My Lords, it is a great pleasure to speak at the end of this debate—a wide-ranging debate, something on which other noble Lords have commented. I am delighted to add my name to the amendment of the noble Lord, Lord Oxburgh, this afternoon. I will not get drawn into the debate that we have had about the climate science, because other noble Lords have done that far better than I could: the noble Lords, Lord Smith of Finsbury, Lord May, Lord Krebs and Lord Deben, have all, very clearly and lucidly, explained the dire situation and the threats that we face with climate change. I am also not going to comment on individual technologies, as it is very clear to me that the debate we should be having today is about the principle of decarbonisation, not about individual technologies. Nothing in any of these amendments dictates that we use renewables, do not use shale gas or use nuclear. They are entirely technologically neutral, which is one of their great assets and benefits. It is fair to say that on this issue we, as a party, and the noble Lord, Lord Oxburgh, are very close to DECC Ministers. We are not here to debate whether or not we should set a decarbonisation target but simply to debate when that target should be set. The Bill has been amended during its passage to state that a target will be set in 2016. The lead amendment is really about timing, and I have a few words to say about why it is right to set that target now.
The main reason is that, without this amendment and without bringing forward the setting of this target, the Bill largely lacks purpose. It is an enabling Bill which includes many measures that enable the Secretary of State to do things at his or her own discretion, but does not require anybody to actually do anything very specific. Therefore, despite the fact that we have been deliberating the Bill for many months—indeed, years now—investors are not celebrating the fact that it is nearly complete and are not yet clear about what the Bill actually delivers. There is still insufficient clarity
of purpose, too much doubt about the Government’s commitment to cleaning up and modernising our electricity sector, and too much control now being given to the Government, who, unfortunately, are equivocating about the need for low-carbon investment. The Bill does not enable enough competition to ensure a broader range of projects and investors are delivered by it. The Bill is an enabling Bill and lacks a clear purpose. The amendment of the noble Lord, Lord Oxburgh, is intended to address that failing.
I have no doubt that the Minister will say that it is not targets, in and of themselves, that will drive investment. The noble Lord, Lord Teverson, has already indicated that that is what he believes. That would be true if we could point to detailed elements of the Bill that gave certainty. The mechanisms that the noble Lord, Lord Teverson, alluded to, which I have no doubt the Minister will also allude to, including the contracts for difference, the strike prices and the capacity mechanism, are not being celebrated by industry; in fact, quite the opposite. We are hearing very strongly that, for example, the strike prices being offered for offshore wind do precisely the opposite of enabling investment and actually deter it. The same is true of the capacity mechanism, which we were told would bring forward investment in gas power generation. Again, this part of the Bill is not being celebrated. It is being lamented because it does not appear to give the certainty investors need. We need to see action, not just targets, but unfortunately, without a target, it seems clear that action will not be delivered.
This is a modest and very moderate amendment. The noble Lord, Lord Oxburgh, could, had he wished, have put in place an amendment that dictated a target in the Bill. He has not done that; he has merely asked that the target be set by April next year. One might say, “Well, of course that’s sensible”, but in other parts of the Bill there are numerate and precise numbers which, when the Government see fit to try to encourage gas investment, they seem perfectly happy to put on the face of the Bill. I am alluding to the energy performance standard, which is incredibly prescriptive and detailed. The noble Lord, Lord Oxburgh, has not followed that; he has made a moderate and necessary amendment and I hope that the Members of this House will find support for it.
If we want to get to the real reason why this amendment is potentially going to be blocked by the Minister, it is not because we do not have a fifth carbon budget. It is absolutely clear to me that if the noble Lord, Lord Deben, as the chair of the CCC, can advocate the setting of this target, then there is clearly no link between the need for a carbon budget and the need for a carbon intensity target. The two things do very different jobs, and it is merely a ruse to state that we must wait for it.
It is also wrong to say that we cannot move without Europe. The situation in Europe is that we are being asked to consider a renewables target, as many noble Lords, including the noble Lords, Lord Jenkin and Lord Deben have alluded to. We may not want a renewables target in 2030, but we may be dictated to by Germany to have one, which seems absolutely certain that that is what it wants. If we had a
decarbonisation target set early, we could then influence that debate and prevent the setting of a technology-specific target in favour of a decarbonisation target.
It seems clear that these reasons for opposing these moderate amendments are not the real ones. The real reason is that there is a complete lack of cohesion within the Government on whether we want to seriously pursue our climate change targets. One need look no further than Prime Minister’s Question Time just a week ago when a panicked Prime Minister was making up policy on the hoof. Without a real response to Labour’s challenge on how to bring prices down, he has now started blaming green electricity, or indeed social, environmental and energy-efficiency policies for those price rises.
I reassure the noble Lord, Lord Donoughue, that it is absolutely consistent for us to call for a decarbonisation target while wanting to see changes to the way that our electricity market is run. We have a regulator that is not fit for purpose, and an oligopolistic energy market that needs to be broken open so that we can have true competition and transparency and see that we are not overpaying for the electricity that is generated.
The real nub of this debate is: why can we not set the target now? Why are the Government insisting that it be set after the next election? It is purely political expediency because they have been unable to arrive at a sensible position in government. I really hope that Liberal Democrats—who have this as part of their party policy—will stand up and vote for this amendment because it is absolutely clear that, although many things are being attempted with this Bill, the bargain that has been struck is not yet balanced. The levy control framework that has been wrested from the Treasury is only a promissory note. That £7.6 billion that may be spent on clean energy will be spent only if strike prices are agreed at the right level. If all of the control that is being given to government means that the strike prices are continually set at the wrong level, we will see no investment and we will have sacrificed clarity of purpose for a bargain which will not ultimately deliver what I think the Liberal Democrats believe it will.
As I said, I am not going to get involved in the debate on climate science. However, I will say that if we are thinking that this amendment will somehow damage our competitiveness, that somehow Europe and the UK are out on their own tackling climate change, then that is absolutely incorrect. The most dynamic economies—China, Germany, California, South America—all now accept that the only future for energy is clean energy, and that we must act together to globally decarbonise. I am sure that we will see in Paris in 2015 the passing of an international framework that will demonstrate that we are not alone and that the big economic powerhouses of the US and China are behind this too. We will therefore move forward in tandem and it will not be a race to the bottom as some would prefer.
In the other place, this amendment was lost very narrowly; had 12 votes gone the other way, it would have been put into the Bill. That, of course, is in a situation where there is a large government majority.
Here, in this House, the balance of power is such that on issues of great importance we can send a strong signal to the Government that they have got something wrong and must institute a rethink. This issue of when we set this target is not a huge issue but it is one of those important issues where we must cause the Government to rethink.
The noble Lord, Lord Oxburgh should be commended for tabling these moderate amendments. I hope that if the opinion of the House should be tested, we will be able to cause the Government to rethink this important issue.
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