House of Commons
Wednesday 30 April 2008
The House met at half-past Eleven o’clock
[Mr. Speaker in the Chair]
Motion made, and Question proposed,
That Mr. Speaker do issue his Warrant for the Clerk of the Crown to make out a new writ for the electing of a Member to serve in this present Parliament for the county constituency of Crewe and Nantwich in the room of Gwyneth Patricia Dunwoody, deceased. —[Mr. Hoon.]
Oral Answers to Questions
The Secretary of State was asked—
The Government are very concerned about the effect of rising food prices on developing countries. According to the World Bank, 850 million people are already going hungry, and as prices rise that number will increase. The international community must act now both to help the world’s poorest people to cope and to address the underlying causes of the current hardship. Last week, the Prime Minister hosted a meeting with leading experts, including the head of the World Food Programme, to strengthen the international response to the growing crisis. In addition, the UK Government announced a £455 million aid package to provide assistance to the hardest hit and to address long-term solutions.
The new money is welcome, although only £30 million is going into emergency food aid. Given that many commentators have been predicting that the dash for biofuels would result in exactly the sort of negative consequences that we are seeing in world food markets, why is it only now that the right hon. Gentleman’s Department is sounding a cautionary note about the use of biofuels? Will he confirm whether he is opposed to or in favour of the continued use of the renewable transport fuels obligations?
The Government have announced the Gallagher review to ensure that the full economic, environmental and social impact of biofuel production is taken into account. However, I am intrigued by the hon. Gentleman’s line of questioning, given the position that his own party’s leader took on the renewable transport fuels obligation. The right hon. Member for Witney (Mr. Cameron) said that—
We all acknowledge that rising living standards, biofuels and some crop failures have all had an impact on rising prices, but is it not a fact that prices have been pushed up to astronomical levels by rampant speculation in the market? Are not these speculators gambling with people’s lives, so what will the international community do about it?
As I made clear, a range of different people from a range of different parties have previously argued the case for biofuels, but it is right to recognise that a range of different causes are affecting the rise in food prices. There has been a drought in Australia, which has significantly affected agricultural production; there is, of course, concern about biofuels; there is a rise in commodity prices, not least in the cost of petroleum, which has contributed to a rise in input costs such as fertiliser; and consideration needs to be given to the operation of the agricultural market. That is why we have continued to argue the case for common agricultural policy reform and why our own Prime Minister made clear to G8 leaders the need for a co-ordinated international response.
There appears to be conflicting evidence as to whether the immediate challenge that we face is a function of sufficient levels of food but inadequacy of distribution through the market, or a global deficit in food production. That is why we need to consider the approach both of the UK Government and of the European Union, while addressing the immediate humanitarian need and raising levels of agricultural production elsewhere in the world, particularly in Africa, where we have seen a decline in agricultural productivity in recent decades, in sharp contrast to countries such as India where we have seen a significant uplift.
May I draw my right hon. Friend’s attention to the worldwide online petition on the crisis, launched by the international citizens’ movement, Avaaz, which has already been signed by almost 100,000 people? I invite my right hon. Friend to sign it, as I have. Does he agree that the petition confirms that people worldwide are demanding action from world leaders to solve this crisis—action now, not months of talking and negotiation?
I agree entirely. It is of real concern to billions of people around the world that 850 million people are already hungry, and that the figure is potentially set to rise. That not only presents a challenge to the Government, who have sought a genuinely co-ordinated international response, but imposes a responsibility on business, civil society and individuals.
Will the Secretary of State acknowledge that there is a need for sustainable biofuels, and that a major reason for rising food prices is rising living standards in countries such as China and India? Will he redeploy the resources at his Department’s disposal to ensure that we can raise productivity levels in parts of Africa using the expertise that exists in this country, which the International Development Committee has called on the Government to mobilise more effectively in the future?
It is true that significant and sustained economic growth in China is leading to a different pattern of consumption—principally an increase in meat consumption, which is a direct consequence of the fall in the production of maize and other crops in recent years. The right hon. Gentleman made a more general point about biofuels. Of course we must distinguish between those that may be sustainable and those that are judged not to be. We are at risk of demonising the whole issue of biofuels, when what we actually need are facts rather than anecdotes.
As for the right hon. Gentleman’s substantive point about DFID’s contribution, at the meeting that he attended in Downing street last week we were able to announce the provision of £400 million for agricultural research, and we want to see that money flow into exactly the sort of productivity increase to which he has referred.
The dash for biofuels is beginning to have a real effect on the food market—it is leading to food shortages in some countries, and we have observed the escalation of prices—but what effect is it having in countries that are offering people huge grants to grow crops for biofuels rather than food? Is that not what will really damage the world in future?
As I have said, I expect the Gallagher review to examine precisely those issues in trying to discern the contribution of biofuels to sustainability, or to a lack of sustainability. A range of subsidies has been introduced by a range of countries for different reasons to support biofuel production. Research is important to our understanding of the challenge of sustainability, but, as our Prime Minister pointed out in his letter, we also need a co-ordinated international response to ensure that the dialogue is not limited to the United Kingdom but takes place in the other countries that are producing biofuels.
The Secretary of State is right to draw attention to the increasingly alarming reports of rising food prices and the resulting food shortages. At yesterday’s summit in Geneva, it was reported that the emergency appeal for assistance had reached barely half its target. I acknowledge the Government’s contribution, but the Secretary of State spoke of calls for international co-ordination. What tangible steps are our European partners and the G8 countries taking in response to that appeal, and is the British Government’s contribution a fixed financial amount or will it be used to buy a particular quality of food supplies?
We do not tend to provide food aid in the same way as the United States Government, who purchase in bulk and then transfer food. We provide resources that are available to be used in-country, often for local sourcing. I should be happy to write to the hon. Gentleman listing the countries in which the money—approximately £30 million, or $60 million—to support the World Food Programme’s efforts to raise, I believe, $500 million is being used. The United States has made a significant contribution to that appeal as well.
We will continue to discuss this issue with our European partners. I strongly welcome yesterday’s statement by Ban Ki-moon, the United Nations Secretary-General, about the need for a co-ordinated response. I am also encouraged by the response from the Bretton Woods institutions—the International Monetary Fund and the World Bank—to the letter that our Prime Minister issued ahead of the spring meetings, arguing for exactly that focus at the G8 meeting that will take place in Japan in July.
Much of what the Secretary of State has announced about the food crisis is welcome, but is he not somewhat embarrassed by the finding of a report produced by his own Department last year that Ministers have failed to support agriculture in the developing world? Have not rising food prices been met by alarming ministerial complacency?
I thought it would not take the Conservatives long to blame the Department for the global phenomenon of rising food prices. As I said, only last week I was able to announce the investment of £400 million in agricultural research. We have been a major funder of such research over a number of years. The Department has expertise in the shape of, for instance, livelihoods advisers. However, it is right to recognise the challenge presented by the need to raise levels of productivity in a range of countries, and we are working with international partners to achieve that goal.
But this is the Department for International Development’s own report, and it says that direct spending on agriculture by the Department has halved over the past 10 years. Therefore, do we not now need Ministers to bring forward plans to bind together Government, business and scientific research in a new global partnership for agriculture similar to the one that delivered the green revolution in Asia in the 1960s?
DFID spends about £120 million a year on agriculture. We have increased to about £55 million a year our financing for safety nets programmes in Bangladesh and many African countries, which support the poorest farmers and their families in those countries, and we have increased spending on rural infrastructure. Last year, we spent £34 million to reduce the cost of transportation in Africa. The emphasis that I have placed within the Department on growth in Africa naturally and inevitably means a focus on agriculture given the role of smallholder agriculture in Africa. It is right to recognise that we need to work with international partners on agricultural productivity, and we have done that and will continue to do so. It is also right to recognise that we have in recent days made a sizeable contribution to agricultural research.
The UK Government have committed £8.5 billion for education in developing countries over the 10 years to 2015. We support education plans, policies and programmes that ensure that girls as well as boys benefit in developing countries.
When we educate a girl, we also improve the life chances of a future family. In particular, there is a direct link between educating girls and reductions in maternal and infant mortality, but change is not happening fast enough. Will the Government therefore take vigorous steps to increase their efforts at every level, including with other Governments, to ensure that every girl has access to a classroom?
What my hon. Friend says is right. Educating girls is one of the best investments that a country can make to further its social and economic development and to improve health. We know that women who have been to school have fewer children, which reduces the risks to them of childbirth and makes it more likely that they will be able to access the care that they need. In addition, their children are healthier; for example, they are 50 per cent. more likely to be immunised. I can therefore confirm to my hon. Friend that although we are making very good progress in getting girls into school, we will be accelerating that work through the call to action and the United Nations-hosted meeting in September. Indeed, our own work through 10-year education plans is bearing fruit.
I welcome the Minister’s response on this important subject, but is it not also the case that girls who are educated for seven years or more are much more likely to be empowered to reduce the risk of HIV/AIDS in their own lives and in their family? Therefore, if we are to tackle that terrible global disease, is not empowering young women by educating them one of our highest priorities? I commend what the Minister has already said and done, but will she go even further and do even more?
I welcome that commendation from the hon. Gentleman, and I thank him for his recognition of the work that the Government and others have done in promoting education. Education has been described to me as a social vaccine against HIV and AIDS, and I concur. Girls who stay in school are much more likely to know key prevention techniques and to persuade their partners to use them, and are less likely to become HIV-positive. The figures speak for themselves. In Swaziland, two thirds of teenage girls in school are free from HIV, whereas two thirds of girls out of school have HIV. Such figures concentrate our minds.
Over the Easter recess, I met two teenage girls in Goma who are desperate to resume their education but cannot leave their camp for fear of being attacked or raped by rebel soldiers or the army. Will the Minister urge the Secretary of State in his forthcoming visit to the Democratic Republic of the Congo and Rwanda to press both Governments to do all they can to uphold the recent peace accords, in order to bring peace to eastern Congo and to allow those girls to resume their education?
My hon. Friend makes an important point, and I am sure that my right hon. Friend the Secretary of State will take steps in that regard. It is, indeed, the case that one of the reasons why girls do not go to school in the numbers that they should is that schools are not necessarily the safest places. Therefore, in addition to my hon. Friend’s points, I would emphasise the work that we are doing in respect of safer and accessible transport, the provision of separate toilets, teacher training, and work to reduce violence against women in their own homes.
I was lucky enough to visit a couple of DFID-funded projects in Nepal when I was there over the Easter recess to monitor the elections. People are working very hard to get more women into the education system, and into jobs and work. I was concerned by the incoming Maoist Government, who were saying that they did not want what they see as “new imperialism” from the west, in regard to both that area and the Gurkhas. Will the Minister tell us what discussions she has had with the Maoists in Nepal about continuing and expanding these particular projects?
The hon. Gentleman will be glad to learn that the Under-Secretary of State for International Development, my hon. Friend the Member for Dewsbury (Mr. Malik), will be visiting Nepal in the near future. I will raise the hon. Gentleman’s comments with the Foreign Secretary.
Progress is being made in the international effort to tackle HIV and AIDS. There has, for example, been a significant scaling up in the level of financial assistance to tackle the epidemic, and the number of people receiving antiretroviral treatment in poor countries has risen from 400,000 to more than 2 million. There is, however, a lot more to do.
Will the Minister take this opportunity to distance himself from the more weird and wacky groups that are suggesting that abstinence is the only way to combat HIV/AIDS in parts of the world? Will he also take the opportunity to tell the House that as many moneys will go via voluntary organisations and non-governmental organisations as will go through some of the dubious central Governments who operate in the areas most afflicted by HIV/AIDS?
I can confirm to my hon. Friend that we do not support abstinence-only programmes for HIV prevention, because none of the available evidence suggests that such programmes are an effective strategy for HIV prevention. He raised a point about the valuable contribution that voluntary sector organisations make. I have had the privilege of seeing some of the work that Christian Aid supports in southern Africa, so I take his point about the need for us to continue to work with the voluntary sector. I hope that he will recognise that where we can have confidence in the commitment of Governments to preventing HIV and AIDS, we should continue to help them scale up their ability to tackle AIDS in their countries.
Will the Department’s forthcoming AIDS strategy continue to contain a dedicated funding target for AIDS, and will a percentage of that funding be allocated to supporting vulnerable children and orphans, as happens today?
The reason why the strategy is forthcoming is that there is still work to do on its preparation, so I cannot give the hon. Gentleman a preview of what it will contain. One of the reasons why we included specific targets when we published our previous AIDS strategy in July 2004 was to generate significant new political momentum behind the effort to fight AIDS in general and the AIDS orphans crisis. I hope that he will recognise, from the research that he has done, that political momentum behind the fight against AIDS has increased significantly and that much greater effort is being put into tackling the specific problems faced by AIDS orphans.
Although it is recognised that there are many health-related problems in the developing world, does my hon. Friend agree that when money is specifically targeted at preventing HIV/AIDS and reversing that trend in that area, it should be spent on tackling HIV/AIDS and not on other health-related issues?
We need to do both. We must ensure not only that we continue to help tackle the HIV/AIDS epidemic, but, as the question from my hon. Friend the Member for Warrington, South (Helen Southworth) indicated, that we do more to tackle a range of other health conditions. We cannot fight AIDS without more health workers—more doctors and more nurses—in-country, and we cannot tackle infant and child mortality without there being more health workers in place. We need to do more to tackle the specific problems associated with HIV/AIDS, but we must also ensure that our response to HIV/AIDS helps to tackle those broader health questions.
Does the Minister accept that on the continent of Africa where HIV/AIDS is a particularly acute problem, as well as education, the other key area is the elimination of corruption, so that the resources deployed can reach those at risk in certain nation states?
We have had many exchanges in the House about the difficulties that corruption causes for Governments who want to help the poorest people in their countries. That is why we have a considerable number of safeguards to help to ensure that our money is spent effectively and goes where it is needed, and to help developing countries to build up their own defences against corruption. I agree that we need to continue to do more in that area.
The hon. Gentleman is also right to say that we must do more to promote education, especially girls’ education and access to primary education more generally. That is one of the reasons why my right hon. Friends the Secretary of State and the Prime Minister have made the commitment to an £8.5 billion investment over the next 10 years from the UK to seek to achieve those objectives.
Human rights are a key issue for UK Ministers and are among the many issues that my right hon. Friend the Foreign Secretary and I discuss on a regular basis. While we welcome efforts to address human rights in Saudi Arabia, the UK Government continue to raise concerns about the human rights situation and to work closely with the Saudi Government to encourage reform.
The oppression of women is a matter of daily life and capital and corporal punishment are part of the Saudis’ abuses of human rights. Can the Minister assure me that he will work with colleagues in the Foreign Office to ensure that the Saudi regime is not allowed to continue those practices, which are condemned by the rest of the world?
I can give the assurance to my hon. Friend that we continue to press Saudi Arabia to adopt the recommendations of the convention on the elimination of all forms of discrimination against women, and in 2007, when we hosted the two kingdoms dialogue at Lancaster house, discussions included specific measures in the area of women’s rights.
As chairman of the all-party group on Saudi Arabia, I can tell the Minister that, following my discussions with the Foreign Secretary this week, he was pleased—following his visit to that country—with the tremendous advances on human rights. Will the Minister join me in congratulating King Abdullah and his Government on the advances that they are making in improving human rights?
Economic Partnership Agreements
We anticipate that the economic partnership agreements that have been agreed with 35 African, Caribbean and Pacific countries will be signed formally over the next 18 months. We will provide aid for trade support to help those ACP countries implement and benefit from the new opportunities provided by EPAs.
The Prime Minister has said that poor countries must be allowed the flexibility to decide, plan and sequence their own trade reforms. However, an analysis last week by Oxfam showed that the interim economic partnership agreements that were hastily concluded in December could mean that Africa loses $360 million each year in tariff cuts. Does the Minister think that an independent evaluation of the EPAs should be made with an eye to revisiting problem areas before the deals are finally signed?
I was at a United Nations Conference on Trade and Development meeting in Ghana last week and had the opportunity to discuss the interim EPAs that have been initialled by many of the non-least developed countries, and also to discuss EPAs with LDCs. There was significant support from several of those countries for the interim EPAs. The hon. Lady is right to note that some countries have highlighted one or two issues, and we want the Commission to continue to show flexibility in responding to those concerns. We need to recognise that the duty and quota-free access offer that the Commission has made to non-LDCs is a significant step forward and that many of the ACP countries, such as Botswana and some Caribbean countries, have been warmly supportive of the efforts that the Commission has made to help them with better trading opportunities in the European Union.
What are the Government doing to help African countries to trade with one another by reducing the tariffs that they impose on one another and strengthening the infrastructure to allow transport links from one African country to another?
My hon. Friend makes a good point about the importance of regional integration. We continue to highlight that as one of the potential benefits of moving from interim economic partnership agreements to full regional economic partnership agreements. As I said in my previous answer, we continue to encourage the Commission to show additional flexibility so that we can move from the interim EPAs that have been signed with individual countries to full regional EPAs over the coming months.
Order. Before I start Prime Minister’s Question Time, may I point out that it is only right and fitting that hon. Members should be heard when they are putting questions? Sustained shouting looks bad and it is not good for the reputation of the House. I have already had a quiet word with Mr. Campbell.
The Prime Minister was asked—
The Prime Minister is well aware that the global economic turn-down is causing concern to many in our country. Will he assure me today that his top priority will be the British economy, with stability and high employment at its core? Will he assure me that he will never make the statement that 3 million unemployed is a price worth paying?
I will never make that statement. It is because of our policies that there are 3 million more people in work than ever before, that we have more vacancies and that unemployment is at its lowest for 30 years. I am grateful to be able to say that in my hon. Friend’s constituency, overall unemployment has fallen 42 per cent. since 1997. The choice in future will be between a Conservative party that caused 3 million unemployed and was responsible for two of the worst recessions in history, and a Labour Government who are on the side of home owners facing difficulties and those facing high fuel prices—a Labour Government who have never seen repossessions reach the level that they were at under the Conservatives. We will continue to fight for every job in this country.
The planted questions get tougher and tougher.
As the Prime Minister knows, there is only one thing more uncomfortable than a U-turn, and that is making a U-turn after repeated protestations that one will not make a U-turn. May I offer him an opportunity to retract what he said last week and to admit that he will have to make major concessions on his proposals to extend detention without charge to 42 days?
No. We are going ahead with our proposal and we will put it to the House of Commons. The Opposition parties agree with us in principle that there will be terrorism cases where we will need more than 28 days to interview witnesses. The Opposition agree with us that there are certain emergency conditions in which that will be required, and so do the Liberal party and Liberty. The question is whether we have put in place the civil liberties protections that are necessary. We have done that, and that is why we will go ahead with putting the proposal to the House. The Conservative party should support it.
What we object to is new legislation that threatens civil liberties, that is not necessary and that could make the situation worse. Will the Prime Minister listen to his own Director of Public Prosecutions, who said:
“we do not perceive any need for the period of 28 days to be increased”––[Official Report, Counter-Terrorism Public Bill Committee, 22 April 2008; c. 53, Q136.]
“our experience is that we have managed comfortably with 28 days”?––[Official Report, Counter-Terrorism Public Bill Committee, 22 April 2008; c. 58, Q150.]
He is the man responsible for prosecuting and convicting terrorists. Why will the Prime Minister not listen to him?
Will the right hon. Gentleman listen to the police, who have said that they might need the power beyond 28 days? Will he also listen to the independent reviewer, Lord Carlile, who gave evidence only a few days ago about the need for the extra power? Will he not recognise that if we were to have to come to the House in a period of emergency and ask for the extra powers, that would not be the way to go because it would give oxygen to terrorism? It is better to take pre-emptive action now. I think that the Conservative party should be ashamed of itself for not supporting the legislation.
It is not just the DPP who opposes the proposal. The former Attorney-General and Lord Chancellor do too, and the man who was chief inspector of constabulary says that it is wrong. We now know what Labour MPs think about it, as we have been sent a report about that from the Labour Whips’ Office. Only this Government could manage to send it across to us—it brings a whole new meaning to the phrase “usual channels”. One Minister says that the 42-day limit has been “plucked from thin air.” Another MP says that he
“could be persuaded to stay away”—
that is straight from the Prime Minister’s book of courage—but my favourite is from the hon. Member for Ealing, who sums up the Labour party’s mood when he says that he “will support” it but thinks that it is “barmy.” Why does the Prime Minister think that he cannot persuade his own MPs?
Is it not remarkable that the right hon. Gentleman will never address the substantial issue? The substantial issue for our country is whether it is right to have the power in law that it may be necessary for the police to go beyond 28 days. The substantial issue is whether, when facing a major terrorist incident, Ministers should have to come before the House and ask for that extra power, when we could take it in a precautionary way.
I believe that we have dealt with the civil liberties arguments on this issue. We have accepted the requirement that the Home Secretary must come to the House if an order is needed in any particular case. We have given new powers to the independent reviewer, so that he can adjudicate the case. We have given new powers to the judiciary, so that every seven days the person involved must come before the judiciary before the detention is confirmed. I believe that we are protecting the country’s civil liberties and that the Conservative party is making a mistake if it believes that we should not have this precautionary legislation, in circumstances where sophisticated investigations that go right across the world, involving mobile phones, e-mails and computers, mean that the amount of police work and time needed to investigate cases is a great deal higher. I believe that the Conservatives would be making a mistake if they opposed this legislation.
The Prime Minister is wrong. We have addressed the substantive issues. We said, “Use intercept evidence in terror trials,” and he is beginning to take up that proposal. We said, “Question suspects after charge,” and that is in the Counter-Terrorism Bill. We said, “Let’s have a proper border police force,” and the Prime Minister got the “border” bit, but does not seem to understand the “police” bit. The Prime Minister reels off the changes that he has made, but he has not convinced anybody. The former Attorney-General has said that
“not only is it wrong in principle but…also…counter-productive because it can lead to the risk that part of our community… sees this as an attack on them”.
How far is he prepared to take this battle with his party? Will the vote be an issue of confidence for his Government?
We will put our proposal before the House. It will be one that I believe Conservative and Liberal Members should also think carefully about. If the right hon. Gentleman had to examine the cases for terrorist asset freezes, as I did when I was Chancellor, or if he had to examine the cases that come before the police, he would know the sophistication of the investigations that are now required. They look internationally at a range of matters, including computer documents and e-mails, and that means that there will come a time when it is difficult for the police to do a sophisticated investigation in 28 days.
If I may say so, we as a House should take the precautionary position and adopt the proposed extra power. It cannot be triggered without the Home Secretary coming back again to the House to ask for it. That means that we vote in principle for a 42-days limit, but at the same time say that the Home Secretary must come before the House. I believe that the issue for the House was whether people would be subject to arbitrary detention. We have taken all the precautions necessary against arbitrary detention. We should now go ahead with this measure, and the Conservative party should support it.
The Prime Minister talks about the sophistication of the prosecutions, but who knows more about that—the Prime Minister, or the Director of Public Prosecutions? The DPP is the man responsible for trying to convict and imprison the people involved.
However, the Prime Minister did not answer my question, so let me ask him again. He tells us how much this matters and that he will not make any more concessions, so is this an issue of confidence?
We will put this before the House. If I may say so, the head of the Metropolitan police also has some idea of the sophisticated investigations involved. The independent reviewer has been examining all the cases and he is convinced of the need to go beyond 28 days. The Home Affairs Committee looked at the matter and said that there may be a case for going beyond 28 days. Equally, at the same time, the Conservative party, Liberty and the Liberal party have agreed that there might be a case, and they want to trigger the Civil Contingencies Act 2004. If there is a case that some instances will involve going beyond 28 days, surely the right thing for a Government to do is to respect the civil liberties of the individual by avoiding arbitrary treatment, but to take the power that could be triggered again only by the Home Secretary coming before the House. That is the right and responsible way to proceed. We are talking about the security of every citizen in this country.
The Prime Minister will not answer the question about a vote of confidence, so I think that everyone knows what is going to happen: another rebellion, another backdown, another U-turn, and the collapse of stout party. Is not the truth of the 42 days provision exactly the same as the fiasco of the 10p tax rate? He is pushing this not because it is right, but because it is part of a political calculation. With the 10p tax rate, it was about trying to pose as a tax cutter. This time, it is about trying to pose as being tough on terror. Everybody knows what is happening. Today, apparently, he is admitting mistakes. Why does he not admit the biggest mistake of all: that he puts political calculation and self-interest—[Interruption.]
The right hon. Gentleman never addresses the substance of the question. This is the man who wants to be both tough on crime and hug-a-hoodie at the same time. This is the man for whom political calculation meant that he cycled to work but, at the same time, had a chauffeur-driven car coming behind. This is the man who is a shallow salesman and never addresses the substance of the issue. The important substance of this issue is how we protect the people of this country against terrorism. That is about more than trading a few quotes in the House of Commons. It is about looking at the evidence before us, and the evidence before us is that we will need 42 days. I urge the Conservative party to think again.
May I point out that the great and noble borough of Ealing is actually represented by three Labour Members, none of whom made the statement attributed to one of them? However, may I say that the Leader of the Opposition is doing a simply marvellous job of auditioning for the sadly vacant chair of “I’m Sorry I Haven’t a Clue”?
Does the Prime Minister agree that it would be the height of irresponsibility for any candidate standing for the mayoralty of London to talk about slashing the Metropolitan police—
It is obvious why someone who is a low earner in Britain today would not support the Conservatives tomorrow. However, after doubling the tax rate for the poor, leaving more than 4.5 million people in fuel poverty and closing thousands of post offices, can the Prime Minister explain why any low earner should support his Government?
Because we have taken a million pensioners out of poverty. Because we are on the road to taking a million children out of poverty. Because we introduced the new deal to get people in work—opposed by the Liberal party. Because we have introduced child tax credits and raised child benefit, and child tax credits were opposed by the Liberal party. The reason why people should support Labour is that our policies for social justice are not only taking people out of poverty, but giving people the chance of work.
The Prime Minister is living in denial. If he wants people to believe that he cares for the poor, he should act as though he does. Is he not ashamed of the “grotesque chaos”, to quote Neil Kinnock, of a Labour Government scuttling around the country handing out closure notices to more than 5,000 local post offices? This morning, the Prime Minister said that he wants to be a listening Prime Minister. Let him prove it. Will he stop all further post office closures, right now?
Four million fewer people are using our post offices than did so a few years ago. We have put £1.7 billion into helping the post office network. Once again, the Liberal party is proposing spending huge sums of extra money without having any recognisable means of paying for it. That is why the hon. Gentleman’s shadow Home Secretary called him “Calamity Clegg”.
I had the privilege of meeting young people from my hon. Friend’s constituency to talk about the challenges that they face in creating and getting jobs, and about the youth facilities in the area. The fact is that in Wales, employment is up 131,000 since 1997. We have helped 120,000 people through the new deal, and we continue to create jobs for young people in Wales. That would not have happened if we had taken the Conservative party’s advice and abolished the new deal. We will create jobs; the Conservatives would create unemployment.
First, we should be proud that the Olympics are coming to London. This gives me the chance to congratulate the Mayor of London on having made sure that the Olympics will come to London. The hon. Gentleman will know that a national contribution to the Olympics is also being made by the Exchequer. I believe that holding the Olympics in London will be a great boost, not just to London but to the whole of the British economy.
I understand that the Leader of the Opposition has said:
“We would let the House of Commons have a free vote…and…if there was a vote to get rid of the ban…there would be a government bill in government time.”
I believe that there is a settled view among the public on the matter and that it would be better if all parties in the House recognised the previous vote of the House of Commons on the issue.
This Government, in the past 11 years, have created more jobs than any other for the people of this country. We have cut poverty, we have doubled investment in the health service and we have improved investment in education. The hon. Gentleman should be congratulating us on what we have done, not criticising us.
Our aim is not just to get the rebel parties together, but to get the Government of Sudan to be part of the discussion process. When I spoke to the Sudanese Foreign Minister yesterday, I pressed him about the need for talks to start as soon as possible. I believe that if talks started, we could achieve a ceasefire and at the same time get to the process of reaching a political settlement. The key thing is to get the talks started. That is why approaches have been made to the rebel groups, why the United Nations Secretary-General is involved, why we have offered London as a possible centre for such talks, and why I am hopeful that if we can move matters forward in the next few weeks, there is a chance of talks taking place that could bring peace to that troubled area.
Will the Prime Minister give an undertaking to the House that by the Report stage of the Finance Bill, we will see detailed and concrete proposals on exactly how his Government plan to compensate the 5.3 million low earners who lost out when he doubled the 10p tax rate?
The Chancellor has sent a letter to the Treasury Committee Chairman and made it absolutely clear what the Government are ready to do and the action that we are taking to help 60 to 65-year-olds and people who are low paid, and that is what we will do.
I have made it clear that there will be a free vote for Labour Members on provisions relating to saviour siblings, mixed embryos and the need for a father or supportive parenting, because this is the first time that those ethical issues have been debated on the Floor of the House of Commons. The letter that I sent to MPs set out the reasons why we should do that. It is the right way of proceeding on an important Bill. We do not want to lose the benefits of research that is available to help people, but at the same time we wish to acknowledge that there are new ethical issues before the House that should be debated on a free vote of the House.
Let me first, on behalf of the whole House, congratulate the right hon. Gentleman on becoming the leader of his party. I wish him well in the task ahead as we move forward with the devolution proposals for Northern Ireland. He is right: we have talked on a number of occasions about the Varney report and what it can do to bring new investment for Northern Ireland. The investment conference, which will include representation from America, will take place next week and I look forward to meeting him and the American delegation there. The Varney report which is published today will offer a number of proposals on how we can increase the attractiveness of Northern Ireland for inward investment. Some of that is in the incentives for innovation that should be available for companies coming into Northern Ireland or developing there. Some of it is in the area of skills, where we ought to be able to increase and build on the good education offered in Northern Ireland. I look forward to talking to the hon. Gentleman about that and the military bases when we have a chance to meet soon.
The deep clean of our hospitals and the doubling of the number of matrons to make sure that all hospital wards are clean are a very important aspect of making the health service better in the future. I join my hon. Friend in congratulating those in his constituency and the hospital, who have done so much good work to make their hospital a better place.
It is also true that GP access is incredibly important to every citizen in this country. That is why it is regrettable that the Conservative spokesman has said that he is against the progress on GP access that has been made, and that he would hand back to GPs the power to decide whether there was access for their patients. That would be a retrograde step.
We are consulting on the nature of citizenship, and one part of the consultation is on potential bank holidays. I have to say also that as a result of the changes that we have made, it will be the legal entitlement of every worker, from 1 April 2009, that statutory paid leave be raised from 24 days to 28 days. That is because of the actions of a Labour Government.
Wales is a much more prosperous country now than it was 10 years ago, thanks to the policies of this Government. Does my right hon. Friend share my despair that the Welsh people will be betrayed once again by the nationalists, who will do a deal to put the Tories into government, as they put Thatcher into government? Does he agree that a vote for the nationalists tomorrow is a vote for the Tories?
I congratulate my hon. Friend on introducing a Bill for the employment of the disabled. I also congratulate him on keeping alive the very important idea that every disabled person should have the chance to get employment opportunities in our country. We recognise the importance of helping disabled people into work, we welcome my hon. Friend’s concern and we share his aims and determination to do more. The Government launched the cross-party independent living strategy in March 2008, and we will move forward on that. I will be very happy to talk with my hon. Friend about how we can move forward with his proposals, including within the Disability Discrimination Act 2005.
I will look at the facts that the hon. Gentleman brings before us and see what has happened to bring that about. However, I have to say to him that this Government have invested in rural communities, and on post offices we are making £1.7 billion available.
Neighbourhood policing has been so successful in London that it is now used in all parts of England. The reason that crime has come down is that there is a visible police presence in these areas and local people are in touch with their local police forces. That is why, under the current Mayor of London, crime has fallen by 15 per cent. and there are 6,000 more police officers and 4,000 more community support officers. The one thing that would put the policing of London at risk is the election of a Conservative Mayor.
Points of Order
On a point of order, Mr. Speaker, of which I have given you and the Minister for Borders and Immigration prior notice. My complaint is that I have been pursuing the case of a constituent since December, and in this particular case, when my interest had been established for a long time, a Labour peer, the noble Lord Goldsmith, was informed of the outcome of the constituent’s tragic case and I was not. We jealously guard each other’s rights to represent the interests of our constituents in this House, Mr. Speaker, and I am asking you to support my view that the example of the handling of this case by the Home Office would, if repeated more widely, represent a significant and detrimental change to way that we, as individual Members of Parliament, hold Ministers to account for our constituents.
I have to be careful that I do not get involved in this matter because I do not know all the details. Sometimes correspondence can go to someone in good faith and the Department concerned is not always seeking to give offence to hon. Members. I think that the best reply that I can give the hon. Gentleman is that he has put his concerns on record, and the appropriate Department and Minister will take note of his deep concerns. [Hon. Members: “Where is the Minister?”] I do not know where the Minister is.
On a point of order, Mr. Speaker. On the last morning of every month, the Ministry of Justice publishes details of how many prisoners have been released early during the previous month. This morning, the Ministry of Justice published every set of data scheduled to be released except the early release figures. Given that those figures were due to show that almost 25,000 prisoners, and more than 4,000 violent prisoners, have been released early on to our streets, will you invite the Justice Secretary to reassure the House that these figures will be published immediately and that this was not a shabby attempt to bury bad news on the eve of the local elections?
Order. I am not going to invite the right hon. Gentleman to speak—[Interruption.] Order. We have to be careful how we use points of order. I tell the hon. Member for Arundel and South Downs (Nick Herbert) that it may be a point that he wants to raise with the Minister but it is not a point of order, and I will not allow the matter to continue. [Interruption.] Order. Hon. Members are getting into a habit of raising points of order about what Ministers did and failed to do. When a point of order is made, it is a matter for me how I handle it. That is the matter finished. It was not a point of order that the hon. Gentleman raised.
New Writ (Crewe and Nantwich)
We now have proceedings on the motion for the writ moved earlier by the Secretary to the Treasury, the right hon. Member for Ashfield (Mr. Hoon), and objected to. I should tell the House that this is treated as a matter of privilege.
Motion made, and Question proposed,
That Mr. Speaker do issue his Warrant for the Clerk of the Crown to make out a new writ for the electing of a Member to serve in this present Parliament for the county constituency of Crewe and Nantwich in the room of Gwyneth Patricia Dunwoody, deceased.—[Mr. Hoon.]
I rise with sadness and regret to oppose the issuing of the writ for the county constituency of Crewe and Nantwich in Cheshire. In doing so, may I apologise to the Chief Whip, the right hon. Member for Ashfield (Mr. Hoon)? I do not wish in any way to frustrate the Government in what they are seeking to do.
As the longest-serving Member in the county of Cheshire, and a close friend of the late Mrs. Dunwoody—I worked with her on many issues in Cheshire over many years—I believe that I represent a view held fairly strongly across the House. It appears to me and many others that the issuing of the writ before the funeral of Mrs. Dunwoody means that this matter is being pursued with unseemly haste.
As you know, Mr. Speaker, Mrs. Gwyneth Dunwoody was hugely respected for what she did in this place. She was a robust, independent socialist who was never frightened to express her view or to stand up for what she believed to be right. She was equally committed to and respected in her constituency and the county of Cheshire as a whole. I merely wish to represent to this House my concern that the writ has been issued before Mrs. Dunwoody’s funeral, next Thursday in St. Margaret’s church here in Westminster, which I shall attend. I wish to register that point. I do not intend to vote against the issuing of the writ, and I hope that Members of the House will not do so.
Ever since I have been here, it has been the tradition that when a colleague dies the party of that colleague moves the writ for the by-election or seeks to persuade Parliament to do so. That has a logic to it, and it is a logic from which my colleagues and I do not dissent. Like the hon. Member for Macclesfield (Sir Nicholas Winterton), none of us has fully taken in or recovered from the fact that only a couple of weeks ago Gwyneth Dunwoody was here, as robust as ever, and now she is not with us any more.
Without seeking to persuade my colleagues to oppose the decision we are about to take, I would like to register my view that we appear to be going down a road of having by-elections much more speedily after deaths of colleagues. There ought to be a convention at least that the funeral takes place first, and clearly there may be a need for talks between the parties to ensure that we return to a slightly more decent, respectful and honourable process. Of course, there is the question of not wanting to leave a constituency unrepresented for too long, but there are practical issues as well as ones of principle. If a by-election is called quickly, although there is no doubt that we will all—[Interruption.]
Thank you, Mr. Speaker. If there is a by-election, we will, of course, all engage in it and fight a robust campaign. Inevitably, that will be the case. However, it is not good to have hasty by-elections, even in practical terms. It reduces the opportunity for people to consider whether they wish to be candidates, and for their parties to consider that matter. It reduces the opportunity for people to apply for postal votes so that they can take part in the process, and it reduces people’s ability to take part in the debate about the politics of the constituency and the country.
I hope that we can re-examine the process for and the speed of calling by-elections. I believe that the public would share the view of the hon. Member for Macclesfield that a little more caution and a little less haste is appropriate. However, the Government have made the decision, and so they must have their way and live with the consequences.
I support my hon. Friend the Member for Macclesfield (Sir Nicholas Winterton) as a fellow Cheshire Member of Parliament. I know that the sentiments he expressed will be shared by other Cheshire colleagues and hon. Members of all parties.
In almost 25 years, I have never known a writ be moved before a colleague’s funeral. I was dismayed at the discourtesy and insensitivity afforded to Mrs. Dunwoody’s family and her constituency.
When boundary changes took place in 1983, I inherited part of Gwyneth’s former constituency—
I inherited part of Gwyneth Dunwoody’s constituency and I know the high esteem in which she was and continues to be held by her former constituents. Gwyneth Dunwoody was a neighbour, a redoubtable woman and a character. She did not deserve such treatment.
I wish to raise two points in response to those that have been made. The first is about the wishes of the family and the second is about the conventions of the House.
I shall read to the House a statement from the family in respect of the late Mrs. Gwyneth Dunwoody. They said:
“We fully support the decision to begin the process of electing a new MP for Crewe and Nantwich. Our mother proudly represented this constituency for 34 years, and would not want to see local people go without an MP. She worked tirelessly for local people and recognised there was always more to do. She would want that job of work to continue, as quickly as possible.”
It is a long-standing convention of the House that, when a party loses a member, it decides when to move the writ, which triggers the process that leads to the ensuing by-election.
Crewe and Nantwich has had a doughty advocate for 34 years and it needs a new Member of Parliament. I therefore invite the House to support the motion.
Question put and agreed to.
I beg to move,
That leave be given to bring in a Bill to permit members of the public to initiate legislation; and for connected purposes.
Under the Bill, citizens could trigger debates and votes in Parliament on topics of their choice. Part of the House’s legislative agenda would be determined directly by the ordinary citizen, not just MPs and officials. Bills would be introduced on things that mattered to the people, not merely those that excite politicians.
The Bill is sponsored by Members from across the political spectrum, united in wanting a new kind of progressive politics. We most certainly do need a new form of politics. There is a growing problem with the old Westminster politics. There is a gaping gulf between the political classes in SW1 and the country beyond. My Bill would ensure that Westminster was made more directly accountable to those whom we are supposed to serve. In place of the gentlemen’s club rules that are used to determine what is on the legislature’s agenda, the people would also get to have a say.
To initiate a law, a citizen would submit a written proposal to the Clerk in the Table Office. Just as in New Zealand, the Table Office Clerk could determine the precise wording and rule frivolous or fantastic proposals out of order. Proposals would be out of order if, in the opinion of the Clerk and the Speaker, a similar proposal had been put forward within five years. Once a proposal had been approved by the Table Office, citizens would have 12 months to collect signatures.
In New Zealand, 10 per cent. of voters need to sign up to trigger an initiative. Many western democracies have a right of initiative, including Austria, Italy, Hungary and Lithuania, yet the threshold in such countries has often been set so high that initiatives are rare. High thresholds mean that the popular initiative plays an integral part in the political process in only the United States and Switzerland.
Rather than selecting an arbitrary threshold, under my Bill those six proposals with the most signatures would qualify. Ensuring that each proposal was, in effect, in competition with other proposals would have advantages. It would encourage proposals that were, by definition, able to command widespread support and would favour measures that were inclusive and unifying, and progressive and uplifting, over and above what was narrow and sectional.
The half dozen proposals with the most signatures would then be presented to Parliament during the state opening. Having listed those Bills that the Sir Humphrey Appleby types, the remote officials and even, it has to be said, the occasional Minister wanted, Her Majesty would then read out those Bills that the people wanted on the statue book. And what a Queen’s Speech that might be! Perhaps people beyond the Westminster village might want to watch and debate the contents of the Gracious Speech—a speech with purpose, as well as pageantry.
Every couple of months, the Commons would debate and vote on one of the people’s Bills. MPs would not be under any obligation to vote for or against them. Perhaps some MPs might not even bother to turn up at all—it has been known—but no longer could politicians avoid the angry gaze of the electorate. No longer could MPs pretend that they did not have the opportunity to confront those issues that matter to the people.
It might be that the party Whips would allow free votes on the people’s Bills—and good luck to those who did not. Yet with or without a free vote, each MP would find themselves more accountable not to their Whips but to their constituents. No longer mere cheerleaders for the current Government or cheerleaders for the next, MPs would have to heed the voice of the voter.
My Bill would boost voter turnout, too. Empirical evidence from the US shows that those states with the right of initiative have, on average, 5 per cent. higher turnouts than those states without.
Would a popular initiative open the floodgates to some wildly illiberal populism? No. Restoring capital punishment is simply not a perennial demand among voters in Switzerland. Giving people responsibility makes them responsible. Even if an angry and, some may say, infantilised electorate initially put forward some radical populism, MPs would of course still have the final say.
Hon. Members may recall that the great and hon. Member for Ealing, North (Stephen Pound) once—some might say rather rashly—promised his private Member’s Bill slot to Radio 4 listeners. When they promptly suggested a change in the law on self-defence and burglars, he promptly chose not to take up their case. Under my proposal, MPs forced to confront issues that they would rather not face could do likewise, but at least when politicians decided that they were going to ignore the views of the voter, they could not pretend otherwise.
A right of initiative would strengthen Parliament and revive our much diminished standing. Far from bypassing or marginalising the Commons, my Bill would give this institution a little backbone. We would still be, in Edmund Burke’s memorable phrase, a “deliberative assembly”; it is just that those assembled here would deliberate what counted with the country. This House, under Governments of both parties, has grown less effective at holding those who wield Executive power to account. It should not surprise any of us that fewer people bother voting in elections to determine who sits here.
Designed in the age of steam trains, our parliamentary system evolved in an era when most people lived and worked in the same parish, and sending a representative off to some remote palace by the Thames was how politics had to be done. Three centuries after the Putney debates, in the age of YouTube, leaving things to politicians is no longer the only way in which politics can be done. In the era of Google, politics is not something that we, the people, must elect them, the politicians, to do on our behalf. Politics can belong to the people between elections, and voters can have a direct say over what MPs debate and vote on.
I conclude with this thought. Throughout the 1980s and 1990s, the mainstream political debates of the day hinged on questions of economic decentralisation. The big debates were about whether and how to decentralise control of the economy, trade union reform, making the Bank of England independent, privatisation and the big bang in the City. Each of those issues was a step towards decentralising economic control. The new political questions of our age will hinge on decentralising control, not of the economy but of politics and public services. This Bill is a small step towards that overarching aim. I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Douglas Carswell, Mr. Graham Allen, Mr. Mark Field, Greg Clark, Stephen Hammond, Mr. Frank Field, Mr. Richard Shepherd, Mr. Philip Dunne and Mr. David Gauke.
Citizens’ Initiative (Legislation)
Mr. Douglas Carswell accordingly presented a Bill to extend and improve methods of electoral registration: And the same was read the First time; and ordered to be read a Second time on Friday 17 October, and to be printed [Bill 102].
Orders of the Day
As amended in the Public Bill Committee, considered.
New Clause 6
Exception for activities carried on partly on land etc
‘(1) This Chapter does not apply in relation to—
(a) the use of a controlled place for the unloading of gas to an installation which is connected with land by a permanent structure providing access at all times and for all purposes;
(b) the conversion of a natural feature of which part is in a controlled place and part under land, if the operations necessary for the conversion take place wholly or mainly on, over or under land;
(c) the use of a place for the storage of gas, or the recovery of gas so stored, where—
(i) the gas was, or is to be, introduced into the store by means of a well on land, and
(ii) part of the place is a controlled place and part is under land;
(d) the establishment or maintenance of an installation for the purposes of activities falling within paragraph (a).
(2) In this section—
(a) land in England;
(b) land in Wales;
(c) land in Scotland landward of the low water mark;
“well” includes a borehole.’.—[Malcolm Wicks.]
Brought up, and read the First time.
The purpose of these technical amendments is to prevent gas storage and unloading developments from being subject to double regulation, namely under the planning regime, through town and country planning legislation on the one hand, and under the new regime for offshore gas unloading and storage developments that the Bill introduces on the other. Chapter 2 of part 1 of the Bill provides a new regime to license the unloading and storage of gas in the offshore area, comprising the area within 12 nautical miles of the territorial sea and an area beyond that, extending up to a total distance of 200 nautical miles.
The measures have been widely welcomed by the industry and received cross-party support in Committee. However, in written submissions and discussions, industry players have sought clarity on the relationship between onshore town and country planning regimes and the licences provided for in this part of the Bill. They are particularly anxious to avoid double regulation in cases in which an onshore development falling within the scope of the town and country planning legislation extends, in part, to the area of the territorial sea, thereby attracting the offshore regulatory regime established in the Bill.
In response to those concerns, we have tabled a new clause and amendments that are designed to prevent an overlap between those onshore and offshore regimes. The effect of those amendments will be to exempt an onshore gas development from needing an offshore gas licence, even if part of the structure or gas storage area in question extends into the offshore area. Such onshore developments will continue to require consent under town and country planning legislation, but they will not need a licence from my Department as well.
I am grateful to the Minister for tabling the amendments. It seems sensible to address this potential loophole now, and we agree that investors, above all, need absolute clarity. We support the proposed changes, but feel that they should be considered against the general concern that not enough is being done to address the issue of storage.
We all know that about two and a half years ago we nearly ran out of gas. I have teased the Minister before about that because it happened within hours of his saying that we were awash with gas. We are aware of that significant challenge two and a half years ago, but still not enough has been done to address the issue, which should be seen in that context. Much has happened since then, with new pipelines coming into action, new liquefied natural gas facilities being built and the storage facilities at Rough, which were half out of action, now operating fully again.
The situation is nothing like as tight as it was, but we need a more strategic approach to storage, and the Bill is a missed opportunity in that respect. The Minister should be proposing to the House that he will report to Parliament every year on how much storage he believes we will need to address our energy needs in the medium to long term. If he did that, he would also be able to tell the House what steps were being taken to ensure that that need would be met. I regret that such measures are still missing from the Bill, but we are pleased that the potential loophole that we have discussed is being addressed.
Let me reply to that point, which featured in our Committee debates. We all recognise that with the decline of gas in the UK continental shelf, in the North sea, we will be ever more reliant, as we approach 2020, on imported gas. For energy security, therefore, we need more gas storage. The Bill is designed to facilitate that with an appropriate, fit-for-purpose regulatory regime—hence the technical amendments to clarify the relevant planning aspects.
Several companies are coming forward with proposals for extra gas storage, and we strongly welcome that. I am not sure that there is a great deal of difference between the hon. Gentleman and me, but I am pleased that he has had the opportunity to make that point again. On the technical amendments, however, there is nothing between us.
Question put and agreed to.
Clause read a Second time, and added to the Bill.
New Clause 7
Disposal of hazardous material
‘(1) Where the Secretary of State enters an agreement for, or in connection with, the disposal of relevant hazardous material by or on behalf of the Secretary of State, the agreement may provide for a fee to be paid to the Secretary of State.
(2) The Secretary of State may not enter an agreement which provides for the payment of a fee unless the consent of the Treasury has been obtained in relation to the amount of the proposed fee.
(3) The fee for which such an agreement provides may include—
(a) such amount as the Secretary of State considers prudent by reason of any uncertainty which exists about the relevant expenditure which will or may be incurred in connection with the Secretary of State’s obligations under the agreement in relation to the relevant hazardous material;
(b) an amount in respect of such proportion as the Secretary of State considers appropriate of the aggregate of—
(i) the relevant expenditure which has been, will or may be, incurred in connection with the design and construction of a repository in which material (including any hazardous material to which the agreement relates) is to be disposed of, and
(ii) such amount as the Secretary of State considers it prudent to make allowance for by reason of any uncertainty which exists about the relevant expenditure which will or may be incurred as mentioned in sub-paragraph (i).
(4) In this section—
“hazardous material” has the meaning given by section 37 of the Energy Act 2004 (c. 20);
“relevant expenditure” means expenditure incurred by the Secretary of State, the Nuclear Decommissioning Authority or any other person;
“relevant hazardous material” means hazardous material which is, or is required to be, the subject of a funded decommissioning programme.’.—[Malcolm Wicks.]
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.
This issue attracted a good deal of attention in Committee, and properly so. The new clause makes explicit in the Bill the policy that the Government have made clear in the nuclear White Paper, in the consultation on the guidance for funded decommissioning programmes, on the Bill’s Second Reading and in Committee. The Secretary of State will set a fixed unit price for new nuclear operators, including a significant risk premium for the disposal of waste. The new clause makes transparent our intentions regarding the pricing of long-term waste management.
Let me give a brief recap of our intentions for the benefit of Members who were not present in Committee. We are creating a framework to ensure that operators of new nuclear power stations are responsible for, and make prudent provision to meet, the full costs of decommissioning and their full share of waste management costs. The effect of the framework will be to ensure that operators of new nuclear power stations return the sites, after those stations have been decommissioned, to a state that will be agreed with regulators and the planning authority—it is likely to be similar to a greenfield state. That will be financed by making provision, throughout the generating life of the power station, for back-end costs.
Under the framework, any potential operator will have to submit a funded decommissioning programme to the Secretary of State for approval. Such programmes will have to include the technical steps that will be required to manage and dispose of radioactive waste and spent fuel and to decommission the power station and clean up the site. They will also have to include a prudent estimate of the costs involved in those steps and proposals on how the operator will accumulate funds to meet those costs. Our intention is that before development consents for new nuclear power stations are granted, the Government will need to be satisfied that effective arrangements exist, or will exist, to manage and dispose of the waste that they will produce.
The Minister says that before such projects go ahead, provision will have to be made for cost, but will that be monitored by the Government over the life of the station and the life of the disposal of the waste, which could be for a long time? How will it be dealt with over such a length of time?
I welcome the interest in the issue from Scotland. We are introducing a regime to put into practice the principle that new nuclear must pay its full costs, including those for the disposal of waste. We are setting up a new committee to help us get the finances right, but the purpose of the fixed price is to give the investor confidence at the beginning of the life of a nuclear reactor about what the costs will be—[Interruption.] It may help if I make a little progress. We missed the hon. Gentleman in Committee—I know he would have aided our deliberations—and I am sure that I would have been able to persuade him that new nuclear has a role in a modern economy, whether it be in Scotland or elsewhere in the UK.
Will the Minister remind us whether the Bill applies to Scotland? Like him, I welcome the comments from the hon. Member for Angus (Mr. Weir), but my impression is that some political parties in Scotland say no to nuclear, which is not a sensible long-term policy.
That is also my understanding. Some in Scotland are saying no to nuclear, so the Bill’s provisions in respect of these issues do not, sadly, apply to Scotland. Let me make some progress.
The Government will set new-build operators a fixed unit price for the disposal of their intermediate level waste and spent fuel. That figure will contain a significant risk premium over and above the expected costs of disposing of intermediate level waste and spent fuel. The fixed unit price will be set by the Government on a case-by-case basis when a new-build operator comes forward to construct a new power station. The risk premium added to the fixed unit price will reflect the level of uncertainty in the cost estimates of waste disposal at the time the agreement is entered into.
For example, the fixed unit price for waste disposal for a power station being constructed in five years’ time might well be different from the fixed unit price agreed for a power station being constructed in 10 years’ time. The difference arises because, over time, it is likely that understanding of the expected costs of the geological disposal facility and associated activities will increase. Therefore, at the time the agreement is entered into, the Government could be more comfortable attaching a different risk premium to the fixed unit price.
That raises a question, does it not? We do not know how many people are going to come forward to build new nuclear power stations. If we make an estimate based on, say, five new stations being built, that will imply a certain share of the depository costs being divided five ways. If, in the end, 10 such stations are built—or the Scots come to their senses and allow some new nuclear build in Scotland so that more than the estimated number of stations are built—the share of the repository costs later on will be lower than they were earlier on. Will there be any process to enable rebates to be given to those who made a more than fair share of the contribution because they came forward earlier?
Obviously, the time scales are important, and they are likely to be long. It is not possible to say exactly when the geological repository will be built and up and running, but it will be some time hence. When a proposal is made to build a new nuclear station, the more immediate task—I appreciate the difficulties—is to seek to estimate what would be a reasonable share of decommissioning and of the costs in the geological repository. Because of the uncertainties, we believe it important to go for the fixed price concept, but also to include the risk premium.
I am grateful. The form of words used by the Department has always been “the full cost” of decommissioning and “the full share” of the costs of cleaning up the waste, but the concepts of “full” and “share” seem to be at odds with each other. Either it is a share, or it is the full amount. For the sake of clarity, would it be more precise to refer to the charge as for the full marginal costs?
When it comes to the cost of decommissioning the plant, it is relatively straightforward, although there are all sorts of technical ramifications, but we recognise that we have a duty to clear up our legacy of nuclear waste in any case—hence, as the hon. Gentleman knows, the process to seek a volunteer community for the geological repository. We need a geological repository for the legacy anyway, but with new nuclear reactors, to put it in simple terms, extra space will be needed for new nuclear waste. Our determination is to ensure that the market or the companies pay the full cost of that extra space.
I am trying to distinguish between marginal and average costs. If extra waste is produced because I set up a new nuclear power plant, marginal costs will arise, but am I expected to meet only those marginal costs associated with the disposal of that extra waste or should I also make a contribution to the average fixed costs of the operation?
The operator would also make a contribution to the fixed costs, but let me make some progress.
The risk premium should help ensure that the operator bears the risks associated with uncertainty in waste costs. We believe that it will provide the taxpayer with protection against the eventuality that the actual costs of geological disposal exceed the projected costs.
With respect, may I make a little more progress?
The fixed unit price and risk premium will provide new-build operators with clarity on the maximum amount they would be expected to pay the Government. That cost certainty will enable them to make investment decisions and seek financing for new-build. Should the actual costs of providing the waste disposal service prove lower than expected, those lower cost savings would not be passed on to nuclear operators. Instead, they would accrue to the Government because companies would have forgone any advantage in the form of lower costs in return for certainty in the price of waste disposal. Because the Government have taken on the risk, it is only right that they keep any upside that accrues.
In light of the debate in Committee on the fixed price for waste and the request for greater transparency, we decided to draft the new clause to set out clearly the Government’s policy intentions on the issue. In essence, the new clause translates our existing stated policy on waste disposal set out in the nuclear White Paper and in the draft guidance on nuclear decommissioning programmes into the Bill. I am now happy to give way to my right hon. Friend.
I am grateful to my hon. Friend, who has already addressed some of the risk premium issues that I was contemplating. Will there be a ceiling on what nuclear investors will be expected to pay? Depending on cost overruns or unforeseen costs, which are very likely, they will presumably be charged up to the ceiling on the premium. Is my understanding correct?
There will be a fixed price, which, as I have indicated, will probably not be the same in respect of a station built in the early days as that for one built 10 years later because by then we will know more about the costs of the geological repository. The principle of the fixed price operates in two parts. First, for the purpose of investor confidence, a fixed price will be determined early in the life of the new nuclear reactor so that money going into the given fund will be paid from year one—a key part of the Bill. Secondly, because of the uncertainties about the costs—we appreciate the difficulties in this respect because we may be talking about waste that does not need to be disposed of for 40, 50 or more years—what we are calling a risk premium will be determined. We are adding an extra amount to the fixed price to safeguard the taxpayer.
Before the hon. Gentleman comes in, may I try to give a fuller answer to the question I was asked about the full share of waste costs? As I said, those costs are directly attributable to accepting new-build higher-activity waste into a geological disposal facility. Added to that is a contribution towards the fixed costs of constructing that facility, which the hon. Member for Northavon (Steve Webb) mentioned. That will also involve a significant risk premium to cover uncertainties, and the cost of managing waste pending disposal or transfer for disposal. Separately, operators are also responsible for the full cost of disposing of low-level waste in a disposal facility, and managing that and other waste pending its disposal. We are doing our best to put our principle—that the costs must be paid fully by the operating companies, and that there should be no cost to the taxpayer—into practice.
I want to ask about practice. Why is the Minister confident that the new clause provides a mechanism guaranteeing that the taxpayer will not be landed with an additional bill, given the notorious regularity of that phenomenon in the case of the nuclear industry? Has he consulted, for example, the Centre for Alternative Technology, which has gone to great lengths to examine the costs of nuclear power and disposal? Has he factored in the cost of reprocessing waste, which may become necessary as uranium becomes scarcer? All those elements may involve a significant cost to the taxpayer if the new clause is not robust enough to ensure that the industry covers 100 per cent. of the cost.
That is our intention. We are going into some technical detail, and we are establishing a committee to help us to understand the financial implications and ensure that our intention becomes practice. I know that some people are doubtful about that, pointing to past practice, but we are adamant that there will be no subsidy in this instance—although renewable technology receives a considerable subsidy, and rightly so.
As for consultation, we engaged in one of the widest and most thorough consultations in the history of British public policy. We were given good advice by non-governmental organisations and, indeed, the judiciary, for which we are extremely grateful. The most important part of the process, in my view, was our random selection from electoral registers of 1,000 people to take part in public consultations in some nine city centres. For a day those people were subjected to the arguments for and against, and I considered it a very good example of modern democracy.
The shorter answer is that I am satisfied that everyone has had an opportunity to contribute thoroughly to consultation on this important issue.
I welcome the Minister’s intention of clarifying the issue, although I think that some of his explanations made it slightly more complicated than it needed to be, particularly his reply to the question from the right hon. Member for Scunthorpe (Mr. Morley).
It is vital for taxpayers to know how their interests will be protected, and essential for the companies that are potential investors in new-build nuclear to know exactly what costs they will face before embarking on their investment plans. We need absolute clarity on that issue, because, as both we and the Government have said, we must ensure that there is no public subsidy for new-build nuclear. Our position is clear: we are happy for companies to invest in new-build nuclear as long as there is no subsidy, and as long as they are responsible for the full costs of decommissioning and the full long-term costs of disposal of spent fuel and waste. We think that, in return, they should be given a level playing field when it comes to sorting out the planning problems that they have faced in the past, although we do not agree with the Government about the total loss of local democracy in the measures proposed in the Planning Bill.
We think that there should be site and type approval, so that two of the biggest issues that have delayed developments in the past—the precise type and the precise location of reactors—can be excluded from the debate. We are also keen to reassure investors that any change of Government will not pose a threat to their investments, or fundamentally change the ground rules for the investments that they have been considering. We consider it absolutely right for us to work with the Government to ensure that the right system is introduced.
We are pleased that the new clause gives those who develop new-build nuclear programmes full responsibility for storing the waste on site for a considerable period, potentially as much as 100 years, and for paying their fair share of the long-term disposal costs and some of the infrastructure costs of building nuclear facilities. We also accept the notion of a flat fee and a risk premium, but here the Minister started to make things a little more complicated. The right hon. Member for Scunthorpe asked whether there would be a ceiling for the premium. My understanding is that there will be a fixed cost but also a fixed element that is the risk premium, which means that if the amount is lower than the ceiling, companies will still pay the full fixed premium. In other words, the ceiling is not flexible.
We need much more detail. We know that it cannot be given to us today, but it will be important to our future considerations. Will the fee ultimately be based on the volume of nuclear waste alone, and if so, will it reflect the balance between high-level and intermediate-level waste? Will it take account of radioactivity levels? The extent to which waste needs to be encased may differ according to the level of radioactivity. Building-cost inflation is higher than inflation in general; how will the fee take account of that?
When does the Minister think the repository will be built? What is his best guess? He said that it was difficult to be precise, but we are not asking for precision. Are we looking at three, five, eight or 10 decades? At what point does he think the site for the repository will be identified and earmarked for further investigation? There is a fear that not enough progress has been made in that regard. Does he think that a single repository will be sufficient for the disposal of both legacy waste and all waste from a new-build programme? The Secretary of State said recently that he thought there might be twice as much nuclear power in a few years’ time. Does the Minister believe that, in the event of a massive expansion of nuclear power, all the waste could be incorporated in a single facility, or does he think that we might need two? That would involve huge additional infrastructure costs, which would need to be taken into account.
The Minister explained about lower costs, and said that there would be no repayment of the risk premium. If it becomes clear that the Government miscalculated, that the cost of building a repository will be much greater than they estimated and that the cost will therefore be greater than the total amount charged to the nuclear companies, including the risk premium, will there be any scope for the Government to tell the companies, “We suggested this amount in good faith but we got it wrong, so a supplementary charge will be necessary”? I know that the Government are acting in good faith, but they may end up subsidising the nuclear waste disposal regime, and I know that that is not their intention.
Does the hon. Gentleman share my concern about the opposite risk? Is there not a danger that, because in the early days the Government will go out of their way to ensure that all the costs are covered, the early builders will be quoted a higher fixed charge than the people who come along subsequently? Given that we do not want to discourage people from entering the industry at an early stage, the Government may need to give some thought to the possibility of lowering charges later if it turns out that people are paying too much.
That is a valid point. If the assumption in the early days was that five nuclear power stations would be needed, the cost of road infrastructure and the building of the repository would be very high; but if we ended up with 20, the figure would change dramatically. There must be equity, or the cost will be prejudiced against the early developers, and it is they who will kick-start the programme if it is to happen.
Will the Minister also tell us more about his approach on the reprocessing of spent and used fuels? There is considerable potential for that within the industry. Britain has led the world on it in the past, and will be keen to do so again. It could greatly reduce the volume of waste that needs to be disposed of, particularly for the most radioactive of materials. The Government, however, are being rather coy about their plans on reprocessing. Also, how would this be factored into the costs? If some radioactive material were to be reprocessed and therefore did not require disposal so the volumes were significantly different from those initially estimated, how would that be taken into account in the long-term costs?
In general, we accept the way in which the Government are progressing, but we believe that it is very important to have clarity so far as the industry is concerned, and a lot of detail has still to be sorted out.
I welcome the thrust of the new clause. It is disgraceful that the nuclear sector has over the decades moved a lot of its liabilities and debts on to public liabilities—although I have to say that that has been the case in just about every country where there has been nuclear power, so it is not unique to our sector. If we are to have new nuclear, it is of fundamental importance that there should not be Government subsidies or a liability that falls on the public after private companies have made their profits over a period of time.
I think that the Government are genuine in their approach to this matter, and I know that my hon. Friend the Minister is, but this is a very complex and difficult area, as has been picked up on in the debate. I now understand exactly what the risk premium will be and also the thinking behind what the Minister has said. However, I know that the Committee on Radioactive Waste Management first recommended that there should be an interim site for the storage of waste, and I presume that the cost of that site would have to be factored into the calculations, and then goodness knows when the longer term depository will be built. The costs and technical challenges of that are huge. That is where the problem lies, because it will be difficult for the Department to calculate what that risk premium should be. It is a bit optimistic to think that we could go back to the nuclear industry and say, “We got it wrong, so can we have some more money?” as I assume that it will have signed various contracts on the arrangements, and it might be a little reluctant to agree to such an approach.
Will my hon. Friend the Minister give us some more detail? For example, is it feasible to have an upper and lower range in the risk premium? I accept that if there is investment the investors need to have some certainty and to know what their maximum liabilities could be. That is not unreasonable; I understand it for such investment in major infrastructure. However, it is also not unreasonable to have some protection for the public and the taxpayer.
On the issue of protecting the taxpayer, does the right hon. Gentleman think that there needs to be a further protection against the company becoming financially insolvent and therefore being unable to deliver when the need arises? Should some protection against insolvency be built into the system?
The hon. Gentleman is a mind reader, because that was the second point that I was going to raise. There has been a history of financial instability in the private sector in the nuclear industry. We all know what happened to British Energy, for example; it had to be bailed out by the taxpayer. There was no choice in that, because if we want to keep the lights on, we have to step in and pick up such liabilities.
Will my hon. Friend the Minister clarify the following point? I understood from what he said that the investors in new nuclear will make a regular payment into a fund, year on year, which covers part of my point. However, in order to protect the taxpayer from people walking away from their liabilities by just wrapping up and going into bankruptcy, is there an argument for some protection such as a bond? That is not unprecedented. It is the case in the waste industry, for example; the Government rightly require waste disposal companies to put down a bond that guarantees the future maintenance of sites. Might the Minister like to consider something like that?
It is welcome to have before us a measure that attempts clarification, as the hon. Member for Wealden (Charles Hendry) said, but that is difficult to achieve in this case. Nevertheless, I share the Minister’s intention of trying to clarify matters, as I do his high regard for Greenpeace and its contribution to the process that has brought us to this point—although I suspect my tongue is slightly less in my cheek in saying that.
The Liberal Democrat position on the nuclear question is clear. We think that the safest way to ensure that there is no public subsidy for nuclear new-build is not to build it. I assure any investors who may be watching our debate on the parliamentary channel that their investment will be at risk if we play a part in any future Government, because if we had the chance we would seek to slow down, and if possible to stop, the development of nuclear power.
I understand where the hon. Gentleman is coming from, but will he therefore outline the Liberal Democrats’ position on buying in power from other countries? When there is a need to supplement peak load, would his party oppose buying in from countries that supply power through nuclear power stations?
The hon. Gentleman raises a quite different point that does not relate to the Bill, so I shall pass on. Let me say, however, that energy markets are complex and we cannot always prescribe where the energy will come from, but my ideal would be that we do not in future source nuclear power from any country, because I would not want those countries building nuclear either.
No; I want to make just a little progress.
The context of this issue is the enormous cost of decommissioning and clean-up with which the first generation of nuclear power stations left us. In Committee, we explored the various current costs that the taxpayer is having to pick up from the nuclear installations inspectorate, CoRWM, the potential nuclear financing assurance board, and the big daddy of them all, the Nuclear Decommissioning Authority. The Minister gave assurances that many of those were intended to be covered under the new regime. That is quite a threat to investors, given the cost of the NDA. The net grant-in-aid contribution of the taxpayer to the NDA in 2007-08 is £1.4 billion. That is rising by 8 per cent.—a very good settlement, as many public sector organisations would agree—in 2008-09, and by almost a further 5 per cent. in 2009-10. Therefore, the taxpayer will soon be facing an annual bill of £1.6 billion from the last generation of nuclear power stations. It is brave of the Government to be leading us down the same path a second time. When we listed all the potential costs to the taxpayer, the Minister gave a lot of assurances about which of them were intended to be entirely covered by the regime, but there was one exception: long-term storage and the financial regime covering that, which the new clause addresses.
It has rightly been said that there is, in effect, a ceiling to the risk to the private sector and an ongoing liability and risk to the taxpayer. We discussed at length in Committee the various time-scale problems. The hon. Member for Wealden has again raised a lot of the questions, many of them unanswered, such as about how the costs can be predicted or divided. For instance, although the new generation of nuclear power stations may, should it ever come to pass, produce radioactive waste in smaller volumes, it may well be much more radioactive and therefore pose new technical challenges that are different from those facing the repository for the current generation of nuclear power stations.
There is also the question of whether we are expecting to take in foreign radioactive waste, as we have done in the past. Are we, in effect, to become the nuclear dustbin of the whole of Europe, or countries further afield, by being one of the few countries brave enough to progress with the idea of repositories?
It is tempting to try to apportion proportions of the blank cheque that we think is at risk of being written, but as the Minister has honestly accepted, the problem is that we cannot know the real context in which all this will be decided in 40 or 50 years’ time. We are seriously expected to sign up to licence fees for a repository for radioactive waste that does not exist, in a location that has not been found, for amounts that we cannot calculate, and all for power stations that might never be built and that no sane investor would touch with a barge pole. This is nuclear fairyland, and the Minister has an impossible task in persuading us that he can provide clarity and reassurance on this matter.
We need greater clarity on the position of the hon. Gentleman’s party on this matter. He just made the profoundly important comment that Liberal Democrat involvement in government would put at risk investment in this area, and people who might be seeking to invest billions of pounds in this project will need to know exactly what that means. Is he saying that a condition of the Liberal Democrats’ entering a coalition would be an end to a nuclear new-build programme? If he is not saying that, what does he mean? If he is saying that, is he therefore saying that the Liberal Democrats would compensate the investment made, or would someone be expected to invest now and then find that that money is simply written off by their involvement?
Although I hope that my right hon. Friend the Member for Sheffield, Hallam (Mr. Clegg) has great regard for my opinions, he is unlikely to ask me to determine the basis on which the Liberal Democrats might talk to other parties after a general election by what I say when discussing the Energy Bill.
No, not on that point.
The Minister referred in passing to an advisory committee—the proposed nuclear liabilities financing assurance board—which is mentioned in the White Paper but is strangely absent from the Bill. In Committee, we proposed an amendment that would give statutory force to and statutory reassurance about its role, but that was resisted by the Government. I would not mind hearing the Minister again tell us precisely why the NLFAB was excluded from the Bill and why it is not present in the regime described in the new clause, because that relates to one of the arguments that he is using to assure us on the future financing of the nuclear industry, and the NLFAB surely should have been given legal force.
The risk is that 40 years hence some future Government will find themselves with unexpected problems on decommissioning and disposal—perhaps spiralling financial or political costs. They will say that the situation is nothing to do with them and that it is all the fault of Labour Ministers back in the noughties who made bad decisions in 2008, many decades ago, because they did not know what they were planning. They will ask, “How could those Ministers have landed us with all these problems?” In the end, the taxpayer will have to pick up the bill because, as the right hon. Member for Scunthorpe (Mr. Morley), a former Minister, described in relation to the previous process, there is no way that we can avoid doing so if we become reliant on nuclear energy and we are to keep the lights on.
The chance of this new clause and the Bill being intact in 40 years’ time is virtually nil, and the Government are leading us down a high-risk path given the poisonous legacy of nuclear power and the creation of radioactive waste that will last for millenniums. The new clause and the system that it will help to create involves a high risk for generations of British taxpayers.
There are two sets of contributors to this debate: those who, like me, believe that nuclear energy will play a key part in reducing our carbon emissions in decades to come, and those who want to stop nuclear energy at all costs and want to continue this debate as a way of making it as difficult as possible for people to invest in the industry.
Before I deal with the substantive issue of the new clause, I should like to correct one of the myths that we have heard. My right hon. Friend the Member for Scunthorpe (Mr. Morley) slightly fell into the trap of citing it, but it has clearly been enunciated by Liberal Democrat Members. I am talking about the myth that the legacy cost is a private liability that was imposed on the public sector and the taxpayer. It was not, because almost all that liability was generated by a nationalised industry, and that public liability has been retained by the public sector. We need to devise a new process and a new structure that deals with a new industry, which will involve private investment and needs to be carefully controlled to ensure that it does not impose a liability on the public sector. That is what the Minister has sought to do through this new clause.
I cannot speak for what people were told in the 1950s, but that is a relevant issue, which is why we need to get the approach right now. The hon. Gentleman has told us that not going forward with the nuclear programme would be a condition of the Liberal Democrats’ involvement in a future Government. He has also said, in effect, that were they to get into power, they would tear up the Climate Change Act, because it will require us to commit to ways of reducing our carbon emissions, and that will almost certainly involve a Labour Government—or, perish the thought, a Conservative Government—building new nuclear power stations. The Liberals will come along at some point saying, “We are not going to have these nuclear power stations any more.” They will thus have to tear up their commitment to the Climate Change Bill, and as the Bill will provide for a legal commitment on the Government, the Liberals would be able to do so only by repealing the legislation once it is enacted. They have got themselves into a complete knot on this matter.
The Minister should be congratulated on listening to the concerns expressed in Committee about the need to provide the industry with clarity and on coming back to us today with a new clause that deals with the issue in a clear and straightforward way.
My hon. Friend is a scientist, and he has brought much-needed scientific analysis to the debate that I have thus far heard on the monitors. Does he share my dismay that, in addition to the Liberal Democrat position of deterring billions of pounds of investment in the UK economy, there is a regrettable omission in Opposition Members’ analysis of the costs of the waste that we are discussing and their basis? For instance, I have heard it said that the liability costs were incurred by our first fleet of reactors. Does my hon. Friend agree that the costs were essentially incurred as a result of our military programme?
Although I do not disagree with the points being raised and in particular with what is being said about the motivation for the original nuclear programme coming from the military, I seek clarification. That programme was state-funded, and a lot of those costs fell to the state. Whether we like it or not, we now have a privatised nuclear sector. It was privatised by the Conservative party, and, as with many of its privatisations, debts and liabilities were written off to make what was being sold more attractive to investors. The enormous liabilities that we have come from that period, which is why my hon. Friends and I are anxious that that does not happen again.
My right hon. Friend brings me to the point that I wanted to make about the new clause. By introducing it, the Minister has tried to provide the industry with complete clarity about what it will have to pay in order to contribute a fair share of the cost of decommissioning, cleaning up and storing the new capacity that is generated. He has even made it clear that a risk premium will be imposed on the industry, so it will be clear about that. My concern, which I have expressed in a couple of interventions, is that to ensure that he is 100 per cent. confident that the public sector will not face a new liability in the future, he will have to be cautious in estimating the future costs. He will probably also have to be cautious in estimating the number of nuclear power stations that will be built.
As the need to build more nuclear power stations to provide us with energy security and to attack our carbon emissions in the decades to come becomes clearer and clearer, I suspect we will end up building more nuclear power stations than we initially estimated and the Minister’s initial estimates of the costs involved will turn out to have been far too high. I am concerned that we should be able to reassure potential investors that, if it becomes clear in five, 10 or 20 years that they have been charged too much, there will be some process for reducing their costs.
If we can provide such reassurance, it will encourage people to come forward early, even though they are bound to be cautious about potential investments, especially if they hear irresponsible comments such as those made by the Liberal Democrats today threatening to overturn a policy that will have been instituted. Investors are bound to be cautious, but we could tell them that we will do the best we can to estimate the costs and, if it turns out that we have completely overestimated them—although there will be a risk premium—we would consider reducing the cost to the investors of storage and decommissioning in the future.
We have had a detailed discussion and I am happy to follow the authoritative speech by my hon. Friend the Member for South Thanet (Dr. Ladyman). I thank him for his contribution.
I shall try to deal with the specific questions that have arisen, but I wish to acknowledge that I am aware of the difficulties we face in the quest to put principle into practice. Technically, this is a complex issue and the time scales are very long. I hope to convince the House that we will use our best endeavours to set up processes and advisory services to get this right.
I was asked whether the risk premium has a ceiling. In a sense it does, because there will be a fixed price and a risk premium on top of that. That will not vary up or down. I listened to my hon. Friend, but if the Government make some money out of this—which is not the intention—and the risk premium turns out to have been too high, that is the quid pro quo for the investor having confidence in the costs through the fixed price.
I was asked whether one geological repository would be enough. That is certainly our intention. We are at the early stages of thinking on the repository, the volunteer principle and so on, but that is our intention. If, generations hence, people return to this issue, that will be a matter for them.
I was also asked what would happen if costs for the geological disposal facility overran. We will do our utmost to be rigorous in project management, although it is more likely that cost overruns will occur in relation to the fixed costs of designing, researching and building the repository rather than in relation to incremental costs that are directly attributable to the cost of disposing of new-build waste. The Government would have to incur the costs of designing, researching and building the repository with proper project management. For each station built a fixed unit price will be set above the central estimate of costs, because of the risk premium provision.
Does the Minister agree that one of the other issues that we need to bear in mind when considering potential cost overruns is the savings that the establishment of a repository will make, not only for the NDA but for the UK taxpayer, by slashing the decommissioning costs that we now face? The current nuclear liability costs are estimated at £78 billion, but the sooner we have a repository in place, the sooner we can whittle those costs right down.
My hon. Friend is a humble optimist—[Interruption.] Apparently there are other contenders.
The fixed unit price will be based on the best available cost information at the time an operator requests a fixed price, with uncertainty factored in when determining the appropriate risk premium. Consequently, dependent on the date of the nuclear power station’s construction, operators of different power stations may be set different fixed unit prices for waste disposal. A road map, published alongside the consultation on the draft guidance, sets out further detail of when we expect to be in a position to publish the methodology we will use to determine the appropriate level for the fixed unit price.
I was asked a difficult question about my best guess on when the repository would be available. We are pursuing an approach to the siting of the geological disposal facility based on voluntarism and partnership. An important part of the process will be to agree an indicative timetable with the volunteer community. Therefore it is not possible to give a firm indication now. However, the “Managing Radioactive Waste Safely” White Paper will include more information and will be published shortly.
I was also asked what would happen if a company or operator went bankrupt. If a nuclear operator were to become insolvent, we would expect that in most circumstances it would be economic to continue running the plant, as the additional costs of operation are likely to be less than the revenue earned from generating electricity. That would make the acquisition of a power station attractive to an alternative nuclear operator. Additionally, moneys in the fund have to be secure in the event of insolvency, and the operator is required to have back-up protection in place to top up an insufficient fund.
The hon. Member for Wealden (Charles Hendry) asked me about radioactivity versus volume and the effect on the price. That is work that is ongoing, and we will publish a methodology and model in due course.
I was asked about reprocessing, and specifically whether the fixed unit price would include possible reprocessing. The fixed unit price will be based on the Government’s current policy for waste disposal, as set out in the nuclear White Paper. We consider that spent fuel from new nuclear power stations will not be reprocessed, but will be disposed of in the geological disposal facility. That is not to say that we are closing the door on the idea of reprocessing, but we have to make some assumptions. The fixed unit price will be based on the expected costs of geological disposal of spent fuel, not on any assumption of reprocessing.
I was asked by the hon. Member for Cheltenham (Martin Horwood) whether we will take on foreign waste, as we have in the past. I remind the hon. Gentleman of the international conventions governing the movement and disposal of radioactive waste. Those would need to be taken into account when considering any proposals to dispose of foreign waste in the geological disposal facility.
I turn now to how the fund will be monitored. Operators will be required to have in place arrangements for monitoring both the expected costs and the performance of the fund, which will be at arm’s length from the company of course. Arrangements would include annual reviews by the operator and the fund managers, which would be submitted to the Secretary of State; in-depth quinquennial reviews conducted by the operators and fund managers and submitted to the Secretary of State; notification of changes, such as operational or technical changes that materially increase the operator’s liabilities; and other specific events, including a change of control or ownership of the operator, or a change in the credit rating of the operator or parent company. Ministers may also obtain information if required. They may call on the expert advice of the board that we are establishing, the NLFAB, and of independent third parties.
I should say that by creating the new board as an advisory body we are ensuring that the Secretary of State retains overall responsibility for the approval of the funded decommissioning programme. That enables the Secretary of State to take a view not only of the advice of the board on the suitability of the funding arrangements, but of any advice from environmental and health and safety regulators. We can argue, as we have, that this approach is more cost-effective than creating a statutory board that would require further consultations and a permanent body of members.
My ambitions today are twofold. First, with the leave of the House, I want to see Report and Third Reading safely through the Chamber. Secondly, I want to watch the football this evening. It is not my ambition to enter into jests with those on the Liberal Benches, but I heard the hon. Member for Cheltenham say that future investors could have no confidence that a Liberal Government would maintain a nuclear programme. I regret that, of course, because responsibility in government is important. I note that British Energy has a base in Gloucester and employs about 1,000 people. I imagine that some of them reside in the hon. Gentleman’s constituency and will have listened to him with great care. I do not know whether he has any further message for the Liberal Democrats who are hoping to hold on to their seats in Barnwood ward, where British Energy resides, and it may be that a change of policy is afoot.
Indeed. Anyone would think that there were elections coming up later in the week, would they not, Mr. Deputy Speaker?
That was exactly where I wanted to draw the line—on a trivial note. I hope that I have done enough to satisfy colleagues that our amendment should be accepted.
Question put and agreed to.
Clause read a Second time, and added to the Bill.
New Clause 8
Power to amend licence conditions: smart meters
‘(1) The Secretary of State may modify—
(a) a condition of a particular licence under section 6(1)(c) or (d) of the Electricity Act 1989 (c. 29) (distribution and supply licences);
(b) the standard conditions incorporated in licences under those provisions by virtue of section 8A of that Act;
(c) a condition of a particular licence under section 7 or 7A of the Gas Act 1986 (c. 44) (transporter, supply and shipping licences);
(d) the standard conditions incorporated in licences under those provisions by virtue of section 8 of that Act;
(e) a document maintained in accordance with the conditions of licences under section 6(1) of the Electricity Act 1989 or section 7 or 7A of the Gas Act 1986, or an agreement that gives effect to a document so maintained.
(2) The Secretary of State may exercise the power in subsection (1) for the purpose only of—
(a) requiring the holder of a licence to provide or install, or facilitate the provision, installation or operation of, meters of a particular kind, or
(b) requiring the holder of a licence to make arrangements related to the matters mentioned in paragraph (a).
(3) Modifications made by virtue of subsection (1) may include—
(a) technical specifications for meters (including specifications in respect of matters relevant to the ability to obtain remote access to meters);
(b) a prohibition on the supply of gas or electricity through a meter other than a meter which complies with a technical specification under paragraph (a);
(c) provision about the installation of meters which comply with a technical specification under paragraph (a) (including provision about the replacement of existing meters);
(d) provision about electricity generated by a customer;
(e) provision about the circumstances in which any pre-payment facilities of a meter may be utilised;
(f) provision about the use of a meter remotely to disconnect a customer’s premises;
(g) provision about the protection of consumers;
(h) provision about access to, and the use of, an electricity distribution system or part of an electricity distribution system for communication in connection with a meter;
(i) provision about access to information from meters (including provision enabling a customer, or a person acting on a customer’s behalf, to have access to information about the customer’s consumption of gas or electricity);
(j) provision about communication of information by or to meters (including provision about its onward communication) and about the use of such information;
(k) provision requiring the holder of the licence to enter (or refrain from entering) into an agreement of a specified kind, or with a specified person;
(l) provision specifying, or enabling the determination of, a date from which a modification is to take effect.
(4) The power conferred by subsection (1)—
(a) may be exercised to make different provision in relation to different classes of customer;
(b) may be exercised generally, only in relation to specified cases or subject to exceptions (including provision for a case to be excepted only so long as specified conditions are satisfied);
(c) may be exercised differently in different cases or circumstances;
(d) includes a power to make incidental, supplementary, consequential or transitional modifications.
(5) The power conferred by subsection (1) may not be exercised after the end of the period of 5 years beginning with the day on which that subsection comes into force.
(6) Provision included in a licence by virtue of that power—
(a) need not relate to the activities authorised by the licence;
(b) in the case of a licence under section 7 or 7A of the Gas Act 1986 (c. 44), may do any of the things authorised by section 7B(5) of that Act (which apply to the Gas and Electricity Market Authority’s power with respect to licence conditions under section 7B(4)(a));
(c) in the case of a licence under section 6(1)(c) or (d) of the Electricity Act 1989 (c. 29), may do any of the things authorised by section 7(2) to (4) of that Act (which apply to that Authority’s power with respect to licence conditions under section 7(1)(a)).
(7) In this section a reference to a meter includes a reference to a visual display unit, or any other device, associated with or ancillary to a meter.’.—[Malcolm Wicks.]
Brought up, and read the First time.
With this it will be convenient to discuss the following:
Government new clause 9—Power to amend licence conditions: procedure.
Government new clause 10—Smart meters: supplemental.
New clause 1—Implementation of new metering arrangements—
‘(1) The relevant licensees for the purposes of this Part are—
(a) gas suppliers and gas transporters within the meaning of Part 1 of the Gas Act 1986 (c. 44); and
(b) electricity suppliers and electricity distributors within the meaning of Part 1 of the Electricity Act 1989 (c. 29).
(2) The effective date for the purposes of this Part is the date which is 10 years after the date on which section 79 comes into force.
(3) Expressions used in this Part have the same meaning as in the Part 1 of the Gas Act 1986 or Part 1 of the Electricity Act 1989.
(4) As from the effective date, a relevant licensee must not supply gas or electricity to any premises that is not subject to the provisions of this section.
(5) The Secretary of State may exempt any relevant licensee from the prohibition imposed by subsection (4) in relation to such premises, for such period of time, and subject to such conditions as he considers appropriate in all the circumstances of the case.
(6) References in this Part to new metering arrangements are to arrangements (including the provision and operation of any necessary communications and data-handling infrastructure) designed to ensure that, by the effective date, all premises supplied with gas or electricity in Great Britain will continue to be so supplied through a meter that conforms to the following three requirements—
(a) that the meter must record and be able to store measured consumption data for multiple time periods;
(b) that the meter, either on its own or with an ancillary device, must facilitate remote access to such data; and
(c) that the meter must meet any specifications that may be set out in any regulations made by the Secretary of State under this Part, pursuant to his duties under Part 1 of the Gas Act 1986 and Part 1 of the Electricity Act 1989, for the purposes of facilitating the introduction of new metering arrangements.
(7) This section may not be brought into force before 1st January 2010.
(8) The Secretary of State may, in accordance with this section, modify—
(a) the conditions of a particular licence held under section 7(1) or 7A(1) or (2) of the Gas Act 1986 or under section 6(1) of the Electricity Act 1989;
(b) the standard conditions of licences of any type mentioned in those subsections
if he considers it necessary or expedient to do so for the purpose of securing the implementation of the provisions of this section.
(9) The power to make modifications under paragraph (a) or (b) of subsection (8) includes powers—
(a) to make modifications requiring licence holders, or classes of licence holder, to cooperate together, under arrangements approved by the Authority;
(b) to make modifications requiring any relevant licensee to take or refrain from taking any specified action, whether in relation to premises supplied with gas or electricity or otherwise;
(c) to make modifications relating to the operation of access to, or use of pipe-line systems and distribution systems; and
(d) to make incidental, consequential, or transitional modifications.
(10) Before making modifications under this section, the Secretary of State must consult the Authority, the holder of any licence being modified, and such other persons as he considers appropriate.
(11) Subsection (10) may be satisfied by consultation undertaken before, as well as by consultation undertaken after, the commencement of this section.
(12) Any modification under subsection (8)(b) of part of a standard condition of a licence shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of Part 1 of the Gas Act 1986 or Part 1 of the Electricity Act 1989.
(13) Where the Secretary of State modifies the standard conditions of licences of any type under subsection (8)(b), the Authority must make the same modifications of those standard conditions for the purposes of their incorporation into licences of that type granted after that time.
(14) The Secretary of State must publish any modifications under this section in such manner as he considers appropriate.
(15) The power of the Secretary of State under this section may not be exercised after the end of the period of five years beginning with the passing of this Act.’.
New clause 3—Regulations on new meters—
‘Where the Secretary of State makes regulations in connection with new metering arrangements under—
(a) this Act;
(b) Part 1 of the Gas Act 1986; or
(c) Part 1 of the Electricity Act 1989,
such regulations must require that such meters have the facility to use the data that they collect on gas or electricity consumption for the purpose of assisting the householder to select the gas or electricity tariff which is most to the householder’s advantage.’.
New clause 16—Information on carbon dioxide emissions—
‘The Secretary of State shall, within 12 months of the passing of this Act, make regulations requiring companies supplying gas or electricity to specify on consumers’ energy bills the volume of carbon dioxide emitted in generating the energy supplied in the period to which the bill relates.’.
Government amendments Nos. 50, 58 and 59.
It is good to get on to something smart, namely smart meters. The issue was of significant interest during our discussions in Committee and in the slightly wider world. I know that many Members of the House have a keen interest in it.
During our discussions in Committee, it was clear that both sides of the House were in agreement about the potential benefits of smart meters for both consumers and energy suppliers. The benefits include giving consumers better information to help manage their energy use, providing accurate bills and, potentially, providing easier access to a wider range of tariffs. Smart meters also have the potential to contribute to the future development of the energy services market that many of us hope will be forthcoming.
Of course, smart meters can also facilitate the export of electricity from microgeneration to the grid. For suppliers, the benefits include reduced costs, for example through remote meter reading, accurate billing and the potential to switch consumers between tariffs. All that will in turn translate into an improved level of customer service. However, Members also recognised that a roll-out of smart meters to all energy consumers would be a complex and highly challenging project, which would entail significant costs as well as the significant benefits I have already outlined.
There is clearly a lot of uncertainty about cost. The figures that the industry comes up with and those that the Government use vary hugely, perhaps by a factor of three. The key source that the Government seem to use is a report by Mott MacDonald. If that has not already been placed in the Library, would the Minister be willing to ensure that it is?
The Government published our response to the billing and metering consultation yesterday. I know that yesterday was only yesterday, but I made efforts to ensure that certain colleagues knew about that publication so that they might be able to glance at the report. Last week, we published detailed economic impact assessments of the costs and benefits of a domestic and small business smart meter roll-out, having previously published an impact assessment for a roll-out to medium-sized businesses.
Before I turn to the Government amendments on smart metering, it would be helpful if I reiterated the Government’s policy intentions as set out in our response to the consultation. Our policy is most easily explained by examining our proposed approach in each of the three customer segments that we have identified: medium-sized business, small business and domestic consumers. Hon. Members who have had the opportunity to study the impact assessments that we published will be aware that there is a positive cost-benefit analysis for proceeding with smart metering for the medium-sized business sector and that the Government have therefore already announced in the 2008 Budget our intention to mandate a roll-out of smart meters to the sector over the next five years. That decision will see about 170,000 electricity and 40,000 gas meters being updated with more advanced technology, delivering carbon savings of around 140,000 tonnes of carbon per annum by 2020—a small contribution to our carbon targets.
Based on our analysis to date, I believe there is also a good case for a roll-out of smart meters to small businesses. However, that analysis needs further testing to ensure that our assumptions fully reflect the complexities of the small business sector. As such, we will be undertaking further work with stakeholders to ensure that our initial positive findings are accurate before making final policy decisions on a small business roll-out.
A roll-out of smart meters to the domestic sector is, of course, a far larger and much more complex project. It would involve replacing some 47 million electricity and gas meters in every home in Great Britain. Current estimated costs to the economy are potentially between £8 billion and £14 billion over 20 years.