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27 May 2010 : Column 328

That means that we must look to another way for those pockets of deprivation that remain. I hesitate to call it a third way, but it is in the Queen's Speech: it is, of course, localism. It means giving power back through the rafts of politics and politicians to the local community and encouraging people who live in those wards to take much more responsibility. It means giving them the freedom to take responsibility for finding the solutions to their problems. It may well be, having sorted out the public finances and helped rebuild a stronger society, that the Government's success will ultimately depend on the genuineness of their commitment in practice to delivering localism to our communities.

I welcome the Queen's Speech.

12.56 pm

Dr Alan Whitehead (Southampton, Test) (Lab): Today's debate specifically relates to the coalition's proposals for energy and climate change as well as for environment, agriculture and rural affairs. What is striking about the coalition document is the number of things it contains that the previous Government had done, planned or set under way and that are now claimed to form the coalition's targets and aims for environment and rural affairs and, indeed, energy and climate change. In a sense, that is reassuring because a key observation that should be made is that the arguments about climate change cannot call upon the Greek defence. A similar argument cannot be made that less should be spent on countering it because particular circumstances have arisen recently. The timetable for the measures that need to be put in place to ensure that we can move to a low-carbon economy and reach the targets that have been agreed universally in the House for reducing carbon emissions remains in place. The time available to make those changes also remains the same. Superficially, therefore, having the aims in place is an important part of the recognition of the urgency of the matter.

We need, however, to ask questions about the detail of the targets and consider whether the commitments in the coalition document provide the reassurance that we will move with the speed that we need on not only climate change but on renewing our energy sources, ensuring that energy efficiency is uppermost in the conduct of our building and refurbishment programmes and progressing with the energy economy.

There are a number of important commitments in the document, including the aim of rolling out smart grids and smart meters over the next few years. That follows from the previous Government's commitment to rolling out smart meters within 10 years and to moving towards much smarter management of the national grid system. Indeed, there is an urgent need to renew and strengthen the grid system so that it can deal with the changing nature of how energy enters and is redistributed from it. It will be a very different grid in future. In the past, essentially, a number of large power sources delivered energy in one direction towards business and households. A new grid that takes energy from local and renewable sources and distributes it in an entirely different fashion is an essential element of that renewal process.

However, we must face up to the fact that those changes will cost a large amount of money to introduce. It is up to the incoming Government to express early
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their commitment to the idea that those changes essentially involve front-line services as far as the future energy economy is concerned. The lights must stay on, but our economy must be on a much lower-carbon footing. The question we need to pose for the new Government at this early stage is this: is there a commitment to funding, underwriting, and ensuring the success of those new ways of delivering energy for our economy?

Similarly, I welcome the commitments on pay-as-you-save and energy efficiency. The proposed new energy Bill and the coalition agreement emphasise such arrangements, but again, they will cost money to underwrite and underpin. It is not sufficient simply to say that Tesco or B&Q or another body will come along and sort out the question of energy efficiency in homes and the necessary investment. Rather, it will be necessary to set out the financial programme to underpin the commitment on energy efficiency in homes, and to say how much that will cost and what the return on the investment will be.

We must invest in more than passive energy efficiency in homes. If we are to move toward the targets-I assume that the new Government wish to maintain them-it will mean radically increasing the energy efficiency of homes so that we can save energy in the future. It will also involve ensuring that new homes are zero-carbon by 2016, which was the previous Government's target. It will not be possible to achieve that change simply by introducing passive energy efficiency measures for homes. Among other things, if we are to achieve those targets, we will need to introduce microgeneration, energy-producing devices both to new build homes and by retrofitting. If, as was recently suggested, the pay-as-you-save measures will apply only to energy efficiency in homes and not to microgeneration, a key way of achieving those targets will be lost. It is therefore essential that early commitments are made to ensure and underwrite the introduction of microgeneration devices.

The previous Government gave key undertakings on feed-in tariffs, small-scale generation and, as important, the renewable heat incentive, which will ensure the rapid development and deployment of renewable heat sources in this country. My eyebrows were raised by the statement in the coalition document about a full roll-out of a feed-in tariff in electricity. That might have been a mistake, but if it was deliberate, the suggestion is that there is no commitment on renewable heat, which is a way in which to ensure that renewable energy moves forward rapidly in the domestic sector. I will be delighted to be proved wrong, either in an intervention from someone on the Government Benches now or later in the debate. I hope that it is not the Government's intention to change or resile from renewable heat arrangements and underwriting, and that the finance and commitment are in place. I hope that I am told later that my suspicions about what the document includes will not be borne out.

Finally, I come to the curious statement in the coalition document on nuclear power. I have considerable sympathy for the position in which the Energy and Climate Change Secretary finds himself, because I too do not think that new nuclear power is a good idea for the future, as I have said in the Chamber on a number of occasions. However, I am clear that there should be a new nuclear programme and that will need to be planned, because it
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is no longer good enough simply to leave the replacement of aged energy supply and the development of new energy to the market. Left to its own devices, the market will probably ensure that we have a new generation of gas-fired power stations, which will ensure that we go way off our climate change targets. If the sole contribution of the Secretary of State to the nuclear debate is simply to say, "Well, someone may come along and build a nuclear power station," they may well not do so. Without other plans, we will simply get a new generation of gas-fired power stations, which would be catastrophic for our approach to climate change.

Following that logic, the Energy and Climate Change Secretary must take positive action on new nuclear power. If the national planning statement is to be rewritten, he must agree on sites for new nuclear power stations. If he does not do so, there will be no such power stations. His position urgently needs to be made clear to ensure that when it comes to planning the new energy economy, there is clarity rather than muddle and chaos.

1.8 pm

Malcolm Bruce (Gordon) (LD): It is an honour and a privilege to speak under your presiding eyes, Mr Deputy Speaker, and I congratulate you on your new role.

I welcome the Queen's Speech and the commitments to a green economy, which is essential for the restructuring of our economy, which has been so dependent on the financial services that have failed us so badly. However, I thought I might give the House the benefit of my personal history of engagement in energy issues. I worked as a young research and information officer for the North-East Scotland Development Authority in Aberdeen in the 1970s. At that time, it was struggling to find 16,000 new jobs for the area simply to stabilise the decreasing population. I doubt whether we would have succeeded in that but for the serendipity of the discovery of huge quantities of oil and gas in the North sea.

There was an unseemly scramble to get the oil and gas into production against the background of the first oil crisis and the foundation of the Organisation of Petroleum Exporting Countries. It also coincided with the first miners' strike and the three-day week. A few weeks after his defeat as Prime Minister in the February 1974 election, Ted Heath came to Aberdeen, and I and others briefed him in our offices about the scale of development activity in oil and gas that was taking place in the North sea. He was duly amazed. I am not sure that he appreciated it when I told him that had he come before the election he might still have been Prime Minister, but it certainly brought home to him that we needed a strategy. The value of coal, as well as of oil and gas, had been dramatically changed by the OPEC crisis.

People may remember that at that time there was lively discussion about the need to reduce the industrialised world's dependency on oil and gas, while trying to maximise production from our own resources, where they had been discovered. I wrote pamphlets on the subject with Ross Finnie, who distinguished himself for eight years as the Environment Minister in the Scottish Administration. We called for a drive for greater energy efficiency and for policies to develop alternative technologies using smaller-scale generation, moving away from
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dependency on fossil fuels. Somehow, as the oil price fell and the crisis diminished, all those high ideals fell away, and I find it extraordinary that 35 years later we are still talking about how we might implement them to any significant degree.

As someone who had, and has, no visceral objection to nuclear power, I became increasingly aware that far from being the cheap option that we were promised, nuclear power was economically unaffordable and we had been lied to big time by the industry. However, the problem of trying to develop alternatives was made much worse by the fact that the Atomic Energy Agency was put in charge of supporting and evaluating alternative renewable energy. I might say to the shadow Secretary of State that that too was like putting a vegan in charge of McDonald's, because the result-predictably-was that if anything looked as if it might become remotely commercially viable, the plug was pulled on further development. So, although Britain developed the first large-scale wind turbines, in shipyards on the Clyde, we had no policy for deployment. It was therefore left to the Danes, who did have a policy for deployment, to become world leaders in that technology. I do not know if Salter's ducks would ever have generated electricity commercially from marine sources, but I know that the technology was never allowed to prove that it could, because the AEA was determined to ensure that there was no alternative. I wonder whether we are being subjected to the same propaganda today.

At the time it was also argued that we needed large generation stations to power the national grid and, given its format, we probably did. But even then it was clear to me that we should be thinking of moving to smaller-scale generation. Over the years, high-energy manufacturing-of which we have less in any case-has increasingly provided its own power generation as an integral part of its operation, requiring only top-up flows in and out of the national grid. So when I was first elected to this House in 1983 I joined what was then known as PARLIGAES, the parliamentary group for alternative energy studies, and I am currently a vice- chair of its successor, PRASEG or the parliamentary renewable and sustainable energies group. They are not very snappy acronyms, but they are important all-party groups.

All of this predated any inkling of the threat of climate change. It was about reducing our dependency on fossil fuels and finding cleaner, more diversified and more sustainable ways to generate energy. We have wasted at least 30 years getting to this point. As a young researcher in 1972, I compiled the first directory of oil and gas operators and supply companies in north-east Scotland, which included an estimate of the number of people employed and a forward job projection. Interestingly, at the time there were several dozen companies employing a few hundred people. I projected that the number could rise to as many as 5,000, with the same number of jobs indirectly generated, and I was accused of gross exaggeration. Today, the Gordon constituency sustains more than 65,000 oil and gas-related jobs. They are not all based in the constituency, but they are payrolled out of it, and the industry employs an estimated 450,000 people across the UK.

As I said in my intervention on my right hon. Friend the Secretary of State, I was very pleased that last week, in his first week in office, he visited the All-Energy
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exhibition in Aberdeen, covering companies engaged in all aspects of renewable energy technology. He saw for himself the impressive emerging technology for offshore and marine renewable energy, and the useful overlap between the technology and systems required by oil and gas and those required by renewables in an offshore environment. Installing a platform, sub-sea connectors, pipes or cabling requires the same equipment and engineering expertise, and there can be a crossover. The important point is that if we can run the second generation of North sea development-which probably has as much oil and gas again to be extracted, although in much more challenging conditions-alongside an expanding offshore renewable industry, we could benefit from huge economies of scale and efficiency by using the same equipment.

Mr Graham Stuart: My hon. Friend is, as ever, making a powerful speech. Not only do we have renewable energy and oil and gas, but carbon capture and storage. We have the skill sets and the ability to store carbon, and I hope that the failings of the previous Government will not mean that we lose the opportunity to be a world leader in that area, because it could produce jobs and wealth if we can sell that technology instead of having to buy it from others.

Malcolm Bruce: My hon. Friend makes a pertinent point. As I have said, we missed the boat 35 years ago, and we must not do so again. There is a real risk that that might happen, if we do not get the policies right.

Simon Hughes: The benefit for apprenticeships and jobs is also manifest. People who are training to work on offshore oil rigs understand that in their careers they might work on renewables or carbon capture and storage, so we have to see this area as an apprenticeships, skills and jobs opportunity as well as an energy opportunity.

Malcolm Bruce: I completely agree with my hon. Friend.

I hope that the Secretary of State took away several points from the exhibition. Exciting as the development of renewables is, it will not replace oil and gas soon in investment, jobs, tax revenue or exports. That will take some years-but if we run them in tandem, we can build one up as the other declines. Renewable technology will require a number of push-and-pull measures to realise its full potential. For both of them, we require substantial onshore investment in ports and transport infrastructure. As a representative of part of the city of Aberdeen, I am concerned that our infrastructure is not appropriate for a city that claims to be the energy capital of Europe. Our promised bypass has not happened, our commuter rail service has been postponed indefinitely, our city finances are in a considerable mess and we have the two most underfunded councils in Scotland, with money being diverted to other parts of the country. In those circumstances, my message to the Secretary of State-and my right hon. Friend the Secretary of State for Scotland-is that it is the UK Government who stand to lose if that infrastructure is not right, because some of the investment will go out of the UK altogether.

I welcome several of the proposals in the Queen's Speech to promote marine energy and to support home energy efficiency, which can help move us away from
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dependency on the national grid and huge power stations, and make microgeneration genuinely part of the national grid, rather than just a domestic alternative to current generation. As I keep asking at every event I attend, when will we get micro combined heat and power? What steps will be taken to provide an easy way for people to take up feed-in tariffs? I defer to the point made by the hon. Member for Southampton, Test (Dr Whitehead) about renewable heat, which is part and parcel of that issue. What can be done to help people with hard-to-heat homes-a question asked earlier by my hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes)? We have many such in Aberdeen, and they are expensive and difficult to tackle.

I would like to address the international dimension. I am a vice-chairman of GLOBE UK and GLOBE International, which played an invaluable role in testing potential policies and negotiating positions in the run -up to the various climate change summits. In fact, in advance of Copenhagen, GLOBE clearly identified China's concerns, through the climate change dialogue that we run.

Mr Graham Stuart indicated assent.

Malcolm Bruce: My hon. Friend acknowledges that point.

Unfortunately, had they been properly addressed, we might have mitigated the fallout in Copenhagen. GLOBE gave the UK Government the opportunity to ensure that what happened would not happen, and to see that Europe played a part in the process rather than being marginalised, so GLOBE has an important role to play.

It is unreasonable for developed countries to tell developing economies that they cannot enjoy the same development opportunities that we did-development that led to the climate danger. It is also realistic to recognise that China will not give up its commitment to double-digit growth, which after all has helped 400 million people out of poverty, although hundreds of millions are still left behind. It is also right to acknowledge, however, that China knows the damage that pollution and climate change are causing for its people and environment, and wants all the help it can get to grow sustainably. That is why I and the International Development Committee, which I previously chaired, do not want an abrupt end to the UK's aid programme for China. It is on the climate change front that we can work together most constructively. We have to give China space, share technology and innovation and recognise that many of the poorest countries are the victims of climate change, not the perpetrators. As the Secretary of State for Energy and Climate Change has already acknowledged, China may well get ahead of us if we do not participate in initiatives with it, so it is in our interests to partner it as much possible.

Poorer and developing countries must be helped to adapt and mitigate the impact of climate change, be given the means to grow sustainably and not find the anti-poverty aid hijacked to fund climate change measures. The previous Government put in place a 10% limit on money being diverted in that way, and I hope-I will hold them to account-that the current Government will not weaken that commitment. Britain can lead the
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world on climate change policy, and in many ways, despite the criticisms that have gone back and forth across the House, it is fair to say that we have made significant progress, although it has been more about ambitions than delivery, so we now have to deliver.

Only if our targets are turned into policies for practical action can we demonstrate by our results and developing technology what we can offer the world. I would suggest-if I can put it constructively-that we should build on the initiatives of the previous Government and recognise that we can take them forward. If we do that, we will deliver credibility and prestige abroad, and jobs and exports for our domestic economy, and it will give us a new dynamic sector to take up the slack left by the abuses that damaged so much of the financial services sector, which I suspect will never make as big a contribution again. The lesson is quite simple: we can help save the world from climate change disaster, but only if we first save ourselves.

1.23 pm

Mr Clive Betts (Sheffield South East) (Lab): I would like to comment on issues of particular importance to my constituency, now named Sheffield South East. It is virtually the same constituency as Sheffield Attercliffe, but the Boundary Commission decided for some reason to give it a slightly less attractive name, in my view.

First, I want to talk about the situation at Sheffield Forgemasters, which has already been referred to in interventions both by me and by my right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett). It is clear that a new nuclear programme and industry will be built in this country. There is majority support on both sides of the Chamber. It is equally important that, if we build this new nuclear industry, as much of it as possible should be built by firms in this country, with British workers getting the jobs. Sheffield Forgemasters is a wonderful success story. The firm was owned by an American company virtually on the brink of collapse. It became a management buy-out when the previous Government, with great ingenuity, used the pension legislation that they had introduced to support not the pensions schemes of people in a bankrupt company, but the pensions deficit being transferred from the American parent company to the new management buy-out company, to enable the buy-out to take place.

Since then, those jobs have been secured, 17 new apprentices have been taken on, the company has full order books, with most of the orders going abroad, and now it has seen the potential to invest in a massive new forging press-one of the biggest in the world-to produce parts for nuclear reactors that only two other companies in the world can produce. If this forging press is not built at Sheffield Forgemasters, that work will go abroad; there is no alternative. That is quite simple.

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