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Energy Policy

2. Mr. David S. Borrow (South Ribble) (Lab): If he will instigate a public debate on United Kingdom energy policy. [24335]

The Secretary of State for Trade and Industry (Alan Johnson) rose—

Mr. Speaker: Order. The hon. Member for Salisbury (Robert Key) should not stare at me. I know that when he stands it means that he wants to be called. I will call him when I want to call him.

Alan Johnson: As the Prime Minister has announced, we will publish proposals on energy policy next year, embracing our continuing commitment to tackling climate change, preserving reliable supplies of energy and maintaining competitive markets. Public debate will play a key role in developing those policy proposals.

Mr. Borrow: A few weeks ago, I met civil engineers in the north-west, who recently produced an infrastructure report on the region. The report makes it clear that their   biggest concern is the effect that phasing out nuclear power stations will have on energy supply in the north-west. Does my right hon. Friend agree that only if we can build public consensus on a long-term energy policy will we ensure that we take the right decisions? Without public support for that policy, it will founder.

Alan Johnson: My hon. Friend is right. In line with the commitment that we gave in the 2003 White Paper, if the   result of the new review announced by the Prime Minister is that we should go down the nuclear new build route—that is a very big if, because factors such as waste and cost have to be taken into account—we will need to publish another White Paper and to have the widest possible consultation. A very healthy public debate is going on, but it is very different from that which took place even as recently as 2003 in terms of climate change and the need for security of supply. I   hope that we can ensure a proper, comprehensive debate that examines the issues, instead of people taking stances based on, perhaps, an ideological viewpoint. Taking such stances will not help us to have the kind of debate that my hon. Friend and I want.

Robert Key (Salisbury) (Con): I am very grateful to   you for calling me, Mr. Speaker. Your earlier admonition gives a whole new meaning to "catching your eye".

May I press the Secretary of State on nuclear energy? Does he share my view that public opinion is changing very rapidly and that the scaremongering of those opposed to nuclear energy is now receding? Does he further agree that, as people see their domestic energy bills rise sharply, and as their desire to see us meet Kyoto and beyond increases, they now understand that there is a serious debate to be had about the role of nuclear energy? After all, we are not that different from the French, and in France 83.4 per cent. of electricity is nuclear-generated.—[Interruption.]
 
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Alan Johnson: My hon. Friend the Member for Croydon, North (Malcolm Wicks) points out that the hon. Gentleman is the first Conservative to admit that we are not that different from the French; however, I shall pass over that point. The hon. Gentleman is right. The public are aware of the issues and they are willing to engage in a constructive debate about them. I very much hope that we can have that debate. We need to ensure that we publish a White Paper that examines all the arguments and issues, such as waste, cost and renewable energy alternatives. If that is   done properly, it will form the basis of a very constructive debate, regardless of the conclusion reached.

Mr. Eric Illsley (Barnsley, Central) (Lab): I apologise for not being in my place when my question was called a   few moments ago. There was a time when, if a question   was to be linked to another, the Department in   question had the courtesy to inform the Member concerned.

Is my right hon. Friend satisfied that this country has enough gas reserves for industrial consumers this winter? Comparisons have been made with the rest of Europe, and some countries have up to 11 or 12 days of   reserves, whereas we have only two or three days.

Alan Johnson: Our having only two or three days of gas supply is one of the myths being peddled. It does not take into account that very big storage tank called the North sea. All things being equal, we have some 77 days of gas supply that we can provide in the event of an emergency. I hope that we can reassure my hon. Friend's constituents that we are on top of this issue. There is no way that the Government could have been any better at predicting the need for the market to change, and nor is there any way that the public purse could have provided the £10 billion that the private sector is providing to ensure that we get the balance between supply and demand right. This will be a tight year if we are hit by very bad weather conditions, but after this year we will get the balance absolutely right.

Mr. Gregory Campbell (East Londonderry) (DUP): There is widespread support for the promotion of renewable energy projects across the United Kingdom, but there is concern about such projects being located in   areas of outstanding natural beauty. Will the right hon.   Gentleman ensure that the Northern Ireland Office is aware of my constituents' continuing opposition to the proposed location of an offshore wind farm off the north coast of Northern Ireland? The entire community is united in its opposition to such a project being located there.

Alan Johnson: The hon. Gentleman raises an important point on behalf of his constituents. Proper planning processes must be followed and any problem in   Northern Ireland will certainly be examined by the   correct authorities. Our investment in renewables means that 2005 will be a record year, with production of power from wind totalling 500 MW. That is a very   important contribution to our climate change obligations and targets, and to our security of supply. Obviously, renewable energy projects must not be introduced without the proper planning consent, which
 
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must take into account the needs of areas of outstanding natural beauty such as the hon. Gentleman's constituency.

Miss Anne Begg (Aberdeen, South) (Lab): Any debate about future energy policy must be concerned about balance and not get caught up in the all the noise and discussion about the nuclear industry, important though that may be. The North sea still has plenty of oil and gas and those resources remain very important to the economy of the north-east of Scotland and of Britain as a whole. Does my right hon. Friend agree that new technologies mean that oil and gas still have a future?

Alan Johnson: I agree completely with my hon. Friend, and I take this opportunity to underline what has been said by my hon. Friend the Minister for Energy—and, indeed, by my right hon. Friend the Prime Minister. The energy review will be balanced, as we need diversity in our energy supply and there is no point in putting all our eggs in one basket. That means that we must look at all available energy sources—coal, renewables, fossil fuels and nuclear.

Mr. Bernard Jenkin (North Essex) (Con): I welcome the Secretary of State's consensual tone in respect of the energy review but, by any measure, the present policy is   failing. The difficulties with security of supply are reflected in the current high prices, while fuel poverty and carbon emissions are both rising. Why is the review not being conducted more urgently? Will he discuss its terms of reference with all the main political parties so that the public consensus that the hon. Member for South Ribble (Mr. Borrow) asked him to pursue can be achieved?

Alan Johnson: I disagree that there is a problem with   the market approach to energy, as I think that it is working very well. After all, the Canadian Government caused a disaster when they decided to intervene in Montreal, and the recovery there is still going on. The hon. Gentleman talks about consensus, but first there needs to be consensus between the hon. Member for Witney (Mr. Cameron) and the right hon. Member for   Haltemprice and Howden (David Davis). Then perhaps we will achieve consensus across the House.

Globalisation

3. Mr. John MacDougall (Glenrothes) (Lab): What steps he is taking to monitor the impact of globalisation on UK manufacturing and services. [24336]

The Minister for Industry and the Regions (Alun   Michael): We are acutely aware of the impact of globalisation and the challenges for UK manufacturing and services. The Government are committed to providing the right macroeconomic conditions and support through the manufacturing strategy to help companies to meet the challenges and to compete on the basis of high skills and added value.

Mr. MacDougall: I am sure that my right hon. Friend is aware that manufacturing industry accounts for one sixth of the UK economy. The industrialisation of
 
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China and other low-wage economies will have a severe impact here. Does he believe that the Government are well placed to deal with that impact?

Alun Michael: My hon. Friend is right about the size of the manufacturing sector, and about the contribution that it makes to the economy. He is also right to point to the impact made by China, India and some other countries, as they now aspire to be at the cutting edge of manufacturing rather then just to produce low-value goods. However, their development provides us with large emerging markets that we should regard as an opportunity rather than a threat. Through the manufacturing strategy, we are working with manufacturing industry to face up to those challenges.

Miss Julie Kirkbride (Bromsgrove) (Con): One of the highest-profile examples of globalisation is the sale of the MG Rover car manufacturer in my constituency to the Chinese. Is the Minister aware that DTI officials confirmed to the Trade and Industry Committee the other week that the platform for mass-produced Rover cars has been shipped to China lock, stock and barrel? That is a great disappointment to my constituents, but the officials also confirmed that so far they had held no negotiations with Nanjing Automotive Corporation in respect of the company's long-standing promise that it would reinstate mass production at Longbridge. That is a very worrying and sad development: is it true, and what will the right hon. Gentleman do about it?

Alun Michael: I am certainly not going to go into the details of what are commercial matters for the company. The Government engaged very rapidly once the impact of the Rover decisions was known and my hon. Friend the Minister for Trade remains closely in touch with the   company. We are also working carefully with the   whole supply chain. Despite the Rover issue, the automotive industry is a success story in this country. The   contribution made by automotive producers to the economy is considerable, and continues to be strong.

Mr. David Anderson (Blaydon) (Lab): This country will always have problems when we are competing with countries such as Bangladesh, where, as has been reported this week, 5 million children are working for 35p an hour. In 1999, the Government went to the World Trade Organisation in Seattle very committed to negotiating a labour scheme. Will we have that sort of debate at the WTO in Hong Kong, or are we to let this situation continue?

Alun Michael: My hon. Friend points to exploitation, which is unacceptable. That is why we strongly support the approach through the International Labour Organisation to deal with such issues. He is right to highlight the situation, which is an international scandal and this country is at the forefront of seeking international action to tackle those problems.

Charles Hendry (Wealden) (Con): The Minister is being frighteningly complacent. We are seeing a collapse of manufacturing employment, with 1 million jobs lost in manufacturing since this Government came to power, and its share of GDP falling from one fifth to one sixth. Even more worryingly, there is now a loss of jobs in the
 
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service sector and the professions, too, and it is only the huge growth in the public sector that masks that. Does the Minister not understand that the Government are part of the problem? Higher taxes, more regulations and cosy deals with the trade unions are making this country less competitive, and driving investment away to eastern Europe and Asia. Does he recognise that the tragedy is that business is telling the Government what is wrong, and it is only the Government who do not recognise the extent of the challenges?

Alun Michael: The hon. Gentleman is supposed to be speaking at the Dispatch Box, not the ranting box. I   shall take no lessons from somebody who was part of   a Conservative Government under whom interest rates were at 15 per cent. for a full year, about 1,000 businesses went bust every week and unemployment stood at 3 million. He has the cheek to try to give us lessons, but I have to say to him that since I came to this job I have been impressed by the way in   which manufacturing industry works with the Government, because those people know the value of the manufacturing strategy that we established in 2002 to help manufacturing industry. They know where their friends are.

Dr. Ashok Kumar (Middlesbrough, South and East Cleveland) (Lab): May I urge my right hon. Friend not to take any lectures from the Tory party on manufacturing? We lost 50,000 jobs on Teesside when the Tories were in power. Does he agree that one of the key components of a successful manufacturing country is investment in research and development? What efforts is he making to ask the private sector to invest more   in   R and D so that we can have a successful manufacturing sector?

Alun Michael: My hon. Friend is right. What is strong is the partnership with manufacturing industry involving initiatives such as the materials centre that we opened recently on the Isle of Wight, and the fact that our manufacturing strategy is based on applying science and innovation, world-class practice, raising investment and a high level of skills. That all depends on high standards and good leadership in manufacturing industry, and leaders in that industry are acting as partners with us to tackle those issues, so our industry will be successful.

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