Can Government Keep the Fit Changes?

Posted by Sally Barrett-Williams of The Carbon Catalysts Group


There is a groundswell of hope that what happened in last week’s debate on solar PV in the House of Lords undermined government intention to change the Feed-in Tariff. The debate may be indicative – but the hope is premature.

In March government published a consultation which announced its intention to slash the Feed-in Tariff for solar PV by something like 70% as from 1 August. (In doing so it deviated from legislation that permits it to change the Tariff only once each year as from 1 April.) The consultation closed on 6 May.

It was then intended - undoubtedly after a period to allow government to take ‘full and proper account’ of responses made by consultees - to take the steps to enable the changes to take effect in law.

The changes themselves involve amending the Tariff table appended to the Electricity Supply Licences. (These Licences are a form of secondary legislation.)

Such changes may be made by one or other version of the negative resolution procedure. In this case, a draft of the proposed changes was laid before the House of Lords on 8 June and before the House of Commons on 9 June.

Each House then has 40 days (excluding any time Parliament is not sitting) to pass a resolution to reject the draft. If it doesn’t do so, consent will be assumed. All it will take is that one of the two Houses passes a negative resolution and the draft will fall by the wayside.

What happened in the House of Lords last week is that two motions of regret were tabled. The first referred to the dashing of legitimate expectations of solar businesses and the second to the negative impact the changes would have on the solar industry.

The Lords condemned the changes and Lord Whitty made very clear that the previous government had intended what this government has said is an unintended consequence of the scheme, namely, that the larger arrays, specifically those at 5MW, were to be most encouraged as being the most efficient.

Despite the Lords’ condemnation, the motions of regret were not passed: one was withdrawn, the other not moved.

The reason for the backtracking is purely constitutional: the House of Lords doesn’t vote against legislation that has been delegated to the executive, it leaves that to the House of Commons.

So what the House of Lords did, and all it did, was show its disapproval in clear terms and leave the matter to the Commons.

The Commons has not made much of a show. Ed Milliband has tabled an early day motion, calling for rejection of the changes. He has managed to attract 17 supporters—not a large number and not enough to defeat the government.

So what will happen? Lord Marland, speaking for the government, told the Lords that a number of directors and chief executives of renewables bodies had written to him to say that there were relatively few companies that would now be affected by a change in the decision of the government, that re-opening the decision would “cause lasting, and we believe irreparable, damage”, adding "We would urge you to oppose any attempts to overturn the Government's decision".

So while the Lords fume and stamp their feet, the renewables industry is fighting against itself and the House of Commons is lamely flailing. The only question seems to be when the changes will take effect. It currently seems likely that mid-autumn is the earliest.

(© Sally Barrett-Williams)