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Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.
The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).
That this House recognises the Government's commitment to maintaining investment in apprenticeships, higher education and skills and its commitment not to repeat the mistakes of past recessions, and to ensure that young people are not trapped in long-term unemployment; notes that since 1997 there have been 339,000 extra students in higher education, more than ever before, and that public funding has increased by over 25 per cent. in real terms creating the world-class higher education sector enjoyed today; further notes the Government's commitment to managed growth in higher education to sustain quality and success in widening access, creating the most diverse student population ever; commends the Government's commitment to helping graduates through the downturn; further notes that investment in apprenticeships today is over £1 billion in 2009-10, and that in 1997 there were only 65,000 starts compared to 240,000 in 2008-09; further notes the success of Train to Gain in supporting over 1.4 million course starts; commends the September Guarantee offering all 16 and 17 year olds an apprenticeship, school, college or training place; and acknowledges the Government's investment of £1.2 billion in the Future Jobs Fund to guarantee a job, training or work experience for every young person unemployed for 12 months, and the graduate guarantee giving graduates unemployed for six months a guarantee of a high-quality internship or training, or help to become self-employed.
Energy Security
Madam Deputy Speaker (Sylvia Heal): I advise the House that Mr. Speaker has selected the amendment in the name of the Prime Minister. I ask all hon. Members who are not staying for this debate please to leave the Chamber as quickly and quietly as possible.
4.17 pm
Greg Clark (Tunbridge Wells) (Con): I beg to move,
That this House notes the impending retirement of over 20 gigawatts of UK generating capacity, the ongoing depletion of North Sea oil and gas reserves and the nation's growing dependency on imported fossil fuels; further notes the high and volatile prices of those imports and the threats to the constancy and adequacy of their supply; regrets that British energy policy has failed to change with these circumstances and that, consequently, the nation's energy security has been compromised, as exemplified by the low levels of UK gas storage capacity; acknowledges that fundamental reforms to the energy policy framework are required in order to attract the investment required to guarantee reliable, affordable and sustainable energy supplies; calls upon the Government to take immediate action to ensure diversity in new electricity generating capacity and adequate levels of natural gas storage; and, recognising that energy efficiency is the most cost-effective means of meeting Britain's energy needs, further calls upon the Government to implement policies capable of accelerating the deployment of efficiency improvements to millions of domestic and non-domestic buildings, in particular to the homes of the growing number of fuel-poor households.
If ever the House needed a reminder of the importance of affordable, reliable energy supplies, this winter has provided it. It has also reminded us that the measures that we need to take to safeguard the security of those supplies will be tested. As the Engineering Employers Federation said last week:
"The long-standing vulnerability in our energy system has been exposed...As a nation we need to take security of energy supply more seriously."
This time around, a number of businesses on interruptible gas contracts were cut off. Thankfully, supplies to residential customers were maintained, but this is no cause for complacency. Temperatures have been unusually low, but the effects of the recession have depressed underlying demand. Fortunately, there has been no repeat this winter of the unresolved dispute between Russia and Ukraine, which has meant that supplies from that region have so far not been disrupted. There is, however, no guarantee that we shall not have another cold winter, or that Russia will not turn off the taps in the future, or that we shall not have a problem with the Rough storage facility, as happened four years ago.
The Government know that, as Shakespeare said:
"When sorrows come, they come not single spies, but in battalions".
The only thing that we should expect is that unexpected events will happen. To guarantee our energy security not just most of the time but all the time, we need to be prepared. The head of Ofgem has said:
"The headline fact is that Britain is the single most exposed country among the big players in Europe".
Current energy policy is not adequately prepared for what could have been, and should have been, foreseen.
Let me say from the outset that I do not blame the Secretary of State for this. After all, he has been in the job for just over a year, and it has taken at least 10 years of drift to leave Britain this unprepared for the energy
challenges of the 21st century. I strongly suspect that he privately shares our analysis of the situation. He himself said today that
"there is clearly an urgent need for additional gas storage",
and I welcome that recognition. He says that we should have more gas storage and greater diversity of supply, including nuclear power and renewables, and that we should promote energy efficiency. I think that there is agreement on this that crosses party lines.
Peter Luff (Mid-Worcestershire) (Con): My hon. Friend makes an important point. The Committee that I chair, which is of course a cross-party Committee, has repeatedly warned of the dangers of inadequate gas storage. It is an eminently foreseeable problem which should have been dealt with sooner. Can he suggest any reasons for the failure to deal with such an obvious problem much more quickly?
Greg Clark: I am afraid I cannot, but my hon. Friend is right to draw attention to the work of the Select Committee on Business and Enterprise over the years. In its landmark report "Energy prices, fuel poverty and Ofgem", produced in 2008, it stated:
"This is an issue our predecessor Committee raised in its 2002 and 2005 Reports on security of supply and fuel prices. Significant additional storage, beyond that currently planned, is needed to reduce volatility in the wholesale gas price...It is now an issue of national importance and should be a high priority in domestic energy policy."
As I have said, I cannot blame the Secretary of State for that. It was his predecessors who should have responded in a timely fashion. I am glad that he now sees the need to respond to the challenge, albeit late in the day.
Mrs. Joan Humble (Blackpool, North and Fleetwood) (Lab): Will the hon. Gentleman take into account the specific needs of individual gas storage applications? An application for underground storage on the border of my constituency and that of the hon. Member for Lancaster and Wyre (Mr. Wallace)-I am pleased to see that he is present-is strongly opposed by our constituents on grounds relating to the geology of the area. Gas storage applications must be examined case by case to ensure that they are safe before it is decided that they should proceed in the national interest.
Greg Clark: I agree with the hon. Lady to an extent. Of course it is necessary to consider whether individual locations are suitable for storage purposes. That makes perfect sense. It is clear that if something as important as gas is to be stored, safety must be paramount. However, I do not think that that should lead us to the conclusion that we should not nationally move towards greater gas storage. The fact that investigations of this kind take some time to complete is all the more reason to begin them earlier, so that they need not be conducted in a rush and there is not the exposure that we have begun to see in recent years.
Mr. Philip Dunne (Ludlow) (Con):
My hon. Friend is being characteristically generous-hearted to the Secretary of State. Is this not the Secretary of State who, only a few days ago, told the media that we did not need to worry about gas storage in this country because we had
such large offshore oil and gas deposits underground in the North sea? If that is the case, and if that is the justification for his predecessors' failure in not providing more gas storage facilities, why has the other major western industrialised country, the United States, which has substantial underground deposits of oil and gas, been creating significant strategic storage capacity over the past 10 years?
Greg Clark: I agree with my hon. Friend, but the fact that the Secretary of State has described the situation as "urgent" may indicate that he has moved on a bit from that position.
As I have said, I do not think that this issue should divide us. Over the past few days the United Kingdom-based Chemical Industries Association carried out a survey following which it reported that nearly half its members believed that increased storage was essential to future investment by companies in the UK, and over a third claimed that the current uncertainty of supply-caused by a lack of gas storage-was restricting the ability of the sector to invest in the UK. The situation is, as the Secretary of State says, urgent.
Simon Hughes (North Southwark and Bermondsey) (LD): The consensual tone of the hon. Gentleman's opening remarks is in notable contrast to comments that he has made publicly in the press over the past seven days. He claimed that we had only eight days of gas storage left. National Grid immediately dismissed that as a "meaningless figure" which totally ignored the amount of national supply that we have available. Will the hon. Gentleman now apologise for what was an unnecessary, alarmist, inaccurate and misleading comment?
Greg Clark: Of course I will not apologise. I think that if there is one significant threat to the country's energy security, it is the possibility that the complacent approach of the hon. Gentleman's party will be adopted by others. I think he should listen to the counsel of his colleague the hon. Member for Birmingham, Yardley (John Hemming), who has taken a long-standing interest in this problem and has repeatedly urged us to act on it. As he believes this is an urgent issue, I assume he thinks we should increase the amount of capacity we have. The fact is that, at the best of times, we currently have 16 days' worth of storage capacity, whereas France has 120 and Germany has 100. Therefore, apart from the Liberal Democrats, I do not think anyone believes the amount that we have is adequate; and, of course, when we have high winter demand, such as we saw recently, that maximum level of 16 days becomes much less. One problem is that the concentration of our storage capacity at present means that it is difficult to withdraw it from storage at the rate that we could use it in cold snaps such as the current one. Therefore, as well as a greater increase in the number of days of storage, we need greater diversity so we can get it into the system more quickly.
Mr. John Gummer (Suffolk, Coastal) (Con): I ask my hon. Friend to resist the temptation to listen to the Liberal Democrats on this issue, on the basis that they are always in favour of things in general and against them in particular when there is a single vote to be gained.
Greg Clark: I would agree with my right hon. Friend, who has always taken a responsible position on this subject, if I thought this was a good electoral strategy for the Liberal Democrats, but I do not believe that refusing to participate in a serious discussion that will ensure that we increase the resilience of our national energy supply will convince the electors at all.
Lembit Öpik (Montgomeryshire) (LD): I ask the hon. Gentleman, in the spirit of transparency called for by his colleague, the right hon. Member for Suffolk, Coastal (Mr. Gummer), to clarify his position on the following question, which greatly concerns my constituents. What is the Conservative party stance on land-based wind turbines? While one may very well be in favour of offshore turbines, it would cause great disturbance to my constituents if the volume of turbines that is proposed were to be built. I have asked the following question on many occasions, but no Conservative Front-Bench spokesperson has answered it: if the Conservative party is elected to office, will it change the turbine policy of the current Government?
Greg Clark: We think that, in order to secure our energy supplies in future, we need diversity of energy sources. It was Churchill who said that the security of our energy supply lies in diversity and diversity alone, and it is important that we have contributions to our supply from across the piece. Therefore, we would change that policy, because one of the problems with the current onshore wind policy regime is that many communities-including some in the hon. Gentleman's constituency, perhaps-feel they gain no advantage from the siting of wind farms in their locality. They are sometimes concerned about what they might see as risks-they might not know whether the wind farms will be noisy, or what the impact will be. They will therefore often decide-on a precautionary principle, perhaps-to oppose the application because there is no countervailing argument. On the continent, however, wind farms tend to be much more community-based and community-owned. Whether in Denmark or Spain, the communities that host wind farms share in the benefits, such as by receiving revenue from the electricity sold or, in many cases, getting cheaper electricity. Our policy is to return some of those benefits-through the first six years of business rates, for example-and to look into how we might provide cheaper electricity to the communities involved. That at least provides a more balanced debate.
Rob Marris (Wolverhampton, South-West) (Lab): I am grateful to the Conservative party for holding a debate on energy security. I agree that diversity of supply is important. It used to appear, to Labour Members at least, that the Conservative party's policy on nuclear-which, interestingly, is not mentioned at all in its motion-was to pop down to the supermarket and buy one if necessary. Life is not like that. Has the hon. Gentleman's party changed its policy on nuclear, and if so, what is it now?
Greg Clark: I shall talk about nuclear later. I am pro-nuclear; I believe we need to get on with it. I think that one of the problems we face is that we now have a gap between the end of the planned life of our current fleet of nuclear power stations and the earliest possible date at which we can get new ones. That gap should not be there; we should have avoided creating it.
The Secretary of State expresses a view with which we all agree-that we need increased capacity in our gas storage system. I was surprised by the wording of the Liberal amendment, which is alarmingly complacent. I hope that at least between those on the two Front Benches there will be agreement on the action that is now required to guarantee Britain's energy security, not least because that action involves long-term decisions. We should not seek to make short-term differences. Companies will make major investment decisions worth £200 billion and lasting 20, 30 or 40 years. We should aim for a long-term view of diversity and more robust sources of supply.
British energy policy has been exposed as out of date. It was designed 25 years ago for a world in which Britain had an excess of generating capacity, where we enjoyed the security of growing North sea oil and gas production, and where concerns about local pollution and international climate change were not as intense as they are now. However, power plants get old, fossil fuel reserves dwindle away, and pollution builds up to crisis proportions. The Government have had ample warning on all those fronts.
Power plant lifetimes are a matter of record. The Government knew that our existing fleet of power stations would need to be replaced. The peaking and decline of North sea production has long been predicted and was already under way at the beginning of the Government's first term, with obvious implications for dependence on fossil fuel imports. In their 1997 election manifesto, the Government promised a 20 per cent. cut in carbon emissions by 2010, thereby serving notice on themselves that a transition to cleaner sources of energy would be required.
Despite the transformation some time ago of the basic assumptions underlying energy policy, the policy framework has remained fundamentally unchanged. A framework designed for an age of plenty is still with us in an age of insecurity. Sometimes Government are overtaken by events, but in respect of energy policy, the Government saw what was coming and did not do enough about it.
Let me explain where that leaves us in terms of the main areas of energy use-first, electricity. Back in July the Department of Energy and Climate Change unveiled its energy plan for the coming decade. It is good that there is such a plan and it is perhaps the most important document that the Department has published to date, but it contained a dark secret. It revealed that Ministers were expecting black-outs across Britain in the years ahead.
A chart in that document showed a big rise in what are called expected energy unserved, otherwise known as power cuts. From virtually no black-outs now, the Government said that they expected the level to rise to 3,000 MWh by 2017. That is the equivalent of three nuclear power stations shutting down at the same time, or to put it another way, 1 million people losing power for 15 minutes more than 20 times in the course of a year. Worse still, shortages would most likely strike at times of peak demand-that is, on the coldest winter evenings. The head of Ofgem warned us that the years following 2015 could be very cold indeed. [Interruption.]
The Minister sometimes complains, as he is doing now from a sedentary position, that the chart is taken out of context and that we ought not to make use of it
in this way. We have always been very careful to make its context clear. It is an official projection included in an official Government publication, freely available not just to the Opposition, but to anyone considering whether to invest in this country over the next 10 years.
Let me turn to discuss coal. Our power sector, in which I include coal, will certainly need investment. Anyone who believes in diversity, as I do, needs to look at fuel sources right across the range. It is worth noting that, in the course of the big freeze that we have had during the past week, coal plant has at times supplied more than 40 per cent. of our electricity, helping to relieve pressure on gas supplies. The pressure on gas supplies would have been very much worse if we had been in the situation that we will arrive at in the next few years, when a third of our coal generating capacity is withdrawn.
Mr. David Anderson (Blaydon) (Lab): Is the hon. Gentleman satisfied that most of that coal will come from places such as Russia, where 6,000 miners a year are dying, so we are getting energy at the cost of people's lives? That would not have been the case if his former Government had not done away with the best mining industry in the world.
Greg Clark: There will be a future for UK coal within that, but it depends on a number of factors. The hon. Gentleman is absolutely right that we import a lot of coal from Russia. Coal is clearly more readily available and easily stocked than gas, so it contributes to energy security. I share his concerns about the safety situation there. We want to ensure that we operate using supplies that come from sources we can be proud of and confident about. I hope that in due course we can have more of a source of supply from this country as well. However, that depends on making progress on carbon capture and storage. If we subscribe, rightly, to a set of emissions targets that require CO2 emissions to come down by 80 per cent. by 2050, we will need to make a breakthrough on CCS if we are to be able to use coal as an addition to our diversity of supply.
John Thurso (Caithness, Sutherland and Easter Ross) (LD): The hon. Gentleman has rightly mentioned diversity of supply on several occasions. In that regard, will he clarify what his party's views will be in respect of offshore wind and marine tidal renewable energy? The July White Paper calls for, from memory, some 33 GW of generation. Much of that development is taking place in my constituency, with the potential for a great many jobs to replace those at Dounreay, which is being decommissioned. There is obviously uncertainty over the long term, and it would be most helpful if he could clarify his position.
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