Tim Yeo
Main Page: Tim Yeo (Conservative - South Suffolk)
Mr Tim Yeo (South Suffolk) (Con)
I beg to move amendment 11, page 1, line 4, after ‘ensure’, insert—
‘that a decarbonisation target range is set and that’.
Mr Speaker
With this it will be convenient to discuss the following:
Amendment 12, page 1, line 5, leave out
‘a decarbonisation target range is set, that’
and insert—
‘such a target range is set’.
Amendment 13, page 1, line 8, leave out ‘may’ and insert ‘must’.
Amendment 14, page 1, line 11, at end insert—
‘(4) Subject to section 2(1) the decarbonisation level must not exceed the level deemed consistent with a low-carbon trajectory as advised by the Committee on Climate Change’.
Amendment 15, page 2, line 2, leave out from
‘and the first decarbonisation order may not’
to ‘Climate Change Act 2008’ and insert—
‘a decarbonisation order must be made by 1 April 2014’.
Amendment 16, page 2, line 6, leave out ‘A’ and insert—
‘Subject to section 2(1), a’.
Amendment 17, in clause 2, page 2, line 30, leave out from ‘The following matters’ to ‘target range’ and insert—
‘Before exercising the power to make a decarbonisation order the Secretary of State must obtain and take into account the advice of the Committee on Climate Change.’.
Amendment 18, page 2, line 32, leave out ‘The matters are’ and insert—
‘In providing its advice to the Secretary of State the Committee on Climate Change must take into account the following matters’.
Amendment 19, page 2, line 46, at end insert—
‘(3) As soon as is reasonably practicable after giving its advice to the Secretary of State, the Committee must publish that advice in such manner as it considers appropriate.
(4) If in making a decarbonisation order the Secretary of State makes provision different from that recommended by the Committee, the Secretary of State must, on making the order, publish a statement setting out the reasons for that decision.’.
Amendment 20, in clause 3, page 3, line 2, leave out from ‘a report setting out’ to the end of subsection and insert—
‘and publish a delivery plan setting out proposals to achieve the duty in section 1 to ensure that the decarbonisation target range is not exceeded.’.
Government amendments 51 and 70.
Mr Yeo
I draw the attention of the House to my entry in the Register of Members’ Financial Interests, in particular to my interests in the energy industry. In doing so, I emphasise, as I have done before, that my views on climate change and on the need for Britain to move more swiftly to a low-carbon economy and to cut its dependence on fossil fuels were formed two decades ago when I had ministerial responsibility for this area of policy.
I have not changed these views at any time since and have repeated them publicly and privately on many occasions throughout the past 20 years. My views have never been influenced at any time or in any way by my financial interests, all of which were acquired after I left the shadow Cabinet in 2005. That was 12 years after I accepted the overwhelming scientific consensus on this subject and began campaigning for a more urgent response to the challenge of climate change. Various bloggers, columnists and others, including one or two of my hon. Friends, who imply otherwise and who ignore the scientific consensus, invariably overlook my strong and consistent support for nuclear power, which is a low-carbon technology that should be part of Britain’s energy mix.
I am grateful for this opportunity to debate amendment 11, which stands in my name and the name of hon. Members from most parties. It is based on a unanimous recommendation made last July in the report of the Energy and Climate Change Committee on the draft Energy Bill. I am glad to say that the Government accepted many of the Committee’s recommendations, and by doing so materially improved the Bill, and I congratulate my right hon. Friend the Secretary of State and his team on their response to our report and on the outcome of their negotiations with the Treasury on a range of issues, including the levy control framework.
For a variety of reasons, however, the need for the amendment is even greater now than when my Committee’s report was published. First, despite some positive signs on the Government’s support for low-carbon electricity generation, the publication of the gas strategy on the very day of the autumn statement confused many investors. The possibility that the Government might sanction 37 GW of new gas-fired generation capacity rests uneasily with their acceptance two years ago of the fourth carbon budget, which covers the period 2023 to 2027, and raises the fear that the purpose of next year’s review of the budget is to water it down and weaken the incentives for low-carbon investment.
John Robertson (Glasgow North West) (Lab)
As a member of the Energy and Climate Change Committee, I want to compliment the hon. Gentleman on his chairmanship. He has done an excellent job. Does he agree that unfortunately the Government have dragged their feet over the Energy Bill? They did not give us enough time to scrutinise it. The Bill then disappeared for a while and came back at short notice. Does this smack of a Government who are putting their heart and soul into energy?
Mr Yeo
It is certainly true, as the hon. Gentleman says, that we waited a long time for the draft Energy Bill. I think that the industry, the non-governmental organisations and the academic world were all hoping to see it appear a lot earlier than last summer. Our Committee was given a very limited period—about half the time normally given to Select Committees to comment on a draft Bill. We completed our work—with great assistance not just from my colleagues on the Committee, but from the staff—in about six weeks. Having received our recommendations at the end of July, we waited another five months before the actual Energy Bill was published, although I recognise that some of that period was used in the negotiations on which I have already congratulated the Secretary of State. The Public Bill Committee stage was completed in the first week of February, however, and we have now waited a further four months to get to Report, so the matter has not been conducted with the urgency that I think the needs of the situation required.
The understandably envious glances cast across the Atlantic by the Treasury at the transformation of the US gas market in the wake of the exploitation of shale gas have not passed unnoticed. Not surprisingly, there are now doubts in the minds of many prospective investors about the depth of the Government’s commitment to decarbonising electricity generation.
Incidentally, the Energy and Climate Change Committee was one of the first bodies to urge the Government, more than two years ago, to approve more exploration and testing to establish the scale of Britain’s recoverable shale gas reserves. If our dependence on imported gas can be cut and if consumers can be partially protected against fluctuations in international gas prices, which have been the main cause of the rise in domestic energy prices in the last few years, that is wholly to be welcomed. However, my Committee also warned, in a more recent report on shale gas, that it would be rash to base energy policy on the assumption that Britain will soon be a major shale gas producer. The opposition to exploring for shale gas in Sussex, which is already emerging, is a foretaste of the battle for public opinion, which must be won before domestic production of shale gas on even a modest scale can occur. The case for a diversified energy mix is therefore as strong as ever.
Kerry McCarthy (Bristol East) (Lab)
What the hon. Gentleman has just said exactly echoes what businesses in my constituency are telling me. The lack of certainty and the suggestion that the Government will now delay setting targets until 2016 mean that businesses simply do not know within which parameters they are operating. They do not know whether they should go ahead and invest in the technology.
Mr Yeo
I agree with the hon. Lady and will develop that very point.
The element of perceived political risk is leading investors to seek higher returns from their investments in the UK energy market. Higher returns to investors mean higher prices for consumers. Amendment 11 directly addresses these issues. By itself, it would not immediately alter the low-carbon pathway on which the Government have already embarked, most notably in its acceptance of the fourth carbon budget. However, the prospect of the fourth carbon budget being watered down in next year’s review is simply another unwelcome uncertainty. The amendment would remove that uncertainty by requiring the Secretary of State to set, no later than 1 April 2014, a decarbonisation target for 2030 for electricity generation.
Mr John Redwood (Wokingham) (Con)
But will my hon. Friend concede that if we put up more wind farms, we would also have to build gas-fired power stations as back-up because the wind might not blow? That would be an awful lot dearer than just building the gas stations. How much is he planning to add to people’s electricity bills?
Mr Yeo
I recommend that my right hon. Friend look at the latest report from National Grid, which shows that the amount of back-up required for wind farms is extraordinarily low. More importantly, on the broader point about costs, I am sure he will be aware—because he takes a close interest in these matters—that nothing in the amendment would affect the cost of electricity between now and 2020 because the support for low-carbon technologies during that period is capped by the levy control framework. The amendment would have no impact on electricity prices for consumers for the next seven years.
I am sure that my right hon. Friend also takes a close interest in what electricity prices will be in the 2020s, and it is theoretically possible that approving this amendment could lead to higher prices during that period. That would depend heavily on an assumption about what gas prices will be doing in the 2020s, and I would not be confident about making such a forecast. If he is really concerned about the cost to consumers—a concern that I share—he should address his attention in the short term to the Treasury, which has imposed a minimum floor price for carbon. That will have the effect of raising electricity prices before 2020. It is an imposition that applies only in the United Kingdom and therefore puts us at a competitive disadvantage with the rest of the European Union. I hope he will join me in making continued representations to the Treasury to drop that policy.
As currently drafted, the Energy Bill gives the Secretary of State a power to set a decarbonisation target for 2030, but it does not compel him to do so. It also prevents him from exercising that power before 2016. Suggestions that the amendment would force him to set the target at 50 grams per kWh in 2030 are mistaken. It would merely require him to set it in accordance with advice received from the Committee on Climate Change. There is nothing in the amendment that would require him to set a particular figure. If the Committee were to recommend a figure higher than 50 grams per kWh, the Secretary of State would have to heed that advice. If he did not do so, he would have to explain why.
The Committee on Climate Change itself would not have a completely free hand in determining its advice to the Government. It would still have to take account of all the matters referred to in clause 2(2). I remind the House of five of those key points. The Committee would have to take account of
“scientific knowledge about climate change…technology relevant to the generation and storage of electricity…economic circumstances, and in particular the likely impact on the economy and the competitiveness of particular sectors of the economy…fiscal circumstances, and in particular the likely impact on…public borrowing”
and
“social circumstances, and in particular the likely impact on fuel poverty”.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
My hon. Friend began by saying that the whole purpose of his amendment was to provide certainty. He is now saying, “This won’t be certain because it will depend on half a dozen things that we cannot forecast.” Why does he imagine that people will invest on the basis of a legal obligation to do something in 2030 that it is impossible to do now, and that they will not invest on the basis of subsidies that are available now and that can be removed only as a result of breach of contract?
Mr Yeo
I am not sure that I completely follow my right hon. Friend’s concerns. Those points in the Bill will simply ensure that, in the event of an unexpected substantial change in economic circumstances or the emergence of a new technology, the Committee on Climate Change would have an opportunity to review its advice. Indeed, I would hope that it would want to do so in normal circumstances anyway. Moreover, investors are accustomed to having to adjust their decisions and expectations in the light of changing events.
I am seeking, through the amendment, to remove another element of uncertainty. I want to ensure that the Government’s current commitment to moving down a pathway of slowly decarbonising the British economy and reducing its dependence on fossil fuels, which is particularly relevant to the electricity generating industry, is reinforced by accepting an obligation to set the target in secondary legislation during the next 10 months. I believe that that would be wholly helpful to investors. It would give them a more secure and predictable framework in which to make their decisions, as well as having an effect on the returns that they might expect.
Jim Shannon (Strangford) (DUP)
In Northern Ireland, Airtricity’s electricity prices have gone up by 17.5%, and Northern Ireland Electricity’s prices have risen by 18%. What elements of the Bill will give consumers confidence that prices will not rise above affordable levels, given that prices are heading in the wrong direction at the moment?
Mr Yeo
On the wider point about future prices, it would be dishonest for anyone to suggest that we could protect consumers against the probability of higher energy prices. The world’s demand for energy is expanding very quickly, particularly in the Asian economies, and that will probably lead to higher prices. What the Government can do, and what the Bill is aiming to do, is at least to minimise those price rises. A number of measures can be taken to achieve that, including improving competition, ensuring that consumers are better informed and deploying various smart technologies on a large scale. Also, as I have said before, it would be helpful if Britain were able to go ahead and identify the scale of our recoverable shale gas reserves and then exploit them. That would certainly reduce our dependence on imports, and it might give us some protection against price fluctuations.
The amendment is not so revolutionary as some people seem to think. It seeks to bring forward by a couple of years something that the Government are contemplating doing anyway. If it is true, as the Secretary of State said yesterday, that we are heading for a substantial decarbonisation of electricity anyway—I am sure that, if he said it, it must be true—what possible objection could there be to the amendment? There is now widespread support for such a measure. Only two weeks ago, the Committee on Climate Change published a report recommending that a target for reducing carbon emissions from electricity generation by 50 grams per kWh to 2030 should be set in legislation, with the flexibility to adjust it in the light of new information. The amendment provides for precisely that.
A wide range of businesses and trade bodies have backed the proposal. The Aldersgate Group, whose members include Microsoft, Marks & Spencer, Aviva, Sky, Pepsico, British American Tobacco and many others, is a strong supporter. Many companies with an interest in the supply chain and with the potential to create jobs in Britain want to see the amendment accepted. A wide range of voluntary bodies is also campaigning for it, including the National Federation of Women’s Institutes, the Church of Scotland, the Methodist Church, the Baptist Union of Great Britain, the United Reform Church and the Quakers in Britain. I mention the Churches because, in the recent debate on gay marriage, I found myself on the opposite side from most of those organisations, and I am delighted to be allied with them on this issue.
Mr Mike Weir (Angus) (SNP)
I am listening closely to what the hon. Gentleman is saying. Does he agree that the purpose of setting a decarbonisation target now is surely related to the supply chain? Companies are looking at bringing developments on stream around 2020, as many of them have a long lead-in time, and they want to know now that there will be a market for them after that date.
Mr Yeo
That is certainly one of the reasons for the amendment. It would help to create more jobs in the UK if the supply chain companies received reassurance in that regard.
Even among hon. Members there are signs of enthusiasm for my amendment. At the Liberal Democrat party conference last September, the Chief Secretary to the Treasury proposed a motion to establish a
“target range of 50-100g of CO2 per kWh for the decarbonisation of power sector in addition to existing carbon reductions.”
If every Liberal Democrat Member of Parliament who supported the Chief Secretary on that day were to join me in the Aye Lobby at 4 o’clock, the amendment would be carried. I am sure that all my hon. Friends on the Liberal Democrat Benches are keen to take this opportunity to strengthen their well-known reputation for consistency.
Martin Horwood (Cheltenham) (LD)
How did the debate go at the Conservative party conference?
Andrew George (St Ives) (LD)
My hon. Friend will be well aware that one of the biggest road blocks to achieving progress in this area is the Chancellor of the Exchequer. It is not the Liberal Democrats who are standing in the way of the progress that we need to make. My hon. Friend needs to work with his own colleagues to persuade the Chancellor of the Exchequer to come on board.
Mr Yeo
I say to my hon. Friend that there are two people who could give a decisive signal to the Chancellor of the Exchequer this afternoon by voting for the amendment: one is the Chief Secretary to the Treasury and the other is the Energy Secretary—both members of my hon. Friend’s party, with which we are delighted to be in coalition.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Given that the hon. Gentleman has chosen to reduce this issue to a political knockabout, it would be interesting to ask him, if he is so committed to his amendment, what meetings he has sought with the Treasury to discuss it.
Mr Yeo
I frequently pass the time of day in the warmest possible terms with my right hon. Friend the Chancellor of the Exchequer when we are voting in the same Lobby, which from time to time we are.
Even the Government seek powers in the Bill as it stands to introduce a decarbonisation target, but for some reason they do not want to do so until 2016 at the earliest. The problem with the Saint Augustinian coyness and this promise of possible future chastity in the matter of greenhouse gas emissions—“but, please God, not just yet”—is that by 2016 many investment decisions will have been made. If these lock Britain into a high greenhouse gas emission future, they will either prevent us from meeting our climate change commitments or else will lead to the construction of fossil fuel generating capacity, which will subsequently have to be scrapped.
The year 2016 is also after the next general election. Delaying a decision until then creates another needless but harmful element of doubt about the Government’s true intentions. I therefore urge hon. Members on all sides of the House to support this amendment. Doing so will remove an element of uncertainty whose presence hampers investment, increases the risk of a capacity crisis and raises electricity prices unnecessarily. The amendment will not impose on the Government today any commitments that they do not already claim to embrace. Furthermore, it will not remove the need for even greater priority to be given to demand-side measures and to energy efficiency—issues that I wholly support. By itself, the amendment will not raise electricity prices in the next seven years by a single penny because the total sums spent on subsidising low-carbon electricity in the period up to 2020 has, as I have mentioned, already been capped by the levy control framework.
Steve Brine (Winchester) (Con)
I am listening to the things that the amendment will not do, but will my hon. Friend tell my constituents in Winchester and across the beautiful Hampshire downs what a decarbonised power sector will look like in my constituency and in many other constituencies by 2030?
Mr Yeo
That is quite a challenge because we cannot predict exactly which will be the most cost-effective technologies. I very much hope, incidentally, that we will move swiftly away from a situation in which the Government set the strike prices for contracts for difference on a centrally determined basis, and that they will allow different technologies to bid in an auction process so that we can be sure that we are getting the best value for money. It may well be that some technologies that we do not yet know about will offer better value than offshore wind farms, for example, which look to me as if they are going to be at the costly end of the spectrum. Even today, it is possible to see solar and an array of wind farms—I visited them in my constituency last Friday—operating. The farmer who showed me these with great pride—he was lucky enough to make his investment before the rates were cut a year and a half ago—pointed out that his sheep enjoyed sheltering under these panels and that there was some evidence to demonstrate increased productivity from the sheep as well as the generation of renewable power.
I think I have probably said enough about the Treasury’s floor price for carbon for the House to realise that I am not a supporter of it. I stress that we need to recognise that it is raising prices, adding to consumer and business bills and making British business less competitive relative to the rest of the EU, and it manages to do so in a way that does not cut carbon emissions by a single kilogram.
Without amendment 11, the Bill, whose early passage through Parliament is desperately needed for economic and security reasons as much as for environmental ones, will be needlessly weakened. I commend the amendment to the House.
Barry Gardiner (Brent North) (Lab)
I am pleased to join the hon. Member for South Suffolk (Mr Yeo) in supporting amendment 11 and voting for it later today.
The Secretary of State is in a bind. His party believes in a 2030 decarbonisation target—it is Lib Dem party policy, after all. His party put the issue in its manifesto. Many of his MPs went further and actually signed a separate pledge in support of a decarbonisation target. Have they not learned the Lady Bracknell rule of politics: to break one pledge may be regarded as a misfortune; to break two looks like contempt for the electorate? The Secretary of State is, however, a decent fellow and he has told me from that Dispatch Box that he favours a 2030 decarbonisation target and would be happy to implement one were it not for the fact that he struck an agreement with the Chancellor. I understand that he refers to this agreement as “the grand bargain”. Hardly: it is more of a Faustian pact.
The Secretary of State was right to negotiate £7.6 billion under the levy control framework to support renewables up until 2020—but a bargain this was not. Old coal will be allowed to provide base load beyond 2023; gas will be incentivised to provide base load right the way up until 2045. All pretence of meeting our carbon budgets and emissions targets will be abandoned, and the jobs and growth that leadership in low-carbon industries would generate will be lost. The combined value to the UK economy of all this is worth many times more than the paltry £7.6 billion that the Secretary of State has negotiated up to 2020. A grand bargain? Not since Esau sold his birthright for a mess of pottage has a worse deal been struck.
Just 10 days ago, the UK’s independent Committee on Climate Change produced its report on the electricity market reform. The report compared and analysed the relative benefits of investing in a portfolio of low-carbon technologies through the 2020s rather than investing in gas-fired generation. The report finds that investment in low carbon would save consumers between £25 billion and £45 billion. If, however, one uses the higher-end estimates of gas and carbon prices, the Climate Change Committee’s estimate then rises to £100 billion.
Mr Yeo
One thing about which I am pretty certain is that the world’s concern about climate change will be more intense in 2030 than it is today. The probability is that through a combination of emissions trading systems and carbon taxes there will be a high carbon price in 2030, and I believe that the most competitive economies in 2030 will be those that have reduced their dependence on fossil fuel consumption.
Michael Fallon
I can certainly agree with my hon. Friend that the concern might well be more intense, but whether we will be so certain, I am not so sure. Indeed, I have read a report of a speech delivered by my hon. Friend during the recess, in which—I was somewhat puzzled to see this—he said about climate change that
“the causes are not absolutely clear. There could be natural causes, natural phases that are taking place.”
Mr Yeo
Let me make the record absolutely clear. I said that during the 4 billion year history of the planet there have been much greater changes in climate than anything that is likely to result from a 50% increase in greenhouse gas concentrations, but that those changes took place before there were human beings, which are one of the most recently arrived species. If we are to support life for 7 billion going on 9 billion human beings in the style to which we have rapidly become accustomed and to which many still aspire, the one absolute precondition is climate stability.
Michael Fallon
I am sure that those who support my hon. Friend will be grateful for that explanation. The quotation I have seems pretty clear to me, but it is for him to explain it. If he is not so sure any more, why should the rest of us be so sure?
I would say to my hon. Friends that they should let the Opposition, as they always will, be opportunistic. Let the Opposition please the lobbyists by suddenly supporting a target that they never endorsed in 13 years in power. I ask those of us here who share the responsibility of government to be a little more careful not to risk higher bills now for our hard-pressed industries and constituents, not to force out generating plants before we have the new investment that the Bill will deliver and, above all, not to drive up costs for those industries struggling to compete against lower energy costs abroad.
Let us have economic and industrial policy that is coherent, and energy policy by design, not decarbonisation by dogma or by default, which can only drive our industries offshore. There is a better way forward, and it is in the Bill. Let us be the first Government ever to enable a legally binding target to be set at the right time: when we set the fifth carbon budget in 2016. We can then better assess the real prospects and costs of carbon capture and storage; properly measure what is happening to the whole economy; and better judge the transition to a greener future against the costs that our consumers and businesses must bear. I urge all my hon. Friends not to rely on blind faith, but on the practical steps that we are taking in the Bill to decarbonise our economy while ensuring security of supply at least cost to our constituents.
Julie Elliott (Sunderland Central) (Lab)
I support the comments that my hon. Friend the Member for Ynys Môn (Albert Owen) and other colleagues made about the hon. Member for South Suffolk (Mr Yeo) and his introduction of this amendment.
Investment in clean energy and policies to keep the lights on go hand-in-hand. We need a commitment to decarbonising the power sector by 2030 not just to combat devastating and unpredictable climate change, but to keep energy prices down and the economy growing into the second half of the 21st century. The idea that there is a binary choice between a firm commitment to green energy and keeping energy bills down is clearly a false dichotomy. Decarbonisation is fundamental to keeping energy prices down in the long term; the alternative is to remain at the whim of unpredictable yet ever-rising global fossil fuel prices.
It is therefore shocking that investment in green energy has fallen in every year since this Government came to power. At current rates, investment in 2013 will be at its lowest level since 2006. This is not just a case of “not good enough”; it is an utter dereliction of duty. The Government, riddled by indecision and infighting, are deterring investment, stopping Britain becoming the leader in Europe on renewable investment.
At the evidence stage of this Bill, I asked the Secretary of State whether he agreed with his party’s position of wanting a decarbonisation target in the Bill. He said that he did but we have a coalition Government, which therefore meant that it was not going to be there—that says it all. This issue should be beyond party politics. I welcome the fact that the hon. Member for Waveney (Peter Aldous) has decided to support the amendment, and I understand that the president of the Liberal Democrats, the hon. Member for Westmorland and Lonsdale (Tim Farron), and their former leader, the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy), are going to support it, too. I urge other Liberal Democrats, who have the choice at 4 pm as to which way to vote, to support the amendment, in line with their party policy.
This Government rightly decry short-termism, and we all support a long-term plan to improve British competitiveness and boost growth, which is why it is so disappointing that the Government cannot recognise the crucial long-term benefits of a 2030 decarbonisation target. Long-term strategy is even more crucial in energy policy, where large fixed costs must be met. Investors’ cash, which we know is highly mobile, relies on a strong and unwavering vision from the Government. Without such a vision, the UK has slumped to seventh in the world for investment in clean energy, and for the first time we are no longer ranked first globally for offshore wind attractiveness.
Decarbonising the power sector by 2030 is not just an important part of our legally binding commitment to reducing the UK’s carbon dioxide emissions by 80% by 2050—it is the totality of it. The Prime Minister once recognised that. In 2010, he told the Liaison Committee that
“if we don’t decarbonise electricity, we’ve got no hope of meeting all the targets that we are all committed to”.
I entirely agree with the statement, but, unfortunately, the Prime Minister seems to have abandoned that.
The case for a 2030 decarbonisation target is about more than preventing catastrophic climate change. There is an irresistible business case for these amendments, and it can be summed up in one word—jobs. The renewable industry currently supports 110,000 jobs and, across the supply chain, it could support 400,000 jobs by 2020. In 2012, the CBI estimated that nearly one third of the insufficient number of jobs created in the UK came in the green sector. Two thirds of jobs providing low-carbon and environmental goods and services are outside London and the south-east. Furthermore, if we use the BIS definition of “low-carbon environmental goods and services”, we find that the largest activity in the sector is manufacturing, with 20% of total sales and employment, as opposed to a figure of 13% for the economy as a whole. In 2010-11, green business grew by 2.3% in real terms, outstripping global growth, yet this Government’s dithering is scaring off investment in an industry worth £3.2 trillion.
Jobs, rebalancing the economy and economic growth are three pillars of this Government’s agenda that would be boosted by a decarbonisation target. It is at times of economic stagnation—this economy is certainly not booming—that investment is at its most economically productive. With interest rates at near zero, the Government should be prioritising investment in decarbonisation. That the “greenest Government ever” claim they want to decarbonise the economy but will not support a 2030 decarbonisation target is simply bizarre. Without such a target, I am deeply concerned that this Bill will not give investors the confidence we know they need to invest in low-carbon generation in the UK.
Mr Yeo
I pay tribute to everyone who has taken part in the debate and thank you, Mr Deputy Speaker, for the opportunity to comment briefly on what has been said. I am particularly grateful to members of my Committee who have spoken and although their full tributes have done great damage to my career prospects, they are much appreciated nevertheless—[Hon. Members: “What career prospects?”] Okay, I accept that.
I am particularly pleased that most of those members maintained the position that the Committee took last summer when we reported on the draft Bill and made a unanimous recommendation about the need for a target. My right hon. Friend the Minister set out the Government’s position very powerfully. I do not think that there was any doubt about his reasons for opposing the amendment, but nothing he has said has explained to me what, if the Government remain as serious as he says they are about meeting the fourth carbon budget, which takes us to 2027, and progressing further towards the 2050 target, the objection is to accepting now rather than in three years’ time the advice of the Committee on Climate Change about a 2030 target for decarbonising electricity generation. That seems to me to be completely consistent with everything he said.
My right hon. Friend also had some perhaps predictable fun about press reports of an answer I gave at something called the Westminster Russia Forum last week, but I am not sure that he attempted to understand the intervention I made during his speech. I do not doubt, and I have not doubted for 20 years, that the man-made increase in greenhouse gas concentrations in the past 200 years as a result of the industrial revolution is extremely likely to be the cause of the changes in the climate that we are now observing.
Leaving that to one side, however, I want to reiterate that unlike a great many people who argue about the science of climate change I see it in an historical context. The human species is one of the most recently arrived on the planet and the phenomenal success of the species—our proliferation in numbers and our control over our destinies to an extent that perhaps no other species has ever achieved—has only happened even more recently than that. The precondition for that has been climate stability.
Concern was expressed by some hon. Members about the cost of energy. I absolutely share those concerns and it is for that reason that the amendment, which I will press to a vote in three minutes’ time, does not have the effect of raising electricity prices by a single penny for the next seven years. Anyone who is concerned about short-term movements in electricity prices should be hammering the Treasury about the floor price of carbon. That is what is forcing prices up and reducing the competitive position of British industry, not the setting of a decarbonisation target for 2030 on advice from the Committee on Climate Change.
As for what will happen to prices in the 2020s, nobody can be certain, as colleagues have made clear. There is, however, a very strong probability that the cost of various renewable energy technologies will be lower then than it is today, as several are on a very rapid downward cost curve. The pace of that reduction in the price of those technologies might be even faster if the industries concerned have greater certainty that the Government remain committed to reducing dependence on fossil fuels for electricity generation beyond 2020.
There are therefore in my view overwhelming environmental reasons for supporting the amendment, but there are other reasons, too. As I made clear, it will encourage investment and bring down the cost of investment, benefiting consumer prices. By accepting the amendment, the Government would strengthen their claim to be the greenest Government ever. The credentials of all previous Governments are not that strong, so achieving that accolade is probably even now within the grasp of the Government. Accepting the amendment would be a big step towards placing Britain in the vanguard of the new industrial revolution, taking our economy to a position in which it is less dependent on fossil fuels. I am convinced that countries, industries and companies that do that will not only be doing the right thing environmentally but enjoy an economic and financial advantage by improving their competitive position over those countries that remain dependent on fossil fuels in 2030.
For all those reasons, I warmly commend the amendment to the House. I urge all my hon. Friends and, in particular, those on the Liberal Democrat Benches, to join us in the Lobby and do something that will materially improve the Energy Bill.
Question put, That the amendment be made.