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12 May 2006 : Column 627
11.22 am

Nia Griffith (Llanelli) (Lab): I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) not only on introducing the Bill, but on seeing it through to this stage. I also join other hon. Members in offering my condolences to my hon. Friend and his family at this time. It is a tremendous credit to him that the ideas in the Bill are so widely accepted across the House that—I hope—we will be able to see it through, even though he is unable to join us today.

It is now almost a year since the ballot for private Members’ Bills was held. At that time, very few people had any idea of what microgeneration was. Perhaps they thought that it was some new form of computer. Simply in their efforts to get the necessary 100 Members here on a Friday, my hon. Friends the Members for Edinburgh, North and Leith and for Southampton, Test (Dr. Whitehead) have raised awareness of microgeneration across the whole House and in the country.

Everyone is now talking about energy-efficient buildings and microgeneration, everyone accepts the idea of microgeneration and many people are very excited about the idea of making their own energy within their communities rather than depending on a centralised system that loses so much power just in transmission. As a gentleman in my constituency says, it is always either windy, sunny or raining. We know a lot about how to harness the wind and sun, but he is now thinking about how to harness the rain as it gushes down the gutters on the roofs of our steeply terraced houses in the Welsh valleys. That is just one example of how people are thinking about where energy and heat come from and how we generate them.

I welcome the announcement in this year’s Budget of an additional £50 million that the Chancellor has pledged for the low-carbon buildings programme, with the specific aim of boosting the market for microgeneration equipment, working on the principle that an increase in the volume of equipment produced will help to bring down prices.

Alison Seabeck: My hon. Friend mentioned improving access to microgeneration equipment. Does she accept that until such equipment is readily available—at the moment, most members of the public would not know where to go to obtain it—and heating and other engineers advise the public almost automatically on where to get such products, as opposed to other forms of fuel generators, we will still face long-term energy efficiency problems?

Nia Griffith: I agree absolutely. The key point is that we need to put in subsidy now in order to make the market more viable. By spending now, we will help to bring down prices and to make the possibilities more viable.

Gregory Barker (Bexhill and Battle) (Con): I hear what the hon. Lady is saying about subsidy, but does she accept that a much more effective way to promote microgeneration than trying to pick winners and impose subsidies—we should recognise that in the scheme of things, £50 million, however welcome, is a
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tiny amount in an electricity industry that generates billions of pounds—would have been for the Government to have supported the new clause that I tabled in Committee, proposing a local authority planning regulation requirement to fit microgeneration as standard in developments of a certain size? The estimates are that, if that had happened, it would have transformed the market from about £50 million to about £800 million.

Nia Griffith rose—

Mr. Deputy Speaker: Order. Before the hon. Lady responds, may I tell her that we should be talking about the contents of the Bill, not what it does not contain?

Nia Griffith: Thank you, Mr. Deputy Speaker. I should like to enlighten the hon. Gentleman: the Bill now contains a clause that refers to large buildings. I cannot immediately refer him to the clause, but it does feature in the Bill, even though it may not appear in the exact format that he suggested. Obviously it is important that we get on with pump-priming the process and enabling people to move forward with the technologies, as well as with supporting our fledgling industries, so that we do not end up importing products when we could be making them here with the right demand and subsidy.

Sir Robert Smith: After the hon. Lady’s exchange with the hon. Member for Bexhill and Battle (Gregory Barker), does she accept that the important message in this debate is that although the Bill sends a signal about a direction in which we want to proceed, the actual delivery still very much depends on the Government taking the actions that will be necessary to achieve the Bill’s aspirations?

Nia Griffith: Absolutely; that is why it is so important that we have pledged another £50 million to taking a step in that direction.

Dr. Alan Whitehead (Southampton, Test) (Lab): My hon. Friend may be aware that clause 11 entails adding to the building regulations a particular category on

That provision incorporates the suggestions made by the hon. Member for Bexhill and Battle. (Gregory Barker).

Nia Griffith: I thank my hon. Friend for finding the right clause.

Gregory Barker: For clarification, I may say that the amendment that has been made to the Bill is permissive. It allows things to happen, but the question is whether they will happen. I was talking aboutan imperative for local authorities to include microgeneration provision in all developments, ensuring an immediate transformation in the size of the market. Under the clause that now features in the Bill, it may or may not be incorporated in new build.

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Nia Griffith: I hope that the hon. Gentleman will accept that the provision is at least a step in the right direction.

As I understand it, the aim is that the £50 million will be available for use on public buildings and for housing association homes, but I would also ask my hon. Friends in the Treasury and the Department of Trade and Industry to make it available for private households. Some Ministers may have reservations about making grant money available to the public. Others see some in the microgeneration industry as perpetually demanding grant funding, with no model for reaching viability without it. However, evidence from fellow northern European member states shows that medium to long-term grant programmes help to build critical market mass, which then offers the prospect of reaching a sustainable large market without grants. All we need is a few years with steady growth conditions in the market, and the rising price of fossil fuels is likely to increase demand.

In the UK, as in Germany, the home owner sector has been and continues to be the cornerstone of the growing solar-thermal market. Purchases by home owners encouraged by the availability of small incentives provide businesses in the sector with the market conditions to invest in growth. Through either subsidy programmes or fiscal incentives, a meaningful market stimulation programme for renewable microgeneration is essential, and it is crucial that that incorporates stimulation of the home owner sector.

Investment in a meaningful market stimulation programme for renewable microgeneration will offer strong returns and will lead to a self-sustainingmarket, which will not require Government incentive. That will significantly reduce UK demand for expensive new power stations, and it will help tofoster an internationally competitive UK renewable microgeneration industry, which is important if we are to get ahead of the game. It will also create jobs in the design, manufacture and installation of renewable microgeneration technologies.

I thank the Minister for Energy for his patience in dealing with the Bill and for producing the microgeneration strategy this year. However, I ask him to re-examine the criteria on spending the £50 million, which is an important practical issue.

11.31 pm

Martin Horwood (Cheltenham) (LD): I, too, extend my sympathies to the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz); I regret his absence today. I also extend my best wishes to theright hon. Member for Bromley and Chislehurst(Mr. Forth)—but I cannot say that I regret his absence, and it is nice to participate in a private Member’s Bill debate in which other hon. Members can get a word in edgeways.

The Bill is important, and it includes many imaginative measures, although it is slightly less imaginative now than it was when it started. Personally, I regret the loss of the clauses on renewable heat obligations, which would have formed an important incentive to technologies such as heat pumps and solar-thermal microgeneration. Nevertheless, the Bill
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will make a significant contribution to microgeneration and other forms of renewable energy.

Sir Robert Smith: Does my hon. Friend recognise that the loss of the renewable heat obligation will also damage the introduction of biomass heating, which could be used in rural areas where there is no gas main, and electricity is often used for heating? Renewable heat is an important way of reducing our carbon emissions.

Martin Horwood: Yes; biomass remains an area that needs to be explored more fully.

Some hon. Members are inclined to dismiss the potential of microgeneration for UK energy supply, which is enormous. Microgeneration can contribute 30 to 40 per cent. of a household’s energy bill. If such percentages were applied to the whole UK energy bill on a national long-term basis, that would dwarf the current contribution made by, for example, nuclear power. Microgeneration is an incredibly important part of the overall UK energy supply.

This is about more than reducing carbon emissions. Promoting microgeneration will avoid dependence on dangerous and expensive alternatives, and thereby make an important contribution to UK energy supply resilience. We have only to compare microgeneration with nuclear power, which is now being discussed more often than it used to be, to see some of the advantages of microgeneration. Where nuclear power depends on a centralised energy supply system, microgeneration is more efficient and works on a decentralised system. The hon. Member for Ruislip-Northwood (Mr. Hurd) has referred to the equivalent of 73.5 million tonnes of oil being lost in the distribution and conversion of energy. Nuclear power would not tackle that issue, but microgeneration would.

Nuclear power is inherently risky not only in the short term, but the long term. Some cases involvewaste hanging around for millenniums, whereas microgeneration is inherently safe and efficient. Microgeneration is inherently diverse, because it involves more than one form of energy production—heat pumps, combined heat and power, micro-hydro, solar-thermal, photovoltaics and wind power. If any one of those sources were to prove to be less valuable than we currently hope, there would be many other sources to take its place, which makes it an inherently more secure form of energy supply than one that relies on a few major, large-scale, centralised sources.

Ms Butler: Does clause 21 cover some of the areas to which the hon. Gentleman has referred? It states that the Secretary of State should consider the steps and report back to the House.

Martin Horwood: I am not sure whether it does. The hon. Lady has drawn attention to the very clause that originally contained the renewable heat obligations—a concrete measure that would have provided the market with a specific stimulus. Clause 21 is a limp alternative to that provision, but its inclusion is nevertheless welcome.

I was comparing the advantages of microgeneration with the disadvantages of nuclear power, and
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re-examining the need to subsidise nuclear power. The new Finnish nuclear power station is not an exampleof clean green technology. It may require enormous guarantees from the Finnish Government on the funding of the power station’s eventual decommissioning and long-term waste disposal. The Energy Policy Act was introduced in the USA last year. It provided some $14 billion of subsidies to the nuclear industry. A microgeneration-led approach would not require such subsidies.

One of the welcome aspects of the Bill is that it uses imaginative incentives and the easing of red tape to encourage renewable generation and microgeneration without large-scale public subsidy. That will encourage private sector enterprises such as Solar Smart in my constituency, which offers a pioneering integrated approach to solar-thermal power. The approach involves the integration of solar panels into the supply of not only hot water, but domestic heating, which is an innovation. That is an example of how the microgeneration industry will reveal more potential than we now realise, if it is stimulated, which will enable a safer and more efficient energy supply industry.

I recently engaged in a debate with the hon. Member for Bexhill and Battle (Gregory Barker) in which he suggested that energy supplies, green issues and tackling climate change were a gentle, quality of life issue. As other hon. Members have pointed out, we must remember that climate change is a real threat to not only our quality of life but to the existence of our economy and, in many cases, to our society as we know it. I have tried to find some sources to persuade even the sceptics on the Conservative Back Benches of the urgency of this matter.

Michael Gove (Surrey Heath) (Con): Sceptic!

Martin Horwood: Sceptic, on this occasion. I found a good commercial case from the Association of British Insurers, which reported in 2004 that weather risks are already increasing by 2 to 4 per cent. a year on household and property accounts due to changing weather. Claims for storm and flood damage in the UK doubled to more than £6 billion between 1998 and 2003 compared with the previous five years, with the prospect of a further tripling by 2015. Last year the ABI reported that in the UK climate change could increase the annual cost of flooding almost fifteenfold by the 2080s under the high emissions scenario, leading to potential total losses from river, coastal and urban flooding of more than £22 billion. There is clearly a serious commercial and economic risk to climate change.

Mr. Chope: Is the hon. Gentleman aware of the recently produced Intergovernmental Panel on Climate Change 2007 report, which says:

Martin Horwood: I am not aware of that particular report. If it is dated 2007, that is interesting, because it appears to be a year in advance.

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Mr. Chope: It is a draft.

Martin Horwood: Okay. Obviously, global warming will continue for several decades. The question is really what we do when we are standing on the edge of a cliff. It does not matter how we got there; the question is whether we step forward or backwards. We have to start resisting and trying to ameliorate the trend towards global warming; otherwise, catastrophe will result. The hon. Member for Bishop Auckland (Helen Goodman), who is no longer in her place, mentioned the possibility of rapid climate change resulting from changes in the thermohaline circulation. That might make the issue even more urgent.

If the ABI is not a sufficiently robust source for the hon. Member for Christchurch (Mr. Chope), perhaps consultants commissioned by the Pentagon might persuade him. They recently reported to the Pentagon the possible consequences of rapid climate change, including the changes in the thermohaline circulation. They speculated:

Climate change is a very serious issue, not a simple, fluffy, quality of life issue, and I am very pleased that it has become a mainstream political concern. The hon. Member for Bishop Auckland indulged in a little nostalgia about her early days. I nostalgically remember the manifesto on which I joined the then Liberal party in 1979, which talked about the very great importance of environmental protection. In those days, only the Liberal party among the mainstream parties was even talking about that issue, and we were regarded as bearded loonies for doing so. [ Interruption. ] I am not entirely sure that I would have been capable of growing a beard in 1979.

It is very welcome that this is now a mainstream political issue and that there is a growing and strong all-party consensus that has been demonstrated today in this House. For that reason, this Bill is very important and deserves all our support.

11.42 pm

Greg Clark (Tunbridge Wells) (Con): I start by adding my condolences to the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz). I congratulate him on the success of the Bill so far. I also pay tribute to my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who has been a vigorous contributor to the Bill. Its current state reflects the great deal of attention that he has paid to it during recent weeks and months.

I will keep my remarks short, because I am keen for us to get on to other business, which includes my own contribution to tackling climate change, or at least halting the deterioration of our environment—my Bill on protecting back gardens. I am sure that the Father of the House is keen to get on to his Bill, too.

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