Energy Bill [HL] — Second Reading

Part of the debate – in the House of Lords at 1:00 pm on 22nd July 2015.

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Photo of Lord Teverson Lord Teverson Liberal Democrat Lords Spokesperson (Transport) 1:00 pm, 22nd July 2015

My Lords, I admit to having been almost quite reassured when the Conservative manifesto was published back in April. It had two key comments on this area. One was that the Government were aiming very hard for a good solution and a good agreement in Paris at the end of this year, and I am sure that that is the Government’s true intent. The other one, which I almost expected not to see, was that the Government were committed to the Climate Change Act and, I assume from that, all the follow-ons involving carbon budgets and so on. So I thought that those were two good parts of a cornerstone of energy and climate policy for the Government. The Benches opposite have mentioned the emphasis on hard-working families—used all the time as a phrase—and I was also quite encouraged because page 57 of the manifesto said:

“We will cut emissions as cost-effectively as possible”.

I am indebted, as always, to the noble Viscount, Lord Ridley, for his work in this area. On 24 June this year he asked a Question of the Minister. He asked what estimate the Government had made of the cost in pounds per tonne of CO2,

“of greenhouse gas emissions abatement in the most recent year”— what were the costs of those technologies? The Minister replied—absolutely correctly, I am sure—that the abatement cost per tonne of carbon dioxide in 2014 was,

“£65 per tonne of carbon dioxide for onshore wind, £121 for offshore wind and £110 for solar PV”.—[ Official Report , 24/6/15; col. 1583.]

It was a very useful Question. I find it somewhat difficult to reconcile that Answer with the Bill before us today. I agree that the Conservative manifesto was very anti-onshore wind. In Cornwall, an equally beautiful part of the countryside as Northumberland, we have a large number of wind turbines. At the last count I could see about 30 from my own house. Strangely enough, there has been a direct and positive correlation between tourism success and the number of turbines that have gone up in Cornwall. I am not saying they are absolutely related but I do not think it is really the problem that sometimes we make out. It is great to see a living countryside rather than a preserved and backward-looking countryside. That is something that Liberal Democrats would stand for: growth and a good economy in rural areas.

I find it very strange that the Government have taken against onshore wind in this way but are promoting other technologies, although I have no argument with them about offshore technologies, which, as we have seen from those figures, are roughly twice as expensive. Again, I agree with the noble Viscount, Lord Ridley, that there are other renewable technologies that are even cheaper. Hydro is one but of course the problem with hydro is that we have more or less used our total capacity in the UK to produce it. I would be standing shoulder to shoulder with the noble Viscount on hydro schemes if we had the ability to produce them. So I find this part of the Bill very regrettable and difficult for our very successful renewable industry to deal with.

However, my biggest concern about the Bill comes back to a number of excellent comments made by the noble Lord, Lord Oxburgh; that is, once again we have an Energy Bill that concentrates purely on supply issues rather than demand—the coalition Government were not a lot better but they were slightly better on this. Of course, it is the demand area that really is the challenge to us as an economy moving into the future. In his excellent speech, the noble Lord, Lord Howell, said that we still have not solved the energy trilemma: the difficulty between affordability, security and low carbon. But, as he went on to mention, we have the solution to that, which is the whole area of energy efficiency and making sure that we decouple economic growth from our energy usage. In the UK we have actually been pretty good at that over recent years. That ratio has come down and we have managed to do that decoupling, but there is nothing in the Bill—or any sign in government policy—of energy efficiency really being core to what they are doing.

My final point comes back to another point made by the noble Lord, Lord Oxburgh. I was very dismayed indeed by the announcement that the policy of zero-carbon homes from 2016 was going to be discarded as if it was something that had been an idea for a short while but is too difficult and will be got rid of in order to produce thousands more houses from 2016 onwards. That is not the case. That policy started in 2007 under the then Labour Government and went through the coalition Government; in fact, some of the standards were raised at the beginning of the coalition period. The industry had prepared itself for that. It was understood that that was going to go ahead but after eight years of negotiation, planning and enthusiasm to go ahead with that, six months before we reach 2016 that policy is screwed up and thrown in the bin.

One of the biggest issues of affordability in this country is fuel poverty. We still have some 2 million households suffering from fuel poverty and some 18,000 excess winter deaths, a significant number of which are due to fuel poverty and inadequate heating. Stopping that move to greater thermal efficiency of homes is not just the abstract issue of solving that energy trilemma; it concerns actual households and individuals who will suffer into the future because of higher energy bills over the life of those buildings of 50 to 75 years; and the rate of excess winter deaths in the United Kingdom, which is substantially above those of other European nations, will continue. What will we have to do in another 10 or 20 years? We will have to reinvent the Green Deal to retrofit all those post-2016 buildings to bring them up to a standard that a civilised society expects. Would that have cost extra to the building industry? The estimates are £3,000 per house—not insignificant, of course, but something that would be paid back within a very short number of years. As always, I am afraid I point at the automotive industry, which has had considerable constraints, mainly through European directives, on the carbon emissions of vehicles produced. That industry actually objected—unlike the building industry, which has been very pro-moving forward—but has the cost of cars in real terms gone up because of that policy? Absolutely not: in real terms, those costs have come down.

My challenge to the Government in this Bill is the inconsistency of the treatment of onshore wind against solar, and to refocus on the demand and efficiency side of electricity and make sure that we solve the trilemma. What concerns me most, very much reflecting what the noble Lord, Lord Whitty, said, is that we seem to have a Government who are “1984” Orwellian in their style, in that what we read is not borne out by the actions that we see.