Feed-in Tariffs (Amendment) (No. 3) Order 2015

Lord Grantchester Excerpts

Tuesday 2nd February 2016 Lords Chamber

[The Deputy Speaker (Lord Brougham and Vaux) (Con)]

My Lords, I should inform the House that if this Motion is agreed to, I cannot call the Motion in the name of the noble Lord, Lord Grantchester, due to pre-emption.

[Lord Grantchester (Lab)]

My Lords, the statutory instrument before your Lordships’ House today is the latest in the recurring string of announcements from the Government that severely limit the UK’s renewables industry, the mishandling of which severely damages confidence among all investors in the sector. This SI contains massive restrictions in the deployment of small-scale renewables, including a 65% cut to the rate of feed-in tariffs available for small-scale solar, from 12p to 4.39p. It also contains a system of deployment caps and degressions that shackle the growth potential of what should be a flourishing new industry. The Government’s impact assessment puts the number of jobs lost at 18,700, which is half the number of jobs in the sector. This Feed-in Tariffs (Amendment) (No. 3) Order introduces quarterly deployment caps which, once capacity is filled, participants transfer to the next available quarter, with a 10% degression rate. Will the Minister explain to the House how this deployment cap will operate transparently for participants?

This is a terrible scheme. In the wake of the Paris agreement on climate change, everyone should be working together to bring forward investment in low-carbon and zero-carbon power. This sudden and severe change in policy with built-in cliff edges risks cutting the industry off at the knees rather than supporting it to get up and running on its own feet and guiding its graduation towards being subsidy-free. Your Lordships’ Secondary Legislation Scrutiny Committee drew attention to the high levels of opposition to these changes in responses to the consultation. Participants found it hard to be convinced on future deployment levels when the department was unable to substantiate its claims. Industry is losing faith with the Government on the way it is being treated.

The noble Baroness, Lady Featherstone, proposed from the Liberal Democrat Front Bench that the order be annulled. This is opportunistic posturing. Liberal Democrats can have short memories. They were willing participants in the coalition Government with the Conservatives. They had a Lib Dem Secretary of State at the Department of Energy and Climate Change who brought in the first alterations and cuts to the FIT scheme. In 2012, the then Lib Dem Secretary of State introduced changes with the following perverse logic and curious soundbite:

“By lowering the tariff we can extend it to more people—making clean, green, renewable energy available to the many not the few”.

They did not set a long-term policy outcome. They did not base the policy on the best outcome for the UK to bring forward industry in partnership.

Our Motion clearly puts on record our serious concerns about the Government’s feed-in tariff policy. Nobody can be in any doubt about that. Labour in this House seek to take on issues where we believe progress can be made within the constitutional limitations we have as an unelected revising Chamber. Furthermore, this House has agreed that it should only rarely threaten to defeat statutory instruments, as to do so would be an effective veto on the Executive Government. The Motion moved today by the noble Baroness is at least the fourth on an SI from the Lib Dem Benches this Session, and there is a fifth fatal Motion to come. If they had all been Government defeats, there would have been as many fatal SI defeats as there have been since World War II, but let us not allow that to deflect the House from the tactics of the Conservatives. At least they have been consistent in bringing forward vague manifesto commitments by putting them in Bills—for example, cuts to onshore wind in the Energy Bill presently in the other place—in contrast to the unannounced policy changes being brought forward in the negative statutory instrument we have before us today. I understand the concern expressed that this is incompatible with the recognised conventions.

When the Minister replies, will he clarify why changes to the onshore wind regime merit a few clauses in the Energy Bill with grace periods and provisions that can be amended, whereas this order on solar energy generation and the solar RO changes to come in another SI are negative instruments that cannot be amended? What are the substantial differences that merit these different approaches? I recognise that the parent Acts may allow this, but to a wider audience they are inconsistent. In view of the strength of argument against the order, will the Minister withdraw it for future reflection?

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Tabled by

[Lord Grantchester]

That this House regrets that the Government intend to implement the Feed-In Tariffs (Amendment) (No. 3) Order 2015 causing significant harm to the renewables sector when there is growing concern at the lack of investment in new energy-generating capacity; and further regrets that the Order sets deployment limits that will severely impact on the size of one of the cheapest low-carbon energy options when there is urgent need for greater deployment of renewables to contribute to the security of United Kingdom power supplies, the decarbonisation of the energy sector, and the attainment of the United Kingdom’s obligations towards climate change mitigation under the Paris Agreement (SI 2015/2045).

[Lord Grantchester]

I thank all contributors to the debate today and thank the noble Lord, Lord Teverson, and my noble friend Lord Hanworth for their support. I was very pleased to hear the contribution of the noble Lord, Lord Robathan. I am tempted to remind the noble Viscount, Lord Ridley, that in his estimation of outcomes he omitted to recall that this measure will also cut community schemes that could help alleviate fuel poverty. However, to talk in terms of transfer from the poor to the rich, as some have done, is to misunderstand the issue and to ignore the huge impact of climate change on the world’s poor. We all want to keep costs down, including subsidies being as low as possible. We needed the wise words of the noble Lord, Lord Deben, to emphasise the bigger picture, along with the contributions from my noble friend Lady Worthington. We have had a full debate, and I detected indications of support from the Minister. I will not move my Regret Motion to a vote.

Motion not moved.