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19 Apr 2007 : Column 192WH—continued
I have listened carefully to the views of hon. Members. We have had some important contributions from my hon. Friends the Members for Stroud (Mr. Drew), for Linlithgow and East Falkirk (Michael Connarty) and for Copeland (Mr. Reed), and of course
I listened with great care to the interesting speech by the hon. Member for Grantham and Stamford (Mr. Davies). We also heard speeches from two Front-Bench Opposition Members.
The Select Committee discussed a broad national consensus on the role of nuclear power, a carbon-pricing framework, the long-term management of legacy waste and a review of the planning and licensing system. I should also acknowledge that it identified issues such as pre-licensing and site selection, which are important for nuclear new build. They would need to be dealt with to enable any new power stations to be built.
Let me start with the judicial review. As hon. Members know, the Government accepted the High Court’s judgment. We will publish a further consultation document next month alongside the energy White Paper. Our new consultation will endeavour to meet the Court’s requirements, and it will bring together the evidence and analysis that the Government have collected and published since the energy review began. It will help people to reach informed views and to provide the Government with valuable contributions.
Our preliminary view, which is, of course, subject to consultation, is that there is a case for having new nuclear power stations as one of the options open to developers of large-scale electricity generating capacity. However, we will consider the comments that we receive before we reach any decision. This is not about nuclear for nuclear’s sake; it is about the potential that nuclear has to reduce carbon emissions and to contribute to security of energy supply.
The Select Committee commented on the need for a broad national consensus. We have already said that we are committed to further consultation and that we will need to consider carefully the responses that we get. The Government recognise that nuclear is a subject on which many people have diverse views. The consultation will enable us to hear and to understand those views, and will inform our decision in the autumn.
Nuclear would only ever be one part of a future diverse energy mix. Renewables, other low-carbon technologies, energy-efficiency measures and carbon capture and storage will have to play an increasingly important role if we are to meet our challenging energy policy goals. The White Paper will set out the overall conclusions in respect of our energy strategy.
The Chairman of the Select Committee asked whether there would be nuclear new build by the private sector, in view of the political uncertainty and its impact on the cost of capital. Of course, political uncertainty is not purely in the hands of the Government. I listened carefully to the Conservative spokesman, but I am still a bit puzzled about the place of nuclear in the Conservative strategy. There are time scale problems that need to be addressed—I offer that advice freely, of course, in all senses.
The Government’s response to the question is that the private sector will come forward if the economics are attractive. Our current view is that, provided the prerequisites that the Select Committee identified—
planning, licensing, carbon pricing—are addressed, the economics will become more attractive. Those are precisely the issues that were identified in the energy review and that, subject to the outcome of the consultation, would need to be dealt with to enable any new power stations to be built.
There have been other developments. At the recent spring Council, EU leaders approved an ambitious climate change and energy package. The fundamental aim is to cut greenhouse gas emissions by 20 per cent. compared with 1990 levels by 2020, or by 30 per cent. if other countries also play their part. The targets are tough, but, through that package, the EU is sending a powerful message to the rest of the world that we are serious about tackling climate change and ensuring security of supply.
We will also continue to work in Europe to address issues surrounding the European Union’s emissions trading scheme. The Commission has been tough in assessing the caps for the second phase. The market is expecting the price of carbon to be about €17 next year, which shows that the market believes that the scheme will have a real impact on emissions. That is encouraging. However, we will also keep the option open for further measures—I have listened to colleagues’ views on that—in order to reinforce, if necessary, the operation of the scheme in the UK and to give greater clarity to investors. That answers another key point raised by the Committee concerning the framework of carbon pricing.
I have listened to a number of colleagues’ views on nuclear waste, including my hon. Friend the Member for Linlithgow and East Falkirk. Comment has already been made on his suggestion that the waters are safe enough to swim in. One always looks for a photo opportunity, but on this occasion I would simply offer to hold the towel for my hon. Friend.
Since I last addressed the Select Committee, the Government have made progress on the issue of nuclear waste. We can be proud of the fact that we are the first UK Government to take decisive steps to resolve that issue. However, we are realistic and know that it will take concerted action to bring about a lasting solution. I should add that I visited Finland to examine its strategy on waste.
As the Committee will know, we are currently developing plans for a consultation on geological disposal and how to take forward the CoRWM recommendations. We aim for that to take place this summer. There will be more in that about volunteerism. I am advised that managing radioactive waste supply is the name of the project to which I have referred.
We all recognise the significance of planning, about which the hon. Member for Grantham and Stamford spoke in an interesting manner. The Committee rightly said that the current planning system can be a significant barrier to investment in all sorts of new infrastructure. All hon. Members are aware of that and we certainly came to the same conclusion. The system needs to be reformed to give us the infrastructure that we need on the right timetable, whether it be for energy or other types of large infrastructure. To that end, the Government will shortly publish a planning White Paper, which will take forward proposals for the reform of major infrastructure planning. Energy will, of course, be an important part of that.
The Committee has concerns on a number of other matters that I will now attempt to address, but I will start perhaps with another matter raised in the debate: reactor type and design. That is not a matter for Government per se, as it is, broadly, for the private sector to make judgments about that. Most of us would agree that that is the sensible approach. We have heard about a number of different companies and designs, so it is for the private sector to judge. However, of course, that must be subject to licensing. It is for private sector technology vendors to decide whether they want to have their technologies pre-licensed, and it is for the private sector generators to decide which licensed technologies to deploy if licensing shows that they are safe.
Skills are now a frequent matter for discussion, not only in the energy sector, but in many other sectors about which we are concerned. The Committee’s report concluded:
“Constraints in the domestic skills capacity could be overcome”.
In our energy review we agreed with that. We know that there are significant skill gaps in the decommissioning and waste management sector. We understand that the demography of the work force means that more people are closer to 50 than to 25—if I can summarise it in that way. Many of us have sympathy with that demography.
We know that there are significant skills gaps in the decommissioning and waste management sector, but we believe that the Nuclear Decommissioning Authority, Cogent, which is the sector skills council, and the industry more widely, as well as the recently established national skills academy for nuclear are pulling together a strategy to deal with those gaps. As the Minister responsible for skills in the Department of Trade and Industry, I promise to take a close interest in those developments.
Regardless of the decision on new nuclear build in light of the consultation, skills will continue to be an important issue. That applies both to existing nuclear power stations and to long-term decommissioning and waste management.
Charles Hendry: I am most grateful to the Minister for giving way, given our time constraints. When he went to Finland, was it impressed on him, as it was on me when I went there, that when the announcement about new-build nuclear was made, nuclear engineering departments started opening up in the universities? They are now producing graduates to help to build that programme, and they have had time to develop the new skills base.
Malcolm Wicks: I recognise that, too. I should assure hon. Members that we have learnt lessons from other nations and we will continue to do so. France and Finland obviously, but not exclusively, come to mind.
The hon. Member for Cambridge (David Howarth), the Liberal Democrat spokesman, did not have time to set out the party’s strategy on energy policy, but he asked one or two questions as he piled attack on
attack, in an obsessive way, on the nuclear industry. When I think of the Liberal Democrat strategy, I think of the last era when the Liberals were in power and a Foreign Secretary reflected in wartime that the lights were going out all over Europe. The hon. Gentleman still has to prove that, if the political miracle, or nightmare, of a Liberal Democrat Government occurred, the lights would stay on. I do not quite see it.
David Howarth: Will the Minister give way?
Malcolm Wicks: On the subject of wind power, I give way briefly.
David Howarth: Perhaps the Minister could explain his Department’s response to the Environmental Audit Committee’s report, to which I referred.
Malcolm Wicks: I am not sure that I can explain it. I am not sure that I understand the question. Let me reflect on it, and if it is worthy of an answer, I will reply in writing.
The hon. Gentleman made some technical, but important points, no doubt, that the DTI energy review used non-standard discount rates and costs of capital. The model used in the energy review was extensively peer-reviewed by external experts who were satisfied as to its robustness. We took the arithmetic very seriously.
My hon. Friend the Member for Linlithgow and East Falkirk asked about grid infrastructure, which is crucial in terms of any development that we are proposing or hoping to see. Ofgem has recognised the need for increased investment in the distribution networks. In its last electricity distribution price control review, it increased funding allowances for investment for 2005 to 2010 by approximately 50 per cent. over levels spent in 2000 to 2005. That is an important point, which is often neglected and I thank my hon. Friend for raising it.
It is interesting that, however few hon. Members are present in the Chamber, we always spend three hours debating, which is gratifying on a sunny afternoon. To sum up, the Government have reached their preliminary view on potential new nuclear build for two main reasons: the science of climate change is now very clear and we need to secure our energy supplies as the amount of oil and gas in the North sea declines.
We will bring forward our consultation on nuclear next month. It is important that people engage with the arguments. If people have better solutions, then, of course, we are listening. We are faced with difficult choices, but any Government worth their name must surely be prepared to show leadership while listening to views on this crucial issue. That is what we intend to do. We have made a good, as it were, new start this afternoon. We have had an excellent discussion involving all hon. Members. Again, I thank the Chairman of the Select Committee for an excellent report and for introducing it with such clarity and authority.
Adjourned accordingly at twenty-nine minutes past Five o’clock.
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