I draw attention to my entry in the Register, especially my interests in energy industry.

In doing so I emphasise, as I have done before, that my views on climate change, on the need for Britain to move more swiftly to a low carbon economy and to cut its dependence on fossil fuels, were formed two decades ago when I had ministerial responsibility for this area of policy.

I've not changed these views at any time since then. I've repeated them publicly and privately on many occasions throughout the last 20 years. My views have never been influenced at any time or in any way by my financial interests.

All those interests were acquired after I left the Shadow Cabinet in 2005. That was 12 years after I accepted the overwhelming scientific consensus on this subject and began campaigning for a more urgent response to the challenge of climate change.

Various bloggers, columnists and others, including one or two Honourable Friends, who insinuate otherwise, and who ignore this scientific consensus, invariably overlook my strong and consistent support for nuclear power, a low carbon technology which should be part of Britain's energy mix.

I'm grateful for this opportunity to debate the amendment in the name of honourable members from all parties and myself.

The amendment is based on a unanimous recommendation made in July last year in the Report of the Energy and Climate Change Committee on the draft Energy Bill.

The Govt accepted many of the Committee's recommendations, and by doing so materially improved the Bill.

I congratulate my RHF the Secretary of State and his team on their response to our Report and on the outcome of their negotiations with the Treasury on a range of issues, including the LCF.

However for a variety of reasons the need for the amendment we are debating is even greater now than it was when my Committee's Report was published.

Firstly, despite some positive signs about the Govt's support for low carbon electricity generation, the publication on the day of the Autumn Statement of the Gas Strategy confused many investors.

The possibility that the Govt might sanction 37 GW of new gas fired generation capacity rests uneasily with its acceptance two years ago of the 4th Carbon Budget which covers the period 2023 to 2027. It suggests that the purpose of next year's review of the 4th Carbon Budget is to water it down and weaken incentives for low carbon investment.

The understandably envious glances cast across the Atlantic by the Treasury at the transformation of the US gas market in the wake of the exploitation of shale gas have not passed unnoticed.

Not surprisingly there are now doubts in the minds of many prospective investors about the depth of the Govt's commitment to decarbonising electricity generation.

On the issue of shale gas incidentally the ECC Committee was one of the first bodies to urge the Government, more than two years ago, to approve more exploration and testing to establish the scale of Britain's shale gas reserves.

If our dependence on imported gas can be cut and if consumers can be protected against the fluctuations in international gas prices which have been the main cause of the rise in domestic energy prices in the last few years then that is wholly to be welcomed.

However my Committee also warned in our more recent Report on Shale Gas that it would be rash to base energy policy on the assumption that Britain will soon be a major shale gas producer.

The opposition to exploring for shale gas in Sussex which is already emerging is a foretaste of the battle for public opinion which must be won before domestic production of shale gas on even a modest scale can occur.

The case for a diversified energy mix is therefore as strong as ever.

Secondly, although we hear regular warnings about a looming capacity crisis in electricity generation, and the consequent risk of power cuts, there is a curious complacency about the Government's attitude.

Investment in new generating capacity is now at a low level.

The nuclear talks between Government and EDF remain unfinished. Even if, as I now expect, they are brought to a successful though belated conclusion it will be 2020 at the earliest before a single KW of electricity is generated by a new nuclear power station in Britain.

New investment in coal is unlikely to occur until an economically viable form of Carbon Capture and Storage is available. Despite the huge potential market for CCS there is no sign anywhere in the world of this happening.

I am an enormous fan of CCS. It is the single technology the world most urgently needs to address Climate Change but we may have to wait another decade or even longer for a breakthrough on this front.

Meanwhile coal can currently be imported cheaply from America so our remaining coal fired power stations are running flat out.

Gas generation, the great white hope of many people, is currently so unprofitable that, far from large scale new investment taking place, some plant is currently mothballed.

Critically, potential investors in gas generation are holding back until the details of the Government's proposed capacity mechanism are known. I urge my Right Honourable Friend to publish these details as soon as possible.

With a decision on nuclear still awaited and fossil fuel generating investment at a standstill it might be thought that money would pour into low carbon renewables. Even here the picture is unclear. For example, according to new figures from Bloomberg, the flow of funds is actually slowing down.

Doubts about whether a future Govt will stay committed to supporting low carbon technologies after 2020, fears that instead it will bet the farm on another dash for gas, and a lack of clarity about the level of strike prices to be proposed for the new Contracts for Difference regime have all unsettled investors.

The only certain consequence of this is that investment will be slower and the risk of a capacity crisis greater.

The element of perceived political risk will lead investors to seek higher returns for investment in the UK energy market.

Higher returns to investors mean higher prices for consumers.

My amendment directly addresses these issues.

By itself it will not immediately alter the low carbon pathway on which the Govt has already embarked, most notably by its acceptance of the 4th Carbon Budget.

But the prospect of the 4th Carbon Budget being watered down in next year's review is simply another unwelcome uncertainty.

The amendment removes that uncertainty. It requires the Secretary of State to set, no later than 1April 2014, a decarbonisation target for 2030 for electricity generation.

As currently drafted the Bill merely gives the Secretary of State a power to set such a target without compelling him to do so. It also prevents him from exercising this power before 2016.

Suggestions that this amendment would force him to set the target at 50 grams per Kwh in 2030 are mistaken. The amendment requires him to set the target in accordance with advice from the Committee on Climate Change. If he does not follow the advice of the Committee on Climate Change he would have to explain why.

The CCC would not have a free hand in advising the Government. It would still have to take account of all the matters already referred to in the Bill in Clause 2 section 2. These include READ OUT (a) to (e).


In truth therefore this amendment is not very revolutionary. It seeks to bring forward by a couple of years something which the Government is contemplating doing anyway.

If it is indeed true, as the Secretary of State asserted yesterday, that we are heading for substantial decarbonisation of electricity anyway, what objection to this amendment can there possibly be?

There is now very widespread support for it. Only two weeks ago the CCC published a report recommending that a target for reducing carbon emissions from electricity generation by 2030 to 50 grams per Kwh should be set in legislation, with flexibility to adjust this in the light of new information as the amendment provides.

A wide range of businesses and trade bodies have backed it. The Aldersgate Group for example, whose members include Microsoft, Marks & Spencer, Aviva, Sky, PepsiCo, British American Tobacco and others, are strong supporters.

Many companies with interests in the supply chain and with potential to create jobs in Britain want to see it passed.

A wide range of voluntary bodies are campaigning for it, including the Women's Institutes,

Even among HMs there are signs of enthusiasm. At the Lib Dem Party Conference last September the Chief Secretary to the Treasury proposed a motion to establish, and I quote, "a target range of 50-100g of CO2 per Kwh for the decarbonisation of power sector in addition to existing carbon reductions."

If every Lib Dem MP who supported the Chief Secretary that day joins me in the Aye Lobby at 4 o'clock the amendment will be carried. I am sure that all my Honourable Friends on the Lib Dem benches are keen to take this opportunity to strengthen their well known reputation for consistency.

Even the Government itself seeks powers in the Bill as it stands to introduce such a target. But for some reason they don't want to do so until 2016 at the earliest.

The problem with this St Augustinian coyness, this promise of possible future chastity in the matter of greenhouse gas emissions but please God, not just yet, is that by 2016 many investment decisions will have been made.

If these lock Britain into a high greenhouse gas emission future they will either prevent us from meeting our climate change commitments or else will lead to the construction of fossil fuelled generating capacity which has to be subsequently scrapped.

2016 is also after the next General Election. Delaying a decision until then creates another needless but harmful element of doubt about the Government's true intentions.

I therefore urge HMs on all sides to support this amendment. Doing so will remove an element of uncertainty whose presence hampers investment, increases the risk of a capacity crisis and raises electricity prices unnecessarily.

This amendment will not impose on the Government today any commitments it does not already claim to embrace.

Furthermore it will not remove the need for even greater priority to be given to demand side measures and to energy efficiency, issues which I wholly support.

By itself it will not raise electricity prices in the next seven years by a single penny because the total sums spent on subsidising low carbon electricity in the period up to 2020 has already been capped by the LCF.

By contrast the Treasury's own cherished floor price for carbon does raise prices and add to consumer and business bills making British industry less competitive relative to the rest of the EU but does so in a way which does not cut emissions by a single kg.

Without the amendment this Bill, whose early passage through Parliament is desperately needed for economic and security reasons as much as for environmental ones, will be needlessly weakened.

I commend the amendment to the House.

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