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7.13 pm

Steve Webb (Northavon) (LD): Like other hon. Members, I welcome the profile given to this important subject by it being debated on the Floor of the House. The frustration, of course, is that we get 90 minutes, whereas if we were debating it upstairs in Committee, we would get another hour on top. Given the detailed nature of many of the issues that we want to raise, it is frustrating that so few of us will be able to contribute in any detail.

It is important to say a word or two about the context. The point of the directive is presumably to reduce our greenhouse gas emissions from energy, heat and transport, yet we are debating this issue on a day when the Office for National Statistics has published greenhouse gas emission statistics for the country showing that in the past eight years, our emissions have barely changed. On hearing the Minister talk about all the triumphs of British policy—on hearing how we are No. 1 at this and that and how we will hit these very bold targets—one would not realise that in the past eight years, we have made no progress at all in reducing our emissions. It is indicative of the lack of drive and determination that we have seen to date that we are starting now from where we are.

It is extraordinary for the Minister to say that the reason we are worst in Europe on renewables except for Malta and Luxembourg is that we have had all this oil, and so we were just going to use it and not bother too much about renewables. The former Prime Minister, Tony Blair, who signed last year’s agreement on these renewables targets, is the same Prime Minister who 10 years earlier signed the Kyoto treaty. The Government were only a few months into power when they signed up to the Kyoto targets, yet 10 years later, we are still virtually bottom in Europe on renewables. Is the fact that we had oil somehow an excuse for our lamentable failure? That is what the Minister seemed to be
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implying—that we were not under any pressure because we had some alternatives, so we did not bother much with renewables. That is a shocking thing for a Minister for Energy to say.

I have to say that I do not hold this Minister personally responsible. He was not the one trying to solve the energy crisis—he was solving the pensions crisis at the time. We absolve him of having failed to solve the energy crisis because he was dealing with other big problems that have now been resolved.

Malcolm Wicks: The hon. Gentleman has provoked me. He is absolutely right: together with friends, we tackled the pension issue—with a little bit of scrutiny from him from time to time. However, the serious point is that I was going for a broader historical sweep, saying that in the 1970s—I was not talking about the past 10 years—we suddenly discovered this huge resource of oil and gas in our own backyard in the North sea, whereas other countries had to look at alternatives because they did not have that resource.

Steve Webb: I am slightly baffled by this. The argument for why, in 2005, on these figures, we were the worst in Europe seems to be that in the 1970s we found lots of oil. We signed up to climate change obligations in 1997, at the start of this Government’s term of office, and for the best part of 10 years on we were bottom of the league. Even if we achieve the goals in this directive, we will still be 18th in Europe. Even if we achieve the targets that everyone is saying are bold and very demanding, we will “surge” to 18th in Europe. Is that not an indication of the paucity of the Government’s achievements so far?

On the one hand, we are trying to cut our carbon emissions through the renewable strategy in the directive; on the other, we are seeing airport expansion and new coal-fired power plants. There is a lack of connectedness in this whole policy, which, again, is segmented into different Departments, none of which has overarching responsibility for the environment. The root cause of the failure of the Government’s climate change policy is that no one in the Government with a very big stick is in charge of it. Whenever I do talks on climate change and the environment, I always ask audiences to name the Environment Secretary, and virtually none of them can. I mean no disrespect to the Environment Secretary; rather, that is indicative of the status of the environment within the Government. All the big decisions on the environment—be they on energy, airports, transport, housing insulation, green taxes—are all taken by somebody else. That is the biggest problem.

On the 15 per cent. target for the UK, the Minister said that we would do our fair share, but of course, we are not. We are doing below our fair share because we failed so much in the past and we start from so far behind. The hon. Member for Linlithgow and East Falkirk (Michael Connarty) suggested that these numbers are made up on the back of a fag packet. The directive indicates that one of the bases for the numbers we have signed up to is where we started from, which is a position of great weakness due to the failure of Government policy to date. One of the reasons our percentage is so low is that we have such a long way to go. It was extraordinary to hear the Minister say in his
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introduction that Britain is rated No. 1 by KPMG for offshore wind potential. That implies that we should have a really big target, because we have fantastic renewable potential. Actually, we have a below-average target because even with tremendous offshore wind and tidal power potential, we still cannot credibly get to more than 15 per cent., given how we have done. So the 15 per cent. figure—the fact that we cannot do any better than this—should be a source of national embarrassment, and even that looks pretty difficult to attain.

One issue is not clear to me. The Minister talked about 15 per cent. and then said, “or thereabouts”. In responding to the debate, perhaps he can clarify whether the British Government are going to attempt to water down that target. The motion refers to “flexibility” on achieving that, and in the evidence that he has given on this directive, he talked about flexibility on the trajectory. He will know the directive contains a trajectory—an indicative trajectory—in annex 1B, which suggests that a quarter of the progress must be made by 2011-12 and that 65 per cent. of the progress must be made by 2017-18. I find that alarming, because it means that two years short of the deadline we will need to have made only two thirds of the progress. I hope that the Minister will correct me if my understanding is wrong.

I understand the point that there is a lag in these things and that they take time to come on stream, but that is an incredibly end-loaded approach. I think that the Minister’s position is that he wants even more end-loading. Let us reflect on what the hon. Member for Linlithgow and East Falkirk just said. He seemed to say that we do not want penalties for really slow progress in the early years, because we will have this great surge in the end. My worry is that the British Government will say, “Tomorrow, tomorrow, tomorrow”, but tomorrow may never come. Unlike the hon. Member for Linlithgow and East Falkirk, I think that the threat of imposing serious penalties on the British Government so that we can make steady progress as we go is a very good thing. It is entirely welcome because we know what the British Government would do without someone taking a big stick to them.

The Department for Business, Enterprise and Regulatory Reform has responded to the directive, producing a written ministerial statement on 23 January. It was totally delusional. It is baffling to realise which country is being referred to when the Department describes the situation. I have not got time to go through it all in depth, but paragraph 13 states that we

Which microgeneration strategy are the Government aggressively implementing? I have not noticed it. They are opposing the only microgeneration strategy in town—feed-in tariffs—for now, because they are going to consult on it in the summer. They will probably eventually give in on that. Where is the aggressive prosecution of the strategy?

The whole document is full of delusion about the position that we have reached. Paragraph 14 states that

It then discusses heat, a crucial subject about which we have had a brief discussion. There was nothing on
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renewable heat in the Energy Bill. Why? Guess what? It was because we will need to do even more. We will need to incentivise renewable heat, which is why we are told that

When are the Government going to get on with it? A legislative opportunity is going through the House at the moment that would allow any necessary legislative steps to be taken on renewable heat, yet there is to be a call for papers and perhaps a conference. Perhaps I could attend that, to listen and debate. Perhaps there could be a further consultation draft.

Malcolm Wicks: I shall tell the hon. Gentleman where he can help me. When I receive representations from Liberal Democrat MPs and Liberal councils trying to block the development of renewable projects, as frequently happens, will he come with me to those meetings to urge his colleagues to walk the walk, rather than just talk the talk?

Steve Webb: I would be interested to receive specific examples. I was talking about the topic of renewable heat, and I am not aware of any Liberal Democrat council in the country that is —[Interruption.] The Minister has swapped to wind farms; I am talking about heat and his answer is wind farms. Will he deal with the specific point I am making about the failure to address renewable heat? We are also failing on renewable transport, and the renewable energy policy is already years behind schedule—that is a pretty poor combination.

We could do with answers on a couple of other specific issues. I would be interested to learn what projections the Minister has made of the contribution of renewables and the contribution of Scotland to his overall totals. To what extent does his Department examine particular sites, areas or nations in the United Kingdom? To what extent will the Government in Scotland’s attitude to, for example, onshore wind, be a barrier to the Government achieving the targets in this directive? Has he examined that matter?

We have heard about priority grid access, which is mentioned in the directive.

Mr. Weir: Will the hon. Gentleman give way?

Steve Webb: I hope that the hon. Gentleman will forgive me if I do not. He has intervened on a number of occasions, and I want to give him a chance to speak.

The issue of priority grid access came up during our debates in the Energy Public Bill Committee but nothing happened, as far as I can tell. The directive refers to it, implying that there would be priority grid access, but it is not clear to me whether or not there is, or what the Government’s position is.

My hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) referred to the renewable transport fuel obligation, and the Minister said something rather strange. He said that we must not have a target unless we are sure about sustainability. I thought we already had a target and that it had come in a couple of months ago. I thought
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that we now had a 5 per cent. obligation on biofuels, yet in only a couple of months’ time the Government’s review will assess the sustainability issue. Are we obliging transport operators to use a percentage of renewable fuels without having robust certification in place now? In other words, are we doing damage now by introducing an obligation when we are not yet satisfied that we have reliable certification? That is my understanding of where we are at, and that concerns me a great deal.

It would have been a great joy to have gone through the entire ministerial written statement pointing out the absurdities and the complacency, yet it would also have been a great sadness, because these are important issues. We want these goals to be achieved, because we think that they are a legitimate priority for this Government. That is why we will support this directive tonight, but we urge the Government not, as is hinted at in the motion, to try to water it down in the negotiations. We urge them not to try to have opt-outs, get-outs and British exemptions. Would it not be great if, for once, Britain was leading the way, rather than having to plead for special terms because we have failed so much in the past?

7.25 pm

Ms Katy Clark (North Ayrshire and Arran) (Lab): I strongly welcome the fact that we are getting the opportunity to debate this draft directive on the Floor of the House because, as has already been made clear, achieving the targets will have substantial implications for many areas of policy. I welcome our focusing clearly on the document before us, which highlights the fact that previous attempts to meet renewables targets have not been very successful. In 1997, a directive setting a non-mandatory target of 12 per cent. by 2010 was not successful, and, as has been said by many hon. Gentlemen, it will be very difficult for us to meet the targets being set by the European Union.

Although it will be very difficult to meet, it is very important that we sign up to a mandatory target on renewables of 15 per cent. As has been said, we are starting at a very low base. There are many reasons for that, but part of the cause is that we have not taken earlier challenges as seriously as we should have done. We need to accelerate our approach in many areas of policy if we are to meet the targets being set by the directive.

The debate on these issues often focuses strongly on electricity, which is, of course, an extremely important factor. However, it is only one of the areas that we need to examine, and it is clear that if we are to meet the directive’s targets, the renewables sector will have to be substantially developed. I welcome what the Government have done on renewables obligation certificates—ROCs—particularly the provisions of the Energy Bill. They introduce enhanced ROCs in relation to other forms of renewable energy.

We need to go further than that and we need to examine what has worked elsewhere in Europe, so I urge the Government to re-examine the issue of feed-in tariffs, particularly in relation to micro-generation. However, I am not of the view that we should move away from ROCs, because they have been exceptionally successful in encouraging the private sector to invest in
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research and development and in the expansion of renewables that we so desperately need.

The table provided to us from the European Scrutiny’s 15th report of Session 2007-08 highlights the situation in which we find ourselves; the UK is starting from a very low base. Only 1.3 per cent of our share of energy came from renewable sources in 2005, which compared with Sweden’s 39.8 per cent., Portugal’s 20.5 per cent., Finland’s 28.5 per cent., and the Czech Republic’s 6.1 per cent. We are very low down the table. I believe that only Luxembourg with 0.9 per cent. and Malta, a small island without a history on renewables, came below the UK.

We need to see significant changes in policy if we are to achieve the kind of development that we need. Like many hon. Members here tonight, I have a constituency interest, in that a range of planning applications is pending, including for wind farms, which provide part of the solution, but only a very small part. We need to look at all the other forms of renewable energy that are available, and ensure that we enable speedy research and get the financial resources to put into development. We do not know for sure which forms of renewable energy we will rely on in the future, so we have to put a financial regime in place that encourages development of all the various forms.

We also need to recognise that we are not talking only about electricity generation. To meet our carbon targets, we need to ensure that we are more effective in our use of the electricity that we produce. That goes beyond this directive, but will be essential in ensuring that we meet our targets. Transport will also have a major role to play, but that is an issue for another day.

What is important in this debate is not our discussion today about the exact method used to meet these targets, but whether we should have the targets at all. If we sign up to the directive and the potentially legally mandatory targets, action could be taken against us if we do not meet them. I support the Government’s courageous position, in Europe and domestically, on the Climate Change Bill, which contains mandatory targets for carbon reduction. This directive fits well with our domestic policy, and for that reason I strongly support the Government’s position on the directive.

7.32 pm

Mr. Mike Weir (Angus) (SNP): I was interested in the animated discussion with the Minister about oil reserves. History is being rewritten, but if Scotland had been given its oil all those years ago, the Minister would have been saved a lot of angst.

The hon. Member for Northavon (Steve Webb) made a comment about the Scottish Government’s record on wind power, although he would not take an intervention on it. The present Scottish Government have granted proportionally more wind farms in their first year than the Government of which the hon. Gentleman’s party was a member.

There is much that is good about the document and I am generally supportive of it. I was especially interested in what it says about transmission charges— an old hobby-horse of mine that I am sure the Minister will be pleased to hear about again—as they relate to renewable energy in Scotland. I will not go through all
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that in great detail again as the Minister has listened to the arguments on many occasions about how renewable generation in Scotland is handicapped by the transmission charge regime introduced by Ofgem.

Article 14 of the document says that renewable sources should be given access to the system and that the rules should be

I hope that the Minister will explain how that will fit in with the present Ofgem regime, which is clearly discriminatory against renewable producers—or indeed any producers in a remote area. The document may mean that the UK Government have to look again at the transmission regime to ensure that it is non-discriminatory.

I agree with the Minister that we should not throw the baby out with the bath water when it comes to biofuels, but the document is not clear about the position of imported biofuels. At the moment, much of the biofuel used in the European Union is imported, mainly from the US, which—given that it has not signed up to previous agreements, such as Kyoto—is unlikely to sign up to any agreement on biofuels soon, pending a possible change in the Administration. Massive grants are given to farmers in the American mid-west for the production of biofuels, and their withdrawal could lead to a farming crisis there.

Will the targets for biofuels in the document be purely for the production of biofuels within the EU, or will moves be made against the importation of biofuels from outside that are not deemed to be sustainable? How would that fit in with World Trade Organisation rules, because that is a potential problem?

In an intervention, I raised the issue of renewables obligation certificates. I apologise to the Minister because I said that only tide and wave would be affected, but deep-water offshore wind will also be affected. I have written to the Minister about this before. He is right to say that grants are given to experimental schemes, but the difficulty is that the new system for ROCs will not allow such schemes to be developed and then to receive the double-banded ROCs for the future generation of electricity. Under the Energy Bill, the companies will have to choose between repaying the grant that they have already received or taking the double ROCs. The problem is that the companies need the grant money to get the projects up and running, but to generate the electricity they will also need the new ROC system.

The difficulty is that companies may get the grant money but then be unable to generate electricity. If they take the double-banded ROCs, they will have to pay back the grant money that got them up and running in the first place. That is a serious problem of great concern to developers, especially of the Beatrice scheme in the Moray firth and wave and tidal power schemes in the Pentland firth. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) has also contacted the Minister about the latter schemes, and the issue may be debated in the other place when the Energy Bill is debated there.

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