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Martin Horwood:
The hon. Gentleman is exactly right. The Peterhead project was a classic example of
the Government sending precisely the wrong signals. Although the Minister seemed to disagree with this earlier, it is clear from talking to BP that the Peterhead project was stopped as a direct result of the announcements relating to the Government’s own competition. That meant that the opportunity to use some of those gasfields for carbon storage is lost for ever, because once capped, the gasfields are almost impossible to exploit. It was a terrible decision, and it meant that projects such as the one at Peterhead, which would probably have been on line and functioning by about 2011, were stopped and replaced by a competition that was unlikely to produce anything before 2014 at the earliest. The Government have produced a carbon capture strategy that is too narrowly focused on post-combustion technology, too miserly and too unambitious in its scale. That is a great shame.
If the decisions relating to Kingsnorth are anything to go by, it is clear that the current framework of the emissions trading scheme is, almost by definition, insufficient to drive us towards a low carbon economy. The fact that Kingsnorth is to go ahead when its carbon emissions will be 70 per cent. higher than the nearest commercial equivalent is almost proof of the inadequacy of the ETS. The Minister seemed to suggest that we should not talk about technologies that had to be retro-fitted more expensively to old power stations, while ignoring the fact that if Kingsnorth is allowed to go ahead without locking in carbon capture and storage in some form, even if it is only in financial form rather than in technical form to start with, carbon capture and storage will have to be retro-fitted to an old coal-fired power station. That is what Kingsnorth will be—a dinosaur from a bygone age—by the time carbon capture and storage is ready.
Perhaps all this is a legacy of the Secretary of State’s predecessor in the Department for Business, Enterprise and Regulatory Reform in its previous incarnation. The hon. Member for Croydon, North (Malcolm Wicks), as the Energy Minister was an amiable Minister to have on board in these debates, but he did not give much away and DBERR was clearly pointing in the wrong direction on such issues. Now that the new Secretary of State has responsibility for energy policy as well, I would urge him to add carbon capture and storage to the long list of welcome modifications—we would not dare to call them U-turns—that he is adding to Government policy.
To say that the Conservative party had a slightly mixed record on some of these issues might be a little churlish in the circumstances, although I would point out to the hon. Member for Bexhill and Battle (Gregory Barker) the failure of his colleagues consistently to support the Californian model that was put forward in an amendment tabled by the Liberal Democrats to the Energy Bill in the summer. He probably ought to look carefully at the voting record of the Conservative group on Kent county council on the subject of Kingsnorth, as well.
However, the hon. Gentleman made clear his position today, and we welcome him on the increasingly crowded road to Damascus. He said that the Conservatives would put the greenhouse gas limit at Kingsnorth at 500 g per kilowatt-hour. If that is the case, he was wise not to specify the exact limit in the new clause. We would have had some difficulty supporting it at such a high level. Our preference is for a lower limit—to judge from the
nods from some on the Government Benches, I suspect that others might agree with me—of about 350 g per kilowatt-hour, which would direct investors towards alternative gas-fired power stations if no unabated coal-fired power stations were viable.
Gregory Barker: I appreciate what the hon. Gentleman is saying, but we hope that the Bill will stand the test of time and that any figure, be it 500 or 350, with the push that it puts behind the technology, will be amended sooner rather than later. It therefore makes sense to give the discretion to the Secretary of State. We hope that there will be an ambitious and progressive Secretary of State, rather than the present hopeless and unambitious lot.
Martin Horwood: I welcome the hon. Gentleman’s comments in that respect. As he said, the new clause gives the Secretary of State the power to define the limits— [Interruption.] The Secretary of State says from a sedentary position that he has that power anyway. In that case, he should support the new clause and welcome it into the Bill. There should be no dispute across the Chamber. We should make sure that we are giving the clearest possible signals to the industry and to private investors that this is the direction of travel, and that if anyone wants to invest in a coal-fired power station, they should factor in the cost of carbon capture and carbon storage into the future, or they would be misreading the investment opportunity.
I am afraid that that is not the signal being given to the energy industry. The signal that the Government are giving at present is that the industry can get away with it, and that, as the Minister described, by going ahead with very high emissions in some sectors and allowing ourselves headroom within the European emissions trading scheme, we will effectively buy our way out of a high-carbon economy.
Paddy Tipping: The hon. Gentleman spoke about the direction of travel. What is the direction of travel of his own energy policy? He and many of his colleagues in local government are against wind power, nuclear power and new, cleaner coal plant. Does he want us to be so heavily dependent on gas that our source of power and our security of supply are at risk?
Martin Horwood: The hon. Gentleman has introduced an unfortunately partisan tone into the debate. However, I am happy to answer him. It is wrong to say that Liberal Democrat councils are against wind power. I have plenty of examples from Orkney and Shetland downwards where Liberal Democrats at local level have supported wind power in their localities, but I would never say that every application for a wind farm is always right. We have been committed to a democratic planning system, which always gives local people the right to refuse a wind farm.
The direction of travel is more in the direction that Denmark has followed for a long time, putting great emphasis on community buy-in to wind projects and there has therefore been a very low level of opposition to wind farms in that country. That is a model that our energy companies might follow. The hon. Gentleman is right that we are against nuclear power, which we believe would leave a toxic legacy to future generations that runs the risk of leaving us with the kind of bill—the Secretary of State is smiling. I do not know whether he
has done the sums, and I am not sure whether he has inherited the budget from DBERR for nuclear clean-up, which runs to some £1.4 billion a year. Fifty-six years after the first nuclear power started producing radioactive waste, we still have not found anywhere to put it. If the hon. Member for Sherwood (Paddy Tipping) is advocating that we make those same mistakes again, I would certainly reject the policy.
We need transitional technologies to see us through any possible energy gap while we wait for renewables to come on stream on a scale sufficient to fill the needs of the whole UK economy. We should do that partly by investing in new renewables. The Carbon Trust recently produced some encouraging figures about how offshore wind is coming on stream faster and is likely to attract more investment than was previously envisaged. Another part of the answer is, of course, energy and demand reduction and energy efficiency, which must make a big contribution.
The other key transitional technology will probably be carbon capture and storage. We need to lock in that technology, which is why it is so important to support amendments such as new clause 11 and give the clearest signal that we will not tolerate unabated coal power into the future. That would give precisely the wrong signal to the private sector and discourage investment in carbon capture and storage. As has been pointed out, that would mean that the projects would go ahead—but in Dubai, China, America and Germany, not in this country. I am happy to support new clauses 10 and 11 and the Government new clauses and amendments.
Mr. Chaytor: New clause 10 is extremely important, and I endorse everything that my hon. Friend the Member for Morley and Rothwell (Colin Challen) said about it. However, I want to add a dimension to this debate. Proposed new section 2A refers to the sectoral targets for 2020 in respect of residential accommodation and the commercial and public services sector. My argument is that those targets could be more ambitious. In the past 25 years, without much effort, we have been improving the general level of energy efficiency in the United Kingdom by about 1 per cent. a year. In one sense, to call for an improvement of only 2 per cent. a year is very modest.
The extra dimension of energy efficiency policy that we have to consider is the impact of the recent events on the financial markets and the global slowdown in the economy. The Chancellor and Prime Minister have recently been forthright in saying that they will invest to avert the worst effects of the slowdown in the United Kingdom, and they are considering bringing forward capital projects already in the Government’s programme to alleviate the difficulties over the next year or so. However, ramping up the energy efficiency work that is already being done would not only be one of the cheapest and easiest ways of reducing our carbon emissions; it would also be powerful in countering the effects of rising unemployment resulting from the global slowdown.
I hope that the Secretary of State will speak to the Chancellor about that because the Government have an opportunity to take an important initiative that other western European Governments could follow, just as they followed the Prime Minister’s initiative on taking
ownership in the financial services sector. The United Kingdom has a unique opportunity to increase massively the energy efficiency of its residential and commercial accommodation and of its existing public sector institutions and to upgrade the skills of some fairly low-skilled people to create jobs when the trend in the market is for jobs to be shed. I am reluctant to use the words “green new deal”, because they have been a little overdone recently, but they are the best simple way of describing the opportunities on offer. That is why new clause 10 is so important.
Gregory Barker: The hon. Gentleman is talking a great deal of sense and there is a lot of shared thought across the Chamber about the importance of investment in green technology and energy efficiency as a response to the current economic crisis as well as for the long-term good of the economy. Has he had a chance to consider what the Germans are doing? He said that the 2 per cent. target was unambitious, and I mentioned earlier that the Germans are looking at 3 per cent. a year for the next 10 years. Has the German plan influenced his thinking at all?
8.15 pm
Mr. Chaytor: I am aware of what Germany, Denmark, Norway, Sweden and Finland have done, so I do not think that it is new or revolutionary. Nor is it idealistic; in the past 10 or 20 years, other countries have made far greater progress than we have. What is happening in Germany at the moment, however, is particularly interesting.
Mr. Graham Stuart: I have followed the hon. Gentleman’s argument with interest. He has just said that in the past 10 years many other countries around us have made much greater progress in energy efficiency than we have. I wonder why that is.
Mr. Chaytor: What I have said is that a handful of northern European countries have made more progress than Britain in many recent years; this goes back 20, 30, 40 or 50 years. We have a lot to learn from what has happened in some other northern European countries, but our progress on energy efficiency in the past 10 years has been faster than in any other decade in our history.
I move on to new clause 11. I was interested that the hon. Member for Bexhill and Battle (Gregory Barker) admitted that his policy that there should be no new coal-fired stations without carbon capture was not dependent on new clause 11. That was an important admission; it is important that every Member understands what new clause 11 says. It says not that there will be no new coal-fired power stations without carbon capture, but simply that
“The Secretary of State may make...regulations...to set the maximum level of carbon dioxide that may be emitted per unit of output”.
Such regulations would be sensible. I do not know whether it is necessary for the provision to be in the Bill, whether the Secretary of State could make the regulations anyway or whether the provision could be made through an amendment to the Electricity Act 1989, although I suspect that it is not necessary to include it in the Bill. The sentiment and statement of intent are admirable, but they are not absolutely related to the question of carbon capture and storage and new coal-fired power stations.
The hon. Member for Bexhill and Battle has worked tirelessly to give a green veneer to his party, and in some senses he has been successful. I have had many dealings with him in recent months in his new capacity as the shadow Minister, and he was formerly on the Environmental Audit Committee with me. I know that his heart is in the right place. The problem is that the mind of his party is in completely the wrong place. The hon. Gentleman talks about spreading around so much money on new CCS projects, but that is not credible given that his party leadership are still obsessed with sharing the proceeds of growth—when it returns—and giving half of it away in inheritance tax cuts for multi-millionaires or tax cuts on gas-guzzling vehicles. The policy is not credible.
Gregory Barker: The hon. Gentleman’s Government have shot our fox on sharing the proceeds of growth; it is very unlikely that there will be any growth for the foreseeable future. In the light of that, we have had to amend our policy. However, if the hon. Gentleman had paid attention to what the Leader of the Opposition has said, he would know that my right hon. Friend has clearly spelt out that we anticipate significant funding for carbon capture and storage from the auctioning of emissions trading scheme credits in 2012 and that we have also spelt out where the savings would come for the funding of feed-in tariffs. The hon. Gentleman would also know of our clear commitment on the expansion of Heathrow. On all those issues, his party’s Government are vague and our party is absolutely clear.
Mr. Chaytor: The hon. Gentleman has just argued that at a time of economic slowdown, spraying away tax cuts is not the best way to pursue our climate change policy. The point also applies to the Liberal Democrats; just a few moments ago, the hon. Member for Cheltenham (Martin Horwood) said that the Government were too miserly and unambitious in the scale of their financial support for CCS. His party promises to cut £20 billion from public investment, so it is hardly credible for it to accuse my party’s Government of being miserly and unambitious.
Martin Horwood: I just want to put the record straight: that £20 billion would come from savings, not cuts to public investment. A great deal of it would be redirected to what we believe are the important priorities for people in this country.
Mr. Chaytor: The hon. Gentleman means efficiency savings through sacking consultants—I understand that.
I turn back to the serious point. New clause 11 is an admirable statement of intent. Few could disagree that what it proposes would be a good thing for the Secretary of State to do. However, I doubt whether it needs to be an amendment to this Bill at this time, and that is why I urge hon. Members to vote against it.
Mr. Graham Stuart: It is a pleasure to speak in this debate. Following the debate on the previous group of amendments, we know that the Bill will go forward aiming for an 80 per cent. cut in emissions in this country by 2050. However, we should bear in mind that aviation and shipping are growing at an enormous rate while growth in the broader economy other than in those two sectors will doubtless, according to the chairman of the Committee on Climate Change, have to be even greater.
The Bill promises a lot, but it allows the Government to do what they have done so often. We have heard excellent speeches by genuinely environmentally committed Labour Members who feel frustrated by a Government who have so often failed to deliver on the ground the cuts in emissions and the change to a low-carbon economy that they have promised. The Bill is sending a false signal to the British people, because the Government are not capable of delivering on the targets within it. The hon. Member for Morley and Rothwell (Colin Challen) made an excellent speech in which he laid out with great care how all the components of new clause 10 are current Government policy. In fact, the Prime Minister himself has said that some aspects of it are Government policy. Yet when the hon. Gentleman puts it down in a new clause, we find that his Front Benchers refuse to accept it.
I was not aware before this evening, Madam Deputy Speaker, that a ruling had been made that accusing Government Front Benchers of rank hypocrisy was unparliamentary and should not be done, so I will not do it.
Madam Deputy Speaker (Sylvia Heal): Order. The previous occupant of the Chair pointed that out to the hon. Gentleman, so there is no need to have it repeated.
Mr. Stuart: I stand corrected, Madam Deputy Speaker. I was searching for a form of words that my constituents down the Dog and Duck would think adequately expressed the Government’s behaviour, but I suppose it would be best to say that they say one thing and do another.
I fear that this Bill is like a conjuring trick that people follow with their eyes. So many people, from Friends of the Earth to many others who genuinely care about this issue, have bought into the idea that the Government are going to take action on it and set down in law the 2050 target, but we need to look at what the Government have actually done. The hon. Member for Bury, North (Mr. Chaytor) referred to energy efficiency. That is an area where it is cost-beneficial to the economy to deliver energy efficiency because it serves the purpose of benefiting social justice, but where we have lagged—pardon the pun—behind our neighbours.
Earlier this year, the Sustainable Development Commission, which has the job of monitoring Government, reported to the Environmental Audit Committee that nearly two thirds of central Government Departments are still not on track to meet the target of reducing carbon emissions from their own centrally held offices by 12.5 per cent. by 2010. The Department for Environment, Food and Rural Affairs was more than halfway down the list. The central Government agency that previously led on climate change has failed to deliver these changes in its own offices in buildings that we can see from here. Yet we are supposed to believe that this Government, who have so signally failed to turn rhetoric into action, can be trusted to deliver on some long-term target about 2050. I am afraid that I have little confidence that they will do so. Policies are not co-ordinated between the different Departments. Instead of leading by example, they push for environmentally unfriendly policies such as new and unabated coal-powered plants or the expansion of Heathrow airport. As the Environmental Audit Committee has noted, the Government will miss their own target of cutting national carbon dioxide emissions by 20 per cent. by 2010.
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