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24 Feb 2003 : Column 33—continued
Dr. Vincent Cable (Twickenham): I am not sure whether to thank the Secretary of State or the Prime Minister for the advance leaked copy that I received but perhaps she will pass on my appreciation to whoever it was. Having had a chance to read the report, I believe that it contains a great deal that is very welcome, in particular its emphasis on putting the environment at the centre of energy policy. However, there are some specific issues and questions that I want to deal with.
First, I welcome the emphasis on energy efficiency and conservation, but how can we take seriously the Government's commitment to energy conservation and fuel poverty, given that the Chancellor of the Exchequer is going to cut the warm front budget—the main practical instrument through which funding for energy conservation is delivered—by 15 per cent. from April? Why have the Government not come forward with proposals to replace those in the excellent private Member's Bill that was tabled by the hon. Member for Brighton, Kemptown (Dr. Turner) but sabotaged in the previous parliamentary Session?
Secondly, I welcome the emphasis on renewables, but can the Secretary of State confirm that—as I believe is correct—of the £1 billion of funding that she is discussing, not one penny is additional money? All of it constitutes funding already committed to support for renewable power, and the only funding outside that budget that will be made available is an additional £60 million. That contrasts with the hundreds of millions of pounds that her Department is throwing at the failed energy company British Energy.
Thirdly, on CHP, I welcome the Prime Minister's lending his authority to the White Paper this morning, but I wonder whether the Secretary of State remembers that four years ago, the Prime Minister launched the Whitehall CHP project—a project that now runs for only four hours a day. In the light of the Conservative spokesman's comments, what concrete action is the Secretary of State taking to deal with the immediate problems associated with CHP, given that output has fallen by 17 per cent. in the past year, and that three quarters of all capacity is currently under-utilised?
I congratulate the Secretary of State on standing up to the pressure that she was undoubtedly under to commit herself to new nuclear power in the White Paper. That is to be commended, but given that, in addition to the well-known security and environmental difficulties, the economics of new nuclear power are hopelessly unattractive, why do the Government feel that waiting another few years before producing the definitive view on this issue will add any new information whatever? Does she not accept that further procrastination both blights investment by the nuclear power industry, and makes it much more difficult for new investment to take place in renewables and other sources?
Finally, I also welcome the very sane and balanced way in which the White Paper deals with energy imports, particularly gas. However, does the Secretary of State
acknowledge that the main threat to this country comes not from dastardly foreigners such as the Norwegians, but from the serious problem that is building up in the industry of large-scale underinvestment in infrastructure such as storage, terminals for liquefied natural gas, and pipelines? When are the Government going to address this very serious and imminent problem?
Ms Hewitt: I am grateful to the hon. Gentleman for his overall welcome for the White Paper, and for his especial welcome for its emphasis on the environment. As for energy efficiency, I must warn him—leaks or no leaks—not to believe everything that he reads in the press. The warm homes programme has already been a considerable success. No decision has yet been made on the next stage of its funding, but I stress again—as I did in my statement—the importance of the energy efficiency commitment, and our intention to extend and increase it. Indeed, we shall also consult on its possible extension to the business sector, to ensure that the benefits already brought to the domestic sector are extended to business.
The hon. Gentleman mentioned investment in renewables, and he began by saying that there is no new money at all. I can confirm that there is indeed new funding of £60 million, which comes from the non-fossil fuel obligation, and a further allocation of £38 million that was part of last year's spending review settlement. That was allocated generally for energy, but I have now allocated it specifically to capital grants for the renewables programme. I stress to the hon. Gentleman that support for renewables does not, of course, come only from the taxpayer. It will come, in even more sizeable form, from the renewables obligation and from the carbon trading system.
The hon. Gentleman also mentioned CHP. We all know that it is difficult at the moment to make the economics of CHP work, with gas prices high and electricity prices low. That price situation will not exist for ever and, indeed, we spell out in the White Paper how we see electricity and other energy prices rising in the future, especially under the impact of the carbon emissions trading scheme. We are also taking action with the regulator, Ofgem, to ensure that the regulatory framework is properly suited to the needs of CHP and more generally distributed small-scale renewable sources. We are also proposing to put a statutory duty on the regulator to assess all regulatory proposals on their environmental impact. That will help to ensure that we get the regulatory climate right and obtain the investment that is needed in new distribution and storage infrastructure.
I know that the Liberal Democrats would like to rule out nuclear power forever, and preferably close it all down today—although that may not be the hon. Gentleman's personal view. The Tories would like us to commit to an entire new fleet of nuclear power stations today. Both are wrong. We have taken the responsible course that will meet this country's energy security needs and deliver our environmental targets.
Madam Deputy Speaker (Sylvia Heal): Order. I ask hon. Members to be concise in their remarks to the Secretary of State, so that more may be fortunate enough to catch my eye.
Mr. Martin O'Neill (Ochil): I welcome my right hon. Friend's statement and the White Paper. In particular, I welcome the incorporation of the timetable of the royal commission on environmental protection, which is more realistic than those we have had in the past. The royal commission placed some emphasis on a nuclear contribution, but—like my right hon. Friend—I think that it is unrealistic to discuss that at the moment, given the financial problems faced by the industry.
My right hon. Friend mentioned the importance of the co-ordination of the research contribution. Can she assure us that the Department will be more aware of the special pleadings that can come from research scientists? In the past, the old Central Electricity Generating Board researchers bedevilled the progress of investment in generation schemes by wanting a few dollars more, and more bells and whistles. We ended up being years behind with most of our major programmes. That meant that prices rose, although no one will be under any illusion that prices will not rise in future as a consequence of the programme of measures that my right hon. Friend has laid out.
Will my right hon. Friend bear in mind that there are still 2.5 million people, by her figures, in fuel poverty, most of whom live in hard-to-heat homes and are not necessarily helped by social security changes? It will be essential that she and her team fight and defend the budgets, which some see as inadequate now but which are under threat as a consequence of the costs of the foot and mouth epidemic and their effect on the budgets of the Department for Environment, Food and Rural Affairs.
Ms Hewitt: My hon. Friend is right to offer those warnings about the temptation to try to develop a uniquely British solution to technological problems. That was a trap into which the British nuclear industry fell in the past. I am sure that he will welcome the announcement today by the Engineering and Physical Sciences Research Council that it will invest more than £11 million in new research into renewable power generation, drawing upon some of the outstanding science that has been done in that area in the UK.
My hon. Friend is also right to draw attention to the need to ensure that vulnerable households, and people living in inadequately heated houses, are able to meet their energy needs. The White Paper has the balance right between ensuring that we do not price those people out of being able to heat their homes, and ensuring that we obtain private sector investment, and retain public sector investment, in energy efficiency.
Mr. John Horam (Orpington): May I thank the Secretary of State for publishing alongside her White Paper the Government's response to the Environmental Audit Committee's report on sustainable energy? I welcome the remarks made in the White Paper about renewables and the emphasis on the environment. However, now that the right hon. Lady has got her White Paper out of the way, will she inject some urgency and decisiveness into this snail-like policy-making
process? It is especially disappointing that a White Paper published now includes a plan for an implementation document in 12 months' time. Are we not in danger of paralysis by analysis?
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