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Energy Bill [HL]

It is not often that I express thanks for the result of the last general election, but I do on this occasion. I am really glad I am not in the position of having to respond to this amendment because it raises areas of such profound complexity and objectives to which we all ought to subscribe. This is a very difficult debate to respond to and my sympathy goes out to the Minister as she prepares herself for that response. The first and obvious fact I want to emphasise is that we owe a considerable debt of gratitude to my noble friend Lord Lea of Crondall. It is important that we address the total perspective of energy pricing which, after all, lies at the heart of everything that we are trying to do with regard to the green deal and the green revolution. It affects the whole way in which our society adjusts to the levels of consumption of energy and how we generate cheaper forms of energy. If we are not successful with the new strategies, the pressure on energy sources will be such that the increases energy prices over the past 50 years, to which the noble Lord, Lord Dixon, referred, may look absolutely marginal compared with what might obtain over the next 50 years. However, the noble Lord, Lord Dixon-Smith, did fulfil an adage which I often use in general discussion, which is that men may not know too many prices but there is always one price that they know and that is the price of petrol or diesel for their car. That is not just because stations are obliged to put it up in lights but because men have one great consumption factor which is their cars. That does not mean to say that rational behaviour takes place. We all know those who would go the extra 15 miles to save something like 40p on filling the car up but they consume that amount and perhaps more getting there and back. One should not underestimate the issue of irrationality even when a price is transferred. My noble friend must have taken some sustenance from the fact that the noble Baroness, Lady Noakes, offered some support for his position: she emphasised the fact that this is a plea for transparency, and we need transparency. Our present factors of production, our present modes of consumption are such as to make it extremely difficult for people to respond accurately and effectively to energy prices or to know the factors that produce the price. This is particularly the case with the householder in terms of the supply of electricity and gas. My noble friend has made a most valiant effort to try to see the way in which the Treasury might throw some light on some very dark and murky quarters in circumstances where we all appreciate that we will not get the community response to the energy transformation of the future unless people have confidence that what our society is doing, what our Government are doing on behalf of our society and what individual productive units in our society are doing is fair and reasonable and clear in terms of policy. I listened very closely to the noble Lord, Lord Deben, who has a great deal of authority on these matters, particularly in this area to which he contributed a great deal as a Minister. He says that it is all about price signals, that we have to ensure that people recognise that the costs will increase and that people will have to knuckle under and respond to it, but we do not say the same thing about food. The Government do not put VAT on food and yet there is a world crisis in food. Many of us believe that there is considerable overconsumption of food and consumption of the wrong cheap foods in our society. Which Government would dare to talk about sending out a price signal to make food more expensive by imposing VAT? I cannot recall either side of the House or even the third part of the House—I have difficulties adjusting to the coalition even now although I do not include the noble Lord, Lord Teverson, in that—the Liberal Democrats, during the freedom they had before they joined the coalition, talking about sending out price signals for food. We operate within a situation where the Government seek to give support to certain essential goods, of which food is obviously one, and, clearly, we have to do that for energy. We do it with fuel payments. In this Committee, we have discussed whether the tariff should change so that consumption on the early parts of the tariff should be reduced, rather than the present position where it is the most expensive. These are very real issues that my noble friend has raised. However, all Members of the Committee have raised some reservations about it. They have seen difficulties with these proposals. I am not sure whether it is a matter of the Treasury being overworked if it takes on this objective, although it looks like a massive agenda to me. The point is whether the Treasury could hit the objectives that my noble friend identifies, particularly as it is quite clear that he would also like to see the revenues received from energy prices put into a bundle— he was very gentle about his use of the word ““hypothecation””—in which they could be directed to counter the most regressive elements in the present price inquisition. That is a pretty challenging agenda. I have spent a small amount of time on Treasury matters over the past few years in your Lordships' House and taking that on seems to be quite a challenge for policy makers. I do not have the slightest doubt that the Minister is likely to say the same thing. I emphasise to my noble friend that he has done us a service with the introduction of these two very challenging amendments and I hope that the Minister, in reply, will indicate that she thinks that from these discussions there may be strategies which we can pursue and which will be effective.