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It will not be easy, as there is significant opposition to the proposals. Under a regime of voting by unanimity—which is what I suspect many Opposition Members would prefer—opponents of change could sit on their hands and resist any progress whatsoever, but with QMV we can make, and are making, real progress. We are unlocking decision making, breaking down time-consuming bureaucratic stalemates and helping to promote policies that we believe are in the interests of all the people of the EU.
I turn now to the important relationship between the EU and UK energy policy. Half a century ago, the European Coal and Steel Community brought European countries together in economic and political partnerships to build a lasting peace across the continent after the carnage of two world wars. Those early steps have borne considerable fruit. We have come closer together, and that is a good thing. Our continent is more prosperous and peaceful, and those are obviously positive developments. The threat of full-scale confrontation between European countries no longer exists.
In all those respects, the EU has played a positive role. I hope that hon. Members from all parties can agree on that at least, but we are undoubtedly still confronted by many difficult challenges, both at home and abroad. We are clear that every member state should be responsible for its own energy resources. That is not a Community competence, and nor should it be. It has been an important red line in the Lisbon treaty negotiations, and the treaty does not change that basic legal reality.
The Government have set out the objectives of our energy policy. We have focused on ensuring the secure provision of affordable and sustainable energy supplies for every UK citizen, as well as the successful transition of our country to a low-carbon economy. We are working with the energy companies and consumers to improve energy efficiency and increase our use of low-carbon energy sources so as to reduce our reliance on fossil fuels. However, fossil fuels will remain a major part of our energy mix for years to come. The best way to protect ourselves against potential supply difficulties caused by either natural disasters or resource nationalism is to develop as diverse a mix of energy sources, suppliers and trade routes as possible.
The UK is also undergoing a long-term transition from being a net energy exporter to being a net energy importer. Unlike many EU member states, we had years of being self-sufficient in oil and gas production but, however successfully we manage our remaining North sea oil and gas reserves, by 2020 imports are likely to account for well over half of our oil and gas requirements.
I believe that dealing effectively with those challenges means that we have to build a solid base of strong bilateral and multilateral relationships. Moreover, although our national measures to reduce greenhouse gas emissions can play an important part in tackling the problem, UK greenhouse gas emissions amount to only 2 per cent. of world emissions. Obviously, therefore, we need to work closely with other countries on a global level to make a significant difference. By acting with an enlarged and, thanks to the Lisbon treaty, more efficient EU, the UK will be able to help to deliver solutions for climate change and energy security at a European and international level.
Bob Spink (Castle Point) (Con): The Secretary of State is right to say that the UK generates only 2 per cent. of global carbon emissions, but does he accept that we have a duty to set an example to the international community when it comes to tackling the problem and setting up solutions to it? Can he guarantee that the treaty will not interfere in any way with the UK’s drive to introduce new and greener sources of energy generation, such as nuclear? Will he give a cast-iron guarantee that the treaty will not result in any increase in our constituents’ energy costs?
Mr. Hutton: The question of energy prices is complicated. I do not think that any Minister in any Government in Europe could claim to be able to hold down energy prices. That is not the world that we live in. We must tackle the problem of the fuel poor, and we are developing measures to that end, but there is nothing in the Lisbon treaty to impede progress on climate change or energy security—far from it, in fact. Moreover, the treaty builds the concept of sustainable development into the EU’s legal architecture for the first time. Such policies should secure support from all sides of the House, not opposition.
Mr. Michael Clapham (Barnsley, West and Penistone) (Lab): My right hon. Friend said that by 2020 we are likely to import half of all the gas that we use. He will know that the new gas pipe from Norway is likely to make more gas available and that that could trigger a second dash for gas. We need the diverse energy mix that he has described, so will he be considering capping the amount of gas used for electricity generation? It already accounts for 40 per cent. of our gas usage, and by 2020 that proportion could be 60 per cent. or more.
Mr. Hutton: I am grateful to my hon. Friend for those questions, but we are not going to cap any source of energy. That would be entirely the wrong thing to do, and completely incompatible with the fundamental features of our energy market. The question of carbon capture is especially pertinent in relation to the future of gas and coal, and all hon. Members should take some pride in the fact that the UK is the only member of the EU that is committed to a carbon capture and storage demonstration project on a commercial scale. I hope that other countries will make a similar commitment so that we can look at a range of technologies—including post-combustion, pre-combustion, oxy fuel, coal and gas—that could begin to make a significant difference.
Taking CCS out of the equation would cause a problem on a global scale when it comes to dealing with climate change. Estimates made by the International Energy Agency, the Stern review and others show that as much as a third of our total global carbon mitigation strategy will depend on CCS technology. So my answer to the question posed by my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham) is that we should not set about the problem by capping energy sources but we should maximise the energy that we get from renewable sources, and the EU has proposals to that end.
In addition, I think that we should look at nuclear, and the Government have made our position clear on that. Finally, gas and coal will be part of our energy mix for some considerable time, and CCS will be an
important way to make sure that those energy sources do not make matters worse. However, I do not believe that placing caps on individual energy sources is the right thing to do.
Kelvin Hopkins (Luton, North) (Lab): I have strongly supported the emphasis that my right hon. Friend has placed on energy sovereignty at a national level, and his recently expressed view that we should move as far as possible towards self-sufficiency in the longer term. However, Germany’s installed solar power capacity is 350 times greater than Britain’s, and it has 10 times more wind power capacity than we have. That provision is the result of intervention by the state rather than by the EU. Should we not do what Germany has done? Should not the Government take action now rather than rely on the EU?
Mr. Hutton: The German Government are playing an active and supporting role in relation to the new proposals from the European Commission, and they do not believe that Germany should not be engaged in shaping the new renewables directive. Indeed, the German Government have made significant progress on renewable energy in the past 10 or 15 years, and I pay great tribute to them for that.
I believe that the UK has made progress. We have doubled the amount of energy drawn from renewable sources in the past few years, and we are planning to treble it. We will have to do significantly more in the years up to 2020 if we are to meet the EU targets, but so far we have concentrated too much on the financial aspects of renewables promotion. We should not overlook some of the other problems with regulatory and planning consents that have got in the way of really moving ahead with renewable energy in this country.
For example, it is a matter of great regret to me that many local authorities around the country—run by the Conservatives, the Scottish National party and even my own party—have presented a brick wall to renewables schemes. There is no place for nimbyism when it comes to climate change, but there has been far too much of it.
Colin Burgon (Elmet) (Lab): My right hon. Friend mentioned the nuclear power industry. I have grave reservations about the Government’s proposals, which have been sold to the public on the assurance that the taxpayer will not underwrite any costs—such as clean-up costs—that are incurred. However, reports this week claim that EU directives and pressure from the European Commission mean that the British taxpayer will in fact have to underwrite the costs on any nuclear incident that might arise. Will he clarify the situation?
Mr. Hutton:
Governments in the United Kingdom and around the world have entered into binding international agreements for dealing with any serious nuclear incident to ensure that public health is protected and decontamination takes place. It would be grossly irresponsible for the UK Government to pull out of such responsibilities, and we have no intention of doing so. Yes, it is a potential issue for all of us, but
there is no question at all of a responsible Government running away from that kind of responsibility, and we have no intention of doing so.
On the costs of decommissioning and waste disposal, we have been very clear about where new lines must be drawn if new nuclear is to play a role in the UK energy mix. The only sort of energy generation that we subsidise in the UK is renewable. We are not proposing a subsidy for nuclear power, and we have made it clear that sufficient funds will have to be accrued over the lifetime operation of nuclear plants to cover the costs of long-term waste disposal and decommissioning the sites. Those costs should not fall to UK taxpayers. That is the view that we have reached.
Richard Ottaway (Croydon, South) (Con): I do not know whether it has been put on the Secretary of State’s desk yet, but is he aware of the report by Dieter Helm, professor of energy policy at New college, Oxford? He says:
“The Government’s nuclear energy policy is fundamentally flawed because it relies on the ‘fiction’ that a new generation of reactors can be built without state support”.
He goes on to say that the way out is to have auctions for long-term reductions in carbon emissions over 20 to 30 years. I ask the Secretary of State to have a hard look at that idea, because I think that there is something in it.
Mr. Hutton: Obviously we treat the comments of such a distinguished person with a great deal of respect and interest. I do not think that the professor made those comments during the consultation period; they came after it ended. I have been struck by how strong the power companies’ interest has been in developing new nuclear proposals on the basis of the terms that we have set out. We are not mandating nuclear; we are not requiring power companies to construct, build and operate new nuclear power stations. We have established the ground rules for how that can be done in future, and it is up to the power companies to respond with proposals. Personally, I think that the professor’s comments are not germane. It is likely that there will be significant interest in undertaking new nuclear projects that follow the lines that we have proposed, and energy companies have themselves strongly expressed that view to us.
Mr. Ian Taylor (Esher and Walton) (Con): I do not want us to get bogged down in a rehash of the energy statement. This country needs new nuclear power stations just to maintain the percentage of the power that is currently provided by nuclear. The key to this debate is that Europe as a whole is already 50 per cent. dependent on imported energy, 25 per cent. of which comes from Russia. Both of those percentages are rising. As a result, it is crucial that the treaty provision on solidarity is supported. I welcome what the treaty proposes, and I want to hear much more about what the Government will do to drive forward a more cohesive energy policy at the European Union level.
Mr. Hutton:
I am grateful for the hon. Gentleman’s support. He has taken a consistent view on all those matters, and I appreciate his remarks. Eventually—I
know it looks as though it will be at some far distant point in the future—I shall come on to the points that he raised.
Ms Patricia Hewitt (Leicester, West) (Lab): The hon. Member for Croydon, South (Richard Ottaway) mentioned the interesting report from Professor Dieter Helm and Oxera. Will my right hon. Friend confirm that the report stresses that the United Kingdom has the most liberalised energy market in the European Union? That has given our consumers the benefits of a much greater choice of supplier and has lowered our prices. It also gives us lower prices than other parts of the European Union. That is the way forward for the EU, which is why all Opposition Members should support the Lisbon treaty’s provisions on energy.
Mr. Hutton: I agree strongly with my right hon. Friend, and I pay tribute to her work on energy policy. We hear a lot from Opposition Members about the costs of Europe for energy consumers in the UK—I have been reading a briefing that was made available to Conservative Members this morning. What is always missing from such debates is any mention of the significant benefits of EU membership when it comes to energy, and which my right hon. Friend highlighted. It is true that the report to which she referred highlights the fact that the UK has the most liberalised energy market in the EU. It also makes it clear that it is the most competitive energy market in the EU. That simply would not be the case if it had not been for the extension of QMV to such issues. I am perfectly prepared to acknowledge that that is an achievement of the Conservative Government, but the sad thing is that not many Conservative Members present want to acknowledge that. That is a sad reflection on the direction that Conservative politics has taken.
Mrs. Claire Curtis-Thomas (Crosby) (Lab): Will my right hon. Friend give way?
Mr. Hutton: Yes, but then I really will make some progress.
Mrs. Curtis-Thomas: My right hon. Friend will be aware that just over a year ago the Russians frustrated the supply of gas to continental Europe. That gave us all a significant shock and focused our minds on providing energy supplies in-country to meet our own needs. I therefore applaud the sentiment that he expressed: we need to strive towards ensuring that our country is energy-rich. I am also acutely aware that the provision of nuclear capacity will be constrained by suppliers and the availability in each country of people to manage those facilities. The UK currently does not have the capacity—
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Lady is making a statement, not an intervention.
Mr. Hutton: I must say that I thought it was a very good statement.
Mr. Deputy Speaker: Order. That is by the bye.
Mr. Hutton: I am sure that that is true. The events to which my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) referred were a wake-up call for all of us. The hon. Member for Esher and Walton (Mr. Taylor) referred to some European Union member states being 25 per cent. dependent on Russian gas; some are 100 per cent. dependent on it. We in the European Union have to keep that firmly in mind, and consider what its long-term significance is.
I should try to make progress. On the proposals that the European Union has put on the table, I am sure that the House will be aware that the European Commission has published a package of ambitious climate and energy targets and measures for member states in a range of areas, including energy efficiency and new technologies. The UK played an important role in the development of those and other EU energy measures. As a result, we see the EU’s overall energy package as a good starting point for the negotiations ahead.
We believe that if the EU has a more stable institutional framework, as a result of the Lisbon treaty, it will be able to focus, and deliver, even more on energy. First, we can ensure that there is a liberalised energy market across the EU that encourages competition and facilitates the flow of energy to where it is most needed. Secondly, we can promote greater market transparency, to help market players deal better with shocks, avoid shortages, and invest in and deliver the best cost-effective low-carbon solutions. Finally, we can develop an external energy policy that supports the EU in working with other countries to address the economic and political pressures that are having an impact on energy supply and demand, and to enable energy companies better to secure the energy that the European Union needs in future.
Albert Owen (Ynys Môn) (Lab): The Secretary of State made a strong case about the UK influencing the European Union. If we have a united European policy on energy, we can influence other countries—emerging economies such as India and China. Is that not good for citizens of the UK?
It is one of the surprising ironies of political life that one occasionally finds oneself quoting people with whom one does not always agree. When preparing for this debate—and I did prepare for it—I came across the following comment, which touches on my hon. Friend’s point:
“we can take pride in the distance travelled”
“But we must also remember how far we still have to go. The Community is now launching itself on a course...which must make it possible for Europe to compete on equal terms with the United States and Japan....What we need are strengths which we can only find together. We must be stronger in new technologies. We must have the full benefit of a single large market.”
That was said by Lady Thatcher in 1986, when she was Prime Minister. It would be an interesting test if we had a quick show of hands to see who on the Conservative Benches still agrees. I suspect that I know who would agree—there are a few decent Members there—but I suspect that a lot of Conservative Members have moved on.
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