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28 Oct 2008 : Column 795

The new schedule includes the energy generators as well as the distributors in the scheme. That will significantly broaden the base from which the improvements can come and more fairly spread the burden of cost to the emitters of the carbon. By allowing the expansion of the scheme, presumably to facilitate the Prime Minister’s September announcement, the change will empower the Secretary of State to use the CERT approach in a broader, but also more targeted, way. If that is done wisely—I hope that it can be—that can only be a good thing.

Considering that the new schedule has been brought forward as a result of action on fuel poverty, I have some concerns about its place in a Bill whose priority is greenhouse gas emission reductions. I do not for a minute discount the fact that we need to act on fuel poverty, but we also need to be clear about the principal purpose of the Climate Change Bill. However, as the problem is urgent and in almost every case the ends are congruent, I see no reason not to support the change here and now on those grounds. To clarify, will the Minister confirm whether the Government regard CERT as a fuel poverty measure or a carbon abatement measure?

Edward Miliband: Both.

Gregory Barker: Some serious concerns have been raised that the costs of CERT will be passed straight on to the consumer, not least by the Association of Electricity Producers. That problem would be exacerbated by its expansion through the amendment, and it would be a cruel irony if this well-meaning step to tackle fuel poverty actually increased domestic fuel bills in the long term. Therefore, I hope that the Minister will reassure the House that the price increases will not be passed on to consumers and that, over the lifetime of the measures, she or her successors will continue, through the regulator, to be mindful of that danger.

Finally, the Opposition are very sympathetic to new clause 10. Although the Government have done many good things during the Bill’s passage through the House, we greatly regret that they have not engaged more positively on this vital issue. We hope that they will take on board the ambitions of this new clause, and the serious concerns that exist in all parts of the House about the need for a serious delivery strategy for energy efficiency. The matter is so vital that we need such a strategy now. We simply we cannot wait any longer.

We believe that energy efficiency is about more than reducing CO2 emissions. In the modern, 21st-century economy, it will be as important to UK plc as labour efficiency was in the 20th century. Energy efficiency will be a hallmark of a successful, internationally competitive economy going forward. That is why the Germans are placing much more emphasis on energy efficiency and have a much more ambitious 10-year target than we do. More to the point, they have a far more ambitious and thought through delivery programme to make sure that energy efficiency becomes a reality.

If the Government cannot support new clause 10 this evening, I assure the House that the Conservative party will bring forward ambitious policies to that end in the spring.

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Colin Challen: I, too, welcome this Bill. It is a major step forward, and certainly a world first, so it is a great privilege to take part in this debate this evening. I rise to speak in support of new clause 10, and I also want to say a few words about new clause 11.

New clause 10 deals with what lies at the heart of a great part of our carbon emissions, 40 per cent. of which come from the building stock in this country. It provides an answer to those sceptics who talk about cost only as a burden and not as an opportunity or an investment. We have heard some of that talk this afternoon but, if we invest in homes to make them more energy efficient, people will save money and we will not have to subsidise them so much in future through the various schemes that exist. That would be an immediate gain for people today, and not just for future generations.

New clause 10 addresses three targets, and I think that I can claim correctly that all of them are existing Government policy, except that they have never been set in statute. The first target is that the general level of energy efficiency in residential accommodation should be increased by at least 20 per cent. by 2020, compared with the general level of such energy efficiency in 2010.

The 2003 energy White Paper identified that a carbon saving of 6 million tonnes from residential energy efficiency is achievable between 2010 and 2020. An answer to a parliamentary question appeared in Hansard on 10 March 2003, at column 11W, which identified that that saving would correspond to an energy efficiency improvement of between 18 and 22 per cent. New clause 10 therefore sets a target in the mid-range of that projection, and the Government answer makes it clear that the target is achievable.

The second target is that the general level of energy usage in the commercial and public services sector should be reduced by at least 10 per cent. by the end of 2010 compared with the general level of usage in 2005, and reduced again by at least 10 per cent. at the end of 2020 compared with the general level in 2010. Again, a parliamentary answer appeared in Hansard on 19 October 2005, at column 1054W, that identified that a potential reduction of 10 per cent. in energy usage in that sector was achievable by 2010. Another parliamentary question received an answer on 30 November 2005 that stated that the cost-effective potential of energy savings would be around a further 10 per cent. from 2010 to 2020. My point is that the Government have already said that the targets set out in new clause 10 are achievable.

7.45 pm

The final target in new clause 10 is to ensure, as soon as is practically possible, that

That is not a vast increase in numerical terms, as so few dwellings have such installations at the moment, but the Prime Minister told the Green Alliance in a speech on 12 March 2007 that

It is therefore clear that all the proposals in new clause 10 are existing Government policy. The Government have assessed the situation and said that all the targets are achievable.

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Mr. Graham Stuart: The hon. Gentleman is making a very powerful case, and showing that all the elements in new clause 10 are Government policy. How then does he explain the hypocrisy of those on the Government Front Bench, who refuse to adopt it?

Mr. Deputy Speaker: Order. That is not a word that we tend to use in the House. Perhaps the hon. Gentleman would like gently to withdraw it.

Mr. Stuart: I would be delighted to withdraw that word, Mr. Deputy Speaker.

Mr. Deputy Speaker: Thank you so much.

Colin Challen: Why is it important to set these achievable targets, and to put them into statutory form? We need to inform ourselves about what is happening today. The investment being made in insulation and other aspects of energy efficiency is struggling to cope with our stated objectives, and many manufacturers and suppliers of equipment and insulation materials are having problems. For example, Knauf Insulation makes plasterboard and insulation materials. It does not produce a poor product—the firm is actually at the cutting edge of the industry—but it is closing its factory in St. Helens because sales are not sufficient to keep the business going.

I have also spoken to people in the microgeneration industry. They have complained about the to-ing and fro-ing—a sort of game of ping pong—that has occurred in the low-carbon buildings programme with the result that, from one month to the next, they cannot tell how much work they are going to get. When the terms of the programme were changed to reduce support for microgeneration projects, many people decided that the payback period was stretching out so far that they no longer had any interest in pursuing that course. It is therefore clear that we need to set statutory targets, and not just say that they are aims or objectives that have no force.

In conclusion on new clause 10, I should tell the House that the Department for Business, Enterprise and Regulatory Reform commissioned independent research on microgeneration that was carried out by a company called Element Energy. The research found that

and that

That also extends to the other proposals that I have mentioned, and these are matters that the Government have to take on board. They may not do so in this Bill, but I think that we will have to return to the issue and strengthen our objectives with statutory backing.

I want to comment briefly on new clause 11. The Opposition Front-Bench spokesman, the hon. Member for Bexhill and Battle (Gregory Barker), weakened his case tactically by allying it so much to the fantasyland of a future Conservative Government’s targets. The new clause already has cross-party support, but it would have got even more support if the hon. Gentleman had just presented it on its merits.

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It is perfectly sensible to set a CO2 emissions target for new power stations. I cannot see what the objection is to that. The opposite, of course, would be to permit anything. There are different ways in which such a target could be set. The Government could say, “We’ll have a target whereby new coal power stations must have such an efficient combined heat and power plant attached that even without carbon capture and storage, it would be possible for us to approve them.” It would all depend on the level set. I was speaking from memory when I intervened on the hon. Member for Bexhill and Battle, but I listened to Lord Turner last week.

Dr. Desmond Turner (Brighton, Kemptown) (Lab): Does my hon. Friend agree that new clause 11 would not prevent, say, the building of the Kingsnorth power station, as the provision is dependent on the level set? The level set could very easily be one that a modern, clean combustion plant could meet without CCS. The new clause is actually a gesture without great meaning.

Colin Challen: Yes, that is true to a great extent, except that new clause 11 provides a power for the Secretary of State to set what might be described as a kind of licensing condition. That is a suitable power for a Secretary of State to have. Of course, a future Secretary of State in a different Government could say, “We’ll help Poland out by buying some of their old coal-powered power stations and setting the limit so high that we can set them up here.” In that sense, my hon. Friend’s point is correct, but no sensible Secretary of State would do a thing like that. The provision is about reducing the emissions from generation. Lord Turner said that by 2030, we should be aiming for emissions of 50 kg per megawatt-hour, which seems an extremely ambitious programme. If that kind of aim appears in the Committee on Climate Change’s thinking when it sets its budgets, this Government—or any Government—will have a real problem on their hands. A power such as that in the new clause would help them to deal with that.

Jim Hansen at the NASA Goddard Space Flight Centre, perhaps one of the world’s leading climate change scientists, has said that a complete ban on new coal-powered power stations that do not have CCS must be implemented immediately if we are to achieve our targets. Al Gore, who I think still advises the Prime Minister on climate change, is on record as encouraging young people to place themselves in front of bulldozers that are preparing to build new coal-powered plants. Of course, many such plants without CCS are to be built in the United States, unless new President Obama deals with the situation.

We should think again on the subject, and not have a “We’ll do better than you” kind of debate. A lot of people outside the House are expecting clear guidance on CCS. Of course, we will have to use it to deal with the Polish and German problems in the EU; there is a great dependency on coal in Germany. I hope that the Front Benchers will reconsider their total opposition to such a proposal.

Martin Horwood: I join others in congratulating the Government on getting the Bill this far, even though it has been a rather slow and painful process at times. I should also like to congratulate Friends of the Earth and its campaign for the Big Ask, and various rebellious
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Members on both sides of the House. If it were not for their rebellious instincts, I do not think that we would be debating this Bill at all tonight.

In her opening remarks, the Minister highlighted the links between economic growth and carbon emissions. That might be thought a slightly unfortunate and perhaps tactless thing to highlight when we are going into recession, but it is quite an important point to make. In fact, Sir Nicholas Stern—now Lord Stern, but Sir Nicholas when he wrote his report—pointed out that the biggest carbon emissions reduction achieved by any economy over a sustained period was that of Russia in the 1990s, and it achieved that, broadly, by collapsing its economy.

It is particularly important, as we enter a recession, that we keep all the signals, indicators and policy frameworks to decarbonise our economy in place, so that UK plc is best placed to take advantage when the upturn comes, and can have an economy that will take advantage of a new era in global economics and business. That is particularly important, and it underlines many of the amendments in the group that we are discussing, all of which we Liberal Democrats will support.

Government new clause 16 and the consequent new schedule and other amendments are welcome. The Secretary of State for Energy and Climate Change said earlier, from a sedentary position, that there was no choice to be made between tackling fuel poverty and tackling carbon emissions. If we can find policy mechanisms that do both at once, we certainly should take advantage of them. I have to say that the proposals have faint echoes of the green mortgages that the Liberal Democrats advocated years ago; those mortgages sought to do exactly the same. They linked carbon reductions to tackling fuel poverty and very high fuel bills. Unfortunately, fuel bills have got even higher in the meantime, and it has taken an economic crisis to stir the Government into real action on that front. Nevertheless, the new clause is welcome, as is the Government’s acceptance that targets for 80 per cent. reductions in carbon emissions by 2050 should be in the Bill; again, the Liberal Democrats have called for that for years. It is important to recognise the progress that the Government are making, and to support it. I hesitate to say, “We told you so,” too many times—but we did, and we have been doing it for years.

New clause 10 is also an important improvement to the Bill. As others pointed out, Sir Nicholas Stern said that the emissions trading scheme and carbon trading were necessary steps towards producing a decarbonised economy, but were probably not sufficient. It is important to grasp that point. The Minister talked about clause 33 in relation to sectoral opportunities, and clause 13 in relation to how policies affected various sectors, but the wordings are slightly wet. This is an area in which toughness and urgency are required, and new clause would 10 begin to deliver that.

We need a host of additional incentives and policy measures, not least to give the clearest possible signals to the private sector. I have great faith in the private sector’s ability to respond to policy frameworks. In my experience, given everything that I am learning about the renewable energy sector, low-carbon transport technologies and other environmental measures, when the private sector is given sufficiently clear signals, it responds brilliantly. A good example is the car industry’s
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response to developing EU restrictions on carbon emissions, which are being flagged up decades in advance. I have to say that we Liberal Democrats would go much further, and would argue for zero-carbon new cars by 2050, but the emerging policy at European level is clearly sending the car industry strongly in the direction of lower-carbon technological innovation. My personal favourite is the Tesla Roadster, which is now on the road. It is rather expensive, but the emissions are only 25 g per kilometre. It looks quite like a Ferrari, and I would happily test-drive it, if anyone listening to the debate wants to offer me that opportunity.

The white goods industry is another example of a sector that was given clear signals, not as part of some broad overarching general scheme, but on a specific basis, and in that case, too, the private sector responded well. Sectoral targets of the kind proposed in new clause 10 could play an important part in energising particular sectors. The hon. Member for Morley and Rothwell (Colin Challen) is right to want to give force of statute to targets that, as he said, were already Government policy in many respects. If we do not do that, there is of course a risk that they might go the way of other Government targets, such as the 2010 targets for CO2 emission reductions or the 2010 target for renewable energy; the Government have drifted away from those targets. We need the kind of pressure that is in the new clause to give a clear direction on issues such as microgeneration and the residential and commercial sectors. We need it to give businesses and industrial sectors the commercial drivers that will release investment, when those sectors can get it, and direct them clearly towards a lower-carbon future.

There is an example in my constituency of which I am very proud. A very good but perfectly ordinary office supplies company called the Commercial Group has set itself the ambitious target of reducing its carbon footprint by 75 per cent. in just three years, and it is well on track to achieving that. That makes all the politicians’ targets look, frankly, rather sick. That example demonstrates how well the commercial sector responds when it gets the bit between its teeth. I am happy to support new clause 10.

8 pm

One sector that might have been excused for thinking that it was a special case consists of the advocates of unabated coal-fired power stations. To say that the Government are giving mixed signals on that front is putting it mildly, and to call Britain a world leader in carbon capture and storage is like calling a penguin a polar bear. Since the Government proudly announced that they were a world leader in the field during the passage of the Energy Bill in the summer, two other countries, Germany and China, have produced working demonstration projects. As the Government were hoping to sell their more relaxed and gradual demonstration technology to China, that rather pulls the rug from under their feet.

Mr. Weir: Is not the situation even worse than that? There was a project at Peterhead that would have put the UK and Scotland at the forefront of carbon capture. The Government withdrew their support, and the project is now going ahead in Abu Dhabi.

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