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6.29 pm

Mr. Brian Binley (Northampton, South) (Con): You will be delighted to know, Mr. Deputy Speaker, that I had planned to make the most moving and effective speech on clean coal ever delivered in this Parliament’s history, but tragically, in trying to accede to your request and be brief, I have cut it to the point where I cannot do so.

We have heard right hon. and hon. Members outline the Government’s failure in recent years, especially in terms of renewable energy, microgeneration and the roll-out of smart meters. We have talked about this country’s abysmal lack of gas storage—we have 14 days’ capacity, Germany has 99 and France has 122. That lack is part of a policy framework that suggests that the Government have abysmally failed the whole population.

I want to concentrate on carbon capture and storage, on which the Government have acted with great timidity, caused disinvestment and, above all, created great uncertainty in the industry. That is a matter of great sadness. Large investment is required for CCS projects, which cannot proceed against a background of uncertainty, but people are having to invest in such a climate. Government policy is unclear: it appears that they support a single demonstration model of perhaps 300 MW and hope that eventually the emissions trading scheme will deliver a carbon price that allows investment to flow thereafter. That policy of wishful thinking has no certainty to underline it. Several large carbon capture projects were under development, but they have been frozen out thanks to the Government’s indecision.

The opportunity is obvious with between 240 and 250 years of coal beneath our feet and the ability to extend our oil production by up to 25 years. Together, those energy sources could solve our energy security problem, but the Government are not tackling that problem with any courage. As a result of a competition they decided in favour of a post-combustion working model—not a commercial station—to be in place by 2014. That decision shows that they do not see the need for any urgency whatsoever, yet that urgency is staring us in the face. That decision has undermined confidence in pre-combustion, where, conversely, technology is in place and we could create a commercial station by 2014. I need only mention the Centrica progressive energy project at Eston Grange to offer a good example of the impact of the Government’s decision: a proposed 850 MW integrated gasification combined cycle coal-fired power station was being worked on, but, although it remains
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in being, its capability is likely to be scaled down drastically. That presents a massive problem—and so it goes on.

We have undermined investment in clean coal to the country’s great detriment. What a missed opportunity! On 17 June, Professor Stuart Hazeldine of Edinburgh university said:

That was a slightly romantic notion, but none the less it underlines a great truth in this debate.

Mr. David Hamilton: Could the hon. Gentleman row back a little in saying that he is disappointed with this Government? Thirty years ago, CO2 emissions capture was being developed by the National Coal Board, and 25 years ago it was happening at a time when the Conservatives were closing all the pits in the United Kingdom. Both Governments have left a lot to be desired on such developments.

Mr. Binley: I am grateful for the hon. Gentleman’s comments. I was not opposing such developments at that time—I was playing football and chasing birds, but that is another matter altogether. We are dealing with the here and now, and the situation is that the Government do not have enough confidence in clean coal technology, have not put enough investment into it, and have not planned enough for a proper policy. They are simply waiting until 2014, when we might see the outcome of a possible post-combustion project that will not have any commercial impact until 2020, 2022 or thereafter.

I am not sure why the Government are being so timid. We have an Energy Minister who is normally robust and speaks his mind, yet I fear that his hand has been forced and he is displaying a level of timidity that he secretly would not want to show. I hope that he can tell us the reason for that timidity. Is it because he felt that the battle to secure the nuclear option would be greater that it has turned out to be, and that he could not have developed CCS adequately against that background? Is it because the oil companies have told him that it would be expensive and take too long, as Mr. Guerrant, the European director of ExxonMobil Gas and Power Marketing told the Business, Enterprise and Regulatory Reform Committee two weeks ago? Is that why the Government have baulked at the challenge? Or is it because they, as the Government, did not have the confidence to grasp the nettle? By their timidity, the Government have held back the whole CCS process, and Britain’s future energy security has been placed in jeopardy. We all must recognise that that is a great pity, to say the least.

6.35 pm

Mr. Peter Bone (Wellingborough) (Con): It is a great honour to follow my Northamptonshire colleague, my hon. Friend the Member for Northampton, South (Mr. Binley), who made a splendid speech that went to the heart of the matter. I sometimes feel that the Energy Minister must go away at night and bang his head against his bedroom wall at the Government’s indecision.
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If Prime Minister Blair were still here serving the full term that he promised at the last general election, I think that we would have had a lot more decisiveness.

Malcolm Wicks: We are all Blairites now.

Mr. Bone: Indeed.

I should declare an interest as listed in the Register of Members’ Interests and say that I drive a biofuel car. I want to make two brief points. The first concerns biofuel, which has not been much discussed during this interesting and constructive debate. For Members who are not aware of it, I should explain that a biofuel car can run both on petrol and on E85, which is a mixture of 15 per cent. petrol and biofuel and is sometimes called flex-fuel. There are only 19 biofuel stations in the country, one of which is at Morrisons in Wellingborough.

It seems strange that the Government are not encouraging more people to use biofuel to power their cars. I remember the former Deputy Prime Minister saying that he intended to reduce the number of miles that were travelled by car, but unfortunately the Government have failed in that regard. In 1997, motor vehicle traffic stood at 450.3 billion vehicle kilometres, whereas in 2006 the figure was 506.4 billion vehicle kilometres—an increase of 12.5 per cent. If we could reduce the amount of carbon that cars emit, it would be far better for the country. We know that biofuel does that, but there is a problem with a biofuel car, as I can testify—it can run quite happily on petrol, when it does the same mileage per gallon as a normal car, but when it runs on biofuel, its efficiency is significantly reduced, so one has to use a third more to get the same number of miles.

Dr. Ian Gibson (Norwich, North) (Lab): Is the hon. Gentleman aware that the Government’s chief scientific adviser, Professor Beddington, has said that the global rush to grow biofuels was compounding the problem of climate change and that cutting down rain forest to produce biofuel crops was “profoundly stupid”?

Mr. Bone: I realise that I have got very little time, so I will try to deal with that point straight away. One of the arguments against biofuels has been about the Brazilian rain forest, to the effect that when I drive down the motorway, instead of saving the planet, I am destroying it. However, the facts do not bear that out. Only 1 per cent. of the rain forest is being used for biofuel products, and the oil that it is generated is also being used in other industries. That argument is a bit of a red herring.

Martin Horwood: Surely the point about biofuels is that without proper sustainability criteria, the hon. Gentleman simply cannot tell what is in his tank.

Mr. Bone: That is entirely right, and if I had the time I would have argued for sustainability. The situation is rather like that of the mobile phone. The first mobile phones were great clunky things that we carried around, and now they are very small. If we do not get the first run of biofuel efficiency right, and if we do not encourage it, we will never get what we want. We now have aeroplanes that can fly on biofuel; Virgin flew a plane across the Atlantic with one if its engines running on biofuel.

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I want the Government to take biofuels into account, and briefly, I put the following points to the Minister. If we are to have a level playing field for biofuel, the duty must be reduced. It should be reduced by the maximum amount allowed under European Union rules, which is 25 per cent. I would like to know whether the Minister supports that idea. Why not make 50 per cent. of the Government agency fleet eco-friendly vehicles, such as those that use biofuel? Why not exempt flex-fuel cars from the congestion charge? Why not give free parking to people who use biofuel cars, or low energy emitting cars?

Malcolm Wicks: Ask Boris.

Mr. Bone: I am sure that the Mayor of London is listening to this debate with great interest. Finally, why not encourage companies to have biofuel pumps on their sites? If we are to encourage biofuel use, it is completely hopeless that there are only 19 biofuel stations in the country.

6.41 pm

Charles Hendry (Wealden) (Con): This has been an important, but somewhat brief debate. Nevertheless, we have covered good ground during the course of it. We have heard important contributions from a number of colleagues, and I give my sympathy to those colleagues who hoped to be called to speak, but did not have the chance to do so. I pick out in particular the comments of the hon. Member for Cheltenham (Martin Horwood), because it is clear from those remarks that a lot of common ground is developing between the parties, although there are matters that still divide us. When there is such cross-party agreement, which the Government could work with, it seems all the more strange to many of us that they choose to stand in its way.

The hon. Member for Barnsley, Central (Mr. Illsley) rightly highlighted the cost to business and consumers of energy prices. Just a few years ago, our industrial energy cost 15 per cent. less than the European average, and today it is 15 per cent. more. That difference is getting greater, so a real issue is at stake. Companies, such as the one in the hon. Gentleman’s constituency to which he referred, are facing the risk of closure because they can no longer afford to manufacture in this country. That is a matter of profound concern. Just as, a few years ago, business was moving abroad because of cheap labour, we now face the risk of business moving around the world to where it can get cheap energy.

However, it should be pointed out that consumers in this country were charged, until very recently, the lowest energy prices in Europe, one of the reasons being the liberalisation of British energy markets. The response to price rises should not be to move back to nationalisation, as the hon. Member for Barnsley, Central seemed to suggest, but to push the rest of the EU to liberalise its markets. The hon. Member’s final point was the most telling of all; he said that it was not for the Opposition to show leadership—although I think that we are—but for the Government to do so. That has been missing from this debate.

My hon. Friend the Member for North-East Hertfordshire (Mr. Heald) spoke of international comparisons and explained how we are lagging behind precisely because the Government have not made the
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tough decisions that are so important. He also made clear the real battle that will be fought in a number of constituencies between the desire to move forward with renewables and the concerns about damaging unspoilt natural landscape. That real debate is one which we should have in this House.

My hon. Friend the Member for Northampton, South (Mr. Binley) spoke with great passion about carbon capture and storage, and he rightly highlighted the lack of vision and the lack of a sense of urgency that we have seen from the Government. My hon. Friend the Member for Wellingborough (Mr. Bone) made interesting points about biofuels. One of the concerns expressed about using them in aeroplanes is that, using current technology, biofuels freeze at altitude, which is not desirable in an aeroplane. More work needs to be done on that, but the most important issue is the one raised by the hon. Member for Cheltenham—sustainability. Biofuels can make an important contribution as long as they are produced in a sustainable manner.

I was particularly struck by the speech of the Secretary of State, which was unusual because it contained a joke—perhaps it will read better in Hansard than it sounded in the House. When he was talking about Conservative energy policy, it was a bit like listening to the Monty Python routine, “What have the Romans ever done for us?” We have called for nuclear power without subsidy, for more resources for the nuclear installations inspectorate, for type and site approval, for changes in the planning system to allow for local democracy to be involved and for the Government to push towards a long-term waste disposal strategy. Putting that aside, however, what else is in the Conservatives’ policy? We have said that there should be a cap and trade system, we have called for smart meters to encourage microgeneration—

Mr. Hutton: Hardly.

Charles Hendry: The Secretary of State says, “Hardly”, but we did it well ahead of the Government. We pushed for feed-in tariffs and for changes to the national grid to allow for priority access, and we want to look at the way in which Ofgem operates to see what more can be done to encourage renewables. We have called for more carbon capture and storage projects and for more general gas storage because we are concerned about the national lack of storage. We have pushed the Government to reform the renewables obligation certificate system to allow for banding. We have not called in any Conservative policy document for ROCs to be scrapped.

We called for a heat strategy, and we called for energy efficiency and fuel poverty to be dealt with in the Energy Bill, but the Government refused. We have pushed for more energy to be derived from waste, and we wanted more information for consumers on their CO2 emissions and their environmental charges. We wanted the public to know what contribution was made from their bills towards those charges. In spite of all that, the Secretary of State says, “Yes, but can you tell us what the Conservatives want in energy policy?” We could not have been clearer in showing the way, and it is unfortunate that the Government have been lagging.

The greatest risk to our energy policy is the Government’s failure to make long-term decisions. My hon. Friend the Member for Rutland and Melton (Alan Duncan)
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and I are fans of much of what the Secretary of State has done. The nuclear industry and its potential investors will be profoundly concerned by the reports in yesterday’s papers that the unions want him sacked in return for continuing to bail out the Labour party. He has been listening and he has been acting, but there remains a worry that there is no plan B if people choose not to invest in this country on the terms set out by the Government.

Concerns arise relating to our energy security in other respects. On gas storage, there is no sense of urgency and no steps have been taken to put an increased number of gas storage facilities in place, even though we have some of the worst storage facilities in Europe. We have 10 or 12 days’ worth of supplies, compared with 80 days in other countries. On carbon capture and storage, the Government ducked one of the great technological opportunities of this decade in opting purely for one technology. They said that they wanted to export the technology to China, but anyone who knows anything about the matter knows that the Chinese will be developing it, too, that they will be there by Wednesday of next week, rather than in 12 years’ time, and that they will be considering how they can export it to us, rather than expecting to take it from us. The Government have turned away from one of the most exciting technologies, which will be a matter of shame for them for ever.

Everyone believes that energy efficiency can make a fundamental contribution to our energy security. At the moment, only 40 per cent. of the properties of this country are effectively insulated. There was nothing in the Energy Bill to improve insulation. We charge 5 per cent. VAT on fuel, but 17.5 per cent. on energy-efficient measures to make our homes warmer. People tell us constantly that they are not getting the independent guidance that they need to determine which technology is right for their homes. The Government have held back and have not been sufficiently dedicated to the roll-out of smart meters. We could have sent a very clear message in the Energy Bill that we wanted every home in this country to have a smart meter within 10 years. They would help to tackle energy inefficiency and fuel poverty, and they are exactly the right way to go. The Government moved some way in that direction but were still not prepared to take the necessary key steps. They continue to run the low-carbon buildings programme, and when the money is used up within a few hours of being unveiled they say that that is a success, showing how popular the programme is, rather than a fiasco because people cannot get access to the support that they are looking for.

We recognise the contribution that microgeneration can play, but the Government are still stalling its development by refusing to accept feed-in tariffs now because they want to consult more on them. That means that it will be years before we can take them forward as is necessary.

We find perhaps the greatest complacency of all on renewables. We have heard about how the marine renewables deployment fund has not worked. The Minister has said on other occasions, “But look, we have almost as much tidal power and wave power as they have in Portugal.” We have 11,000 miles of coastline, compared with 1,000
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miles in Portugal. We should be leading, but we find that the new renewables strategy that the Government announced last week is not so much a strategy for success as a shocking admission of the Government’s failure. We are third from bottom in the whole EU in the development of renewables. In spite of all the Government’s fine words, we have simply not made progress.

All that we get from this Government is consultations. There was a consultation programme on smart meters, and at the end of it their conclusion was that there should be three more consultation exercises. That is this Government’s approach; rather than make decisions, they have a further consultation programme. That is simply not good enough.

We are concerned about reliance on imported energy, which will include 80 per cent. of gas by 2020. That will lead to higher prices and less security. That is the challenge for the Government, and it is unprecedented, as we have heard in the debate. We are not getting the leadership that we need from this Government. Their legacy will be terrible in many areas, but the worst legacy of all will be that they have failed to make the key decisions. That will result in a loss of vital supplies, which in turn will lead to higher prices and, potentially, power cuts.

6.51 pm

The Minister for Energy (Malcolm Wicks): We have had a lively and wide-ranging debate, ostensibly about the security of the energy supply but in practice ranging very much wider. I shall start with energy security, which is a serious challenge.

Our task is to ensure that we continue to have a secure and reliable supply of energy in a world in which global demand is growing rapidly and supply has struggled to keep pace. We have to import far more fuel than in recent decades, and energy resources are concentrated in certain regions, including the middle east and the former Soviet Union. Energy therefore becomes a vital component of our nation’s security, not just because we need the supply but because we must ensure, through diversity, that our sources of supply do not affect our independent foreign policy on issues such as human rights. The energy security aspect of national security is vital.

The imbalance between supply and demand affects prices. As we have heard, the price of oil has gone over $140 a barrel, having doubled in the past year. That has had knock-on effects on gas—wholesale forward gas prices have increased by more than 135 per cent. since June 2007—and on coal, with spot prices increasing by more than 150 per cent. since then; on electricity, whose price has more than doubled since June last year; and on petrol and diesel, whose prices are respectively about 35 per cent. and 25 per cent. higher than last year. Of course, that is affecting every household, motorist and business.

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