INFORMATION TO BE GIVEN TO CUSTOMERS (Hansard, 27 July 2000)

§ Dr. Howells
I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker
With this it will be convenient to discuss Lords amendments Nos. 79 to 94, 98 to 100, 125, 138 to 140, 142, 173, 175, 186, 191, 222 and 238.

§ Dr. Howells
The amendments deal with the standards of performance and aspects of consultation on renewables and energy efficiency targets, including some of the implications of the trading of obligations between gas and electricity obligation holders, rather than simply gas obligation holders on the one hand and electricity obligation holders on the other.

§ Mr. Stunell
On the whole, I welcome the amendments. I wish to deal briefly with amendment No. 79, which requires any action by the Secretary of State in making an order to be preceded by consultation with renewable energy generators. I certainly welcome that, and regret that provisions on renewables are still missing from the Bill. We need more action to promote and support renewable generation, as well as simply consulting renewable energy generators before orders come into force.
Can the Minister update the House on the DTI's views about the banding of the renewables obligation and the approach that the Government are likely to take in regulating in support of the Bill? I understand that a meeting was held at the DTI yesterday to discuss the banding of technologies. It would be helpful for the House to know the outcome.
Is the Minister still as satisfied as Ministers have been in their public declarations in the past that the targets of achieving 5 per cent, of renewable electricity generation by 2003 and 10 per cent, by 2010 are still realistic and feasible? If the Minister is able to reassure us on those points, how would he refute the arguments put forward by those in the industry who believe that the targets are increasingly unrealisable and unrealistic?
1350 6.45 pm
In supporting amendment No. 79 and agreeing on the need to include the renewable generators, will the Minister explain how he can reassure them that future investment will be worth while, that their product will be taken up in the market and that the Government's targets will be achieved? That is a vital part of the Government's longer-term policy to comply with the Kyoto agreement. There is definitely a gap in the Bill, and I hope that the Minister will at least give a signal that further work will be done and further proposals will be put before the House.

§ Mr. Forth
We are now wading knee-deep in gobbledegook, especially with amendment No. 81.1 shall give the Minister the opportunity to tell us, succinctly and with his usual clarity, exactly what he thinks amendment No. 81 means. It looks like complete nonsense to me. I suspect that it is to do with environmental strutting and posturing. What it is supposed to achieve is beyond me, but it seems to sanction sleight of hand. If I were to believe in any of the Kyoto nonsense, I should be very suspicious because a provision such as amendment No. 81—if I even begin to understand it—seems to represent almost an invitation to fiddle the books and to pretend that we are doing all sorts of Kyoto things when we are doing nothing of the kind.
Amendment No. 81 is akin to the Government policy that, on the one hand, put additional taxes on vehicle fuel—which they claimed was an environmental measure—but, on the other, lowered taxes on domestic fuel consumption. They have never been able to explain the justification for that. I suspect that, if it means anything, amendment No. 81 comes into the same category.
I am worried that amendment No. 86 will undermine any viability that may have existed in the adjustments for inflation. As we know from recent examples such as pensions and so on, those adjustments can be of the greatest importance to people of all ages and categories. However, amendment No. 86 seems to provide almost unlimited scope to fiddle the books on inflation. It states: for any such sum to be adjusted from time to time for inflation by a method specified in the order … That is fair enough; one would expect such a provision, but it continues: including such a scale or index or such data in a form not current when the order was made, but in a subsequent form attributable to revision or any other cause and taking effect afterwards… I do not know what that is supposed to mean. I was just about following it until adjustments "by a method specified" were mentioned. That is fair enough, but it then took off into the stratosphere of completely blank cheques, allowing people to produce whatever figures they felt like producing in a form not current when the order was made and for any reason.
We are getting into some odd and difficult territory, but as usual in such circumstances, I rely on the Minister to step up to the Dispatch Box and, with great clarity and as succinctly as ever, to set right my anxieties about those matters and tell us exactly what he thinks amendment No. 81 means. When he says what he thinks, it becomes official and fixes matters. I have no doubt that he will tell 1351 us equally succinctly about amendment No. 86 and explain the reason why my unhappiness about it is completely unfounded. I cannot wait.

§ Dr. Howells
I do not intend to make the right hon. Gentleman wait. May I deal first, however, with the hon. Member for Hazel Grove (Mr. Stunell)? Taken together, the amendments that he has mentioned try, I suppose, to set out some of the thoughts of another place on where we have got to. For example, the comprehensive spending review was excellent for encouraging renewables. I was glad to see that. A consultation will be conducted by my right hon. Friend the Minister for Energy and Competitiveness in Europe on the banding of technologies. It is far too early to predict the outcome of that consultation, but it is important.

§ Mr. Stunell
I am encouraged by the fact that there is to be a consultation and that prediction is too early, but, before the door is shut firmly, is the Minister indicating that the door is now at least a little open?

§ Dr. Howells
On the Government side, we are always receptive to constructive arguments and to imaginative approaches to what are important issues.
The hon. Gentleman asked whether we were still on line for 5 per cent. It is a big challenge—I give him that—but it is do-able and the CSR will help a great deal. Essentially, we are trying to move the renewables from the margins to the centre of the market. That must be a good thing.
The right hon. Member for Bromley and Chislehurst (Mr. Forth) wanted to know more about amendment No. 81. It says that an order may provide that, to a specified level, under-achievement or over-achievement in a particular period of a supplier's obligation may be carried forward into a subsequent period—so-called banking and borrowing. I do not think that it is a fiddle. He will recognise that, sometimes, for example, a power station may be down for a time—an efficient one that does not spew out various pollutants into the air. The company that owns that power station may need a bit of time, going into the following year, to make up for the period when the power station was down, so the measure allows a bit of leeway at the end of the year. However, he is right to highlight the point because it must not be a big percentage of the obligation that the suppliers have. I hope that my saying that from the Dispatch Box will reinforce what he said—that when the Minister says something, it does matter.

§ Mr. Forth
When this Minister says something, it always matters. Therefore, I want to press him a little on two things. He has just touched on one of them. Is he satisfied that there does not appear to be any limit on either the percentage—therefore, that leaves it very open ended—or on the period? I am prepared to accept what he says about the power station example over a limited time, but the amendment, as I read it, appears to allow the possibility of such movements over almost any time. That does begin to look like fiddling.

§ Dr. Howells
Clearly, strict guidelines and time limits, where necessary, must be imposed by the authority. 1352 There is no question about that. The right hon. Gentleman is right to raise the matter, but I am sure that he will agree that there must be some flexibility for companies—not too much; I agree about that.
The right hon. Gentleman asked about amendments Nos. 85 and 86. Amendments Nos. 80 to 94 are pretty minor. They do not make substantive changes to the renewables power in the Bill, but make some technical adjustments and enable the provision to be more effectively applied.
On the specific measure that the right hon. Gentleman asked about, it provides that a different buy-out price may be set for different periods within the overall period of renewables order under clause 61, and that the buy-out price may be adjusted for inflation, which is important in case, suddenly, his party were returned to power and it became rampant again. To return to his earlier point, percentages and periods will be set in the statutory instrument.