Clean Energy Investment

Debate between Julie Elliott and John McNally

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?