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Mr. Byers: It is unfortunate that the proposals have not received a warm welcome. They reflect important progress in the development of an energy policy that is comprehensive and allows the market to work effectively. It is worth reminding the House of the mess that we inherited in regard to electricity trading arrangements. That is what happened, and Conservative Members know it.
There has been no U-turn. We clearly stated that we would ask the director general to report. He reported to me last Thursday on the progress made towards reform of
the electricity trading arrangements, and a copy of his report is in the Vote Office. The report makes it clear that the reform programme is almost complete, apart from the new trading arrangements. They will be introduced in October, which is why we shall be lifting the stricter gas consents policy then. That is entirely consistent with what we said at the time of the White Paper.The hon. Member for Tiverton and Honiton (Mrs. Browning) asked about Baglan bay in south Wales. We have always said that our policy in that regard is a stricter gas consents policy, not a block on any new development. When considering our proposals for Baglan bay, we noted that it had exceptional technology and was developing an energy park according to a high-quality plan, which we were prepared to approve in the circumstances. I was pleased that we were able to do that.
The German, Spanish and French Governments are able to subsidise their coal industries under the European Coal and Steel Community agreement, which the Conservative Government signed in 1993. [Interruption.] Both the right hon. Member for Wokingham (Mr. Redwood) and the hon. Member for Tiverton and Honiton were members of that Government. It was agreed that the arrangement would hold until 2002. The other countries are simply using the powers that the Conservative Government agreed they could use.
As for the question of civil servants, there is no truth in what was said in the Guardian article.
Environmental objectives are important. That is why we strongly support combined heat and power, and why we feel that gas-fired power stations will make an important contribution.
On the wider issue of subsidy, let me point out that the Government support shipbuilding through the shipbuilding intervention fund. I introduced a degree of flexibility to the arrangements that had not been there before, as a result of which orders have been secured for our shipbuilding and ship repair industry that would not have been secured otherwise.
The Government will provide subsidy where appropriate, but we will not do so in a way that props up failing industries. We will support industries that have a real future. Some of the industries that Conservative Members say have no future, such as shipbuilding and coal mining, do have a real future. People in those industries, and local communities, need to know that they have a Government who are on their side.
Mr. Dennis Skinner (Bolsover): Is my right hon. Friend aware that the Tories have a cheek to talk about subsidies because, a fortnight ago, there was an announcement that the farming industry would get several hundred millions and the Tories' answer was that it was not enough?
Will my right hon. Friend take it on board that, instead of handing over a big cheque to Budge, who got the industry for a song from the previous Government, it would have made much more sense to have taken the coal industry back into public ownership? Does he accept that some of us, especially in Derbyshire, where there is not a single pit left--they were all closed by the Tory Government--and where there is mass unemployment, will not take kindly to the idea of some of that money
enabling Budge and his allies to exploit opencast operations? It would be much better to ensure that all that money goes to deep mines only.
Mr. Byers: My hon. Friend will be pleased to know that, when the paper was submitted to us on the various options in relation to the coal industry, option number 15 was renationalisation of the coal industry, but we did not take it much further than that. On the significant point about support for the coal industry generally, we will have to introduce a scheme that does not discriminate against one sector over another. However, within the scheme, we will be able to give greater emphasis to particular parts of the industry. When we work up the scheme, we will be particularly mindful of the need to improve productivity, particularly in deep-mine pits.
Dr. Vincent Cable (Twickenham): I am sure that all Members representing mining constituencies, particularly my right hon. Friend the Member for Berwick- upon-Tweed (Mr. Beith), who has led the fight for Ellington colliery, will welcome the Secretary of State's support for the industry.
More broadly, I welcome the lifting of the moratorium on gas-fired power stations. Can the Secretary of State quantify some of the effects of that on the Government's Kyoto targets? Today's statement gives rather contrary indicators. It would be useful to know by how much the statement will contribute to the saving of carbon emissions, bearing in mind the fact that every unit of energy produced by gas produces 40 per cent. less carbon than coal.
How important is the high value of the pound for the difficulties of the coal industry, given that the pound has appreciated against the Australian dollar by 20 per cent. and against the South African rand by 40 per cent.--they are some of our major competitors? Does he not accept that the Government's inability to deliver a stable and competitive exchange rate is a major factor for the industry, as it is for other manufacturing enterprises?
Will the Secretary of State comment on this morning's Rowntree report on the effectiveness of Government aid to mining communities? It appears to suggest that much of the aid has been ineffectual and needs to be refocused in a radically different way.
Mr. Byers: Today's statement is primarily about the lifting of the stricter gas consents policy and deals with the consequences of that. It would have been foolish not to recognise that that significant change--which we want to introduce from October--will have an impact on the coal industry. The Government will not walk away from their responsibilities to the coal industry and to the communities that depend on coal mining.
On the specific points in relation to the Kyoto targets, the fact that more energy will be produced from gas-fired power stations will obviously make a significant contribution, but it will need to run alongside programmes that the Government are already introducing, particularly to develop cleaner coal technology, which we think will help, as we maintain the coal burn at least at present levels--I hope that those levels will rise as a result of our support--to make an important contribution to achieving those environmental objectives.
The hon. Gentleman mentioned the value of sterling. One of the key issues in coal importation, particularly from European countries, has been the subsidy received
by industries in those countries. The German coal industry, for example, receives from the German Government the equivalent of £56 million a week in subsidy. The United Kingdom coal industry has asked us for fairness, not favours. Fairness is achieved by providing a level of subsidy which--even at the modest £100 million that we may be prepared to spend--will still enable the UK coal industry to be competitive against German coal, as the UK industry itself is highly efficient.Like the hon. Gentleman, I have today read the Rowntree report with great interest. It contains important messages, but it also states that the particular needs of some of the communities that have been affected by pit closures will have to be met. I know that the Deputy Prime Minister will be considering very carefully the lessons that we can learn from the Rowntree report's findings and proposals.
Mr. Bill O'Brien (Normanton): May I express my thanks and appreciation to my right hon. Friend for his statement on energy policy? For far too long the coal mining industry suffered, particularly from Tory policies. His statement on help to the mining industry is therefore particularly welcome.
Is my right hon. Friend considering a long-term policy on the mining industry? If so, will he examine the possibility of introducing the fluidised bed system for generating electricity from coal? Introduction of such a system would be one way of ensuring a long-term future for the mining industry.
In considering the issue of combined heat and power, how much attention has been paid to using domestic and industrial waste in CHP programmes? Use of such waste would serve the dual purpose of generating electricity and heat and of disposing of waste that would otherwise go into landfill.
We have to address those issues. Doing that, and some assurances on a long-term programme for the coal industry, would be a major step forward in reassuring my communities in the Normanton constituency.
Mr. Byers: I thank my hon. Friend for his welcome of the measures that we have been able to announce today. He is right to say that the arrangement for the state aid that we wish to provide for the coal industry is transitional. We intend that the aid should end in July 2002, when the current European Coal and Steel Community agreement itself ends. We shall therefore have to consider other ways of planning for the industry's future.
I have no doubt that we will have to consider new ways of developing programmes. There will also have to be greater innovation in the coal industry if it is going to be in a strong position to compete in the years ahead. I have no doubt that, by providing this breathing space for the industry, it will be able to seize those opportunities.
My hon. Friend makes a very important point about combined heat and power and the use of waste. We are developing a policy on renewables, and the use of waste will make a very important contribution within that context. We have set a challenging but achievable target on amounts of energy generated from renewables. The opportunity of linking that policy with combined heat
and power offers some very real prospects of meeting both our environmental concerns and our energy objectives.
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