Edward Miliband
Main Page: Edward Miliband (Labour - Doncaster North)
The Secretary of State for Energy and Climate Change (Chris Huhne)
With permission, Mr Speaker, I wish to make a statement on energy policy. This statement and the departmental memorandum that I am placing in the Libraries of both Houses fulfil our commitment to present an annual energy statement to Parliament. In making this statement within three months of coming into office we are signalling the importance of this policy. We are setting out a clear strategy for creating the 21st-century energy system that this country urgently needs if we are to have affordable, secure and low-carbon energy in future.
We face short-term challenges as a result of the legacy inherited from the previous Government. We have the third lowest share of renewable energy of all 27 states in the European Union, which is the same ranking as in 1997. In the longer term, we must meet the challenges of a volatile oil market and increased energy imports. We are taking three big steps forward: we are creating a market for energy savings through the green deal; we are ensuring a properly functioning electricity market; and we will strengthen the carbon price.
Our actions must be informed by the best information about the future. That is why I am publishing our work on 2050 energy pathways, which has been worked up in consultation with industry, scientists, engineers and economists. We are making the data and analysis available and we are inviting comments over the summer. We want to start a grown-up debate about what a low-carbon future will look like and the best way of achieving it. These are possible pathways; we are not claiming to be able to see the future with certainty, but we cannot continue on the current pathway, which is high carbon and highly dependent on imports, with highly volatile prices.
Like the other industrial revolutions, the low-carbon revolution will be driven by entrepreneurs, the private sector, local communities, individuals, businesses, scientists and engineers—not by government. However, industry needs stable policy and functioning markets. The role of government is to provide the policy framework and to act as a catalyst for private sector investment. As the 2050 pathways work demonstrates, we need to apply those principles to the challenge of changing fundamentally the way we produce and consume energy.
The cheapest way of closing the gap between energy demand and supply is to cut energy use. We need to address the state of our buildings—we have some of the oldest housing stock in Europe. Our green deal will transform finance for improving the energy efficiency of Britain’s homes. It will get its legal underpinning from measures in the first-Session energy Bill. We are also accelerating the roll-out of smart meters, which provide consumers and suppliers with the information to take control of their energy management. Alongside this statement, the Government and Ofgem are publishing a prospectus for smart meters, which sets out how we will do this.
Openness is important to us, as it is to business and the public. Alongside this statement, I am also publishing analysis of the impact of energy and climate change policies on both household and business energy bills up to 2020, and I will continue to do so on an annual basis. At the moment, the UK economy is reliant on fossil fuels. As UK oil and gas production decline, this leaves us more exposed to volatile prices and increasing global competition for the resource. The challenge is to spur the capital investment required for new energy infrastructure. The volatility of fossil fuel prices and continuing uncertainty about the carbon price makes such investment high risk, pushing up costs and slowing development, so the first step is to support the carbon price.
In addition, I can announce that we are carrying out a comprehensive review of the electricity market and I will issue a consultation document in the autumn. This will include a review of the role of the independent regulator Ofgem. The Government will also put forward detailed proposals on the creation of a green investment bank. The coalition agreement is clear that new nuclear can go ahead so long as there is no public subsidy. The Government are committed to removing any unnecessary obstacles to investment in new nuclear power. In the memorandum, I have outlined some clear actions to aid this. As a result, I believe that new nuclear will play a part in meeting our energy needs. In the heating sector, I can confirm our strong commitment to action on renewable heat. The Government are considering responses to the renewable heat incentive consultation and will set out detailed options following the spending review.
The UK is blessed with a wealth of renewable energy resources, both onshore and offshore. We are committed to overcoming the real challenges in harnessing those resources. We will implement the connect-and-manage regime, and I am today giving the go-ahead to a transitional regime for offshore wind farms. Both those measures will help to speed up the connection of new generation to the grid. We remain committed to developing generation from marine energy, biomass and anaerobic digestion. Biomass investors that were promised help under the renewables obligation will continue to benefit.
We also need incentives for small-scale and community action. We are consulting on a new microgeneration strategy, and I am today laying an order to allow local authorities to sell renewable electricity to the grid.
Fossil fuels can also have their place in a low-carbon future, provided that we can capture and store most of their carbon emissions. We will introduce an emissions performance standard and we intend to launch a formal call for future carbon capture and storage demonstration projects by the end of the year.
This is a bold vision. We will not be able to deliver it without a 21st-century network that can support 21st-century infrastructure. The statement sets out practical measures that we are taking to improve network access and begin the building of a truly smart grid. However, the vision needs to be grounded in reality. The low-carbon economy must happen, but it will not happen tomorrow. There are potentially 20 billion barrels of oil equivalent remaining in the UK continental shelf, but we must maximise economic production while applying effective environmental and safety regulations. We are doubling the inspections of offshore oil and gas rigs, and we will undertake a full review of the oil and gas environmental regime.
We must also be mindful of our inherited responsibilities. My Department is responsible for managing the country’s nuclear legacy. I am committed to ensuring that those essential duties are carried out with the utmost care and consideration for public safety.
The UK does not stand alone. The Government will work together with our international partners in efforts to promote action on climate change and energy security across the world. We are working hard to put Europe at the front of the race for low-carbon technology. This will help to refresh the appetite for action across the world after the disappointment of Copenhagen.
In conclusion, the statement is about planning ahead and providing clarity and confidence in the policy framework. That is why I am also publishing today my Department’s structural reform plan to show how we are carrying out our priorities. Once we have completed the spending review, we will publish a full business plan. At last we can have an energy policy with real direction and purpose, and a Government who are willing to take the bold steps necessary. I commend the statement to the House.
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for early sight of his statement and the associated documents. There are some things in the statement that I welcome: the continuation of our work on the 2050 pathways and scenarios; the role of local authorities; and what he said about smart metering, although I think that he has adopted our timetable for the roll-out of smart meters despite the great rhetoric before the election about a faster timetable.
The problem with the statement, however, is that the Secretary of State did not tell us that, on a whole range of issues, he is going backwards not forwards compared with the actions of the previous Government. The truth is that the Government have gone from the rhetoric without substance of opposition to rhetoric without substance in government. Let me take the issues in turn and ask him some questions.
Contrary to what the Secretary of State says, we had a clear plan on the long-term transition to the low-carbon economy that Britain needs—it was the low-carbon transition plan that was published in summer 2009. That plan was widely applauded by industry, employers and green organisations. The problem, however, is that he is unpicking parts of that plan. If he wants a higher renewables target, will he explain why he is abandoning the measures that we put in place to meet the existing renewables targets? He has given in to Conservative nimbyism by abolishing local and regional targets for renewables.
It is absolutely unclear from the documents that the right hon. Gentleman has presented to the House how he will meet the higher targets. We do not even know what they will be. On onshore wind, his own Minister, Lord Marland, in another place, says:
“It is our determination there should be no dramatic increase in this”.—[Official Report, House of Lords, 5 July 2010; Vol. 720, c. 5.]
How will the right hon. Gentleman meet his renewable targets without a dramatic increase in onshore wind? If he does not agree with Lord Marland, he had better get a grip on his own Department.
The right hon. Gentleman is going backwards on wind power and on the incentives to use renewable heat in our homes. We were set to be the first country in the world in April 2011 to have a renewable heat incentive in place. All that he has done in the statement today is to postpone any decision on this until after the spending review. Will he explain why has he done so and what the timetable will be for the renewable heat incentive?
On nuclear, the right hon. Gentleman has finally said something positive, but I do not think that anyone will really believe that his heart is in it. Let me test him out. We said in our national policy statement that we believed that new nuclear should be free to contribute as much as 25 GW towards new capacity. Does he agree with that?
On a green economic future for Britain, I am afraid that his statement goes backwards too, most shamefully with the decision on Sheffield Forgemasters. A written answer has been smuggled out by the Secretary of State for Business, Innovation and Skills this morning trying to explain how it is possible that the Prime Minister, the Deputy Prime Minister and others said in this House that Sheffield Forgemasters had refused to dilute the loan when that was not the case.
Will the Secretary of State for Energy and Climate Change explain once and for all, because it has not been explained before, why, given that it was a loan, given that the money was set aside, given that there was value for money as judged by the independent panel that looks at these issues, he cancelled that loan? Why has he taken the £1 billion away from the green investment bank? We set aside resources from the sale of High Speed 1 towards the green investment bank and he has taken that money away. So the right hon. Gentleman is going backwards, too, on the question of our industrial future.
Finally, on fairness, we all accept the huge challenge of fuel poverty amid the green transition. Will the right hon. Gentleman explain why, in the documents that he publishes today, he no longer says that he will necessarily be going ahead with the compulsory social tariffs that will give cut-price energy for the most vulnerable? Again, it is put off until after the spending review, and again it is subject to review. Does he agree that it is vital? The Liberal Democrats’ position before the election was to do more to help the most vulnerable, including through compulsory social tariffs.
The truth about this Government is that they promised that they would be the greenest Government ever. Any fair-minded person looking at this statement will conclude that they are a huge disappointment—to industry and to the country. In our first debate, the right hon. Gentleman said:
“One thing that the Government are going to do is to under-promise and over-deliver”.—[Official Report, 27 May 2010; Vol. 510, c. 317.]
On today’s evidence, he got it the wrong way round.
Chris Huhne
I am grateful to the right hon. Gentleman for his response. Let me make it clear that we have set out in this annual energy statement a clear route map with a framework that will deliver the low-carbon economy that I believe we both want. That is something that will be seen in the test of results rather than in the test of rhetoric.
If one looks at wind power, for example, I cannot accept that the Government should take lectures from the Opposition on renewable energy. The reality is that we have the third worst record of all 27 European Union member states. I know that the right hon. Gentleman, in the latter years of the last Government, improved the policy settings, to which I pay tribute, but the reality is that, taken as a whole, the record of 13 years of Labour rule on this agenda is truly shocking. For us to take office after 13 years of Labour Government, when they have made no progress whatsoever in improving our rankings on renewable energy compared with all 27 members of the EU, is extraordinary.
The right hon. Gentleman knows very well that, on the renewable heat incentive and, indeed, on Sheffield Forgemasters and the fuel poverty commitment, we are inevitably subject to the spending review for the very simple reason that his colleague, the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), said extremely pithily when he left the Treasury, “There is no money left.” Although I have enormous respect for the green credentials of the right hon. Member for Doncaster North (Edward Miliband), I do not think that he does the cause of progressive politics or green politics any good by pretending that there is a bottomless bucket of money that we can dip our hands into and throw at problems.
The right hon. Gentleman did not say anything about the constraints that, if elected, the Labour party as he very well knows would have laboured under exactly as we do. He certainly talks the talk, but we are delivering. We will introduce a carbon price floor; he did not. We will introduce an emissions performance standard; he did not. We will introduce a green deal to tackle energy saving in every household, including fuel-poor households; and he did not. That should be a matter of shame to Labour Members.