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Energy

Volume 485: debated on Wednesday 10 December 2008

My Department and I are in regular contact with all sectors of the energy industry, including clean coal, oil and gas, renewables and the nuclear industry.

I thank my right hon. Friend for that answer. I know that he will be playing a part in Pilot, the cross-industry, Government and trade union committee. Does he agree that the best way to secure Scotland’s future energy needs is to ensure that we maximise the recovery of the oil and gas that we already know are in the North sea, particularly in the west of Shetland? What will he do to encourage the Treasury and the Department for Energy and Climate Change to ensure that we successfully get the gas finds that are already being exploited by Total and others in the west of Shetland basin to shore, so that they can fulfil Scotland’s future energy needs?

My hon. Friend speaks with great experience and a detailed understanding of the oil and gas industry, particularly in the North sea. I had the opportunity of visiting and speaking at the oil and gas supply chain conference last month. It is clear, as my hon. Friend rightly said, that a large proportion of the untapped oil reserves lie west of Shetland. I met Total and others when I was in Aberdeen to discuss that very issue. Those conversations need to continue within government and with the industry so that we can exploit that natural resource in the North sea for years to come.

Has the Secretary of State had a chance to look at the report on Scotland’s energy by the Scottish Council for Development and Industry, which found that Scotland can meet

“its target of 50 per cent. of electricity from renewable sources by 2020”

but also that

“Scotland needs £10 billion of investment in new electricity generation between now and 2020”?

How does that fit with his Government’s plan to cut £1 billion from the Scottish Government’s budget?

I have to remind the hon. Gentleman, as I did his hon. Friend the hon. Member for Moray (Angus Robertson), that a few days ago the pre-Budget report put £2 billion back into the pockets and purses of Scottish taxpayers. That is an important point to bear in mind. I know that the hon. Member for Angus (Mr. Weir) and his party have a virulent ideological opposition to the nuclear industry, but as he referred to yesterday’s report by the SCDI, which he quoted selectively, perhaps I can add a quotation. The report also said:

“it is our view that nuclear power should be considered as a potential part of the longer term generation base in Scotland.”

The SCDI speaks the truth.

Does my right hon. Friend agree that one of the energy industry’s problems is sourcing skills? Is he aware that his right hon. Friend the Secretary of State for Innovation, Universities and Skills has earmarked £50 million for high-level skills training in the oil and gas industry, but that there is no such fund in Scotland? The Minister I wrote to in Scotland says that the Scottish Executive have no plan to deal with the problem in Scotland, but that they will bring out a report in the spring, two years after they were elected. Is it not a concern that Scotland may have to go to England to find trained, skilled workers to work in our energy industry?

It is indeed a fact that the oil and gas industry in Scotland, as well as the energy sector more generally, needs access to the most highly skilled workers, not only from throughout the UK but from across the world. There is global competition for those highly skilled workers, which is why I, along with the industry, announced a working group to look into the issue. I share my hon. Friend’s concerns that if the Scottish Executive cannot ensure that Scotland has the highest quality workers and apprentices to exploit the opportunities in the oil and gas industry, that will be a blow to the Scottish economy.

Is the Secretary of State aware of the potential of marine energy in the Pentland firth to provide something in the order of 31 GW for Scotland’s future energy needs? Is he further aware that, although the Crown Estate has started applications for the licensing process, applications are being limited to 20 MW and five years, which is possibly a barrier to future development? Will he use his good offices to speak both to the companies that are making applications and the Crown Estate to see whether a better method can be found for applications?

I listened with great interest to the hon. Gentleman’s genuine point. My hon. Friend the Under-Secretary and I recently met the Crown Estate, so I should be happy to meet him to discuss the issues that he raises. His point is important. For two centuries Scotland relied on its geology, through the exploitation of coal, for our energy. Now we increasingly have to rely on our geography, through the exploitation of natural resources, including wind and wave power.

When he meets the energy companies, will my right hon. Friend raise the fact that although the prices of commodities in the market place have dropped like a stone in the past few months, that has not been passed on to consumers? What is he doing in that respect?

It is entirely unacceptable if the energy companies do not pass on these lower prices to Scottish and UK consumers, and we will continue to press them on that point. Additionally, it is important that the social tariffs that have been announced are more highly publicised. They offer support for tens of thousands of Scots, and are worth hundreds of pounds. The energy companies must not only agree to the social tariffs but publicise them so that they can be taken up.

Reference has already been made to the Scottish Council for Development and Industry report, but does the Secretary of State recognise that not only the business community but every other objective analysis suggests that if there are no new nuclear power stations in Scotland, the lights will go out? Can he offer any hope, not only on the security of energy supply in Scotland but on the economic benefits that the new nuclear development offers to constituencies such as my own, or does he share the nuclear industry’s pessimistic view that, because of the actions of the Scottish Parliament, there is no prospect of new nuclear development in Scotland in the foreseeable future?

I should like to say to the hon. Gentleman:

“We cannot afford for the Scottish Government to play fast and loose with the security and reliability of our future electricity supplies and run the risk of the lights going out in Scotland”.

[Interruption.] Hon. Members may scoff, but those are not my words; they are the words of Liz Cameron, the chief executive of the Scottish Chambers of Commerce. The fact is that the Scottish National party Government are isolated on this issue. Business, trade unions and experts know that the nuclear industry must be part of a balanced energy policy in the United Kingdom and in Scotland.