Energy Bill

Mark Lazarowicz Excerpts

Wednesday 19th December 2012 Commons Chamber

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

Let me begin by referring to my entry in the Register of Members’ Financial Interests, which relates to my involvement—on an unpaid basis—with the Edinburgh community and energy co-operative.

I strongly support the call in Labour’s amendment for a commitment to the 2030 decarbonisation target to be included in the Bill. Before the Secretary of State leaves the Chamber, let me say that although he felt obliged to attack our amendment, he clearly supports that call. Indeed, he presented some good arguments for the inclusion of the target. For instance, he told us that discussions and negotiations with National Grid would shortly be under way, and suggested that the fact that there would be a decision in 2016 will strengthen his case in the negotiations, but his negotiating hand would be even stronger if National Grid knew now that the target was included in the Bill. I hope that he will work wonders with his colleagues in the coalition. If our reasoned amendment is not passed, an amendment could no doubt be tabled at a later stage.

There are other reasons for including the decarbonisation target in the Bill. As has already been mentioned, there is still considerable uncertainty in the industry about the direction of Government policy. That uncertainty has been caused primarily by the different messages coming from the Government, as even Conservative Members have pointed out. It does not relate only to renewables, although the impact has been particularly obvious in that instance. Many people work in the renewables industry in my constituency, and what they say leaves me in no doubt that uncertainty about the direction of Government policy is having an effect on future investment programmes. Anything that the Government can do to emphasise that certainty and clarity exist in their policy would be extremely important.

There have been some positive steps, such as the recent launch of the green investment bank and its initial programme, but much more needs to be done to provide clarity, not just for the purpose of encouraging future investment but in many other areas. A lack of certainty and clarity in Government policy will have an impact on what the Bill is trying to do as a whole. The proposals for a capacity mechanism are one example. The more uncertainty there is and the greater the consequent lack of long-term investment, the more need there is likely to be for increased capacity to deal with ups and downs in supply and demand; and the greater the need, the more that capacity is likely to cost the consumer at the end of the day. Uncertainty about policy will also affect the ability of the Government—or, if Members prefer the term, the counterparty—to negotiate the arrangements for contract for difference, and, again, it is consumers who will ultimately suffer as a result when prices rise.

Let us hope that the Government soon provide some clarity and consistency, and one way of doing that would be to accept our proposal for the decarbonisation target to be included in the Bill at some stage.

I also want to talk about the effect of these measures on Scotland. That is, of course, important to me and other MPs representing Scottish constituencies, but it is also important for the UK as a whole. England and Scotland benefit in different ways from the current situation; Scotland has greater renewables resources, and Scottish energy producers have access to the larger market in England.

There is uncertainty because the renewables obligation in Scotland is devolved and, unsurprisingly, the Scottish Government have not said how they intend to proceed as they do not yet know what will happen across the UK as a whole. I urge the Government to expedite their discussions with the Scottish Government about the arrangements for Scotland after 2017. The renewables sector is particularly important for the Scottish economy, and both the Scottish and UK Governments must ensure that renewables are supported across the UK. Already, some 11,000 jobs in Scotland are dependent on the renewables industry, and there is the potential for many more such jobs to be created, but lack of certainty and confidence will threaten that. I hope that, either today or later, Ministers can give an indication of the state of play in these negotiations with the Scottish Government and the possible implications of the Bill’s measures for Scotland.

[Several hon. Members]

rose—