It is a pleasure to follow the hon. Member for Beverley and Holderness (Graham Stuart) who made a number of points with which I agree, and my right hon. Friend the Member for Doncaster North (Edward Miliband) who continues to make such a contribution to this debate. I also wish to place on record my thanks to the Secretary of State, who is no longer in her place, for the excellent job that she did in Paris—I am sure that those comments will be passed on to her—on behalf of us all. We are all delighted with the outcome of the Paris talks.
This is a wide-ranging Bill, but I wish to focus my short contribution on the renewables element, particularly the removal of the renewables obligation for onshore wind, and how that is impacting on investment in the north-east of England. I am fully aware of the Government’s concerns about the financial integrity of the levy control framework, and indeed I share those concerns. We need a fully funded, functioning levy control framework to fund clean energy developments. As the framework is funded by bill payers, it is absolutely crucial that we protect it and ensure value for money, but this Bill does not do that. The impact assessment demonstrates that, in the Government’s central scenario, this policy is projected to save bill payers 30p. In terms of the levy control framework, again in the Government’s central scenario, this policy is projected to save £20 million, out of a budget in 2021 of £7.9 billion. This measure does not appear to be protecting bill payers at all. Rather, it seems drafted for the purpose of appeasing climate change sceptics.
Last week, the Prime Minister reiterated his commitment to decarbonising at the lowest cost to the consumer, and for that he has my support, but his Secretary of State is going about things in an odd way. The Government remain committed to the EU renewable energy directive, for which the UK must source 20% of its energy needs from renewable sources by 2020. We also have a fixed budget for clean energy in the levy control framework. Will the Minister explain how, given a fixed renewables target and a fixed budget, replacing the cheapest renewable electricity technology, which is onshore wind, with more expensive technologies, such as offshore wind, can possibly lead to lower bills for consumers and maintain the financial integrity of the levy control framework?
In its July 2015 report, the Office for Budget Responsibility forecast a £1.6 billion overspend for the levy control framework in 2021, owing to higher take-up under feed-in tariffs and the RO, greater capacity from offshore wind, and lower wholesale electricity prices resulting from the lower than forecast gas prices and the freezing of the carbon price floor. No one is blaming the Government for not anticipating this remarkable fall in global energy prices, but in their efforts to restrain this potential overspend, the Government are doing serious damage to the UK’s clean energy future and to the investment we need to encourage in low-carbon generation.