Future of Energy in Wales

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Mr. Murphy: Indeed, I was coming to that very point. During the past decade or a little more than that, we have seen a change in how our country is governed—the change involves the Welsh Assembly, with its powers and interest in energy matters, coupled with what local authorities and the United Kingdom Government do in respect of energy production—which means that, in a sense, we are blessed with a greater diversity of experimentation in Wales. We certainly have more interest in energy matters, because more public bodies deal with the production of energy and with its assessment, and because people in Wales are naturally interested in finding different ways in which to deal with such issues.
As was made clear in the question to the Minister for Energy, we clearly have concerns about how the production of energy can affect our environment and ecology. My right hon. Friend the Member for Neath was right to say that we cannot run away from the tough decisions that have to be made, some of which people agree with and others of which people disagree with, so matters are not easy. However, there are decisions that we have to take as a Government, an Assembly and a people that will produce sufficient energy to ensure that those who follow us on this planet can live in the way in which we have been used to living for the past decades.
Mrs. Cheryl Gillan (Chesham and Amersham) (Con): Does the Secretary of State therefore believe in encouraging widespread microgeneration and feed-in tariffs?
Mr. Murphy: Yes, we must embrace all aspects to ensure that we increase energy production. If we—a village or town—can do that on a small scale and provide our own energy, there is nothing wrong with that. As for what is happening in Port Talbot, which is in the constituency of my hon. Friend the Member for Aberavon, it is important that the biomass idea is developed. I did not realise that Aberystwyth university was so significant in research into biofuels, but diversity is the key and we must all encourage it.
Lembit Öpik (Montgomeryshire) (LD): I am encouraged by the Minister’s response about feed-in tariffs. Is he aware that the industry is frustrated that the Government have not taken a more strategic lead by requiring the introduction of smart meters to make the feed-in tariff system work? What comfort and support can he give to those of us who have been campaigning for a long time for the Government to provide a playing field to allow the sector to do the rest?
Mr. Murphy: I cannot give any more comfort than the Minister for Energy gave, since I am not responsible for such matters. However, I hear what the hon. Gentleman has said and will obviously pass on his comments to my colleague.
Albert Owen (Ynys Môn) (Lab): My right hon. Friend might be aware that the Assembly has some pilot schemes on smart metering. Until we know the results of those schemes, it will be hard to move forward. We want the smartest of smart meters, so that the system does the job. Consider the case of Mr. Betamax, who introduced an early product that was suddenly replaced by new technology. The issue is serious. The system must work rather than just rolling out the meters quickly.
Mr. Murphy: Yes. A couple of months ago, my hon. Friend and I met representatives of energy companies in the United Kingdom to talk precisely about smart metering and how individual households can work out how much energy they use and how much they can save. While we are on the matter, it is important to understand a point that has not been pressed in the past hour, which is the importance of the conservation of energy and of using less energy.
In my constituency and that of my hon. Friend, two significant firms deal with the insulation of houses and businesses. I visited the company in my constituency recently, and the way in which the amount of energy that is needed can be reduced, particularly for older people, and the way in which money can be saved is hugely significant. When one adds to that the points about winter fuel payments and all of those sorts of things, it is important to look at fuel poverty and also fuel conservation in exactly the same way.
Mr. Peter Hain (Neath) (Lab): I am grateful to my right hon. Friend. He is making an excellent speech, and I am sorry to interrupt him and take him to the question of energy costs. Will he take up with the Chancellor the proposal put to me by a local haulier, John Pearce Glynneath Ltd, which is facing astronomic fuel costs? The company has been built up since 1973 and now employs 70 people. It has laid off four workers, and it plans to lay off another four if things continue as they are going, because the company has incurred an additional £3,900 a week in extra fuel costs since mid-April, which is serious. There is still a demand for its haulage business, but it must turn the business away. The Treasury should consider that company’s proposal to reduce fuel duty for commercial companies and to increase VAT, which would allow the Treasury to reclaim the difference and stay in balance. Of course, the cost would be passed on to retail customers, and we would have to consider the consequences, but it would save jobs and keep the wheels of the economy turning.
Mr. Murphy: I very much take my right hon. Friend’s point. In fact, two weeks ago my hon. Friend the Minister for Energy met representatives from the haulage industry in south and west Wales, who raised concerns about fuel duty through cabotage in addition to other issues that I am sure the Chancellor is aware of. I will ensure that a specific Welsh case is made to the Chancellor about the problems that hauliers and other businesses in Wales face as a result of the huge increases in oil prices to which my hon. Friend the Minister for Energy has referred.
Mr. Murphy: My hon. Friend the Minister for Energy mentioned Ofgem, and Members made points about Ofgem to him, so it is important that the general points to which my right hon. Friend the Member for Islwyn has referred are raised with the energy companies, that there is a specific Welsh dimension to that, as people pay more dearly for their energy in south Wales and in Wales generally, and that there is a duty on an independent regulator to look at the precise issues that he has raised. Those companies can help by ensuring that they work closely with insulation companies and others companies in the country to help people who cannot afford high energy prices.
Mrs. Gillan: The Secretary of State is right that the Government should consider what they can do to help. He has mentioned smart meters that will assist in feed-in tariffs, and he has clearly indicated his support for them. Will he speak to his colleagues about that, because I understand that there has been reluctance to support smart meters during the passage of the Energy Bill and think that it is important that the Welsh dimension on that is put to his colleagues in the Energy Department? I hope that he will undertake to raise that specific point on the Energy Bill.
Mr. Murphy: I do not want to interfere with the legislative process of a Bill that is not my responsibility, but I merely say to the hon. Lady that my hon. Friend the Minister for Energy and I met the Energy Retail Association, which made a fair point about the importance of smart metering. It will be hugely significant if individual households can help themselves, and the new technologies can bring that about, so we will certainly pick up those points.
Another good way in which the Assembly Government and the Government are working together relates to how all those factors are taken into account when new houses are built. The low carbon buildings programme in Wales, for example, has received £1 million from the UK Government and £1 million from the Welsh Assembly Government to look at how new houses can be the most energy-efficient homes that we can devise and at other ways in which we can save money.
The Severn barrage was raised on a number of occasions during the course of the questions to my hon. Friend the Minister for Energy, and I support the concept of a barrage. Obviously, we must take the ecological factors raised by the hon. Member for The Wrekin into account—they are important, but they must be balanced up. My right hon. Friend the Member for Islwyn was correct in saying that if climate change gets out of control, it will mean the infinite destruction of species in our world, and those things must be balanced up.
Some hon. Members raised the issue of lagoons. I am not an expert on such matters, but I know that if there are other ways in which we can ensure the supply of energy and balance up the ecological factors, we should look at them. For example, if a project could meet 5 per cent. of the UK’s energy demands in an entirely green and clean way, which, incidentally, might also provide a base on which trains could go across the Severn, we should look at it. The issue at the moment is about going further in examining the possibilities and viability of a Severn barrage, and I am sure that most members of the Committee agree that we should look very carefully at that as a means of getting more energy for our country.
Chris Ruane: Mention has been made today about the Welsh perspective on traditional industries such as coal, gas, nuclear power and oil. We have also talked about renewables—microgeneration, hydroelectric power, biofuels, onshore and offshore wind farms, tidal empowerment, the barrage, solar panels and insulation. The one big area of energy that has been left out, and about which there is a Welsh perspective and dimension, is nuclear fusion. The OpTIC centre in St. Asaph in my constituency is the third biggest optoelectronics cluster in the world and plays an important role in developing fusion. Fusion can be delivered by magnets or lasers, and the OpTIC centre plays a role in that. I invite my right hon. Friend to visit the centre and see the excellent work going on there.
Mr. Murphy: I am grateful to my hon. Friend for that. I believe that my peripatetic friend, the Under-Secretary of State for Wales, has visited the plant, and I would certainly like to come and look at the work that it does.
That brings me to the issue of nuclear power—I am in favour of it. We need a balanced and diverse range of energy sources, and nuclear power plays an important part in that. Nuclear power is green; of course it must be safe; and we must look at how to deal with the waste. In terms of the effect on the constituency of my hon. Friend the Member for Ynys Môn, for example, it is a hugely important factor not only in producing energy but in creating jobs. I believe that more skills, jobs and other benefits will come if we look at the issue of nuclear power. The only way to deal properly with the issue of energy is to have diverse energy sources—otherwise we will fail. It cannot be one or the other, it has to be many. There must be a diversity of clean, green and sustainable sources.
Lembit Öpik: I am aware that the Labour party, the Conservatives and Plaid Cymru all support the creation of new nuclear power stations. Does the Secretary of State agree that this time the Government must ensure that the private sector covers commissioning, operational and decommissioning costs? Will he give the Committee an assurance that there will not be a subsidy for nuclear power such as that over the past 50 years, which has run into billions of pounds?
David T.C. Davies (Monmouth) (Con): Once again, I welcome what the Secretary of State is saying—it is becoming a worrying habit. What does he think that Liberal Democrat Members would do to power Wales, when they do not support wind farms—particularly in their own constituencies—and nuclear power? What does he think would happen to Wales if we had no sources of power to generate electricity?
The Chairman: Order. I do not think that the Secretary of State is competent to comment on Liberal Democrat policy.
Hon. Members: Oh he is.
Mr. Murphy: There is not much policy to comment on, but that is another issue. I agree with the points made by the hon. Member for Monmouth.
Mark Pritchard (The Wrekin) (Con): I am grateful for the Secretary of State’s comments on nuclear energy, which I agree with. The only shame is that the Government took too long to make the decision, so we will have an energy gap. Following last week’s statement in the House by the Secretary of State for Environment, Food and Rural Affairs on managing radioactive waste safely, will the new Infrastructure Planning Commission under the Planning Bill take the decision on where radioactive waste might be sited, or will that be done through the usual planning consultation process? I wonder whether the Secretary of State would like to assure the people of Wales that nuclear waste will not be put in old deep-cast mines in Wales and that local decision makers will have a say and will not be overridden by the new IPC.
Mr. Murphy: The commission will include representatives nominated by the Welsh Assembly, which will, I hope, give it an ability to consider Welsh issues in a special way. I do not want to get into the position of giving assurances. I have already been asked to give assurances on behalf of my right hon. Friends the Chancellor of the Exchequer and the Secretaries of State for Environment, Food and Rural Affairs and for Business, Enterprise and Regulatory Reform. I take the point that the hon. Member for The Wrekin has made, and I will take it back to my colleagues in government.
Albert Owen: On safe nuclear generation, the Secretary of State will be aware that Anglesey Aluminium in my constituency was built at the same time as the Wylfa nuclear power station for an obvious reason, namely a continuous supply of electricity. Only last week, Anglesey Aluminium had a very serious fire. It was without electricity for four hours, and almost two thirds of the plant was closed down as a consequence, involving millions of pounds of repair work. Does that not make the point that we need those types of industry? If we do not have them, we will only import products from abroad. We need to produce products in Wales and we need that continuous supply of electricity. Safe nuclear power is the way forward, and the infrastructure is in place in those large areas.
The Liberal Democrats on Anglesey support nuclear power. They have two county councillors, one of whom is the chairman, campaigning actively for a Wylfa B, so now all the parties have come on board in Anglesey, and I am pleased to have led that campaign.
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