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House of Commons

Thursday 13 November 2008

The House met at half-past Ten o’clock


[Mr. Speaker in the Chair]

Private business

London Local Authorities (Shopping Bags Bill) ( By Order)

Leeds City Council Bill ( By Order)

Nottingham City Council Bill ( By Order)

Reading Borough Council Bill ( By Order)

Orders for Second Reading read.

To be read a Second time on Thursday 20 November.

Oral Answers to Questions

Energy and Climate Change

The Secretary of State was asked—

Electricity Generation

1. Mr. Mark Harper (Forest of Dean) (Con): What assessment he has made of the effect of the current economic climate on investment in new electricity generation plants. [235267]

The Secretary of State for Energy and Climate Change (Edward Miliband): No sector is immune from the current economic climate and credit crunch. Along with the regulator Ofgem, we are closely monitoring the effects on the energy sector, including on investment plans. However, there is 11.5 GW of new plant currently under construction or consented and a further 12 GW in the consent process. That is a sign of the willingness of investors to make plans for new generation.

Mr. Harper: I thank the Secretary of State for that answer, but I also want to ask about a specific electricity generation plant, the Severn barrage. By my reading of article 5.2 of the EU renewables directive, the Government are not going to hit their renewables target without constructing the barrage. That would make nonsense of the studies that are under way and the great concern that there is locally. Will the Secretary of State confirm that the Government can hit their EU renewables target without having to build the Severn barrage?

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Edward Miliband: Yes, I can confirm that. The Severn barrage is one of a number of options that we will be considering in relation to our renewables target. However, I would point out to the hon. Gentleman that we have made progress on renewables, admittedly from a low base, in the past few years. We want to make further progress, which is why, for example, we are banding renewable obligation certificates in legislation that is before the House, why I have made announcements on feed-in tariffs, and why the Planning Bill is intended to speed up the siting of new renewables facilities. I acknowledge that we need to make a lot more progress on a number of fronts on renewables. The Severn barrage is one option for doing so.

Colin Challen (Morley and Rothwell) (Lab): May I take this opportunity—my first—to congratulate my right hon. Friend on his appointment? Does he agree that a period of economic downturn is a good time to look again at the skills that we need, and the investment that we need to put into them, to help to recreate our energy generation sector? Will he have discussions with the Secretary of State for Innovation, Universities and Skills to pursue that agenda?

Edward Miliband: My hon. Friend makes an important point, and I should like to join the mutual admiration society and pay tribute to the work that he has done on climate change and energy over a number of years. He is right to say that, as we think about the current downturn, some people will say to us, “It’s time to abandon your climate change objectives.” However, the green jobs agenda and moving to a low-carbon economy give us an opportunity to prepare for the upturn and to find new ways of employing people. He is also right to say that the skills agenda is an important part of that, and I will have discussions with the Secretary of State for Innovation, Universities and Skills on the matter.

Mr. Philip Hollobone (Kettering) (Con): There may be 11 GW of replacement plant on its way, but it is not here yet, and there could be problems if there are unscheduled outages in major power plants, problems with the gas interconnector with Europe and a cold winter. What priority is the Secretary of State attaching to ensuring that there is not a major blackout in this country this winter?

Edward Miliband: Clearly, the hon. Gentleman makes an important point. The answer is that that is my top priority. The Minister of State and I monitor the situation on a weekly basis. We talk to the National Grid Company and Ofgem about all such issues. The National Grid Company is reassuring me about the prospects for this winter at the moment, but I am not complacent. We keep a very close eye on the situation.

Albert Owen (Ynys Môn) (Lab): Does the Secretary of State agree that, to help business through this difficult period and, indeed, in the short and medium term, we need to increase electricity capacity, thereby reducing prices? That would particularly help energy-intensive industries. Does he further agree that one way to do that is to extend the current life of safe nuclear plants while we are waiting for new build to come on stream? Will he agree to meet the Nuclear Decommissioning Authority and me so that we can make progress on a matter that has been ongoing in my constituency for some time?

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Edward Miliband: Our team will definitely undertake to meet my hon. Friend, and I will definitely consider his suggestion. It was right to end the moratorium on new nuclear power stations, but the priority on nuclear is to work out how we can get new nuclear facilities built. The situation will be helped by the EDF takeover of British Energy. EDF wants to build four new nuclear power stations, which I think is right for our country. Lots of people have changed their opinion of nuclear power on the basis of the climate change challenge that we face. I think that we have got the right policy on nuclear, but I will endeavour also to look at the issue that my hon. Friend has raised.

Charles Hendry (Wealden) (Con): Yesterday morning, the Minister of State told the “Today” programme that, far from facing energy shortages in 2015, 37 per cent. more power would be generated in comparison with today. Will the Secretary of State confirm that the National Grid Company seven-year statement takes no account of whether projects will get planning consent or even whether they will get the funding to build them? Will he also confirm that it does not take account of the extent to which generating capacity will be lost? Almost 15 GW of capacity is likely to be lost, as more of our capacity in nuclear, oil and coal closes down, so will the Secretary of State take the opportunity to set the record straight and admit that the outlook is much tighter than the Minister suggested?

Edward Miliband: My hon. and learned Friend the Minister of State was absolutely right in the figures that he provided, which come from the National Grid Company. As I said in my answer, there are issues about the next decade, but the prospect for new build happening is a good one. The difficult question for all of us is how to ensure that the supply of new build is diverse and not simply more gas-fired power stations. We want a diversity of supply and we want low-carbon options.

Greg Clark (Tunbridge Wells) (Con): Coal.

Edward Miliband: The hon. Gentleman shouts “Coal” from a sedentary position, but unlike Conservative Members, we have not set our face in principle against new coal-fired power stations, which is to prejudge the issue. The challenge is to get the capacity we need—I am convinced that we can—while also having a diverse range of energy sources.

Carbon Dioxide Emissions

2. Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): What recent assessment he has made of the progress towards achieving the Government’s target for carbon dioxide emissions reduction by 2050. [235268]

The Secretary of State for Energy and Climate Change (Edward Miliband): Between 1990 and 2006, the UK cut by 16 per cent. its own emissions of dangerous greenhouse gases, including carbon dioxide; and if action taken under the EU emissions trading scheme is included, emissions were cut by 20 per cent. That makes Britain one of the few countries in the world that is on course to exceed its Kyoto targets; and we are the first in the world to legislate for a 2050 target, which, following my announcement last month, is now set at 80 per cent.

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Linda Gilroy: I welcome that progress, but my right hon. Friend will know that many of my constituents are particularly interested in climate change. Does he understand their concern that the Government are not yet moving fast enough on issues such as getting the balance right between air, road and rail travel? Does he acknowledge that they also worry about credits, which may be a way of buying our way out of things rather reducing our own emissions?

Edward Miliband: My hon. Friend is absolutely right that we need a balanced approach and that we need proper domestic effort to deal with these issues. What I would say to her and others listening to our debate on the question of buying in credits from abroad is that we need to show that we—the whole world—are in this together. If we can find ways of providing finance to developing countries to enable them to move towards a low-carbon economy, I believe that that is all to the good. There need to be limits, but we argue in favour of that in the EU and we also have recommendations from the Energy and Climate Change Committee to consider. My hon. Friend is right in what she says, but I believe that credits have a role to play as well.

Mr. Peter Lilley (Hitchin and Harpenden) (Con): During the debate on the Climate Change Bill, the Secretary of State made much of the fact that the targets that he has set will be legally binding. Will he confirm that that does not mean that Ministers or officials will be held to account or punished if they fail to meet those targets and that its only implication is that those targets are judicially reviewable? Does he accept that if a court believes that he is failing to achieve those targets, it could insist, without being democratically accountable to the public, that we spend more and take more measures to meet the targets—all £200 billion of them—than the Government are currently committed to?

Edward Miliband: I know from our debates that—

Mr. Lilley: Answer the question.

Edward Miliband: I will. I know from our discussions that the right hon. Gentleman is a sceptic about some of our climate change targets. It is of course the case that the targets in the Bill will be judicially reviewable. It is also the case that there are limits to the actions that can be taken against Governments. However, the important point is that when the House set out its general cross-party consensus on long-term targets, it was a way of binding the hands of Ministers in this Government and Ministers in future Governments. No Parliament can completely bind the hands of the next Parliament, but this was an important innovation because it set out so clearly—in a cross-party consensus—the objectives that Ministers needed to follow to meet the targets.

Mr. Mark Todd (South Derbyshire) (Lab): One means of meeting our targets is to change the balance of our energy generation. A new biomass power station is already planned at Drakelow in my constituency, but are there opportunities to encourage the site owners to explore other biomass options at other locations along power valley—the Trent valley which South Derbyshire straddles?

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Edward Miliband: My hon. Friend has made a good point. Biomass can play an important role in meeting some of our future energy needs, particularly in terms of heating. We have tabled amendments to the Energy Bill to encourage the generation of renewable heat, but I think we can go a great deal further to meet our climate change targets in that regard.

Jo Swinson (East Dunbartonshire) (LD): It is to the Secretary of State’s credit that he listened to the experts, scientists and thousands of campaigners across the country who called for the target of an 80 per cent. reduction in emissions by 2050, but does he agree that if that target is to be met, the current target of a 26 per cent. reduction by 2020 will need to be revised significantly upwards? If so, when does he intend to announce the new target?

Edward Miliband: I thought that the hon. Lady was going to add that I had listened to the advice of the Liberal Democrats, but, in a very non-partisan way, she resisted the temptation, on which I congratulate her. She is right to suggest that we need to look again at our 2020 targets.

Lord Turner will make recommendations on 1 December for carbon budgets for the next 15 years, which will include 2020. It is also important for us to stick to the agreement reached by the Heads of Government in 2007 that we will aim for a 20 per cent. overall European Union reduction in greenhouse gas emissions, and a 30 per cent. reduction contingent on agreement at Copenhagen. That is something for which we have argued. We will take a view on the new 2020 targets following Lord Turner’s advice.

Lynne Jones (Birmingham, Selly Oak) (Lab): When my right hon. Friend made his first statement to the House as Secretary of State, he told me that calculating the direction of travel for public spending would be an important part of meeting our climate change targets. He said that he would go away and do some homework. Will he now tell us what assessment he has made of whether we are on track to meet the Stern recommendations?

Edward Miliband: I am tempted to say, “The dog ate my homework”, but I think the best thing for me to tell my hon. Friend is that I am working on it. Now that she has asked me the question a second time, I shall make sure that I demonstrate further progress next time she asks it.

Gregory Barker (Bexhill and Battle) (Con): There was broad support for the adoption of the even more stretching 2050 and 2020 targets, but what policy does the Secretary of State believe does more to undermine their credibility—building a third runway at Heathrow, or the Government’s commitment to building a new generation of dirty coal-fired power stations without carbon capture and storage from the outset?

Edward Miliband: The hon. Gentleman is on the fringe wing of the Tory Front Bench—he is its outrider—when it comes to these issues, about which he knows a great deal. Let me deal directly with the two questions that he has asked, because they are important. The two main points about aviation are that reducing its carbon
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emissions must be, and is, part of our overall climate change objectives, and that we must put a price on those carbon emissions, and are doing so under the European Union emissions trading scheme. The decision on the third runway is a matter for my right hon. Friend the Secretary of State for Transport, but whatever decision is made, there will be a carbon price for aviation. That is the most important point.

As for what the hon. Gentleman describes as “dirty” coal-fired power stations, Conservative Front Benchers have made a decision on those: whatever the needs of security of supply and whatever the demands for the next decade—about which the hon. Gentleman asked—there must be no more new coal-fired power stations. I take the more balanced view that we need to examine the case relating to security of supply and, as quickly as possible, establish how we can also meet our need to reduce carbon emissions. That is the work that we are undertaking. We will respond to the carbon capture and readiness consultation that we initiated, and then we will answer those questions.

Energy Market

3. Judy Mallaber (Amber Valley) (Lab): What recent discussions his Department has had with energy companies on the energy market; and if he will make a statement. [235269]

The Minister of State, Department of Energy and Climate Change (Mr. Mike O'Brien): We met the chief executives of the big six energy suppliers three weeks ago, and emphasised to them that, just as oil prices have fallen and petrol prices have therefore begun to fall as well, wholesale gas prices have come down. We want the companies to respond to business and consumer concerns about the fact that gas and electricity prices remain so high.

Judy Mallaber: As my hon. and learned Friend points out, oil prices have halved. Following those discussions, does he have an indication as to when the utilities will take action to cut bills so that households no longer suffer and businesses are able to have sustainable power contracts? Have they given any indication that they are prepared to take action on the Ofgem findings on the scandal of rip-off bills for those on prepaid meters and of those who are not connected to the gas mains? Why are they so quick to put prices up—

Mr. Speaker: Order. The hon. Lady is doing well and she should stop there.

Mr. O'Brien: On prepayment meters, Ofgem has given the companies until December to respond to that point and we have indicated that if the companies fail to respond adequately, we are prepared to legislate. On gas prices, the gas companies say that they buy their gas sometimes up to about six months ahead on the advance markets and, therefore, it takes time for the gas price reductions—the last time I looked they had fallen by about 22 per cent.—to come through into gas bills. I am pleased to say that this morning’s newspapers reveal that Scottish and Southern has indicated, as we asked the companies to do, that it is looking at lowering its prices as soon as it can. I now look to the other energy suppliers to give indications that they will be bringing down their prices to a more reasonable level.

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