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Mr. Ellwood:
The hon. Gentleman is using tactics typical of those on his Front Bench. Instead of discussing the issues of the day and taking responsibility, he has shifted the argument to the Opposition. His party has
been in power for 10 years, during which our nuclear power capability has shrunk. It took 22 years to get a spark out of Dungeness, but we have reached the point where nuclear power facilities are closing faster than we can replace them. That took place on the hon. Gentleman's watch; it was nothing to do with Tory policy.
Paddy Tipping: We need new investment in generation capacity of £95 billion to £200 billion. Companies such as EDF want to know whether the policy framework will be secure into the future, because in a difficult capital market it is hard to see where those sums will come from. We must remember that of the big six players in the UK, four are truly international companies. It is far from clear that money will be invested in this country, so we must ensure that we have a set of policies that can encourage investment into the future. At the cornerstone of those policies is a robust and high carbon price.
John Robertson: May I tell my hon. Friend not to take any history lessons from the Opposition, because the reinvention of history that we are hearing today bears no resemblance to what has happened in the past 25 years, particularly in the nuclear industry? Does he agree that the Government's policy of proceeding with the Planning Act 2008, the Climate Change Act 2008 and the Energy Bill is the right way forward, and that we should all get back to talking about what is important, which is the needs of the people of this country?
Paddy Tipping: And the need of the people of this country is to keep the lights on. There is a potential energy difficulty in 2015-17, and it is clear to me that we must encourage investment to ensure that we can keep the lights on. One way to do that, which my hon. Friend has always championed, is to bring on new nuclear generation. The Opposition may not like it, but they are Johnny-come-latelys to nuclear. There are differences between those on their Front-Bench team about nuclear power. If we are to ensure that the first new nuclear plant is open by 2017, we must ensure that companies such as EDF are confident that their investment will last into the future.
Mr. Jamie Reed: My hon. Friend will know, because he is a keen student of such issues, that every major nuclear decision in this country has been made by a Labour Government-from Calder Hall onwards. He mentioned the Copenhagen conference, but does he, like the rest of the policy-making world, believe that it is much harder for the Secretary of State to strike a deal with Environment Secretaries from other countries, because when they look at Britain's putative alternative Government they see that they increasingly consist of climate change deniers?
Paddy Tipping: My hon. Friend makes the point. It is clear from the discussion in the Chamber, and from the policies announced by the right hon. and learned Member for Rushcliffe (Mr. Clarke) and by the right hon. Member for Haltemprice and Howden (David Davis), who used to be the shadow Home Secretary, that there are real difficulties about investment in the future. To put it simply, they just do not know what they are doing. As they say in my part of the country, they don't know their arse from their elbow.
Mr. Deputy Speaker (Sir Michael Lord): Order. I shall not ask the hon. Gentleman to withdraw those remarks, but perhaps he should choose his words a little more carefully.
Paddy Tipping: I take your reproach, Mr. Deputy Speaker. Those words will be read down the coal pit in Welbeck in Edwinstowe, and the miners there will know what I am talking about, even if it offends some of the people in this Chamber.
My right hon. Friend the Secretary of State has been a champion in the process of preparing for Copenhagen, but I am not confident that the discussions will produce that high and stable carbon price for the future. He describes getting an agreement there as plan A. We need to consider plan B. There is an argument that if we want investment on such a scale, we need to ensure that we in the UK can underwrite the price of carbon-that there can be a ceiling on that price, to drive the investment forward. It is not a decision that we need to take this year, pre-Copenhagen or straight afterwards, but ultimately a decision will have to be made about how we can promote new investment. The obvious way is to maintain a robust carbon price into the future.
One way of bringing on new fossil fuel plant-new clean coal plant-is through a carbon capture and storage levy. That is in the Bill, and I welcome it, even though it is a little late. The rules of the competition seem to have changed over time, and the end date, even today, is not entirely clear, but four new projects here in the UK will be a tremendous development. I want my right hon. Friend to initiate that quickly. I want him to listen to the miners in Nottinghamshire, who know that although Harworth colliery is mothballed, it could be reopened and new reserves could be accessed. That is what UK Coal, the owners, would want to do, if £200 million were available.
That sort of money is pretty tough to raise on the capital markets just now. In recognition of that, there have been discussions with the European Investment Bank about a loan. The discussions have gone well. The sticking point appears to be that the EIB says that any coal that comes from Harworth should be burned cleanly. At present there is no power station in the UK that can provide that. I want to stick up for and protect mineworkers in Nottinghamshire and steelworkers in Middlesbrough and Redcar, because we owe it to them. They have given their lives and their health to keep us warm, so anything that my right hon. Friend can do with the EIB would be extremely helpful.
My right hon. Friend ought to pick up on two other points about carbon capture and storage. The first is that it is important not to let the market operate, but to take a strategic approach. E.ON's development at Kingsnorth is long delayed, but were it to win the competition, there would be sense in talking to E.ON and the rival company, RWE, which has a power station just over the river at the Isle of Grain, to ensure that any demonstration plant at Kingsnorth was significant, with sufficient capacity to act as a cluster. We do not want stranded assets.
We should look at the work that Yorkshire Forward has been doing in the Yorkshire coalfield down the Humber valley and take a strategic approach to carbon capture and storage. In Committee we need to debate that and think it through extremely carefully.
We should be clear that the cost of the levy will fall on customers' bills. One of the Government's aims, in addition to security of supply and a reduction in carbon emissions, is affordable heat. As politicians we must recognise that there is increasing consumer resistance to rises in bills. The £2 billion cost of the levy will be passed on to customers. They are beginning to say, "But we're paying the social tariffs." About 1 per cent. of their bill is for social tariffs, and 9 per cent. is for environmental purposes, to deliver the ROC obligation. In future that could rise to 20 per cent. There will come a point when customers say, "Enough is enough," and in the immediate short term we need to ensure that bills are detailed enough for customers to understand what they are paying for. Given the rising bills-the hon. Member for Tunbridge Wells (Greg Clark) quoted the figures-it is important that we look at social tariffs. Some companies, such as Centrica, have an excellent reputation and record, but we need to go further, which is why I support mandatory social tariffs.
I look forward to discussing in Committee who might benefit from such tariffs, because they should apply not only to elderly people, but to people who are in fuel poverty generally. Last winter, 5 million people experienced fuel poverty, including a group below pensionable age with long-term illnesses. We need to look carefully for ways in which we can help them, and we need to discuss mandatory social tariffs in a wider context.
Sir Robert Smith: The hon. Gentleman, in his intervention on the Secretary of State, specifically mentioned Macmillan, which has taken this issue forward. It provides a helpline to support people with cancer, and one of the commonest questions asked is, "How do we cope with our energy bills?" That is because when someone is being treated for cancer, not only do they often become more sensitive to a shortage of heat, but their income falls at the same time, because their employment is disrupted.
Paddy Tipping: The hon. Gentleman has a long track record of following the subject of fuel poverty, and he is exactly right. I look forward to a more detailed discussion about how to tackle that problem.
As I have said, we need to set social tariffs in a wider context. The Warm Front budget is clearly under real pressure, and there needs to be a discussion about its future. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), who will wind up the debate, has made some very welcome changes to Warm Front, but I want us not only to roll out smart meters but to give people real practical assistance with energy issues such as efficiency and insulation. I want us to roll out smart meters at the same time as we give advice.
John Robertson: Members in all parts of the House agree that smart meters are important, but, from what I have seen of them on television over the past week or so, I think that they will be quite technically challenging for some members of our communities, particularly the elderly, the frail, people with sight problems and so on. We really have to provide education as well as the meter.
Paddy Tipping:
I am sure that that is right. Smart meters with a visual display will clearly be interesting for some people but a turn-off for others. Nevertheless,
now that we have the technology to look at a minute-by-minute, second-by-second account of our energy use, it is clearly right that we structure the market to ensure that elderly people and those with visual handicaps know that they are getting the best deal.
I talked about a wider discussion, and I am keen to discuss the winter fuel allowance. Last year it cost £2.7 billion, and I am not entirely confident that we get the best out of it. Of those who received the allowance, it is estimated that only 12 per cent. were in fuel poverty. We need to make some tough choices about how best to use our resources, and as part of a debate about mandatory social tariffs, Warm Front and Eaga we need to discuss whether the winter fuel allowance is the best way forward.
The final part of the Bill deals with, and extends, the role of Ofgem. My respect for Ofgem has grown over the past 12 months, when, under pressure from Government, it has become much more proactive. I welcome its quarterly reports, in which it is interesting to follow the tracks and see the gross margins that have been made by all the energy companies. We must extend Ofgem's role by giving it more investigatory powers and greater responsibilities, to ensure that customers benefit as soon as possible from those powers.
The case for going to the Competition Commission has been argued on both sides of the House today. However, let us be clear about this: it would probably take two years for that inquiry to come round, and during that period the big energy companies would not be investing. It is as simple as that. If people want £95 billion or £200 billion of investment, a Competition Commission inquiry would be completely the wrong way to go about getting it. It would stop that investment in its tracks, because companies such as E.ON and RWE would make decisions to invest elsewhere in the world, and we need that finance here.
The big issue for us at the moment is the renewal of our generating capacity by 2020. The Bill goes a small way towards achieving that, and I support it, although I am not entirely confident that it is supported throughout the House. I look forward to the debate in Committee, because it is a valuable, if modest, Bill, which could still be improved.
5.52 pm
Simon Hughes (North Southwark and Bermondsey) (LD): I am happy to follow the hon. Member for Sherwood (Paddy Tipping), the acting Chairman of the Select Committee on Energy and Climate Change, who speaks with a long-held interest in energy issues.
The hon. Gentleman ended where I begin: by contrasting the Bill before us with the great task that begins today across the North sea in Copenhagen. Earlier, I put it to the Secretary of State-he responded positively-that Copenhagen requires the United Kingdom and the European Union to be ambitious, bold and brave in reaching for the best possible permanent deal. That is obvious. We could also have had an ambitious energy Bill being debated in this country at the same time but, to repeat the word used by the hon. Member for Sherwood, this is a very modest Bill indeed.
Having been in the House throughout the period, my analysis is that, after nearly 13 years in government, Labour's energy policy is perceived by many of my
constituents and those of many colleagues as having left millions of the British public out in the cold. They feel worse off, not better off, as a result of the energy policies of the past 12 and a half years-and they are worse off. Energy is costing them more and the future is less certain. The number of people who spend more than 10p in the pound on their fuel bills has gone up, not down, and that situation is likely to get worse, not better, given the price increases in oil and gas that they know they are to expect. If the Government had been really bold and determined, they could have said, "This is the opportunity to try to put high fuel bills that people cannot afford behind us once and for all."-in other words, to do the sort of social justice legislating that I thought Labour came to power to deliver. It is therefore sad that, on the first day of the Copenhagen conference, when people are calling for radical action abroad, we are not seeing extensive and radical proposals at home.
Over the past 12 and a half years, the response to variations in fuel costs has been a system that, although welcome when delivered, is very much one in which Labour makes people dependent on themselves. The winter fuel payment, which is a better system than the benefits system if people do not claim the benefits, has been given irregularly, spasmodically and unpredictably. There has not been a built-in subsidy for poor people, or a guaranteed, legislated-for provision so that people know they will be able to afford their bills. That is in the Bill-we are now seeing it for the first time ever-but it has taken 12 and a half years for a Labour Government to realise that without guarantees in law, people often end up paying much too high a price.
As we have heard, there are three issues before us. Many of us wish that there were many more and that this was legislation in which the Government nailed their colours to the mast of continuing to support and to develop support for the renewables sector, which is growing, but from a terribly lame and slow start. Of course, in some respects there is a difference between my colleagues and I and both the Government and the Conservatives. We do not think that the future lies in nuclear power, which is always expensive, always delivered late and always risky because of the fuel that we import and the failure to find ways to store, let alone to dispose of properly, the waste that is created. Nothing that has recently come to light suggests that nuclear power will become any more safe or secure in future, as the climate change crisis affects Britain and we get more floods, more storms and more risk of disruption, with the same things happening around the world. For this country, which is so well placed with our wind, wave and tidal power, renewables are a far safer and saner route forward, and that is the way we should go.
Mr. Ellwood: As I do with much Lib Dem policy, I am having a few problems understanding this. If the hon. Gentleman is against nuclear policy per se, why does he support the nuclear deterrent? From a safety perspective, he seems to have one rule for our service personnel working on nuclear submarines and another for the civilian population.
Simon Hughes:
Those are entirely different arguments, as the hon. Gentleman well knows, having also been involved in this debate for a long time. I will not be
distracted into a debate on defence, although I am happy to have it another time. The position we have always taken is that we have inherited a nuclear deterrent that, in the multilateral negotiations that are coming up next year, we should use to lever down the number of nuclear weapons in the world, with a world policy and a national policy of reducing dependence on things nuclear.
We believe that, having gone down the nuclear road in this country and seen that it is unsatisfactory-it was not at all successfully developed under past Tory Governments-it is completely the wrong road to go down under any prospective Government, whether Labour or Conservative, or with somebody else in the lead.
Mr. Goodwill: The hon. Gentleman talked about the security of fuel supply. As I recall, the main sources of nuclear fuel are Australia and Canada, which are surely much more secure places to get fuel from than the middle east or Russia.
Simon Hughes: Some of the sources of supply that we need for nuclear are not in those countries but elsewhere, and there are predictions that they may run out in the foreseeable future and that prices may become significantly higher. If the hon. Gentleman thinks that, in a world of uncertainty, transporting around the world things that are needed to create nuclear power is a safe and sensible thing to do, he can make that argument, but it is not finding much credence with the public, who, on all the opinion poll evidence, find the idea of renewables a much more satisfactory way forward than nuclear power.
Simon Hughes: Let me make a bit more progress. I do not want to get bogged down in nuclear, which is not in the Bill, nor should it be. We are not in favour of it, and we hope that in the end the Government realise that they should not support it either.
The first item in the Bill is carbon capture and storage. Ministers know that we support CCS technology, which is vital if we are to make coal our servant in the years to come and ensure that it does not produce the same problems for our planet in the future that it has in the past. It needs to be seen to be commercially viable, and one difficulty has been that we have been really slow off the mark. That is not the fault of the Secretary of State or the Minister of State, the hon. Member for Lewisham, Deptford (Joan Ruddock), but it was in 2006 that the Select Committee on Science and Technology said of carbon capture and storage:
"Multiple full scale demonstration projects using different types of capture technology and storage conditions are urgently needed."
The first demonstration project was in 1996 in Norway. Why have we been waiting? What has caused the delay? Why, for 12 and a half years, when the technology has been developed elsewhere in the world, have we not sought to advance the CCS that we have always known we would need? We are now going to have to try to catch up, but with other countries much further ahead, it might be as easy for us to take the technology from them as to develop our own.
I would be interested to hear from the Secretary of State why the Government have not yet come clean on their response to the results of their consultation, which
ended in September, on having a framework of emissions performance standards for the whole coal industry. He did not allude to that in his opening speech, so I hope that the Minister of State will do so in her response. In the debate in the summer on a Bill introduced by my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy), the Under-Secretary of State for Energy and Climate Change said that he supported the general direction of it, but it was a sort of St. Augustine's reply-"But not yet." He said:
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