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Mr. Bob Blizzard (Waveney): Has not the dash for gas done more than anything else to enable this country to meet its Kyoto targets?

Mr. Wilson: We will have that debate, but I was about to come on to renewables. If we had done more on renewables 20 years ago, we would have a better balance now, and we would not be starting from such a low ebb in renewables. Nobody underestimates the contribution of gas to the Kyoto targets. Whether that is why the dash for gas was embarked on might be another interesting question. It probably was not. What is undoubtedly true, however, is that, for the past 20 years, we have had a fantastic indigenous resource. We have been gas-rich, which has been a great asset for this country.

Also, given the power of hindsight—as was pointed out, this was not exactly unforeseen to start with—we will, in the space of 25 years, go back to being net importers of gas. At the very least, that seems to call into question whether that great indigenous resource has benefited from prudent stewardship, given that so much of it has gone in such a short time. That is history, however, and we are considering the future, and how dependent we should be on any one energy source.

Mr. David Drew (Stroud): To give complete balance to this picture, the other source of energy that we have not mentioned so far is nuclear. My hon. Friend will be aware that at the moment, in advance of the operation of

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the liabilities management company, there is a possibility of major realignment in generating capacity in the nuclear industry. Some of us are concerned about the speed at which that is being progressed. Will he assure me that Members of the House will be brought into any discussions that involve a public sector company, BNFL, and a private sector company, British Energy? There are major implications for jobs and the basic integrity of the nuclear industry.

Mr. Wilson: I shall say something about the nuclear industry later, but the very first people to know about the proposal to set up the liabilities management authority were Members of the House. My right hon. Friend the Secretary of State made a statement when the process to establish it was started. The work is going forward.

Before I move on to nuclear and other energy sources, I wish to say something about renewable energy and the crucial role that it will play in future. In fact, the PIU report concluded that promoting energy efficiency and the development of renewables should be the immediate priorities of a low-carbon energy policy. Renewables and energy efficiency were the big winners in the energy review.

I was an advocate of renewable energy many years before I took up this post, but I must point out that there must be healthy realism. The unfortunate reality is that renewables start from a very low base. They comprise just under 3 per cent. of our electricity supply. As I never tire of pointing out, most of that 3 per cent. has absolutely nothing to do with anything that has happened in the past three or four decades. It is due to the vision of our political forebears, notably the great Secretary of State for Scotland, Tom Johnston, who had the vision to put in place a programme of hydroelectric schemes. I join my hon. Friend the Member for Bolsover (Mr. Skinner) in pointing out that they were under public ownership. Hydro is still our No. 1 renewable. As a great believer in hydro, I would love to see a renaissance of new projects as well as the refurbishment of existing ones. We have made that possible through the inclusion of hydro in the renewables obligation.

Ms Debra Shipley (Stourbridge): A vision for the future of renewables means tackling the construction industry. Not only does it create a large proportion of harmful pollutants, but it could provide a solution to the problem of renewables. If we take the bull by the horns as far as the construction industry is concerned, every new building that goes up could be energy self-sufficient. The technology now exists. If we required all new buildings to be energy self-sufficient, the price per unit could make the policy economically viable.

Mr. Wilson: I entirely agree with my hon. Friend that the construction industry has a huge role to play in energy efficiency and in incorporating renewable technologies into new buildings. I had the pleasure of opening a new primary school—the Catchgate primary school—in County Durham the other day. It had been built along such lines and provides a model. There is no reason why any new school or public building should not be constructed without the same features being built into it. Wearing my other hat as the Minister with responsibility for construction, I make it clear that we are trying to drive forward such a policy through the rethinking construction

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agenda. That will ensure that features such as those incorporated in that school are provided for in design and construction and at the earliest possible stage in the project.

Hydro is still the main source of renewable energy, and the only other significant contributor in terms of volumes or power generated is wind power. We have a long way to go to meet the challenging target of obtaining 10 per cent. of electricity supply from renewable sources in 2010.

Mr. Gareth Thomas (Harrow, West): As well as the short-sightedness of previous Governments in not developing renewable energy sources, does my hon. Friend not accept that the planning system is probably the other most important factor in preventing the deployment of wind power? The fact that so many wind farm proposals are called in for planning inquiries imposes serious additional costs on the businesses that want to develop them. What hope can he give to the renewables industry that some of those difficulties will be sorted out?

Mr. Wilson: I agree with my hon. Friend's premise. Here is a sobering statistic: the forerunner of the renewables obligations was the non-fossil fuels obligation, and two thirds of the projects that were approved under the non-fossil fuels obligation have never happened. The great majority were blocked locally by planning objections. There is a clear dichotomy between the lip service that many people pay to renewable energy as a good thing in principle, and the attitudes that they strike as soon as something is proposed in practice in their localities. Many people in the environmental movement must start to square their conscience with their intellect. If they are in favour of renewables in general, they should also be in favour of renewable projects in practice.

Consultation is going on in England and Wales about the planning guidelines. Again, a balance must be struck. People should have the right to make representations, but they should not use delaying tactics. There must be a bias in favour of a balanced outcome rather than an inbuilt mechanism by which every project can be blocked. I hope that the consultation will be beneficial in clearing the way for many more projects.

Another issue that is being dealt with is the transportability of projects. One of the problems under the previous obligation was that if a project failed to get planning permission in the spot for which it was initially designated, it could not be taken elsewhere. If it becomes possible for a project to try another site where it might obtain planning permission, many of the projects may go ahead.

We can change the planning laws as much as we like, but unless there is a change of attitude and people are prepared to be reasonable, to allow projects to go forward and to recognise that they are beneficial to the local community as well as to the wider society, we will still face bottlenecks. We can have as many targets as we like, but we will not reach them unless the projects come to fruition.

Mr. Peter Duncan: The Minister referred to the inbuilt mechanisms for blocking wind projects. He will be aware

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that one of those inbuilt mechanisms goes by the name of the Ministry of Defence. What discussions is he having with MOD officials to establish how we can get through the bottlenecks that are stopping many projects that would otherwise have great potential for the Scottish and the UK economy?

Mr. Wilson: We should be fair to the MOD. It is often said that it is blocking everything, but it is not. Some 18 sites have been designated under the first tranche for offshore wind projects, and the MOD raised objections to only four. I hope that the other 14 can proceed. I do not take the issue of safety lightly. It comes above everything else and there are questions to be answered about flight paths and interference with radar. A wide range of issues apply to civil aviation as well as to military activity. The best approach is to work through the cases individually. I do not think that the problems will be as great as they are presented. I assure the hon. Gentleman that there is active dialogue with the MOD and the Department for Transport. I am due to meet Ministers from other Departments shortly to discuss exactly these issues. There is not a blanket ban from the MOD even on offshore projects, and it would be wrong to get the scale of the problem out of proportion.

Other than hydro, wind is the only other significant contributor to renewable energy. Other technologies exist, but little has been done to turn them into commercial industries. That is the hurdle that we must cross. The key mechanism that we have adopted to achieve that is the new renewables obligation for electricity suppliers that came into effect on 1 April this year. It requires them to provide a rising proportion of their supplies from renewables, reaching 10 per cent. by 2010.

We have also exempted electricity from renewable sources from the climate change levy. All that means that across Great Britain as a whole, the total value of the market for electricity generated from renewables will be between £1.5 billion and £2 billion a year by 2010. A massive new industry is being created. In addition, we are providing support worth £260 million over the next three years to boost technologies that are at the demonstration stage—offshore wind energy, energy crops, wave and tidal and solar photovoltaics—and to enhance our research and development budget for renewables more generally.

I emphasise the point that renewables are not just about energy and the environment; they are also about manufacturing and jobs. There are significant opportunities for UK industry within our current targets, let alone those suggested by the PIU for beyond 2010. Even those do not take account of the massive global market that will exist in renewables technology and hardware. If UK industry responds to that, new generating equipment and services will be supplied by UK firms and the jobs will be located here. If our industry does not respond, however, imports will meet the orders.

I am pleased that there is much activity in that sector and many signs that industry has woken up to the opportunities. That is why I decided to establish a new unit—Renewables UK—within the Department of Trade and Industry. The overall aim of the unit, which is located in Aberdeen, is to maximise UK jobs, exports and investment in renewables by promoting the same enterprise and innovation that occurred in the oil and gas industries 30 years ago. In many ways, Renewables UK

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is an attempt to replicate the success of the Offshore Supplies Office set up by the Labour Government in the mid-1970s, which took the supply chain contribution by British companies to the North sea from virtually zero to well over 60 per cent. within a few years—and it has stayed at that level. I hope that Renewables UK and everyone else who works in the sector will have the same success in turning renewables into a major British manufacturing industry.

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