Energy: Feed-in Tariffs

Lord Empey Excerpts

Thursday 9th February 2012 Lords Chamber

[Baroness Stowell of Beeston]

I am grateful to my noble friend for his comments and for widening the debate beyond solar. It is worth pointing out that feed-in tariffs are not just about solar PV but, as I mentioned in my Statement, they are also about micro-CHP, wind and hydro power, and anaerobic digestion, as my noble friend said. As to his specific question about bands for AD, they are the same as in the original scheme, so we are not proposing a change. However, we have announced today two things: one is an outcome from the first phase of the consultation, and the other is the start of a second consultation. I therefore hope that my noble friend will take the opportunity of the new consultation and make his contribution along the lines he mentioned.

[Lord Empey]

My Lords, I broadly welcome the Statement. As someone who spent three years as an energy Minister in Northern Ireland, I have some grasp of the problems we face. While the announcement today is one step, we must remember that there is no silver bullet for resolving our energy problems. Much of the enthusiasm from various groups conceals the fact that we do not really have sufficient non-fossil fuel and nuclear capacity in this country to make the sort of impact that we hope for in the long term. One of the reasons why we have to approach this matter from a different angle is that we need to do more by way of making what we have more efficient. Can the noble Baroness ask her right honourable friend the Chancellor of the Exchequer to encourage the retrofitting of buildings to reduce energy demand? One of the levers at his disposal is VAT. We charge full VAT on the refurbishment of buildings and no VAT on the construction of new buildings. We need a twin-track approach—one to develop other energy sources, and another to increase insulation and thereby make buildings more efficient. Would the noble Baroness be kind enough to draw that matter to the attention of her right honourable friend in the other place because the combination of those two directions that we should travel in is absolutely essential? Otherwise we are simply running to follow rising demand when in fact we must make better use of the energy that we are already producing.

[Baroness Stowell of Beeston]

I am grateful to the noble Lord for those points and for making the clear remark that there is not a silver bullet. It is important to keep that in mind when we look at the range of different sources of energy that we are using and introducing into our wider energy strategy in the UK. We need a range of different sources and that is precisely what we are doing.

As to the noble Lord’s specific point about VAT exemption on new builds, and whether that can be introduced for retrofitting of older buildings in order to make them more energy efficient, which is another important part of our strategy, I will certainly pass that point on to my right honourable friend the Chancellor as I am sure the noble Lord will understand that it is not possible for me to respond today.