Energy Bill

Lord Lawson of Blaby Excerpts

Tuesday 2nd July 2013 Grand Committee

Mention has been made of people who are set against a belief in climate change. I have had two serious floods in my home in the past 15 years as a result of changes in the climate, so I do not need convincing that there is a need for change. However, I say to the Minister that she is right to keep that flexibility, and that the most serious thing that could happen to undermine the confidence both of domestic consumers and, in particular, of commerce and industry, would be if there were any question of a failure in the security of supply. Nobody in this room will need me to spell that out. As politicians, we all know what happens to whoever is in government at the time the lights go off. I remember when the lights went off in the 1970s—I moved house on a cold, dark, winter’s morning, running around with a baby under one arm and holding a candlestick with the other, trying to pack up my final possessions before the delivery men arrived. I would not want to go through that again, and nor would anybody who aspires to govern.

[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.

[Baroness Worthington]

Will the noble Lord explain, therefore, why there is currently a trade dispute between China and Europe on solar panel manufacture and why there have been disputes between the US and China on wind turbine manufacturing?

[Lord Lawson of Blaby]

That is an interesting question, which I will answer. The Chinese felt that the Europeans were so foolish that there was a big potential export trade sending solar panels to Europe. Their solar panel industry is in dire straits, so they have cut their prices to the bone, which is why there is this dispute. The noble Baroness may be interested to know more: China has a five-year plan. In that plan, how much of their electricity does she think would be generated by the solar industry by 2020? The answer is 0.5%. That is what China is doing. However, China thought that credulous Europeans would buy these panels and that there was a great export trade to be had. The winding-down, which I was referring to a moment ago, of the renewables industry in Europe has meant that their market is not nearly as big as they thought. So the Chinese are in a very difficult state on this front and that is the origin of the trade disputes. I am glad that the noble Baroness asked me that, because the answer is interesting.

Before I go on to the amendment tabled by the noble Lord, Lord Oxburgh, there is one thing that I hope we can change if we are going to debate this important issue in an honest and sensible way. We should get away from the idea of saying, “I am all in favour of clean energy”. Two noble Lords have said this already. There is nothing cleaner than carbon dioxide. It is a colourless, odourless gas whose main effect is to make the world habitable, because without it there could be no plant growth and without plant growth there could be no animal or human life. Scientists are agreed that the biggest single effect of carbon dioxide is to enhance plant growth; it is known as the fertilisation effect. There is nothing unclean about that.

[Baroness Worthington]

My Lords—

[Lord Lawson of Blaby]

No, I have not finished. It is true that carbon dioxide in the atmosphere has a warming effect. How big a warming effect, as the noble Viscount said, is disputed among scientists, and the consensus is moving to a much lower effect than was previously thought. However, the sun has a much greater warming effect and I have not heard anyone referring to the sun’s rays as dirty. Therefore, can we get away from all this clean/dirty nonsense, which is emotive rubbish and has no place in a proper parliamentary, or any other, debate?

Did the noble Baroness wish to intervene? No, she has thought better of it.

One of the curiosities of this Government in this area is that we have not one energy policy, but two. This Bill represents one of them. Calling it an energy Bill is somewhat misleading; it should have been called a decarbonisation Bill, or maybe an anti-energy Bill. Nevertheless, ostensibly it is an energy Bill. That policy is out of date, if it ever was in date. The draft was produced in 2010 and the gestation goes back to the previous Administration in the era when the Climate Change Act was passed. That is one energy policy.

I will quote the other energy policy. In his comprehensive spending review Statement, my right honourable friend the Chancellor of the Exchequer said that we,

“will put Britain at the forefront of exploiting shale gas”.—[Official Report, Commons, 26/6/13; col. 310.]

A week earlier, at a European Council meeting, the Prime Minister, my right honourable friend David Cameron, said that we must make,

“the most of indigenous resources such as shale gas”.

Perhaps it is a consequence of coalition government that you have two separate energy policies. However, the other energy policy and the one in the Bill are in complete conflict. The purpose of this Bill is, through long-term contracts for difference of 15 years or even more, to lock this country into high-cost renewable energy and nuclear energy. That will leave very little space for shale gas, although, as my noble friend Lord Ridley pointed out, it is now clear that we have enormous reserves in this country. Having indigenous reserves is particularly important and, because of liquefaction, the cost of transporting gas across the ocean adds considerably to the cost of the gas.

We cannot have it both ways. We either go for shale gas, which is cheap, or we lock ourselves into high-cost energy. That is what worries me. The only way in which you can make sense of these two conflicting energy policies is if you think that the purpose of developing our resources of indigenous shale gas—we cannot use it here because of this Bill—is for it to be exported to our competitors so that they can have the benefit of the cheap energy that we are foregoing. That is the only way in which you can reconcile the two policies. Of course, it is complete rubbish, complete nonsense. It is the economics and the politics of the madhouse.

Finally, I come to the amendment about the target in the name of the noble Lord, Lord Oxburgh, on which I think that he is a little naive. As my noble friend Lord Howell said, just putting in this target does not give any guarantee to energy companies in the slightest, because things can change. No Parliament can bind its successor. As I said earlier, the Germans and the Spanish are changing all their subsidies and support for renewable energy. No businessman believes that this target means anything. It is true that the contracts for difference, which are legally binding, will bind us and lock us in. That concerns me, but this target is neither here nor there.

Since it is neither here nor there, I am very much tempted to support the amendment in the name of the noble Lord, Lord Oxburgh, for a good reason. This Bill is absurd and unworkable, but some people may not have realised quite how absurd and unworkable it is. Voting to include his amendment will make the full absurdity and unworkability of the Bill clearer. Nevertheless, I shall do my best to resist the temptation.