Electricity Market Reform
Debate between Chris Huhne and Tim Yeo
Mr Tim Yeo (South Suffolk) (Con)
As the task of attracting huge amounts of new investment into new low-carbon electricity generating capacity is extremely urgent, can the Secretary of State assure us that the passage of the necessary legislation will be a top priority for the Government in the next Session? Will he ensure that as much clarity as possible about the levels and manner of operation of the feed-in tariffs, with contracts for difference, will be available as soon as possible to reassure investors that it is a new, stable and predictable regime?
Chris Huhne
I assure the hon. Gentleman that the Government are extremely seized of the urgency of getting the legislation through during the second Session and of issuing the contracts, so that they will be on course and we are able—I hope—to issue the first contracts in 2013.
Fourth Carbon Budget
Debate between Chris Huhne and Tim Yeo
Mr Tim Yeo (South Suffolk) (Con)
This is a most welcome decision by the Government. Does my right hon. Friend agree that there are considerable potential economic advantages for Britain in leading the world towards a lower carbon economy? Does he further agree that, although it is understandable that the Government should wish to retain the option of purchasing credits in order to achieve the target, the sooner that option is ruled out, the greater the incentive will be for British business to invest in low-carbon technology?
Chris Huhne
I very much agree with the hon. Gentleman, the Chairman of the Energy and Climate Change Committee, who has made a powerful case in the past for a low-carbon economy. This is no longer a set of cottage industries. We are talking about a sector of the British economy that employs 910,000 people, which is growing extremely rapidly in a major world market, and which offers us enormous opportunities. I have no doubt that to those who move first and furthest will come the great advantages of the low-carbon economy. On the point about purchasing credits, having in a misspent youth practised economic forecasting and knowing about the difficulties of getting forecasts right one or two years in advance, I think it makes pragmatic sense to preserve a little flexibility when looking ahead as far as 2023-27.
Energy Bill [Lords]
Debate between Chris Huhne and Tim Yeo
Mr Tim Yeo (South Suffolk) (Con)
I begin by drawing attention to my entry in the Register of Members’ Financial Interests.
I would very much like to find something nice to say about the speech that has just been delivered by the hon. Member for Hackney South and Shoreditch (Meg Hillier). I listened carefully for 25 minutes and I could not really say that it made any serious contribution at all to the debate. It was extraordinarily churlish in tone and very ill-judged. If ever there was an issue that cried out for a bipartisan, long-term and constructive approach, it is energy policy and climate change. That was wholly lacking from every sentence of the hon. Lady’s speech.
I warmly welcome the Bill, which is a big—and overdue—step in the right direction. I agree that some details remain to be filled in, but no doubt they will be addressed in Committee. I want to comment briefly on four aspects of energy policy that relate to the Bill. The first, of course, is energy efficiency. The Bill is especially welcome because of its intense focus on energy efficiency, which has always been the Cinderella of energy policy. I have always found that to be extraordinary—it is truly the no regrets policy. Even people who do not accept that climate change is a threat to the conditions of climate stability that have prevailed in the very recent history of our planet, thereby allowing one of the most recently arrived species, human beings, to proliferate in number and enjoy phenomenal and unprecedented success, and who see no advantage, either environmental or economic, in moving to a low-carbon economy can see the merits of greater energy efficiency, which has economic as well as environmental advantages. Those economic advantages accrue to households, rich and poor alike, and to businesses.
The green deal, which is the centrepiece of the Bill, is an excellent concept, even if there remain some areas of its implementation that we would like to know more about. The principle that energy efficiency measures can be financed through savings on fuel bills is a good one that is attractive to consumers. In practice, however, although most of the energy efficiency measures needed have a large and fast enough payback to meet the golden rule to which the Secretary of State referred-that instalment payments for the improvements will not exceed the cost of the savings made-there will be some measures that probably do not come into that category. I hope therefore that the Government will recognise—not necessarily in the context of the Bill, but soon—that some further incentive might be needed to improve all the housing stock in this country. I urge Ministers, as I have before, to explore more fully how discounts on council tax could be used to encourage faster progress to a comprehensive energy efficiency process. Those discounts could even be introduced on a revenue-neutral basis.
Chris Huhne
Powers for councils to do that are already on the statute book. A number of councils have introduced incentives through council tax, which have been very effective. We do not need new powers to do that, and I think that a lot of the most go-ahead councils will do it.
Mr Yeo
I am grateful to the Secretary of State for that point. I hope that means he will encourage the use of those powers in areas in which a significant number of households are not able to use the green deal measures as a sufficient mechanism and incentive to get the improvements that are needed. The same approach could be adopted for business premises by giving discounts on business rates.
Smart meters might also help. Helping consumers to understand the costs of energy and how they can better manage their energy consumption could be very valuable, but I hope that the Government will take a close interest in the roll-out of smart meters. There is a risk that the whole initiative might turn sour if the meters do not get off to a good start, if mistakes are made or if consumers become suspicious that they are going to benefit suppliers more than consumers.