Q10.  Dr. Julian Lewis (New Forest, East) (Con): For what reason the numbers of frigates and destroyers to be deployed by the Royal Navy have been reduced from the total set out in the 1998 strategic defence review.
The Prime Minister: As we said in the White Paper that we published in July 2004, we judged at that time that we needed fewer destroyers and frigates because of the reduced conventional threat and because of the improved technology of the new warships that are now coming into service. We are therefore putting more resources into programmes such as the future aircraft carriers and the Bay class landing ships, which will be vastly more capable and versatile than the ships that they are replacing.
Dr. Lewis: That is indeed what was said in 2004, but what was said in 1998 was that we needed 32 frigates and destroyers. The warships then were just as technologically advanced as the ones referred to several years later. When it comes to believing the Prime Minister or believing successive First Sea Lords who have said, in and out of office, that we need 30 frigates and destroyers, I know which I would believe. The Prime Minister has cut them from 35 to 25. Will he now guarantee that he is not going to cut them further by mothballing another six frigates and destroyers?
The Prime Minister: The hon. Gentleman asks why the situation is different as between July 2004 and 1998. It is true that in 1998 we said that there should be 32 such frigates and destroyers, and in 2004 we reduced that number to 25, but we then increased the number or the capability of the alternative vessels.
The Prime Minister: The hon. Gentleman should wait for the answer before he shakes his head; he may shake it afterwards. As a matter of fact, we are the party that has increased defence spending, whereas his party cut it by 30 per cent. The amount of money that we are putting into the new warship programme, which is huge and amounts to £14 billion over the next few years, is exactly the same as was predicated back in 1998, but we are spending it differently. That is change, and very sensible too.
The Secretary of State for Trade and Industry (Mr. Alistair Darling): With permission, Mr. Deputy Speaker, I should like to make a statement on the energy White Paper and the consultation on the future of nuclear power, which I am publishing today. Copies of these, together with several accompanying papers, are in the Vote Office.
As I said last year, we face two big challenges: first, the need, with other countries, to tackle climate change by cutting greenhouse gas emissions; and secondly, the need to ensure that we have secure and affordable energy supplies. Both are vital for our future prosperity; both are global issues calling for action internationally as well as action here at home.
The evidence supporting the need for urgent action on climate change continues to mount. Sir Nicholas Sterns report last autumn underlined the importance of acting now, and together with other countries. If not tackled, climate change poses catastrophic humanitarian consequences and economic costs.
Meanwhile, world energy demand continues to grow. It is expected to be 50 per cent. higher by 2030 than it is today, and it is likely to be met largely by fossil fuels for some time to come. That means rising greenhouse gas emissions and greater competition for energy resources, which has massive implications for both climate change and security of supply.
Here in the UK, our reserves of oil and gas are declining. Although significant amounts remain in the North sea, production has hit its peak and is now falling. As we made clear, we will make the most of our reserves, but as our economy grows we will become increasingly dependent on imports in a world where supplies are concentrated often in less stable regions. We need to take action to manage those risks.
In the next few years, energy companies will also need to replace ageing power stations and other infrastructure, so we need to create the right conditions for that investment to get timely and increasingly low-carbon energy supplies. The White Paper sets out a long-term framework for action to tackle those challenges at home and abroad.
The White Paper sets out our international strategy, which acknowledges that we need to tackle climate change and energy security together. Influenced by the UK, the European Council has agreed to a new strategy, including commitments to competitive markets, cuts in greenhouse gas emissions, more renewable energy and a central role for the European Union emissions trading scheme as a potential basis for a global carbon market. We also need to influence the wider international community, notably in getting a consensus on the post-2012 Kyoto framework for reducing greenhouse gas emissions. It also sets out the measures that we are taking here at home. We have already published a draft Climate Change Billwhich, for the first time, would impose a legally binding duty on Government to reduce the amount of carbon that is producedas we work towards our target of achieving at least a 60 per cent. reduction in carbon emissions by 2050. We are the first country in the world to do that.
Faced with such challenges, more is needed. The first priority must be to save energy. The White Paper sets out a range of measures to help us to become more energy efficient and cut energy use. Consumers need better information about how they can save energy. Next year and the year after, any householder who asks for them can get free, visual real-time displays that show the amount of electricity that they use. In parallel, we will work with the industry to ensure that consumers have visual displays, together with smart meters, in 10 years. In addition, better and clearer energy bills will help.
It is estimated that leaving electric appliances on stand-by uses about 7 per cent. of all electricity in UK homes. That is equivalent to the electricity generated from two 600 MW gas-fired power stations or from more than 1,500 2 MW wind turbines. We will work with industry and others to improve the efficiency of domestic appliances to phase out inefficient goods and limit the amount of stand-by energy wasted.
If we are to make a genuine difference to reducing energy demand, we need a stronger obligation on energy companies to provide their residential customers with energy-saving measures. The White Paper therefore proposes that from next year they double their current effort, and from 2012 we aim to transform the way in which they see their relationship with their customers, shifting the focus to the provision of energy services, increasing energy efficiency and saving carbon in the home, rather than simply selling them gas and electricity.
We will also require big organisations such as supermarkets, banks or hotel chains and large public sector organisations to limit their emissions and set tougher standards for the homes that we build and the products that we buy. We need more low-carbon generation of electricity and heat. We want to encourage the enthusiasm of individuals and communities to generate their energy locally, for example in homes or schools, through solar panels and wind turbines. We are therefore introducing a range of measures to support that approach. As part of that, we will remove the barriers and simplify the licensing regime so that more communities can the follow the example of Woking, including by developing combined heat and power schemes.
However, we still need large-scale energy investment. In the next 20 to 30 years, we need new generating capacity equivalent to approximately one third of our existing capacity. Our aim must be to ensure that companies have a wide range of options available so that we can retain a diverse energy mix, which is good both for our security of supply and will help us to move to an increasingly low-carbon economy.
Renewables are crucial. We are strengthening support for renewable electricity. The reform of the renewables obligation is essential, and means that by 2015 we expect that around 15 per cent. of our electricity supplies will come from renewablesthat is triple the current amount in only eight years. In transport, the road transport fuel obligation will save a million tonnes of carbon a year. We want to double it only if we can be satisfied that it is sustainable to do so.
New technologies will also help. We want British-based business to be at the forefront of new green technology. That is why we set up the Energy Technologies Institute, which brings public and private
investment together, now with a minimum budget of £600 million. We will launch a competition for the demonstration of carbon capture and storage, which has the potential to reduce carbon dioxide emissions from fossil fuel power stations by as much as 90 per cent., which is important as we will rely on gas and coal power, including coal mined in the UK, for some time to come. Details are set out in the White Paper.
We want to save energy, and we want low-carbon sources of energy. That is why we will do everything that we can to encourage renewables such as wind, wave and tidal power. But that alone will not be enough if we are to minimise our costs and risks. Alongside the White Paper, we are publishing a consultation document on nuclear power, so that we can take a decision on whether companies should have that option when making their investment decisions. We have reached the preliminary view that it would be in the public interest to allow energy companies to invest in nuclear power. Before making our decision, however, we are consulting further. The White Paper makes clear the complexities of the challenges that we face in terms of climate change and energy security. There is no single answer to those challenges. As wide a choice of low-carbon options as possible is needed, so that we do not become over-reliant on any one form of electricity generation.
Nuclear is an important part of our current energy mix. We get about 18 per cent. of our electricity from nuclear power stations, which are a low-carbon form of generating electricity. That provides a regular and steady supply of electricity, whereas electricity generated from most renewables is, by its very nature, intermittent. Every year, a modern nuclear reactor saves about 2.5 million tonnes of carbon dioxide being pumped into the atmosphere, compared with an equivalent gas-fired station.
Most nuclear power stations are set to close over the next 10 to 20 years at a time when we know that demand for electricity is going up because of economic growth. Quite simply, in the public interest we need to make a decision this year on whether we continue to get some of our electricity from nuclear, because new stations take a long time to build. If nuclear is excluded, there is every chance that its place will be taken by gas or coal generation, which emits carbon. Yes, carbon capture and storage, if it can be developed, would help, but at this stage we cannot be certainthere is no commercial-scale operation of carbon capture and storage on power generation anywhere in the world.
Although we want more renewable energy as part of the mix, it, too, is controversial. There are more than 170 applications in the planning process at the moment. It will be for the private sector to initiate, fund, construct and operate new nuclear plants and cover the cost of decommissioning and its full share of long-term waste management costs. There are important issues to consider, including waste, and those will be examined in the consultation, which will run until October.
Our measures, including those in the White Paper, put us on track to make savings of carbon emissions of between 23 and 33 million tonnes by 2020. If we meet
the upper end of that range, it would be the equivalent of removing all the emissions from every car, van and lorry on Britains roads today. By saving energy, encouraging new timely investment in gas import and storage infrastructure and maximising recovery of UK reserves of oil, gas and coal, our measures will also help security of supply.
We cannot become a low-carbon economy in a single step. Further measures will be needed if we are to achieve our long-term goals in the light of further international agreements in Europe and more widely. The White Paper sets out a framework for action to enable us to make real progress now towards tackling climate change and ensuring secure and affordable energy supplies. I commend this statement to the House.
Alan Duncan (Rutland and Melton) (Con): I thank the Secretary of State for advance sight of the statement. At its heart, however, there is confusion. The Government say that certain things must be done, but their policy, at best, says that they might be done. The current Prime Minister says that the replacement of nuclear power stations is back on the agenda with a vengeance. The future Prime Minister says that a new generation of nuclear power stations will be built across the country. The most that the Secretary of State says, however, is that nuclear plant could be part of the future energy mix, and that it is for the private sector to take decisions over new nuclear power stations.
Whatever the rhetoric, nothing in the White Paper will guarantee that a single nuclear power station will ever be built. Where has the vengeance for nuclear power gone? Are the Government saying that nuclear new build will definitely happen, or not? How many new nuclear power stations will definitely be built as a result of the White Paper? How can the Secretary of State deliver a UK-wide energy policy if Scotland rejects nuclear power? If the Scottish National party has rejected both nuclear in principle and wind in practice, is the SNPs policy anything other than utter lunacy?
Business will invest in nuclear power only if it knows its costs. It needs certainty about carbon, decommissioning and waste. There is no greater clarity on those issues today, so what will happen if no one comes forward to invest? Over a year ago the Prime Minister said of new nuclear build that
if we dont take these long-term decisions now, we will be committing a serious dereliction of duty.
Last July we set out our objectives. We called for a cap and trade scheme for CO2 based on auctioned rights, for site and type licensing, and for reform of the renewables obligation and the climate change levy. In addition, we said that there must be long-term certainty for investors. As we keep on saying, if this could lead to broad agreement between us and the Government, that would be good for Britain.
In todays announcement, there are detailed proposals for banding the renewables obligation, but these will not overcome its central flaws. On what basis,
therefore, has the Secretary of State assessed and then chosen to reject the considered alternative put forward by Ofgem?
Hidden in the statement is bad news about carbon capture. Will the Secretary of State confirm that his failure already to agree a pilot project for it means that any prospect of it happening has been seriously delayed? Is it not the truth that far from being on the edge of happening, carbon capture is about to be deferred and endangered? How on earth will carbon capture ever happen if it is still clobbered by the climate change levy? When will the Government remove the perversity of keeping a dirty tax on a clean process?
Our policy statement last July called for the greater use of carbon trading. A broad and rational regime for carbon trading is crucial to incentivise low carbon technologies. We therefore welcome the Governments announcement that they will broaden the scope of carbon trading to cover a greater number of businesses. We think permits should be auctioned. Will the Secretary of State tell us how and when they will be?
Climate change is the greatest threat that we face. That is why we supported the Government in signing up to tough EU targets on emissions and renewables in March, but at present we get just 2 per cent. of our total energy from renewables. Raising that to 20 per cent. was always going to be challenging, to put it mildly, but is it not true that todays plans will, at best, get us only about halfway to that target? Is it not the case that despite the clear wish expressed in the White Paper to encourage local and decentralised energy, there is almost nothing that amounts to a robust policy that will make it happen? Again and again, the White Paper wills the ends, but does not provide the means.
In households, smart metering could greatly increase energy efficiency and help customers to export electricity back into the grid, but the Government are supporting the limited clip-on visual electricity displays. Does this intervention not pull the rug from under the real smart meter market? Why are the Government going for the most basic option, when real smart meters would help to stimulate the microgeneration industry?
Todays announcement has already been twice delayed. It is Labours third White Paper, following dozens of consultations, and it is the product of their third energy review under their ninth Energy Minister. It offers nothing definite on nuclear or anything else. It heralds the potential collapse of carbon capture. It continues an irrational regime for carbon penalties and incentives. It provides little or no prospect of hitting renewables targets. It does not offer the security that we need. Ten months after the energy review, it is still content-free, not carbon-free.
Although the hon. Gentleman undoubtedly received my statement, I am sorry that, yet again, he did not have an opportunity to read it before he responded to me. Let me start with nuclear. As I understand his position nowI may have got it wrong, because it seems rather different from his
position 12 months agohe is berating the Government for not having said today, Look, were definitely going ahead with nuclear. That comes from the hon. Gentleman, who at the beginning of last year said:
From about the age of 12, I have had an instinctive hostility to nuclear power.[ Official Report, 17 January 2006; Vol. 441, c. 779.]
This is the man now urging us not to consult or do anything other than press on with it. His policy, as I understand it, is that nuclear should be deployed only as a last resort. In other words, only when it became clear that we cannot meet our obligations through renewable or other means would the hon. Gentleman say, Okay, lets consider nuclear. That seems to me to be absolute nonsense.
The hon. Gentleman asked me about the renewables obligation. I know that it is Tory policy to get rid of the renewables obligation, yet it has meant that we have doubled the amount of wind farm energy over the past two and a half years and that we are on track to reach the target of 15 per cent. by 2015triple the current amount, as clearly set out in the White Paper. The Tory policy is to get rid of it. On top of that, Tory councils up and down the country are objecting to wind farms. [Interruption.] Let us take the London Arrayone of the largest offshore wind farms in Europe to which my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and I consented. Who is objecting to it? Tory [Interruption.]
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The shadow Secretary of State has asked some questions, so I think that the Opposition Front Benchers should allow the Secretary of State to answer them.
The hon. Gentleman asked about the European emissions trading scheme. We wholeheartedly support it and believe that it should be tougher. It has an auctionary element to it. I am sorry, of course, that from the hon. Gentlemans point of view, it is in Europe, but there we are. That is just one of the things we have to deal with.
In relation to carbon capture and storage, we have taken a step forward that no other Government have taken. We are in discussion with about half a dozen large institutions that are interested in seeing it developed. Yes, it does take time. Nowhere in the world is a commercially operating CCS system in place, but we are determined to ensure that Britain is in the forefront of this technology, which is why I have been able to announce further details in the White Paper.