Energy Policy

Rachel Reeves Excerpts

Monday 25th June 2018 Commons Chamber

[Greg Clark]

My right hon. Friend is correct to point to the amortisation. As someone who has spent a career in finance, he is aware that in discounting the value of earnings in future generations, the great majority of the value is in the earlier years, and that has been the standard basis of the assessment made. What has not been taken into account is the prospective decommissioning cost of the proposed lagoon, which has been estimated at £1 billion. That has not been included in the analysis, but it would be a further liability for the taxpayer.

[Rachel Reeves (Leeds West) (Lab)]

I have to say that I am slightly surprised by the Secretary of State’s tone. In answer to the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), he said that this project was “so out of kilter” with other ways of producing energy and that the costs are much higher. In that case, can I gently ask why on earth it has taken five years to come to this decision? What lessons has the Secretary of State learned from the decision-making process around the tidal lagoon project? Frankly, a lot of effort has been put into this project by business, the Welsh Government and others, and I think that many people have lost confidence in the Government’s programme for renewables because of this.

[Greg Clark]

The hon. Lady will know, as Chair of the Business, Energy and Industrial Strategy Committee, that the Government’s programme of renewables has resulted in the biggest reduction in the cost of the deployment of renewables that we have seen in this country, and that deployment has increased threefold. The success of that strategy is evident. I was asked by many Members, the Welsh Government and many businesses to make sure that every aspect that could contribute to a value-for-money case had been considered —the impact locally, the prospects for exports and the prospects for innovation—and it was right to do so and to leave no stone unturned. I think that that was the right approach, and when the Select Committee scrutinises the decision, I think it will regard the process as having been exhaustive and rigorous.