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Energy and Climate Change

Volume 488: debated on Thursday 5 March 2009

The Secretary of State was asked—

LED Lighting

1. What discussions he has had with the Secretary of State for Environment, Food and Rural Affairs on the effect on electricity consumption and carbon dioxide emissions of the installation and use of light-emitting diode lighting. (260721)

Although I have not discussed the issue of LED lighting with the Secretary of State for Environment, Food and Rural Affairs specifically, the Government certainly recognise the potential energy savings that ultra-efficient lighting technologies such as LEDs can offer. We continue to work to stimulate development and take-up, and officials in the two Departments have worked, and will continue to work, together on this issue.

LED lighting is super-efficient. It uses just 5 per cent. of the wattage of a conventional light bulb; it generates very little heat, which means that it reduces fire risk in applications; and it contains no mercury, which means that it is safer to dispose of. May I urge the Minister to have discussions with the Department for Environment, Food and Rural Affairs on this issue? Will she also advise the House what the low-carbon business innovation unit within her Department is doing to promote this technology?

I thank the hon. Gentleman for his question, and I should tell him how much we agree with him on the huge potential benefits of LED lighting. That is why we have put some LED products on to our energy technology product list and why we have made those specific types of lighting available to benefit from the enhanced capital allowance scheme, which has delivered approximately £550 million in tax relief to those who have purchased products on the Carbon Trust’s energy technology list. The potential for the makers and retailers of LEDs is considerable, and I shall pursue the points that he has made. As I have indicated, I am sure that our officials will continue those important discussions.

Several years ago, I proposed to the Government, by way of written questions, that a considerable amount of electricity could be saved just by fitting LEDs to all the traffic lights in the country. Will my hon. Friend now look at that proposal as a serious one?

The Department for Transport has been working with lighting manufacturers to look carefully at how to include low-energy traffic lights in its pursuance of a low-energy transport strategy. I am not, of course, able to tell my hon. Friend the extent to which it may have considered LEDs, but I am more than happy to have a discussion on this point with my opposite numbers.

What discussions has the Minister had with organisations representing the blind and partially sighted on the effects of the withdrawal, over a period, of conventional light bulbs?

When I was in my previous post in DEFRA, I had a number of discussions with such representatives, who quite properly came to me to express concern about the phase-out. I contacted my colleagues in the Department of Health, we then specifically organised meetings with those who represented the blind and partially sighted and we referred the matter to the European Commission because, of course, this is ultimately the subject of a European directive, although we are in advance of it in this country. The European Commission has undertaken research and has found that the use of double-envelope compact fluorescent lamps—CFLs—which look like traditional light bulbs, can largely or entirely mitigate the risk of aggravating the symptoms of too light-sensitive individuals. Other forms of lighting are available, remain on the market and are entirely safe, and, as I have said, double-envelope bulbs should not give problems to those who may be light sensitive.

Renewable Energy Generation

2. What progress has been made towards the Government’s targets for renewable energy generation by 2020; and if he will make a statement. (260722)

In December 2007, 5 per cent. of the UK’s electricity and about 2 per cent. of its energy came from renewable sources. We are taking steps to increase this through better grid access, reforms to planning legislation, the banding of the renewables obligation and a range of other measures as part of the drive towards having 15 per cent. renewable energy. However, no sector is immune from the credit crunch, and we are also urgently looking at how measures such as the working capital scheme can help the renewables sector and whether further measures are necessary.

The Secretary of State mentioned the lack of credit, but we must also consider the rising turbine costs, which are causing many utility companies to question the validity of offshore wind farms. I am concerned, in particular, about the London Array project in the Thames Gateway, so what more can he do to make sure that that scheme goes ahead, despite Shell’s withdrawal? That scheme, on its own, will contribute 10 per cent. of the Government’s commitments.

The hon. Gentleman raises an important issue about London Array. We have recently overtaken Denmark as the world leader in offshore wind, despite the difficulties that he mentions. We are pleased that Masdar has said that it will invest in the London Array project, and we are keeping closely in touch with investors on issues such as the cost of turbines and the exchange rate. We agree that we need to ensure that the project goes ahead.

Does the Minister agree that these targets would be less important if it were not for the fact that, after the miners went on strike 25 years ago—in an honourable dispute that was not for money to fill their own pockets, but to ensure that pits remained open—150 pits and the clean coal plant at Grimethorpe were closed before the Tories left office? The targets we are talking about today would be a lot closer if that had not happened. Is it not a scandal that our legacy on energy is that we are in hock to countries that we cannot even trust?

My hon. Friend makes his point very eloquently. He is right that this country’s energy policy has been beset by short-termism. He is right about clean fossil fuels, carbon capture and storage and coal being part of the energy mix. That is why this Government are determined to ensure that we drive the market towards carbon capture and storage, and make clean coal part of the energy mix in the years ahead.

What proportion of the cost of household and industrial electricity bills is required to meet the cost of subsidising our renewable energy commitment?

It is different for electricity and for gas, but it ranges between 2 and 14 per cent. of the total, depending on how it is calculated. I profoundly disagree with the right hon. Gentleman on this issue, because there is no low-cost, high-carbon future for this country. Demand from India and China will drive up the price of oil and gas, and we cannot assume that $40 a barrel today will be a permanent price for oil. That is why it is right to plan for and move towards a low-carbon future. The danger of the right hon. Gentleman’s approach is—as I said in reply to my hon. Friend the Member for Bolsover (Mr. Skinner)—that it is a recipe for short-termism, and we will end up in the same situation as a year ago, with high oil prices and without the indigenous sources of fuel that we need.

Yesterday, I was fortunate enough to attend the launch of a report on renewable energy, and one of the points made by the industry people at the launch was that there are still problems obtaining consents for renewable energy in rural areas, where—without making a political point—Labour is not the dominant party. Does my right hon. Friend accept that we have to do something about the way in which, especially in rural areas, valuable renewable energy projects are too often delayed by the obstructionism of unsympathetic local authorities?

My hon. Friend makes an important point. Those who say that they are in favour of renewable energy should practise what they preach. In a way, we should be grateful to the hon. Member for Wealden (Charles Hendry) who said:

“I think frankly you will find different views among colleagues—colleagues are more divided on onshore wind than nuclear power.”

That speaks to an important question: if we are in favour of renewable energy, we should make sure that it happens throughout the country, including at local authority level.

Yesterday, the electricity network strategy group published an interesting report on the substantial investment needed to strengthen the grid to transport renewable energy, especially from the north of Scotland. What action is he taking to deal with the perennial problem of transmission charges, to ensure that we get the benefit of renewables?

The hon. Gentleman raises two separate issues. I took powers in the Energy Act 2008 that are available if Ofgem and the national grid fail to sort out the connection to the grid. We hope that they will make an offer on 450 MW, which would come from connecting various projects to the grid. The report that he mentions is an important contribution to how we set up the system of regulation to ensure that we have the smart grid that we need.

Does my hon. Friend agree that energy from waste is a proven technology that can deliver a great deal for our country? Is he aware that he must have the courage to face up to cowardly local authorities that will not make decisions? Planning stops everything, and PFI, at the moment, is stopping everything. Will he be courageous and lead so that we can have some energy from waste and can make a good resource more valuable?

I agree with my hon. Friend, and I hope that I will live up to his recommendation to be courageous. In the civil service, that is not always a compliment, but I think that my hon. Friend is right to say that one should be courageous on these issues. Energy from waste can play an important part in the energy mix. Waste that would not otherwise be used for good purposes can be used to heat our homes and to make a real difference to our energy needs. I agree that this needs to be pursued urgently.

At a recent planning appeal in my constituency, the Government inspector overturned a decision by the local planning authority to reject a single wind turbine application. Given that Fenland district council has one of the best records for wind farm development in the whole country, where does that leave local democracy and the wishes of local people?

I cannot comment on the individual case, because I do not know the details. However, let me say more generally to the hon. Gentleman that I think that all of us in this House who believe in renewable energy and who believe in the part that renewable energy can play have a responsibility to do all we can to encourage wind farms—[Hon. Members: “Waste of time.”] Some Opposition Members say that they are a waste of time, but I profoundly disagree. To be completely honest, I am afraid that that attitude will get us nowhere. If we preach renewable energy at a national level, we need to encourage it at a local level.

My right hon. Friend has just recognised that there is a big difference between the setting of renewable energy targets nationally, which everybody supports, and their implementation locally. I live in Derbyshire, which is very rural but is Labour from the constituency down to the local authority. We have a gasification unit and a wind farm is now in the planning system. Will my right hon. Friend consider what they do in France, which is to have a 2 km buffer zone around any such projects, which goes from the site to the nearest residences? To please the Opposition, we could perhaps have a 2 mile buffer zone.

I will definitely consider my hon. Friend’s proposal. It is right to understand the concerns of local residents about these issues, but I think that in 10, 20 or 30 years, people will look back on this debate as they do on the debate about electricity pylons, when people asked how we could possibly have those things that disfigured the countryside. I am afraid to say that this is a cultural change that needs to happen. We need to be sensitive and to understand that local communities need to benefit from wind turbines in their area. That is very important and some of the more progressive-thinking companies understand that, but we do need to move forward with it.

If we are to have the secure energy future that the Government want and to meet the climate change targets that the Government have set out, as well as having a future for coal with carbon capture and storage, does the Secretary of State accept that we need a renewables energy industry in which investors can feel real confidence that they will be able to find the billions of pounds that yesterday’s report said we needed? That needs the Secretary of State to co-ordinate with the Treasury and those responsible for planning so that everybody seeks to deliver that goal, which has to be at the front and the centre of the Government’s energy policy for the future.

I agree. Let me take the opportunity to welcome the hon. Gentleman to the Front Bench, as this is our first interchange at Question Time. He brings a wealth of experience and knowledge on these issues.

I agree that co-ordination is necessary. We passed the Planning Act 2008 to encourage the speeding-up of renewable technology and renewable energy projects and we moved on the feed-in tariff, about which I know the hon. Gentleman is rightly enthusiastic. The credit crunch is also a concern, and I have recently returned from the United States, which faces the same issues. No sector can be immune from that. It is an added complication to the issues that we face, and that is why we are urgently considering how existing schemes, such as the working capital scheme, can be used by small and medium-sized companies and why we are also considering whether other measures are necessary.

Yesterday, the Prime Minister told the American Congress that only by tackling climate change could we create the millions of new green jobs that we need. Yet back in the real world here not only are we flagging in our efforts to meet our 2020 renewables targets, but E.ON UK has been quoted as saying that the economics of the London Array project are on a knife edge. In addition, UBS is predicting a 20 per cent. decline in investment in new wind capacity this year, and Siemens has seen a 28 per cent. year-on-year decline in renewables orders. However, instead of seeing them drive real job-creating change now, all that we see from this exhausted Government is the same old dither and delay. So will the Secretary of State say how many new green jobs his climate change and renewables policies will create this year?

Thousands of green jobs will be created. The attitude displayed by the hon. Gentleman, who knows that Conservative councils throughout the country oppose renewable energy and wind turbines, does not speak well for him. I have said that no sector is immune from the credit crunch, which poses added difficulties. I have also said that we are looking at what we can do, but the point that I would gently make to him is that the Government are acting on the credit crunch, whereas all we hear from the Opposition is “do nothing.” The £20 billion working capital scheme is precisely designed to get finance to the companies that need it. Instead of carping from the sidelines, he should support the measures that the Government are taking on recapitalising the banks and encouraging lending.

Gas Storage

3. What assessment he has made of the adequacy of the UK’s gas storage capacity; and if he will make a statement. (260723)

As North sea production declines over the coming decades, we will import more gas. That means that, for energy security reasons, we will need significantly to increase our storage capacity. National Grid’s recent “Ten Year Statement” identifies 17 commercial gas storage projects in various stages of development, and another was announced last week. If all those projects go ahead, the UK’s gas storage capacity could increase to some 20 per cent. of current annual demand levels by around 2020.

I am sure that my hon. and learned Friend is well aware that Centrica has announced one of the biggest gas storage projects in the UK. Given the present economic situation, is my hon. and learned Friend confident that such a massive project, which will require equally massive amounts of funding, is going to go ahead?

Yes, I am confident that we will get a number of these investments going ahead. Storage projects are major, long-term strategic investments for companies, and decisions about them are never taken lightly. The very fact that Centrica is seeking to bring forward that £1.2 billion project demonstrates that, although current economic conditions are, of course difficult, investors are taking that strategic view of the market. As I said, there are 17 other projects at varying stages of development. Gas suppliers have a legal obligation to supply gas daily, and the new storage capacities will enable them to have some insurance for that. We cannot be complacent: apart from the steps that we have already taken to ensure a supportive consenting regime for projects, we have also been working with the European Investment Bank and the gas storage industry to ensure that, if projects experience difficulty raising finance, the people behind them are aware of the facilities available at the EIB.

Mine is a largely rural constituency, and many of my constituents are not able to be connected to the mains gas network and have to use LPG instead. Will the Minister explain how the improvements in gas storage capacity will benefit those of my constituents who are not connected to the mains network?

To those who are not connected to gas, gas storage will be of limited benefit. We need to make sure that we create gas links that enable people to get on to gas. Across the country, and certainly in my area, communities are coming together, and local authorities have co-ordinated applications by communities to get connected to gas. That has worked very successfully. A number of companies are prepared to work with local authorities to do that. As for the hon. Gentleman’s area, I recommend that he talk to his local authority and the companies, and get some of those projects going.

My hon. and learned Friend will be aware that there is a real need for increased gas storage, not least because when prices were very high due to problems with Russian supply in Europe, gas from the Norwegian gas fields came straight into the UK and into the European market. An interconnector can be a good thing, but there has to be a genuine two-way process. Is he convinced that the European market is properly liberalised, and does not have protectionism, so that when we want to import gas from Europe, we can do so?

The straight answer is no, I am not convinced that we yet have a European market that is properly liberalised, but the European Commission is responding to concerns that the Government have repeatedly raised with it about the fact that we need change in Europe. We strongly support, and indeed have been a motivating force for, the work that is going on in the Commission to move forward EU energy liberalisation. There is a lot of work to do on the issue, but let me add that, as my right hon. Friend indicates, the issue is not just about gas storage. Companies have delivered a 400 per cent. increase in Britain’s import capacity over the past 10 years. Pipelines including the interconnector, which he mentioned, have been expanded. There are new pipelines, such as the Langeled from Norway and the Balgzand-Bacton line from the Netherlands. The capacity for liquefied natural gas from the Isle of Grain has tripled to 9.8 million tonnes per annum. Britain’s gas import capacity is equivalent to 120 per cent. of our annual gas consumption.

On 20 February this year—two weeks ago—Britain hit a new low, with just four days-worth of gas in storage in the reserve. Does the Minister consider that an acceptable margin for safety?

It is not about how many days worth of gas there are. The amount of gas in storage at a given point cannot meaningfully be assessed in terms of days. Stored gas is not used on its own to meet UK demand in any way. North sea gas reserves put the UK in a position unlike that of other countries. Yes, we need gas storage, and we will need to increase the amount of storage as our imports increase, but we still have a substantial amount of gas coming from the North sea. That means that we do not need quite the amount of storage capacity that other countries do, although we will need to improve gas storage capacity in future as North sea gas depletes and imports rise.

That is a remarkably complacent answer, because every country in the world is content to denote their storage in days—apart from Britain, apparently. For the second time in only four winters, we almost ran out of gas, and almost did not have sufficient gas to meet demand. According to a written answer that the Minister gave me only this morning, only the depressed state of the economy, due to the recession, saved us from running out. Even the official regulator thinks that we do not have enough storage. In the Energy and Climate Change Committee, my hon. Friend the Member for Bromsgrove (Miss Kirkbride) asked the regulator whether he thought that enough storage was being planned, and he said:

“I am not happy to talk about this…we were hoping”—

that storage would have doubled in the past five years—

“and we have barely moved.”

Given that record, do we have to hope that this Government run out of time before Britain runs out of gas?

That is a stunning statement the week after Centrica announced a £1.2 billion proposal to create the second-biggest gas storage facility at the old gasfield in Baird in the North sea. We hope that that will come on stream from 2013. There are 17 other projects, too. That is one of the main areas for us, and the Government are setting out their priority of bringing gas storage on board. Let me be clear. The hon. Gentleman’s claims that we were suddenly about to run out of gas take no account of the fact that the Norwegian gas fields were pumping vast amounts of imports into the country. We were therefore able to manage successfully and capably the issues that arose as a result of the recent cold snap and the Russia-Ukraine dispute.

Is my hon. and learned Friend aware that just two years ago a proposal to develop a massive underground gas storage facility at Preesall just outside my constituency was overwhelmingly rejected by all the local people, both local councils, both local MPs, the planning inspector and, indeed, the Government, because of major concerns about the safety of the local population? I cannot ask my hon. and learned Friend to comment on the revised proposal that has been submitted, but will he assure me that the safety and security of our gas supply is not put ahead of the safety and security of our people?

These issues always need to be looked at in the round, to ensure that all the factors that need to be taken into account are taken into account. I am sure that that will happen as part of the process of assessing any application. It is always essential to ensure that communities are safe, but it is also important that as a country, for the protection of our energy security and our energy supply, we have sufficient gas storage. That is why the Government have made it one of their key priorities to bring on gas storage capacity in this country.

Last week saw increases in the amount of gas storage volume. As at 3 March 2009, the total volume of gas storage stocks in the UK was more than 1.2 billion cu m. The UK’s total gas storage capacity is approximately 4.4 billion cu m. At this stage of the winter that is what we would expect—after all, gas storage is there to be used.

Notwithstanding the Minister’s synthetic anger in response to the question from my hon. Friend the Member for Tunbridge Wells (Greg Clark), and as the rest of the world measures gas storage in days and the UK, at last measure, had 15 days, as against more than 100 for France and Germany, will the Minister agree to make regular statements to the House about the number of days of gas storage this country has?

The hon. Gentleman does not need me to make statements. If he goes to the National Grid website, he can find out every day. Let me be clear. Let us look at the country that people normally use in order to say, “Look, they have far more gas storage than the UK has.” The country is Germany, which has about 25 per cent. of its imports covered by gas storage. The UK has about 25 per cent. of its imports covered by gas storage. We are covering ourselves adequately at present in terms of gas storage. As we increase the amount of gas imports, we will need to increase the amount of gas storage. That is why the Government are making it a priority, why we have encouraged companies to bring forward projects, and why they are bringing forward eight projects, including the very important one announced by Centrica last week.

The volume of gas that we have stored is bound to impact on domestic gas bills, but may I tell my hon. and learned Friend another reason for the increase in domestic gas bills? It happens when the units of gas in underestimated bills are aggregated in a catch-up bill and charged at the tariff that applies at the time of the catch-up bill. That results, of course, in an increased gas bill. Not many people know that the companies will recalculate, if requested. Does my hon. and learned Friend agree that when a catch-up bill is sent, there should be a note informing the consumer that they can ask for a recalculation?

My hon. Friend raises an important point. It is, I hope, one of the issues that Ofgem will consider as part of its overall review of energy companies’ bills. Ofgem has expressed concerns about some of the ways in which billing has taken place, and I will make sure that my hon. Friend’s point is drawn to Ofgem’s attention.

Home Energy Efficiency

5. What recent discussions he has had with ministerial colleagues on improving the energy efficiency of houses by 2020; and if he will make a statement. (260725)

Department of Energy and Climate Change Ministers have had regular discussions with ministerial colleagues on improving the energy efficiency of households, particularly through the development of our heat and energy-saving strategy published last month. With measures to provide low-cost energy audits, insulation through a new pay-as-you-save scheme, and incentives for renewable heat, we aim to build on the 5 million households insulated since 2002, provide whole-house energy efficiency for 7 million more households by 2020, and make it available for all households by 2030.

I thank my right hon. Friend for that answer. It is true, is it not, that many of the homes that are standing today will be standing in 2020? Many of those homes are not energy-efficient. What real progress is being made to ensure that our families are saving money and that we can have a positive impact on climate change?

My hon. Friend makes a very important point. The carbon emissions reduction target, or CERT, the Prime Minister’s announcements last September and the Warm Front scheme are making a big difference. I mentioned that 5 million households had been insulated since 2002, but there is a lot more that we need to do. We also need, over the coming years, to move towards a much more house-by-house, street-by-street approach. I do not recall this in detail, but the transition to North sea gas is perhaps the right model to think about—every house was visited and switched over. We need the same approach in relation to energy efficiency, because that can make a huge difference to families’ bills and to carbon emissions.

The Prime Minister talks about new green jobs, but is not the reality far removed from his rhetoric? In September, he said that 6 million homes would be insulated in the next three years, but industry says that that figure will now be just 4 million; the Government said that 1 million homes would have cavity wall insulation in the current financial year, but the real figure is fewer than 600,000; and instead of 150,000 new green jobs in this crucial area, manufacturers of energy conservation materials are cutting their output and putting their workers on short time. Will the Secretary of State accept our proposals, endorsed by the Energy Saving Trust, to offer every household a comprehensive range of energy-efficient measures, with the cost recouped over time through their bills? It works in the States, so why not here?

This proposal is very interesting, because it was announced and spun with great fanfare by the Opposition, who said that every household would get £6,500 to spend on energy efficiency. When further inquiries were made, it turned out that 1 per cent. of households would be offered £6,000. As to the hon. Gentleman’s point about the Prime Minister’s announcements last September, let me give him the figures. In the third quarter of this year, 183,000 households were given cavity wall insulation under CERT and 158,000 households were given loft insulation under CERT, compared with figures in the second quarter of 67,000 for cavity wall insulation and 98,000 for loft insulation. I consider that real improvement and real help now for Britain’s families.

Topical Questions

One of my Department’s key responsibilities is to work with others towards an international agreement on climate change. This morning, I returned from talks in the United States with representatives of the new Administration, as well as Members of the House and Senate. It was clear from my discussions that there is an important shared agenda with the new Administration for a greening of the economy and for a global deal on climate change in December, with the maximum ambition in that agreement based on the scientific evidence on climate change. I look forward to working with President Obama’s team in the period ahead, and I believe that all Members of this House will welcome the fact that we can now genuinely say that there is US leadership on climate change.

Of course, we look forward to that.

What can Ministers do about a problem experienced by low-income households in my constituency when seeking the benefit of the laudable Warm Front scheme, which is caused by the way in which contractors are selected? The benefit of the grant available is often more than negated by the monopoly situation in which those contractors find themselves and the extortionate charges that are levied for the schemes.

The hon. Gentleman raises an important point about getting maximum value for money under the Warm Front scheme. Let me deal with his question in two parts. First, the maximum grant under Warm Front—we discussed this with the Select Committee last week—has not been increased for a number of years. We want to increase it and we will make proposals shortly. On the wider question of value for money and Warm Front, the studies that we have seen suggest that contractors’ rates are reasonable when compared with others. However, we continue to monitor that. We want more value for money from the Warm Front scheme, and we are determined to ensure that we get it.

T3. Yesterday, at the Geneva car show, the International Transport Forum, which includes the United Nations, set a target for the global auto industry and Governments of halving emissions from cars by 2050. Are the Government in discussion with that consortium, and when can we start on this initiative, which could be integrated with financial support for a car industry that is having problems at the moment? (260743)

As my hon. Friend is aware, the recent announcements made by the Department for Business, Enterprise and Regulatory Reform and the noble Lord Mandelson mean that we are bringing forward funds to help particularly innovative new areas of vehicle energy use, so that we can ensure that we as a country are at the forefront of this research. I cannot say whether this consortium is in discussions with the Department, but I will make inquiries and let my hon. Friend know.

T2. I must remind the House of my entries in the Register of Members’ Interests to do with the oil and gas industry. Phase 3 of the emissions trading scheme, which is coming from the European Union, will penalise modern, all-electric offshore production, as compared with old-fashioned mechanical production. Will the Minister work with the industry to ensure that the vital global investment that the North sea needs is not driven abroad, and that we do not lose any more jobs from the North sea? (260742)

I certainly want to work with the industry, as do the Government as a whole, to ensure that we maintain the jobs that we have in the North sea. We are seeing some areas of decline in production, but there is still a lot of interest in oil and gas in the North sea. We have prospects of offshore wind generation and onshore wind generation—certainly in Scotland—so there are prospects for significant expansions of our energy production, and we want to ensure that that happens. We want to work closely during the present difficult economic period to ensure that jobs are protected in so far as they can be.

What assessment has the Secretary of State made about the possibility of new nuclear build following the banking crisis? Given that banks are reluctant to provide mortgages for people to buy one-bedroom flats, does he think it likely that anyone will offer the finance to construct a new nuclear power station in the immediate future? Will he continue to resist the arguments of those who want to rig the carbon market to provide a hidden subsidy for new nuclear?

My hon. Friend raises an important point. The larger companies—we have three consortiums that want to build new nuclear—have been less affected by the credit crunch, as far as we can tell. That is not to say that it does not have any effect, but it has had less of an effect on those companies. My sense is that they will still come forward with their plans for new nuclear—we have heard no views otherwise.

My hon. Friend is also right on the question of subsidies. We have said that we are not going to subsidise new nuclear. We are breaking down the barriers to new nuclear in a number of different ways, but I do not think that it is right to subsidise it. It is also right to ensure—as we did in the Energy Act 2008—that waste costs are paid by the companies. New nuclear needs to be part of the energy mix and the plans will be taken forward.

Further to the exchanges on gas storage, the Minister will be aware that there is limited geological scope for gas storage in the UK. How confident is he, in the light of the question asked by the hon. Member for Blackpool, North and Fleetwood (Mrs. Humble), that the planning process will deliver all the gas storage sites, bearing in mind that the industry does not think that we have enough even if they all go ahead?

The hon. Lady will be aware that since the Planning Act 2008 became law last October, changes have been made to the planning process, particularly in relation to large gas storage projects. I am confident that some gas storage projects will go ahead, but that process needs to take place with a proper reflection on the ability of local people to voice their concerns and to say what problems might arise. We want reasoned and proper decisions to be made about all gas storage projects so that we get the gas storage we need, and we get it in the right place.

Ministers will be aware that millions of households living in fuel poverty also live in homes that have poor energy efficiency. Yet even with the recent increase, the Warm Front programme is spending only £380 million a year. Seven times that amount is being spent on the winter fuel allowance—£2.7 billion this year—yet that takes only 100,000 people out of fuel poverty. Will Ministers have urgent discussions with the Chancellor of the Exchequer in advance of the Budget to see how that largesse can be better focused?

The brief answer is that of course we are always in discussions with the Treasury, and as I have indicated already, because of the economic situation, the high fuel prices that have occurred and the need to move forward with our renewables obligations, we will have to examine our fuel strategy in the broadest sense. That is under way already, and I am pleased to tell my hon. Friend that we will have cause to take account of what she has said.

T4. Both the Secretary of State and the Minister of State have said a great deal about the security of gas supplies. Does the Minister accept that Bacton gas interconnector terminal is an absolutely crucial part of our gas infrastructure? What discussions has he had with the Home Office about ensuring that there is proper funding for the maintenance of security at the terminal? (260745)

The hon. Gentleman is quite right that Bacton is enormously important. Although we have not had discussions directly with the Home Office on that particular point, I have talked to the civil nuclear police authority and others to ensure that we are considering all the security issues at some of our major energy installations. I do not believe that this is the right place to discuss the details, but I am happy to meet the hon. Gentleman and talk about any concerns that he has about security. It is likely that if he has them, we ought to have them too.

T5. Energy demand is rising exponentially, which makes the issue of energy security even more important. New nuclear generation will play an important role in that. What discussions has the Minister had with colleagues in the Department for Business, Enterprise and Regulatory Reform to ensure that we have enough technical and engineering expertise for this country to play its part in the building of new nuclear generation facilities? Although the Prime Minister cannot in fact promise British jobs for British workers, because of European Union legislation, will the Government take a page from some other countries’ book and ensure that that happens by the back door? (260746)

Bringing on the skills that we need for the nuclear industry is enormously important. We know that we have an ageing work force in the nuclear industry at the moment, because for 20 years we were not building sufficient capacity. The hon. Lady is quite right about that. We have created the national skills academy for nuclear, built up Cogent and got the industry together to invest both in developing skills and, through Government and private sector funding, in university courses to build up the intellectual base that we need and ensure that we can not only expand nuclear in the UK but benefit from the worldwide expansion that is taking place.

T6. Earlier this year, wholesale energy prices dropped dramatically, yet the British consumer continued to pay record high prices for energy. Her Majesty’s Opposition believe that the Competition Commission should conduct an urgent investigation into the relationship between wholesale and retail prices. Do the Government agree, and will they ensure that such a review is undertaken? (260747)

It is good to reply to another Member who has a family connection in the House.

On energy prices, I do not think that at this stage a referral to the Competition Commission is the right way to go, because it would not be brief and quick. It would take a long time. That is the experience of referrals to the Competition Commission. I believe that the better way to go is what we are doing, which is pressing the energy companies to reduce their prices and pass on the price cuts, and introducing more transparency through the work of Ofgem, which published its first quarterly report on the connection between wholesale and retail prices earlier this month.

The hon. Gentleman’s general point that we need price cuts to be passed on to consumers is completely right. That needs a combination of tough regulation, consumer associations making their voice clear and the Government doing the same. That is what we intend to do.

T7. Given that the Government say that we should accept the economics and science of the intergovernmental panel on climate change because they have been peer reviewed, and given that the methodology used by Sir Nicholas Stern has been repudiated by his own economists when producing the impact assessment on the Climate Change Bill, will the Secretary of State submit the Stern review to peer review? (260748)

That is not at all our intention. The Stern review has been widely reviewed around the world, it is doing an extremely good job and it has been very well considered. I can tell the right hon. Gentleman, however, that we intend to produce a new impact assessment to the Climate Change Act 2008. I know that that matter is important to him, and that he has raised queries about it. We now know that there are things that have come to light since the Bill was originally drafted. The benefits of the previous impact assessment were valued using the shadow carbon price, and that is currently under review. We are also likely to find that the costs, which covered a very large range, were exaggerated at the time because they assumed no technological progress beyond 2010, and that the potential for international trading to reduce the cost of avoiding dangerous climate change was not taken into account. So that is good news for the right hon. Gentleman, and the assessment will be published on Monday.