The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Truscott): My Lords, power station investments are determined by the market and it is the role of government to establish a market framework that ensures that electricity generation is both secure and low carbon. The main market instrument for achieving this is carbon pricing, currently through the EU Emissions Trading Scheme. In the long term, our goal is to reach international agreement and to have a global carbon market. The EU agreement on 9 March on the greenhouse gas target is a major step towards achieving this aspiration.
Lord Ezra: My Lords, I thank the Minister for that Answer. Does he agree that power stations account for 30 per cent of the total UK carbon emissions and that that quantity is growing year by year? Does he further agree, as he has indicated, that steps have already been set out whereby this can be dealt with, including an improved European Emissions Trading Scheme, the encouragement of distributed energy and microgeneration, the further development of renewable energy and the early installation of clean coal plants? In these circumstances and in the light of the climate change agreement, should not the Government now prepare a plan in conjunction with the power station sector and other interested parties to reduce these substantial and growing emissions by a specified rate each year until acceptable levels are reached?
Lord Truscott: My Lords, the noble Lord has a great deal of experience in this area. The whole point of the spring Council was to agree a limit on greenhouse gas emissions growth over coming years20 per cent unilaterally by 2020 and 30 per cent if we achieve international action. An important part of this is the EU Emissions Trading Scheme. We are currently in phase 2. We see this as the main mechanism for introducing a carbon price in the UK and the EU and for extending it globally. We see it as a major mechanism for reducing carbon emissions. We are looking at other measures. The noble Lord will know about our position on, for example, the co-firing of power stations. We shall also publish our energy White Paper next month, which will outline our plans in detail.
Lord Renton of Mount Harry: My Lords, is it not increasingly clear that for a substantial reduction in carbon emissions from energy production to be obtained we shall have to realise a greater percentage of our power from nuclear energy? When will the Government have the courage to make this decision, tell the country that that is what they are going to do and produce a programme for more nuclear power stations?
Lord Truscott: My Lords, as noble Lords know, the Government produced their Energy Challenge last summer which outlined our belief that nuclear should form part of our future energy mix. That is still the Governments position, subject to consultation. We shall publish our views in the energy White Paper to which I referred earlier. Of course, nuclear would be only part of the Governments programme to tackle climate change and reduce CO2 emissions. Another part of that strategy would be to boost renewable energy, which we think is equally important.
Lord Tanlaw: My Lords, in listing the things that the Government would do to reduce carbon emissions, I did not hear the Minister include daylight saving. Is he not aware that this has been done in the United States and Australia for that very reason? Indeed, it is estimated that up to 0.5 per cent of electricity generation and the subsequent carbon emissions could be saved. Can he give a figure on that, and why was it not included in the list that he read out to the noble Lord, Lord Ezra?
Lord Truscott: My Lords, I congratulate the noble Lord on raising the issue for the third day running. Certainly, he is generating a lot of heat on the issue; whether he is also generating a lot of light remains to be seen.
Lord Berkeley: My Lords, is not carbon emissions trading doomed for failure while member states on the Continent, particularly those where there is a great deal of coal burning, allocate starter packs of such high values of carbon to the industries concerned that there is absolutely no incentive for them to reduce the amount of carbon that they shove into the atmosphere?
Lord Truscott: My Lords, that is why we toughened up the whole approach to the EU Emissions Trading Scheme between the first phase and the second phase. Under the second phase, the national allocation plans were a lot tougher for member states. As a result, we have seen the price of carbon increase from about half a euro under phase 1, to €17.67 currently. Under phase 3 of the EU ETS, we will see a further strengthening of the price of carbon.
Lord Teverson: My Lords, given that we now have a European energy policy, should not a core part of that policy be that any new coal-fired stations are able to capture carbon in the way in which they are built? Should not that become a simple part of that energy policy?
Lord Truscott: My Lords, the noble Lord makes a valid point. It was one of the decisions of the European Union spring Council that carbon-capture and storage should be expanded across the EUthe EU should develop up to 12 carbon capture and storage plants up to 2015 and plants should be carbon-capture and storage ready by 2020. The noble Lord will know that the Chancellor announced that we are having a competition for a carbon capture and storage plant in the UK.
The Lord Bishop of Liverpool: My Lords, is the Minister aware of the new technology that is being installed in Fiddlers Ferry power station in Cheshire, where ash is being turned into concrete, thereby saving 500,000 tonnes of carbon a year? Will his department monitor the success of that technology and in the light of that success encourage other power stations to follow that example?
Lord Truscott: My Lords, I agree with the right reverend Prelate that that is a very good example of the sort of power plants and schemes that we would like to see developed in the UK, and my department welcomes it and similar plants.
Baroness Wilcox: My Lords, we on these Benches welcome the European Union measures to cut carbon emissions by 20 per cent by 2020. While the Government aspire to meet those obligations, we have some practical plans in place. To meet those obligations, I invite the Minister to support us in setting annual targets for the rate of carbon reduction.
Lord Truscott: My Lords, the Government have already announced that we will be introducing a climate change Bill, which will contain carbon targets over a five-year period. One argument against annual targets is that, as noble Lords may be aware, the weather may change in the course of a year, and energy demand can go up and down. It is easier to balance over longer periods, and it gives more certainty to industry and business. Five-year carbon budgets are a better way to go, but there will be annual reports to Parliament, and the Government will be advised by the carbon committee.
Baroness Crawley: My Lords, under the Merchant Shipping Act 1995, the UK Government have a statutory responsibility to fund the Commissioners of Irish
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Lord Berkeley: My Lords, I am grateful to my noble friend for that Answer, but given the Governments commitment to a competitive shipping industry is it not a bit ironic that 10 per cent of the tax on ships entering UK ports goes to Irish ports? Do the Government believe that the same should apply also to French or German ports? Is it not ironic that, 80 years after independence, we are still subsidising the lights in the beautiful island of Ireland? Some 18 months ago in this House, on 28 November 2005, my noble friend said that the Government were starting hard-nosed negotiations to resolve the matter. Is it not more like treading on eggshells? Are not the Irish Government and the Irish ports laughing all the way to the bank?
Baroness Crawley: No, my Lords. My noble friend will know that under the Merchant Shipping Act 1995 the three general lighthouse authorities have responsibility for the provision and maintenance of aids to navigation around the UK and the Republic of Ireland. Yes, I said that we were entering hard-nosed negotiations and I hope that he will be encouraged by the fact that the result of those negotiations was that in February of this year a study was to be set up between the Department of Transport in the Republic of Ireland and our Department for Transport to examine the current funding system and to explore whether there can be a more equitable split in cost sharing between the UK and Ireland.
We remain committed to renegotiating the current agreement to require the Republic of Ireland to meet the full costs of provision of their aids to navigation. We will continue to work closely with the Foreign and Commonwealth Office and the Irish Government to achieve this objective.
Baroness Crawley: I can wax lyrical on this for a long time, my Lords, but I will not. We have here three ancient and long-established organisationsthe lighthouse authorities for the Republic of Ireland, Northern Ireland and the rest of the United Kingdom. They work extremely well together and they have huge cost savings through the efficiency of their work. The way in which they work is the way forward for the safety of seafarers around the waterways of the UK and the Republic of Ireland.
Lord Bradshaw: My Lords, will the noble Baroness reflect on the relationship between her department and the Republic of Ireland? I have received answers from her noble friend Lord Davies of Oldham about our relationship with the Republic with regard to lorries from there that constantly flout the laws on weight and drivers hours. I am constantly told that we are in touch with the Irish authorities, but nothing happens, the law is not observed and we in this country seem to get the bad end of the stick, whether on shipping or road transport.
Baroness Crawley: My Lords, I was briefed on boats, not lorries, but I say to the noble Lord, Lord Bradshaw, that we expect to have results from the study within the next monthcertainly by the end of 2007. It will be in two phases: one will gather information on the expenditure on aids to navigation, and the other will assess the options based on that evidence and make recommendations for the future.
Lord Greenway: My Lords, I declare an interest as an Elder Brother of Trinity House. Does the Minister not agree that the present integrated service run by the three general lighthouse authorities is working extremely well? If anything were to bring that co-operation to an end and the Republic of Ireland had to go its own way, the result would be ship owners paying higher light dues in Ireland to the detriment of Irish ports and, possibly, higher light dues in England, Scotland and Wales, because an extra ship might be needed to cover Northern Ireland.
Baroness Crawley: My Lords, the noble Lord, Lord Greenway, has just outlined a little of the complexity of this issue. He is right. The burden of light dues on shipping has steadily fallen since 1993; it has fallen by 50 per cent. He is right about the efficiency gains of the three general lighthouse authorities. He talked about the Trinity House authority and the other two. The automation of lighthouses and centralised lighthouse monitoring are efficiency gains. A rather dramatic phrase is the solarisation of all buoys, which I am told is also an efficiency gain, as is the collocation of the CILs Dublin premises.
The Minister of State, Department for Environment, Food and Rural Affairs (Lord Rooker): My Lords, in 1996-97, total government spend on flood management in England was £307 million. Last year it was £590 million. The capital sums for the two years were approximately £127 million and £273 million respectively. All these figures include coast protection projects, which often provide significant flood-risk benefits.
Lord Sheikh: My Lords, I am grateful to the Minister for that response. Does he agree that spending on flood defences needs to rise from the current level of £590 million to £750 million a year by 2011, which is an increase of around 10 per cent each year, so that people and businesses can continue to feel secure in the knowledge that the Government have a long-term, planned and sustainable approach to the reduction of flood risk?
Lord Rooker: My Lords, I agree with the noble Lords general point but I cannot agree with the figure. We are spending more than ever before and some £4 billion has been spent across England in the past 10 years. The later years of which he speaks will be subject to the Comprehensive Spending Review that will be conducted later this year.
Baroness Miller of Chilthorne Domer: My Lords, does the Minister accept the advice given in Sir David Kings Foresight review, which is backed up by the Association of British Insurers, the LGA and the board of the Environment Agency, that the funding needs substantially to increase, particularly given the need for adaptation around climate change?
Lord Rooker: My Lords, the noble Baroness is right. One can spend a lot of money on flood defences and preventive measures for an island nation. We have a fairly large programme of works on the coast and inland but I cannot stand here and say that it should be a certain figure. I have given the figures for the past 10 years, which were asked for in the Question. It has been a substantial programme. There have been modifications to the budget but there have been no capital cuts in the budget. I understand that the Association of British Insurers is content with our programme and with our keeping to our commitment to making flood defences a priority.
Lord Dixon-Smith: My Lords, the fact is that improvements in the programme, which I readily acknowledge and am grateful for, do nothing to match the increased damage caused because of enhanced property values, which have risen much more rapidly than the expenditure on flood prevention. I am not suggesting for a minute that the two could be kept equal but there is a very real problem for property owners in areas that are prone to flooding.
Lord Dixon-Smith: My Lords, the question is coming immediately. There is a problem because the floods are increasingly the result of freak conditions. Have the Government modified their policy to take account of the change in the weather that is going on increasingly over time?
Lord Rooker: My Lords, the value of properties obviously goes up. I understand that the Association of British Insurers has reported very few instances in which members have declined to make flood insurance available to households. We, the Government, are keeping our commitment to the ABI for our programme. I understand that the ABI is content with that. There is ongoing work with the shoreline management programme and the long-term work of the Environment Agency in planning for Thames safety for 2100. That work will be needed for the protection of London in the latter part of this century; it is certainly safe for the earlier part.
Lord Stoddart of Swindon: My Lords, local authorities and the British Waterways Board are under constant pressure from builders and developers to allow the development of housing and other buildings on flood plains. Will the Government assure me that they will assist local authorities and the British Waterways Board in resisting such pressure? If they do not, all the flood management measures will amount to nothing.
Lord Rooker: My Lords, the noble Lord is quite right. Planning policy statement 25 on development and flood risk was published in December last year by the Department for Communities and Local Government. It gives strength to local government and planning departments in refusing planning permission where there is a flood risk and improves the surveillance of the Environment Agency, which is able to block some of these projects.
Lord Rooker: My Lords, no. There was a £15 million cut in 2006-07, which has been more than restored for the Environment Agency in 2007-08, with a budget allocation of £436 million. There was slight dip in 2006-07, none of which affected capital. There was no capital programme cut in flood defences.
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