Caroline Flint
Main Page: Caroline Flint (Labour - Don Valley)Solar Power (Feed-in Tariff)
Caroline Flint Excerpts(12 years, 11 months ago)
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Caroline Flint (Don Valley) (Lab)
I beg to move,
That this House believes that solar power gives families, community organisations and businesses greater control over their energy bills and will help the UK meet its renewable energy targets and reduce carbon emissions; notes that since the creation of the feed-in tariffs scheme under the last administration, introduced with cross-party support, nearly 90,000 solar installations have been completed in the UK and the number of people employed in the solar industry has increased from 3,000 to 25,000; believes that the Government’s cuts to feed-in tariffs go too far, too fast, will hit jobs and growth in the solar industry, undermine confidence in the Green Deal and deter investment in the wider green economy; regrets that the cuts to feed-in tariffs were announced with just six weeks’ notice and come into force before the consultation has even finished; further regrets that the Government’s plans would exclude nearly nine out of ten households from installing solar power under the feed-in tariffs scheme, will disproportionately hit social housing and community projects, and could affect thousands of households which have already installed solar power; and calls on the Government urgently to withdraw the 12 December 2011 deadline and bring forward more measured proposals that guarantee the continued growth of the solar industry, put feed-in tariffs on a sustainable footing and are fair to the public.
Exactly a year ago today, in a speech to the Micropower Council, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), lauded the feed-in tariff scheme. He said:
“The coalition is absolutely committed to FITs…I have been really encouraged by the positive response that the FITs scheme has received since its introduction in April and hope this will continue. It’s still early days but early indications show that the scheme is working well”.
Well, they say a week is a long time in politics, but a year is obviously an eternity. However, at least the Minister is not on his own today, and we are glad to see the Secretary of State in his place. We all remember his famous energy summit, which went so well he decided to do a disappearing act. When his Department announced these cuts to feed-in tariffs, first, it tried to sneak them out in a written statement. Then, when I secured an urgent question, he sent his junior Minister to take the flack instead. Anyone would think he was trying to avoid me, or perhaps the Secretary of State is just very good at not getting caught at the crime scene. Either way, his fingerprints are all over this one.
Although talk of feed-in tariffs might sound technical, their impact could not be more real. Some 25,000 jobs are on the line. Thousands of businesses are at risk and tens of thousands of people who have already installed solar could still lose out. Millions more have been excluded from having solar under the Government’s new rules and have been denied the chance to control their energy bills. That is all because we have a Government who are out of touch, cutting too far and too fast, with no plans for jobs and growth.
Caroline Flint
I will make some progress because a lot of people want to speak in this debate.
At the outset, let me deal with a few of the myths that the Government have desperately resorted to peddling in defence of their plans and that appear in their motion today. The first and most bizarre is the idea that we were opposed to the introduction of feed-in tariffs and that somehow the Tories and the Liberal Democrats introduced them. It takes some audacity to try to claim credit for a scheme that was enacted, introduced and came into force under the previous Labour Government, but to try to take credit for a scheme that they are scrapping really takes the biscuit. The record will show that while Labour began this growth industry, the Government’s policies have all but killed it in its infancy.
The second myth is the Government’s claim that the reason they are cutting the tariff level is that they are worried about energy bills.
Caroline Flint
I will give way to the right hon. Gentleman in a moment. This from a Government who have cut help for more than 12 million pensioners with their heating bills this winter and who have stood back and done absolutely nothing as customers’ bills have soared and energy companies’ profits have rocketed.
If the Secretary of State really wants to talk about energy bills, I will tell him a thing or two. Let us start with how much the average annual energy bill costs under this Government—£1,345—and how much feed-in tariffs cost the public. From what the Government have said, one might think that this is costing us all hundreds of pounds a year, but it is not. Is it perhaps £50 a year, or £20, or even £10? No, the actual figure, according to the independent regulator, Ofgem, is less than £1 per household per year—less than £1 at a time when the average energy bill stands at £1,345, when pensioners are seeing their winter fuel payments cut by £50 or more, and when standard tariffs are up by £175 only since June. Labour and I will not take any lectures on energy prices from this Government.
Caroline Flint
If the Secretary of State really wants a debate about this, let us start one.
Chris Huhne
There was only ever one vote in the House of Commons on feed-in tariffs, in April 2008, when the right hon. Lady voted against. What has made her change her mind?
Caroline Flint
There was an amendment tabled by the former Labour Member, Alan Simpson. My right hon. Friend the Member for Croydon North (Malcolm Wicks) said at the time:
“I sympathise with, and fully support, people’s yearning for appropriate incentives to encourage the faster take-up of microgeneration.”—[Official Report, 30 April 2008; Vol. 475, c. 393.]
He told my hon. Friend and the House that he wanted to go away and look at what could be possible. On 5 November in the same year, the Labour Government tabled an amendment in the House of Lords that paved the way for the scheme that we have today. We do not need any lectures by the Secretary of State on who created the opportunity for feed-in tariffs in this country—it was the Labour Government.
Mark Tami (Alyn and Deeside) (Lab)
Companies such as Sharp in Wrexham have expanded and employed more people because they believed the Government on feed-in tariffs, only to find that they have pulled the plug.
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.
Kate Hoey (Vauxhall) (Lab)
Perhaps my right hon. Friend might like to tell Members who do not have any of these companies in their constituency or who do not understand this issue that they might like to walk five minutes from here across Westminster bridge and along Lower Marsh to visit Solar Century in my constituency. A large number of people there will be out of work precisely because of what the Government are doing.
Caroline Flint
I was pleased to take the opportunity to go to Solar Century on Monday with my right hon. Friend the Leader of the Opposition. It was very similar to the firm that I visited in Glasgow the other week with my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex). It is a company that employs young graduate engineers and other skilled people. It has links with small businesses and contractors around the country, including installers and fitters. Some people who had been working on the digital switchover have been trained up to do this work. There is a chain of despair and destruction throughout our country as a result of these proposals.
Huw Irranca-Davies (Ogmore) (Lab)
Will my right hon. Friend expand on that point, because this proposal has affected not only the solar industry, but general confidence in the Government’s handling of the renewables sector? I spent an interesting evening yesterday speaking in depth with farmers who are concerned about the handling of this matter and about its impact on confidence in the anaerobic digestion sector, the biomass sector and so on. They do not trust this Government any more and they never will.
Caroline Flint
That is an important point. Some people say to me, “Caroline, this is all just about solar.” I say, “No it isn’t. It is actually about confidence, about the direction of travel and about being able to rely on the goalposts not being moved on a whim to effect some crazy policy dreamed up by these coalition Ministers.” What Ministers are doing is destroying this growing industry.
Interestingly, some of the social housing projects that have been brought to my attention wanted to put solar panels on the roofs of some of their properties, but they were also looking to use some of the gain from the tariff for other energy efficiency schemes, so the tariff would also have provided benefits beyond using solar power.
On Monday Solar Century brought it to my attention that it knew of a number of farmers who were interested in establishing solar. They were not thinking of solar farms, which caused some concern last year; they just wanted to generate energy to run their farms. They are now rethinking and cancelling their plans. That is not good enough.
Laura Sandys (South Thanet) (Con)
The mixed energy economy will include all renewables. Is it sensible or sustainable to subsidise solar at twice the rate of offshore wind? We have lacked an energy strategy for 13 years. At least we have now got ourselves in gear and there is a clear path ahead.
Caroline Flint
We are talking about things that are on totally different scales. Solar is pretty much for small businesses and communities. Of course we want a diverse mix, but the solar industry in our country—I will come to myth No. 5 in a moment—is 3% the size of Germany’s. Our industry is a baby in terms of what we need for the future and what we need from other energy sources. The Opposition will work consensually to tackle climate change and reduce our carbon emissions, but we cannot stand by when idiotic proposals are made that will strangle a growing industry at birth. That is just not good enough.
Caroline Flint
I shall make a little more progress before giving way.
Myth No. 5 is the idea that the Government’s plans are just like what has happened in Germany. Nothing could be further from the truth. The German Government invested €6.5 billion in solar last year; we are investing £860 million over four years. Germany has installed half the solar panels in the world and supports 250,000 jobs in solar; we have installed just 90,000 panels and have only one tenth of the jobs. This year the tariff for solar power in Germany was cut by 15%, in agreement with industry and only after installation levels reached a fixed benchmark: here the Government have announced a cut of more than 50%, with no proper consultation and only six weeks’ notice, which will take our solar tariff below that of Germany.
None of the Government’s excuses will wash, because the truth is that their cuts to the feed-in tariff for solar power are a triple whammy. They are bad for jobs and growth, bad for the public and bad for the environment.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The right hon. Lady is right to say that the German Government are reducing the tariff by a much smaller amount. In January they are reducing it by about 15%, but they are reducing it to €0.24, which is almost exactly equivalent to the 21p tariff that the Government propose. They are reducing the tariff to the same level as ours.
Caroline Flint
Dearie me! The Germans have been planning how to staircase down their tariffs for years. They have a mature industry that is the world leader. We are not in that ballpark. That is why we must ensure that we do not strangle our industry at birth.
The cuts are bad for jobs and growth, bad for the public and bad for the environment. When growth is flatlining and unemployment rising, solar is one industry that is growing and creating jobs. When the previous Government introduced feed-in tariffs, just 3,000 people were working in 450 firms; today more than 25,000 people work in 3,000 companies. By 2020, as many as 360,000 people could be working in solar—but not if the Government’s cuts go ahead. Be in no doubt that the Government’s current plans will strangle the solar industry and cost thousands, if not tens of thousands, of jobs.
A survey conducted by the Renewable Energy Association and the Solar Trade Association earlier this month forecast in excess of 10,000 job losses. Fifty-seven per cent. of companies anticipate having to lay off at least half their current staff, a third are worried that their business will be forced to close altogether, and fewer than one in six are confident that they can weather the changes. That is the reality.
John Healey (Wentworth and Dearne) (Lab)
Is the Minister not missing the point about the comparison with Germany? The purpose of the tariffs in this country is to build up our industry and get it up and running, but cuts on this scale at this pace risk throwing the industry into reverse. Those production and new design skills that my right hon. Friend mentioned will be lost at a time when the Government should be helping to cut fuel bills for householders and cut the country’s reliance on fossil fuels.
Caroline Flint
I can add nothing to my right hon. Friend’s comments, except to say that there is another organisation that agrees with him—the CBI.
The Government claim, on page 2 of their impact assessment, that they can slash the solar industry by anything between 70% and 95% and still, as page 26 claims, increase the number of people working in it by up to 10,000. As someone I met at the lobby of Parliament yesterday put it, the Government may think that they can get full employment by shrinking the economy, but month after month we see that their plans are hurting but not working. We knew that the Government were out of touch, but today we see that they have lost the plot.
Richard Graham (Gloucester) (Con)
I am grateful to the right hon. Lady for eventually giving way. It was she who said only one month ago:
“The Government do not understand the reality for families who struggle to pay the bills at the end of the month”.—[Official Report, 19 October 2011; Vol. 533, c. 937.]
Does she agree that today’s debate is not about whether we support solar power, which we are all in favour of, but about the cost of the subsidies for solar—a small-scale industry—which will cost families about £26 a month extra by 2020? Would that not be an unreasonable cost on hard-pressed families?
Caroline Flint
I am afraid that the hon. Gentleman has neither read his brief nor sought other views. Ofgem, the independent regulator, made it absolutely clear that the feed-in tariffs cost less than £1 a year per household. The bigger problem is how prices have been put up while energy companies are making exorbitant profits, and while this Government are cutting the support available to people this winter. That is a price debate that I would like to have. The hon. Gentleman’s comments imply that he is in favour of those businesses going under, of social housing not having solar panels, and of this industry not even getting out of the cradle. That is rich coming from a party that prides itself on being the small business champion.
Nic Dakin (Scunthorpe) (Lab)
Does my right hon. Friend agree with a constituent of mine, Mr Robert Borrill, who described the Government’s decision as devastating, especially given that people have entered into commitments? Even those who have entered into financial commitments now will be penalised because of the six-week period. Surely, at the very least, the Government should consider that.
Caroline Flint
I absolutely agree, and I will come to that point later, because it is a travesty that the cut-off date has been set two weeks before the consultation finishes.
Caroline Flint
I want to make some progress, because I am conscious of time and lots of people want to speak.
For every job in the solar industry, many more in the supply chain are also at risk. According to the Minister’s colleagues in the Department for Business, Innovation and Skills, the solar industry and its supply chain employ about 39,000 people and resulted in nearly £5 billion of sales last year. All of that is in jeopardy. Sharp Solar, which was mentioned by my hon. Friend the Member for Alyn and Deeside (Mark Tami) and which is in the constituency of my hon. Friend the Member for Wrexham (Ian Lucas), currently employs about 500 people at its plant manufacturing solar panels. It is now warning that because of these cuts it is reviewing its presence in the UK, putting hundreds of jobs on the line. Given that we need to invest up to £200 billion in our energy infrastructure in the next 10 years, how can anyone have confidence in a Government who are so short-sighted that with just six weeks’ notice they are killing off a flagship policy that has cross-party support?
Gregory Barker
Before the right hon. Lady scaremongers any further, may I confirm that I spoke to the European head of sales at Sharp yesterday, and it has no plans to close its UK plant? It remains an important centre of European manufacturing.
Caroline Flint
Such companies are worried about the policies on the table, and they will be waiting with bated breath to see what happens. There are containers full of panels on our docksides all round the country not being used because sales orders are being affected by the Government’s policies.
Since we introduced feed-in tariffs nearly 90,000 families have benefited. That has helped those who want to do the right thing and green their homes, while also trying to protect themselves from soaring energy bills. However, under the Government’s plans nearly nine out of 10 households in England will be excluded from solar power and denied the chance to get just a little more control over their energy bills. That is because properties will be eligible for feed-in tariffs only if they have a minimum energy performance rating of C or above.
Andrew Bridgen (North West Leicestershire) (Con)
Will the right hon. Lady give way?
Caroline Flint
No, I will not give way.
However, the most recent estimate showed that 86% of properties in England had an energy efficiency rating of D or below. Those households will be excluded from solar power. The Government’s plans are unfair, too, not least because they could hit people who have already installed solar power. In fact, the cuts could hit people who installed solar power before the Government even announced the changes. That is the problem with a six-week deadline, when it takes up to seven weeks to get a solar installation on the FITs register. Those people are going to lose out. In answer to a parliamentary question the Minister of State, the hon. Member for Bexhill and Battle, said:
“We recognise though that some prospective FITs generators who have incurred or committed expenditure may not be able to complete their installations and submit their applications for FITs before the proposed reference date.”—[Official Report, 10 November 2011; Vol. 535, c. 409W.]
What the Minister calls “prospective FITs generators” are people—thousands of them—who have already installed solar, but not yet registered. They will be caught up in a mess entirely of the Government’s making. They include, for example, the pensioners who wrote to me telling me that they had invested their savings in solar power to try to get their heating bills down and give themselves a little income in their retirement.
By cutting the tariff by an additional 20% for councils, housing associations and community groups, on top of the 50% cut, the Government’s changes will all but end solar power for social housing. Across the country, from Cambridge to Wrexham, Torbay to Leeds, Reading to Haringey, councils are already scrapping their solar plans; and last week it happened in Doncaster, too. As a result, those councils are forgoing funds that they could have invested—and that they planned to invest—in other energy efficiency measures for their tenants.
All Governments get accused of not listening, but it takes a special kind of arrogance—not to mention a healthy dose of incompetence—to launch a consultation that is half the normal length and closes after the cuts on which it is consulting come into force. What happens when the consultation closes on 23 December and all the responses tell the Government that their cuts go too far, too fast, and will kill the solar industry? What happens to all the projects that have already been scaled back or scrapped altogether? What happens to all the families who have already decided to cancel their solar installation? What happens to all the firms that have had to lay off their staff—to all the engineers, technicians and installation teams who have lost their jobs before Christmas? What happens to them? What all this says is that the Government do not care what anybody thinks; and what it shows is that they are completely out of touch.
When the economy is flatlining, unemployment is rising and even the Prime Minister admits that his plan is failing, what sort of Government choose to kill an industry that is growing and creating jobs? When energy prices are at record levels and millions of families are struggling with their bills, what sort of Government choose to exclude nine out of 10 households and everyone in social housing from installing solar to cut their bills? When Ministers are flying halfway around the world to Durban next week to try and reach an agreement on climate change, what sort of Government choose to cut back on policies that will increase our supply of renewable energy and reduce our carbon emissions?
From the CBI, the Mayor of London and the man who installed the Prime Minister’s solar panels, all the way to the Welsh Liberal Democrats and Friends of the Earth, everyone is backing our campaign and telling the Government that they have got this badly wrong. Today we have come to a crossroads. Much damage has already been done. Many projects have been ditched. Confidence has been dented, with future investment possibly lost for good. However, we can step back from the brink. We can put feed-in tariffs on a sustainable footing, in a way that is fair to the public and which secures the future of one of our brightest industries. Today I call on all hon. Members to support our motion—to tell the Government to scrap their 12 December deadline, to stand up for an industry that is growing and creating jobs, and to stand up for people who want to do the right thing and protect themselves from rising bills. I commend this motion to the House.
Chris Huhne
Let me come back to the point my hon. Friend made about social schemes and social housing, about which I care. Sadly, however, another design flaw that emerged from the inception of this scheme—again, the right hon. Member for Doncaster North was responsible for it—was that it did not have the ability to recognise social housing or social schemes. If we wanted a special scheme to help non-profit-making companies, we would not have the legal basis for achieving it.
Caroline Flint
If there was a provision for communities to take advantage of solar power, why are so many local authorities and housing associations cancelling projects? As a result of the right hon. Gentleman’s initiative, 100,000 social homes will not have solar power. Did not the Labour Government set in train a review to be completed by 2013, implicit in which was the need for a “staircasing down” of the tariff to achieve value for money?
Chris Huhne
The right hon. Lady makes a good and serious point, which returns me to what I was saying before. We need to consider, and consult on, whether there should be a separate tariff for social schemes. Many social housing providers offer their tenants free electricity to encourage take-up—free electricity that has been rising in value because of the rise in world gas prices and the rise in UK electricity prices. That is an important part of the rate of return. If providers give all that to their tenants, the amount that is left from the feed-in tariff to compensate for their financing costs will be less. However, we are not legally able to provide a separate tariff, because the Labour party did not implement such an arrangement when it was in government. I regret that, because it would have given us some flexibility.
Dan Rogerson
I will not give way, but the Minister will have a chance to respond in his summing up.
Dan Rogerson
I will not, because I need to complete this point.
I do not think that we need to connect this matter with energy efficiency so intimately. In the green deal and other schemes, there are advantages and pressures to encourage people to consider energy efficiency measures. I think that linking these things is unhelpful, particularly for people in areas such as mine.
Although I welcome the Secretary of State’s commitment to move forward with this scheme and the vision for solar that he has set out, I urge him to consider other means for getting the sector to grid price parity, so that we can have confidence that the sector will continue to grow in a sustainable way.