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9.29 pm

Charles Hendry (Wealden) (Con): We have had an excellent debate on the whole range of energy issues, and it has shown the House of Commons at its absolute best. The contributions have been informed, thoughtful, sincere and passionate, and where there have been disagreements, Members have engaged in a good-tempered and constructive manner. I hope that people looking in from outside will see that the debate does us some credit.


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It must be said, however, that not many of the contributions have been on the Bill itself. The first Back-Bench Member to speak about it was my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb), who spoke four hours into the debate. Most of the other contributions were about omissions from the Bill. There has been cross-party agreement about many of the omissions, and we are going to set up an omissions trading scheme so that we can push them forward effectively.

I wish to begin, however, by talking about some of the issues that are addressed in the Bill, and have been covered. The hon. Member for Sherwood (Paddy Tipping) spoke strongly in favour of carbon capture and storage. He rightly said that we in this country have centuries of coal and we are the most efficient country in Europe at extracting our coal. He also rightly said that we should explore both pre-combustion and post-combustion. Although the Bill makes it possible to provide a system for carbon capture and storage, the main problem with it is that it pushes to one side an exciting new technology. The Government approach is flawed from the start. We will continue to press Ministers to broaden the rules for the pilot scheme, so that Britain can genuinely take a world lead in this area. We have missed out on the project in Peterhead, and it will be a tragedy if we miss out on some of the other important contributions that CCS could make in this country.

My hon. Friend the Member for Preseli Pembrokeshire spoke about gas imports and storage. In a very rational speech, he urged us to be sensible about energy security. I agree that we have to see these issues in perspective. At present, more than half the coal we use is imported, and more than half the imports come from Russia, and nobody ever questions the stability of those imports. Equally, people should recognise that Russia is as keen to sell us its gas as we are to buy it. We have to look more generally at issues of energy security, and my hon. Friend’s comments about improving our storage of gas have an important contribution to make in that regard.

Many Members rightly talked about the roles that renewables can play. The hon. Member for Northavon (Steve Webb) said that there had been a lack of UK success in this area—that we have not moved as far forward as we should have. However, we have found out this week from the Minister for Energy that the targets have been downgraded. The target is no longer to get 10 per cent. of our energy from renewable sources of electricity by 2010, but that target is now 8 to 10 per cent., and the 20 per cent. figure by 2020 has been reduced to 12 per cent. That is a massive admission that we will not hit the targets, and it proves the cast-iron rule of targets: Ministers put them so far away that some other poor soul has to come along to the Dispatch Box years later to explain why they have not been met.

My hon. Friend the Member for Wellingborough (Mr. Bone) made one of the most charming speeches of the debate, and I hope that Tom was listening to it on the television—although if he is watching the parliamentary channel at the age of seven I am worried about him. Nevertheless, it was an enjoyable speech. My hon. Friend explained the complex arguments for and against biofuels, and brought home to us how
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quickly science evolves in these areas. Two years ago, everyone was telling us that biofuels had a fundamental part to play, but it is now said that they are a potential problem; however, I am absolutely confident that in a few years’ time, when cellulosic biofuels are brought in as more use is made of redundant land, they will again be seen as part of the solution.

The Severn barrage was discussed. The hon. Member for Northavon told us that it was first mentioned in 1849, and we should be aware that there was a Liberal Government then. It is not surprising that that party has been out of power for 100 years if we have had to wait 159 years for further action on that. My hon. Friend the Member for Tewkesbury (Mr. Robertson) brought to the House the benefit of his experience of looking at the project at La Rance in France, and we are grateful to him for his contribution. We welcome the Government’s approach to the Severn barrage. It is right to examine all the options for the project, as well as the reasons why nothing might be done. That is the right way to proceed, so we support the Government’s approach.

A great deal of discussion has taken place about the role of renewables obligation certificates and feed-in tariffs in encouraging the growth of renewables in this country. I was encouraged by the support given to feed-in tariffs by the right hon. Members for Scunthorpe (Mr. Morley) and for Oldham, West and Royton (Mr. Meacher), my right hon. Friend the Member for Fylde (Mr. Jack) and the hon. Member for Nottingham, South (Alan Simpson). I was particularly struck by the eloquent evidence given by the hon. Member for Nottingham, South about the nightmare an individual citizen faces in claiming ROCs, whereby they almost lose the will to live before they put the form in the post.

I understand what my hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Select Committee on Business, Enterprise and Regulatory Reform, was saying, in his usual thoughtful way, about how hellishly complicated the system of ROCs is. He was concerned that the banding of ROCs might make it more complicated. We are encouraged by the overwhelming support for the banded ROCs approach from right across industry, even from those who will not benefit, such as the British Wind Energy Association.

However, we should seek to go further. That is why we are so disappointed that the Bill does not include a commitment to open the door to feed-in tariffs. A genuine energy policy should do much more to encourage microgeneration and decentralised power, which have played such an important role in enabling other countries to take a lead over the UK in green energy. Feed-in tariffs could make a fundamental difference to the take-up of these technologies, and again, they have wide support on both sides of the House.

We are not calling for a prescriptive approach to feed-in tariffs, but we want the Bill to open up the option of their introduction. We shall introduce an amendment to that effect in order specifically to encourage the development of microgeneration and decentralised power. There is a case for running two systems together, perhaps with ROCs for some systems and feed-in tariffs for others, because of the problems of moving from one system to another. However, we shall explore other such issues in Committee.


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Much comment has been made about the need for smart metering. The Chairman of the Business, Enterprise and Regulatory Reform Committee talked about the evidence given to his Committee, as indeed did my right hon. Friend the Member for Fylde, who is Chair of the Select Committee on Environment, Food and Rural Affairs. They both talked about the mounting volume of evidence in favour of smart metering. I simply fail to understand the Government’s lack of imagination in that field, where there is cross-party support for a change of policy.

As my hon. Friend the Member for St. Albans (Anne Main) said, the way forward is not simply the clip-on device being favoured by Ministers. That will just be a gimmick used for a few weeks and then put away in a cupboard and forgotten. In addition, we must consider the added hazard of people who have no electrical training trying to attach such devices to their electricity supplies. I urge the Secretary of State and the Minister to do more in that direction. Genuine smart metering will bring massive gains. Such meters would work for both gas and electricity, and perhaps for water too. They would help to tackle fuel poverty, because people would never again have estimated fuel bills that made them think they were consuming less electricity than was the case; they would allow for the measurement of energy produced in the home and exported back to the network; and they would allow for a much more intelligent use of energy, by encouraging people to use electricity out of peak hours, with a range of different tariffs.

A national roll-out of smart metering is supported by the electricity industry, the regulator, consumer groups and environmental groups, and it is supported on both sides of this House. The Minister should be bolder than he has been so far. If the Bill receives its Second Reading tonight, we shall immediately table an amendment requiring provision for a national roll-out of smart metering within 10 years to be included in the Bill. I hope that the Minister will support such an amendment.

We have heard discussion about the role of Ofgem, and the Bill should also make provision for that. The Government are proposing some slight tinkering changes, but the time has come for more fundamental reform. The Bill again misses an important opportunity. We will press the Government to amend Ofgem’s duties to include a specific reference to encouraging green energy alongside its existing primary duty. The regulator, Alistair Buchanan, and Sir John Mogg, Ofgem’s chairman, have done an outstanding job, but just as the energy challenges we face move on and change, so too must Ofgem’s remit. We will also explore whether it should have a clearer duty to promote the interests of consumers to assist in tackling fuel poverty.

The two most contentious issues in the debate were fuel poverty and the nuclear industry. My hon. Friend the Member for St. Albans was absolutely right to say that Energywatch believes that the Bill has missed an opportunity on fuel poverty. The hon. Member for Northavon pointed out that the Government have failed to meet their objectives. He also pointed out the complications of data sharing. Even within local authorities, data are not shared effectively between departments because of a concern that they might go
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astray. That cannot be sensible—and because of that fact, people who should be receiving more support are not getting it.

The hon. Members for Sherwood, for Halifax (Mrs. Riordan), for Edinburgh, North and Leith (Mark Lazarowicz) and for Nottingham, South all talked about the legal requirement to eradicate fuel poverty by 2010—a target that will be missed. They talked about the importance of support for Warm Front, and the need for measures on social tariffs. It is easy to see why the Government wish to slide over the problem of fuel poverty, as it has been one of the greatest failures of the past few years. Fuel poverty is rising, and there is no prospect that the Government will hit their target of removing all vulnerable households from fuel poverty by 2010. Indeed, the number has doubled from 2 million to 4 million. At a time when VAT receipts from household fuel bills have risen by £400 million, the Government’s response has been to cut the budget for Warm Front by £300 million over the next three years. What the Government take with one hand, they also take away with the other.

The Government cannot simply stand back and wash their hands of such a failure of policy. It is a particularly sad day for the Minister for Energy, with his great personal commitment on fuel poverty, because when he had a great opportunity to do something about it he failed to do so. The Bill should be used to make progress on fuel poverty, and if the Government will not table those measures, we will do so in their place.

Finally, on the nuclear industry, a range of issues has been discussed. My hon. Friend the Member for Mid-Worcestershire spoke about the serious problems of the lack of skills in the nuclear installations inspectorate. My hon. Friend the Member for Tewkesbury spoke about the need for a mix of primary energy sources. The hon. Member for South Thanet (Dr. Ladyman) talked about how the science of the nuclear industry has moved on. There are some who would have us believe that the world of nuclear technology has not moved on in 50 or 60 years, and that things are the same as they were at the time of Chernobyl. The technology in their cars, fridges and televisions has moved on, but for some reason they want us to believe that the nuclear industry’s technology, alone, has not.

Those people want to suggest that the UK is the only place in the world where the subject is being debated. There are 34 nuclear power stations under construction and 439 in operation worldwide. Those who are fundamentally opposed to nuclear power have a number of reasons for being so. The hon. Member for Brighton, Kemptown (Dr. Turner) gave his reasons in 36 seconds, which was something of a record. Such people talk in particular about waste. To us, that is the cornerstone of the debate. At a time when the Government have given the go-ahead to a potential new generation of nuclear power stations, it is completely irresponsible simply to start a new consultation process on the disposal of the waste.

We support the Government in saying that there must be no subsidy for new-build nuclear, but that must mean exactly that—no subsidy. How can a company propose plans to build a reactor if it does not yet know how the waste will be disposed of or how much it will
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be expected to pay for that to be done safely? After so much uncertainty, the industry is seeking clarity about what is expected and what it will have to pay. That is still missing.

We will table an amendment saying that the Secretary of State should not permit a nuclear installation to commence operation until he has approved a waste programme and a location for the long-term disposal of the radioactive waste that it produces. To us, that is the cornerstone of the debate.

Mr. Jamie Reed: Will the hon. Gentleman give way?

Charles Hendry: No, as I want to give the Minister more than equal time to respond.

This is not a bad Bill. It does many things that are necessary, and we will support those steps. However, it is inadequate. The hon. Member for Brighton, Kemptown said that it was feeble, so he probably will not be on the Committee. The Bill leaves out many of the things that an energy Bill should include. It fails to take advantage of too many of the new opportunities available today. It overlooks vital elements relating to nuclear power, where clarity is essential if new investment is to take place.

We will not vote against the Bill tonight, but there is much work to be done to improve it in Committee. The Government do not seem to recognise the seriousness of the energy challenges that we face. The wrong decisions now, or simply a failure to take decisions, will mean that the lights will start to go out in a few years. The Government need to do much more than they are proposing to do. We will work with them to make this an Energy Bill that is fit for purpose.

9.44 pm

The Minister for Energy (Malcolm Wicks): When a future historian looks back at the 21st century and tries to review and summarise the great themes and questions that confronted our planet and its people, I believe that two of the issues that have featured so strongly in this debate will be numbered among them. They are climate change and energy security.

Climate change must be this year’s most urgent question. If global warming goes unchecked, thousands of species will perish and millions of people will be at risk from drought, hunger, flooding and forced migration. That is why the Climate Change Bill imposes important targets, such as the proposed reduction of 60 per cent. in CO2 emissions by 2050. As my right hon. Friend the Prime Minister has indicated, that target could be even higher.

Energy security is no longer simply a technical matter to do with supply, but an increasingly important aspect of national security. I am less relaxed than some Conservative Members about the national security implications. We are in an era of colossal energy demand, when the geopolitics of energy are not reassuring, to put it mildly. That is why we need to be bold.

We stand today at an energy crossroads, and it is a time for decision. Our indigenous oil and gas industries remain strong and vital to Britain’s interests. As my right hon. Friend the Secretary of State said, they still meet about two thirds of our energy requirements, but
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supplies are nevertheless declining by some 9 per cent. a year. Britain has only recently become an importer of gas: about 20 per cent. of our gas needs are imported at present, but that proportion could rise to well over 50 per cent. by 2020. Moreover, almost a fifth—19 per cent.—of our electricity comes from nuclear power today, but that figure could be as low as 6 per cent. by 2020.

It is clear that a great deal of investment will have to be made in the energy sector, and that is why I say that this is a time for decision. Over the next 10 years, 16 of our power stations, accounting for 30 per cent. of our electricity generation, are due to close. Massive investment is needed to prevent our country from facing an ever-widening energy gap. As my right hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr. Ingram) noted, that will have implications for investment in the network.

It is no coincidence that three related Bills—on energy, planning and climate change—are currently before Parliament. This Bill puts in place legislation on a number of issues, although the debate has gone far wider, as the shadow Minister recognised. Certainly, the Bill acknowledges the need for new technologies. Carbon capture and storage has been a feature of the debate, and it is absolutely crucial: it is not just any old technology as, whatever some may wish, fossil fuels will be burned around the world for 100 years or more. Indeed, CCS should reduce by some 90 per cent. the amount of CO2 emitted from power stations that burn fossil fuels.

I am proud that the Government have announced already a demonstration project that makes the UK a world leader in the field of CCS. I am sorry that some people want to talk down that achievement, as though we were being left behind. We are not being left behind: along with only a few other nations, we are leading the development of this new technology that is so important for climate change and for British business. Why is CCS so important? As was mentioned in the debate, the Stern review has estimated that it could contribute up to 28 per cent. of all CO2 reductions by 2050.

The Bill also includes measures to allow for greater gas storage, which has been acknowledged to be an important aspect of the nation’s energy provision and therefore of our national security.

Renewables feature strongly in the Bill, and it is perfectly proper that the reform of our renewables obligation featured strongly in the debate. The aim is to provide more support for the newer and at present more expensive technologies such as photovoltaics, wave and tidal power, microgeneration and other innovations.

Of course, the Bill is only part of the wider strategy that we set out in the energy White Paper last May. Indeed, tomorrow sees the publication of the European Commissioner’s detailed proposals on ambitious targets for renewable energy and cutting greenhouse gas emissions. However, let there be no mistake: massive investment and innovation will be required, although we will see what the figure is and we will discuss it.


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