My Lords, I am grateful to the noble and learned Lord, Lord Wallace, for opposing the Question that the clause should stand part of the Bill. It is tempting to engage on the many points that have been made about the principle of onshore wind in general, but I would rather stay focused on Clause 60 and say why I have a great deal of sympathy with the noble and learned Lord’s proposal that it should not form part of the Bill. That is mainly due to the process by which the Government have conducted themselves. I do not wish to misquote the Minister but he said that he needs time to think things through in relation to the grace period, and that is quite a telling statement. It is clear to me that this clause has not been fully thought through and that it has been put in hastily, without due consideration of the full implications and without due consultation. For those reasons, I am very supportive of the idea that we should simply take the clause out, do the thinking and consulting, and then come back with something that is fit for purpose.
With regard to things being fit for purpose, during the course of the Bill we have had exchanges about the impact assessment. We now have an impact assessment in relation to this clause, but I have to say that it was not exactly worth waiting for. It does not cover some of the most important issues in enough detail. It is incredibly lacking in proper detail in its attempt to make a net present value calculation of the implications of introducing the clause, and I find that it has significant weaknesses.
My overall impression is that the department is building the aeroplane as it takes off from the runway and that not enough thought has been given to this clause. It all seems to hinge on two words in the Conservative Party manifesto: “new” and “subsidies”. There is a great deal of subjectivity in interpreting the phrase “new subsidies”. It cannot be claimed that the RO is a new subsidy—it has been in existence for a number of years—and it cannot be argued that the RO provides, in the words of the noble Baroness, Lady Byford, subsidies for ever and ever. It does not do that. It does not create an unending subsidy. The RO is closing. It will close, as we agreed in the Energy Act 2013, in March 2017. That is not far away—in the grand scheme of things, it is about 12 months. In their haste to generate some kind of political benefit from this attempt to destabilise onshore wind, in those 12 months the Government are destabilising investment across the energy market, and that is deeply regrettable. I am very grateful to the noble Lord, Lord Cameron, for stating the wider implications of what the Government are doing here. There is a question of how we deal with industry and how we encourage people to invest in the UK.
I raised a general point about my disappointment with the impact assessment. I made it clear in a letter to the Minister and on the Floor of the House that we wanted to see the impact assessment properly make the case for the Government’s concern about the levy control framework running out of money or not having sufficient money. I am afraid that there is insufficient detail in the impact assessment. It does not give us any sight of the Government’s numbers on this or explain why they are so concerned.
More than that, the impact assessment makes me fear that the department does not even understand the energy policy that it is governing. When it comes to considering the benefits and costs of this intemperate change to policy, which was changing anyway, it considers only the positive benefit of a reduction in resources—by which I assume it means the amount of money that has been spent on onshore wind—and then it sets against that the increased cost of the EUA purchases. It makes very precise calculations over a period of 24 years to 2040. I am in the business of monitoring the carbon market in Europe and not a single analyst can give you any degree of confidence about the numbers relating to the carbon price over that period. I am afraid that the table on page 15 is really a work of fiction.
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Of more interest are the non-monetised impacts on pages 16 and 17. They are numerous and quite significant, and they have been completely omitted. Paragraph 4.22 raises the risk of our missing the 2020 renewables target. It gives all of five lines to an issue that is going to see us on a collision course with Europe. We have signed up to legally binding targets and we are going to miss them because we are tying our hands behind our back and removing one of our most successful industries which would help us to meet those targets. We will talk about that more when we come to subsequent clauses. The fact that the impact assessment does not
even mention that that will have a cost seems highly regrettable. It is not just the fact that we may be fined, which we may well be; there is also the fact that we have seen in the press intimations that the Government will simply purchase their way to compliance. That will incur a cost. The fact that that is not even mentioned makes me wonder whether we have officials who are across the detail of what they are currently doing. It also means that the Minister has to look at this issue in the round and put it in the wider context.
There are sufficient concerns about this element of the Energy Bill for it to be right and proper to ask for it not to be part of the Bill at the stage, and I have significant sympathy for those who oppose the clause. We now need to hear from the Minister. I will go back to my team and consult it on what we can do about the absence in the impact assessment of the information that we have requested. I have referred to the fact that there is no mention of the LCF assumptions upon which this is all predicated and to the rather partial and, I think, very substandard monetisation of costs. There is insufficient detail. At one point, the impact assessment says that there is too much uncertainty to include the impact on jobs and inward investment. There is uncertainty across every element, not least the one thing that has been monetised over 24 years.
I am afraid that the impact assessment is not a very good piece of work. I am sorry that we have had to wait so long for it. Had we had it earlier, we might have been able to raise our concerns earlier and have had more information about the clause from the department. It is a very controversial clause and it is highly politicised. This Bill is starting in the Lords and it should therefore, by convention, be uncontroversial. This is not uncontroversial and, as I said, I sympathise with the opposition to it. I look forward to the Minister’s response.