Jonathan Reynolds
Main Page: Jonathan Reynolds (Labour (Co-op) - Stalybridge and Hyde)
Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Richmond (Yorks) (Rishi Sunak), although I cannot say that I will be quite so enthusiastic about the Bill, and the other hon. Members who have spoken on Second Reading.
Having recently returned unexpectedly to the Back Benches, it was with considerable excitement that I saw we would have the Second Reading of the Energy Bill today. Frankly, that was before I realised we would be talking about sado-masochism in an energy debate, which I must say is a first for me and an interesting development in matters of this kind. With a different electoral outcome at the general election, I would have hoped to be one of the people presenting a different energy Bill today—one from a Labour Government. Although we may have different views on this Bill, there is no doubt that the UK certainly needs an energy Bill. Many policy questions need a direction and many energy issues require some political leadership. Because of that, I must say I find this Bill quite disappointing. A fairer title would be the “offshore oil and gas Bill that does some quite harmful things to the renewables industry.”
By any measure, I am not opposed to the oil and gas provisions we have talked about. We should do all we can to protect the industry, which has been vital for the UK. The Wood review was a good piece of work and made many sensible and impartial recommendations. However, we must acknowledge the reality about the supply and demand prevailing in the international commodity market, especially for oil.
With oil at $30 a barrel, we cannot deny that there will be an impact on investment in the North sea. In many ways, we should take two notable things from that. First, to follow the logic of successful energy policy across the world, divesting and getting more into low-carbon generation will reduce demand for oil, which will be reflected in its price. Secondly, we cannot mention the oil price without remarking how silly it has made the SNP Members’ economic case for independence appear. It is a matter for them, but it should not go unmentioned. That deals with the entirety of one section of the Bill.
The section of the Bill on renewables is equally straightforward in that, except for the local consent provisions, we should not do it. I understand from the many times I have attended energy debates in the House what the general feeling of Conservative Members is about the wind industry. I would simply say that when we talk about this, whatever the personal positions that may come into it, we should not try to introduce personal facts, because some of the things said today are simply untrue. The figure for the contribution of UK wind to our electricity mix during the past 24 hours is 5%, not 1%. That information is very easy for anyone to obtain from their smart phone. It is equivalent to the contribution of biomass and, frankly, it is about a quarter of the contribution of our entire nuclear fleet, so it is not insignificant.
Constraint payments are a feature of any electricity system, which is a system that requires supply and demand. The best way for any hon. Member to see that for themselves is to go to the control centre, which is quite a fascinating place to visit. Constraint payments apply to every form of generation, and they go disproportionately —the numbers are much greater—to fossil fuels than to renewables. It is simply not the case that that feature applies just to our renewables sector.
The main point I want to raise on the provisions for onshore wind is that although financial support should of course be tapered out as the industry matures, ending it for what are seen as arbitrary or political reasons based on Conservative Back Benchers’ prejudices will damage not only that industry but all energy investment. I have been in the Chamber so many times to hear Conservative Members say, “We don’t like wind. We need some solar farms. The price of solar is coming down, and it looks great.” A few months later, the same people are back saying, “Actually, I don’t like solar farms now. Let’s talk about marine technology and tidal generation.” The fact is that if they undermine investor confidence in one sector, they will undermine it across the board.
It is true that there has been a set of long-standing opponents of wind energy in the Conservative party, and the industry might reasonably have been expected to anticipate that. I would say that there must be due regard to sunken costs, and amendments were made in the Lords that reflected the need to protect investor confidence, but they have been disregarded by the Government. For much of the time, especially when we talked about the price freeze proposed by Labour during the last Parliament, “investor confidence” were buzzwords for Conservative MPs. Frankly, in looking at such provisions, they seem to have deserted such a case. It must be acknowledged as factually true that if the cheapest form of renewable energy is scrapped, bills will increase. It is hypocritical to have one set of provisions for renewable energy and a completely separate set of provisions for fracking: if one set is good for one sector, it has to apply to all of them. That is the kind of inconsistency or incoherence that many people find frustrating.
Having dealt with those two parts of the Bill, I cannot help but use the rest of my speech to lament the issues and the sectors that have been missed, and to lament the missed opportunity that the Bill represents. The first such issue, which my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) mentioned, is energy efficiency. The Government’s record on energy efficiency is frankly abysmal. It has cost thousands of jobs, made fuel poverty worse, made bills worse and has hindered our ability to tackle climate change. Whatever form of generation people favour—there are cases for different forms and there is certainly a need for a mix covering almost everything—such generation will be expensive, and I would say that not getting the most efficient use of the energy we already have is a scandal. In our access talks when we were in opposition, we looked at all kinds of things—from short-term measures we could bring in to emergency legislation to extend some obligations on energy companies—because we are going to need the jobs we have lost if we are to have any hope of hitting our targets and keeping bills low.
The second missed opportunity is carbon capture and storage technology, which, broadly, is essential to any of our plans. We know that it works, and the UK could be a world leader in it. Frankly, it is worth a punt: we should put some money into it. But we are all left wondering whether any financial support at all will be available from the Government for carbon capture and storage. This is not just about electricity, but a principal means by which we can decarbonise industry. It seems tragic for the Government to have retreated from that area.
The third missed opportunity is decentralisation. The comments on that by the hon. Member for Daventry (Chris Heaton-Harris) were extremely thoughtful. There is a need to decentralise and diversify the benefits and costs of energy subsidies, as well as where they are put, to make the situation more equitable and to deal with the issue of local opposition to planning new energy infrastructure. My own political party—not the Labour party, but the Co-operative, by which I am dually sponsored—has a fine record of being consistent and actively campaigning for that.
If we want communities to host electricity generation closer to their homes than has been the case historically because of the system we have used, we must find ways to bring them in and for them to see some benefit from it. Some of the hon. Gentleman’s comments were a little harsh, because some developers offer, for example, substantial reductions on energy bills for people who host nearby onshore wind. We should, however, look at ways in which to diversify the ownership structure of many such developments, as has happened on the continent. As he rightly said, if local communities feel that they are receiving a benefit, they will pay greater heed to the need for such developments close to them.
The last thing I want to mention is low-carbon heat. I try to get it into all debates, because if we are talking about hitting our targets or about trying to tackle climate change, heat is as important as electricity. Frankly, big political decisions need to be made during this Parliament if the UK is to make any progress whatsoever in this field. I still believe that we are nowhere near making such decisions, but we cannot wait much longer before starting that process.
In conclusion, the Bill has many worthy provisions, but it does not feel in any way as if it tries to meet the challenges in the UK energy market today. There is a sense that that is no longer a priority for the Government, when it should be a major one, not just because of the international climate change agreement that we made in Paris, but because of jobs and energy security in the UK. The right policies are available—policies that would simultaneously cut bills, tackle fuel poverty and cut emissions. My hope is for a much greater level of ambition from this Government and subsequent Governments.