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House of Commons

Thursday 22 November 2007

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Oral Answers to Questions

Business, Enterprise and Regulatory Reform

The Secretary of State was asked—

Social Tariffs

1. David Taylor (North-West Leicestershire) (Lab/Co-op): What recent assessment he has made of the potential contribution of social tariffs to the reduction of fuel poverty in North-West Leicestershire. [166782]

The Minister for Energy (Malcolm Wicks): We have made no assessment of the individual contribution that social tariffs have made in specific locations. However, following publication of the energy White Paper, we continue to work closely with Ofgem and energy suppliers to analyse the range of social programmes—including tariffs—that suppliers currently offer, in order to draw out best practice and highlight where improvements are needed. Across Great Britain, about 700,000 households are on social tariffs, rebates or trust funds.

David Taylor: The numbers in fuel poverty have doubled since 2003, but can be dramatically reduced if suppliers implement in a meaningful way the energy White Paper challenge to offer social tariffs to their fuel-poor customers. Does the Minister agree that the upcoming energy Bill should give Ofgem reserve powers to require a minimum standard for social tariffs, to avoid the situation in which some Scrooge suppliers backtrack on voluntary commitments and dilute their initiatives to the meagre penny-pinching level of those who offer the least?

Malcolm Wicks: We recognise that after years of progress in reducing the number of households affected by fuel poverty, the numbers are now increasing because of rising energy costs, which are, of course, a global phenomenon. I have met all the chief executives of the major supply companies to talk about the importance of social tariffs. Some companies are doing well and others are now moving in the right direction. We are keen that social tariffs—alongside social policies such as energy efficiency programmes and the winter fuel payment—should play a full part in tackling fuel poverty.

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Post Offices

2. John Barrett (Edinburgh, West) (LD): If he will make a statement on the post office closure programme in Scotland. [166783]

The Minister for Employment Relations and Postal Affairs (Mr. Pat McFadden): On 17 May my right hon. Friend the Secretary of State announced the Government’s response to the public consultation on the post office network. Post Office Ltd is now carrying that forward through local implementation plans, and there will be six such plans for Scotland. The first area plan for Scotland, for the Greater Glasgow, central Argyll and Bute area, is out for local consultation. The plan covering the hon. Gentleman’s constituency is scheduled for consultation in August next year.

John Barrett: I thank the Minister for that answer, but given that the Government have announced 2,500 closures across the country, can he assure the people of Edinburgh that that will be a genuine consultation? Or has he already decided on the number of offices to close, so that all he is prepared to discuss is the method of execution?

Mr. McFadden: The announcement on 17 May did indicate the number of offices that would close, so the consultation, in the hon. Gentleman’s area and in others, is about how that is to be implemented. Postwatch and the local authorities will be involved, and the hon. Gentleman and his constituents can be involved, but the direction of travel was set by the announcement. The reasons are clear: as a society, we are using the post office less than before. Some 4 million fewer customers a week are going through the doors of post offices, which are losing, collectively, some £3.5 million a week.

Mr. Russell Brown (Dumfries and Galloway) (Lab): My hon. Friend knows only too well that it is usage of, and footfall in, sub-post offices that will ensure that they continue to operate. Is he in a position to speculate as to how many Members of Parliament will, on reaching retirement age, open a Post Office card account to receive their state pension?

Mr. McFadden: I would not like to speculate on that. At the moment, eight out of 10 pensioners choose to have their pension paid into their bank account—and among new retirees, that figure is nine out of 10. My hon. Friend is right to point to the trends in lifestyle that are driving many of the changes. However, we should give credit to the management of the Post Office for innovating and developing new products, such as broadband services, selling foreign currency and—of relevance at this time of year—the recent launch of the Christmas pre-payment scheme, which will offer a secure outlet for people who want to save for Christmas in that way.

Mr. Mike Weir (Angus) (SNP): Despite what the Minister says, the Post Office has made it clear to campaigners in Scotland that if a post office is saved from closure after a local campaign, another post office in the same area will simply be closed instead. Will that not pit community against community? Does it not demonstrate that the whole consultation process is a
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sham, and that the Post Office is simply engaged in an exercise to cut the network—an exercise that is being pursued in Scotland, despite reports that it has been put back in many areas of England because of the local elections in May?

Mr. McFadden: The announcement on 17 May made it clear that the size of the network would have to reduce. There is no secrecy about it. The local consultations are about how that is to be done. It is true that the network must reduce in size, and that is accepted by the Federation of SubPostmasters, and by most witnesses to the Select Committee on Trade and Industry when it examined the issue.

Carbon Capture

3. Paddy Tipping (Sherwood) (Lab): What financial support he is making available to carbon capture and storage projects. [166784]

The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): On Monday my right hon. Friend the Prime Minister launched the competition for a commercial-scale carbon capture and storage demonstration project. My Department will support up to 100 per cent. of the additional capital and operating costs of the project, which will be selected through a competitive process. In addition we have a £35 million programme for carbon abatement technologies, including CCS.

Paddy Tipping: I am grateful for that reply, and for this important initiative. Does the Secretary of State accept that the electricity generators feel that there have been long delays in bringing the programme forward? Secondly, there are concerns about the kind of technology being evaluated—post-combustion rather than pre-combustion. Can he say whether there will be only one winner of the demonstration project, or is there scope for more applicants?

Mr. Hutton: My hon. Friend is right to raise those points. I have great respect for him, and I know that he is a strong supporter of what we are trying to do. Given the technical complexity of the technology it was right and proper for the Government to select one type of competition to run. When we have done that, clearly we have to make a choice. It is worth reminding ourselves that only two other countries in the world are seeking to develop projects like this. Post-combustion technology will give the United Kingdom a potential leading role in developing this important technology, which could play a significant role in meeting our carbon reduction targets by 2050. I understand my hon. Friend’s frustration. We are trying to move forward as quickly as possible on this project, but given the scale of the technology and the issue of public finance, it is right that we make these decisions appropriately.

Lembit Öpik (Montgomeryshire) (LD): Given that the first proposed UK carbon capture and storage demonstration plant seems at least seven years away, as the hon. Member for Sherwood (Paddy Tipping) implied, how will the Secretary of State ensure that new fossil fuel generating capacity will necessarily include the CCS capability to meet the emissions goals? What carbon
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price does he estimate will persuade UK energy producers to include CCS in their fossil fuel-based generation designs as a matter of course?

Mr. Hutton: I am grateful that the hon. Gentleman is a supporter of what we are trying to do and carbon capture generally, as I hope all hon. Members will be. In relation to his two points, we will be publishing some proposals in the very near future on aspects of capture readiness which should be included in the consenting process, and how this might work in practice. On the economics of carbon sequestration, we want to see a much more robust and strengthened trading scheme. Clearly that must involve a much higher price for carbon. We need to see how phase 2 beds in and then we have important decisions to make for phase 3, which will be the moment when we have to address the issue that the hon. Gentleman raised.

Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): May I tell my right hon. Friend that when the Trade and Industry Committee met staff of the EU Commissioner for Energy we were told by an energy economist that what was required in the United Kingdom were four demonstration plants and 15 in Europe. To judge from what my right hon. Friend has just said to my hon. Friend the Member for Sherwood (Paddy Tipping), we are not going to see that kind of investment in clean coal technology. If we do not see it, we will not be able to have that technology on stream, and as a result we will meet the energy crisis much earlier than we will be able to have nuclear power stations on stream. Therefore it is important to concentrate our efforts on getting clean coal technology up and running. Has my right hon. Friend had meetings with the Energy Commissioner, and if so, what has been the outcome?

Mr. Hutton: I am tempted to say that the European Commission would say that, wouldn’t it? The United Kingdom is willing to play its full role, but other countries in the European Union should, too. I am not aware of any EU country other than the UK that has made a commitment to funding a CCS project. My hon. Friend asks whether we can support up to four projects. I do not think that that is possible. We believe that we can fund one significant-scale demonstration project. I still believe that, having chosen this particular path of post-combustion coal and of running a competitive process which, if we had taken the advice of the Conservative party, we could not have run, the United Kingdom has the opportunity of being a world leader in this important technology. It can bring significant growth to UK manufacturing companies and engineering consultancies. We are being responsible. We are committing public money, so there will always be a limit—the Conservatives may have forgotten that—to the amount the public can afford to put into such technologies.

Economic Partnership Agreements

4. Mr. Andy Reed (Loughborough) (Lab/Co-op): What progress is being made in negotiations on economic partnership agreements; and if he will make a statement. [166785]

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The Parliamentary Under-Secretary of State for Business, Enterprise and Regulatory Reform (Mr. Gareth Thomas): There has been progress in discussions between all African, Caribbean and Pacific regions and the European Union, and further negotiations will take place next week. We continue to work to maximise the development benefit from economic partnership agreements.

Mr. Reed: As my hon. Friend knows, there is a great deal of criticism of the speed with which some of the deals are being done, especially in countries that feel under pressure to achieve a preferential deal by the end of the year. What measures is he taking to ensure that the deals are good for the countries involved, and that they are not being forced into taking something they do not want? What exactly are the development benefits that he foresees from such deals? There is a great deal of scepticism about what they are.

Mr. Thomas: As my hon. Friend rightly says, concerns have been expressed, in particular by some civil society groups, about the pace of the negotiations. However, I remind the House that we have known for a considerable time that we would be in this situation, and that we continue to hear from all developing countries in the ACP regions that they want to negotiate an economic partnership agreement. The specific development benefits that we have fought for, and secured, are that all ACP regions should have duty and quota-free access to the EU market. We have achieved that, albeit with transitional periods for two products. Furthermore, we want much simpler rules of origin to maximise the benefits of that duty and quota-free access offer, and there has been significant movement in that direction, although we would have liked a little more.

Mr. Geoffrey Clifton-Brown (Cotswold) (Con): As the hon. Member for Loughborough (Mr. Reed) has just said, the agreements have to be concluded by 31 December, so time is short. As the Minister knows, the EU Commission is using its full might to negotiate with some very small countries in the ACP regions. Over recent weeks I have visited a number of those countries, where I met senior Ministers—and there is concern because they feel that the British Government have not stood up enough to make sure that proper impact assessments have been carried out so that the severe downturn in jobs and employment, and the damage to some of their economies, can be properly cushioned by a realistic package of international development assistance. Before signing the agreements, what will the British Government do to ensure that the transitional assistance is in place?

Mr. Thomas: My right hon. Friend the Secretary of State for International Development and I, and other Ministers, have been in discussion with a series of developing countries in each ACP region. As I have pointed out, all developing countries indicated that they continue to want to sign economic partnership agreements. The hon. Gentleman is right to say that there will be some adjustment costs and he will, I am sure, have noted the significant increase in funding for development through the EU development fund and in the bilateral budgets of a range of EU member states to help with the costs of adjustment. In addition, we have secured commitments from the commissioner that the pace of market opening from the ACP regions will be at the
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pace that the ACP countries want. Indeed, markets for some goods from the ACP regions will not have to be opened at all.

Nuclear Power

5. Mr. John Whittingdale (Maldon and East Chelmsford) (Con): If he will make a statement on Government policy on nuclear power generation. [166786]

The Secretary of State for Business, Enterprise and Regulatory Reform (Mr. John Hutton): We have consulted on the basis of a preliminary view that it is in the public interest to give private sector energy companies the option of investing in new nuclear power stations. The consultation ended in October, and I shall announce a final decision early in the new year.

Mr. Whittingdale: But does the Secretary of State not accept that unless he moves quickly to announce the decision to go ahead with the new generation of nuclear power stations, energy companies will have no alternative but to invest in new conventional power if they are to fill the coming energy gap? Does he accept that there is growing public support for investment in new nuclear power, not least in communities such as Bradwell-on-Sea in my constituency, which have had long experience of living next door to a nuclear power station?

Mr. Hutton: I am genuinely grateful to the hon. Gentleman for those comments, and I agree with him about the need to make the decision as quickly as possible. The consultation shows that his view of where public opinion is moving is also mine. There is little doubt that people are concerned about both the challenge of climate change and the importance of future energy security for the UK. I hope that he will exert his best endeavours to persuade his right hon. Friend the Leader of the Opposition that nuclear power should not be a last resort.

Kelvin Hopkins (Luton, North) (Lab): Instead of building nuclear power stations, there is the possibility of using generating barrages—particularly in the Severn, but there are many other strongly tidal estuaries around Britain’s coast that could equally well provide power generation. Will my right hon. Friend look at those first, before he considers nuclear power?

Mr. Hutton: I agree with my hon. Friend in many respects, and my view is that we must look at all these things simultaneously. The clock is ticking. Time is running out. We do not have the luxury of sitting back, luxuriating, to consider the various options. We have now got to make decisions. On renewable energy, I agree strongly with my hon. Friend that we should explore, as aggressively as we can, sources of tidal power. We have committed ourselves to undertake a series of feasibility studies that will extend not just to the Severn barrage, but to other projects across the UK that have potential, and I hope that he will support us in getting on with that as quickly as possible.

Peter Luff (Mid-Worcestershire) (Con): When the Secretary of State gave his very persuasive evidence to the Business, Enterprise and Regulatory Reform Committee
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on Tuesday, he indicated that planning permission exists for some 30 GW of generating capacity—I think that he was indicating section 36 consent—a very large proportion of which will not be constructed in practice. Is his Department’s view that there is a very large generating gap for which new nuclear, renewable or even conventional generating capacity must be built, and for which consent does not exist currently?

Mr. Hutton: The National Grid produces an annual statement of its assessments of the gap, as the hon. Gentleman describes it, and of what is in the pipeline. Our information is that steps are being taken to ensure that the necessary margin of energy supply will be available to the UK when we need it. I hope that I have made the position clear to him and his Committee, and I thank him for the very nice words that he said at the beginning of his question.

Ms Patricia Hewitt (Leicester, West) (Lab): Does my right hon. Friend agree that the best way to get the long-term investment that we need in both low-carbon and no-carbon energy is to set a high price on carbon? Is it his judgment that the next stage of the European emissions trading scheme will, in fact, enable that price on carbon to be set effectively?

Mr. Hutton: Yes, I agree strongly with my right hon. Friend about the importance of the emissions trading scheme, and I thank her for all the work that she did when she was leading my Department. She did an excellent job. Our aim is to make the scheme the principal mechanism in helping us to meet the challenge of climate change and reduce carbon emissions. I agree with her strongly that the proof of the pudding will be in setting an effective market price for carbon—and that would certainly be higher than it is at the moment.

Mr. John Redwood (Wokingham) (Con): How do the costs of new nuclear power compare with those of other low-carbon or no-carbon technologies, and what kind of taxpayer guarantee or subsidy would be needed at current carbon prices?

Mr. Hutton: We have published all that information in the energy White Paper, and I am very happy to send it to the right hon. Gentleman. All our work indicates that nuclear electricity will be a very cost-effective form of energy supply for the future. One of the significant challenges that we must also address is that we need our energy to be clean and secure, but the price must be affordable for consumers and businesses. The information is in the public domain; I will happily share it with the right hon. Gentleman, and if he wants to discuss the detail, I look forward to having that discussion with him.

Mr. David Drew (Stroud) (Lab/Co-op): I hear what my right hon. Friend says, but the basic integrity of the industry involves the people who work in it, and there is real concern in the industry about the number of jobs being lost and the increased reliance on contractorisation. Will he meet colleagues in the House who are interested in how we can maintain, and indeed restore, the vitality of the industry, so that we can prevent any future job losses and give the industry a chance in the future?

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