"The carbon price is not a subsidy for new nuclear, it is to drive forward low carbon investment."
An argument can be made that that is the case, but it is also undoubtedly true that new nuclear will be the main beneficiary of such a policy. It will have the effect of driving up, perhaps very substantially, the price of energy produced by fossil fuels, thus making nuclear much more attractive, which is why the nuclear industry is the cheerleader for this particular policy. In his speech, the hon. Member for Glasgow North West said that without nuclear power, we faced the prospect of very high energy prices, but if this policy is pursued, we may face very high electricity prices across the board with or without nuclear power.
In effect, the introduction of a floor price would be fixing the market, which I thought would have been anathema to free market Conservatives. It will no doubt be argued that that is a move that will help all other low carbon emitters, and that there are already many subsidies on different kinds of renewables. That point was also made by the hon. Member for Glasgow North West. Some of that is true, but other forms of renewables are new technologies that are receiving help to get them to a take-off postion in the market. The previous Government's proposals to stagger renewables obligation certificates recognised that some of them had almost reached that position.
Nuclear is not a new technology; it is an old technology that has already had a shedload of money from the taxpayers. I am old enough to remember when it was said that nuclear power would be too cheap to meter. That did not happen, and we have seen the vast amount that will be needed to deal with the legacy of waste, now and far into the future.
It seems, therefore, that rather than making private investors take the risks, it is again the taxpayer who will do so, and I would be interested to know whether the Minister can give us more details on how the policy of the floor of the carbon price is to work. For example, when and how is it to be introduced? I noticed that The Independent suggested that it will be introduced when new nuclear power stations would be up and running in 2025. Will the policy apply only within the UK if he is unable to persuade the EU to adopt such a position, and how will that work with the competition laws within the EU?
Finally, I ask the Minister to confirm that the coalition Government remain signed up to the respect agenda with the Scottish Government that the Prime Minister talked so much about, and that there will be no attempt to amend the powers of the Scottish Parliament in that area so that we might continue to be nuclear-free.
As I stated at the outset, the SNP remains opposed to new nuclear power stations. We believe that Scotland has great potential to be the green powerhouse of Europe and that the determination of all three Unionist parties to pursue new nuclear power stations is an horrendous mistake that will cost the taxpayers dearly in the future.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I congratulate the hon. Member for Glasgow North West (John Robertson) on securing this debate and on putting his case for nuclear power, as he did so many times in the previous Parliament. As he recognises, one of the legacies that this Government will have to address is the previous Parliament's lack of momentum in decarbonising electricity generation in the UK.
The hon. Gentleman did not address my specific question about nuclear power's global contribution. Although nuclear power will be embraced by some countries, it will not be the solution to providing a low-carbon future across the world. Therefore, it is very important for us to develop other low-carbon energy systems, such as carbon capture and storage, especially if they can be retrofitted in China. That will have a far greater impact.
John Robertson: I thought that I had addressed the hon. Gentleman's point; if I did not, I apologise. As we speak, power stations are being built around the world. Still more will be built when people see the low-carbon output-it is practically nil-of nuclear power stations.
The hon. Gentleman is absolutely right. China is the market that we have to get into, and CCS would help us do that. Nevertheless, the case has to be proven and the technology has to be there, and it is not there at the moment. The hon. Member for Angus (Mr Weir) said that nuclear power is an old energy. It is, but it is also a tried and tested energy that can be relied on.
Sir Robert Smith: Historically, the nuclear industry has required public subsidy for the purposes of trying and testing. Even the great white hope in Finland, which was meant to show how the market could deliver, has turned out to need an underpinning of public subsidy. I recognise that the carbon market is an important way of incentivising whatever means of low-carbon electricity generation comes before us, and anything that can be done to get a better price for carbon will be an important part of driving forward alternative energy supplies.
I must declare an interest here as a shareholder in Shell. I also represent the north-east of Scotland, where the oil and gas industry is extremely important. The hon. Gentleman said that he was worried about us relying on gas. This Government will have to address one of the legacies of the previous Government and make sure that we maximise our own gas production, because in that way we will reduce any immediate worries about having to rely on imported gas.
Moreover, the Government must recognise that the big change resulting from the near-decoupling of the oil and gas markets following the discovery of the means of producing shale gas-a new means of producing gas-is altering the whole concern about a further dash for gas. Gas is one of the cleaner fuels. Although it produces CO2 , it produces less than other fuels. Therefore, it can play an important part in our electricity mix without too much concern.
I hear what the hon. Gentleman says, and I agree with him in many ways, but does he not accept the point that raising carbon prices will affect the cheapness
of gas? It will substantially push up the price because gas is a fossil fuel and will be hard hit if we put a floor on the carbon price to benefit nuclear power.
Sir Robert Smith: What the hon. Gentleman has to accept is that we want a low-carbon future. Can he suggest a mechanism other than putting a price on carbon? The EU has embraced the idea of putting a price on carbon as the only means of producing a low-carbon future for the European Union.
Mr Weir: The EU has not accepted a floor price for carbon, as is proposed by the coalition Government. So we may have a position in which the UK is the only country trying to impose a floor price for carbon while remaining within the emissions trading scheme. I cannot see how that is workable.
Sir Robert Smith: That is why we have to convince the EU that, if it is going to deliver on a low-carbon agenda and if it has embraced the ETS, it will have to put a floor on carbon to make the ETS deliver the treaty commitments and other commitments to having a low-carbon future.
The hon. Member for Glasgow North West said that the world is facing the major problem of there being too much carbon dioxide going into the atmosphere. There is no way of not putting CO2 into the atmosphere unless we are willing to pay the costs of producing alternatives to CO2. Nuclear is one alternative, which we do not think is the right alternative, but marine renewables also need a floor on carbon-all low-carbon energy systems, if they are going to take off and be delivered, will need a floor on carbon. That is the only way. The EU has decided to embrace the ETS and unless we actually make the ETS work, we will not deliver on all our commitments.
Graham Stringer (Blackley and Broughton) (Lab): I think that this debate about the European ETS is at the heart of European energy policy. Would the hon. Gentleman go as far as I would and say that the introduction of that scheme has been a catastrophe, that the low level of carbon is actually subsidising polluting industries and that it would be better to start again?
Sir Robert Smith: The EU cannot keep inventing new schemes. I think that we need to make the ETS work now that we have embraced it and we actually need to deliver it, because at least it uses the market to try to come forward with the best and most efficient solutions for achieving the low-carbon future that we need to embrace. So that is an important point.
There is another situation with nuclear. When we on the Energy and Climate Change Committee were looking at the planning statements, it struck me that the long-term solution for nuclear waste may well be a deep repository, but the plans now are to keep the waste on site for a considerable time. Therefore, all these communities must be managed for a long time, to protect those waste sites. They are all in low-lying floodplains, so we had this vision of little islands of nuclear waste being protected
by flood defences, as the sea level rises and the legacy of the new nuclear generation is left for future generations to pick up.
So it still seems a major challenge for this country to go down that route of nuclear if we can embrace other technologies, such as carbon capture and storage and marine. We have a massive tidal resource around our coastline, which we have failed to tap and failed to launch. Those of us who are committed to marine renewables and the alternative technologies have been frustrated about the legacy of so many resources going into nuclear. That has diverted resources away from what could have been another great export industry and a very substantial source of low-carbon energy for this country, and it does not pose the risks of pollution that we would still face with nuclear.
Simon Hughes: I just want to make one other point. My hon. Friend has huge experience in all of these areas. However, the statutory body that advises on waste and nuclear waste, and that gave the official advice to the last Government, has not said so far that there is a safe method of disposing of nuclear waste. Yes, it has accepted methods of storage of nuclear waste, and the communities where that waste is produced and stored understand that, but there is not yet an agreed safe method of disposing of nuclear waste. Going ahead with a programme of new nuclear without a safe method of disposal being objectively agreed would be another folly.
I am conscious that other Members want to speak. As the hon. Member for Glasgow North West said, we have the serious challenge of ensuring that the lights stay on. We need electricity to be generated. There is also the serious challenge of producing a low-carbon future. We need long-term investment, and we need the incentives that have been mentioned. I think that a price on carbon is an important incentive to low-carbon energy industries and that nuclear is not the great white hope that will solve the problem, although it is portrayed as such.
I also think that we need to embrace marine renewables and carbon capture and storage, and ensure that we achieve the most effective gas production from our own gas resources before we waste them and leave them locked in the ground. There is a low-carbon future in which we can keep the lights on, but I do not think that nuclear is the means of achieving that future.
Dr Alan Whitehead (Southampton, Test) (Lab): I congratulate my hon. Friend the Member for Glasgow North West (John Robertson) on securing this debate. It is, of course, a debate about Government policy on new nuclear; we are not talking about the overall advisability of going down the nuclear route. My view remains that nuclear power is not renewable. We have no nuclear fuel in or around the UK and I have my views on that subject. However, Government policy on new nuclear is the important issue that we need to concentrate on right now.
In that context, the Minister has an enormous responsibility on his shoulders. I, too, have a great regard for him and for his skills in tackling these matters. However, he will need at least the skill of those responsible for putting in and removing the nuclear cores from Three Mile Island to keep the coalition on track as far as its policy is concerned, because although the provisional wing of the coalition is in for this debate, the official wing is apparently locked into Government policy on nuclear, in respect of the decisions that will need to be made as far as the Department of Energy and Climate Change is concerned.
Of course, we have clarity about what those decisions will consist of-indeed, we had that clarity in a speech that the Minister made to the Nuclear Industry Forum very recently. In that speech, he stated:
"We will keep the fast-track process for major infrastructure, but planning decisions will be made by Ministers thereby ensuring democratic accountability".
There is a national policy statement on nuclear. Incidentally, the new Government are going to take that statement apart and put it together again, which I think will ensure further delays in the process. Among all the national policy statements that have come out, the statement on nuclear is unique in that it is site-specific. We have already heard mention this morning of the inclusion or exclusion in that statement of a particular site at Dungeness; in total, 10 sites have been identified in the statement.
If that is to happen as far as those sites are concerned, the decision taken by the Minister will mean that he will have to frank each of those sites and so will, among other things, give an enormous use value to those people who are then commissioned to develop them. The Minister will have to take a positive decision; he cannot remove himself from it.
As my hon. Friend the Member for Hartlepool (Mr Wright) mentioned, we will therefore have the spectacle of an agreement that appears to suggest that the Liberal Democrats can maintain their opposition to nuclear power while permitting the Government to bring forward the national planning statement for ratification. But that same Minister, in agreeing to that national planning statement, will specifically have to frank those sites, thereby allowing those particular nuclear stations to be developed.
Mr Weir: Does the hon. Gentleman agree that it seems ludicrous that, under this system, the Secretary of State for Energy and Climate Change can abstain on a vote that is being brought forward by his own Department to push forward nuclear energy?
Dr Whitehead: I was just going to reflect on that issue very briefly. As the Minister mentioned in his recent speech to the Nuclear Industry Forum, these decisions will come before Parliament. Presumably, therefore, the Minister who has made the decisions will be in the position of abstaining during votes on them. That will be an interesting piece of choreography, if the policy is to go ahead.
In his recent speech to the Nuclear Industry Forum, the Minister also emphasised that there will be no cost to the public purse as a result of the new nuclear programme. We need a little more clarification of what that actually means. In the past, one of the reasons why
potential builders of nuclear power stations said that they might go ahead with nuclear build was that their clear underlying view was that they really did not believe that the new proposals would present no cost to the public purse.
It is one thing to say that there should be a floor price for carbon-that would not be a cost to the public purse, but generic assistance for all forms of low-carbon energy-but there is also the question of subsidising or giving guarantees of last resort on insurance, waste and storage, and of giving assistance on how all that works. Those are subsidies. If the Government are saying out of one side of their mouth that there will be no subsidies but out of the other side that, actually, there will be subsidies in several areas, that may be the way forward that they wish to assume as far as their policy is concerned. However, if they really do mean that there will be no subsidy from the public purse, there will also be no timetable for the build of new nuclear.
That is the crucial issue that we need to face in respect of future policy. If there is no subsidy at all from the public purse, a company may come forward and build a new nuclear power station, two or three companies may come forward and build two or three new nuclear power stations, or perhaps no one will come forward to build a new nuclear power station. We cannot easily afford that uncertainty, given our energy supply situation.
The previous Government's timetable for the arrival of the first new nuclear power station was 2017-18. My hon. Friend the Member for Glasgow North West mentioned that potential date today. Interestingly, a policy document issued in 2007 by the then Department of Trade and Industry, "New nuclear power generation in the UK: Cost benefit analysis", gave a different date-the early 2020s-for the arrival of the first new nuclear power station. Indeed, several industry analysts and others suggest that a realistic date is more likely to be in the mid-2020s.
That is important because, by that date, some 8 GW of coal-fired power stations, 3 GW of oil-fired power stations and 7 GW of nuclear power stations will have gone out of commission-for various reasons, including the large combustion plant directive, the age of the plant and the difficulty of maintaining or extending the life of nuclear power stations. That capacity will definitely be out of the system, so the question is what we do in the meantime to replace it. If no nuclear power stations are likely to come on stream until the mid-2020s, it will have to be replaced by other means.
Personally, that is not a source of regret to me, but there certainly is an argument that, because of the long-term scale of the planning, if one were to develop a range of new nuclear power stations to replace power stations as they ran down, replacement should be on that basis: as they run down. However, successive Governments have not taken that view on nuclear power; it was not only the previous Government for whom it was not an issue. However, we are in a
position where like-for-like renewal would mean an enormous fleet of new power stations coming on stream at an early stage.
If that does not happen, base-load power, which is so important for our energy economy, is likely to be replaced by other means such as carbon capture and storage-fitted coal-fired power stations or-the Committee on Climate Change recently wrote to the Government to emphasise this-CCS-fitted gas-fired power stations. That would then be a new generation of base load, on the back of which new nuclear power would have to compete.
If new nuclear power has not been planned in any way, it will have to compete with that new form of base load, and whether it can compete on price for its power will be entirely determined by whether there is a subsidy for new nuclear power or whether there is some form of carbon pricing that enables nuclear power, at the point at which it comes in, to compete effectively against other forms of power. The time scale is crucial as far as new nuclear power is concerned.
That is the central issue for this country's future energy policy. The challenge that we face is to keep the lights on, to replace an enormous amount of generating capacity-not just base-load, but other forms as well-and to ensure that that generating capacity is low carbon for the low-carbon economy that we must move towards. Above all, that needs planning. Planning is needed to ensure that that happens over a period of time.
For the new Government to announce a policy that says, in essence, that there will be no planning as far as new energy supplies are concerned seems perverse, given the imperatives ahead of us. Whether we plan to have a fleet of CCS-fitted power generators, large-scale renewables-wind, wave and tide, and large deep-sea wind arrays-or a new generation of nuclear reactors to provide energy, we have to ensure that there is planning at some stage.
I am concerned that the new Government's announcements in their early days about how they will manage the energy economy, and what they are doing in respect of national policy statements, the Infrastructure Planning Commission and nuclear power, appear to be moving away from ensuring that we plan our energy economy so that we can keep the lights on for the next 50 years.