PowerSwitch

Mr Speaker, the oil shock of this year has led to calls for more efficient use of energy and support for alternative fuels.

I am enhancing the capital allowances for production of the most environmentally friendly biofuels including to help oil companies meet their agreed biofuel obligations.

Carbon capture and storage protects the environment from carbon emissions by containing them at source and transporting them to the North sea, where they make it easier to extract remaining oil from mature fields. I can announce a new partnership with the Norwegian government. Together we will consider the right level of incentives to speed up the adoption of this new technology.

Because the UK can also become a world leader in clean coal, the secretary for industry is announcing today further support for clean coal and all carbon abatement technologies, as part of our wider energy review.

And because we need to encourage energy efficiency in small and medium sized firms, the environment secretary is announcing further funding for the Carbon Trust.

So that all import capacity for gas is put to use, Ofgem have announced today they will use their powers to intervene where necessary to ensure that importers either "use or lose" their capacity to import.

And the trade secretary and I have today written to the European Commission supporting Ofgem's call for an urgent investigation to make sure that this winter there are no blockages to the full use of the interconnector with Europe and thus no restriction on imports of gas from Europe.

Our economy has had to withstand an oil price rise from around $25 to a current price of around $55, which is also the close to the level of almost all future projections.

Returns in the North sea are now nearly 40% on capital, compared with ordinary returns on capital of 13%.

With the tax on new development in the North sea now lower than in the USA and the Gulf of Mexico, Norway, Italy and Australia, and in order to strike the right balance between producers and consumers, I will raise the supplementary North sea charge from 10% to 20%, while giving new incentives to companies for exploration and development of the most difficult fields, by extending the exploration expenditure supplement to all ring-fenced activity.

I am also now able to freeze petrol and diesel and road fuel gases duties for this full financial year at an exchequer cost for the full year of ?600m.

I am also able to set aside resources so that the winter fuel payment - the universal payment tax free to all pensioner household - will be ?200 not just this year, but next year, the year after and every single year of this parliament - and it will be ?300 for the over-80s, paid every year before Christmas.

In addition to the winter payment, I want to ensure that for pensioner households energy costs are as low as possible while ensuring the most efficient and effective heating systems against the winter cold.

Insulation and central heating can reduce heating bills for the typical pensioner household by ?300 a year.

The energy savings are so great that no pensioner household should be without insulation and no pensioner should be without help to install central heating. And after many years it is time to complete the insulation and installation of central heating for their homes.

The government's warm front programme has so far insulated 1m homes. But there are still half a million that have no central heating and 2m without insulation.

Separate announcements will be made for Scotland, Wales and Northern Ireland.

By setting aside an additional ?300m over the next three years, the government's Warm Front programme will not only be able to offer pensioner households on pension credit free installation of central heating, but we will also offer all other pensioner households without central heating ?300 towards the costs of installing it. And we can go further.

And I am grateful to the energy companies who are matching our offer by announcing this afternoon that they will extend their offer of insulation: free insulation for all pensioner households on pension credit, and with for all other pensioner households between ?125 and ?175 towards the costs of insulation.

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MacG wrote:One word: Interesting!