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5.22 pm
Mr. Richard Page (South-West Hertfordshire) (Con): I should declare an interest, because for a couple of years I had ministerial responsibility for renewables until I was given a little more time with my family, although not quite as much time as some of my hon. Friends. I am very much in favour of renewables, provided they are introduced in a sensible way and not at a completely uneconomic cost.
The hon. Member for Southampton, Test (Dr. Whitehead) is quite right—hydrogen is the way forward, and the electricity supply need not be a problem. All we need do is introduce a sensible programme of nuclear power. We would then have a base load, and would never have a problem with the electricity supply again. The Government are blinkered about anything to do with nuclear power, but it would be contentious to develop that argument.
Biofuels form part of the energy pie, but the flipside of that pie, if there can be such a thing, are the costs of pollution, CO2 and global warming. I promise not to be diverted down the route of making general points about renewable energy production, but biofuels play a part in such production. I welcome initiatives to reduce pollution and CO2 to achieve climate control, but they should involve an appreciation of the commercial world in which our industry competes. It is fine to say that we want reductions in emissions and carbon trading, but not if countries from which we import do not impose the same burdens—responsibilities may be a better word—on production. If we do not acknowledge that, it would be small wonder if plants continue to relocate to countries that do not operate such levels of control. Do we wish to increase the number of our industries that relocate overseas? Over the past seven years, more than 600,000 manufacturing jobs have gone abroad, and we should consider whether we want gratuitously to increase that figure.
Hon. Members have pointed out that biofuels have the virtues of a closed carbon cycle. The crop is grown, thanks mainly to the sun, which itself is a diminishing resource. There is not much we can do about that, but it should not worry even the younger Members of the House. The carbon from the atmosphere is locked into the crop, burned and locked in again—a balanced cycle and everything is hunky-dory. The process has the advantage of low pollution, it does not add to present CO2 levels and it can usefully employ set-aside. It could have dramatic price advantages, subject to Exchequer approval. As my right hon. Friend the Member for Fylde (Mr. Jack) said, there is sufficient tax headroom on the cost of fuels to allow the Chancellor to be quite generous.
The Government have helpfully signed up to the target for biofuel usage of 2 per cent. by the end of 2005. Unfortunately, that is the end of the good news. The target of 10 per cent. renewables by 2010 is, to put it bluntly, for the birds. It is completely unrealistic, unless the Government suddenly announce some secret scientific advance, such as that photovoltaic cells will have a conversion rate of three times the present level, or that after all these years a way has been found to harness wave power. I even heard one Minister, who had better be nameless—enough Ministers are in trouble already—say to an audience of energy enthusiasts that if we do not reach the 10 per cent. target by 2010, it will be the responsibility of everybody in the energy business, not of the Government.
I think that there is a reasonable chance that we can meet the target of 2 per cent. for transport usage in 2005, but if we miss it, I put the blame squarely on the shoulders of Government. The 10 per cent. level for renewables by 2010 is capricious; the 2 per cent. target is achievable. I shall not repeat what my right hon. Friend the Member for Fylde said about the Government's present position, other than to endorse his words when he called it muddled and unfocused. I say amen to that.
The NFU brief issued to hon. Members has been mentioned. The union believes that farmers, who have had a very rough time, could take advantage of the move to biofuels and put their set-aside land to productive use to reduce pollution levels. I support that.
How do we go forward, following on from what my right hon. Friend the Member for Fylde said? The hon. Member for Sherwood (Paddy Tipping) called us used chip oil recyclers, and he is not far off the truth. Burning fuel oil is not the cleanest activity. As someone with some experience in transport oils, I would regard it as a positive sales pitch to be able to say that there were biofuels in the mix, and that customers would be helping the environment. My hon. Friend the Member for North Thanet (Mr. Gale) mentioned the problem that the Exchequer has with a product going abroad and coming back in the form of biofuel. The DTI has grant facilities and support facilities, and I see no reason why it does not start—through the challenge process, say—competitions to build plants in the UK. Once there were plants, the feedstocks would come to this country, go through those plants and be sold in this country. That would be the start of a virtuous circle.
We have done that in the past. I remember that we gave support to chicken dropping electricity manufacturing—I think chicken litter is the polite word, although in the Department we used another word,
which had better not be used in the Chamber. It works, and we exported some of those plants abroad. Why not support the bioethanol and biodiesel plants? It would overcome the problem of going abroad.I should have liked to spend considerably longer on this important subject, but the fact that we are under time constraints shows Members' interest in it. I hope that the Minister will take note of that. I am sure that my right hon. Friend the Member for Fylde is right. Let us blend the biofuel with fossil diesel, with a price obligation in place; let the Government positively support biofuel production plants in the United Kingdom, and—who knows?—they might meet a target. That must be a bonus.
5.30 pm
Mr. Andrew Miller (Ellesmere Port and Neston) (Lab): I thank my hon. Friends in all parties for their courtesy in allowing me time to contribute. I want to begin by considering the phrase, "muddled and unfocused" debate, which many hon. Members used. It understates the complexity of the picture.
I should perhaps technically declare an interest because I shall comment on the benefits of liquefied petroleum gas, from which I benefit as a user. I have also contributed to creating a new carbon sink in my area by planting 850 trees last year. I therefore have a reasonable track record in making some positive contribution.
We all agree that there is no such thing as clean fuel. Even solar energy requires large amounts of glass to produce it, and that involves energy costs. We must exploit the best available technologies and, in the context of fuel that is used for generation, we must consider a balanced fuel policy. I believe that attempts in the vehicle industry to move towards becoming carbon free can technically succeed. I have had the privilege of driving two hydrogen-powered vehicles. One was a concept vehicle but the other was derived from a body that is used for a people carrier today. I am pleased that it will be in the United Kingdom next month. I hope that members of the Select Committee on Environment, Food and Rural Affairs will look at it. It is a Vauxhall-built vehicle.
I praise the work of the right hon. Member for Fylde (Mr. Jack) and my hon. Friend the. Member for Southampton, Test (Dr. Whitehead). However, I want to criticise one sentence in the Select Committee report. Paragraph 53 states:
- "In our view, the environmental performance of biofuels is at least as good as that of liquid petroleum gas."
I am proud that my constituency makes a big contribution to the good aspects. People view it as the dirty constituency, which makes all the things that pollute. However, recent work by the Environment Agency—it has not yet been published but I have permission to cite it—examines the total local impact figures of several vehicles that are currently on the roads. I am pleased that the first seven models on the list are Vauxhalls, which are built in my constituency and powered by LPG. Those are the cleanest vehicles
available today, using today's technology. Taking into account overall pollution, not simply carbon issues—a whole well-to-wheel analysis has to be done—those vehicles come out on top in an urban environment.I am certain, on the basis of my knowledge of the industry, that there is an important place for the biofuels technologies that have been discussed today. We need to support those technologies, and I accept the Select Committee's analysis in that respect. However, on our route to an affordable hydrogen economy—I am told that I could not afford to insure the two vehicles that I have driven because their capital costs run into millions of pounds—we must ensure that the transitional steps work. There is a problem with that, because we need to incentivise vehicle manufacturers, fuel producers and consumers, but at the same time, the Treasury has to raise income from somewhere. I say openly that I was delighted that the right hon. Member for Fylde was frank and honest about the possible increased costs of his proposal, but it was only a couple of years ago that Brynle Williams—who is now a Conservative Welsh Assembly Member—and his crew were leading protests against fuel duty. We will have to deal carefully and sensitively with the market issue, but I acknowledge that the right hon. Gentleman's point is important.
During the past few years, we have achieved just over 1,000 LPG filling points around the country. There are still gaps: LPG is not available down the Worcestershire stretch of the M5, for example, and it is also thin on the ground in rural Worcestershire, as I have discovered when trying to visit my daughter. However, as I said in my intervention on the hon. Member for Lewes (Norman Baker), it is readily available in Cornwall. The gaps need to be filled, and we need to keep the incentives going to fill them.
I am anxious that we should not allow this debate to submerge the importance of maintaining another good, clean, proven technology that involves vehicles made here in Britain and supports British jobs. Just like the jobs in East Anglia that the right hon. Member for South-West Norfolk (Mrs. Shephard) mentioned, those are British jobs, and we must support them. We must ensure that we do not incentivise one part of the market in a way that damages another. We must get the balance right, and the concept that my hon. Friend the Member for Southampton, Test dreamed up, and which the Committee has developed, might provide us with a route forward.
I urge my hon. Friend the Minister to acknowledge that in determining the best way forward we must continue to provide incentives to both LPG and the other fuels that we have discussed. I have already made that point to my hon. Friend the Economic Secretary. Those incentives must take into account the driving forces—if hon. Members will excuse the awful pun—that encourage fleet buyers to buy, and must also ensure that the costs surrounding the distribution of the fuels are met. If we get those parts of the equation right, we will continue to encourage important work, which UK plc can capture ahead of many of our European competitors, on the transition to a hydrogen economy. I am certain that we can deliver that transition.
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