Lord Deben
Main Page: Lord Deben (Conservative - Life peer)
Lord O'Neill of Clackmannan
My Lords, in his meandering tour d’horizon, the noble Lord, Lord Jenkin, said that the only approach he had had in support of this amendment was from the renewables lobby. I have certain misgivings about renewables, as I stated at Second Reading, but there is a degree of oversimplicity in the approach that a number of people have taken towards this amendment. The blanket opposition to almost all kinds of targets that we have just heard from the noble Lord, Lord Howell, is symptomatic of this condition.
This amendment does not suggest that the target will require nuclear power stations to be built tomorrow. Some of us would like them to be built today—yesterday, in fact—but that is not a possibility. But there are a number of small and medium-sized projects, about which there is probably greater investor uncertainty because of their size and disparate character, which would take encouragement and reassurance from amendments of this kind. Rather than the somewhat cautious approach of the noble Lord, Lord Stephen, I think that the dates suggested by the noble Lord, Lord Oxburgh, are more realistic.
We are grateful to the noble Lord, Lord Stephen, for his insight into how coalitions work. Certainly, as far as decarbonisation is concerned, it seems that the bus has set off on the way to Damascus. What some of us want is for it to arrive there. One of the sure signs that it would be at least within the environs of that city would be if we were to get acceptance of this amendment and an early possible date. There are dangers in targets at times but on this occasion this is a nudge—not a massive shove—in the right direction. It would be a very significant amendment if it were carried on Report—I know that none of these amendments is going to be pushed to a vote at this stage.
In summary, we are not considering all forms of generation and all projects as being triggered by an amendment of this kind. We are saying that a number of small-scale investments would be given a significant push if there were to be appropriate targets within a reasonable timescale. These amendments meet both those objectives. We could remove a degree of uncertainty. I do not think that we are going to get security of supply from these targets today, or a massive degree of decarbonisation, but we will get some. If we get a bit more security of supply, perhaps we will get a degree of affordability.
A lot of pious nonsense is spoken about affordability and security of supply. For the fuel poor, there is no security of supply because they cannot afford to pay for it. They self-disconnect and do not use it—they have to make very difficult choices. We need far more radical measures than this modest amendment to try to secure objectives of that character. However, for the purposes of the moment, this is an appropriate and sensible amendment to start the passage of the Bill in this House. If we were to get a broad spread of consensus at this stage, we could hopefully look to going into the Chamber and securing the kind of majority that a modest amendment of this character merits and deserves.
Lord Deben
My Lords, it gives me some concern to disagree with both my former Secretary of State—for whom I was a loyal and, I hope, reasonably efficient PPS—and my former Permanent Secretary, both of whom have spoken against this amendment. I always find these discussions difficult, because people move to extremes, and I hope that your Lordships will not mind me suggesting that there have been some examples of that today. The reason why the climate change committee advised that there should be such an interim target is that, by law, we are charged with ensuring that we meet the statutory target of reducing our emissions by 80% from 1990 by 2050. That is a statutory provision.
At the moment, we face a situation in which business has certainty up to 2020 and has it again in 2050. I declare an interest as a chairman of the climate change committee and, although I do not have business interests in the areas that we are talking about, I have had them in the past. The reality is that business needs to feel that there is a continuing mood, so that if it invests now it will be secure at least from government vacillation. No business can be assured of everything else—all kinds of things can happen in these circumstances—but the one thing that makes this very difficult is the natural fact of government intervention. My noble friend talked about the interventionist nature of the Bill. The real problem with the subject that we are dealing with is that it is necessary to have some intervention. The argument is in large part about how much.
As to whether industry needs this, we had the powerful suggestion from my noble friend Lord Jenkin that industry did not want it except for the renewables. I have a list here of 50 major companies, including Scottish and Southern, EDF, Alstom, Doosan, Mitsubishi, Siemens—I could go on—all of which have specifically asked for this because they are concerned not only about their own investment but about the supply chain. We are pressing this not because of climate change but in order to get the benefit of what the UK is doing because of climate change. If you do not do this, all the money that we are going to spend—£7.5 billion—between now and 2020 in order to begin the decarbonisation of our electricity supply is imperilled, in the sense that the businesses that should grow and produce will not come here if they feel that there is no certainty beyond that. My noble friend Lord Jenkin said that it was all very difficult and we ought to put it off. My problem with that is that climate change does not wait until we find it convenient to meet the problems. Every year we put it off, the cost is greater and the problem is bigger. We have to take that into account when making these decisions.
We also have to recognise a serious new factor, which is the reverse of what used to be true. It used to be thought that Britain was in the vanguard. We had this wonderful Bill and we were doing all this, and other people were not. Anyone who looks at the GLOBE International report, produced with the London School of Economics—and I declare an interest as the president of GLOBE—will see that over the last year some 30 countries are now embarking on serious investment in this area. So we are now competing with other countries that are also seeking this investment.
The problem for the British Government is that, however much they talk about these issues, around these tables today are others who keep on saying, “Well, it is not going to be like that”. Every newspaper throughout the rest of the world repeats the comments of the climate change dismissers, who are always suggesting that just around the corner all this nonsense will stop and we will go back to business as usual.
The trouble with that is that people will go to countries to invest where that is not the case and where Governments have given long-term assurances. We need therefore to take this fact seriously for the British economy and for the green jobs that we have sought to create. This is why I think that the Government have been mistaken in doing this and why I have some sympathy with this proposal, although of course I have no inside knowledge of the kind produced by the noble Lord, Lord Stephen, as to what may have led to this decision.
Then we have the question of the cost to the consumer. When the newspapers see a rapidly rising cost of energy, they do two things. First, they want an easy answer as to why that is happening, particularly one that they think they might be able to affect. Secondly, they will not think ahead as to whether this is going to go on and what we do as far as the future is concerned.
I suggest to your Lordships that the biggest problem of the cost is actually the basic cost. It is true that gas prices have risen—that is much the biggest amount. The additional cost to the average family in Britain at the moment from our green measures is £60 a year. It will rise to £100 a year in 2020. If we do what is suggested and set a carbon-intensity target, the bills for the average consumer—as far as we can do this work; we have to rely on the best evidence that we have—will between 2020 and 2030 have risen by £20 more than they would have done. After that, of course, because electricity will have been decarbonised, private energy costs will fall significantly.
We ought to keep this in some sort of proportion, rather than blaming all the rises on the fact that we have what is actually a limited cost. That cost is, in my view, a cost of insurance. I am sorry to repeat it—I have said it before because I think it is important—but there is not a Member of your Lordships’ House who does not insure his home against fire. Yet there is a 99.8% chance of that house not burning down. That insurance costs £140 a year. That is more than twice what we are charging as a nation for people to protect themselves in the future.
The insurance cost that we are talking about is sensible and it insures us against three things: it insures us against dangerous climate change; it helps to ensure our energy sovereignty; and it insures us against rising gas prices. Some people believe that gas prices will not rise. The international energy body certainly thinks that they will rise. I certainly would not like to bet my future, or my children’s future, on the idea that gas prices are going to fall. That does not seem sensible to me. Replacing our present dependency with a portfolio of mechanisms by which we produce our energy is an essential insurance against that, because energy is so crucial, as my noble friend Lord Jenkin has said.
I end with a reminder to your Lordships. The noble Lord who is a former Secretary of State for Energy said that he had had a great plan for nuclear power, and what a great thing it would have been if it had gone through. He did not get it because people were not prepared at the time to face realities, needs and long-term decisions. He is now asking us, on the basis of that experience, to repeat the mistake. He is asking us again to say that this is not the right moment and that we must not rush into things and make these decisions because, for one reason or another, we should wait.
I say to the noble Lord, Lord Turnbull, that we have not impaled ourselves. We have taken on a necessary and absolutely essential burden. It is the burden of this generation ensuring a future for the next. The sense of urgency is there because, if we do not do it but put it off, we will always put it off. That is the lesson of our failure to invest in nuclear power when we should have and it is why the noble Lord’s speech should have been the other way round. He should have said that we should learn from that disaster and do now what we need to do. The pace does not seem rushed to the public; it seems very reasonable.
Lord Howell of Guildford
My noble friend has missed the point. The danger of targets such as the one proposed now is that they distort investment decisions. It is not that they prevent all kinds of investment but that they distort investment decisions through their urgency and through their aim at a particular target, in ways that lead to counterproductive results. The results now before us are a growing hostility among the public to the higher prices that they have to pay, a feeling that there is redistribution from the poor to the rich, which is not at all welcome, and difficulties about deciding what strike price to give for our replacement fleet of nuclear power stations.
My experience in the 1970s and 1980s was that the investment decisions were all askew. They were not clear at all. The long-term determination, backed by the then Prime Minister, Mrs Thatcher, to support an entire nuclear replacement fleet was undermined by all kinds of alternative views and distortions. The same distortions will result from this target. That is all I am saying.
Lord Deben
I find that very difficult to follow. This is not a prescription for the means by which we will meet the requirement of a carbon-intensity target. It is an assurance that we are going to stick to that target so that everybody can use whatever mechanisms they have. This is a non-prescriptive concept, of which I approve. It does not say that we have to use this, that or the other. It is a portfolio approach. I still think that the parallel is very clear. If we had been able to stick to our proposition, we would be in a better place today and we would not have to do many of the things that we seek to do today. To ask us to repeat that mistake seems to me a great sadness.
I come back to my first point. The reason we believe that there should be an interim carbon-intensity target is that it is necessary if we are to reach our statutory requirement in 2050. It is necessary for the United Kingdom plc because it gives certainty to people about the parameters within which they will work. If we do not do it, all the noise around what the Government are doing, and the determination to put off to beyond the next election the carbon-intensity target that is now admitted by the Bill, will do a great deal of harm. It will mean that the supply chain that could come to this country will not come and that the jobs and prosperity that should come from our far-sighted decisions will not be gained and earned. We will do very much better to take the advice that will lead to a serious system in Britain that will make us competitive with the rest of the world.
Lord Cameron of Dillington
My Lords, like the noble Lord, Lord Deben, I support the amendments in the name of the noble Lord, Lord Oxburgh, in favour of setting a 2030 decarbonisation target in 2014 and not waiting until 2016. I declare my interest as a farmer and landowner with a very small interest in a renewable energy scheme on my farm.
As I said at Second Reading, we desperately need to invest now in new sources of power to keep our lights on and our economy running efficiently. Of course, I am referring to the long term because it is probably already too late for the short term, although we are not going to be discussing that today; nor are we discussing incentives for the generators themselves. Their incentives are contained in the contracts for difference, which help them to overcome the problems and the risks of the huge upfront capital costs of renewable energy schemes, where, on the whole, the fuel or the power source is free—which, as the noble Lord, Lord Deben, says, makes them very cheap and good value to the consumer in the long run.
What we are discussing today is the need for supply chain investment, as the noble Lord, Lord Oxburgh, said. We are seeking to give a degree of certainty to the Gamesas, the Vattenfalls, the Siemenses and the Vestases of this world that, yes, they can invest billions in production plants to produce the turbines and blades for offshore wind—they can invest in the UK economy. These amendments are trying to give them the confidence that their plant will not produce up to the cliff-edge that is 2020 and then have to sit while the UK Government adopt one of the options in last December’s gas strategy that makes gas a central, core part of our energy policy. This amendment is about giving confidence to the supply chain for renewable energy.
Some people might ask—as the noble Lord, Lord Jenkin, did—who could doubt the UK’s commitment to a decarbonisation agenda? It is a rational certainty. After all, our Climate Change Act gives us the tightest emissions reduction target on the planet for 2050. After all, the Government’s own sponsored impact assessment shows that a 50 gram target could have the benefit, among other things, of reducing consumer bills between 2016 and 2030, depending on international gas prices. After all, the Government have virtually admitted that the whole point of this part of the Bill is to bring in a target in 2016, so all we are doing here is arguing about a two-year pause—what possible difference could that make?
A 2030 target is a rational certainty, yet 2016 brings us beyond the next election and who knows who will be in charge then? As has already been said, this Bill does not quite commit the Government to setting a target in 2016, only some time possibly after 2016. Therefore, Amendment 7, in the name of the noble Lord, Lord Stephen, is a possible fallback position.
In the light of all this rational certainty, what is preventing the Government committing themselves now? Is it the need for ongoing gas generation to provide the capacity reserve that everyone knows will still be around well into the 2040s, pumping out 300 grams of CO2 for every kilowatt hour produced? Or is it the possibility of more dramatic changes in the energy market? No one can deny that in the United States shale gas was a revolution in terms of the price of power there, and the rest of the world is looking to see whether it can join the club, as it were, including the United Kingdom. I think that a revolution from our shale gas is pretty unlikely and that the international price of gas will carry on going up.
If the Government cannot commit amid all this certainty, why on earth should business, its investors, its banks or backers commit? This is an investment landscape totally driven by the political agenda. Without government commitment, it is hard to see why industry should commit. This is such a golden opportunity for creating a whole new economy for jobs and growth in this country. As the Chief Secretary to the Treasury said,
“we just need to have a very, very clear position and a very, very clear plan”.—[Official Report, Commons, Energy Bill Committee, 5/2/13; col. 468.]
However, that is not apparent as yet.
Various noble Lords who attended a very interesting talk last night by Peter Atherton, an investment analyst, have made reference to it. I have heard similar talks before. When I sat on Sub-Committee D, we looked at the European power sector. We were informed, in much the same language, that it was going to be very hard to produce the power and the investment. Indeed, there has been such a lack of political leadership on the continent, which I think is fairly important, that the continental power companies’ shareholdings have sunk almost out of sight and very little investment is happening in that sector. It has not happened yet in this country but the question of political leadership is important here.
The essence of Peter Atherton’s message was that a 50 gram target by 2030 would cost far too much and be impossible to deliver in the current UK and EU financial markets. That is quite apart from the extreme difficulty of building the physical structures needed to deliver a 50 gram target on time. Clearly, the Government and the climate change committee should listen to him and others on the practical difficulties and expense for consumers of delivering a 50-gram-per-kilowatt-hour target by 2030. He convinced me that perhaps a 50-gram target by 2030 was a step too far but he did not convince me that we do not need a target at all. It could be that 75 grams or 100 grams would be enough to convince the investors that their investment in the supply chain would be safe. The point is that if we believe in climate change and the need to act sooner rather than later—it appears that all political parties in this country do—we have to commit ourselves sooner rather than later, which is why I support this amendment.
The Government say that they are waiting for the fifth carbon budget before they commit, but I do not find that a very convincing excuse. Such a budget applies to the wider economy and is not set to specific. I realise that the power sector is responsible for some 27% of the nation’s carbon emissions. Therefore, it could not expect to escape totally untouched by such a carbon budget but there is unlikely to be the total clarity within these general targets to provide the certainty for investors in the power sector.
In conclusion, it would appear that over the past 200 years our society has developed a form of lock-in to fossil fuels and fossil-fuel power. We have got better and better at extracting these fuels, and better and better at using them. They have become cheap, convenient and reliable. But now we realise that we have to make a step change, which will not be easy—indeed, it is proving to be very difficult—as a nation or even as a species, to getting better and better at deploying and harnessing non-fossil technologies. I believe that over time we can learn to make renewable technologies also cheap, convenient and reliable. But for that to happen, and for us to create this whole new economy and these new jobs, we need commitment from our Government. These amendments give our Government the opportunity to take that lead.
Viscount Ridley
My Lords, in the United States, shale gas has displaced coal. I should, by the way, declare my interest in coal even though, once again, I am speaking against it and in favour of its greatest competitor, gas. There has been a massive displacement of coal by shale gas, which brings me on to the next point. The effect of displacing coal with shale gas in the United States has been to cause the fastest drop in CO2 emissions of any western country. They are down to the levels they were at 30 years ago and down to the per capita levels they were at 50 years ago. These are extraordinary achievements and suggest that we have, in shale gas, a technology for short-term reduction in carbon dioxide emissions—not all the way down to 50 grams or anything like that but a good chunk of the way—that could be achieved and combined with affordability. The counterfactual to building a huge amount of offshore wind capacity and other industries is to allow the development of gas in this country. We know that the numbers would be much lower in terms of the cost to the consumer—it would be much more feasible and much more affordable. To throw away the flexibility of going for that possibility would be a potential mistake.
Lord Deben
I am sure that the noble Viscount knows this, but in the calculations that the climate change committee has made, it fully accepts the need for using that shale gas in the amounts that we generously expect will be used. We are not throwing it away, we are including it as one of the portfolio.
Viscount Ridley
Would the noble Lord accept that the figure that came out last week for the amount of shale gas under the UK is far higher than was assumed when his report was written? I went to talk to Cuadrilla at one point last year. I said that the 200 trillion cubic feet that they were talking about under Lancashire was being ridiculed as a very high number and asked whether they stood by it. They said, “Privately, we think it is much higher. It is about 300 trillion cubic feet but we dare not say so because people will not take that seriously”. Then an independent consultant, Nick Grealy, said 700 trillion cubic feet and everybody laughed at it. Now, the British Geological Survey has said there is 1,300 trillion cubic feet. This is the largest find of shale gas ever on the planet. The shale rock we are talking about, the Bowland shale, is in places 10 times as thick as the Marcellus shale in Pennsylvania.
I went to see shale gas extraction in the Marcellus shale in 2011 because I had heard about it and thought it was interesting. You could hardly find these well pads—they are tiny and hidden among the trees. There was a flock of wild turkeys running across the road on the way to one. I asked somebody for a calculation of just how much energy can come out of a small area when you are drilling for shale gas. The answer is that about 25 acres of well pad in Pennsylvania can produce as much energy from shale gas as the entire UK wind industry produces at the moment.
Lord Lawson of Blaby
My Lords, the whole Committee owes a great debt of gratitude to the noble Lord, Lord Oxburgh, for having, through his amendment, sparked a most interesting and wide-ranging debate, which featured in particular an outstanding contribution from my noble friend Lord Ridley. His exposure of the facts put in its place the fantasies peddled by my noble friend Lord Deben and the noble Viscount, Lord Hanworth. There is no need for me to refer any more to them.
Lord Deben
I hope that the Committee understands that the “facts” that were presented would be denied by almost every climatologist in the world, and that they are entirely the same as those always put forward as regards those who dismiss climate change for the seriousness it has. We ought not to use the word “fact” so loosely.
Lord Lawson of Blaby
If my noble friend feels that anything that the noble Viscount, Lord Ridley, said was incorrect, he had the opportunity to say so. He is quite unable to do so. What the noble Viscount said is right. Another fantasy, since I am provoked by my noble friend, was his statement that it is not the case that we are going out ahead of the pack and that everybody else is going green, going renewable, in the same way. This is patently untrue. The major European countries that have gone in this direction, Germany and Spain, are both winding back as fast as they can on their subsidies and support for renewables. They realise that it is a blind alley, which is why, as the noble Lord, Lord Cameron, pointed out, the share prices of the renewables companies have collapsed. That is what is happening.
Lord Grantchester
My Lords, I will speak also to Amendment 25 in this group. Amendment 12 ensures that, on a decarbonisation order being made, the existing requirement on the Government under Section 5 of the Energy Act 2010 to report on CCS developments every three years is not removed.
The Explanatory Notes state that,
“the repeal of the three yearly progress reporting requirement on decarbonisation and Carbon Capture and Storage contained in section 5 of the Energy Act 2010 … is to remove duplication, since the scope of these reporting requirements is covered by clause 3 of this Bill”.
However, that fails to recognise that under the Bill there is no certainty that there will be any reporting on CCS. Repealing the triennial reporting on both but bringing in requirements only on decarbonisation means that in effect there will be no reporting on CCS. This would be very unsatisfactory. Section 5(1)(a) maintains reporting on CCS.
The first and latest report on CCS was made in 2012. It is a very useful document which outlines the components of the Government’s CCS road map and the funding of research and development initiatives, including pilot projects. It outlines the development of the UK’s storage atlas, identifying nearly 600 storage sites across the UK. The report also puts into context UK action to support CCS by comparison with initiatives in other countries; for example, the US has two commercial-scale projects already under construction, with commencement of operation scheduled for 2014.
CCS is a hugely important technology for the decarbonisation of energy. My noble friend Lord Whitty has already mentioned EU Sub-Committee D. Its report emphasised the critical need for technologically and commercially viable CCS to be fitted to new coal-fired power stations in order to hit our carbon savings trajectory by 2050. While there has been slow progress at EU and UK level, the UK could yet achieve leadership through successful pilots, adequate resources and a clear regulatory framework. We have some of the best storage capacity in Europe. We have decades of offshore engineering experience that can be applied to this new sector.
Progress has certainly been unnecessarily slow. The introduction of contracts for difference in this Bill, together with the £1 billion made available to support demonstration projects, is intended to move things forward in the UK. We expect significant progress to be made in the coming years and regular reports on progress are therefore necessary. Future reports should continue to expand assessments of developments in other countries, including policy developments in the EU and projects under way elsewhere, such as in China, so that lessons can be learnt and our own strategy informed by the latest advances in other countries.
It is vital that Parliament is kept abreast of these CCS developments and we see no reason why the passing of the Energy Bill in 2013 should remove this useful requirement to report.
Amendment 25 would make the annual requirement follow the enactment of the Bill rather than as stated in Clause 3(3). The Energy Bill is intended to deliver a big increase in investment in low-carbon electricity in the UK. The measure of its success will be the rate of reduction of carbon intensity of electricity over time. This Committee has already debated the setting of targets for carbon intensity that are intended to give investors confidence by requiring that the Government maintain policies beyond 2020 to decarbonise electricity. However, we should not forget that there is a near-term challenge significantly to reduce carbon intensity in the UK as soon as possible.
As my noble friend Lady Worthington has pointed out already, there is significant potential to reduce carbon intensity simply by acting to ensure the merit order of existing plant is optimised. Unfortunately, a combination of low coal prices and high gas prices has led in recent years to a significant increase in carbon intensity. Between 2011 and 2012, carbon intensity rose from 450 grams per kilowatt hour to 530 grams per kilowatt hour as coal plants that would normally provide load-following capacity began to baseload.
Recent closures of plant due to sulphur restrictions under the large combustion plant directive should help to reverse this unfortunate trend. However, if we are serious about managing our carbon emissions and proceeding on a cost-effective path to our legally binding targets, we need a policy framework that rewards plant that are the cleanest and most efficient and that penalises the most polluting. Only then will the merit order be such that we are achieving our goals at least cost—knocking more than 200 grams off our carbon intensity without the need to subsidise any new plant at all.
The Government must not treat the carbon intensity of our electricity as an afterthought. It is one of the most important measures of progress and is how we can judge the success, or otherwise, of the Bill. The Minister may point to the annual reports contained in the Digest of UK Energy Statistics as a reason for not introducing annual reporting. However, this is a lengthy document, not intended for a parliamentary audience and, indeed, not even laid before Parliament. The triennial report produced in 2012 is a much more concise and useful document. It should be made an annual report, and this amendment seeks to deliver that.
While we are on the subject of the reporting of carbon intensity, does the Minister agree that, in the future, there will be demand for much more frequent reporting than annually? As the mix of electricity changes to contain more varying forms of power—from wind, wave and sun—there will be times of the year and times of the day when supply is high and prices will fall and also times when the opposite is true. Reporting the carbon intensity of electricity in real time will enable customers to see when it makes most sense, environmentally and economically, to use electricity. Reporting in real time would enable the development of tariffs that allow customers with flexible demand to profit from moving their demand to times when electricity is cheapest. The development of electricity storage solutions would also be facilitated as a business model, whereby demand is absorbed during times of high low-carbon supply and delivered back to the grid at times of low supply.
At the moment there are a number of applications that purport to report the real-time carbon intensity—GridCarbon and Realtimecarbon being just two. However, it is not clear whether these applications, which take data from the national grid and use them to calculate the carbon intensity of all the plant delivering electricity to the transmission, are accurate. A considerable volume of renewable generation—several gigawatts—is connected directly to the distribution network and may not be being captured by these grid-based applications.
It is time that the Government took a lead in developing a gold-standard methodology for providing this information and I would be grateful if the Minister could comment on whether her department can undertake this important task. I beg to move.
Lord Deben
My Lords, perhaps I might counsel the Minister to be very careful about accepting these amendments. They seem to confuse a range of different things. They also demand a degree of reporting that might get in the way of the action that I hope will be carried through. The reporting system we have at the moment was designed by Parliament. It stipulates that there should be reports from outside the ministry on the ministry’s and the Government’s performance. If there are areas where it is not done properly, I, as chairman of the climate change committee, would want to know that, in order to see whether we should produce reports in areas that we do not cover at the moment.
I am very concerned about the current desire to report so often as we go along that we do not actually do things. I see this throughout government. We have to be extremely careful. There are two kinds of issue here. The idea that we should have reporting more often than once a year, and that we should have real-time reporting, are issues of such concern that it would perhaps be better if we did not proceed down that route during consideration of the Bill, where there are many decisions to be made on specifics.
I am also unhappy about the proposed constant series of carbon intensity targets. That would be a totally different way of looking at the matter from the suggestion that we needed an interim target to give some kind of parameter and scale to what we are looking at. If we are going to start tying people down to very much closer targets, it will raise issues that go much further than the Bill, towards the way in which government and industry interrelate. I hope that on this occasion the Minister will feel that this is something that should be thought about more carefully before we take on board what is proposed.
Lord Oxburgh
My Lords, I will not take up much time. The noble Lord, Lord Deben, may be right that this level of reporting may be a little excessive at this stage. However, it is important that the Government should recognise, if they take seriously the 2050 decarbonisation target, that it is almost certainly unachievable without CCS. That is a crucial technology if the target is to be achieved.
Baroness Liddell of Coatdyke
My Lords, I will be brief because a lot of what needed to be said in this debate has been said by the noble Baroness, Lady Maddock, and my noble friend Lord O’Neill. However, at some stage we need to focus on fuel poverty issues. I declare an interest as a non-executive director of the Offshore Renewable Energy Catapult. I am very conscious that the change in the structure of the market proposed in this legislation is complex. I echo the words of the noble Lord, Lord Oxburgh, who said that the model is complex and relatively expensive. With my commitment to renewal energy, I know that we are talking in many respects of infant industries and that there will be additional costs. I have no doubt that in the long run we will see energy prices come down, not least through the introduction of nuclear energy, but, frankly, in the long run we are all dead. We need to try to find something now to mitigate the impact on the fuel poor of the possible side effects of this legislation.
As regards change in the energy markets, as a policy-maker I have always felt that no change is a change for the better if it means that someone else is worse off—the old concept of Pareto optimality that some of us who are in our prime will remember. Under this legislation there is a real risk that the most vulnerable will be worse off. The Government’s own figures estimate that 4 million people in England are fuel poor. Many of those are particularly vulnerable and are also affected by, for example, the bedroom tax and stringency in local authority budgets. They are the people who can least afford to have these increased costs placed upon them.
The Bill is about market manipulation. I do not have a problem with that. If you are to change the nature of an industry, you need to manipulate the market. What I am pleading for—I will return to this at a later stage—is that, in manipulating the market, we seek to mitigate some of its worst effects on the most vulnerable. I seek to put another weapon in the armoury of the Secretary of State so that he or she will be in a position in the future to draw upon instruments that will mitigate the impact on the fuel poor.
There has always been a consensus in this Parliament, certainly in the years that I have been here and certainly since 2000, on the need to act to protect the fuel poor. In a building such as this which is well heated and where we are well fed and looked after, we may not realise the impact that the inability to turn on a heater has if your house is cold and damp. In Coatdyke, where I and my title come from, people are issued with hypothermia meters for their houses to make sure that they do not suffer from hypothermia. I acknowledge that this provision does not directly relate to that part of the country, but whether you come from the north of Scotland, the Yorkshire dales, Derbyshire or wherever, it is a damning indictment of our society that poor people have to choose between putting on their heating or feeding themselves. That is a choice none of us should have to make in a civilised society. In 2000, we set targets that should be reached by 2015. The most recent work by the NEA suggests that we are going backwards. That is not a good position in which to be.
I urge the Minister to bear in mind the significance of fuel poverty and to give us some indication of whether the Government are looking at mitigating factors. I take the point about the Green Deal. As I pointed out at Second Reading, you need money to get into it. If you do not have money, you cannot buy into the Green Deal and get assistance, for example, to protect or heat your home, or to ensure that it is properly insulated.
This is a probing amendment. I will not seek to engage the Committee much longer. However, if we come to the end of the Bill and we have not done something about the poorest in our society, we will have let them down.
Lord Deben
The climate change committee raised some very important issues about fuel poverty. We have a commitment to do that. My noble friend Lady Maddock pointed to it. Has the Minister had a chance to register our concerns? They are specific and bear on the way in which the Green Deal is operating. It is important for us to take that into account. I hope that she will be able to help me here.
I am always concerned about the expression, “fuel poverty”. When I was chairman of a statutory water company—I am still chairman of a water company that has interests in the industrial area—I was very concerned about the poverty that meant that people found it difficult to pay their water bills. There is an issue around these fundamental necessities of life. I do not like to put it all to one side. I have stopped myself having anything to do with one part of a business that connects electricity of any kind—it is agnostic about the sort of electricity—but I try to keep in touch with the same issue that we knew in the water industry as it relates to the supply of fuel. There is an issue about some forms of help that we thought would be more extensive: for example, solid-wall insulation, which is a real problem in some of the poorest parts of the country. I very much hope that my noble friend will be able to say when she will look again at the effects of government policy in the particular areas to which the climate change committee drew attention.