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9 July 2008 : Column 448WH—continued

9 July 2008 : Column 449WH

We know the background. We have to do some big things to combat the threat of climate change. Whether we include in the Climate Change Bill an emissions reduction target of 60 per cent., or, as I hope, 80 per cent., we have to do those things at the very latest by 2050. We are therefore looking for a change in policy.

The Government are right to consider the various factors that need to be dealt with, including the entire range of renewables. I am always ready to argue the case for the regeneration of the nuclear industry. It is good to see the hon. Member for Bridgwater (Mr. Liddell-Grainger) in his place; he is a kindred spirit in that regard. We must regenerate at least the amount of electricity that we currently produce from nuclear power. As someone who has seen the Berkeley power station live and die, I recognise that nuclear has a part to play. That is not the subject of today’s debate, but it acts as a backdrop to what we should be considering, and affects how we can stack up the figures.

With the best will in the world, what is proposed is enormous. There are two main barrage proposals, the Weston to Cardiff and the Shoots barrages, and a number of alternatives. Even the more minimalist barrages will be huge projects. Huge capital expenditure will be involved, and they will give rise to huge obligations in terms of the amount of electricity that will have to be produced to get the right payback.

I do not have fears about that, although I tend to be an incrementalist. I believe that small is beautiful. However, there are times when we have to go for big solutions, as with the re-harnessing of nuclear power. I look back to my epiphany on this issue, which was the 1989 report. Sadly, I read it, but I cannot recall much of it. However, it was good. It was not like the latest report.

In researching for today’s debate I have looked at the papers that accompany it, and earlier investigations took place as far back as the early part of the 20th century, so the idea is nothing new. We have considered the possibility of a barrage many times. However, the 1989 report taught me two things. First, we were talking then about something that was impossible—it was make-believe—because energy prices then would not have allowed us to recover the construction costs.

I remember that the only way to bridge that financial gap would have been to build massive housing developments further up the vale. Thank you very much, we get 50,000 extra houses. Of course we need houses, and we need them in ever greater numbers in some parts of the country, but it was hardly an acceptable aspect of that proposal for houses to be built in order to get the barrage in order to get cheaper electricity. Of course, if we had built the barrage we might now be thinking slightly differently.

The biodiversity issue, which will always be at the back of people’s minds, keeps returning. The Severn is a very special water course. I would argue that it is the most important in Europe. It has the second highest tidal range, which is what makes it a good prospect for generating electricity, but the flora and fauna of the estuary is so important that we tinker—dare I say tamper—with it at our risk and with considerable concern.

I have been leading up to the Sustainable Development Commission report. It makes an interesting analysis, which will inform the later study. We are led to believe that it will take two years, but perhaps the Minister will
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tell us more about the schedule. I do not say that we should scrap that investigation, but I want to change its nature. I want it to put far more emphasis on alternatives to the barrage. However, the Government would look rather silly if they were suddenly to do a volte-face and say that they do not want an investigation.

I would like to know more about gaining access to the team, and how we might work with it. Those of us who do not want a barrage will want to ensure that we are able to make representations. At this stage, however, I am not saying that it would be wrong for the investigation to go ahead, because even though we had an investigation some 20 years ago, the figures need to be updated, and new techniques and new approaches ought to be considered.

Although the details were wrong, the SDC report included some interesting work on alternatives, as well as an examination of the implications of the barrage. It was long on words and short on recommendations, which is why the Government had to set up their own feasibility study, which will go into much greater detail on technical necessities, finance and biodiversity, which is always the backcloth.

To move away from the pure biodiversity arguments, the NGOs—including the Royal Society for the Protection of Birds, the Slimbridge Wildlife and Wetlands Trust, the WWF and the National Trust, which are all reputable—commissioned the Frontier Economics report. Frontier Economics was asked to address the relatively narrow question of the justification for the barrage. In particular, it was asked to examine two questions regarding whether any justification could be contextualised within the current debate on the feasibility study. First, it looked at the Government’s role, and asked how they could or whether they should instigate such a project. Secondly, it looked at the costs of the project—we are talking about the economics of the Severn barrage—in relation to the alternatives and other forms of energy production. The study was not simply a sterile, limited analysis of the barrage versus other uses of the Severn, but asked whether we could find other ways to generate electricity.

It is important to separate the Government’s role of worrying about climate change and altering people’s mindset, and their role of driving the project forward. Of course—this will come as no surprise—Frontier Economics sees the Government’s role as crucial, saying that there can be no barrage unless the Government sign up to it wholeheartedly. However, there is a subsidiary question: to what degree must the Government consider whether they are doing the right thing at the right time? This is the premise of my argument: I do not want to leave the Severn alone, and I do not believe that the Severn is anything other than a wonderful opportunity for the generation of energy, but I have a big thing about the barrage. I do not see it as the solution, especially because I want much more activity and proactivity immediately.

I can offer the Minister an opportunity. There is a wonderful way to pull all the different threads together—we could look at the different possibilities on the Severn at the moment, which include using smaller-scale technologies on the river, lagoons, booms, river streams and underwater turbines. To pull those different technologies together, we need a location, to get synergy between companies. I have a wonderful location in mind—the old Berkeley nuclear laboratory site. Myself and others discovered
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that it is currently in splendid isolation and that the laboratory is all but gone. We looked at the idea of a renewable energy park, but, sadly, that has not yet got off the ground.

The site would be an ideal location for the kind of industries and firms that could generate alternative energies on the Severn. The offer is genuine and those things could happen now. We would have to talk to our colleagues in the Nuclear Decommissioning Authority, but the Government can talk to themselves sometimes, even within the same Department, so we could make some progress on that. That is the offer. Will the Minister say whether that will be considered as part of the feasibility study? We cannot expect companies to operate virtually—we need locations and facilities in which they can work together. That could and should be happening.

We can look at the cost of the barrage in two ways. Clearly, we are simply staggered by the sort of figures that are thrown about for the initial, construction costs. The lowest estimate that I have seen is about £14 billion, but I gather that a figure of £23 billion has been introduced by Halcrow, which was commissioned by the Institution of Civil Engineers. That is pretty big money, and it would have to be justified. We must ask not only whether the project is technically possible and whether the money can be found in such difficult times for the building industry, because it would need to be properly funded—perhaps the building industry is looking for such a project at the moment—but whether there is a payback.

All the evidence shows that the barrage is a very expensive project. I am told—this is reinforced by the Frontier Economics study—that electricity will be produced at about twice the cost of solar energy, which is the most expensive renewable option. It does not compare at all with the nuclear option, which should be used as a benchmark. The barrage could be a very expensive form of electricity generation. I hope that we will get some definitive evidence on that, which is why I do not want to destroy the feasibility study, but to push it in the direction in which I think it should be going. There is a big question mark against the cost, which will be the kernel of the argument on whether we should push on with the project.

Like other hon. Members in the Chamber, I have been approached and lobbied by a variety of organisations, including the Bristol Port Company, Natural England—as the Government’s experts on the environment, it has considerable worries about biodiversity in relation to the project—and the different NGOs, representatives of which I have met individually and collectively. The Bristol Port Company said that, even at this stage, it has had no assurances or guarantees that ships will get through easily even if we go for the larger barrage between Weston and Cardiff. I am sure that my hon. Friend the Member for Bristol, North-West (Dr. Naysmith) will talk about this, so I shall not go into any great detail, but the company is about to launch a huge investment project. It welcomes the barrage like a hole in the head, because it casts doubt on whether it can make Bristol a deep port. The terminal is probably the most important gateway to the country—much more
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important than any on the east coast—because it is not only close to the Bristol hinterland, but offers a rapid route to Birmingham.

I shall take no hostages to fortune on the issue. We should not look at the barrage as a barrage. We should look at alternatives and push the feasibility study in that direction, and recognise that the biodiversity costs are too great. We have a useful account from Frontier Economics, which I hope will feed into the process. We cannot avoid our responsibilities, however, and we have to do something; it is just that I would prefer to do something now. I am happy to work with other hon. Members, the Minister—obviously—all those companies that we want to generate electricity along the Severn and NGOs prepared to work with anyone provided that the threat of a barrage does not hang over them and the Severn itself. That is the offer, and I hope that the Minister will make some clear statements about how we can engage with the feasibility study team to ensure that there is a balance and to counter the belief that this is a done deal.

Some of the statements from the Secretary of State for Business, Enterprise and Regulatory Reform have intimated at the fact that we have to do something. The target of 4 per cent. plus of electricity generation is too good an opportunity to turn down, but I hope that we approach the problem with an open mind, because we could be producing more electricity sooner and at a lower cost than would be the case with the barrage.

I look forward to engaging on this matter, and I hope that the Minister will say how that can be done. I also look forward to hearing what other hon. Members have to say. I promised to mention my other kindred spirit, the hon. Member for Salisbury (Robert Key). On this matter, he and I are one—or rather we are twins. Like me, he feels that the barrage is not a good idea. He would have liked to have been here, but he is chairing a Committee somewhere else. However, if he were here, he would be arguing very strongly in support of my case.

2.51 pm

John Penrose (Weston-super-Mare) (Con): I congratulate the hon. Member for Stroud (Mr. Drew) on securing this important debate and on the very fair way in which he set out much of the background to the issues that we are here to debate. I disagree with him on two points only—one small and the other slightly more substantive.

The small one is this: the hon. Gentleman said that his constituency is likely to be the most affected if the barrage is built, but I suspect that many would take issue with that. I am sure that his constituency will be greatly affected, but speaking as the Member for Weston-super-Mare, I can tell him that if the Weston to Cardiff barrage is built, a hulking piece of civil engineering will come ashore on the border between my constituency and that of my right hon. Friend the Member for Wells (Mr. Heathcoat-Amory). That could have a dramatic impact not just on biodiversity, but on the economy of a seaside town such as Weston-super-Mare. I am sure that we all agree that there is a great deal to play for—the potential impacts are both positive and negative, economic and environmental. It is essential that we appreciate that the stakes riding on this decision are incredibly high, and that it is therefore vital that the correct decision is made.

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I respectfully disagree with the hon. Member for Stroud on a second, slightly more substantive point. He said very clearly that he starts from a position of feeling that the barrage is wrong. I, on the other hand, think it imperative that we find substantial sources of renewable energy in this country, and it is clear that the Severn estuary and the Bristol channel constitute one of the largest potential sources of renewable energy in Britain. However, I would like to keep my powder dry and wait until the Government’s two-year feasibility study has been concluded before deciding which of the potential technologies for harnessing that power would be best.

I think that the Government were right to realise that much of the work done up until now, by previous generations, on both the economics of the Severn barrage and the environmental impacts—let us not forget that the latter have very severe knock-on economic effects—is now out of date. That is partly because, as the hon. Gentleman said, construction techniques have changed and construction prices have altered out of all recognition, as we can all understand. Furthermore, our understanding of the engineering and environmental challenges surrounding the Severn estuary have also moved on dramatically.

Clearly it is right and sensible of the Government to say that, before rushing to judgment, we need a modern, up-to-date and scientifically and economically robust analysis of the different technological alternatives to harnessing the power of the Severn. It is vital that we get this right and take the time to evaluate the pros and cons of the different options, because the stakes are so high and because not only our children and grandchildren, but their grandchildren and future generations will be living with the consequences of the decision that the Government take at the end of the feasibility study.

I start from a different position from the hon. Gentleman’s, and think that the Government’s approach is right. However, I press the Minister to give us a couple of reassurances. It is clear from many of the submissions, including the one from Frontier Economics, which the hon. Gentleman mentioned, that it is neither right nor good enough merely to consider the alternative means of harnessing the power of the Severn. I accept that we need to understand the implications of each of the alternatives, but having done that, we must put our conclusions into the context of the other available sources of renewable energy that could be created, given equal amounts of investment, elsewhere in the UK.

We all know that many other potential sources of renewable energy are available—from offshore and onshore wind to biomass, biogas and so on. If a great many better options are available away from the Severn estuary, it is not good enough to say, “This is the best option for the Severn estuary, so let’s build it.” If we have what I suspect will be a fixed pot of money—resources never match the ideas on which they could be spent—we must remain open to the possibility that the feasibility study might conclude that the barrage is the best option for the Severn estuary, but that plenty of other options are available elsewhere in Britain, all of which are better, and that therefore nothing should be done on the Severn. We must consider that for the sake of intellectual clarity and honesty with ourselves and our constituents.

As I have said, I am coming at this subject with the preconception that we need to harness the power of the Severn. However, in spite of that preconception, let me
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say for the sake of accuracy, clarity and logic, we owe it to ourselves and to future generations who will be living with the consequences of this decision to ensure that we can look people straight in the eye and say, “We made the comparison not just in the Severn, but more widely.” I hope that the Minister can give me that assurance when he gets to his feet.

I would like to press the Minister on section 2, article 5 of the proposed European directive on the promotion of the use of energy from renewable sources. He and I have corresponded on and debated the directive already, but so far our discussions have amounted to an exchange of views without conclusions. In case people do not have the directive as their bedtime reading—if they do, they will almost certainly have nodded off trying to get through it—I shall provide a brief summary. If adopted, it would effectively give the Government credit for energy generated from a very large renewable energy project, such as the Severn barrage, which would be put towards the Government’s commitment to produce 15 per cent. of Britain’s energy from renewable sources by 2020.

The Severn barrage, however, is almost the only project that could qualify under the proposed directive: none of the other proposals for harnessing the power of the Severn could qualify under the terms in which the directive is written. The credit would start from the moment that construction of the barrage began, which would be about 10 years before the first watt of renewable power energy flowed from it. However, given that that would apply only to the barrage, and not to the other potential sources of renewable energy from the Severn, it might create a slanted playing field and an obvious incentive for the Government to choose the barrage, even if it is not necessarily the best answer, because of this accounting trick that would allow the Government to put the power generated towards their adopted target early.

It is clearly not in the interests of the credibility of this Government or any democratically elected Government to be open to a charge of fiddling their figures or indulging in accounting trickery. There will be no solid basis for justifying what will be an incredibly difficult and important decision if everybody looks at it from day one through the prism of believing, “Well yes, they would choose the barrage, wouldn’t they? They have this accounting trick, which predisposed them towards the barrage in a way that didn’t apply to any of the other options.” That would be an incredibly corrosive perception, which would undermine the validity of any decision that the Government took.

As I said, the Minister and I have discussed the matter and exchanged letters. Let me summarise the Minister’s response thus far—he will correct me if he thinks that I am mis-stating his position. While looking at me in a slightly pained fashion, he says, “Perish the thought that Her Majesty’s Government should ever take a decision on such a basis. That would clearly be wrong.” Obviously, that is very reassuring, but I am afraid that it does not necessarily deal with the problem that I am describing, because it will not convince many people outside this place or solve the problem of corrosive doubt—the belief that the system is fundamentally slanted in favour of a barrage. Given the low esteem in which politicians of all parties are held in this country, it is in the interests of everybody, including the Government,
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to ensure that justice is not only done, but seen to be done when Ministers take their decision.

I therefore ask the Minister when he replies to give me an assurance that the Government will seek either to change the directive so that it applies equally to the barrage and the other options that they are considering for the Severn estuary, or to ensure that it applies to none of them. It cannot apply only to one and not to the others. I am told that the directive is still in draft, and it is essential that no accusation of bias can possibly be made on this vital subject. I therefore hope that the Minister can reassure me of his good intentions.

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