Solar Power (Feed-in Tariff)

Pat Glass Excerpts

Wednesday 23rd November 2011 Commons Chamber

[Phil Wilson (Sedgefield) (Lab)]

If ever there was an example of how not to make an announcement in this House, the announcement of the review of feed-in tariffs is it. The Government tried to slip it out as a written statement, but our ever-vigilant DECC team on the Opposition Front Bench recognised its importance, and managed to get a Minister to the Dispatch Box only by tabling an urgent question. The Government’s code of practice on consultations states that they should last 12 weeks, but this consultation is to last only six weeks, with the changes coming into force nearly two weeks before it finishes. Given the dearth of proposed legislation before the Chamber, I would have expected the Government to allow an oral statement and a full- day debate on the issue—not least to discuss the implied loss of jobs. It would be laughable if it were not so serious.

The change will cost a lot of jobs in this sector, in which up to 30,000 people work. It will remove the opportunity for nine out of 10 households to take advantage of the feed-in tariff to reduce their energy bills at a time of rising fuel poverty. The 12 December deadline is causing planned solar projects nationwide to be shelved and millions of pounds of investment to be lost. A survey by the Renewable Energy Association reveals that 57% of companies now anticipate laying off at least half of their staff, while a third believe that their companies will go under.

Let us take the example of Mr Wayne Richardson, one of my constituents who runs Revolution Power—a small renewable energy company employing 17 people. It has been on the go for about six years. Revolution Power fits photovoltaic units and provides ground and air heat pumps. Mr Richardson tells me that he might have to lay off a third of his staff. He is a young man with a young family; he is an entrepreneur and a trier. We need more Wayne Richardsons in the north-east to promote and protect jobs in the private sector.

[Pat Glass (North West Durham) (Lab)]

Does my hon. Friend agree that companies such as Romag—a major employer in my constituency that has been in the industry a long time and employs young people and young graduates in its research and development section—recognise the fact that feed-in tariffs are reducing, but are concerned about the shameful way in which this consultation has occurred and the very tight time scale? That is what is going to do them in.

[Phil Wilson]

My hon. Friend is right. We all agree that the tariff has to come down, but how it is implemented is important. We need to think about the best way of protecting jobs, particularly in the north-east, where I want to see more private sector jobs available.

Wayne Richardson agrees that the value of the feed-in tariff should be reduced, but the cack-handed way in which the Government have introduced this policy is hurting his company. The early reduction in the feed-in tariffs has created a vacuum in the market. As a consequence, parts and materials are in short supply, making it difficult for projects to be finished before 12 December.

One reason behind the reduction is the falling price of installations. Because of the arbitrary deadline of 12 December, however, the price of equipment is going up. The number of inquiries about PV has decreased by 90%, which does not bode well for the future. The FITs scheme is paid for by a levy on energy companies, which is passed on to consumers and costs, as I understand it, only £1 a year. We should compare that with the situation with wind farms. Eon wants to build 45 wind turbines in the constituency. The subsidy from the consumer in that case is close to £200 a year.

The FIT needs to be reduced, but not by 50% in seven weeks. In Germany, where 50% of all PV units are installed, the tariff was cut by 15% and it is being achieved step by step through negotiations and agreement with the industry. Plenty of time and notice has been allowed. I understand that reductions in the tariff there occur year on year so that the industry and consumers can plan ahead—something this Government are daily proving their inability to do. The fact that so little legislation is before the House proves to me that they have no plan and, I suspect, no future.

--- Later in debate ---

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

We have had an important debate and a number of significant points have been made by many hon. Members despite their speaking for a limited time. My hon. Friends the Members for Ynys Môn (Albert Owen), for Ayr, Carrick and Cumnock (Sandra Osborne), for Glasgow North West (John Robertson), for Sedgefield (Phil Wilson) and for Clwyd South (Susan Elan Jones), my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr Clarke) and my hon. Friend the Member for North Ayrshire and Arran (Katy Clark), among other Members, made important points about the Government’s changes to the feed-in tariff. We could no doubt have had a somewhat longer debate had time not been curtailed by the Secretary of State’s lengthy urgent statement earlier this afternoon and his lengthy speech at the start of the debate, but I want to keep my remarks as brief as possible to enable the Minister to respond. A number of important issues have been raised and I am sure that he wants to respond to them.

The Minister is a politician that many of us have come to appreciate, especially in his recent works, as a master of his art. The reduction in the feed-in tariff

“effectively slowly suffocates the growth that the policy has so far encouraged.”

Not my words but those of the Minister’s close colleague, Boris Johnson, the Mayor of London.

“Industry trust and confidence in the government has evaporated.”

Again, not my words but those of the CBI. The new rates mean

“that unless you have significant savings, you’re unlikely to be able to afford solar panels”.

Once more, not my words, but those of Friends of the Earth. The ability to build such a consensus against his own policy is a formidable feat on which I congratulate the Minister.

I would also like to pay tribute to the Minister’s transformational skills. In a few short weeks, he has managed to turn a policy that was admired, appreciated and effective into a shambles that is mired in confusion, contradiction and potential legal challenge. However, he is a man of great foresight and has the extraordinary ability to set a consultation with an effective date close to two weeks before the close of the consultation. It is a remarkable record from a remarkable Minister. I can only look on in awe and wonderment at his abilities and only aspire never quite to plumb those depths myself.

[Pat Glass]

Does my hon. Friend agree that the issue for the consumer is not the £1 each that the feed-in tariffs will cost, but the fact that the Government have clearly and demonstrably failed to tackle the big six energy companies that are taking massive and obscene profits from the British consumer?

[Tom Greatrex]

My hon. Friend is entirely right. When the Minister, as he is about to do, following the example of the Secretary of State, makes points about consumer bills and compares the £1 cost with the £1,345 for the average annual bill, which is 0.08%—less than a tenth of 1%—I think that the figures speak for themselves.