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7 Dec 2009 : Column 91

I shall make a brief pitch for something for which I have been pushing for four and a half years. There are 40,000 tonnes of uranium oxide-that is a commodity, not waste-and 100,000 tonnes of plutonium oxide, which is also a commodity and not waste. If we turn those materials into fuel, not only do we obviate the need to dispose of them, saving £3 billion to £4 billion, but we could run three new nuclear reactors at Sellafield over a 60-year period, eliminating the need to emit more than 0.5 million tonnes of CO2 in the same period while providing 6 per cent. of the UK's electricity-based generation. That is a prize worth pursuing. In addition, we could provide perhaps the most comprehensive and effective way for the nation to meet its non-proliferation targets. That policy should be championed by any Government of any colour in future.

With that in mind, I welcome the Bill's main objectives. The establishment of carbon capture and storage technology-and consequently ours, and the world's, ability to reduce emissions of CO2-the protection of millions of customers from energy price exploitation, and much-needed steps to end fuel poverty are at the heart of the Bill. It is a scandal in the world's fourth largest economy, at the beginning of the 21st century, that anyone in the UK should be affected by, or live in, fuel poverty. It is even more distressing to note that, inevitably, it is the least well-off, including thousands of elderly people, who find themselves in fuel poverty for lack of what is a basic essential need. As my hon. Friend the Member for Southampton, Test (Dr. Whitehead) pointed out, the days of cheap energy are well and truly over, so it is right for the Government to mandate energy companies to discount bills for some people on the lowest incomes.

I pay tribute to the Secretary of State for taking up cudgels against electricity providers. That has been mentioned fleetingly, but I believe that he was right to intervene. His intervention was significant, and will be welcomed by people living in fuel poverty. As has been said, about 1 million households receive discounts and other help with their energy bills. However, that voluntary arrangement will end in March 2011. The Bill will ensure that when it does so, discounts for the most vulnerable will continue in law through compulsory social programmes, which should be welcomed by Members on both sides on the House.

It is right that we should spend more to take people out of fuel poverty, and I welcome the fact that new resources will be targeted at the most vulnerable consumers. I have mentioned the elderly, and I pay tribute to Age Concern for its interest in this issue over many years and its advocacy on behalf of elderly people in fuel poverty. Not only is it morally and socially right that we attend to the most vulnerable people in fuel poverty-as I have said, very often they are elderly people-but I am sure that there is a body of work about to be done somewhere demonstrating the value to the nation in policy areas such as the NHS of taking elderly people out of fuel poverty. It must be significant, and somewhere there must be a figure that we can put on that.

It must also be said that the fight against fuel poverty is a real test of the deregulated market. Historically, consumers have benefited financially from increased competition driving down the unit price of electricity. I
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do not think that anyone would doubt that, but in recent years the deregulated market has not so much driven down prices as resembled a multinational cartel. I am not suggesting for a second that the creation of fuel poverty was ever an aim of the market or of its constituent parts, but it is a consequence of the way in which it has conducted itself in recent years.

There are two alternatives to that model: first, the complete re-regulation of the energy markets, which may well be the inevitable consequence of continued failure; and secondly, the creation of a stronger regulator, with more socially responsible practices deployed by the energy utility companies, and a stronger framework established by Government designed to protect the most vulnerable consumers-not quite a public-private partnership, but not far from one. That is what the Bill strives to achieve, and I support it.

The House should make no mistake: the strength of feeling about fuel poverty is such that unless that second alternative works, re-regulation will become a necessity. This is the last chance for the energy utilities to prove that the current model of regulation can be effective and even beneficial, so I urge them to make it work. They must not follow the route of the banks. If the market cannot deliver for the people of this country, we will have no choice but to intervene.

Carbon capture and storage is a phenomenally important issue, and a great deal has been said about it today. If that technology can be proven to work, it may well rank in importance alongside the invention of the internal combustion engine, the advent of powered flight and the splitting of the atom. Given the nature of the challenges posed to human life by climate change, it may in time prove to be even more important than any of those landmark achievements. Again, it is right for Government to facilitate CCS. The Bill will introduce a financial support mechanism for up to four commercial-scale demonstration projects for CCS, and it will also permit the retrofit of additional CCS capacity for those projects, should it be required in future.

The benefits of CCS, as we have heard, are enormous. It will create truly green jobs. In the UK, 30,000 to 60,000 jobs in engineering, manufacturing and procurement will be created by 2030. It will leverage investment for the UK, and could create £2 billion to £4 billion a year for the economy, or a total of £20 billion to £40 billion between 2010 and 2030. It will develop a genuinely new industry for Britain, thus providing a massive regional opportunity for Tyneside, Teesside, the Thames Gateway, the firth of Forth, the Humber, Merseyside and other locations with industry sources that are CO2-intensive, and offer a great opportunity for the establishment of British CCS business centres. In my view, those are jobs in the right areas.

CCS will also bring an end to unabated coal. The conditions that the Government propose are the most environmentally ambitious of any country in the world, and it is right that at the advent of the Copenhagen conference we should lead. Our plans will make the UK a world leader in technology that will help us to avoid the most severe effects of climate change. Something that has not been mentioned is the fact that CCS technology could be of real benefit in helping to facilitate or smooth the transition to a post-oil economy. When, inevitably, we begin to exploit tar and oil shale reserves and so on, CCS technology will be vital in enabling us to use them.

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I fear, however, that the public at large do not yet know enough about CCS. I am concerned that there is a belief that CCS is a panacea or a silver bullet for the climate change challenge facing us all, but it is not like that. The Government are right to support and subsidise CCS, as it is a strategic and environmental necessity for the nation. Again, I draw a comparison with the nuclear industry.

CCS must command well-understood public support, so there is a job of work to be done. In many ways, as the hon. Member for Scarborough and Whitby suggested, the challenges of CCS make the challenges of radioactive waste disposal look like a walk in the park. We know a great deal about radioactive wastes-their properties, their effects, their half-lives, how to contain them, for how long, and the costs and engineering challenges associated with containment. As much as I support CCS, can we really say the same of it right now? How and where will carbon be stored? What are the public liability implications? How will it affect the unit price of electricity? What are the effects of storage on the environment? What would happen in the event of a leak or catastrophic failure? We must address all those questions, because CCS is too important to fail. However, it does not follow that it will succeed just because we want it to. Nevertheless, the signs are encouraging.

I support the necessary subsidy of CCS, and I place on record that I support subsidy in principle for any technology that will help us to ensure the security of our energy supplies and help us to combat climate change. Let me be explicit. If it is necessary, I would agree with state support for the nuclear industry and all aspects of it-although I do not believe it is necessary. I refer to power generation, fuel reprocessing, fuel manufacture, waste disposal and decommissioning. Will such an approach work? Ask the French.

The Secretary of State heads for Copenhagen well armed, able to demonstrate leadership and able to make British industry central to whatever policy initiatives and agreements emerge. We should all support him in doing so. These issues require cross-party political consensus, so it is a matter of regret that so many front-line Conservative figures are leading what can only be called a counter-revolution in the scientific and political consensus regarding climate change. It beggars belief that the Leader of the Opposition will not publicly denounce these senior figures in his party and his hand-picked non-dom environmental policy advisers, who have holed his attempted rebrand below the waterline-the rising waterline.

Instead of supporting the Government in an effective and non-partisan fashion for the benefit of the planet and entirely within the national interest, the Leader of the Opposition is presiding over a party that increasingly believes that the established science which attributes climate change to manmade activities is a sham. It is worse than neo-conservative flat earth science. So obsessed are they, many of them, with the size of government that they do not believe that the Government can achieve any good, even when the future of the planet depends upon it. That is not a philosophy. It is an illness. The right hand does not seem to know what the extreme right hand is doing.

The Leader of the Opposition currently resembles the Quisling of the climate change deniers, so if he seriously wants to bridge the chasm between his rhetoric
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and the reality of so many in his party, he should have the basic decency and courage to do that publicly. We need a consensus or else we invite failure. If we fail-

Mr. Deputy Speaker (Sir Michael Lord): Order. I am not very happy about the word that the hon. Gentleman has just used. Perhaps he would like to withdraw it.

Mr. Reed: Which word in particular, Mr. Deputy Speaker? [Laughter.]

Mr. Deputy Speaker: Order. Is the hon. Gentleman not aware of the word that I am talking about?

Mr. Reed: I am afraid not, sir.

Mr. Deputy Speaker: He might consider withdrawing the word "Quisling" .

Mr. Reed: Absolutely, sir.

If we fail, our children will never forget and they will never forgive.

8.2 pm

Mr. David Jones (Clwyd, West) (Con): Before those somewhat churlish closing remarks, I was going to say what a great pleasure it was to follow the hon. Member for Copeland (Mr. Reed), who speaks with great knowledge of the nuclear industry.

As many other Members have pointed out, it is not wholly coincidental that we are debating the Second Reading of the Bill on the first day of the Copenhagen summit on climate change, which has been described by some as the most important conference in human history. Although there may be some hyperbole in that description-I seem to recall that Yalta was quite important-the question of climate change is certainly the dominant one for our generation. Notwithstanding the local difficulties at the university of East Anglia's climatic research unit, it is clear to most sensible commentators that the world's climate is indeed changing. Whether climate change is caused by human activity is still a matter for debate.

A few years ago I was fortunate enough to pay a visit to the Argonne national laboratory in Chicago. My visit and the presentation that I received there left me in no doubt whatever that since mass industrialisation, the world's climate has warmed and is continuing to warm significantly. I, for one, am entirely satisfied that human activity is contributing significantly to global warming, and it is clear that for the sake of future generations, we must take what action we can to attempt to slow that process and to adapt to it.

As other hon. Members have pointed out, however, the Government have been somewhat slow to respond to this phenomenon. Given that some 47 per cent. of carbon emissions are produced in energy generation, the Government's energy policy was for many years timid, with a refusal, for example, to accept and recognise the urgent need to replace our ageing fleet of nuclear power stations. Very late in the day they have recognised that nuclear generation should be an important part of the energy mix of this country, and that it will be necessary to build new nuclear reactors.

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The Government's slowness in recognising that fact means that there will be a hiatus of many years between the closure of our last remaining nuclear stations and the commissioning of the new ones. During that time the country will be prone to serious power cuts, and when the lights go off, the British people will remember who is responsible for that.

Nevertheless, there are signs in the Bill that the Government have belatedly recognised that security of supply should be central to our energy policy. To that extent, I welcome the amendments in clauses 16 and 17, which provide that the principal objective of both the Secretary of State and Ofgem is to protect the interests of consumers in relation to gas and electricity-interests which include the reduction of emissions of greenhouse gases, and security of supply. Indeed, security of supply must be a prime objective.

With the depletion of North sea oil and gas and the decline in our nuclear generating capability, it is all the more important to ensure that our supply of gas and electricity is as secure as it may be. This will undoubtedly mean employing various fuels for the generation of electricity, including nuclear, gas, conventional fossil fuels and renewables.

We in Wales have a significant interest in all matters relating to energy, which is perhaps unsurprising, given that we are sitting on large coal reserves, are in a particularly windy part of the country, and have coastlines that lend themselves to the production of tidal power, to say nothing of the fact that we are on the coast of the Severn estuary. We also have one of the last remaining operational nuclear power stations, at Wylfa, and I was pleased to see that only last month the Secretary of State indicated that Wylfa was a preferred location for one of the new fleet of nuclear power stations.

We also have Trawsfyndd, which is in the process of decommissioning, and which I have visited. It provides an example of an impressive exercise in the handling of a retired nuclear power station. I was told by the work force there that one of the things they would like most of all in that area is another nuclear power station, because nuclear power stations provide high-value jobs in areas where frequently there is no other work at all.

We also have the Dinorwig and Ffestiniog pump storage schemes. I am sure many hon. Members have visited those schemes. They are remarkable feats of engineering, able to fire up from complete shutdown in 12 seconds, giving an enormous and reliable boost to the energy supply in the grid.

Some three years ago, the Welsh Affairs Committee conducted an important inquiry into energy in Wales, and produced a follow-up report a couple of years later. Those reports were important contributions to the debate on energy production in this country, and I commend both of them to hon. Members. Some of the themes touched on by the Committee in its inquiry have to some extent been addressed by the Government and feature in the Bill. In particular, I welcome the proposals to take forward the development of carbon capture and storage technology, as set out in part 1.

Coal is an important resource for future generation in the UK. However, it is clear that if we accept, as I believe we must, that emissions from conventional
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power stations are contributing significantly to global warming, the problem of those emissions must be addressed.

The Select Committee on Science and Technology has indicated that in the long term, some 85 per cent. of carbon dioxide emissions could be stored safely through the development of carbon capture and storage technology, so it is highly desirable to do as much as we can to develop that. We are fortunate in this country in that we already have significant expertise in exploiting the North sea's resources, which themselves could be turned to the development of CCS technology. Exhausted wells in the North sea could also prove to be ideal locations for the storage of captured carbon. The Government therefore need to press on with the development of CCS technology, and I welcome the Bill to the extent that, in its own faltering way, it provides the launch pad for that development.

However, I have concerns about how CCS will be funded. My constituency-indeed, much of Wales-is largely rural, and I know from conversations with constituents that fuel poverty is a significant concern. Indeed, it has been estimated that more than 740,000 rural households in the UK live in fuel poverty, and that amounts to about 8 per cent. of rural households. Further, some 42 per cent. of rural households are not connected to the gas mains, as compared with only 8 per cent. of households in urban areas. As a consequence, many rural households rely upon liquified petroleum gas or fuel oil to heat their homes, and the Commission for Rural Communities has estimated that heating a three-bedroom house in the countryside costs some £1,300 per annum using LPG and £1,044 using domestic fuel oil, as against only £568 using mains gas.

Clause 4 provides that CCS demonstration projects will be funded by a levy on electricity suppliers. As other hon. Members have said, that levy will undoubtedly be passed on to consumers in the form of higher electricity prices, and although the levy will affect all consumers, it will have a disproportionate affect on rural households, which already pay considerably more than urban households to heat their homes. Clause 4(4) provides that the Secretary of State may make regulations exempting certain types of electricity suppliers from the levy, so I ask the Secretary of State to consider the disproportionate impact that electricity price increases will have on rural consumers, particularly because they will not benefit from the schemes in part 2 for reducing fuel poverty, because those do not apply to either LPG or fuel oil.

Returning to clause 17, I should say that the new statutory focus on greenhouse gas emissions will, or should, clearly lead to the development of new sources of renewable energy. At the moment, the principal form of renewable energy in Wales, as indeed in most of the rest of the country, is wind power. There is no doubt that wind should form part of an energy mix, but it is illusory to suggest that it can ever constitute a reliable form of base load generation. Its efficiency-at some 27 per cent. as opposed to nuclear power's 95 per cent.-is worryingly low, and the reasons why are obvious: wind by its nature is intermittent, and when the wind does not blow the turbines do not turn.

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