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24 Feb 2003 : Column 29—continued
Mr. Tim Yeo (South Suffolk): I am grateful to the Secretary of State for providing a timely copy of her statement and the White Paper this morning. I share her concern about leaks. As she wholeheartedly deplores these leaks, will she confirm that they came not from the Department of Trade and Industry, but from No. 10 Downing street, which made a late draft of the White Paper available to a certain Financial Times lobby journalist last Friday? The same day, her Department seemed unaware that the White Paper was to be published today. The timing was presumably chosen to suit the Prime Minister's presentational timetable.
Seldom has a document that was so widely trailed and so eagerly anticipated been so disappointing. The White Paper is long on aspiration and short on conclusions. It ducks all the hard decisions, and leaves Britain without a coherent energy strategy just when clarity and decisiveness are most needed. It is not as though the Government have not had time to think about the issues. It is a year since the performance and innovation unit's report was published, and two and a half years since the royal commission published its report, but all we get from Ministers is a series of targets watered down into aspirations, and bland statements that would scarcely rate a pass mark in a GCSE economics exam and which bear all the hallmarks of the cut-and-paste techniques now favoured by 10 Downing street.
The White Paper has had the gestation period of an elephant, and at the end of a lengthy labour the Secretary of State has delivered a mouse. It is a typical new Labour exercise, full of overblown prime ministerial rhetoric and claims, and its content is wholly inadequate to meet the challenges that Britain faces.
Governments have two responsibilities in relation to energy policy: first, to ensure security of supply, and secondly, to meet our environmental commitments. The White Paper fails abysmally on both counts at a time when Britain is moving from self-sufficiency in energy supply to being a net importer, and when the Government's failure to achieve reductions in carbon dioxide emissions is serious.
Incidentally, the Secretary of State's claim in her statement that the
- "United Kingdom is already on course to achieve our Kyoto commitment to reduce greenhouse gas emissions"
The Prime Minister, in his foreword, calls the White Paper
- "a milestone in energy policy",
We welcome the references in the White Paper to the importance of improving energy efficiency. Nevertheless, experience shows that relying on greater energy efficiency to achieve half the carbon dioxide savings required is wishful thinking. Although the White Paper admits past failures, for example on condensing boilers, it does not provide any policies to deliver micro combined heat and power in the future, which could be an important contributor to greater energy efficiency and generating capacity.
The Conservative party fully supports Britain playing its part in meeting internationally agreed targets to tackle climate change. That process originated under the Conservative Government. Will the Secretary of State tell us whether she believes that other countries will now commit to a 60 per cent. target cut in carbon dioxide emissions by 2050? Will she confirm that it would be economically damaging for Britain to impose such a target unilaterally? What discussions have taken place recently with the world's largest emitter, the United States, about its commitment to reducing carbon dioxide emissions? Why are the Government persisting with the climate change levy as one of their primary instruments for achieving a reduction? Does not the Secretary of State recognise that the climate change levy is unfair, arbitrary and ineffective in its impact? Does she understand that a comprehensive emissions trading system would provide a fairer and more efficient way of cutting carbon dioxide emissions? Why does the White Paper not admit the failure of the climate change levy, and announce its immediate replacement?
Will the Secretary of State confirm that the Government's existing emissions trading system is incompatible with the European Union scheme, and that the EU scheme itself is not comprehensive?
I welcome the overdue signs of realism in Ministers' minds in relation to renewable energy. Will the Secretary of State admit that when the White Paper describes the target of 10 per cent. of Britain's energy being supplied from renewable sources by 2010 as "very challenging", what it really means is that the chances of meeting it are remote? Will she confirm that that target can be met only at huge cost to both consumers and taxpayers, giving the lie to the Government's claim that they are concerned about affordable energy and fuel poverty?
Does the Secretary of State recognise that onshore and offshore wind, the two sources identified in the White Paper as the largest contributors of renewable energy in 2010, are not reliable sources, in the sense that there is no guarantee that the wind will blow when electricity demand peaks?
Yet another example of the White Paper's failure is the lack of any new policy on combined heat and power. The Government are failing to meet their existing CHP targets, no new CHP arrangement is being constructed, and all the White Paper offers is
- "review existing guidance . . . continue to emphasise the benefits of CHP . . . work with Ofgem to keep these developments under review"
Will the Secretary of State explain why the Government have ducked any decision on nuclear power? Does that mean they believe that existing
nuclear power stations, which provide more than a fifth of current energy supplies, do not need to be replaced? What more do the Government need to know about nuclear technology or public attitudes before making up their mind?Given that the lead time for planning, approving and building nuclear power stations is very long indeed, does the Secretary of State agree that by requiring both the fullest public consultation and the publication of yet another White Paper before any decision can be made, the Government are effectively trying to kill off Britain's nuclear industry? Does she agree that in doing so she has made Britain even more dependent on imported gas? Are the Government content to make Britain's electricity depend on gas supplies from countries such as Russia and Algeria? Does the Secretary of State believe that in the event of a future energy crisis, Britain—at the western end of a gas pipeline that passes alongside Russia's biggest gas customer, Germany—could rely on that source of supply? Does she agree that, at the very least, the situation would require the construction of huge new gas storage facilities? Where will those be, and who will pay for them?
We waited a long time for this White Paper, but judging by its content I think it would have been better for us to wait a bit longer so that the gaps in the policy could be filled in and the uncertainties that it perpetuates could be resolved. The long lead times in the energy industry, and the fact that Britain faces the most acute energy challenges for a generation, mean that the Government's actions and, more particularly, inactions now will have effects in years to come which consumers will still be suffering, and paying for, long after the Secretary of State has begun to draw her pension.
This White Paper represents a missed opportunity that could have disastrous results. Dodging the difficult decisions today may mean that the lights will go off tomorrow, and will certainly mean that the bills will be higher the day after that.
Ms Hewitt: That was a bit rich, coming from the spokesman for a party that was responsible, in government, for the discredited pool system that gave us artificially high electricity prices for years, which encouraged massive over-investment in electricity generating capacity—over-investment that is still unwinding itself. That Government's only energy policy was to have no policy whatsoever.
The hon. Gentleman began by referring to carbon dioxide reductions and our Kyoto targets. I can confirm that we are indeed on course to meet not just those targets but, we believe, the more challenging domestic target that we set of a 20 per cent. reduction by 2010. It is true that for the last two years there has been a small increase in carbon dioxide emissions, but we expect to see a fall again this year when we have the new figures. We also expect a continuing downward trend that will not only meet the Kyoto commitments, but go beyond that.
As for the commitments of other countries, today, my right hon. Friend the Prime Minister announced that he and the Swedish Prime Minister have written to the Greek Prime Minister as President of the European Union to urge all our European partners to sign up to the target of 60 per cent. reductions by 2050.
The hon. Gentleman complained about the climate change levy, but that levy and the climate change agreements made under it, which deliver an 80 per cent. discount on the levy, are proving to be an extremely effective incentive for much greater energy efficiency and cleaner electricity within our industry, just as we thought that they would be. Britain pioneered voluntary emissions trading and it is already using that trading scheme to enable a number of companies to meet the commitments that they have entered into under the climate change agreements. As we say in the White Paper, as we move towards the new carbon trading system in 2005, we will look at how people move from the existing emissions trading scheme to the new trading scheme, and how the climate change levy fits in with that.
The hon. Gentleman complained about progress on renewables. Yes, it is a challenging target for 2010, and I mean precisely that. We put in place the renewables obligation only last year, so it is not surprising that it has not had much effect recently. We know very well, and we say in the White Paper, that we need to do far more year on year to ensure that we get the renewables electricity that we need, but the renewables obligation will build up to an enormous level of support for the renewables industry. It will be backed by the capital grants programme that I have just announced over the next four years and it will be reinforced from 2005 by the emissions trading scheme.
Let us recognise that, in Britain, we have one third of the entire wind resources of the European Union. Just as we used the coal reserves of our country to build our industrial wealth, so we can use our wind and wave resources to build the energy systems that we need for the future.
As for combined heat and power, we are already halfway towards the 2010 target and we have set out in the White Paper sensible, practical steps that will enable us to go the rest of the way.
The hon. Gentleman complained about the announcement that I have made today on nuclear energy. Let me make it plain that, although nuclear energy is a carbon-free source of energy, as I said, its economics are not attractive at the moment. The problem of radioactive waste rightly causes great concern to the public. The Secretary of State for Environment, Food and Rural Affairs is working on that issue at the moment.
It would have been foolish to announce, as the hon. Gentleman apparently wanted us to do, that we would embark on a new generation of nuclear power stations because that would have guaranteed that we would not make the necessary investment and effort in both energy efficiency and in renewables. That is why we are not going to build a new generation of nuclear power stations now. We are going to put all the priority on energy efficiency and on renewables, but we have not ruled out the possibility of needing some further nuclear capacity to meet our carbon targets.
On the issue of energy security, I disagree with every assertion that the hon. Gentleman made. We have access, potentially and already, to the extensive gas fields of Norway, with which we are working on a new treaty. Not only Britain but western Europe as a whole have been buying gas from Russia for the past 30 years
without interruption. Already the industry is investing in liquefied natural gas facilities and in storage that, in a new world of much greater dependence on imported gas, will enable us to ensure that we continue to meet our energy security targets as well as our environmental targets.
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