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UK Energy Policy

Volume 470: debated on Thursday 10 January 2008

The Secretary of State for Business, Enterprise and Regulatory Reform
(Mr. John Hutton)

With permission, Mr. Speaker, I wish to make a statement on UK energy policy. Our strategy, as set out in our energy White Paper last year, is designed to achieve two objectives—first, to ensure that the UK has access to secure energy supplies and, secondly and together with other countries, to tackle the global challenge of climate change.

The competition for energy resources is increasing. Access to supplies across the world is becoming increasingly politicised. As a result, the cost of energy is rising. And few who have been exposed to the science of climate change now doubt the immediacy of the threat to our planet. As the UK shifts from being a net energy exporter to a net importer, our ability to source a diverse range of secure, competitively priced energy supplies will be one of the most important challenges that we face as a country—affecting our economy, our environment and, ultimately, our national security.

Our strategy to manage these risks is based on three key elements, which are increasing energy efficiency and helping people and businesses make a real contribution to solving the challenges we face; using the widest range of cleaner energy sources; and ensuring that the UK is as energy independent of any one supplier, country or technology as possible. Let me touch on each of these.

We have already set out the measures that we are taking on energy efficiency. These could result in savings of between 25 tonnes and 42 million tonnes of CO2 by 2020. We will keep these measures under review, going further and faster wherever we can. We are also planning for the amount of UK electricity supplied from renewable sources to treble by 2015. The Energy Bill, published today, will strengthen the renewables obligation and help to speed up the deployment of an even greater share of energy from renewable sources. Offshore wind, wave and tidal power will all gain from that new approach.

The Government are also committed to funding one of the world’s first commercial-scale demonstrations of carbon capture and storage. CCS is a technology that has the potential to make a critical contribution to tackling climate change. Measures in the Energy Bill will enable that to move forward.

If we are to be as energy independent as possible, it is also vital, first, that we continue to press the case for energy market liberalisation in the EU, and secondly, that we look to maximise economic domestic energy production. Finally, we must ensure that energy companies have the widest range of options open to them when it comes to investment in new low-carbon power generation.

Over the next two decades, we will need to replace a third of the UK’s generating capacity, and by 2050 our electricity will need to be largely low-carbon, so we must be clear about the potential role of nuclear power. In October, we concluded a full and extensive consultation across the UK, seeking people’s views on whether new nuclear power should play a continuing role in providing Britain with the energy that it needs. Today I am publishing the Government’s response in the form of a White Paper alongside our analysis of the comments that we received. I can confirm that, having carefully considered the responses, the Government believe that new nuclear power stations should have a role to play in this country’s future energy mix alongside other low-carbon sources. The Government’s view is that it is in the public interest to allow energy companies the option of investing in new nuclear power stations and that we should therefore take the active steps necessary to facilitate that.

Nuclear power has provided us with safe and secure supplies of electricity for more than half a century.

It is one of the few proven low-carbon technologies that can provide base load electricity. Nuclear power currently provides us with around 19 per cent. of our electricity requirements.

Nuclear power will help us to meet our twin energy challenges: ensuring secure supplies and tackling climate change. First, a continuing role for nuclear power will contribute to the diversity of our energy supplies. Secondly, it will help us meet our emissions reduction targets, as every new nuclear power station will save the same amount of carbon emissions as are generated by about 1 million households. The entire lifecycle emissions from nuclear power—from uranium mining through to waste management—are only between 2 and 6 per cent. of those from gas for every unit of electricity generated. Thirdly, nuclear power will reduce the costs of meeting our energy goals. Analysis of future gas and carbon price scenarios shows that nuclear is affordable and provides one of the cheapest electricity options available to reduce our carbon emissions. [Interruption.]

Order. Mr. Flynn must be quiet. It is unfair to the Secretary of State while he is making a statement to the House.

Our energy suppliers recognise that, and in a world of carbon markets and high fossil fuel prices, they recognise that nuclear power makes commercial sense. For those reasons, I do not intend to set some artificial cap on the proportion of electricity that the UK should be able to generate either from nuclear power or from any other source of low-carbon energy. That would not be consistent with our long-term national interest. Given that nuclear power is a tried and tested, safe and secure form of low-carbon technology, it would be wrong in principle to rule it out now from playing any role in the UK’s energy future.

Not surprisingly, however, some important concerns were expressed during the consultation about nuclear power. They fall in to four broad categories: safety and security, waste management, costs, and the impact of nuclear power on investment in alternative low-carbon technologies. Ensuring the safety and security of new nuclear provision will remain a top priority. Having reviewed the evidence put forward and the advice of independent regulators, we are confident that we have a robust regulatory framework. The International Atomic Energy Agency concluded that our regulatory framework is mature, flexible and transparent, with highly trained and experienced inspectors.

However, it is right that we should work closely with the regulators to explore ways of enhancing their efficiency in dealing with new nuclear power stations. I am keen, therefore, to ensure that the UK has the most effective regulatory regime in the world. I believe that it could be a critical differentiator for the UK in securing access to international investment in new nuclear facilities. I have asked Dr. Tim Stone to take that work forward, alongside his continuing work on the financial arrangements regarding new nuclear power stations.

Secondly, during the consultation, many argued that a permanent solution for dealing with existing waste must be developed before new waste is created. We have considered the evidence fully, and our conclusion is that geological disposal is both technically possible and the right approach for managing existing and new higher-activity waste. It will be many years, of course, before a disposal facility is built, but we are satisfied that interim storage will hold waste from existing and any new power stations safely and securely for as long as is necessary. In addition, before development consents for new nuclear power station’s are granted, the Government will need to be satisfied that effective arrangements exist, or will exist, to manage and dispose of the waste that those stations will produce.

The third concern relates to cost. It will be for energy companies, not the Government, to fund, develop and build new nuclear power stations. That will include meeting the full costs of decommissioning and each operator’s full share of the waste management costs. The Bill includes provisions to ensure that, and transparency in the operation of the arrangements will be essential.

So in order to increase public and industry confidence, we will establish a new, independent body to advise on the financial arrangements to cover operators’ waste and decommissioning costs. The advice of that new body will be made public. The nuclear White Paper published today sets out a clear timetable for action to enable the building of the first new nuclear power station, which I hope will be completed well before 2020. The Planning Bill will improve the speed and efficiency of the planning system for nationally significant infrastructure, including new nuclear power stations, while giving local people a greater opportunity to have their say. A strategic siting assessment, to be completed by 2009, will help identify the most suitable sites for new build. We expect that applications will focus on areas in the vicinity of existing nuclear facilities. Work is already under way on assessing the safety of the new generation of reactors.

Finally, we must work with our EU partners to strengthen the EU emissions trading scheme to give potential investors confidence in a continuing carbon market. We look forward to the Commission’s proposals later this month. I remain firmly of the view that there should and will be room for all forms of low-carbon power technologies to play a role in helping the UK meet its energy objectives in the future. Nuclear power can be only one aspect of our energy mix as, on its own, it cannot resolve all the challenges that we face. Meeting those challenges requires the full implementation of our energy and climate change strategy, with nuclear taking its place alongside other low-carbon technologies. The Energy Bill will ensure that we have a legislative framework enabling all of those technologies to make a positive contribution to our future requirements for cleaner and more secure energy.

Giving the go-ahead today that new nuclear power should play a role in providing the UK with clean, secure and affordable energy is in our country’s vital long-term interest. I therefore invite energy companies today to bring forward plans to build and operate new nuclear power stations. Set against the challenges of climate change and security of supply, the evidence in support of new nuclear power stations is compelling. We should positively embrace the opportunity of delivering this important part of our energy policy.

I commend this statement to the House.

May I thank the Secretary of State for advance sight of his statement?

There has never been a more pressing time for responsible policy making. Carbon emissions are changing our climate, we are paying $100 for a barrel of oil and we are facing a clear and massive energy shortfall. It is our duty to set political scrapping aside so that we can make sure that we do what is right for the country. So let me make it absolutely clear that, where we can find agreement with the Government, we are up for it and we will reach that agreement.

Our vision on nuclear is clear: we must refine the planning system, set a price for carbon to establish a long-term climate for investment, and ensure that there is clarity on waste and decommissioning. On no account, however, should there be any kind of subsidy for nuclear power. Judging by what the Secretary of State has just said, our position is, by and large, similar to the Government’s. If business wants to invest in new nuclear power stations on that basis, it should be free to do so, and it should know that the investment climate will remain stable under any Conservative Government. Any such investment must not be allowed to detract from unrelenting effort to improve efficiency and to encourage renewable technologies, microgeneration, decentralised energy and feed-in tariffs.

The first of our concerns—and those of investors—is the apparent weakness of our national skills base. Is it not the case that the nuclear installations inspectorate cannot find, recruit, train and retain the number of skilled employees it requires to assess and approve the different types of reactor for which licences are sought? Is it the Secretary of State’s policy to require the NII simply to accept or reject the proven designs submitted to it, or will it be empowered to reject the endless subsequent design adjustments that have so dogged the industry in the past?

Both the Government’s policy and ours is that there must be no subsidy. Although nuclear companies claim that they do not want subsidies, suspicions remain that the industry will end up asking for them, either through subsidised waste disposal or guaranteed off-take agreements. Is the Secretary of State satisfied that the industry will not later request some form of subsidy?

Will the Secretary of State tell us more about the authority of the new advisory board that he intends to set up? How will it assess and confirm the honesty, accuracy and integrity of new-build projects, and might he not prefer to set up that board on a statutory basis?

On the question of waste, what do the Government mean by their reference to the “full share” of waste management costs rather than to the full costs of waste disposal? Who exactly will pay for what? On decommissioning, we accept that companies will set money aside, but how can the Government be confident that their economic modelling is correct, and what would happen if a nuclear company went bankrupt?

We need a long-term price on carbon, but the present carbon regime is weak. The EU emissions trading scheme is insufficiently robust. Does the Secretary of State agree with us that it needs to be underpinned by a possible carbon tax? In the spirit of the responsible approach that we wish to engender, does the right hon. Gentleman accept that it is illogical to continue with the climate change levy, which taxes nuclear, when a carbon regime should release nuclear from carbon penalties and affect only methods that create carbon?

We shall study with the greatest care the broader proposals set out in the White Paper and the Energy Bill. We note in passing that the Government appear to be putting no limit on the number of new nuclear power stations that might be built. We regret that the Government seem to have rejected feed-in tariffs, even for microgeneration, but we welcome—at least as a first step—their proposal to band the renewables obligation to give more balanced support to emerging technologies in a way that removes the perverse bias towards onshore wind and methane.

We are critical of the delay in respect of carbon capture and concerned about the contradictions in the Government’s policy. Britain was ahead of the game; now, it is not. How can the Government say that it is not their policy to pick one technology over another when they have done exactly that in determining the terms of their carbon capture competition?

Whatever happens to nuclear, it is clear that it is part of a much bigger picture. If we are to have secure, affordable and green energy in 20 years’ time, we must do much more to encourage energy efficiency, we must achieve a fundamental shift toward microgeneration and decentralised energy, and we must lead the world in taking advantage of renewable and new energy technology. Today’s statement is just one part of that process. The true test of the Government’s determination will be whether they continue to put together all the pieces of the energy jigsaw.

I broadly welcome what the hon. Gentleman says. All of us Labour Members will welcome what I hope is the end of the flip-flopping on nuclear policy that we have witnessed from the Opposition in recent months. [Interruption.] We probably need to move on. I hope that the hon. Gentleman will support the Planning Bill’s progress through the House, because it is a critical part of speeding up the introduction of low-carbon technologies. So far, his party has been lukewarm in its support for that legislation. We have set out a full, balanced and diverse energy policy that includes support for renewables and diversified energy systems. Nuclear will be one part of our policy in future, not the sum total of it.

The hon. Gentleman raised a number of specific points about nuclear, including on reactor safety procedures. Of course, that is properly and responsibly a matter for the nuclear installations inspectorate, but clearly its decisions could have important financial implications for potential new nuclear investors. As it is a matter for the NII, I do not want to comment on any aspect of the safety and approval system. On his point about subsidy, there will not be a subsidy for new nuclear, and we have made that absolutely clear. As for the new body that he asked about, we will consider all the options. As I say, the Energy Bill is published today; its Committee stage will start in the next few weeks, and there will be plenty of opportunity to consider the argument then. He asked how the body would do its job. We will need to get good, decent, experienced people to serve on it, and I am sure that there will not be a shortage of people prepared to do that.

The hon. Gentleman asked what was meant by the “full share” of decommissioning costs. Each energy company that wants to operate a new nuclear power station will have to meet its full share of the cost of new nuclear waste. I do not think that that policy is unclear. Of course, what each company’s share will be needs to be resolved, because it will obviously depend on how many nuclear power stations that operator runs. There will be an opportunity later in the spring for us to consult fully on the details of the financial mechanisms that we are proposing. I hope that the broad principles will be available for the Committee considering the Energy Bill later next month.

The hon. Gentleman asked about the financial modelling for the economics of new nuclear. We have proceeded on a prudent, conservative basis—I hope that he will like that—in terms of understanding the modelling of nuclear economics in future. We have taken the best international evidence from the International Energy Agency and others to form the basis of our calculations. On carbon pricing, we are waiting to see new proposals from the Commission on the ETS. We will keep all our options open for the long term to make sure that investors have sufficient confidence that the ETS will work in the way that we want it to. There has to be a robust, increasing price for carbon; it is a pollutant, and we have to make sure that we regard CO2 in that way.

The hon. Gentleman raised his familiar arguments about feed-in tariffs and the renewables obligation. I am sure that there will be other occasions when we can consider the detail of those matters. Finally, I do not accept his view that the UK has slipped when it comes to carbon capture and storage. We are one of only three countries in the world to have signalled their willingness to invest and support the demonstration of a commercial-scale carbon capture and storage project. The others are the US and Norway. That puts the UK in a global leadership role; we are not losing ground on CCS.

There is much to welcome in the energy White Paper, and of course we cannot separate energy policy from the overriding need to tackle climate change, but will my right hon. Friend confirm that there has been nothing to stop anyone coming forward with a suggestion for a nuclear power station in the past 20 years? He can understand why people will ask, “What has suddenly changed?” On carbon prices, is he talking about some form of carbon price guarantee? On subsidies, will he make it clear that the obscene windfall profits for generators from free carbon allocation needs to be looked into at some point?

I pay tribute to my right hon. Friend for all his years of service as a Minister in the Government. On his point about the ETS, we will have to wait and see what proposals come forward from the Commission later this month, but I have tried to put forward in the House today our view that we need a strengthening of the ETS. The issue of allocations and allowances will have to be looked at carefully as part of that.

My right hon. Friend’s more fundamental question was about what had changed. It is of course true that any company could have brought forward a proposal to open or operate a new nuclear power plant, but they would not do so unless there was a clear planning framework and a view from Government that such a plant could be an acceptable way forward. Today, that signal is being given, but it was not previously. That is why there have not been new applications for some considerable time. The other things that have changed are the science of climate change and the economics of nuclear power, to which I referred, including carbon markets. That is leading to a totally different situation.

I thank the Secretary of State for his statement, just in case we had not read it in the newspapers last week.

I am not clear about what the Secretary of State has just said. As the right hon. Member for Scunthorpe (Mr. Morley) asked, what has changed? The Secretary of State said that, following a second sham consultation, the Government have come up with the answer that they first thought of, which is hardly a surprise. He said that the Government would now take the active steps necessary to facilitate new nuclear, but we are still not clear what they are. We still do not know how we will dispose of the waste. How are companies meant to invest with certainty, unless the Government give them guarantees and subsidies? Can he give us a cast-iron guarantee that there will be no subsidies at any stage of the entire process? Can he put that on the record?

Is there not a danger that new nuclear will lock us rigidly to a technology for the best part of a century, at a time when other technologies such as carbon capture and storage and renewables are evolving practically every day? Is not the danger that the technology will be obsolete by the time that we get the first, small amount of new nuclear power?

What about before 2020? We have an energy crisis now. Does he agree with his predecessor, the right hon. Member for Derby, South (Margaret Beckett), who said:

“It would have been foolish to announce…that we would embark on a new generation of nuclear power stations because that would have guaranteed that we would not make the necessary investment and effort in both energy efficiency and in renewables.”?—[Official Report, 24 February 2003; Vol. 400, c. 32.]

She was right. Why does he not agree with his predecessor that going ahead with new nuclear inevitably crowds out renewables and energy efficiency, in terms of Government time, expertise, and manpower? Why are the Government so slow on such issues? Why are we producing half the renewable energy of the rest of Europe, when we have the resources to do far more?

What about fuel poverty? The Secretary of State did not mention it. Will the Energy Bill include anything on mandatory social tariffs? There are too many people in this country living in fuel poverty, and the statement offered them no hope. I cannot decide whether new nuclear is a white elephant or a red herring, but it clearly is not the answer to the energy problems that we face today.

I am saddened but not entirely surprised by that response. I am particularly disappointed that the hon. Gentleman did not understand what I said in my statement. If he would like me to send him a copy with bolder type, so that he can understand it, I shall be happy to do so. It may be helpful if I cleared up one or two confusions under which he is labouring. We are not mandating the use of nuclear power.

Well then, obviously the hon. Gentleman has understood my statement. We are not giving planning permission today for new power stations, and we will not subsidise them; I have made that absolutely clear. If power companies want to invest in other forms of cleaner technology, there is obviously nothing stopping them doing so. Those are decisions that the energy operators or companies will make. It is transparent from the hon. Gentleman’s contribution that we in this House could benefit from some fresh thinking, instead of a rehash of all the old prejudices that have confused the debate for so long. We want open minds, not closed minds. I am all in favour of reducing emissions, and we can start with what comes out of the hon. Gentleman’s mouth.

I thank my right hon. Friend for the statement. It will be particularly welcomed in my constituency, the home of British Energy. May I draw his attention to the fact that thousands of jobs in Scotland are tied up in the nuclear industry? It is vital to the science, engineering and technology base of the Scottish economy. Will he use his persuasive powers to try to convince the Administration in Holyrood, led by the Scottish National party, of the error of their ways, and to make them understand the vitality of the industry and its importance in the energy equation?

On my right hon. Friend’s latter point, I shall certainly do that. We invited Scottish Ministers to support a Sewel motion in the Scottish Parliament to facilitate the operation of the energy clauses of the Bill on a UK-wide basis. That would have been sensible, because the clauses are designed to ensure that there is no subsidy going into the costs of nuclear waste decommissioning and disposal. It is a missed opportunity.

My right hon. Friend is right about the manufacturing consequences of the announcements that we are making today. There could be a renaissance in UK power engineering, with significant consequences in constituencies all over the United Kingdom. I hope that that is another reason why hon. Members will support what we are trying to do.

I am in no doubt that today’s statement from the right hon. Gentleman represents a very big step forward and a welcome one in progress towards building a new generation of nuclear power stations. In that context, I am particularly glad about the response of my hon. Friend the Member for Rutland and Melton (Alan Duncan), which underlines the fact that there is now broad cross-party support for the issue in the House, which is genuinely welcome. Another key test that the Trade and Industry Committee laid down in its report 18 months ago related to a carbon price. The Secretary of State referred to that in his response. There is not much in his statement about that, and there is not much in the documentation. Will he repeat to the House his assurance that if the second phase proposals to the Commission are not strong enough, he will take unilateral steps in the United Kingdom to provide a firm price for carbon?

I am grateful to the hon. Gentleman for the work that he and his colleagues on the Select Committee are doing. I agree that if there is cross-party consensus on these matters, that would be a tremendously good thing for the long-term future of our country. In relation to carbon markets, the most sensible thing for us all to do is to wait and see what the Commission proposes. I am sure that my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will look carefully at those proposals. We do not rule out any option, as I said, but it is important that the carbon price is strengthened in subsequent phases of the emissions trading scheme. That will be important for the economics of nuclear, and will be the right signal for our approach to climate change.

My right hon. Friend draws attention to the fact that we will have to replace one third of our power plants by 2020 or so. Bearing in mind the existing published material, including that from the Health and Safety Executive, his Department and various other agencies, on the timetable for justification for site search, planning permission and so on, does he accept that it is unlikely that there will be any new nuclear power plant on stream by the time we have to replace that one third of our energy plant? Does he therefore accept that our concentration now should be on replacing that one third of energy with renewable energy, to make sure that that new one third of power plant is indeed low-carbon?

We need to do all those things. I tried to make it clear in my response to the hon. Member for Northavon (Steve Webb), who speaks for the Liberal Democrats, that our argument today is not that nuclear can fix all the problems. That would clearly be the wrong argument, but we should not rule nuclear out because on its own it cannot meet all the challenges. My argument today is that it has a role to play. I do not believe that it is unlikely that there will be new nuclear power stations operating in the UK by the middle of the 2020s. It is likely that there will be several nuclear power stations operating by that stage. We should also remember that it is not just the 2020 target towards which we must aim our sights—it is 2050. Between 2020 and 2050 the challenge of responding to the science of climate change will intensify, not become easier to deal with. That is why it would be wrong in principle to rule out now one proven form of low- carbon technology.

I welcome the statement from the Minister and from our Front-Bench spokesman, my hon. Friend the Member for Rutland and Melton (Alan Duncan), and I look forward to being able to work on the progress of a Sizewell C. Does the Minister recognise that it will be much more difficult to do that if the second half of the Planning Bill is not changed? My constituents accept that the decision on the safety of nuclear power should be made here centrally, but when it comes to a discussion about the much needed road changes and so on for such a large construction, they want to have an inspector locally to whom they can put their case. If they do not, we will hold up the proposals to a degree that the right hon. Gentleman will find unimaginable. He must give local people direct influence, not hand the matter over to a quango. They want an inspector.

I welcome the first part of the right hon. Gentleman’s comments. I had the good fortune to be in his constituency yesterday to look at Sizewell B, which is a phenomenal success story—probably the most successful pressurised water reactor in the world. It is coming towards the end of 445 days of full load capacity without a break. That is an extraordinary achievement, and I congratulate his constituents on it. His comments in relation to the Planning Bill will have been heard. The Bill is in Committee, and there will be an opportunity to consider the detail of that. As a point of information, which I am sure the right hon. Gentleman does not need but others might, the Sizewell B inquiry took 340 days. It dealt with local planning issues for only 30 of those 340 days, so anyone who argues that the current system is defensible does not live in the real world.

Bearing in mind, first, that taxpayers will pay more for nuclear electricity to cover decommissioning costs and will still have to pay for any shortfall, which could run into billions; secondly, that taxpayers will have to pay the massive construction costs for storing hundreds of thousands of tonnes of highly radioactive waste; thirdly, that taxpayers will also be called on, if necessary, to guarantee a minimum price of carbon; and, fourthly, that the last round of nuclear build led to the country and taxpayers having to pay £5 billion to bail the nuclear industry out of bankruptcy, as well as £70 billion to deal with the waste, is not the whole nuclear project the mother of all white elephants?

No, it is not. I am sorry that my right hon. Friend takes that view. He raised a number of specific points about decommissioning and waste disposal. We all accept that the responsibility for dealing with the legacy waste from the Magnox and advanced gas-cooled reactors will occur on the balance sheet of Governments for some considerable time. That is right, and there is no point pretending otherwise. Clearly, taxpayers will be involved to that extent. My statement was about the future of nuclear power. In a nutshell, we should learn from what has happened, and we can do so. There is a different way of doing it. We should be open-minded about the future. I know that my right hon. Friend follows these arguments closely. For me, the science of climate change is changing my understanding of these matters. It is imperative in our national interest that we do not take a decision now that we would rue in future. To deny future generations the benefits of nuclear power would be entirely the wrong thing to do.

I, too, welcome the Secretary of State’s statement and the response from my hon. Friend the Member for Rutland and Melton (Alan Duncan). Is the Secretary of State aware that British Energy has recently objected to proposals to expand Lydd airport in my constituency, because of the effect that that might have on the existing nuclear power station at Dungeness and a possible future station on that site? In view of his statement today, will the right hon. Gentleman make representations to his right hon. Friend the Secretary of State for Communities and Local Government to call in the airport application and hold a public inquiry, so that the effects of the airport proposals on the nuclear power station and on the local environment more generally can be subjected to independent public scrutiny?

I welcome the support from the right hon. and learned Gentleman for what we are trying to do. On his specific point about Lydd and the planning application, I am completely unaware of those issues, but as we say in the trade, I will cause inquiries to be made.

I am grateful to you, Mr. Speaker. Why on earth are we repeating the nuclear folly of the last years, when one power station was 14 years late, there were vast cost overruns, and £75 billion was required to manage the waste? The new thinking on waste is to bury it in a hole in the ground, which was the answer 40 years ago. I appeal to the Government to turn away from this atrocious decision and turn to the renewables, which are practical and cheap, especially marine power, which has long been neglected, tidal powers and the other marine powers, which are clean, non-carbon, practical, British and eternal?

We are making significant support available so that the renewable sources of energy that my hon. Friend mentioned can come to fruition. Through the renewables obligation, all of us are subsidising renewable power. It is the right thing to do. We are not subsidising nuclear. So I do not believe that what I said today will in any way crowd out from the energy mix of the UK in the future a proper and growing role for renewable power.

The Government seem to have rejected the idea of the feed-in tariff for the UK, but in Germany it has massively increased the amount of renewables. Will the Government at least stop lobbying within the EU to stop feed-in tariffs?

The renewables obligation is a genuine market mechanism and that is why it has been successful. It has overseen a rapid increase in renewable energy in the UK and we should stick with what works. The feed-in tariff in Germany has undoubtedly incentivised microgeneration in particular, but a significant extra cost has been borne by consumers as a result.

Will my right hon. Friend confirm that the effect of his statement today on future waste streams is quite small because of the historical legacy and the inefficiency of previous systems and waste from the weapons programme? Will he also ensure that as part of the ongoing work that is undertaken, work is done through Sellafield Ltd and the university sector to ensure that improvements are made in the exploitation of those waste streams for future power sources?

Yes, it would be right and proper for us to look at all those options. Primarily, that will be the responsibility of the Nuclear Decommissioning Authority and others, but it is worth making it clear that the new generation of reactors is likely to produce significantly less waste than Magnox and AGR, and that has to be a good thing.

The Minister may know that recently I initiated a debate in Westminster Hall on clean coal technology. Given the UK’s vast coal reserves and the fact that he has said that he has an open mind about these matters, will he be a little more specific today with respect to the opportunities that could be made available for clean coal technology, perhaps with regard also to the question of Medway and the opportunities for exporting our technology to China?

With great respect to the hon. Gentleman, the Kingsnorth Medway application is a current application and at some point it will come to me to be approved, so it would be improper for me to say anything about that today.

Coal has an exciting role to play in future. The successful demonstration project in carbon capture and storage will be critical. If CCS does not work, we will have to work twice as hard on energy efficiency, renewables and other sorts of low-carbon technology to make good the deficit, but if we are prepared to back the right project—post-combustion coal is the right way to take CCS forward, partly because it would suit the UK’s requirements, but it also has significant global application, given what is happening in China and other emerging economies—the UK could, rather unlike the hon. Gentleman, take an important global leadership role in supporting exciting new clean coal technology in the future, and I hope that he will support that.

I welcome my right hon. Friend’s clear leadership in terms of the two big issues of security of supply and climate change, but also in terms of my constituency and the engineering industry. Last night I was talking to Graham Honeyman at Forgemasters, and in the light of this decision it is giving serious consideration to an investment in a 15,000 tonne open die forging press, one of the largest in the world, and the associated melting and engineering capacity that goes with that, because there is a chronic lack of capacity globally for such programmes and many others. In the light of this statement it is important that consideration is now given to the supply chain of that so that we can capitalise for UK Ltd more fully than we have done before.

I welcome my right hon. Friend’s comments. He is absolutely right in relation to the supply chain and the industrial matters that touch on the important issue of new nuclear in the UK. Forgemasters is an excellent company. I have had the benefit of seeing at first hand its extraordinary facilities and expertise. We will need to invest significantly in the nuclear skills industry and in engineering if the UK is to take advantage of this opportunity, and I look forward to working with my right hon. Friend in Sheffield and elsewhere to make that happen.

I too welcome the statements from both Front-Bench spokesmen on the reconsideration of nuclear power, but the Secretary of State mentioned the Planning Bill. May we take it as read that the White Paper is a draft national policy statement, and, if so, how does he plan to take forward consultation and what plans does he have for inviting the House to consider the White Paper as a national planning statement?

We need to take forward the detailed work on a nuclear national policy statement and that work is under way. I do not think that the national policy statement will be the White Paper; we need to do more work on that. The NPS will need to be as site specific as it possibly can be in relation to possible future nuclear sites. I understand that there will be an opportunity for the House to approve nuclear national policy statements about all of the national policy statements, and that will enhance the democratic credibility around planning for major infrastructure projects in the future.

Does my right hon. Friend accept that although he may be right in his analysis, one of the reasons for scepticism is that the nuclear industry has a long history of misleading the public and previous Governments about the costs, safety and aspects of waste disposal? What makes him think that he has not been misled this time?

There is no doubt that many people in the country have real concerns about nuclear going forward, and we have heard some of those expressed today and we heard them expressed during the nuclear consultation exercise. It is a subject of great emotion for many people. I hope that my hon. Friend will accept my assurance that we have looked carefully—my officials, Ministers, my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and previous Ministers in this role—at these issues. We are in a different set of situations now. The science and the economics have changed, and the nuclear engineering capacity and capability have also changed significantly. The simple question for all of us today is not whether we should consent to an individual nuclear power station or mandate power companies to use nuclear—that is not what I am talking about—but whether we want to rule out for all time the possible contribution that a proven, and it is proven, form of low-carbon technology could make to tackling climate change and energy security problems in the UK. It would be entirely the wrong thing to do today to rule out this technology in perpetuity knowing that it could make a significant difference. That is not just my view but the view of many others in the scientific community and the Sustainable Development Commission and others.

I welcome the Secretary of State’s statement and the reply of my hon. Friend the Member for Rutland and Melton (Alan Duncan), but the right hon. Gentleman will be aware that my constituency is the home of the majority of nuclear fuel manufacture in the UK. What assurances can he give me today that the NDA will enter into meaningful discussions with Toshiba Westinghouse to ensure that a suitable business model can be developed to make sure that we can sustain the manufacture at that site of nuclear fuel for the benefit of the UK and to realise the benefits of fuel and energy security for the UK?

Again, I welcome what the right hon. Gentleman says. In relation to Springfields, these are matters for the NDA to resolve and work through. We have given it the executive responsibility to handle these matters and it should get on with it. I hope that he will be at least partly reassured to know that I want to see the UK gain the maximum that it can for its industrial sectors and manufacturing capacities from what we seek to do. I am sure that it is also the NDA’s view, in managing the business and taking it forward, that it needs to maximise every opportunity for new business, growth and employment in the UK nuclear industry. That will be my priority and I will ensure that Ian Roxbrough and the NDA board are aware of that.

On the question of investment in alternative low-carbon technologies, I welcome my right hon. Friend’s announcement during the recent recess, not repeated in today’s statement, of a major expansion in offshore wind power. Does he agree that between now and 2020, that decision has much more significance for our secure energy supplies and cutting carbon emissions than his nuclear decision today? Will he confirm that the contracts for the interconnectors to bring the electricity from offshore to the coast and from the coast to the national grid will soon be in place, a matter of great importance to the power industries in Stafford?

I can certainly confirm that work is under way to make sure that we can take full advantage of the extraordinary opportunity that offshore wind offers the UK. In the short term, my hon. Friend is also absolutely right that this is what we should be focusing on. Work is under way, particularly in relation to the point about transmission access. That is critical. There is precious little point in building offshore wind turbines if we cannot connect them to the grid, so we had better make sure that we have that issued sorted.

I do not suppose that it will come as a total surprise to the Secretary of State that the Scottish National party remains fully opposed to new nuclear power stations; fortunately, the SNP Government in Scotland will not allow new such stations in our country. I remind the Secretary of State that that stand is supported by many Labour MSPs.

May I press the Secretary of State further on the question of financing the containment and guarding of nuclear waste for a period in excess of recorded human history? In the White Paper, he talks about using an exercise in waste-cost modelling to set a fixed price or upper limit for nuclear operators. Can he tell us how that price will be calculated and how he will ensure that it is paid? Will generators have to provide security for future costs at the outset, or is he talking about a one-off payment when they put the waste in the depository?

On the hon. Gentleman’s first point about the attitude of Scottish Parliament Ministers, I should say that that is obviously a matter for them. The Bill and the White Paper respect the devolution settlement. I think that those Ministers are making a mistake and that their stand has more to do with a political stunt than taking a responsible long-term decision in the best interests of Scottish electricity consumers and the wider UK perspective. I regret the stand that those Ministers have taken, and I believe that they will come to regret it too.

On the hon. Gentleman’s point on financing, I should say that a lot of the detail is set out in the White Paper. I do not want to go through all the detail in this response, but the clauses will apply only to England, and not to Scotland, in respect of the technical plan and other issues; the hon. Gentleman should not be too worried about them. In February, there will be an extensive consultation setting out in more detail how the particulars of the provisions will work. As I said, I hope that that will be of assistance to the Select Committee.

May I congratulate the Secretary of State, the Minister for Energy and the Prime Minister on their courage and wisdom in making today’s decision, which is long overdue. I welcome it.

The Secretary of State knows that my constituency is home to the single largest concentration of British nuclear workers in the country. Following today’s announcement, will he work with me to ensure that, although there will be multinational efforts in part, the delivery of new reactors in this country will be predicated on British workers, British nuclear expertise, British companies and British skills and experience?

May I reciprocate my hon. Friend’s warm feelings? He is my constituency neighbour; I see locally and in this place the excellent work that he does as an advocate for his constituents, and I am aware of the arguments that he makes for the UK nuclear industry. He has done a great deal to help the decision that we have announced today. The UK and his constituents will be well placed to take full economic advantage of new nuclear technology, and what is good for the UK nuclear industry is certainly good for my hon. Friend’s constituency.

I welcome the Secretary of State’s statement because of my interest in Hinckley Point.

West Somerset and Sedgemoor district councils have been working on a framework document for local people to get planning gain over the life of the nuclear industry; Hinckley Point has been around since 1957. Will the Secretary of State consider forming some sort of framework agreement extending from central Government to local government, so that the benefits come straight to a community fund or some other form of organisation that could benefit local people directly in their areas?

I am happy to consider what the hon. Gentleman has said, although such matters are primarily for my right hon. Friend the Secretary of State for Communities and Local Government.

I welcome the Secretary of State’s comments about renewables, but as he is well aware, the fishermen of Fleetwood—and the ferry operators that transport their goods from Fleetwood to Northern Ireland—are concerned about the large number, and size, of offshore wind farms proposed for the Irish sea. Will the Secretary of State ensure that there are meaningful discussions between those whose livelihoods are affected by those developments and the energy operators so that there can be a solution that satisfies both sides?

I certainly recognise the issue that my hon. Friend has raised; she and I have already discussed it a number of times, as fishermen in my constituency have raised similar concerns with me. As we set about the process of siting further offshore wind turbines, of course a full and proper consultation will be necessary. Furthermore, an effective strategic environmental assessment of the proposals will have to be made. I am sure that that will give my hon. Friend’s constituents the opportunity to get involved in the decision making.

I congratulate the Secretary of State on standing up to the muddle-headed thinking of the environmental organisations that claim to be green but are against nuclear power. His statement has provided a clear framework for going forward. Will he confirm that he will consider some of the research and development implications of the White Paper? For example, it is still not possible safely to channel the variable supply from renewables through the grid. More research is needed on that issue.

We still need to consider pre-emission and not just post-combustion carbon capture and we genuinely need more science and engineers for the development of power stations. I hope that the Secretary of State will work with his colleagues to ensure that specific skills targets and encouragement for research grants are given to the relevant people.

I am grateful to the hon. Gentleman for his words. I agree that we are at the beginning of the process, not the end. A lot of work will need to be done on a number of different issues—he referred to science, engineering and skills and I accept what he said. The Government have a role to play and they need to play it.

Obviously, we considered carefully whether we could support a variety of different technologies through the competition process for CCS. We had clear legal and other advice that the right thing was to be clear about which technology we were inviting interest in and bids for. The competition would have been much more complicated if those basic ground rules had not been properly established. There are opportunities across the European Union for other types of project to be supported. The European Commission is seeking to develop 12 demonstration projects in the EU, and I hope that there will be other opportunities for other technologies to be explored fully.

The Secretary of State has confidence in nuclear power, but does he not have concerns when he considers Finland? The latest plant there is already two years behind schedule and running over budget only three years after construction started. Has the Secretary of State taken that into account in his long-term planning?

The competition for carbon capture and storage may be difficult, but the Government’s job is to do difficult things, not make things easy by making exclusions. If the competition were genuine, it would have embraced the full variety of technologies.

I tried to say that there would be opportunities for other forms of CCS technologies to be properly developed. We are not against that. However, in this country we have to be clear about the ground rules for the competition, and we have done that. We have acted properly and prudently, taking into account the advice that we have received.

The hon. Gentleman made a wider point about nuclear power. The project that he mentioned has run into difficulties; that is a matter of fact. However, it is quite wrong to conclude from that any general or wider lessons for the UK.

We have to be honest and recognise that the statement is as full of holes as the Sellafield reprocessing plant. Margaret Thatcher promised 10 new nuclear power plants and delivered one. We have heard about the Finnish experience and know that Germany, which is tackling climate change with a thorough energy policy, is eradicating the possibility of new nuclear plants there. When does my right hon. Friend anticipate that the first new nuclear plants will be commissioned and how many will we get?

As I tried to say in my statement, I am not going to set a limit or attempt to calculate the number; that is not for Ministers to do in an energy market that operates on liberal parameters. Industry estimates suggest that the first such nuclear power station could be operational in the UK by 2017. I think that an optimistic assessment, but it is what the industry is saying.

To those who sneer about the contribution of nuclear power, and many in the House have done so, I simply repeat what I said in my statement: we should keep an open mind and not rule out the potential benefits of nuclear power. That, for example, was the view of the Sustainable Development Commission and I think that it is right. Nuclear power could make a significant contribution to carbon mitigation in the UK. Furthermore, the view of Patrick Moore, one of the co-founders of Greenpeace, is interesting; in April 2006, he wrote in The Washington Post that nuclear power could make a decisive and important contribution to saving the world from the serious threat of climate change.