Energy Bill
Debate between Lord Howell of Guildford and Lord Turnbull
Lord Turnbull
My Lords, as noble Lords may be aware, I have strong reservations about the Bill but on this issue I side with the Government. The agenda to which we are working had its genesis 10 to 15 years ago when continued growth in the world seemed secure, real incomes were rising, global temperatures were tracking quite closely the rise of CO2, which is not the case today, when there was optimism about an international agreement, public money to fund the expansion of renewables was plentiful and peak oil was pretty much a received wisdom. None of that is true today. Indeed, the world is still in a state of flux. Therefore, a moratorium on specifying new commitments seems a sensible response.
The noble Lord, Lord Oxburgh, referred to infirmity of purpose. Some would say that there is such infirmity, partly for the reasons given by the noble Lord, Lord Stephen, partly because the world is uncertain, but, principally, because the Government have not yet made up their mind on how to resolve the trade-off between conflicting objectives. Until they do that, they cannot make this commitment sensibly.
We have impaled ourselves on a set of targets and timescales that are forcing us in desperation to undertake a number of responses that we could avoid if we had a more measured view of the sense of urgency. It is a truism that in commercial negotiations, the party with the deadline is the one in a weak position, yet we are engaged in probably the biggest commercial negotiation the Government have ever undertaken, with a variety of energy suppliers. We should not allow them to exploit this urgency, which is what is happening at the moment. For those reasons, the Government—not just out of political funk but for good reasons—are delaying the timing of these commitments.
Lord Howell of Guildford
My Lords, I apologise to colleagues and to the Minister for not being at Second Reading. I had inescapable commitments elsewhere. I declare my interests as president of the Energy Industries Council, in succession to my noble friend Lord Jenkin, whose superb speech we have just heard, president of the British Industry of Energy Economics, chairman of the Windsor Energy Group and as an adviser to Mitsubishi Electric. I apologise also for the fact that I appear to be sitting on the wrong side of the Committee. The truth is, I strongly oppose the amendment and believe that it is completely wrongheaded, but I am not over the moon about the Government’s policy, either—so perhaps I am sitting in roughly the right place.
The noble Lord, Lord Oxburgh, is a very wise man with whom I usually agree on everything. However, in this case I do not agree with him. He said that this is a very complex Bill. Of course, there is a mass of interventionist detail in it, a great deal of which will never work, but the basic aim is quite simple. It is to get investment in new plant as quickly as possible, and get plant of one sort or another up and working before we have serious interruptions, given that we are closing other plants at a great rate for all sorts of reasons, not least to do with EU directives. The noble Lord said clearly that if we put this additional target definitely in place by 2014, rather than perhaps in place later, we will overcome infirmity of purpose. I can only offer my experience. It may sound cynical, but I have been in and out of government over a long time, so perhaps it is the same thing. Targets do not do that.
In some of the ministries in which I served—I hope that this does not sound too awful—the saying was that targets were set to be missed. They are not an inspiration, and a lot of shrewd investors and financiers know perfectly well that if they put too much faith in targets, they will be wrong-footed. What they should watch of course is technology. I advise both the Committee and the Government to do as much as they can to put their faith in technology and to back every kind of technological advance, because technology rather than targets will deliver the objectives that most of us want, including decarbonisation, affordability, security of supply and so on.
When I see the suggestion that we should put another target into the pattern—an early one, at that—on top of the targets for 2050, and for 2020 for renewables, which we are stuck with the moment, I worry that I am seeing yet another example of a rather dreadful trend, which is to rush at decarbonisation much too fast. It is all question of pace and politics. While I am as anxious as the next man to see a greener, cleaner world, and while I accept the horrors of global warming, whether or not their cause is scientifically established, the rush and overambition of the Committee on Climate Change, of the recommendations and of the zealots will upset our targets and ensure that we do not get the decarbonisation that we need. It is going to distort decisions and undermine the green cause. It will lead us to absurd situations towards which we are rapidly heading now, where we are actually burning more coal and not less, the opposite of what we want, and where we are getting, as my noble friend Lord Jenkin has rightly said, eye-watering price increases and minimum prices fixed for years ahead to encourage renewables. So much for lower prices—there are not going to be lower prices. Households are now paying average prices twice as high as they were paying five years ago, and some forecasts—perhaps too gloomy—are saying they will be paying two or three times as much as that by the mid-2020s.