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Joan Ruddock (Lewisham, Deptford) (Lab): I congratulate my right hon. Friend on the key elements of the statement—the 8 million tonnes, the auction and the environmental transformation fund. They are essential to our climate change programme.
My right hon. Friend referred to the corporate leaders group on climate change, which will be delighted with the announcement. He has united keen environmentalists such as me and leading members of industry. Will he meet the group again to discuss its proposals for hydrogen storage and wave and tidal electricity generation technologies, which could make us a world leader? I believe—and I think that the group does—that they are essential for dealing with the problems that the electricity generating industry faces.
David Miliband: My hon. Friend has an incredibly distinguished record in this field and I am grateful for her kind comments. I can certainly confirm that we are working with the corporate leaders group to establish a work programme to further our discussions. Her point about non-mature industries, such as tidal, was important; when we talk about a level playing field for different forms of renewable energy we must recognise that some forms of renewable energy are more developed than others, and make sure that they all have every chance to develop to the full.
Sir Nicholas Winterton (Macclesfield) (Con): The Secretary of State talked about the corporate leaders group. Could he indicate more accurately how much input there was from industry and commerce in the decisions that the Government have taken? As he may know, I am deeply concerned about the position of the UK manufacturing industry, because we are competing with countries that are not in the least interested in carbon emissions—China and India, for instance, which are our major competitors. How much input was there from industry and how concern is there about the impact of the changes on manufacturing industry and its competitiveness?
David
Miliband: I can strongly assure the hon. Gentleman that
the consultation in which the Government have been engaged since March
has had wide and deep industry involvement. I shall write to him with
the exact number of responses that we have received. The hon. Gentleman
made some important points about manufacturing; I certainly understand
his point about the tough nature of the global competitive market in
which manufacturers are working, but I hope that he is reassured by two
things in my statement. First, I confirmed that the Government will
continue to insulate internationally competitive sectors within the ETS
from the burden of carbon reduction—although I emphasise that
the extent to which they can reduce
their energy use will save them a lot of money, especially at a time of
high energy prices. The second aspect of my statement that is relevant
to the hon. Gentleman’s legitimate concern about the role of
manufacturing industry is that our calculations show a 1 per cent. base
case impact on electricity prices of the decision, over the existing
cap. One can live on 1 per cent. so one must not dismiss it as being
the same as nothing, but given that it is 1 per cent. over the
five-year period and not an annual increase, I think that we have
struck the right balance both to grow the economy and protect the
environment.
Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): In my right hon. Friend’s statement, he said that as we build on the emissions trading scheme we shall create opportunities in the UK for investment in low-carbon technologies. Is he aware that Mitsui Babcock is producing supercritical boilers that are being fitted in China but not in this country? Will he discuss with his hon. Friend the Minister for Energy, who is sitting beside him, what we might do to encourage British generators to invest in that new technology?
David Miliband: My hon. Friend makes a profoundly important point. I think that I am right in saying that there has been an 85 per cent. shift in the UK boiler market towards condensing boilers, which is obviously good for the environment, but I realise that his point was about their production. I shall certainly talk to my hon. Friend the Minister for Energy about that and one or both of us will write to him about what the Government are doing in that regard.
Peter Luff (Mid-Worcestershire) (Con): In the Sellar and Yeatman “1066 and All That” sense there is no doubt that the ETS is definitely “a Good Thing”, but it operates over quite short time scales, so can the Secretary of State reassure me that he is talking to his colleagues in the Department of Trade and Industry about how Britain can provide longer time frames for the mechanisms whereby carbon allocations should be set, to enable investors in low-carbon generating techniques the confidence to take informed investment decisions?
David Miliband: Yes, I can, and the work of the Finnish presidency in finalising the European Council’s long-term view about the role of the ETS will be vital.
David Taylor (North-West Leicestershire) (Lab/Co-op): I congratulate my right hon. Friend on his statement and welcome the announcement of the environmental transformation fund. I am optimistic that it will indeed catalyse greater investment in non-nuclear, low-carbon technologies, energy efficiency and renewable energy. On the basis of the Select Committee inquiry into biofuels, which looked at related areas in terms of investment incentives for business, it seems clear that my right hon. Friend may need to ensure that the Chancellor of the Exchequer in 2008—who may be a different person from now—opens his cheque book wider than he did for other incentive schemes. Does my right hon. Friend the Secretary of State recognise that generous incentives will be needed to get business to invest, for the reasons given by the hon. Member for Mid-Worcestershire (Peter Luff)?
David Miliband: My hon. Friend tempts me into the future of farming, which I spend part of my time addressing, because his point about biofuels is important to the vision of a diversified farming sector—as it is, too, to the future of our environment. The decision of the former Secretary of State for Transport a few months ago, that by 2010, 5 per cent. of all petrol bought will come from a biofuel basis is an important step in the right direction.
Hywel Williams (Caernarfon) (PC): The Secretary of State said that allocations for industry will continue to be made on the basis of need. I think that is historical need, so what are his plans to review and reassess that need on a regional basis, given that manufacturing in Wales is a substantially larger part of the economy than elsewhere in the UK?
David Miliband: The hon. Gentleman makes an important point. We have two years to make sure that phase 2 of the scheme works well from 2008. We shall be working closely not only with industry but also with the devolved Administrations to ensure that the scheme appropriately recognises different needs around the country.
Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): If other European countries are to follow a lead set by the UK Government, they will be required not just to set tough national allocation plan targets but also to ensure that their own industries comply with those targets in a transparent way. What measures does my right hon. Friend think should be put in place to ensure that the European Commission can properly monitor the effectiveness of the schemes agreed and the implementation of the caps by all member states in the Union?
David Miliband: My hon. Friend raises a really important point about the difference between phases 1 and 2, which relates to a question put by the hon. Member for Eastleigh (Chris Huhne) that I forgot to answer. Phase 1 was characterised by much uncertainty about existing emission levels in different countries. We now have figures for emissions in every country and the European Commission has said that no country will be allowed to set a cap higher than its current emissions level. For starters, we are in a much, much stronger position. Secondly, my hon. Friend makes an important point about independent monitoring and reporting. Our strong view, which we are discussing with the Commissioner, is that we must do everything we can to strengthen the integrity of the monitoring and other systems.
Mr. Crispin Blunt (Reigate) (Con): Why did the Secretary of State not offer an explanation and an apology for the embarrassing shambles last year in the Department he now heads? Figures given to the European Union had to be corrected, but the Commission refused to accept the corrections and we were led into the embarrassing position of taking it to the European Court of Justice to put things right. What confidence can we have that his Department will be able to administer this otherwise thoroughly welcome scheme?
David Miliband: To say that there is grotesque embarrassment is a bit rich, given that we are recognised around Europe as playing a leading role in the emissions trading scheme; but if it is any consolation to the hon. Gentleman, we are working closely with the Department of Trade and Industry to make sure that the expertise of the two Departments results in the successful operation of the scheme.
Ms Angela C. Smith (Sheffield, Hillsborough) (Lab): Major industries in my constituency, such as Corus Engineering Steels, are concerned about the impact of the scheme on their ability to compete. If we are helping to create a genuinely global carbon market, will it be likely to draw in the countries that initially stayed out of the Kyoto process, such as the United States?
David Miliband: My hon. Friend makes an important point. Fortunately, the Minister for Energy is sitting next to me and assures me not only that he is also responsible for steel but that he is a man of steel as well. He recently met Corus to discuss the point raised by my hon. Friend the Member for Sheffield, Hillsborough (Ms Smith) and other issues. Obviously, questions about environmental regulation, the role of climate change agreements and the role that we have set out for the insulation of internationally competitive sectors from the burdens imposed by the scheme are all part of the calculation that we and industry have to make to ensure that we achieve the right balance not only between the economy and the environment, but also between different parts of the economy. My hon. Friend’s commitment to a strong manufacturing sector is shared on both sides of the House and certainly by the Government.
Adam Afriyie (Windsor) (Con): Through my work on energy in the Science and Technology Committee, it is clear to me that the energy production industry is ready to trade carbon emissions for the next 20, 30, 40 or 50 years ad infinitum. The challenge is that there is no long-term framework, so will the Secretary of State let us know why he omitted the longer-term framework from his statement, and will he confirm the admission that the Government are on track to miss their target of carbon emission reductions by 2010?
David Miliband: I would have been happy to give an hour-long lecture on all aspects of energy policy, but today’s announcement was about phase 2 of the scheme, and it might have tried Members’ patience if we had gone further. However, in answer to the question, we have said that we are very clear about the 2050 goal as the guiding line for policy, we are very clear about the need for the EU and all its leaders and Governments to set a clear indication of the longterm direction and we are determined to do that as quickly as possible.
Dr. Alan Whitehead (Southampton, Test) (Lab): I welcome, with other colleagues, the great step forward represented by today’s statement in terms of carbon saving. Can my right hon. Friend confirm whether there will be a special good-quality combined heat and power sector in the second phase of the NAP? If there is to be a good-quality CHP sector, under the new entrants holdback will he be able to provide new CHP entrants with 100 per cent. of the spreadsheet calculation within that sector?
David Miliband: To answer questions about spreadsheets I am going to have to get my PowerPoint out—[Hon. Members: “Excel.”]—or even my Excel. But my hon. Friend the Minister for Climate Change and the Environment assures me that CHP will be in the scheme. The only thing I would say is that, as I stressed in my statement, there are strong links between the statement today and the energy review, and the energy review will be looking right across the piece at energy need and how to meet it.
Mr. Charles Walker (Broxbourne) (Con): At a more granular level, the Rye house power station in my constituency is one of the UK’s top 100 producers of emissions. How is the Secretary of State working with organisations like that to encourage them to burn their fuel more efficiently in the creation of electricity?
David Miliband: The ETS is one way. My right hon. Friend the Secretary of State for Trade and Industry and I had a very useful meeting with the UK Business Council for Sustainable Energy, where we talked about the challenges that are faced by the sector but also the commitment of the sector to ensure that it works in a much more energyefficient way. Two weeks ago I was up in Warrington, looking at a major production facility that is now using 30 per cent. biofuels to help ensure that emissions are curbed as much as possible. Maybe there is something for the hon. Gentleman’s constituents to learn from that.
Mr. Adrian Bailey (West Bromwich, West) (Lab/Co-op): The Secretary of State may be aware that, in my capacity as secretary to the allparty steel and metals group, I have led deputations to the Minister responsible for steel on issues arising from phase 2, not least the dramatic reduction in carbon allowances that will be made. The industry maintains that both for blast furnaces and electric arc furnaces the spreadsheets on which the calculations have been based are incorrect and have not been drawn up in consultation with the industry. What steps is the Minister taking to ensure that in the consultation with the industry we arrive at targets that will deliver on our overall national target but not compromise the longterm viability of the steelmaking industry in this country?
David
Miliband: I do know that my hon. Friend has been a doughty
campaigner on behalf of not just his constituents but the steel
industry throughout the
country and has met my hon. Friend the Minister responsible for steel. I
can assure him that if there are disputes about facts, we shall use the
forthcoming period to get to the bottom of them and ensure that there
is an agreed evidence base on which decisions are
made.
Mr. Philip Hollobone (Kettering) (Con): Is phase 2 open to European countries that are not members of the European Union, and given that China, India, Brazil and the United States continue to splurge out carbon dioxide at an increasing rate, what progress is being made towards the establishment of a global carbon market?
David Miliband: The hon. Gentleman raises a very interesting point, not just in respect of China and India but perhaps also the 248 US cities that have now committed themselves to the Kyoto targets under something called the Seattle declaration led by the mayor of Seattle, some of which have expressed an interest in joining the scheme. The latest legal advice is that it is not open to nonmembers of the EU. However, I am pleased to report that I hear that there are moves afoot to try to replicate the successes of the EU scheme in other regions of the world.
Mr. Peter Bone (Wellingborough) (Con): Is the Secretary of State at all concerned that the EU will not operate the scheme in the way that he thinks it should be operated, given that, when the EU gas liberalisation happened, our continental colleagues completely failed to follow it and householders in this country paid £186 a year extra because of that failure?
David Miliband: I am sure that my hon. Friend the Minister for Energy is still pressing on the gas liberalisation issue—the hon. Gentleman raises an important issue. However, I can say to him that I felt in my discussions with the European Environment Council on Tuesday in Luxembourg that there was widespread recognition that we absolutely had to make the ETS work, because it is the lowestcost way of driving down carbon emissions, and that view was shared not just by member states but in the Commission. We shall be working very hard to ensure that they live up to that commitment.
Point of Order
1.5 pm
Mr. Greg Hands (Hammersmith and Fulham) (Con): On a point of order, Mr. Deputy Speaker. May I get your guidance on the speed with which written questions are answered, especially in the Department for Work and Pensions? On 19 December 2005 I tabled a question on the cost of departmental Christmas cards, which was answered on 14 June 2006—some six months later—at a cost of about £3,000. I hope that they are more prompt in getting out their Christmas cards than they are in getting out their parliamentary answers.
Mr. Deputy Speaker (Sir Michael Lord): The hon. Gentleman must be aware that the speed with which Ministers answer written questions is not a matter for the Chair. He might, however, like to read yesterday's Adjournment debate, which was very much about these matters; he might find that of interest.
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