Lord Lilley
Main Page: Lord Lilley (Conservative - Life peer)
Simon Hughes
Clearly, he has gone out for his tea just at the moment. I will tell him off later, but even the ever-energetic Energy Secretary has to have a cup of tea some time.
I am glad that we are having this debate, and I pay tribute to the right hon. Member for Don Valley (Caroline Flint) for choosing this important issue. She knows my commitment to it and I am grateful for the acknowledgement of the work I have tried to do in this area for many years. The Labour Administration had many successes, the Climate Change Act 2008 being the biggest, and the Leader of the Opposition, as he is now, tried hugely hard at the Copenhagen summit, which I, too, attended, to rescue it, as far as was possible, from the disaster that was otherwise afflicting it. Happily, he made sure that there was good progress that could be built on in the years to come.
I have to say to the right hon. Lady that in some areas Labour clearly did not deliver. I do not wish to spend most of my time discussing the past, because we all have a duty to work together to ensure that we have the best possible present, but the renewables figures I cited were not speculation; they were the figures that are in the record. The energy figures for the EU show that we were the worst at achieving the renewable energy targets we had set. The table is commonly available and the share of renewable consumption as a proportion of our target showed us in the worst possible light. That was not acceptable and this Government will, I know, do better. It was a defeat of the Labour Government in the House of Lords that got the feed-in tariff system going and that was resisted by the right hon. Gentleman who is now the Leader of the Opposition. The European common energy market was never delivered in 13 years of Labour government. On all those things, the record was not all that the right hon. Lady might wish to make us believe it was.
There was one area in which Labour had a clear position with which I disagreed and with which I still disagree. I am not committed—the Liberal Democrats are not committed—to nuclear power. We do not think that it is the solution—[Interruption.] There had to be negotiation for the coalition agreement but we have made it clear that it is neither necessary for the future of British energy policy nor good for investment in jobs. It creates very few jobs compared with community-based and renewable energy schemes, and the criterion negotiated, while we retained our opposition, was that it would go ahead only
“provided there is no public subsidy”.
I and colleagues will remain eternally vigilant that there will be no direct or indirect public subsidy for nuclear. It is unacceptable in any other context and we have spent and wasted far too much on nuclear power in the past.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
Without nuclear, where will my right hon. Friend get the base load supply of electricity that does not depend on fluctuating winds and variable sun?
Simon Hughes
The answer is very easy. We still have huge capacity in gas and oil—
Mr Peter Lilley (Hitchin and Harpenden) (Con)
My right hon. and hon. Friends on the Government Front Bench will probably be relieved to hear that I do not intend on this occasion to dispute the wisdom of the renewables targets that we have imposed on ourselves or had imposed upon us by the European Union. If we take those targets as given, we must accept the need to tax or ration fossil fuels and to subsidise or set quotas for renewables if we are to meet them. However, I dispute the premise that appears to underlie contributions to the debate from both sides of the House: that the move from low-cost energy to high-cost energy can generate jobs or growth. Such a move might be necessary, but we delude ourselves if we imagine that it will have either of those effects.
Subsidies can boost employment in the area that is subsidised, just as taxes can reduce employment in the area that is taxed, but the suggestion that subsidies can produce a net increase in additional jobs, as the right hon. Member for Don Valley (Caroline Flint) suggested, is a delusion. It is self-evident nonsense and involves abolishing the rules of arithmetic, because we would destroy as many jobs with the taxes we would have to levy to pay for the subsidies as the subsidies given at other points would create. That is essentially the green version of the old broken windows fallacy, according to which we can create jobs by breaking someone’s windows because the householder would have to employ a glazier, who would have to employ glassmakers and the people who produce the other raw materials. That fallacy was destroyed ages ago and should not be reproduced by Members on either Front Bench.
Chris Heaton-Harris (Daventry) (Con)
I am wondering whether my right hon. Friend is making an interesting and strange bid for the siting of the green investment bank in either Hitchin or Harpenden.
Mr Lilley
We have absolutely no desire to have what is essentially a sub-prime bank in our area. The idea that we can boost—[Interruption.] It will be a sub-prime bank, because the Government have said that it will not accept prime investment opportunities, which will be left to the market. The bank will be able to lend only to those opportunities that are not attractive to industry—despite huge subsidies, quotas, publicity and fashion. In short, it will be able to lend only to the sub-prime opportunities, so let us hope that it is a long time coming. We do not want it in Hitchin.
The idea that we can boost productivity by replacing competitive sources of energy with uncompetitive sources of energy is so ludicrous that it is strange it has passed without comment today. We have a need for electricity generation. If we invest a certain amount of money in wind, which is four times as expensive as gas turbines, we will get for a given investment only one quarter of the electricity that we would if we relied on gas turbines. With onshore generation we will get half the electricity that we would from gas, so the idea that we can boost growth through low-productivity, high-cost industries is nonsense, and we should cease deluding ourselves that we can. It has been suggested that we might be able to generate jobs in the supply industries for those forms of energy, but it is nonsense to suppose that subsidising the use of renewable technologies automatically results in an increase in the domestic production of equipment for them. It manifestly has not; there is no reason to suppose that it should; the Government are not allowed to give subsidies to those equipment suppliers under EU rules; and in any case the record of Governments trying to pick winners is lamentable and miserable, so it is probably just as well that they cannot.
David Mowat
The thrust of my right hon. Friend’s comments—that we cannot generate jobs with lower-productivity activities—is right, but if we accept that the Climate Change Act 2008 is right also and we have to decarbonise, we reach a position whereby we ought to decarbonise ruthlessly with the cheapest option in front of us, which takes us to nuclear power rather than to some of the others.
Mr Lilley
As one of the five people who opposed the 2008 Act, I do not necessarily accept my hon. Friend’s premise, but I will for the purposes of debate, and if we are going to meet those targets we should do so as efficiently as possible. Nuclear is one of the best ways, but the cheapest of all is gas turbines, and gas might become cheaper in this country if we exploit the potential for shale gas, which has halved the cost of gas in the United States.
Zac Goldsmith (Richmond Park) (Con)
On subsidies, can my right hon. Friend name a single nuclear power plant in the history of the sector that has not existed on the back of vast public subsidies? Has there ever been an unsubsidised nuclear power plant?
Mr Lilley
I am not sure whether some of the early ones were subsidised, but nuclear power is more attractive economically—the point that my hon. Friend the Member for Warrington South (David Mowat) made—than some of the very high-cost renewables.
As Harold Macmillan remarked, when both sides of the House are agreed, they are usually wrong. They are wrong on this occasion, they invariably end up scratching each other’s backs and intellectual rigour goes out of the window. It is time that we looked rigorously at what is involved. It may be necessary to do what is under discussion, but we should not kid ourselves that it is going to create an industrial revolution, green growth or green jobs. It is going to cost a lot of money, and we are going to be worse off so that future generations can have a better climate.