Durban Climate Change Conference

Debate between Chris Huhne and Lord Goldsmith of Richmond Park

Monday 12th December 2011 Commons Chamber

[Zac Goldsmith (Richmond Park) (Con)]

I, too, congratulate the Secretary of State on the progress that has been made, particularly given that I do not think anyone really believed that there would be progress. I also welcome the declaration relating to the Congo basin—the second largest tract of rain forest in the world—which was launched by the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker). The Secretary of State mentioned progress on reducing emissions from deforestation, and I was hoping that he could be a little more specific.

[Chris Huhne]

I pay tribute to my hon. Friend for his interest in that area and the work he has done. The Congo basin initiative is absolutely crucial. We aim to work with some interesting projects through bilateral support from the UK Government for some key forest nations, which will be in the Amazon, the Congo basin and Indonesia. Further progress was made through the technical achievements in the working groups, which he will find set out in the full agreement.

Solar Power (Feed-in Tariff)

Debate between Chris Huhne and Lord Goldsmith of Richmond Park

Wednesday 23rd November 2011 Commons Chamber

[Chris Huhne]

My hon. Friend makes a good point. If the previous Government had bothered to find out how well-managed feed-in tariffs are run in countries such as Germany, they would have built in an automatic system which brought the tariffs down in line with the fall in costs, but they did not. The result was a massive over-compensation.

Contrary to the claims that we have heard from the Opposition, we are not shutting down an industry, which is what would happen if the money ran out. The revised tariffs will provide inflation-proofed returns for 25 years of around 5%. That remains competitive with other investment opportunities. A householder would still be able to get a 4.5% real post-tax return. This compares well, for example, with the 0.5% post-tax real return currently available through index-linked National Savings bonds.

[Zac Goldsmith (Richmond Park) (Con)]

The Government are right to cut the tariff. That is the message that I have heard from many in the solar sector, but the 12 December deadline is causing panic. There is no doubt about that, so I ask the Government to publish as soon as possible some kind of cost-benefit analysis showing what the cost would be of sticking to the April deadline and what the cost to the sector would be of a 12 December deadline. That is the issue causing most fear. It is hard to exaggerate the level of that fear.

[Chris Huhne]

My hon. Friend makes a good point, but I have dealt with that issue in response to the hon. Member for Southampton, Test (Dr Whitehead). This is such a movable feast that every time we do a projection, we find that the budget is being eaten up even more rapidly, so we have put out, in the impact assessment, a very clear projection on the basis of the knowledge that we had when the consultation was launched about what would happen overall—that is, a very substantial increase in the overall budget and a £26 increase in household bills. The revisions that we have done since then suggest that, if anything, things will be moving even more rapidly.

By the way, the returns still compare favourably with the returns intended when the scheme was set up. Our proposals are the difference between windfall profits from double-digit returns and a reasonable return—double-digit returns that would bring into the industry all sorts of curious people who never had any previous interest in it and who were operating tax avoidance schemes to raise money to invest in the industry. The scheme had been growing dangerously unbalanced. We are working to put it back on an even keel. I do not accept that putting right the feed-in tariffs scheme undermines confidence, for the reasons that I have given.

Aside from those such as electricians and scaffolders who have branched out into solar PV installation alongside other employment, our analysis suggests that the number of full-time equivalent jobs in the solar industry is between 8,000 and 14,000. We do not wish to see a single company stop trading or a single job lost, but we cannot continue to prop up unreasonable profits with consumer cash. Jobs created by a bubble of excessive returns and paid for by consumer energy bills are simply unsustainable. Companies that have prepared themselves accordingly are likely to continue. As I have said, I have not come across a single person in the industry who contests the fact that we needed to act, although we did not hear that loud and clear before we acted, contrary to what various Opposition Members have said. Companies that were going all out with installations for the next few months with no plans beyond that will be in a position that is only slightly different from what would otherwise have been the case.

Fourth Carbon Budget

Debate between Chris Huhne and Lord Goldsmith of Richmond Park

Tuesday 17th May 2011 Commons Chamber

[Chris Huhne]

I can add very little to what I have already said to the right hon. Member for Oldham West and Royton (Mr Meacher). We are, in fact, dealing with a period that is very far off—well beyond the normal range of economic forecasting—and it is sensible for us to exercise a measure of flexibility in the way in which we achieve our aim. However, I can assure the hon. Lady—as I assured the right hon. Member for Oldham West and Royton—that we intend to meet this budget from our domestic activity. That is absolutely in line with everything that I have said about encouraging low-carbon goods and services.

The hon. Lady should also bear in mind that even the flexibility that is afforded by trading will be limited by the existence or otherwise of far cheaper opportunities to ameliorate the position by mitigating carbon emissions outside the country rather than inside it. I believe that the more we invest in the industries that I have mentioned, and the more “learning by doing” that we do, the greater will be the chance of our meeting our targets entirely from domestic activity, which is what we intend to do.

[Zac Goldsmith (Richmond Park) (Con)]

I strongly welcome the statement. What contribution does the Secretary of State think demand-side measures are likely to make in a reformed electricity market, particularly given the focus on negawatts?

[Chris Huhne]

The concept of negawatts is very important. Let me explain to those who have not followed the debate that it means we should be able to trade into the electricity system savings in energy and not merely electricity generation. That concept is part of the consultation that we are currently considering about electricity market reform, and I believe that it will be a crucial part of our reform proposals. There are several different aspects, but I am sure the hon. Gentleman will not be disappointed when he sees the results.