On the 2nd January 2016 the Bishop of Salisbury, the Rt Revd Nicholas Holtam, spoke during a debate on a motion from Baroness Featherstone to annul the Government’s Feed-in Tariffs (Amendment) (No. 3) Order 2015. The Bishop spoke of a gap between the rhetoric and reality in the Government’s record on energy policy, citing the impact of cuts to feed in tariffs on the renewable energy sector.
The Lord Bishop of Salisbury: My Lords, I am very grateful for this debate. When I joined this House last year, I was really struck by how it was possible to work with Members from all parts of the House in preparation for Paris and by the strong sense of common purpose with which we could work together. I am grateful for the contribution from the noble Lord, Lord Deben, in terms of what now happens, post-Paris, and how we move on. However, I am unable to support a fatal Motion. On the other hand, it is really important that the House discusses where the Government are with their energy policy, and that is what this debate is able to do.
My contribution is simple: I have two points. There is an extraordinary gap between rhetoric and reality in what is happening at the moment with government policy, and there is no consistent overall strategic energy policy. Both those things need to be addressed. As reported by the Hastings and St Leonards Observer in May 2015—presumably just after the election and her appointment as Secretary of State—Amber Rudd said:
“I want to unleash a new solar revolution”.
In February 2015, the Prime Minister pledged to,
“accelerate the transition to a competitive, energy efficient low carbon economy”.
In Paris, he brilliantly said that we are going to be judged by what our grandchildren will say to us when we are asked what we did at this stage in our history, in response to what we knew about climate change.
The noble Baroness, Lady Featherstone, quoted DECC’s own figures about the impact of cuts in feed-in tariffs. She cited the loss of jobs in a successful industry. Renewable energy is crucial to the present and the future. We are at a transitional stage in technology; things are changing very fast. However, it is still an industry that requires support. On its own assessment, the feed-in tariffs could be phased out within the life of this Government, but the speed of change has undermined its success. I do not agree with the noble Lords behind me that this is about rewarding the rich at the cost of the poor. The average household saving from this cut in feed-in tariffs will be £6 per year. That is not a huge amount on something which we agree is an important goal. Surely it is not good enough to meet targets in this area: it would be really good to overshoot them. However, the concern is the Secretary of State’s own admission that it looks as though, by 2020, we will be 3.5% below the aim of 15% renewables which is our responsibility.
There were a pretty extraordinary number of responses to the DECC consultation on feed-in tariffs—over 54,000. The Church of England’s own Shrinking the Footprint project fed in one of those responses. We have 400 churches with solar panels at the moment: three of them are carbon neutral. Many churches are taking a holistic approach to energy use and efficiency, but churches are just an example of people’s commitment. However, this is made out of an understanding that there is a consistent, reliable policy approach which allows one to make longer-term, costly investments. I would have thought that the solar panels feed-in tariff initiative had produced a very successful public/private partnership, one which needs to be incentivised at the front end and then reduced gradually as it becomes more successful, the technology becomes cheaper and more people use it.
Lord Vinson (Con): Perhaps the right reverend Prelate was not here earlier, but the noble Viscount, Lord Ridley, made the point that solar panels are currently reducing CO2 output by only 1% in this country alone. That is an even tinier fraction of the world’s CO2 and we are talking about a world problem, not just the UK’s CO2 level. Even if the number of solar panels were tripled, it still reduces our CO2 output by only 3%. Perhaps we are pushing at the wrong solutions. That is the point the noble Viscount was trying to make. Perhaps the right reverend Prelate should consider it.
The Lord Bishop of Salisbury: I thank the noble Lord for his contribution. Of course, I have been here through the whole debate and I did hear what was said at each stage. I agree with the noble Lord, Lord Deben, about the need to focus on the larger picture as well. But the information that was given was a particular description of the problem, as the noble Lord, Lord Deben, pointed out.
In addition to my points about the importance of the rather more gradual change in feed-in tariff reductions and the gap between rhetoric and reality that is emerging in what we are seeing of government policy, there is also a problem with the Government’s strategic approach. It is not clear how all these individual decisions fit within an overall energy policy framework. There are very different approaches being taken to continuing the use and extraction of fossil fuels; shale gas and fracking; nuclear; and renewables. There is no indication yet as to what will be in the national energy-efficiency policy. So this debate is a really good opportunity post-Paris for us to gather again and try to hold the Government to account, when there are some very mixed messages being given by a variety of initiatives, and to ask that we begin to see more clearly the strategic energy policy which would help us all have more confidence in the way in which we can engage with this.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con): [extract]
The Government are committed to cost-effective decarbonisation of the United Kingdom’s electricity supply—let me nail that straight at the start. In recent years, we have made huge progress in encouraging the development and deployment of renewable energy and in building a successful renewables industry. The feed-in tariff, or FIT, scheme has been a vital part of this. The FIT scheme now supports more than 830,000 small-scale renewable installations—a figure far in excess of what we expected to deploy when the scheme was first set up.
In 2010, when the FIT scheme was set up, the then Government estimated that it would cost £490 million per year in 2020. That was the estimate. Without the changes that we are seeking to introduce today, we estimate that by 2020 it would cost £1,740 million per year; with the changes, it will still cost £1,300 million per year. Let me just repeat that: £1,300 million per year. There has been a slight tendency in the debate to suggest that the Government are walking away from the renewables sector and not spending anything on FITs, but we will be spending £1,300 million per year, via the LCF. Of course it is not direct—it is via the levy control framework—but it is still a cost for bill payers. We need to establish that at the start.
The noble Baroness, in opening the debate, quite fairly said that subsidies must end—that nobody wants subsidies and that we must do this in a controlled way. I agree, but she did not then suggest how we should do it; she just opposed everything that we were seeking to do. It is a mode of proceeding, but if you are going to be taken seriously about ending subsidies, you should suggest how you are going to do it….
….I have worked closely with the right reverend Prelate the Bishop of Salisbury. I thank him again for his work on the Lambeth declaration, and for saying that he cannot support a fatal Motion. I hope we are setting out a clear position on this. Our clear position is that we must remember the importance of bill payers and keeping them onside. It is perhaps easy for us to forget that £5 is not insignificant for many hard-working families and individuals. We should not lose sight of that. Yes, of course we must recognise that decarbonisation comes with a cost but there is this balancing act to do.
In the subsequent Division on Baroness Featherstone’s Motion there voted Contents 91; Not-Contents 230: Motion disagreed.