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British Energy

4. Mr. Andrew Stunell (Hazel Grove) (LD): What recent assessment she has made of the (a) environmental and (b) economic performance of British Energy. [189173]

The Minister for Energy and E-Commerce (Mr. Mike O'Brien): British Energy is subject to stringent environmental regulation. The Environment Agency raised some concerns about British Energy's environmental performance, but the company is working closely with the agency to address those concerns. British Energy's economic performance is regularly assessed as part of its current restructuring.

Mr. Stunell: I thank the Minister for that reply and welcome him to the Dispatch Box. He is the sixth Minister with responsibility for energy in seven years; I hope that he enjoys his stay, however long or short it might be.

Has the hon. Gentleman had an opportunity to read the Public Accounts Committee report on British Energy transactions, and do the Government intend to accept those recommendations? Can he assure the House that he will resist the shareholder revolt, which is seeking to overturn the arrangements that have been made, and does he agree that it is very important to safeguard taxpayers' money and the environment of the United Kingdom?

Mr. O'Brien: Of course it is important to protect the UK environment; however, the Liberal Democrats' policy—which is, it seems, to get rid of the Department of Trade and Industry—would undermine that objective. We have seen the PAC report, which we welcome, and we will respond to it in detail in the normal way. I should point out, however, that the privatisation of British Energy undertaken in 1996 involved the traditional structure and left the Government with few tools with which to mitigate any risk. So many of the problems that have arisen since can be laid at the door of those who created that privatisation. On restructuring and the views of shareholders, we are watching carefully what is happening, and we have a great deal of interest in ensuring that such restructuring is carried out effectively.

Mr. Bill Tynan (Hamilton, South) (Lab): The hon. Member for Hazel Grove (Mr. Stunell) is interested in doing away not only with the DTI but with nuclear energy. Is my hon. Friend aware that if we had substituted gas-fired power stations for British Energy production, we would have created an extra 27 million tonnes of carbon emissions from August 2003 to August 2004? Is he not concerned about our being dependent on gas in future, and our losing energy production capacity in this country?

Mr. O'Brien: We need to ensure that we have diverse sources of energy, and we intend to do so as part of our
 
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strategy. That will include developing renewables, for example, which can make a substantial contribution. However, the Government are not committed to building new nuclear power stations because new build is currently economically unattractive and important issues such as disposal of nuclear waste need to be resolved. Any decision to proceed with nuclear build in future must be based on a full public consultation.

Mr. Robert Key (Salisbury) (Con): Does the Minister agree that British Energy needs all the help and support that it can get as it faces the future, and that we need to start building a consensus on the energy gap that we face, on Kyoto, and on the question of where we are going to derive our energy source from? We therefore need to encourage a sensible public debate, based on science and good information. If we do not encourage the British nuclear industry, we are likely to see—in addition to the Liberal Democrats wishing to cut electricity cables from France, through which we receive nuclear-generated energy—bids from Electricité de France to build nuclear power stations in this country, because we will have lost the capability.

Mr. O'Brien: I certainly agree that we need to have a broad-based debate on how to reach our emissions targets. I welcome the various contributions that have been made in the past week; indeed, we heard very strongly from the Prime Minister on these issues. The Government have shown that we are prepared to take the practical decisions necessary to meet those emissions targets, and we intend to continue developing our renewables policy and efficiency targets. There will doubtless be a debate on nuclear energy in due course, but at this stage we are not committed to new nuclear power station build.

Mr. Parmjit Dhanda (Gloucester) (Lab): When considering the economic implications of our policy regarding British Energy, will my hon. Friend continue to take my constituents into consideration? British Energy employs 1,000 people in my constituency, and they welcome the support that the Government have given—not least the provision of £500 million in loan payments, as and when required. The Liberal Democrats oppose that policy, without which unemployment in my constituency would double. Such opposition is doubtless supported by Jeremy Hilton, who is the Liberal Democrat candidate for Gloucester at the forthcoming general election.

Mr. O'Brien: We have seen historically that the Liberal Democrats jump on any old passing bandwagon. I would say to my hon. Friend that the Government's aim is to ensure that the restructuring of British Energy is done effectively. We need to work with the company and engage with the unions to ensure that the restructuring is effective and that British Energy has a future. That will, in the long term, protect the jobs in my hon. Friend's constituency. That is our hope, so we must ensure that the restructuring is undertaken effectively.

Mr. Laurence Robertson (Tewkesbury) (Con): I welcome the Minister to his new role and pay tribute to his predecessor. I wish them both well for the future. I
 
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remind the Minister, however, that shareholders did not lose out because of the privatisation of British Energy; it is the restructuring that is in question. Given the rise in electricity prices and the subsequent better financial position of British Energy, will the Minister give due consideration to the revised proposals for restructuring to ensure that all stakeholders get a fair deal, particularly the 230,000 individual shareholders?

Mr. O'Brien: We want to ensure that the restructuring is carried out in a way that looks to the interests of those who work for British Energy and ensures that the company can continue to operate so that shareholders feel that they have a fair deal. However, I would say to the hon. Gentleman that the Public Accounts Committee has expressed concern about the way in which the privatisation was carried out. Under that privatisation, the Government retained no rights of information or control over the company's decision making. The PAC criticised aspects of the privatisation process, so it will be interesting to see whether the Conservatives continue to defend their actions.

It is clear that we are now talking about a private sector restructuring of British Energy. The Government are watching how that is happening and we want it to succeed. We will remain engaged in the process, but in the end it is being done in the private sector. We want to ensure that the British people—the consumers—get a good deal, as well as the shareholders.

David Taylor (North-West Leicestershire) (Lab/Co-op): The Prime Minister has described global warming as the most serious environmental threat to the planet, and we know that a major accelerator is the emission of carbon dioxide and other carbon gases. British Energy has pointed out that the generation of about 64 TWh—or 64,000 GWh—by its nuclear power stations avoids the production and generation of about 40 million tonnes of carbon dioxide. Does the Minister believe that the Government should keep well under review, on a regular basis, their attitude towards nuclear power?

Mr. O'Brien: Yes. As I have already said, we operate on the basis of the energy policy set out in our White Paper, which keeps the nuclear option there in the long term. At the moment, however, our view is that it is not the most economically viable approach and there is no investor interest on a substantial scale in new build, so our aim is to ensure that we move towards our emission targets by developing renewables and through energy efficiency. Those are the areas in which we can make substantial progress now. We may look at other options in the future, but that remains to be seen.

Post Office Closures

5. Dr. Vincent Cable (Twickenham) (LD): If she will make a statement on the appeals mechanism in relation to post office closures under the network reinvention programme. [189174]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Proposed closures of urban post offices are considered in accordance with the code of practice agreed by the Post Office and Postwatch. That includes an escalation procedure for handling cases
 
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where Postwatch strongly opposes a closure. Cases are escalated for consideration at senior levels up to and including the chief executive of the Post Office and the chairman of Postwatch.

Dr. Cable: Is the Secretary of State aware that almost every appeal against urban post office closures is being rejected, regardless of the strength of the case or the backing of Postwatch? Is not the reason for that the fact that the group of people making the decisions on closures is the same as the one hearing appeals?

Ms Hewitt: When the new Financial Secretary to the Treasury, my hon. Friend the Member for East Ham (Mr. Timms), was responsible for this matter, he strengthened the consultation and escalation process, and that has worked well. But the hon. Gentleman not only wants to scrap the DTI, he wants to privatise the Post Office. He was the author of a Liberal Democrat policy paper that was voted on by his party conference, and which proposed moving to the privatised Dutch model, even though there are only half as many post offices per head of population in the Netherlands as in the UK. If he wants to help post offices, I suggest that he talks to his Liberal friends in Aberdeen council, who have stopped people being able to pay their council tax, council rents and business rates at the post office. That has made it more difficult for post offices to stay open, and it shows that we must watch what the Liberals do, not listen to what they say.

Mr. Bill O'Brien (Normanton) (Lab): Can my right hon. Friend tell me who is responsible for responding to appeals from Members of Parliament for an audit of the assurance that 95 per cent. of the population will live within one mile of a post office? In my constituency, it is estimated that 25 per cent. of people live more than a mile away from a post office. Who is responsible for auditing the assurances that have been given, as neither Postwatch nor the Post Office take responsibility for that?

Ms Hewitt: Postwatch takes its responsibilities enormously seriously. Under the urban reinvention programme, Postwatch staff go and look at all the post offices proposed for closure, and take note of where alternative offices are situated. The problem is very simple: in too many places, nine or 10 post offices serve the same population living within a mile. The pledge that 95 per cent. of people will be within one mile of their nearest post office applies across the whole country. The Post Office and Postwatch, the consumer champion, have the responsibility of ensuring that that target is achieved.

Mr. Owen Paterson (North Shropshire) (Con): On one hot day last year, I visited 28 post offices in my constituency. Nearly every one is under threat, thanks to the complete mess that the Government have made of the benefit card system. I took a delegation to see the new Financial Secretary, when he was responsible for these matters, and he confirmed that he had made it a requirement that there should be no avoidable closures. Will the Secretary of State confirm what an avoidance closure is, and will she say how she intends to allow post offices to make representations?

Ms Hewitt: Perhaps I could just point out to the hon. Gentleman that before the Government started
 
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investing in and saving rural post offices, they were closing at the rate of about 400 a year. We have brought that number down to just over 100 a year by imposing on the Post Office a requirement that rural post offices should not be closed unless that is absolutely unavoidable—in other words, when it is impossible to find people to run them. To avoid those closures, as I announced earlier this morning in a written ministerial statement, we are extending for another two years the payments that we make to rural post offices. That means that, on top of the £450 million that we have put in already, there will be a further £150 million a year for another two years. That is very good news for people living in our villages and countryside.

Mr. Anthony D. Wright (Great Yarmouth) (Lab): Two post offices in my constituency closed even though Postwatch objected and supported the campaign against closure. On appeal, the Post Office decided to go ahead with the closures. Does that not show that Postwatch is a toothless tiger? Is it not about time that it was given powers to ensure that it can overrule the Post Office when it has serious objections to a closure?

Ms Hewitt: I will certainly look at the specific case that my hon. Friend raises, but I stress that in several cases around the country—including my own city, where I was involved as a constituency Member—Postwatch has persuaded and cajoled the Post Office into changing its mind. Postwatch has insisted on post offices staying open, and it is a strong and well-resourced consumer champion. Obviously, I understand my hon. Friend's regret that the post offices were not reprieved in that case, but Postwatch has been responsible for changing the decisions in several cases, and that is exactly how the escalation process is designed to work.

Mr. Henry Bellingham (North-West Norfolk) (Con): Is the Secretary of State aware that in Norfolk several rural sub-post offices—some of them are appealing against closure—set up a new token payment scheme with Powergen? The scheme was very popular with sub-postmasters and the public alike. However, the Post Office has cancelled the contract with Powergen and is stopping sub-postmasters dealing directly with that company to keep the scheme going. Is not that very short-sighted and possibly a restraint of trade? Will she investigate?

Ms Hewitt: Decisions of that sort are of course a commercial matter for the Post Office, but I will take up with David Mills, the chief executive, the matter that the hon. Gentleman raises. I hope that he will welcome the announcement that I made this morning of a further £300 million to support rural post offices. We have seen, in Norfolk and other parts of the country, good new arrangements to support postal services. Post offices are opening in pubs and village halls, and we are piloting mobile post offices. All those innovations give us the opportunity, in the longer term, to keep postal services in those villages where they still exist and to extend them to all those thousands of villages that lost their post offices in the Conservative years. Will the hon. Gentleman tell the House whether he would cut the £300 million that I am giving to rural post offices? Of course he would.

Clive Efford (Eltham) (Lab): I understand that the sub-post offices that are to close have signed a contract
 
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to accept a compensation package, but is my right hon. Friend aware that if money is paid over it closes down the option for the local community to campaign to keep the service in its area, perhaps by moving into a supermarket or newsagents, where economies of scale could apply and the cost of running the service overcome? Many of my local communities where post offices will close include elderly people who will find it impossible to travel to another area. The suggested alternative post offices might as well be on the moon for such people. We must provide the option of keeping postal services in local areas.

Ms Hewitt: We all care about our local post offices and of course they are a lifeline for elderly people in particular. However, we must face the reality that sub-postmasters and mistresses all over the country simply cannot make a living. With the changes to people's lives—the shift to banking, the use of the internet and more people owning a car—post offices have fewer customers. The Post Office, through the urban reinvention network, is providing better post offices. Most customers are transferring to those other post offices, which are bringing new customers in by providing new services. That is the real way in which we will save post offices in future.

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