Select Committee on Liaison Minutes of Evidence

Examination of Witness (Questions 200-219)

6 JULY 2004


  Q200 Mr Key: That is not very bold leadership, is it?

  Mr Blair: I agree, Robert. I will tell you what, I will do a deal with you, Robert, we will put one in your constituency first and you can lead and I will follow.

  Q201 Mr Key: I still maintain that is a pretty weak approach to this problem. After all, there are over 430 nuclear reactors around the world in 31 countries and, as it happens, five of those countries make up half the population of the world and over 50 years nuclear energy has proved to be the safest of all energy sources. So why are we not prepared to take the lead here?

  Mr Blair: There is a cost issue. You have to work out how you are going to engage with the public on the basis of acceptability. The reason why in our White Paper we kept the door open deliberately—and I think we were attacked at the time for keeping the door open—is because I think it is not sensible for us to say, "Because of the public concern about this we are just shutting the door." Let us be clear, when you embark upon this you are going to have to be clear both about the costs and that you can meet the concerns over public safety.

  Q202 Mr Key: I would maintain that on neither are you giving a lead, Prime Minister. Look at costs, your own figures from the DTI on generation costs in 2025 point out that nuclear could be cheaper than offshore wind. I believe that if you are going to use your G8 Presidency to champion climate change you will be going into the conference chamber half-naked if you will not come off the fence.

  Mr Blair: I think that is an interesting thought. I agree with you to this extent. I have fought long and hard, both within my party and outside, to make sure that the nuclear option is not closed off, but I think we have got to be realistic about this. If we are going to develop a new generation of nuclear power stations, we are going to have to do a lot more work on reassuring people both on the cost and on the safety grounds and we are going to have to have a debate in which people understand the science and, in particular, which I think is the real issue to do with nuclear power, the difference between a nuclear power station and the development of nuclear weapons, because I think what happens in scientific terms is that the two get mixed up together. I am not pretending to you that the Government has been majoring on this issue recently because we have not been, but we have left the door open for that debate. I also think, frankly, the more it happens in a cross-party way the better because I think it is one of these issues that obviously is highly potent in the political field. I agree with you to this extent, that you cannot remove it from the agenda if you are serious about the issue of climate change. There is no point in me sitting here completely blind to the political reality. Unless we overcome these two hurdles our progress will be limited.

  Q203 Mr Key: Prime Minister, if you will come off the fence, I will come off the fence half-naked or not. Even in decommissioning our own nuclear power stations, the UK skills base is aging, people are retiring and they are not being replaced. Are you content with the thought that we will be out-sourcing our nuclear engineers and workforce from India and China in a few years?

  Mr Blair: No. The skills base, as you would rightly go on to tell me, requires us also to make sure that we are developing the new generation of nuclear reactors because that skills base requires updating in respect of that. I think as well that there is a serious case—this may be one of the things we can do in the course of our presidency of the G8—which is to try and put before people the facts as we know them, not just about nuclear power, but about renewables and about the research and development that is necessary and about the impact of climate change so you get a more rational debate and I am very happy to engage in that.

  Q204 Mr Key: Should we be spending more research money on nuclear fusion or the hydrogen economy?

  Mr Blair: I think we are looking at the moment on nuclear fusion as to how we put investment into that research. I find that a very interesting idea and I know that David King is keen that we look at that and that we look at that with the United States as well. One thing I should say, to be fair to the US, is they put an awful lot of money into research. One of the things that we could do at the G8 level is, insofar as that is possible, to share some of the benefits of this research knowledge because all of these things—developing fuel cell technology—require a massive lead time and investment.

  Q205 Dr Gibson: You might be able to resolve the problems in the G8 between different nations about the siting of the new thermonuclear reactor that they are going to put in Europe somewhere and they are all arguing where it should be and it has been going on for some time and we desperately need that in the G8 Bill now.

  Mr Blair: This is the debate about whether it is in Europe or Japan, is it?

  Q206 Dr Gibson: Yes.

  Mr Blair: I hope that we will resolve that reasonably soon.

  Q207 Mr O'Neill: Prime Minister, you seem to be confusing, certainly me, about timescales. As far as I can see, by about 2011 to 2012 we will have virtually no coal-fired stations of any substance in the UK. We will have diminished quite considerably our nuclear capacity because of obsolescence and the end of life and various things like that. We will have become increasingly dependent upon gas. I do not think there are many bookies taking odds on renewables. We might reach 10% by 2011 it and it does not matter if it slips a wee bit, but I do not think there is a cat in hell's chance of us getting 20% by 2020. The point, therefore, is that we are going to have a generating gap probably around 2013/2015 and we cannot wait until we redevelop our own nuclear stations. The history of British nuclear power has been ridiculous "Union Jack projects" where, in fact, there are probably going to be ones from America or South Africa that we could usefully employ and there are sites which will be freed up as a consequence of the closure of the stations that I mentioned. There are opportunities that do not have to be addressed and probably thankfully this side of the General Election, but very shortly afterwards they will have to be. Would you agree with that logic or am I being a little too pointed in bringing up words like General Election?

  Mr Blair: No. Irrespective of the General Election, I think within the next few years there are some very difficult decisions that we will have to take on this. Precisely because of the points you make, Martin, that is why I think there has been a deal struck recently in respect of Norway and imported gas. We believe we have sufficient energy reserves that are available to us to deal with this. I agree, there is a question that does not arise for decision today but will arise within the next few years, which is whether as your existing nuclear power stations run down you try and replace that and replace it with the latest technology which, as you say, round the world is developing in a different way from the generation of nuclear power stations that we have now. I am not in a position to make a decision or give an indication on that, but I do not disagree with the essential thrust that you are making. There is a real issue for us about energy supply in the medium to long term.

  Q208 Mr O'Neill: At the moment who is looking at this on your behalf in Government?

  Mr Blair: We published the paper on energy policy precisely because we needed to look at this and the Strategy Unit within the Cabinet Office also looked very closely at what the future energy needs were going to be and how we were likely to meet them. We are continuing to do that. Defra and the DTI are in the lead on it.

  Q209 Dr Gibson: Is that not the problem, there are so many departments with their fingers in the pie, you either need a Ministry of Energy, which we have had before in this country, or a minister who champions the whole link up and there does not appear to be anybody emerging?

  Mr Blair: We realise we have got to be in the position to take these decisions within the next few years. The nature of the decisions is such that it will be at a fairly senior level that we need to get this sorted out.

  Q210 Mr O'Neill: One of Europe's unsung achievements last year was to have the chemical Directive offered by the EU radically removed and it was perhaps one of the few occasions when there was big power unity between Germany, France and the UK on an issue. It highlights another aspect, which is the competing claims of Defra whose desire is to meet Kyoto at all costs and in the quickest possible time and then the DTI which has a responsibility to represent the interests of industry. So we have got the Climate Change Levy, we have got emissions trading, we have the large plant directive, all of which are imposing sizable burdens on British industry and our capacity to generate the wealth which will enable us to subsidise less economic forms of electricity generation in the future. Are you happy that there is the right balance or do you think that we have undue creative tension between the two departments?

  Mr Blair: I think in a way what you and others have been questioning me on actually leads us to the conclusion that there is no reason why the two should be in conflict. The starting point of Robert's question was really that climate change is a serious issue, have we measured up to the scale of the challenge? The whole issue to do with nuclear power, with renewables and so on is how do we make sure that we have a sufficiently secure energy supply that is compatible with the requirements of the environment in dealing with climate change? Inevitably that is something where you have got to have the Government working together. I do not honestly think it is the problem. I think you put your finger on the problem earlier, which is that these decisions are so big about future energy links that it is going to be very hard to see how we deal with this unless you are prepared to take a big and reasonably bold decision. There is not a great problem in the short term because we have got sufficient supplies of gas and so on that we can buy in. I think longer term there is. To be fair to the United States, they raised some of these issues to do with nuclear power. Where they have shifted their ground somewhat is that they used to be saying they did not accept this as a problem. They are now saying we do accept it as a problem, but if we accept it as a problem, why is nuclear power ruled off the agenda? Why are we unprepared to look at this solution and that solution? That is where they do have a point. The other thing is, for those countries that are heavily dependent on carbon fuels, again there is technology that can be developed there to make those cleaner and they are of huge importance but it requires a massive research effort. I think the interesting thing about climate change is that it is an issue that every political leader really knows is a very big long-term question. There is no political leader for whom it is such a short-term problem that, as it were, you can knock every obstacle out of the way in order to deal with it. Talking about some of the security threats that we face, as we will be doing later, and the need to co-operate at an international level, this is par excellence an issue that cannot be dealt with by any one country. Even if Britain meets all its Kyoto targets (and I believe we will) but supposing we do and other people do not meet them, the actual impact on the world environment is pretty limited. So it is an issue where there is, I think, a tremendous need for the beginnings of agreement at the international level as to how you tackle this. The reason I made it a priority for our G8 is not because I suddenly think the Americans, whatever the famed British influence or not, are suddenly going to say "Right, that's a very persuasive argument, we will go with Kyoto"—they will not—but what I do hope to do is to get agreement on certain key principles that inform this debate, and a way of working to move it forward in the future.

  Q211 Dr Gibson: You must have been saying this all your political life, really. You have seen the problem—and you had an energy brief at one time, I think, in your career—and people make these speeches and it sounds great, and wonderful, and nothing much happens. Somebody has got to take the bull by the horns at some point and go for it, and whatever devices you have to use politically have to be used. Is there not that all-consuming demand to get it done, for any politician, to hide it because "I'll be out of office before it happens and before the lights go out in London and before the water comes streaming down"—all that kind of scenario?

  Mr Blair: One of the things we have done recently, and you may have been involved in this, is we got together a group of people from different countries, all of whom are interested in this climate change issue, and we also deliberately got in touch with some of the states in the United States, because some of them are actually supportive of what we are trying to do. I think the beginnings of this is to get agreement on certain principles, to get agreement on the science and then to get a way of working forward. The thing I have become more and more convinced of, looking at this, is that unless one major part of this is a push on the science and technology to do with renewable energy, to do with energy efficiency and to do with issues to do, say, with nuclear power, we are not going to resolve this. We are not going to resolve it if you are going to end up saying to these major emerging economies: "We want you to cut growth in some way". That just will not happen.

  Q212 Dr Gibson: I think many of the scientists and technologists think the science is there; there are so many renewable options now, it is just making them work. There are debates in the Chamber here about bio fuels incessantly which would bring the agricultural industry in East Anglia up to the heights. They could do it but the tax incentives are not being provided and so on. There are wind farms all over the East Anglian coast—up they are going, wind turbines. There are all sorts of things going on, we just need to make it really work. Biomass, everything—there are dozens of renewable sources.

  Mr Blair: But there are also big issues to do with how you make it cost effective. For example, if you take something like tidal power and tidal energy, there is potentially a huge significance in that. I was up in the North East visiting a scientific project looking at tidal energy the other day and they were explaining to me that tidal energy, in theory, can meet all the energy demands of the entire country, but then they were explaining to me that the scientific and technology problem is not understanding what tidal power can do, it is understanding how you can deliver it at anything like a realistic cost. That is where I think the research is very important, and the same issues arise in relation to fuel cell technology.

  Q213 Mr Ainsworth: Prime Minister, the impression I am left with, after listening to those recent exchanges and your talk about big and bold decisions needing to be made at some point in the future, is not so much that you are keeping the nuclear option on a back burner but it is actually a decision which, somewhere inside your own mind, has already been taken—because I cannot think of what other big and bold decisions you might be going to take in relation to energy. Do you not think you are leaving it all a bit late if the time-frame that Ian Gibson set out is correct (and I believe that is right)? As you pointed out to Robert Key, the idea of building new nuclear power stations quickly and easily is hardly feasible. If you have actually decided to reinvest in nuclear, why do you not just say so?

  Mr Blair: We have not, Peter. We have not made that decision. We are not going to be in a position to make that decision for the near future.

  Q214 Mr Ainsworth: How long are you going to give renewables to make up the gap?

  Mr Blair: We have got our renewable target, and although it is challenging we believe that we can meet it. We do not have to take the decision on nuclear power at this present time. The significance of what we did in the paper on energy is that we left the door open. As I say, there were people who wanted us to close it off. We have not, but we are not in a position to take a decision yet. It is not that we cannot in the near term meet our energy requirements—we can. As I say, the deal that was struck recently with Norway is a perfect example of that. I think there is something like 20% of the gas needs met through that. We can do that. I do not think that is the issue, I think the issue is the interplay between the environmental question and the energy requirements. That is the difficult thing. It is not there are insufficient reserves of gas in the world that we could have access to in the near term; that is not the problem, the problem is how are we going to not merely meet Kyoto but end up with a radical reduction in greenhouse gas emissions.

  Q215 Mr Ainsworth: Just on that point: you talk a good game, Prime Minister, on these issues, and you do it internationally and make a lot of good noises about it, but do you not feel slightly embarrassed when you make the case for the need to tackle climate change when you look at the record of your own government which has, since 1997, seen a 0.2% decrease in CO2 emissions when we were achieving 1 per cent-a-year decreases during the 1990s? Why do you think the pace has slowed so dramatically?

  Mr Blair: Of course, the pace was very dramatic because we were closing coal mines and coal-fired—

  Q216 Mr Ainsworth: Is that before you were interested in climate change?

  Mr Blair: No, I have been interested in climate change as well; I am just explaining why the rate was very strong in those times. Actually, we will meet our Kyoto targets, so it is not that we talk a good game, we have done a good game, and that is in periods of high economic growth. In the late-80s/early-90s we had a recession. We have had strong economic growth and we are still managing to meet our Kyoto targets. We introduced the Climate Change Levy, though it was not very popular, let me say, with parts of business, but, nevertheless, we did it and that has contributed to meeting our targets as well. So I do not think we have just talked a good game.

  Q217 Mr Ainsworth: I apologise, but we have our own target as well, which is a 20% reduction, as you know. We are currently standing at minus 7.5% against the 1990 figure, which is the benchmark figure. I just do not know how you are going to make up the extra 12.5% in the next six years of this decade when the current rate is 0.2% since 1997.

  Mr Blair: We believe we can do it. I am not saying it is not challenging because we are going beyond the Kyoto target.

  Q218 Mr Ainsworth: How are you going to do it, Prime Minister?

  Mr Blair: The only way of doing this is to increase the renewables, and this is why we are putting what is a substantial sum of investment into that, and to make sure that we are doing—in terms of fuel efficiency and the Climate Change Levy—everything we possibly can to meet it. We believe we are on a trajectory to meet it. I agree it is going to be very challenging to do it, but we are doing the most that we can reasonably do at the present time in order to achieve it.

  Q219 Mr Ainsworth: Just finally, is there not one further complication here which is, to the extent that the door is open to nuclear, that there is a significant disincentive to those who might consider investing in the risky, high-tech business of renewables? If the door is open the nuclear industry might walk through it with a huge taxpayers' subsidy at any moment, and blow you out of the water.

  Mr Blair: I do not think that will happen. I think both are necessary as issues that we have to resolve. I do not see it as an either/or, actually.

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