believe such practices are widespread or that they are a consequence of renewable subsidies, but they are unacceptable.

Shale Gas Extraction

14. Dame Joan Ruddock (Lewisham, Deptford) (Lab): What assessment he has made of the report by the Royal Society and Royal Academy of Engineering on shale gas extraction in the UK. [116513]

The Minister of State, Department of Energy and Climate Change (Charles Hendry): In response to calls for an independent and rigorous examination of the evidence on fracking, there could be no more authoritative or independent sources of advice than the UK’s science and engineering academies. Their report is therefore particularly welcome, and we will study it carefully in considering the future of fracking for shale gas in the UK. Its main message is that shale gas fracking could be allowed within strict environmental and safety constraints.

Dame Joan Ruddock: As the Minister will know, the report says that some issues merit further consideration, including climate risks. For the avoidance of doubt, will he carry out a comprehensive assessment of the emissions arising from the extraction of shale gas, and indeed its subsequent use?

Charles Hendry: The right hon. Lady brings tremendous expertise to this debate. We have already commissioned independent advice on some of the fracking issues, which is being subjected to wider analysis and peer review. One of the most thorough assessments has been requested by Sir John Beddington, the Government’s chief scientist. We will look at all the evidence. We believe that the technology has a potential that must be

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explored, but that will be done only with the most careful analysis of all the environmental and safety considerations.

John Pugh (Southport) (LD): When can we look forward to the commercial production of shale gas in this country?

Charles Hendry: I think that it will be a while before we see commercial production. The situation here is very different from that in the United States, where, for example, landowners own the mineral rights beneath their homes. That is not the case in this country, so there is not the same economic driver. We are seeing some exciting assessments of the potential, but it will be some time before we see specific licences for development.

Renewable Energy

15. Caroline Nokes (Romsey and Southampton North) (Con): What assessment he has made of the effect on security of supply of the Government’s renewable energy policy. [116514]

The Minister of State, Department of Energy and Climate Change (Charles Hendry): The Department carries out a range of analyses to assess future security of supply. That includes the impact of all technologies, including renewable energy. Our most recent analysis was published in December 2011, and reinforces our commitment to a balanced energy mix to help to deliver security of supply. Ofgem will provide an assessment of future security of supply by 1 September, in line with its obligations under the Energy Act 2011.

Caroline Nokes: Gas continues to play an essential role as both a transition and a destination fuel for a low-carbon economy. What measures is the Minister considering to ensure that we have a secure and affordable gas supply to underpin electricity generation and support our energy-intensive manufacturing sector?

Charles Hendry: As my hon. Friend may know, we are putting together a gas generation strategy. We will look at the long-term role for gas, including the role that it can play in combination with other technologies. Other work is being done in relation to the implications for security of supply. We shall need to address wider issues as we move towards becoming a net importer of gas, but we are in no doubt whatsoever about the contribution that it can make.

Nuclear Power

16. Damian Collins (Folkestone and Hythe) (Con): What progress his Department has made on negotiations to build a new generation of nuclear power stations. [116515]

The Minister of State, Department of Energy and Climate Change (Charles Hendry): The Department of Energy and Climate Change regularly meets industry and other parties that are interested in the development of new nuclear power stations in the United Kingdom to discuss progress and the UK policy context. We are working with developers to address all relevant issues, so that they will be in a position to take final investment decisions as early as possible.

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Damian Collins: Is the Minister prepared to maintain an open mind about the suitability of sites such as Dungeness in my constituency for new nuclear build, particularly if new evidence suggests that some of the initial concerns about the sites that have been raised by Natural England could be overcome?

Charles Hendry: Let me reassure my hon. Friend that we will always keep an open mind in regard to new evidence. The problem with the Dungeness site was that development there was not compatible with the EC habitats directive. The Government’s major infrastructure environment unit is continuing to investigate, and if there is additional evidence, I shall be pleased to meet my hon. Friend at any time to discuss it.

Mr Dennis Skinner (Bolsover) (Lab): If the Minister is happy to meet the nuclear generation people, will he also take an interest in coal? We have 100 years’ worth of coal beneath our feet, and it is high time the Government paid some attention to the industry. Not many pits are left, and some of those are in jeopardy. It is high time the Minister met those people, together with the National Union of Mineworkers.

Mr Speaker: I assume that the hon. Gentleman is suggesting that as an alternative to new generation.

Mr Skinner: You have hit the nail on the head.

Mr Speaker: The approval of the hon. Gentleman means a great deal to me.

Charles Hendry: I had never seen the hon. Gentleman as an advocate of alternative energy policies.

I had a meeting yesterday with the head of the National Union of Mineworkers and the head of the National Association of Colliery Overmen, Deputies and Shotfirers, but if the hon. Gentleman feels that it is time for another meeting, I will of course consider that.

Green Investment Bank

17. Neil Carmichael (Stroud) (Con): What assessment he has made of the likely implications for his Department’s energy policy on the green investment bank. [116516]

The Secretary of State for Energy and Climate Change (Mr Edward Davey): The UK green investment bank policy is one of a number of policies that together will support the Government’s green and growth objectives. The bank, funded with £3 billion over the three years to 2015, will tackle gaps in the financing of green infrastructure projects. It will operate to a “double bottom line” of both achieving green impact and making positive financial returns. The initial priority sectors for the bank are offshore wind, waste and recycling, energy from waste, non-domestic energy efficiency, and support for the green deal.

Neil Carmichael: Does the Secretary of State agree that the green investment bank is emblematic of the Government’s determination to promote economic growth, and does he recognise the importance of ensuring that small and medium-sized enterprises are part of that story?

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Mr Davey: My hon. Friend is absolutely right: our energy infrastructure and climate change policies are very much part of our growth strategy, and are bringing forward serious investment. He is also right that SMEs play a critical role in this regard, particularly in respect of innovation and the supply chain that is developing in many of the new and existing markets that we are developing.

Joan Walley (Stoke-on-Trent North) (Lab): How is the Secretary of State following up representations from ceramics companies in Stoke-on-Trent, who are intensive users of energy and who have an agenda for innovation and investment, and who very much want to have the support of the green investment bank for the work they do?

Mr Davey: As the hon. Lady will know, a Department for Business, Innovation and Skills and Department of Energy and Climate Change consultation that has now closed looked at policies to help such energy-intensive industries. My right hon. Friend the Business Secretary will introduce some of the proposals, and we hope they will cover a range of industries.

Energy Bills

18. Graham Stringer (Blackley and Broughton) (Lab): What steps he plans to take to reduce the cost of energy bills for consumers. [116517]

The Secretary of State for Energy and Climate Change (Mr Edward Davey): My Department is taking a number of steps to help consumers with energy bills. Programmes such as the carbon emissions reduction target, Warm Front, the green deal and the energy company obligation are helping to make more homes energy-efficient. The warm home discount provides direct help—worth £1.1 billion until 2015—to cut bills for 2 million low-income and vulnerable households. The voluntary agreement announced by the Deputy Prime Minister means suppliers will ensure that all consumers have good information on their supplier’s best tariff.

Graham Stringer: Those measures are trivial compared with the amount of subsidy going into wind farms, which has the effect of making rich landowners filthy rich, and by 2020 will put £1,000 per head on consumers’ energy bills. When is the Secretary of State going to change those policies so the consumer benefits, rather than rich landowners?

Mr Davey: I am afraid that the hon. Gentleman has got his facts wrong. The support for renewable energy costs 6p a day per household, and in this financial year the warm home discount will result in 1 million of the poorest pensioners getting a discount of £130—so I have to say the hon. Gentleman is wrong.

Solar Panels

19. Mr Mark Spencer (Sherwood) (Con): How many solar panels were installed in the most recent month for which figures are available. [116518]

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The Minister of State, Department of Energy and Climate Change (Gregory Barker): About 13,800 solar PV installations, with a total capacity of 58.5 MW, were confirmed on to the feed-in tariff scheme’s central register in May 2012. I am pleased to report that that is more than double the number of installations—with more than triple the capacity—that were confirmed in the same month last year. Preliminary figures indicate even stronger growth this month.

Mr Spencer: Clearly, this is a very popular technology. Given that—and the discussion that has just taken place in the Chamber—might it be time to consider switching subsidy from wind farms to solar panels?

Gregory Barker: My hon. Friend is right: it is a very popular technology, and as our reformed FIT scheme is now driving down the costs and helping to promote competition, it is also scalable to a very large scale. Solar will be included properly for the first time in our renewables road map that we will publish later in the year. Solar will have a meaningful part to play in the energy future of Great Britain.

Oil and Gas Prices

Laura Sandys (South Thanet) (Con): What assessment he has made of the likely level of future global oil and gas prices. [116520]

The Minister of State, Department of Energy and Climate Change (Charles Hendry): DECC publishes low, central and high projections for long-term trends in world oil and gas prices. In 2011 prices, our central scenario is for oil to rise to $130 per barrel by 2030 and for gas to rise to a high of over 80p per therm in the middle of this decade, before falling back to settle at about 70p per therm.

Laura Sandys: Does the Minister see a time coming when we can decouple fossil fuel prices from low-carbon production prices?

Charles Hendry: We are already seeing some decoupling. We have seen a decoupling of the oil price from the gas price. We are expecting to see that gas will be an important source of generation in its own right, but that it will also have a very important future in providing back-up to renewable generation, which will inevitably be intermittent in most areas.

Mr Speaker: We are ahead of time today, and we will move on now to topical questions.

Topical Questions

T1. [116522] David Morris (Morecambe and Lunesdale) (Con): If he will make a statement on his departmental responsibilities.

The Secretary of State for Energy and Climate Change (Mr Edward Davey): Since my Department’s last Question Time we have published a draft Energy Bill for pre-legislative scrutiny, set out the next steps for the green deal, publishing the detailed plans and secondary legislation, and we have helped to broker an EU energy-efficiency directive. There is also decarbonising power generation,

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a new market for energy-efficiency and European leadership on international climate change—it is an ambitious agenda.

David Morris: I thank my right hon. Friend for that comprehensive answer. However, may I ask him what steps his Department is taking to ensure that Horizon Nuclear Power switches from its current owner, E.ON, to a new one with the minimum of disruption to nuclear build in Britain?

Mr Davey: My hon. Friend will know that, ultimately, this is a commercial decision for the owners of Horizon Nuclear Power—RWE and E.ON—but we have been working with them to facilitate investors coming forward to talk to them. We are very optimistic that we will see the Horizon project sold to another consortium and that new nuclear build will continue.

Caroline Flint (Don Valley) (Lab): Since this Government came to power, we have seen: the chaotic mismanagement of cuts to solar power; delays to the green deal; delays to the borrowing powers of the green investment bank; cuts to the Warm Front scheme, with far fewer people getting a chance to avail themselves of that support, as my hon. Friends have said; and an Energy Bill that was laughed out of the room by the Select Committee. We have also heard in questions today that the assessments for that Bill are going to have to be further revised. This week, we also learned that the Department has underspent its budget by nearly £400 million. Nobody is against the efficient management of office budgets, but this is a ministerial team who fudge decisions, make the wrong choices, cannot keep to timetables and are incapable of managing the budget. Is this not another example of the omnishambles that is spreading through this Government like a virus?

Mr Davey: The right hon. Lady is getting a name for inaccuracy on some of these points. Let me deal with the new issue that she has raised—the Department’s underspend. Some people would congratulate the Department on underspending—

Caroline Flint: It is £400 million.

Mr Davey: She says £400 million, but I am afraid that she needs to look at the facts, because the real figure for underspend is £266 million. That is still a large underspend, but I have to tell her that £177 million of that comes from higher energy trading income from the Nuclear Decommissioning Authority’s programme. So better performance by one of our non-departmental bodies is producing more money for the Treasury—I would have thought that she welcomed that.

T2. [116523] Amber Rudd (Hastings and Rye) (Con): The residents of Hastings and Rye are looking forward to cheaper energy bills following the implementation of the green deal. What plans does the Minister have to make sure that residents of social housing also get the benefit of that? May I also invite him, as Minister and constituency neighbour, to come to Rye to share that information with AmicusHorizon?

The Minister of State, Department of Energy and Climate Change (Gregory Barker): I congratulate my hon. Friend, who has taken a very close interest in this issue of how

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we are going to help the poorest people in our society access the green deal and to improve the housing stock for everyone. I can assure her that we are working very closely with both the Local Government Association, the National Housing Federation, and with individual local authorities and community groups. I would also be delighted to come across the border and have a round table meeting to see how we can drive forward the agenda in Hastings and Rye.

T3. [116524] Alun Michael (Cardiff South and Penarth) (Lab/Co-op): Ministers will be aware that the Welsh landfall for an optimal Severn tidal barrage will be in my constituency. Given the need for a major increase in renewable energy and the potential for creating nearly 40,000 jobs, will Ministers provide us with some clarity on what the Government will do to promote this project?

The Minister of State, Department of Energy and Climate Change (Charles Hendry): I am sure that the right hon. Gentleman is aware that a year or so ago we published a report, which had been commissioned by the previous Government, to look at the barrage proposals and the lagoon proposals. It showed that the largest of those would cost £30 billion-odd, and we believe that in the current climate that is unaffordable. We know that work is being done on looking at other ways of bringing finance into that. We have said that we will keep an open mind on the proposal, but it needs to be done at a cheaper cost to consumers.

Sarah Newton (Truro and Falmouth) (Con): The Department has been a really good friend to the emerging deep geothermal energy industry in this country, through regional growth funding and direct support. Can the Government make that last commitment to give the industry the five renewables obligation certificates it needs as part of the review, which would enable the first commercial deep geothermal power station to be opened in my constituency?

Charles Hendry: My hon. Friend will not have to wait very long before we provide the final decisions on the renewables obligation banding review. She might also be interested to learn that I recently went to Iceland to sign a memorandum of understanding with the Icelandic Government about how we can share some of their knowledge as the world’s leading economy in geothermal power and heat, and see how that can be brought to bear to assist developments such as those in her constituency.

T4. [116525] Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): Since this rather miserable Government came to power, pensioners in my constituency have seen their energy bills rise by £200. If the Government insisted that the big energy companies put those pensioners aged over 75 on the cheapest possible tariff, 5,500 pensioners in my constituency would see their bills drop by £200. Is it not time that the Government stood up for senior citizens rather than the big energy companies?

Mr Davey: I have good news to cheer up the hon. Gentleman. Under the warm home discount, 1 million of the poorest pensioners will get £130 off their bills in this financial year. Under the voluntary agreement

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negotiated by my Department and announced by the Deputy Prime Minister in April, the big six will ensure that customers who are getting the warm home discount are informed that they can move to the cheapest tariff, if they are not already on it, which will augment the benefit from the discount.

Several hon. Members rose

Mr Speaker: Order. May I remind the House that topical questions are supposed to be significantly shorter, and the same goes for the replies? We will then be able to get more colleagues in.

David Mowat (Warrington South) (Con): Over the past few months, there has been a significant increase in the level of electricity imports, mostly cheap nuclear from France, through the interconnector. Indeed, over the past 24 hours we have imported more electricity by a factor of two than we have produced from offshore and onshore wind. That is a big policy failure and is costing us thousands of jobs. How can we address it?

Charles Hendry: I disagree with my hon. Friend, as the interconnector is an essential part of our energy security. We have seen a new interconnector introduced to Holland and a new connection is coming through to Ireland. We are exploring other aspects of the matter, too. We think that it is a fundamental part of energy security and delivering low-carbon electricity at the cheapest cost to consumers.

T5. [116526] Graeme Morrice (Livingston) (Lab): What steps is the Secretary of State taking to ensure that energy bill standing charges do not unfairly hit the fuel poor and other low-income consumers, especially pensioners?

Mr Davey: The hon. Gentleman will know that Ofgem is undertaking a retail market review that is considering standing charges. We expect its deliberations to be published in the autumn. Given that it is an independent regulator, I am sure that the hon. Gentleman will agree that I should not pre-judge its conclusions.

Tessa Munt (Wells) (LD): Investing in a balanced mix of low-carbon energy projects has huge job creation potential. The CBI’s analysis has shown that the green economy currently supports 940,000 jobs, two thirds of which are outside London and the south-east. Does the Minister agree that that reveals how the green economy can support a balanced nationwide economic recovery?

Mr Davey: I strongly agree with my hon. Friend and pay tribute to the work she does in her constituency to promote energy efficiency and renewables. She mentions the CBI report and it is clear that the CBI’s director-general, John Cridland, is very supportive of the Energy Bill and our attempts to increase investment in energy infrastructure, which he sees as a key part of this Government’s growth policy.

T6. [116528] Lilian Greenwood (Nottingham South) (Lab): Under Nottingham’s decent homes programme, more than 15,000 tonnes of carbon will be saved each year. Nottingham City Homes, the local arm’s length management organisation, can use decent homes

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funding to lever in additional benefits from the green deal’s energy company obligation, but that funding remains indicative for 2013 to 2015. What discussions has the Secretary of State had with the Department for Communities and Local Government on decent homes funding and will he join me in praising the environmental benefits achieved by Nottingham’s “Secure Warm Modern” programme?

Gregory Barker: I would go further and praise Nottingham for a whole range of things that it is doing. It has a very progressive agenda and I look forward to visiting Nottingham in the near future to engage on how we can drive that agenda forward. I cannot comment in detail on something that is the responsibility of DCLG—the decent homes programme—but I can say that we are keen for the green deal programme to leverage in all sorts of additional finance where possible. It is about not just energy efficiency but the wider sustainable regeneration of areas such as Nottingham.

Chris Heaton-Harris (Daventry) (Con): The Department’s own figures suggest that, in 2009, 50,000 people were put into fuel poverty because of the wind element of renewable energy. Will the Secretary of State give up-to-date figures on that?

Mr Davey: I saw the press reports that made that allegation and I am afraid that I do not agree with them at all. The press article was trying to suggest that particular amounts of money that come from consumer bills to support the renewables industry was the top bit that would push people into fuel poverty. It was a very poor analysis and we completely reject it.

T7. [116530] Graham Stringer (Blackley and Broughton) (Lab): The Minister failed to answer the question earlier about when shale gas would come on line, yet this source of energy would create real jobs and partially decarbonise the energy industry as well as lowering fuel bills. Why does he not get a move on?

Charles Hendry: This is not a matter purely for the Government. Companies here are exploring for shale gas and seeking to identify how much of the resource there may be. They will then need to apply for a licence, get permission from the Health and Safety Executive and get approval from the Environment Agency. A range of different bodies, in addition to local planning permission, are a vital part of the process. It may well have a role to play, but it has to be done with the strictest environmental and safety protections.

Damian Hinds (East Hampshire) (Con): Does my hon. Friend agree that the continued growth of UK solar vindicates the approach of this Government, who keep returns attractive and make the money go further, in stark contrast to the limited ambitions and dodgy maths of a previous Secretary of State, now Leader of the Labour party?

Gregory Barker: Absolutely. We will see far, far more deployment now in the rest of the Parliament than we would have done if we had carried on with Labour’s very expensive, unfit for purpose, form of subsidy. Moreover, there is other exciting news. I am delighted that Sharp, the leading European manufacturer of solar,

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has announced that subsequent to the reforms, it will move its European manufacturing base from Germany to the UK—a real vindication of our reforms.

Derek Twigg (Halton) (Lab): The Heath business and technical park in Runcorn in my constituency is one of the most important employment sites in the north-west, but the decision by SP Manweb plc to apply for a wayleave to retain electric lines on the site is putting at risk a multi-million pound investment in jobs and houses, which has been made worse by the fact that the Department will not be able to make a decision on this until well into next year. Will the Secretary of State intervene quickly to ensure that the investment does take place and is not put at more risk?

Charles Hendry: I am interested to hear the hon. Gentleman’s comments. I am not aware that he has written to me on the subject. If he has done so, I will be very keen to talk to him to see if there are things that we can do to speed up the process, because I understand the impact that it could have on employment in his constituency.

Neil Carmichael (Stroud) (Con): Does the Minister welcome the news that nearly a third of the 900,000 new jobs have come into the green economy, which is obviously underlined by the excellent news that Sharp is moving to this country from Germany?

Mr Davey: I strongly agree with my hon. Friend. The House recently debated the green economy, and Members on both sides of the House gave examples from their constituencies of big investments and job creation as a result of our policies and the green economy.

Chi Onwurah (Newcastle upon Tyne Central) (Lab): There is real concern, especially among small innovative companies, that the Department’s smart meter programme, which should help reduce energy bills, is behind schedule, disorganised, has no technical standards to help small companies take part and is unco-ordinated with either the smart grid programme or spectrum release. Will the Minister provide some reassurances?

Charles Hendry: Let me provide the hon. Lady with reassurances. We have sped up the programme that we inherited and brought it forward by 12 months, we have been going forward in a very collaborative approach with industry to get its buy-in to all the key decisions, and we have submitted the technical specification for European Commission approval, which is happening in two stages, with one going through now and the second shortly. We see this as a very important aspect of energy efficiency and putting consumers in power, and also for real business opportunities for large and small companies alike.

Andrew George (St Ives) (LD): Energy bills are still impenetrable to many households. What progress are the Government making to ensure that energy companies improve the transparency and clarity of their domestic bills?

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Mr Davey: As we said earlier, work is under way on this. Ofgem, through its retail market review, is looking at tariff simplification, which is important. As my hon. Friend will know, since becoming Secretary of State, I have been pushing the idea of collective switching and collective purchasing, and simpler bills will be a big facilitator for that.

Jessica Morden (Newport East) (Lab): Like my hon. Friend the Member for Scunthorpe (Nic Dakin), I have concerns about what the Government are doing to maximise the use of UK steel in the low carbon economy and all the opportunities that that brings. I understand that the Minister’s answer was encouraging, but does he appreciate that we must get this right now, because the deteriorating market for steel is impacting on workers in my constituency today?

Charles Hendry: Let me reassure the hon. Lady that that is absolutely at the heart of what we are doing. We are determined that there will be a major industrial gain for this country from building the new low-carbon facilities, as well as some of the older type of facilities. We have strategies for the oil and gas sector, the nuclear sector and the renewable sector. Throughout this area we want to see real industrial gain, often bringing new employment to areas that have been hard hit for a very long time.

Peter Aldous (Waveney) (Con): Following on from the CBI’s report, the New Anglia local enterprise partnership has just published its manifesto for promoting green growth over the next three years. Will the Secretary of State and his colleagues across Government work with the LEP to discuss how its manifesto can best be implemented?

Mr Davey: We are keen to hear from any LEP across the country. I know that my right hon. Friend the Secretary of State for Business, Innovation and Skills and his ministerial team work closely with LEPs. Across Government we want to support their work in promoting the green economy.

Dr Alan Whitehead (Southampton, Test) (Lab): Has the Minister spoken with the developers of large-scale wind farms who have difficulties because their development periods straddle the end of the renewables obligation and the start of—if they come to pass—contracts for difference? Does he consider that the end of the RO, if that is necessary, should be in 2020, rather than 2017, in order to accommodate those problems?

Charles Hendry: We are not persuaded by that argument. We think that there needs to be a clear switchover date and are giving a long lead-in time, to 2017, so that there is certainty. Alongside that, we are giving people the choice of whether they go with the existing renewables obligation mechanism or move to the new contract for difference mechanism so that they have the best opportunity to decide what works for them in the longer term.


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Olympics (Security)

11.30 am

Keith Vaz (Leicester East) (Lab) (Urgent Question): To ask the Home Secretary if she will make a statement on the Olympics security situation.

The Secretary of State for the Home Department (Mrs Theresa May): The Government’s overriding priority is to use all resources necessary to deliver a safe and secure Olympic games. That is what the public and the House would expect. The security operation has been meticulously planned. It will be the largest and most complex security operation in this country since the second world war.

Police plans, and those of the security and intelligence agencies, are well advanced. The success of the policing operation around the nationwide Olympic torch relay gives confidence in the robustness of police planning. Contingency planning has always been central to our security work, should any changes be needed at this late stage. The games security picture can change rapidly, so we have deliberately built in flexibility to respond to any challenge.

As the Defence Secretary has already told the House, we had always intended to deploy 7,500 military personnel to support the venue security operation organised by the London Organising Committee of the Olympic Games and Paralympic Games. These military personnel have already started to deploy to venues to support the rolling search and lock-down process between now and the start of the Olympics. They are already working alongside the police, LOCOG, the commercial security provider, G4S, and accredited volunteer staff.

As the venue security exercise has got under way, concerns have arisen about G4S’s ability to deliver the required number of guards for all Olympics venues and within the time scales available. The Defence Secretary and I, along with other Ministers, have been constantly monitoring the situation and the security contracts over many months. In consultation with LOCOG and G4S, we have now agreed that it would be prudent to deploy additional military support to provide greater reassurance.

I have therefore requested additional MOD support, and the Defence Secretary has authorised the deployment of a further 3,500 military personnel. That will bring the total number of military personnel supporting the safety and security of the games in a variety of roles to 17,000, including the military personnel deployed on functions wider than venue security. The chiefs of staff support an increased deployment and have confirmed that the deployment will have no adverse impact on other operations. The Government have committed £553 million for venue security and remain confident that we will deliver within that budget.

Ministers across Government recognise the burden that this additional short-notice deployment will impose upon individual servicemen and women and their families, especially over the summer holiday season, so we will ensure that all those taking part receive their full leave entitlement, even if it has to be rescheduled, that no one is out of pocket due to cancelled personal arrangements and that all deployed personnel are appropriately supported.

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We have agreed with LOCOG that 10,000 Olympic and Paralympic tickets will be donated to the armed services via Tickets for Troops. Access for 2,000 people to spectator areas in the Mall for the Olympic cycle road races and the Olympic marathon will also be made available, as will the right to buy 2,000 Olympic park tickets. In addition, I can tell the House that a total of 7,000 tickets have now been offered to the troops for the dress rehearsals of the opening and closing ceremonies, a significant increase to recognise their extra commitment.

I can confirm to the House that there remains no specific security threat to the games and the threat level remains unchanged, and let me reiterate that there is no question of Olympic security being compromised.

In this country, we have the finest military personnel in the world, and they stand ready to do their duty, whatever the nation may ask. Our troops are highly skilled and highly trained, and this task is the most important facing our nation today. I know that we can rely on our troops to help deliver a safe and secure Olympic games that London, the country and the whole world can enjoy.

Keith Vaz: I thank you, Mr Speaker, for granting this urgent question and the Home Secretary for coming to the House at such short notice. I endorse the Government’s decision to provide 3,500 additional troops.

The right hon. Lady will understand, 15 days from the start of what we all hope will still be the greatest Olympics that have ever been staged, our deep concern about reports that surfaced last Sunday, now confirmed by the Government, that there is a shortfall in the trained security officers provided by G4S.

On Monday in the House the Home Secretary said:

“We have been testing our plans thoroughly and are confident that our partners”—

“our partners”—

“will deliver a safe and secure games”.—[Official Report, 9 July 2012; Vol. 548, c. 9.]

I spoke this morning to the chief executive of LOCOG, who told me that the matter surfaced, that it crystallised a fortnight ago but there had been concerns for some time, and that the decision, as the Home Secretary says, was made by all parties concerned.

Can the Home Secretary confirm the exact date that Ministers found out about the security shortfall, and the action that she took? When was the decision made to ask the Secretary of State for Defence for these additional troops, and when did he agree to provide them? What processes were in place to monitor the situation over the period—indeed, the lifetime—of the G4S contract?

I am very pleased with what the Home Secretary has said about the taxpayer not being inconvenienced by the situation, but will any troops have come from abroad and, therefore, be entitled to leave now because they are exhausted? It is a question not just of their being out of pocket.

Can the Home Secretary confirm that G4S will suffer penalties as a result of this fiasco? As she knows, G4S is already the supplier of hundreds of millions of pounds worth of Government contracts, from prisons to the immigration service. Will she now look at those contracts and ensure that there is a pause before any more are awarded?

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Can the Home Secretary confirm that the Prime Minister had to cancel his appearance before the Olympic security committee this week, but that it will be rearranged? I attempted to contact the chairman of G4S this morning. Apparently he is in an emergency meeting with the MOD, the Home Office and other officials. I hope it is not another crisis meeting, with another set of changes.

G4S has let the country down, and we have literally had to send in the troops. Can the Home Secretary assure the House that she is now satisfied that all the changes she has announced today will mean that what we hope will be the greatest games ever staged will be done securely, for the safety of visitors and the British people?

Mrs May: I thank the right hon. Gentleman for his support for the Government’s decision. It is absolutely right that, at this stage, when what may be a gap has opened up, we act quickly to ensure that any gap will be filled.

The right hon. Gentleman asks about my remarks in the House on Monday, and about when the gap in the numbers from G4S was crystallised. We were receiving reassurances from G4S until very recently, and the absolute gap in numbers was crystallised finally only yesterday.

Because we have been monitoring the situation, we had had discussions with the MOD about whether troops would be available for the contingency, should the circumstances have arisen in which that was necessary, and that is why yesterday we were able to take that decision, having prudently had those discussions and made those contingency arrangements.

As I said in my response to this urgent question, we have been monitoring: monitoring has been taking place throughout the contract process; and we have obviously been testing and challenging the assurances that we have been receiving from G4S.

It is the case that some troops who are now within that 3,500 number will be from abroad, and some will have returned from recent operations.

The right hon. Gentleman asked about penalties for G4S. LOCOG signed the contract with G4S, and I understand that there are penalties within that contract. It will be for LOCOG to deal with that matter with G4S. He said that the Prime Minister had been forced to cancel the Olympic security board meeting this week, but the Prime Minister was not forced to do that.

What is absolutely essential is that when the Government identified that a need was there, we acted to ensure that we covered that requirement so that we can ensure that we have the venue security and general security for the games that we all want.

Mr James Clappison (Hertsmere) (Con): I welcome the decisive action that my right hon. Friend has taken in safeguarding security for the Olympics. I particularly welcome what she said about the armed forces; the country would appreciate it if the powers that be were as generous as possible to members of the armed forces and their families in respect of receiving tickets and hospitality for the Olympic games.

On the further, separate point about G4S that the right hon. Member for Leicester East (Keith Vaz) has just chosen to make, is it not the case that G4S received

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large-scale contracts from the Government and was considered fit to receive such contracts before May 2010, for example?

Mrs May: My hon. Friend is absolutely right on that point. On his earlier point about generosity to the armed forces, I should say that the Secretary of State for Defence has taken that very seriously. He has been ensuring that we will be generous to those who are taking on the responsibility. As I outlined in my remarks, a number of arrangements are being made to cover that, particularly if members of the armed forces have personal arrangements, to make sure that they are not out of pocket and that they will get the leave to which they are entitled.

Yvette Cooper (Normanton, Pontefract and Castleford) (Lab): Everyone wants us to have a safe and successful Olympics, and we support the Home Secretary’s decision to bring in extra military support in the circumstances. We also recognise that, given the scale of the Olympic challenge, no one can guarantee that everything will go smoothly.

However, I have to say to the Home Secretary that this really looks like another huge Home Office shambles. On Monday, she was asked specifically about recruitment at G4S. She said:

“The Home Office has put in place a number of assurance processes to ensure that we have effective and robust scrutiny of venue security planning. We have been testing our plans thoroughly and are confident that our partners will deliver a safe and secure games”—[Official Report, 9 July 2012; Vol. 548, c. 9.]

She was so confident that two days later she called in the troops. What does it say about the Home Secretary’s assurance process that it took until two weeks before the games to realise that 3,500 military additional personnel would be needed? G4S is not just a few volunteers short—we are talking about 3,500 people from a contract to provide 10,000 staff and 6,000 volunteers. That is a breach of contract of about 25%. Why did it take until lock-down to realise what was going on?

The Minister responsible for security, the hon. Member for Old Bexley and Sidcup (James Brokenshire), told the “Today” programme this morning:

“We’ve obviously been monitoring the progress and been challenging them, asking the questions, really going down, kicking the tyres and doing all those sorts of things.”

Well, it was not very effective—was it?—if, with just 15 days to go, we could be in this situation. Can the Home Secretary tell us again what will happen to the G4S contract? Has she even asked those questions to make sure that the security budget is not affected and that the taxpayer does not end up out of pocket?

Of course we pay tribute to our military, who I am sure will do an excellent job, but what does it say about the Home Office that there are still two-hour queues at Heathrow, that borders staff sacked last year are being re-recruited, that the borders force is becoming a borders farce, and that the dynamic duo of the security Minister and the Minister for Immigration were tripping up this morning in the “Today” programme studios to defend themselves on different aspects of Home Office incompetence?

Everyone is working really hard to make the games a success and show the world the best of British. The Home Office is making that harder, not easier. I say to

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the Home Secretary: please get the security and border problems sorted out and stop letting everybody else down.

Mrs May: I think that I can deal swiftly with the right hon. Lady’s response. First, I thank her for her support for the decision. Secondly, I should say that it is not a shambles when the Government take the action necessary to ensure that we are providing the venue security. Troops have always been part of the provision of venue security and we are taking the action that ensures that we have the confidence that the numbers will be there. She should have listened to the answer I gave to the right hon. Member for Leicester East (Keith Vaz) about the timetable in relation to the G4S contract. It is a LOCOG contract, and it is for LOCOG to exercise the penalties within it.

As for the right hon. Lady’s reference to my hon. Friends the security Minister and the Minister for Immigration, I am sure that if neither of them had been speaking publicly about these issues today she would have complained about that as well. I am slightly sorry that she has not taken the approach of her noble Friend, Lord West, who has said, “I’m not trying to indulge in a blame game regarding Governments.” It is a pity that she could not, like him, be a bit more statesmanlike.

Mr Don Foster (Bath) (LD): Safety and security is of paramount importance, and we should welcome the willingness of our armed forces to take on these additional responsibilities. Will the Home Secretary assure us that the additional troops will be provided with the necessary training, particularly for specialist tasks such as scanning? If G4S can bring additional people in, may we have an assurance that troop numbers will be reduced over time?

Mrs May: I thank my right hon. Friend for those questions. Yes, I can absolutely give the assurance that the training will be provided. We will of course want to ensure that at all times we have the correct number and the correct mix of people available to undertake venue security duties. I assure him that the troops will be used for tasks for which they have been fully trained.

Mr Jack Straw (Blackburn) (Lab): Will the Home Secretary be more precise about the numbers? We know that 3,500 additional troops are being brought in. What was the total number of trained staff for whom G4S was contracted, and what is the shortfall in numbers?

Mrs May: The overall number that we were looking for was 23,700, which includes 7,500 troops. The right hon. Gentleman can do the maths for himself in terms of the total numbers and make-up of staff, who include volunteers, students, and the G4S staff themselves. G4S undertook the training of all those elements. G4S has said that it is not able to provide the balance of 16,000 to 17,000 guards, and therefore we have taken the step of bringing in the 3,500 military personnel. That is absolutely what one would expect a Government to do in these circumstances, and if he were in government, he would be doing exactly the same thing.

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Nicholas Soames (Mid Sussex) (Con): May I congratulate the Home Secretary on the prompt way in which she has dealt with this difficulty? Will she confirm that members of the Territorial Army based around London would be extremely serviceable on this occasion and would, I am sure, be very pleased to be called up to help in these matters? Will she assure us that all the security and immigration matters at Heathrow have been attended to, so that there is the ability to get people swiftly through and it will be a flawless operation?

Mrs May: I thank my right hon. Friend for his very appropriate reference to the reserves, who are indeed being used. We welcome the work done by people who willingly give up their time to the Territorial Army, and they will be part of the troop deployment that will be taking place for the security of the Olympics. On Sunday, the contingency arrangements for the Olympics period will kick in at Heathrow, with the extra numbers of staff over and above any who have already gone in, and there will be a policy of ensuring that all desks are manned at peak times. That will deal with the issue he raised.

Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab): I share the view that has been expressed about the military. In February 2003, when there was a very serious security threat to Heathrow, we discovered that the deployment and demeanour of the military was crucial in avoiding turning security into a feeling of insecurity. Given the deployment of missiles on residential property and the numbers of military now being deployed, will the Home Secretary talk to LOCOG to ensure that we do not have a repeat of a situation where visitors to this country feel genuinely worried?

Mrs May: I think that the opposite is the case. Obviously, we want people who are coming to the Olympics to feel that they are coming to an event that is about sport and not to think that the prime issue that they are facing is security. All the evidence so far is that the troops who are already at Olympic venues are welcomed, that their demeanour is entirely appropriate, and that they provide a degree of reassurance that is welcome to the public.

Jane Ellison (Battersea) (Con): The Chair of the Home Affairs Committee has rightly asked an important question this morning and I am grateful for the Home Secretary’s reassurances. Does she share my feeling that the sour attitude and political point scoring from the Labour Front Bench will not be forgotten by Londoners if it continues?

Mrs May: My hon. Friend, as a London Member of Parliament, has made her point very appropriately and very well. I say to the Opposition that what Londoners and people across the country want is for us all to be behind the Olympics and to do what we need to do to ensure that it is a great event for the United Kingdom.

Mr David Winnick (Walsall North) (Lab): Despite all the excuses that are being made, does the Home Secretary recognise that people will see what The Daily Telegraph has written about a security farce as perfectly justified? What is so difficult to understand is that, with all the

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time that has been available to prepare for the Olympics, we now have this near-crisis with just 15 days to go. Why should the country be let down by the Home Secretary and by the failure to plan properly? Why should Britain become an international embarrassment as a result of her incompetence?

Mrs May: The aspect of the hon. Gentleman’s question that most strikes me is the fact that he reads The Daily Telegraph. The Home Office has ensured that contingency arrangements are in place throughout this period. We have monitored the progress and looked for reassurances from LOCOG, whose contract it is with G4S, and from G4S. As I said in answer to the Chairman of the Home Affairs Committee, the gap in numbers that has been identified, which requires us to employ these 3,500 troops on venue security, crystallised only yesterday.

Penny Mordaunt (Portsmouth North) (Con): I draw the attention of the House to my interest as a member of the Royal Navy Reserve. This situation shows how reliant we are on our armed forces. We must never take them for granted. I welcome the Home Secretary’s announcements about compensation and access to events, which I think will be very much appreciated. Will she reassure the House that there will be enough time and budget to ensure that, whether they are regulars or reservists, people are properly trained?

Mrs May: Yes, I can give my hon. Friend that assurance. She is right that we would not want to put our military personnel into these circumstances without their having been trained, because they are not usually required to undertake some of these duties. The training will be there.

Alun Michael (Cardiff South and Penarth) (Lab/Co-op): It is clearly in the Home Secretary’s job description to look unruffled when faced with a shambles, and she is getting plenty of practice. Very simply, if the operation was planned as meticulously and monitored as carefully as she claims, how did it go so badly wrong?

Mrs May: As I have said, and as the right hon. Gentleman has repeated, we have been monitoring this situation, but, of course, it is only at this point, when the scheduling of staff for the Olympic games comes through fully, that these sorts of issues start to arise. It is perfectly reasonable for the Government to have been talking to G4S and LOCOG throughout this period, which we have been doing. We have ensured that contingency arrangements are in place in case there are any difficulties. When we were advised yesterday that the guarantee was not there of the numbers that we needed, we did what was absolutely right and appropriate: we said that we needed to put extra contingency arrangements in place and we did so.

John Glen (Salisbury) (Con): It seems that the Government have received verbal assurances from G4S, but not verifiable recruitment plans and progress reports. What wider lessons does this episode give the Government on how to handle such situations in future?

Mrs May: We have obviously had discussions with LOCOG and G4S about their plans for the numbers that they were bringing on board at any particular point

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in time. It has become clear to G4S that it cannot guarantee the numbers that it had previously given us reassurances about. It is in those circumstances that we have made the contingency arrangements.

Kate Hoey (Vauxhall) (Lab): I welcome the use of extra servicemen and women at our Olympics. The three Olympic games that I have attended have had many representatives of the armed forces, who do a brilliant job. Perhaps they should have been involved from the beginning and the money that has gone to this security force could have gone to them to start with. Can we please remember that this is a sporting event? I worry that we are going so over the top on the security aspect that people have forgotten that this is about countries competing in sporting endeavours in a friendly way.

Mrs May: The hon. Lady makes an extremely valid point. This is a sporting event. We want people to come to London 2012 and enjoy it as a sporting event. We want them to feel safe and secure while they are doing that. That is why it is appropriate for us to ensure that the venue security arrangements are right. She referred to the military being engaged in other Olympic games. The military in the UK provides security at other sporting events, such as Wimbledon, so it is not unusual. What is different is the scale of this event and, therefore, the scale of the venue security that has to be provided.

Nick de Bois (Enfield North) (Con): I commend the Home Secretary for her swift action. I can imagine the furore on the Opposition Benches had she not taken such action. On the penalty clauses between LOCOG and G4S, in my experience of business, such clauses are easily wriggled out of. I urge her to press LOCOG to publish the details of any successful rebate that it gets as a result of these apparent errors.

Mrs May: My hon. Friend is right that in previous examples, penalty clauses have not operated as well as they should have done. This is a matter for LOCOG to deal with, along with G4S. Everybody accepts that there are penalty clauses in the contract. That is obviously being looked at carefully. I will ensure that LOCOG is aware of his suggestion.

Margaret Hodge (Barking) (Lab): I join others in congratulating the armed services on identifying personnel so swiftly and thank the 3,000 volunteers who will provide venue security. The Public Accounts Committee has looked at the issue of venue security a number of times. Does the Home Secretary accept that her Department and LOCOG did not identify early enough the numbers that would be sufficient? The contract with G4S was increased from £282 million at the time of the spending review to £553 million a few months later in December 2011. That suggests insufficient planning. Her officials, together with LOCOG officials, gave assurances to my Committee that they would recruit sufficient numbers perfectly adequately. Why did her officials give those assurances when it has now become so chaotic?

Mrs May: On the right hon. Lady’s second point, the assurances were given on the basis of the discussions that were taking place with the contracted providers. At that stage, the contracted providers were clear that they

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were going to be able to provide the numbers that they were contracted to provide. As I have explained, the gap that has opened up finally crystallised only yesterday when the request came through and we accepted that there was a need to undertake further contingency arrangements.

On the right hon. Lady’s first question, it was never the case that it would be possible, two or three years out, to identify absolutely every requirement of venue security. It was possible to identify the full requirements for venue security only at the point when all the venues had been determined by LOCOG, the appropriate level of security at the venues had been determined and the programme of events had been scheduled. It was at that point that the numbers necessary for security were finally determined.

Sir Bob Russell (Colchester) (LD): I pay tribute to all members of Her Majesty’s armed forces who will provide security at the Olympic games, particularly those from the Colchester garrison. Is it not fortunate that we still have an Army large enough to deploy these numbers? I put it to the Home Secretary in respect of G4S that no public contracts funded by UK taxpayers should go to a company that is aiding and abetting the state of Israel with illegal activities in the west bank.

Mrs May: I will not go down the route that the hon. Gentleman is trying to tempt me down on a matter that is more appropriate to my right hon. Friend the Secretary of State for Defence. However, I would say that G4S is one of the largest security providers in the world, so it was natural to look to exactly such a company for venue security.

John McDonnell (Hayes and Harlington) (Lab): Security begins at Heathrow. For months, the Public and Commercial Services Union, which represents border control staff, has been warning the Government that there are too few staff. BAA wrote to the Government saying that the queues were caused by too few staff, and the former head of border control has said that the temporary staff who have been brought in are totally inadequately trained to meet security needs. I am worried not just about the embarrassment caused to this country by passengers who are coming for the Olympics spending more time in the queues than watching the Olympics, but about the security of the staff working at Heathrow, many of them my constituents. Does the Home Secretary not understand that her statement will be seen as utterly complacent about what is really needed at Heathrow airport?

Mrs May: I welcome the hon. Gentleman’s support for the Government’s approach to border security. When we identified that security checks had been relaxed and put to one side on many occasions between 2007 and 2011, we decided that as the job of the border forces is about border security, we would tighten up that security.

Mr Philip Hollobone (Kettering) (Con): In failing to honour its contract, G4S has clearly let the whole country down. As a result of the Home Secretary’s swift and correct decision today, Britain will have more troops dedicated to venue security than deployed to Afghanistan.

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It is not enough to rely on penalty clauses in LOCOG’s contract with G4S. My constituents would want the Home Secretary and the Government to say that G4S should have no more Government contracts whatever until it pays every last penny of the additional costs of the extra 3,500 troops.

Mrs May: My hon. Friend refers to the number of troops working on venue security, but of course the overall number of troops that I cited includes those who will be involved in specialist support and other operations as well.

A number of right hon. and hon. Members have made comments about G4S and its contract, but it is still contracted to LOCOG as a partner to produce a significant number of personnel for venue security. We want to work with it, and we want LOCOG to work with it, to ensure that it can deliver the number to which it has now committed.

Jim Fitzpatrick (Poplar and Limehouse) (Lab): The whole House accepts the Home Secretary’s assurances about the great role that the armed services will play in the Olympics. Does she recognise, however, that the real casualties are the thousands of people who were looking for employment and volunteering opportunities as part of the legacy of the games? This morning, the airwaves were full of them complaining and expressing their frustration. Does she recognise that frustration, and can she say anything to them today?

Mrs May: We continue to support the work that G4S is doing to bring in the number of people that it has now said it will be able to supply. At the point when G4S and LOCOG identified that, in their estimation, there would be a gap in the number of people such as the hon. Gentleman mentioned coming forward to work in security jobs at the various Olympic venues, it was absolutely right that the Government said that we would not just risk what might happen. We decided that we would ensure venue security, and that is exactly what we have done.

Dr Andrew Murrison (South West Wiltshire) (Con): Once again, our regular and reserve forces are about to prove that they are indeed the nation’s flexible friend, but they must not be taken for granted, and it is good to hear that the Home Secretary is not doing that. There will be big cash and opportunity costs for the Ministry of Defence budget as a result of all this. What structures exist to ensure that any clawback from G4S is hypothecated to the MOD?

Mrs May: I assure my hon. Friend that discussions are taking place among Departments about the funding. The funding will not reside with the MOD. The matter of penalties is one between LOCOG and G4S, but the Government will discuss it with them. As he rightly says, if the required numbers have not been delivered, the financial penalty proceeds should revert to the Government to make extra money available.

Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op): I share the concerns of my hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) about the number of people, including in my constituency,

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who would have loved to have had one of the 12,000 jobs that are now going not to security staff but to the armed forces.

The Home Secretary has been in her post for two years and two months. In that time she has had three security Ministers, and Olympic security needs have more than doubled. The Home Office knew that there was a problem in May 2010. When did she know there was a problem, and why did not she or one of her three security Ministers ask LOCOG more detailed questions about its poor forward planning?

Mrs May: If I may just correct the hon. Lady on one fact: there have not been three security Ministers over the past two years and two months.

Mr David Hanson (Delyn) (Lab): Pauline Neville-Jones, Angela Browning and the hon. Member for Old Bexley and Sidcup (James Brokenshire).

Mrs May: No, Baroness Neville-Jones was the first security Minister, and my hon. Friend is the second. Perhaps the shadow Home Office team could pay a little more attention to what happens with Ministers—I know that there are more of them shadowing us than there are Ministers.

The Home Office and others examined the contract and worked with LOCOG and G4S throughout the period in question to ensure that the arrangements they had in place were correct. Only yesterday did it become clear that G4S felt it was not able to provide the full number of personnel that it was contracted to provide. I hope the hon. Member for Hackney South and Shoreditch (Meg Hillier) will agree that, in those circumstances, it was entirely right for the Government to act.

Mr David Nuttall (Bury North) (Con): As it is now more than seven years since the UK won the right to host the Olympic games, does my right hon. Friend not agree that the fact that we are having to bring in the Army with the opening ceremony just 15 days away must mean that someone in either LOCOG or G4S is utterly incompetent?

Mrs May: As I have explained in answer to a number of questions, plans have been put forward and changed over those years, and contingency arrangements were put in place. It was entirely right and proper for the Government to act in this appropriate and contingent manner when it became clear that the security provider contracted to LOCOG could not reassure us that it could provide the full number of personnel.

Mr Pat McFadden (Wolverhampton South East) (Lab): What will the Home Secretary do about terror suspect CF, who is reported to have visited the Olympic site five times and is believed by the court to have undergone terrorist training in Somalia? Does she accept that CF’s ability to be in London at all is a direct result of her legislation removing the power to relocate such suspects away from London or other parts of the country? That legislation is complacent, wrong-headed and dangerous. Will she revisit the issue on the basis that it is not the terror laws that threaten liberty but the intent of those who would seek to kill and maim innocent people?

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Mrs May: It is certainly the case that the threat to the UK is the intent of those who wish to kill or maim fellow citizens. I answered a question on this matter in Home Office questions on Monday, and it is not possible for me to go into considerable detail of a case that is before the courts. However, the right hon. Gentleman is incorrect in some of the facts that he has stated. The situation is that the police identified CF travelling through the Olympic park area, and the arrangements that we have put in place enabled that identification to take place. That is different from what he said.

Several hon. Members rose

Mr Speaker: Order. I hope the House will take note of what the Home Secretary has said. That was a perfectly proper question and answer, but if the specific case is sub judice, which I believe to be so, we should not seek to press the Home Secretary on the details of it.

Mark Pawsey (Rugby) (Con): Will the Home Secretary remind us when the contract with G4S was entered into? Under its terms, will the company cover the cost of the welcome commitment to ensure that none of the additional armed forces involved in the Olympics will be in any way out of pocket?

Mrs May: The contract was entered into by LOCOG in December 2010. As has been indicated, the Ministry of Defence is making arrangements for troops. Payments will be made so that no troops are out of pocket as a result of this requirement on them, and arrangements will be made to ensure they can have the leave to which they are entitled. The Government will speak to LOCOG about the penalties available in the G4S contract. The contract is between LOCOG and G4S, but I can assure my hon. Friend that we intend to ensure we do not pay sums of money that we should not pay when penalties can be used to claw the money back.

Mr John Spellar (Warley) (Lab): Have delays in Criminal Records Bureau checks, particularly by the Metropolitan police, partly caused the problem? Either officials and Ministers have been lied to by G4S, or they have not been on top of the job. Which is it?

Mrs May: I can confirm to the right hon. Gentleman that, as far as I am aware, the numbers were not affected by the accreditation system process for checks on individuals. There are various parts to the accreditation system. There is also a role for LOCOG in working with G4S in inputting information into the system and in ensuring that cards are available for those who are accredited.

Several hon. Members rose

Mr Speaker: Order. This is an extremely important matter in which there is a lot of interest. I would like to accommodate that interest among colleagues, but we have an important statement from the Foreign Secretary, business questions and other business to follow, and therefore I must appeal for short questions and short answers.

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Mrs Helen Grant (Maidstone and The Weald) (Con): Does the Secretary of State agree that our fantastic forces’ stepping in at short notice to assist with security shows how vital they are?

Mrs May: I absolutely agree with my hon. Friend. Our troops do a fantastic job for us in so many ways. Their ability to step in at this stage to undertake this work and to provide reassurance to everybody coming to the games is yet another example of what a great military we have.

Simon Danczuk (Rochdale) (Lab): G4S gets millions of pounds from the taxpayer to deliver the Work programme to reduce the unemployment created by the Government. At the same time, it gets millions of pounds to recruit security guards for the Olympics. Why could G4S not marry up those two initiatives?

Mrs May: G4S was responsible for identifying where it was to recruit individuals from. I am confident that it has been looking to recruit people who have been unemployed, alongside various other people.

Robert Halfon (Harlow) (Con): Will my right hon. Friend review the use of private companies at all for state events such as the Olympics?

Mrs May: Given the numbers necessary for venue security for the Olympics, it was entirely right of LOCOG to look at working with a private sector contractor as large as G4S, as I have said. It was entirely appropriate for LOCOG to do that. Frankly, it would not be right to say that we should not use private sector contractors for venue security—they are used in a number of such events very effectively. I remind my hon. Friend that G4S will provide venue security personnel for the Olympic games.

Kevin Brennan (Cardiff West) (Lab): The Home Secretary will know that hundreds of thousands of people will attend Olympic events in Cardiff. My office received a number of calls this morning from constituents who did the course and got the necessary accreditation, but who will not have a job owing to the use of the Army. One constituent passed the course, but G4S has not yet sent the certificate of accreditation. The right hon. Lady said, quite rightly, that she will help the armed forces with extra tickets, so how about compensation for those people who wanted a job and went through the course and who are now denied the opportunity of a job in the Olympics?

Mrs May: The hon. Gentleman makes an assumption that he cannot make. Some of those who went through accreditation will be used by G4S, which will still provide a significant number of venue security personnel for the games. Security personnel will be drawn from those whom G4S has trained and who have been accredited.

Bob Blackman (Harrow East) (Con): I welcome my right hon. Friend’s swift and decisive action and thank the Government for delivering the games on time and within budget. Will she confirm that there will be no extra requirements on the Metropolitan police? If there

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are such requirements, will there be similar gestures in the form of tickets for relatives of police whose leave is cancelled?

Mrs May: Some arrangements have already been made in relation to the Metropolitan police—

The Secretary of State for Culture, Olympics, Media and Sport (Mr Jeremy Hunt): Thanks to the Culture Secretary.

Mrs May: I was about to come on to that. My hon. Friend the Member for Harrow East (Bob Blackman) makes the point that all the Olympic venues are being delivered on time and within budget. I pay tribute to the work done by my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport and my hon. Friend the Minister for Sport and the Olympics, which built on work done by the previous Government—Labour was in government when the bid was won, and they did a lot of Olympics planning work. We should accept that both parties take responsibility for the Olympics and hope that everybody will enjoy a fantastic games.

Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): When I first raised this issue with the Home Secretary on Monday, she refused to confirm the size of the shortfall, or indeed whether G4S had a shortfall in its security training. Will she say specifically what the size of the shortfall in G4S security trained staff is, 15 days before the Olympics start?

Mrs May: G4S has been training a significant number of staff—over and above the numbers it intended to provide. We do not know whether it can guarantee or reassure us that all those staff will be available for the Olympic games. It was on that basis that we decided to make contingency arrangements. In relation to the hon. Gentleman’s question on Monday, I refer him to the answer I have given on a number of occasions, but which I first gave to the right hon. Member for Leicester East (Keith Vaz), who asked this urgent question: the fact that there was a gap of this size and that this contingency was required crystallised, and the request was made, yesterday.

Sarah Newton (Truro and Falmouth) (Con): I had the privilege of sailing along the Thames on HMS Ocean when she took up her position to provide security for events at venues all over London. Does my right hon. Friend share my belief that the presence of the Navy in London will be reassuring to all Londoners and volunteers, who are coming from Cornwall and all over the UK to help to make this the best ever Olympics?

Mrs May: My hon. Friend is right to remind us that, although we tend to use the term “troops”, the security contribution is being made by our armed forces as a whole. My right hon. Friend the Defence Secretary has laid a written ministerial statement today that refers not only to HMS Ocean and other Royal Navy assets, but to the important role that the Royal Air Force will play in ensuring our security.

Rushanara Ali (Bethnal Green and Bow) (Lab): As an Olympic host borough, my constituency is not hosting any events, but it is host to the surface-to-air missiles on residential blocks. There are already concerns about the

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heavy military presence. Will the Secretary of State give an assurance that proper safeguards will be in place? Will the military work closely with the community to provide sensitive security, so that people feel they will not be targeted? It is welcome that the military is stepping in to address this failure, but sensitive and appropriate treatment is needed.

Mrs May: I can reassure the hon. Lady. She will know that the Ministry of Defence and the military have made every effort to work with local residents, local residents’ groups and local authorities in the areas where the ground-based air defence will be situated. That will ensure that that layer of security for the Olympic games can be delivered safely and appropriately, and in conjunction with local residents.

David Morris (Morecambe and Lunesdale) (Con): I congratulate my right hon. Friend on her swift and decisive action in dealing with this matter. Will she confirm that the G4S contract is with LOCOG and not the Home Office, and that the previous Government procured that mixed arrangement?

Mrs May: The contract is indeed between LOCOG and G4S and not between the Home Office and G4S. It is therefore LOCOG’s responsibility to deal with the contract and to ensure that it contains the right penalties and so forth. As I have said, discussion took place for some time, but LOCOG finally signed the contract in December 2010. It had obviously discussed the mix with potential providers for some time prior to that.

Heidi Alexander (Lewisham East) (Lab): Some of my constituents in Blackheath will have to live with Rapier missiles located metres from their home during the Olympics. Does the Home Secretary recognise that this latest fiasco with G4S undermines pubic confidence in the planning and preparation for the Olympics, and what assurances can she give me that the same lax approach has not been taken to other security arrangements?

Mrs May: This is not a lax approach; it is about the Government ensuring that we have the right approach to security and that we step in when the necessity arises. I hope that the hon. Lady will reflect carefully on the words she used today, however, because I can assure her that in providing this and other layers of security, particularly the Rapier missiles, the military are certainly not lax in their approach. They deal with these matters appropriately and are working with local residents, who can have every confidence in our armed forces.

Harriett Baldwin (West Worcestershire) (Con): G4S has had years to prepare for this event and has been paid millions of pounds, and according to the International Labour Organisation, 230,000 young people in this country are seeking part-time work to go with their studies, so the timing should have been perfect. What does the Home Secretary think has gone wrong with the labour market and G4S that it has been so completely incompetent at finding people to do these jobs?

Mrs May: G4S will still be providing a significant number of venue security personnel drawn from a variety of sources to provide security at the Olympic games. We

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will continue to work with the company. Obviously it recently identified problems with providing the complete number of personnel it was contracted to provide, but we will continue to work with it because it will still play a significant role in the security of the Olympic games.

Alison Seabeck (Plymouth, Moor View) (Lab): We have heard across the House concerns about pressures on border security and wider airport security, so will the Home Secretary say what discussions she has had with the Ministry of Defence? Has she had confirmation from the MOD that it can provide any additional troops that might be required for a contingency plan to her existing contingency plan, and will any of those troops be coming from units abolished last week?

Mrs May: I can assure the hon. Lady that we have had significant discussions with the MOD about the contingency arrangements, but, as I said in my initial answer, the number of troops includes those on specialist operations as well as those providing venue security. A number of contingency arrangements remain in the plans, however, because we obviously recognise the need to continue to plan for other circumstances. That is why we will have been talking to the MOD. I can assure her that contingency arrangements remain.

Dan Rogerson (North Cornwall) (LD): A retired police officer from my constituency travelled to Cardiff in early April to be interviewed and offered a job by G4S. As of last week, he was still contacting it to find out whether he had a job. Will the Home Secretary advise police authorities and, in due course, police and crime commissioners to steer clear of this shower and stick with their own support staff and police officers?

Mrs May: Police forces up and down the country have been working with private sector contractors for a number of years now. For example, when I visited Maidenhead custody suite, Reliance was working alongside the police officers and others. Indeed, it was the previous Labour Government who enabled forces to bring in private sector contractors to undertake detention and escort duties, which had previously been done only by police officers.

Kerry McCarthy (Bristol East) (Lab): Given that the Home Secretary has been caught out by her complacency towards this contract, has she given her personal attention to concerns raised with her by the noble Lord Prescott, among others, about the fire marshals contract that LOCOG has awarded to Close Protection UK? Does she think that company fit and proper to run those services, and does she have confidence in its ability to do so?

Mrs May: The premise on which the hon. Lady asks her question is one I utterly reject. There is no complacency in Government. Had there been, we would not have announced the decision to bring in the contingency plan.

Mr Peter Bone (Wellingborough) (Con): I am sure that the whole House will thank the right hon. Member for Leicester East (Keith Vaz) for bringing such an important urgent question before us, and the Home Secretary for answering personally and not pushing it

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off to a junior Minister. Will she say whether what has been announced is the maximum number of troops being deployed? Would she hesitate to increase the number, if security was at risk?

Mrs May: As I said in answer to a question from the hon. Member for Plymouth, Moor View (Alison Seabeck), we are clear that we still have some contingency in place, so were there any security considerations, we could draw on that as well. We have ensured, and will continue to ensure, that further contingency arrangements are in place.

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Balance of Competences

12.24 pm

The Secretary of State for Foreign and Commonwealth Affairs (Mr William Hague): With permission, Mr Speaker, I will make a statement on the review of the balance of competences of the EU as it affects the United Kingdom.

Membership of the EU is in the UK’s national interests. The Government are committed to playing a leading role in the EU and protecting the UK’s national democracy, but the EU needs to reform to meet the challenges of competitiveness, a stable eurozone and greater democratic legitimacy. The crisis in the eurozone will almost certainly mean great changes for the European Union over the course of this decade. We understand the case for eurozone countries to take steps towards closer fiscal and economic integration as a logical consequence of monetary union. Given the UK’s place outside the euro, it is right that we have said we will not be part of that closer integration. We support the existence already of multiple forms of EU membership. This flexibility is in the interest of both the EU and UK. The EU is not and should not become a matter of everything or nothing.

As the European Union continues to develop, however, we need to be absolutely clear when it is most appropriate to take decisions at the national or local level—closer to the people affected—and in other cases when it is best to take action at the EU or global level. It would be rash to predict with certainty how the eurozone crisis will end, what solutions will be agreed upon and found to be workable and sustainable, and what choices other countries will make. Until we have a better idea of the answer to those questions, we will not know the decisions that all EU countries will be facing.

The crisis in the eurozone has intensified the debate in every country on the future of Europe, and there is no exception to that here. Equally, it is essential for the long-term success of any institution that its members are vigilant in reforming it so that it remains modern, effective, efficient and legitimate. The EU is no exception to that, either, but our national debate and the broader European debate must be thorough and informed.

Today, I have published a Command Paper that sets out in detail how we will deliver our undertaking in the coalition programme for government to

“examine the balance of the EU’s existing competences”.

The review will be an audit of what the EU does and how it affects us in the United Kingdom. It will look at where competence lies, how the EU’s competences, whether exclusive, shared or supporting, are used and what that means for our national interest. These are issues that affect all EU member states and could have a bearing on the future shape of the EU as a whole.

The review will be a valuable exercise for deepening understanding in Britain of the nature of our relationship with the European Union and how it has evolved over time, and will provide a constructive and serious British contribution to the public debate across Europe about how the EU can be reformed, modernised and improved. The review will be taken forward in a comprehensive and analytical way, jointly co-ordinated by the Foreign and Commonwealth Office and the Cabinet Office, and the Minister for Europe and I will answer to Parliament for it.

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Government Departments will undertake the review for the areas of EU competence for which they are responsible. For example, the Department for Environment, Food and Rural Affairs will be responsible for conducting the review on the EU’s competence on fisheries, and will be jointly responsible with the Department of Energy and Climate Change for the EU’s competence on the environment. The review will be an outward-facing exercise, both domestically and internationally, and Departments will be tasked with consulting and inviting evidence from everyone with a knowledge of and interest in the exercise of the EU’s competences, including not only Committees of Parliament and the devolved Administrations but businesses, civil society, other interested parties and individuals with expertise in and experience of each area.

We will be as interested to hear from car manufacturers about EU product standards as from non-governmental organisations about environmental policies or security experts about combating organised crime. We will also invite our European and G20 partners, as well as the EU institutions and other international bodies, to contribute evidence if they wish. The review should be seen as a necessary and positive part of reforming Europe. Unless there is a good reason to the contrary, we expect to make all evidence submitted publicly available.

To do justice to the complexity of the issues and the interests at stake, it will be important to allow enough time for this process to cover the necessary ground. Departments will begin substantive consultation this autumn, and reports informed by evidence received on individual areas of competence will be published as the review progresses. The review will conclude in 2014.

The end result will be the most thorough and detailed analysis possible of what the exercise of the EU’s powers does and what it means for the United Kingdom. The review will present the evidence and analysis, and of course it will be for political parties to decide on their own policy recommendations. Such a comprehensive piece of work has never been undertaken before, but it is long overdue. It will ensure that our national debate is grounded in knowledge of the facts and it will be a valuable aid for policy makers in the future. Of course, this country is not alone in giving thought to the future evolution of the EU. Work is also being undertaken by, for example, my colleague the German Foreign Minister, Guido Westerwelle, and a number of my EU colleagues on the future of Europe. Our exercise will inform that wider debate.