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Mr. McLoughlin: Is not my hon. Friend being a little too harsh on the Government? Is he aware that I
received from the Minister and the Under-Secretary of State for Trade and Industry, the hon. Member for Edinburgh, South (Nigel Griffiths), an unusual letter informing me that an energy Bill would be introduced next year and that they were in consultation with the Chief Whip as to whether it would be introduced in January? I thought that that was unusual, as I did not realise that junior Ministers were supposed to tell us what the Queen's Speech would contain. However, we have been told by those Ministers that there will be an energy Bill. The Government are obviously waiting until January as that is when they expect problems to arise. Presumably, that Bill will address all the problems that we are facing.
Mr. Yeo: The House and the nation have cause to be grateful to my hon. Friend for revealing that information, of which I was aware. I dare say that the Minister will rely heavily on the forthcoming Bill, just as Ministers relied heavily last winter on the forthcoming energy White Paper as the fount of all future wisdom. No doubt, the Bill will contain the solution to all the problems that I have mentioned.
I think that we should draw some reassurance from the fact that the Minister, with his triple responsibilities, is sufficiently on the case to make such an announcement. Those of us who can recall the battles for parliamentary time that occur inside government may also wonder whether he is trying to pre-empt some disagreement in the Cabinet about which Bills are included in the Queen's Speech. Perhaps the Minister will enlighten us later.
Mr. Peter Luff (Mid-Worcestershire): I am glad that my hon. Friend has broadened the subject of security of supply to cover the regular shortages of power that rural parts of the country, including my constituency, suffer. Will he take the opportunity to remind the Government that the problem must be better controlled, and that that applies not only to the impact on residential customers that he has already rightly highlighted but to the serious impact on the rural economy? Significant firms are often located in remote rural locations and they must have security of supply.
Mr. Yeo: My hon. Friend is right. The issue is extremely serious, especially for smaller businesses, which will not normally have the opportunity to invest in back-up generating capacity. Businesses can suffer not only great inconvenience but harm and severe financial loss when power is cut off. The experience in East Anglia last year was devastating, and my hon. Friend's constituency obviously suffered a similar experience.
Mr. Andrew Robathan (Blaby): The problem does not apply only to rural areas. In Narborough on the edge of Leicester in my constituency, there is a marked deterioration in service. I received a letter last week that complained about the number of power cuts and pointed out that Britain was not Iraq. What responsibilities do the Government have for the deterioration of service and the failure of power supply?
Mr. Yeo: My hon. Friend makes a powerful point, to which I hope that the Minister will respond. Perhaps it
would not be out of order if I referred to my hon. Friend's close interest in the energy industry. When I visited his constituency earlier this year, I had the opportunity of inspecting a possible site for a wind farm, to which, I believe, my hon. Friend is sympathetic.
Mr. Kevin Hughes (Doncaster, North): Will the hon. Gentleman answer a question about privatisation? He is right that our generation capacity is becoming aged, but it is not surprising that private companies are unwilling to invest heavily in replacing it. Did the Conservative party consider that when it privatised the generating industry? It is an important point.
Mr. Yeo: I thought that it would not be long before the hoary old chestnut of privatisation was mentioned. It would have happened previously had not the Labour Benches been so thinly populated for a debate on an extremely important subject. The disregard of London Labour Members for the devastating effects of last month's power cuts is clearly reflected in the absence of the majority of them. [Hon. Members: "Harry's here."] Of course, there are honourable exceptions. The hon. Member for Leyton and Wanstead (Harry Cohen) is in his place, as he is frequently. However, other London Labour Members are absent and the only explanation I can devise is that the Labour party is in a panic about the Brent, East by-election and that Members have been drafted there.
Let me deal with the point about privatisation. For almost all industries, privatisation gave us the opportunity to set in law requirements for higher environmental and safety standards than those that existed when they were in public ownership. All the privatised industries yield example after example of higher standards as a direct result of the transfer of enterprises from public to private ownership. Of course, the issues to which the hon. Member for Doncaster, North (Mr. Hughes) referred were considered when the electricity industry was privatised. Evidence clearly shows that, for example, investment in the national grid has increased substantially following privatisation. In the past, successive Chancellors of the Exchequer were keen to find public expenditure savings. The easy way to do that was through axing the capital programmes for public sector industries. That happily no longer happens. However, the Government's ambivalence about specific energy decisions is having an effect in deterring investment.
When the Minister replies, he will doubtless point out that a contraction in generating capacity has occurred through the operation of the market in the form of the new electricity trading arrangements. Of course, NETA has achieved a reduction in the prices that are paid to generators. However, it is worth pointing out that consumers have not enjoyed such a big cut in the prices that they pay. Nevertheless, as NETA metamorphoses next year into something that we may call "better" rather than "BETA", that will provide us with an opportunity to examine Ofgem's remit. In the light of the concerns about security of supply that are now more widely expressed than ever, it is not clear that the current remit gives a sufficiently strong market signal to ensure that long-term investment in, for example, gas storage capacity, will happen.
The Government's inaction in the face of short-term risks is matched by their refusal to rise to the medium and longer-term challenge. We have reached an historic moment in energy policy. For the first time in a generation, Britain faces the prospect of becoming a net importer of gas. In less than a decade, our ability to generate enough electricity to meet the nation's needs will depend on imports. The change is occurring at the very moment when international environmental commitments start to bite more sharply. Given the accumulating evidence of climate change, we should set an example by honouring those commitments. In seven years, half our gas may be imported. By 2020, 90 per cent. is likely to come from abroad, as North sea reserves dwindle.
Increasing amounts of gas will come from Russia, which has an even bigger customer on its doorstep: Germany. The gas that Russia sends to Britain may travel through a pipeline that runs across Germany. There are no prizes for guessing the country that will have priority if there are problems with supply. The Minister will say, "Never mind. There are other countries that can meet any shortfall." Indeed, there are: pillars of political stability such as Algeria and Iran. I suppose that Ministers have cynically calculated that they will have long left office and that the risks that they run with the security of the British economy and the safety and convenience of the British people do not matter a damn because they will not be around to be held accountable.
Mr. Timms: The hon. Gentleman overlooks the fact that Norway will supply gas to the United Kingdom. I hope that he will not describe Norway as an unstable source. However, the wording of the motion and his point suggest that he believes that there are other sources that we do not propose to access. What are they?
Mr. Yeo: I shall deal with the solutions shortly. The arrangements that could make it possible for us to import more gas from Norway are not fully in place, although I hope that they will be. Even when they are, the need to import substantial amounts of gas from other countries will remain.
Mr. Kevin Hughes: I accept the hon. Gentleman's comments about our future gas supply, but does he agree that it is time to stop wasting natural gas through using it to generate electricity? We do not need to do that and we should deploy it for domestic use.
Mr. Yeo: I am not sure whether the hon. Gentleman's view reflects the Minister's, but I perceive that the point is probably about coal. The dash for gas was driven significantly by environmental considerations. Britain has important commitments, which it needs to honour.
The irresponsibility of the current generation of Ministers may be cursed by the next generation of citizens. As the Institution of Civil Engineers, in its recent, rather damning report, pointed out:
- "If future gas supplies were interrupted, this country would have major difficulty in keeping the lights on."
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