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Lord Richard: My Lords, with the leave of the House, perhaps I may say a few words in reply.

I am grateful to the noble Viscount for his general support for the Bill. Constitutionally and aesthetically, I am not inclined towards hair shirts. I do not think that they would sit well upon my chest. They would certainly be scratchy and rather unpleasant. I am not sure whether I am supposed to wear the sackcloth and ashes together with the hair shirt or whether those come separately, but I take the point that the noble Viscount makes.

As regards his other point, which was reiterated by my noble friend Lord Howell, I shall make sure that the representations and the inquiries made to this House get on to the appropriate desks. I shall ensure that they do so reasonably quickly. I hope that we shall receive a response as a result of this debate, also fairly quickly. I commend the Bill to the House.

On Question, Bill read a second time; Committee negatived.

Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 14th October), Bill read a third time, and passed.

Fossil Fuel Levy Bill [H.L.]

4.4. p.m.

Lord Haskel: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.--(Lord Haskel.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Murton of Lindisfarne) in the Chair.]

Clause 1 [Supplies on which levy charged]:

On Question, Whether Clause 1 shall stand part of the Bill?

Lord Ezra: I had originally intended to move the amendment as printed on Sheet HL Bill 15(a). The purpose of the amendment was to use the opportunity presented by the present Bill to extend the sources of electrical power to which moneys raised via the fossil fuel levy could be applied by order. I had thought that this would be a reasonable amendment to make in view of the fact that the uses made of the fossil fuel levy had previously been modified in the Environment Act 1995. However, the Public Bill Office has advised me that in

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its opinion the present Bill is so narrowly drawn that my amendment would be out of order. It did not consider that the amendment introduced into the Environment Act 1995 was a relevant precedent because that legislation was more widely drawn. It was suggested to me that by opposing the Question that Clause 1 stand part of the Bill, I should be able to make the points I had in mind and obtain the views of the Committee, as well as getting a response from the Minister. I wish to make it clear that I am not opposed to the present Bill. I support it and would like to get it through as quickly as possible. However, I have these points to make which I now wish to do.

The Government have, rightly in my opinion, made a commitment to reduce carbon dioxide emissions by 20 per cent. by the year 2010. This is very ambitious and if it is to be achieved much has to be done quickly. One of the means of doing so is to make use of the non-fossil fuel obligation to provide a stimulus to projects which can reduce such emissions and improve energy efficiency. However, as at present defined, the NFFO does not support heat producing technologies such as solar heating, community heating, anaerobic digestion and other similar processes. It does not support any general investment in energy efficiency. It does not support combined heat and power (CHP) other than when it is powered by energy from waste. It does not support solar photovolatics. It does not support cleaner coal technology. Yet all those will be vital to the achievement of an effective policy to tackle climate change.

The purpose of my amendment was to extend the system to include other projects of this nature where substantial savings could be made but some assistance was required to get the projects going.

In proposing to put forward the amendment, I had in mind in particular combined heat and power, where conversion efficiencies of up to 80 per cent. can be achieved. At present there are CHP schemes in the UK with a total capacity of around 3.5 gigawatts contributing only some 6 per cent. of the electricity supplied. The Government have proposed a target of between 10 gigawatts and 17 gigawatts by 2010--that is, three to five times the present amount. This will require great effort. I submit that the amendment that I had in mind would have helped.

I also had in mind cleaner coal technology, which would achieve substantial reductions in emissions and improved efficiency in the use of coal. This would give coal, which has suffered so much in recent years, a fighting chance to compete in the next century and not to be increasingly ruled out on environmental grounds. In the Second Reading debate on 18th July, the Committee will recall that the noble and learned Lord, Lord Fraser of Carmyllie--I am delighted to see him today--referred specifically to this issue and to the case for the use of the levy fund to,

    "be extended to support the research and development of cleaner coal technologies".--[Official Report, 18/7/97; col. 1145.]

The proposed widening of the NFFO arrangements would of course be enabling. It would not oblige the Secretary of State to assist any particular project but would enable him to do so from a wider range of choices

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than is at present possible. It had seemed to me that the Bill was an excellent vehicle for providing the Secretary of State with those wider powers, so that an increased impetus could be given to projects which could contribute to the carbon dioxide target but which required some degree of assistance to get off the ground. If separate government legislation was required to achieve such a widening, that could introduce a delay of something like two to three years, bearing in mind the pressure of government business in the present Session.

A whole range of measures need urgently to be put in place if the Government's target is to have any chance of being met. Widening the scope of the NFFO arrangements would be one of them. Indeed, that is specifically mentioned in the recently published report of the Government's Energy Advisory Panel. I therefore put it to the Committee, and specifically to the Minister, that if on technical grounds the amendment that I have in mind cannot be incorporated in the present Bill, some other way should quickly be found of achieving the objective. That means finding an alternative legislative route by which a widening of NFFO arrangements can be made.

Lord Mason of Barnsley: I support the noble Lord, Lord Ezra, both in his initial amendment, which I am sorry did not pass the Table, and in this one, which he has devised in order that we can discuss the matter afresh.

I understand that the Bill is a technical measure to ensure that future support for the Government's programme of renewable power generation technology, such as wind and wave energy etc., will be levied from nuclear-generated electricity as well as from fossil fuel electricity.

One might ask: what of support for other energy efficient technologies, such as combined heat and power and clean coal technologies, to which the noble Lord referred. My noble friend realises that the Government have a commitment to reduce the United Kingdom's CO 2 emissions by 20 per cent. by the year 2010; and energy efficiency must play a part in achieving that objective. In this regard, is there not a need to support clean coal demonstration power stations if the United Kingdom is to benefit from the security of supply and sustainability that United Kingdom coal reserves can offer. Only with clean coal technology can we meet our international obligations--and, importantly, help to sustain our coal industry.

The United Kingdom has now only 20,000 people directly employed in pits. The coalfield communities feel that they have already suffered too much misery, despair and mass unemployment due to Heseltine's cruel cuts in the pit closure programme. Now the industry is looking to this Government; it seeks new ideas from New Labour--renewed hope for our coalfield areas. Is the Minister aware that the Bill could be amended to give coal an opportunity to play its role in reducing CO 2 and other emissions, and also advancing clean coal technology by benefiting from the fossil fuel levy?

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Is the Minister further aware that there is now much unease in the coalfield areas? A lot of uncertainty is arising again about the future. He must be aware that a mass lobby is now being generated by the Coal Field Community Campaign, the Confederation of United Kingdom Coal Producers and Labour Members of Parliament, especially those in coalfield regions. I was pleased to note that during the course of the previous debate the noble and learned Lord, Lord Fraser of Carmyllie, also gave the industry his support. If the Minister could expand the Bill, as the noble Lord, Lord Ezra, and I have suggested, he could very well make a start, even today.

4.15 p.m.

Lord Howie of Troon: I shall be brief as there is little to add to the remarks already made. I support very strongly the remarks made in opening by the noble Lord, Lord Ezra. The fossil fuel levy was always far too narrowly conceived, and it paid too much attention to rather glamorous ideas such as wind energy, regardless of the minimal effect that it is likely to have on our requirements. There is no doubt that the wide range of technological improvements outlined by the noble Lord, Lord Ezra, should be supported with maximum effectiveness by the Government.

It is ironic that the most important renewable energy source is not an energy source at all--it is the efficient use of energy that would do more to save energy than any number of windmills or whatever we care to introduce. I am happy to endorse everything that was said by the noble Lord, Lord Ezra, and by my noble friend Lord Mason. I hope the Government will pay great heed to the comments made in this debate, especially by the other two noble Lords who took part.

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