Clean Energy Investment

Julie Elliott Excerpts

Wednesday 25th November 2015 Westminster Hall

[Julie Elliott (Sunderland Central) (Lab)]

As ever, it is a pleasure to serve under your chairmanship, Mr Bailey. I congratulate my right hon. Friend the Member for Don Valley (Caroline Flint) on securing this timely and important debate. It should surprise no one in the House that she has continued to throw her considerable energy and expertise into this area, both as a Back Bencher and as chair of Labour’s Back-Bench energy and climate change committee.

The Secretary of State for Energy and Climate Change will no doubt have hoped to prop up investor confidence in her “reset” speech last week. She was right to hope for such a response, because clean energy developers are going bankrupt and investors are fleeing the UK. However, I suspect that she may have been disappointed. As my right hon. Friend said, EY’s most recent renewable energy country attractiveness index, published in September, is a damning indictment of this Government’s record on clean energy and the power that they have unleashed to scare off investment and the jobs that come with it. In November 2013, the UK was fourth in the world for investor confidence. In February 2014, we fell to fifth; in May 2014, to sixth; in September 2014, to seventh; in March 2015, to eighth; and two months ago, we fell to 11th—outside the top 10 for the first time in a decade. I can see why the Secretary of State was hoping for a reset.

Boosting investor confidence and achieving clean energy security will require more than warm words. Rhetoric does of course matter, and this Government have thrown their fair share against renewables, but investors pay attention to policy. They put their money where they believe there is a stable regulatory framework. That cannot be said of the UK market at the moment. Wave after wave of policies have deterred investors and confused consumers. The Government claim that affordability is king, yet the main focus of their attacks has been on onshore wind and solar—the two cheapest large-scale renewable technologies. EY calls that

“policy-making in a vacuum, with no rationale or clear intent.”

That lack of confidence does not exist in isolation. It seeps into other sectors, such as CCS and offshore wind. Investors will naturally think, “If the most cost-effective and proven technologies are being attacked, surely we will be next.”

[John Mc Nally (Falkirk) (SNP)]

On the point about renewable energy, I think, coming from the background of what is happening in Scotland, where we are pursuing a clean and green energy policy, that the short-term approach to policy that is causing uncertainty among investors needs to go. We need a long-term policy to be agreed across the House, perhaps by means of an all-party parliamentary group. That would reassure investors for the long term that the money that they invest will be secure. We need to get rid of the repair and maintenance that we seem to be so intent on delivering at the moment.

[Julie Elliott]

I thank the hon. Gentleman for his intervention. Of course the key to good, stable energy policy is to have a long-term framework. Energy policy needs to last through more than one Government. Governments change every four or five years. Energy policy should be agreed and set out for the long term, to attract investment and so that we can regain our place as the world leader in this industry.

Uncertainty is this Government’s watchword. We have no idea what the size of the levy control framework will be post-2021. If we are relying on offshore projects with lead times of eight years or so, how can we expect people to invest when they do not know the size of the pot beyond 2021?

[Ian Lavery]

Is it not also extremely important, with regard to the levy control framework, that stakeholders should be aware of how this budget is being spent? It is not transparent at the moment, and people do not have a clue about what is being spent, when it is being spent and how it is being spent.

[Julie Elliott]

Absolutely. I thank my hon. Friend for that intervention; I totally agree with him.

The situation in which we find energy policy today can perhaps best be illustrated by the grotesque chaos of clean energy developers, starved of the certainty that they need, being encouraged to install diesel generators on their sites because the Government’s policies have led to the narrowest—frighteningly narrow—margins this winter. Approximately 1,000 diesel generators, second in carbon intensity only to coal, have been installed in the past 18 months, and another thousand are in the pipeline.

The Paris climate change conference starts in just five days’ time. I wish the Secretary of State and the Minister well, and I know that they will work hard to secure a binding agreement. They may, however, find that not everyone is taking them as seriously as they would like. The UK can take on global leadership abroad only if we are seen to be taking bold action at home. The Department of Energy and Climate Change does not exist in isolation. Our policies are noticed not just by investors, but by policy makers around the world. In passing the Climate Change Act 2008, Britain grabbed the baton of global leadership. Others took note and made steps to catch up. Now, we are being overtaken. Today, when we slash support for clean energy, the rest of the world looks on.

[David Mowat (Warrington South) (Con)]

The hon. Lady makes a point about the Climate Change Act. It is true that we showed global leadership on that. However, no other country in the world has passed anything similar and, worse, the EU, for the Paris climate change talks, has put in a submission for decarbonisation that is significantly lower than what the UK is attempting to achieve. We have shown global leadership.

[Julie Elliott]

I thank the hon. Gentleman for that intervention, but nothing in what he said takes away anything from the point that we were the global leaders. I take great pride in that. The Conservative party supported that measure while it was going through Parliament, so it obviously agreed with it at the time.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

A very important point must be put on the record: countries have different climate legislation programmes in place, but this country has never been completely out there on its own and other countries have attempted to do what we have done. There is a huge academic study of climate legislation across the world. Hundreds of countries have attempted to do what we have done—many of them very successfully. Of course we will need to take a higher burden in this country than, for instance, Poland, and that will be reflected across the whole EU target, but we cannot say that other countries have not followed us down this route. That is simply incorrect.

[Mr Adrian Bailey (in the Chair)]

Order. Let me just point out that I did say five minutes. We are already way over that, and long interventions do not help.

[Julie Elliott]

I shall wrap up quickly, Mr Bailey.

The Washington Post noted last week that although Britain had been expected to play a leading role alongside the Obama Administration, the decision to cut support for clean energy at home

“threatens to undermine Britain’s international authority”.

As the United States pushes ahead with an ambitious programme and the rest of Europe pulls ahead of us in meeting renewable energy targets, Britain’s capacity to lead on the world stage is being squeezed.

I am confident that the Minister will deliver a rousing defence of this Government’s record and the importance that she personally places on delivering a low-carbon economy in the UK and securing a binding global deal in Paris. It reminds me of the line that Joe Biden, Vice-President of the United States, is credited with coining. He said:

“Don’t tell me your values. Show me your budget, and I’ll tell you your values.”

Attacks on onshore wind and solar, no extension of the levy control framework, the UK’s position as a world leader dropping like a stone and the fact that we are on course to miss our 2020 target—with such a record, the values are very clear.