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Topical Questions

Volume 488: debated on Thursday 5 March 2009

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.