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Mr. Gummer:
On a point of order, Mr. Deputy Speaker. I have listened carefully to the hon. Gentleman's explanation, but he has accused my hon. Friend the
Member for Tunbridge Wells (Greg Clark) of producing false statistics. That seems to be contrary to the rules of the House, and I ask you to ask him to withdraw the accusation.
Mr. Deputy Speaker (Sir Alan Haselhurst): An allegation relating to whether information is correct or not is a matter of debate, and there should be an opportunity in the debate to correct it. As I am on my feet, I should like to say that time is precious and the House will want the debate to be fully comprehensive. The Front Benchers have taken up a considerable chunk of time with the speeches that we have already heard. I shall therefore maintain the eight-minute time limit on Back-Bench speeches for the first two speeches-one from either side-then I shall reduce it to five minutes.
Simon Hughes: Thank you Mr. Deputy Speaker. My speech will be considerably shorter than those of the two Front Benchers who have spoken.
The idea that all our sources of supply could fail at the same time is just unfeasible. We need to ensure that the public understand that the position that was either alluded to or, certainly, interpreted by the Conservatives recently is clearly wrong. I want to cite certain objective commentators who can confirm that, so that the House will know that I am not making party political comments. The Daily Telegraph is not a natural supporter of the Labour party or the Liberal Democrats, yet, on 11 January, it stated:
"To be clear, it is highly unlikely that we will run out of gas: we are not facing the prospects of old ladies freezing in their homes as large swathes of residential customers have their supplies cut off."
Of course, we have become a net importer of gas, and we will import more.
Most importantly, on 6 January, National Grid's spokesman made an immediate response to the comments by the hon. Member for Tunbridge Wells earlier in the week, stating:
"We are absolutely not going to run out of gas...The UK is well supplied."
National Grid dismissed the hon. Gentleman's figure of eight days as a "meaningless number", because it ignored the amount of gas being imported and the fact that nearly half of UK demand is met by North sea production. National Grid has given further commentary in the press in the last few days, citing the official figures published at the end of last year in the latest edition of its review "Transporting Britain's Energy". They show that the potential supply from UK power stations is 28 per cent. above demand, and the review forecasts that this excess will continue through to 2016 and beyond.
I hope that the hon. Gentleman will accept that we have an adequate supply now and for the foreseeable future. There is no likelihood of it running out, and the only ones who have suffered are those companies who had negotiated an interruptible supply contract, which rewarded them with a lower price. They knew that their supply would be reduced for a limited period if demand was creating pressure. That is what happened, and it seems to be entirely commercially proper. They knew exactly what would happen in those circumstances.
Greg Clark:
The hon. Gentleman has quoted various people, but he has not been able to produce a single quotation proving that I implied or stated that the gas
supply of any residential customer was likely to be cut off. I mentioned the Engineering Employers Federation, which said that the supplies of some of its members had been cut off. He should bear in mind what was said about the situation by his colleague the hon. Member for Birmingham, Yardley (John Hemming). He said:
"It is like driving blindfold on a cliff. You might go over the edge".
Does that not reflect the concern that we feel, and about which I still maintain that the hon. Gentleman is still rather complacent?
Simon Hughes: I have spoken to my hon. Friend and I disagree with his analysis. That is not the official position of our party, just as there are members of the hon. Gentleman's party who do not always adopt his official position-not least on issues connected with climate change and the Copenhagen conference, which we debated recently.
I am afraid that, intentionally or unintentionally, those comments were alarmist, and I know from information I have been given that they have resulted in some customers of gas suppliers turning their gas down or off for fear that they will not have a supply in the future. That is not the message that we should send to the vulnerable and poor, who are most at risk in weather such as this.
Of course we know that certain of our plants will be decommissioned. Of course we need more storage, but much has already come on-stream and much is in the planning process. We need to ensure that that planned storage capacity can be turned into reality around the country. The new access to liquid petroleum gas in Milford Haven and the Isle of Grain, which, to be fair, the Secretary of State mentioned, has given us a whole new opportunity, and that trend is likely to continue.
Mr. Crabb: I think the hon. Gentleman means liquefied natural gas. Can he explain why, at the 2005 general election, his party opposed the LNG developments in Milford Haven, and can he tell us where the extra 10 per cent. of gas supply going into the grid today from those two terminals would be if the Liberal Democrats were running energy policy?
Simon Hughes: I can give the hon. Gentleman-my friend-an honest answer to his first question. No, I cannot explain that, and I am not going to try. It seems to me that, in retrospect if not in advance, it was clearly a good idea. I have certainly never opposed it, and nor have my colleagues on the Front Bench.
We live in a changing energy world involving different sorts of imports and different sorts of access to imports, and-again, the Government have understood this-new sources are likely to come on-stream. Last Friday's announcement by the Government about offshore wind was extremely welcome, and, as has been pointed out by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), we have a fantastic opportunity to achieve world leadership in tidal power in the Pentland Firth. If that opportunity were developed to the full, this country could have the capacity for the most resource from tidal power anywhere in the world, not just for our own use but also for export purposes.
The Liberal Democrats do not believe that we need the nuclear option as part of the energy security mix. That is a known position, although obviously there are differences of view in our party as in others. Our belief is based not least on evidence that in other countries nuclear is normally, if not always, delivered late and very expensively, and that the same would be the case if it were developed again in this country. I have to say that I still do not understand the Conservatives' position on the nuclear industry. It appears to be supportive when we listen to some Conservative Front Benchers, but entirely opposed when we listen to their environmental and energy advisers. No doubt the Conservatives' position would be equally complicated if they were to gain any form of majority after the next election.
We are certain that microgeneration will also add to our capacity. It is small at the moment, but there is a consensus that it has huge potential. I believe that if the Government had an appropriate feed-in tariff they could encourage microgeneration, and we hope that that will happen.
The other side of the equation is that the energy security issue would have been much better addressed had the Government succeeded in the area in which I believe they have failed most. They have not helped people to reduce their demand and need for energy. The fact is that 99 per cent. of homes are not properly insulated to independently established standards. Despite all the protestations, we do not yet have a comprehensive scheme for warm homes in our country. We know what a great difference proper insulation would make, yet the Government have failed abysmally on a measure that my party has been arguing for 25 years is the most important way in which we can become more energy efficient, because reductions in demand and consumption have as great a part to play as anything else. Gearóid Lane is managing director of British Gas communities and new energy, and the following quotation is taken from an article he wrote for this month's Parliamentary Brief:
"We have just completed what we believe to be the largest ever piece of customer energy consumption research, analysing 64 million meter readings between 2006 and 2008 and correlating consumption savings with actions customers have taken to improve the energy efficiency of their homes. For example, after separating out the impact of price and weather, our data shows a reduction in gas consumption of 18 per cent. for the customers every year for whom we install insulation, and a 21 per cent. fall in gas consumption for the 100,000 customers every year for whom we install a new boiler."
The real prize in energy efficiency-and thus in reduction in consumption-will be won if all our homes, schools, hospitals and industrial and commercial buildings are properly insulated and we did not waste so much of the energy that we consume. That is where the Government have failed most, because we still have a very partial, piecemeal and inadequate programme for achieving those goals.
Obviously, we are always going to be interdependent with other countries around us and throughout the rest of the world. Our energy security is dependent on what happens in the rest of the world, and, sadly, there have been some disastrous actions in recent years. The invasion of Iraq has been harmful in this regard, as it had a knock-on effect on energy supplies; oil production in Iraq is now up, but not up to pre-war levels. There is also a lack of support, certainly from the Conservative party, for a European energy policy co-ordinated in
such a way as to bring us all together. From what I have heard from the hon. Member for Tunbridge Wells, his party's ideas are entirely inappropriate to meet the challenges of the next decades. The Liberal Democrats believe we need not only to be firm in dealing with emissions and climate change, because we must have a zero-emissions policy and a carbon neutral, or zero-carbon, future, but to have an integrated European future. If we are really going to achieve energy security, we not only have to produce as much of our own energy as possible, but we have to be enthusiastic leaders in the campaign for a European supergrid so that the energy produced throughout Europe-whether from solar power in the Mediterranean, hydroelectric power in Norway, tidal power in Scotland, or renewables throughout our country-can be shared to give us all collective security. The UK should aim to be more energy independent, but the best security for all of us is for the whole of Europe to become energy self-sufficient. That is what will give us the security we need. If the Conservative party were a bit more enthusiastic about Europe in this context, that might give consumers and industry a little more hope of the prospect of a secure future if-although I do not think this will happen-it were to form the Government in the near future.
5.48 pm
Malcolm Wicks (Croydon, North) (Lab): Understandably, the context for much of this debate has been the appalling conditions facing our country this winter, and we should remember the elderly at risk from the cold. We often talk about global warming, but many of our elderly would say that the chance of warmth would be a fine thing in their living rooms and bedrooms this winter. That is an urgent social issue. However, I want to begin my remarks by talking about energy security in the longer term and by dealing with the matter in a global context.
When the world comes out of economic recession, the global demand for energy will resume its previous trajectory and, depending on our success in respect of climate change, the International Energy Agency estimates that global energy demand could increase between 20 and 40 per cent. by 2030.
History is playing a trick on the British isles. At this time of globally increased demand for energy from the great emerging nations of India, China and the rest, we are moving to a position of much greater import dependency. For our country that represents not just a challenge in relation to energy supply, but a challenge that has implications for our foreign policy. When we talk about energy security, what do we mean? We should mean not just the important issue of where we get the stuff from. We should talk about our need for energy security with imports, which does not jeopardise our capacity to have an independent foreign policy that takes account of human rights and democracy, including in the countries that will be supplying much of our energy.
When Tony Blair as Prime Minister said that energy policy and energy security in the 21st century could become as important to a nation's defence and security as conventional armed forces, he was at least raising an important hypothesis for us to discuss.
During the debate we have considered some of the trends affecting our country. Yes, there is a great deal of resource still in the North sea-much to be explored in
the future west of Shetland, and so on. Nevertheless, our gas and oil from the North sea are in decline by some 6 or 8 per cent. a year. That is a fact of life, although we must do our best to push the line in the right direction. Meanwhile, our nuclear energy capacity has declined from 30 per cent. at its peak to about 15 per cent. today. We know the story of coal and the missed opportunity there in an earlier generation. Our renewables are contributing more and more each year but still a very small percentage.
We must be as smart as we can in our foreign policy on energy so that we are in the game of diversity, as the Secretary of State says. We must not be over-dependent on any one fuel. We must avoid the dangers of a new dash for gas, which seriously concerns me. We should not source too much of our energy from any one company, region or country. We should build up our links with countries that are important to us, such as Qatar and in particular Norway. With the right approach, we could secure more gas from Norway.
We need diversity, and we need to ensure that in future, despite the trend towards import dependency, we secure as much of our energy indigenously, from within the British isles and our seas, as possible. That is a recipe for the Secretary of State's policy on renewables. The development towards 15 per cent. of our energy coming from renewables by 2020 is as much about energy security as it is about climate change. The two go together.
There is a role for coal. To ignore coal would be a national security disaster-hence colleagues talk perfectly properly about the importance of carbon capture and storage. Nuclear must play a key role. It is important for climate change and for the nation's security. In my report to the Prime Minister, to which the Secretary of State kindly referred, I go as far as to say that if by 2030 some 35 to 40 per cent. of our electricity was coming from nuclear, that would be sensible for the nation's security as well as for global warming. There is far more that we can do to reduce energy demand, not just in housing but across the industrial process and in transport.
In the final few minutes available to me, I shall turn from that macro perspective to a much more specific perspective on gas. As I said, I fear that there could be a new dash for gas, partly because gas power stations are far easier to build than nuclear and some other kinds of power stations. That needs to be avoided. Gas is an important part of the mix, but it should not be over-dominant. There are issues about gas supply in the UK that I set out in my report to the Secretary of State and the Prime Minister, which I know the Government are taking seriously and to which they will respond in due course. I do not expect a response today.
One such issue is that, compared with many of our continental partners, we have a relative lack of long-term contracts for gas. Companies tend to buy short-term, or sometimes "spot". Is that a problem? When we say that companies have a supply obligation, what does that really mean? In the course of the inquiry for my report, I found that the supply obligation is a bit like jelly-difficult to get to grips with. My understanding, and that of those who advised me, is that in our present system there is no way for National Grid or the regulator to establish whether, in aggregate, there is likely to be sufficient availability of gas during any one year or any
one winter. That does not mean that the gas will not be there, because companies might buy "spot" or short-term, but it is not a very secure position. Having been Minister for Energy and having had to take my share of responsibility for these things, I found myself rather less confident about some of this than the Liberal Democrat spokesman-that is a bit strange, is it not? When I did my report, that raised in my mind some serious issues about what we mean by the supply obligation. The regulator is looking into that, as is the Secretary of State, but we need to consider it carefully.
My final point is about gas storage, which is a more complex issue than those on the Opposition Front Bench-perhaps both Front Benches-fully understand. The Secretary of State said that there are arguments against strategic storage, and I understand that; but there are arguments for it, as well. It is a question of balance. If we simply go in for commercial storage, we must recognise that much of it is owned by German companies and in certain winters some of it, from places such as Rough, flows towards the continent. How do we secure in extremis-in emergency conditions-the stored gas that can be used first and foremost for British business and British homes?
5.56 pm
Mr. John Gummer (Suffolk, Coastal) (Con): I refer the House to my declaration of interest.
I very much take on board the Secretary of State's remark that we want the facts and a robust analysis. That is why I start by repeating what I said earlier-that I congratulate him on changing the way we look at these things compared with the 10 years that preceded the last White Paper. The trouble was that we were working on the basis of a White Paper without any figures-nearly all the dates and targets had been removed, with only the 50-year one left. We therefore had a situation in which nobody could have their feet held to the fire because nobody had a target that was serious and could be kept to. I honour the right hon. Gentleman very much-this may be embarrassing for him-because he has changed the whole atmosphere and we can now have a proper debate about energy in a way that was not possible for a long period. He is suffering for that, and so are the rest of us.
Starting on a personal level, I recently had a problem in my constituency that arose because somebody on the Army base did not fill a tank, which meant that a lot of my constituents did not have any gas. That was nothing to do with a national problem or any of the arguments that we have heard today, but simply a local problem. When we talk about energy security, let us realise that there are some local issues, as well as national ones, and that they are very serious for people.
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