Solar Power (Feed-in Tariff)
Debate between Sarah Wollaston and Chris Huhne(13 years, 1 month ago)
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Chris Huhne
My hon. Friend makes a good point, but I have dealt with that issue in response to the hon. Member for Southampton, Test (Dr Whitehead). This is such a movable feast that every time we do a projection, we find that the budget is being eaten up even more rapidly, so we have put out, in the impact assessment, a very clear projection on the basis of the knowledge that we had when the consultation was launched about what would happen overall—that is, a very substantial increase in the overall budget and a £26 increase in household bills. The revisions that we have done since then suggest that, if anything, things will be moving even more rapidly.
By the way, the returns still compare favourably with the returns intended when the scheme was set up. Our proposals are the difference between windfall profits from double-digit returns and a reasonable return—double-digit returns that would bring into the industry all sorts of curious people who never had any previous interest in it and who were operating tax avoidance schemes to raise money to invest in the industry. The scheme had been growing dangerously unbalanced. We are working to put it back on an even keel. I do not accept that putting right the feed-in tariffs scheme undermines confidence, for the reasons that I have given.
Aside from those such as electricians and scaffolders who have branched out into solar PV installation alongside other employment, our analysis suggests that the number of full-time equivalent jobs in the solar industry is between 8,000 and 14,000. We do not wish to see a single company stop trading or a single job lost, but we cannot continue to prop up unreasonable profits with consumer cash. Jobs created by a bubble of excessive returns and paid for by consumer energy bills are simply unsustainable. Companies that have prepared themselves accordingly are likely to continue. As I have said, I have not come across a single person in the industry who contests the fact that we needed to act, although we did not hear that loud and clear before we acted, contrary to what various Opposition Members have said. Companies that were going all out with installations for the next few months with no plans beyond that will be in a position that is only slightly different from what would otherwise have been the case.
Dr Sarah Wollaston (Totnes) (Con)
The Secretary of State makes a compelling case for the need for change, but will he consider a concession for those businesses that have already paid a deposit? Pennywell farm in my constituency aims to be the first carbon-neutral tourist attraction in the country and has already received a gold business award for energy conservation. It has already paid a 10% deposit, but the costs of meeting the 12 December deadline will increase its costs by 11% and it faces great difficulty as a result.
Chris Huhne
I hear what my hon. Friend says, and she is not contesting the fact that there will still be a positive return. That comes back to the point I was making. People might not make as much money as they thought they would, because the scheme had not been brought into line with the fall in the cost of panels, but they will still make a positive return. My Department’s key objective is to ensure that we make the transition to a low-carbon economy, not to provide excessive subsidies where they are not warranted by the action that is to be taken. If she would like to write to me with the details of her example, we will take it into account as part of the consultation. I repeat that it is a genuine consultation.
The revised tariffs will allow the feed-in tariffs to work in the way they were intended to, supporting the industry and jobs in the long term, rather than burning brightly for a few short months before fading away. The right hon. Member for Don Valley might urge on us the attractions of becoming a sort of policy Catherine-wheel in which we are all fizz, but we do not particularly want to be followed by all phutt, which is exactly what we would have if the Labour party was to have its suggestion. I am sure that Members will join me in supporting long-term ambition across the whole green economy, rather than windfalls for the few.
The Government are committed to supporting sustainable low-carbon energy, but we cannot continue to write blank cheques. By bringing solar PV returns in line with other investment opportunities, we are guaranteeing the success of the feed-in tariff scheme as a whole, which will mean more renewable energy delivered to more households in a sustainable way.
Budget Resolutions and Economic Situation
Debate between Sarah Wollaston and Chris Huhne(14 years, 5 months ago)
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Chris Huhne
No. I said that the previous intervention would be the final time that I would give way before winding up, and I have given way to the hon. Gentleman before.
By the way, I should add to my response to the previous intervention by saying that we have confirmed some of the grants and soft loans made available, for example, for wind energy.
Chris Huhne
I am not going to give way again. I am sorry, but I am going to end up—[Hon. Members: “But it’s a new Member!”] I am sorry, I did not realise that the request came from a new Member.
Dr Wollaston
I am extremely grateful to my right hon. Friend for giving way. My constituency is home to Transition Town Totnes, of which he may have heard. It leads the way in looking at climate change and peak oil, and I am sure that the people involved will be very interested to know the size and scale of the projects that will be funded by the green banks. What will be the time scale? When might they be able to start looking forward to making applications?
Chris Huhne
I thank my hon. Friend for that intervention. [Hon. Members: “Answer!”] Opposition Members know perfectly well that there are certain processes in Government that we have to go through. We have to consult. We have to make sure not only that we produce decisions at the moment that both Opposition and Government Members would like, but that those decisions are right and have gone through all the normal processes.
However, I want to pick up on one very important point. My hon. Friend mentioned peak oil, something that, especially in the context of Deepwater Horizon in the gulf of Mexico and our exploration west of Shetland, opens up a terribly important point about the whole thrust of what we are intending to do. That is that we have been given a wake-up call to move towards a low-carbon economy even more rapidly than before. That is not merely for climate change reasons but because an economy that is more independent of volatile sources of energy from geopolitically troubled parts of the world is also more resilient to oil price shocks. If the name of the game is not to end boom and bust, as the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) used to promise, but at least to moderate boom and bust, then an important objective for my Department has to be to ensure that that moderation takes place by making energy security a more serious objective and defining energy security not merely in terms of physical interruptions—problems, say, in the straits of Hormuz—but in terms of our ability to withstand price volatility and price shocks.
I think I have gone on far too long—[Interruption.] As the hon. Member for Islington South and Finsbury (Emily Thornberry) says from a sedentary position, and I can agree with her—[Interruption.] Sorry, the hon. Member for Wallasey (Ms Eagle)—I was being barracked. I want to make a key point about the prospect of the move to a low-carbon economy providing us with a new type of economy that will be more resilient to shocks, will be jobs-rich and will provide genuine prosperity, employment and profit for British businesses, including opening up enormous opportunities in export markets. The framework that we have set out enables us to do that, and I commend the Budget to the House.