Renewable Heat Incentive Scheme (Amendment) Regulations 2016

James Heappey Excerpts

Wednesday 19th October 2016 General Committees

[Jesse Norman]

I am grateful for that clarification and am happy to look at the facts of the case. I make a wider point that relations between the two Governments on this issue have traditionally been very close.

As I said, we recognise the impact of the change on companies that have invested in projects under development in good faith and therefore the Government will introduce amending legislation to the House, as soon as is practicable, to reduce the 20% power threshold to 10% for a transitional period, to be applied to all plant that has qualified for the scheme since 1 August 2016.

[James Heappey (Wells) (Con)]

I agree very much that the Government have a responsibility to ensure that subsidy is in the taxpayers’ interest, and they are right to insist on a certain level of efficiency. I welcome the change that the Minister has just announced, but the Energy and Climate Change Committee’s report on investor confidence, already mentioned once, emphasised that it is important that we move away from any sort of retrospective changes. Now that energy policy is within business policy, can the Minister reassure us that this is a new beginning for energy policy?

[Jesse Norman]

I absolutely give my hon. Friend that reassurance. I simply direct him to the recent announcements on Hinkley, on offshore wind and on the contracts for difference that will shortly be coming forward. Funding for the renewable heat incentive is due to rise from £430 million in 2015-16 to £1.15 billion in 2020-21. Those are hardly the signs of a Government who do not take these issues seriously or are unwilling to make plans on the lengths of time suitable for investment or licence.

I want to pick up the point, en passant, raised by my right hon. Friend the Member for New Forest West. He is a classical liberal and made a wonderful intervention on the importance of avoiding subsidies. I remind him that any classic liberal of a modern slant would recognise two things: first, that markets can perform not very effectively or efficiently—in some cases in the environment area, pollution is a classic externality generated by market behaviour—and secondly, that markets are instruments of public policy, so it is perfectly proper for a Government on behalf of the public interest more generally to seek to blend objectives in how they treat markets.