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Ms Hewitt: As I explained earlier, the Bill is not all that we are doing in respect of renewables or other aspects of the White Paper. The renewables obligation itself will build up by 2010 to be worth support of £1 billion a year. We have also extended the obligation to 15.4 per cent. by March 2016, so that investors can have no doubt at all about our commitment to renewable energy in the longer term. Indeed, we now have the first large-scale offshore wind farm at North Hoyle, which is already generating electricity. By the time it is fully operational, it will be capable of powering 50,000 households. Scroby Sands is under construction and consents have been given to a further 12 projects around the coast.

The effect of clause 120, however—it was also inserted by the other place—will be to take combined heat and power out of the renewables obligation base. That will mean either less renewable energy or, if compensating measures were in place to keep the obligation level, additional costs to electricity consumers of some £90 million a year by 2010. We continue to look for practical ways to support combined heat and power, which is facing particularly difficult times with high gas prices and low electricity prices, but we should not do so at the expense of renewable energy. My hon. Friend the Minister for Energy, E-Commerce and Postal Services will therefore seek to reverse that provision later in the Bill's passage.

Brian White (Milton Keynes, North-East) (Lab): My right hon. Friend will be aware that many renewables companies, such as Powergen and British Sugar, have said that support for the combined heat and power industry is necessary. They believe that use of the renewables obligation is the right way forward because the state of the industry requires such a step forward. Will my right hon. Friend take into account the views of those major renewables companies that are pressing for the clause to remain?

Ms Hewitt: We have worked extremely closely with the CHP industry but we do not want to support CHP at the expense of the renewable electricity sector or the renewables obligation itself.
 
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Mr. Andrew Robathan (Blaby) (Con) rose—

Mr. Bob Blizzard (Waveney) (Lab) rose—

Ms Hewitt: If hon. Members will forgive me, I intend to make a little more progress.

Part 3 creates the right legal framework to support future renewable energy developments further offshore, beyond the UK's territorial waters. It will pave the way for developments that could harness wave and tidal power, as well as wind, and it makes provision for new transmission networks to connect groups of developments to the shore. Part 3 will also allow us to move to a UK-wide system of tradable certificates for renewables electricity, once certificates can be issued in Northern Ireland and once Northern Ireland has implemented a corresponding system of mutual recognition.

The Bill provides for new arrangements for nuclear clean-up. The nuclear industry makes a significant contribution to our economy, but the liabilities of waste and decommissioned plants that date right back to the 1940s add up to some £48 billion, and they will need proper management well into the next century. Our White Paper in 2002 spelled out how we would manage that nuclear legacy safely, securely and cost-effectively in a way that ensures protection of the environment. Chapters 1 and 2 of part 2 implement that commitment.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): As the Secretary of State said, nuclear clean-up is a long-term commitment. The Government have insisted on a segregated account for that, rather than putting the money into a separate fund. Why do the Government feel they need a segregated account to allow flexibility when that will undermine confidence in future generations that the money will definitely be there? A segregated account will make it easy for future Chancellors to decide not to allocate money.

Ms Hewitt: The arrangements that we are making will make it quite clear, and transparently so, that the resources being dedicated to managing the nuclear legacy are used for that purpose.

The Bill will establish a non-departmental public body, the nuclear decommissioning authority, to manage those liabilities better, and that will be operational by April 2005, subject to the Bill's safe passage. The NDA will have further strategic control over all public sector civil nuclear liabilities. It will operate clearly and transparently, and by fostering competition for the management of sites, it will ensure that the best skills and expertise deliver the highest standards of clean-up most efficiently.

Chapter 3 modernises the existing policing arrangements for the nuclear industry, transferring the current UK Atomic Energy Agency constabulary to a newly created civil nuclear police authority, which will have responsibility for it. Chapters 4 and 5 include more minor updates and amendments to nuclear legislation, dealing with our international obligations in the event of a nuclear accident, and security of equipment and software relating to uranium enrichment and sensitive nuclear information.
 
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Mr. David Drew (Stroud) (Lab/Co-op): In order to meet our international obligations, we have to maintain the basic integrity of our nuclear industry. Will my right hon. Friend ensure that the Bill underlines the need to train and upskill the existing work force and to get younger people into the industry? If it does not, with the best will in the world, it will never fulfil its potential.

Ms Hewitt: My hon. Friend makes an extremely important point, which we underlined in the White Paper. Since we published the White Paper and made our commitment to working with the nuclear industry to sustain and grow the skills it needs, we have established a sector skills council, Cogent, which is moving forward on that matter. Quite apart from any issue about new nuclear build, the nuclear decommissioning and waste management operation will offer extremely interesting, well paid and highly skilled jobs for a very long time to come. The industry therefore offers wonderful career opportunities for young engineers and technicians.

Mr. Michael Weir (Angus) (SNP): Before the Secretary of State moves on from chapter 5, will she tell us something about the thinking behind clause 82 and the extra expenditures allowed by the Government to buy out nuclear power stations that may have been sold on to third parties?

Ms Hewitt: I am delighted to say that my hon. Friend the Minister for Energy, E-Commerce and Postal Services will deal with that point when he winds up.

I stress that we all appreciate the world-class scientific, professional and engineering skills of the people who work in our nuclear industry. I can also confirm to the House that the chosen location for the NDA is west Cumbria. I hope that there, and in the other places where the NDA will have responsibility for sites, we will develop even stronger clusters of nuclear business and talent. We will also give the NDA a statutory function to encourage and support the socioeconomic life of local communities and to work in partnership with people in those communities. It will have a key part, therefore, to play in the strategic taskforce for west Cumbria that is led by the Northwest Development Agency and which we announced in December last year.

Dr. Jack Cunningham (Copeland) (Lab): My right hon. Friend has been generous in allowing interventions. As she is talking specifically about my constituency and that of my hon. Friend the Member for Workington (Tony Cunningham), it is appropriate to say that we applaud and appreciate her decision to locate the headquarters of the NDA in west Cumbria and to set up a strategic taskforce to provide some joined-up thinking across Whitehall on the future of west Cumbria. However, there is a sting in the tail. To our great pleasure and the satisfaction of local authorities and the work force in the industry, the Secretary of State took that initiative in November last year, but the taskforce has not yet met. Can she tell us why?

Ms Hewitt: I am grateful to my right hon. Friend for the work that he did in bringing together some of the key partners in Cumbria to visit me, so that we could discuss
 
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exactly what was needed. My understanding is that the Northwest Development Agency is already in discussions with the local councils in Cumbria and that we are awaiting proposals from them. If it is not making satisfactory progress, I will make inquiries and ensure that progress is made because, like my right hon. Friend, I understand its importance to his constituents and the community.

I stress that the energy industries contribute 4 per cent. directly to the gross domestic product of this country and they power all the rest of our economy. There is no issue that is more fundamental to our economy, to the quality of our lives and to sustainable development and our environmental future. In the White Paper, we set out a 50-year vision of sustainable energy and how that could contribute to the shift to a low-carbon economy. It was a 50-year vision, but action started immediately. The Bill will move us even closer to the cleaner, secure and affordable energy that our people and our businesses all depend on. I commend the Bill to the House.

5.3 pm

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