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Andrew George (St Ives) (LD)
It is a pleasure, Mr Howarth, to perform under your chairmanship for the first time. I understand that the debate in the House is winding down to a possible vote. I am well aware that this debate, which I am delighted to have secured, has attracted a lot of support across all parties. There is tremendous interest in the matter. The Energy Bill will return to the House for debate, and my concern is whether we will have sufficient opportunity to discuss the matter then. This debate is not so much an early skirmish, but an opportunity to ensure that we begin the process of opening a parliamentary dialogue on a matter that is clearly vital as we take forward an excellent Bill, on which I congratulate the Government. It includes some significant stepping stones in setting out a clear agenda for energy generation in this country to achieve energy security. I am sure many hon. Members will want to contribute to this debate on decarbonisation and lowering carbon emissions from this country’s energy sources.
The debate is timely, today of all days, partly because of last night’s vote in the European Parliament on the European trading scheme. I would be interested in the Minister’s comments on whether he believes that that enhances or makes it more difficult to advance the case for a decarbonisation agenda in the UK. I would argue that it makes it even more urgent for the UK to ensure that we press the agenda firmly.
The debate is also timely because of a matter partly related to the way in which we do business in the House. Yesterday, I was significantly frustrated that we were unable to debate or divide the House on the Government’s proposed abolition, which is shortly to be enacted, of the Agricultural Wages Board. We will have further debates on the Energy Bill and the failure to debate abolition of the Agricultural Wages Board may be an example of how, despite the issue being deeply significant to many hon. Members, including me, we were unable to debate the matter. There was no mechanism by which to divide the House to establish what support exists for that abolition, which was introduced in another place. That worries me, and to ensure that today is not our only opportunity to debate the decarbonisation agenda, will the Minister ensure that when the Energy Bill returns to the House there will be protected time in the Chamber for a proper debate and votes? That is important.
I congratulate the Government, the Minister and my right hon. Friend the Secretary of State for Energy and Climate Change on their significant progress in advancing the case. My intention today is primarily to advance the economic case for green jobs and investment as the fundamental justification and raison d’être for advancing as quickly as possible a decarbonisation agenda in the UK. If we are to corner a growing global market, we must lead the way and ensure that future investment in the manufacture and production of green and decarbonised energy generation. The UK needs to be at the forefront.
The pinch point in the debate on decarbonisation and the setting of targets is that the industry looks in the long term against a political cycle that, by its very nature, is relatively short term—often five years at the most. I congratulate the Government on rightly looking at this vital agenda decades ahead, but the worry is that the political agenda might drive the basis on which decarbonisation targets are met.
Mike Weatherley (Hove) (Con)
The aim of a decarbonisation target is laudable, but does my hon. Friend agree that we should not rush forward with increased proposals for the nuclear option, which might be seen to be an easy option in the long term?
Andrew George
I entirely agree with my hon. Friend. Indeed, I have raised the issue on the Floor of the House with my right hon. Friend the Secretary of State that, in advancing this policy, we should stick to the Government’s stated aim of ensuring no public subsidy for nuclear power. Hon. Members know that the Liberal Democrats have made it clear that their stated policy is to oppose nuclear power, but in coalition compromises and concessions must often be made. The concession on nuclear power, which is shared by both coalition parties, is that it is vital to ensure that no back-door public subsidy underwrites the future costs of nuclear power.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate the hon. Gentleman on securing this important debate. I am pleased to follow the hon. Member for Hove (Mike Weatherley), with whom I do not often agree, but on nuclear, I certainly do.
Does the hon. Member for St Ives agree that, although there seems to be widespread consensus, one of the fastest, cheapest and most effective ways to reduce our emissions is through energy efficiency and conservation and that we are still not putting enough into that? There is a lot of talk about energy sources, but not enough about demand reduction and energy efficiency. Does he also agree that one way to put in more resources would be to ring-fence the taxes from, for example, a new carbon floor price or the EU emissions trading system and to invest that money in energy efficiency?
Andrew George
The hon. Lady makes an excellent point. This debate is primarily about the decarbonisation of energy supply; conservation and reducing energy demand is a separate debate. To be fair, the Government have established a strong case through the green deal and the establishment of the green investment bank, which will support many measures to address energy conservation. The hon. Lady makes an excellent point, but this debate is about energy generation and supply, and I do not want it to stray too far.
It is worth reminding ourselves that the Government have made a commitment to be the greenest Government ever, which does not set the bar very high. However, beyond that, as they said in the coalition agreement, they believe
“that climate change is one of the gravest threats we face”
and that
“We need to use a wide range of levers to cut carbon emissions, decarbonise the economy and support the creation of new green jobs and technologies. We will implement a full programme of measures to fulfil our joint ambitions for a low carbon and eco-friendly economy.”
The coalition agreement then sets out how the Government intend to do so, but I will not have time to go through that.
Kerry McCarthy (Bristol East) (Lab)
Does the hon. Gentleman share my frustration that it is three years since the coalition came to power, and to drive the agenda forward, we need things such as targets to create the impetus for some of the measures to be put in place and to create a situation where investors have confidence? At the moment, so much is uncertain about the future of Government energy policy. We have the Treasury driving fracking forward, a lack of targets and the Secretary of State for Energy and Climate Change criticising the general thrust of energy policy that is being imposed on him by the Treasury. Does the hon. Gentleman agree that certainty is important and that decarbonisation targets are an essential part of that?
Andrew George
The hon. Lady is absolutely right. In fact, that is the nub of the debate. It has taken me 10 minutes to get to that point—perhaps I will get to it now—but it is fundamental to this debate. Investors are clear in the messages that they are sending out at present. This is not purely a green campaigning issue for non-governmental organisations. It is an area in which very substantial pension funds and other investors are looking to invest. Looking forward decades, they want certainty and confidence, and they see this as a sector where they believe that certainty can be demonstrated with a target set sooner rather than later. Not only has this part of the economy performed by generating a large number of jobs and significant growth—far higher growth than in almost all other sectors of the British economy—but it is an area in which significant investors in the British economy want investment to take place.
Mr Tim Yeo (South Suffolk) (Con)
I congratulate the hon. Gentleman on securing the debate, and I add my strong support for the intervention made by the hon. Member for Brighton, Pavilion (Caroline Lucas). On the point that the hon. Gentleman just mentioned, one of the most significant factors is that the need for a focus on reducing the carbon intensity of electricity generation is supported not only by what one might call the usual suspects from the green world, but very strongly by the business world, including a large number of industries that have no direct interest in the issue whatever. That concern is perhaps reinforced by last night’s vote in the European Parliament, which is clearly a setback for achieving more effectiveness in the EU emissions trading system.
Mr George Howarth (in the Chair)
Before the hon. Member for St Ives (Andrew George)resumes, I realise that there is a very strong temptation in such a debate, where a lot of people wish to get in, to make an intervention, but hon. Members need to be reminded that interventions must be short and not mini-speeches.
Andrew George
I am grateful for your guidance on that, Mr Howarth, and I am particularly grateful to the Chairman of the Select Committee on Energy and Climate Change, my hon. Friend the Member for South Suffolk (Mr Yeo), for his telling intervention. As he rightly said, this is an issue of hard-headed financial decision-making and not one that is driven purely by eco-warriors. This matter is all about ensuring that we have a strong economy, and in terms of the hundreds of thousands of jobs that will be created through the green economy, Britain must lead the world. It has an opportunity now, but that opportunity will not exist for many years, and if we miss it, we may be dragged behind other places. We will be importing their technologies into this country, and the cost to the economy will be very significant. My hon. Friend is engaged in an excellent campaign on that issue, and I congratulate him for his contribution.
I have written to the Secretary of State, as I know many others have in recent months as the debate has developed. He kindly responded to me this week, saying that he agrees that
“a decarbonisation target for the electricity sector could increase certainty for investors in large and long term low carbon energy projects like renewables, new nuclear and Carbon Capture and Storage. That is why, last year, I worked for and achieved Government agreement to set a 2030 decarbonisation target range”—
Andrew George
It is a pleasure to serve under your chairmanship, Mr Gray. I was reading from a letter that I received from the Secretary of State this week in which he also justifies the option of setting a target in 2016. He refers to the other decisions that the Government need to make. I am sure that the Minister will outline those in a moment, so I shall not take up time describing them. The Secretary of State says that
“a target would not be set in isolation but in the context of considering the pathway of the whole economy towards our 2050 target, and making sure we do that in a way that minimises costs both to the economy as a whole and to bill payers.”
The problem with that is that the bulk of industry interested in energy generation and the bulk of investors interested in the future of the energy generation economy do not take the same view. I, of course, have tremendous respect for my right hon. Friend the Secretary of State; he acknowledges that it is Liberal Democrat policy to set a decarbonisation target now, rather than in 2016. That target has to be the result of a compromise, and as in any coalition Government in the world, between two coalition parties, we sometimes do not get the outcome that we desire. That is why a large number of interested companies have written to the Chancellor, rather than the Secretary of State, to move the agenda forward, which indicates the target at which the debate needs to be directed.
Mr Mike Weir (Angus) (SNP)
Does the hon. Gentleman not accept that one reason why companies are doing so is that they are looking now at investments into the 2020s? They want to be sure that past 2016 there will be a target and that their investment will be secure.
Andrew George
Absolutely. We are talking about multi-billion-pound investors who, as the hon. Gentleman rightly says, are looking decades ahead.
The UK green economy has continued to grow, even while broader economic activity remains relatively subdued. The CBI has demonstrated that more than one third of UK economic growth last year is likely to have come from green businesses. Renewable and low-carbon energy businesses are the segment of the green economy with the most stake in the 2013 decarbonisation target. Cumulatively, they generate more than £98 billion in sales and employ more than 735,000 people—more jobs than the entire UK automotive and telecoms sectors combined.
Figures from the Department for Business, Innovation and Skills demonstrate an average growth rate of 6% each year for that portion of the economy, which equates to some £7 billion of additional sales for UK plc or 6,000 new jobs each year, based on today’s figures. That growth is now placed at risk by a lack of investor certainty and confidence, which a 2030 decarbonisation target would certainly remedy and remove. Setting the target sooner, rather than later, would provide the certainty and confidence that such investors require.
I have an inkling that I am preaching to the converted, including the Minister, who has to follow the Government’s policies as a whole. The fact is that the decision has to be made across the Government as a whole. People are looking at the challenges as we go forward, and I know that he is seized of the issue. The green economy is a significant source of growth in UK plc and it needs confidence and certainty going forward. The letter of 8 October 2012 to the Chancellor from 52 leading businesses in the sector sets out a strong case. They sought a meeting with Ministers, which they have not yet secured. They say:
“Failure to act at sufficient scale and pace will undermine our prosperity; and cause us to miss out on the huge commercial opportunities associated with the global shift to a low carbon, resource efficient economy.”
Although the Energy Bill makes significant advances, for which the Government should be congratulated, the difficult compromise that they have come to needs to be teased out and debated further than we have been able to so far. I do not know how we will do it, but we should have a debate with the Department of Energy and Climate Change that includes the Department for Business, Innovation and Skills and the Chancellor of the Exchequer and the Treasury. When we debate the Bill in the Commons in the coming weeks, it will be a pity that we will not have the opportunity for a full debate with all the Departments on which it will have an impact. I hope the Minister will address my earlier question on the impact of last night’s vote.
I shall add a couple of words on an exciting source of energy generation in my constituency and plug the west Cornwall wave hub, which I raised with the Minister in questions in the House on 14 March, when he gave me an encouraging response. He went to RenewableUK’s annual wave and tidal conference in February, where he told the industry:
“Now is the time for bold next steps—moving from individual projects to large-scale arrays.”
That is vital. I welcome that the Government are supporting the wave hub. The Department for Business, Innovation and Skills is clearly taking a significant role in the future management of the project, which has been handed on from the South West of England Regional Development Agency. It is difficult to scale up to a commercial level from the prototype machines at the demonstration project in Orkney. The Government need to provide the wave hub project with more certainty and address some of the long-term investment issues, some of which feed and bleed into the decarbonisation agenda. I hope that the Minister will visit the wave hub, talk to those involved and address the funding gap, which still exists, to bring the wave devices on to the site.
Dan Byles (North Warwickshire) (Con)
How does my hon. Friend respond to the statements that, in the 2050 target, the UK has the toughest legally binding emission reduction target in the world and that no other nation on the planet has a 2030 decarbonisation target?
Andrew George
The UK is setting the standard for the rest of the world, and the rest of the world will move in that direction in due course. It is important that there is cross-party agreement that we want to be the greenest Government ever, which is I think part of the coalition agreement that my hon. Friend signed up to. We also want to ensure that the decarbonisation targets that we set will put the UK economy at the forefront of green jobs and investment.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Just for the record, being the greenest Government ever is not part of the coalition agreement, but the personal pledge of the Prime Minister.
Andrew George
I am grateful to the Minister for that clarification. It is true; I looked through the coalition agreement and could not find a reference to the slogan. Nevertheless, it is a commitment of the Prime Minister on behalf of the Government that everyone who supports the Government is aware of and supports.
I am sorry that my hon. Friend the Member for Camborne and Redruth (George Eustice) is not here. He strongly supports the west Cornwall wave hub, which makes landfall in Hayle, a former part of my constituency. I hope that Ministers will come to look at the project and give it the additional support that it needs in terms of wave energy and floating offshore wind energy.
Andrew George
I am afraid that I will not give way, because I am coming to a close. The primary issue is that when the Energy Bill returns to the Floor of the House, I hope that the Minister will give us an opportunity to reflect properly on the economic case for the early setting of a decarbonisation target.
Barry Gardiner (Brent North) (Lab)
It is a great pleasure to follow the hon. Member for St Ives (Andrew George). I congratulate him on securing the debate, and even more on being absolutely true to his principles and honouring the pledge that he and a number of his colleagues made more than a year ago. It is absolutely right that he has raised the matter in this forum, where we can take some time to develop the arguments, because, as he suggests, during consideration on Report of the Energy Bill in the main Chamber it will perhaps be more difficult to go into the same detail and depth. I am, therefore, very grateful to him for introducing the debate in this way.
I pay tribute to the Government—and to the Secretary of State for Energy and Climate Change for his interlocutions and iterations with the Treasury—for their commitment of £7.6 billion under the levy control framework up to 2020. That is a significant achievement, which will be important for low-carbon generation in this country. It is £7.6 billion from people’s energy bills to pay for new low-carbon energy generation that will increase energy security, reduce the cost of energy bills in the long term and ensure that we meet our moral and legal obligations to reduce our greenhouse gas emissions. So far, so good; I am with the Minister and with the Government.
Industry has welcomed the commitment, but has also clearly said that it is not enough. The £7.6 billion is security for only seven years. In the words of DONG energy,
“it is a case of having a cliff edge at the moment; 2020 is a big milestone”––[Official Report, Energy Public Bill Committee, 15 January 2013; c. 58, Q175.]
Andrew Buglass from the Royal Bank of Scotland told the Energy Bill Committee that the cliff edge is making it very difficult for supply chain investors to invest in the UK. Overcoming the insecurity created by the 2020 cliff edge does not require more public money, or even the promise of more money; it requires coherence, in the form of a 2030 target that proves to industry that the demand for low-carbon energy will continue to rise beyond 2020. The shadow Minister, my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex), quoted Mr Buglass in a sitting of the Energy Bill Committee, saying that
“a 2030 target ‘is absolutely critical from the conversations I have with potential supply-chain investors because they quite rightly point out that it is very difficult for them to take investment to their board if they really only have visibility on three or four years-worth of work.’”––[Official Report, Energy Public Bill Committee, 7 February 2013; c. 570.]
It is clear that what we are facing in 2020 is a cliff edge—a milestone—and the Government, without necessarily committing considerable excess funding at this stage, somehow have to be able to give a signal to industry and investors that this is the direction of travel the Government are taking and that they can confidently lay down their investments in the knowledge that they will get a clear return.
David Mowat
I am listening carefully to the logic flow of the hon. Gentleman’s position. What puzzles me a little is that Germany has four times as many renewables as the UK, in spite of its much higher carbon emissions per capita and per unit of GDP. It would be a step in the right direction if we emulated Germany. Germany does not, however, have a target—how did that happen?
Barry Gardiner
If the hon. Gentleman reads the record of the written evidence that was given to the Energy Bill Committee, he will see that no less a figure than David Kennedy, chief executive of the Committee on Climate Change, which independently advises the Government, said that the context in Germany is different. A low-carbon trajectory has already been established there, precisely for the reasons the hon. Gentleman suggests—four times as many renewables are already in place. People in Germany are not in doubt about what their Government are going to do or about the direction of travel.
David Mowat
We often take Germany as an example of best in class in such matters, so it is right to make absolutely sure that on the record we have the point that Germany’s carbon emissions are 20% higher per head and 23% higher per unit of GDP than the UK’s, principally because of the amount of coal burnt, which makes the renewables activity irrelevant. I thank the hon. Gentleman for his answer.
Barry Gardiner
I am happy to allow the hon. Gentleman to get what he wishes on the record. He is at perfect liberty to make his own remarks later, and I trust he will do so, but I point out that Germany, by going away from nuclear generation, will see a significant rise in emissions—not only there, but in neighbouring countries. Germany has been a net exporter of low-carbon electricity to its neighbours, and that also is going and will create substantial problems for Europe as a whole in meeting its emissions reduction targets. It will also present severe problems for Europe’s response to the challenge of global warming. Ultimately, I think Germany will move through that transition, away from coal.
Ian Swales (Redcar) (LD)
Does the hon. Gentleman not think that the exchange we are having demonstrates the fallacy of counting carbon on a production basis? Germany is a heavy exporter of manufactured goods—cars, for example. Whose carbon is it? Is it Germany’s, or that of the person who buys the car?
Barry Gardiner
The hon. Gentleman makes a very interesting and worthwhile point, which I perfectly understand. I am sure that if I go into consumption emissions versus production emissions, you will call me to order from the Chair, Mr Gray, but we must not pat ourselves on the back for seeing our own production emissions drop if we are still driving the very consumption model that generates the emissions elsewhere around the globe.
The Committee on Climate Change estimates that in the absence of a 2030 target, offshore wind might cost as much as £140 per megawatt-hour. With such a target, the cost, under the committee’s scenario, drops to £100. The difference between the two costs is about the presence of a competitive supply chain in the UK. We do not have one, but what we do have is at risk.
Let us remember that the Government’s proposals are not that we should set a target in 2016, but that we may not set one until at least that date. Those are two very different propositions.
Dr Alan Whitehead (Southampton, Test) (Lab)
Would my hon. Friend also care to include the provision that not only can the Government not set a target before 2016, but that there is no level at which the target might be set after 2016?
Barry Gardiner
My hon. Friend is, as ever, thoroughly astute on these matters. He was a tremendous champion of the decarbonisation target when the Bill was in Committee, and he speaks with great knowledge on the subject. He is absolutely right. Only last night at a dinner, I heard the Secretary of State talking as if this was a great leap forward, that this would be the only Government who had legislated for a decarbonisation target. At that point I almost spluttered into my chicken, because we have not legislated for a decarbonisation target. [Interruption.] And it was beef anyway, says my hon. Friend the Member for Southampton, Test (Dr Whitehead). What we have done is make provision so that, at the appropriate moment, it would not be impossible to legislate.
Let me return to the key point that I wish to address, because I know that other Members want to enter the debate. Although it is good to have a debate and a real exchange of views through interventions, I fear that I must press on if other Members are to be able to speak. Siemens told us that if we wait till 2016 to set a decarbonisation target for 2030, it and many of its competitors are likely to delay or cancel planned investments in the UK.
In March, six of the largest supply chain investors wrote to the Chancellor, the Secretary of State for Business, Innovation and Skills and the Secretary of State for Energy and Climate Change to register their strong support for the decarbonisation amendment tabled by the hon. Member for South Suffolk (Mr Yeo) and me, which to date is supported by 41 Members from—I am pleased to say—all parties in the House. They wrote:
“Projects can take 4-6 years from investment decision to construction and operation. We are already close to the point where lack of a post-2020 market driver will seriously undermine project pipelines. Supply chain investment decisions depend on reasonable assurance for manufacturers that a production facility to be constructed during this decade, costing hundreds of millions of pounds, will have an adequate market for its products well into the 2020s.
Postponing the 2030 target decision until 2016 creates entirely avoidable political risk. This will slow growth in the low carbon sector, handicap the UK supply chain, reduce UK R&D and produce fewer new jobs. This is not in keeping with the Government’s aspirations for the UK to be the global leader in low carbon technologies such as offshore wind and marine.”
The amendment would require a 2030 decarbonisation target for the energy sector to be set by the Secretary of State, on the advice of the Committee on Climate Change, by next spring, which would ensure that the Energy Bill sent a coherent signal to investors. By securing investment in a competitive UK supply chain, the amendment would not only reduce the cost of decarbonising our energy infrastructure, but ensure that the investments that we are committed to make produced a significant growth multiplier and contributed to the essential rebalancing of the British economy.
Recent peer-reviewed studies from the London School of Economics and Berkeley have concluded that the fiscal multiplier for productive infrastructure investment in current economic conditions is likely to be about 2.5 in the UK. The amendment would ensure that the £7.6 billion produced secure investable propositions, creating significant numbers of construction jobs and long-term high-value jobs in communities around the UK, where both are scarce.
Caroline Lucas
I of course completely support the hon. Gentleman’s amendment, which he is understandably justifying in terms of economics and, no doubt, political expedients. Will he, however, acknowledge that we should set the targets in line with the science, rather than with what we think is politically possible, because the target of decarbonisation by 2030 gives us only a 37% chance of remaining below 2°, and if someone said that we had only a 37% chance of not falling out of the air, I suspect that we would not get on an aeroplane? The odds are very scary.
Barry Gardiner
I am not a gambling man, but I understand the position of seeking to look at climate change policy as a balance of risks, and the hon. Lady is absolutely right to make that point. In truth, whatever the UK does will not make a global difference to whether we reach 2°, as I am sure she would acknowledge. The aspiration required of the UK and the global leadership that it possesses, which the hon. Member for St Ives mentioned, mean that we have to drive this if we are to play our part in achieving the global reduction. I understand the percentage figures she gave, but it is perhaps illegitimate to conclude that if we hit the 2030 target we will have only a 36% chance of achieving the 2° target. The UK cannot achieve that on its own; it demands a similar effort across the globe.
Part of the problem is that, in considering electricity market reform, the Government have been like a phlebotomist looking at the body politic. They have been obsessed with the energy flow around the system, as a phlebotomist is obsessed with the blood flow around the body, but they have failed to consider the health of the whole organism. That makes for a very poor doctor; we would not want a GP who was simply a phlebotomist.
The Government’s approach has not taken enough cognisance of how the energy sector fits in with powering our economy as a whole. A good example is the ramping down of funds available for carbon capture and storage. Coal and CCS will be vital for us. There will be significant jobs, and if we invest in and develop CCS, it will become a major part of our exports in skills and technology around the world, from which we can benefit. It is part of our wider economy, and the same is true of the renewables industry the more we invest in it and adopt the position, as the hon. Gentleman said, of being the global leader.
I am afraid that we have already lost that position, because other countries have invested far more, including what we are prepared to do in CCS. Unless we invest, we will not develop the export capacity that we need to drive our economy as a whole. We cannot simply be what Gary Smith of the GMB often refers to as the Meccano men of Europe, who simply fit together a product made elsewhere. We must have supply chains in the UK, create the jobs and invest in companies here.
Gregory Barker
I am sorry to intervene, but I will be pressed for time when I am winding up. The hon. Gentleman has forgotten that the Chancellor announced in the Budget the two preferred bidders for the detailed planning and design stage of our CCS competition, including the CCS project in Peterhead that was canned under the Labour Government—two projects, real progress.
Barry Gardiner
I do not dispute what the Minister says about the two projects that are on line, but I do not think that he will dispute what I have said about the reduction in funds available for CCS.
If we build a competitive supply chain fast enough, we can expect significant investment in the UK almost immediately, which will mean that British companies are well placed to export to a renewable energy market that the International Energy Agency predicts will be worth at least $6.4 trillion by 2035. If we do not lay the foundations for a competitive supply chain, we will see the cost of decarbonisation rise, along with our trade deficit, as we hand over the growth benefits from public investment to countries that have already taken steps to remove the policy risk from low-carbon infrastructure investment. Businesses are calling for demand security beyond 2020, which the Energy Bill could provide at no cost.
The Committee on Climate Change is the body trusted by the industry to set the right target. The Minister will know only too well the letter written by the newly appointed chair of the CCC to the Secretary of State on 25 February. He described how the Government’s plans entail a
“high degree of uncertainty about sector development beyond 2020. This will adversely impact on supply chain investment decisions and project development, undermining implementation of the Bill and raising costs for consumers.”
He went further, however, and referred to
“the need to resolve uncertainties about the direction of travel for power system development”,
specifically the “dash for gas” and the danger that it presents to low-carbon generation. I trust that the Minister will reconsider the proposals on the decarbonisation target in the Department and that we may yet see some progress.
Mr James Gray (in the Chair)
Order. I intend to call the Front-Bench speakers at five minutes to 6 o’clock. There are five or six Members of Parliament who are trying to catch my eye, so, as a matter of courtesy, perhaps we could keep our remarks reasonably brief.
Mr Mike Weir (Angus) (SNP)
I am pleased to speak under your chairmanship, Mr Gray, and to make a short contribution to this debate.
In introducing the debate, the hon. Member for St Ives (Andrew George) said that he was concerned that there might not be enough time to discuss this matter when the Energy Bill returns to the House on Report. One of the problems that many of us who served on the Bill Committee faced was the lack of detail in many areas. We were promised the delivery document in May, and that document might contain a great deal of information. I suspect that there will be pressure to debate many issues on Report, which makes it even more important that we discuss decarbonisation now.
As has rightly been said, the Government made late amendments to the Bill on the decarbonisation target. However, they did not require it to be set, or to be set in 2016, which, according to the hon. Member for Brent North (Barry Gardiner), is the earliest date it can be set. They did not even say that it should be available for 2030, which is merely the earliest date to which it should apply. In essence, there is no provision for a decarbonisation target in the Bill. Even more worryingly, when the Bill was published, the Government announced their gas strategy, which clearly envisaged a substantial number of new gas generation stations. It seems to me that the emissions performance standard in the Bill would allow for the building of new unabated gas stations, even though Ofgem has warned that bills could rise substantially until 2016 should we have a heavy reliance on gas. There could also be a reduction in energy security, so we might have to rely increasingly on imported gas.
The current carbon budget might have to be amended—not downwards but upwards—to allow for the greater emissions that are to be created. Certainly, the Committee on Climate Change has been a strong proponent of the need for a decarbonisation target and is concerned about that very issue. As the hon. Member for Brighton, Pavilion (Caroline Lucas) rightly said, the main reason for a decarbonisation target is to reduce carbon emissions; we must do that if we are going to have any chance of keeping within 2°, as she said. The Committee on Climate Change has made it clear that decarbonising power is the cheapest way of meeting our overall carbon budget. It is important that we give a clear and unequivocal message that we must continue with decarbonisation. It is remarkable that those who are calling for the target include not only those who campaign on climate change but a wide range of industries, which wish to maintain progress on climate change not for political reasons but for hard-headed business reasons. They want to be sure of the future before making very substantial investments in new green energy, and they are looking at investments into the 2020s. Long lead-in periods are involved, and decisions taken now are for massive investments that will not come on stream for many years. They need to be sure that those investments are worth while. There are mixed signals from the Government, which makes business nervous that there will not be the same commitment to renewable energy in future.
Mr Weir
I have just explained the mixed signals through the carbon targets, the gas strategy and the failure to set a decarbonisation target. The hon. Gentleman has argued, as Ministers did in Committee, that we have a 2050 target, which no other country has but, as the hon. Member for Brent North rightly pointed out, there is a difference from the past. There is a strong movement towards renewable energy production in Germany and especially in Denmark, which is heavily into wind. In fact, Denmark took over leadership of the wind energy industry from the UK in the 1970s, and has invested heavily in it. It is much more advanced and is clearly going down the renewable route. Professor Mitchell from Exeter university said in our evidence session:
“If you look at what has been going on just in terms of the EMR over the last two years, we have a lobby full of nuclear industry, strong movements for renewables and now a gas strategy coming out of the Treasury. It is an incredibly uncertain world for those who wish to invest, going into the long term.”––[Official Report, Energy Public Bill Committee, 15 January 2013; c. 72, Q217.]
That is the message that industry is getting. Siemens appeared before the Committee, as did Gamesa, which has said publicly that it is concerned about the matter and fears that it might affect future investment.
The Government need to make it clear that they intend to proceed with the decarbonisation of energy, as those mixed messages are causing concern. If we are to have green energy for the future, it is crucial that a supply chain is established to help us reap the economic benefits and jobs that come with it. We must not end up, as we have in the past, importing kit—turbines and whatever else—to ensure that we can meet the energy challenges.
David Mowat
I have not been in the Chamber from the outset, but the hon. Gentleman was the first to use the word “nuclear” in the debate. France has some of the lowest carbon emissions in Europe. Would he support an expansion of our civil nuclear programme so that we can be like France and have much lower emissions than the average in Europe?
Mr Weir
The hon. Gentleman obviously was not here at the beginning of the debate, because we had quite a big discussion about nuclear. He knows perfectly well that I do not support nuclear power, but that is an entirely different argument, which I will not get into at this stage, Mr Gray, as I am sure that you would rule me out of order. I will just say in passing that negotiations with EDF over Hinkley and the costs of nuclear have raised huge concerns about its affordability—never mind the other concerns that have been raised over nuclear. We have been promised details on that matter, which we will hopefully receive before we discuss the Bill on Report. Certainly, some of the things that are being reported at the moment give us huge cause for concern.
I was saying that during our debates on the Energy Bill, Ministers made the point that other countries did not have decarbonisation targets, but those countries are further ahead in creating that supply chain, which is something that we are trying to do almost from scratch. In an evidence session, David Handley of Renewable Energy Systems said:
“The value of a 2030 decarbonisation target, as we heard earlier, is in providing that greater signal to the supply chain, to the entrepreneurs who are looking to invest in new businesses and to the people who are developing projects that there is going to be this long-term market for the products that they are delivering.”—[Official Report, Energy Public Bill Committee, 15 January 2013; c. 57, Q168.]
That point was also made by DONG Energy. As the hon. Member for Brent North said, it saw 2020 as a cliff edge for investment. Given the long-term commitment required, that is a serious drawback.
Offshore wind has, I believe, a strong and vibrant future. There are plans to install up to 10 GW of capacity in Scottish waters over the next decade, including three projects off the coast of Angus in my constituency. They promise not only employment in renewables but a boost for the port of Montrose, which has good prospects for supplying and maintaining wind farms in the future.
Many more sites are being looked at for deployment in the 2020s, alongside commercial wave and tidal generation. We must ensure that we send a clear and unambiguous message that we want those developments and will continue to push the decarbonisation of our energy sector. If we fail to do so, we will not reap the economic benefits that are available in the sector. As the hon. Member for St Ives noted, much of the growth at the moment, although low, is coming from green industry. If we fail in this area, we will limit even further our prospects for growth in future.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Member for St Ives (Andrew George) on securing this debate and on bringing this important matter to Westminster Hall for our consideration at a very important time. I will keep strictly to my allotted time scale, Mr Gray, because I realise that other Members wish to contribute, I shall try to ensure that they can do so.
I recognise the importance of this critical debate and I want to try, if I can, to give the Northern Ireland perspective. At the same time, I want to put down a marker by offering some suggestions to which I hope the Minister can respond. Only last week, I had a meeting with local people in Portavogie, one of the villages in my constituency, and we discussed flooding issues. The guys from Northern Ireland Water were there and they told us that, as far as they were concerned, although people used to refer to “one in 50 years” or “one in 100 years” flooding—that was the way that people looked at it—flooding would be a regular occurrence for the next five to 10 years. Gone are the days of “one in 50 years” or “one in 100 years” flooding; floods will perhaps be an occurrence every week. I make that point because it is the reason why this debate is important—there is a change in world conditions and it is very clear how it will impact on us.
There is also the issue of cheap coal. The United States is putting a lot of cheap coal on the market, which power stations in the United Kingdom have used. However, by doing so over a period of time, power stations have increased the emissions that they produce. All those things underline the importance of this debate and the need for the decarbonisation of energy generation.
I will make a couple of quick points about wind farms. I also want to put down a marker, because while everyone is committed to green energy—ask anybody in the street or in a constituency and they will say that they are committed to green energy—when it comes to cost they sometimes draw back or have a question mark about it. We have to achieve a balance that can work for everyone. Wind farms on land can create energy, which is important, but what they can also do—if they are not sited in the correct way—is have an impact on people living near them, both visually and by creating noise. Wind farms need to be situated in the right location; perhaps the Minister can discuss that in relation to planning matters.
Wind farms have the potential to do great things, but at the same time they can be contentious. There are plans for an offshore wind farm off the coast of South Down in Northern Ireland in prime prawn and fishing areas, which will affect what fishermen can do at a time when they need to fish. The fishing industry is under pressure. The past six months have been critical for fishermen and fishing fleets in Northern Ireland. They have made no money in the past six months.
Jim Shannon
Absolutely—I accept that, Mr Gray. I just wanted to put a marker down about fishing.
There are alternatives that will allow us to reduce carbonisation. Willow mass is an alternative that farmers have been encouraged to consider. It is a method whereby they can reduce carbon while at the same time achieving an income. I will put down a quick marker on anaerobic digester systems. Germany has 2,500 of them, yet in the United Kingdom we have only 23. They are another alternative that allows us to reduce carbonisation.
Several hon. Members have referred to nuclear power and to the concerns expressed by the hon. Member for Brighton, Pavilion (Caroline Lucas). As far as a great many people in my party and I are concerned, nuclear power is the key factor in reducing emissions to ensure that targets are met. We believe that the new generation of UK nuclear plants, beginning with Hinkley, are welcome news. What we need is an overall strategy that delivers; one that is not contentious and that does not create division; and one that has achievable targets, with everyone committed to achieving the right balance. With those comments, Mr Gray, I have finished.
Nia Griffith (Llanelli) (Lab)
I congratulate the hon. Member for St Ives (Andrew George) on securing this debate.
When we served on the Joint Committee on the draft Climate Change Bill, we heard from manufacturers how much they wanted certainty. They said, “Well, whatever you decide, whatever you do, certainty is what we want. We want to have that message. We want to know exactly what we are doing.”
The decarbonisation of the power sector is vital, not only in its own right but as a contribution to decarbonisation in other sectors, such as transport, industry and buildings. If we delay setting decarbonisation targets, that will lead to an increased reliance on gas. We can all understand why we had North sea gas and why we then imported gas to take over from North sea gas, but can anybody understand why a country would wish to rely so much on imported gas now? First, importing gas contributes to greenhouse gases and the speeding-up of climate change, but secondly, following the oil crisis in the ’70s, surely we must understand the volatility of oil prices and, linked to them, gas prices. In addition, there is increased world demand and the volatility of some nations that supply gas to us. Furthermore, the versatility of gas means that when we do have it there are things that we should be using it for, such as piping it directly to industry or homes.
As for shale gas, it is highly controversial in a densely populated country such as our own, and costs will certainly escalate before it can be extracted, not to mention the carbon footprint that its extraction will leave behind. However, tacitly encouraging—
Nia Griffith
No, the hon. Gentleman has had many chances to talk; I will give way only to someone who has not yet had a turn.
Tacitly encouraging more reliance on imported gas looks even more bizarre when we have huge potential here for renewables, particularly—
Mark Reckless
Gas prices are linked to oil, but we have seen in the United States that the success of shale gas has detached gas prices from oil, and gas prices are now much lower. In addition, that has helped the US to reduce its carbon emissions.
Nia Griffith
Mr Gray, I will not digress to discuss that matter, as we want to keep—fairly strictly—to the matter of decarbonisation targets, and it is absolutely vital that we get those targets now. That is because the Government’s position is that no targets will be set until 2016 at the earliest, with no guarantee then as to what those targets might be. Targets are absolutely vital for industry, because we need absolute certainty to encourage investment in low or indeed zero-carbon technologies. We want to get ahead, rather than seeing big investment in green energy components go elsewhere.
I am secretary of the all-party group on steel and metal related industry, and we see huge opportunities for the steel industry in the production of turbines for offshore wind farms and of marine current turbines. Without targets, however, we will lose those opportunities to other countries. The steel industry in this country is facing a real crisis in demand, and certainty about decarbonisation targets now would bolster investment in renewable technologies and help that manufacturing to stay in the UK.
Research by the Institute for Public Policy Research puts paid to the myth that decarbonisation will increase fuel bills. Leaving aside all the disgraceful ways in which the big energy companies exploit the consumer as a result of weak regulation, excessive profits and now, we understand, dubious taxation practices, simply looking at the price of decarbonisation, the conclusions are that increased reliance on electricity generated from gas will cost the consumer more, and that is on conservative estimates of price rises without unpredictable events. Certainty on decarbonisation targets now would be good for the future of the planet, good for manufacturing and good for the consumer.
Dr Alan Whitehead (Southampton, Test) (Lab)
I, too, will try to be as brief as possible, because I know that other Members wish to contribute to this debate.
The hon. Member for North Warwickshire (Dan Byles) stated that we had some of the world’s toughest targets on climate change, but it is precisely because we have those targets that a target now for decarbonisation of the energy sector up to 2030 is vital. Essentially, that is the case that the Committee on Climate Change made on decarbonising the power sector, falling from 450 grams or so per kWh today to about 50 grams per kWh by 2030. That is because the power sector produces a large percentage of emissions, so we cannot decouple the question of decarbonisation of the power sector from overall targets. The suggestion by the Committee on Climate Change that, in order to stay in line with the overall targets that this country has set itself, the target should be about 50 grams per kWh by 2030 should be the basis for what we set as a target in the Energy Bill.
The Government tabled amendments to the Energy Bill after it was considered in Committee, stating that they “may” set a target. However, they cannot do it before 2016, and if they do so the Minister “may” set a target of—a level we know not what. In terms of building confidence for industry and knowing that we have to reach the position that I have suggested regarding the relationship of energy to overall climate change targets, that change in the Bill will be of very little comfort indeed to those people who know what they have to do as far as investment in the low-carbon economy is concerned.
I would go further than that. Between now and 2016 —we cannot set a target before then in the amendments—a number of events will occur, and I wish to ask hon. Members if they can spot the difference between two phrases. The paragraph in the energy White Paper dealing with what will happen in respect of emissions when the Government revise their view of EU emissions trajectories in 2014 says:
“The Government will review progress towards the EU emissions goal in early 2014. If at that point our domestic commitments place us on a different emissions trajectory than the EU ETS trajectory agreed by the EU, we will, as appropriate and consistent with the legal requirements of the Climate Change Act, revise up our budget to align it with the actual EU trajectory.”
That sounds good. The gas strategy, which came out shortly afterwards, states:
“We will review our progress in early 2014 and if, at that point, our domestic commitments place us on a different trajectory from the one agreed by our partners in the EU under the ETS, we will revise ... our budget as appropriate to align it with the actual EU trajectory.”
That is the problem of waiting until 2016. If, by that point, we have revised up our trajectory to deal with a gas strategy that suggests that, in at least one direction, we have more than 37 GW of new gas plant running at full tilt, rather than DECC’s previous suggestion of some 19 GW of gas—we need gas, but not that much, running at a much lower trajectory—we will irrevocably bust our climate change targets by that act alone. That is why it is important that there is a target in the Bill that locks us into a proper direction on the decarbonisation of energy and, at the same time, gives confidence in respect of future investment for those who wish to invest in that low-carbon economy.
I hope that I have done the Minister a favour by mentioning that he appears to have agreed, on behalf of his Department, to a different strategy from the one to which he is committed, and to which he thinks he is committed. I hope that, in the run-up to the end of the Energy Bill, he looks at the quote from the gas strategy—it is on page 22—and sees whether, among other things, he might agree with the amendment tabled by my hon. Friend the Member for Brent North (Barry Gardiner), which may be considered during the latter stages of the Bill, and excise that paragraph from the gas strategy, to make things really tidy for the future as far as our targets are concerned.
Ian Swales (Redcar) (LD)
I will cut my remarks short, Mr Gray. I was going to speak about the beneficial effects of all this for the Teesside economy and mention a number of projects, but I do not have time.
Although there is good news for the local economy, not everything in the garden is rosy. The bioethanol plant in my constituency, set up in February 2010, shut down for more than a year. Having restarted, it has recently shut again, because of Government dithering over renewable transport fuel. We do not have full clarity from the Department about a biomass power station at Teesport, which three Korean companies have formed a consortium to build. We are getting mixed messages from the Department on that.
As other hon. Members have said, we need local purchasing. A wind farm is being built offshore, literally outside my house. Although that is good news, I have seen the ships transporting all the materials coming past my house. We must act urgently to ensure that we have supply chain and local purchasing.
I heard this week for the first time that there are concerns in the north-east about the national grid capacity not being in line with the Department’s various energy generation plans. I hope that the Minister will provide clarity on that. Other hon. Members have spoken about the need for long-term certainty. That is not just about long-term targets, but about the grandfathering arrangements that the Department makes. The omens are not good. The retrospective change in combined heat and power has been bad for companies that thought they had a regime lasting until 2027.
There have been seven Energy Acts since 2003. I hope that we are getting to the end of this and that the Minister will think about standing down the policy factory, or at least part of it, that has been working for 10 years, so that we can get on with all the investment that is required.
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for St Ives (Andrew George) on securing the debate. As is his habit, he gave a comprehensive account of the issues, many of which other hon. Members were seeking to add to the debate. He rightly made the point about the time pressure in respect of the Energy Bill. Members of the Bill Committee know that we need to return to a range of issues and it is important that we have adequate time on Report if we are ever to get to them. Even in this debate, a number of hon. Members have been unable to speak or have had to truncate their remarks on a fundamentally important issue.
It is always a pleasure to stand opposite the Minister, although I am slightly disappointed that the other, new, part-time Energy Minister—the third Energy Minister in six months—is not here, because his other part-time responsibility is in the Department for Business, Innovation and Skills, and publications coming out of that Department have highlighted the important role that decarbonisation and the green, low-carbon economy needs to play in having a target and a direction for the future.
Tom Greatrex
I am tempted not to, because the hon. Gentleman came into the debate late, but I will. I am more generous than I should be.
Mark Reckless
Some are concerned about the extent to which decarbonisation and the green agenda are pushing up electricity prices. The shadow Minister says that he is keen to have sufficient time to discuss all the issues on Report, so would he support having two days on Report?
Tom Greatrex
I am glad that I gave way, because the hon. Gentleman is right on that point. Significant time needs to be given to these matters, because a range of issues must be discussed, and this is just one. He has talked previously about other issues covered in aspects of the Energy Bill—not directly on this point—and I am sure that he would want to contribute. I hope that the Minister and the usual channels have heard his concern.
I have mentioned the other responsibilities of the new Energy Minister. The hon. Member for St Ives rightly focused on the business case, and the jobs and growth case, for the decarbonisation target, but there are other strong arguments. My hon. Friends the Members for Brent North (Barry Gardiner) and for Southampton, Test (Dr Whitehead) made the climate arguments. There are also important security-of-supply arguments about why this is sensible.
The hon. Member for St Austell and Newquay (Stephen Gilbert), the close geographical colleague of the hon. Member for St Ives, is sitting slightly apart from the rest of the Liberal Democrat Members today, and he is the only Liberal Democrat in the Chamber who had the opportunity to ensure that this target was in the Bill. We debated the matter in the Energy Bill Committee and he and another colleague chose not to vote for his party’s policy. I hope that the number of Liberal Democrats who are here this afternoon is indicative of the fact that those who are not encumbered by ministerial or Parliamentary Private Secretary posts will support that policy when the opportunity to support the cross-party amendment comes in due course, although their party’s policy was not in the manifesto, but was agreed at their party conference in October, when the Bill was under way and under discussion in pre-legislative scrutiny.
Andrew George
Neither was it in the Labour party manifesto. Rather than trading points, I want to speak on behalf of my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert), because he cannot speak in this debate, and say that we should ensure that this agenda is shared across all parties. It is led, as the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) knows, by a Conservative Member. Although I cannot speak for the Conservatives, there is an economic agenda in favour of decarbonisation. That needs to be emphasised at this stage and we need cross-party consensus for it.
Tom Greatrex
The hon. Gentleman is right to make that point, as he did in his speech and as other hon. Members have. My remark about his colleague was just to make it clear to those who were not on the Energy Bill Committee that there was an opportunity to put that target in the legislation, but sadly it was missed. That could have been done, but those with the opportunity chose not to do so. I hope that, on reflection, we will get to a better position and a better decision on Report.
Members of the Energy Bill Committee have dealt with a number of similar issues that the hon. Member for North Warwickshire (Dan Byles) touched on. He mentioned targets, including in other countries. I am sure that he is as aware as I am of the targets in Denmark—the 2035 target for all electricity and heating production to be fossil fuel free; in Austria, in relation to low-carbon energy by 2050; and in Germany, in relation to 50% of electricity generation in 2030.
It is not strictly accurate to suggest that there are not targets elsewhere in Europe and across the world, because those countries are seized of the growth and job opportunities that come with the imperative to decarbonise the power sector. Those of us on the Energy Bill Committee heard repeatedly—others will have heard this in subsequent letters—that business is seeking clarity of purpose beyond the scope of this Government and of this Parliament and the next, towards 2030.
My hon. Friend the Member for Brent North was right to address the levy control framework, but the hon. Member for Angus (Mr Weir) was also right to mention the time it takes to make some of those decisions. There are serious, big decisions that have not yet been made, such as on the memorandums of understanding that have been signed on siting offshore wind fabrication facilities in the UK. Part of the reason why the final decision has not yet been taken on that is the fact that the global companies involved, which have to make a case to their international boards, are not convinced that they have the clarity to be able to say that there will be a market. The only way we will bring down the cost of offshore wind is by having scale, and the way to do that is through manufacturing. There are strong business threads throughout the debate.
Ian Swales
Does the shadow Minister agree that it is not just climate that companies are interested in? Although climate is obviously an important overall consideration, the companies want their specific arrangements to be grandfathered when they decide to invest.
Tom Greatrex
I agree. We are grappling with the legislation because we do not know the detail of how that will operate. Again, in Committee we received assurance from the then Minister of State, Department of Energy and Climate Change, the right hon. Member for South Holland and The Deepings (Mr Hayes), that that will be forthcoming, but it has not yet emerged. Not only can we not scrutinise it, but the companies, to which the hon. Member for Redcar (Ian Swales) was going to refer before he had to truncate his speech, cannot.
Finally, Ministers speak about setting a decarbonisation target, as the Deputy Prime Minister did on the very afternoon that we moved amendments in Committee that the Liberal Democrats failed to support, but that is not to say that this is about setting a target. As others have said, it is about the power perhaps to set a target. The Government may set a target, but they might not. The longer this goes on, all we are doing is storing up lack of certainty, which means that the costs will not necessarily come down as fast as they might and that we cannot get the benefit of jobs and growth from the shift to the green economy that is happening—and it will have to happen in any case.
David Mowat
It is right that the costs need to come down, and, of course, activity will drive down the costs. There is a school of thought that says that excessive subsidies stop costs coming down, but I accept that costs need to come down. Does the shadow Minister accept that these are global industries and that global activity, not just UK activity, is what will drive down costs?
Tom Greatrex
There is activity in other parts of the globe, and these are global companies making global investment decisions. To get the costs down we need scale, and to get scale we need manufacturing. That manufacturing will not happen without the sense of a long-term trajectory in that part of the energy sector in this country.
I am conscious that I am about to run out of time, but I hope that we get the opportunity on Report to debate the issue fully. I am sure that the cross-party amendment will draw a degree of support from across all parties, as has been demonstrated this afternoon.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Having returned from St Paul’s, I may be feeling a little dewy-eyed and unduly romantic, but I think this was a really good debate on both sides of the Chamber. I do not agree with all the speeches and interventions, but the quality of the arguments deployed by both sides has been very high and I have listened carefully to the points made by the hon. Members for Brent North (Barry Gardiner), for Angus (Mr Weir), for Strangford (Jim Shannon), for Llanelli (Nia Griffith) and for Southampton, Test (Dr Whitehead) and by my hon. Friend the Member for Redcar (Ian Swales). I have also listened carefully to the powerful and pithy interventions by my hon. Friends the Members for North Warwickshire (Dan Byles), for Warrington South (David Mowat) and for Rochester and Strood (Mark Reckless).
Most of all, I congratulate my hon. Friend the Member for St Ives (Andrew George) on securing this debate and on opening with a tour d’horizon on the energy sector with a clear focus on decarbonisation. He is right in so many respects on the Government’s ambition and direction. In less than three years, we have put in place many of the key building blocks of a greener, cleaner energy economy of which both coalition partners can be rightly proud.
Year-on-year, offshore wind capacity was up 60% and solar PV capacity was up 500% in 2011-12. [Interruption.] The hon. Member for Brighton, Pavilion (Caroline Lucas) is chortling, but in the past six months we have added more than half a gigawatt of solar. That totally flies in the face of the Opposition’s doom-mongering and scaremongering. The Government have a record of deployment and real action of which we can be proud, but we are absolutely clear that we will always consider the interests of the consumer. We will always consider who is actually paying. We do not believe in going green at any price; we believe that there is a fair balance between value for money and achieving our vital climate goals.
Gregory Barker
I am afraid that I will not give way, because I have very little time to cover all the points.
It is interesting that I do not think that I have heard anyone in this debate refer to consumers, to consumer bills or to the ability of the British taxpayer to shoulder the subsidies that are necessary to pay for this agenda. As hon. Members know, I am a great champion of greening our economy. I am one of the few Members present who played a part in the passage of the Climate Change Act 2008, which is one of the proudest moments of my parliamentary life to date. I am absolutely committed to that, but we have to reconcile the difficult challenge of cost and delivery.
The Prime Minister has been emphatic. I am glad that my hon. Friend the Member for St Ives mentioned that we are the greenest Government ever. That was the Prime Minister’s pledge when he visited the Department of Energy and Climate Change on day four of the Government, and he reiterated the pledge only a matter of weeks ago to the Royal Society:
“we are in a global race and the countries that succeed in that race, the economies…that will prosper are those that are the greenest and the most energy-efficient… it is the countries that prioritise green energy that will secure the biggest share of jobs and growth.”
There is no fundamental difference between the two sides of the House in our direction, destination or determination to meet the goals that are embedded in the Climate Change Act. In fact, there is not so much between us on the decarbonisation target, either. We have tabled an amendment to the Energy Bill that will allow us to set a decarbonisation target alongside the fifth carbon budget, and I will go on to address that in detail.
My hon. Friend the Member for St Ives mentioned marine energy in his opening speech. I am extremely proud of the huge leaps forward we have made on that exciting technology over the past three years with the establishment of the UK’s first marine energy parks—first in the south-west and now in Scotland. I am extremely proud of that investment. Our commitment in the last review, despite all the pressure on public finance and energy bills, was to increase substantially the renewable obligations certificates that we are giving marine, to give it the investment punch that it needs.
My hon. Friend kindly invited me to visit Cornwall and see FaBTest. I will be there next week. I must admit that it was already in the pipeline, but he can take back the good news this weekend and tell every Cornishman good and true that the Energy Minister is coming.
Gregory Barker
Quite right. I stand corrected. Although I am blowing my own trumpet, the hon. Member for Rutherglen and Hamilton West (Tom Greatrex) chided my Department for its turnover in Energy Ministers. Coming from the Labour party, that is a bit bleeding rich. Under the previous Administration, there was a revolving door on the Department. I think I am now the longest-serving Energy Minister since the previous Conservative Administration—
Gregory Barker
No, I will not, I am afraid. I greatly welcome the closer alignment with the Department for Business, Innovation and Skills. I cheered the last Government when they created a separate Department of Energy and Climate Change. It is a good thing, but it must also be a good thing, as he pointed out, to have much closer alignment between BIS and DECC. The appointment of my right hon. Friend the Member for Sevenoaks (Michael Fallon) to the important job of Energy Minister, much as it will stretch him, sends a clear signal about the central importance of the low-carbon economy to British growth and our long-term growth prospects, as the Prime Minister said and every Member who has spoken in the debate has pointed out. The CBI supports the agenda, and there is wider support for the low-carbon economy that goes way beyond certain renewable energy technologies. It offers export and other business opportunities requiring little or no subsidy, and it has a great deal of its own momentum.
We will return to the decarbonisation target when the Bill returns to the Commons on Report after the Queen’s Speech. I know that some hon. Members have argued that we should go further and set a target now, to provide greater certainty to investors. I understand that argument—I listened carefully to the contributions made in the evidence session before the Bill Committee—and I see the strong merit of the argument for a decarbonisation target. That is why we are introducing measures in the Bill to create such a target. However, we must also resist the temptation to think that life is about targets. Surely, we learned our lesson under the last Government. Simply setting targets does not deliver results. If this Government are about anything, we are about deployment, results and driving real change in real time, and our record demonstrates that we are capable of doing that.
As we set out in the carbon plan in December 2011, it is likely that, as well as decarbonising electricity generation, meeting our 2050 target will require the electrification of a significant amount of heat and transport in the UK. In turn, that will not only affect overall demand for electricity but require us to take into account when that electricity is needed. For instance, when will people want to charge electric vehicles? Heat demand changes seasonally and over the course of a single day. All those things must be taken together when we consider the best way to decarbonise electricity as part of a least-cost route to meeting our obligations under the Climate Change Act 2008.
The second reason why I believe we should wait to set a target range is that we do not need to do so now. As I have said, we have provided clear signals to investors via a range of different initiatives, legally binding targets and the action that we are taking through the electricity market reforms in the Energy Bill. They have prompted the director of the CBI to say that the Bill sends
“a strong signal to investors that the Government is serious about providing firms with the certainty they need to invest in affordable secure low-carbon energy.”
That is what we are doing.
This must be seen in the context of the Government’s wider plans. The green investment bank is now investing billions of pounds in our green economy and catalysing billions more. I appreciate that hon. Members have focused on one element, but the wider package is extremely ambitious and encouraging.
Mr James Gray (in the Chair)
I am most grateful to the Minister for winding up precisely at 6.15. Can people from the last debate leave the Chamber quickly and quietly?