Chris Huhne
Main Page: Chris Huhne (Liberal Democrat - Eastleigh)(12 years, 7 months ago)
Commons Chamber14. What recent representations he has received on his decision to reduce the feed-in tariff for solar PV.
Ministers and officials meet regularly with a range of stakeholders from the solar photovoltaic industry. Details of meetings between Department of Energy and Climate Change Ministers and external organisations are published quarterly on the DECC website. The recent consultation on feed-in tariffs for solar PV closed on 23 December 2011. More than 2,300 responses were received and are being analysed prior to the publication of a full Government response to the consultation in the coming weeks.
The Secretary of State spent more than £66,000 of public money on legal fees, but he is refusing to accept the Appeal Court decision that his plan to cut feed-in tariff subsidy is unlawful. As well as jeopardising the future of the industry by fighting the Court ruling, how much more public money does he intend to waste?
I entirely reject the idea that there is no future for the industry. The reality is that we would be able to support at least twice as many installations at the new tariff rate as we could under the old one.
The hon. Lady asks about the costs of the legal cases. I merely point out to her that we are spending a few thousand pounds in order to save consumers £1.5 billion, which is what the cost would have been had we left the case to run. The reality is that the previous Labour Government introduced a scheme that was fundamentally flawed. As with other issues, this Government are putting Labour’s mess right.
Is not the truth of the matter that this episode has led to a frenzy of additional applications? There has been a 1,100% increase in the number of people trying to get systems installed in their homes in a short period of time. Businesses in my constituency tell me that that has caused chaos in the supply chain. Those systems also had to be installed at a time of extremely poor weather in Scotland. What does the Minister say in response to those points?
The hon. Lady conveniently omits to mention that the design flaw in the scheme introduced by the Leader of the Opposition ensured that there was absolutely no way of automatically reducing the tariffs in line with what was going on in the real world, despite the fact that other countries—Germany, for example—had introduced such schemes. All we had to do was find out what was happening in Germany and model our scheme on theirs. Did the Labour Government bother to learn those lessons? No. The result is that we have to clean up the mess.
It is becoming uncomfortable watching the Secretary of State trying to defend the indefensible. On 31 October, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), told the House that the Government wanted to spread solar power as widely as possible. If that is true, why do the Government’s plans exclude almost nine out of 10 households and anyone living in social housing from having solar power?
I entirely disagree with the hon. Lady’s analysis of what was proposed in the consultation paper. Apart from anything else, she completely ignores the possibility of improvement in the energy efficiency of homes. Ensuring energy efficiency is one thing that we are keen to do.
I simply remind Labour Members that the Leader of the Opposition introduced a scheme at a cost of £7.9 billion. That went directly to consumers, and there was no way whatever of controlling those costs. He so doubted the dynamism of the private sector that he predicted no commercial take-up of solar power in the first three years of the scheme, even while solar costs were tumbling, and he ignored the best practice of the German FITs scheme and failed to include a system of automatic degression. All this Government are doing is clearing up the mess that Labour left behind.
One unfortunate knock-on effect of the solar dispute is a delay in the review of FITs for small-scale hydro. Many planned schemes on Argyll and Bute cannot go ahead until that uncertainty is resolved, which is causing severe problems for businesses and community groups. Will my right hon. Friend please do all he can to end that uncertainty as soon as possible so that those vital small-scale hydro schemes can go ahead?
I pay tribute to my hon. Friend, who has also raised this issue in correspondence. He is a doughty champion for the interests of those of his constituents who want to go ahead with micro-hydro and other schemes. I can reassure him that the Government will not let problems with the solar feed-in tariff get in the way. We want micro-hydro and other schemes to take off and will introduce proposals as soon as possible. I hope to be able to do so in February.
The Minister may be aware that there are hundreds of Harlow residents in social housing who were promised solar power panels, but the new rate is too low for the scheme to be viable. Will my right hon. Friend tell the House whether he would consider a more generous community rate for the feed-in tariff, even if it was for only a few months?
The absolute key to what is happening with solar panels is the collapse in the cost. The idea that something might not be attractive commercially today does not mean that it will not be so in pretty short order. What has been happening over the past 18 months is an enormous increase in the production capacity of China. Essentially, what has happened is that the Henry Ford of solar panels—who happens to be Chinese these days—has introduced the Model T, and we are getting an enormous reduction in costs as a result of economies of scale.
When the cuts to solar were announced, the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker) claimed that they would create jobs. Paragraph 73 of the impact assessment, signed off by the Minister on 2 November 2011, says that
“there could be around 1,000 to 10,000 gross additional jobs in this sector in the three years to 2014/15”.
Can the Secretary of State confirm today that those 1,000 to 10,000 jobs are not additional jobs, but the total number that the industry will support, which, for a sector that currently employs nearly 30,000 people, means tens of thousands of job losses?
What is absolutely crucial for the sector is that there should be a sustainable pathway for growth in the future. What the right hon. Lady has completely failed to address is the fact that if we continued to over-subsidise at the previous rate, we would have fewer than half the installations that we can afford to subsidise today with the new rate. It was not an accident that the British Photovoltaic Association intervened on our side in the courts, precisely as a result of that calculation.
Seven times I have asked the Minister of State what these cuts will mean for jobs; seven times he has tried to hide the fact that his cuts will put thousands of people out of work. According to his figures, released on Friday,
“in the 2012/13 to 2014/15 period…the total number of gross full-time equivalent jobs will be 1,000 to 10,000.”
That is not additional jobs; that is the total number. Nothing can hide the sheer incompetence of the Government’s handling of this. Is it not about time that the Government stopped thinking about saving face, creating more uncertainty and wasting even more money on more legal challenges, and sat down to work out how we are going to put the industry on a sustainable footing?
I realise that the right hon. Lady supported a different candidate for the leadership of her party from the winning candidate; nevertheless, given her repeated attempts effectively to undermine the former decisions of the Leader of the Opposition, as well as her failure to recognise their consequences, I would merely remind her, as she now likes to lecture us about the impact assessment, what the impact assessment showed in February 2010. It is important that she should go back—as she wants to look at this—because that impact assessment showed that the cost of the scheme introduced by the now Leader of the Opposition had a net present value of £8.6 billion, while the benefits had a net present value of £400 million. If she thinks that is the sort of policy making of which she is prepared to be proud, good luck to her.
Order. May I just say to the Secretary of State that that answer—about which he felt strongly—was too long? There must not be a repetition of that, and if there is, I will cut it off. That is the end of it.
The Secretary of State is right to say that the design of the scheme he inherited from Labour was flawed. However, by continuing with that scheme for 18 months, coupled with apparently poor legal advice, the implementation of FITs that he has presided over has been somewhat chaotically managed for consumers and businesses alike. I am concerned that a letter from the Minister of State says that if there is no action, proposals may have to be brought forward to close the FITs scheme. What reassurance can the Secretary of State give that FITs will be put on a sustainable footing for the rest of this Parliament?
I entirely reject the idea that we did not act to deal with this issue as soon as we were advised. The problem with the design of the scheme was that it was unable to cope with the dramatic fall in the cost of solar panels. That dramatic fall, the reason for which I have already described, became apparent over the past year, and we acted as quickly as we could to deal with the situation. What is unforgivable is the fact that the present Leader of the Opposition failed to foresee, by looking at best practice internationally, how the scheme should have been designed in the first place.
2. What steps he is taking to help households to reduce their energy bills.
13. What assessment he has made of the potential effects on UK oil and gas supplies of any disruption of shipping through the Strait of Hormuz.
We have made assessments of the impacts of short-term disruptions to shipping through the strait for both oil and gas. There is no reason to believe that such closure would create a physical shortage of oil or gas in the UK. Price impacts would depend on the exact nature of the disruption. The UK has access to a wide variety of oil and gas sources and routes, including production from the UK continental shelf, imports from Norway, storage, and oil and liquefied natural gas from global markets.
Given that 20% of the world’s traded oil, and 35% of the seagoing trade, passes through the strait every day, presenting a significant terrorist risk, will my right hon. Friend encourage the diversification of supply, including overland pipelines, such as project Nabucco, the Abu Dhabi pipeline and the Iraq pipeline across Saudi Arabia, despite its being called IPSA?
My hon. Friend is right to highlight the overland capacity. Unfortunately, the IPSA pipeline, as he may know, is not currently functioning—I do not know whether that is anything to do with its namesake. Diversification is a crucial part of our strategy, and the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), and I have been working hard on getting closer relationships with some of our key suppliers, including the Norwegians.
My constituents already suffer from high fuel and heating oil prices, so will the Secretary of State reassure them that EU sanctions on Iranian oil will not cause further price pressures in that market?
I would love to assure the hon. Lady that we are able to have greater control over the politics of the middle east than has been the case so far, but the reality is that that part of the world is extremely sensitive geopolitically. As she may know, HMS Argyll is supporting the USS Abraham Lincoln in the carrier group, and we are sending out clear signals that we want the issue dealt with in the most rapid way.
Coupled with the potential problem of oil import is the problem of a lack of oil refinery capacity in this country, made worse by the Petroplus decision to close refineries in the south-east. What assessment have the Government made of refinery capacity, and what are they doing to increase that capacity?
The hon. Gentleman misunderstands the situation in the refinery market. With regard to Petroplus, the problem with Coryton has been the over-capacity in the refining market, which has led to shaved margins. We are working to resolve that as quickly as possible.
Although the Secretary of State has reflected on the potential disruption through the Strait of Hormuz and on the point made by my hon. Friend the Member for Ynys Môn (Albert Owen) about refining activity, and although it is good news that the tankers have resumed distribution from the refinery this morning, will he update the House on whether oil is now being delivered to the refinery for refining activity?
There is indeed a cargo ready to be delivered this morning, and there have been contingency back-ups. I know that BP has been working closely with us on this matter and I very much hope that normal activity will resume.
I thank the Secretary of State for that response, which will, I am sure, bring comfort to many people. As well as the 850 jobs, including those of contractors at the refinery, that are at risk, he will know that the background is that this situation is less to do with the refinery’s operation and more to do with the financial structure of the Switzerland-based former owners. Given the significant role played by UK-based refineries in providing energy resilience, is he concerned that the ownership of such a significant number of UK-based refineries is now overseas?
We have traditionally benefited enormously in this country, both under the previous Government and under this Government, from our open-door policy on foreign investment. Indeed, we own a substantial amount of investment in other countries. The swiftness with which the arrangements have been put in place suggests that there is no case for reviewing that policy at this stage.
6. If he will hold a review of the smart meter infrastructure upgrade.
8. What steps he is taking to encourage households to improve their energy efficiency.
The Government have established the energy efficiency deployment office to develop an overarching energy efficiency strategy. We will launch the green deal later this year, which will radically improve take-up of energy efficiency measures. We want every home to have a smart meter by 2019 so consumers have much greater control over their energy use.
Is the Secretary of State proud of the fact that this is the first Government since 1970 who have not had a programme to help poor families with their fuel costs? Is it not the case now that many poor families will get less help, and that there is virtually no targeting of those resources that are available to the poorest families?
The hon. Gentleman has clearly been hibernating over the past few months if he believes that we are not helping poor families. First, the warm home discount scheme, which is a statutory scheme for reducing costs, will disburse two thirds more money than was disbursed under the voluntary scheme operated by the Labour Government. Secondly, the affordable warmth obligation in the energy company obligation subsidy will take over from Warm Front. Thirdly, we have asked Professor John Hills to conduct a thorough review of fuel poverty, which will lead to some interesting and important recommendations.
Does the Secretary of State accept that the ECO’s affordable warmth element, which comes to £325 million, is substantially less than the Warm Front commitment of £370 million and the CERT commitment of £600 million? Does he accept that that is a substantial reduction in affordable warmth for those on lower incomes? Even now, will he review the split in costs in relation to affordable warmth and those who can pay, or look for other methods of dealing with the issue?
It is important that the hon. Gentleman compares like with like. He should remember that what is available under the ECO subsidy helps holistically to improve the energy efficiency of the whole home and is not like the Warm Front, which was largely a boiler replacement scheme. That proposal is out for consultation and we are listening to responses.
The green deal skills alliance has highlighted the importance of having the right skilled professionals in place to deliver the green deal to households. How will my right hon. Friend ensure that we have the right number of skilled energy efficiency assessors, installers and training providers to make sure that when the green deal comes in this year we can deliver it?
My hon. Friend is absolutely right that such skills will be essential for the green deal—indeed, for the whole low-carbon economy. That is precisely why we have been working closely with the Department for Business, Innovation and Skills, which takes the lead on skills. We have a national skills academy for environmental technologies, which is developing standards, delivering training and upskilling tradesmen and technicians. We also have funding for the renewables training network that is run by Renewable UK, and a talent bank for the gas, power, waste management and water industries, which is led by the Energy and Utility Skills sector skills council.
I understand that the Government have not yet even designed the training programme for many of the people who will have to deliver the green deal. Ministers have been claiming for months that the green deal will mean the creation of thousands of jobs, but the Department’s figures show that the number of energy efficiency installations will plummet in the first year of the scheme, with cavity wall insulations set to fall by 67% and loft insulations by a staggering 90%. That will cripple the sector and, according to Europe Economics, could lead to the loss of 3,000 jobs. Will the Secretary of State protect those jobs by adopting Labour’s proposals to include hard-to-treat cavity walls and lofts in the ECO?
I think the hon. Lady misunderstands a couple of issues. First, the green deal is a very different scheme precisely because it is designed to support a complete retrofit. We are talking not just about cavity wall insulation or loft insulation but about many other measures as well. The second point is that she is quoting the first impact assessment. It has always been the case that the take-up of the green deal will depend on the triggers and incentives that have been introduced for take-up, which have increased substantially since the figures she quoted.
10. What steps he is taking to engage charities and social enterprises in projects that will reduce their energy consumption.
All property types, including those belonging to charities and social enterprises, will be eligible for the green deal which begins later this year. Charities and social enterprises will be eligible for up-front support to cover improvements, which will be paid back gradually through savings on energy bills. We are also running a £10 million fund to support communities, including charities and social enterprises, in understanding their current energy use and the opportunities to reduce demand, as well as in developing renewable energy schemes locally.
Charities and not-for-profit groups up and down the country have enormous in-house expertise on this matter and are ready and willing to do more work with businesses and local authorities on the green deal. Good firms such as Morrisons do a great deal in partnership work. Could the Secretary of State do more to encourage more partnerships between local authorities, the private sector and charities such as Urban Mines, which I chair?
I am very happy to join the hon. Gentleman in encouraging the third sector in this regard. However, I point out that we recently announced 82 community winners in the first tranche of DECC’s £10 million local energy assessment fund, which share in £4.2 million to undertake feasibility studies for proposed community energy and energy efficiency schemes. The winning communities in the remaining, second tranche are due to be announced in early February.
11. What the level of debt is by which a prepayment meter customer is able to change supplier.
15. What assessment he has made of British Antarctic Survey research on the effects of historic industrialisation on global carbon dioxide levels.
Ice core measurements by the British Antarctic Survey reveal that over the last 800,000 years, global carbon dioxide levels varied between 180 and 300 parts per million. Those peer-reviewed results provide crucial data on past natural levels for climate science research. Observations show that global atmospheric carbon dioxide levels are currently increasing at about two parts per million per year, and are now at 391 parts per million, as a result of emissions from industrial and other human sources.
May I thank the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) for going to Bristol recently to launch the marine energy strategy? How does my right hon. Friend the Secretary of State perceive it working in delivering fewer CO2 emissions and helping with the energy strategy?
Marine energy parks are an important part of developing a tremendously good natural resource for us in this country. We may not have quite as much sunshine as in southern Spain or Arizona, but we have an awful lot of wind, an awful lot of waves and an awful lot of tidal resource. Within the ministerial team, my hon. Friend the Minister of State has been leading the charge on marine energy parks precisely to make sure that we do not let those enormous opportunities slip through our fingers.
Does the Secretary of State have three points he would like to share with us on the main conclusions of the research?
I can certainly point to one conclusion of the research that I think is absolutely crucial: measurements of current carbon dioxide levels show that they have increased by nearly 40% since pre-industrial times, and carbon isotope information shows that this has largely been caused by the burning of fossil fuels. Drilling down into ice cores is a fascinating way of finding out what was happening in prehistory, and it thoroughly underlines the importance in the science of our addressing those issues. One thing that as politicians we cannot do is negotiate with scientific conclusions as robustly supported as these.
16. What steps he is taking to ensure a competitive energy market.
T1. If he will make a statement on his departmental responsibilities.
Since my Department’s last Question Time, I have attended the UN climate change conference, where the UK delegation as a whole played a key role in securing the Durban platform, a road map to a global legal agreement. DECC has published the carbon plan, which sets out how we will meet our first four carbon budgets; we have consulted on incentives for solar energy as part of our review of the feed-in tariff scheme; and our clean energy plans took an important step forward with the opening of the UK’s first carbon capture and storage plant in November last year.
The right hon. Gentleman neglected to mention the defeat in the High Court. My constituents Mark Davenport and Brian Malone lost money setting up solar power companies. Will the Government compensate people who lost money as a direct result of the Secretary of State’s illegal actions?
Evidence of the very sharp take-up when we announced that we were getting to grips with the problems of the scheme shows that those involved in the industry had plenty of forewarning. As in any other sector, businesses take risks: sometimes the rewards are high and sometimes they are not.
T2. No new nuclear power stations have been built in this country for more than 20 years. How confident is the Secretary of State that Britain will possess all the relevant skills and supply chains necessary to create a thriving nuclear industry in this country?
My hon. Friend is right to highlight the importance of skills to the nuclear industry’s revival, especially as so many who work in that industry are nearing retirement. That is why the Minister of State responsible for energy, my hon. Friend the Member for Wealden (Charles Hendry), has been working so hard with the Department for Business, Innovation and Skills to make sure, through the nuclear skills academy and other measures, that the skills are there so that we can deliver on time—and we will.
T4. The St John’s Sunshine project in Old Trafford in my constituency planned to use feed-in tariffs to fund big society community projects, but Gavin Wood told me yesterday that those involved now feel that proceeding with the project would be a gamble. What assurances can the Government offer that Ministers will make good on their promises to community projects and offer them the certainty they urgently need?
As I have made clear in the House before, I wish we had been able under the law to provide separate support to the community schemes that have come forward, but we were not able to do that under the legislation passed by the previous Government. We will consult on that. I merely point out, as I did to the hon. Member for Harlow (Robert Halfon), that the continued fall in the cost of solar panels will make more and more schemes viable.
T3. The green deal is very dependent on consumer uptake and consumer trust in the energy companies. What sort of expertise has the Department in understanding consumer behaviour and how will we be able to deliver this programme through consumer behaviour change?
T5. Further to the question from my hon. Friend the Member for Rugby (Mark Pawsey), what estimate has the Secretary of State made of the number of wind turbines that stopped working at some point during the year, and how many of those stopped working due to too little wind and how many of them stopped working because of too much wind?
I will happily come back to my hon. Friend on wind turbines, but just because someone falls off a ladder does not mean that the House jumps to abolish ladders. In a similar sense, the operation of wind turbines, particularly those that are onshore, which are most economic, provides an increasingly important contribution to our energy needs, which is home-grown and not likely to be buffeted by events in the middle east.
T7. Four thousand five hundred employees of Carillion, headquartered in my constituency, went into Christmas on notice of redundancy due to the arbitrary and clearly illegal changes to the solar feed-in tariffs. We all agree that tariffs need to be reviewed, but will the Minister not help to end the terrible uncertainty in which Carillion employees are living by accepting the High Court decision and taking the time to review the policy properly?
I have already referred to the substantial costs and the fact that the industry would face a substantial reduction in the number of potential installations were we to accept those costs. I merely point out as well that going forwards we have attempted to provide that certainty, precisely because we laid the order, making sure that the new rate will be available from the beginning of March.
T8. Has the Minister made an assessment of the energy sources that may or may not be available in some of the British overseas territories, particularly the Falkland Islands?
The matter of oil exploration around the Falkland Islands is a lead responsibility of the Foreign and Commonwealth Office. Exploration is under way. Some of the initial exploration undertaken in territorial waters was disappointing, but that may change in future.
Having been a Minister myself in the Department of Energy and Climate Change, I cannot believe that officials did not warn the Secretary of State and Ministers of the folly of setting a cut-off date before the end of the consultation period. Will he not now apologise to those whose plans have been ruined and whose jobs have been lost, and acknowledge that a review was provided for in the Labour Government’s legislation?
The right hon. Lady sadly does not draw attention to the fact that there was no system of automatic degression under that scheme. However, she will be interested to hear that the general point that we should learn all the lessons required to be learned from this episode is not lost on the ministerial team, and I have ensured that we are doing precisely that. I do not think that it will come to conclusions that will be entirely to the right hon. Lady’s liking.
Does the Secretary of State agree that swift action to deal with metal theft is vital to protect our energy infrastructure, and will he therefore join me as a member of the all-party group on combating metal theft in welcoming today’s statement from the Home Office?
I certainly welcome today’s statement from the Home Office and think that the right hon. Lady the Home Secretary is putting forward some excellent ideas on how to deal with this problem. Metal theft affects all networks, including electricity networks, and because it affects networks it has a much broader cost than many other crimes.
The Government’s incompetence and arrogance over the feed-in tariff fiasco has been staggering. The industry and the public need certainty, so will the Secretary of State now try to answer the question my right hon. Friend the Member for Don Valley (Caroline Flint) asked him earlier, abandon his costly and doomed legal case and sit down with the industry to agree a sustainable solution?
As I have already pointed out, a substantial part of the industry intervened in the court case on our side. This is the best way forward for the sustainable growth of the industry. We have also laid the order that will provide absolute certainty on the tariff rate we are providing from 3 March, so I think that the right hon. Gentleman is being uncharacteristically churlish.
On Tuesday the Institution of Engineering and Technology is due to publish its long-awaited report on the undergrounding of electricity transmission lines. Given that 1,000 new pylons would have a significant effect on the natural environment and the landscape, what steps has the Secretary of State taken to ensure that the study considers the wider economic benefits of undergrounding to tourism, particularly in my part of Somerset, and the lifetime maintenance costs of undergrounding compared with using mile upon mile of pylons?
What assessment has the Secretary of State made of the Government’s liability for their unlawful actions in bringing in the feed-in tariff consultation?
We disagree, respectfully, with the Court of Appeal’s judgment, and that is precisely why we intend to go to the Supreme Court. Clearly, given that we disagree, the issue of liability at this stage does not arise.
Half an hour ago the Thamesteel works in my constituency went into administration, with the potential loss of 400 jobs. Obviously I hope that the administrators will find somebody to take over the plant as soon as possible, but any successor will face similar problems with the high cost of energy as do so many other companies in the energy-intensive industry. What can my right hon. Friend do to help such companies?
As my hon. Friend knows, the Chancellor of the Exchequer announced in the autumn statement that we will bring forward a package to help the energy-intensive industry—
Order. I enjoy greatly listening to the Secretary of State, but can he please face the House? Then we will all have the benefit of his eloquence.
We will therefore bring forward that package with a consultation paper, and there will be detailed proposals at that point.
In the light of the court case that has been mentioned and the Secretary of State’s comments this morning, it is clear that the Department is no longer fit for purpose. Is he really telling the House that he is going to drag the Government’s reputation further into the mire and waste further large amounts of taxpayers’ money in order to pursue what is really a wasted cause?
Let me reiterate the point that, if we were merely to accept the number of installations after our reference date and before 3 March, we would add £1.5 billion to the total cost of the scheme. That is what Opposition Members are asking us to do. If we were to go further, the cost would be even greater. If the hon. Gentleman thinks that that is a price worth paying, he is entirely consistent with what else Opposition Members say on economic policy, but it is not something that will be entertained by Government Members.