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9 July 2008 : Column 467WH—continued
Let me say more about where we are on the Severn tidal power scheme, which is certainly an important option to consider. Come the time, the decision will be an important one. As we heard, with its 14 m tidal range—the second highest in the world—the Severn estuary has the potential to provide 5 per cent. of the country’s electricity needs from a renewable, indigenous resource. We need to examine the estimates, but that would be a huge contribution to our goals. Of course, once a barrage is built—if it is built—it could no doubt be there for a century or more, producing clean and green energy.
That is why, back in 2006 when I was running the energy review, I asked the Sustainable Development Commission to look again at the potential for tidal power in the Severn estuary. Its report last year concluded that tidal power can indeed be generated in the estuary within sustainable development principles. However, as the commission advised, much more work needs to be done before a decision can be taken on whether or not to support a tidal power scheme, hence our feasibility study.
We need to do much more work on the potentially considerable environmental impacts of such a scheme, and I take the ecological issues involved here most seriously. The estuary is, after all, of international nature conservation significance and we must take the time, through our strategic environmental assessment, to gather a detailed evidence base to ensure that we understand the impacts of any barrage scheme. We also need to consider the regional, social and energy market impacts. Of course, we also need detailed, up-to-date—I emphasise that they must be up to date—cost estimates for the potential schemes, and therefore a new economic assessment.
Let me say a little more about the economics. The SDC report began the process for us. The SDC estimated the key costs and benefits of two potential barrage schemes using the data available; however, those were old data. Construction costs were £15 billion for a Cardiff to Weston barrage and £1.5 billion for a Shoots barrage. The SDC considered the unit cost of electricity relative to other renewables, in a similar approach to the Frontier Economics study that my hon. Friend the Member for Stroud mentioned, along with potential ownership options. The SDC also began to consider the regional economic impacts.
However, as the SDC made clear, there are significant limitations with these assessments, as much of the available information is out of date and in some cases incomplete, with the last detailed studies dating back, after all, to the 1980s, as we have heard today. The SDC called for further work to address the gaps in information and that is what we are doing through the feasibility study.
We are revisiting in detail all of the issues that the SDC looked at: costs; financing and ownership options; and regional economic impacts. As I said at the outset, we are not just examining two barrage options; we are considering a full range of possibilities, including lagoons and other technologies for which there are no current cost estimates. In the course of the study, we will also be making detailed assessments of all shortlisted schemes, considering all the associated costs and benefits, such as environmental impacts, flood benefits and regional impacts.
The hon. Member for Wealden asked about the economics. When we have the final arithmetic about
which we can be reasonably confident, of course we will assess it against other uses of that money that could produce renewable energy or, more broadly, policies that help us to tackle climate change. That will be a sensible approach and I hope that people will accept that that will be the Government’s approach. It is worth noting here that the Frontier Economics report only considered one barrage option—the Cardiff to Weston option—using previously produced cost estimates in reaching its conclusions. An analysis that includes other options and that uses new estimates may reach different conclusions. We will have to wait and see.
The report does not “scale up” the International Energy Agency cost estimates for wind. To meet our 32 per cent. central renewable electricity scenario, we are likely to need an additional 28 GW of wind, of which 14 GW is offshore. At this scale, some higher-cost installations will be needed, beyond those included in the estimates calculated by the IEA. This is not a criticism of the IEA; rather, it is a reflection of how radical our renewable energy goals are. Our analysis for the renewable energy strategy suggests that the costs of electricity from a Severn tidal power scheme are comparable with the costs of offshore wind, but we need to refine and revisit that judgment. Having said that, before we can make an accurate comparison we must, of course, complete all of our work through the feasibility study.
The Frontier Economics and SDC reports both presented views on the roles that the public and private sectors should have in any potential tidal power project. Those are important matters, and that is why we have already appointed PricewaterhouseCoopers to consider options for ownership and finance. With respect to the hon. Member for Wealden, I cannot say more about those options today; we need to do the work first. We will be looking at a range of potential ownership and delivery options, from publicly led, as the SDC recommends, to private ownership, as the Frontier Economics report suggests. We need to assess how best to manage the different risks associated with each project, to ensure that it is delivered in a framework that results in value for money, and to take account of the implications for wider energy policy in terms of delivery and ownership structures. We need to acknowledge that, owing to risks that may be best managed by Government, the private sector would be unlikely to develop a project on its own. I therefore believe that it is right that the Government lead the feasibility study, but that does not necessarily imply Government ownership.
I expect to have some early cost estimates and findings from the financing and ownership report in the autumn. These findings will feed into our internal decision later this year on whether to proceed with phase 2 of the study. I will happily discuss the new information, when it is available, with hon. Members through our Parliamentary Forum on the study. We will also publish the report, following that decision. What I am saying is that, fairly soon, if we see any big show-stoppers, the show will stop. We will not continue with the feasibility study if it is clear that that would be foolish.
Of course, we also need to consider the regional economic impacts of a tidal power scheme, and we expect to appoint consultants later this month to lead this work for us. We will look at both the construction and operational phases and investigate the impacts on
the regional economies of Wales and south-west England, and on specific sectors and activities, including, importantly, the region’s ports.
Let me say something now about Bristol port. As my hon. Friend the Member for Bristol, North-West (Dr. Naysmith) said, we both met representatives of the Bristol Port Company; we had some useful discussions with the owners and took a good look around the port, which I found invaluable. One of the issues that the owners raised with me was the need for locks in a barrage. That is clearly an important matter and one to which I am sympathetic. I am looking into what is possible in terms of committing to locks soon, but we cannot provide guarantees on lock specification without considering the consequences for the technical and engineering aspects of a tidal power scheme. After all, we also cannot say at this stage that the tidal power project, if it goes ahead at all, will be a barrage.
I listened to my hon. Friend the Member for Stroud talking about a possible testing site. We are investing in other testing sites, but I am happy to discuss his ideas further.
The hon. Member for Weston-super-Mare (John Penrose) also spoke. I looked across at his beautiful constituency from Brean down only recently and I think that I waved to him on the beach; I am not sure about that. No, no—he was attending to his duties; local reporters could be here. He is very concerned about the draft directive, and I want to reassure him. It is a draft directive. We are looking at the 5 GW threshold, perhaps to argue that it could be reduced to less than even 1 GW. The feasibility study will look at seven tidal power projects against other options, based on standard cost-benefit analysis.
In brief, I want to reassure the hon. Gentleman that it would be outrageous for anyone to think that, just because we need to hit a target and to be flexible about that, we would somehow give the go-ahead or favour a project on this scale. I am happy to discuss the matter with him, because I really want to reassure him that that is not where we are in our considerations. What we are saying is that, if large projects in Europe that are being built are a year or two late surely it is not unreasonable that they could count before the target, but not before time. They would not provide full benefit until the project is commissioned.
Malcolm Wicks: Can we talk later, because I have only got two minutes left and there were one or two other things that I wanted to say?
One thing that I wanted to say to the hon. Member for Bridgwater (Mr. Liddell-Grainger) is that I heard what he said about non-governmental organisations. I think that it is a pity that any serious organisation can make up its mind about a project of this sort now, in advance of the feasibility studies. In the long term, the environmental impacts of climate change will be devastating and the more of us who can keep an open mind, the better. However, I will not say more about that issue, because I think that I ruffled a few feathers, when I spoke about it the other day. I ask all hon. Members and all those with an interest to keep an open mind, as I will, until we have developed our evidence base and are in a position to make an informed decision on whether
the huge potential of the Severn estuary should play a part in meeting our energy needs.
Finally, as we approach the hour, I would like to say that I want to keep in contact with all the various interests, including all the voluntary organisations and industry interests. I certainly want to remain involved with Members of Parliament and I look forward to our continued dialogue through the Parliamentary Forum, the next meeting of which is likely to be on 24 October in Cardiff.
Child Poverty
4 pm
Kerry McCarthy (Bristol, East) (Lab): Usually, on such occasions, I am delighted to see my right hon. Friend the Minister for Employment and Welfare Reform, but I hope he will forgive me if I express a little disappointment today. When I submitted my request for the debate, I was hoping that a representative of the Department for Communities and Local Government would answer.
Only a few weeks ago, my right hon. Friend joined us for an excellent Westminster Hall debate some three hours long on the Work and Pensions Committee report on child poverty. I am sure he will listen to today’s debate and answer with his usual courtesy and skill, but I would have liked to involve the Department for Communities and Local Government, because so far it has not been clear what its involvement, if any, is in respect of child poverty.
I was told that my debate would be responded to by a Minister from the Department for Work and Pensions, because it leads on child poverty. Perhaps the Minister will clarify that when he responds, as I have been told at various other times that the Treasury and the Department for Children, Schools and Families lead on child poverty. It would be useful to know where the buck stops. Furthermore, I gather that a Cabinet Committee is examining child poverty. Certainly, the cross-departmental child poverty unit is considering it. Is the DCLG represented anywhere in those discussions?
I regret that I did not request a 90-minute debate, which would have given the Opposition Front-Bench spokesmen the chance to respond. I notice a Conservative Member on the Opposition Benches. Perhaps he will intervene at some point. In a 90-minute debate we might have heard the Conservative party spokesman explain exactly why their party leader seems to believe that being fat and poor is people’s own fault. In case anyone accuses me of misleading the Chamber about what the right hon. Member for Witney (Mr. Cameron) said, that came from a Daily Mail headline. In my view, if you live by the sword, you die by the sword.
To make a more serious point on the same subject, when we debated child poverty in Westminster Hall a few weeks ago, referring to the Work and Pensions Committee’s report on child poverty, I mentioned the dangers of focusing on what I described as “the dysfunctional poor” and on what some people call emotional poverty, rather than on material poverty. There is a danger that what the right hon. Member for Witney has been saying in this past week feeds into that agenda and, in doing so, does many people living in poverty a great disservice. I hope right hon. and hon. Members present will indulge me if I dwell on the point for a moment longer.
The right hon. Member for Witney said:
“We talk about people being at risk of poverty, or social exclusion: it’s as if these things—obesity, alcohol abuse, drug addiction—are purely external events like a plague or bad weather. Of course, circumstances—where you are born, your neighbourhood, your school, and the choices your parents make—have a huge impact. But social problems are often the consequence of the choices that people make.”
He jumps from talking about people’s being at risk of poverty and social exclusion to talking about obesity, alcohol abuse and drug addiction. Perhaps I have got it wrong, but it looks to me as though he is portraying people who live in poverty as drinkers, drug-takers and junk food eaters. That conjures up negative images, not images of decent, hard-pressed families trying to make a little go a long way and not images of a single parent struggling to find child care, working for the minimum wage and paying a fortune in rent to a buy-to-let landlord.
There is no mention of external factors that might be completely beyond a family’s control. When the party led by the right hon. Member for Witney was last in government, child poverty tripled, and that was, by and large, due to the huge increase in unemployment. That cannot be laid at the doorstep of people who unfortunately lost their jobs during that time.
I mentioned the speech made by the right hon. Member for Witney on my blog and received a comment saying,
“As the son of an electrician and a dinner lady, I can confirm much poverty is voluntary.”
I am not denying that some people—some parents, in this context—make the wrong choices in life and that some do so recklessly or selfishly without any regard for their children’s well-being, but 50 per cent. of children living in poverty have a parent who works, many more have parents who want to work, and the vast majority of parents of children living in poverty want to do what is best for their child and will put their child's needs and interests above everything else. I put that on the record because it needs restating.
I should like to move on to the real subject of the debate: what can be done locally by local authorities to help fulfil the Government’s child poverty agenda and help us meet the targets, which we have set for ourselves, of halving child poverty by 2010 and abolishing it within a generation. I shall rattle quickly through some of the areas where councils could and should be doing more.
Housing benefit administration has been a problem for decades. It is undeniably a barrier to seeking work and a cause of poverty when people move back on to welfare from work. Sometimes, councils take too long to process claims and sometimes, they get it wrong. Often, claimants get it wrong, because the system is too complex or too confusing, or they have too much else on their plate to cope with making a claim at a particular time.
Being able to pay the rent and keep a roof above their heads is one of the most important considerations for parents in making the decision to move from welfare into work and being able to provide for their family. However, not enough is done to publicise the availability of in-work housing benefit. Although Jobcentre Plus advisers can tell people about it, the fact that people do not realise that such a thing exists often means that they are reluctant to go anywhere near Jobcentre Plus, thinking that they are in the housing trap because they could not possibly afford to cover the rent if they went for a low-paid job.
We know that for many people, particularly lone parents, moving from welfare to work can be something of a revolving door. They start work, find it difficult to cope, move back on to benefits, struggle to make ends
meet, look for work again, and so the cycle continues. That is when the bureaucracy of the housing benefit system defeats them, with new claims taking too long to assess and delays in payments pushing families even further into poverty. That is a major deterrent, for example, to people taking on temporary or seasonal work, because they dread what will happen when they have to move on to housing benefit at the end of it.
I have had representations from parents with mental health problems, who feel particularly anxious about the time that it would take to get their benefits reinstated if they could not cope with moving into the world of work.
Mr. Oliver Letwin (West Dorset) (Con): The hon. Lady is talking about exactly the matter that I came to ask her about. I agree with what she says. I have experience of that in my constituency. Does she agree that part of the problem is that there is no flexibility built into the housing benefit system, and that people are either receiving something or not? Does she agree that we ought to be seeking some transitional provision—I accept the difficulties of doing so—that enables people to put their toe in the water, go back to work and come back out again if they have to, without having sacrificed everything in the meantime and without the bureaucratic nightmare that she describes?
Kerry McCarthy: I thank the right hon. Gentleman for his intervention. I agree. I am sure the Minister will be able to tell us a little more. We have considered introducing a taper for out-of-work benefits, so that lone parents, particularly, can receive some money to make the transition while they are meeting the new costs of going into work. That could be done with housing benefit.
In Bristol, Jobcentre Plus and the council have established joint working pilots, with the aim of speeding up communication between housing benefit administration and the work-related benefits side at Jobcentre Plus. However, I have long been of the opinion that housing benefit administration is not best placed with local authorities. The system would be able to give people a much better service if all the benefits administration were placed in one area—with the DWP, locally. Doing so would reduce bureaucracy, give claimants one point of contact and make it easier to compute better-off-in-work calculations.
As we move to a more sanctions-based benefits system for people, including lone parents when their child reaches a certain age, and as we tighten up the incapacity benefit regime, particularly when people drop out of work or refuse to take work, we need people who understand the financial situation of those on benefits across the board. That is difficult to do when the council is doing one thing and Jobcentre Plus is doing another. Perhaps the Minister can say something about that.
John Battle (Leeds, West) (Lab): I am grateful to my hon. Friend for requesting, and I congratulate her on securing, the debate. In respect of the DWP’s changing the regime for incapacity benefit and for lone parents, I have been encouraged about the way that the councils in Leeds got together with Jobcentre Plus and the primary health care trust. However, would it not be better if local authorities looked at pulling together a much more complex response to poverty? I shall give a practical example.
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