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22 Oct 2002 : Column 232—continued

9.38 pm

Mark Tami (Alyn and Deeside): Thank you, Mr. Speaker, for giving me the opportunity to speak in the debate this evening. It is a pity that we do not have more time to spend on an issue of such great importance for the country.

The energy review published in February this year was a useful document identifying some of the key challenges facing Britain in the coming years. Identifying the problems is one thing; doing something about them is quite another. We have had reviews, reports and studies in the past, but we have never translated those into a meaningful and structured energy policy for Britain. In the pre-privatisation days, we relied predominantly on large coal-fired stations

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supported by a strategic nuclear component. I seem to recall that the three new coal-fired power stations that were due to be built by the Central Electricity Generating Board were cancelled directly after privatisation. We have not seen, and nor are we likely to see, the building of another coal-fired power station.

Likewise, nuclear generation enjoyed a turbulent ride through the privatisation process. First, it was to be included in National Power, but the City got cold feet and it was removed. The Magnox power stations were also removed and the rest of the nuclear power industry went to what has subsequently become British Energy. As in the case of coal, the end result is that we have not seen the building of another nuclear station and we are not likely to do so in the foreseeable future. The approach to renewables has perhaps been more consistent. The CEGB and the Scottish generators did not see them as a worthwhile and viable investment, and it is fair to say that the privatised companies have followed suit.

We saw under privatisation an incredible and ultimately unsustainable dash for gas that led to the early closure of many coal-fired power stations that could and should have produced energy for many years to come. That had the terrible effects on the UK coal industry that we have all seen. For the longer term, the dash for gas has had even more damaging effects. A country that rightly prided itself on being self-sufficient in energy production now faces dependency on imported gas in the not-too-distant future. We will be a net importer of gas by 2005. The energy review is not worried about the increased use of imported gas in terms of energy security, but I am not too sure about that. While supply might not be a major problem, we cannot guarantee price, and that must endanger security. The recent changes in gas prices have already had an effect on existing gas-fired stations and on the likelihood of further stations being built.

Where are we now? On the positive side, as many hon. Members have made clear, we have the cheapest electricity for 10 years. We have also made some progress on carbon emissions, although that is a by-product of the increased use of gas rather than part of any concerted plan of action. However, I do not think that we have addressed the major issues that we face today in terms of meeting our energy needs in the years to come and into the middle of the next century, while maintaining our presumably growing commitments on climate change.

The industry is currently geared almost purely by commercial decisions. While that remains the case, I cannot see how we will make a meaningful change in how we produce energy in this country. The energy review rightly calls for an increase of some 20 per cent. by 2020 in the contribution made by renewables. That is a very tall order and I think that it will be unobtainable if we are not prepared to grasp the challenge of greater intervention in the mix of fuel generation. The review rejects that possibility on the ground that it distorts the market, but surely that is the point. It goes on to say that the

If we are not prepared to intervene or exert influence, we will recognise what we have done only when it is too late. We will then have to intervene, as we will be at the

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last resort. If we leave things entirely to the whims of the market, the reality is that nothing will change, or if changes occur, they will be driven purely by price, rather than by any need for diversity or by environmental concerns.

Nuclear power currently accounts for 15 to 20 per cent. of our electricity generation, but that percentage will fall. By 2020, the majority of our nuclear power stations will have closed. We must either be prepared to accept that or to change it. We must face up to the current situation. While nuclear power is not and never has been the cheapest means of energy production, it makes a major contribution to reducing carbon emissions. We must consider nuclear power in a full light and not purely in price terms.

9.44 pm

Mr. Robert Key (Salisbury): The debate has been a wasted opportunity. A pathetic, 19th-century motion was followed by a limp, 20th-century argument from the Liberal Democrats. We should have discussed the future of energy—science and engineering. We want to be involved in nuclear fusion and on the way to the hydrogen revolution. We will get there through science and engineering. We must abandon the country's perception that it is anti-science. It is preposterous to debate energy in an anti-science culture that looks backwards, distrusts science and will not understand the reality.

The proposition that renewable energy is not favoured and is not on an even playing field with other forms of energy is ridiculous. The renewable energy programmes are important and we welcome them, but they would not have a prayer if they did not have free ride on the back of the formerly nationalised electricity systems. We must inject some science, technology, sense and engineering into our debates.

Some of us are convinced that we must have a new generation of nuclear stations, constructed with new technology. I do not mean the old-fashioned, defence-based technology, which, as we all acknowledge, had terrible problems in the past. We want to move beyond that, and I hope that the Government will have the courage to do that.

Will the Minister state that he genuinely wants to support the work in plasma physics at Culham, and to look forward beyond Jet to the ITER programme, which must be the greatest hope for the planet?

9.46 pm

Mr. Andrew Stunell (Hazel Grove): The debate has been lively and interactive. There are many points about which I wish to speak, but it is simply not possible to do so.

After six and a half years, we do not have a Government energy policy, and the payment of #650 million to one company constitutes another contradictory bombshell. Other companies are in the queue, holding out their begging bowls.

The Minister produced some good, knockabout stuff, which I enjoyed. I suggest that he speak to my hon. Friend the Member for Southport (Dr. Pugh), who is desperate for an offshore wind project near his constituency; he has been denied one by the Ministry of Defence.

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British Energy is 20 per cent. above the market price. If Conservative Members believe that a 20 per cent. price premium should be paid to keep the company afloat, good luck to them.

On security, more than 20 per cent. capacity above maximum peak demand is available. On diversity, my hon. Friend the Member for Twickenham (Dr. Cable) referred to the necessary portfolio of technologies. On safety, I point out that a series of nuclear plants have been successfully closed down in good order in the past 10 years. There is no problem about closing down the remainder.

It is important to keep the environmental impact of our energy policy in focus. My hon. Friend the Member for Twickenham made our position clear. If anyone wants more detail, I say for the third time in the Chamber, XPlease buy my book." It deals with the matter in depth.

The #650 million has been wasted. The Energy Saving Trust made it clear that if the money was invested in achieving the 20 per cent. improvement in energy efficiency in the domestic market, we could save the amount of energy that such plants produce.

The Energy Saving Trust has a budget of #28 million rather than #650 million. Much more could and should be done. I tell those people who claim to be in favour of both nuclear and renewable energy that there is a competition for resources in this country. The Government must decide whether to pump the limited money into a failed nuclear giant, renewables or energy efficiency and conservation. It is competition for resources that this argument is blowing to smithereens; this is not about pro and anti-nuclear arguments. The Government have so far failed to explain how high a price they are prepared to pay to keep British Energy alive. How will they be able to justify refusing bids from other firms and other technologies if they have rescued British Energy?

We had 20 minutes of knockabout from the Minister, followed by 10 minutes of evasion and three minutes of departmental brief, but we are still no clearer about where the Government stand on these matters. What is the Government's long-term energy policy?

Malcolm Bruce: Next week.

Mr. Stunell: Next week, next year, next decade—who knows?

Our motion poses serious questions not just about British Energy but about Britain's energy in the future, and I urge the House to support it tonight.

9.50 pm

Mr. Wilson: I am delighted to hear that the Liberal Democrat spokesman enjoyed my opening remarks, so I shall give him just one more. We have had an excellent, if all-too-short, debate and contributions from both sides have served the important purpose of feeding serious views on serious subjects into the White Paper process. I would welcome more debates and more dialogue, because they would allow people who really know what they are talking about to contribute to the White Paper.

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We have heard a great deal about renewables targets. This matter was summed up for me by a press release issued in Scotland. The Scottish Environment Minister, Ross Finnie, announced that the Scottish Executive were setting a new 40 per cent. target for renewables. Splendid! I have to say that I am slightly allergic to targets. If a target has been set for 20 years hence, for example, that can often be a substitute for the need to do anything for the next 10 years. Anyway, within milliseconds of that statement being made by Mr. Finnie—who, for the benefit of our external audience, is a Liberal Democrat—a press release was issued by the Scottish Liberal Democrat environment spokesperson, a Ms Nora Radcliffe MSP, under the inspiring—inspirational, indeed—headline

[Interruption.] I am sorry. Is that word taught in public schools? Do we all know what Xscunnered" means?

Ms Radcliffe went on to say that the main point in support of this 40 per cent. target was that

The comparison with wee boys—or, indeed, wee girls—in a playground making contrasts between their respective anatomies springs to mind here.

I do not want to labour the point, but setting targets achieves nothing. Delivery achieves something, and I hope that the Liberal Democrats will take my remarks to heart, because, instead of being regarded as the party of sustainable energy, as it would wish, it is in some danger of being regarded as the party of unsustainable hypocrisy.

The substance of this debate has been excellent. I fully respect the reasons why the Opposition spokesman has had to leave the House, but I want to answer some of the points that he raised on the nuclear issue. First, Project Blue is nothing sinister. That is not a name that I would have chosen myself, but the use of code words when discussing commercially sensitive information is perfectly normal, and there was no agenda there. The name describes a process of monitoring what was going on in British Energy.

That leads me to the answer to another of the hon. Gentleman's questions. Of course we knew that there were problems with British Energy, and we were monitoring them very closely. It is true that we did not know the full extent of British Energy's problems until the company approached us in early September. When the discussions between two commercial entities—BNFL and British Energy—concluded without delivering the solution that had been widely hoped for, the extent of the difficulties became apparent and the company approached the Government. There is absolute transparency about what we discussed and when we discussed it. I shall be happy to answer further questions if they are asked.

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