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Ms Hewitt: My hon. Friend makes his point with great force—

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): May I just point out that far from referring to one pleasure boat when we talk about wind farms in shipping lanes, we are talking about major shipping lanes around the UK that are an extremely important part of our economic development?

Ms Hewitt: My hon. Friend makes an important point. We have looked very carefully at the report from her Select Committee and we will respond to it. Indeed, we have had a valuable debate on it. We took all such interests into account when we originally designated offshore areas as potential sites for offshore wind farms, including shipping interests; radar and other defence interests; and environmental concerns, including nesting of particular species of birds. All of those partners have been carefully involved in our plans for developing the sector and I do not minimise the difficulties.

I shall be interested to see where the Opposition end up on the issue. Will they support the development of renewable power that will make a hugely important contribution to our energy supplies in future, or will they line up with those who think that the future lies only in nuclear energy?

Mr. Salmond: The Secretary of State appears to agree with the hon. Members for Waveney (Mr. Blizzard) and
 
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for Crewe and Nantwich (Mrs. Dunwoody), but they argued diametrically opposed positions. Genuinely offshore wind power might be the answer that reconciles those positions, but under the Secretary of State's sunset clause it will become impossible to make the necessary billion pound investments, such as in the Beatrice field in the Moray firth. Scottish generators were promised a better arrangement that would reduce connection and interconnector charges. However, the Secretary of State's proposals, which Ofgem helped to draw up, could actually result in generators in the north of Scotland paying more under the new system. How can that be fair, equitable or just and how will it help renewables and other forms of generation?

Ms Hewitt: That matter was dealt with pretty extensively at earlier stages of the Bill and is one for Ofgem to decide. It is examining the issue extremely carefully with both the National Grid Company and the industry and I have no doubt that they will make the right decision and that we shall get the infrastructure as well as the generation investment that we need.

Finally on renewables, I remind the House that last December my hon. Friend the Minister for Energy, E-Commerce and Postal Services announced measures to increase the obligation to 15.4 per cent. by 2015–16 and to continue that level of support until 2027, providing exactly the long-term framework that is needed.

There has been much debate on the future of nuclear energy. There is no change to our policy and I echo the comments of my right hon. Friend the Prime Minister when he appeared before the Liaison Committee last week. Although he acknowledged the carbon-free benefits of nuclear power, he emphasised the point that the public still need to be persuaded both of its safety and its economic viability.

The plants that currently provide a rather important share of our total electricity are coming to the end of their life, building new stations is economically unattractive at present and we have yet to resolve serious issues relating to the disposal of nuclear waste. Alongside those issues, the Government have always recognised the importance of supporting the social and economic development of west Cumbria, which is so dependent on our nuclear industry and the skills of our excellent work force.

Tony Cunningham (Workington) (Lab): I thank my right hon. Friend for restating the Government's commitment to the economic and social development of west Cumbria, and also for establishing the West Cumbria strategic forum. It is important that the forum meets quickly, so can my right hon. Friend tell us when it will meet for the first time? Will local groups and local partners be involved, especially the local councils—Cumbria, Copeland and Allerdale? Their involvement will be vital to the success of the proposals.

Ms Hewitt: I am grateful to my hon. Friend not only for making that point but also for his work supporting the establishment of the West Cumbria strategic forum. It will indeed involve not only Whitehall Departments with a direct interest in west Cumbria, but also regional partners, including of course the Northwest Development Agency, and local partners, especially the local authorities of Cumbria, Copeland and Allerdale,
 
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as well as local community groups. Obviously, the nuclear decommissioning authority will also be represented.

I confirm that I shall be chairing the first meeting of the forum and that it will take place in early October. It will bring national focus and energy to bear on the long-term strategic issues that west Cumbria faces. We remain completely committed to supporting the Northwest Development Agency and its delivery bodies as the prime regeneration agency for the area.

Once the nuclear decommissioning authority is up and running, it will provide long-term strategic direction for the clean-up of our civil nuclear sites and will have responsibility for safety, security, environmental protection and value for money. It is the major achievement of the Bill and we all, on both sides of the House, want to see the NDA established by April next year, and the new electricity trading arrangements for Great Britain implemented in the same time frame.

In conclusion, I repeat my thanks to hon. Members from all parties for the constructive and positive approach they have taken to the scrutiny of the Bill. I have no doubt that we have a better Bill as a result of that scrutiny, building on the pre-legislative scrutiny that began in January 2003. Our improvements to the Bill will enable the NDA to engage in environmental schemes in local communities and we have set out in much more detail the scope of the annual reports required under the Sustainable Energy Act 2003. We have built in flexibility to deal with the effect of transmission charges on remote renewables generators—the problem we have just been discussing. We have given Ofgem a statutory duty to have regard to the principles of best regulatory practice. We have given more flexibility to customers on pre-payment meters to vary the terms of their supply agreements.

The Bill is an extremely important part of achieving those big energy goals that we set ourselves in the energy White Paper. I am grateful to all hon. Members for the consideration that they have given to the Bill, and I commend it to the House.

6.35 pm

Mr. Stephen O'Brien (Eddisbury) (Con): I welcome this Third Reading debate. The substantial elements of the Bill have our support, not least because of the extent to which it was revised and improved by the Opposition teams in the other place, where it was introduced and subjected to rigorous and expert scrutiny under the leadership of my noble Friend Baroness Miller of Hendon, and during debates here in Committee and on Report, which were expertly and responsibly conducted by my hon. Friend the Member for Tewkesbury (Mr. Robertson). Not for the last time this evening, I record my enormous gratitude to them for their positive contribution, and, indeed, to all members of the Standing Committee, particularly those of the official Opposition, who made important, cogent and expert contributions then and today. I pay tribute to the unfailing courtesy of the Minister for Energy, E-Commerce and Postal Services, who was responsible for steering the Bill through the House.
 
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The principal effect of the Bill will be to extend to Scotland the electricity trading arrangements for England and Wales, by replacing NETA with BETTA, and to establish a structure to safeguard and manage the clean-up of Britain's nuclear legacy, by establishing the nuclear decommissioning authority and a civil nuclear constabulary.

The Bill follows the 2003 White Paper, "Our Energy Future: Creating a Low Carbon Economy", which sets out the four goals of the Government's energy policy: to put ourselves on a path to cut the UK's carbon dioxide emissions by 60 per cent. by 2050; to maintain reliability of energy supplies; to promote competitive markets in the UK and beyond; and to ensure that every home is adequately and affordably heated. Measured against the Government's criteria, which I have just recited, no doubt, to their pleasure, the Bill substantively deals with only one of the four declared policy goals: the promotion of competitive markets.

Given that energy Bills are a relative rarity, the Government must concede that the Bill represents something of a missed opportunity, particularly in the context of the urgent need to address the challenge of climate change without jeopardising long-term access for the UK to safe, reliable and affordable energy supplies. That is not to say that none of the measures in the Bill is constructive. Many such measures were inserted at the Opposition's behest. Among the new clauses added to the Bill since Second Reading, I particularly welcome new clause 5, which secures the Government's concession to a commitment to make an annual report to Parliament on the availability of short-term and long-term energy supplies, to which I shall return in a moment, and which was secured only on the instance of and after protracted negotiations with the Opposition teams in both Houses.

I acknowledge the merit of introducing the renewable transport fuel obligation, although I note that the Secretary of State is merely awarding herself powers without specifically proposing to use them. Still on renewables, I welcome the amendment to clause 100 on duties in relation to navigation that prevent installations of offshore wind turbines in areas where they would interfere with international shipping lanes, although it is an inferior replacement to the similar amendment originally inserted in the other place under the authorship of Lord Jenkin, whose experience in energy matters is beyond dispute. I commend amendment (b) to Government amendment No. 5, which was agreed to during the last minute nod-through that we suffered in the guillotine on Report and successfully secured by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) to help to safeguard shipping.

I am pleased that the Bill contains a clause on microgeneration, noting again that its presence in the Bill is another triumph for the Opposition. However, we must wait to study the details of the strategy before we know how serious the Government are about promoting it. I welcome the fact that the Government have agreed that copies of the nuclear decommissioning funding account should be laid before Parliament, and I pay tribute to my colleagues, particularly my hon. Friend the Member for Tewkesbury, for securing its inclusion.

Notwithstanding those positive improvements and additions, the Government's reluctance to address the wider policy goals that they identified in the White Paper
 
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has been an enduring theme during the Bill's passage through the other place and then on Second Reading, in Committee and on Report. The most notable instance of the Government's aversion was seen during the flurry that followed the insertion of the so-called security of supply amendment by Opposition Members in the other place, which tried to formalise in statute the Secretary of State's responsibility for setting a framework that would enable markets to deliver energy supplies over the medium and long term. Ministers opposed that suggestion by claiming that such a clause would usher in re-nationalisation of the industry. I made it crystal clear on Second Reading that the Conservative Government liberalised energy markets in the teeth of blind opposition from the Labour party of the day, and Conservatives do not have an ounce of nationalising blood in them, unlike several Labour Members. In the same breath, the Government went on to argue that the provision would be unnecessary, and thus flawed, because it simply restated a clearly recognised reality. The logic of those claims was cancelled out when the Government made them simultaneously, but the individual claims do not stand up to close inspection either, especially when examined in conjunction with the Government's response to a similar provision in the constitutional treaty to which they, if not the energy industry, British business or the British public, are keep to sign up. Article III-157 of the constitution states that for the first time the Commission will henceforth take charge of policy to

"ensure security of energy supply in the Union".

I note that the United Kingdom Offshore Operators Association called on the Government in October 2003—forlornly in the end—to make conceding that co-competence a red-line issue.

The Minister for Energy, E-Commerce and Postal Services told the European Scrutiny Committee on 2 December 2003 that

"the fact that there is an Energy Chapter"

in the constitution

"in itself is something that we are happy with."

He may be happy that energy policy will be a co-competence between the democratically elected UK Secretary of State and the unelected EU Commission, but he has not explained during the passage of the Bill—or at any other time—the effect that that will have on Ofgem's present duties to regulate the UK energy market or the Secretary of State's duty to negotiate bilateral treaties with non-EU Governments on, for example, the building of gas pipelines, let alone the possible powers of the Commission to intervene in our domestic energy markets.

While I am on the subject of the European Union, will the Secretary of State give us a categorical assurance in relation to the Bill that the nuclear decommissioning authority will not run into difficulties with the competition commissioner? Is she entirely satisfied that the Bill is in line with EU rules on state aid? If she does
 
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not want to intervene on that point now, will she consider the matter and write to me, placing a copy of the letter in the Library of the House?

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