Baroness Smith of Basildon
Main Page: Baroness Smith of Basildon (Labour - Life peer)Energy: Climate Change
Baroness Smith of Basildon Excerpts
Baroness Smith of Basildon
My Lords, I suspect that I am not alone when I say that I have enjoyed today’s debate. I have greatly appreciated the expertise, experience and the huge amount of knowledge and commitment from noble Lords from all sides of the House. I am grateful to the Minister for bringing this debate forward today. I suspect that it is a bit of a taster for the debates to come on the energy security and green economy Bill.
The debate has made clear the widespread and overwhelming evidence of the man-made impact on climate change. It is one of the most challenging problems facing us and has the potential to devastate nations and reshape the world as we know it. It is clear that we must determine energy policy in light of these challenges. Notwithstanding the views and comments of the noble Lords, Lord Lawson and Lord Stoddart, and the noble Baroness, Lady Noakes, we cannot see energy policy just in terms of the financial costs. There are social and environmental costs which bring with them different financial costs.
Tempting as it is to respond on each and every point of the observations made by the noble Lord, Lord Lawson, I believe that other noble Lords, particularly the noble Lords, Lord Hunt, Lord Giddens and Lord Smith, have already addressed them with ample scientific evidence. I will, however, challenge one point. If we take no action on climate change, who will pay the highest price? It will be the poorest and the least able to cope and respond, whether at home or abroad. Extreme impacts will take the greatest toll on the poorest in the world. If we do nothing, the worst scenarios will come true. People around the world will be displaced by freak weather conditions and floods and then it will impact on everyone across the world. We should bear that in mind.
The noble Baroness, Lady Parminter, commented on having to persuade the public and to bring home to people the message about what we are facing. We should take the opportunity to thank the individuals and organisations that are working tirelessly in seeking to educate the public and lobby governments and other organisations about climate change and related issues. This is a continuing process. We do not have all the answers and it requires a proper assessment by Government of both the national and international interests. Governments must be prepared to work with everyone to meet our international commitments, and to step up and take a leadership role when required.
Despite scepticism in some quarters, we support the Government in trying to make progress at the Cancun climate change talks. The Government will need to have the courage of their convictions. I know that the Leader of the Opposition, Ed Miliband, has offered Chris Huhne, the Secretary of State, the benefit of his experience and expertise—indeed, he says, of the scars he received from the previous talks in Copenhagen.
I was rather surprised at one of the Minister’s comments—when he said that the Government have stated their aim to be the greenest Government ever “whether you like it or not”. Can I assure him that we do like it and that we hope they achieve it? In our role as an Opposition we will support measures that seek to achieve it, and scrutinise and press for action where the Government fall short of that objective. I would also add that resources must follow promises, otherwise those promises are worthless. So we look forward to seeing and scrutinising the energy security and green economy Bill which will seek to address some of the issues raised today. However, we on this side of the House find it reassuring that many of the Government’s policies in the coalition agreement were first undertaken, initiated or planned by the Labour Government. For example, the targets that have been set for moving to a low-carbon economy have remained. The commitment to smart grids and smart meters, the need for an energy mix, the commitment to zero-carbon homes by 2016, the creation of the green investment bank, the renewable heat incentive and feed-in tariffs and substantial investment in the development of low-carbon technologies, including offshore wind and manufacturing at port sites—all these and other commitments remain, and we welcome that.
However, as has been highlighted in the debate today, there are some areas that remain unclear and give us cause for concern about either policy or implementation. Where we have concerns, we will press the Government to address them. I hope that the Minister will be able to be address the points raised in today’s debate, and I am sure that we will return to them when the Bill comes before us.
The noble Lord, Lord Haskel, and the noble Baroness, Lady Parminter, emphasised that we have to win over hearts and minds in order to change behaviour. The noble Lord, Lord Haskel, pointed out some contradictions in government policy in this regard. I think that there is a far greater awareness of the issue, but it is still very difficult for the individual to appreciate that their individual actions can and do have an impact. I hope my noble friend Lord Giddens will not mind me mentioning that in his book The Politics of Climate Change he describes what he very modestly calls the Giddens paradox. This paradox is that for most people the dangers posed by climate change are not visible or tangible in normal everyday life—but if we wait until they are, it will be too late. Both he and my noble friend Lord Hunt of Chesterton succinctly and eloquently spoke of the scientific evidence and the economic implications of the opportunities.
As my noble friend Lord Giddens made clear, that makes it even more imperative that Governments take action and take the lead. There has to be a policy thread that runs through Government and not just through the actions of one department. For example, when Ministers in DECC are working with the energy companies on the green deal, I hope that they are at the same time talking to their colleagues in DCLG about building regulations and about the private rented sector. When DECC is developing proposals for increasing renewable energy, there needs to be—as we have heard from a number of noble Lords tonight—ongoing discussions with the DCLG about planning issues and consultation. If the Government are to have any measure of success in their stated aim of being the greenest Government ever, policy development in DECC cannot be taken in isolation.
I want to touch on two of the key issues raised today by a number of noble Lords—security of energy supplies and the cost of energy for consumers. There are twin goals to secure the nation's energy supplies, as the noble Lords, Lord Jenkin and Lord O’Neill, pointed out. We need to ensure new investment for a low-carbon future in both renewables and nuclear and we have to maximise the potential of our remaining coal, oil and gas resources in a way that meets the renewable targets set by the Labour Government and supported by this Government. We need to remove carbon from our electricity supplies. Our response to that challenge when we were in government was the mix—the trinity of clean coal, renewables and nuclear. I agree with the noble Lord, Lord Whitty, that we are pleased to see the continuing support for this principle from the coalition. As always, however, the devil is in the detail, and there are some matters on which we seek further clarification.
On coal, there are great advantages to coal-fired power stations and the role they play in electricity generation, but only as part of the mix of a low-carbon economy. That is why the investment in carbon capture and storage is so important. My noble friend Lord Smith of Finsbury raised a number of questions. It would be helpful if the Minister could also update the House on a couple of other matters as well: the details of the levy to fund CCS and also whether he intends to deliver more than one commercial-scale CCS demonstration project. It would also be very helpful if he could tell us what progress there has been on the energy performance standard. We will want to scrutinise this because the Government have to ensure that they do not impede investment by creating uncertainty.
The noble Lord, Lord Grantchester, also raised the changes made to the carbon reduction commitment which are of great concern to industry. This is due to start next year and was intended to be a self-financing fund designed to reward companies with high energy consumption that reduce their energy use. Under the CSR the estimated £3.5 billion raised will go directly to the Treasury. The Minister will understand the concerns about this. We would welcome his assurance that this amount will not be swallowed up by the Treasury—which the noble Lord, Lord Lawson, indicated would be a good thing—but that the full amount will be used for its intended purpose. This was not meant to do anything other than pay to reduce carbon.
The nuclear issue has featured high in our debate today and has been welcomed by noble Lords across the House. It has been a difficult issue for the coalition, but the Government have confirmed their support for the nuclear power industry. It is clear that very powerful arguments were made to overturn the entrenched opposition expressed by the Secretary of State, Chris Huhne, before he was in Government. On 9 May he said,
“Our message is clear. No to nuclear, as it is not a short cut, but a dead end",
but everyone is entitled to change their mind, and that is to be welcomed rather than criticised. Where I remain puzzled is on the position on nuclear subsidy, which was raised by the noble Lord, Lord Jenkin of Roding. It would be helpful if the Minister could bring clarity on this issue.
In May, the Secretary of State, Chris Huhne, wrote that:
“No private sector investor has built a nuclear power station in anywhere in the world without lashings of government subsidy, since Three Mile Island and Chernobyl”.
However, on 18 October, when announcing the potential sites for new nuclear power stations, he said on subsidies:
“To be clear, this means that there will be no levy, direct payment or market support”.—[Official Report, 18/10/10; col. WA 56.]
Then Charles Hendry, the Minister of State at DECC, said in a speech last week:
“We published what we mean by subsidy because we've been absolutely clear that there will be no subsidy and we want to set out now what that means".
If it is so clear, why does the Minister need to explain what it means? Given the Secretary of State's previous statement that it is not possible to build nuclear power stations without lashings—his word—of government subsidy, the Minister will understand the confusion being created on this issue. It would be helpful if he would clarify what no subsidy means. Does it mean no subsidy or does it mean some subsidy at some point? I encourage the Minister to take on board the comments and suggestions made by my noble friend Lord Hunt of Chesterton about promoting and explaining nuclear energy to a wider public and taking an international lead on this.
There are two other crucial areas—reforming the electricity markets and regulating carbon emissions from coal-fired power stations—that are unlikely to be in the Bill, but to be subject to consultations. Can the Minister confirm whether that is the case and, if so, how long they will take?
My noble friend Lord Grantchester used his experience and expertise on renewables and emphasised the investment required and the wider commitment of government that is needed. He particularly referred to small-scale projects, as did the noble Baroness, Lady Maddock. The target is that renewables should provide 15 per cent of energy supplies by 2020, yet it was reported in the Independent that there are 230 separate groups against wind farms and that only one-third of applications get consent. I understand that part of the Government’s answer to this is a cash incentive for councils that give planning permission, but the impact may be on the residents of another council area. I understand concerns about this, so I ask the Minister: what other action is being taken to address the concerns of those who have raised objections? It would also be helpful if the Minister could address the issues around planning consents and planning issues for small-scale generation.
Other issues that have been raised several times in the debate, particularly by my noble friend Lord Whitty and the noble Lord, Lord Teverson, were the cost of energy for consumers, energy efficiency and energy savings. Unlike the Government’s welfare reform plan, we are very clear that the poor should not pay the most. Pay-as-you-save through the green deal is generally welcomed, but the Minister will know from our debate on Warm Front last week that we would like greater clarity on how this will operate. One of the observations about Warm Front was that more needs to be done to reach the poorest and those in the least fuel-efficient homes. Warm Front has helped over 2 million households but now, following government cuts, the money for this year will run out in December and the next two years will see the budget cut by two-thirds. I think we all agree that further measures are needed to protect the fuel poor. Given that the green deal will be consumer-led, what plans are there to ensure that it will be taken up by those in greatest need and in the least fuel-efficient homes? We also want to be reassured on the financial arrangements which will need to be in place before the green deal gets under way. For consumers to engage, they will need some certainty and guarantees about the costs, the savings and the payback period.
We also look forward to progress on smart grid and smart meters. They are already being brought in by British Gas, but is the Minister aware that, although the technology is available, the meters are not interchangeable between energy companies? Without legislation to ensure that meters can be made interchangeable, there will be no competition between companies because people will not be able to switch suppliers. I know that the Government will not want to bring in an anticompetitive measure, and I hope that this will be addressed in the forthcoming Bill.
Finally on consumer issues, can I express the very real concern from this side that Consumer Focus is being lost in the cull of quangos? The work of this organisation is invaluable. Since its inception, it has recovered £1.4 million for energy consumers, npower has had to repay a total of £70 million to 1.8 million customers who had overpaid in 2007, many consumers have saved money by using the accredited price comparison sites and many vulnerable consumers have been protected from having their energy supply cut off. I understand that Ministers intend Consumer Focus’s responsibilities to be transferred to Citizens Advice. As a former Third Sector Minister and a strong supporter of Citizens Advice, I am well aware of the invaluable work it undertakes, but there are serious questions to be answered about how this will work in practice. Consumer Focus is a statutory body with a board and a chair appointed by the Secretary of State. It is answerable to Parliament and audited by the NAO. It has legal powers contained in statute. Citizens Advice is a charity. As such, does the Minister intend that Consumer Focus’s legal powers should be transferred to Citizens Advice? Was any other way sought or consulted on for funding the invaluable work that CF undertakes? What discussions did departments have with Citizens Advice regarding the financing and expertise required?
While I am sure that Citizens Advice will be able to advise on individual consumer issues, it is a lot to expect for it, on top of its existing work, which is increasing, to understand the intricacies of how the energy market works. The Minister may recall that, at the time of British Gas privatisation in 1986, in the “Tell Sid” adverts, there was a commitment from the then Conservative Government that there would be a consumer watchdog. I urge the Minister to discuss this with his ministerial colleagues and to think again. I do not require an answer this evening, but it would helpful for a considered reply at another time because we feel strongly about the role of the organisation.
In conclusion, the new energy security and green economy Bill to come forward shortly will seek to address many of the questions and issues that have been raised today. I welcome the annual energy statement in which the coalition seeks to be measured and held to account on the actions promised in the statement. We share objectives with the Government on this and where they set out actions to improve energy security, we want to test the effect and efficiency of those policies, the environmental impact, and the social and economic impact. The poor must not pay the highest price for actions that need to be taken.
We will not seek to oppose for opposition’s sake. We will seek to be constructive at all stages. It is in the interests of everyone in the country that the Government meet the energy and environmental challenges that face us. We will support the objective of the Government to be the greenest government. We will use our role—for now—as the Official Opposition to challenge, to test and to evaluate in order to make progress and to make improvements. Climate change is real. It is a huge challenge. But if we get this right, there are huge rewards. There will not be just a cleaner and more stable environment, but also a cleaner and more stable economy. That is a challenge we want to meet.
Lord Marland
My Lords, I thank my noble friend the Duke of Montrose, but I have answered a lot of questions. However, if any are unanswered that I can answer, as I pointed out earlier, I will answer them. However, I do not see the point when we are about to have a considerable lock-in on the energy Bill and various debates, which will provide answers to these questions. However, if noble Lords feel that their questions have not been adequately answered in this exhaustive debate, I shall be happy to write to them.
Baroness Smith of Basildon
I apologise for delaying the House. A number of questions were asked and not all were answered. I appreciate that some questions will have to wait for the Bill, but there were others that related to measures that will come into force before the Bill takes effect. It would be helpful if he could look at those—I am happy to remind the Minister if he is unclear as to which they are—and provide answers that could go in the Library.
Lord Marland
As I said earlier, I am happy to answer questions that noble Lords feel have not been answered and that are within my remit. The noble Baroness asked several questions that were not within my department’s remit: for example, about Consumer Focus. I answered her questions on smart meters, but I am very happy to respond further if she or any noble Lord wishes to write to me.