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Energy Bill

My Lords, I congratulate the noble Lord, Lord O’Neill, on his speech, particularly his words about fuel poverty, which I shall move on to later. I hear his criticism of these Front Benches, which was balanced by his criticism of his own Government in certain areas. Again, I shall come to that later. One of the key impressions I have from the debate, like the noble Lord, Lord Taylor, is that the Bill is comparable with the Climate Change Bill, but there was some enthusiasm for that legislation. It might not have been that strong and a number of flaws were pointed out, but people were enthusiastic about it as marking a way forward. With this Bill, there is a lack of enthusiasm and a reluctant consent to its provisions, but, frankly, it does not go far enough and it does not meet the challenges that many noble Lords have outlined. In fact, perhaps that is why I sensed from the Minister’s opening speech that his usual ebullience and enthusiasm and urge to move forward were not evident to the degree that they have been on some of the other issues he has been involved in. I would say he is quite right in that. It is certainly the case that a number of issues in this area, such as energy security and energy supplies, are quite downbeat and difficult at the moment. The noble Baroness, Lady Wilcox, mentioned the fact that one third of our energy production capacity is going to disappear over the next 20 years. We are also facing the highest oil prices in real terms in recent times. Moreover, we are moving towards net imports as opposed to net exports. Where are we in terms of renewables? We all see renewables as part of the low carbon economy future, but we know that we are near the bottom of the European league table even though we talk up our abilities in this area. We know that we will miss the Government’s 2010 target of 10 per cent; that was pretty much confirmed by the Minister. We know that even where we are trying to build renewable projects, we face equipment supply problems and that British industry has no place whatever in the supply chain. We have missed the boat in that area. Some 50 years ago, coal provided 80 per cent of the UK’s energy needs. It is now down to 20 per cent, so the position is completely reversed. But because of the issues around gas supplies, coal is now potentially starting to rise again, and yet we do not have in place standards for how new coal-fired power stations need to be built to meet potential carbon capture in the future. I was particularly taken by the fundamental point made by the noble Lord, Lord Truscott, that we have no control at all over the supplier of a huge amount of our energy, the Russian Federation. We have no control over investment levels. British industry wants to invest, but has been gradually taken out of the equation. We see a very nationalistic and chauvinistic approach to energy supplies in the Russian Federation which is going to affect Britain and the whole of Europe. Lastly, in terms of downbeat issues, we have the problem of timescales. Even if we get on with nuclear build and plough ahead with carbon capture and storage immediately, there will be a lag of around 15 years until those technologies come on stream. Again, that is in complete contrast to the challenges set by the Climate Change Bill where we saw ways to move forward. This leg of the stool does not come anywhere near to fulfilling what the Climate Change Bill requires. We knew it was a framework Bill and we forgave it for being that so long as it was followed by legislation on energy supplies that would fill in the gaps and ensure that we would be able to meet the very demanding targets. This Bill does not do that. On carbon capture and storage, the Scottish plant that was originally going to be tested is no longer moving ahead. On offshore energy, the noble Lord, Lord Palmer, mentioned that Shell has pulled out of London Array. We welcome the fact that provisions for gas storage are included in the Bill, but again it is an administrative necessity that needs to happen and is not something that is going to change the world. On renewables obligation certificates, changing the weightings for different sources of renewable energy is fine, but that will not meet the challenge of sourcing renewable energy supplies for the future. Nuclear waste is also a key area, but again it is administrative. Even on legacy nuclear waste we need to move forward with those solutions. I think that all noble Lords have said that the key areas are those that we have left out. I will not go through them all again, but the one I want particularly to emphasise has not been mentioned a great deal: it is energy efficiency. All the studies show clearly that investment in energy efficiency measures provides the best return of all the areas that seek to tackle energy issues and carbon reduction. Energy efficiency is way ahead of renewables, yet the Bill says nothing about it. We could have used this opportunity to put into legislation the Government’s target for zero carbon homes by 2016, a target which not many people understand how to meet. We could have had a discussion about financing energy efficiency measures in a proper way because they have started to fall back in many areas. The noble Lord, Lord Jenkin of Roding, mentioned the very important point about revenues from the auction of carbon permits. Should we not ensure that the huge revenue that will come to the Government in future years really is ploughed back into energy efficiency measures? I somewhat disagree with the pessimistic view of the noble Lord, Lord Birt, on our ability to reduce energy consumption. While I agree that it is difficult, in the 1980s the Japanese showed how you can effectively decouple energy use from economic growth. Indeed, over the past 10 years even in our own economy we have seen flat energy usage during periods of economic growth. Through energy efficiency measures we should be able to push energy reduction further, although the difficulty at the moment is the increase in oil consumption to meet the growth in transport. I was going to say quite a bit about fuel poverty, but it has been very well summarised by the noble Lord, Lord O’Neill. The fact is that energy prices have doubled over the past five years and that, whatever the figure, many millions of people will be brought into fuel poverty. In Cornwall and the south-west, fuel poverty in rural communities presents the same level of challenge as it does in urban areas. Ofgem may have changed its approach to many of these issues, but it needs to make its top priority the development of a low carbon society in the future. Smart meters very much tie in with fuel poverty and are, potentially, one way forward on that. I agree that smart meters are classically middle class, pushing the power to make good decisions back to consumers. That is an important part of decentralising energy-use decisions and democratising energy use. Is there not a way in which that clever technology can start to calculate for itself and find the cheapest tariffs, even for those people who do not necessarily take much interest in it day to day? That technology may be there, whether people watch their smart meter on their PC every day, or leave it there, simply to do its work every year. One important area is the £215 pre-payment that the poor pay. As has been shown in Northern Ireland, that can disappear; it is no longer there. The other provision that is no longer necessary—and it says something that it was not in the Energy Bill—is the Merton principle, which gives local authorities the ability, in planning permission, to be far more stringent over a number of environmental and energy areas. The Government even resisted the Private Member’s Bill at Second Reading but, I am pleased to say, have now adopted that Bill, which will come through in parallel, and will no doubt come to this House in due course. My noble friend Lord Redesdale has already referred to the Prime Minister’s speech in November, which I always look back to. The Prime Minister likened the fight against climate change to the reconstruction efforts and international co-operation that took place post-1945. The Climate Change Bill, with all its targets and what it wants to achieve, clearly demands that sort of concentration. The Stern report very much said, ““It is great what you do over the next 50 years, but what is most important is what you do now, and over the next 10 years””. This particular Bill does not meet that challenge. From all the points that have been made, there is a great deal of consensus in this House. I only hope that we can amend this Bill in a number of ways. Many Members of the other place would be sympathetic to that. It will be necessary to do so, or there will soon have to be yet another energy Bill. I would describe this Bill as ““managerial””. It is not particularly focused or ambitious; it does not, in any way, go towards meeting the Government’s own vision on climate change. Its challenge to global warming is tepid legislation. That is a great shame. This Chamber will make a number of changes to this Bill, which will be welcomed by many people at the other end, on both sides of the House. I look forward to working with other Members of this House, from both sides, in making the changes that we have discussed today.