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Liberal Democrat Members also welcome the committee’s recommendation of a tougher 42 per cent. reduction target, which is compatible with an EU-wide
cut of 30 per cent. by 2020. I would be interested to hear why the Government have not agreed to that recommendation. I realise that the global deal has not yet been struck, but the Climate Change Committee and the EU have made working assumptions and set intended targets, so why are the Government not doing likewise? Whatever the carbon budget, the test is whether we produce the policies and actions to deliver it.
Mr. Bone: I am listening carefully to the hon. Gentleman’s well-crafted speech. Does he support the Government’s decision, which is listed on page 173 of the Red Book, to remove the biofuel duty differential, which will increase the cost to people who use biofuels—I declare an interest, because my car is powered by biofuel? Some £1 billion will be raised from people who are trying to save the environment.
Martin Horwood: I had not spotted that item, and I am grateful to the hon. Gentleman for drawing it to my attention. There are, of course, many bear traps in the area of biofuels. Unless we implement sustainability criteria, we could contribute to global warming rather than prevent it.
The Climate Change Committee says that aviation must face an appropriate cost for carbon to provide an incentive for supply-side abatement and demand constraint. The background to the third runway decision was a fiddled version of the shadow price of carbon, which deviated from Sir Nicholas Stern’s proposed formula and, specifically, his discount rate. Perhaps the Secretary of State should seek the committee’s advice on the appropriate cost of carbon and how exactly one can constrain demand for aviation while building extra runways at our biggest airports.
On carbon capture and storage, we heard the Chancellor’s statement yesterday and have heard and read the Secretary of State’s announcements and documents today. The announcements sound great—a bigger, better competition and an apparent commitment to all coal-fired power stations being 100 per cent. retrofitted with carbon capture and storage by 2025, but the vital escape clause is that it is
“subject to the technology being ready”.
If it is not ready, the unabated power station will not be shut down and will continue to belch out far more greenhouse gases than any available alternative. In the accompanying document, much is made of carbon capture-readiness. A friend once told me that carbon capture-ready is a bit like paving one’s front garden and declaring it Ferrari-ready—aspirational, but no real guarantee of success. How right she was.
Lord Smith, chairman of the Environment Agency, the Government’s own environmental advisers, was also right. The agency rejected the idea of building coal-fired power stations that can be fitted with CCS technology later, claiming that it would be
“insufficient for the climate change challenge that we face”.
There are some other genuinely welcome steps in the Budget, of which the extra incentive to offshore wind energy through increased renewables obligation certificates is one, but there are also some strange steps in completely the wrong direction. Was the push to exploit new oil and gas reserves the Secretary of State’s idea, or has big
oil been talking to the Secretary of State for Business, Enterprise and Regulatory Reform? Does the Secretary of State for Business, Enterprise and Regulatory Reform carry more clout with No. 10 and the Treasury than the Secretary of State who is here today? I suspect that he might. It all sounds a bit more Bush than Obama.
A great deal was missing from the rest of the Budget, such as an admission that the Government have got some things plain wrong. For example, it is absolutely irresponsible to waste £1 billion a month on a VAT cut that hardly anyone has noticed. The Budget also lacks any serious measures to help us adapt to climate change. I notice in the detail, because it affects my constituency in particular, that the £800 million flood budget is being supplemented by a £20 million increase, although the increase will be brought forward only from next year, when there will presumably be a compensating cut. The Budget does not include a scheme to compensate those communities located in counties such as Norfolk that face much faster than expected coastal erosion, perhaps in large part due to the action of climate change.
Landfill tax keeps increasing, placing a burden on local authorities, which might be acceptable if there were corresponding help for some of the programmes that have been cut drastically in recent years, such as the national industrial symbiosis programme, the waste recycling action programme, Envirowise, the Carbon Trust, the Energy Saving Trust and the small and much neglected Partnerships for Renewables. The latter was set up to help public sector bodies deliver renewable energy locally at no cost to them. The scheme is exciting and innovative, but it has had precious little support so far.
Mark Lazarowicz: The hon. Gentleman is, like me, a member of the Environmental Audit Committee, which proposed an increase in landfill tax, but he seems to be suggesting that landfill tax should not be increased. Will he clarify Liberal Democrat policy on that issue, too?
Martin Horwood: The hon. Gentleman is, of course, correct. I am happy to clarify the policy. I am not saying that we should not increase landfill tax, but if we place such burdens on local authorities, we must give them the corresponding support to develop recycling; otherwise the result will be exactly what we face in Gloucestershire, where the Conservative-controlled county council is pursuing incineration, which will contribute toxic fly ash to the waste disposal site at Wingmore Farm near my constituency. We do not want to force local authorities in that direction. I do not necessarily disagree with an increase in landfill, but we must have compensating support for local authorities to enable them to meet that in an environmentally responsible way.
Where is the investment in railways? Last year, the Office of Rail Regulation turned down millions of pounds of railway schemes. One of the schemes would have been built near Doncaster, and the Swindon to Kemble line would have improved railway services to the whole of Gloucestershire and helped reliability for the whole network in the west country. In our “Green Road out of the Recession”, we suggested as an alternative to the £12.5 billion VAT cut that the money might have been better spent delivering almost the entire list of projects turned down by the Office of Rail Regulation
for lack of funds. That would have provided not only a fantastic short-term stimulus, but support for business and local economies, which would have been a long-term investment in this country’s future. It could have been extended to include high-speed rail to Scotland or Wales and the west country. There could have been more investment in innovative ideas such as ultra-light rail, which would work in not only urban areas, but mixed urban, rural and suburban areas such as Gloucestershire. Instead, we have had the very hyped announcements on electric cars—a very new Labour idea. The Liberal Democrats suggested years ago that the EU might be crucial in directing the whole of the new-car market towards electric and zero-carbon vehicles. However, we also said that a short-term investment in the railways would do much more to reduce CO2 than would subsidies to the car industry for vehicles that, although more efficient, would still run on fossil-fuel powered electricity for years to come.
Where was the investment in housing? The Chancellor announced a few hundreds of millions of pounds for energy efficiency in housing, but if we had not been wasting money on cutting VAT we could have invested billions in providing energy efficiency and insulation for a million homes for some of the least well-off families in the country. We could also have subsidised investment in energy efficiency for a million more.
While the Liberal Democrats and the Government argue about how the money for stimulus measures should be spent, at least we agree that there had to be stimulus measures. The Conservative party could not pay for any of the green stimulus that we propose, because it would not have had any sort of stimulus package. Perhaps its interest in the environment is waning anyway, as it is unashamedly pro-nuclear and pro-incineration, and many of the interesting proposals from its quality of life policy group never made it into party policy.
There is, however, a bigger picture. Do we need to look more fundamentally at how we measure the quality of our economy and society? The hon. Member for Brent, North (Barry Gardiner) made a speech yesterday that might not have been widely noticed but which I consider to be very important. In it, he said:
“What if today’s financial crisis were something more fundamental than merely a serious and deep recession? What if 14 September 2008—the date on which Lehman Brothers was allowed to go belly up—represented the point at which the whole architecture of a consumption-led, growth-based economy collapsed? Perhaps this crisis is telling us that a system predicated on limitless growth must inevitably hit boundaries—boundaries that are not only economic, but ecological.”—[ Official Report, 22 April 2009; Vol. 491, c. 298.]
It has been a Liberal party and Liberal Democrat theme for many years that the environment contains the economy, and not the other way around. Will recovery without clear environmental performance indicators and the recognition of constraints on well-being lead us straight back to the obsessive boom-and-bust model perfected by the Conservative party and executed with rash panache by the Labour Government over the past decade? We need a new model of sustainable prosperity that allows us to meet people’s aspirations for a decent quality of life, decent homes and a clean environment in a truly sustainable way.
2.32 pm
Mr. Clive Betts (Sheffield, Attercliffe) (Lab): Madam Deputy Speaker, may I begin by offering an apology to the House? I have a long-standing appointment at 3 o’clock, and I intend no discourtesy either to you or to hon. Members who speak after me if I have to leave at that time. However, I shall of course return to the debate in due course.
I shall not deal too much with the bigger picture of the Budget: instead, I want to focus on some of the particulars. My right hon. Friend the Secretary of State for Energy and Climate Change amply illustrated the clear divide between the two sides of the House. We on the Labour Benches are looking to target measures to help the economy in general, firms and individuals through what is clearly going to be a very difficult time in the next few years. The Opposition offer no hope at all, only totally inappropriate cuts.
I have the honour of representing in this House a constituency in the city of Sheffield, where life is becoming difficult for many individuals and companies. However, it is interesting to note that the success of our local economy during the period of Labour Government has meant that, although unemployment is starting to rise in Sheffield, that is not happening as quickly as it is nationally. That is completely different from the city’s experience in the 1980s, when our economy was based very largely on steel and engineering. The collapse of those industries had a devastating and dramatic effect, but we now have a much more diversified economy, with a range of different industries. They include education and health provision in the public sector, as well as firms in the high-tech, financial and leisure-related sectors. That diversity certainly holds us in better stead to come through what nevertheless will clearly be a difficult period.
Mr. Graham Stuart (Beverley and Holderness) (Con): I am glad to hear that unemployment is not rising in Sheffield as quickly as it is elsewhere. We in the East Riding of Yorkshire also have a diversified economy, yet we have seen a doubling of unemployment in the past two years. My constituents are suffering from what is the fastest rise in unemployment in the region since the second world war.
Mr. Betts: Of course, the rate at which unemployment is rising depends on the base from which it starts. I can comment with particular knowledge about my city of Sheffield, and that is what I will do. As I have pointed out, we certainly benefited from the period of a Labour Government and their actions.
Despite the fact that we will have problems—people in Sheffield will lose their jobs and we should recognise the individual trauma that that causes them and their families—many companies are nevertheless doing well, and we should not forget about them. Nor should we forget about the Advanced manufacturing park, which is located just in Rotherham but works with the university of Sheffield. Through that partnership we are now working to redress a long-term British problem, which is that we do well in research and invention, but not so very well in innovating and extending that research and invention into products. That is what the Advanced manufacturing park is all about, and its work with Boeing and a number of other high-tech companies will spin off into jobs for the future.
Then there are companies such as Forgemasters, which had an appalling experience with the floods last year. However, Forgemasters took on 40 new apprentices only a few months ago and has order books for the future. The company is now looking for serious investment and exports most of its products throughout the world. Forgemasters will be a key player in the development of our nuclear industry, because it has the capacity to produce some of the most important parts for nuclear plants.
The other day I went to a firm on the edge of my constituency, just in the constituency of my right hon. Friend the Member for Sheffield, Central (Mr. Caborn), called Davy Markham, which is also a success story. A management buy-out of a firm in difficulties a few years ago, Davy Markham now has an order book for months ahead and is exporting most of its work. The managing director said to me, “I can take on any skilled machinist who walks through the door, because we are successful and producing products that are needed.” Davy Markham makes massive machining products for turbines and other parts. That is a niche market, but the company is a success story.
However, we should also learn the lessons for those companies from what happened in the past. One of the problems for those firms is the legacy of the lack of training for so many years after the recessions of the 1980s, the effects of which still lingers today. We took away a swathe of skilled operatives and did not train any more. Therefore, firms such as Davy Markham are still suffering today from a shortage of experienced, skilled operatives, even though they run their own training schemes. We must ensure that the recession of the day does not leave for the future the sorts of legacies that we suffered from after the recessions of the 1980s. I therefore welcome the help being given to businesses through capital allowances, the deferment of business rates and the strategic investment fund. All are important to ensure that our successful high-tech firms with export markets are sustained for the future, and helped and encouraged to train the people who will be needed when the recovery comes.
I also welcome the measures taken on the environment. Those on carbon capture, offshore wind farms and combined heat and power are all important moves to sustain those industries and ensure that we fulfil our international climate change commitments. I also hope that some of the measures that we have taken to support industry will help to sustain and develop firms in the green transport sector, which is something that I am particularly keen on. Indeed, I have two ministerial meetings arranged with two companies in my constituency that have some very interesting proposals.
One of those companies is called ITM and is developing ways of producing hydrogen much more cheaply than has been possible in the past. The firm has developed a refrigerator-sized unit for domestic properties that can produce hydrogen that people can then put into their cars. That is an interesting development, because it means that we do not need a great network of sites throughout the country; rather, people can use the unit in their own homes. The unit may not yet be commercially viable, but the research, the invention and the innovation are there, and it is absolutely fascinating.
The Government are looking at help for electric cars, but if we are to help to develop green transport in the future, hydrogen-powered cars will probably be a much more exciting and relevant possibility. When Jeremy Clarkson can welcome an environmentally friendly car as a real possibility on “Top Gear”, we are perhaps making real progress. If we can produce an environmentally friendly car that people still enjoy driving, that must make success in tackling climate change a real possibility. I hope that we will consider helping firms such as ITM and seeing how they can be encouraged and helped to produce products that will be important for our economy and our export potential for many years ahead, if we can become a world leader in producing them.
In its ideas for the production of hydrogen, ITM is looking to link in with offshore wind farms, which will certainly be an important source of energy in the future, although they produce energy simply when the wind blows, which is not always when that energy is needed. ITM is looking at the possibility of turning the energy produced by offshore wind farms into hydrogen, storing it under the North sea and using the pipelines from the North sea as a means of bringing it onshore. It is a concept at this stage; it is an idea, but it is exciting and interesting and, again, something in which we have the potential to become a world leader. I hope that firms that have such ideas will be assisted so that those ideas are implemented in this country as a first.
I also intend to have Transport Ministers meet with another firm in my constituency called Magtec. It is developing an interesting electromagnetic motor that can be attached to a conventional heavy goods vehicle or bus. The firm believes that it has the technology, and it works; there are buses running around in Denver in the United States with the original form of the technology on them. It says that it can achieve a 40 per cent. fuel saving on an HGV or a bus. It is a practical proposal. The technology is there; it works. The firm just needs to convince some of the bus manufacturers that its product is the one that ought to be used and developed.
Magtec has just taken on four more skilled engineers and technicians to help it with this work. It is a small company, but again it is looking to grow, even in the current difficult circumstances. Such companies are growing in precisely the industries that we ought to be encouraging and assisting. I hope that they can have access to some of the measures in the Budget to help them through what is obviously not an easy time for any company.
The hon. Member for Cheltenham (Martin Horwood) referred to rail. I certainly support rail transport, and I hope that, whatever problems we have with future Government finances, we will maintain our commitment to invest in rail, especially where it can lead people to stop using internal air transport and where we can switch from diesel to electrified rail systems. I have a constituency interest in two particular issues. I know that a working party that includes Transport Ministers is looking at the potential electrification of the Midland main line. That certainly would be welcomed in Nottingham, Derby, Sheffield and many other places. On the line north of Bedford, we hope for an early announcement and a commitment that the scheme will go ahead.
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