It is a pleasure to see you in the Chair this evening, Mr Howarth.
I am pleased to follow the hon. Member for Brigg and Goole (Andrew Percy), who made an excellent speech in support of the industry in his constituency. I agreed with much of what he said. The hon. Member for Selby and Ainsty (Nigel Adams) made an outstandingly good speech, contextualising the issue and setting it in the framework of the energy market in this country. His was a very helpful contribution.
Just before the summer recess, I became a member of the Treasury Select Committee, and in July we took evidence from the Chancellor, so I took the opportunity to ask him why he had taken this decision on the climate change levy. The first question I asked was:
“Are you a climate change denier?”,
to which he responded:
“I am not sure I accept that phrase as a general term in British politics, but what I will certainly say is that I think climate change is happening, that it is caused by human beings, in part, and that it is not good for our society, going forward.”
This did not seem a very strong endorsement from the greenest Government ever—as they like to think of themselves—so I asked whether he supported the international work and whether he was
“looking for a good, strong commitment in Paris, internationally agreed, on climate change”.
“Yes”, he said. So then I asked about the domestic legal framework:
“Do you wish to see any changes to the legal frameworks that we have in this country? So, the carbon budgets out to 2027, the target to have 15% of our electricity generated through renewables by 2020, or our target to see carbon dioxide emissions reduced by 80% by 2050; are you looking to change any of those frameworks?”
“No”, he said.
As hon. Members have said, the pattern of words and actions do not seem to fit, so I said to the Chancellor:
“Notwithstanding the fact that you are committed to all of those, you have removed the climate change levy exemption for renewables, removed the subsidy for onshore wind, restructured VED, and ended the zero carbon homes commitment”—
since then, of course, he has also changed the solar subsidies as well. The papers the Committee had from HMRC said, with respect to the climate change levy, that there would not be any impact on climate change, so I asked him whether, taking all four measures together, there would be
“any reduction in the rate at which we are reducing our carbon emissions from the measures you have taken”.
He said:
“We can go through each one individually, but I think for different reasons they are not effective or good value for money, and I think there are better ways to meet these targets.”
He said we needed to meet the targets, but in a cost-effective way, so I asked him:
“Do you have any forecast or any scenario setting out how you think that the environmental objectives will be achieved on your new policy framework?”
“Yes”, said the Chancellor.
“I am happy to send you some analysis.”
7.15 pm
It is now September and we have still not had the analysis promised by the Chancellor in July, so I asked the Select Committee Clerks if they would ring the Treasury to find out where those documents are. I was told that the Treasury could not get them over to us as quickly as we had wanted because they had to be cleared by the Chancellor and he had not cleared them. I thought that was very strange, given that he told me that he had seen the scenarios and the analysis before taking the decision, so I hope very much indeed that the Minister will tell us from the Dispatch Box this evening where the analysis is and why it has not been sent to the Treasury Committee. What we have seen seems to be evasive and possibly cowardly on the part of Treasury Ministers. They should be straight with us and give us the information we need. They knew perfectly well that we were having this debate this evening and that that information would have informed it, and they should have provided it in less than seven weeks.
I would also like to ask the Minister whether he can reconcile the impact assessment—which, as the hon. Member for Brighton, Pavilion (Caroline Lucas) pointed out, says that there will be a 1 million-tonnes increase in carbon dioxide emissions from the change to the climate change levy—with the statement by the Chancellor that it would have no impact on our capacity to meet our climate change objectives. Which is it? Or is it that the Chancellor said one thing to us before the Treasury Committee and his officials wrote another thing in the impact assessment, and is that the reason for the delay in our seeing documents we were promised?
I also asked the Chancellor about the fall in the Drax share price, because obviously it is very destabilising. He said:
“Inevitably, when you raise taxes, and we saw this with some of the banking sector, there is the risk of an impact on share prices, but that does not make it the wrong thing to do.”
I thought that was rather a flippant response. I very much got the impression from the exchanges we had with the Chancellor that he was desperate to find some money, that here was some money he had found and that, far from being a long-term economic or environmental plan, this was a simple thing he thought he could do.
The Chancellor again told us that a third of the benefit goes overseas, but that it would be perfectly possible to change the way the climate change levy operates to deal with that without getting rid of the exemption for renewables. If that was the real problem, Treasury Ministers should have asked HMRC to tackle it, not doing what they are doing in clause 45, which, as hon. Members across the Committee have said, will destroy jobs, worsen our chances of meeting our carbon targets, set us up badly for the Paris negotiations and damage investor confidence in this country.