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Back in March, I asked my hon. and learned Friend to work with energy companies to identify the poorest consumers in need of social tariffs. I know that the BT
basic scheme for a fixed phone line involves the DWP helping it to identify eligible customers. Therefore, can he tell me what progress has been made on co-ordinating action over energy?
I welcomed the statement by the Secretary of State for Energy and Climate Change last Thursday that he would bring in legislation if energy companies continued to overcharge customers on prepayment meters. But earlier this year Ofgem also found that customers on social tariffs often did not receive the best deal available, so will my hon. and learned Friend undertake to follow the Secretary of State’s no-nonsense approach on social tariffs?
When my hon. and learned Friend was in his former post, I also lobbied him for a consolidation of the increase in the winter fuel allowance. I put my support for that on record again. Moreover, I repeat my call for support in relation to winter fuel bills to be extended to other vulnerable groups who receive no extra support in the winter—the unemployed, those on income support, the disabled and those with children.
My hon. and learned Friend may mention the cold weather payment in this context. I will make two points about that payment: it is available to only a small minority of those in fuel poverty, and it kicks in only after seven days of below-freezing temperatures have been forecast.
As my hon. and learned Friend will doubtless know, it does not take a week to die or fall ill in the cold; it takes just one bitter night when someone does not put the heating on. I urge him, in his new Department, to work with colleagues throughout Government to provide more help for people this winter. If he is looking for somewhere to start, I suggest the profits of the energy companies themselves. He cannot miss them: they are huge.
I hope that the link between the two issues that I have raised is clear. Both are key to Scotland and my constituents. We cannot have a new age of irresponsibility that gambles on keeping the lights or the heating on.
10.45 pm
The Minister of State, Department of Energy and Climate Change (Mr. Mike O'Brien): I congratulate my hon. Friend the Member for Glasgow, North-West (John Robertson) on securing the ballot. He is right to ask, on Scotland’s behalf, whether the Scottish National party will keep the lights on in future decades.
In recent decades, Scotland has been dealt a wonderful hand in energy. North sea oil and gas have boosted its economy, and still have much to contribute. Scotland is rich in potential for renewables such as wind turbines. However, that hand has changed in recent years. Oil and gas are there now, but will decline in the decades to come. Onshore wind turbines will be vital to the achieving of our renewables target. Offshore wind turbines in shallow water have further potential, but some of the shallow areas involve environmental and other issues. Scotland, with United Kingdom Government support, has developed the first deep-water offshore wind farm, the Talisman project, but offshore wind farms in deeper water are more expensive. The technique still needs to be improved if the cost is to be reduced.
In any event, wind requires back-up generation. Given the requirement for steady and consistent electricity supplies at times of peak demand and the fact that wind is by its nature intermittent, there have to be other sources of generation. Onshore wind turbines have potential, but planning is a devolved matter. Unless the SNP wants turbines all over the Scottish landscape, it will limit the number of turbines.
The requirement for that steady and consistent electricity supply must be borne in mind. It is possible to obtain some of it from coal, and, as a Member of Parliament with a working pit in his constituency, I do not need to be reminded of the importance of coal in the context of energy. In the long term, if we can get carbon capture and storage right, coal—as part of a wider energy mix—has the potential to make an enormous contribution. We should therefore work very hard to develop carbon capture and storage, but we cannot pretend—for it is a mere pretence—that coal provides the complete answer. King coal may have been the way forward 100 years ago, but in an era in which we must deal with climate change issues, we cannot claim that it provides the whole answer. It must be seen as only part of a wider energy mix, which means recognising the key role that nuclear generation will have.
Nuclear generation can provide part of the back-up generation that, as I have explained, is necessary, but the SNP has rejected new nuclear power generation. That leaves an emerging gap in Scottish energy provision. In the decades to come Scotland will have to obtain some of its baseload electricity from other sources, perhaps from England and probably from nuclear power stations in England.
That is not a problem in the United Kingdom, because we share energy generation, which is the way it should be. Scotland supplies England with power, and we work together. For an independent Scotland, however, it just does not add up. The First Minister is a bright guy—he is, after all, an energy economist—and he knows that there is a gap in the SNP’s energy policy. It is just too tough a decision for him to acknowledge that he must do something about the nuclear case.
John Robertson: My hon. and learned Friend makes a strong argument. May I draw his attention to the knock-on effect on jobs and infrastructure at Hunterston and Torness, and to the billions of investment that could come Scotland’s way if it signs up to new nuclear energy?
Mr. O'Brien: My hon. Friend makes a strong point. It is not just the jobs that are enormously important. My hon. Friend the Member for East Lothian (Anne Moffat), who represents Torness, identified the risk that SNP policy poses to Scottish jobs in the nuclear industry at the moment. The rejection of future development of nuclear generation does put jobs at risk—it is very difficult to get away from that. Not only is there an emerging energy gap but jobs are at risk, and substantial investment that could otherwise be made would be denied to Scotland
There is a real gap in SNP energy policy. It is too tough a decision for the First Minister to acknowledge the nuclear case, so he is letting it drift. He will not endorse the case for nuclear but he wants British Energy to keep its offices in Scotland. He opposes new nuclear
build but has extended the life of Hunterston to ensure that jobs and generation continue a bit longer. It is a half-baked policy and we need some change.
Energy policy cannot be allowed to drift. Energy powers our economy, heats our homes and propels our transport. It is essential. Securing the UK's energy supplies as we make the transition to a low carbon economy is one of the greatest challenges that our country faces. As a result, our efforts are focused on three principal issues. First, we must ensure the greatest degree of energy security for the United Kingdom, including Scotland. Secondly, we must address the threat of climate change. Thirdly, we must do all that we can to ensure energy is affordable.
These challenges require tough decisions and effective action. The UK Government is making those decisions and we want to work with the Scottish Executive in delivering on them, but the SNP policy on nuclear is not sustainable. Nuclear can play an important role in giving all of us in the UK a diverse low carbon energy mix and increasing our energy security. To remove nuclear from the mix, as the Scottish Nationalists propose, would seriously threaten our ability to deal with our energy challenges and increase the costs in doing so, including for consumers.
Nuclear accounted for 26 per cent. of electricity generation in Scotland in 2006, the latest year for which figures are available. The position of the SNP inevitably will impact upon the jobs available in Scotland and the massive—approximately £3billion per reactor—investment opportunity that a new nuclear power station brings to an area.
Industry has made clear its interest in investing in new nuclear in the UK. The recent £12.5 billion proposed takeover bid by EDF for British Energy confirms this; that is important for Scotland. The timetable of actions set out in the Nuclear White Paper published earlier this year should allow companies to start building new nuclear power stations in 2013-14 and start operation in 2017-20.
We know we are in a competitive global market for new build. Across the world other countries are also supporting nuclear because it is low carbon and adds to the number of technologies in the energy mix. That is why we have set up the new Office of Nuclear Development and the Nuclear Development Forum. Both will help to facilitate new build, help to maintain the UK as one of the most attractive places in the world to invest and help business take advantage, both here and overseas, of the opportunities new nuclear will bring. I hope therefore that the Scottish Nationalists will reconsider their position on nuclear policy.
On coal, I repeat that I represent a mining constituency and I recognise the importance of coal. Coal carbon emissions are clearly an issue that we cannot duck. But in the long term, coal is potentially an important alternative source of energy if we get the science right. That is why the UK Government are exploring the possibility of overcoming the problems with carbon capture and storage. The UK is leading the way in the search for technological solutions that will make these fossil fuels cleaner. We are supporting the world's first commercial-scale demonstration project for post-combustion carbon capture and storage in a coal-fired plant. This technology has the potential to capture 90 per cent. of carbon emissions and is a crucial tool in the global fight against climate
change. However, old king coal cannot be the single answer to the need for back-up generation, but coal should be part of that diverse energy policy to ensure long-term security of supply.
Renewables are important in our energy and climate change strategy. The UK is committed to meeting its share of the EU target for 20 per cent. of renewable energy by 2020 in heat, power and transport. We are making rapid progress, but the 2020 target requires us to go dramatically further and faster. Therefore, the measures we set out in our draft renewable energy strategy published over the summer are aimed at delivering a tenfold increase in the use of renewable energy by 2020.
Scotland is rich in renewable resources, and much of the renewable deployment necessary for achieving the UK’s EU targets will be in Scotland. Scottish Ministers have responsibility for the implementation of the renewables obligation in Scotland, our main mechanism for stimulating the growth in renewables. We welcome the Scottish Executive’s commitment and work in this area, in particular through their co-operation on the Energy Bill currently before Parliament. We are working to develop a new regulatory regime for offshore electricity transmission to support the development of up to 33 GW of offshore generating capacity. I am delighted to say that today’s opening of the Lynn and Inner Dowsing wind farms off the Lincolnshire coast, which I was able to attend, has taken us through the 3 GW barrier for wind generation. It also means that we have now overtaken Denmark to become No.1 in the world for installed offshore wind capacity. My right hon. Friend the Secretary of State for Energy and Climate Change announced that we would be making an amendment to the Energy Bill to allow feed-in tariffs to encourage small-scale electricity generation, in view of the important role that it can play in meeting our renewable targets.
The exploitation of oil and gas is another important issue that is close to Scotland’s heart. We want to work with the Scottish Executive to make sure that where we can develop the resources—which are often now much more difficult to access than they were in the past—we can develop a strategy that ensures that Scotland and the whole of the UK can make best use and get the best benefit from what remains of oil and gas in the North sea. It will be there for some time to come. The offshore industry is a global industry that places a premium on stability. The UK’s fair and flexible fiscal and licensing regime successfully incentivises the research, innovation and investment that are in Scotland’s interests as much as those of the UK as a whole.
In the light of rising fuel bills, we must also protect the vulnerable in our society. High oil prices are impacting disproportionately on the poor, so we must continue to make the eradication of fuel poverty a priority for action. That is why the Government announced last month a new £1 billion package of measures to help families on middle and modest incomes permanently cut their energy bills. Alongside targeted extra help for the vulnerable this winter, and with new funding of £910 million from energy suppliers and electricity generators, this will support the widest programme of energy improvement to British homes since the conversion to North sea gas in the 1960s. Following Ofgem’s report on energy supply published earlier this month, we told the representatives of the big six energy companies that we needed to see rapid action.
We believe that the interests of Scotland are best served by being part of a UK-wide energy policy. The Scottish National party knows it has a gap in energy in Scotland in the future. Only as part of the UK can we ensure Scotland has the right energy mix. No one says the lights will go out tomorrow in Scotland—that will not happen—but my case is that the energy gap in the future can be filled by a number of energy sources, including nuclear as part of a wider energy mix. Our policy is based on the principle that a regulated, competitive
energy market is the most cost-effective way to deliver secure energy supplies and lower emissions. We need to ensure that devolved energy policy in areas such as Scotland include the promotion of renewables and energy efficiency and a wider energy mix. We recognise the importance of the Scottish Executive—
The motion having been made after Ten o’clock, and the debate having continued for half an hour, Mr. Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at one minute to Eleven o’clock.
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