Clause 133 — Financial provisions

Energy Bill – in the House of Commons at 6:06 pm on 4th June 2013.

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Votes in this debate

  • Division number 20
    A majority of MPs voted to reform the energy market with regard to reducing carbon dioxide emissions, securing supply, affordability for consumers and increasing generation from renewable sources.

Amendment made: 135, page 102, line 30, after ‘operator’ insert

‘, a person or body on whom a function is conferred by virtue of section [Provision about electricity demand reduction]’.—(Gregory Barker.)

Third Reading

Queen’s and Prince of Wales’s consent signified.

Photo of Edward Davey Edward Davey The Secretary of State for Energy and Climate Change 6:07 pm, 4th June 2013

I beg to move, That the Bill be now read the Third time.

Let me begin by thanking those from all parts of this House and outside who have helped to strengthen this crucial Bill and bring it to this point. I thank the Energy and Climate Change Committee and its Chair, my hon. Friend Mr Yeo, and the informal scrutiny group in the other place for conducting invaluable pre-legislative scrutiny of the draft Bill. I also thank the individuals who gave oral evidence to the Committee, as well as the organisations that took the time to provide expert written evidence and recommendations.

In particular—I think you will agree with me, Mr Speaker—I could not allow the Bill to leave this place without thanking my right hon. Friend Mr Hayes for skilfully guiding the Bill through Committee. I am told that at one point in Committee he managed to compare himself to Henry VIII and Indiana Jones in the same breath—I am not sure whether he has told his wife. I for one salute his unique style in promoting renewables.

I also want to thank the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend Michael Fallon and the Minister of State, Department of Energy and Climate Change, my right hon. Friend Gregory Barker for their hard work. It would be remiss of me if I did not also mention my hon. Friend Charles Hendry.

On the Opposition Benches, the hon. Members for Rutherglen and Hamilton West (Tom Greatrex) and for Liverpool, Wavertree (Luciana Berger) have been skilful and insightful. I am grateful that they have applied the principles of constructive opposition to the Bill’s scrutiny rather than the principles of destructive opportunism, which are all too often applied in politics generally—by people of all political colours—but which are all too often not in the national interest. Let me take this opportunity to remind the House why the passage of the Bill is so important and so firmly in the national interest.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

I am grateful to the Secretary of State for thanking everyone for contributing to making the Bill stronger, but I wonder how he thinks that it has been made stronger, given that, as far as I can see, not a single Opposition amendment has been accepted, either in Committee or on Report.

Photo of Edward Davey Edward Davey The Secretary of State for Energy and Climate Change

The hon. Lady might not have noticed that the Government have responded to a lot of the debates and tabled a lot of amendments on everything from electricity demand reduction to decarbonisation. I will come to those amendments shortly.

Electricity market reform, which is at the centre of the Energy Bill, is the result of four imperatives: the need to power the country; the need to protect the planet; the need to insulate consumers from rising energy bills; and the need to get the economy moving. With demand for electricity set to increase, and around a fifth of our power plants set to close, we will need to attract £110 billion of new investment in electricity and grid infrastructure in this decade alone to ensure that we have enough reliable capacity to meet demand. The Energy Bill will do that.

The Climate Change Act 2008 commits the United Kingdom to an 80% reduction in greenhouse gas emissions by 2050, so we need specifically to encourage investment in low-carbon energy generation: renewables, carbon capture and storage, and nuclear. The Energy Bill will do that. With global demand driving wholesale prices higher, and with that in turn driving domestic energy bills higher, we need to create a more diverse and competitive energy market to help to cushion consumers from volatile fossil fuel prices. We also need to ensure that they are getting the best deal from suppliers. The Energy Bill will do that.

By facing up to the need to invest in low-carbon energy infrastructure, we will support economic recovery too. The trebling of support under the levy control framework will mean £7.6 billion a year by 2020 to support low-carbon technologies, including infrastructure projects that are ready to go now, supporting jobs, supporting communities and providing prosperity. Projects worth over £8 billion are already in the planning pipeline. Electricity market reform could support as many as 250,000 jobs in the energy sector. The Energy Bill will support green growth. That is why I am pleased that the Bill, as strengthened in Committee and on Report, benefits from a general level of cross-party support in the House.

I want to reflect on some of the ways in which the Bill has been further strengthened in this House. Let me start by dealing with the decarbonisation target head on. No party in this House—not the Liberal Democrats, not the Conservatives, not Labour, not the nationalists, not even the Greens—had a commitment in its 2010 manifesto to set a 2030 decarbonisation target during this Parliament. Nor has any other country yet set a power sector decarbonisation target for 2030.

I can understand the argument that an early decarbonisation target could provide extra certainty for large, long-term projects in the UK power sector, particularly in the supply chain. However, there is also logic in the consistency of setting the decarbonisation target for 2030 at the same time as the fifth carbon budget, which is scheduled for 2016—still 14 years ahead of the target date. By comparison, the 2020 renewables target was set in 2008, just 12 years from its target date.

If anyone still doubts my commitment, or that of this Government, to decarbonisation, they should consider the decision that we have just made on the UK’s position for the EU’s 2030 greenhouse gas target. In the context of winning an ambitious global climate change treaty, we will be arguing for a 50% reduction target in the EU. That is the most ambitious position of any member state, and I am proud that this Government are leading the way on climate change action.

Let me turn to other areas of the Bill—first, to contracts for difference. Long-term electricity price stability will be provided through CFDs and will be a key part of the new low-carbon electricity market. As such, the Commons Committee quite rightly looked at the nature of the CFD counterparty body and made a number of recommendations. In response, the Government have clarified the Bill’s drafting to make the policy intention more explicit.

Photo of Michael Weir Michael Weir Shadow SNP Spokesperson (Business), Shadow SNP Spokesperson (Energy and Climate Change)

I am listening closely to the Secretary of State, but does he not share my slight concern about the CFDs that, as the Bill presumably leaves this House tonight to go to the other place, we still do not know basic details such as the strike price? Although that information has been promised on several occasions, we are now told that the delivery document may be published next month. We do not seem to be getting any nearer to getting this information.

Photo of Edward Davey Edward Davey The Secretary of State for Energy and Climate Change

We always said we would publish the document in July 2013, and we are on track to publish it in July 2013.

Accompanying the CFDs, the capacity market will ensure that sufficient reliable generating capacity is available to meet electricity demand as it increases over the next decade, but we are also looking at reining in demand. We have added measures on electricity demand reduction that for the first time can allow energy-saving projects to be able to compete with power stations for new investment—negawatts. Delivering through the capacity market can incentivise permanent reductions in demand at times when electricity is most expensive, allowing for a more direct trade-off between generation capacity and demand reduction. This is a radical approach that has been shown to work in international examples such as in forward capacity markets in the United States, and it is a major advance for the UK.

We acknowledge that many consumers are “feeling the pinch”, and we remain committed to doing everything we can to help. Let me be clear, however, that the main reason for rising energy bills is rising wholesale gas prices, which make up around half a typical household dual fuel bill. These prices are set on global markets and changes are driven by global events. This Bill paves the way for increased UK production of energy, which will help to reduce price rises from global markets.

As well as providing a more stable pricing environment and helping consumers to reduce their electricity demand, we introduced in Committee new provisions on domestic tariffs to ensure that all households will be able get the best deal for their gas and electricity. These provisions will ensure that energy companies provide consumers with clear information about their tariffs and put them on the cheapest tariff that meets their preferences. These provisions will also ensure that there are fewer and simpler tariffs so that it is easier for consumers to shop around for the best deals across the market. Last year, Ofgem estimated that there were approximately 900 open tariffs. Under these proposals, each supplier will allowed to offer a customer a maximum of four core tariffs for each fuel and meter type. We want to see a competitive retail market, where suppliers have to work hard to retain their existing customers and attract new customers.

These measures complement the new consumer redress measures already in the Bill, which ensure fairer outcomes for consumers by giving a new enforcement power to Ofgem. This power will enable Ofgem to require energy companies that have breached regulatory requirements directly to compensate consumers where they might otherwise not have done so. This is another step forward for energy consumers.

We have listened to the concerns raised throughout the passage of the Bill. Opposition Members have raised questions about transparency and accountability, and we have responded by amending the Bill further to ensure that it aligns with the Government’s principles in this area.

We remain committed to encouraging a more diverse and competitive energy market, and there are a number of related areas within the Bill that we will hope to consider further in the other place. As indicated in Committee, we will continue actively to consider raising the threshold for the small-scale feed-in tariff scheme from 5 MW to 10 MW, and the Government hope to respond to this issue in the other place. We are taking backstop powers in the Bill to enable the Government to intervene in the generating market, if needed, to improve liquidity and competition.

I am grateful to the House for taking the time to scrutinise and contribute to this Bill. The wide cross-party consensus we have achieved sends a strong signal to investors in the UK and investors globally. The UK is the place in the world to invest in low-carbon energy. We now have the opportunity to deliver a lasting framework for investment in the country’s energy infrastructure: delivering green jobs and green growth, securing a low-carbon energy future, and ensuring that consumers get a fair deal. I commend the Bill to the House.

Photo of Caroline Flint Caroline Flint Shadow Secretary of State for Energy and Climate Change 6:19 pm, 4th June 2013

Let me begin by paying tribute to my hon. Friends Tom Greatrex and for Liverpool, Wavertree (Luciana Berger), who, with just a fraction of the resources and staffing available to Ministers, have done a first-rate job in debating the Bill. They have not only scrutinised it, but improved it.

I also pay tribute to my hon. Friends the Members for Sunderland Central (Julie Elliott) and for Hyndburn (Graham Jones), who have provided invaluable support for those on the Opposition Front Bench; to my hon. Friends the Members for Southampton, Test (Dr Whitehead), for Brent North (Barry Gardiner), for Wansbeck (Ian Lavery) and for Ynys Môn (Albert Owen), who served on the Bill Committee; and to my hon. Friend John Robertson. They have all brought a great deal of expertise and experience to bear.

I thank the Ministers and officers in the Department. There have been some personnel changes on both fronts, but we have managed to get through the process. I thank the Secretary of State for the briefings that he facilitated with officials in his Department, as well as the Clerks and the ever-helpful staff in the Library, who have advised us on some of the finer points of detail and parliamentary procedure.

I made it clear on Second Reading that we would not oppose purely for opposition’s sake, and on that basis we have sought to find areas of agreement with the Government when that has been possible. We have supported the provisions to establish an office for nuclear regulation, as well as those relating to the Government pipeline and storage system and to offshore transmission systems.

As the Secretary of State has just said, Ministers have accepted some of our amendments, including those concerning the transparency of investment contracts and the structure of the counterparty under contracts for difference, and I welcome that. We have not yet managed to persuade them to accept amendments relating to other issues, such as carbon capture and storage, support for community energy and access to the market for independent renewable generators, but we have noted their commitment to considering our proposals, and we hope that colleagues in the other place will return to them.

The Secretary of State referred to the redress framework. We are disappointed by the rejection of amendments that would have ensured that consumers were compensated pound for pound and that compensation was paid in respect of any breach of the rules that came to light, because that has left a massive loophole. The best way of protecting consumers is not to provide a redress framework—much though we need that—but to prevent companies from ripping people off in the first place, and I am afraid that on that count the Bill falls badly short.

The Prime Minister told the House 12 times that he would force the energy companies, by law, to put everyone on the cheapest tariff, but, although the Bill consists of nearly 200 pages, not a single one of them contains legislation to put every customer on the cheapest tariff automatically, which is what the Prime Minister promised. Ultimately, unless the energy market is genuinely reformed through the wholesale side—as we have proposed—there will be nothing to prevent the energy companies from raising all their tariffs in any event.

Whenever I meet investors, the single most important thing that they tell me they want is certainty. They should gain confidence from our support for the substance of the Bill. When it comes to contracts for difference, there are clearly many important details still to be worked out, but, in principle, if CFDs are executed correctly, they should provide investors with long-term certainty, and we will therefore support them.

There are also many important details still to be worked out in regard to the capacity market, but in principle we believe that it could work, and have supported it. We also support the principle of an emissions performance standard, and welcome the commitment to reviewing it in five years’ time. However, as my hon. Friend the Member for Brent North said yesterday, we are concerned about the particular standard that the Government have chosen to adopt, and we hope that the other place will scrutinise it carefully.

That is some of the good news, but I must also be candid about where the Bill fails, and how we would seek to remedy that after the next election if it is not rectified in the other place. The Government’s stated purpose was to reform the electricity market to deliver secure, clean and affordable electricity, but there are no two ways about it: the Bill will fall short of its stated purpose unless it puts Britain’s electricity system on a pathway to decarbonisation, and unless it genuinely reforms the electricity market to make it more transparent, liquid and competitive.

We have had a full debate on decarbonisation this afternoon. I pay tribute to Mr Yeo for tabling his amendment, and for the work of his Select Committee. I also pay tribute to the work of my right hon. Friend Edward Miliband, who was the first leader of a main political party to commit himself to decarbonisation. The Bill does not contain a decarbonisation target because the Liberal Democrats, with a few honourable exceptions, did not have the courage to vote for it.

It is clear that the Conservative party has now set its face against decarbonisation. Its choice is to lock Britain into a high-cost, high-carbon electricity supply for decades to come, but there is still a clear majority in this House in support of decarbonisation. The Labour party supports it, and the Scottish National party, Plaid Cymru and the Green party all support it, too, and I thank colleagues from other parties who joined us in the Lobby this afternoon. With a Government majority of just 23, there is no doubt that if the Liberal Democrats—who claim to support this, who have a party policy on it, and who have a Secretary of State who says he supports it—had voted for it, this Bill would have put us on the pathway to decarbonisation.

Let us be clear about what this Bill does and does not do. It does not set a decarbonisation target; it only says the Secretary of State may set one if they so choose. The Government could have supported just changing “may” to “must”, to give an indication of more certainty in this area.

It has been said many times this afternoon that none of the major parties had support for this target in their manifestos. However, the Committee on Climate Change has only made that recommendation since the general election, and we said we would support its recommendations. We must be able to do that. Things change from one general election to another, and we must listen to that advice. The truth is that even if the Secretary of State decides to set a target, 2016 is the earliest date at which it could be set, but it could be set at any later date—2026, 2036, 2046—or not at all. There is also no specification about what the target should be, so the Secretary of State could issue an order for a target that is totally inconsistent with decarbonisation, or do nothing at all, and still have fulfilled the requirements of the Bill. We would put that right.

Photo of Caroline Flint Caroline Flint Shadow Secretary of State for Energy and Climate Change

I enjoy many train rides from Yorkshire with the hon. Gentleman, but I will not give way to him as he has not been present all day for this debate. If he gets a chance, he can make his comments later.

Her Majesty’s Opposition are absolutely committed to decarbonisation of the power sector. The reasons for that are simple. First, the biggest driver of soaring energy bills is rising global gas prices. Cleaning up our power supply and investing in energy efficiency would lead to lower, not higher, bills. Secondly, the best way of improving our energy security is to take advantage of the natural energy sources in our own country. This is the windiest country in Europe, and when it comes to marine energy, Britain really can rule the waves, but businesses will only invest, and bring jobs and growth to this country if they see that the Government back decarbonisation. As my hon. Friend the Member for Wansbeck said, we should give confidence to those who wish to invest in carbon capture and storage and put us at the forefront of clean coal. Thirdly, if we cannot decarbonise the power sector, we will not be able to reduce the country’s carbon footprint, and if we cannot do that, we will face a future of chaotic weather, rising sea levels, flooded homes, failing harvests and drought.

If the other place is not able to rectify the omission of a decarbonisation target from this Bill, we will do so in government. Our determination to clean up the power supply is matched by our commitment to reform the energy market and to make it work in the public interest. So, on decarbonisation and fairer bills for consumers, we regret what is missing from this Bill, and make a commitment to put it right.

Investors should draw confidence, however, from the fact that there is broad cross-party support for many of the provisions in the Bill, and, on our part, there is the political will to deliver a lasting framework to bring forward investment in low-carbon electricity generation. On that basis, we will not oppose the Bill on Third Reading, but it is to be regretted that a dirty deal with the Liberal Democrats has once again blocked the path to clean energy and all the benefits it could bring.

Photo of Brian Binley Brian Binley Conservative, Northampton South 6:28 pm, 4th June 2013

I am grateful for this chance to speak on Third Reading, and I will be brief.

In bringing forward these measures, the Government have identified a genuine problem whose consequences could be severe—indeed, the lights could go out. Security of supply is imperilled through the decommissioning of resources. The shortage of available public funds requires that the private sector delivers, but uncertainties and market conditions have created a blockage. Above all, we need to keep a close eye on the price of energy, and this Bill has proved to be an important opportunity to do that.

I do not doubt that some of the measures in the Bill will contribute positively, but the bigger issue remains an abiding concern that the cost to British industry will be disproportionately high, and the price we pay will be of even greater magnitude. I have seen nothing to indicate that the Government have taken seriously the question of the costs from this Bill to our economy and our businesses compared with our major competitor economies.

We need to ask whether the true cost of the zealous attachment of Liberal Democrats to renewable energy solutions, endorsed by and, sadly, imposed from Europe, should be pursued seemingly at any price. A recent report by Civitas articulated many of those concerns, saying that the relentless drive to renewable energy is stifling innovation in the sector and costing a fortune, with the risk of reversing the long-term trend of improved living standards. It estimates that the cost to households of the renewable energy fixation will be about £600 each year by 2020, with the economy bearing a cost of about £200 billion—more than £16 billion each year, which exceeds 1% of our GDP. That is an enormous cost and a massive burden. The report also demonstrates that we risk bearing a quarter of the target of the EU renewables directive, as we plan to create the largest single increase in renewables to achieve compliance. The renewables obligation already costs us around £2 billion each year, a figure predicted to rise to £8 billion to meet these targets. Taking that money out of the economy will impede our growth, reduce prosperity and cost jobs.

Although decarbonisation is a worthy ambition and a desirable destination over time, fuelling subsidies for expensive and inefficient renewable energy technologies risks taking us further from, not closer to, achieving that ambition. The cost we pay in promoting the renewable energy sector could prove damaging to the development of our own innovative response to the challenge of decarbonisation. It could harm our prospects for rapid and sustained economic recovery, and it could drive enterprise away from this country. If decarbonisation is our goal, we should be far more prepared to encourage innovation in a range of different technologies and systems. This is not about whether we have a decarbonisation target in the Bill; it is about approaching the issue without the prejudice and the dogmas that have characterised the Secretary of State’s rhetoric and approach in office—he has been only moderately less rabid than his predecessor.

The energy challenge that we face is acute. The previous Government failed to do what was necessary. The time to act has almost passed; it is possible that even these measures may be too late to avert a harmful crisis. However, my overwhelming anxiety is that this Bill is not the answer to the energy questions we face, not least because of the impact that will confront businesses in this country. I wonder whether, in approving these measures, we are supporting good politics within the coalition but at a far greater cost to our economy than we can either sustain or afford.

Photo of Michael Weir Michael Weir Shadow SNP Spokesperson (Business), Shadow SNP Spokesperson (Energy and Climate Change) 6:32 pm, 4th June 2013

I said at the outset that SNP Members did not oppose this Bill on Second Reading and we will not oppose it tonight. We recognise the need for electricity market reform and support much in the Bill. I understand the Minister’s point—I understand that contracts for difference could well be a good way forward—but I remain concerned about the lack of much of the detail, and I say that for two reasons.

In Committee, I raised the issue of the closure of the renewables obligation system in 2017 and whether that could have an impact on investment in the meantime. Many companies that are considering investment are still unsure about how the CFD system will work and are concerned about the changeover. More thought should have been given to how the interim period could be dealt with, perhaps by extending the RO system. Regrettably, the Minister was not prepared to accept that.

The other point about CFDs is that we still do not know what is being negotiated between the Government and EDF in respect of Hinkley. Whether or not I am anti-nuclear, that is important, because whatever those details are they will inevitably become the template for future CFDs in the nuclear industry. If the price is set too high and the contract is too long, that could have huge implications for the public purse in the future. None of those details are available. We are told that they will be available in July, presumably when the House is in recess, but we have no opportunity to look at these things, and that is a shame.

Late in the proceedings, the Government introduced amendments on consumers, including the Prime Minister’s promise to put them on the lowest tariffs. I do not think they were strong enough and I tabled amendments on Report that, unfortunately, were not reached because of the time available.

I also tabled an amendment to deal with a question that I have often raised about winter fuel allowances and the need to provide small-scale practical help for consumers, but it fell into the last group tonight.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Human Rights)

On that subject, statistics show that in the past year 24,000 people died from cold-related causes. That was due in a big way to the inability of the system to address people’s needs early. Does the hon. Gentleman feel that it is not too late for the Government to take that on board and that ensuring the early payment of such money at a time when oil is cheap would be a good way forward?

Photo of Michael Weir Michael Weir Shadow SNP Spokesperson (Business), Shadow SNP Spokesperson (Energy and Climate Change)

That is an excellent way forward. The Minister of State, Department of Energy and Climate Change, Michael Fallon, has convened a round table on oil-fired heating. The first meeting was held in May and I welcomed that. It was a useful meeting and might perhaps be a way of dealing with that industry, but we need small-scale help as electricity market reform is not the only way of dealing with energy markets. Small-scale things can be done that make a real difference and the Government must grasp some of those issues, rather than simply considering massive measures such as this Bill.

There is a decarbonisation target. We fully support it; I spoke in the debate on it and gave the reasons why. If Governments north and south of the border want a true, green, sustainable manufacturing base, a decarbonisation target will give companies the assurance that will allow them to invest for the future. It will enable them to be sure that they have a market as they push towards it.

It could also provide a huge amount of sustainable, highly skilled jobs. As I pointed out earlier, growth in the Scottish economy has come largely from the energy industry and such development could be a huge boost for the future, so it is unfortunate that we do not have that target.

There are defects in the Bill, but there are some good things. We will not oppose the Bill on Third Reading, but I hope that when it gets to the other place the Government will reconsider some of the issues.

Photo of Dan Byles Dan Byles Conservative, North Warwickshire 6:37 pm, 4th June 2013

It is a pleasure finally to be speaking on Third Reading. I am a member of the Select Committee on Energy and Climate Change, which has carried out inquiries into energy market reform and pre-legislative scrutiny of the Bill, and I also sat on the Public Bill Committee, so it has been a labour of love getting here.

Although I support the Bill, I admit that I have some concerns. I am concerned about the level of complexity we are starting to pile on to our energy sector. Perhaps that is inevitable, as this is a highly complex policy area, but I sometimes feel that unintended consequences lead to another sticking plaster being put on, leading to more unintended consequences, so that a highly complex system evolves. I do not necessarily blame the DECC team for that, as this is a difficult and complex area, but I hope that as the Secretary of State introduces the secondary legislation he will bear in mind the need to try to minimise the complexity as much as possible, in keeping with the aims of the Bill.

The energy sector still faces huge challenges. As for the oft-quoted figure of £110 billion a year of infrastructure investment, I have seen a lot of estimates that put the figure much higher. Some people grossly underestimate the scale of change required in our energy sector, particularly in the argument about decarbonisation. The year 2030 is just 17 years away and at 10 minutes to 6 today, in real time, 40% of our electricity was being provided by gas and 35% was being provided by coal. That means that 75% of our electricity was being provided by gas and coal. Gas heats 83% of our homes. We will have a substantial slice of gas on the system for a long time, so we need to get on and start exploratory drilling for shale gas once again, so that we can ensure that the gas is provided from a domestic source. The Institute of Directors has told us that shale gas production could provide up to 74,000 jobs, both directly and indirectly, and up to a third of peak demand—and that is just the central scenario. We need to search for shale gas, and to accept that gas will be on the system for a long time to come.

We also need steadily to increase investment in renewables; I entirely accept that. Sometimes people throw at me that I am anti-decarbonisation—we have heard that from some Opposition Members—but I am not. We need to move to a low-carbon future, not through a rash, uncosted 2030 decarbonisation target set this year, but through the nuts and bolts of the contract for difference and the levy control framework, as the CBI has said.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

One of the reasons why I was not here earlier is that colleagues from our region and I were with a Treasury Minister, trying to ensure that when the money for renewables comes on stream, British companies benefit from it. Does my hon. Friend not agree that once we get the Bill out of the way, the biggest challenge is to ensure that it is British companies, such as Tata Steel in Scunthorpe, who benefit from the additional money going into renewables?

Photo of Dan Byles Dan Byles Conservative, North Warwickshire

I entirely agree. This needs to be seen in a much wider context than energy; this is about jobs and investment, including inward investment.

Gas will be on the system for a long time; we need to bring forward new gas generation. We need to increase renewables on the system, and we desperately need new nuclear. There is hardly a credible scenario for a decarbonised future that does not involve new nuclear on the system. We need to incentivise generation capacity in all three. The Bill is long overdue, and I will support it this evening, because it will achieve that aim.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion 6:40 pm, 4th June 2013

I am sorry to sound a negative note, but to my mind the Bill falls well short of what is needed. Ministers have had many opportunities to improve the legislation for the sake of our economy and those struggling with high energy bills, in order to create many thousands more jobs and, crucially, to demonstrate that we politicians are up to the job of tackling the climate crisis with the urgency and ambition required.

The Bill could have demonstrated that politicians understand the risks of locking the UK into high-cost, high-carbon gas generation for decades to come; that we listen to and act on scientific advice on the urgency of action needed to avoid irreversible climate change. The Bill simply does not go far enough. There are some positive aspects; for example, I welcome the emissions performance standard, but it is too weak, and it opens the door to a new dash for gas. As a result, we have not seen the last of people turning their backs on the politicians who listen to the fossil fuel lobby rather than climate scientists, and people instead taking action themselves in the name of what they see, and the science says, needs to be done—people such as the brave, peaceful protesters who occupied EDF’s West Burton power station last year.

If we are to avoid catastrophic climate change and the worst impacts here and elsewhere, in terms of water shortages, flooding, food price rises and drought, it is clear that around 80% of existing fossil fuel reserves need to stay in the ground. How can we hope to leave that unburnable carbon in the ground if we cannot even agree a decarbonisation target for 2030? I am not looking forward to writing yet again to hundreds of my constituents to tell them that the decarbonisation target has been rejected, against all common sense. Frankly, I find it almost unbelievable that so many Liberal Democrats voted against their own policy.

It is a scandal that the Bill does not have more ambition when it comes to renewable energy and energy efficiency. Instead, it will facilitate vast subsidies to new nuclear power stations that we do not need. There are plenty of records of how we can reach our climate change and decarbonisation targets without new nuclear. New nuclear, with vast public subsidies to support it and no real public or parliamentary scrutiny, is at the centre of the Bill. Crucially, that is diverting investment away from faster, less costly, more jobs-rich and more secure means of meeting electricity needs, including through harnessing the UK’s huge renewable energy resource. The enormous potential of energy efficiency and demand reduction is also overlooked, with weak amendments from the Government convincing nobody. That ignores the widespread consensus that these are the cheapest, quickest, and most effective ways to protect householders from high energy bills, and to cut emissions.

Perhaps most of all, I am disappointed that the Bill simply fails to have a vision of a different energy future. It simply entrenches the big six energy companies and their death-grip on the UK’s energy system and on the many households in Brighton, Pavilion and elsewhere who are struggling to pay ever higher energy bills. It reinforces the centralised electricity system, in which people are just passive consumers, constantly ripped off, whether or not they switch from npower to EDF to E.ON, because essentially they are all the same. Contrast that with a place such as Germany, where only 13% of the country’s 60 GW of renewable energy is owned by big energy companies. The rest is owned by households, communities, development trusts and farmers. Fully 50% is generated by community-based projects.

The Bill could have supported projects such as the Brighton Energy Coop, releasing a new wave of co-operative and community energy projects where people are so much more than passive consumers—they are active producers of energy. It could and should have set us on a path to a radically different, more democratic energy future by giving smaller independent generators and community and co-operative energy schemes fair access to the market, where people own and generate their power on a serious scale and benefit from lower energy prices as a result. I am very sorry that the Bill has not taken those opportunities.

Photo of Glyn Davies Glyn Davies Conservative, Montgomeryshire 6:45 pm, 4th June 2013

I have sat in the Chamber for more than six hours today and heard many interesting speeches. It has been an extremely good debate. The Bill is important in many respects. It is the responsibility of Government to ensure energy availability, to ensure that energy is supplied at a reasonable cost and to pay proper heed to the need for decarbonisation of the energy generation market.

Whether or not one believes that man’s activities contribute to climate change—I do not think they make that much difference—it is perfectly reasonable to want to pursue a decarbonisation approach as a sort of insurance policy, so people will tend to agree with the general approach that the Government are taking. There is also general support for renewable energy projects, and there is a huge number of good projects all over the country. I opened a biomass project in my constituency run by a firm called Egnisco. If anybody is going to the National Eisteddfod in Wales in 2015, I recommend that they go to the farm buildings at Mathrafal where they will see a superb scheme. The buildings have been converted into factories and have all been heated by a biomass project that is taking timber from local woodlands. It is a wonderful project.

To me it is important that the Government pursue their objectives in a reasonable way. There are two aspects that cause me and my constituents great concern.

One is the attitude that we have to the local population. We have heard the words about localism in the Chamber, but I am more interested in the deeds. I can say that, right across the constituency, my constituents do not believe that the Government care one jot for what they think and what they say.

Today the largest public inquiry into wind farms opened in Welshpool in my constituency. It is likely to take 12 months. The small rural local council has had to set aside £2.8 million just to defend the decisions that it took. This will have a huge effect on local services, but nobody cares. When the Welsh Government were asked whether there was any way they could help the council, they said, “You knew what was going to happen and you turned down the application.” I thought that was utterly disgraceful. They were going to suspend their entire planning responsibilities to avoid the costs of defending their decisions.

Another aspect is the public inquiry itself. My constituents are deeply concerned that it is dealing just with the wind farms and not with the transmission line to them. It is like dealing with houses without any roads to them. Some £50,000 was spent trying to change the position, and people believe that DECC had some involvement with the inspector when the council’s decision was rejected. I do not know whether that is true, but I wrote to the Minister several weeks ago and have not yet had a reply to reassure my constituents that that did not take place.

A further issue that causes me shock and disgust is how National Grid has behaved and is behaving. The project that I am talking about is a very big project in my constituency; it involves about 500 wind turbines and 100 miles of cable, 50 km of which are on 150-foot high steel pillars. Not surprisingly, landowners have not been keen to co-operate with National Grid and to allow it on their land, so National Grid sent in the heavies. In truth, it has sent in thugs.

I have an e-mail here that I only wish I could read out, because it is so shocking. It comes from Councillor Gwilym Thomas, a recently elected county councillor for an area affected. I can just refer to one or two points that he makes. He is a man of unquestionable integrity and he begins by saying that he was visited by two gentleman who approached the door with envelopes, and said, “Mr Thomas, I have these for you.” They looked threatening and he asked them for some ID. They said they did not have it and would get it from their van and come back. Some time later they came back but he was on the telephone and his daughter answered the door. She clearly saw a threatening individual. The daughter and Councillor Thomas’s wife retreated to the kitchen. He went to speak to the man and they finished up nose to nose with the man shouting at him, “Take these, Mr Thomas,” and he threw them out and walked away. Mr. Thomas walked after him, and as he walked away the man shouted, “Goodbye, Mr Thomas,” 10 times, in a shockingly intimidating manner.

It gets worse. Later that day Councillor Thomas called at a property that he owns. There were two vans blocking the gate so he tooted the horn to go in, and he found that it was the same people employed by National Grid to enforce its policy. During the conversation, they used the f-word at least three times, an example of gross profanity. Councillor Thomas rang National Grid to tell it, but it seemed not to care. It talked about them being process servers, not bailiffs. This is shocking behaviour.

Another councillor contacted me—

Photo of Dawn Primarolo Dawn Primarolo Deputy Speaker (Second Deputy Chairman of Ways and Means)

Order. I have been listening carefully to what the hon. Gentleman is saying, which is clearly heartfelt, and I have given him much more latitude because of the seriousness of the matter that he raises. But this is the Third Reading of the Energy Bill, and what he says must relate to that, or he might want to find another way to raise what are very important matters. He may continue with his points, but he should either make them relevant to today’s debate or perhaps stake a claim for a future debate.

Photo of Glyn Davies Glyn Davies Conservative, Montgomeryshire

Thank you, Madam Deputy Speaker, for making the allowance that you have. I thought it was important to put that kind of behaviour in the public domain.

What the Government are doing in the Bill is hugely important to the country’s future, but we will not have anyone’s support unless we take forward what we are doing with reason and working in co-operation with the local people. That is what we need to do, so I thought it right to put in the public domain what is happening in our name. This is an important Bill that I am pleased to support, but please let us take forward what we approve today in a reasonable manner that the people of Britain will be able to support.

Photo of Christopher Chope Christopher Chope Conservative, Christchurch 6:52 pm, 4th June 2013

The Bill fails to meet four essential tests. First, will this Bill help to reduce energy costs for consumers? At the moment, energy costs for consumers are projected to rise at the rate of about 8% above inflation for the foreseeable future, and the Bill does nothing to address that. In fact, it makes it worse for consumers.

Secondly, will the Bill make UK plc more competitive in international markets? The resounding answer to that question is no, it will not. Indeed, we have already driven a lot of our manufacturing capacity overseas and the Government recently had to include in the Finance Bill a sticking plaster to try to prevent the potteries from closing down completely. That demonstrates that firms that are not perhaps involved in the potteries will suffer as a result of more lack of competitiveness being generated.

Thirdly, will the Bill prevent our countryside and coastal heritage from being despoiled by wind turbines, such as those proposed for Christchurch bay? It will definitely not do that. Indeed, because it is encouraging the subsidy junkies to come to this country and feed off our taxpayers’ money, it will make life even worse.

Finally, does the Bill address any of the perverse consequences that have flowed from the Climate Change Act 2008? The answer is that it does not. Five of us voted against the Third Reading of that legislation, and a lot more colleagues wish that they had also been able to register their opposition to it in the Division Lobby. That is why I hope that tonight, although there is this grotesque cross-party consensus about a lot of this legislation, it will be possible for individual Members to put on record their own views as to whether the Bill should go on to the statute book.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole 6:54 pm, 4th June 2013

I was not intending to speak, but I have been moved to do so by the speech made by Caroline Lucas, who attempted to present those of us who oppose the decarbonisation target as in some way anti-renewable. I voted against the target not because I am anti-renewable but because I am concerned about the bills paid by those who sent me to this place and the impact of onshore wind developments in my constituency.

In the Humber, we hope to benefit from significant investment by Siemens and others in offshore wind. We all stand behind and support that, if for no other reason than it is a job creation scheme. I hope we will see British employers such as Tata—I got things slightly wrong earlier in calling it a British company—benefiting from that. We want that development and those jobs to come to the Humber. However, the attempt to paint those of us who have opposed the decarbonisation target as anti-renewable is not fair at all.

Many of my constituents work in the coal and gas sectors. A large number work in coal and gas generation and some even work in coal mining. I think about their jobs and rights when we debate our energy market. It is not yet clear how the decarbonisation target would be hit or how carbon capture and storage technology could contribute to it. In my side of the constituency, at Drax, a lot of money is going into trying to develop clean coal technology. We want that to be a success. Perhaps in a couple of years’ time, when that is scalable and deliverable, I will be in the Lobby with the hon. Lady.

Photo of Caroline Lucas Caroline Lucas Green, Brighton, Pavilion

The hon. Gentleman has not been in the Chamber in the past two days, but over and again those on this side of the House who have been proposing and supporting a decarbonisation target have been able to demonstrate that it will precisely lead to lower fuel bills for consumers. It is precisely gas that is leading to higher bills. Will he not base his statements on the facts?

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

I have followed this debate closely both inside and outside the Chamber, and I am afraid that it has not been demonstrated at all that the target could be set up cheaply. If that were so, it would already be being done. I am concerned about the impact that such a target would have not only on bills, but on England and our countryside. I represent a constituency where people are very concerned about onshore wind turbines. The hon. Lady represents a more urban area, so perhaps she does not have to face what I have to.

Photo of Andrew Percy Andrew Percy Conservative, Brigg and Goole

No, I will not give way. There are very concerned people who feel very disempowered with respect to the planning process because of the march of onshore wind. That has to be taken into account. I am not prepared to vote for something that would say to my constituents, “Whatever your view is, it doesn’t matter. We have this target and we have to deliver on it.”

I think about the public inquiry at Saxby Wold, at which I spoke only a few weeks ago. I got a clap from local residents; it is not often that Members of Parliament get clapped by their constituents. I spoke for my constituents who said clearly that they did not want an ever-increasing march of onshore wind turbines. I also think about the residents in the towns of Winterton and Broughton and elsewhere. Just this weekend, I was informing them about the proposed development in the Ancholme valley of yet more wind turbines—an area that has already hit its 2020 targets.

So please do not present those of us who oppose the target as anti-renewable. We are pro-renewable, but we want a balance and a sensible energy policy that gives the people most affected by the changes a real voice in the process. That is why I will support the Bill. Perhaps in a year, two years or three years, we will be able to support a decarbonisation target. However, the CCS technology is not yet there and I am not prepared to say to people in my constituency who work in the industries I mentioned that they should be put out of work for a vague target that somebody has plucked out of thin air.

Question put, That the Bill be now read the Third time.

The House divided:

Ayes 396, Noes 8.

Division number 20 Energy Bill — Third Reading

A majority of MPs voted to reform the energy market with regard to reducing carbon dioxide emissions, securing supply, affordability for consumers and increasing generation from renewable sources.

Aye: 396 MPs

No: 8 MPs

Ayes: A-Z by last name


Nos: A-Z by last name


Absent: 242 MPs

Absents: A-Z by last name

Question accordingly agreed to.

Bill read the Third time and passed.