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Mark Lazarowicz: That provides a good example. One of the problems in the UK is that although we have some examples of community ownership, they are, by and large, fairly limited and on a small scale.

Several hon. Members rose—

Mark Lazarowicz: Perhaps I should give way to the whole Liberal Democrat party.
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Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I thank the hon. Gentleman for giving way and congratulate him on introducing the Bill. It represents an important step in ensuring that we try to meet our Kyoto commitments. He was just talking about the benefits for rural areas and earlier he mentioned the economic and employment benefits of promoting the renewable sector. I particularly welcome the Bill's commitment to renewable heat. If we can promote renewable heat in rural areas, it will also provide an outlet for farming communities that are having to make a transition in their economic activities. It is also important for the forestry industry, which faces the economic problem of what to do with the "thinnings". That problem is undermining the good management of the forestry, so I greatly welcome the hon. Gentleman's attempts to promote renewable heat.

Mark Lazarowicz: I am grateful to the hon. Gentleman for that intervention. One of the clauses indeed enables the Secretary of State to introduce a renewable heat obligation. The hon. Gentleman is right about the immense potential of renewable heat in rural as well as urban areas. It can play an important role in combined heat and power, for example. Given the very welcome renewable fuel obligation announced by the Government yesterday, it is appropriate for a renewable heat obligation to be the third pillar of the package. It could make a huge difference.

Mr. Alistair Carmichael (Orkney and Shetland) (LD): I particularly commend the hon. Gentleman for his words on community ownership and community benefit. He will be aware of the Viking Energy project in Shetland, which is a significant community development of significant scale. However, it risks being thwarted by the transmission charging regime operated by Ofgem. The cap in energy legislation is not proving to be adequate in practice. The Bill could be a vehicle for an amendment to the Energy Act 2004. Has the hon. Gentleman heard from the Government whether they would be prepared to support such an amendment?

Mark Lazarowicz: It is for the Minister to speak for the Government, but I am pleased to say that the Department has approached me about using the Bill as a vehicle for dealing with part of that problem. I hope that it will prove possible to do so. The issue is important not just to the hon. Gentleman's community, but to the whole of the UK. Evidence shows that the Scottish islands could contribute as much as 1 per cent. of the country's entire energy needs if the renewable sector fully reached its potential.

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): I congratulate my hon. Friend on bringing his Bill before Parliament. On the renewable energy clauses, has he made any assessment of the contribution that biomass could make to increasing the market for bioethanol products in this country? Our position on that is very low compared with the United States, for example. Clearly, another element of the Bill can contribute to the diversification of work available in rural areas.

Mark Lazarowicz: My hon. Friend is right. That is why the proposal to make progress on renewable heat is particularly important.
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Richard Ottaway (Croydon, South) (Con): I am in my place to support the hon. Gentleman's Bill today. He is discussing the renewable heat obligation, which is by far the most controversial and most complex aspect of the Bill. Progress cannot possibly be made without Government support. Has the hon. Gentleman heard from the Department of Trade and Industry about its attitude to that particular measure?

Mark Lazarowicz: I have had an indication, but let us see what the Minister says about that. The debate about how best to progress renewable heat obligations is still ongoing.

John Hemming (Birmingham, Yardley) (LD): One difficulty is the fact that the Inland Revenue frequently seeks additional sources of revenue. From time to time I have heard about the possibility of the Revenue obtaining national non-domestic rates from domestic micro-generation. I note that one clause deals with fiscal incentives, but one hopes that the Bill will also deal with preventing fiscal disincentives, perhaps looking for a threshold level at which generation rates become free.

Mark Lazarowicz: The hon. Gentleman makes a very important point. If I can make some progress, I may be able to say a few words about that part of the Bill later.

I want to deal with community ownership. The United Kingdom has an opportunity to take advantage of developments that are already evident in other parts of Europe. In Denmark, for example, 50 per cent. of the country's wind power capacity is owned by individuals or co-operatives. Similarly large schemes exist in Austria and Germany—and even in the US. We should try to promote community energy here in the UK.

As I said in reply to earlier interventions, the Bill is designed to promote renewable heat, but it also recognises that micro-generation must be part of a wider agenda and overall Government policy. That is why the Bill has 12 important clauses that place a duty on the Government. The first relates to maximising the use of fiscal incentives. We have already seen a number of valuable measures in that respect, but a whole array of measures could further encourage energy efficiency and micro-generation. They include council tax rebates for householders who install energy-saving devices, stamp duty rebates for house purchasers, measures to encourage the purchase of energy conservation materials for houses, and so forth. Many measures could be taken and it is important to examine them collectively across government. That is what the Bill is designed to do.

John Barrett (Edinburgh, West) (LD): The hon. Gentleman is being generous in giving way and I am delighted to be able to support his Bill today. Does he agree that it is important to give equal emphasis at local and national level to measures to introduce energy efficiency savings? Discussing different methods of generating power is not good enough on its own; we must also place great stress on implementing measures to save energy.

Mark Lazarowicz: Absolutely—the two go together. We could make immense savings through energy efficiency alone, and if we combine it with micro-
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generation, we could make a real impact on the country's energy needs and consumption, and on tackling our climate change targets.

Emily Thornberry (Islington, South and Finsbury) (Lab): I thank my hon. Friend for allowing me to intervene in this debate, and may I add my voice to those who welcome the introduction of this Bill? We hope that it has an easy passage. Does my hon. Friend agree that, although climate change is one of the biggest challenges faced by our generation, too many people feel that there is little that they can do as individuals? Micro-generation is exactly the sort of thing that people can do, and it is encouraging to hear that in Denmark, 50 per cent. of wind generation is created by people's own individual wind plants.

Mark Lazarowicz: I agree absolutely. In developing this Bill, I discovered that there is a real interest across the country in these issues. People want us to facilitate such developments.

Mr. Hollobone : I thank the hon. Gentleman for giving way. One of the big attractions of micro-generation is that, because electricity generation takes place far closer to where the electricity is actually used, it automatically improves efficiency of energy delivery. Micro-generation would reduce the transmission and distribution losses that this country currently suffers from as a result of most of our electricity being generated away from big population centres.

Mark Lazarowicz: I agree entirely.

Meg Hillier (Hackney, South and Shoreditch) (Lab/Co-op): I thank my hon. Friend for giving way and I congratulate him on introducing this important Bill. The majority of my constituents live in council or social housing, and although they would very much welcome the benefit to their pocket of reduced energy costs, they are not in control of such matters. What discussions has he had with the Minister for Housing and Planning on how to support social landlords and councils in providing such facilities in council housing?

Mark Lazarowicz: The detail on this subject is probably more a matter for my hon. Friend the Member for Southampton, Test (Dr. Whitehead), who seeks to introduce a Bill on related matters later today. However, in promoting not only national but local authority energy conservation targets, my Bill would encourage discussion with local communities about how best to meet those targets and to promote micro-generation. Such developments can benefit communities of all types throughout the country.

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