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The Bill will provide an energy mix that could serve those four goals. However, the nuclear option in that policy gives me cause for concern. There is an alternative, but I realise that we are looking at energy in a market context. The markets suggest that the energy
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gap is going to occur well before any nuclear capacity can be provided. It will occur between 2012 and 2015, because of the simultaneous run-down of nuclear and coal-fired power stations. Unless the Minister is prepared to consider capping the gas market, we are likely to see another dash for gas, as a result of the gas coming in from Norway at realistic prices. At present, 40 per cent. of our electricity is provided by gas, but we are likely to finish up with that figure being around 60 per cent. by 2020 unless he is prepared to act.

I reminded the Conservatives earlier of two decisions that they made in the 1990s that had had an impact on the present situation. A third decision that they made, in 1989, was to implement the decision to lift the restriction on the burning of gas in power stations. In 1990, there was not one gas-fired power station in the UK. By 1999, 40 per cent. of our electricity was provided by such stations, using up enormous quantities of premium fuel. Consequently, we are now facing a crisis, and the Government have decided, in their energy policy, to tackle it by using the nuclear option.

I believe that the nuclear option is wrong. It gives me great cause for concern. One of my concerns relates to carbon dioxide. We have heard a great deal about how nuclear power would reduce CO2 emissions, but the Government’s own figures suggest that 10 nuclear stations would reduce those emissions by only about 4 per cent. I see the Minister looking at me as though those figures are new to him, but they come, as he knows, from the Sustainable Development Commission. We know that those 10 stations will not be producing electricity together until 2025, which will be well after the energy gap has occurred. We therefore need to act quickly, and to consider the alternatives.

I suggest to the Minister that, to reduce CO2, we could take action to ensure that more freight travelled by rail. Every tonne of freight moved by road generates 12 times as much CO2 as a tonne moved by rail. Transferring more freight to rail would result in a greater reduction in CO2 emissions than the establishment of a fleet of nuclear power stations.

My second concern about nuclear power stations is the enormous cost. There is a legacy from the previous generation of nuclear stations of £72 billion. To that we can add the £5.2 billion spent on bailing out British Energy. In addition, the likely cost of the depository is more than £20 billion, so we shall be starting with a £100 billion bill. The Minister must also be aware that building nuclear power stations uses an enormous amount of energy. He will also know that not one reactor has been built on time—the average delay is six years—or within budget. Finland’s new reactor is now nearly two years behind schedule, and is already £1 billion over budget. It has squeezed out the renewables.

The options that I think we should be considering for base load are carbon capture and storage, along with combined cycle technologies. They are much more flexible than nuclear for providing base load and, at the same time, they would move us away from a centralised energy system. We have heard much about what will be required, including flexibility, for the future and we will need to ensure that renewables of every type are available.

Let me quickly say to the Minister for Energy that we need to look further into location. In my constituency, a number of windmills that are to stand
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100 m high are being considered. On account of the visual pollution that comes with them, they are a cause of some concern to the local community. That is why location needs to be considered carefully. At the same time, we need to find other technologies that can help to deal with the four planks of our energy policy. It is right to concentrate on carbon capture and storage for base load, using clean coal technologies. He should perhaps also consider investing more in exploring underground gasification, which could provide us with enough methane gas to take us well into the future. There are alternatives, which is why, even at this 11th hour, I ask the Minister to pay more attention to them.

7.31 pm

Mr. Peter Bone (Wellingborough) (Con): It is a great pleasure to follow the hon. Member for Barnsley, West and Penistone (Mr. Clapham). Speaking as a former colleague on the Trade and Industry Select Committee, I know that he is always worth listening to on account of his great knowledge of the subject. I hope that the Minister will take his views into account. I have since been thrown off that Select Committee in the Government’s downsizing of scrutiny of their industrial policy.

I notice that it is getting rather late. If I were at home at this time, I would usually be telling my seven-year-old son, Tom, a story—so let me tell the House a story about the confused MP for Wellingborough. A few months ago, I needed to replace my car, so I paid Saab Stratstone in Northampton a visit. People there observed that the leader of the Conservative party seemed keen on solving global warming and was very concerned about the environment, so they asked me whether the subject of the environment was now at the top of the agenda. I said, “Yes, my right hon. Friend has indeed made that issue a priority.” Actually, what really happened is I went into the showroom and they said, “Isn’t Dave, your leader, keen on the environment?”—but that roughly translates to what I previously said. They then asked me whether I would like to buy a biofuel car, because it reduced energy demands and the CO2 emissions were much less. I have to declare an interest in that I did buy that car. I thought how good it was that at the local Morrison’s store, Wellingborough had one of only 19 E85 biofuel pumps in the country. I could happily fill up with biofuel and save the world. I continue to drive along in that car—doing very well, as it seems to be the way forward.

Unfortunately, however, the Whips intervened and put me on a Delegated Legislation Committees to consider the renewable transport obligation. I thought, “This is good; I can talk about my new biofuel car”, but as I listened to that debate, I suddenly realised that I was responsible for destroying the rain forest and putting up the price of food. Instead of saving the world, I was destroying the world! I was confused, but it still seemed the right thing to do.

Then, lo and behold, as I drove around Wellingborough, a huge protest movement broke out. “What’s the problem?” I asked. “There is a plan to build a biofuel site in Rushden and everybody is up in arms about this disgraceful site”, I was told. People were right, as it was clearly in the wrong place. The object of my story is to show that the issue is not
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straightforward. I acknowledge that I should perhaps have done a little more investigation of the issues, as it is clear that there are both pros and cons.

The problem with biofuels at the moment is sustainability. We must use second-generation biofuels from local sites where no disruption is caused. For example, a biofuel site off a main road, which is using waste material that would not be used for anything else, would be a good thing. Equally, however, there are some huge problems with the current system of biofuels.

Mr. Jamie Reed: Is the hon. Gentleman aware that a senior scientist at the United Nations recently described the setting aside of arable land to grow crops for biofuel use as “a crime against humanity”?

Mr. Bone: I am grateful for that intervention, which again shows that sustainability is the crux of the matter.

Another problem, if we are serious about encouraging people to drive biofuel cars, is doing something about pricing. When I investigated buying my vehicle, I looked into the fuel performance charts, which said that a petrol car would get 35.8 miles to the gallon for combined urban and motorway travel. When I looked into the biofuel car performance, the same figure of 35.8 miles appeared, so I thought that there was no difference between the two. However, when one drives along the road using biofuel, it is easy to see the needle drop—the car does only about 19 miles to the gallon. I thus asked Saab why the literature highlighted the same performance for biofuel as for petrol. I should have guessed who the culprit was—the European Union. Apparently, there is no standard by which to distinguish between biofuel and petrol. The petrol figures had to be entered because, as we all know, we can drive our biofuel cars with petrol in them.

Another interesting aspect is the generational dimension. When I stop my car to put petrol in it, my seven-year-old son will say, “Daddy, why aren’t you buying biofuel?” I have to explain that not every station has it, but it is interesting to see how the message that we must do something to save the planet is getting through to the younger generation. I seriously congratulate my party leader on changing the Conservative party in that respect. We heard the hon. Member for Barnsley, West and Penistone mention all the terrible things that the Conservatives have done that did nothing to save the planet, yet we are now leading the debate on that front— [Interruption.] I am pointing out the reasons why we should not have biofuels, highlighting the issue of sustainability, about which the hon. Member for Copeland (Mr. Reed) made a good point.

British Sugar at Wissington provides an interesting example. Its production plant uses waste sugar beet product and guarantees a reduction of at least 60 per cent. in CO2 emissions in comparison with equivalent fossil fuel production. The plant creates biofuel from sugar beet, which is grown locally in the UK and is surplus to the needs of the food market. It can be done, so we should look in that direction for more sustainable biofuel plants in this country.


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I would like to put a few points to the Minister for Energy; I hope he will have the opportunity to deal with some of them in his concluding speech. If we are serious about biofuel pricing, we must reduce the duty so that it costs the same as petrol. Otherwise, we are not really serious about it. I do not know how many cars in the Government fleet are either biofuel or flex fuel, but if we want to reduce CO2 emissions, we should surely move in that direction.

The congestion charge is also relevant. When I rang to find out whether my car was exempt from it, I found that there was no class for biofuel at all. We must look into these issues more carefully. It cannot be right that there are only 19 E85 pumps in the whole country. If the Government are serious about improving the position, they should tell petrol suppliers that half the stations in the country must provide flex fuel. I believe that the Government are trying to tackle the issues constructively, but they have not yet done enough work on biofuels. I would like to see them make more progress on that front.

7.39 pm

Mrs. Linda Riordan (Halifax) (Lab/Co-op): I want to make some points about fuel poverty, which will be similar to those made by my hon. Friend the Member for Sherwood (Paddy Tipping) and the hon. Member for St. Albans (Anne Main). The background to our debate is the fuel poverty suffered by one in six families in the country: 4.4 million families, 3 million in England alone and many of those in my Halifax constituency. According to the consumer group Energywatch, fuel poverty is when people spend more than a tenth of their income on utility bills. Meanwhile, British Gas has announced a 15 per cent. increase in its bills, and others suppliers—EDF and npower—have raised their prices by 27 per cent. That is unacceptable, but the unaccountable nature of those bodies means that they can get away with increases that hit the sick, the elderly and the poor most. A constituent wrote to me last week to ask

I fear that these price increases will send many of my constituents into fuel poverty. We need action to bring the utilities into line. We cannot sustain circumstances in which two thirds of British households are paying more, and many vulnerable groups are afraid to heat their homes. I must remind Ministers that there is a real danger that we will not be in a position to eradicate fuel poverty by 2010, which—as was pointed out by my hon. Friend the Member for Sherwood—is a legal obligation.

May I make a plea? First, we should adequately fund the Warm Front programme which provides grants for poor households to insulate their homes. Secondly, we should ensure that utilities have an obligation to make their customers aware of social tariffs. Thirdly, we need a wide-ranging Government inquiry into the home energy market.

What upsets me most about the Bill is that, unlike the 2003 energy White Paper, it makes no reference to how we can begin to end fuel poverty. That is a lost opportunity, and one of which I and other Labour Members will doubtless be reminded when we are campaigning on the doorstep. It seems to me that energy companies are placing more importance on maximising their profits
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than on a willingness to offer subsidised tariffs to poorer households to help with their bills. That issue affects Halifax today. We need action now to ensure that another generation of people are not sucked into fuel poverty. I call on the Government to make social tariffs compulsory if the reluctance to agree them voluntarily continues. I find it grotesque that the companies to which I have referred made £2 billion in six months last year.

Mr. Clapham: Did my hon. Friend see a report in The Sunday Times a week ago last Sunday, which alleged that six energy companies were meeting to set prices to ensure that they stay high?

Mrs. Riordan: Yes, I did. I am glad that my hon. Friend has raised that issue, because it is important.

Alan Simpson: Did my hon. Friend also see the Energywatch report on social tariffs? It claimed that, at best, British Gas contributes 0.18 per cent. of its revenue to such tariffs, while at the other end of the spectrum the poorest performer contributes 0.003 per cent. of its turnover. In the light of those huge profits, is that not obscene?

Mrs. Riordan: It is absolutely obscene, and our Government must do something about it. What message does it send to the families in Halifax and other constituencies who are spending 15 per cent. of their incomes on energy? What message does it send to the parents who have said that their children must do without basic items such as food, clothes and a warm home in winter? I must say, with regret, that this energy strategy appears to be paying lip service to the poor, the vulnerable and the environment.

My party in government has done many good things to help families out of fuel poverty. During the last 10 years, many of my constituents have benefited from its policies. However, the message that I am now receiving loud and clear from my postbag is that more needs to be done. At a time when a Labour Government’s intervention in failing markets does not seem to be out of fashion, I call for a radical look at how energy markets operate before we condemn thousands more to fuel poverty.

Winter fuel payments, tax credits and many other policies of this Labour Government have helped to lift people out of poverty in the last 10 years. It would be very regrettable if we sat back and allowed the greed of private utilities that put profit before people to condemn a generation to the trauma of fuel poverty.

7.45 pm

Mr. Stephen Crabb (Preseli Pembrokeshire) (Con): I intend to focus on some of the provisions that are actually in the Bill, particularly those dealing with gas import and storage infrastructure. If I have time, I shall say a little about the reforms of the renewables obligation.

In our energy debates in the House, much of the background noise—which has been heard at several points this afternoon—relates to the theme of energy security and, specifically, reliance on energy imports. The phrase “over-reliance on imports from unstable regions”, or variations on it, is heard time and again in
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the House when we discuss energy policy. We also see it in early-day motions in which various Members promote their pet policies or projects. It is wheeled out to justify everything from reinvestment in deep coal mining in the United Kingdom to renewables projects to the requirement for a new generation of nuclear power plants. I do not dispute that there may be valid reasons in favour of all those, but so often when the phrase is used the implication is that energy independence equates to energy security. Obviously indigenous sources of fuel and energy have a role to play in a balanced and secure energy policy, but it is simplistic to say that complete reliance on those sources will guarantee energy security.

Partly as a result of short memories and partly because of our 30 years’ experience of the abundant blessings of North sea oil and gas, we in Britain have a peculiar and somewhat irrational fear of energy imports. What is happening in the United Kingdom now and will continue to develop in the next 10 or 20 years is, in fact, no different from what many successful industrialised countries have faced for years: reliance on countries overseas, outside their borders, for a large proportion of their primary energy requirements.

What is happening to oil and gas as a result of the decline in production from the UK continental shelf is similar in some respects to what has happened to coal. Although last year coal became a more significant producer of electricity even than gas, 75 per cent. of our coal supplies are imported from countries all over the world at economic prices. It is, I think, difficult to argue seriously that there has been a diminution in the security of coal supply in the United Kingdom because we have become a heavy importer of coal. I believe that something similar could happen in the case of natural gas, as long as the necessary gas import and storage infrastructure can be constructed and brought on stream in a timely way. The Bill seeks to answer part of the question involved in that.

Whatever criticisms may be made about delays in energy policy over the past 10 years and an overload of consultation, it should be recognised that thanks to a well-functioning liberalised gas market and the exemption on third-party access to gas infrastructure, the private sector has been able to present new project proposals that will create flexibility and diversity in Britain’s energy system. That is what I believe energy security is all about. I hope that the Bill will encourage the industry, and provide a framework within which it can produce even more project proposals that will create further options and flexibility in the system, particularly in the area of liquefied natural gas.

The technology for LNG is not new, but its recent emergence as one of the energy solutions for the early 21st century represents an exciting development. LNG provides a means of releasing stranded gas supplies and transporting them economically to world markets where those supplies are needed. Many Governments around the world are currently either investing in LNG infrastructure or studying proposals to bring that on stream in their countries.


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