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Column 368(c) such conditions as the Director may determine which enable the holder of a licence to conform to pollution legislation through : --
(i) energy efficiency measures ;
(ii) the expansion of alternative renewable generating sources ; (iii) a system determined by the Director which allows one licence holder to offset the reduction requirements of another licence holder.'.
Amendment No. 124, in clause 8 page 7, line 4, after supplier', insert (a)'.
Amendment No. 126, in clause 8 page 7, line 6, at end add-- (b) to promote energy conservation in the supply and use of electricity to his consumers.
Amendment No 128, in clause 8 page 7, line 11, after competition', insert and energy conservation.'.
In connection with this grouping, I am prepared to allow reference to new clause 17 which is an amended version of former clause 13. I have not selected it for a separate division.
"promote the efficiency and conservation of energy and in carrying out that duty to ensure that public electricity suppliers take such active steps as, in his opinion, are reasonable to maximise energy efficiency and conservation and set annual targets for improvement in energy efficiency."
New clause 14 supplements that by imposing a duty on the director general and the Secretary of State to set targets for improvements for the emission of pollutants.
We will debate energy conservation and more environmentally beneficial ways of generating electricity under this group of amendments. Later we will combine heat and power and discuss other matters relating to the environment. This is effectively "environment day".
I want to begin by referring to an intriguing press release from the Press Association the other day. It revealed that next week the Secretary of State will have talks with Soviet Ministers about energy use and the need to safeguard the environment. He will do that during his five-day trip as head of a delegation of top business men. I found it rather intriguing and not a little bizarre that he should go abroad next week to promote environmental concerns in the Soviet Union--matters over which he has no responsibility--while he does not take the opportunity to promote environmental concerns this week during the Electricity Bill debates, a matter for which he is directly responsible. It occurred to me that perhaps he was not acting so much in his capacity as the present Secretary of State for Energy, but in the capacity of a future head of the Department of Trade and Industry--a position he desires to occupy in future. Perhaps we will find out about that later.
The Bill is the most important single measure touching on the environment that we shall debate this Session, yet virtually nothing in it provides even the mildest encouragement to energy conservation, which is the biggest contribution to meeting concern about the environment that we can make. The new clause sets the Government a fundamental test of their sincerity. Is green just the colour of the Prime Minister's rhetoric--a passing flag of convenience to protect her in dangerous political waters--or is she prepared to match words with action and to stand up to the industry's vested interests? So far, from the evidence in the Bill, the answer is a resounding no. Every amendment promoting vigorous action to conserve energy --they numbered about 30 in Committee
Column 369--has been defeated. Instead, we have a derisory and pathetic response of such inadequacy that it casts doubt upon the commitment of those who make it. We debate energy conservation against the background of a Select Committee report on privatisation that wanted the regulator to require public electricity suppliers to come forward with energy conservation schemes. We debate it against the background also of our European obligations to promote energy conservation. However, clause 3, which lists the director general's primary duties, does not include energy conservation or efficiency. They are only mentioned as a secondary duty, subject to the primary duties, in subsection (3). The Bill contains nothing specific.
If one examines the licences that will govern both the public electricity suppliers and the generators, one finds an alarming state of affairs. All that is said in specific terms about energy efficiency in relation to the area boards that will supply electricity appears in condition 18 on page 83 of the draft licence. Licensees--the area boards--will be obliged to prepare a statement of general information about electricity efficiency
"and make a copy of such statement available for inspection by members of the public at each of the relevant premises during normal working hours."
The notion that that is an adequate contribution to energy efficiency is laughable. However, we find that in the terms of the licence for those generating electricity--the Secretary of State or his hon. Friend the Minister will advise me if I am wrong--there is not one single specific duty in relation to energy conservation. It is scarcely any wonder that the Bill's existing provisions have provoked the ridicule of every serious environmental lobby group. The one argument that is not available to the Government is that energy conservation does not matter. It is not disputed that energy conservation is important. The question is how best to promote it. The Government fail in terms not only of the test that we set them but of the test that they set themselves. That is of a piece in the policy of the Government, who cut the budget of the Energy Efficiency Office, ceased to allow home insulation grants, and scrapped industrial energy schemes. Soon, all that will be left is a massive television advertising campaign-- the usual substitution of style for substance that has become the Government's hallmark.
It is vital that action is taken in respect of the greenhouse effect, for example, which may be small in its terms of global impact but is still of importance in relation to the electricity industry's emissions. Also, acid rain has been established as an environmental problem. What is unbelievably depressing about the Government's response is that they see in the evidence about greenhouse gases or acid rain, not an opportunity to promote environmental concern but a chance to make the case for nuclear power.
Those environmental hazards first came dramatically to public notice last year, although many people had known about them for a long time. The Prime Minister, in an interview in The Times, commented :
"Had we gone the way of France and got 60 per cent. of our electricity from nuclear power, we should not have environmental problems."
That statement is about as bold as it is possible to imagine. I do not know whether the Secretary of State will give the
Column 370House the benefit of his views on that remark, but I can guess his views on the statement made subsequently by the Secretary of State for the Environment, who commented :
"There is absolutely no doubt that if we want to arrest the greenhouse effect we should concentrate, like the French, on a massive increase in nuclear generating capacity."
It need only be said that not only is such utterly
impracticable--as to swap from coal to nuclear would mean building nuclear power stations at a rate that not even Lord Marshall foresees--but radioactive waste is itself a major environmental problem and one for which we have no easy answer at present. When people learned from television that nuclear reactors must be left for 100 years before final decommissioning takes place, it provided them with a considerable education in the environmental implications of nuclear power.
Even on the most optimistic forecasts, the demand for energy conservation will rise--at least in the short term. We are talking not about reducing that demand but rather how to reduce or contain an increase. That re- emphasises points that we made in Committee about the desirability of ensuring that before power stations of whatever type are built, it should first be ascertained whether it will not be more cost-effective--quite apart from environmental considerations--to put more money into energy conservation and less into new build. Under the proposed new clause, that aspect is one that the director general could consider. That is done in the United States and in Norway with considerable success, and it is difficult to understand why such planning should not be adopted in this country.
The amendment does not stop there. It would ensure that we promote not only energy conservation but environmentally clean technology. Later, we shall debate the subject of combined heat and power. At this point, I wish to raise a specific point concerning the future of the fluidised bed combustion plant at Grimethorpe, which is a subject dear to the hearts of many of my hon. Friends.
I understand from the Financial Times that a director of British Coal who appeared before the Energy Select Committee yesterday morning said that that project provides an opportunity to burn coal in an environmentally beneficial way, but that it is at risk because of the Government's refusal to come up with what is, by comparison to the sums put into the nuclear power industry, a small amount of money. He said that £11 million is still wanted, but believes that the Government will not make that commitment. In debating the new clause, it is entirely appropriate to ask the Government to make that commitment, and to ask what are their intentions in respect of a project that has widespread support and shows that the industry is prepared to take seriously its environmental responsibilities. Earlier this week, four environmental groups--all of which have a long-standing commitment in the environmental field and are well respected--jointly urged support from all political parties for the amendments and new clauses that we propose. They mentioned many ways in which energy could be used more efficiently and to reduce environmental difficulties. Those proposals are at least worth examining. History has taught us that there is no possibility of encouraging a greater measure of concern for the environment unless one is prepared to interfere with the vested interests that wish to carry on burning energy in the least efficient way, which does not put care for the environment at the top of the agenda. If we are
Column 371serious about promoting environmental concern, it must mean intervening in the market place to do so. That is what the new clause would do.
Without obligations on the electricity supply industry and without legislative duties--in other words, without interference in the market place--the degree of care for the environment that we desire is simply highly unlikely to happen. If the House takes the environment seriously, that interference should not happen at the whim of industry but by the will of the people. If the Secretary of State was prepared to set aside market forces to protect the nuclear industry yesterday, why does he not set them aside today--this time for the good of the environment and the country as a whole?
Mr. A. J. Beith (Berwick-upon-Tweed) : My hon. Friend the Member for Gordon (Mr. Bruce) may seek to catch your eye later, Mr. Deputy Speaker, to discuss some clauses dealing with the conservation aspects of the amendments.
I shall refer to new clause 17, as Mr. Speaker said I could, because another version of the new clause was selected with this group yesterday. It is about rural areas. People in rural areas have a particular reason to be concerned about the conservation and energy efficiency aspects of the Bill. It is in rural areas that green field sites are sought for the new power stations which would not be needed if proper energy efficiency and conservation were applied. The race to find, buy and use green field sites could be halted if we had proper conservation and an energy efficiency- based policy were followed. Therefore, one of the first interests of rural areas must be that part of the new clauses.
Several other aspects must also be considered. One is the duty to supply, on which I dwelt yesterday. The weakness of the duty to supply aspects is only one of the problems that the Bill presents for rural areas. That is why my hon. Friends sought to incorporate into the Bill two deputy directors of supply, one to deal with conservation and one to deal with the particular problems of rural areas.
There are a series of such problems. One involves the compulsory purchase powers in the Bill. For example, the National Farmers Union remains deeply concerned that the private electricity companies will have compulsory purchase powers which have previously belonged only to a Government body--a nationalised industry--and will therefore be able to take from agricultural use land which is of agricultural and environmental importance in the same way that a public body was able to do. Draconian powers are to be in the hands of private companies. That is another matter in which a deputy director general concerned with rural affairs would have a role to play.
The Bill's most alarming feature for rural areas is that the electricity supply companies could choose to impose a higher tariff on rural customers than on urban customers. That provision would allow a private company a power which no public company would surely ever have dared to use. That is why it has not been an issue in the history of nationalised electricity.
Within the North of Scotland Hydro-Electric Board area, the common tariff-- the right of every customer to pay the same tariff, regardless of where in the board's area he or she lives--has been enshrined in legislation and will continue to be so enshrined in the area of the north of
Column 372Scotland electricity supply company. But in the rest of Scotland and in the whole of England and Wales, it will be open to the new electricity supply companies to choose to charge their rural customers more than their urban customers. It is common for commercial organisations to say, "It is costing us a lot of money to deliver to little villages and to go to the heads of valleys and supply goods. Therefore, we will impose a surcharge and charge them at a higher rate." That cannot be an improvement for such a basic commodity as electricity, which has hitherto--certainly since the war--been supplied by public service bodies.
The chairmen-designate of the new companies have given indications that they might not choose to use that power for the first five years after privatisation--but five years only, and not beyond that time. The very way in which they have given such indications suggests that they will seek to use that power. There was a trial run of the problem in the Isles of Scilly. From the consumers' point of view the outcome was rather satisfactory. At the end of the day, primarily because of EEC involvement in the provision of a new electricity service on the Isles of Scilly, it was determined that a differential tariff could not be required of consumers there. They have the guarantee that they will pay the same as consumers in the rest of their board area. We have the EEC to thank for that, not any provision in existing legislation or in the Bill.
Hon. Members should think of what the companies can do now. The company supplying north Wales could decide to charge Anglesey at a higher rate than the rest of its consumers. North Yorkshire consumers could be charged at a higher rate than the rest of the Yorkshire consumers. The company in the north-east could decide to charge Northumberland at a higher rate than Tyneside. The appropriate board could charge rural Devon at a higher rate than the city of Plymouth. Such practices could be tempting if companies want to load higher charges on rural consumers who have fewer alternatives. Those consumers will not have access to gas as an alternative fuel for cooking, for example, and therefore will not be able to offset any higher costs by turning to alternative fuel.
These are grave prospects for abuse of a monopoly at the expense of rural consumers, in the absence of any protection provision. They were not seriously considered by the Government when the legislation was framed. That is why we sought in Committee to build in a right or guarantee that there should be a common tariff and that there should be no discrimination against any geographical area. The Government failed to accept that. We said that there should at least be someone in the controlling mechanism--a deputy director, for example--with a specific responsibility to prevent boards discriminating against their customers on the ground that they live in a rural area. I fear that that will happen unless some such provision is incorporated in the Bill. That is why we will continue to press in the House and through our friends in another place that rural areas should be much better safeguarded than they are at present.
Mr. Peter Hardy : (Wentworth) Unfortunately and sadly, I must make an extremely critical speech about Her Majesty's Government's record in energy conservation and the environment. Last night, the Secretary of State said that the Government's approach was one of diversity to maintain security of supply. If the Government were keen to enhance the security of supply, they would not
Column 373have such an appalling record in energy efficiency and energy conservation. When I made that point last night, the Minister looked shocked. He should not be shocked. He should be aware that Britain's record is deplorably below those of other advanced European industrial countries. That is sad. We would not have needed a nuclear ring fence. We would not have had nuclear power stations if the Government had wanted to avoid the massive capital costs of such installations. It would have been cheaper to save that energy through proper energy efficiency.
I am sure that the Minister has seen the claim by conservation bodies that we could halve the present use of electricity by using new kinds of light bulbs, save three quarters of the amount of electricity consumed by freezers and refrigerators if modern technology were applied, and save two thirds of the electricity consumed by washing machines, not by having dirtier clothes, but by having modern, technologically advanced energy- saving electric washers. We could certainly reduce the energy required to warm our homes by at least 20 per cent. if we reached the standards which are the average in western Europe, rather than lagging so far behind. We have been in that position for a long time and the Government's response to the case for energy conservation has been to adopt the policy that, if the price is high enough, the brutal effect will be to compel people to insulate, conserve and act with energy efficiency in mind.
A little while ago, I was advised by some of the groups that do splendid work in seeking to advance those most in need in society of the comparative position of a four-bedroomed detached house occupied by people in comfortable circumstances who invested in conservation, insulation and energy efficiency, who had the maximum possible insulation and the most efficient and effective forms of heating. They could maintain their four- bedroomed detached home at a comfortable heating level for less than the cost incurred by many hundreds of thousands of elderly people living in little, old, drafty houses and having to spend a fortune on electricity for unsuitable appliances. From an economic as well as a social standpoint, the case for a much higher priority for energy conservation should have been adopted long ago.
I said that I would be critical of the Government and I hope that the Government will accept that their record on conservation and efficiency deserves condemnation. An even greater criticism should fall on the Government if the work of such people as my hon. Friends the Members for Pontefract and Castleford (Mr. Lofthouse) and for Barnsley, East (Mr. Patchett), in whose constituency lies the Grimethorpe research centre, is ignored and the centre is allowed to founder simply because the Government are not prepared to support it. The Government should understand that Britain's record in research and development is deteriorating and that this is one area in which international advances and economic benefit could accrue. I hope that the comments already made about Grimethorpe will lead to a more favourable decision, especially if the Minister takes note of the work of the Select Committee on Energy.
I may be more critical of the Government than ever in regard to the environment. The Minister heard me say in Committee--and it is worth repeating--that the words of
Column 374schedule 9 in regard to the "preservation of amenity" sound attractive. They were attractive, forward-looking words of high quality prose and literary merit in 1957.
Mr. Hardy : I am delighted that the Secretary of State is taking credit for the words of 1957. Unfortunately, whereas those words were commendable in 1957, the record of Governments in the 32 years that have elapsed since suggest that we need a rather different approach. A mere reliance on words that have already been frequently ignored and which receive a deteriorating priority is not acceptable. The Government have included the words in a series of pieces of legislation far too frequently, but having used the words, far too frequently no relevant action has followed. I am reminded of the Government's approach in a series of ways. As the Secretary of State knows, I could continue at length in giving illustrations, but I shall illustrate my point by the examples of one current event and of another that took place a little while ago.
On 16 January 1989, as the Secretary of State knows--I am sorry if some of my hon. Friends have heard this before, but I do not apologise if Conservative Members have heard it before--at the centenary of the Royal Society for the Protection of Birds, the Prime Minister, dressed in green, made a splendid speech. In terms of literary quality, her words were as good as those in schedule 9. The Prime Minister advised us to protect our natural heritage and she expressed her disapproval of the fact that 120,000 miles of hedgerow had been destroyed in the past four decades. I was delighted to hear her speech. That afternoon, I presented the Hedgerows Bill and I thought that the Prime Minister's words would allow my Bill to succeed, but it failed because the Government blocked it. I wrote to the Prime Minister because she was supposed to have been converted to the cause of greenery and the environment. I shall not bore the House by reading out her letter, but I was somewhat annoyed when I read that she believed that other matters should be considered as well as conservation.
The second incident is, perhaps more venal. My hon. Friend the Member for South Shields (Dr. Clark) was drawn in a high place in the ballot for private Members' Bills. He tabled a Bill in 1985 of considerable environmental relevance--the Wildlife and Countryside (Amendment) Bill, which had six particular points in it. The Government disfigured the Bill by leaving only one of the points in substance when the Bill went to the other place. I mention that because when the Bill was considered in the other place, the five points that the House had removed from the Bill as a result of Government pressure were restored. The Government were then left in a bit of a dilemma. They had to decide what to do about the five Lords amendments. Grudgingly, belatedly and at the last minute, following the most concentrated telephone lobbying the House of Commons has ever experienced, the Government decided the following day that they would not oppose those Lords amendments. What was nasty was that later that day, the appropriate Department issued a press statement claiming the credit for my hon. Friend's Bill and describing it as a Government measure.
Column 375No doubt the Government advance that Bill as evidence of the fact that from time to time they have paid attention to the words included in schedule 9, but those words, lifted from the Electricity Act 1957, have been far too frequently ignored. They have been too widely disregarded by this Administration during the past decade for us to have any trust or faith that the words in schedule 9 will receive a response. That is why environmental organisations throughout the country are deeply worried about the Bill. They believe that when the Government finally complete the privatisation of the industry--and the transactions for the water industry give us no cause for relief of that anxiety--perhaps substantially into the ownership of those who have no interest in these islands, the environmental consequences may be tragic. That is why I hope that the amendments will be accepted. If they are not accepted here, I hope that they--or similar amendments--will be passed in the other place. I hope that when the Bill returns to this House, suitably amended, the House will ensure that it provides better arrangements and safeguards to assist the causes of energy conservation and the environment.
Mr. Alan W. Williams (Carmarthen) : Since last September, we have become familiar with the Prime Minister's conversion to green, environmental issues and to beliefs that we did not realise she had ever had over the previous 10 years. The privatisation of the electricity industry was an opportunity for her to put some of those sentiments into legislation, because in dealing with the electricity industry, we are dealing with Britain's largest polluter. In terms of air pollution, it has no rival. It is responsible for about half our total air pollution, 73 per cent. of sulphur dioxide emissions, 35 per cent. of nitrogen oxide emissions and 40 per cent. of carbon dioxide emissions.
Surely the Bill could have given the Government the opportunity to legislate to improve their environmental record? However, as my hon. Friend the Member for Sedgefield (Mr. Blair) said, there is nothing in the Bill on environmental protection, conservation, energy efficiency or cutting pollution. There is some access to information via leaflets that may be distributed, but we already have that because information on insulation comes with our electricity bills. If ever there was an opportunity to try to do something about conservation and pollution, the Bill was it.
In the past 20 years, conservation has had far too little attention paid to it by both this Government and their predecessors. However, conservation has a critical role in energy policy. It can contribute as much as oil, gas or coal and certainly far more than nuclear power to our energy needs. In that sense, it is properly described as potentially the "fifth fuel".
Over the next 20 or 30 years planning is vital because if we adopt strict policies on energy conservation it will be possible to double our living standards without any growth in energy demand. Despite the Government's green claims, their record speaks otherwise. In the past few years the budget of the Energy Efficiency Office has been cut from £25 million to £12 million, giving the lie to the Prime Minister's green claims. In new clause 7 on energy conservation, we are asking the regulator to take measures to instruct the
Column 376distribution companies to improve energy efficiency. We should like an annual energy audit and annual records kept to show how efficiency is being improved.
In Committee, we debated at length the idea of least-cost planning, which has been adopted in the United States. Instead of building more and more new power stations, it would be better to invest that money in home and factory insulation, in combined heat and power or simply in demand management to iron out the peaks in the demand for electricity in the evening and during the day. If we did so, we would not need such capacity to meet the demand.
Least-cost planning is very much in the consumers' interest. It is designed for consumers because ultimately it means that the electricity produced is cheaper. It aims for the lowest cost of electricity. Rather than consumers paying for the four PWRs or for new power stations, they would be paying for insulation, which is much more efficient. Such measures could be adopted in this country and new clause 7 would help the regulator to acquire those powers. My hon. Friend the Member for Wentworth (Mr. Hardy) talked about energy efficiency and appliances, such as washing machines, refrigerators and television sets. He also mentioned light bulbs. It is possible to produce such things with between two and four times their present efficiency. In that context, one danger of the Bill is that the research work carried out by the CEGB may be cut. Therefore, in new clause 7 we are asking that the regulator be given powers so that conservation and energy efficiency become part of the role of the privatised industry.
My hon. Friend the Member for Wentworth also said that we have a sort of conservation policy at the moment. It is conservation by price. It means that in the winter pensioners, who often live in draughty houses, cannot afford to switch on two bars of their electric fires. That social problem applies especially to the poor, the elderly and families. It is a cruel kind of conservation. Since 1973 energy efficiency has improved in the advanced countries by 20 per cent. I hasten to add that Britain is pretty well at the bottom of that league. Far more is possible, and our new clause asks that there should be action.
New clause 14 refers to pollution and environmental protection. Opposition Members acknowledge that coal is dirty. We realise that sulphur and nitrogen oxides and carbon dioxide are all by-products of coal combustion. However, they need to be and can be tackled. Sulphur dioxide and acid rain pose a serious problem. Acid rain is killing our trees and affecting water supplies and the tributaries of rivers in upland areas. The drinking water in my constituency has a high aluminium level, often in excess of the EEC limit, simply because of the problem of acid rain.
The Government's record on acid rain is appalling. My hon. Friend the Member for Rother Valley (Mr. Barron) was in Japan a few weeks ago and visited a power station that was built in 1974 and which had flue gas desulphurisation installed then. That was about 20 years ago but not one of our power stations has such FGD equipment. The Government did not recognise acid rain as a problem until 1986 and it was only then that they started to take some action. Under the present programme, none of our power stations will be cleaned up until 1997. We are dragging our feet. For years the Government refused to join the "30 per cent. club", and a 30 per cent. reduction
Column 377by 1997 is now completely out of the question. The Government have agreed to a European Community directive to cut sulphur oxide by 60 per cent. by the year 2003, but that is now impossible under the Government's present policies. Nothing in the Bill will help to achieve those targets.
We believe that part of the regulator's role should be to monitor the amount of sulphur oxide, nitrogen oxide and carbon dioxide that is emitted year by year. The regulator should set targets for reduction in line with those of the EEC directives.
Clean combustion technology and the work of Grimethorpe was commented on earlier. It is appalling that the Government are placing such important long-term research in jeopardy. Grimethorpe is the power station of the 1990s. It is the way to produce electricity in the next century, yet under this Government that programme is threatened. I hope that we shall receive some assurance today from the Secretary of State that the money that is needed will be found. It is a small amount--£11 million--which is pathetic when compared to the money that has been given to the fast breeder reactor programmes and to nuclear power in general over the years.
There can be no doubt about the greenhouse effect being the most intractable environmental problem. I read in the New Scientist last week that the amount of carbon dioxide in the atmosphere has now passed the 350 parts per million barrier. In was 290 ppm, but it is now 350 ppm. It has increased by 20 per cent. during the past century and it is increasing at the rate of an extra 1 per cent. per year. That could lead to global warming and to the climatic effects that we have all heard about. Exactly what may be implied there is not very clear, but it would be prudent to take action now on the greenhouse effect.
At last year's United Nations conference in Toronto on the global climate, Britain agreed with other countries to cut carbon dioxide emissions by 20 per cent. over the next 15 years, but we saw in Committee that the Central Electricity Generating Board projects an increase of generation of 25 per cent. over the same period and of 60 per cent. over the next 50 years. So our assurances and our promises to that conference were not worth the paper that they were written on.
The only way to cut those CO emissions is by conservation. Nuclear power stations are almost irrelevant. Conservation is the answer, and that is where the two Opposition new clauses tie together. I end by quoting something said by my hon. Friend the Member for Sedgefield--it deserves to be a "quote of the week". In a recent article he said that in the 1970s conservation was about saving money ; now it is about saving the environment.
Dr. Kim Howells (Pontypridd) : It has been a joy to watch the greening of the Government over the past 12 months. I remember that in July 1984 the Government's delegate to an international acid rain conference in Munich, the right hon. Member for Bristol, West (Mr. Waldegrave), did not even bother to turn up to present the United Kingdom's case and had one of his civil servants read out Britain's excuse for not joining the "30 per cent.
Column 378club", despite the fact that the Government were well aware of the outrage felt at the time by Scandinavian countries at having to suffer the noxious and destructive effects of United Kingdom sulphur emissions. At the time, Britain's most notorious trained scientist, the Prime Minister, had decided that the evidence on acid rain was inconclusive and had forbidden right hon. and hon. Conservative Members to support any shade of green--although rumours abounded that a few were secretly wearing green underpants as a gesture of concern for the environment. They are now retrofitting green garments at a far faster rate than they are retrofitting flue gas desulphurisation equipment in the nation's power stations.
Nevertheless, I welcome the plan to retrofit 6,000 MW of coal-fired capacity over the next eight years. I also welcome the plan to install low nitrous oxide burners at the CEGB's 12 largest power stations over the same period. But I do not welcome the Government's continuing refusal to sign the Helsinki protocol to undertake the reduction of sulphur dioxide emissions or their trans-boundary fluxes by 30 per cent. from 1980 levels by 1993.
The Government's new air quality standards for nitrous oxides and sulphur dioxides comply with EC directives and are most welcome but, as my hon. Friend the Member for Carmarthen (Mr. Williams) has already said, the directed levels are unlikely to be reached by the dates set.
Retrofitting is one answer, but it has limited application and it is very expensive. What is needed is a general transformation in our attitudes towards the fuelling and production of electricity in this country, one which posits an altogether more imaginative and environmentally sensitive approach than is encapsulated in the present Bill. I am not trying to defend the status quo. The attitudes towards energy production of virtually all the interested parties over the past decade have been partisan, unimaginative and generally governed by a notion that energy conservation and efficiency, and environmentalism as a whole, meant job losses, additional expense and consequent political unpopularity.
The Bill strengthens rather than weakens that notion, and I commend new clause 14 as a measure which may encourage a different attitude towards the fuelling and production of electricity. The development and application of the kinds of energy technology already mentioned by my right hon. and hon. Friends might be encouraged for example, the various renewable sources of energy, the greater efficiency of existing technologies, and moves towards the proper uses of materials with which we can make better use of our energy.
If we adopt this new attitude we shall see that environmentalism and efficiency will mean more jobs, not fewer. They may be different jobs, and that is a problem that the trade union movement must take on board, no question about it. If we support those new clauses we shall be doing a very constructive thing in that we shall not merely force the Government to act upon some of their protestations about being a green party, a party that cares about the environment; we shall encourage all levels of society to adopt a much more imaginative and realistic approach to the great problems of fuel production, electricity generation and the protection of the environment.
Column 379It is my view and that of my colleagues that that issue ought to be at the heart of the debate about the Bill. It is very unfortunate that we have been diverted into a debate about nuclear power which, although interesting, has allowed the Government to avoid confronting the fundamental issue of how we can use energy much more efficiently.
Our record of energy efficiency is extremely poor compared with that of our competitors. It is difficult to understand why, given the number of times that Ministers have come to the Dispatch Box and claimed that they are in favour of conservation, we have fallen so far short of the objectives declared by the Government to be both achievable and desirable and to which they are committed. It is something that we really ought to take on board.
For example, in 1986 the Prime Minister opened the Milton Keynes energy week. She said that Britain's total fuel bill was £35 billion, which could be reduced by £7 billion. The Secretary of State for Energy tells us that the energy bill is £39 billion and could be reduced by £8 billion. In other words, nothing has changed except the figures, which have, in both cases, gone up. We have failed to achieve any significant move towards the reduction in energy use that the Government say they want to achieve and which they believe can be achieved.
I suspect that the reason is that the Government believe that it is not their responsibility, that the market will solve the problem and that it is up to everyone except the Government to take appropriate action. Given that this is one area where the Government and my colleagues and I share common ground, the Bill should have been seen as an opportunity. The common ground that we share is a complete dissatisfaction with the way in which the industry has been run over the past 10 or 15 years. It has been centralised and inefficient. It has over-invested. It has been generation-biased in the extreme ; its response to forecasts of rising demand has been the desire to build more power stations instead of asking how it can ensure that the demand can be met with the existing capacity, because the technology exists to do that.
The irony--I may be giving the Minister the lead to his reply--is that it is cost-effective to invest less money to achieve greater profitability. It is true--I have some common ground with the Government on this--that the industry in the public sector has manifestly failed to grasp that issue, but I part company with the Government in that I believe that they can and should do a great deal more, and that the Director General of Electricity Supply should have been--and would be, if our amendments were carried-- charged with a specific responsibility to promote energy conservation.
Significant benefits will flow from energy conservation. The first benefit is environmental. According to the Rocky Mountain Institute, investment in energy efficiency and conservation is seven times more effective than nuclear power in abating global warming. I do not believe that the Government will get very much mileage from suggesting that their nuclear programme is a contribution to dealing with the greenhouse effect. It is irrelevant. The programme, as promoted in the current state of the electricity supply industry and as endorsed by the Government as their future direction, will, in fact, lead to a 20 per cent. increase in carbon dioxide emissions from the United Kingdom by the end of the century.
It has already been stated that the original reasons for introducing energy conservation were financial and were
Column 380connected with the oil crisis of the 1970s. At the risk of boring the House, I would point out that I wrote a pamphlet in 1979 in which I stated the environmental benefits and urged action to be taken. I regret to say that nothing has changed. My pamphlet is just as relevant today. The problems are even more severe, and no action has been taken to confront the issue.
Mr. Bruce : It has not even been recycled. It has been shelved. The second benefit from energy conservation is economic. It would lead to a cheaper unit cost of energy. That would be beneficial to industry and to our ability to compete in world markets. I hope that the Government would regard that as desirable, because at present we are not competing very successfully as a trading nation. That is possibly because we use energy substantially more inefficiently than our major competitors, Japan and West Germany. The Japanese use half as much energy per capita as we do and the primary energy consumption ratio to GDP in West Germany is half that of the United Kingdom. Therefore, effectively, it is twice as good as we are at using energy efficiently, which possibly explains why it is twice as good as we are at securing shares in world markets.
That benefit also has a social relevance as it helps to deal with the problem of fuel poverty. I worked for a number of years for a Norwegian- based oil and gas industry publishing company, and travelled to Norway fairly regularly during that time. I found it extraordinary that the issues of fuel poverty and condensation which are so alive in this country are almost unknown in Scandinavia. That is, first, because the Scandinavians have learnt that they live in a climate that requires a particular standard of building. They build to meet the climatic conditions and, therefore, they have houses that are fundamentally efficient and warm and do not suffer from condensation. Secondly, they ensure that their energy is relatively competitive. They have, of course, for a long time had the advantage of hydro-power, which has obviously been an additional helpful factor.
Perhaps the even more extraordinary situation is that investment in energy conservation would actually make money. The science policy research unit has estimated that every pound spent on
conservation--this is not an airy-fairy proposition, but is based on spending money on existing conservation methods, which are specific and known--would save 38 kW, would cut carbon dioxide discharges by 42g and would save customers £1.90 each. Will the Secretary of State tell us what other investment in the United Kingdom could give a 90 per cent. rate of return? He must address himself to why we do not manage to achieve the target savings for which he has said that we should be aiming.
The Association for the Conservation of Energy has recently carried out an analysis of some fairly simple measures that would produce significant benefits. It has assessed that simply by ensuring that lights, old fridges and freezers are replaced with the state of the art, best available technology, demand for electricity would be cut by 12 per cent. That means that it would cut the demand for electricity by the equivalent of four and a half Hinkley Cs.
Column 381That reinforces the point that I have often made--that, if the electricity supply industry had any imagination, it would recognise that instead of spending money on wasteful public inquiries and the building of unnecessary power stations, it should spend that money on conservation, and thereby improve the profitability of the industry as well as reducing the cost to its consumers. That should be at the heart of the post-privatisation regulatory system.
In anticipation of the Minister's response--although I hope that I am wrong --I must say that it is not good enough to say that the figures I have quoted are so dramatic that once the industry is privatised the problem will solve itself. All the evidence from other countries shows that there must be a specific Government momentum behind the problem in order to solve it.
I know that the Minister is not enthusiastic about all its aspects, but the regime that has operated for a number of years in the state of California for promoting conservation and alternative energy required legislation, funding and tax benefits to ensure that it was stimulated. Once there was that framework, people were prepared to make investments because they were required to do so. They were astonished to find that under the regulation system that this Government so often denounce they were able to make greater profits than they would if they had pursued their desires in a free market, which was their initial wish.
The other sources of benefit are closer to home. The Select Committee on the Environment, when considering especially the problems of air pollution, stated :
"However, if the world wants light, heat and energy in constant and increasing supply, the choice might resolve itself between a source which is deliberately and constantly poisoning the atmosphere and one whose misadventure would have catastrophic global results"-- that is obviously between fossil fuels and nuclear power "but an alternative would be energy conservation and reduction in demand".
Energy conservation and improved energy efficiency is the absolute key to dealing substantially and significantly with the problems facing the energy industry of high costs and great environmental concern.
The proposals put forward by a variety of organisations have all reinforced that message. What should concern the Government now is how they will retain credibility as a Government who are putting forward the privatisation of electricity as an environmentally and economically beneficial measure, when all the indications are that without substantial action by the director general prices will rise, our competitive relationship with other countries will continue to deteriorate and the output of carbon dioxide and the aggravation of the greenhouse effect will continue to escalate between now and the end of the century.
I am led to believe that the Prime Minister is specifically concerned about the greenhouse effect and that that is her major environmental concern. Unlike many sceptics and cynics I welcome her conversion and believe it to be sincere. I believe that she has come to terms with the problems. [ Hon. Members :-- "No."] Oh yes. But I do not believe that she has appreciated that a commitment to deal with the greenhouse effect and the associated environmen-tal problems is, unfortunately, incompatible with Thatcherism. When the Prime Minister discovers her dilemma I suspect that she may suffer a severe attack of schizophrenia. The one great thing about schizophrenia is