Energy Policy

Lord Lilley Excerpts

Thursday 29th November 2012 Commons Chamber

[Mr Davey]

I am grateful for the right hon. Lady’s initial remarks. I am delighted that she wants to work with the Government to attract investment and that she wishes us well in the Doha talks next week. I hope we can reach a cross-party consensus on some of these important measures to tackle climate change, which is incredibly important. Both coalition parties gave that support to the last Government, for their Climate Change Act 2008, and I hope we can continue that consensus.

The right hon. Lady said that the Bill had been delayed. Ever since I have been Secretary of State for Energy and Climate Change, I have said it would be published in November and it has been. We are on time and on track. She asked a number of questions, but gave no recognition to the fact that two parties that have had their disagreements have come together with an energy policy. She also failed to mention how that has been received by industry and the investor community. The director general of the CBI, John Cridland, gave a ringing endorsement to the policies that we have announced, after the discussions I had with the Chancellor of the Exchequer. That political certainty, backed with the policy certainty of today’s announcement, will bring the billions of pounds of investment into the UK that our economy and our energy infrastructure needs.

The right hon. Lady asked me about competition. One almost thinks that she is suffering from amnesia, because it was the previous Government who failed to tackle competition. We are determined to tackle it, but we will not be using ideas from the Labour party’s manifesto, because we have our own ideas on how to ensure competition in the retail sector, with our arguments about switching, and in the wholesale sector, with our arguments about greater liquidity and transparency in that market. Of course we have competitive markets, but they could be more competitive. We are determined to drive them further and faster, and our policies will do far more than the ones she is offering the country.

The right hon. Lady questioned our new policies on tariffs, which will simplify them in a way that I believe will drive competition. Time and again, my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) asked the previous Government to simplify tariffs, to drive competition in the consumer’s interest, and what did they do? Absolutely nothing. We will take no lessons from her on that matter.

The right hon. Lady asked about strike prices. She does not seem to understand how they will be set, so let me explain, although we will no doubt do this on Second Reading of the Bill. They will be set administratively until 2017; then they will be set through auctions. Auctions are the way to get the real transparency and competition that the previous Government failed to deliver.

The right hon. Lady asked about the decarbonisation target. That has been a matter of some debate within the Government, and there will no doubt be a debate on it between Members on both sides during the passage of the Bill. I looked at the 2010 manifestos of all the parties—the Green party, the Labour party, the Liberal Democrats and the Conservatives—to see what promises they had made on a decarbonisation target for the power sector. None of us had made any. There were no such promises in the coalition agreement either, but since becoming Secretary of State, I have gone into the discussions determined to make that argument. I have done so, and we will table amendments to the Bill to give the Secretary of State power to set a decarbonisation target. I am proud of that.

The right hon. Lady said that without a decarbonisation target, we would see no investment in the supply chain. I simply refer her to Arriva’s announcement last week on a turbine factory. The weeks and months ahead will show whether we will see that supply chain investment. I believe that we will, because this coalition Government have put the right policies in place.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

Lord Stern, whose discredited report still forms the rationale for the Government’s energy policy, calculated in 2006 the amount by which the price of hydrocarbons needed to be increased in order to decarbonise the economy. Since then, the price of hydrocarbons has risen faster and further than either Lord Stern or the Intergovernmental Panel on Climate Change thought sufficient, so why does my right hon. Friend propose to pile Pelion upon Ossa by burdening British industry and households with these tripled taxes?

[Mr Davey]

My right hon. Friend has been consistent: he voted against the Climate Change Act 2008 and he clearly does not like our low-carbon policies today. The fact that fossil fuel prices have gone up is yet another argument for our policies. We need to insulate our economy, our consumers and our businesses from those high prices. This country has to import far more fossil fuels than we used to because North sea resources are going down, and that is leaving our economy exposed. We need to tackle that issue for reasons of energy security and to ensure that we have competitive prices.