Baroness Smith of Basildon
Main Page: Baroness Smith of Basildon (Labour - Life peer)
Baroness Smith of Basildon
My Lords, I thank the Minister for repeating the Statement in your Lordships’ House today. It is not the first time that we have discussed feed-in tariffs in your Lordships’ House. I have to say to the Minister that I was surprised to receive an e-mail this morning announcing that a Written Statement was due to be issued. Given the public interest, I was surprised that the Government wanted to issue a Written Statement rather than an Oral Statement. I appreciate this, and I am grateful to the Minister for repeating it. With thousands of jobs and businesses at risk, he will understand the concern that this could have been slipped out as a Written Statement without the opportunity to seek answers to some very important questions in your Lordships’ House.
The Minister will recall that we discussed this issue in your Lordships’ House just before the Summer Recess. Given that the order we debated then made significant changes to the feed-in tariff system following a previous consultation, can the Minister tell us why, so very soon after one consultation and legislative change, the Government have now initiated another?
When I asked the department about this previously I was informed that the consultation was required because of a loophole in the law. I found this quite surprising, because I was concerned about whether the issues addressed in this consultation that seek to plug that loophole were evident or should have been evident at the time of the last consultation. When did the Government become aware of this loophole, and would it have been reasonable for them to have been aware of it sooner, prior to this consultation—indeed at the time of the previous consultation?
Does the Minister really understand—I am sure he does—how difficult it is for investors to have any confidence in the Government if the goalposts on feed-in tariffs keep moving, making it more and more difficult for them? Are they supposed to guess what the next so-called loophole will be that the Government will try to plug? This is the second significant change in a matter of months. I have to say to the Minister that it seems to be a bit of a shambles. I am sure he is aware that investors need certainty, and this merry-go-round of consultations and changes provides exactly the opposite for investors and for the industry. What message will the Minister give to current and potential investors, and will he offer an apology to them for the chopping and changing that we have witnessed over the past two months?
As I said in our previous debate on this issue, to say that only the Government wanted to see any changes in the feed-in tariffs and that everybody else wanted to leave the feed-in tariffs as they were creates a false dividing line. Investors and others are aware that installation costs have fallen by around 30 per cent, and it was recognised that feed-in tariffs would change in line with that. Many preferred a tapered change.
What is not understood is why the Government have reduced the tariffs by more than 50 per cent, which is a significantly larger amount than the reduction in costs. With a new rate of 21p per kilowatt hour, less than half the previous rate, has any assessment been made of the impact on jobs and businesses? Last year the solar industry employed 3,000 people in 450 businesses. Today it employs 25,000 people in 3,000 businesses. Has any impact assessment been undertaken of the impact on jobs and investment in business?
In the previous consultation just a few months ago, over 80 per cent of those who responded opposed the Government’s plans. What level of support do the Government expect for the plans they have issued in this current consultation? What notice will be taken of the consultation this time? Although the consultation does not finish until 23 December, the cut-off date for eligibility under the current scheme ends before that on 12 December, in just six weeks’ time. Will the Minister take any note of the responses to the consultation, or is this a pronouncement of government policy rather than a consultation on possible or intended changes to government policy?
I listened with interest to the Statement in the other place earlier today, and I thought I heard the Minister, Greg Barker, say, if I understood him correctly, that there could be individual exceptions to the cut-off date. Does the Minister know what these are, or what the process will be for those individual exceptions? Can any advice be given to those who have already commissioned domestic solar power systems and paid a deposit but who will not have been able to manage the installation, certification and official registration by 12 December?
Has any assessment been made of the impact on community projects, and are the Government worried that the changes being made will mean that those on lower incomes are now far less likely to benefit, while those on higher incomes are more likely to be able to do so? It might be helpful if I quote to your Lordships’ House a gentleman called Nigel Farren from Energise Barnet, who says: “Churches, synagogues, mosques, schools, sports clubs and other community organisations across the country are getting together to establish energy saving initiatives so they can lower energy bills, reduce carbon emissions, and eradicate fuel poverty among their members. Unless community-owned projects and community-buying group initiatives are ring-fenced from the feed-in tariff cuts, the trust of these organisations and thousands of volunteers will be lost, setting back the whole green agenda in keeping secure their help in delivering the Green Deal”.
Finally, the Secretary of State Chris Huhne said to the Corporate Leaders Group on Climate Change earlier this year,
“The next time someone asks where the growth is coming from, you can tell them. Green energy”.
It is a sad irony that on the very day the Deputy Prime Minister Nick Clegg announces funding for 35,000 new jobs, a successful industry that has created 20,000 jobs in the last year seems to have had the rug pulled from right underneath it.
At the beginning of the Minister’s comments he said that this was a successful scheme. It is, and we want it to remain so—we take great pride in the capacity that it has built up and those who benefit from the current scheme. We know that there have to be some changes, but these are very serious issues that I have raised today, and I hope the Minister will be able to answer my questions.