House of Commons
Tuesday 18 November 2008
The House met at half-past Two o’clock
[Mr. Speaker in the Chair]
Oral Answers to Questions
Communities and Local Government
The Secretary of State was asked—
The Government recognise that the current market conditions pose significant challenges. We are responding by helping those at risk of repossession, bringing forward money for affordable housing this year and next, and establishing new programmes to help first-time buyers and support the construction industry. While responding to the immediate challenges that we face, the Government remain committed to meeting the long-term housing needs of an ageing and growing population.
Is the Minister aware that 1.7 million families are languishing on housing lists waiting for homes? Why will she not allow councils the same borrowing rights as registered social landlords, so that they can buy land now while it is cheaper? Surely the Government should be trying to make the best of the current economic downturn, and using it to plan for the future.
We are trying to make the best of the current economic downturn, and we are indeed considering what can be done. In some circumstances councils have more freedoms than they have exercised, or in some cases been aware of, in recent years, but I assure the hon. Lady and the House that we are considering all circumstances and all options in order to do what we can to ease people’s problems through the present difficulties.
I welcome my right hon. Friend’s commitment to affordable housing, but may I caution her against returning to the days when we built large mono-tenure housing estates? It is crucial for us to retain mixed-tenure estates. One way of investing in affordable housing to liberate the supply in the social rented sector is to build more affordable housing schemes for supported housing, which shakes people down through the tenancy stream and frees up social housing tenancies. Will she look again at our supported housing strategy, particularly for older people, but also for young people?
My hon. Friend is entirely right, and has shown remarkable prescience. I am indeed taking a great interest in the possible opportunities for social housing, for precisely the reasons that he has given. Social housing can be beneficial and offer a better option to some who are seeking housing, but it can also help to solve the problem of under-occupation, which does sometimes arise.
The current market conditions are actually making housing more affordable, while also providing lower mortgage rates. We need more social housing in my constituency, but I am not sure that we need the Government’s long-term housing targets. The south-east draft plan refers to possibly allowing for overspill from London, and targeting us as a growth area. That causes the real worry of whether we can accommodate those people, given that much of the constituency is green belt.
I understand the anxieties that the hon. Gentleman has expressed, but we still have substantial unmet housing need. We cannot as a country, let alone as a society, afford to ignore that and hope that somehow it will vanish, because it will not. I have some sympathy with his concerns, and I know that there can be problems if people are anxious about these matters, but we have to put homes somewhere.
While demand for affordable housing is rising, does my right hon. Friend share my disappointment at the fact that my local authority, Westminster, managed to ensure that only 11 per cent. of the area’s housing built last year was affordable? Given that the Mayor of London now appears to be set on tearing up the target of half all housing built in London being affordable, will she take whatever steps are necessary to ensure that we meet the growing demand for social and other affordable housing across the country?
I entirely understand my hon. Friend’s point, and share her disappointment that more was not achieved last year in her constituency and her area. She says that the new Mayor does not propose to continue with the targets set by his predecessor. She may be pleased to learn that the Mayor has assured me that he expects to be able to deliver as much, perhaps even more, through agreement with the boroughs, and I am sure the whole House will wish to hold him to that.
My understanding is that that was an ambition, whereas some of the more short-term numbers in the programme are definitely targets. Of course I appreciate that, owing to the present difficulties, people will consider whether and on what trajectory we should meet the need, but I am sure the right hon. Gentleman agrees that because the need is not going to go away, the targets cannot just disappear either.
In a difficult economic situation, there may be a tendency for developers to build on greenfield or green-belt sites before moving to the more expensive and difficult brownfield sites. The Government have an excellent record in the east midlands, where 75 per cent. of development is on brownfield land. Will my right hon. Friend continue to make her policy “brownfield before greenfield”?
I take my hon. Friend’s point. He is right that the Government have an excellent record, and this is one of the many targets that others said we could not possibly meet but we have met; in fact, we have exceeded the targets on building on brownfield. I understand his concerns, and I feel sure that all Members will agree with him that we should do this, rather than, as the hon. Member for Esher and Walton (Mr. Taylor) mentioned, go for greenfield development.
Now that the new Minister for Housing has, we understand, dumped the Prime Minister’s 3 million by 2020 target for house building and has stated instead that it was only ever an ambition—it certainly was a target according to the quotes of the Prime Minister that I have to hand—can she tell us whether eco-towns were also only ever an ambition, or does the faltering eco-town project for 10 new eco-towns remain on target?
The eco-towns programme is totally on course. As I think the hon. Gentleman will know, we have only recently published the draft planning guidance and the sustainability appraisal. I am not committed to any specific number. It is certainly the case that under the programme that was previously put forward, one site has met the “generally suitable” criterion, and we believe others can meet it. They all have ambitious and difficult targets to achieve, however, which will be different for each one. What is important is that every site in that programme achieves the standards that would be required for eco-town status, and I have said—clearly, I hope—to those who are ambitious to take part in such developments, of whom there remain many, that they will be required to meet those standards. The standards will not be lowered, and that is why I say that I am not—neither are the Government, and nor have we ever been—fixed to any specific number. That will depend on which of those involved meets the targets, but I shall be extremely disappointed if there are not substantially more than the hon. Gentleman is trying to pretend.
Local Authority Housing Revenue Account
The current review of council housing finance is a joint review between my Department and the Treasury. It includes a thorough exploration of the housing revenue account—HRA—subsidy system. DCLG and Treasury Ministers regularly discuss the progress of the review.
Council tenants in the borough of Kettering pay £12 million a year in council rent, £3 million of which goes into the Treasury coffers and is not reinvested in council housing in Kettering. Why should council tenants in my constituency pay £1 in extra stealth tax for every £4 they pay in council rent?
I know that the hon. Gentleman and his constituents are concerned about this, and the Government recognise that the current system can be unpopular and perceived as unfair. That is precisely why we undertook the review of council house financing. The review of the HRA subsidy system will look at how local authority housing is financed. It will cover such issues as the recycling of rental income subsidies and the concept of negative subsidy, and I hope that that will address the concerns of the hon. Gentleman and his constituents.
After years of neglect by the previous incumbents in government, there has been substantial investment in social housing in my area. Slum houses have been removed and new buildings have been put up that are far more suitable for the people in our community, and we thank the Minister and this Government for that—[Interruption.] It needs to be said—[Interruption.]
Thank you, Mr. Speaker. On this point, can my hon. Friend reassure me that in the current investment in social housing, which is part of a massive rolling programme, young people who are doing skilled work at college are employed in local projects, so we can take full advantage of that significant investment?
I thank my hon. Friend for that challenging question; I agree with her completely on this. When we came to power in 1997, some £21 billion of spending was needed to refurbish the council housing stock. That was disgraceful, and a terrible legacy of the previous Tory Government. By the end of 2010, we will have spent in the region of £40 billion—a once-in-a-generation opportunity to refurbish a generation of council housing. My hon. Friend will be pleased to hear that in the next comprehensive spending review about £8.4 billion—a 50 per cent. increase—will be provided in order to provide the social and affordable housing that this country needs.
Is the Minister aware that social housing depends hugely on the health of the private sector? A huge part of social housing is a by-product of housing that is in the marketplace. Given the recession that we are entering, is he aware that the Housing Corporation is permitted to finance only up to 40 per cent. of social housing developments, and that the rest must come from sale-for-market properties or from borrowing? Given the dependence of social housing on the private sector, would it not be intelligent to raise the 40 per cent. limit so that the Housing Corporation could make a proportionately bigger contribution to social housing? Would that not be a good recommendation for the Treasury’s pre-Budget statement?
I thank the right hon. Gentleman for his question. He is a former housing Minister, and I know that he is well versed in these arguments. His point is well made, and my response to his question is twofold. First, we are aware of the need for a vibrant construction industry. The £1 billion package that my right hon. Friend the Secretary of State announced in September is part of a package to help the construction industry prepare for the upturn and manage the current difficulties.
The right hon. Gentleman mentioned the grant regime. The Housing Corporation—as of 1 December, the Homes and Communities Agency—is looking at that issue, and Sir Bob Kerslake, the chief executive designate, is keen to have increased flexibility to ensure that delivery can happen on the ground so that we can help the industry to provide more houses, particularly social and affordable housing.
I am sure that my hon. Friend will agree that problems with the housing revenue account, among other difficulties, lead to a great deal of uncertainty about financial wherewithal for organisations such as Sheffield Homes, the ALMO—arm’s length management organisation—that runs homes in Sheffield. It also leads to a disconnect between the rents charged and services provided to tenants collectively and individually. Is he committing the Government in principle to a reform of the housing revenue accounts system, and could he give us some idea for his timetable on that?
I thank my hon. Friend. He is a former housing portfolio holder in Sheffield, and is well versed in these matters. He is absolutely right: there is a great deal of volatility with regard to planning, particularly in the repair and maintenance of council houses, which we need to address. He is also right that in the current national system, there is a disconnect between rents paid for by tenants and the services provided. I am not in the business of tinkering around the edges of the housing revenue accounts system; it needs wholesale, fundamental change. My hon. Friend asked about the time scale, and the review will report to Ministers in the spring of 2009, with a hope to introduce some sort of legislative vehicle in 2010.
Can the Minister do more as a matter of urgency to help local authorities and even housing associations to buy up unsaleable flats and other developments for social housing? That would help the economy, the housing market, which needs a lot of help at the moment, and our constituents who need social housing.
I absolutely agree with the hon. Gentleman, but that is happening already. Throughout the country, £200 million has been provided to allow it to happen. We have said that more is possible; the Homes and Communities Agency will be actively engaged in the process. I would temper that by saying that the public sector does not want to buy inferior quality. We need high quality, so it is important that the public sector is well provided for with adequate space standards.
Affordable Accommodation (Private Rented Sector)
Julie Rugg’s review of the private rented sector, which the Government commissioned in January, includes an assessment of how well the sector caters for those on low incomes and in housing need. The review reported last month. We are currently considering the report’s findings, including its suggestions for delivering new and affordable property supply, improving rental property quality and professionalising rental housing management.
I thank my hon. Friend for that answer. One of my main concerns about the impact of the credit crunch on the housing market is that it could push even more people into the private rented sector. While there are some good private landlords out there, there are also some rogue ones. The Rugg review suggested an independent procedure for complaints and redress, particularly for long, drawn-out complaints. Can my hon. Friend confirm whether the Government are looking at implementing that suggestion?
I pay tribute to my hon. Friend, who has been championing the idea of tackling unprofessional landlords in his own patch. There is a similar problem in my area, particularly with regard to more vulnerable households. We need to do more. The Rugg review provided a range of options on how we can increase the professionalism of landlords. We are considering those options, and hope to respond in the housing reform Green Paper some time in the new year.
The House was delighted when the Government introduced deposit protection for people renting under assured shorthold tenancy agreements back in April 2007—I believe that the whole House supported that. The threshold for the scheme remains at £25,000, but if it had been index-linked, it would be £52,000. The reality is that many young and vulnerable tenants are simply not covered and need to be, so will the Minister urgently examine the issue?
I thank the hon. Gentleman for his comments, and I shall take them away and examine the matter. He will be aware that under the tenant deposit protection scheme about £1 billion of tenant money has been protected. We are anxious to build on that to ensure that further protection is provided for vulnerable tenants.
My hon. Friend will be aware that Brighton and Hove city has one of the highest proportions of private rented housing in England outside London, and that it is also a successful university city. It has two successful universities, whose students not only contribute to the economy and the vitality of the city, but put pressure on the private rented housing sector. When will guidance be issued to councils stemming from the ECOTEC report, which I know his Department recently received?
I would like to pay tribute to my hon. Friend, who is a strong Brighton Member of Parliament, but I do not want to do so because Hartlepool United are playing Brighton and Hove Albion in an FA cup replay this evening. He makes an important point; Brighton is a fantastic place, but its large proportion of private rented properties creates an issue. On studentification and its associated problems, he will be aware of a range of possible planning proposals and non-planning proposals. He also mentioned the ECOTEC report, on which I am hoping to consult later this year.
Despite the current market correction, the need for affordable housing in south Devon remains as great as ever, yet both the proposed new towns, which were intended to deliver much of that affordable housing, are now unlikely to happen for many years because of the credit crunch. Can the Minister tell us what plan B is?
I am not entirely certain what that had to do with the private rented sector, but one of the things that the Julie Rugg review says is that we must grow the business of that sector—we must improve the supply. That is true of not only the private rented sector but social and affordable housing. As I mentioned in an earlier response, the Government are providing about £8.4 billion to help improve the supply of affordable housing. We need to do that, and we need to correct the imbalance between housing demand and supply, which persists in this country. I hope that Conservative Members will support us in that.
My hon. Friend will be aware that many local authorities in London have to cope with homelessness by leasing properties in the private rented sector and that such properties are anything but affordable. I saw an example this week where someone was living in a poor-quality three-bedroomed flat, yet the rent was £380 a week. The only consequences of this situation are huge housing benefits bills for local authorities, and people not being able to afford those properties and get into work. What steps does he intend to take to tackle it?
My hon. Friend makes an extremely important point, which demonstrates how this is not solely a departmental issue; it involves working in partnership with local authorities and other Departments. He may be aware that I published the Government’s new rough-sleeping strategy this morning, which pledged that we will end rough sleeping once and for all by 2012. He will also be aware of the housing benefit reform package that the Department for Work and Pensions is taking forward. On his point about unscrupulous landlords taking advantage of the system, I am working closely on that issue, particularly with the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Burnley (Kitty Ussher). I am keen to take a cross-governmental approach, so that we can tackle the problems that he rightly identified.
Gypsy and Traveller Sites
Between 2006 and 2008, the Government have awarded grants to provide more than 400 additional socially rented pitches, and 120 sites have been refurbished. The timetable for allocating suitable land for Gypsy and Traveller sites is set out in local authorities’ local development schemes. However, where there is a clear and pressing need, work should begin now on identifying land for sites.
I thank my hon. Friend for that reply and congratulate the Government on their initiative in trying to provide an adequate number of Gypsy and Traveller sites. Does he believe that there is a net increase in the number of pitches being provided? In some situations, refurbishment leads to a reduction in the number of pitches because it expands the size of individual pitches. Does he feel that there is an expansion in the number of pitches that are being provided by local authorities at the moment?
I congratulate my hon. Friend; as chair of the all-party group on Gypsy and Traveller law reform, she has been the catalyst for much of the progress that has been made. She raises a serious point about whether, in our enthusiasm for investing in refurbishment and providing additional pitches, some may be lost in other parts of the country. The important point for local communities and local authorities to recognise is the benefit that the provision of well-managed, authorised sites can offer. They help to reduce the number of unauthorised sites and mean that there are more levers at the disposal of local authorities when it comes to removing unauthorised sites. We will ensure that we encourage local authorities to continue to provide additional pitches and to refurbish those pitches that are already in existence, as they should do.
Does the Minister agree that the rules and laws of this country should apply to everybody equally? If so, does he understand how my constituents in the villages of Wilburton and Haddenham feel at the prospect of another 14 Traveller pitches being granted permission? That permission is being granted not because those sites are wanted there and not because the district council wants them, but because the council is being forced to grant permission on land for which it would not otherwise do so, because of pressure from the Government and from the regional planning policy. One of the two sites has already been rejected for use in building conventional housing. The other is a greenfield site. If anybody else applied to carry out normal development, they would not have a prayer.
Gypsies and Travellers are bound by the same planning laws and human rights legislation as everyone else, which means that they should apply for planning permission before moving on to or developing land that they own. In the same way as everyone else, they are subject to enforcement action if the proper planning processes are not complied with. Local authorities, rather than the Government, should decide what happens in local communities.
Traveller provision might not be politically popular, but does my hon. Friend agree that if every local authority made good provision for Traveller families there would be an overall saving, as illegal sites would not be used, saving all the money that dealing with them frequently costs—not to mention the rental income that would come from official sites?
I thank my hon. Friend for that sensible question. The independent taskforce on site provision and enforcement concluded that the Government’s policy framework was sound, but her point is very important. The provision of additional well-managed and authorised sites will help to reduce the number of unauthorised sites. Authorised sites also enable rent and council tax to be created and utility bills to be paid. I hope that we would all welcome that.
The Minister must recognise that no one on the Opposition side of the House objects to reasonable rights being given to Gypsies and Travellers. However, he and his Government are taking away the rights of other people in my constituency. Decent, normal, law-abiding, hard-working, tax-paying people are under threat of having the little pieces of land right next to their houses taken away by his Government, by compulsory purchase, to provide sites for Gypsies. What about the rights of the decent, hard-working taxpayers in my constituency?
Let me deal with the hon. Lady’s first point. Local authorities spend £18 million a year on enforcement action on unauthorised sites. If we can reduce the number of unauthorised sites by encouraging local authorities to provide authorised sites, that will reduce that bill. Secondly, I know from a letter that I have been passed by the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hartlepool (Mr. Wright), that the hon. Lady has been involved in a campaign that some would characterise as scaremongering about compulsory purchase orders in her community. There is no truth in the headlines. There is no requirement for local authorities to compulsorily purchase land for Gypsy or Traveller sites. I would ask, caution and counsel hon. Members to use their words carefully and to temper them when it comes to spreading stories that are factually incorrect and misleading.
Leicestershire lies at the heart of England and is very well served by the motorway network, including the M6, M1 and M42, but the county has much more than its fair share of unauthorised Traveller encampments on both private and public land. Would my hon. Friend like authorities to share best practice in respect of how rapidly they deal with such concerns? Northamptonshire, for instance, has a far better record than Leicestershire in that regard. Does he plan to give authorities greater powers in legislation to move Travellers on rather more quickly than they can at the moment?
I congratulate my hon. Friend on the work that he is doing with his local community. I should be more than happy to visit examples of good practice, and MPs who articulate it. He is of course aware that the police have greater powers to move Gypsies and Travellers from unauthorised encampments if there are suitable pitches available for them to move to. I hope that the examples of good practice in his community will be adopted elsewhere in the country.
The Minister will be aware of how controversial this issue is. He said that the point about compulsory purchase made by my hon. Friend the Member for Epping Forest (Mrs. Laing) was unreliable, but will he confirm that in 2006 the Office of the Deputy Prime Minister issued guidance instructing councils to meet their regional targets for Traveller camps by using compulsory purchase powers? Does he appreciate the ill-feeling that that advice and guidance has aroused, and the harm that such heavy-handed, top-down state interference has caused to community relations?
Frankly, the hon. Lady should know better. Compulsory purchase orders are entirely a matter for the local authority. If a local authority wished to compulsorily purchase any land, it would have to demonstrate that there was a compelling case in the public interest before confirming a compulsory purchase order. Such an order should be a last resort that is used only when efforts to purchase land by agreement have failed. However, it is a basic courtesy—[Interruption.]
Council Tenants (Fixed-term Contracts)
The Government have announced plans to publish a housing reform Green Paper to create a fairer and more effective system for those living in rented housing. I am currently considering all the evidence and arguments in favour of reform.
The speculation in The Times on 10 November described proposals published by the Chartered Institute of Housing. They are not, as was said, Government policy.
I am grateful to my right hon. Friend. My purpose in tabling that question was to enable her to knock very firmly on the head the report in The Times on 10 November. For the avoidance of doubt, will she confirm that, whatever else it contains, the Green Paper will not contain proposals for issuing fixed-term tenancies to council tenants?
As I said to my hon. Friend a moment ago, I have made no decisions about what will be in the Green Paper, but I can certainly tell him that I am not at all sympathetic to the notion that council housing residents should somehow lose their security of tenure. Indeed, I cannot think of a worse time to make such proposals. However, I fear that my hon. Friend—who I know is himself a distinguished journalist—may be mistaken in thinking that it would be easy to knock this notion on the head, since I have observed that, once something gets into the press cuttings, it is liable to be repeated, whether it is accurate or not.
The Minister’s words will be heard with support and encouragement by thousands of constituents who are council tenants in boroughs such as mine, Southwark. May I therefore ask her to be explicit about what I understand to be her view? Is she saying that no council tenant in England will have their status changed and their security of tenure removed, and that the Government will not force those who wish to remain council tenants into a different relationship—one that they do not support—with the council, for example through the involvement of an arm’s length management organisation?
I am tempted to make a joke about “Focus leaflets,” but I will refrain from doing so as the hon. Gentleman is in agreement with me. I can certainly say that we have not the smallest intention of removing security of tenure from existing tenants. I understand entirely his point about those who wish, for a variety of reasons, to remain council tenants, and to retain the mobility that comes with that. One thing is slightly worrying, and makes it important for us to look into and pursue these issues: it is counter-productive to say, on the one hand, that if people are beginning to earn a little more, perhaps they should think about moving out of council housing, whether they wish to or not, and to say on the other hand that we need mixed communities. I understand that right across the House there is acceptance that mixed communities are highly desirable. Let us see how we can maintain them.
I think all Labour Members thank my right hon. Friend for that good answer. As I think she knows, there are other council tenants, including those who live in pre-fabricated accommodation built after the second world war, when materials were scarce. There is a problem with some of that accommodation, including the Tarran bungalows in Bolsover. Will she meet relevant representatives to discuss the problem? It will need a bit of money, and will mean borrowing. We on the Labour Benches are in favour of that, and we can then solve the problem, and those council tenants can remain where they are.
I understand my hon. Friend’s description of the value and benefit of that accommodation. I think that Members across the House are aware that although pre-fabs were intended to last only a short time, they have been extremely popular, and I can completely understand the point of view of those who wish to see whether there is a way of extending the life of that accommodation. Of course I will meet his constituents. As to whether we would be able to find funds, and in what circumstances, that is not something that I dare guarantee from this Dispatch Box, but I certainly heed his remarks.
As year follows year under Labour, the number of people despairing and desperate in their pursuit of an affordable home grows and grows. There were 1 million people on the social housing waiting list in 1997, and there are 1.7 million people on that list today. Fewer than a fifth of the number of council houses built in 1997 are being built today. Given the Government’s inexcusable failure to provide affordable homes when times were good, how can they possibly hope to meet their targets when the Brown boom has turned to bust?
May I point out to the hon. Gentleman that, despite his remarks, 1 million more people are in home ownership than when this Government came to power? He talks about “inexcusable failure”, but it seems an utterly inexcusable failure that when this Government came to power, we found a backlog of £19 billion of needed repairs and maintenance, particularly in the social housing sector. Investment was made in putting roofs on while the sun was shining—they were left off by the Conservative party—and that has perhaps meant that fewer resources went into new build than might otherwise have done. That was a scandalous failure of the previous Government, but one that our party has rectified.
Small Business Rate Relief
The Government do not keep an ongoing account of the take-up rate of small business rate relief, but the latest reliable figures show that on 31 December 2006, some 392,000 businesses in England were claiming small business rate relief. The next figures will be available at the end of December this year.
I am grateful to my right hon. Friend for that answer. So many small businesses are suffering from cash-flow problems, but is the benefit not a source of help that is available now, waiting to be asked for? Does she agree that the Department could carry out a campaign to promote take-up of that relief, that there are good examples of local authorities already doing so, and that all of them should do so? Would she encourage all hon. Members to join in promoting take-up of that relief—even those who voted against setting it up in the first place?
My hon. Friend is absolutely right. There is a relief that helps more than 400,000 businesses, and in the current economic circumstances the smallest businesses are feeling the greatest strain. I wrote to all local authorities on 17 September, encouraging and urging them to start a take-up campaign for small businesses, and Members from all parts of the House will be delighted to join us in that. As my hon. Friend says, we introduced the measure in 2003, but at that time, I am afraid, the Opposition voted against it. In fact, the Leader of the Opposition voted against it on two separate occasions, but now, apparently, they are campaigning for it. They say one thing; they vote for another.
If the Secretary of State really wants to help small businesses, will she explain what possible logic there is in charging 100 per cent. business rates on empty commercial and retail properties at a time when those properties cannot be sold and cannot be let?
The hon. Gentleman raises a serious issue, and I am very aware of the impact on commercial and industrial properties. However, he has never mentioned the context of those empty property rates. There is a three-month full exemption for non-industrial premises, and a six-month full exemption for industrial premises. When we brought in the measure, we reduced the rates for charities and sports clubs to zero, and we have a done great deal to help on empty property rates. If the hon. Gentleman wants further rate reductions, the money will have to be found from somewhere. Obviously, we are aware of the pressures, we are keeping the issue under review and we are engaged with the property sector, but it is right that we establish the context of those empty property rates.
I hear what my right hon. Friend says and I warmly congratulate her. Will she talk to her colleagues in the Department for Business, Enterprise and Regulatory Reform about how post offices are now able to take up the small business rate relief, because now that we have recognised the value of sub-post offices, is it not right that we give all of them the opportunity to stay in business by ensuring that communities invest in them? That idea is one way they can do so.
That is an excellent idea from my hon. Friend, and, again, I am sure that Members, particularly on the Government Benches, will have welcomed the announcement about post offices which my right hon. Friend the Secretary of State for Work and Pensions made last week. I also think that local authorities can do much more to ensure that services are provided through the post office network, and we are already engaged with a number of local authorities that are seeking to maintain as a key anchor in their communities post offices that have played a very important role.
The right hon. Lady was very quick to dismiss the question from my hon. Friend the Member for North Thanet (Mr. Gale). Does she dismiss the concerns of the Government’s own Chief Whip, the Parliamentary Secretary to the Treasury, the right hon. Member for Newcastle upon Tyne, East and Wallsend (Mr. Brown), who labelled the charges on empty properties “destructive”? Indeed, 60 colleagues have called for them to be scrapped. That £1 billion tax increase on empty buildings at the beginning of a recession will cost jobs now and seriously hamper the recovery. Will the right hon. Lady next week advise the Prime Minister to undo the damage that he inflicted as Chancellor of the Exchequer?
The hon. Gentleman raises the issue of empty property rates, but he will know, as I do, that if we get rid of empty property rates, we will have to look for funding elsewhere. Very interestingly, we have seen a very dramatic development this morning: we have seen from the Leader of the Opposition—
The right hon. Lady should just stop digging. Her right hon. Friend the Chief Whip may have a different view. The Government’s policy on retrospective taxation states that backdating should take place only when it is fair, proportionate, necessary to protect revenue and in the public interest. In what way do the Government’s backdated business rates on ports meet those criteria? How can it be proportionate that the rates bill for one port operator alone has gone up from £50,000 to £1.25 million? How can it be fair that that backdated tax will cost 100,000 jobs throughout the United Kingdom? And how can it be in the public interest for such companies to be transferred to Rotterdam and Zeebrugge?
The hon. Gentleman will know that in the past 11 years the Government have done more to regenerate communities, support businesses and create jobs in this country than his Government ever did. He will also know that when empty property rates were brought in, a whole range of companies were deliberately leaving properties empty in order to find homes, sometimes for offshore funds; it was absolutely right to encourage those empty properties to be let.
The hon. Gentleman will also know that there is an issue about valuation in relation to ports and that we are seeking to take whatever steps we can to ensure that the impact on the port sector is measured and moderated. However, for the Conservative party to talk about building—
We are working with a range of stakeholders, including mortgage lenders, local authorities, the courts and third sector advice agencies, to ensure that appropriate support is available for all households in financial difficulty. On 2 September, we announced plans for a mortgage rescue scheme targeted at the most vulnerable households facing repossession.
My right hon. Friend has made an extremely important statement. It is vital that we get the message out through local authorities, building societies, mortgage lenders and in particular the courts. What can she do to work with other Departments to make sure that the message gets through loud and clear and that there are no further unnecessary repossessions?
My hon. Friend is entirely right: is important that we convey the message of where people can seek help—and that they should seek help, rather than waiting until the last minute. Some 340 local authorities, as well as lenders, money advice agencies and officials from the Housing Corporation, have attended briefings, at a regional level and in other ways, to try to get information across. As my hon. Friend will be aware, we are working particularly with the Ministry of Justice to improve provision of advice at the courts.
I hope that hon. Members across the House will take on board the fact that it is very important that people in difficulties contact their lenders as early as possible; it will often be possible to make arrangements with which those people can live and which they can readily meet. However, for those who go as far as the door of the court before seeking advice, we, with the Ministry of Justice, have funded court desks in about 90 per cent. of courts across the country, including in my hon. Friend’s constituency. They have had an average success rate of 85 per cent. in averting repossessions, even at that late stage.
The pre-action protocol is intended to encourage communication between borrowers and lenders, but will the Minister concede that it does not require lenders to do anything at all and that it offers the courts no sanction for non-compliance? Does the guidance not need to be accompanied by changes in legislation, and will the Government finally agree to support amendments to that effect in the Banking Bill next week? That would give courts the power that they need to make a real difference on repossessions.
The hon. Lady is right to say that the position does not place a requirement on lenders, but it is a heavy encouragement to lenders to know that what they are doing will be scrutinised. I hope she is aware that, quite apart from the encouragement given by the Government and the justice system through the protocol, the Council of Mortgage Lenders itself has issued guidance strongly advising people to take the same kinds of steps. The whole thrust of the approach, whether from the council or the courts, is to make sure that repossession is a last, not a first, resort.
Does the Minister accept that if the Government are genuinely to take a sensitive approach to the growing problem of debt for families, a further step would be to set the issue in the context of the enforcement of other civil debt? They should cancel their current plans to implement proposals to give bailiffs powers of forced entry into family homes to pursue things such as parking tickets and credit card debt.
The hon. Gentleman is rather taking us away from the issue at hand. I completely understand and sympathise with people who feel distressed when they are approached on such grounds. However, the issue is not of the same order as the threat of losing one’s home. The hon. Gentleman should recognise and concede that the Government are doing a great deal to help people in those very worrying circumstances, and they hope to do more.
My Department continues to work to build strong, safe communities where people want to live, work and bring up their families. In recent weeks we have been especially focused on the effects of the tough economic times on communities. We are working hard to keep people in their jobs and in their homes, and we are giving them real help in tough times.
I am grateful for that answer. I want to have my say in support of eco-towns, just as others want to speak against them. Will my right hon. Friend confirm that there has been consultation on the general principle of eco-towns? There is currently consultation on the proposed planning policy statement, and there will in future be consultation on each individual site through the planning process.
My hon. Friend is entirely right, and I am grateful to him. We sometimes get the impression in this House that absolutely nobody is in favour of eco-towns. The second round of consultation has now begun, and I hope that people will respond to it as thoroughly and enthusiastically as they did to the first round. He is also right to say that when all the processes are completed and we have the final set of proposals for places that may be suitable for an eco-town, ordinary planning procedures and decisions of local authorities will then come into play.
The hon. Gentleman has raised with me on several occasions the issue of Gypsy and Traveller encampments in his constituency. I can give him the information, although I think I may already have done so in a written parliamentary answer. Let me reiterate the point made by the Under-Secretary, my hon. Friend the Member for Tooting (Mr. Khan). The provision of authorised sites helps to improve planning, has ensured that we have better social cohesion between the settled community and Gypsy and Traveller communities, and can help to reduce council tax bills. Everybody wins with the provision and assessment of authorised sites, and I hope that the hon. Gentleman would agree with that.
I know that my hon. Friend, like me and my colleagues, takes the issues raised by the recent lobby and report very seriously. I hope that she will be reassured that all firefighters, whether whole-time or retained, are trained to the same standards. Firefighter training is based on national occupational standards, which ensure that a consistent and appropriate level of training is maintained across the country. Those standards also give individual fire rescue services the flexibility to ensure that all their staff are trained for the particular risks that are identified in their local integrated risk management plan.
The hon. Gentleman has pursued these issues conscientiously on behalf of his constituents on a number of occasions. There have been some 35,000 responses to the south-west strategy. I am in the process of considering them very carefully, and we will respond in due course.
My hon. Friend raises a serious and alarming issue. I am indeed aware that such scandalous behaviour is occurring. I assure him that we are ascertaining what we can do to discourage it heavily. It is clearly alarming and to the disadvantage not only of the individual families, but of the whole sector in the long term.
I note the hon. Lady’s views on the matter. In setting the framework for the new unitary authorities, we are having detailed discussions with them so that they can keep some of their chartered rights and ceremonial positions intact. It is for the respective new unitary authorities to make such decisions. We will work with them to enable them to set up their authorities in the way they choose for their area and their residents.
My hon. Friend asks an interesting question. Like him, I deplore it if his local authority has retained section 106 money, which could be put to good use for the people of his area. I am not entirely sure whether we can do anything to encourage local authorities to use it in that way, but I assure him that, following Question Time, I shall find out.
Will the appropriate Minister give further and sympathetic consideration to the point that my hon. Friend the Member for North Thanet (Mr. Gale) and Opposition Front Benchers made about empty property relief? There is a crisis. Three business men approached me separately at the weekend, requesting that I make representations to the Government for such relief, even if it is reintroduced only for the period of the recession and the financial crisis. The only way they can currently get around the problem is by taking the roof off their property. That cannot be considered value for money. Will the Government reconsider the matter for the period of the recession?
In responding to the hon. Member for North Thanet (Mr. Gale), I said that we kept such matters under review. I am aware of the impact, especially in the current economic climate. I wanted to stress the steps that the Government had taken to try to ensure that we provided some relief and support. If the hon. Gentleman was approached by only three members of the commercial property sector last weekend, he was probably lucky. I have been approached by many more members of that sector and I am well aware of the position. Indeed, we are very much engaged with the sector and we are examining the impact of the empty property rates in different places.
I am indeed aware of the Law Commission’s report and anticipate hearing something further from it in the near future. I will not disguise from my hon. Friend the fact that, although I respect the work that was done and the careful thought that went into it, I have concerns about some proposals in the report. For example, private rented sector tenants have been mentioned during today’s Question Time, and there is concern that some of the proposals might reduce security of tenure for some in that sector. That would worry me. However, I assure my hon. Friend that I will consider the matter with great care.
I thank the Secretary of State for refusing HelioSlough’s proposed 3.5 million sq ft rail freight interchange in my constituency. However, I am extremely disappointed that only five weeks after that refusal, which cost my council and my residents several hundreds of thousands of pounds in defending themselves, HelioSlough has yet again asked to make a planning application. Although I am aware that under the Planning and Compulsory Purchase Act 2004 councils can stop similar applications, HelioSlough was apparently somewhat comforted by the Secretary of State’s comment that she might have agreed the proposal if the site specification and assessment work had been done first. The fact that HelioSlough did not do so correctly—
I am pleased that the hon. Lady and her residents were pleased, but clearly we have not managed to please her enough in this instance. If commercial operators want to bring forward applications, it is not within my power to prevent them from doing so. It is a matter for the market to determine whether such applications are made.
May I ask my hon. Friends on the Front Bench, and the Minister for Local Government in particular, about the situation regarding Icelandic banks? I am thinking of those local authorities that looked at the credit ratings and made sensible judgments about investing in those banks. Will my right hon. Friend make a statement to the House about that matter? In particular, will he meet some of the leading councils that suffered because of that advice, not least my city council in Nottingham?
Our first priority has been to help those authorities and other depositors in the Icelandic banks to get their money back and to be treated fairly. Led by the Treasury, that has been happening over the past few weeks. Our second priority has been to ensure that we send in financial experts to work with authorities that have deposits in Icelandic banks, so that we could reassure them and residents that there was no short-term threat to services or staff, and we have done that.
Beyond that, there is currently no evidence that the guidance for local authorities on investment that has been in place since 2004 is faulty. Indeed, most authorities have spread their investments, which is one reason why none is experiencing serious short-term difficulties. I will of course meet my hon. Friend—indeed, I believe that I am due to meet him shortly. I look forward to that meeting with him and leading members of Nottingham city council, which was one of the authorities with deposits in a failed Icelandic bank.
Could the Minister offer any additional guidance to councils such as West Lancashire district council to ensure that affordable housing schemes are progressed to positive fruition? Sadly, I have to report a number of incidents, including one in which the housing association, working with the council’s housing department, brought forward a scheme costing £800,000, only to find that the planning department preferred it on an adjacent site for which there was no grant. The whole scheme therefore fell apart, with £800,000 or £900,000 lost and no affordable housing built. That is an absolute disgrace. We need some help with things like that.
I completely understand the distress that my hon. Friend expresses and I share her disappointment that, owing to what sounds like a series of unfortunate decisions not being connected, such proposals fell through. I am not sure that guidance from us would help in such circumstances, unless it was “For goodness’ sake, show some sense.”
Points of Order
On a point of order, Mr. Speaker. I believe you are aware of a letter that I recently received from Westminster city council saying that despite your robust statement on 28 October about the unauthorised and illegal protest noise in Parliament square, there are no plans to prosecute, because, as the council puts it,
“the Courts would be unlikely to impose a penalty much beyond a nominal fine”.
Would you care to inform us whether the Government have responded to your request to be consulted about the matter? If they have not, when they consult you, will you draw to their attention the recent report that Westminster city council has ordered Debenhams to stop playing Christmas carols outside its window display, because, the council says,
“it will cause noise pollution”?
Mr. John Wilkinson, the council’s noise team manager said:
“We don’t think it’s fair for hundreds of thousands of daily visitors to be bombarded by loud music in the street as they walk past shops.”
Perhaps we should advise Debenhams to intersperse its carols with terms of abuse towards politicians and our armed forces, in order to be allowed to play them.
I am not aware of what restrictions on noise nuisance are being imposed by Westminster city council away from Parliament square. Perhaps Debenhams was putting us all in a Christmas spirit—good luck to it. I am awaiting the response of the council to the deliberations of the Joint Committee about noise affecting the House.
Order. I listened carefully to that. The term “misleading”, as used by anyone outside the House, is not something that I would draw to the attention of a Minister or any other hon. Member, unless a Minister or an hon. Member says that an hon. Member is misleading the House. The hon. Gentleman did not say that the hon. Lady was misleading the House. Had he done so, I would have brought him to order.
Further to the point of order made by my hon. Friend the Member for New Forest, East (Dr. Lewis), Mr. Speaker. You gave a good answer to my hon. Friend, but may I remind the House, through you, that the Procedure Committee, which I chaired some years ago, produced a report into the noise and other antisocial activity in Parliament square? It appears that the advice of the Committee, which was accepted by the House, has not been followed through properly by the Government and Westminster city council.
On a quite different point of order, Mr. Speaker. Is it not ironic that today’s motion 9, entitled “Debate Europe”, which promotes yet more propaganda from the European Union on how good it is for this country, cannot be debated in the House tonight under Standing Orders? Can you please do something, Mr. Speaker, to enable us to debate the motion?
Energy Bill [Ways and Means] (No. 2)
Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Energy Bill, it is expedient to authorise the levying of charges by virtue of the Act by the Gas and Electricity Markets Authority in connection with payments relating to the renewable generation of heat.—[Mr. Mike O’Brien.]
We are being asked to vote on the Ways and Means resolution on the Energy Bill that provides power for Ofgem to levy charges in connection with the renewable heat obligation. The Minister will know that the renewable heat obligation is vague. It came in only at the last minute of their lordships’ consideration of the Bill, and even the Government will accept that we do not really know what it is, what form it will take, or when it will come in. However, we are being asked to nod through a motion that gives powers to Ofgem to levy charges in connection with the obligation.
My understanding is that this problem would not arise if were we talking about feed-in tariffs, because the feed-in tariff from which a person benefits is generally taken through higher charges on other consumers of electricity. However, when it comes to renewable heat, I am not clear what we are giving a blank cheque to Ofgem to do. Will the Minister, when he responds to this short debate, tell the House what powers we are giving to Ofgem, in what circumstances it would levy charges, on what sorts of people, for what purposes, on what scale, and when? It is not without reason that we have been given 45 minutes to explore and probe the provision, and I hope that the Minister tells us what Ofgem would use the power for.
One can see the flip side of the measure, and that a renewable heat incentive would be beneficial to one set of people, but it is not clear who would have to pay Ofgem under the motion. Will the Minister clarify what powers he is asking us to give to Ofgem, in what circumstances, and why?
This is not a blank cheque. The Government have taken the view that the renewable heat incentive amendments that we will debate shortly should be subject to substantive discussion and consultation, and to a further order in the House in due course. All the amendments to be debated later will do is give us the power, if necessary, to enable Ofgem to levy some charges or make some payments to put the renewable heat incentive in place. In a sense, we are creating a power or an ability to do something, on which we will subsequently consult. If we are to introduce the renewable heat incentive—I think that the hon. Gentleman is in favour of it—the mechanisms must be in place to deliver it. In the debate that follows this one, we can look at what is going to be done in broad terms, knowing that we are essentially creating powers that will at a later stage be the subject of substantive discussion. In due course, further orders will be put through the House. [Interruption.] The hon. Gentleman asks me exactly what levy charges will be made. That is exactly what we will discuss in the subsequent debate on the powers in the Bill.
Essentially, we would need to look at the payments from some of the fossil fuel generators. They would probably—this will be the subject of discussion later—make payments that could then be used to ensure that the renewable heat incentive was substantive or to make compensation payments to those involved in generating that renewable heat. We thus need to create the power to enable that sort of levy to be imposed. As I have said, much of this will be the subject of consultation.
The hon. Gentleman will be aware that some of the amendments resulted from discussions during the Bill’s passage both here and in the other place. The Government have been persuaded by some of the arguments, not least from Liberal Democrat and Conservative Members as well as Government Members, so we want to create a series of powers to deal in a detailed way with what needs to be done. We have the broad outline of policy—I think that we all agree with that—but we need to make provision for precise details on the issues raised by the hon. Gentleman about what sort of levy will be imposed and on whom. I have explained who is likely to be affected and how it will be done.
Question put and agreed to.
Energy Bill (programme) (no. 2)
Motion made, and Question put forthwith, pursuant to Standing Order No. 83A (Programme Motions),
That the following provisions shall apply to the Energy Bill for the purpose of supplementing the Order of 22nd January 2008 (Energy Bill (Programme))—
Consideration of Lords Amendments
1. Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion relating to Energy Bill [Ways and Means] (No. 2).
2. Any further Message from the Lords may be considered forthwith without any further question being put.
3. The proceedings on any further Message from the Lords shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.—[Mr. Watts.]
Question agreed to.
Orders of the Day
Lords amendments considered.
I must draw the House’s attention to the fact that privilege is involved in Lords amendments Nos. 42 to 44, 55 to 57, 63, 65 and 86. If the House agrees to those amendments, I shall ensure that the appropriate entry is made in the Journal.
Terms and conditions
Lords amendment: No. 1.
I beg to move, That this House agrees with the Lords in the said amendment.
This group of amendments deals with a number of issues, including carbon capture and storage, the renewables obligation and offshore electricity transmission. Let me deal with the amendments in turn; I suspect that they will not prove controversial, but it is right to outline their main provisions.
Amendment No. 1 refers to the carbon dioxide storage provisions and relates to clause 20, which deals with the terms and conditions of carbon dioxide storage licences. In Committee, the other place agreed an amendment to require the licensing authority to consult the licence holder before making modifications to an existing licence. Even though this would be standard practice, an express duty would provide greater certainty to commercial operators. We agreed with the arguments presented and I am therefore bringing forward the amendment from the other place.
Amendments Nos. 2 to 11 are proposed to the carbon dioxide storage provisions in the Bill, specifically clause 34. The clause enables the functions of the Secretary of State and the Scottish Ministers to be transferred, by order, to another authority, or more than one authority, that is best placed to exercise such functions. It will be possible to use the power to transfer functions to the most appropriate and best equipped authority to regulate carbon dioxide storage in due course. For example, if a marine management organisation is established, it might prove an appropriate authority for regulating carbon dioxide storage. The provision will give the House an opportunity to decide later if that is the way in which it wishes to deal with the matter.
The Delegated Powers and Regulatory Reform Committee has recommended that only public rather than private bodies should be tasked with carrying out the functions on behalf of the Secretary of State or Scottish Ministers. That recommendation is consistent with our intentions in the clause. Any potential transfer was always intended to be in connection with public bodies and we therefore brought forward these amendments in the other place.
Amendments Nos. 12, 13 and 79 to 83 are minor drafting amendments aimed at clarifying the definitions of Scottish and Welsh waters that are currently contained in one chapter of this Bill and which have been inserted in legislation that this Bill amends.
Amendment No. 68 relates to importation and storage of gas and carbon dioxide storage. The Delegated Powers and Regulatory Reform Committee recommended that regulations made under clauses 13 and 27 be subject to an affirmative procedure. Such regulations would specify the powers and duties of inspectors of offshore gas storage and unloading and carbon dioxide storage facilities, respectively. Amendment No. 68 was tabled in the other place to meet those recommendations. We accept the Committee's recommendation to subject the making of the regulations to an affirmative resolution procedure.
The second set of amendments in the group relates to the renewables obligation under clause 37. It is our intention, supported by the renewables industry, to introduce a reformed renewables obligation as soon as possible after receiving Royal Assent for the Bill. In practice, that will mean from 1 April 2009, as the obligation runs out at the end of a financial year. However, the timetable for achieving that is very tight. The difficulty is that the operation of the renewables obligation in Scotland is already devolved. The amendment puts the transfer of the reformed functions to Scottish Ministers in the Bill rather than using the longer process of an order under section 63 of the Scotland Act 1998 once Royal Assent has been received.
In just a moment.
Transferring functions in such a way is fully in line with the devolution settlement but ensures that we are on track to deliver on our zero band by April 2009. May I assure you, Mr. Speaker, that the issue has been debated and approved in Holyrood by means of a legislative consent motion?
Why did the Minister not take the opportunity to correct the mistake relating to the renewables obligation as far as biofuels were concerned, which was later found in the Bill by Department for Transport lawyers and will mean that there will be considerable disorientation this year on the biofuels requirement?
We took the view that the issue of biofuels was not appropriate for the Bill. The amendments do not deal with that; they deal with a separate issue of how the renewables obligation will be dealt with and the way in which clause 37 will operate. As I have already indicated, with these Lords amendments we are ensuring that the role of Scottish Ministers is dealt with, rather than trying to deal with a particular issue, such as biofuels. I accept that the right hon. Gentleman has a view on biofuels—we certainly accept that many other people have—but this is not the appropriate place to deal with it.
I think that the Minister has mistaken me; I am asking not about biofuels, but about the powers under the legislation that could have been altered at this point. It is not a question of argument between us that a mistake was made in the legislation—that has been admitted—and we need to put it right. This is the only opportunity to do so, and I wonder why he decided not to take it.
I will look again at what the right hon. Gentleman is saying to see what has happened, but I am not aware that any legal point needs to be amended. If he is suggesting that there is such a point, perhaps it would have been appropriate to ensure that it was brought to my attention earlier, rather than on the Floor of the House in that way. He smiles knowingly. If he wants to make a point, I will happily consider it later in our proceedings. He will be aware that I have just been handed a note from officials, and I am told that the issue that he raises will be dealt with in secondary legislation. Perhaps that satisfies him. It has brought a smile to his face, and I am pleased to have done that. However, I have not been aware of any legal point such as he described, so I am pleased that officials have now reassured me that it can be dealt with in secondary legislation.
Lords amendments Nos. 30, 31 and 33 will make a small drafting change in relation to the renewables obligation. During a debate in the other place, we identified that, as drafted, the provisions in proposed new section 32E of the Electricity Act 1989 that cover the transitional arrangements for existing projects would have inadvertently prevented future research projects from benefiting from our reforms to the renewables obligation and receiving grant support if appropriate. That was not our intention, and these technical amendments seek to address the issue.
The final set of amendments in this group relates to the provision for offshore electricity transmission. Lords Amendments Nos. 45 and 99 will amend the definition of the term “relevant offshore line” in section 64(1A) of the Electricity Act 1989 for the purpose of defining the term “high voltage line”. The amendments will ensure that the new offshore electricity transmission regulatory regime will apply to the right electric lines—those of more than 132 kV or those built to transmit electricity from an offshore generating station to the onshore grid, even if only a small proportion of the relevant line is situated offshore. The amendments will also clarify the status of electric lines if they convey electricity to a place in Scotland and are wholly or partly in offshore waters—thus ensuring, for example, that a line connecting the Shetland islands to mainland Scotland comes within the scope of the regime even if some of it is on the land.
Lords amendments Nos. 84 and 85 are minor drafting changes to clarify that the references in paragraph 26(2)(b) and (c) of schedule 2 are to the person who owns the asset prior to the transfer scheme taking place. These technical amendments will ensure that the references correctly capture the generator developers who will transfer property, rights and liabilities to the holders of an offshore transmission licence under any property transfer scheme made by Ofgem under schedule 2.
I hope that the House will agree to this group of Lords amendments.
I broadly welcome the amendments. We consider that the Bill has improved greatly since it left the House of Commons a while ago. There are aspects that we should have liked to be included which are still not included, but we are glad to note the concessions that the Government have been willing to offer in the other place in response to significant cross-party agreement on the need for changes in relation to, for instance, smart meters, the role of Ofgem, feed-in tariffs and reporting issues.
I feel an element of frustration about the fact that not one comma of the Bill was changed as a result of our deliberations in Committee, but perhaps the persuasiveness of our arguments at that time caused Ministers to think again about some of the details, although it may have been simply the electoral arithmetic in the other place. I congratulate their lordships on the changes that they have made, but I also thank the Minister, his colleagues and his officials for their willingness to listen to the arguments.
I consider the amendments straightforward and sensible, particularly those relating to the carbon capture and storage regime, although we still feel that the Government’s approach to that issue is very unambitious and that we are proceeding very slowly. While we are still talking about it in this country, China, the Canadian province of Alberta and Abu Dhabi have moved ahead of us. We are slipping down the league table in carbon capture and storage. We are also disappointed, to say the least, by the structure of the Government’s pilot scheme, which rules out various technologies. That, however, is a debate for another day, and I am sure that the Minister and I will discuss it further in due course.
As for the changes in the renewables obligation, we support the move towards banded renewables obligation certificates, and we are pleased that those changes can be applied to Scotland. It is important for such arrangements to apply to all parts of the United Kingdom in the same way. The application of common standards regardless of where the scheme operates in the UK will clearly benefit investors. The clarification of grandfathering rights is also important. It is also sensible to clarify the fact that the rules on offshore transmission will apply even if most of the grid connection cables are onshore rather than offshore. The two should obviously be treated as a single entity. I realise that that will apply in only a minority of cases, but we support the Government’s efforts to secure a cohesive package.
As I have said, these are straightforward and sensible changes which we are broadly happy to support.
I declare an interest, in that I chair a company that advises firms on the provision of renewables and sensibly managed, environmentally friendly products. That gives me the advantage of knowing a little about the issues.
I thank the Minister for this group of amendments, and also for other developments that have occurred during the Bill’s passage. I hope that the House recognises just how complex the issues will be, and how easy it is to distort the future simply by getting the legislative parameters very slightly wrong. The Minister has been extremely helpful, as was his predecessor, in ensuring that we have a fit-for-purpose Bill to deal with what are sometimes considered boring details. I thank the Minister particularly for the measures relating to offshore electricity. The issues that arose in my constituency, where one of the largest offshore wind farms in Britain happens to connect with the grid within a nuclear power station complex, showed me just how complicated such matters can be.
I hope the Minister accepts that we shall probably have to return to these issues much sooner than we would normally wish to do, simply because the technology and the circumstances are moving so fast. It is because he has been willing to change right up to the last minute that I permitted myself my intervention on his speech. It is a case of keeping up with rapid change at a time when, as was pointed out by my hon. Friend the Member for Wealden (Charles Hendry), other countries too are moving very fast. We need to be fully competitive.
I now find myself in the unusual position of being able to say thank you for a Bill that I think has been greatly improved by the amendments.
May I briefly thank the hon. Member for Wealden (Charles Hendry) and the right hon. Member for Suffolk, Coastal (Mr. Gummer) for their support on these measures, and join the hon. Gentleman in thanking the officials for the way in which they have dealt with matters? I know that my predecessor agrees with me in regarding the officials as exceptional in being able to grasp a very complex policy area and address it with skill and dedication, and in their devotion of so much time and effort. We greatly value that.
The right hon. Gentleman is right that transmission access will be a major issue in the decades to come—and much sooner, probably. We will have repeatedly to return to this, because many in the industry are concerned about it. He is right that there is not an easy answer, but we need to ensure that we get it right, because others are competing with us and we must get the best possible access to transmission to the grid that we reasonably can.
Let me say once more that I am grateful for the support on these amendments.
Lords amendment agreed to.
Lords amendments Nos. 2 to 41 agreed to.
After Clause 40
Lords amendment: No. 42, to insert the following new clause—Feed-in tariffs: electricity.
I shall also speak to amendments (b) to (d) and Government amendment (g).
Let me begin by taking this opportunity to pay tribute to those involved in bringing us to this point. As in all our debates on feed-in tariffs under this Bill, the amendments are cross-party. I also pay tribute to the coalition of organisations that are the drivers of the renewable energy agenda outside the House for the help they have given us in bringing the key arguments into the Chamber. Without diminishing the role of any of the other organisations, it is important to recognise the role played by Friends of the Earth, and in particular Dave Timms and Ed Matthew, who have almost unendingly pursued our understanding of the arguments, and we are truly grateful for that.
May I join in the tributes the hon. Gentleman is paying to the various bodies and the cross-party support? Will he extend that to the Government and congratulate them on including these amendments, which improve the Bill? Does he agree that we should have a proper timetable for the introduction of the feed-in tariffs for renewables, and that 2010 would be a good time? I wonder whether the Minister and the three wise men would agree with that, too.
The hon. Gentleman is right, and his comments allow me to come to the final part of my tributes to those who have brought us to our current position, by paying tribute to the new Secretary of State, because it is fair to say that the lead he has given is what has transformed the agenda. We are right to have tabled today’s amendments, which require any feed-in tariff scheme to include a precise timetable for its introduction and to be precise about the technologies that will be incorporated and the different tariffs that will apply both to the technologies and the scale of the technologies.
On a personal level, every time I had to bang on the Secretary of State’s door about getting things right, I did not find the difficulties or hostility that we faced little more than a year ago. It is important that the House recognises the way in which the goalposts have shifted in the debate. It was not too long ago that the Department for Business, Enterprise and Regulatory Reform issued an internal briefing paper whose whole approach was hostile to feed-in tariffs, dogmatically repeating a mantra that the renewables obligation delivered all the answers and that feed-in tariffs would be a distraction. The Secretary of State grabbed the process by the scruff of the neck and gave it a shake. He saw that there was nothing in that argument, and he came to the House to make a commitment to introduce a feed-in tariff regime in the UK; his role in that should be recognised.
I am sure that the Secretary of State will not parade any of the bruises or scars that he has acquired in introducing his proposals on the threshold for feed-in tariffs. It is fair to say that behind the scenes there was enormously hostile opposition to the shift from the previous position to where the Secretary of State—and, I hope, the whole House—intends to take us.
The hon. Gentleman is perhaps being too modest in underestimating his role in shifting the balance of opinion. He has gone from a time when the Liberal Democrats were his only allies in this place to the exercising of such influence on his own Benches that the Secretary of State has followed his lead.
I always thought that we could get majority support, and it is great that we are moving collectively towards that position.
I want to say more about the shift that has taken place. On the record, many of the big energy suppliers have been fighting tooth and claw to prevent us from doing anything as bold and imaginative as we are doing. The Association of Electricity Producers had lobbied for a threshold of 50 kW. The British Wind Energy Association lobbied, until the last moment, for a threshold of 500 kW. Such demands would preclude the opportunity to develop genuine, transformational renewable energy systems on a community, town or city scale. The Secretary of State should be praised for his determination and willingness to push the boat out much further than many of those vested interests would have felt comfortable with.
It is worth noting that the arguments used by energy companies, and their representatives in another place, suggested that if we were willing to be bold by setting a threshold of 3 MW or 5 MW, it could be disastrous. In the other place, Lord Jenkin of Roding cautioned the Lords:
“One has to remember that for many of the firms that are investing in large wind farms both onshore and offshore, the world is their oyster. They can do this elsewhere, and if they find that their arrangements are threatened as a result of the integrity of the ROC system being undermined, they will push off.”—[Official Report, House of Lords, 5 November 2008; Vol. 705, c. 241.]
I am glad that the Secretary of State ignored or resisted that argument, because the truth is that they will not push off anywhere. Far be it for me to suggest that the energy companies that have been hiking up household energy charges in Britain are crooks in this sense; let us merely say that energy companies recognise a gravy train when they see one, and they are fond of gravy. Under the renewables obligation, they have been able to make returns on capital of roughly 40 per cent., so it is little wonder that they want to preserve this precious domain of substantial rewards that go only to our large energy companies.
We are a nation of inventors, and I wonder whether, like me, the hon. Gentleman is excited at the prospect of inventors across this country being able to develop ways of providing energy and feed-in tariffs providing the means by which to make their inventions economic? This could be an exciting future, and new technologies could develop in this country as a result of these changes.
I share that excitement, but I want to repatriate some of our inventiveness. This country has some of the leading solar photovoltaic suppliers in Europe, but their leading role is primarily based on supplying others, rather than us. A recent high-profile article in The Guardian featured a Scottish company, Pelamis Wave Power Ltd, which has constructed the “serpent”, a wave-generating machine, off the coast of Portugal. It will be part of a sequence that will deliver 21 MW of energy under Portugal’s feed-in tariff regime. That is precisely the inventiveness that we must seek to bring back into our domestic energy agenda. The one thing that we must be able to say is that we have access to wave power that many of our European partners would envy. We must harness that inventiveness on the basis of the security and clarity that a feed-in tariff regime has to offer.
I make that point only as a way of reinforcing many that have been made to successive Departments by Government-commissioned studies into the way forward on renewables. Many of the reports have stated specifically that the renewables obligation is an obstacle to the dynamic extension of renewable energy generation in the UK. Even those who have tried to say that we should set lower thresholds have come up with fairly fraudulent arguments about what would be lost if the big energy suppliers ceased to invest.
I wish to make two points on that. First, the big energy companies know the obligation that they share with us on the UK’s 2020 renewable energy obligations. Any company that does not want to be part of meeting those obligations can simply surrender its part of the energy market, and I am sure that its competitors would gladly clean its plate for it—if a company does not want to be part of this, let it go. Secondly, it is fallacious to say that the companies are already doing what I hope the Secretary of State will ensure we are able to do after this Bill is passed. The fear argument is that somehow this 5 MW threshold would scupper investors’ security. Even the figures on the British Wind Energy Association’s website make it clear that, in reality, the amount of wind energy being supplied at less than 5 MW—the existing capacity—is 8 per cent., the amount in construction is 0.6 per cent. and the amount in the planning system is no more than 1.2 per cent. So this threshold will not scupper any of the energy companies’ plans—the truth is that all their plans have been on a much larger scale.
The simpler reality is that the energy companies do not want to go down the path that 18 countries elsewhere in Europe have already taken with the introduction of feed-in tariff legislation. The principal reason for that is that the energy companies do not want to pay citizens for contributing to a renewable energy future, yet any of the partner countries in Europe will tell us that that is precisely what gives dynamism to their renewables agenda.
It is brilliant that the Secretary of State has decided to be the driving force in ensuring that Britain occupies the same front line and promotes technology, innovation and scientific research while giving clarity and security to the structure within which that must take place. Some of that clarity must be in the definition of what will be included in the scheme. I think that even the large energy suppliers, perversely, will want the Government to deliver that clarity. They will want clarity about the time scale within which we intend to introduce the scheme, about the pricing regime and about how and where it interfaces with the renewables obligation. It is important that we make this change not just to deliver energy security for the future but to harness some of the potential that is sitting waiting for us.
The study that the Government commissioned from a company called Element Energy Ltd sets out the precise scale of potential energy that is waiting for us. The company pointed out that almost 8.9 GW of renewable energy could be delivered for the UK by 2020 with a range of preferential feed-in tariffs. At some point, we will need to return to the practicalities of what those tariffs will be. Different tariffs will need to apply to photovoltaics, to wind energy on different scales and to wave energy. They will have to be discounted over different time periods. The suggestion was that even if we set a starting tariff of 20p per kWh for wind energy, that would deliver 5 GW of new renewable energy by 2020.
If we start to put those facts together, we realise that the energy that will be delivered by 2020 has the scope to exceed existing UK energy generation from the whole nuclear industry before any of the new nuclear power stations start to deliver a single watt of energy, which will not happen before 2022. That transformation will be possible, and I would like the Minister to clarify the details rather than sign up to aspirations. There is no point in the House being pretty much united on a desire to set off in a race to a different renewable energy future if we are unable to say when the race will start, how long it will run for and what the course will be. We need clarification of the details today.
The amendments that have been tabled would strengthen the timetable, structure and vision of the Government new clause in Lords amendment No. 42. If we can get the Minister to endorse and clarify that this afternoon, we will emerge with a Bill that we collectively as a House of Commons can feel proud of, and which will genuinely take us into our own renewable energy revolution.
May I congratulate the hon. Member for Nottingham, South (Alan Simpson) on the work that he has done on this matter? The hon. Member for Cheltenham (Martin Horwood) was completely right to draw attention to the fact that, in his very modest way, the hon. Member for Nottingham, South had left himself off the long list of people to be congratulated, but it is genuinely the case that without him and his drive, commitment and willingness to work with others we would not be where we are today.
I also join the hon. Member for Nottingham, South in paying tribute to organisations such as Friends of the Earth for the very constructive way in which they have engaged in the debate. They have put a tremendous amount of work and detail into arguing the case, and it is absolutely appropriate that they should be thanked as well.
I hope that the Government might be willing to go a little further than they have so far. We are very grateful indeed for their agreeing to put feed-in tariffs into the Bill, and I hope that they will find it in their heart to accept the amendments before us today. I somehow suspect that they might not, but nevertheless I hope that they can be persuaded in the course of the debate. I think that we now have 95 per cent. of what is needed, and we just need that other 5 per cent. of detail to reassure people about exactly what direction the feed-in tariffs are going in and what they will deliver.
Initially, of course, the Government rejected the concept of the feed-in tariff, but they were subsequently prepared to accept it as we went into the Bill. However, it was clear all along that there was tremendous agreement and support for the principle among the non-governmental organisations, Members of Parliament on both sides of the House and their lordships. If we had had the Government’s agreement earlier, we would be further down the line and it might have been possible to introduce feed-in tariffs within a year of the Bill getting Royal Assent, which I assume will be in the next few days.
Some of the work could have been done earlier, but we are where we are. As I say, the Government could have done more, and we would have been willing to assist them. As far as the consultation is concerned, I think that it should be possible in some cases to lock the people involved in a room and say, “You’re not coming out till you’ve agreed on the terms.” That could apply to some aspects of smart metering as well. It is all very well to say to people that we need months and months to talk through the detail, but if they realised that they were not going home to see their wives and kids at the weekend until they had worked out the detail, I think that we would have agreement on these matters pretty soon. A greater degree of urgency would be welcome.
My hon. Friend might like to cast his mind back to the time of the packaging directive. Members of the industry said that they had to share the obligation among themselves, but they could never make up their minds about how that would work. I threatened that they would have to continue their deliberations over Christmas, and it was surprising how soon their wives made sure that they made their minds up.
My right hon. Friend makes a valid point. Clearly, if the people involved in the consultation are not reaching agreement, we could lock him in the room with them for the weekend. There is no doubt that that would move us forward to an early conclusion in these matters.
We will watch the progress of the consultation very carefully. There should be no doubt in the Government’s mind that, if they do not deliver the feed-in tariff by the last date for a general election in 2010, we will make it a key plank of our election policies. We will make clear our determination to make it a priority to move this matter forward with greater urgency and dedication. Nevertheless, we hope that the Minister will be able to satisfy us about how the Government will deliver the feed-in tariff within the time scale that we seek.
The hon. Member for Nottingham, South also mentioned Government amendment (g), which proposes a change in the threshold limit from 3 MW to 5 MW and which will be moved later by the Minister. Concerns have been expressed by some groups that raising the threshold of the feed-in tariff above a limit of 1 MW would start interfering with the renewables obligation. We tabled amendments precisely to allow for the variation of the feed-in tariff, according to technology and the size of development. Some older and more developed technologies do not require the boost that a feed-in tariff would give to newer small-scale renewables.
The 5 MW limit is an upper limit only, and would not necessarily apply to all technologies at all sizes. We therefore understand why the Secretary of State has decided on that threshold. The idea behind it is to allow the inclusion of non-commercial scale projects, such as those that will be installed by homeowners, small businesses, local authorities, community groups, farmers and others. That would help out hospitals and schools that want to facilitate greater use of renewables and ensure low emissions as part of our 2020 targets. It would also help households to reduce their reliance on the grid, ameliorating levels of fuel poverty. However, we also understand why those in the wind sector were anxious about the threshold, as they are concerned not to have a system that jeopardises any investment plans. The key to resolving the problem is to have much greater clarity. We therefore urgently need the Government to indicate what upper limits for feed-in tariffs would apply to which technologies, so that investors in every sector can understand fully what is being proposed and how it will affect them.
I am also keen to speak to the amendments in my name, and the name of my hon. Friend the Member for Tunbridge Wells (Greg Clark) and other hon. Members, through which we seek to get more detail about the exact definition of a feed-in tariff. They have been tabled because concern has been expressed about the nature of the feed-in tariffs that the Government propose to introduce. The Government were initially reluctant to introduce the feed-in tariff principle at all, so there are concerns that they might seek to wriggle out of the commitment that has been made while the Bill is passing through both Houses of Parliament.
A letter from Friends of the Earth to Members of Parliament, signed by many people associated with such issues, says:
“We are concerned that neither of the amendments that the Government has made to the Energy Bill include a timetable for their introduction, and that the feed-in tariff amendment does not contain basic provisions to guarantee the introduction of a genuine feed-in tariff.”
It goes on to quote Lord Hunt, who said that:
“our hope is that a feed-in tariff scheme will be operational in 2010. Clearly, I have to say that that is a hope, and I cannot give that as an absolute commitment, because a lot of work needs to be undertaken.”—[Official Report, House of Lords, 5 November 2008; Vol. 705, c. 234.]
Those comments have caused some concern, because they may mean that the 2010 target could be allowed to slip; the Minister has already made it clear that that might happen.
Those of us who have advocated a feed-in tariff for some time have always been clear that it must contain the basic elements of a feed-in tariff that are lacking from the Government amendment. There must be a definition that can apply only to a feed-in tariff. We are keen explicitly to exclude any option that would allow the payment to take any form other than that of a feed-in tariff. For the scheme to work effectively, the Government must fix the level of the tariff and guarantee the tariff level for a specified contract period. There would, of course, be different tariffs to reflect different technologies, and there would also be a need for the variations in the tariff to reflect the scale of the application involved.
My hon. Friend says that Government should fix the tariffs; I believe that the experience elsewhere has been that it is better to have the tariffs fixed independently, to ensure that they are fixed on the basis of scientific comparison of the amount of investment necessary for different sorts of renewables. Does he not agree that that might be a better way of proceeding in Britain?
My right hon. Friend makes a valid point. There is concern that the feed-in tariff could be set at so low a level that no one would wish to take it up. That would be an effective way of killing off a feed-in tariff, if the Government were inclined to do so. Clearly, independent input is required, and because there may be elements of public funding involved, the Government have a direct interest in that being the case, too. Clearly, the issue would have to be addressed in the consultation. Perhaps the Minister could comment on what the most appropriate way is to bring forward the measure.
We are all clear that a feed-in tariff scheme must be different from the scheme for the renewables obligation certificates. We must be sure that the provision is not intended to introduce a super-ROC scheme. Lords amendment No. 42 on feed-in tariffs uses the phrase, “Feed-in tariffs”, only in the title of the proposed new clause inserted by it. No definition is provided elsewhere in the amendment, so we see the case for providing greater detail. We may look to you, Mr. Speaker, to decide whether we may vote separately on the amendments, rather than voting on them as a block, depending on the response that we receive from the Government.
Amendment (c) to Lords amendment No. 42 is, again, in our names. Paragraph (a) of the amendment adds
“a specified period of time”.
A feed-in tariff needs to be a guaranteed level of payment for a fixed period of time, in order to give investors the certainty that they need and a guaranteed rate of return for each unit of electricity generated. In Spain and Germany, the tariffs run for a period of 20 years. However, under Lords amendment No. 42, there is no specified time. We have not suggested a specified time, but we need greater assurance from the Minister that the concept will be in place, and that a specified time will indeed be part of the mechanism.
Paragraph (b) of amendment (c) would change a proposed new sentence from
“how a payment…is to be calculated”
“specifying the level of payment.”
The new clause would require the Government to specify only how the payment was calculated, rather than the level of payment. If the Government were to set the tariff payment level, it would not be a feed-in tariff in any sense that we recognise.
Paragraph (c) of amendment (c) would give the option to establish what is called tariff digression. For example, either every year or, more likely, every few years, the tariff rate for new installations starting that year is likely to be slightly lower than before. The current wording of the Lords amendment would allow, through the Secretary of State simply publishing a new formula, the tariffs to be changed after the generator had started on a tariff. Certainty is needed for anyone deciding to invest in small-scale generation, and it would not be provided if the Government had the power to change the tariff halfway through the period in which it was supposed to be fixed at a certain level. That part of our amendment would make it clear that tariff degression applied only to new entrants, and not retrospectively to existing generators.
Our third amendment, (d), examines the need for the tariff to be set at different levels for different technologies. That is a basic feature of feed-in tariffs throughout Europe, and the Government must be prepared at least to make provision for it. The amendment would not force the Government to use the provisions, but it would give the Secretary of State the option to do so. The amendment would also allow for the banding of feed-in tariffs to be dependent on the size of development, so, for example, a technology generating between 300 kW and 3 MW might get a lower level of tariff than the same technology generating between 50 kW and 300 kW. That reflects the need for greater support for smaller installations. The level must be set at a rate that will provide incentives for the installation of small-scale generation.
When I looked at that argument, I wondered whether it would be appropriate to include the provision in the Bill, or whether it would not be better off in secondary legislation, given the changes that are taking place in renewable energies, as we speak. I wonder whether the amendment would be too technical for the approach under discussion. What are the hon. Gentleman’s comments on that?
I am grateful to the hon. Gentleman, whose amendment is a beacon of clarity compared with some of the other technical aspects of the Bill. We have considered very carefully the point that he makes, and our view is that it is better to set out clearly now what is meant by a feed-in tariff so that there is no need for a discussion later, in which people say, “We haven’t got what we thought we were getting.” In our discussions with the relevant non-governmental organisations, we have found that they are concerned, as are other external commentators, that because of the lack of definition in the Bill, there is scope for a misunderstanding to arise later, and that is what we are very keen to avoid.
In addition, amendment (d) would require the Secretary of State to make provision for how costs relating to connecting installations to the grid or to the distribution network will be dealt with. It would not pre-determine how the costs would be dealt with, but simply require a determination to be made. Our concern is that if the provisions are not made, suppliers might be able to make such charges as they wish to small generators to make their investments unattainable.
I should also like to speak to amendment (f), standing in my name and that of my hon. Friend the Member for Tunbridge Wells (Greg Clark). There are concerns about the very low combined heat and power—CHP—threshold of 50 kW, compared with the 3 MW limit set for supporting renewable energy, and the effect that it may have on people investing in CHP. Under the renewable obligation, only larger-scale investments have prospered, but CHP has been recognised as one of the most significant drivers in reducing carbon dioxide emissions. Our cities are responsible for about 80 per cent. of greenhouse gas emissions, and their potential for installing CHP is enormous. To reach our targets on reducing carbon emissions, CHP must be encouraged. CHP can reduce the carbon emissions of a building by as much as 40 per cent., according to some external advisers.
The Combined Heat and Power Association, in a briefing to Members ahead of the debate, said:
“A 50 kW CHP plant would serve a development of between 50 and 100 dwellings.”
However, the association noted:
“Raising the cap to 5 MW would encourage the deployment of CHP in community schemes of the order of 5,000 to 7,500 dwellings. It would increase the likelihood of developing local district heating schemes.”
We are keen to see such development and roll-out of combined heat and power. If the 50 kW support threshold for CHP is not increased to the same level as the threshold for renewable sources of energy, the result will be to tilt the economics against investment in more effective CHP schemes. William Orchard of Orchard Partners, an expert on these issues, has said that the
“50kW limit will distort the market and discourage investment in larger 500kW CHP used to heat blocks of flats”.
Such projects should be at the heart of our thinking as we try to drive forward this complete change in our approach to energy, towards renewable energy and clean energy.
Although we all accept that renewable sources are the ideal for CHP, a fossil fuel CHP project can also deliver savings. In a submission to us, Clarke Energy, which implements a lot of CHP schemes across the country, said that the limit
“would imply that fossil-fuel CHP schemes above 50kW output are not to be encouraged and not beneficial”.
We all know that that is not the case and that we would be keen to see such schemes introduced as well.
We want much greater use of district CHP schemes. However, under the Government’s plans, such schemes would receive support only if they used the ROCs, with all the complexity and confusion that that would involve. We want, for example, to encourage district general hospitals to replace their old boilers with CHP systems. Their output would typically be about 1 MW, or slightly more; however, they could reduce the carbon emissions of a large district general hospital by as much as 2,000 tonnes per annum and save it as much as £350,000 in running costs. If the systems generated more power than was needed, they should be eligible for support from a feed-in tariff. To exclude them would seem perverse; they might not be using renewable fuels, but would still have taken a significant step in the right direction.
The Minister has said that he is reluctant to accept the change. However, in the course of the Bill we have seen so many of our proposed changes accepted following protracted parliamentary scrutiny, and here we are proposing just a little further degree of detail. If we got that into the Bill, the people who have been delighted by the overall decision to include feed-in tariffs would be genuinely thrilled that what the tariffs are intended to do was tied down in detail.
I should like to add my tributes to those that have already been made. I pay tribute to my hon. Friend the Member for Nottingham, South (Alan Simpson)—my good friend, whose roof turbines will no doubt be spinning tonight—and to the Secretary of State, who has shown a real willingness to engage in the argument and see off some of the lobbying from vested interests. As my hon. Friend the Member for Nottingham, South said, it is clear that some of that lobbying has sought to keep other people out of this gravy train. That is reprehensible.
I also pay tribute to the Opposition, whose opinion poll lead has dropped to a mere three points in the past few days. Even now, however, they are urging us on to get a vote-winning formula ready by 2010. The subtitle of our manifesto might be “Power to the people”, and we should be grateful to the Opposition for urging us to have the measures in place in time for the next general election. I am sure that it will be a great vote winner.
I want to be brief, but I should make a couple of small declarations of interest. I am a very small investor in the Westmill wind farm co-operative in Oxfordshire, and I am a customer of Good Energy Group plc. Thinking of small businesses and small concerns makes me ask about the specified maximum capacity. We should use the correct language. It is not really a threshold; it might be one for the renewables obligation, but it is not the threshold for the feed-in tariff, which is probably half a kilowatt.
The specified maximum capacity is an issue. I support the fact that we have travelled a great distance; before the summer recess, we were considering one hundredth of the generating capacity as a maximum, but now the figure has multiplied by 100, which is a great step forward. My question relates to small businesses that may want to generate renewable electricity, but find a glass ceiling. What do they do when they get to 5 MW? Will they have to split off into separate entities to avoid the bureaucracy, which would be an additional—not a separate or replacement—burden? When they get to that maximum capacity, they will have to consider seriously what they do with their business, and that could mean a limit on their expansion. That will happen in the early stages, because we are just starting out on this process. I support having no specified maximum capacity for a feed-in tariff, but since we are having one, we need to consider what happens to businesses as a result.
I am anxious about my hon. Friend’s comment. The renewables obligation has served us well in many respects, but it has not been acceptable and valid in the case of small microgeneration projects. Surely one cannot run the renewables obligation alongside a feed-in tariff that has no upper limit.
We will, de facto, be operating a feed-in tariff alongside the renewables obligation. Some people who have small generation units of less than 5 MW may operate both systems. There might be an administrative burden for small businesses. What happens when they get to that ceiling? Do they split off, sell out to somebody else, or start again? Having the ceiling imposes a whole range of questions. I say to my hon. Friend, whose record on renewable energy is among the best in the House, that the real answer to his question is to ask why we did not start with the feed-in tariff all those years ago, instead of trying to improve on a failed system of support—the non-fossil fuel obligation, which was a Thatcherite market solution largely designed to support the nuclear industry.
In a few years’ time—not immediately, because businesses, schools and communities will be just starting off with this far more confident future ahead of them—we will have to review this and consider increasing the maximum.
Will my hon. Friend reflect on his own knowledge of how feed-in tariff schemes operate in other parts of Europe, particularly Germany? Is not the right way to set the interface in running two schemes in parallel—feed-in tariffs and the renewables obligation—to be found in setting tariffs for higher levels of energy generation? After we have done that, is it not sensible to let the market itself decide? Although we are introducing further reforms to the renewables obligation, the Ernst and Young study commissioned by the Government last year set out specific and serious ways in which the structure of the RO is an obstacle to the development of renewables, in so far as it requires people to second-guess the future price of tradeable certificates. Is not the strength of the feed-in tariff regime its clarity and certainty over the guaranteed time for which it operates?
I completely agree with everything that my hon. Friend says. We want that certainty, and in the near term we will now see it for people who want to invest their own money in small schemes. That is a brilliant step forward. The 5 MW maximum that will be in the Bill, since there is no other amendment, is a huge advance. However, the certainty that that brings will last only for a certain period, until people want to go that little bit further but do not want to get involved in the complications of the RO, which was designed for big business—the big box solution—and not for the smaller player. In a few years’ time, in the fourth term of a Labour Government, we will have to ask ourselves what is the appropriate level for the maximum capacity. By that time, it should not be a problem, because people will have accepted that we have made this start and it will be a matter of a little tick-box that goes up to 50 MW or whatever is then thought appropriate in the light of experience.
I welcome the amendments. This debate is one of agreement and cross-party consensus. We can go out with that message, and show that on occasion Parliament works.
It would be remiss of me not to add my congratulations to the hon. Member for Nottingham, South (Alan Simpson) on all his achievements. We have all been harangued by him in the nicest possible way, and mysteriously come round to his way of thinking. I pay tribute to him, and to those who have briefed and lobbied us, including Friends of the Earth, which has been mentioned.
We welcome their lordships’ addition of a feed-in tariff, but the Liberal Democrats have added our names to amendments that support more definition of deadlines and the financial subsidy mechanism. Perhaps we are still not quite there on urgency. The Minister will be familiar with the 100 months campaign, which was launched at the start of August. It talks about 100 months before reaching a tipping point for climate change. We are already three and a half months through that time. We need a new way of thinking about such matters, which does not involve a consultation, a discussion paper, a Green Paper, a review or a period of further reflection. We are past all that.
Like the hon. Member for Wealden (Charles Hendry), my worry about the Minister in another place, who said that he hoped that we could achieve the aim in 18 months, but perhaps we cannot, is that not acting quickly is not an option. It is far better to get something roughly right by, as the right hon. Member for Suffolk, Coastal (Mr. Gummer) said, locking people in a room for a weekend, and then perhaps refining it, than to try to wait until it is perfect—it probably would not be perfect anyway.
I am worried by the mentality that assumes that we have to work according to financial years. I do not know whether I am right, but I sense a presumption about 6 April. I hope that that is not the case. I do not know where 6 April comes from—perhaps pagan festivals and the spring equinox—but it should not govern when we have to act. Things are far more urgent. We should get on with it the very day, week or month that we determine how to act.
I therefore support amendment (a), which would set a deadline of within 12 months of Royal Assent. We could fill any time available—we could spend six years thinking about this—but we urgently need to get on with it. I therefore urge the Minister to accept amendment (a). Even if he were not forced to do so, I am sure that he would want to pull out every stop to ensure that action was taken in 12 months.
I welcome amendment (f), and if the Minister does not feel able to accept it, I hope that we can test the House’s opinion on it. It deals with combined heat and power. One could be a purist and say that, because that is not a renewable, it should not be included. That would be an argument, albeit one that I do not accept. However, if we intend to include combined heat and power and recognise its contribution, the low threshold is odd. I know that the Minister will try to justify it shortly, but the contribution of combined heat and power, at least in the transitional phase when we try to move to very low carbon, if not zero carbon, is demonstrable. To constrain it so much, up-front, in primary legislation is odd. Tariffs can differ according to technology and at varying thresholds, so the potential to treat small micro-CHP differently from larger CHP already exists. Removing the constraint simply gives the Government more power and flexibility. I therefore hope that the Minister will accept amendment (f).
A potential downside of the feed-in tariff has not been mentioned. We support and welcome the feed-in tariff, but I hope that the Minister will reflect on that possible downside. Who pays for it? If we are not careful, we know which small-scale community groups, hospitals and schools and householders will do small-scale generation. We know who will have a solar panel and—dare I say it?—a small-scale wind turbine on the roof. We know the social groups and the income bands that will do that and to whom the feed-in tariffs will be paid, if we are not careful. Everybody else will pay for it in their bills, and that will be bad news for fuel poverty.
We have a combined Ministry dealing with climate change and energy. Part of the energy remit is obviously affordable energy. Clearly, there is a tension. However, given that we want feed-in tariffs, and that we want them to be generous enough to make things happen, does not that place a great onus on the Government to get serious about social tariffs and tackling fuel poverty by other means? If all we do is introduce a generous feed-in tariff that results in an increase in fuel bills across the board, we will worsen fuel poverty. None of us wants to do that. What will go hand in hand with feed-in tariffs to ensure that we do not make fuel poverty worse? I hope that part of the answer is insulation and so on, but that is happening anyway. We hope that other energy efficiency measures will be taken, and that companies will introduce social tariffs, but there is precious little evidence of that so far.
I thank the hon. Gentleman—my neighbour—for giving way. Does he agree that that point is a weakness, and that one way of responding to it would be to collectivise the operation of the feed-in tariffs? One weakness of the renewables industry is that we rely far too much on pepper-potting activity, depending on the willingness of individuals to participate. We need communities, neighbourhoods and streets to take up initiatives together, so that they can benefit from the efficiencies that arise from economies of scale.
I agree that one possibility for the 5 MW threshold is schemes of that kind. However, even if a school undertakes such a scheme, the money goes to the school. That is great for the school, but who is paying? Everybody else is paying, through their energy bills. My worry is that we will do something that is entirely laudable and right, but which has unintended consequences for those whom we are all so concerned about.
Is the hon. Gentleman aware of one way in which other EU partners have begun to address this issue? The certainty of the tariff system has allowed local authorities to cushion the installation costs in social housing, so that rather than being a barrier to addressing fuel poverty, the system turns out to be an additional resource. However, that is possible only by doing what the Secretary of State has done, which is to set a threshold high enough to encourage municipalities to undertake schemes on that scale.
We can certainly learn from what has happened elsewhere, and the examples that the hon. Gentleman cites are good ones. For example, if a local authority takes forward a scheme, the revenue from that scheme can cushion council tax bills, or whatever. My worry is that whereas local authorities in Germany, for example, are substantially devolved, with revenue-raising power and other freedoms, we are grafting the feed-in tariff on to a British system that is staggeringly centralised. Local government has little power to do those things, although some find ways. There is great potential for what the hon. Gentleman describes, but a lot of other things would have to happen to facilitate it. In a sense, that is what I am flagging up. We need to ensure that mitigation measures are in place so that we get the good of the feed-in tariff without the damage of fuel poverty.
I want briefly to raise two other issues. The first is the issue of grandfathering, which is to say that we want to avoid any hiatus. Again, that argues in favour of the 12-month limit proposed in amendment (a). We want people to invest now; we do not want them to hold off. One reason for holding off on a smaller-scale development—either a renewables obligation development or a feed-in tariff development—might be to wait and see what happens to the feed-in tariff. If the Minister could confirm that somebody investing in a certain regime would be guaranteed that regime for the life of the project, that would remove some of the investment uncertainty. If somebody was considering investing in a 4.4 MW two-wind-turbine project, that project would be below the threshold, and therefore potentially either feed-in tariff-able or ROC-able. We would want them to invest now and to get on with it, so can the Minister clarify whether, if it turned out that the feed-in tariff would be more beneficial, such a person would be able to opt into the feed-in tariff, perhaps once and for all, for the lifetime of the project?
If I were deciding today to go for a two-turbine 4.4 MW project, which could relate to either a ROC or a feed-in tariff, could I switch on to the feed-in tariff—once we know what it is, that is—or would I be committing myself to the ROC for ever, in which case I might delay until I knew what the feed-in tariff was? Can the Minister confirm whether there might be a one-off opportunity to switch? I am still slightly hazy as to whether, once everything is up and running and both schemes are potentially available to small-scale generation, people will choose one or the other, or whether they would be able to switch between the two and change their minds. Can the Minister clarify how the two will interrelate?
We warmly welcome the feed-in tariff, and the Government’s amendment (g), which increases its scope. We need action to check that fuel poverty will not be worsened by the measure, but above all we need a sense of urgency, not endless further consideration to try to perfect the provisions. We must not make the best the enemy of the good. We must not simply strive for perfection when that means delay, because we will never have perfection. We need to get on with it—in which spirit, I support amendment (a), and I believe that amendment (f), on combined heat and power, also needs to be supported.
May I also give my warm support to the introduction of feed-in tariffs? The Government have been bold on this matter. I also give my support to the campaigns by non-governmental organisations such as Friends of the Earth, and to the many Members of this House who have taken the issue forward.
It is fair to say that if we had understood feed-in tariffs better at the beginning of the incentivisation of renewables, the Government might have gone down that path. However, I understand, given the need to encourage investment in large-scale renewables and the fact that there has been a lot of investment in ROCs, that the Government are reluctant to disturb the stability that has been put in place. Stability and certainty are important, which is why I accept the argument that it is important for the Government to give some indication about time scale, pricing and structures. That cannot be done overnight; it will take a little time and involve some consultation. However, the sooner it is done, the better in terms of the undoubted benefits that we will get from a feed-in tariff. Those benefits will be both environmental and economic. There is no doubt that feed-in tariffs will be a great stimulus to the development of new small-scale technologies, and I am keen to see support for manufacturing in this country, innovation and new developments.
I also want to mention the potential impact of the measure on fuel poverty and people on low incomes. Some good points were made on that by the hon. Member for Northavon (Steve Webb) and my hon. Friend the Member for Stroud (Mr. Drew). Will the Minister consider the idea of a community or co-operative approach to encourage small-scale renewables? Perhaps one way of doing that is through warm zones. To their credit, the Government have pioneered warm zones, whereby additional funding is made available for insulation in areas of low-income housing. It would be possible, without too much difficulty, to adapt the funding for those zones to encourage the installation of small-scale renewables in the same way. I am sure that that could be done in partnership with local authorities. As my hon. Friend the Member for Nottingham, South (Alan Simpson) said, many local authorities would be very keen to be involved in such a scheme.
It is important that the environmental and economic benefits of small-scale renewables should be spread out to provide social equity. That way, we would have all three strands of sustainable development: social, economic and environmental.
All in all, this measure is a very welcome development, and I agree with my hon. Friend that the Secretary of State and the new Department deserve a great deal of credit for it. However, it is important, if we want the development brought forward, to have the earliest indication about the details and time scale, as other hon. Members have made clear.
Along with other hon. Members, I warmly welcome the Lords amendments that bring in the feed-in tariffs. I am glad that the Government have moved a considerable distance towards this. That is not something that the Minister will hear often from my party, and I hope that it does not damage him too much in the eyes of the Prime Minister.
I fully support amendment (a), which was tabled by the hon. Member for Nottingham, South (Alan Simpson). It is important that there is certainty regarding when the feed-in tariff will be introduced. The sooner we know, the better. As others have said, the hon. Gentleman led a very good campaign that received support from both sides of the House to get this far on the matter, on which he deserves our congratulations. Hopefully, he will be able to get us a little bit further, so that we can all be satisfied that feed-in tariffs are definitely coming.
My interest in the matter comes about because I represent a largely rural area. In many parts of rural Scotland—this also affects many other rural areas—there is a problem because many homes are not connected to the gas grid. I have for a long time raised questions—the Minister’s predecessor, the right hon. Member for Croydon, North (Malcolm Wicks), heard me raise them often—about the problems of off-grid supplies for hard-to-treat homes. That is a serious issue for my area and many other rural areas.
The hon. Member for Northavon (Steve Webb) rightly talked about fuel poverty, which is a real problem for those not connected to the gas grid at the moment, but wanting to heat their homes. I believe that feed-in tariffs offer the opportunity to look at renewable energy as a way of tackling the problem, and significantly alleviating fuel poverty in rural areas. It is not without its problems, one of which was touched on briefly by other Members: that many of the renewable energy resources are very expensive to install at the moment. The feed-in tariff will help to some extent, but we also need to ensure that the capital cost of the equipment is reduced, to allow many other people to take advantage of this. I look forward to the day when smaller communities can have their own renewable energy, and feed in the excess to the grid.
That raises yet another problem—the nature of the grid itself. There have been ongoing problems with renewable energy’s access to the grid—an issue that I have spoken about on many occasions. I shall not rehearse all the arguments again, but I note that only this week, the Crown Estate Commissioners started their licensing application for renewable energy through wave and tidal power in the Pentland firth, which offers huge potential for renewable energy. Even there, however, there are problems accessing the grid.
The hon. Member for Nottingham, South mentioned the Pelamis development. On a visit, I actually stood under a Pelamis machine—thankfully, it was not in the water at the time. It has huge potential, but it needs to get into the grid. This a problem that we are going to have to tackle through Ofgem, to ensure that the grid can take on both large-scale and small-scale renewables and allow the feed-in. I suspect that many energy companies will allow grid access difficulties to stand between customers and feed-in tariff.
The hon. Gentleman is making an important point, but I hope he will accept that how we tackle the grid does not need to be addressed in this legislation. The EU directive on renewables gave all EU countries the right to decide for themselves whether renewables were to have priority access to the grid, or whether it would be left to the market. The UK took a decision not to make that a binding obligation. We could reverse that decision ourselves; we do not need to view it as a deficiency in the Bill. We can change the Government’s remit through regulation, which does not require primary legislation. If we have the will, there should be no obstacle to changing the remit and putting ourselves on the same sort of playing field as the rest of Europe.
I accept the spirit of what the hon. Gentleman says; I was not suggesting that we needed to build requirements into the Bill. I was just making the point that the issue will have to be tackled, along with the introduction of the feed-in tariff. Grid access is a real problem, and we should not blind ourselves to it.
To conclude, I warmly welcome the distance we have travelled, and I hope that we can travel that last bit of distance and have a feed-in tariff regime that will really work—and work quickly.
I hope that we are not in danger of sounding churlish to the Minister, as there is no doubt that we have moved a long way in a very short time. There is also no doubt that the new Ministry has got off to a very good start; right from the beginning, certain things were announced that we had all hoped for. The 80 per cent. reduction in emissions by 2050, and feed-in tariffs, were two things that gave all of us across the House a feeling that the new Ministry had lined up its ducks in the right order.
Therefore, it is with a certain amount of reluctance that I say to the Minister that there is a third element to this that would make a big difference—what I might describe as “urgency”. If we are being fair about the excellence aspects, we must also be fair about the drawbacks. We have treated many of these matters with a lack of urgency. The Government have not been as quick or fleet-footed as they ought to have been. Most of us would accept that.
If that is true, and if urgency is very important, it is reasonable to support the amendments, to ensure that people get on with it. That is not because I believe there is any possibility of the Government going back on their feed-in tariffs decision. It would be foolish for anyone to suggest that someone will turn up and say that that is not what the Government promised. I would love to find out who it was in the Treasury who hated feed-in tariffs for so many years. There must have been a person whose life’s determination was to block feed-in tariffs. However much the argument went on, somebody there deep in a cavern was determined to make sure that it would happen over his dead body. Now we will find the body, but it would be interesting to know to whom it belonged.
I do not think that the Government will get this wrong, but we need to involve people outside in a real crusade to find answers to the issues of climate change. The reason why I have always believed in feed-in tariffs, and why we made them a central part of our energy proposals in the “Quality of Life” report, was simply that we dare not leave to the experts, the big companies or the ministries the job of finding the way to solve the challenge of climate change. We must get every kind of person with any kind of contribution to make that contribution. As my hon. Friend the Member for Wealden (Charles Hendry) said, we are an innovative country and we can find ways that were hitherto unthought of.
Feed-in tariffs draw those ideas out and encourage all sorts of different people to find structures that make it possible for us to apply new ways of generation that would otherwise not occur. I hope that the Government will help us by ensuring that we know that this will happen quickly, and that people know how it will affect them. Will the Minister answer some of the questions asked by the hon. Member for Northavon (Steve Webb), who speaks for the Liberal Democrats, in terms of understanding whether people who opt in to one system can opt out, if the other is more suitable?
Perhaps the Minister will take these questions as compliments to the Government. We are all pleased that today we can see this new beginning; we just want it quickly. Christmas cannot come quickly enough, because we do not have time, and urgency must be injected not only into the Government, but into the world outside. If the Minister can give us that assurance, we will have a real reason to thank the new Ministry, beyond all the plaudits that it has received already.
I welcome the debate and its positive tone, not least in terms of the praise for the Government and, quite rightly, for my right hon. Friend the Secretary of State. I join other Members in paying tribute to the work of my hon. Friends the Members for Nottingham, South (Alan Simpson) and for Morley and Rothwell (Colin Challen) and others who, on an all-party basis, have pressed for the changes.
The hon. Member for Wealden (Charles Hendry) was right that this measure will help hospitals and schools, but 5 MW of electricity can heat an awful lot of homes, indeed thousands of them, so that means we can ensure that we have electricity, and heat in due course, for large communities.
May I also reassure the hon. Gentleman that we are talking not about super-ROCs, but about real feed-in tariffs? That is certainly the obligation to which the Government have signed up, but there has been much lengthy debate about the effective deployment of renewables since the Bill was introduced in the House in January. I am pleased that hon. Members both sides of the House share our objective of ensuring that we are best placed and have the best possible financial framework to enable us to meet our 2020 renewables target.
The changes that we will make to the renewables obligation under the Bill will build on the success of the renewables obligation so far and lead to the deployment of more diverse mixes of larger-scale renewable electricity projects as we move towards 2020. That is important: although there is a lot of praise for the introduction of feed-in tariffs, the renewables obligation will continue to be a primary means by which we ensure that the 2020 target is hit.
We have listened to the arguments that the RO is not suitable for domestic and small-scale electricity generation projects, at least partly because of its relative complexity. Although some small-scale projects have operated via the RO, the results are patchy, so we have decided to introduce feed-in tariffs for small-scale low-carbon electricity generation. An upper cap for those feed-in tariffs has been defined in the Bill to give clarity and certainty to investors in large-scale projects under the RO. Our original amendment in the other place set an upper limit of 3 MW—we wanted the upper cap to be high enough to give us sufficient flexibility to ensure that we can direct support to small-scale projects of the right capacity.
It is important that there is no confusion about the fact that the 5 MW limit relates to capacity, not generation. The capacity restriction is not dependent on the number of kilowatt-hours that an installation will generate over a year. Different technologies will generate different kilowatt-hours of electricity, and they will be paid over that period. This is a capacity argument in terms of determining whether or not they qualify, rather than anything else. It is important that that point is made clear during the debate, so that no one expects all those technologies to generate at that massive 5 MW level or whatever, but we also want the cap to be low enough to avoid delaying perfectly viable renewable projects under the renewables obligation. Since the debate in the other place, we have decided that the 5 MW level will be better than the 3 MW one because it will enable projects that fall into the 3 to 5 MW category to benefit from feed-in tariffs. Those involved in such projects should analyse the evidence to find out which tariff is beneficial.
We will, of course, consult on the tariffs next year. As part of that process, we will undertake further analysis to determine the limit at which FITs would be set below the 5 MW cap. It is important to note that we expect that the renewables obligation will deliver the vast majority of renewable electricity up to 2020. We intend to make further announcements soon on how we plan to modify the renewables obligation to ensure that it delivers a much higher share of renewable electricity by 2020 than previously planned.
On a one-off opt-out to the RO or to FITs, we intend to make further announcements on our approach to transitional projects that could be captured in the new scheme. Our aim in this announcement, however, is to minimise the risk of projects being tempted to wait and see before committing to either the RO or FITs. It is absolutely crucial that we ensure that investment confidence is sustained in the RO for larger-scale electricity projects and that no project is disrupted while we develop a feed-in tariff policy to support small-scale low-carbon generation. Indeed, 2020 is only 11 years away; delay now is undesirable.
Amendment (a) seeks to require the Secretary of State to modify licences within a period of 12 months after Royal Assent to the Bill. I understand the wish of Members in all parts of the House to make rapid progress on these enabling provisions and to ensure that we deliver an effective scheme as quickly as possible. The need for urgency is felt no more keenly than in Government, especially in view of the EU renewables target that we need to hit by 2020. However, we also need to ensure that we get this right.
For example, before we can modify the relevant licences to implement the policy, we need to develop models enabling us to introduce a scheme that can effectively encourage deployment on the scale that we want. We need to consult on our analysis on the proposed tariff levels of payments for the different technologies. We need to work with the electricity suppliers and Ofgem, which will deliver the tariffs to generators to ensure that the licence modifications that we propose will function as we intend, alongside the existing licence conditions that regulate this complex market.
Members should not assume that this process will be simple. It will be enormously complex. However, the benefits will be considerable and important, so we shall have to go through the process and we shall have to get it right. It will involve spending a vast amount of consumers’ money, for, as was pointed out by the hon. Member for Northavon (Steve Webb), the consumer will ultimately pay for much of it. We do not want to waste any of that money. We do not want people to be pushed further into fuel poverty because we are spending more money than is necessary on a particular project.
The hon. Member for Northavon said that we had wasted enough time, and that we needed to get on with all this. I agree about the urgency, but moving too fast and getting it wrong will carry a price, and that price will be paid by consumers. We have an obligation to ensure that we get the process right, and that means getting the consultation right. While we all agree on the need for urgency, I trust that we also all agree on the need to ensure that we do not land consumers with a big and unnecessary bill.
Last but not least, we need to allow time for Parliament to scrutinise the draft proposals before modifications can be made. Parliament takes its time with things: it has to go through the processes. Let us ensure that we can carry out our consultation on the feed-in tariff system and the proposed tariff levels next summer. Following that consultation and through further work with Ofgem, electricity industry players and other interested parties, we shall be in a position to finalise the implementation aspects of the system, such as arrangements for payment processes.
Taking all that into account, we are committed to introducing a feed-in tariff scheme for small-scale electricity in 2010. Our ideal target is for the scheme to go live in April 2010, so that it can be aligned with the financial year of the renewables obligation. As I do not know the date of the next general election just yet, I cannot assure my hon. Friend the Member for Morley and Rothwell that “power to the people” will be at the top of the manifesto; but I can say that, if this Parliament extends to a full term, it might.
We should not underestimate the challenges inherent in delivering a fully operational scheme in a little over 16 months, but, despite its complexity, it is important for us to set a target and try to meet it. We are committed to introducing the feed-in tariff as soon as possible. However, choosing an arbitrary date at this stage will fetter our ability to deliver a fully functional and effective scheme in 2010, and may put consumers at risk of having to pay more than they need.
The Minister says that he wants the introduction of the scheme to coincide with the start of the financial year 2010. Does that mean that if he missed that date, perhaps owing to factors beyond his control, the scheme would not be introduced until April 2011, or would he intend to introduce it as soon as possible thereafter?
I would intend to introduce it as soon as possible thereafter. In the event of a delay of a month or two, we would aim to introduce it after that. If, for example, Parliament took a little longer to discuss things for some reason, we would want to allow that time framework, but we would then be able to introduce the scheme at the appropriate moment. April is a convenient date because many, although not all, businesses manage their annual calendars in relation to it, but it is not an essential date.
I wholeheartedly agree with the Minister that it is more important to get the scheme right than just to get it in place quickly, but will he consider the following two things in the process of trying to combine those two goals? First, it is clear from today’s amendments that a considerable amount of expertise in the House could be harnessed towards coming up with a scheme that we get right in the first place, so can we have a commitment to try to harness that know-how now, rather than leave it to the end of a consultation process? Secondly, will the Minister make sure that we have as seamless a transfer-in as possible, which does not lose certain things? For instance, will he look specifically at the current decision to close access to the low-carbon building programme in seven months’ time, because the danger is that we will have precisely the sort of renewables energy-generating companies that will then cease to have access to the only low-carbon schemes we are currently promoting, yet we will still be dependent on such schemes for perhaps a year after they have ceased to exist? Will he look at the interfaces, so that we do not lose access to our current expertise?
We will certainly look into those issues, but I cannot offer my hon. Friend an assurance on them. I can assure him, however, that we want to utilise the know-how, and I can think of few better people to have their know-how utilised than my hon. Friend, and I ask him now if he will work with Ministers and our officials on developing the detail of this strategy over the coming 16 months, because there will be a lot of work to do. I hope that when he rises to close the debate, he will be able to reassure us that he is prepared to work with us on that.
I have quite a lot still to say, so I shall try to give as full a reply, and as brief, as possible. Amendment (b) to Lords amendment No. 42 suggests we replace the term “financial incentives” in proposed new subsection (2)(a) with “payment”. The use of the term “financial incentives” clarifies that the general purpose of the scheme is to incentivise low-carbon electricity generation through financial incentives, as opposed to other means such as a regulatory obligation or barrier-busting support, such as help with the planning system. We believe that such clarity is helpful in setting out beyond any doubt the primary purpose of the scheme. However, to give additional reassurances about our intentions, I would point to the powers under proposed new subsection (3) that specifies the term “payment” in all the key provisions that will establish the scheme. In others words, it is explicit that we are dealing with payments to small-scale generators. What is proposed will be a real feed-in tariff scheme.
Amendments (c) and (d) seek confirmation that the Government intend to introduce a feed-in tariff scheme similar to those established on the continent. We want to ensure that those schemes work as effectively as possible in the UK electricity system, and we need to get this right. We certainly want to learn from our European colleagues and make sure we consider the best features of their schemes. My officials have already benefited from discussions with the German Government during the policy development process. Officials also attended the meeting of the international feed-in co-operation group in Brussels earlier this month, which was also attended by representatives from Spain, Germany and Slovenia. It aimed to update co-operation on feed-in tariff developments in the UK, and to show how countries could learn more about best practice from other nations with operational tariffs in force. That group has recently updated its best practice paper, which will be an extremely useful document for us to use when developing this policy, and we look forward to working in close co-operation with other countries. In line with best practice, the expectation is that generators will receive a guaranteed payment for generating electricity over a set period of time. This is covered in proposed new subsection (3)(a), which allows for “specified circumstances”.
Changing proposed new subsection (3)(b) to include the words “level of payment” in addition to outlining how a payment is calculated is unnecessary as this is already covered in the proposed new subsection. For newly installed plants only, we expect that the level of payments for a given group of technologies will decrease year by year to take account of learning and economies of scale—a familiar concept in most feed-in tariff schemes. That eventuality is already covered in proposed new subsection (3)(c).
Amendment (d) to Lords amendment No. 42 concerns, among other things, the distribution system, a point that was raised on Report in the other place. It demonstrates the sort of complexities created by the introduction of a feed-in tariff. The new scheme has to operate within what is effectively a dynamic electricity system with many players and interested parties. Subsections (1) and (2)(b), as proposed in amendment No. 42, seek to address those issues by giving us the power to modify distribution licences where we believe it necessary to do so. The proposed new clause is sufficiently flexible to allow different levels of tariff payments to be made to different sources of energy and technologies as well as to different scales of plant, so I can give hon. Members some assurance on that point.
Finally, I would like to respond to amendment (f) to Lords amendment No. 42, which removes the capacity limit for fossil-fuel combined heat and power within the feed-in tariff. CHP has an important role to play in moving the UK towards a thriving, competitive, low-carbon economy. That is demonstrated by the range of support measures that we already have for good quality, fossil-fuel CHP, such as the exemption from the climate change levy, special status in the second phase of the European Union emissions trading scheme and eligibility for enhanced capital allowances. Those measures are already in place. We should not forget that the principal purpose of the feed-in-tariff clause is to reward smaller-scale renewable electricity technologies in order to meet our ambitious renewable energy targets.
However, we were persuaded by the arguments put forward in the other place by the Opposition, who sought, through their own amendment, to place a cap on CHP of 50kW. They did so because micro-CHP is still a technology in development, unlike large-scale CHP, which is a proven technology. As with other technologies, we can expect our final feed-in tariffs policy to set different tariffs for different scales of micro-CHP units, but it is most important that we support CHP appropriately. We cannot know all the unintended consequences of taking a last-minute decision to switch from a mechanism that should principally be about incentivising small renewable projects to one which can encourage non-renewable CHP up to a scale of 5 MW. Is that what that the Opposition intended? I have some concerns about that. The right place to consider the incentive framework for non-renewable CHP above the micro-level is in the forthcoming heat and energy efficiency strategy, not here.
I am grateful to the Minister for giving way; he is being very amendable to the House. He talked about the incentives for CHP. I remind him that the Government have set a target for CHP, and he knows that we are a long way from achieving that. I welcome his undertaking to look at the issue again when we talk about a renewable heat strategy. It is important that we make significant progress in that respect.
My hon. Friend is absolutely right. I can heartily give him such a reassurance, particularly on a day when we remember Peter Lehmann, who was most active in ensuring that CHP was put on the public agenda. Today, on the day of his funeral, I pay enormous tribute to a man who was a wonderful advocate for people who suffer from fuel poverty, and who campaigned strongly for CHP. It was in the latter context that I first met him, and I reassure my hon. Friend that I—along with him and other hon. Members—want to ensure that the work that Peter did to advance CHP will be delivered upon.
I do not understand why the Minister wants to prevent himself from having a power that he might want to exercise. Let us suppose that he keeps the 50 kW threshold in the Bill, but then decides, through his other strategy, that the best way to incentivise 100 kW or 150 kW CHP is through a feed-in tariff. He would be able to get on with that if we were to give him the power to do so today. Why does he want to prevent himself from having that power?
Because we need to ensure that we focus on the renewables agenda that we intend this entire legislation to focus on. We have accepted an Opposition proposal that we make provision up to a certain level. Not setting the cap may have a series of unintended consequences that we need to consider with a great deal of care. I am advised that if, as the hon. Gentleman suggests, we decide at some future stage that we want to get rid of the cap, we would be able to do so in secondary legislation—we would have the power to do that.
I am satisfied that 50 kW should be the limit that we set in this Bill, because I do not want to create expectations that feed-in tariffs will be available to above that level for CHP. That would generate a load of speculation and a lot of pressure, and it would be very difficult for us to resist it, as we might wish to do after considering this issue in the round as part of a wider examination of non-renewable CHP. The hon. Gentleman’s approach would close down the options much more than it would keep them open, because it would generate a level of expectation that I do not wish to see at this stage. I strongly believe that we need to examine the matter separately, and we will examine CHP above the micro-level in the forthcoming heat and energy efficiency study.
The hon. Member for Angus (Mr. Weir) raised an important point when he asked whether feed-in tariffs would help to relieve rural poverty and help people in hard-to-connect areas. The answer is absolutely, because this is a significant development for people in the sorts of areas that he identifies. He also mentioned, as did others, that there were problems in getting access to the grid, and he rightly said that such issues have to be addressed. However, we must remember not only that we need to help people in those rural areas with feed-in tariffs, but that the renewable heat incentive could be of significant benefit to such people. As a result of some of the changes that we are introducing today, if the House decides to accept them, some of his constituents, like the constituents of many of us—I, too, represent a rural area—could well derive significant benefits.
In conclusion, the Government are determined to reassure the House that we are committed to feed-in tariffs. In reality, we are not talking about super-ROCs or any such thing; these are genuine feed-in tariffs that we want to see implemented. We have a clear strategy on that, and I shall be happy to meet my hon. Friend the Member for Nottingham, South to discuss how we implement it. He can keep an eye on us to ensure that when we implement it, we do so properly.
We should place on record our congratulations to my hon. Friend the Member for Nottingham, South (Alan Simpson) on his work. This is a dream day for him. He has been superb in campaigning on this issue and it is great how far this Government have gone. So, I also pay tribute to my Front-Bench team for today’s debate.
My hon. Friend rightly says that we should praise my hon. Friend the Member for Nottingham, South. He has always been on the radical left of the party, so I am not sure whether a new Labour Minister praising him from the Dispatch Box would have been in his dreams or his nightmares. However, praise him we should and we do—I congratulate him on the work that he has done.
I speak with some trepidation, but I thank the Minister for the way in which he has responded to the debate. I do not think that the House could have expected him to go into such detail in his assurances about the specifics of what will be incorporated into the Government scheme. Anyone who takes stock of those will understand that they will put the UK scheme at the forefront of European standards of best practice and best guidelines rather than at the back. That is exactly where we ought to be.
On the timetable, I understand the Minister’s anxiety to get the correct balance between urgency and accuracy. On the basis of his assurances, it would be crass to push the House to a Division. It would also be appropriate to say that given the specific invitations and the kind and generous words that the Minister has offered to me, I agree wholeheartedly to work with him in whatever ways the Government and the Department want me to. I can think of no better way of using my remaining time in Parliament. We are moving into our own renewable energy revolution, and that is something of which I am proud to be a part. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed to the Lords amendment: (b), in line 14, leave out ‘financial incentives’ and insert ‘payment’.—[Charles Hendry.]
Question put, That the amendment to the Lords amendment be made:—
Government amendment (g) to the Lords amendment made.
Amendment to the Lords amendment proposed: (f), line 76, leave out—
‘with an electrical capacity of 50 kilowatts or less’.—[Charles Hendry.]
Question put, That the amendment to the Lords amendment be made:—
Lords amendment, as amended, agreed to [Special Entry].
Lords amendments Nos. 43 to 45 agreed to [some with Special Entry] .
Nuclear decommissioning: regulations and guidance
Lords amendment: No. 46.
With this it will be convenient to consider Lords amendments Nos. 47 to 53, 58 to 63, 67, 86, 87, 90, 92, 93, 97, 98, 100 and 101.
This group of amendments covers the changes made in the other place to a number of issues in the Bill, including the three decommissioning regimes—nuclear, offshore renewables and oil and gas decommissioning—the reporting requirements and matters relating to smart meters. There is also a minor and technical drafting amendment. I shall deal with each of them.
Amendments Nos. 46 and 47 relate to the nuclear decommissioning provisions. The other place sought greater clarification about the factors that the Secretary of State may take into account when deciding to approve or modify a funded decommissioning programme for a new nuclear power station. Amendment No. 46 creates a duty on the Secretary of State to publish guidance on factors that it may be appropriate to consider when approving a programme or making a modification to a programme in clause 51(5). Amendment No. 47 creates a duty on the Secretary of State to have regard to that guidance. That provides the potential operator with greater certainty about the factors that the Secretary of State will take into account, while not unduly limiting his flexibility.
Amendments Nos. 48, 50 and 53 relate to the definition of security and the protection of that security in the event of insolvency for the three decommissioning regulatory regimes in the Bill—the nuclear power stations, offshore renewable energy installations and offshore oil and gas installations. The amendments clarify the meaning of the term “security” as it is used in relation to the three regulatory regimes. Under the Bill as it was previously drafted, there was a risk that if an operator became insolvent, the courts could construe the term “security” by reference to the narrow, legal nature of any arrangements in place, rather than to their broader economic effect. In such a situation, there would be a high risk that the taxpayer would have to meet any resultant shortfall in decommissioning funds. The amendments will help to ensure that the courts take a broad definition of security when considering insolvency cases, thereby helping to protect the taxpayer better.
Amendments Nos. 51 and 52 relate to the oil and gas decommissioning provision in clause 69. The other place debated an amendment aimed at more closely linking the liability for decommissioning an offshore installation to companies that have received benefits from the installation. The amendments are technical in nature, and make it clear that liability will apply to licensees only when they are entitled to benefit or have benefited from the principal purpose for which the installation is maintained or is intended to be maintained. The amendments will create a precise link between the benefit and activities on the relevant field. The liability will not extend to licensees on a different field even if they receive a secondary service from the installation. The amendments will extend further clarification to gas unloading and storage and carbon sequestration activities. The Government believe that these amendments add to the clarity and practicality of the respective frameworks while maintaining their robustness.
Amendments Nos. 58 to 62 reinstate a requirement for the sustainable energy report to cover a specific reporting period. We propose that this period should run from January to December instead of retaining the current 12-month reporting period ending with 23 February, which was arbitrarily based on the publication date of the energy White Paper in 2003. That change will enable our report to align with the carbon budget reporting cycles that will be established through the Climate Change Bill. The change of reporting period to a calendar year also necessitates a change in publication date. We have therefore added a requirement that the report for a particular calendar year should be published no later than October the following year. That would commit the Government to report by a certain time in the year but will still enable the appropriate analysis to be completed shortly after all the latest data become available, which is generally between April and July. Finally, we are reinstating the requirement in section 172 of the Energy Act 2004 for the Secretary of State to report separately to Parliament on security of energy supplies. Lobby groups have expressed concern that we might be seen to be rowing back from reporting, but that is not our intention.
Amendment No. 49 relates to nuclear decommissioning. The other place debated the offence under clause 57 of knowingly or recklessly supplying false or misleading information to Ministers in relation to nuclear decommissioning programmes, and whether that should apply in all cases. Lord Jenkin of Roding believed that that was too onerous. Amendment No. 49 therefore creates a materiality threshold so that only information that is false or misleading in a material respect falls within the scope of the clause. That makes clause 57 consistent with equivalent offences in other areas of legislation—for example, sections 117 and 201 of the Enterprise Act 2002.
Some of the other Government amendments cover a variety of smaller technical matters and consequential issues related to legislation.
Let me turn to amendments Nos. 63, 86, 87, 90, 92 and 93. The House will be aware that the Government recently confirmed that we will move forward with smart metering for all households in Britain. I believe that we all recognise that delivering 47 million smart meters to homes across Britain in an efficient and well managed way will be an enormous challenge. On Report in the other place, Lord Dubs proposed an important amendment related to the type of market model that will underpin the roll-out of smart meters. As we develop the detail of the project, it may become apparent that there are advantages to moving away from our current competitive metering market and considering centralising some or all metering services. At the moment, smart meters could be got to six houses by six different suppliers, who could send six different sub-contractors to those houses, which could be all in a row next to each other. We should look for a better way of doing things. At this stage, our objective is to ensure that we have a legislative basis on which to deliver a range of future options to ensure an effective roll-out.
In response to my noble Friend’s amendment, the Government tabled amendments Nos. 63, 86, 87, 90, 92 and 93. We believe that the new clauses and new schedule will enable us to deliver a range of market model options in future. They amend the Secretary of State’s powers under the Gas Act 1986 and the Electricity Act 1989 to create new licensable activities and ensure that, by affirmative order, he can create new licensable activities in connection with providing, installing or operating smart meters or the related communications infrastructure. The power also provides that the Secretary of State may make regulations so that he or Ofgem will be able to award those licences following a competitive tender process, the detail of which is outlined in schedule 4. We believe that that type of power is the best way to ensure that we can deliver a range of market model options to ensure that, whatever model we choose, we retain an appropriate element of competition. This is about ensuring that we deliver the smart meters effectively and that we have competition that is not obtuse or bizarre but effective, and a model that enables it to be delivered.
We want to ensure that people are able easily to switch. We do not necessarily want to ensure that all the smart meters are provided by exactly the same supplier—we want an element of competition. In terms of delivery, we must work out how we ensure that we have smart meters that enable effective switching so that people do not need to swap them if they decide to switch suppliers two or three times a month to get the best price. I do not have a straight answer to the hon. Gentleman’s question whether there will be one standard meter, although I think that there probably will not be. On whether we can frame a system of smart meters that will facilitate the sorts of circumstances where people are able to switch, I think that we should be able to do that. However, we need to consult those who will be delivering this stuff to ensure that the mechanics of doing it are right.
Amendment No. 67 is minor and technical. It clarifies the fact that the regulation-making as well as order-making powers set out in clause 94(2)(a) are subject to the affirmative resolution procedure. I hope that the House will agree to these Lords amendments.
Between the first and second Divisions, the gap between the Government and us narrowed by three votes, so if we had gone on for another couple of hours we would have got it down to zero. However, we decided not to inflict that on the House, and I am glad that we can now move on to the next group of amendments.
The Government will be aware that we have supported the approach taken in the Bill towards encouraging nuclear new-build. We think that they have got the framework broadly right. We have to examine the changes proposed in the Bill in conjunction with some of the other initiatives that the government are taking to encourage people to consider nuclear new-build.
Whatever one’s approach to nuclear new-build, we should recognise the work that is being done by the office for nuclear development, which is an outstanding example of proactive government in seeing where there are problems and how to get round them to ensure that people looking to invest in this country feel that the Government are trying to remove the obstacles. That is a good example for other areas of energy policy. I single out for praise the work of Dr. Tim Stone in trying to identify where the obstacles may be, looking specifically at the nuclear installations inspectorate and seeing what needs to be done to provide it with additional resources and more skilled personnel so that it can move forward more quickly with the work of assessing the role that different reactor types might be able to play.
We welcome the changes that the Minister has announced today. We strongly support the obligation to publish the decommissioning guidance and the requirement on the Secretary of State to take account of that guidance. We also welcome the clarification of the definition of what would constitute information that is false or misleading. In fact, we proposed that in Committee, so it would be rather churlish not to support it now.
We welcome the clarification of reporting requirements. There had been a strong sense in and outside the House that the Government were using the changes to remove the requirement to report regularly and in a way that people could understand. The Minister has tackled that most helpfully.
There was particular concern about the vagueness of the time scales that would have been permitted and could have resulted in reports that did not reflect the same period of time. For example, one report could have covered 15 months, with the next covering nine months, and we could not easily have gained a clear picture of what was going on. We could not compare like with like. We therefore welcome the Government’s change of heart and the decision to state specifically the definition of the reporting period, which will relate largely to the calendar year.
We also welcome the requirement to publish the sustainable energy report before the end of October in the year following the year to which it relates. Perhaps that approach could be taken to other Government reports, for example, on the number of people in fuel poverty. The figures always appear to lag approximately three years behind the actual figures. They probably do not lag when the numbers are going down, but when they increase, there seems to be more of a lag. Nevertheless, the requirement is a welcome step forward and we are pleased to support it.
One of the most significant changes of heart that the Government had during the Bill’s passage was about smart metering. We are pleased that they will mandate the installation of smart meters. It will make a huge contribution to resolving fuel poverty, removing for ever the need for estimated bills. It will enable people to choose the cheapest tariff much more constructively and give the customer much more information. It will also help meet the environmental goals, which we share, encouraging people to use energy outside peak times. It will also be a key element in encouraging microgeneration by measuring two-way flows of electricity: that which is brought into a house and that which is exported from it. It will be essential if feed-in tariffs are to work.
It is crucial that smart meters will apply to gas, electricity and, potentially, water. That is an important step in fulfilling a range of different goals. It is a step towards what would be called a smart grid—a much more intelligent grid—and being able to control the way in which people’s electricity is used and manage demand much more effectively.
We are glad that the Government have overcome their reservations and accepted in principle the case for smart meters, which energy companies, consumer groups, environmental groups and Members of Parliament of all parties advocated. We are also glad that they have been persuaded of the need to accept a time scale for introducing smart meters.
The 10-year roll-out is not significantly different from the current rate. Typically, in a year, 8 per cent. of meters are replaced and, just on that natural rate of churn, one would expect the whole country to be done in 12 or 13 years. Ten years is, therefore, not especially ambitious, but we recognise that it has much support in industry and with other groups outside.
We could shorten the two-year consultation period. Let us revert to the concept of a locked room, especially with my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer) there to badger people to reach a conclusion. That would have been effective. We could achieve agreement in a much shorter time, but we are not prepared to make a big issue out of it because we are genuinely pleased with the Government’s approach and the fact that they have taken on board many representations that we and many others have made.
Lord Hunt said:
“We anticipate a period of around two years to resolve the issues and to design the full detail of a domestic roll-out. Our aim is then to ensure that the subsequent roll-out happens over a period of 10 years. This would see delivery of smart meters by the end of 2020 to align with our renewables targets.”—[Official Report, House of Lords, 28 October 2008; Vol. 704, c. 1515-16.]
Will the Minister give us assurances or tell us the legal status of Lord Hunt’s comments? Will he clarify whether the Government would be inclined to move more quickly on the installation of smart meters in new-build properties? A case could clearly be made for saying that it is easier to install them when a property is being built and that that should be done before replacing the stock. Can he give us assurances about the way in which the Government wish the roll-out programme to proceed?
Having said all that, the amendments are sensible and we are happy to support them.
It is the first time that I have spoken in today’s debate, so, first, I congratulate the Department on moving some way with the amendments that it has tabled. We all acknowledge that the Bill is much better than the measure we started debating.
I am grateful to the Department for providing a briefing on some of the amendments that we are discussing today, partly because some are complex. I was encouraged by the heading, “Nuclear energy—false and misleading”, but, sadly, it was only an introduction to amendment No. 49. For one moment, I thought that the revolution in the Department of Energy and Climate Change had begun—sadly, it has not.
I am surprised by amendment No. 49. I accept the Minister’s comments that Members in the other place felt that clause 57 was onerous, but it is strange to punish knowingly false and misleading information, yet excuse it if it is slightly false and misleading, even if it is “knowingly or recklessly” provided. If even a small amount of false information is provided knowingly and recklessly, a small fine might be appropriate, but there should still be a penalty. Although we will not make a huge issue of that, there is a good case for retaining clause 57 unamended.
By contrast, we unreservedly welcome amendments Nos. 46 and 47 to clause 51. More frequent use of “must” in legislation that applies to Ministers is a good thing. Some of the duties that the amendments would explicitly create helpfully strengthen clause 51. The Minister understandably gave the amendments a slightly understated welcome, but he should be congratulated on accepting them. If they mean that the Department has to take into account the advice of, for example, the Health and Safety Executive and the Environment Agency, and that it must publish the way in which it has taken that advice, it will be less tempted to balance health and environmental considerations with those dictated by short-term political convenience—or, as is more likely, political embarrassment.
Let me deal with amendments Nos. 48 to 53—the most interesting set of amendments, which the Minister portrayed as somewhat technical—which cover the slightly controversial subject of the nuclear decommissioning programme. The hon. Member for Wealden (Charles Hendry) is right that there was considerable debate, which I shall not revisit, about them in Committee. However, it was good to hear the hon. Gentleman making it crystal clear that the Conservative party is now enthusiastically pro-nuclear and has abandoned the ambivalence that seemed to be present in Committee about whether it could be simultaneously pro-nuclear and anti-nuclear. He clearly said that he wanted to encourage nuclear new-build, and I welcome his clarification of his party’s position. It is obviously not our position.
We are especially concerned for the amendments on arrangements for securities to do what the Minister suggested and better protect the taxpayer. What would happen if the funded nuclear decommissioning programmes turned out not to be so well funded? That is a critical question. The amendments sensibly help define the term “securities” in a legal context. However, as we know, not all securities are as secure as others. As businesses and local authorities that are trying to recover funds from Iceland have found, some bonds and investments turn out not be as secure as they had believed.
That underlines the long-term issue with funded decommissioning programmes for nuclear power, which is whether, in the event of future economic downturns, financial crises or simply bank failures, the public purse will yet again have to subsidise nuclear power. Perhaps this is a moment for the Minister to clarify how likely he thinks it is that those provisions will be used to allow public funds yet again to bail out the nuclear industry, which seems to us to be a bail-out that we need not risk at all.
Many of the remaining amendments in the group are technical, tidying amendments, which is welcome. The most interesting are those from amendment No. 63 onwards, which relate to smart meters. I entirely endorse the comments that other hon. Members have made about these important provisions. It is welcome that we are setting the framework for smart meters to be introduced. Smart meters will empower householders, so that they can not only play their part in tackling climate change and helping to save the planet, but use their household appliances much more efficiently and reduce their energy bills, thereby tackling fuel poverty. That has to be a good thing and, as the hon. Member for Wealden pointed out, may contribute towards a more intelligent use of energy on the grid more broadly.
It is a shame that the time scales envisaged in the amendments are of the rather more relaxed kind that were typical of the old Department for Business, Enterprise and Regulatory Reform, rather than the imaginative new Department for Energy and Climate Change. It is pretty disappointing that the process will be complete only by 2020. We all know—the financial crisis has underlined this—that the House and the Government can certainly move fast when they want to. It would therefore be nice to see a greater sense of urgency in the planning of the introduction of smart metering.
The Minister is right, however, that there are complicated details to be sorted out. I understand that, and the devil will be in the detail. I am sure that I am not alone in having already been lobbied quite extensively by advocates of different systems and technologies. We can all anticipate a heated debate on the regulations and orders made under the Bill. It will be important that we get them right and that we correctly balance commercial competitiveness, affordability for energy customers and the environmental priority of having the best possible technology to allow people to reduce their energy use.
Overall, however, progress is progress. I end by congratulating the Government on the bulk of the amendments and on the green shoots of environmental change that they are beginning to cultivate in their policies.
I was interested in the opening comment that the hon. Member for Wealden (Charles Hendry) made about the vote moving his way. I look at the assembled ranks behind him and wonder whether that would continue—mind you, Mr. Deputy Speaker, I look at the similarly empty Benches behind me and wonder what our majority would be. I join the hon. Gentleman in praising the work of Dr. Tim Stone and welcome the establishment of the office of nuclear development, which was set up by my predecessor, my right hon. Friend the Member for Croydon, North (Malcolm Wicks), who was with us earlier, and our predecessors in the Department for Business, Enterprise and Regulatory Reform, including the then Secretary of State.
Let me deal with the points that have been raised. On the target of two years plus 10 years, we are undertaking a massive project and we need the time to do it properly. New build provides us with the opportunity to make sensible provisions early on. We would like to consult the building industry on how quickly we can introduce the scheme, but it makes sense that new buildings should have the new smart meters as soon as possible.
The hon. Member for Cheltenham (Martin Horwood) raised a couple of issues, including one about clause 57 and the need for materiality before a prosecution is undertaken. If somebody knowingly or recklessly gave information that was utterly immaterial to the decommissioning process, it would be a bit onerous for us even to give them a small fine. People do things frivolously, and that can be taken as reckless; therefore, we need some element of materiality in a criminal prosecution. That is why we have decided to accept the proposal made in the other place that there would need to be some issue about the release that was deserving of prosecution.
The hon. Gentleman also asked about the public becoming responsible for decommissioning. I remind him that nuclear power was initially public, which meant that there was an obvious public liability in relation to decommissioning. However, in respect of the introduction of nuclear power in the future, we have said that we are putting in place robust mechanisms to ensure that the taxpayer is protected, through ensuring that the operator securely pays sufficient funds to cover the costs of decommissioning and waste management. We h