Caroline Lucas fracking question to Caroline Flint: Will Labour rule out fracking?

Caroline Flint, Shadow Secretary of State for Energy and Climate Change, has adopted Labour’s now traditional policy of sitting firmly on the fence and having no opinion on anything, choosing instead to spout lots of meaningless hot air. What follows is, in fact, a masterclass of this approach.

Opposition? What a joke that is. We may as well have a three party coalition!

Energy Prices and Profits
Opposition Day — [6th Allotted Day] — Living Standards
4:45 pm 4th Sept

Caroline Lucas (Brighton, Pavilion, Green)
Yesterday, Lord Stern dismissed claims that fracking could bring down the price of gas in the UK as “baseless economics”. Given the long list of experts explaining why shale gas will not help people who are struggling with high energy bills and will actually trash our climate commitments, will the right hon. Lady take this opportunity to rule out fracking in the UK under any future Labour Government?

Photo of Caroline FlintCaroline Flint (Don Valley, Labour)
I have been clear that our approach to fracking and what it could offer must be evidence-led. In the past few years, I have been disappointed by the
fact that, for all sorts of reasons, the Government have chosen to up the ante on what gas from such exploration can provide. We do not really know the exact cost-benefits of fracking for gas. We do not know how much is there and whether those benefits will be realised when we get it out of the ground. I am afraid that I shall have to disappoint the hon. Lady by not ruling it out, but our approach must be evidence-based and pragmatic. I certainly do not believe that we should be offering tax breaks, given everything that is going on in this country, for something that might not happen for 10 years, if it happens at all.
The Government have harmed the reasonable debate that we should be having about fracking by trying to polarise the use of the gas against that of renewables. That has been incredibly unfortunate as regards having a practical, reasonable and evidence-led debate. That is what we will lead on in trying to debate the issue, which is important for our country.
As I have said, we can simplify the tariffs. We can take our proposal to put all those who are over 75 on the cheapest tariff. But before we even get to tariffs, we must ensure that the prices that make up bills are set fairly and openly in a properly competitive environment. That is crucial because wholesale costs are the single biggest component of domestic energy bills and make up more than half the prices consumers pay.
If we do not have a competitive wholesale market putting a downward pressure on prices, people might be on the cheapest tariff but might still not be getting a fair deal. The Government seem to say that they agree that the market is not as transparent or competitive as it should be, but what are they doing about it? Not very much.

Photo of Michael WeirMichael Weir (Angus, Scottish National Party)
Will the right hon. Lady give way?

Caroline Flint (Don Valley, Labour)
I just want to make a little progress.
The Energy Bill takes broadly based back-stop powers to improve liquidity, but the Government cannot even say in what circumstances or in what way they would use those powers. I am sure that the Secretary of State will pray in aid Ofgem’s work on liquidity. In our previous exchanges, he has defended the regulator against my criticisms, but I hope that he has read the Select Committee’s report, “Energy Prices, Profits and Poverty”, which was published over the summer. Its conclusion is stark. The very first page of the report states:
“Ofgem is failing consumers by not taking all possible steps to improve transparency and openness in the energy market.”
I am afraid Ofgem’s proposals on wholesale market liquidity do not go anywhere near addressing the two main problems with the market.
The first problem is that the market is dominated by six companies that both generate power and retail it to consumers with a market share of 98%. As Which? pointed out in its report over the summer, the obvious problem with the structure is that it provides little incentive for companies to keep wholesale prices efficient if the effect of doing so is to reduce the overall profitability of the company. Why would the supply arm of an energy company try to drive down profits on the generation arm if the outcome was to reduce the amount of money the company as a whole was making? Although the
companies are right to say, as they frequently do, that their retail profits are only 5%, which is pretty healthy, their profit margins on generation are much more substantial. Which? suggests in its report that last year they were about 19%.

Edward Davey (Kingston and Surbiton, Liberal Democrat)
Will the right hon. Lady give way?

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