Energy: Fourth Carbon Report
Debate between Lord Lea of Crondall and Lord Marland
Lord Marland
The right reverend Prelate hits on a very topical issue. I am very happy to say that tomorrow we will present the findings of Mike Weightman, who was commissioned by the Secretary of State, Chris Huhne, to report on Fukushima, and look at them in terms of the future of the nuclear industry in this country. It would be wrong of me to intercept that report in this House, as it will be announced tomorrow. However, I can say that I met Mike Weightman earlier this week when we went through the implications of his report. We must not be complacent about our own position, but I think that we will feel quite positive by the end of tomorrow. That will, I hope, bring new nuclear back on to the agenda. I think that it has the broad approval of the House and it of course goes to the heart of carbon reduction and energy security.
On carbon capture and storage, as the right reverend Prelate knows, I am leading negotiations on the first demonstrator. I had meetings last night with the chairmen of each of the consortium companies to try to get us to the timetable that I have mentioned to the House. Broadly speaking, we are on track with that timetable and we are now looking at a cost which should be achievable. I hope that we will have that fully on the agenda towards the autumn—as I hope, for my part, we will have with new nuclear.
Lord Lea of Crondall
My Lords, I am one of those who have been involved in the programme in one way or another since Rio in 1992. Some of the fiscal questions now being raised are timely. I should like to ask about the relationship between the Government’s Statement and the Committee on Climate Change, and which is which. Page 2 of the executive summary indicates that there is an assumption that the price of carbon will rise to £70 a tonne in real terms, on present values, by 2030. You can see that this is necessary to make the arithmetic work. I am rather reminded of doing the national plan in 1965, where we played around with investment numbers and price numbers till everything fitted. We are doing an exercise in looking at numbers that will fit fiscally, but without saying to people what carbon tax they will have to pay in real terms. We must of course be transparent and honest with people. However, a carbon tax—albeit a European one—which I advocated in my maiden speech 11 years ago and I am not against, is a regressive tax. Now is the time to be much more transparent in how all the fiscal arithmetic fits together. There is a growing demand for that, however it is managed. The document is very short on financial figures; it is all tonnages of carbon dioxide. On the financial side, there is scope for a bit more transparency.
Lord Marland
The noble Lord is absolutely right. We must be very committed to the fiscal aspect of this and we must be transparent. We will be transparent, and we will put the British taxpayer first in terms of the fiscal implications.
Energy Bill [HL]
Debate between Lord Lea of Crondall and Lord Marland
Lord Marland
My Lords, I am very grateful to all noble Lords who have spoken on this matter. Indeed, the noble Lord, Lord Lea, has yet again provoked a substantial debate—43 minutes on Report so far, and an hour and 15 minutes in Committee—on a very complicated subject. He identified in his speech the complications of getting to grips with this. To some extent—and I will make a partisan point here—we have in his view inherited a complicated situation that could perhaps have been solved over previous years but that is so complicated it is probably very difficult so to do. In fact, he has spent time with our officials, and with Treasury officials whom we put at his disposal, discussing this matter and, I hope, better understanding the complications.
The noble Lord is perhaps concerned that there is not enough information. Well, there is the Office for Budget Responsibility. There is the National Audit Office, which produces annual statistics. There is our own departmental publication, our annual report, which produces the statistics that are being mentioned. We have the Digest of United Kingdom Energy Statistics and an annual publication on energy prices. I could go on.
My noble friend Lord Deben makes an extremely good point. How much continual burden of statistics and information are we going to put on people, which they would have to digest in order to work out what is going on, in the name of transparency? As we have agreed through these debates, transparency is fundamental. That is one reason why we are bringing the smart meter into people’s homes to make readily available the information on the electricity that they will be spending. We have discussed throughout the merits of smart meters, a fundamental platform for this Bill.
I agree with the noble Lord, Lord Jenkin, it is fundamental that we have better public understanding of the cost of electricity and it must be the aim of the Government to do that. Not for one moment do we not accept that the noble Lord, Lord Lea, makes some important points, but we cannot sort this out in nine months of government or, with a click of the fingers, in the short period of time that has been available to this Bill.
However, it should be reviewed and we should look at it. We should embrace it in our electricity market reform programme, which is under consultation, and we will consider it through that process. Perhaps appropriately, as the noble Lord, Lord Jenkin, suggests, it will be part of a Bill that looks at this area and not be part of one which has fundamentally been driven by the Green Deal, admittedly with a few add-on bits. The noble Lord, Lord Judd, recently proposed an addition in an excellent amendment.
The Government do not feel that this is an appropriate amendment for this Bill. We believe that it is something that we should consider. Like the previous Government, we constantly believe in transparency and helping the general public to better understand this complicated issue of energy and electricity prices. Perhaps I may remind noble Lords that we are committed to this. On that basis and with that assurance, and in recognising the important and great value that this amendment has brought to the debate, I hope that the noble Lord, Lord Lea, will withdraw his amendment accordingly.
Lord Lea of Crondall
My Lords, I hope that I do not have to come back in three years’ time because there are riots in the streets and name all noble Lords who said that this did not need to be done. There will be great anxiety in the everyday lives of people because matters will have got mixed up in their minds about the obligation. I am sorry that the noble Lord, Lord Deben, is now so intellectually confused that he does not remember that it was he, following Kyoto, who brought in a degree of hypothecation whereby we are transferring funds to mitigation in Bangladesh and so on. These are all part of the deal. It involves a huge amount of money, which soon will approach $500 billion a year. Therefore, people should have a chance to understand.
I am afraid that everyone from the noble Lord, Lord Jenkin, on has contradicted themselves and has made totally inconsistent remarks. It seems that if people do not understand the statistics, presumably that is their fault and the poor dears will never be able to understand them. We should put the statistics in a form that people can own and understand, giving them a picture of the problems, and reasons for the price increases, that they can accept. I do not know whether the noble Lord thinks that he is living in ancient Athens, but we have a wider electorate than they had there.
Energy Bill [HL]
Debate between Lord Lea of Crondall and Lord Marland
Lord Marland
My Lords, I thank all noble Lords for a wide-ranging debate and some very thought-provoking and some not quite so thought-provoking but none the less invaluable advice and comments. I will not go beyond the scope of the Bill, even though some of the advice and comments did, because this is a debate on the Energy Bill. I will therefore restrict my responses to that matter. We have had plenty of opportunity to debate in the past and will no doubt have plenty in the future and I am happy that we will debate the other issues that have been raised then.
For the purposes of this summing up, I will clarify that this is a framework Bill on which there is a lot of work to be done. I very much value the comments made by noble Lords. We have created the opportunity, which I am told is groundbreaking in this House, to hold breakfasts and discussions with noble Lords, to listen their views and to improve on them, and I shall continue to create those opportunities as the Bill progresses. That the Bill starts here is a good opportunity for us all to get it right, and to do so within the spirit of the Bill. I shall therefore deal with some of the broader issues that have been raised by noble Lords, take some of them together and refer to individual ones later. There have been, as noble Lords are aware, an awful lot of questions. In Committee, I shall pick up on those questions that have not been commented on, or I am very happy to correspond or discuss further with noble Lords.
The noble Lord, Lord Grantchester, raised the subject of consumer protection, as did the noble Lord, Lord Teverson, and others. It is fundamental that the consumer is protected in this whole endeavour. There are two risk areas—accreditation and assessment—and the best practices must be established.
Lord Lea of Crondall
The Minister said that he would discuss some broader points, but he is now on the narrower Bill points again. On this occasion, it is not acceptable—certainly to me—for him to say that he is just going to stick to the Bill when last week it was overtaken by events. The hugely important, historic announcements about electricity price restructuring and the carbon floor are relevant to this Bill; that is what we have all been talking about. It is an absurd use of parliamentary procedure to say, “My job is to get the Bill through. I don’t want to hear about anything else”. But that seems to be the Minister’s approach. There might be Front Bench agreement on this all being a love affair, but it is a greatly missed opportunity. I would ask the Minister to think again, to discuss the matter with the Treasury and Chris Huhne and to find out whether it is really sensible, given last week’s announcements, which have hijacked this Bill, to go on as if nothing has happened.
Lord Marland
Well, thank you for those very unnecessarily hostile remarks. Obviously, the noble Lord has been deaf to anything that I said at the start of this wind-up. I notice that he was one of the few who has not attended any of the opportunities to have briefings or discussions on this document, and chooses to take up our time on this particular issue, which is not relevant to this Bill. If he wishes to discuss things outside the context of this Bill—as I said earlier, and I shall repeat it, if he would not mind listening—he is entitled to do so, and he is entitled to ask for a debate on it himself. As I said earlier, we are perfectly happy to do that.
If I may, I shall go back to the substantive issues on the Bill. A lot of time has been taken up in this House in the past few days, and I think that people want to get on to other things in their life. To say that I have been unnecessary and not listening is a most unfair remark.
As I think I said, consumer protection is at the heart of this. The OFT will be fundamental to ensuring that best practice carries on, and through the Committee stage we shall enjoy noble Lords’ support. I was grateful to the noble Lord, Lord Best, and others in what they said on the rented sector, and the encouraging words coming from the associations that he mentioned. The noble Lord, Lord Teverson, and the noble Earl, Lord Cathcart, and the noble Baroness, Lady Noakes, also referred to that matter. Clearly, we want to encourage the rented sector to embark on this and embrace it with open arms. The noble Lord, Lord Best, suggests that it will do; clearly, if it does not want to utilise the market practices, we will have to review the provisions in 12 months and then we will have to use powers to ensure that it does. Cracking that is one of the most difficult areas of the Green Deal.
The local authorities issue mentioned by the noble Baroness, Lady Maddock, the noble Lord, Lord Teverson, and others, is largely a matter for the Localism Bill, which involves authorities going back to the local authorities and enhanced authorities. It is to their benefit to do something like that. They have a number of incentives to do this through carbon-reducing programmes that they have to adopt through government best practice. That in itself should be an incentive.
Fuel poverty, one of the biggest issues with which the Government currently have to grapple, was raised by the noble Lords, Lord McFall and Lord Lawson, and others. It is a critical issue. Clearly, there are a number of measures. Fuel poverty has exponentially increased year on year since 2004. We must reverse that trend. The Green Deal is part of the attempt to do so, along with all the other measures that I mentioned in my opening speech and, of course, the warm home discount, which will provide £250 million, rising to £310 million by 2015, to encourage people out of fuel poverty. As your Lordships know, we are going to conduct a review of fuel poverty to get into the detail and solve this terrible trend for those in great difficulty.
Incentives were mentioned by a number of noble Lords. There are incentive schemes. This is a free-market programme so the incentives will come from within the market. The noble Baroness, Lady Parminter, will know that councils have the opportunity to incentivise programmes through 60 schemes. We will be looking forward to them doing so.
The noble Baroness, Lady Parminter, also mentioned a level playing field, as did the noble Lord, Lord Grantchester. Through all our energy and endeavours, we are trying to get competitiveness into the market so that we can establish a level playing field. That is fundamental to this programme.
The noble Lord, Lord Jenkin, raised, among other things, Warm Front and how it interacts with the Green Deal. I am delighted to say that Warm Front has been fully subscribed early in the current year with the money that was made available. In 2011-12 £110 million will be available and a further £100 million in 2012-13. During that time, the Green Deal will have fed in and been excellent in its support of the Warm Front which, as I have said many times, was a good attempt at combating fuel poverty but has not worked in itself. We must grapple and deal with that.
The noble Lords, Lord Cathcart and Lord Teverson, talked about their energy bills and the reverse cost thereof. I undertake to review this during this process because it is an extremely good, fundamental point.
On specific points, the noble Lord, Lord Grantchester, said that there was a cap of £6,500. There is no cap. The golden rule will in itself impose a restriction on the amount that the house can utilise. He also asked a reasonable question about interest rates. We obviously have no control over interest rates, but are developing a model and will, through Committee, have developed a model into which we can build interest rates.
I am afraid that noble Lords would not expect me to have an answer on the timeframes of the second Energy Bill. Getting a timeframe for any Bills at the moment seems quite difficult. I thank noble Lords for their support in getting us to where we are today.
Electricity Market Reform
Debate between Lord Lea of Crondall and Lord Marland
Lord Marland
I am grateful that my noble friend champions my boss, Chris Huhne, who has been excellent to work with. I compliment my fellow Ministers on the Conservative Benches for their excellent work on this matter. The key to this reform package is to ensure that we have a pricing structure—which would otherwise be going out of control through the uncertainty of fossil fuel prices in the future—that gives us electricity security through our own supply of electricity from renewables. We have no alternative but to achieve our targets because they are set down in European law.
Lord Lea of Crondall
My Lords, as an aside, I hope the noble Lord, who is normally very courteous about all these matters, will not repeat the canard that the Labour Party was uniquely responsible for not getting nuclear to be more advanced than it already is. After Chernobyl in 1986, all western Governments got cold feet about nuclear; it took an awfully long time to bring the world around to the reasoning for going forward, which has several elements, as we all know. The Labour Government got us to the starting gate more or less before the election.
I come to three questions about this announcement. First, I particularly welcome the fact that the Treasury, as far as I know, has for the first time produced a consultative document that will lead to a Statement in the new year about a carbon price floor. That is the Treasury’s phrase. However, in not revealing what the carbon price floor might be in pounds, dollars or euros, the Treasury only lifts its petticoat as far its ankle. There is no further gleam as to where it might wind up. For 20 years, ever since Rio, we have known that—
Lord Lea of Crondall
The second question is coming up, if noble Lords would mind not interrupting. Secondly, how does the Minister reconcile this Statement with the Energy Bill, the Second Reading of which we will debate in this House next Wednesday? This is a rather important Statement, but the government decisions announced in it were not available when the Energy Bill was published. Does he agree that it is rather surprising—if you take a half-interest in these matters—that he has not said anything about the implications of our now having to table a considerable number of amendments to the Energy Bill? Finally, on the European aspect of the carbon regime, we are now talking as if we are acting on our own. I cannot believe this is the case. Will he comment on that as well?
Lord Marland
Clearly the noble Lord was not listening when I gave credit to the previous Government for reversing public opinion. I thought that I gave fulsome praise in that regard. As for the carbon floor price, as the noble Lord rightly says, the Treasury has lifted its skirt and has said that it will publish the results of its consultation by 2011. It hopes to have the new carbon price support in place by 2013. The Treasury is carrying that matter forward now.
I am not sure what point the noble Lord makes about the EU. He may be suggesting that we are the only people who have signed up to our renewables target. However, this is a mandated, cross-European target, to which we are signatories.