---

Ms Joan Walley (Stoke-on-Trent, North) (Lab): It is always a pleasure to follow the hon. Member for South-West Hertfordshire (Mr. Page). He and I go back a long way, but I should point out that I do not share his conviction concerning a nuclear future. I want the Government to do everything that they can with renewables and energy efficiency, so that we can get to where we need to be. The Bill, and the new clauses and amendments that we are discussing, which were quite controversial in Committee, are all about security of supply. We must take the right action now to get us to where we need to be. We must avoid going down the nuclear route, and ensure that we have what we need when we need it.

The amendments and new clauses before us deal with perhaps the most complex and central issue of our time: how to provide the energy that we need. As was pointed out, there was a rebellion in Committee—we do not want another one this afternoon—but the Minister has listened to many of the arguments. It has been pointed out that the debate seems now to be about semantics rather than anything else; I hope that that is so, and that we are showing that this is an ongoing issue and campaign. We need to get the legislation right. We need to provide the tools to achieve the necessary investment in renewables, so that we get the energy policy that we actually need.

The debates in Committee centred on two main themes: residential energy efficiency, and the power of the regulator. The Government rejected a residential energy efficiency target, clause 3 was withdrawn, and there was a vote on clause 81. Many of us felt that that was a way of dealing with an issue that should have been dealt with in a more up-front way through clause 3. The most important point is that it is possible that existing carbon savings are simply not being counted. There was a great deal of frustration among many members of the Committee, including hon. Friends who are far more conversant with these issues than me, that the carbon savings had not been properly counted. In Committee it seemed wrong to go for a lesser target than that which we already had.

That is why I support my hon. Friend the Member for Milton Keynes, North-East (Brian White) as he continues to try to drive the agenda forward. He has tabled new clause 6, which deals with a policy goal. I do not mind whether something is a "target" or a "policy goal", but I do mind that we should have a Minister who aspires to make the carbon savings that we really need.

Mention has already been made of evidence given to the Environmental Audit Committee. We heard, for example, from the Energy Saving Trust and it is clear from its evidence that savings have been made, but are simply not being counted. There may be a role for the Sustainable Development Commission working with officials from the Department of Trade and Industry and, by that means, we could reach the stage that we should have reached in respect of energy efficiency. I believe that 5 megaton of carbon savings is absolutely on the cards, and we could achieve it quickly. I hope that in further discussions in the other place and in the
 
13 Jul 2004 : Column 1310
 
Minister's ongoing policy work—I do not mean only when he speaks on the "Today" programme, defending his policy so admirably at whatever time in the morning—the necessary action will be taken forward. We want the Minister to make the carbon savings that we absolutely need and ensure the security of energy supply that we also absolutely need.

The role of the regulator is important. New people are responsible for the regulator's work and we may never go back to the days of Clare Spottiswoode, when we were categorically told that there was no way that environmental sustainability issues could be taken into account. It may not be necessary to have everything built into the legislation, and I hope that the Minister can provide us with an assurance that a change of direction has already taken place. The Sustainable Development Commission, under the chairmanship of Jonathon Porritt, could be more actively involved in ensuring that the regulators are conversant with the way in which the new duties have been spelled out in respect of the Government's and the Minister's long-term objectives.

The Deputy Prime Minister made a statement earlier today in which he referred to the new programme of house building across the country, which I believe that hon. Members on both sides of the House support. The extent of new house building and modernisation and investment in our existing housing stock will make it more important than ever that we have joined-up thinking across government. We need to ensure that we consider the impact of the energy systems in new residential properties, which could be significant in terms of carbon emissions. We need to promote joined-up thinking through the Green Ministers Sub-Committee and we need much tighter regulations from the Office of the Deputy Prime Minister on energy efficiency. We might then be able to start to deliver some of the policy goals set out in the new clause proposed by my hon. Friend the Member for Milton Keynes, North-East.

I believe that the Government have an opportunity to drive this agenda further forward. The thrust of legislation on energy efficiency and renewables is right. I welcome the provisions on microgeneration, which will also help. The day-to-day implementation will be crucial and the devil will be in the detail of how we get to where we want to be in respect of averting global warming and meeting the Government's Kyoto commitments. The Prime Minister has pledged himself to meeting them and will speak at the G8 talks next year. I hope that our consensual debate means that progress will be made on those most important issues.

Mr. Weir: I shall be brief in the vain hope that we might reach the last set of amendments in due course, but I should like to make a few points about this important group of amending provisions. I support new clause 6 and new clause 19—despite its proprietorial implications, as pointed out by the hon. Member for Lewes (Norman Baker).

New clause 19 is, in fact, supported not only by Friends of the Earth, which the hon. Member for Salisbury (Mr. Key) mentioned, but by the National Farmers Union, Slough Heat and Power, the Renewable Power Association and many others. They all support it because it deals with an issue that is vital
 
13 Jul 2004 : Column 1311
 
to rural as well as urban areas. The renewable heat obligation provides the opportunity for biomass to contribute to our energy mix, which could be important for our farming communities as they look for new work to replace traditional work whose economic importance is not as great as it used to be. It also provides an opportunity for the forestry industry in Scotland, for example, to have an outlet for much of its produce.

I have already said that I support Government new clause 4, though I am slightly disappointed that its terms have been watered down. We debated an earlier draft in Committee, and I prefer the original wording. Microgeneration could be important in rural areas of Scotland where there is considerable interest in it, particularly on the part of those who have very expensive oil-fired central heating. Microgeneration provides an opportunity for replacing that fuel with a renewable source of energy, which would help many of our rural areas. It will become a very popular option if clauses 176 and 177 are passed in their present form and it will impact on many areas of Scotland.

I want to deal briefly with the regulator, particularly Ofgem, which the hon. Members for Milton Keynes, North-East (Brian White) and for Brighton, Kemptown (Dr. Turner) mentioned. I strongly agree that some guidance should be given to the regulator about how best to interact with Government policy, although I do not share the view expressed about the supposed improvement in Ofgem. My hon. Friend the Member for Banff and Buchan (Mr. Salmond) and I met representatives of Ofgem yesterday and, frankly, I was shocked at the fact that they did not seem to take any cognisance whatever of Government policy on renewable energy. Ofgem's entire raison d' être seemed to be to deal with markets and with what it saw as consumer protection. It did not take into account anything to do with renewable energy. In its calculations it did not seem to take into account what the Government are trying to achieve—an increasing element of renewable energy in our energy mix, which we all support.

That is a serious defect. By passing the Bill in its present form without addressing that problem, we are in danger of making it worse. We are all going forward together, across parties even, towards a renewable future, yet we may find it being sabotaged by the regulator, which is operating on an entirely different agenda. That is a serious matter, which the Government need to address. If they do not, the renewable future may go down the tubes very quickly.

3.30 pm

Mr. Colin Challen (Morley and Rothwell) (Lab): I am pleased to say that through the Bill, the Government seek to deliver power to the people. I always knew they would. New clause 4 puts that into practice. Microgeneration will give people at a local level or an individual level a high degree of control over their sources of energy supply. It is good not to be dependent on a supply industry that has under-invested. The grid, allegedly, is on its last pylons, if not its last legs. We are told continually that power stations do not have the necessary capacity and that we may face another winter
 
13 Jul 2004 : Column 1312
 
blackout crisis. We do not want a Californian situation in this country. That points to one good reason why we should give more control over these matters to people in their communities, just as is beginning to happen in Germany.

The hon. Member for South-West Hertfordshire (Mr. Page) asked why the period of consultation should last 18 months. He was given a good response to that from my right hon. Friend the Member for Cunninghame, North (Mr. Wilson) and my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley), who said that there are clear issues that the Office of the Deputy Prime Minister must grapple with. There are also issues that the Department for Environment, Food and Rural Affairs must address. I urge my hon. Friend the Minister to ensure that the consultation that flows from the clause is extremely thorough and that it is carried out in partnership with those two Departments, so that the impact of the clause on the announcements that we heard today from the Deputy Prime Minister is taken on board by the Office of the Deputy Prime Minister.

I am concerned that that may not be the case. There is a great enthusiasm to build as many houses as we can get for the price that we are prepared to set. We should examine ways of funding environmental improvements. The Barker review suggested a windfall tax on sales of land for housing, which is not a bad idea. We might also consider a windfall tax on the profits of house builders, and we could Government hypothecate those amounts to improving the environment. I hope that the consultation that flows from the new clause will examine such proposals.

Microgeneration offers a great opportunity for the Department of Trade and Industry to show that the United Kingdom plc has a new manufacturing base and a new manufacturing strategy. If we get that right, there will be enormous markets—for example, in the developing world, where small and remote communities would benefit enormously from cheaper solar power. There are, of course, many different ways of trapping solar energy. If we can develop it in this country, we will have a potential export industry of a high order. That would help our manufacturing plant.

The week before last, with other members of the Environmental Audit Committee, I visited Aberdeen, which is known as an energy town, second only to Houston. People in the oil and engineering industries there are looking for new ways of developing what they see as a declining industry. When we discuss new alternative technologies, it is important that we recognise that we are not necessarily against those in the existing energy and engineering industries—we could work with them.

I thoroughly support new clause 6. It represents the other side of the coin to the sentiment about power to the people. If people can generate their own power through microgeneration, it makes sense that they should not have to generate so much energy. Energy efficiency, the other side of the coin, is known as the fifth fuel. I am a little perturbed by the reduction of the target from 5 to 4.2 megatons.

In that context, my hon. Friend the Member for Milton Keynes, North-East (Brian White) referred to a memorandum and evidence to the Environmental Audit Committee from the Energy Saving Trust. On the same
 
13 Jul 2004 : Column 1313
 
day, 24 May, we also had before us representatives of the Carbon Trust, which was set up a few years earlier. It deals with the industrial and commercial side of energy saving, whereas the Energy Saving Trust is more concerned with the domestic side.

I was interested to note that the Carbon Trust said that the energy efficiency implementation plan would leave

"a gap to 2010 of around 4m tonnes of CO ₂ assuming the 20 per cent. goal is applied specifically to the business and public sectors. Clearly, this gap could still be closed by ramping-up existing measures and introducing new ones. This should be a key issue for the review of the CCP later this year."

I hope that that approach also applies to domestic energy efficiency. Both the trusts to which I have referred believe that a lot more could be done, but they would say that, wouldn't they? However, I tend to agree with them—a lot more could be done.

We heard in Committee that the shortfall on the domestic energy front could be made up, and exceeded, in the commercial and industrial sectors. If so, I do not see why the same approach cannot be adopted for domestic energy. Why does one sector have to be downgraded, and the other upgraded? Industry and commerce obviously contribute a great deal in terms of carbon emissions, but the many hon. Members in receipt of this week's report from the Confederation of British Industry will know that that body is worried that environmental measures could make business uncompetitive. That is a very valid concern.

The very noble cause of reducing fuel poverty is at the centre of Government strategy. The DEFRA chapter of the 2004 spending review talks about the environment, and shows that it is fuel poverty that drives the policy on energy efficiency in the domestic market. That is very worthwhile, but what happens when everyone is released from fuel poverty? Will there be an end to grants for insulation, the Warm Front programme, and the rest of it? Clearly, there needs to be a greater emphasis on environmental need. We should not concentrate solely on fuel poverty.

I shall end with a brief comment in support of amendment No. 20. The EAC heard from the UK World Business Council for Sustainable Development that it was in favour of inserting a tighter requirement on the regulator. It wanted to use the phrase "sustainable development", and I noted that my hon. Friend the Member for Brighton, Kemptown (Dr. Turner) spoke earlier about "renewable energy". Those may be narrow definitions, but any reference merely to "the environment" can mean so many different things that it could mean nothing at all. I hope that the Government will listen to the intent behind the amendment, and act on it in some way.

---