Yes, there is an element of that. Moreover, we will be unable to do anything about it, because a future Parliament will be stuck with the contracts.
I fear that the sum might be larger than the £9.8 billion. Policy Exchange has released a well-considered analysis that adds up the total additions to gas and electricity bills within the levy control framework to £16.3 billion. Even that does not take into account two significant factors: first, the carbon tax floor, which is a tax and not in the levy control framework, which applies to spending; and secondly, the cost of banning coal production—coal production will be banned by shutting down plants through the EU directive, and through the domestic and unilateral legislation to ban the construction of new coal-fired plants. We could be looking at amounts equivalent to 4p, 5p or 6p on income tax.
Almost all hon. Members seem to be prepared to drive that measure through, but almost all of my constituents that I speak to do not want to pay those amounts on their electricity bills. We are forcing the measure through. Obviously, lobbyists and the industry understand this complex area, but it is important that Members get to grips with the Bill and the extent to which CFDs will drive higher prices. The more I understand the Bill from the point of view of my constituents, the less keen I am on it.
The amendment confuses two issues, the first of which is the Climate Change Act 2008 commitment to an 80% reduction in carbon gases by 2050. The commitment applies to the whole economy, but the amendment seeks an electricity decarbonisation target. The Minister persuasively drew attention to that inconsistency. If we are looking to hit the 80% reduction target in 2050—the target strikes me as an enormously ambitious and costly one, and I doubt it will be met—we need to decarbonise large sections of the economy, and not just the electricity sector. As part of that, we must persuade significant sections of the heating and transport sectors to convert from current fossil fuels to electricity. However, the amendment would accelerate the decarbonisation of electricity still more, which will shove up the cost of electricity so much that it will be hugely unattractive for those sectors to switch to electricity from their current fossil fuels. Therefore, even on its own terms, the electricity decarbonisation target risks setting back its avowed goal of helping towards the purported 2050 target for the decarbonisation of the economy as a whole.
None the less, one might say in the amendment’s favour that it potentially exposes the contradictions in current policy. We have heard a lot of the “grand bargain”. The hon. Member for Edinburgh West (Mike Crockart) was honest in setting out how much the Lib Dems have gained from it and how little they have given up in consequence. I do not, on balance, support the amendment, but I am not sure why the pass has been sold on so many other issues to avoid having to make a decision in 2014—we are quite happy to kick it down the road and make it in 2016.
The inconsistencies in the proposals are significant. The hon. Member for Brent North (Barry Gardiner)—I am pleased he is still in his seat—suggested that it would be cheaper to go down the route of renewable electricity rather than electricity largely from gas. He cited a Committee on Climate Change report, but did not mention the basis of its calculation. The report states:
“Beyond 2030, bills would fall in a low-carbon system as new low-carbon capacity is commissioned at lower cost than the older capacity (assuming learning in deployment leads to cost reductions). In contrast, for a system with a major share of generation from unabated gas, bills would continue to increase as carbon prices continue to rise.”
The basis of his argument is predicated on the assumption that the massive carbon tax will rise—that is within the system, but also endogenous to his own model.