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Energy policy, security of energy and climate change are all interconnected. There is already a single market in gas and electricity, and once again the single market flows from the single European Act of 1986, entered
into by the noble Lady Thatcher. A single market exists for gas and electricity. It exists for the benefit of consumers, with competitive prices and appropriate transport and storage infrastructures. A great deal has been made of the fact that the revised European constitution—as it is called by Open Europe; we call it an amending treaty—will hand new powers over energy policy to the EU: there would be a specific legal base for EU legislation on energy, and energy would for the first time be subject to majority voting.
As Opposition Members such as the hon. Member for Kettering (Mr. Hollobone) said, the amending treaty extends qualified majority voting to new policy areas, and some of the new articles will be subject to QMV, reflecting existing practice for EU legislation in certain fields, including energy policy. The amending treaty will streamline and speed up decision making in a number of technical areas. The UK has always insisted on maintaining ultimate national control in the key areas of justice and home affairs, social security, tax, foreign policy and defence. The Lisbon treaty clarifies that position for the UK. Overall, the impact of QMV under the Lisbon treaty will be significantly less than, for example, under the Single European Act or the treaty of Maastricht.
Mr. Gummer: I negotiated for a long period in the EU, so will the hon. Gentleman accept from me that one is more likely to achieve one’s national interest under the mechanism of QMV than by having a veto, because all the other countries know that if they steamroller a country in those circumstances, it can be done to them? The idea of consensus that that encourages greatly defends national interests, rather than damages them.
Sir Stuart Bell: I am grateful to the right hon. Gentleman for that point. He will also know that since the EU has been enlarged to 27 member states, QMV has worked well because they are all working together in a common European cause.
One of the difficulties I have with the Conservative position—which comes through repeatedly—is its wholly defensive approach towards the EU. It is extraordinary that the hon. Member for Stone, who has now returned to the Chamber, has somehow managed, either single-handedly or with the help of others, to persuade more Conservative party members to take the view that he took on Maastricht so many years ago. We will see whether that eventually plays in the country, but it is a great sadness for our great nation state that the great Opposition Conservative party, with values that go back more than 100 years, has taken a position very similar to that of the Labour party under Hugh Gaitskell in 1961.
Mr. Cash: I am all in favour of co-operation in the EU, provided that it is proper co-operation. The problem is when it invades the primacy and supremacy of the laws that are passed in this House.
Sir Stuart Bell:
I think I answered that point a few moments ago when the hon. Gentleman was briefly absent from the Chamber. We have not given any
powers away to the EU. We have pooled our sovereignty and our competences, and we have done so in our national interests and in the interests of the EU as a concept and an ethos.
We have also discussed nuclear energy. The Secretary of State referred to that; the hon. Member for Croydon, South (Richard Ottaway) intervened, and the hon. Member for Esher and Walton (Mr. Taylor), my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) and my right hon. Friend the Member for Leicester, West (Ms Hewitt) all had a little nibble at the issue. France and Finland will expand their nuclear energy, and the Commission declared in its energy policy for Europe that more than half the member states use nuclear energy, and that nuclear energy provides some 30 per cent. of their electricity. Decisions in this area are left to member states, as this House learned when dealing with the Energy Bill. I should, however, make the obvious point, which has to be pointed out time and again, that nuclear power does not cause carbon emissions. Therefore, it is part of the environment-friendly programme of this Government and the EU.
The hon. Member for Rutland and Melton talked about France. Nuclear power in France produces 75 per cent. of its electricity, and nuclear power has made France the largest electricity exporter in the EU. The UK’s nuclear energy debate is coming to an end with discussion on the Energy Bill but, as has been pointed out, new nuclear power stations will have a role to play in the UK’s future energy mix, alongside other low-carbon sources. In the public interest, energy companies will be allowed the option of investing in new nuclear power stations, and we should take the steps necessary to facilitate that. As the Secretary of State said in response to an intervention, nuclear is not the whole answer, and the energy White Paper sets out the measures being taken to enable us to become more energy-efficient and increase the supply of energy from low-carbon sources. Nuclear energy can contribute positively to the energy mix.
Sadly, debate on energy has for a long time been neglected within the EU. That is why the Commission President Barroso declared on 20 November 2006 that energy had been a forgotten subject that was not on the Union agenda, but that now it is back on the agenda and is also at the heart of European integration. That should be understood against a background of energy demand growing within the global economy at the same time as energy sources are being depleted. World electricity demand is expected to double by 2030—overall global energy demand will grow by 53 per cent. between 2007 and 2030.
The Union has so far enjoyed energy sufficiency at competitive prices and supplies from a variety of sources. Like the United States, the Union is a net energy importer, with 50 per cent. coming from outside the Union, rising to 70 per cent. in the next 20 to 30 years, yet member states must compete with other nations in world markets to secure supplies. It must be said that member states are unlikely to run out of energy in the next 50 years, but that does not lessen the obligation to plan for the worst while hoping for the best, as former President John Fitzgerald Kennedy once said. We have to plan for conflict and for supply interruption—the hon. Member for Rutland
and Melton touched on that. We must also plan for price variations; the Secretary of State commented on that, as did the hon. Member for Castle Point (Bob Spink).
It is against that background that we can debate article 176A of the amending treaty. It addresses the framework of the internal market and acknowledges the need to secure energy supplies as well as to preserve and improve the environment. It states that the Union’s aim is
“a spirit of solidarity between Member States”
“ensure the functioning of the energy market”,
the promotion of “energy efficiency” and
“the interconnection of energy networks.”
As the Government’s document “Global Europe: full-employment Europe” acknowledged in referring to the spring European Council meeting of May 2007—also referred to by the Secretary of State—the Union leaders signed up to an ambitious package of climate change and energy proposals with the objective of putting the Union on the path to becoming the world’s first competitive, energy-secure and low-carbon economy. The goal of the Union must be to create an energy policy that provides energy-supply security and efficiency, assists in the reduction of carbon emissions and other greenhouse gases and links in with the Lisbon agenda. It is necessary to provide a competitive framework for the new technologies in the eco-industry that will not only enable the consumer to reduce their carbon footprint, but do so at reasonable cost.
Notwithstanding all that is said by opponents of the amending treaty, the paradox is that the goals of energy security, environmental protection and the fulfilment of the Lisbon agenda can come about only through the action of member states. That is made clear in article 176A of the amending treaty, which was, again, referred to by the hon. Member for Rutland and Melton. There is no single market in energy . The market indeed lies with each member state. That was touched on by the right hon. Member for Skipton and Ripon (Mr. Curry) when he referred on Second Reading to the gas contract that Bulgaria has entered into with Russia. My hon. Friend the Member for Crosby also referred to Russia in an intervention on the Secretary of State. I shall discuss Russia in a moment.
There are structural differences in the way in which member states fulfil their market requirements, and although the Union may lay down rules and regulations, the operation of them is a matter for each member state. It is true that the Commission has investigative powers within its competition competence, and that it has initiated legal proceedings in Germany against alleged infringements—I refer to the case of four electricity and generator suppliers. Any proposal to commit to further liberalisation of the gas and electricity markets of the Union could be led only by the Union, and member states would have to follow. The challenge for the Union is to urge member states along in the interests of the broader Union and in their own interests. That is the purpose of article 176A; it aims to provide a framework to those ends.
The Union must meet its own increasing energy demand and match that with its intended constraints to safeguard the environment. Such measures include:
reducing carbon and other greenhouse gas emissions; developing hybrid cars to consume more biofuel; developing renewable energy; and, of course, resolving the debate on nuclear power. To return again to the comments made by the right hon. Member for Skipton and Ripon, much is often made about security of supplies when it comes to Russia. I believe that was also touched on by the hon. Members for Rutland and Melton and for Mid-Worcestershire (Peter Luff). The question is whether too much dependence is involved in dealing with suppliers from Russia. Is the Union’s dependence on Russia to the detriment of the Union?
The Union’s policy towards Russia is one not of dependence, but of interdependence. José Manuel Barroso has declared that interdependency is for the mutual benefit of both Russia and the Union, and that it requires transparency, the rule of law, reciprocity, non-discrimination and a level playing field in terms of market opening, market access and competition. In other words, interdependence means that the Union relies on Russia for a major part of its energy supply, and Russia sees foreign currency receipts from that and its trade with the European Union contributing some 40 per cent. of the Russian budget.
However, interdependence goes beyond energy supply. The Union is Russia’s major trading partner—bilateral trade reached €96.55 billion in 2004. More than 60 per cent. of Russian export revenue comes from energy—most from exports to the Union. That is true interdependence. The Union has therefore every interest in deepening its relations with Russia and maintaining its access to oil and gas through long-term contracts, facilitating security of supply, which is so paramount to the Union’s industrial efforts. I have cited Winston Churchill once, and I am happy to do so again. He said that dreams are good, but facts are better. The fact is that Russia has 27 per cent. of the world’s known gas reserves, in addition to its oil reserves.
Of course, the Union imports from the Organisation of Petroleum Exporting Countries and has established a formal dialogue to improve communication about prices, supplies and investment. In 2003, some 23 per cent. of the Union’s gas came from Russia, whereas Algeria provided 30 per cent. and Norway 25 per cent. That was also mentioned by the hon. Member for Rutland and Melton and my hon. Friend the Member for Barnsley, West and Penistone (Mr. Clapham). Algeria is a reliable and traditional supplier that enjoys a strategic energy partnership with the Union. I am glad that delegates from the Algerian Parliament will visit the UK Parliament, through the auspices of the Inter-Parliamentary Union, at the end of February.
The Government’s policy and the amending treaty link energy policy and trade policy. The Union’s aim is to integrate Algeria fully in the Union’s internal market, and thus double its gas supplies to the Union. The Union has also signed an agreement with Ukraine to co-operate not only on nuclear safety, but on the integration of electricity and gas markets. The Union seeks to improve environmental standards in Ukraine’s coal sector, and agreements have been signed with Azerbaijan and Kazakhstan. The Foreign Secretary’s Bruges speech on 15 November followed in the august footsteps of the noble Baroness Thatcher. He called for
an “environmental Union” and for the Union to be a “model power” in the 21st century. He also wanted it to be a low-carbon power.
There should be some unity across the Floor of the House on the following at least: an energy policy linked to a reduction in carbon emissions; a 20 or 30 per cent. reduction from a base year of 1990, with a longer-term goal of reducing emissions to less than 50 per cent. of 1990 levels by 2050; and all that being linked to sustainable development and poverty reduction, doing one’s best for the environment and marrying that with energy security.
The Union spoke with one voice at the Bali conference in December in its search for a replacement for the Kyoto protocol. It gave world leadership to achieve these reductions in greenhouse gases. The Prime Minister added to that when he reported back from the European Council meeting in December. He said:
“Europe must also step up funding, including funding through the World Bank, to help the developing world to shift to lower carbon growth and adapt to climate change.”—[ Official Report, 17 December 2007; Vol. 469, c. 597.]
On Second Reading, the right hon. Member for Skipton and Ripon quoted from Milton’s “Paradise Lost”. The European Union is not a paradise lost, but nor is it a paradise found. Whatever the views of right hon. and hon. Members of this House, the Union is here to stay. Europe has had centuries of fluctuating history, with its plagues, pestilence and wars, but now it has peace, prosperity and unity in diversity. The Union has chosen the path of civilisation, progress and prosperity, seeking to apply that to all its citizens. The hon. Member for Stone does not seem to think it a wise principle to follow civilisation, progress and prosperity. Perhaps he will give me an alternative.
Mr. Cash: It used to be the red flag, but now it is the European Union flag that the hon. Gentleman is waving.
Sir Stuart Bell: I must tell the hon. Gentleman that the Union flag has more stars than the red flag had.
Let us return to civilisation, progress and prosperity. The Union has sought to apply that notion to all its citizens, rich and poor and healthy and sick, including the weakest and most deprived. It seeks a liberal economy that does not conflict with, but is compatible with, a social model. I believe that those words come from the preamble, which is often derided across the Floor of the House, including by those on my own Back Benches.
The quotation cited by the right hon. Member for Skipton and Ripon brought to mind a quote from Henry David Thoreau, which I first heard from the lips of George Kennan during his 1957 Reith lectures—I said that I would be giving my age away during this contribution. He said that
“there is no ill which may not be dissipated, like the dark, if you let in a stronger light upon it, but if the light you use is but a narrow and paltry taper most objects shall cast a shadow wider than themselves.”
It is to be hoped that the Government, in choosing these debates, such as this one on energy, by subject
matter, will cast a stronger and better light on the operation of the Union, which is there for the benefit of all our citizens, now and in the future.
3.9 pm
Steve Webb (Northavon) (LD): It is a pleasure to follow the poetry and prose of the Second Church Estates Commissioner, the hon. Member for Middlesbrough (Sir Stuart Bell). He cited Churchill twice, as well as Thoreau and various other people of whom I had not heard. In the midst of that, the hon. Gentleman put his finger on a fundamental point: if we go back to the founding of the single market—I understand that the Conservative party still approves of that—we see that it implies the pooling of sovereignty. We cannot have a single market with common rules across national borders without such pooling. That must apply equally to the market for energy, but whenever the logic of being pro-single market is applied in a particular case, Conservative hackles rise and they cry, “National sovereignty!”
It is surely impossible to have things both ways, although Conservative Members may try to do so. If we support the principle of the single market, including a single market in energy, we must accept some pooling of sovereignty. Simply to say that we do not like a treaty because it involves some qualified majority voting on the structure within which the single energy market will operate is inconsistent. If we will the end, we have to will the means.
Mr. Harper: Will the hon. Gentleman address the question that the Secretary of State did not deal with satisfactorily? We already have the powers necessary for a liberalised energy market. Indeed, the Government extolled the virtues of the liberalisation introduced by that great woman, Baroness Thatcher, in the Single European Act. What will this treaty enable us to do in liberalising the energy market that we cannot do already?
Steve Webb: I am happy to address that point. When I intervened on the hon. Member for Rutland and Melton (Alan Duncan), who is no longer in his place, I put the same question to him the other way round. I asked him what Conservative Members were afraid of in the powers in the Bill, as it consolidates and clarifies existing powers.
Mention was made earlier of gobbledegook and double Dutch, but as European legislation and provisions go, article 176A is admirably clear. One could show it to the average person in the street, and they would understand immediately what it was talking about. It includes the aims to
“ensure the functioning of the energy market...ensure security of energy supply...promote energy efficiency ... and ... promote ... interconnection”.
Those are all clear and laudable aims, and putting them explicitly is better than having them brought in through the back door as environmental or economic provisions. The Secretary of State rightly pointed out that in the past, some of those energy goals have been achieved using other provisions—not as a pretext but as a route to them. Surely it is better to be explicit about energy policy and its goals, and that is what the treaty does. I cannot see what the Conservatives are
afraid of in clarifying the goals and adding the caveats. I have not heard a convincing explanation.
Mr. Weir: Does not that point illustrate the futility of much of this debate? Although the provisions that the hon. Gentleman mentions will be put on the face of the treaty, the real argument is about liberalisation, which will be bogged down because many nations support their national champions and will not support a full unbundling of powers.
Steve Webb: The treaty states explicitly that its role is to
“ensure the functioning of the energy market”.
I accept that that is qualified by the provision that it shall do so
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