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The Government could have announced a serious programme in the Queen's Speech to make every home a warm home, instead of introducing piecemeal schemes: a bit here and a bit more there; a top-up for this scheme; a bit of the community energy saving programme, a bit of the carbon emissions reduction target, a bit of Warm Front. There is no reason why the UK should not have a programme, driven by Government and managed locally by local government, street by street, village by village and community by community. That is what we need, but the question of financing then arises. With respect, the hon. Member for Tunbridge Wells ducked that question, because the money must be made available up front. If the work is going to be done, even if it is done by loan, apart from work for the very poorest, the loan has to come from somewhere. He made it clear that not a single penny would come from the Government, and he appeared to imply that there would not even be any Government underwriting or support. I do not think that that is possible, and my right hon. and hon. Friends have said so. We believe that such a scheme has to be underwritten by someone, and we believe that it should be the Government, so that people can take out a loan and pay it back.
I understand the economics of the system: if someone invests in loft or cavity wall insulation, their bills will go down and they can afford the repayment or top-up, but their bills will still be less than they were before. However, we cannot pretend that this is a cost-free exercise. At £6,500 a time, the total cost would be more than £100 billion. At a more realistic £11,500, it may be more like £200 billion. The Tory party is often wonderful at ideas-talking the talk-but as I could prove on lots of other things, it is slightly less convincing when it comes to walking the walk.
Greg Clark: The hon. Gentleman asked a fair question. Clearly, if we are recovering costs through savings on people's energy bills and meter charges, there is a risk of default. That risk also applies to people paying their energy bills through the gas or electricity meter, and it is about 2 per cent. If we include that 2 per cent. default rate in the cost of the scheme, and spread it out for everyone, it is perfectly manageable and financeable. It can be managed without requiring a huge injection of public funds.
Simon Hughes: I do not want the whole debate to be dominated by this topic, but I have read the trailer for and the speech of the Conservative shadow Chancellor. I do not see in it anything that ensures the funding necessary. I am happy to have the debate in private and in public, but whereas we as a party have said for 25 years that we need warm homes for all, there must be something that triggers the funding, otherwise many people will not participate in such a scheme, which makes the proposal unconvincing.
The reason why that is as important now as ever is evidenced by the figures that I cited today-not my figures, but figures from the Office for National Statistics, which showed almost 40,000 extra deaths, above the average, for the winter quarter last year, higher than at any time since the beginning of the decade. That is not happening in other countries with much colder climates than ours, so this is not theory or some wild idea that does not matter. This is about making a fairer Britain
and above all protecting the vulnerable from dying in one of the richest countries in the world, where that should not happen.
Mr. Oaten: Many of the vulnerable people to whom my hon. Friend refers live in park and mobile homes. Is he aware that they are unable to take part in the Warm Front schemes? Would it not make sense to include them in the Government schemes?
Simon Hughes: The honest answer to my hon. Friend is that I learned that fact yesterday. Those people should be included.
It is frustrating for my hon. Friend, other colleagues and myself that our hon. Friend the Member for Hazel Grove (Andrew Stunell) got a Bill on the statute book in 2004 for sustainable homes, and our hon. Friend the Member for Somerton and Frome (Mr. Heath) had a private Member's Bill earlier this year to deal with fuel poverty, which would have got through had the Government not blocked it. There have been opportunities, but time and again they have not been taken. I know that work is going on in the Department of Energy and Climate Change. I hope Ministers will realise that we should be seeing the results now. Unless we do, another winter, which is likely to bring problems, will see other people suffering.
I shall make three other points; I am conscious that others want to speak. I want to pick up the point made by the hon. Member for East Devon (Mr. Swire). The Minister was uncharacteristically-flippant is, perhaps, the wrong word-dismissive of the issue. It is scandalous that off the coasts of Britain there are tankers full of oil which are not unloading. They are waiting until the price goes up because they are being managed by the speculators. I know that there is nothing new about that. The global regime means that we have enough of the fuel. The oil is taken out of the ground, put on to tankers, and sits off the shore of the UK, not just anywhere but in vulnerable marine environments such as off the coast of Dorset and the south-west. Some of us well remember the Torrey Canyon.
I ask Ministers in the Department for Transport as well as Ministers in the Chamber-the Secretary of State for Environment, Food and Rural Affairs has a responsibility too, as does the Secretary of State for Energy and Climate Change-to engage with the companies that own the oil and the tankers to ensure that the regime does not allow people to exploit the prices. We know what the effect is. The price of oil has increased-doubled in some cases-over the past year. Petrol at the pumps will probably be a quarter as much again at the end of the year as it was at the beginning.
Prices are going up all the time. People are suffering because of those who are fiddling or abusing the system. I would like to hear from the Government what they intend to do. If they say that they and the global community can do nothing, that is an unacceptable answer. The public would think so, too. The energy companies-I did not hear Ministers say this-have an obligation to respond to the fact that when prices go down, the price to the consumer does not follow, but when prices go up, it seems to follow mighty quickly. The regulatory system has been inadequate since it was set up. I had hoped to hear a much tougher response from Ministers. I hope that we might do so before the end of the debate.
In relation to other supplies, all parties are concerned that we should have energy security. There is a difference between us: the Labour and Tory parties believe that nuclear is a necessary component; we do not. We can have that argument separately, but the Liberal Democrats believe that nuclear makes a small contribution to dealing with emissions and a small contribution to our need, and that we could do much better and in a more accountable way by renewables.
Paul Holmes (Chesterfield) (LD): Does my hon. Friend not agree that, in costing nuclear power, the Government must include the huge cost-£18 billion was recently suggested-of providing the underground long-term waste storage facility? The industry will never pay for that; it just assumes that the taxpayer will pick up the bill. If that was included in the costs, it would become quite clear not only that not a penny should go to nuclear power, but that the money should go into real clean and renewable energy, which is not nuclear.
Simon Hughes: I absolutely agree. The Government's official advisory body on these matters is absolutely clear: we should not opt for another generation of nuclear power until somebody has come up with something that it and others, who are independent and not politicians, consider to be a safe method not just of storage, but of disposal. That has not been found. That is not my view; it is the view of those charged with advising the Government. My hon. Friend is completely right.
The other day the Government defeated the Liberal Democrat motion on a 10 per cent. reduction in emissions next year. The Conservatives support that reduction today, and they supported it the other day, although I noticed that the Conservative shadow Chancellor and leader were not present to vote for it in the Commons. However, we are pleased to hear that the shadow Chancellor has now bought into it. I think that it is achievable, and if it is not, it should be an aspiration.
The Minister of State, Department of Energy and Climate Change, is on the Front Bench today, and in October her only real argument was, "We cannot do it, because we have already set targets which go to dates beyond that, and this would get in the way of those." I just say to her very simply- [ Interruption. ] I heard her argument and followed it carefully, but the Government set their policy before the 10:10 campaign was launched, and they believe-I could turn to what she said in reply to the debate-that to introduce a 10 per cent. reduction target for the next 12 months would confuse, complicate and undermine the longer-term strategy. I understand the argument, but I do not accept or believe it, and I do not think that the public believe it either. They still see a huge amount of waste from the public sector and the Government.
The public expect the Government to lead, and that is why I intervened on the Secretary of State to say that I was saddened, although not entirely amazed, by his written answer to me explaining that at least half the Ministers and officials going to Copenhagen will fly there. Of all the places- [ Interruption. ] But it is a serious point. People are meant to set an example, so the Government must set an example. They have often made it clear that they are committed to a Copenhagen
deal that averts climate crisis, and that they want to do the right thing for a sustainable future, but when the Secretary of State for Environment, Food and Rural Affairs winds up the debate, he must acknowledge that they have to lead by action, not words.
The Queen's Speech contained half as much as the public and the crisis needed. That was not enough, and this is the Government's last chance. These may be the last few months that they are in office, and I am afraid that, if they are trying to make up for lost time, they have not done so with the Queen's Speech.
5.23 pm
Malcolm Wicks (Croydon, North) (Lab): This has been a very useful debate, with good speeches from all parts of the House, although the speech from the hon. Member for Tunbridge Wells (Greg Clark) reminded me, if I may say so humbly, that Opposition wish lists are so much easier than government. However, I hope he never finds that out.
I am convinced that when the historian looks back on this century, energy questions will assume great importance in terms of global affairs. I shall not cover the whole field, but as a framework I suggest that there are about four major questions. The first of those relates to the economics and affordability of energy. Not so long ago, when energy prices were sky-rocketing and the price of a barrel of oil hit $147, the business and economic consequences were extremely serious; that must not be forgotten. Secondly, there are key themes about energy supply and security.
Thirdly, and most important, there is climate science and the importance of making progress at Copenhagen: issues that the former Deputy Prime Minister, my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), spoke about so eloquently and, as usual, with such great passion.
The fourth issue, as my right hon. Friend noted, again with some passion, is social justice, internationally and domestically. The other day, I saw an estimate suggesting that some 1.5 billion people-more than one fifth of the world's population-do not have electricity. Here we are talking about global warming and, in a sense, the over-demand for energy, yet, in terms of inequality and injustice, so many of the people who share this planet with us are nowhere near to getting electricity. Of course, that has a domestic resonance. The Liberal Democrat spokesman reported that the ONS has produced its annual statistics on excess winter mortality. One must be careful about interpreting those figures: for example, flu has an impact, and that varies from year to year. Nevertheless, it is a scandal that in modern western affluent societies we talk in comfort about global warming while many of our constituents might say to us, "Chance would be a fine thing-I'd love some of this global warming in my bedroom or living room." I do not want to get sidetracked on to that subject, which I feel very strongly about. It is a matter of immense importance. I could write a book about it; indeed, more than 30 years ago I did so.
Linda Gilroy: Will my right hon. Friend give way?
Malcolm Wicks: If it is to publicise my out-of-print book, yes.
Linda Gilroy: It certainly is; I was at the Age Concern conference where my right hon. Friend published his book on hypothermia. Does he agree, however, that some of what has been said about the progress that we have made on warm homes plays things down a little bit? I do not know about his constituency, but in mine 2,000 homes have been fitted with insulation.
Malcolm Wicks: I think that both things are true. We have made immense progress, not least under this Government, but there is still so much more that needs to be done.
I want to focus on energy supply and security, putting the issues in a global context but focusing to some extent on Europe and particularly on our own country, the United Kingdom. There are serious matters to consider. When I stopped being Energy Minister a year ago, the Prime Minister asked me to be his representative on energy security. I delivered my report to him in August; it was published by DECC and entitled "Energy Security: A national challenge in a changing world". If my words are of any interest and people want to know more, they will find it in that report.
The key issue is that, post recession, the global grab-the global demand-for energy will surely be maintained. We speak at a peculiar time. According to the International Energy Agency's new report, "World Energy Outlook 2009", this is an almost-I think I use the word properly-unique year, because global demand for energy will go down, as will carbon emissions. When we come out of recession-I hope that we are doing so-this huge increase in demand for energy will be maintained. That is happening at a time when, historically, we are moving away from relative self-sufficiency in terms of indigenous energy in the UK towards a significant import dependency, obviously for oil but also for gas. That involves serious issues as regards energy supply and security. I use the word "security" because this takes on a further resonance of national security. I remember the former Prime Minister Tony Blair, when the Langeled pipeline from Norway was opened-thank goodness we have it-saying that in this century, energy security could become as important to a nation's security as the conventional defence forces. That is at least an interesting point to consider.
We have the benefit of the International Energy Agency, which has painted two scenarios of how global demand will increase. I will not go into too much detail, but they are closely related to Copenhagen. One is a reference scenario, if the energy efficiency and other policies that we have already agreed are implemented. The other is called the "450 scenario", because it sets out a world in which collective action is taken to limit long-term concentrations of greenhouse gases in the atmosphere to 450 parts per million of CO2 equivalent. Many of today's useful contributions have been about the importance of securing that agreement.
In the reference scenario, into which are built a lot of actions that Governments in Europe have promised and need to take, the assumption is that between 2007 and 2030, global energy demand will increase by 40 per cent. In the far more ambitious 450 scenario-maybe I could call it the Copenhagen scenario-that goes down to 20 per cent. That is still a huge increase, but only half the increase in the reference scenario. People can make their own judgments about what percentage increase is likely to take place in practice.
Although there is much excitement, controversy and debate, not least in the House, about the contribution of new renewable technologies and the fairly new technology of nuclear, that global demand will be met in the main not by wind turbines and nuclear power stations, although they will start to make a greater contribution, but by fossil fuels-coal, gas and oil. They account for three quarters of the increase in demand in the reference scenario, and in the 450 scenario they still account for two thirds of the increase, even though coal is less important.
As we know-this is part of the politics of Copenhagen-most of the extra demand will come from emerging and developing countries. We should be pleased that demand is fairly flat in OECD countries such as our own, even though it goes up and down in different countries. We are beginning to find out how to have economic growth without a correlation with energy demand. The challenge for our country is surely to reduce our demand for energy but move back to economic growth after the recession. According to the latest edition of the IEA's "World Energy Outlook", published just a couple of weeks ago, 93 per cent. of the increase in global demand to 2030 will come from non-OECD countries, driven largely by China and India. We all know the data that can be related to that situation, but just to give an illustration, the number of vehicles in China was some 23 million in 2005. By 2030, it will grow tenfold to 230 million.
Why do I talk about the national security energy challenge? First, let us look at Europe. The EU already depends largely on imports, and that dependency will only grow in magnitude. By 2030, it will be getting some 90 per cent. of its oil, more than 80 per cent. of its gas and 50 per cent. of its coal from outside the Union. Parts of Europe, of course, already depend heavily on Russia, and we know some of the difficulties that that can bring about. Sadly, I would guess that the geopolitics of energy and security will become more important for Europe as the years, and possibly the next few decades, roll by.
Let us look at Great Britain. To generalise, we have been blessed with self-sufficiency. In the pre-industrial era, people used wood and twigs-what would now be called biomass-to cook their food and keep warm by their fires. We then had the development of coal, which fuelled our industrial revolution and our industrial and economic development. After coal, we discovered oil and gas in our backyard, in the North sea on the wider UK continental shelf.
What will happen in the next 10 or 20 years? The North sea oil and gas resources are in decline, although there are still plenty of resources out there, and it is still a major British industry. Many younger, smaller entrepreneurial companies are coming into the North sea, as some of the big boys move on to Brazil and elsewhere. The licensing round is always very active and resources remain to be exploited-for example, West of Shetland-and that augurs well. However, oil and gas production is in decline by 6 to 8 per cent. a year.
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