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House of Commons

Thursday 7 June 2007

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions


The Secretary of State was asked—

Carbon Capture and Storage

1. Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): What factors were taken into account in choosing the date of the carbon capture and storage competition announced in the energy White Paper. [140924]

The Secretary of State for Trade and Industry (Mr. Alistair Darling): The date was chosen to allow the minimum amount of time required to design a competition that would allow a number of companies to participate, and to ensure maximum benefit and value for money.

Sir Robert Smith: I am very disturbed by the Secretary of State’s answer. North sea investment has to confront the fact that decommissioning is coming and the clock is ticking. The Government knew that decommissioning was coming for the Miller field. Why did they not say at the outset that the project had no chance and that they could never make a decision in time? They will have to be much speedier in creating the criteria for investment in novel industries if we are to get new investment into this country. Will the Secretary of State work to see whether anything can be rescued from this project? What hope is there for gas gathering west of Shetland—

Mr. Speaker: Order. That was an awful lot of supplementaries. There should only be one.

Mr. Darling: Let me deal with the points that the hon. Gentleman made. As I said when we discussed this matter yesterday, I am sorry that BP was not able to continue operation of the Miller field, but I should point out two things. First, BP always knew that there was going to be a competition. Seven other companies are interested in working with the Government towards building a carbon capture and storage scheme and, as I said yesterday, it is not open to the Government to hand over a contract such as this to one company, when we know that others are in the field. Secondly, even if BP had remained in the competition, there was of course no guarantee that it would have been
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successful, because as I said, other firms are interested. I hope that BP will be able to work with us again in future, and it has said that it would like to do that. So far as Scotland is concerned, Scottish Power has publicly said that it is interested in participating in this competition in relation to either Longannet or Cockenzie.

Mr. Andy Reed (Loughborough) (Lab/Co-op): My right hon. Friend is right to recognise the speed at which we need to work to advance these technologies. In this regard, we should take particular account of the energy technologies institute, which his Department and the Treasury are trying to foster. As my right hon. Friend knows, Loughborough university is a key bidder for one of the partnerships, which will be rolling out later this year. Will he assure us that these technologies and the various institutes that are being set up across the country will be with us as soon as possible? As we learned from the G8 this weekend, if we are to have a positive impact on climate change, we need to act within days and months, rather than years.

Mr. Darling: On the energy technologies institute, five groups of companies have shown an interest and we will be making a decision. We have set out the timetable and the short leet is being worked through. My hon. Friend is absolutely right—this is a unique venture. The public and private sectors are working together and looking at new technologies, of which carbon capture might be one. However, the process is separate from the one relating to carbon capture and storage.

Richard Ottaway (Croydon, South) (Con): A critical part of the answer to this question is the amount of nuclear power in the energy mix. What is the Secretary of State’s best estimate of the time that it would take to commission and construct a nuclear power station? Starting from now, when would he expect a new nuclear power station to be on-stream?

Mr. Darling: First, as the hon. Gentleman will know, following the court judgment in February the Government now have to consult on whether nuclear should be part of the mix. I know that some Members find that frustrating, but that is the law and the Government are bound by that decision. Once the consultation has finished we can reach a final conclusion and, as I said, that needs to be done this year. It is very difficult to estimate how long it would take between the start of the process and a new nuclear power station opening. Decisions on whether nuclear power stations are to be built will be taken by the generators themselves, not by the Government. Of course, it would greatly assist that process if we could improve the planning regime, and I hope that we will get all-party support for that.

David Taylor (North-West Leicestershire) (Lab/Co-op): Is not the delayed decision on subsidies being used by BP as a smokescreen? Is it really serious about investing in carbon capture and storage technology in the United Kingdom? Centrica is still pressing ahead; that sets an example, does it not? We need this technology to access the many hundreds of millions of tonnes of clean coal that still exists in this country, not least the 800 million tonnes in the constituency of the shadow Secretary of State of Trade and Industry.

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Mr. Darling: I am absolutely sure that BP is serious about looking at new technology such as this. The problem that it had with the Miller field in the North sea was that the field had reached the end of its life, and keeping it going was proving quite expensive for BP, which, as a company, obviously had to have regard to that. It has been suggested in some quarters—by the nationalists in particular—that the BP project was somehow ready to go. Yes, BP had spent some money on it, but as I said yesterday, we are talking about hundreds of millions of pounds over a 10 to 20-year period. That is why it was not open to the Government simply to have said to BP, “Okay. You’ve expressed an interest—let’s go with you”, when we knew that at least seven other companies—there might be more in future—are interested in working in this area.

Let there be no mistake: I hope that we can become a world leader in this field. No other Government are involved in this process to this extent. Nowhere in the world is there any commercially operated carbon capture and storage, and it is important that we should be part of that, because we can see the potential for this country and, crucially, for countries such as India and China. Let us not forget that China is building a new coal-fired power station every four days on average.

Mr. Mike Weir (Angus) (SNP): That last point is exactly why it is so important to make progress with CCS. The point about Peterhead is that it was years ahead of any other project in this country. The White Paper says that a competition will be launched this year and the full chain will start to be demonstrated at some point between 2011 and 2014. Can the Secretary of State give us some idea of when any new project from that competition will reach the stage that BP had already reached at Peterhead?

Mr. Darling: The hon. Gentleman knows that although BP had done a lot of preliminary work and spent quite a bit of money, it was still in the foothills of development of the whole process. Other companies were doing exactly the same work. I understand why the hon. Gentleman, representing the constituency that he does, and the leader of his party, as the local MP, were keen to see BP proceed, and I am sorry that it has withdrawn. However, as I said yesterday, it is not open to the Government to hand over a contract of this value without being satisfied that we have considered all the possibilities. That is what we are doing and that is the right way to proceed.

Alan Duncan (Rutland and Melton) (Con): The Chancellor of the Exchequer first promised a demonstration project for carbon capture at the end of 2005. We will now have a competition only at the end of 2007. We are still in the foothills and the Secretary of State ain’t much of a Sherpa on this issue. Given such a delay, can he tell the House when carbon storage will be sufficiently advanced to deliver low-carbon electricity to homes? If he thinks that there is a risk that that will never actually happen, how will he ever meet his emissions targets?

Mr. Darling: As I said two weeks ago when we launched the White Paper, I think that carbon capture and storage has great potential. However, precisely because it is not in commercial operation anywhere in
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the world at the moment, we cannot be certain. To all those people who say that we do not need nuclear because we have CCS, I say that until we can be sure that that technology actually works, it would be foolish to rule out possibilities such as nuclear. As of yesterday afternoon at least, that is the hon. Gentleman’s position too—

Alan Duncan: It has always been our position.

Mr. Darling: “Always been our position”! I congratulate the hon. Gentleman on his sense of humour.

Post Office Closures

2. Mr. Andrew Robathan (Blaby) (Con): When he will announce which post offices will close following his recent statement. [140925]

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): On 17 May, my right hon. Friend the Secretary of State announced the Government’s response to public consultation on the post office network. Now that the Government have announced their decision, it will be for Post Office Ltd to restructure the network strategically through 50 to 60 local area implementation plans over the next 18 months. Following initial input from sub-postmasters, Postwatch and local authorities, the plans will include closure proposals which will then be put to local consultations ahead of the final decision.

Mr. Robathan: My constituents from Braunstone Town in the north, down through Blaby and Dunton Bassett to Lutterworth in the south, have contacted me about their concerns that their post offices will close. Since the Government came to power, they have had the urban network reinvention programme, which closed some 3,000 post offices, and now we are talking about closing perhaps another couple of thousand. When will the Government see the countrywide network of post offices as a fantastic opportunity for the delivery of services and goods, instead of restricting the freedoms of small businessmen—sub-postmasters—to carry out business, and undermining that business by withdrawing the Government services that they may deliver? The customers like getting those services from post offices.

Jim Fitzpatrick: The hon. Gentleman knows that the Government have supported Post Office Ltd to the tune of £2 billion since 1999. We are committed to support it with another £1.7 billion until 2011. He neglects the fact that losses have increased from £2 million a week a few years ago to an anticipated £4 million a week this year. The Trade and Industry Committee and the National Federation of Sub-Postmasters both say that that situation is unsustainable. With the new access criteria laid out by the Secretary of State, we are trying to ensure that by 2011 the network is in a much better place and we have a viable national network for the future.

Mr. David Kidney (Stafford) (Lab): I am especially concerned about the risk of social exclusion in rural areas if post offices are lost. Can my hon. Friend at least assure me that where there is a village shop with
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the post office, support will be given to existing shops, the encouragement of community shops and the retention of the basic postal services of cash, payment of bills and parcel postage? Will he undertake to give a clear steer to the regional development agencies to support such enterprise in shops in rural areas?

Jim Fitzpatrick: My hon. Friend raises some very good points about how the network can best be protected. In his statement of 17 May, my right hon. Friend the Secretary of State outlined a number of joint working arrangements worthy of examination. We have said that our aim is to establish ways to work even more closely with the devolved Assemblies and the Local Government Association by 2011, and that, in the restructuring programme, Post Office Ltd and Postwatch must take account of a variety of conditions over and above economic and commercial criteria, such as economic impact and local transport arrangements. The Government are committed to supporting the post office network with the commercial assistance that the hon. Gentleman seeks, and I am sure that we will get the best deal possible.

Mr. Alan Reid (Argyll and Bute) (LD): The Government have laid down all sorts of criteria, including the availability of public transport, but Post Office Ltd acts as judge, jury and executioner when it puts forward proposals and then makes the final decision. Will the Government put in place an independent referee who can look at the closures in every area to make sure that they conform to the access criteria?

Jim Fitzpatrick: Post Office Ltd has been charged with the responsibility of drafting the plan, but it will do so in consultation with local government and Postwatch. The plans will receive quite a bit of attention before they are published, so they should be quite well refined. Even so, hon. Members will be contacted about a week before the plans are published, and there will then be a six-week programme of local consultation in which local communities, organisations and individuals will be able to make their feelings known. The plans will not be solely in the gift of Post Office Ltd, as there will be a robust consultation exercise.

Rosie Cooper (West Lancashire) (Lab): In my constituency, there have been some very creative ideas about how to deal with the problem of post offices. For example, the post office that has been opened in an equestrian shop has been very successful. However, one of the sub-postmasters in my area decided that he did not want to renew his licence, and his office was closed. How is the Department supporting the post office network in cases where people want to retain a post office but the sub-postmaster does not want to continue?

Jim Fitzpatrick: In his 17 May statement, my right hon. Friend the Secretary of State said that the access criteria that have been laid down require Post Office Ltd to make sure that the service across the UK is as universal as possible. Moreover, that service will be planned: it will not be the ad hoc service that we had before. Post Office Ltd is also developing new products
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to try to make sub-post offices more attractive. As has been noted in previous debates, it is offering new financial products such as foreign exchange facilities and insurance. In addition, the new saver account was opened last year, and a contract to provide broadband services has been signed with BT. I see from press cuttings this morning that Post Office Ltd is moving into the mortgage market as well. All those innovations are to be welcomed, as they demonstrate Post Office Ltd’s ambition to provide more services on top of the traditional ones that my hon. Friend mentioned.

Charles Hendry (Wealden) (Con): Does the Minister agree that, in spite of the improvements made in recent years by Royal Mail’s management and staff, the company’s finances remain in a very worrying state? The financial problems facing it and the Post Office have been made worse by the Government’s failure to agree a long-term package for the future of the business. Does he accept that a decision by postal workers to strike would cause very significant damage to the Royal Mail, and that a strike would put even more services and post offices at risk? Will he therefore join me in urging all postal workers to vote against strike action for the sake of the business in the long term?

Jim Fitzpatrick: I have to take issue with the hon. Gentleman, because my right hon. Friend the Secretary of State has made several statements in recent years in which he has outlined the considerable financial support and assistance that the Government have given to Royal Mail Group. I do not agree that we have not set out a very strong business plan for the group, including Post Office Ltd, for the future. As for possible industrial action, operational matters such as that are the direct responsibility of the company’s management. The negotiation of pay and conditions is a matter for the management and the union involved, and the Government are not—and should not be—involved. Both relevant parties have the responsibility to resolve all such issues, and the Government encourage them to do so as constructively as possible. We do not want the business to be damaged; our commitment of the past few years demonstrates that we want the recent good progress to continue.

3. Mr. David Amess (Southend, West) (Con): How many (a) voluntary and (b) compulsory post office closures there will be over the next two years under the scheme he announced in May; and if he will make a statement. [140926]

The Parliamentary Under-Secretary of State for Trade and Industry (Jim Fitzpatrick): The measures announced on 17 May by my right hon. Friend the Secretary of State will maintain a stable national network of post offices and ensure reasonable access with the right services in the right areas. This will include the compulsory closure of a maximum of 2,500 post offices. Closure decisions will not be determined by sub-postmasters' preferences although we expect that there will be cases where it makes sense to accommodate the wishes of those who want to leave the network.

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Mr. Amess: I live in the constituency with the greatest concentration of senior citizens and the most centenarians, and I cannot emphasise strongly enough to the Minister what a devastating effect the closure of post offices has had on the local community. Senior citizens find it difficult to cope with new technology. Having closed 10 post offices already in Southend, West, will the Minister now give a commitment that there will be no further post office closures in my constituency?

Jim Fitzpatrick: The hon. Gentleman knows that I cannot give that commitment. The restructuring programme is a matter for Post Office Ltd in consultation with Postwatch and local authorities. He will want to make his usual robust representations on behalf of his constituents when the time comes. I have to say, however, that the absence of a Conservative party policy on the programme leaves the hon. Gentleman in a weak position. The Lib Dems have a policy—it is not a very good policy, but at least they have one—which is to privatise Royal Mail and use the money raised for a short-term injection. They would then be back here in three years’ time with continued losses haemorrhaging from the network. We will do our best to protect the universal national network and I am sure that the hon. Gentleman will play his part on behalf of his constituents.

Mr. Lindsay Hoyle (Chorley) (Lab): It is no good coming out with, “It’s not me, guv” because the bottom line is that the Minister is the shareholder; he has the upper hand over the Royal Mail. I want him to use that upper hand to ensure that there will be no compulsory closures in Chorley and that more services will be offered so that we have a suitable network of the type we expect for the people of Chorley.

Jim Fitzpatrick: I could refer my hon. Friend to the answer that I gave a moment ago. I am sure that he, too, will make the strongest possible representations for his constituents. However, he must acknowledge that the £4 million a week losses of Post Office Ltd do not present a sustainable position. We want to protect the network, which is why we are investing a further £1.7 billion and introducing 500 outreach outlets and innovative ways of delivering services, and why we are encouraging Post Office Ltd to develop new products.

Mr. Roger Williams (Brecon and Radnorshire) (LD): Up and down the English-Welsh border, individual post offices serve communities in both England and Wales. Will the Minister give an assurance that the consultation on the future of such post offices will include all the communities that they serve and not just those limited to the nation in which the post office is located?

Jim Fitzpatrick: I can assure the hon. Gentleman that although Post Office Ltd has said it will bring forward proposals for 50 or 60 area groups, these will not be cliff edged; there will be some overlap. Common sense will have to prevail. There may be some double consultation, but I am sure that these valid issues will be taken into account.

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