Keeping Labour’s lights on

By Alan Simpson MP

In the dark days of the Thatcher government, one of Labour’s favourite slogans was that the Tories knew the cost of everything but the value of nothing. Nearly 30 years later, our own Government is in serious danger of making the same mistake over its forthcoming Clean Energy Cash Back Scheme.

Despite the leadership shown by Ed Miliband on this issue, my great fear is that officials in the Department of Energy and Climate Change are literally sucking the lifeblood out of the scheme even before it’s begun. A misguided obsession with the “cost” of the proposed scheme risks neutering its employment, investment and wider economic value and impact.

Take solar power. Ministers accept that it can make a significant contribution to our 2020 renewable energy target. But the current feed-in tariff proposals under the Clean Energy Cash B Scheme would see the UK’s installed solar PV capacity still languishing behind those economic powerhouses of Belgium and the Czech Republic.

Today, there are fields in Germany with more solar PV in them than has been installed in the whole of the UK to date. There is nothing in the Government’s solar PV feed-in tariff proposals to suggest that we are serious about even beginning to catch up with our European neighbours.

Part of the problem is an inability in Whitehall to recognise the immense economic benefit to the UK of a serious solar PV programme. The We Support Solar campaign identified the potential for at least 30,000 new jobs in the solar power sector by 2014. The vast majority of these would be skilled jobs in the UK roofing and construction industry.

The same Whitehall timidity extends to the proposed treatment of other technologies under the Clean Energy Cash Back scheme. In setting a woefully low ambition for the new scheme, delivering no more than 2% of UK electricity by 2020, civil servants are strangling the life out of the scheme and unnecessarily so. The Government’s own figures suggest that a really effective scheme, delivering over 6% of UK electricity demand from small scale renewable technologies, would add just over £1 per year to annual domestic electricity bills over the next four years.

That is a small price to pay for a world leading scheme. It would drive rapid uptake of solar power and other technologies, create hundreds of thousands of jobs by 2020, and contribute more energy to our 2020 target than the combined 2008 output of the five British Energy nuclear power stations due for closure by 2018.

The modest level of ambition set out in the DECC proposals could easily result in Labour being outflanked by both the Tories and the Lib Dems. The tactic would be to paint Labour as being strong on rhetoric but weak on real measures for change. All the work done by ministers would then be undermined by vested interests in the energy industry, and DECC itself, who want a scheme that only operates at the margins of energy transformation.

Energy policy is about choices. It is still not too late for ministers to save the day. My fear is that a lack of courage will lead the government to make entirely the wrong choice on feed-in tariffs.