This article appears on the Sustainable Building web site on 24 January
Appearing before a six-monthly session of the Liaison Committee - made up of the chair people of the select committees - Prime Minister David Cameron robustly defended the Coalition’s green energy policies despite sniping by various committee members.
In a session held on 14 January dedicated to energy policy and environmental priorities, issues covered included
- Energy subsidies and fuel poverty
- Energy security and blackouts
- Investor confidence
- The risks posed by electro-magnetic pulses
- Environmental priorities
- Shale gas
- Community engagement and scientific advice.
On renewable investment Mr Cameron was bullish, asserting: “the idea that there has been some hiatus in investment in renewable energy under this Government is completely untrue. I have here the list of the £33 billion of renewable energy investments that have gone ahead since 2010. It is £33 billion of investment; the figure in 2012 was, I believe, over £12 billion, compared with £6 billion in 2010. The run rate of the previous five years was about £3 billion a year, so there has been a massive increase, with no sign of a hiatus.”
He added: “Frankly, I believe that energy investors now have all the information that they need. If you want to invest in renewable energy, you can see what return you will get and what money you will be paid for the next 20 years. There isn’t a country in the world that has as clear a system in place as we have - those are not my words, they are those of Ernst and Young.”
When Energy & Climate Committee chair Tim Yeo put to him that the respected academic Professor Lord Stern had said on 5 November that “quarrelling in the coalition” undermines confidence and “government-induced policy risk” is a “serious obstacle to investment”, Mr Cameron retorted: “the point I would make is that not only have you got the £33 billion, but you have got a lot of plans coming forward. You also now have the strike prices published for wind, anaerobic digestion, biomass, energy from waste, geothermal and hydro. This is on a chart for inward investment into the UK. There are not many industries for which I can say to you, “if you come and invest now, I’ll tell you what money you’ll be paid for the next 20 years.”
He stressed that he supported the carbon budgeting process and the Climate Change Act, adding: “my nervousness about being too frank about the future is simply down to the issue about carbon capture and storage and the role that gas will play in future. I see some in the green movement who seem so keen to nail down a decarbonisation target, irrespective of whether carbon capture and storage works, but I think that would be unwise, to put it mildly.”
He was challenged by Environmental Audit Committee chair Joan Walley, to explain how he squared his recently stated views (recognising the impact of climate change) with his actions when the energy companies started to put up their prices in October by 10% or more, at which time he told Parliament that he wanted “to roll back some of the green regulations and charges that are putting up bills.”
Mr Cameron replied: “if you quote me accurately, I think I said that I wanted to roll back the cost of some of the green levies and charges, and that is exactly what I have done. If you look at what we have done, for example, with the energy company obligation, we have rolled back its cost by some £35, but we have done it on a carbon-neutral basis, because we have introduced other changes to ensure that we are taking carbon out... It was time for the Government to roll up their sleeves, look at all these charges and levies and think, ‘how can we help people and how can we get the bills down?’ We do the cold weather payments, the winter fuel allowance, the warm home discount and the big insulation schemes, and that is all well and good, but we needed to get the bills down. It was absolutely right to do that. We have rolled back the cost of the charges. We have not, I believe, sacrificed important green initiatives such as home insulation.”
He stressed: “First, we set out deliberately to try to do this in a way that was carbon-neutral. That was why we introduced the stamp duty discount for people who take action to improve the energy performance and energy efficiency of their home. I believe, on all the evidence that we had, that it is carbon-neutral. It was necessary and right to try to reduce the cost of people’s bills. I do not believe that we have done that by sacrificing insulation programmes. The truth is that it is getting harder. The early work as you improve the country’s housing stock - the solid wall insulation, the lagging of lofts - is the easiest and the most cost-effective.”
At this point, senior Liberal Democrat MP Sir Alan Beith (the Liaison Committee chair) intervened to point out to Mr Cameron that “solid wall insulation is one of the more difficult things.” To this Mr Cameron responded: “sorry. If I said that, I got it wrong. What I meant is the insertion of foam into cavity walls, which is relatively cheap. Solid wall insulation is incredibly expensive. The marginal benefit for the expenditure starts to become a bit challenging.”
Ms Walley then asked: “But how do you square that with the changes that you are making to the codes for sustainable homes and the impact that that will have on insulation?”
Mr Cameron replied: “I think you have to get a balance between regulation that is green and regulation that will deliver the building of new homes. The standards that we have in place are exacting and the balance is about right.” Adding: “there is always more to be done. The work on making this market more competitive is not finished. It is important that we are always driving down the cost of levies and charges. We should continue with that work. If you look at what we are doing to help people, we have kept the cold weather payments at the higher level - they were introduced just before the election, even though the money was not in the budget to do that - and we have kept winter fuel payments at a higher level.”
Ms Walley also asked: “was the Deputy Prime Minister wrong when, in a speech before Christmas, he said that “the green consensus across the political parties is…falling away”?
To this Mr Cameron wryly responded: “he is obviously never wrong, but I do not really agree with that… I think it is right to have these debates. I very much initiated this debate about rolling back the costs of green levies and charges and I am not for one minute regretful about that. I think it was absolutely right to have that debate.”