Energy Bill [Lords]
Debate between Martin Horwood and Barry Gardiner
Martin Horwood
I am sympathetic to the hon. Gentleman’s point, which is important, but the genius of the green deal is that it will use market mechanisms and a competitive arena in which providers will compete to provide the best deal, which I hope will help drive down the interest rates offered by different financers and providers.
Barry Gardiner
Does the hon. Gentleman accept that the Department of Energy and Climate Change has predicted that the interest rate would be 11%, which has to be factored in, particularly when dealing with the fuel-poor?
Martin Horwood
I did not say that the measure would drive a coach and horses through our commitment to no subsidy. I am sure that our commitment to it is absolutely intact, but the clause seems to insert a rather large crack in the edifice. The arrangement that my right hon. Friend mentions—in which the operator and the Secretary of State may agree to the necessity of some amendments, which might be upwards or downwards —is in the existing legislation. The difference between that and the clause under discussion, however, is that in the existing legislation the final decision rests with the Secretary of State, and in the clause before us the Secretary of State gives away that right in advance. That seems to represent poor negotiation.
To return to the situation in Fukushima—
Barry Gardiner
I am grateful to the hon. Gentleman. Does he accept that the DECC’s proposals for a “contract for difference” feed-in tariff are precisely the subsidy to the nuclear industry that he counsels his right hon. Friend not to introduce?
Martin Horwood
I am not sure about feed-in tariffs, but if the hon. Gentleman is talking about the floor price for carbon, that certainly risks inadvertently subsidising the new, and indeed existing, nuclear industries. Perhaps a windfall tax on the nuclear industry might help to compensate for that, because the floor price for carbon is an important policy for operators.
To return—for the final time, I hope—to Fukushima and the example in Japan, the compensation bill looks likely to be about £61 billion for the 80,000 people who have been evacuated from their homes, and for the damage to agriculture, businesses and so on in the area. That is a very extreme case, but it is not impossible to imagine much smaller disasters—natural shocks to the system, terrorist attacks or whatever—that might deliver similarly unexpected large bills.
The situation in Japan has resulted in its Government announcing today that they will examine their energy policy from scratch, with a brand new emphasis—surprise, surprise—on renewables and energy efficiency, and almost certainly less emphasis on nuclear. That seems to me a wise decision to take, in the circumstances.
I am pleased that we are emphasising energy efficiency before we are forced to do so, and it is important that the Government promote renewables and energy efficiency as cornerstones of their energy policy, but I would not want energy subsidy for nuclear to creep into that mixture, and it seems to me that clause 102 is unnecessary. As the Secretary of State says, it provides reassurance to investors, but it provides very little reassurance to me or to the taxpayer.