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Patrick Mercer: The hon. Lady makes a good point. If she had been at the exercise 10 days or so ago, she would have seen that it was wholly unrealistic. How does one plan such an exercise without providing financial compensation for ruining the City's trade for at least a day? If we are ever to get our heads around the problem, however, such a thing must be done. I hope to ask later whether such an exercise will be held realistically.
Mrs. Curtis-Thomas: The hon. Gentleman clearly illustrates the problem at hand but there are solutions. The whole transport system would not have to be taken down because one could choose to fail aspects of the system to discover the readiness of a working unit to deal with it. Many different industries use such a system and, although I am not an expert, I do not understand why it could not be used for the underground. I am worried about London Underground's response because although it was safe, it was not especially effective. I do not understand what the company will gain from the learning exercise.
I also have real worries about London Electricity. When London Underground was operating its power supply, it had its own staff, which was absolutely essential. They were highly qualified and experts in delivering power to the system. They knew that system intimately because engineers know the systems with which they are involved and can usually pinpoint a problem within minutes of it arising before taking appropriate action. But when power provision was transferred to London Electricity, one of the first problems that arose was that of communication between London Underground, as the users of the electricity, and London Electricity, as its suppliers. As we know from the significant arguments that took place here about the privatisation of electricity, inadequate communication between party A and party B can be a
significant problem following the fragmentation of an industry. I do not know what London Electricity has done to plan for disasters and emergencies and what correspondence and joint planning exercises it has conducted with London Underground, one of its major customers. Did they sit around a table together and say, "How do we plan for catastrophic failure of the underground? What is going to be our response and what is going to be your response?" My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) alluded to the failure of various parties to talk among themselves and to agree coherent plans. In this case, there is little evidence of the existence of a co-ordinated plan.The other element is the national grid. We have a three-party supply line consisting of the national grid, the local supplier and the end user. National Grid has developed a significant number of scenarios for power failure. That is impressive, and it is evidenced not least by the fact that per head of the population we have fewer power failures than any other country. That is an extraordinary position to find ourselves in: we should be grateful.
Mr. Mark Hendrick (Preston): Like my hon. Friend, I, too, am a chartered electrical engineer. What is her opinion on the recent power failures in the United States? I was in the US when the power failure occurred in London. There is still great debate over there about that failure and the qualities of a system that is even more fragmented than that of the UK.
Mrs. Curtis-Thomas: If anything should happen to my hon. Friend and me with regard to employment in this place, we will be safe in America, which has a desperate shortage of appropriately qualified staff to manage not only transmission, but integration. Two factors in the US failures were states failing to pay bills to providers and lack of capacity. I am pleased to say that capacity is not an issue in this country; it was certainly not a factor in the failure on the London underground. In fact, it was caused by human failure—the whole system was brought to its knees by the failure of one contractor. It is not the first disaster to be caused by the failure of a contractor: Hatfield was an example that had not only economic consequences, but caused devastating loss of life.
Speaking as a member of the engineering community, we have huge concerns about the shortage of adequately trained staff. The incident on the underground could have been caused either by an inadequately trained individual who simply made a mistake—human error is perfectly admissible and permissible—or by an individual who had received very little training in a very important system. That is not unusual. I started my engineering career in the 1970s; the world of the next 20 years was one of reduction, not expansion, in the UK's engineering capacity. When I was the dean of an engineering department, I had to preside over the closure of parts of it. I became increasingly concerned that, as a nation, we were not producing sufficient skilled tradespeople, incorporated engineers or chartered engineers to be able adequately to manage the infrastructure that exists today. There is an acute shortage of power engineers and heavy electrical
engineers. Those are not glamorous professions, but we desperately need such individuals, who are essential to companies' safe operation.Following the Hatfield disaster, there was much discussion about whether the rail industry would be able to hang on to its professional engineers, who were desperately worried about the lack of investment and the possibility that they would ultimately be left carrying the can. We now have massive expansion in public sector investment, but that cannot be sustained without adequately trained staff. I hope that the review will reinforce what came out of the Hatfield review—namely, that in order to continue to provide safe systems we need adequately trained staff. That means that we have to assess our capacity to produce those people and to make engineering and the activities of engineers attractive to a population of young people who are not interested in that enormously rewarding and exciting work.
That concludes my comments; I look forward to the Minister's response.
2.56 pm
Mr. Crispin Blunt (Reigate): It is always a pleasure to listen to an authoritative speech from a Member who is very well informed; I congratulate the hon. Member for Crosby (Mrs. Curtis-Thomas) on her contribution. It is extremely important that she drew to the House's attention, in relation to the London underground incident, the importance of differentiating the issue of capacity and the way in which the power shortage occurred in the transmission system. Her discussion of engineering capacity in the United Kingdom could have been delivered so effectively only by the former dean of an engineering department. That issue must be addressed through the reward structure and the way in which we view engineers in our society. Our engineering capacity has been central to our economic success for a matter of centuries.
The hon. Lady's point about the resilience of the national grid was also well made. If her figures are correct, the national grid is delivering electricity for the United Kingdom with the greatest degree of reliability in the world—although one or two tiny little countries may well seek to challenge that.
I congratulate my Front-Bench colleagues on raising the subject for debate. Security of the electricity supply is an immensely important issue. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) said that the general public are interested only in the consequences when things go wrong—and, boy, is that right! It is our duty as elected representatives to ensure that we do not put the general public in a position where they have to endure the consequences of our failure to look ahead. The greatest problem, which the Government still have to confront, is the failure of the energy White Paper to deliver a proper framework for energy policy.
This is the first opportunity that I have had to speak on the subject from the Back Benches since I ceased to be the Conservative party spokesman on energy in May. I congratulate my hon. Friend the Member for Tewkesbury (Mr. Robertson) on taking on those responsibilities. I hope that he finds them equally stimulating and that he finds working for the shadow Secretary of State just as enjoyable. We agreed about
many things and I very much appreciated the partnership. However, having departed the scene, there are one or two lines in the motion tabled by my hon. Friend the shadow Secretary of State to which I take slight exception.The Minister for Energy, E-Commerce and Postal Services replied to my hon. Friend and, outstanding as he is, it is too much of a burden for him to look after e-commerce and the Post Office as well as energy. It was not very long ago that energy had its own Department, with a Secretary of State in Cabinet. Given the challenge that the security of electricity supply will pose to the United Kingdom over the next few decades as we become a net importer of fuel again, it is important that we should have a Minister as talented as the Minister for Energy, E-Commerce and Postal Services but whose sole responsibility focuses on energy matters. The Government face serious challenges because of the sad lack of framework in the energy White Paper.
As for the security of supply and the Conservative motion, like the hon. Member for Crosby, I am reasonably reassured by briefings and information from the National Grid that any short-term problems in supply and capacity can be tackled, as it has 18 per cent. overcapacity, enabling it to meet the point of highest demand. Even in difficult circumstances, it has further tools available to it—for example, asking major electricity consumers such as aluminium factories and so on not to use electricity at certain times and to reduce their output by 10 per cent. In the short term, that gives the national grid the capacity to establish the required safety margin.
The Minister also drew attention to the fact that the price mechanism is now starting to operate. However, my thesis is that it must operate within a framework. It is our job as parliamentarians to examine the Government's framework and make sure that it is robust. Having studied these matters for nearly a year as my party's spokesman, I wish to elaborate on my proposals for that framework. In the motion, my hon. Friend the Member for South Suffolk (Mr. Yeo) draws attention to concern about the Government's plans
- "to make Britain dependent on gas imports from unreliable sources".
When I became shadow energy spokesman, one of the first issues on which I wanted to satisfy myself was the question of how much gas there is in the world and the security of supply risk to our major fuel. The simple answer was present in the Government's own analysis, initially from the performance and innovation unit and then in the energy White Paper. There is lots of gas out there—the Russians have about 30 per cent. of the world's supply and so far 100 years' worth of gas
supplies around the world have been identified. As we become a gas importer, we will have to address the issue of security of supply by having as many different sources of natural gas as we can reasonably achieve.That is why, in the wake of the White Paper, I watched with approbation the journeys made by the former energy Minister, the hon. Member for Cunninghame, North (Mr. Wilson), around the world as he tried to secure the gas supplies that are vital to our future interests. He was in continual negotiations with Norway over the delivery of gas from the north Norwegian sea, and went to Moscow, Algeria and Iran. I do not know whether he went to Qatar, but it is thought to have 8 per cent. of the world's gas supplies, so it may be another important gas source for us. I very much welcome proposals to create a Northern Natural Gas terminal to bring liquefied natural gas into the United Kingdom from areas where it is uneconomic to pump compressed gas.
I particularly welcome proposals for pipelines direct from Russia, thus avoiding the concern expressed by my hon. Friend the Member for South Suffolk that supplies from Russia will have to go through Germany before reaching the United Kingdom. The Government have made all the right noises about policy on the supply of fuel, particularly gas, being part of our European and diplomatic policy, and it is necessary that they keep up the pressure on that issue. It must be a high priority for everyone up to and including the Prime Minister whenever he is in discussion with Heads of Government, particularly President Putin of Russia, which has a large share of gas supplies, and other Heads of Government in the region. That priority is also central to our wider security and foreign policy in Iran and the middle east. It is important to ensure that the new Saudi gas deals—the Saudis have hitherto ignored their substantial natural gas resources, which are about four times as large as the North sea's—are concluded successfully so that western oil and gas companies can translate those deals into production and widen the sources of gas available to the UK.
Our energy shop is based on gas, whether we like it or not, so for the foreseeable future—certainly for at least the next two or three decades—we have no choice but to deal with the issue of getting gas from what the motion calls "unreliable sources". I am not convinced that we can be quite as complacent as the hon. Member for Hazel Grove (Mr. Stunell), who said that there is no risk to our security of supply. These matters must be kept under review, and that is properly the function of the review set up by the Government. However, we must also consider the national security aspects of the issue—ensuring the security of fuel supply will be an important part of our defence policy. The threat may be limited, but if it becomes a reality it would be catastrophic for the United Kingdom. These matters must therefore be kept under permanent and constant review. All the signs are that the world is becoming a more interdependent place. Using the interdependence of Russia and the United Kingdom as an example, that country needs our money as much as, if not more than, we need its gas. The lessons that we can learn from the oil price shocks of 1974 and 1980 and the way in which the Organisation of Petroleum Exporting Countries has since managed its
policies are that it suits countries with natural gas to ensure that the world is reliant on a constant supply of natural gas. If our industries become reliant on cheap and constant supplies of gas we will not start looking around for other fuels. The oil price shocks stimulated huge investment in the search for alternatives to oil, and in the end that did not do the oil producers themselves any favours. I believe that they have learned that particular lesson.The reference in the motion to the concern about gas imports from unreliable sources is intended to draw the Government into a debate about the fuel mix, which they have previously resisted. It is clear from the energy White Paper that they do not believe that that is a proper decision for government, and I agree with them. If we start going down that road, we are obliged to consider the alternatives to gas. The main source of fuel for electricity generation is coal, but the future of that is not frightfully bright—indeed, it is bleak. The large-scale plant combustion directive will make uneconomic a large proportion of the electricity supplied from coal-fired power stations, and once the emissions trading regime comes into operation and proper pricing of carbon dioxide emissions begins, it is hard to see how almost any form of coal-fired electricity production will be economic, compared with gas or alternative sources.
The Government are investing in carbon sequestration and trying to find a way of rescuing what is left of the electricity generating industry. We must consider carefully the scale of investment that might be required to keep coal-fired electricity generation staggering on. The investment may not be worth the candle. Any Government dealing with energy policy must recognise that the No. 1 requirement is to go on delivering secure and economic electricity supplies, because the wealth of our industry and our quality of life depend on that achievement. Privatisation has contributed greatly to the economic supply of electricity in the United Kingdom, as well as an extremely reliable source of supply in normal circumstances.
The saddest thing about the White Paper was its failure to address the future of the nuclear-generated electricity industry. The Government are doing the country a huge disservice by delaying a decision about that. They must put in place a framework within which future investors will be able to decide whether to invest in new nuclear power stations. Plainly, the Government will not build new nuclear power stations. I believe there is a way to achieve that, as part of an overall energy policy.
We need to create a proper free market in energy within environmental constraints. The vast majority of scientific opinion is agreed that the greatest threat to the planet is atmospheric pollution and climate change. The Government and the European Union are moving towards emissions trading for carbon dioxide. Sadly, that scheme will apply only to large-scale emitters. It will not be comprehensive and will cover only about 30 per cent. of carbon dioxide emissions. I hope to publish in the near future my detailed proposals for an energy policy for the United Kingdom that would provide a comprehensive environmental framework and would, as far as possible, price all greenhouse gas emissions associated with electricity production, transport and domestic use of power. We could then begin to price the comprehensive environmental consequences of what we do.
We have failed to produce a system that does that. The result is that the Government are giving huge support to renewable electricity generation, for example, although its cost is astronomic. The wind farms that are now attracting investment in order for investors to take advantage of the subsidy available from the Government are hopelessly uneconomic. They will be a huge cost to the country. There will be far better ways to achieve the environmental objectives associated with reducing greenhouse gas emission than the production of electricity from wind power.
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