Energy Bill [HL]

Lord Cameron of Dillington Excerpts

Monday 14th September 2015 Lords Chamber

[Lord Cameron of Dillington (CB)]

My Lords, I support this group of amendments. I was not sure whether I would speak to this group or in support of the clause stand part Motion in the next group. I want to make a small but vital point and endorse the point touched on by others about the need for government consistency and clarity as soon as possible.

First, I declare an interest as a farmer and landowner, and also as a trustee of a trust in Scotland that has renewable investments, although no wind farms are involved. I also declare myself someone who would like to see the proper and ordered development of our renewable capabilities in this country.

It seems to me that it does not matter whether you are for or against wind farms, onshore or offshore—like the Government, you may prefer the more expensive and, to my mind, much more risky offshore wind. The point is that if a Conservative Minister can say in January that your investments are safe and that no changes in the rules are proposed, but then six months later the rules have changed, that undermines not only energy investment in this country but all investment. It makes banks run a mile. Say the Treasury had made promises to a car manufacturer to invest in northern England, and the investor spent millions preparing for the project on marketing exercises, planning and costings—I know from my own experience that preparing a project can often account for as much as a quarter of the total cost of a project. What if then the Treasury went and pulled the rug out and changed the rules? There would be a universal outcry—similar to that if a referee changed the rules in the middle of a game of football. To some extent, this is a game—an international game of investment. If we are going to compete economically, we must continue to be seen as a reliable country in which long-term investments are safe.

I admit that the Government’s manifesto commitment on land-based wind farms introduces a mitigating factor, but as the noble and learned Lord, Lord Wallace, pointed out earlier, it is only a peripheral factor to this clause, which is why I am speaking in favour of this group of amendments rather than in the stand part debate. But we must get a firm investment background sooner rather than later, and these amendments bring a degree of consistency back to the table. None the less, it would have been better if the Government had produced their own paper on grace periods, as they promised to do before Committee.

Even if we agree the government proposals on grace periods next month, that may be too late for some projects even if they are eligible at that stage. The trouble is that they are dependent on banks and credit, and banks are naturally cautious and, in my experience, inordinately slow about getting their processes and procedures in place, and even about producing the money. It could be months before these eligible projects get the go-ahead to proceed or to reproceed with their investment.

I will not say any more, but we really must get the rules fixed as soon as possible and then stick to them. That also applies to the basic ground rules for CFDs in the future. Bearing in mind that it takes at least five years to prepare for these projects, bankers and other investors must know with certainty where they stand as opposed to the state of limbo the Government have left them in at the moment. I hope that the Government will be able to respond positively to these amendments and give us some hint of exactly when we are going to hear what their views are.