Renewables Obligation (Amendment) Order 2021

Baroness McIntosh of Pickering Excerpts

Tuesday 23rd March 2021 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to welcome my noble friend Lord Kamall and congratulate him on a witty and excellent maiden speech. I look forward to hearing further contributions and working with him in his new place of work. This is very much a family occasion because, of the nine noble Lords due to speak, six are former MEPs and three are former leaders of the UK’s Conservative delegation. I particularly welcome my noble friend Lady Hooper, with whom I had the pleasure of working in 1983 as a humble staffer when I started out in the European Parliament.

I approach the order before us in my capacity as president of National Energy Action, and very much from a consumer focus. I would like an assurance from my noble friend the Minister, another former leader of the UK Conservative delegation in his time. Can he assure us today that the shortfalls, astonishing in their extent, will no longer reach a level above the threshold being set today? We have to pause for a moment and consider that in three successive years, shortfalls have been reached of £53.4 million, £88.1 million and £31.4 million. Never was it envisaged when these ROCs were first created that we would reach anything like that level of shortfall.

I understand that a shortfall occurs when a company leaves the market—a rather euphemistic expression for market failure, when the company has actually gone bust. That is obviously regrettable, not just for its customers but for other electricity suppliers as well. Can my noble friend assure us today that this will be, as far as possible, avoided under the provisions of the order before us? I gather that there have been a record number of market failures in the last two to three years, leading to the extraordinary breaches of the threshold to which I just referred.

We are told that the suppliers of electricity will pass the increased costs flowing from the order on to consumers: my noble friend said that it would be, on average, a £70 increase to domestic consumer bills. Could he repeat that to clarify it for me? It would be helpful to know what the impact will be on business users. Could my noble friend also say what the impact will be on the Government’s green homes scheme and the warm homes strategy, which I follow very closely?

Finally, I press my noble friend the Minister by asking how these additional costs will be passed on to consumers in order to minimise the impact on vulnerable consumers as far as possible. Could he give us an assurance this afternoon that it would be best not to pass these on to those consumers as a fixed charge that hits everyone equally, disregarding their ability to pay? Could he also assure us that they will also not be recovered from those customers on pre-payment meters? With those few remarks, I welcome the order but, obviously, this is a source of concern, with implications for current and future consumers.