Solar Power (Feed-in Tariff)

Andrew George Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Caroline Flint]

My hon. Friend makes a good point about the damage that has already been done to many businesses around the country. I will come to his point about the impact not only on insulations but on manufacturing in Great Britain.

We are happy to have a debate about why the Government are cutting help for pensioners this winter, when they need it more than ever, and about why this Government have stood back and allowed the big six to increase their profit margins to record levels while energy bills have soared, but let us also have a debate about why this Government have failed to stand up to vested interests in the energy industry and failed to reform our market.

Let us not pretend that the Government’s approach to today’s debate is about some new-found concern for bill payers. However much Ministers like to claim feed-in tariffs cost the public, when 25,000 people lose their jobs—[Interruption.] Government Members might not like to hear this, but people may be laid off this Christmas as a result of an ill-thought-through strategy. When 25,000 people lose their jobs, when the Treasury loses the taxes and national insurance they pay, and when we have to pay out unemployment benefit, the costs will be a lot higher. This Government would rather pay people to be on the dole than support an industry of the future.

[Andrew George (St Ives) (LD)]

I think we all accept that this is an extremely difficult issue to resolve. Given that the right hon. Lady is advancing the case that the Government are making the wrong decision, by how much is she prepared to see bills rise in order to sustain the tariff at the current level and in line with the level of income for people with solar PV?

[Caroline Flint]

I respect the fact that the hon. Gentleman has probably raised concerns about how his coalition Ministers have approached this issue. As I said, according to Ofgem, we are talking about less than £1 on people’s annual bills. What we said in our urgent question and have proposed in the motion is that we need to work to see how we can change the scheme as it moves forward, but in a sustainable way. The problem is that we have not had a chance to have this debate because the hon. Gentleman’s Ministers, in his Government, have chosen to set a cut-off date of 12 December even though they are still consulting until 23 December. When answering the questions about how we have got to where we are today, they have more to answer for than us.

Myth No. 3 is that the scheme would run out of money if it carried on as it is. In the past few weeks, I have spoken to a lot of people in the solar industry. I have yet to find a single person who argues that the scheme should carry on unchanged. I am sure that that has come across in the lobbying of Members on both sides of the House. Not even the industry is calling for that. It wants planned, sensible reductions in tariffs. That is exactly what we would have done. When we introduced the scheme in 2010, we made it clear that there would be a review in 2013, or earlier if needed, to look at tariff levels and whether the scheme was delivering value for money.

Let us get serious. We have a cut of more than 50% with just six weeks’ notice. Is that reasonable? Is that fair? Is that sustainable? I suggest that it is not. To make matters worse, the first that the industry heard of it was when it was summoned to the Department after the announcement had been made.

Frankly, the only reason that feed-in tariffs need reform is that this Government have managed the scheme so badly since coming to power. It is no good blaming us. Before the election, Conservative and Liberal Democrat Members accused us of lacking ambition. They said that what we set up did not go far enough. The Conservative party said that feed-in tariffs should be paid to solar installed before April 2010 and that it would raise the capacity threshold for qualifying schemes from 5 MW to 10 MW. The position of the Liberal Democrats was also clear. Far from saying that our scheme was too generous, they wanted it to be more generous. Their spokesman at the time, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), said:

“Labour’s plans are too little too late.”

I tried to speak to him on Monday to confirm that that was still his position, but he spurned my advances. We wait to see whether he will join us in the Lobby this evening.

The fourth myth is that if we did not implement the Government’s cuts, solar power would be available only to the lucky few. However, it is the Secretary of State’s cuts that will exclude nearly nine out of 10 households from having solar power. It is his cuts that will prevent families living in social housing from having solar power. It is his cuts that will once again make solar power the preserve of the wealthy few.

--- Later in debate ---

[Tom Greatrex]

My hon. Friend is entirely right. When the Minister, as he is about to do, following the example of the Secretary of State, makes points about consumer bills and compares the £1 cost with the £1,345 for the average annual bill, which is 0.08%—less than a tenth of 1%—I think that the figures speak for themselves.

[Andrew George]

rose—

[Ben Gummer (Ipswich) (Con)]

rose—

[Tom Greatrex]

I am afraid I am going to make some progress, because I want to give the Minister time to respond.

The Government have endangered an industry in its very infancy and, as my hon. Friend the Member for Ynys Môn made clear, sent to the rest of industry a signal that is doing the UK a lot of damage. It suggests that we cannot rely on what the Government say because they will change their position with scant consultation, no planning and in an arbitrary way. As E.ON said only yesterday,

“this sort of action creates uncertainty for business, and will have a negative impact”.

The Minister has argued that there is a pressing need to reduce costs, that installation costs have fallen and that the subsidy must follow, and, despite the Secretary of State’s best attempt to muddy the waters earlier, no one argues with that—not the solar industry, not consumer organisations and not the Opposition. Indeed, it might take him six months to answer his correspondence, but, as he well knows, trade bodies have argued for months that there should be a sensible, structured reduction in the subsidy—not a jump off the landing, but a walk down the stairs.

The Government’s consultation states that installation costs have reduced by 30%, but it is no good the Minister getting to his feet and citing the cost of panels in isolation from other costs as a way of justifying the 70% figure from Bloomberg, because, if installation costs have reduced by 30%, why is the tariff being cut by 52% in one go? Perhaps, as he has claimed before, it is part of his cunning plan to cut energy bills, but, as my hon. Friend the Member for North West Durham (Pat Glass) has made clear, that attempt will just not work.

[Andrew George]

Will the hon. Gentleman give way?

[Tom Greatrex]

I will make a little more progress and then I may be able to give way. I am conscious of the time and of the Minister needing to respond.

The important point is that the Government’s policy will also cost: it will cost some of the 25,000 jobs; it will cost some of the 3,000 businesses; and it will cost people’s confidence in the UK as a place to invest. It is shameful to pull the plug on one of the few industries providing growth and jobs, which are nowhere else in the economy, for the sake of £1 a year on a bill. It is short-sighted to put at risk 25,000 jobs and, thereby, reduce tax revenues and increase benefit payments for £1 a year. Throughout the country it will cost community projects, which are being cancelled, co-operative models that are being developed, social housing schemes and people’s sense of involvement in electricity generation in this country.

It would be unfair of me to suggest that the Minister, as much as he has united people in opposition to the policy, is without friends. He has a very supportive Secretary of State, with a burgeoning reputation for collegiate behaviour in government and loyalty to his colleagues. He is also known to dabble in Twitter, so I am sure he has made the Minister aware that there is, indeed, a SaveGregBarker Twitter feed. It has 18 followers, but perhaps it will have some more after today’s debate.

There are more than 18 of the Secretary of State’s hon. Friends who have expressed concern at his Department’s action on feed-in tariffs. However, some 24 Liberal Democrats have signed early-day motion 673, which states that

“the feed-in tariff scheme will provide much needed stability for the expansions of renewables up to…2013.”

[Andrew George]

The Labour motion before us turns on its penultimate line, which refers to “more measured proposals”. Members from all parts of the House want a more sustainable solution than the current one, but what are these “more measured proposals” and how they are going to be paid for?

[Tom Greatrex]

The hon. Gentleman, as a signatory to early-day motion 673, has expressed his concern about those issues, and I will go on to make a couple of remarks about what we need to do next, following his support for the motion before us and that of his colleagues who signed the early-day motion.

Indeed, the hon. Member for Manchester, Withington (Mr Leech), who is no longer in his place, was quoted on the Friends of the Earth website last week, saying:

“Solar has been the real success story...We can’t afford to jeopardise thousands of jobs by slashing the feed in tariff and creating uncertainty, giving the industry no time to adjust.”

The hon. Member for Lewes (Norman Baker), a Minister no less, says on his website that he has concerns

“about the speed and level of the proposed changes for community size projects and I am therefore asking the Secretary of State to examine urgently the case for some flexibility”.

The Secretary of State’s own Parliamentary Private Secretary, the hon. Member for Chippenham (Duncan Hames), quoted in the Financial Times this morning, said that we should look at the German model of gradually reducing support rather than, as I described it earlier, jumping off the cliff.

If all those friends of the Secretary of State want to be friends to the Government—I understand their desire, however misguided, to support the Government—and if they want to get the Government to right their mistakes; if they want to repair some of the damage of the past few weeks; if they want a sustainable and sensible model for support going forward; if they want to walk down the stairs rather than jump off the landing; if, perhaps, they want to “SaveGregBarker”, they must vote for the motion this evening. They should look at the wording of the motion, which is about having a sustainable, sensible, gradual approach rather than making a sudden cut that is putting people, jobs and businesses in jeopardy and leaving consumers high and dry. Let us help rescue the Government from the mess that they have made for themselves, and support the motion this evening.