Energy Bill [HL]

Lord Deben Excerpts

Tuesday 8th February 2011 Grand Committee

[Lord Marland]

I am not sure that I quite caught the end of that last sentence. Perhaps it is best that I did not. Suffice it to say that I welcome the amendment tabled by the noble Lord, Lord Judd. I am grateful that it should have the support of his Front Bench, which is excellent news. It is not the first time that his amendments have found favour with government. We are obviously extremely disposed to look at this amendment. Unfortunately, the timing was too tight for us to consult as widely as we wanted with the national park authorities before introducing this Bill, so we have to do that. Of course, like the noble Lord, I welcome their ambition to generate electricity on their own land and support that commendable ambition. With that in mind, and knowing that we will give this amendment consideration in coming days and months, I—

[Lord Deben]

My experience of working with the national parks was not anything like as cheerful as that presented by the noble Lord, Lord Judd. In many cases, the national parks have not been helpful for enterprises within them. I hope that when he talks to the national parks, he will make it clear that he wants them to make it as easy as possible for others within national parks to generate electricity and that this will not be another occasion for the national parks to make it extremely difficult for anybody who is not themselves to do things within their areas.

[Lord Marland]

I note what my noble friend Lord Deben says. If we are going to look at the national parks and what they will do with their microgeneration, we should obviously encourage them to practise as they preach, which I think are the words he is looking to hear from us. With that in mind, I hope the noble Lord, Lord Judd, will withdraw his amendment.

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I believe that it is important that we find a way of communicating how these various costs flow through to consumers and especially, as the noble Lord said, to particular categories of consumers. That is not easy to do. The figures produced by the Department of Energy and Climate Change make some heroic assumptions about energy consumption, which tend to disguise what is happening. However, there is a case for regularly producing a comprehensive statement on how these costs are flowing through to consumers and their impact on different types of consumers. We also need some way of getting the debate into the public domain. While the former is complicated, the latter is very difficult, because it is hard to mount conversations based on complex economic interactions. However, I think that that is worth trying. An important gap in all the policies that have come forward to date is the lack of transparency about this one important fact, which is that it is consumers who are paying for the vast majority of the policies that have been pursued around energy, renewables and so on. That subject is seriously underdebated in our society. I support the principle behind the amendments, but I am not sure that I can quite sign up to them.

[Lord Deben]

I oppose the amendment, first, because it suggests that the Treasury will be able to do things that even it cannot do. I am always suspicious of requests for the Treasury to do something, but this seems to go beyond the normal. In the interesting discussion between the noble Lord on this side of the Committee and the noble Lord, Lord Lea, on whether one situation is more elastic than another, we missed the important point: people make very different decisions, which are not necessarily connected with their income. Many of us have had the experience of canvassing in not the richest parts of constituencies and being hit by a wall of heat. That is in circumstances where people are clearly in the quartile to which the noble Lord, Lord Lea, referred. As I said, people make very different decisions. To ask the Treasury to produce some sort of documentation in which it applies these requirements to so wide a range of individual decision-making seems to me not sensible.

Secondly, the amendment does not fit into the whole context of the Bill and what we are trying to do. I say to my noble friend Lady Noakes that of course we want to have an effect on the consumer; that is part of what we have to do. However, the idea that there is some secret thing that we are not putting forward misses the point. The point is that we do not pay the proper price of our energy because we do not pay the price for destroying our climate. I know that my noble friend does not believe that the climate is changing, but most of us do. In those circumstances, we would do great harm to a future generation if we allowed people to go on treating energy as if it did not have these costs. Therefore, those of us who believe in a marketplace have to make sure that the market pays the costs.

We ought to be a bit bolder in telling people what we are about; that we are hoping to provide alternative means which do not destroy the future for our children and our grandchildren. The idea of trying to twist the argument in order to say that it is somehow unfair on a statistical fault is one that I have always found so difficult in politics. Of course it is true that if you have a smaller income, any increase has a bigger effect. It says nothing to say that. You can put up the price of anything and it is bound to affect those on the poorest incomes by its nature. That is not a statistical statement but a fact of life which is obvious to all.

The question is: can we take alternative measures in order to help those who are most hurt by this? However, you do not do that by providing even those very erudite people who clearly speak in the pubs of Burton with the material suggested in both these amendments. I cannot believe—although it may be true of Burton, it certainly is not true of any town that I know—that this would be the subject of discussion in the saloon bar, let alone the public bar. The fact of the matter is that there would be a general moan about the increase in prices.

We have to face the problem that if we are to deliver a world in which our children are able to live comfortably, we have to change our energy arrangements. In this Bill, we are doing that to help poor people to have the kind of housing which does not need as much heat. That is part of what we are trying to do and I hope that the Minister will be extremely robust in her reply to the noble Lord, Lord Lea. This seems to me to be both out of date and not a sensible use of Treasury time. I would like to see the Treasury getting down to understanding why on earth it cannot allow sensible borrowing from the private sector to improve energy efficiency. It pretends that that is somehow or other on the books when it could quite easily be off them.

There are a lot of things that the Treasury can be doing but it should not be doing this and we certainly should not kid ourselves that we either make these changes or, in fact, leave the world a worse place. I am a Conservative; I believe in passing on to the next generation something better than I have received. That is why I am very much in favour of this Bill and I hope that we will be really tough about the proposals in this amendment.

[Lord Dixon-Smith]

Perhaps I might intervene after my two noble friends, partly because I would like to introduce a little bit of hope. I should say to the noble Baroness, Lady Noakes, that in fact the consumer pays for it all. We should not duck on that. Even if they do not pay for it through their use of the fuel, they do so through their taxes. The consumer has to pay the total bill, one way or another. Of course, through the tax system we share the bill out a little differently from the actual consumption figures, which are what I really want to talk about. My noble friend Lord Deben brings me to my feet, because I want to look backwards instead of forwards.

The fact of my life is that in 1960, I paid one shilling and thre’pence and three-eighths of a penny for a gallon—that is, five litres—of farm red tractor diesel. Petrol prices were commensurate but the duty rates were of course higher. In the case of petrol, prices have risen as they have with red diesel oil but the duties have risen even further.

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[Lord Lea of Crondall]

My Lords, I rather cut short my thanks to the noble Baroness, Lady Northover, but she will perhaps forgive me for that. I think I thanked the noble Baroness, Lady Noakes, and was addressing some remarks to the noble Lord, Lord Deben. I made one remark about this being a great cost to the Treasury. I do not think it is a great cost, but I think it is a challenge, and I make no apology for mentioning Burton upon Trent once again because we have to keep in mind the audience that we have to get to if it is not going to revolt. It is not just a statistical bulletin. Statistics unfortunately do not speak for themselves. That is where spin comes in. I would rather there was a stakeholder body that agreed on certain things that needed to be done or were self-evidently true. We cannot afford to be elitist. That is a statement of the obvious. There is a huge increase in taxation in these tables.

The second point on which I would very respectfully part company with the noble Lord, Lord Deben, is about his remark that this is the wrong Bill. When two or three years ago, my noble friend Lord Rooker was summing up on the Climate Change Bill, which was not a million miles different from this Bill, he said that his job was to get the Bill through, but he was not sure that it was the right Bill. I can foresee the next 10 energy Bills never being the right Bill, so I have got my teeth into the backside of this particular elephant.

[Lord Deben]

I said a number of things, but I do not think I said that this is the wrong Bill. It seems perfectly reasonable to put it in; I just think it is the wrong amendment, which is rather different.

[Lord Lea of Crondall]

I am pleased about that. It may have been the noble Lord, Lord Dixon-Smith, and as he is not here, he cannot deny it.

I thank my noble friend Lord Whitty for his broad support. I totally take his point about the need to make some adjustment. I say to my noble friend Lord Judd that rationing by price is a rather crude but accurate way of describing the world we live in. Whether it is capitalism or socialism, rationing by price is a fact of life in the middle of India or anywhere else. We also have to bear in mind that if we cannot change the income distribution in this country to be more reasonable than the outrageous distribution at the moment, we will have to fiddle around with a lot of discounts, exceptions and adjustments. Unfortunately, the question would then be whether so many people would be excluded from the heavy incidences of some of those price rises that we would not raise the revenue or have the carbon effect that we wished. That is the moral hazard that we are into, and it requires a lot of thought.

My penultimate point is that I do not think that today is the day when Treasury officials in the Room are going to stand up and say, “We’ve fallen in love with hypothecation”. What I am suggesting is in the Treasury’s interest. The priesthood in the Treasury is not separate from the rest of society, and we want to encourage it to be part of fronting up some of these matters. The consultative body and all the stakeholders have got to be able to communicate with Burton upon Trent. I think that community needs to be brought together.

Finally, my noble friend Lord Davies of Oldham was very kind in what he said. I can assure him that we are at one in wanting to get this in a form that does not have all the teething points. I do not think the amendment as it stands states as crudely as he implied that we put all these taxes into one bundle and redistribute them in energy. I go halfway to that to make sure that the quantum is clearly identified. I recognise that this is mainly for general taxation, but in Burton upon Trent, it is a huge selling point to be able to say, “This is what we are doing with some of the money”. I want to be a bit pedantic about that distinction. I hope that it is acceptable for me to say that one bundle does not quite sum up what I was trying to say. I will conclude on that note. Although I hope that we can come back to this on Report with a slightly different amendment, I would like to withdraw the amendment.