Energy Bill [Lords]
Debate between Martin Horwood and Phillip Lee
Dr Lee
My view is that these targets are extremely difficult to meet, partly because the energy policy of the previous Administration was woeful; admittedly, it improved when the Leader of the Opposition took over the position that the hon. Member for Hackney South and Shoreditch (Meg Hillier) now shadows. The hon. Gentleman knows that we are in a difficult position as regards hitting these targets, and that difficulty was not aided by the previous Government’s performance.
In the spirit of the Bill, I will try to speak within the generous time limit and save some energy. I am struck by the fact that the time limit is so long, because energy and the need to secure energy supply is one of the most important strategic challenges for our generation. We cannot have more hospitals, schools, aircraft carriers or anything else provided by Government unless we have energy, so the subject matters very much. I want to speak primarily about the green deal, because that is at the heart of the Bill, but will move on to discuss energy generation and my thoughts and views on the technology of the future that, as a country, we should be backing.
The green deal is an ambitious plan, and the first of its kind in the world. I hear that Opposition Members want more detail, and of course it requires additional clarification that will no doubt come in Committee. The reality, however, is that this is the first time that such a scheme has been attempted. I am very proud of that and to support a Government who are introducing it. It will benefit homes and businesses, allowing them to save money. At the moment, saving money matters to individuals, to families, and, very much, to businesses. It is a tough environment out there economically, and if they can save money, all the better.
The green deal involves the introduction of a new financial framework that is subject to market forces. I say to those calling for details about the interest rates that we should wait and see and let the market dictate. We are talking about long-term energy products, particularly in the area of generation, and I would invest in that sector if I were in control of a sizeable pension fund because that would produce a return in the medium to longer term. I do not buy into the idea that interest rates will be driven higher by this scheme. It is “pay as you save”, and it will benefit people who are struggling with their bills. The loan is supposedly £6,500—I hear rumours that it may be slightly increased—and it will be made against the property, not against the individual; that is an important distinction. In the past, when we have tried to go down this policy path, we have worried about the loan going with the individual and the fact that those who are less able to afford it will therefore not take one out. The reality is that it will be attached to the property.
The second aspect is the introduction of the energy company obligation to replace the carbon emissions reduction target. As I understand it, it will target those who could experience fuel poverty and have homes that are difficult to insulate. I think that it was a Scottish Member who referred to the difficulty of insulating some homes. The idea in the Bill is to deal with those problems. In view of the fact that 25% of carbon emissions are thought to come from those very homes, it strikes me as an investment worth making.
There are estimates on the benefits of the green deal. I am always cautious about such estimates because they are always dependent on human behaviour. The Secretary of State referred to the situation of someone having a Brazilian wife, and the reality is that such estimates are not always accurate. However, it is suggested that the benefit to society will be in the realm of £8 billion to £9 billion. Fourteen million insulation measures are required, which could lead to an average saving of £550 per year on domestic bills. That will lead to an increase in manufacturing jobs. In my constituency of Bracknell, small and medium-sized construction firms are crying out for this kind of work. There will be no shortage of companies willing to do it. There will be an increase not only in manufacturing jobs, but in service jobs. If we hit 26 million homes taking up the scheme, the number of jobs in the sector may increase from 27,000 to 250,000. That is pretty good.
I welcome the changes to the Energy Act 2008 to ease the introduction of smart meters. A number of companies in my constituency, not least General Electric, will be pleased to hear about that. If smart meters function properly and are able to connect to the network—I know that there are problems with that—they will play an essential part in reducing energy usage. Ultimately, that is what this legislation is all about. I congratulate Ministers on making energy efficiency the key part of their first Bill, because that is the easiest way to reduce our carbon footprint. On a recent trip to Norway, I was struck that even though it generates huge amounts of energy, the first thing I was told was, “Phillip, the best thing that Britain can do is become more energy efficient.” I know that the same view is held in Sweden.
I am also pleased about the balance of powers between Government and the nuclear industry in regard to decommissioning. I am a strong advocate of nuclear power, and I found it depressing to hear yet another speech on the dangers of nuclear power from the hon. Member for Cheltenham (Martin Horwood). I remind him that, as yet, there has never been a proven death from nuclear power in the west.
Martin Horwood
I have on occasion made speeches about the dangers of nuclear power, but today’s was not one of them. I actually talked about the dangers of subsidising nuclear power through the use of clause 102.
Dr Lee
Forgive me. I thought that the hon. Gentleman said something about compensation to agriculture and people moving house. However, I shall move on.
The final part of my speech will be about energy generation. I commend the previous Government for their commitment to offshore wind, which was a strategically important decision. Given that we have shallow water in the North sea, I think that it was the right decision. I am not so sure about onshore wind, but offshore wind, for sure.
This country needs a sustainable energy policy. It needs sustainable sources of energy that are low carbon and, most importantly, secure. There is an increasing world population, which is going to hit the 7 billion mark earlier than projected. One does not have to be a doctor to know that that means that the 8 billion, 9 billion and 10 billion marks will be hit earlier, because that is what human beings do. That concerns me because it means that future wars on this planet will be fought over not just energy and fuels such as oil and gas, but also over food and water. This country has to get real. It has to realise that energy matters. Energy is associated with prosperity, as everybody knows. We cannot rely on how we have done things in the past, but must look to the future and work out how Britain can become as energy independent as possible.
I will mention two areas. The first is marine technology. The UK is surrounded by energy; water is just the medium that transmits that energy. Tidal power comes from the moon, and we have the Severn bore. Waves, particularly off Scotland, provide remarkable sources of energy. Why are we not concentrating on harnessing that energy? It strikes me as a no-brainer. Why is it that there are more renewables obligation certificates for tidal and wave in Scotland than in England? How is that paid for? I encourage the Minister to look at that, and I know that there is a review of ROCs at the moment. Why is solar so subsidised, and not marine? That was a decision by the previous Administration. Solar is subsidised nine times more than onshore wind. I know we are having some good weather at the moment, but I do not think that that makes sense in this country.
I know that the Government are reviewing low-carbon technologies and that £200 million will be allocated. I hope that they look at marine technology and do their best to support it. I think that it is an opportunity for us to lead the world. If one believes RenewableUK, it is an opportunity for us to generate 20% of our energy. I recognise the capital cost and the potential local environmental impact of the Severn bore project, but that one project could provide 12% to 15% of the UK’s electricity needs. We need to look at that again.