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AMENDMENT OF THE LAW

I would respond to that by referring to something that my dad said, which was that any idiot can run down an industry by selling off its assets. That makes a profit in the short term, but we are left with nothing in the long term. That is the approach to privatisation that the Conservatives drove through this country, leaving us with a wretched legacy of destruction and abandonment. Simply shifting the responsibility for contamination offshore does not add anything to the UK’s contribution to tackling nationally what is a global problem. If we are to take seriously the invitation that scientists are pressing us to address—we have identified the need for a 60 per cent. reduction target in carbon emissions by 2050; scientists have identified the need for an 80 per cent. reduction—the scale of what we do within the shape of the UK economy has to be transformed. It will mean reducing our carbon emissions to 32 million tonnes by 2060. That would require a national carbon savings programme delivering savings of about 3 million tonnes a year, every year between now and 2050. Given that our record over the past 15 years has been to save less than 0.6 million tonnes of carbon a year, achieving that target would require a transformation. I suggest to the House and to the Government that we need to establish a new set of golden rules and a new set of specific policy initiatives. The golden rules should begin with one that recognises what the Stern report said—that the Government should henceforth seek to ensure that the UK economy as a whole commits a minimum of 1 per cent. of UK gross domestic product to the climate change mitigation programmes. That should happen not just across government but across every sector of the economy. As a long-term commitment, all parts of the UK economy would then be required to make annual carbon reductions consistent with the 80 per cent. carbon reduction target, based on 1990 emissions levels. In the short term, however, it would require existing UK target commitments to climate change and fuel poverty to have a rolling programme of a 5 per cent. reduction each year. Again, that should apply to all sectors of the UK economy. For the Chancellor’s second new golden rule, I would suggest that borrowing within the economic cycle should be reinterpreted as borrowing that should be prioritised to restore the ecological capital of the country, specifically in respect of renewable energy generation and water recycling. To deliver all that, we need specific policies, which I would address in three areas: energy, the built environment and transport. The Government must begin by transforming energy market rules. The Chancellor made a welcome commitment today, saying that income received by customers who install energy generating systems in their homes should be tax free. Although that is welcome, it does not address the fact that most of the companies that buy back energy in that way pay a pittance for it. In that regard, by far the most successful intervention approach is the one already in use in Germany, which introduced a renewable energy sources Act in 2000. It requires the energy industry to pay customers four times the current market rate for the renewable energy that they put back into the system. The effect has been transformational. The measures resulted in a cavalry charge of German citizens seeking to become part of the renewable energy generating process, and produced a renewables industry that, last year alone, delivered 214,000 new jobs into the German economy, and 24,000 in the last year alone. In that last year, 90 million tonnes of carbon savings were delivered—a huge quantum increase on the combined levels of carbon savings of all the UK schemes. The German system has been successful because it was citizen-driven. It recognised that the role of the Government was not to abolish markets but to change the rules so as to create markets that are ethically competitive and ethically sustainable. The cost to German energy customers has amounted to €1.40 a month on the average energy bill. The impact of the German scheme has been profound, and our Government ought to establish a similar scheme here in the UK. We should require industry to set out the terms of the preferential buy-back arrangements. We should also designate the period—perhaps 15 or 20 years—within which the preferential pay-back tariffs will remain in existence. We should also define which tariffs should apply to the specific technologies that are available in the marketplace at any given time. The next important job for the Chancellor would be to address how we deliver all those measures. If we look across the landscape of Europe, we see that local authorities are by far the most efficient vehicles for delivering sustainability agendas. They are given specific powers and duties to co-ordinate and drive the sustainability agenda that is defined by their central Governments. We need to make exactly the same provisions in this country, and at the same time remove many of the obstructions that stand in the way of developing decentralised local energy networks. That has already been done on a wide scale across Europe; only the UK’s own intransigence stands in the way of a much more coherent approach to energy investment and sustainability. On the back of a serious commitment to the promotion of energy services companies, the Chancellor should change Ofgem’s terms of reference. At the moment, the UK is locked into an impossible position, in which all the major energy companies talk about their desire to get into sustainability programmes but say that achieving that is hopeless. They say that they are required to compete with one another on short-term lowest-price terms. Nothing allows them to break out of the 28-day contract rule in order to get into the long-term energy services contracts that those same companies have in other parts of Europe. It is the obstacles of our own rules base that are getting in the way of the transformation that we need.