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Mr. Russell Brown (Dumfries) (Lab): Many Labour Members are in favour of the nuclear option being far wider than at present. I am not aware of any company or organisation that is falling over itself to build nuclear reactors. Is that not at least partly a result of the failure of British Energy, which is yet another failure of privatisation?

Mr. O'Brien: The hon. Gentleman encapsulates a number of issues that are highly relevant to the debate. The first is that, leaving aside decommissioning, which is of course what the Bill intends to do, nuclear does not receive subsidies in the same way that wind farms do, so it has to be said that the economics of new nuclear plants are not particularly attractive. The hon. Gentleman's points are more of an operational nature. The key issue is that Government policy should give signals about the expectation for the fuel mix for the delivery of our energy supplies. That cannot be postponed because the industry and providers need that knowledge, in proper time, to inform the decisions that they have to make on basic commercial and economic grounds.

Mr. Nigel Evans (Ribble Valley) (Con): Some people think that anything to do with nuclear is bad. Is it not bizarre that, although some Members say no to nuclear in any form, they are only too happy to import electricity from France, which draws 70 per cent. of its power from nuclear energy?

Mr. O'Brien: I agree—in fact, I think that the proportion is larger, at about 80 per cent. More to the point, because the French have been able to retain a vibrant nuclear industry, they have developed a nuclear energy capacity that is as safe, if not safer, more efficient, and even cheaper for the purpose of production.

My final point in response to the hon. Member for Dumfries (Mr. Brown) is that he should remember that nuclear-derived energy is subject to the climate change levy, despite the fact that nuclear produces no carbon dioxide emissions.

Mr. Bill Tynan (Hamilton, South) (Lab): The document "The Cost of Generating Electricity" has been mentioned. The hon. Gentleman says that nuclear energy is not economic at present. Does he not accept that, according to the costs set out in that document, it is very competitive with any other energy source?

Mr. O'Brien: I am happy to confirm that position.

Mr. Robathan : My hon. Friend knows that I am a great supporter of wind energy, but may I suggest an option for plan B if wind energy does not come up to expectations? If—God forbid—Labour were to win the next election and put in place a plan B that consisted of enhancing nuclear plant, what would my hon. Friend's reaction be?

Mr. O'Brien: That is an interesting speculation, which I might have explored later in my speech.
 
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As I understand it, Ministers are—perhaps unsurprisingly—involved in a deep ideological argument on the subject of nuclear that has the potential to do a lot of damage both to themselves and to the industry. On the one hand, we have the Secretary of State for Environment, Food and Rural Affairs, who last month told a newspaper that the prospect of new nuclear is

"not valid . . . come back in another generation".

The breathtaking arrogance and irresponsibility of that statement beggars belief. On the other hand, in December last year, the Minister for Energy, E-Commerce and Postal Services told the all-party nuclear energy group that

"we need the possibility of new nuclear build",

and only last Thursday, in response to Lord Tombs's unstarred question, which was supported by my expert and senior colleagues, DTI Minister Lord Sainsbury of Turville said,

"The first question is whether we should consider nuclear as part of the . . . plans for energy. The position of the Government is clear. We think that nuclear may well play a large part, for many of the reasons given in this House during the debate, including environmental issues and security of supply. But that is one issue, and that is why we believe that we must keep our option open."—[Official Report, House of Lords, 6 May 2004; Vol. 660, c. 1268.]

While Ministers continue to argue, nuclear generation's present 20 per cent. contribution to our power is declining, and it is expected to be as little as 2   per cent. by 2023. At the same time, our nuclear expertise is dwindling. It is simply not good enough for Ministers to postpone the debate until 2006. As my hon. Friend the Member for Blaby (Mr. Robathan) suggested, that might have something to do with the timing of the general election. The White Paper states that

"even without new build the nuclear fuel cycle, power generation and environmental restoration sectors are likely to need around 19,000 graduates and skilled trades people"

However, a parliamentary answer in the Official Report of the other place records that

"no universities currently offer undergraduate courses specifically in nuclear science and engineering."—[Official Report, House of Lords, 26 June 2003; Vol. 650, c. WA42.]

There are consequences to ducking the hard decisions today and coming back in another generation, as the Secretary of State for Environment, Food and Rural Affairs says we should do. We must find a way to make progress, because if the Government do not come out from under the covers, the House, the industry and the country will not be able to judge the desirability and doability of future nuclear build based on proven fission technology.

It is unacceptable that the White Paper clearly states:

"In the long term, nuclear fusion could provide power generation from an abundant fuel source with zero carbon emissions and without the problems associated with long-term highly radioactive waste",

when the DTI's most recent departmental report reveals a cut in funding for research into nuclear fusion from £15 million a year to zero for the foreseeable future. Either the Government believe what the White Paper says, in which case they should make the appropriate
 
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investment, or they do not, in which case they should state once and for all that the nuclear option is now closed—and wrestle with the consequences of that as a policy. At present, the official position stated in the White Paper is that "The initiative" for any nuclear build "lies with the market". That statement is somewhat cynical, as Ministers are fully aware, especially as the White Paper concedes openly that competitive markets cannot deliver some wider policy objectives.

That approach merely reaffirms the importance of our security of supply amendment in attempting to ensure that the Government do not shirk the tough decisions. At the moment, it seems, the only direction on which the Government are clear is signing up to an EU constitution that threatens to include an energy chapter, which, against the UK's national interest, would bring responsibility for security of supply under the control of Brussels rather than Parliament. Or is it just part of the tidying-up exercise? Taxpayers expect leadership on energy policy, but all they get is a mixture of high aspirations on renewables, low cynicism on the future of nuclear, blazing ministerial rowing, which has been kept largely behind closed doors, and a bloated and bureaucratic research and skills structure.

Science research councils have an enormous budget of £2.5 billion, yet for several of them administration costs represent 50 per cent. of income. Much of the energy research is being directed into renewables, and, as I mentioned, funding on nuclear fusion has been cut altogether. Meanwhile, the inordinate rise in the DTI's resource budget has been matched by bureaucratic proliferation of the various research and funding channels for energy, which now include the science research councils, the new sector skills councils, the Sector Skills Development Agency, the Learning and Skills Council, the regional development agencies, the Small Business Service and the Carbon Trust. A report entitled "Science and the RDAs" published last week by the Select Committee on Science and Technology in the other place concluded:

"The main message of our Report is the need for coherence, longer term perspectives and reduced bureaucracy".

I wholeheartedly concur with that conclusion.

This Bill, as now hugely improved by their lordships, is worth supporting subject to the detailed scrutiny and further improvements that we hope to secure in Committee, led by my hon. Friend the Member for Tewkesbury (Mr. Robertson). But, to substantiate the arguments that I have outlined, has the Secretary of State taken the time to study the serious, important and timely PricewaterhouseCoopers global survey published four days ago, in which security of supply is now seen as the leading strategic aspect of the power market? It states:

"Last year security of supply barely rated as a concern among European and US companies in our Movers and Shakers survey. It is now top of the industry's agenda. The blackouts have raised serious questions about the adequacy of transmission facilities, and whether the right signals are being given to the market in relation to ensuring sufficient investment in the required infrastructure."

British businesses are not alone and are right in highlighting security of supply as a key issue facing them, whereas the Government, in whom responsibility lies with the Secretary of State, are deliberately putting
 
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their heads in the sand over the future of the UK's secure, safe, affordable and sustainable energy supplies. As the fourth largest economy in the world, we have a right to expect the right signals from the Government and the regulator to create the conditions whereby the market can deliver security of supply and reassurance, for businesses and consumers alike, that there is a sustainable long-term strategy for the future.

It is about time that the Department discovered its focus and started delivering some bang for its bucks—all £8.2 billion of them—starting with setting out its medium to long-term strategy for the future of our energy supplies. It would be politically cynical in the extreme to put that off until after the general election, not least as price signals and investment decisions must be made now—as I said in response to an intervention from the Labour Benches—to stop the black hole becoming too big to fill or too high a risk of a gap between supply and demand. It is the responsibility of the Government of the day, and if they will not come forward with a policy on medium to long-term UK energy strategy, or at least a transparent debate in front of the people of this country, given the huge resources and access to expertise that they have at their disposal, which is not available to the Opposition, they should make way for a Conservative Government who will do so.

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