John Robertson
Main Page: John Robertson (Labour - Glasgow North West)
Mr Yeo
I draw the attention of the House to my entry in the Register of Members’ Financial Interests, in particular to my interests in the energy industry. In doing so, I emphasise, as I have done before, that my views on climate change and on the need for Britain to move more swiftly to a low-carbon economy and to cut its dependence on fossil fuels were formed two decades ago when I had ministerial responsibility for this area of policy.
I have not changed these views at any time since and have repeated them publicly and privately on many occasions throughout the past 20 years. My views have never been influenced at any time or in any way by my financial interests, all of which were acquired after I left the shadow Cabinet in 2005. That was 12 years after I accepted the overwhelming scientific consensus on this subject and began campaigning for a more urgent response to the challenge of climate change. Various bloggers, columnists and others, including one or two of my hon. Friends, who imply otherwise and who ignore the scientific consensus, invariably overlook my strong and consistent support for nuclear power, which is a low-carbon technology that should be part of Britain’s energy mix.
I am grateful for this opportunity to debate amendment 11, which stands in my name and the name of hon. Members from most parties. It is based on a unanimous recommendation made last July in the report of the Energy and Climate Change Committee on the draft Energy Bill. I am glad to say that the Government accepted many of the Committee’s recommendations, and by doing so materially improved the Bill, and I congratulate my right hon. Friend the Secretary of State and his team on their response to our report and on the outcome of their negotiations with the Treasury on a range of issues, including the levy control framework.
For a variety of reasons, however, the need for the amendment is even greater now than when my Committee’s report was published. First, despite some positive signs on the Government’s support for low-carbon electricity generation, the publication of the gas strategy on the very day of the autumn statement confused many investors. The possibility that the Government might sanction 37 GW of new gas-fired generation capacity rests uneasily with their acceptance two years ago of the fourth carbon budget, which covers the period 2023 to 2027, and raises the fear that the purpose of next year’s review of the budget is to water it down and weaken the incentives for low-carbon investment.
John Robertson (Glasgow North West) (Lab)
As a member of the Energy and Climate Change Committee, I want to compliment the hon. Gentleman on his chairmanship. He has done an excellent job. Does he agree that unfortunately the Government have dragged their feet over the Energy Bill? They did not give us enough time to scrutinise it. The Bill then disappeared for a while and came back at short notice. Does this smack of a Government who are putting their heart and soul into energy?
Mr Yeo
It is certainly true, as the hon. Gentleman says, that we waited a long time for the draft Energy Bill. I think that the industry, the non-governmental organisations and the academic world were all hoping to see it appear a lot earlier than last summer. Our Committee was given a very limited period—about half the time normally given to Select Committees to comment on a draft Bill. We completed our work—with great assistance not just from my colleagues on the Committee, but from the staff—in about six weeks. Having received our recommendations at the end of July, we waited another five months before the actual Energy Bill was published, although I recognise that some of that period was used in the negotiations on which I have already congratulated the Secretary of State. The Public Bill Committee stage was completed in the first week of February, however, and we have now waited a further four months to get to Report, so the matter has not been conducted with the urgency that I think the needs of the situation required.
The understandably envious glances cast across the Atlantic by the Treasury at the transformation of the US gas market in the wake of the exploitation of shale gas have not passed unnoticed. Not surprisingly, there are now doubts in the minds of many prospective investors about the depth of the Government’s commitment to decarbonising electricity generation.
Incidentally, the Energy and Climate Change Committee was one of the first bodies to urge the Government, more than two years ago, to approve more exploration and testing to establish the scale of Britain’s recoverable shale gas reserves. If our dependence on imported gas can be cut and if consumers can be partially protected against fluctuations in international gas prices, which have been the main cause of the rise in domestic energy prices in the last few years, that is wholly to be welcomed. However, my Committee also warned, in a more recent report on shale gas, that it would be rash to base energy policy on the assumption that Britain will soon be a major shale gas producer. The opposition to exploring for shale gas in Sussex, which is already emerging, is a foretaste of the battle for public opinion, which must be won before domestic production of shale gas on even a modest scale can occur. The case for a diversified energy mix is therefore as strong as ever.
Gregory Barker
I deem the raising of the FITs threshold to be very attractive and am personally driving the issue in the Department. However, when looking at the proposal in further detail, I have been made aware of potentially perverse consequences and impacts on the renewables obligation. I was slightly surprised by the views of the STA but have taken them on board. We need to unpack a number of issues and I currently have officials working on the matter. I am hopeful that we can find a way through or partially through, and land at an outcome that, while it might not be the one the hon. Gentleman exactly wants, he would find satisfactory. I cannot say any more on that because I have not come to the House in a position to make a commitment or statement, but I hope he takes from the tenor of my response that we are not just considering the matter; work is being done in the Department and we hope to bring further measures to the House. I reassure him that we hope to respond as the Bill continues its passage through Parliament—most likely, in the other place.
Amendment 46 seeks to increase the specified maximum capacity of the FITs scheme to 50 MW. I have considerable sympathy with that objective, which recognises the effective nature of the reformed FITs, but such an uplift could produce unintended consequences on FITs, budgets, the levy control framework and renewables obligation certificates. As things stand, we do not consider that such a large change offers the best value for money, because it could have significant impacts on the functioning of the renewables obligation and push up costs for energy bill payers.
Amendment 42 seeks to define distributed generation. I applaud the motive of the amendment, but having carefully considered it, and as sympathetic as I am to its intention, on balance, we do not consider it necessary. The reformed and highly successful FITs scheme already ensures that communities can generate their own electricity from a range of technologies. I am proud that, under the coalition, hundreds of thousands of people have decided to do so, and are now successfully self-generating electricity to meet some or all of their needs—in some cases, they export to the grid—on both community and domestic scales. Public buildings, particularly schools, are a popular choice.
Amendment 43 aims to implement a new support mechanism for generation attached to our electricity distribution network. I have led reforms on the FITs scheme to ensure that it remains not only open, but successful and increasingly ambitious, while delivering value for money. We are now closing in on half a million installations. Virtually all the installations supported by the FITs scheme are distributed generators. We therefore do not see the need for a new mechanism, which could confuse consumers and potential generators. The reformed FITs system is doing a good job and is increasingly popular.
Amendments 44 and 45 aim to require distribution companies to supply distributed generation—even if that does sound like a slight oxymoron. UK distribution network operators already ensure that electricity generated by distributed generation is transmitted to where it is needed, if it is not consumed locally. While I am sympathetic to the intent behind the amendments, I do not see that they are strictly necessary.
I am grateful to the hon. Member for Southampton, Test for tabling amendment 47, which seeks to address an important issue: the independent renewable generators’ route to market. The amendment would create a duty on the Secretary of State to establish a green power auction market for renewable generation—GPAM, as it is often known. I hope the hon. Gentleman knows, and the House appreciates, that I am sympathetic to the intention behind the amendment. Bringing on board new, dynamic and disruptive new entrants is a key aim of the Bill. I am personally committed to breaking the grip of the big six and making our vision of a far more decentralised energy economy a reality.
John Robertson
The Minister will appreciate that this is music to my ears, but how does he expect to be able to do that—by bringing new people into the market or by trying to help smaller companies to develop?
Gregory Barker
Both, I hope. Certainly, it would not be satisfactory if the big six became the big seven or eight. Ultimately, we need the big 60,000. We want to extend the enthusiasm for micro-generation and community generation, and scale it up so that small-scale generators, who currently cater only for their own needs, begin to have the ambition to export electricity in their areas and create community interest companies. We also want entrepreneurial companies. The sector is ripe and rich for entrepreneurs. We want to see new disruptive players coming into the market and using new technologies or offering better services. There are already some good independents in existence. I have met a number of them and they are seeing their customer numbers grow considerably. As things stand, however, there is still a long way between them and the big six.
Caroline Lucas
I refer the hon. Gentleman to a report by McKinsey on DECC’s website, which sets out exactly how we can reduce electricity demand by 36% by 2030. That potential figure was properly referenced and much work has gone into identifying it—indeed, others have used a higher figure—but we are not even getting anywhere close to that at the moment.
The focus of my new clause is to say that that is not enough, given that those on both sides of the House, with the possible exception of the hon. Member for Monmouth (David T. C. Davies), appear to agree that the most effective way to tackle fuel poverty and high energy bills is to reduce the overall amount of energy we need to keep our homes warm and to cut energy waste. The new clause is straightforward and complementary to amendments 39 to 41 on demand reduction regulations.
While energy demand reduction is a bit of a no-brainer, the Government’s current approach is failing. The latest shocking example is last week’s news that the number of homes installing cavity wall insulation has crashed by 97% since the introduction of the green deal. Quite incredulously, I can say that a DECC spokesman is quoted as saying that the early signs are encouraging. I wonder what Ministers would consider discouraging and alarming if a drop from almost 40,000 cavity wall insulations in April last year to 1,138 this April is not precisely that.
For the sake of existing energy efficiency businesses that are struggling in Brighton, Pavilion and elsewhere, for the sake of families paying huge bills due to poorly insulated homes, and for the sake of the huge number of jobs that could be created in every constituency across the UK, we urgently need a serious approach with suitable ambition, a plan to get there, and that is exactly what new clause 2 would achieve.
John Robertson
I tried to get cavity wall insulation and I was told that because of my brickwork I could not have it, although I would have thought that my type of house was ideal for it. Is it not that the rules are now being adhered to by companies, whereas before they were putting it in and a lot of houses were suffering from damp as a result?
Caroline Lucas
Obviously, I am not deeply acquainted with the brickwork of the hon. Gentleman home, but I find it slightly surprising that the justification that he advanced would be responsible for such a dramatic reduction. I cannot believe that quite so many cavity wall insulations, down from 40,000 last year to just over 1,000 this year, could be as a result of its having been done badly in the past. There might have been an element of that, but there are some real concerns about the take-up of the green deal and the way in which it replaced some pretty good schemes instead of building on them.
New clause 3 is about community rights to priority access to local power generation and local grid ownership.