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Feed-in Tariffs

Volume 541: debated on Wednesday 29 February 2012

2. What assessment she has made of the effect of changes to feed-in tariffs on the Welsh economy. (96368)

We are continuing to consult and engage with the solar industry on changes to the feed-in tariff scheme and our assessments are ongoing. There are several key innovative businesses in the solar industry in Wales and we are committed to ensuring that they have a prosperous future.

According to the Department of Energy and Climate Change’s own figures, the industry is likely to shrink by a third, which means 5,000 jobs, in 2012 as a direct result of Government policies that the Under-Secretary has supported. How many of those jobs will be lost in Wales? Will he put his hand up and say that it has been a hash from start to finish?

I would certainly say that it was a hash at its inception, because the scheme that the Government of which the right hon. Gentleman was a member put in place was poorly designed and lacked the flexibility to respond to changes in the cost of installing PV and in the price of electricity. The measures that the Government are now putting in place in response to the recent consultation will provide consumers with a proper rate of return, of the sort that was originally envisaged.

Does my hon. Friend agree that the important thing is that there is a fair, not an excessive, return? As a result of that, Italy, France and, in the past week, Germany have significantly changed the tariffs, as the Government have endeavoured to do in the UK.

Yes, of course, and that underlines the fact that the scheme was poorly designed from the start. The Government’s proposals will provide a fair rate of return for investors.

But this retroactive policy has shattered business confidence in Wales. We are set for advances in the green economy, but who will invest when moneys can be wiped out at the mere flick of a pen in Whitehall? It is simply not good enough, and the Under-Secretary should realise that we are considering a key industry in Wales.

The right hon. Gentleman’s criticism would be more properly directed at the previous Government. The measures that the Government have now put in place will ensure stability in the industry and a fair rate of return for investors, and restore confidence to manufacturers.

I hear what the Under-Secretary says, but can he guarantee that this sort of mess will not happen again and that we can further develop green technology in Wales, where we are well placed to do that, in my constituency and throughout Wales? We need to develop those industries, so will he assure the House that we will not again have this kind of mess, which undermines confidence in the whole sector?

I agree with the right hon. Gentleman that the sector is extremely important to the Welsh economy, but I am afraid that, as ever, it has been left to the Conservative party to clear up Labour’s mess.

Given the feed-in tariffs fiasco and this week’s news that big investors in wind energy are threatening to take millions of pounds worth of green jobs abroad because they are losing patience over the Government’s shilly-shallying about renewables policy, how will the Under-Secretary convince companies to invest in the installation and manufacture of renewable energy equipment in Wales, securing much-needed jobs and reducing our dependence on ever costlier imported gas and oil?

The Government’s response to the consultation does just that: it provides a sustainable framework for the industry to go ahead and for investors to have a proper rate of return.