Energy: Low Carbon Transition Plan — Statement
Lord Teverson (Liberal Democrat)
My Lords, I, too, thank the Minister for repeating this Statement. I know the Government are keen to get on with the legislative programme of the House today, but given the importance of this subject, it was fitting that this Statement was heard, and I thank Ministers and the Official Opposition for allowing it to come forward.
This is an important Statement. It moves from discussions on the Climate Change Bill to statements of intent, targets and ideas about legislation to taking action, although I note that the shortest chapter in the Renewable Energy Strategy is concerned with implementation, so perhaps there is a little more still to do there. Given the shift in thinking from considering carbon dioxide to assessing greenhouse gases as a whole—in my opinion that is a correct shift—it is interesting to note that the 34 per cent reduction comes down to 18 per cent, which is very manageable and is important to achieve, although many of the relevant reductions have already been achieved. In that sense much of the low-hanging fruit has already been taken.
We are looking at this strategy up to 2020 in an environment of very tight public cash availability. Much of the investment will need to be private investment but we are still subject to a low carbon price. I have seen no reference to a carbon price in the documents or in the Statement, but clearly it will be one of the main drivers for the private sector. I do not think there is any real understanding of how we will ensure that those price signals are right to encourage the private sector to make the right decisions in this area. Indeed, I think that the ETS is mentioned in only one box in the accompanying papers.
These Benches welcome much that is in the Statement and the strategy. The feed-in tariffs are to be implemented in April, but what about heat? The Statement mentions the grid in that connection but there is no mention of heat tariffs. I should be interested to hear about that. We welcome the strong focus on Ofgem reducing carbon emissions. However, on first reading the Statement, I was alarmed to note how uncompetitive the Government feel the electricity supply industry is, given that many years' study have been devoted to that matter.
We also welcome the measures concerning grid access. The fact that it can take 10 years to get connected to the grid, as the Statement says, is clearly unacceptable, and has been for some time. Do we not also need a smart grid to allow access for all the different types of electricity that will be available? What is the Government's view of the European supergrid, which will lead to much greater energy independence not just for us but for our European partners? Do the Government take a more favourable view of that now? I also welcome the introduction of departmental carbon budgets. This may not be the Minister's responsibility but it would be nice to see both Houses having their own carbon budgets. Perhaps that matter should be taken up elsewhere.
However, we have a history of relative failure in this area. Sweden has already achieved a figure of about 30 per cent with regard to renewable energy. The figure for Germany—a large economy—is 10 per cent. We are still at 2 per cent, and are bottom of the league. As regards aspirations for manufacturing, noble Lords around the House agree that we want to stimulate a renewable energy industry in this country. However, we have a track record of recent closures in that regard. In terms of costs to consumers, I am pleased to see that social tariffs, which have worked only partly, will be overhauled. But surely with fuel poverty having gone up substantially and fuel prices going up under this regime, we should introduce something more radical whereby consumers pay less for lower consumption and more for greater consumption—the opposite way round to the normal thinking on this issue.
I have asked the Minister a number of Written Questions on skills needs. I am still unconvinced that we have sufficient staff with the relevant skills in the nuclear or the renewable industries. Smart meters are rather old news but I am glad to see that there is a commitment to implement them by the date set out.
Insulation of the existing property stock clearly must be one of the most important areas. Although I accept that we need a programme that is similar to the North Sea gas conversion programme, the big difference is that households did not have to pay for that. They might have suffered inconvenience when someone changed their fittings or appliances, but they had no upfront costs to meet. Although there are various schemes to avoid cost, it would be dangerous to think that it will be quite as simple as that.
Beyond that, my questions for the Minister are as follows. The airline industry was not mentioned in the Statement, though there is a small reference to it in some of the supporting documentation. Is the airline industry included in these reduction figures? Will the carbon reduction commitment mentioned in the Statement at last discriminate between renewable and non-renewable electricity? Pre-payment meters are one of the greatest scandals of the energy supply industry and fuel poverty in this country, with pre-payment meter payers paying some £95 more per year for their energy bills. Will that be solved more urgently than the smart meter programme? It is clearly an area of major social injustice. From these Benches, we welcome this Statement. It is now all about implementing it and making it happen.