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Column 565I must stress that the amendment is essential to tackling effectively the greenhouse effect. Untrammelled industrial expansion, which is what we have been experiencing throughout the world in the past 20 years, is now bringing our planet to the boil. The Prime Minister's conversion to concern about the greenhouse effect, heralded in her Royal Society speech, is genuine, but I find it incredible that she does not seem able to grasp the fact that it requires a fundamentally different approach to policy.
Independent assessment suggests that, within existing technology, we can achieve a reduction of more than 20 per cent. in carbon dioxide output by the year 2005 while still sustaining a 2.5 per cent. per annum growth. If that information, which comes from a variety of sources, is anything like true, how can any responsible Government fail to take action to ensure that we secure that benefit? If the Government are really pretending that this pathetic amendment, which is their alternative to the Lords amendment, will go anywhere near achieving that, they are treating us with contempt and as fools. I am not prepared to be treated as a fool by the Government or the Secretary of State.
I do not believe that we will achieve anything like progress towards that essential reduction unless we have a much stronger measure. A Bill about the regulatory framework of the electricity industry is the most appropriate one to contain such a measure. We in the United Kingdom are major contributors to the greenhouse effect. We cannot hide behind the need to secure international action and use that as an excuse for not taking action on our own behalf--yet that, essentially, is what the Government are doing.
As I understand it, in simple terms, carbon dioxide accounts for about 50 per cent. of the greenhouse effect and 80 per cent. of that carbon dioxide comes from burning fossil fuels. Here in the United Kingdom, with 1 per cent. of the world's population, we are contributing 3 per cent. of the carbon dioxide output. We must, therefore, take action to put our own house in order if we are to make any contribution to solving the global problem.
The problem touched on by the Secretary of State is not confined to the United States industry, which has a tendency, as he put it, to go for overcapacity. I represent a constituency in Scotland and I have never been convinced that we need 105 per cent. extra capacity. If that is not excess capacity, I do not know what is. But even taking the United Kingdom position as a whole, the problem with the electricity industry, as it is presently constituted and as it will be constituted post-privatisation, is that its response to increasing electricity demand is to want to build more power stations, when its response should be to use the capacity that we have substantially more efficiently. That makes economic sense, but, more importantly, it makes environmental sense. The economic arguments have not delivered the goods. We need more action to ensure that we achieve more substantial results.
Our commitment to energy conservation goes back a long way. I was involved in writing a pamphlet in the mid-1970s on the important role of conservation and what it can contribute. I find it depressing to look back over the period of that first oil crisis to see the way in which we were then approaching the issue of energy conservation, and to find out how little progress has been made 15 years on, when we now know that the environmental consequences are far greater than we realised then.
Column 566We have tabled amendments which are only fall-back amendments. I believe that the House should agree with the Lords amendment and reject the Government's proposed motion to disagree. The Lords amendment sets the framework which ensures that energy efficiency is not only something that we seek to promote or that we express as being desirable, but something by which we can put teeth behind the Director General of Electricity Supply to ensure that energy efficiency is achieved. So far, we have conspicuously failed in that.
The benefits are not just environmental. The benefits of seeking greater efficiency in energy use are that it will help to alleviate fuel poverty and to improve the competitiveness of our industry. In a sense, we get three benefits in one--a benefit to the consumer, a benefit to industry and a benefit to the civilisation of the earth in ensuring the protection of the environment.
When the Secretary of State replies to the debate, it would be helpful if he could say exactly how the Government will confront the crisis of the greenhouse effect if he does not believe that enforcement of energy conservation has a part to play.
I draw attention to two passages in the report of the Select Committee on Energy, entitled "Energy Policy Implications of the Greenhouse Effect". Paragraph 102 states :
"the most striking feature of our Enquiry has been the extent to which improvements in energy efficiency--across all sectors of the economy--are almost universally seen as the most obvious and most effective response to the problem of global warming".
That is the Committee's view and it is the view of experts. What is the Government's view? Do the Government agree? If so, what will they do about it? If they do not agree, how do they justify their splendid isolation on that argument? We need to hear answers to those questions.
In paragraph 146 the Committee states :
"It would be inexcusable if pusillanimity and the inability of the governments of the world to plan long-term allowed irreversible and disastrous global warming to occur for want of the means or political will to take effective action to curb it."
We and the Lords are proposing a way in which the Government could take effective action. The Government amendment is a way of taking no effective action and of ensuring that the problem will continue and get worse and that the civilisation to which we contribute will continue to be damaged. The Government must accept that their amendment is unacceptable and that it will have to be reversed. If this Government will not do that, a future Government must. The Secretary of State does not have the time that he thinks. Every scientific report suggests that the problem of global warming is becoming more and more urgent. Having just heard the Secretary of State's remarks, I advise him that it is a grave tragedy if he thinks that he and his party can continue to sit on the Government's green Benches and fail to grasp the nettle that the people of this country expect them to grasp. The sooner that he and his party are removed from office, the better. He has shown a total failure to recognise that representing commercial interests in this place is not what he is here for. As Secretary of State for Energy, he has a wider responsibility. His decision to move the motion to reverse the Lords amendment proves that he has failed in that responsibility. People will not forgive him for doing so.
Mr. Peter Rost (Erewash) : Increasing concern about the threat of global warming is rapidly rising to the top of the world's political agenda. I have attempted to assess the merits of the Government's new clause in that context. I have listened carefully to my right hon. Friend the Secretary of State, but in my view his approach does not offer an adequate response to what may well be the greatest environmental challenge that has so far threatened mankind. All the best scientific advice tells us that it may be another five years or more before international research studies can guide world politicians about the causes and effects of global warming. So far, all that we are certain about is that global warming is happening and that it is measurable. What we do not know yet is how much of the global warming is caused by mankind's distortion of the natural balance of global ecological systems.
We do not yet know the likely effect on sea levels, world climate, agriculture or anything else. We do not yet know how much global warming can be expected if we succeed internationally in stabilising carbon dioxide releases. We do not even know how much global warming is in the pipeline, resulting from increased CO and other gas emissions over recent decades. We do not know how long the lead time will be. We do not know how serious the threat may be if we succeed and begin to implement the Toronto conference proposal of a 20 per cent. world reduction in greenhouse gases by 2005.
However, what we do know and what we ignore at our peril is the fact that there is global warming. We also know the overwhelming consensus of scientific advice to us here and now. Until we can predict with more precision what may need to be done to save life on earth, all the authoritative voices are saying that in the meantime, as an insurance policy--even if it is a third-party insurance policy, rather than a comprehensive insurance policy--we need vigorously to promote energy efficiency.
Therefore, I urge my right hon. and hon. Friends to study the report of the Select Committee on Energy. It is all there. I believe that it is the most important report that the Committee has produced to the House in its 10 years' existence. It is by no means the first report in which we have recommended a policy of energy efficiency, but it is the most important report. We have gathered the most wide-ranging expert evidence, including from those scientists and energy experts who participated in the No. 10 Downing street seminar. They all came to the same conclusion--that the priority now should be greater energy efficiency because that is the quickest, least costly and least painful option and the one with the most potential. Judged against that overriding priority, I am afraid that I must advise my right hon. Friend the Secretary of State that the Government's proposal is inadequate. It does not have sanctions and it does not address itself to the priorities. I accept that the Lords amendment has technical flaws and that it might well discourage more efficient investment in power plants, such as combined heat and power even though such new investment would double thermal efficiency and thus make a greater contribution to reducing fuel consumption and pollution than would investing at the consumer end of energy efficiency.
However, I also accept that much of what needs doing cannot be included in this Electricity Bill. The distribution
Column 568companies can do a great deal and my right hon. Friend's amendment will direct that beginning. However, until the Government provide much stronger market signals for consumers, it will not happen. What we need is an energy efficiency Bill to meet the real challenge of global warming just as we are promised a green Bill next year. We need an energy efficiency Bill to build on what my right hon. Friend has done. I welcome his announcement this week about stronger building regulations. Such a Bill would at long last deal with a system of energy labelling--the labelling of buildings and energy appliances--which, through incentives and the fiscal system, would send the right signals to consumers. It would be a programme of incentives with some regulation and with a fiscal carrot and stick. We know that the potential for energy efficiency could replace the equivalent of 12 new large power stations, so reversing the annual increase in global greenhouse gases, and perhaps meeting the Toronto target of a 20 per cent. reduction. We also know that that would be cost effective because it would have a short pay-back period. It would be less costly than meeting the increasing demand with new capacity.
I understand the Government's reluctance to tie the electricity industry with unreasonable regulations. I accept that argument. On the other hand, the Bill provides tough regulations to promote competition so that we can put downward pressure on electricity prices. That will be done through a tough regulatory system. Should we not also accept equally tough regulations to promote greater energy efficiency in order to put downward pressure on global warming?
If the existing consumer signals--the market forces--are enough to provide greater energy efficiency, why has that not happened, particularly in the public sector where the Government's responsibility lies? An energy bill carrying a cost of nearly £2 billion could achieve a saving of 20 per cent. of taxpayers' money with a pay-back period of two to three years. That has not happened. We need a wider, all-embracing range of measures, putting energy efficiency higher in the Government's overall priorities. We use the tax system to promote high priority objectives in other sectors of the economy. That is why we provide tax incentives to people to buy their homes. It is not suggested that people would not buy homes if we did not provide them with a tax incentive. But we still provide that encouragement. We use the tax system to provide money for grants for urban renewal, industrial training and regional aids. We use the tax system--the carrot and the stick--to promote lead-free petrol, and I congratulate the Government on having done that. We use the tax system in all sorts of ways to intervene in the market place to provide stronger signals to consumers to do certain things. The time has now come--indeed it is long overdue--for us to do the same with a major programme of energy efficiency incentives.
I hope that my right hon. Friend will have the opportunity to stay on at the Department of Energy and that the Department will stay on for just long enough for him to put such a Bill on the statute book next year. Meanwhile, the Lords amendment has technical defects, so I cannot vote for it. But without a satisfactory Government alternative that meets the spirit of that amendment, I cannot go into the Lobby to vote it out of the Bill either.
Column 569I am not brave enough to predict how much time we have to tackle the probable threat of global warming. In due course, we shall know. I just hope that by then it will not be too late.
Mr. Peter Hardy (Wentworth) : I hope that the hon. Member for Erewash (Mr. Rost) will not come to regret that he had not the confidence to carry his argument to a more logical conclusion. However, I congratulate him on having argued the case for energy conservation for 10 years.
Mr. Hardy : It has been 10 years since the Government took office and for 10 years he and I and a few other hon. Members have been arguing for energy conservation and energy efficiency and we have become increasingly frustrated that the Government have given priority to the service of greed and the exercise of frivolity. The Government's exercise of frivolity leads me to my next point, which is that my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) would have spoken today as an active member of the Select Committee with the hon. Members for Erewash and for Havant (Sir I. Lloyd), but he is chairing the Standing Committee on the Football Spectators Bill. He would have made a useful contribution to the debate because the Select Committee offered the House useful advice which I regret that the Government have not taken. The same applies to the House of Lords Select Committee. Unfortunately, the Government maintain the line that the noble Baroness Hooper, their confident and ebullient spokesman in the other place, adopted in selling the Bill in the other place on Second Reading. The House should pay attention to the words that the noble Baroness Hooper used. In an important presentation of the Government approach she said :
"The Bill and public electricity supply licence also provide for the promotion of efficiency in electricity use. These are important provisions which wil be of particular interest to your Lordships. They impose a specific duty on the director and the Secretary of State, and public electricity suppliers will be required to provide guidance to their customers on the efficient use of electricity. The public electricity supply licences require each licensee to provide, within three months of his licence coming into force, information on the efficient use of electricity. Licensees will be required to revise this information as necessary ; and also to send information on energy efficiency prepared by the director to every customer, if so asked."--[ Official Report, House of Lords, 25 April 1989 ; Vol. 506, c. 1155.]
The Government will do all those wonderful things so long as the customer knows that he has the right to ask for the information. We have the hon. Member for Havant who recognised the fragility of our planetary system, and the hon. Member for Erewash who has for 10 years or more served the cause of conservation, but we have a Government who are more interested in a Football Spectators Bill and in serving dogma than in contributing to the survival of the planet. A few moments ago the hon. Member for Erewash expressed anxiety about whether the Department of Energy would survive. The Secretary of State appeared to be complaining that the Opposition did not have an energy policy. But we would have a Department of Energy because we recognise that an energy policy is vital if we are to manage the affairs of our planet in the hope of creating the prospect of survival within the next few decades.
Column 570On Monday 17 July, the House debated the Antarctic Minerals Bill. During that debate I made the point that some of the Antarctic pack ice is scores of thousands of years old. In that ancient pack ice, pockets of air have been trapped since its formation. That air has been measured and the proportion of carbon dioxide in the air in that trapped air is half what it is at present in our planet. In the face of that change, a change which is almost certainly accelerating rapidly, the Government have an obligation to seek to contribute to survival. Therefore, it is a pity that we have seen an utterly counter-productive exercise.
In the next few weeks, I understand that hundreds of cups and saucers bearing the mark of the CEGB, or E, representing the publicly-owned electricity company, will go out of use because the private sector cannot possibly allow publicly-owned and publicly-purchased cups and saucers to bear the brand of the publicly-owned industry. It will go out and buy more.
The Minister knows, and the Select Committee recognised, that enough money was spent last year to employ 222 people and this year 749 people, not to contribute to the survival of the planet, but simply to promote the organisation of electricity privatisation. There has been clear evidence of fecklessness and frivolity. It is regrettable that the Secretary of State, rather than seeking a way to make the minor flaws in the amendment acceptable, should prefer to return to the present grossly unsatisfactory position.
Mr. Michael Stern (Bristol, North-West) : As I am conscious of the need for brevity, I shall concentrate my remarks on two of the points made by the hon. Member for Sedgefield (Mr. Blair). He began--I believe that it is a frequent trick of members of his profession--by making a statement with which he said everyone would agree. I certainly do not agree. It was that energy efficiency is the best way to combat global warming. Perhaps the hon. Gentleman believes that, but it is rather like the White Queen asking Alice to believe six impossible things before breakfast.
I remind the hon. Gentleman of my comments on Second Reading, when I said that in more than one third of the world the energy intake available to each person was less than one tenth of the energy intake available in the developed world. In those circumstances, I do not understand how anyone could suggest that energy efficiency is a solution to the problems of the world. A reduction in energy production would inevitably mean condemning one third of the world to continuing grinding poverty. Quite frankly, that would be an expression of inhumanity that I had thought that even the Labour party had abandoned. A policy of energy efficiency to solve the problem of global warming would be at such a cost to humanity that most of us would consider it unacceptable.
The second point in the hon. Gentleman's speech which struck me with some horror was when he criticised the Government's amendment because it did not set targets for energy demand. I hate to have to tell the hon. Gentleman this, but it is not a function of the Bill to set targets for energy demand. Indeed, it is not a function of Government to set such targets. We have, thank goodness, moved beyond the days of rationing when a Government could say to ordinary people and to industry, "You may have so much and no more."
Column 571The hon. Gentleman might suggest that the amendment should set targets for energy demands, but not have the power to enforce those targets. I would not trust any Government with having that power and never using it. The hon. Gentleman's criticism of the Government's amendment is, therefore, a criticism of the Bill because it does not take us back down the road, which he clearly would prefer, of a controlled economy. The hon. Gentleman's complaint is that it is not a paving stone on the road to state control. As such, not only do I reject the Opposition's criticism but I earnestly commend the Government's amendment to the House.
Mr. Alex Salmond (Banff and Buchan) : I wish briefly to support my two colleagues on the Select Committee who have already contributed to the debate. The Select Committee strongly supported the principles of the Lords amendment. We wanted an obligation placed on the electricity suppliers to promote energy efficiency, with penalties if that obligation was not met. The Select Committee identified tariff control as the most effective means of imposing penalties. In no way could it be said that the Government's amendment is strong enough to meet those requirements. The Select Committee accepted that the Lords amendment was technically deficient, but it asked that the Government's response to it should reflect
"its intentions as fully as possible."
The Government's amendment certainly does not do that.
I wish to deal specifically with the Scottish position, and I hope that the Secretary of State will pay particular attention because most of his opening remarks were irrelevant to Scotland. Of course, in any electricity industry there must be a balance between security of supply and conservation. However, Scotland has a technical over-capacity of 100 per cent., a duopoly and an integrated structure. I do not think that there will be any competition in the privatised electricity industry in Scotland. Even the Secretary of State will admit that Scotland will have even less competition than England and Wales. In the circumstances of over-capacity and low or no competition, the privatised companies will have the strongest possible motivation for selling as much electricity as possible. Therefore, the regulator will have to have the strongest possible enforcement powers to ensure that the companies meet their energy efficiency obligations.
The Secretary of State did not deal with the circumstances in Scotland and his silent partner, the Minister with responsibility for electricity in Scotland, is not even speaking in the debate. Who, then, could deny the Select Committee's original advice that the distinctive nature of Scotland's electricity system demanded distinctive regulation if the interests of the Scottish people were properly to be protected? Would the Secretary of State like to intervene on this point?
I wish to make a few remarks about the process followed by the Select Committee. There was a difference in emphasis on a number of factors relating to the
Column 572greenhouse effect, but eventually all members of the Committee agreed on two points. The first was that action had to be taken to deal with the problem of global warming, which we thought to be a serious environmental challenge. The second was that, from the evidence presented to the Select Committee, it was clear that energy efficiency provided the best, quickest and most substantial means of making an impact on the problem.
The Lords amendment has had at least some success because it has persuaded the Government to think about the matter. I hope that the Select Committee's report on the greenhouse effect will make them think rather further than their glib initial response. Given the strength of evidence put before the Select Committee, and given the strength of opinion voiced in the Committee's two reports, we would be selling ourselves short if we accepted the Government's extremely modest amendment as being in any way adequate to deal with the problems.
Mrs. Teresa Gorman (Billericay) : There is concern that our climate is being substantially altered by an increase in the volume of gases, particularly carbon dioxide, in the atmosphere. However, it should be remembered that at least 99 per cent. of climatic effects are caused not by changes in the atmosphere but by the earth's proximity to the sun and to the effect of sun spots. The contribution made by the atmosphere to climatic changes is relatively minor.
It is also important to remember that the carbon cycle--the release of carbon dioxide into the atmosphere--is not a one-way traffic. Carbon dioxide is reabsorbed by the soil and oceans, and particularly by plants. Plants usually photosynthesise--and I speak as a biologist--at less than 50 per cent. of their capacity, but the earth's capacity to balance the effects of carbon dioxide is rarely discussed.
Whenever the greenhouse effect is debated, one often has to deal with a cascade of uncertain criteria. We should remember that when we start worrying people about melting ice caps submerging in water not only Southend but London and half of the British Isles. Although it is true that more fossil fuel is used today, the rate at which that use is increasing is dropping substantially. It is said by those who warn of a cataclysm that fossil fuel usage increases by about 4 per cent. annually, whereas the figure is now down to only about 2.75 per cent. There is awareness of the problem, and something is being done about it.
When my right hon. Friend the Secretary of State is pressed to make important policy judgments, I urge him to bear in mind the lack of scientific evidence on the true effect of the release of carbon dioxide into the atmosphere. I am not arguing that man's activities have no effect, because they have. If a forest is turned into agricultural land, if a swamp is drained, or if more fossil fuel is burnt, heat and gases are released into the atmosphere. However, I reiterate that the effect is largely self- correcting.
The heat effect is micro-related. Urban areas are heat islands, and their temperatures may vary one or two degrees from that of the surrounding countryside. Nevertheless, that extra heat is quickly dispersed and does not make a significant contribution overall. I urge my right hon. Friend to maintain a balanced view in deciding on future policies until such times that more scientific evidence emerges as to the true nature of the carbon dioxide problem and whether it is already being corrected through our awareness of the potential problem. Even so,
Column 573that problem is puny by comparison with the massive effect over the millennia of the earth's proximity to the sun and of the way in which the earth relates to the sun and moves around it.
Mr. David Steel (Tweeddale, Ettrick and Lauderdale) : Having listened to the hon. Member for Billericay (Mrs. Gorman), I am tempted to inquire of the Secretary of State what he intends doing about the proximity of the earth to the sun. I suspect that the Government have no more policy on that than they have on various other matters.
The debate should confine itself to the serious issue raised by their Lordships. While I am quite prepared to bow to the superior scientific knowledge of the hon. Member for Billericay, I believe that most people in this country assent to the simple proposition that we should use no more energy than we need for our normal daily and commercial lives. If we agree on that simple proposition, we must accept also that we are nowhere near to achieving that desirable objective. The debate in the other place, and public reaction to it, demonstrated widespread anxiety that far higher priority should be given to environmental matters.
The Select Committee chaired by the hon. Member for Havant (Sir I. Lloyd) produced a very cogent report, which received far more public attention than most Select Committee reports for the very reason that it struck an intelligent chord on the same theme. Now that the subject of energy efficiency is before us again tonight, we are obliged to ask ourselves what we can do, as mere legislators, to allay public anxiety and to make sure that in restructuring the electricity industry and the sale and distribution of its product we do not ignore the issues that have been raised. The feeble amendment that the Government invite the House to accept pays lip service to energy conservation but does nothing to promote it.
The purpose of the Bill is to privatise the manufacture and sale of electricity. I do not claim to be an expert economist, but I understand that those engaged in that process are primarily interested in making a profit. That is the purpose of the Bill, which is one of a whole series of Government measures dedicated to the pursuit of making money. One way of making more money is to expand the market in which one is manufacturing and selling. The legislation has an inbuilt impetus to increase energy consumption, so we must ensure that effective control is written into the Bill.
I agree with the hon. Member for Banff and Buchan (Mr. Salmond) that, thanks to the wrong forecasts made by the industry in the 1970s--the hon. Member for Midlothian (Mr. Eadie) will also recall this--on Scotland's future electricity needs, we were sold a pup in having to accept the construction of the Torness power station. The figures were completely bogus. As a consequence, Scotland is littered with mothballed power stations of every conceivable variety. It is not just a question of the Bill encouraging companies to manufacture more electricity but, as was said by the hon. Member for Banff and Buchan, in the case of Scotland, of selling what they are already capable of manufacturing in greater and greater quantities. If nothing is done, that is what will happen. Fortunately, their Lordships have given us a way of doing something by suggesting built-in controls.
The Select Committee commented :
Column 574"Only part of this considerable potential for energy efficiency will be realised if present circumstances and Government policies in particular remain unchanged."
The wording proposed by the Secretary of State means that Government policies will remain unchanged. The Committee's report added :
"Market mechanisms alone will not produce an adequate response." I do not see the hon. Member for Havant in the vanguard of those wanting a state- controlled economy, as was suggested by the hon. Member for Bristol, North- West (Mr. Stern). Indeed, the hon. Member for Havant is well known in this House for being a market freebooter. Nevertheless, he chaired a Select Committee that undertook a serious investigation of the issues and produced a sensible report. It concluded :
"A mixture of regulations, penalties and incentives is required to promote energy efficiency, and the Government should bring these forward."
Suddenly a solution lands on the Government's plate in the form of the amendment from another place. The Government did not even have to invent an answer because one was generously and kindly produced for them by the combined might of the minds in the other place, yet they spurn that proposal.
We must honestly admit that our country has not been very successful at, or interested in, energy conservation. Even if the hon. Member for Billericay is right--which I beg leave to doubt--about the minimal effect on the ozone layer of increased energy consumption, and although I am privileged to live in a part of the country that is relatively pollution-free, I noticed when I visited Northampton last weekend, which has beautiful countryside even if it cannot compare with the Scottish borders, that a brown haze of pollution was visible to the naked eye which came from the industrial towns in that part of the country. One does not need to be a scientist to know that that kind of pollution cannot be healthy.
In earlier years, the Government did a great deal through home insulation grants to help energy conservation. In 1987, however, they were stopped for all but those on supplementary benefit. We are no longer providing people with incentives to ensure that private dwellings are as energy-efficient as they should be; nor do we make much effort in the public sector--we need not go far from this place to see that.
I am a new tenant in the parliamentary annexe of the Norman Shaw North building. As my fellow tenants will know, in the dead of winter the place is boiling hot, and there is no control over the temperature. If anyone complains, a member of our efficient staff will come along and put lagging on the pipes, so that the excessive amount of heat that has been generated can in some way be suppressed and prevented from entering our rooms. If we cannot even get the temperature of this place right, what hope have we of sending a call for energy efficiency across the country?
The Government's replacement for their Lordships' proposals simply gives the regulator a possible responsibility--no more than that--to set standards of energy efficiency. Our amendment seeks to rectify that, and we shall divide on it later this evening. As was mentioned earlier, we have a precedent in British Gas. All that British Gas has done, however, is to produce a rather badly printed leaflet--available in some gas showrooms-- giving advice on how to promote energy efficiency. The electricity
Column 575industry is desperately in need of more than mere leaflets and advice : its need is much greater than that of the gas industry. The main failing of the Government's alternative proposal is that, in practice, it would have no teeth. If a supplier fails to comply with the provisions of the Lords amendment, on the other hand, the regulator has two real sanctions, over tariff increases and over permission to construct new plant. I think that those sanctions are essential in the public interest. I know that phrases such as "public interest" and "public service" have rather gone out of fashion in recent years, but I feel that in this context it is time that they became fashionable again.
Mr. Malcolm Moss (Cambridgeshire, North-East) : As a signatory of the early-day motion to which I am delighted to see that my right hon. Friend the Secretary of State has responded in the amendment, I--along with others--have sought to express my concern about energy efficiency. We expressed that concern for three reasons : we recognised its contribution to mitigating the greenhouse effect, we saw that it kept a downward pressure on electricity prices and, of course, we knew that it prevented unnecessary generating plant from being built and used.
Let us examine the history of the Central Electricity Generating Board, much beloved by Opposition Members--an example of an American vertically integrated monopoly utility. It built new capacity in the past without too much regard to the ultimate cost, and without any regard--as far as I can determine--to energy efficiency. Yet over the years we have heard nothing from Opposition Members about any of those deficiencies in the present system. To listen to them, one would think that the Government had done nothing.
It is time to put the record straight. Britain's rate of improvement in energy efficiency is now twice that of any other EEC country. We were once the seventh largest energy consumer out of 10 countries, and we are now the fourth largest out of 12, although our gross national product has increased by 25 per cent. in the past 15 years. The carbon dioxide generated from each unit of electricity has been cut by 33 per cent. in the past 30 years. In the past 15 years, energy efficiency measures have saved the country 122 million tonnes of coal equivalent. There is no room for complacency, but that is certainly not the record of a Government who are showing a lack of interest or involvement.
The Electricity Bill contains a large number of measures that seek to develop and promote energy efficiency, including the imposition of a duty of promotion on the director general and the Secretary of State, and licences issued to distribution companies will require them to promote energy efficiency. This could mean a whole new range of activities, as the privatised PLCs will be able to become involved in efficiency, manufacture and sale. The companies will want to keep customers' bills down, and will buy from the cheapest
generators--those that employ the most energy-efficient measures in their plant. Competition will mean that new technologies--for example, combined- cycle gas--will come on to the market for the first time. At a meeting yesterday, the new chairman of British Gas told us that he was involved in 20 sets of discussions on that new technology, including
Column 576discussions with National Power and PowerGen. It is important to remember that gas produces 55 per cent. less carbon dioxide than coal.
The Bill makes special provisions for renewable energy, which produces no carbon dioxide and no pollution. It has been given a market share of some 600 MW. Methane gas contributes 30 times more global heating than carbon dioxide : about 46 land-fill projects produce 41 MW.
Much has been said today about the American model--vertically integrated monopolies whose price increases are strongly regulated. The problem is that we have moved away from vertical integration : we now have a privatised industry on the stocks, and have separated generation and supply. In America, because prices are built into a formula based on the return on assets, there is always pressure on the utility to build new plant and increase the asset base--hence the need to introduce the corrective regulatory system called least-cost planning.
Least-cost planning, as set out in the Lords amendment, would drive a coach and horses through the negotiations in the free market between suppliers and generators. That is unworkable, as the proposers have admitted. The Government's amendment is much more sensible.
Mr. Rhodri Morgan (Cardiff, West) : We have all had to apply the principles of energy conservation to the length of our speeches. That is particularly difficult for politicians from my part of the world, but I shall do my best to limit my remarks so that we can complete the debate on the original timetable.
That does not mean that this is not an important issue ; it is among the most important issues of the current Parliament, and was recognised as such by the Prime Minister when she signed a declaration last Sunday, along with the other six leaders of the Group of Seven advanced industrialised nations. She said that from now on environmental matters would rank equally with economic matters, even at so-called economic summits of the Group of Seven. That illustrates the importance of putting the environment on the agenda : those, at any rate, were the Prime Minister's words.
We do not want to pass any legislation that does not accord with the spirit of that declaration--which the Prime Minister signed in all sincerity, as did her fellow signatories. This is the first opportunity that hon. Members on both sides of the House have had to try to put it into effect, and we should all be conscious of that when we decide how to vote.
As I intend to pass up the opportunity of commenting on hon. Members' speeches in the traditional way, I shall not deal with the rate of improvement in energy efficiency mentioned by the hon. Member for Cambridgeshire, North-East (Mr. Moss) or with the interesting idea of the hon. Member for Billericay (Mrs. Gorman) about carbon replacement therapy for the globe. I shall, however, refer to the statesmanlike speech of the hon. Member for Havant (Sir I. Lloyd), the Chairman of the Select Committee. I hope as many of the uncommitted as possible will give it serious thought, and will recognise that if a statesmanlike, experienced Chairman of the Energy Select Committee can regard the issue as important enough for him to criticise the Government's attitude, it bears thinking about on the Back Benches. What the hon. Gentleman was really saying was that when we have all left this place our descendants will ask us, "What did you do
Column 577in the great war against energy, waste and inefficiency, Daddy?". The hon. Gentleman gave a strong signal that we should all follow. It is not just a matter of reading early-day motions. That is just the graffiti of the Houses of Parliament. What really counts is which Lobby we choose. When one compares the Government amendment, which is long on bumf and short on statute, with the Lords amendment, which tries to do something about a problem and which is generally recognised as capable of offering a major contribution to the solution of global warming, making better use of financial resources and entering into the spirit of the G7 summit declaration last Sunday, the way in which we should bend our thoughts is clear.
Sometimes we reject Lords amendments because we feel that the Lords are talking for the landed interest, but in Lords amendment No. 3 they are talking for the whole country and for what people outside want. With the full authority of my right hon. Friend the Leader of the Opposition, I offer an electoral pact to all Conservative Members who signed that early- day motion. If they join us in the Lobby tonight, we will write a letter to the Green party asking its members not to stand against them at the next election. I cannot do better than that. Do we want it said of us, when we consider energy efficiency and conservation, that we accepted the Government's pathetic attempt to replace the Lords amendment, when the Government's sole contribution to energy conservation is to cut down more forests to produce more junk mail, more leaflets, more bumf, more switch- off-something campaigns and more full-page
We should remember the Prime Minister's words to the Royal Society when she said that we only have a lease on this planet and we must hand it on to our children in at least as good a state as it was when we took it over. All Conservative Members who are thinking seriously about these issues and about their place in history and not about their relations with their Whips' Office will follow us into the Lobby tonight.
Mr. Parkinson : With the leave of the House, I thank my hon. Friend the Member for Cambridgeshire, North-East (Mr. Moss) for pointing out that, although a number of hon. Members making speeches tonight gave the impression that they had suddently discovered energy efficiency for the first time, over a period of years, as a result of persistent campaigns, Britain has achieved a first-class record of improved performance in the use of energy. My hon. Friend quoted a mass of statistics which I shall not repeat, but they demonstrated that, although Opposition Members have discovered energy efficiency for the first time, British people have been saving energy consistently and well for a long time.
America has been quoted to us as an example, presumably because of its amazing policies, as a country which we should aspire to emulate. Let me point out a few facts. In energy consumption per head, Americans use almost twice as much as we do ; in electricity consumption per head they use considerably more than twice the amount we do ; in energy consumption per unit of GDP they use nearly twice as much as we do and their emissions of carbon dioxide per head are almost twice as much as ours. The country which we are all being urged to emulate and which, presumably, is on to a lot of secrets to which
Column 578we have denied ourselves access performs about half as well by any criteria of energy efficiency one cares to name. We had a look at the state of Maine in which the hon. Member for Sedgefield (Mr. Blair) has suddenly developed an enormous interest. It has had least- cost planning, so presumably we should see the benefit, but its consumption of electricity is growing faster than ours. I can say only that by their work shall ye know them, and the results of access to the amazing policies which have gripped the imagination of Opposition Members, and some members of the Select Committee, appear not to be showing good results and to be leaving America very near the bottom of any energy efficiency league table that one would care to mention, in stark contrast with Britain.
The hon. Member for Sedgefield talked about 29 states in America. Even the arch-fanatic, Mr. Andrew Warren, has been able to identify only 10 out of 52 states, and admitted that only three of them are states with any remote competition built into their systems. The hon. Member for Sedgefield and the right hon. Member for Tweedale, Ettrick and Lauderdale (Mr. Steel) mentioned the fact that the word "may" was used. That is a statutory drafting practice where one does not specify in the statute itself exactly the terms which the person has to follow. "May" will be "will". The director general takes this duty extremely seriously, but he has to consult in drawing up the code of practice and performance. He will do that, he will implement it and he will have sanctions.
My hon. Friend the Member for Havant (Sir I. Lloyd) quoted with admiration California, pointed out that it has roughly similar energy consumption to ours, and said that it had saved $350 million a year. Our estimate so far is that our Energy Efficiency Office has helped to produce a saving of £500 million. He also quoted the fourth argument I used in my letter :
"The Amendment is illogical since it inhibits the construction of new capacity by the distribution companies."
He said that he did not understand what that meant. Perhaps had he read the second half of the sentence :
"yet it is the generating companies who will be building the lion's share of the new capacity"
it would have become clear to him that to impose a duty on the electricity suppliers--as the Lords amendment does--to inhibit their ability to build new capacity, when the new capacity will be built by the generators not covered by the Lords amendment, makes an enormous hole in the argument which he put forward.
My hon. Friend the Member for Havant was kind enough to say that the Bill contained a considerable number of powers, but he forgot to mention the effect of the new clause and the new licence conditions, which were also ignored by the hon. Member for Sedgefield. The new licence conditions combined with the new clause will give the director general the power to set standards for promoting energy efficiency, and to enforce them ; and of course he has available to him the sanctions that anyone in his position would have. If the licence conditions are ignored, he has economic sanctions, he can go to court and get an injunction and he can force the supply companies to honour the code which he sets for them. That is an important sanction. The idea that the public electricity suppliers will behave with ill faith and ignore their legal obligations and that the director general will have no power to do anything about them is quite wrong.