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Commons Chamber

Volume 495: debated on Friday 3 July 2009

House of Commons

Friday 3 July 2009

The House met at half-past Nine o’clock

Green Energy (Definition and Promotion) Bill

Consideration of Bill, as amended in the Public Bill Committee

Third Reading

I beg to move, That the Bill be now read the Third time.

It has been a privilege and a pleasure to help to pilot the Bill through the choppy waters of parliamentary procedure thus far. Private Members’ Bills are notoriously fragile vessels and the waters are full of dangerous beasts, but I am happy to say that when I sought navigational assistance from the Government, they responded avidly. In fact, they seem to have taken over the ship, but I am not concerned about that. I am concerned about getting a Bill on to the statute book, with cross-party support, which will help to move the green agenda forward and help businesses, communities and individuals to play their part in meeting the challenging target of an 80 per cent. carbon reduction by 2050, and the perhaps even more challenging 2020 target that the Government have set us for renewable energy.

The hon. Gentleman is now facing his third Minister on the same Bill. Before he leaves the subject of the history so far, may I ask whether he agrees with me that he enjoyed a good, co-operative relationship with the previous two Ministers—particularly my right hon. and learned Friend the Member for North Warwickshire (Mr. O’Brien), who decided that the Bill was valuable and should be supported, and the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), whose co-operation in Committee ensured that all the amendments were carried unanimously?

I was coming to exactly that point. There has been a good working relationship, demonstrating that when it comes to important matters relating to climate change and carbon reduction we need to work together, and proving that we can work together. I am very grateful to successive Ministers. I might wish that there had not been so many of them, but the hon. Gentleman is of course a beneficiary of the way the doors have revolved in Whitehall in recent weeks, and I am pleased about that as well.

I congratulate the hon. Gentleman on getting this far. One of his master strokes was asking me to be one of the Bill’s supporters. I thought that the best way I could help was by taking a Trappist vow of silence on a Friday, but I want to compliment him on what he has been able to achieve. Energy efficiency and renewable and low-carbon sources have an important role to play in the long-term strategy, and I think that his Bill will make a major contribution towards the meeting of our share of the 2020 renewable energy targets. I hope that it will receive an unopposed Third Reading.

That is rare praise for a private Member’s Bill. It may have something to do with the fact that the hon. Gentleman’s own private Member’s Bill is due to be dealt with later today, but I am delighted by what he has said. I return to my metaphor involving ships, pilots and navigators. The hon. Gentleman is, of course, one of the most notorious Friday morning pirates in the House, and it is good to have him on side on this occasion.

Let me extend my gratitude beyond the ministerial team to the civil servants in both the Department for Energy and Climate Change and the Department for Communities and Local Government, who have worked together to help the Bill to make progress and, in some cases, to make sense. I am also grateful to those in the Public Bill Office who, as ever, have worked their secret ministry, and to my hon. Friends the Member for Bexhill and Battle (Gregory Barker) and for Wealden (Charles Hendry), both of whom have spoken from the Opposition Front Bench during proceedings on the Bill.

Almost inevitably, given that this is a “green” private Member’s Bill, I owe a particular debt of gratitude to Ron Bailey, that Whitehall scourge of counter-revolutionary forces and ardent upholder of anarcho-syndicalism—it is on the record now!—who, along with Jacky Howe, has been immensely helpful and influential behind the scenes. I also thank the Micropower Council for its support and hard work, particularly in encouraging members of the public to make known to their representatives their feelings about the importance of these measures.

The purpose of the Bill is to help the United Kingdom to meet its carbon reduction target of 80 per cent. by 2050, to help to tackle climate change and fuel poverty, and to increase the diversity of our energy supplies, thus making us both greener and safer. It aims to make it easier for households and businesses, including agricultural businesses, to generate energy in a more sustainable way, and to contribute to the meeting of the challenging renewable energy target set for 2020.

No one should underestimate the scale of the task ahead if we are to meet the climate change targets. Nor should anyone underestimate the benefits of moving swiftly towards those targets, not only the benefits in avoided costs—as Members will recall, the key message of the Stern review was that if we do not take action now, the consequences will be vastly more expensive and difficult—but the positive advantages of job creation, economic security, technical innovation and investment. In addition, if the United Kingdom is seen to take a real lead in practical terms, not just in terms of rhetoric, that will greatly strengthen our negotiating position in the vital international discussions that are taking place this year in the run-up to the summit at Copenhagen.

It is often the small, humdrum changes that make a big difference. The Bill contains a number of small measures: changes to permitted development rights for air-source heat pumps and micro-wind turbines, the inclusion of small-scale combined heat and power in the definition of green energy, the extension of permitted development rights for microgeneration to non-domestic land, and a timetable for a revised and up-to-date microgeneration strategy that includes raising the capacity limit for microgenerated thermal from 45 kW to 300 kW, which may help significantly with the development of community-based heating schemes.

I believe that all those measures add up to something potentially substantive. Above all, perhaps, they should make it easier for more people to benefit from green energy, with the added benefit of enhancing social engagement in the cause of carbon reduction. They may also help social cohesion where small, community-based schemes are made possible and introduced, bringing people together and—literally—empowering them. That is a useful social spin-off from the implementation of the micropower agenda.

In dealing with the whole question of climate change, we need to be bold, we need to have vision, and we need the grand designs; but we need to get the detail right as well, and we need to get people involved. That will only happen if there are easy, low-cost ways of getting involved. In green circles there is much talk of behaviour change, but it will not happen unless political policies are in place that enable people to change their behaviour. It was put to me the other day that the main religions of the world have been working on behaviour change for millennia without any notable success, and that human beings remain at heart selfish, short-term chimpanzees.

I should make it clear that I am certainly not speaking for my constituency, although I may well be speaking for that of my hon. Friend.

Chimpanzees respond to bananas. They respond to incentives. We need incentives: we need to make life easy, and we need inducements and encouragements. We certainly do not need punishments—and we do not need any number of Government strategies and reviews.

I congratulate the hon. Gentleman on getting this far with his Bill. He was right to say that all-party co-operation has made that possible. May I pick up his point about incentives? Does he agree that it is slightly disappointing that the Government were so opposed to the part of the original Bill that would have helped to preserve people who used microgeneration in their homes from the danger of increased council tax, and does he share my hope that the Government will deal with the problem at a later stage?

The hon. Gentleman makes a very good point, and I made it clear in Committee that I was disappointed that that clause—clause 6 in the original Bill—did not find favour with the Government. It seems to me illogical that people who take the trouble to invest in improving their properties by installing micropower may face an increase in their council tax on revaluation. That is anomalous, and if this Government do not change it I hope a future Government will.

Returning to the need to engage people and the importance of accumulating small, detailed measures to make changes—and moving rapidly away from chimpanzees and bananas—one of my favourite quotes is, I think, from Ghandi. I have not managed to trace the source of the quote, and I would be very grateful if anybody can, but what Ghandi said was, “The effect of an insignificant action is greater than the effect of no action by a factor of infinity. And when a multitude each takes an action which may itself seem insignificant, the effect can be huge.”

The Committee stage was a thoughtful and useful process. It also enabled the Minister of State, the hon. Member for Lewisham, Deptford (Joan Ruddock), to make the very welcome announcement that the Department for Environment, Food and Rural Affairs had committed to a complete review of the environmental consent process for micro-hydropower. That is very welcome news. When the Minister makes his—no doubt brief—contribution to this debate, I would be grateful if he would let us know a little more about the detail of that review, and in particular the timetable.

If the Bill completes its voyage to the statute book, I hope that it will be regarded as a useful piece of legislation by the micropower industry, consumers, households and green campaigning groups. However, as I said on Second Reading, lack of time is always potentially lethal to private Members’ Bills, and on that basis, and in anticipation that the House will wish to debate the commendable Industrial Carbon Emissions (Targets) Bill, which the right hon. Member for Ross, Skye and Lochaber (Mr. Kennedy) will introduce later this morning, I shall conclude my remarks with an exhortation to Members, and in particular the Minister, to keep their contributions brief.

As this is the first time that I have spoken in the Chamber since you were elevated to the Chair, Mr. Speaker, may I congratulate you and wish you well? May I also make it clear that it is not my intention to delay proceedings on this Bill, or the commencement—or even termination—of Bills further down today’s agenda?

I welcome the Bill and congratulate the hon. Member for East Surrey (Mr. Ainsworth) and his fellow sponsors of all parties, including, rather unusually, my hon. Friend the Member for Hendon (Mr. Dismore). The Bill’s proposals augment, in part at least, the Energy Act 2008 and the Climate Change Act 2008, which the Government successfully piloted on to the statute book. I particularly welcome the Bill’s clarification of the fact that green energy includes energy saving and efficiency measures. They are not especially glamorous; they do not stand out as much as alternative sources of producing energy either physically, in people’s minds or in most of the talk about trying to reduce our carbon-based energy consumption. Double glazing is not as eye-catching as a windmill. However, although energy efficiency and saving do not get the attention they deserve, their scope for benefiting us and the whole of mankind is enormous. Huge amounts of energy are still being wasted, and we can reduce that wastage quite quickly. Investment in energy saving produces much quicker returns than money invested in windmills, heat pumps or photovoltaics.

Most things in life involve dilemmas; there are advantages and disadvantages. Energy saving, however, is almost dilemma free; it is mostly gain. If we save energy, we reduce the need for carbon-based supplies—or, indeed, supplies of energy from any source. Through energy saving, we can rapidly reduce the cost of heating and lighting, because if we reduce the amount we waste, we have to buy less and that costs us less. The installation of energy-saving measures also creates jobs in the supply of various materials and in the process of installation itself, and the great virtue of that is that it will be done in homes and businesses in this country by people in this country; the jobs created by the installation of energy-saving measures have to be performed here, not by some impoverished person working for the tyrannical regime in China.

There is also a very substantial element of social justice involved in pushing forward with energy-saving measures, because it is a lamentable fact that the worst-off families and pensioners tend even now to be living in the worst insulated homes. They are getting the worst of all worlds: they are not keeping warm, yet they are paying more for their gas and electricity than better-off people who are keeping warm. That is absurd. I therefore welcome energy efficiency and its inclusion in the definition of green energy.

The right hon. Gentleman raises an important point, and I would like to take this opportunity to put on record my support for the Bill. The more we can kick-start these technologies, the better they are likely to develop and the less they will cost, which will make them more affordable to a broader cross-section of the population. Today we can perhaps start a snowball effect that gradually makes all these technologies, whether they involve energy efficiency or energy saving, available to everyone. Also, as the right hon. Gentleman says, often it is lower-income people who suffer most from poor energy usage.

I entirely agree. This point is probably most starkly illustrated at present in the field of photovoltaics, which are currently very expensive, but if they were produced in tens of millions of units, the unit cost would come hurtling down. We have seen something similar happening in IT, and there are some strong parallels between that industry and photovoltaics.

The Government should be stepping up their action in this area. I know there is talk of reducing capital investment, but in my view there ought to be more Government and private capital investment in energy saving, particularly in people’s homes. That is green, and it would save energy, create jobs and promote social justice, all of which cannot be said for many things in this life. I am therefore strongly in favour of it.

There must also be energy efficiency in non-domestic buildings. A lot of businesses need to do more to reduce their consumption. Quite a lot of them spend quite a lot of money on the physical security of their offices, factories and warehouses, but the fact of the matter is that despite the value of all the things that might be vandalised and stolen, they lose a lot more every day from energy escaping through the roof, chimneys, doors and windows of the buildings that the security guards are roaming around. I think they need to pay a lot more attention to that.

We must also recognise that there is a great deal of waste through overheating and over-lighting. As for the IT industry, I always smile wryly when I see somebody being interviewed on television advocating green measures while they are standing in a room with about 40 visual display units flashing away, with all the electricity consumption that that entails. I also think that there is a timeless element to energy saving, because once we have done it, we have done it—we may need to do a bit of maintenance occasionally, but it is done. Any form of energy production that we consider may go out of fashion, or its relative costs may change, whereas the relative gains of energy saving are permanent and continuous.

I am not a recent convert to the idea of energy saving. I can recall that within two or three days of being elected to this place some 30 years ago I had a drink on the Terrace—I have not done that very often since, but that has nothing to do with the particular incident I am describing—and talked to someone who had been a No. 10 adviser to the Callaghan Government. I asked why the Government were not putting more money into energy saving and instead of putting more money into building power stations, to which the response was, “It is so much more difficult to monitor and control that sort of investment, and it is less easy to demonstrate to the public that it is being done.” That did not seem to me to be a particularly good answer at the time and it has not become one since.

When I first started working for a living, I worked for the Central Electricity Generating Board, whose chairman at the time was a most distinguished engineer, Sir Christopher Hinton. He was the boss of the generating organisation; he was probably the person who made possible the establishment of nuclear power stations, and he did that by what can only be described as engineering and managerial genius. He also had a great deal of common sense. He used to upset the marketing side of the electricity industry by saying that it was making money out of ridiculously high temperatures in offices. Even at that time—this has grown since—the custom was that everybody went to work and then took off their jacket. He used to say, “I can remember when I was a graduate engineer for the Great Western Railway at its Swindon offices. During the winter we did not just wear a jacket; we put on a jumper or a waistcoat under our coat in order to keep warm.” He pointed out that if everybody in an office in Britain did that, we could probably close two 2,000 MW power stations. So we need to examine our own individual behaviour to see whether we could tolerate not being roasted in a hotel, train, plane and so on—it does not matter what example we use. We ought to be pursuing that approach; we ought to try not to consume energy wastefully through our own behaviour, rather than just look at other people’s energy saving.

I move on to the other aspects of the Bill, which do involve dilemmas. The microgeneration proposals for dwelling houses and non-domestic land are intended to make it easier to install wind turbines—I call them windmills, because I am so old-fashioned—or air source heat pumps, and I am in favour of doing that. The proposal seeks to make it easier by amending the permitted development controls, and I support that. In relation to the proposal’s application to domestic buildings, we need to take care not to end up with someone’s wind turbine causing a nuisance to the house next door, the flat upstairs or the flat below. That is not likely to happen where modern, properly installed and continually well-maintained wind turbines are involved, but wind turbines will need to be modern, of a high standard, properly installed and continuously well maintained. I do not know whether they already have a noise rating, but we clearly need to address that issue.

I do not say that because I want to prevent wind turbines from being installed. I want them to be installed and I do not want to be negative about things, but it would be a real setback if some are installed using the general permission only for there to be a tremendous row about a particular incident involving a particular old lady who is being driven mad by the windmill next door. All the enemies of all the green measures that we wish to push for would jump on that, publicise it and gloat, and could set back all the developments that we want to take place.

I note that the Bill’s definition of “non-domestic land” for these purposes includes “buildings” and that the proposal would not apply only to rural areas. I am happy about that because my constituency is at the urban end of things, despite containing Primrose Hill, Chalk Farm, Oak village, Elm village and so on. Much more use should be made of non-domestic urban buildings as, in effect, the towers for wind turbines. There is a great deal of scope for wind turbines in urban areas, provided they are not too intrusive on particular parts of the urban landscape. I say that because urban landscapes are just as valuable as rural ones and many of them need to be protected. The source of electricity in some shopping streets could literally be above the shop.

One of the most famous sights in my constituency used to be the gasometers behind St. Pancras station. Some of those have been temporarily demolished, whereas others have gone for ever. Their example prompts me to suggest that a perfectly sound site for wind turbines, and one that would be inoffensive in terms of the urban landscape, would be on top of the new, modern extension of St. Pancras station. We need to take that sort of approach all over our urban areas.

Obviously I know the site well, and I agree entirely with the right hon. Gentleman’s suggestion. Would he be willing to join some of us in speaking to people at Network Rail, which looks after some of the big sites in London? We could suggest several huge railway sites whose use in this regard would be consistent with what goes on at the moment and inoffensive in terms of tradition. They present very good opportunities to get new sorts of energy into the middle of the capital city.

As my constituency is the proud possessor of King’s Cross, Euston and St. Pancras stations, I have a bit of an interest in major railway stations and the approaches to them. I have already made a suggestion about St. Pancras, King’s Cross is being redeveloped and a proposition for the redevelopment of Euston station is rather further back—I am meeting the proponents of that next week and I intend raising this matter then.

One other thing that I should say, if this is not too far off the topic, is that huge swathes of land in my constituency and in other parts of inner London are alienated by having a railway running over them. These railways are sometimes 10 or 20 tracks wide, and I recall that when I was leader of Camden council I got the engineers to look into the possibility of building over the railways as they come into the main line stations. We cannot create any more land, so we must make better use of what we have. Perhaps some sources of new energy could be built into those areas, if what I suggested were to happen.

I come back to my main point about domestic buildings, because I think we need to be very careful about using the general permission approach in respect of non-domestic buildings. We need to ensure that all these things are subject to the consideration of their impact on neighbours, be they commercial and business neighbours or, as is most likely, residential neighbours. That would help to promote microgeneration while also being sensitive to neighbours. It should not be too intensive or intrusive in particular landscapes, whether urban or rural. Instances of microgeneration being unpopular, or being exploited by newspapers and complained about week in week out on the “Today” programme on the BBC, would not help to achieve any of the benefits that we are all hoping for.

On the whole, I very much welcome the Bill. I congratulate the hon. Member for East Surrey on introducing it. I hope that it succeeds and that we can get on to the other measures that are before the House today.

I wish to take my first opportunity to congratulate you warmly, Mr. Speaker, and wish you all the very best.

I also congratulate the hon. Member for East Surrey (Mr. Ainsworth) on his choice of Bill, his stewardship of it, and his co-operative efforts to get his key objective on to the statute book, which look as though they will succeed.

I am grateful to the hon. Gentleman for giving way and I apologise to you, Mr. Speaker, for failing to welcome you to the Chair in my previous remarks, as that was the first time that I have contributed since your elevation. I also apologise for not mentioning the very co-operative assistance that I have received from Liberal Democrat Members on the Bill.

The hon. Gentleman is very kind. I know that my hon. Friend the Member for Northavon (Steve Webb), who was doing my job when the Bill was introduced, is happy to be a sponsor, and also that my hon. Friends the Members for Cambridge (David Howarth) and for Cheltenham (Martin Horwood) were happy to serve on the Committee. My hon. Friend the Member for Cambridge is in his place today to ensure that the Bill proceeds satisfactorily today.

I shall be brief, because I made my substantive points on the Bill on Second Reading. My core point is that we will again have a microgeneration strategy for England. That is what we need as part of the energy mix. My vision is of a country where energy is not provided for people by bigger and bigger organisations run across borders with less and less personal control, but instead where we regain personal control of the link between the energy we need and the use that we make of it. The more we can make the link between the person and the provider—between the village, town or community and the provider—the better.

It will be good for this country if people can begin to see that link. It will encourage the sort of initiative mentioned by the right hon. Member for Holborn and St. Pancras (Frank Dobson). If people realise that the wind turbines or solar panels at King’s Cross, Euston or St. Pancras—or at London Bridge station in my constituency—provide the heat or energy for their community, they are more likely to be positive about them. Indeed, just outside London Bridge is SELCHP—the South East London Combined Heat and Power plant—which has been there for more than 10 years. It is an incinerator so it is more controversial, but it had the same intention of linking the communities with the production of energy, in what was thought to be the best way at the time. Microgeneration should be part of the energy mix and it should come from individuals and communities as a contribution to the grid.

The hon. Gentleman said “again”, so he recognises that we have already had a strategy. He mentions the public face of the strategy, but does he agree that, as I have found in my discussions with the supply chain, people are more confident about investing in their businesses, equipment and the skills of their work force if a strategy is in place?

That is true, and I concede that there has been a strategy, but this new strategy will ensure that our efforts do not stop.

The second good thing about the Bill is that it includes dates and deadlines. The first is that the Bill will come into force within two months of the date on which it is passed. That is much shorter than many pieces of legislation, and it is very important. Other deadlines provide that the consultation must begin within six months of the coming into force of the Act and must be published within six months, beginning with the end of the consultation. The only thing that is not specified is the length of the consultation. I ask the Minister to ensure that the Government take as long as necessary for the process to be perceived to be fair, but not so long that it loses momentum. I am sure that they would not want that to happen, but we need a commitment from the Front Bench to keep up the pressure—

To make the obvious point, the Cabinet Office guidelines on consultations are that they should take 12 weeks. We will not truncate the consultation, and nor would we want it to overrun.

My third point is about definitions. We had a debate on Second Reading about the phrase “green jobs”, which was in the original Bill. The Government were all over the place on that definition at the time. The Prime Minister was promoting green jobs from the Front Bench, but one of his ministerial colleagues said in a parliamentary answer that there was no such thing as a green job, because all jobs were green jobs, so it is probably good that the attempt to define a green job has disappeared from the Bill. My colleagues and I hope that more and more jobs will be genuinely green jobs that provide sustainable solutions to our economic and ecological crisis, but any attempt to limit and circumscribe that definition to certain things to do with the energy industry is probably inappropriate.

The definition that remains in the Bill of “green energy” is not as controversial. Clause 1(1) states:

“The principal purpose of this Act is to promote green energy.”

We all know what we mean by that—at least, we think we do—but the Bill defines it more specifically. We had two small debates about this point in Committee. The Bill defines it as

“the generation of electricity or heat”—

the word “heat” was a welcome addition in Committee—

“from renewable or low-carbon sources”.

It also contains a capacity limit of 5 MW for electricity and 5 MW thermal for heat. I am happy with that definition for the purposes of the Bill, but I would not want to think that that would be the final word on the definition of green energy. My hon. Friend the Member for Cheltenham made the point in Committee that some of us do not think that nuclear energy is the green energy that others may think it is. Energy produced in such a hugely complicated and technological way is not green energy. I do not want to open the Pandora’s box of that debate today, but I make the point that the definition in the Bill works well. We are talking about small schemes in this instance, but I hope that when we have other debates on strategy for energy policy generally we can look at what we mean by green energy and reach common agreement.

That could be a new strategy to try to gain friends and influence people by the nuclear industry—[Laughter.]

To complete my words on the definition, it is good that as well as the Bill’s principal purpose of promoting green energy it retains two other objectives: the desirability of alleviating fuel poverty—that point was mentioned by the right hon. Member for Holborn and St. Pancras in the context of his constituency and it is also a big issue in mine—and the desirability of securing a diverse and viable long-term energy supply. Those two objectives are properly retained, and I am very pleased about that.

May I add my usual rider? I am never sure that fuel poverty is the right phrase—it is not what people talk about on the Caledonian road, the Old Kent road or in the villages of Staffordshire or Surrey. We need to talk about warm homes if we mean warm homes and we need to use phrases in this debate, as far as possible, that people can relate to and that are understandable.

Finally, I note that two parts of the Bill have disappeared, and I lament their passing. One has been referred to and one has not. We have lost the good but controversial proposal—described in Committee as radical or revolutionary—to offer people an incentive to have green energy at home: introducing microgeneration or energy efficiency measures would affect what occupiers paid in council tax. Obviously, my hon. Friends and I are not supporters of council tax as a method of paying for local government services, but there will always be a method of some sort and we think that, if that method is attached to the property, there should be ways of incentivising people to ensure that they see the benefit of such a move. I am sad that that provision has gone, but the issue will not go away and will come back elsewhere.

The other provision that disappeared in Committee was the requirement that in updating the microgeneration strategy the Secretary of State should at least consider financial and fiscal measures. I hope that the Minister can reassure the House that such measures will at least be considered as part of the process of updating the strategy. Carrots and sticks are always important as we change people’s culture and behaviour, and financial and fiscal carrots and sticks are probably the most useful things that the Government can introduce. We all respond positively to financial and fiscal incentives and the Government have the mechanisms to introduce them. They know that they use them in every Budget and regularly at other times.

I do not want to go on further. This is an important Bill and I am sure that the House of Lords will be keen to ensure that it continues its passage and becomes law in this Session. We have two very important green Bills on our agenda this morning. My right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy) is waiting patiently to propose his, and we look forward to that. We could do very good work if the Government responded positively to both of the Bills. I know that they will respond positively to this Bill; I am not so clear about whether they will be quite as positive about my right hon. Friend’s Bill. I hope that they can be persuaded.

This Bill has been a piece of very good work. The hon. Member for East Surrey is to be commended and we all wish him and his Bill well. It will make a difference to the energy sources in this country, to people’s engagement with the production of energy and to the response to the terrible risks to the climate about which we increasingly know.

It is a pleasure to follow the thoughtful and interesting speeches of the right hon. Member for Holborn and St. Pancras (Frank Dobson) and the hon. Member for North Southwark and Bermondsey (Simon Hughes). The right hon. Gentleman was absolutely spot on; he made the point about the absolute imperative of energy saving extremely well. In the 21st century, energy saving is the great no-brainer, but we need to provide greater leadership and incentives for people to grasp the energy saving agenda. However, that is business for another day.

I am delighted to be welcoming the Bill back to this Chamber for Third Reading. I congratulate my hon. Friend the Member for East Surrey (Mr. Ainsworth) on his not inconsiderable achievement in bringing this important Bill so far. I am sure that his delightful, intelligent and responsible constituents will be extremely proud of the measure.

I am also pleased that for a second year running those on our Benches have produced an ambitious and progressive Bill which will drive forward the climate change agenda. The green energy and microgeneration agenda lies at the heart of the new Conservative vision for a low-carbon Britain. It also proves that even in opposition there is the opportunity to make a real difference.

It is a testament to the importance and substance of the Bill as well as to the skills deployed by my hon. Friend that he has been able to attract such a wide degree of bipartisan support, as reflected in the cross-party support of a number of Members whom he has gathered. That is more important on this issue than on almost any other. Climate change calls for a new form of responsible politics and it is critical that we embrace bipartisan politics and consensus where possible, not because it makes the passage of any one Bill any easier but because of the very important signals that such consensus sends to the outside world. It not only shows our determination to tackle this agenda but sends out a critical message about long-term direction and strategy to the capital markets.

The Bill hints at the huge scale of investment, the larger part of which will come from the private sector, that will be required to transform our economy over the next decade, not in a piecemeal or step-by-step way but in an almost revolutionary way. It is vital that we in this House act responsibly in giving that long-term direction to the capital markets, the private sector and large and small investors so that they can have faith and confidence in the agenda, which will outlive any Government, any Parliament or any party leader. It is something that Britain plc is determined to see through and it will outlive all of us.

I am pleased that despite major changes to its wording the Bill that went into Committee has for the most part been preserved. The changes in Committee were mostly constructive in clarifying and strengthening the Bill’s intent. I support efforts made by the Minister and his officials to bring the definitions and language of the Bill into line with its parent legislation, the Energy Act 2004. Indeed, it is appropriate that a Bill concerned in part with definitions should have been improved by amendments that reinforce the use of terms such as “renewable or low-carbon source”, which not so long ago were poorly understood and vague and are now part of the established vocabulary of climate change legislation in this country. I am also pleased that the Minister made allowances in Committee to include heat in the Bill. Heat makes up more than half of UK carbon emissions, and measures to promote low-carbon, small-scale heating will be an important part of rising to the significant challenge of decarbonising our heat supply.

I followed with interest the record of the Committee’s proceedings, particularly the confusion over the feed-in tariff cap for combined heat and power. My hon. Friend the Member for Wealden (Charles Hendry) was typically perceptive in his questioning and both his point and the Minister’s response satisfy my concerns over the apparent contradictions between this Bill and the energy legislation over the level of the cap.

I agree with the hon. Gentleman’s comments about the hon. Member for Wealden (Charles Hendry), who was very perceptive in Committee. Has the hon. Member for Bexhill and Battle (Gregory Barker) seen the letter that my hon. Friend the Minister of State sent to the hon. Member for Wealden to clarify that point afterwards?

I have indeed; I have it beside me, in fact.

As I said on Second Reading, in promoting local energy economies and facilitating the permitted development of low-carbon solutions this Bill will do much to empower smaller generators of power, whether those generators are households, businesses, communities or community-based organisations.

The tackling of the issue of permitted development is particularly timely, as for too long there has been a lack of consistency between words and action on the ground. Permitted sound levels for air source heat pumps and small wind turbines have caused a great deal of confusion and anger in the industry, with some small entrepreneurial firms brought to the edge of bankruptcy by delays and confusion in decision making. Ultimately, I hope, the Bill will help the Government to join up their thinking on microgeneration and ensure that there is an impact out there in the real world.

After the Bill has achieved Royal Assent, as I hope that it will, one thing that the hon. Gentleman might do, possibly with the help of the hon. Member for East Surrey (Mr. Ainsworth), is ensure that those farmers, landowners and householders who have had frustrating experiences in trying to develop their new energy sources can come together and share them, so that Ministers can really respond, particularly as they change the planning regulations.

It is an excellent idea that we should share experiences, because there are a lot of individuals—I have them in my constituency—who just do not seem to be able to get through the tangle of rules, yet they are trying to respond to the national agenda. I would be happy to work with the hon. Member for North Southwark and Bermondsey on that.

As I say, ultimately, the Bill will help to join things up, and will cut through the tangle of legislation with new purpose. Meaningful consultation with stakeholders in non-governmental organisations and the industry is required in any microgeneration strategy, and conversations will need to be had between officials in the Department of Energy and Climate Change and those in the Department for Communities and Local Government to ensure that pre-permitting is fair. That will give a much-needed boost to our deployment of small-scale low-carbon technologies, many of which are still in their infancy but show real signs of potential. They are being spurred on by the new surge of innovation that is coming through as we start to develop in earnest a low-carbon energy economy. To that end, I ask the Minister to consult on fiscal and financial measures in drawing up the strategy. He will correct me if I am wrong, but I think that it was clause 4(3)(b) that was removed in Committee. I ask him for reassurance that, although that provision is no longer in the Bill, fiscal and financial measures will be an important part of his consultation.

I should like to finish by acknowledging, as did my hon. Friend the Member for East Surrey, the extraordinary force for change that is Ron Bailey and his team. I also thank the officials who have done so much to bring the Bill into line with other relevant legislation while maintaining its obvious powers, and colleagues on both sides of the House who have supported and endorsed the Bill in the Chamber and in Committee.

May I start, as everybody else has done, by congratulating the hon. Member for East Surrey (Mr. Ainsworth) on his choice of subject, which is a perfectly good one, as we have found in this good debate? The Bill is well supported in every part of the House. I also congratulate him on his persistence in ensuring that it got this far—I hope that it will go all the way to the statute book in the not-too-distant future—and on his co-operative approach. He does not just say that such issues need cross-party co-operation; he demonstrates it by his behaviour.

As the hon. Gentleman acknowledged in answering an intervention of mine, he had good relations with the previous two Ministers responsible for handling his Bill. When the Minister of State, Department of Health, my right hon. and learned Friend the Member for North Warwickshire (Mr. O'Brien), was a Minister at the Department of Energy and Climate Change, he had a meeting with the hon. Gentleman. At the time, it was not entirely clear to the Minister from the advice that he was receiving that he should support the Bill, but he and the hon. Gentleman together saw the value of it as a vehicle for promoting microgeneration more widely in this country. My right hon. and learned Friend made a difference, thanks to his meeting with the hon. Gentleman.

When my right hon. and learned Friend moved on to other business, my hon. Friend the present Minister of State, Department of Energy and Climate Change took over. She conducted the Bill through the Committee. The slight thing that I have done to assist so far is to secure the money resolution for any expenditure that will be needed to put the Bill into effect practically. She worked hard with the hon. Gentleman on the amendments that made the Bill acceptable to the Government and, as we have heard, to the House. The hon. Member for Bexhill and Battle (Gregory Barker) acknowledged that most of the amendments in Committee were constructive and have improved the Bill, and that is pleasing for all of us.

I think that my two predecessors would agree that it is a pleasure working with the hon. Member for East Surrey—a pleasure that I have enjoyed for many years in other settings before recently becoming a Minister. I should like to join others in paying tribute to all the members of the Public Bill Committee for the constructive and helpful discussions that characterised their debates in Committee on this important Bill.

I am blushing horribly at the Minister’s kind remarks, for which I am very grateful. He will be aware that the process is not over yet; the Bill now has to go to another place. He will also be aware that there appear to be some timing problems in the other place, regarding when it can consider the Bill. I hope that he and his colleagues will do all that they can to get it listed for debate in the other place on 10 July, because if the debate does not happen then, there is a risk that the Bill, which everybody seems to support so strongly, will fail to get into the final harbour and on to the statute book.

The hon. Gentleman pre-empts a point that I would have liked to have made later. I will make it now instead. I anticipate, from all that has been said so far, that the Bill will be agreed to by the House today, which is welcome. It will go to the other place, where it will need some time, as he says, in order to be agreed to there, too. The Bill has had the detailed debate, consideration and scrutiny that will, I hope, satisfy Members of the other place that it needs very little additional attention at their end of Parliament. I hope that they will not take too long over it. I am conscious, as he is, that there is some pressure on the time that can be given to the Bill in the other place, especially before the summer recess. Clearly, if it has to start its passage there in the autumn, it will have limited time in which to get through all its stages there. Members of the ministerial team in my Department are conscious of those difficulties, and we will do all that we can to ensure that it has a safe passage through the other place and becomes an Act of Parliament in the autumn; that is what we want to happen.

The Green Energy (Definition and Promotion) Bill represents an excellent opportunity for us to build on the solid foundation of the Government’s ongoing support for small-scale on-site low-carbon and renewable energy generation. Part of that makes clear the Government’s ongoing support for microgeneration. That support has developed as a result of actions included in the Government’s current microgeneration strategy, a point that I raised with the hon. Member for North Southwark and Bermondsey (Simon Hughes).

The Government see an important role for microgeneration installations, which are small-scale on-site energy technologies. Microgeneration, such as small-scale heat pumps in local community halls, can engage and interest communities in generating their own energy. It can also help us, as a nation, to tackle climate change and achieve energy security. I am pleased to say that the Government are continuing that impetus by maintaining their strong support for the Bill as amended in Committee.

We talk about microgeneration in the abstract, and in the legal terms of definitions, but it actually makes a difference in people’s homes and communities, as I have seen in my constituency. I recall visiting a man, in his cottage in a conservation area, who had installed solar thermal in the roof of his property. He was confident that he was making a difference to his energy bills, and contributing to tackling climate change. Of course, he was a member of a community. All his neighbours saw what he had done, and hopefully will be willing to follow his example. To digress for a second on to the subject of permitted development rights, which I shall talk about later, he put in his installation before there was general permission to do so, so he had to go through the planning process. As he was in a conservation area, he also needed consent. It is important to point out that the Bill retains the ability of local authorities to impose limitations and conditions in certain circumstances, such as those where the property is in a conservation area. That way, they can ensure that character is not damaged in pursuit of a fine objective, such as tackling climate change or lowering people’s energy bills.

I welcome the Minister to his responsibilities. Will he agree to meet, at some time convenient to him, the sponsor of the Bill, the hon. Member for East Surrey (Mr. Ainsworth), the hon. Member for Bexhill and Battle (Gregory Barker) and me so that we can provide examples of people whose proposals, possibly including some that might apply in national parks, would not offend the wider conservation interest, but who have struggled to get through the system, so that we can achieve the best possible process, both in special areas—conservation areas and others—and generally?

The hon. Gentleman knows that I am a new Minister, so I am very much in meeting mode. How could I resist such a polite request to meet people with an interest that I share personally to discuss such issues? We will make arrangements for that to happen in due course.

I want to mention one or two of my own experiences which show the practical support that exists for microgeneration, which we need to tap into as a result of the Bill. I want to describe the day I climbed on to the roof of my local school, King Edward VI high school—as I am mentioning that, I should declare an interest: both my son and my daughter went to that school. It had installed a solar thermal installation on its roof to contribute to the heating of the school’s water. The people at the school were very proud of the installation, because it immediately provided a reliable source of energy and they saw a reduction in heating costs. They wanted me to come to the roof of their building to celebrate their success with them.

The point about a school having a microgeneration installation is that it is educative in the general sense. The entire school population every day was seeing and benefiting from that installation, so when my right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson) talks about having microgeneration installations in public places such as railway stations, I thoroughly agree with that suggestion because of the educative effect, in addition to all the other benefits, that such public sitings can provide.

Another example that I shall give from my experiences of microgeneration installations—yet again a solar thermal installation—is at the Staffordshire wildlife trust in its headquarters in the beautiful rural location of Wolseley Bridge, just outside Stafford. With the help of the industry, which wanted a public display of its technology, and with the help of a grant under the low-carbon buildings programme, the trust was able to have both the installation and install a real-time meter in the entrance to its premises. There was an interpretation board next to the real-time meter to provide an explanation to the thousands of visitors who come to the centre every year so that they could see and learn more about microgeneration installations. That is a good example of educating a much wider audience than the people who benefit directly from the installation.

In case the House thinks that the only thing I can talk about is the Stafford constituency, brilliant though that constituency is, I want to draw attention briefly to the Sustainable Development Commission’s latest report, “Sustainable Development in Government 2008”, which contains a marvellous photograph of the Foreign and Commonwealth Office’s Wiston House. It is a beautiful building, in a beautiful location in a rural setting, but the importance of the photograph is in the forefront—the biomass boiler fuelled with woodchip taken from the surrounding woodland, giving a carbon saving of 160 tonnes per year. I know that hon. Members would say the Government should go further and faster, but that is one instance of the Government setting an example and demonstrating the benefits of microgeneration installations.

I do not need to remind hon. Members of the difficult economic times that we face at national and global levels. While Governments must deal with the problems and consequences of the global recession, we must also bear in mind that, at this point in history, there can be no relaxation of our need to focus on the importance of sustaining our individual, national and global efforts to tackle the major challenge facing us all—climate change. We cannot shelve the issue until we have steered our way out of the economic downturn. Mañana is not the time to tackle it. Tomorrow will be too late.

The Stern review demonstrated that the costs of responding to unchecked climate change are incomparably higher than the costs of taking action to combat it now. The review also estimated that the economic and environmental costs of a failure to act could be as much as 20 per cent. of GDP or even more.

The current glorious weather in Wimbledon week seems to improve the quality of life in the British isles, but the current unusual health warnings may well foreshadow similar warnings in the summers of 2030, 2050 or 2080. Children born now will have to endure these and other extreme events as a result of changing weather patterns. They will be only 40 years of age in 2050, by which time we need to have reduced our carbon emissions by 80 per cent.

It has been glorious weather for Wimbledon, although probably rather too hot. I am told that the temperature in central London yesterday hit 32º C. Meanwhile, in other parts of the country there has been torrential rain and flooding. Is that not entirely consistent with what the scientists have been telling us for a long time about the likely effects of climate change?

Of course, with my new responsibility for fuel poverty, I have learned a great deal more about excess winter deaths—the increased number of people who die in the winter months because of the cold—yet recently we had a summer when there were excess summer deaths because of a heat wave that was outside the norm. I agree that the evidence before our very eyes is quickly catching up with what the scientists have warned us about for many years. It must be increasingly difficult for the few deniers of climate change and its causes to maintain their opposition.

We must not be lured into excuses or slacken the pace at this crucial point. DEFRA recently released the UK climate projections, which give climate information for the UK up to the end of the century. The projections are based on a new Met Office methodology. It allows a measure of the uncertainty in future climate projections to be included in the information, but that element of uncertainty only covers a range of negative scenarios, not the possibility that climate change is not happening at all—a point reinforced by the hon. Gentleman.

Almost all climate scientists agree that the climate is changing and that that is due to man-made climate change, caused mainly by an increase in emissions of human-made greenhouse gases, such as carbon dioxide from burning coal and oil. I am informed that the Met Office has graphically described it as heading into a change of temperature equivalent to

“the opposite of an Ice Age”.

Changes of this magnitude normally take thousands of years to develop, but in this case have taken just over 100 years. I hope hon. Members will agree that this is no time to downgrade climate change from being the leading challenge facing humanity today. Everyone who contributed to the debate had that as their unspoken text and motivation for their support for the Bill.

Would it not be difficult for anybody to deny that some amount of climate change is taking place? Most people believe that humanity is contributing to that, but even those who do not believe that ought to accept that it is extremely stupid of us to waste the carbon-based energy supplies, which are clearly limited, particularly oil and gas.

I served on the Joint Committee of both Houses that carried out the pre-legislative scrutiny of the Climate Change Bill. We had evidence from Lord Lawson, who is one of those who would say that there are other causes of climate change, it will not all go in one direction endlessly and we have no reason to worry. I agree with my right hon. Friend that that is a very dangerous attitude to take on many levels.

My right hon. Friend mentions carbon-based fuels running out. We probably still have centuries of coal supplies. It is an expanding source of energy, particularly in developing countries, and it is urgent that we tackle the emissions that come from burning fossil fuels. However, as he says, it is so pressing, demanding and obvious that we should follow a precautionary approach and take the actions that we are describing here and in other forums. They are the right actions to take if we are to ensure that the world does not get into the dangerous circumstances that scientists say will otherwise prevail later this century.

The Minister makes an extremely important point. Whatever anyone’s views about climate change, does he not agree that we should have been promoting resource efficiency and energy efficiency anyway, and that in the developed west we have scandalously neglected those things for far too long? Dealing with those issues presents an enormous opportunity for good in the future.

I agree. This is a fascinating discussion, although we are in danger of going a long way from the Bill. The hon. Gentleman’s point is important for two reasons. First, there is the great unspoken issue of population growth; there are already more than 6 billion people in the world, and some say that by the middle of this century, there will be 9 billion. In that context, resource efficiency is an important subject. Secondly, to be a little selfish for my own country, as we are all entitled to be, there will be skills and technologies from which we can benefit if we are more resource-efficient in future. Britain could be at the forefront of finding the technologies for low-carbon and renewable energy sources and benefit from immense trade in those technologies. There is every good reason for us to be resource-efficient.

I want to respond to one or two points made by the hon. Gentleman, and I shall answer the question that he asked me. He said that taking his Bill so far had been a privilege and a pleasure. I wondered about his use of the word “pleasure”; perhaps tonight, as he looks back on his Bill’s successful passage, he will feel a lot more pleased than he does now in listening to me drone on in support of it. I was pleased that he recognised how the Government had co-operated with him during its passage.

My two predecessors have been models of co-operation with the hon. Gentleman. I learned the secret of his success in getting this far when my hon. Friend the Member for Hendon (Mr. Dismore) popped up and reminded us that he is a sponsor of the Bill. Recruiting him was a shrewd and clever move on the part of the hon. Gentleman.

I am also glad that the hon. Gentleman has recognised the contribution made by the civil servants. I am new to my post and have been with the civil servants for only a short time, but I, too, have been impressed by the commitment and dedication evident in their assistance to me and the House in getting the Bill into good order. Who could not join in the praise for Ron Bailey? I would not describe him as a scourge, but as a friend of the family to Parliament because of his work over many long years in pushing us along the route on which we should have been anyway. I am glad that he has been able to contribute to the hon. Gentleman’s success today.

The hon. Gentleman mentioned that raising the heat capacity limit for microgeneration to 300 kW would benefit community projects, and I agree. The Government’s entire intention was to see many more of the kind of community projects that I described—in schools, in wildlife trust centres and community centres. As well as being of public benefit in themselves, such projects are educative and mean that people learn more about microgeneration.

The hon. Gentleman also spoke about behavioural change. If he does not mind, I shall not follow his comments about chimpanzees; I shall merely say that he is right in saying that the policies have to be right if behaviour is to change. He mentioned that incentives should be a part of policy, and I agree—but only one among many parts. In a green revolution, regulation is an important part of the whole package. The hon. Member for Bexhill and Battle spoke, as I will later, about the need for investment in the sector. Strong, clear lasting regulation gives confidence to people so that they can make those investment decisions, so regulation is important, as well as incentives.

Investment is also important. As the hon. Member for Bexhill and Battle said, a lot comes from the private sector, but the public sector is also involved, especially when there is a need to pump-prime or kick-start projects when they begin. Some technologies would not have gone far without some public support and investment; now they are more established and look like making lasting contributions to our future strategy. As several hon. Members have said, sticks are important as well as carrots, and some of those sticks should be fiscal. I agree with all that.

My last example of the right policy relates to the setting of examples: we should ask people to do as we do, not as we say. If lights are on in Departments at night, that will be a bad signal to people; a biomass boiler at Wiston House, however, is a good signal.

Finally, I come to the question that the hon. Member for East Surrey asked about micro-hydro. In Committee and on Second Reading, there was pressure in favour of micro-hydro being included in the Bill’s extension of the permitted development rights, but the Government resisted that pressure. In Committee, my hon. Friend the Minister of State announced that there would be a review of the consent and licensing system for all hydro projects. As the hon. Gentleman demonstrated during the short debate on the night when I moved the money resolution, he knows that there are some difficult issues with micro-hydro, mainly because there is only one system for consents and licensing. It applies to every hydro project, however small or large. As a scheme could be very large, the system is complex and demanding. I can see that going through that process would be a great deterrent for somebody proposing a micro-hydro scheme. I am pleased that my hon. Friend announced to the Committee that there will be a review of the system to see whether we can come up with a second system for micro-hydro that will streamline the process and make things quick and easy for people who want to suggest good microgeneration projects that include a component of hydro.

The hon. Gentleman asked me to give some detail about the review. It will be carried out by the Environment Agency, which administrates the existing scheme. It has a time limit of one year to complete the review, to stay inside the time scale of this Bill in respect of the review of the microgeneration strategy. I hope that everything will come together for micro-hydro in a year’s time. That is my wish.

My right hon. Friend the Member for Holborn and St. Pancras made an important point about the contribution that saving energy makes to tackling climate change and ensuring security of supply. He said that the issue should not be underestimated, and it is certainly not underestimated by the Government or the hon. Member for East Surrey. Energy saving is specifically referred to in the Bill. My right hon. Friend is absolutely right to say that it can cut costs for individuals. The Government estimate is that most people could save about £300 a year on their energy bills if they made their homes as energy efficient as possible. As he said, if we promote energy saving as an industry, that will create jobs in the supply chain. I am keen for that to happen, because one of my areas of responsibility relates to skills in the low-carbon economy, and I am keen to see an expansion of jobs—highly skilled and well-paid jobs—in the sector. That is my ambition.

My right hon. Friend also mentioned those who do not have the money to keep themselves warm in their homes. He said that the worst-off families and pensioners often live in the worst-insulated homes. That is why there is a fuel poverty strategy in this country. It has been going off-target in recent years because of high rises in fuel costs, so it is being reviewed this year. It is a sobering thought that many people in this country die in the winter months partly because of extreme cold from which they are unable to protect themselves in their homes. Last year, the figure amounted to 25,000 individuals, a statistic that should make us all determined to put energy efficiency at the top of our list of priorities.

My right hon. Friend observed that the more we can promote microgeneration technologies, the greater the likelihood that their costs will fall, which will put them within the reach of more people and more businesses, and therefore promote further take-up of microgeneration—a virtuous circle that all of us in the House want to achieve. When he went on to mention that a lot of businesses do not take up energy efficiency measures, he reminded me to say that in the Energy Saving Trust we have an excellent, trusted organisation that can give advice to domestic householders about energy efficiency measures. I would argue equally that we have an excellent, skilled organisation in the Carbon Trust, which gives similar advice to the owners of non-domestic business properties. I would urge any business that is wondering what to do about energy efficiency measures and what help there is for doing it to contact the Carbon Trust if they have not already done so.

My right hon. Friend noted that there is great waste in over-heating and over-lighting properties. At that point, I was reminded to state my message that Departments should also turn their lights off at night. The sustainable operations on the Government estate targets, which are monitored by the Sustainable Development Commission, help to ensure that Government set a good example; I am anxious that that is what we should do.

My right hon. Friend said that when he worked in the power sector, the boss, rubbing his hands, said that they made a lot of money out of the over-heating of premises. That reminded me of the importance of trying to incentivise energy companies to help people to make energy savings instead of simply promoting greater sales of their products.

I would not like my hon. Friend to misinterpret what I said as meaning that the great Sir Christopher Hinton rubbed his hands with glee. He thought that it was absolutely stupid that the country was building two power stations so that people could take their jackets off at work. Indeed, he used to cause terrible offence to people selling electricity by insisting on having gas-fired central heating at home because he thought it was more efficient.

I am grateful to my right hon. Friend for that useful clarification. The attitude that he describes feeds into today’s carbon emissions reduction target programme, whereby energy companies make a great commitment to helping customers to make energy savings in order to cut their bills. That is the kind of approach for the future that the Government want to encourage.

My right hon. Friend made an important point, which was not much taken up on the Liberal Democrat Benches, about the potential effect on neighbours of the installation of new micro wind turbines and air source heat pumps. One person’s benefit can be a neighbour’s nuisance, and it is important for us to ensure that we avoid any negative developments from what is a very good policy. That is why when the Government extended permitted development rights for many microgeneration technologies last year, further time was taken on micro wind and air source heat pumps in order to ensure that we got right issues such as noise and vibration and did everything possible to minimise the effect on neighbours so as not to attract negative publicity that would harm the cause of promoting greater microgeneration.

I am sorry to interrupt my hon. Friend in mid-flow.

It is likely that a wind turbine or an air source heat pump will be quiet and not vibrate much when it is first installed; the big problem is whether there will be high-quality maintenance. A car that is fairly quiet eventually turns into an old banger, and it is called that because it makes a lot more noise. We must try to ensure that there is sufficiently good maintenance so that a wind turbine does not become an old rattler that used not to be offensive but becomes so as the years go by.

I am grateful to my right hon. Friend. I was about to remind the House that the Bill permits there to be limitations and conditions on permitted development rights. I am not aware that we were planning to suggest that there should be a condition about regular maintenance, but certainly the advice and guidance would say that that is good practice. Today’s modern designs do everything possible to minimise the risk of excessive noise and vibration. The time since the relaxations were introduced last year has been well used in terms of Government consideration and consultation about noise levels that might be acceptable to neighbours. I hope that when we come to make decisions about the precise detail of these permitted development rights we will strike the right balance between satisfying neighbours and those who want to install the technologies.

I am delighted that my right hon. Friend drew our attention to railway stations. I had forgotten that he had three such great ones on his patch—St. Pancras, King’s Cross and Euston. I wish him the best of success next week in his meeting on Euston in terms of ensuring that microgeneration is taken into account as part of the design of the project for the refurbishment of that station, which I visit every week on my way to and from Parliament and my Stafford constituency. I agree that it would be a delight to see examples of microgeneration technologies at our major railway stations across London, always taking account, as he says, of preserving the urban landscape, which is just as important to this country as its rural landscape. His warning to us to get this right so that we do not have public misunderstanding and negative reporting by the media of microgeneration is an important one to act on after today. We want the media to join us in promoting microgeneration as something that is positively beneficial to householders and business owners, and to the wider aims of tackling climate change and ensuring energy security in this country.

I have said on every occasion when it has been possible to do so that I am certainly not in favour of a free-for-all in micro power that causes a nuisance. That is not the purpose of the Bill, and there are safeguards built into it. The Minister may wish to confirm that when consulting on any proposals to do with microgeneration in domestic properties, a noise limit of 45 dB from the nearest window of a habitation will be taken as a benchmark. I hope that that will provide enough of a safeguard during the consultation period for the Government to satisfy themselves that an installation will not cause a nuisance.

I am grateful to the hon. Gentleman. I certainly exonerate him from any suggestion that he is gung-ho about installing microgeneration anywhere at any time; of course, he has been extremely responsible, as are the Government. I am merely saying that we should continue to balance possible conflicting interests to ensure that we stay on the right side of the public and maintain their support. The limit that he mentioned is indeed the Government’s thinking in terms of the permitted development right for wind turbines and air source heat pumps. A further reassurance that he did not mention—I will do so in order to join him in saying how responsible his attitude is—is that the whole thing will be reviewed after two years to ensure that it is attracting public support and that there are no areas that need any extra attention. We are all doing the best we can to ensure that this is an entirely positive experience for people.

The hon. Member for North Southwark and Bermondsey agreed that the strategy for England, which will be the second one, gives confidence, and stressed the importance of that confidence to the public at large. That is an important subject as we try to attract more and more people’s attention towards considering microgeneration. I join him in that view and add the importance of giving confidence to those in the supply chain that provides microgeneration technology, be they manufacturers, sellers or installers. I am keen that we have a healthy supply chain with the confidence to invest in its business, its equipment and the skills of its work force because it knows that a lasting and sensible strategy is in place.

The hon. Gentleman is pleased that there are dates and deadlines. I suppose that as a Minister I should not be so pleased, but I assure him that I am determined to keep to them. I look forward to meeting them in future. He mentioned the loss of the definition of “green jobs” from the Bill and described the conceptual difficulty that people have with the term. I attended the launch yesterday of a document jointly produced by British Gas and the GMB trade union called “Green Collar Britain”. That is a good way of looking at jobs in the environmental industry, as people can identify with the idea of green-collar jobs. We already have more than 800,000 jobs that exist because of trade in green goods and services, which is worth more than £107 billion a year to this country. As a country and as a Government, we want to capitalise on that success and create more jobs and more wealth in environmental industries.

The hon. Gentleman made a point about the capacity limits in the Bill. The hon. Member for Bexhill and Battle reminded us that there had been a teeny bit of confusion at one point in Committee about how the different definitions in the Energy Act 2004, earlier electricity legislation, and the Bill would mesh together. As he said, however, we have now established that they are perfectly compatible and mostly desirable.

In an ideal world for the Government, we would try to leave specific capacity limits out of primary legislation, because we never know how things will turn out in future. However, they started to appear in primary legislation back in the 1980s, and there were some in the 2004 Act, so we are where we are. I am pleased that we have established the relationship between the definition of green energy, the limits for future feed-in tariffs and what is meant by microgeneration, and we can all work with the limits that we have for the time being. I noticed the touchiness on the Liberal Democrat Benches about nuclear power, but for today we will pass quickly over that.

I agree with the hon. Member for North Southwark and Bermondsey about the language of fuel poverty. I am the Minister for tackling fuel poverty, and I am charged with a target of eradicating it in this country by 2016, which is an immense responsibility. I agree that the public might be more engaged with the debate if we talked more about warm homes. As a member of the all-party warm homes group I am familiar with that term, which is a positive one to engage people in dialogue. I am with him on the importance of using that language.

I understand why hon. Members were disappointed to lose the points about council tax and non-domestic rates from the Bill. In Committee, my ministerial colleague gave a detailed explanation of why each was unattractive to the Government, and I have nothing to add to that. The hon. Gentleman asked me about fiscal measures, and I was also asked about future consultations on such measures. I am certainly willing to say that the Government keep all fiscal measures under review, and consultations are planned quite soon on feed-in tariffs, for example. There will be further discussions, and who knows, perhaps when I meet him and the hon. Member for East Surrey we can touch on that subject.

The hon. Member for Bexhill and Battle stressed the importance of energy efficiency. We all agree about that, which is why it is important that it appear in the Bill, as it does in the Government’s thinking about how to improve our energy security and tackle fuel poverty. Like myself, he stresses the importance of giving people confidence to invest in the technologies in question, which is why long-term strategies and firm regulation that gives the market clear signals are very important for the future. Like him, I am pleased that we are making good headway on the subject of heat. He is right that although we have begun the march towards getting much more of our electricity from renewable energy, it will be a much longer march to decarbonise heat. That is an important priority for us.

The hon. Gentleman was keen to stress that we should make much more use of permitted development rights. That is a good point, subject to the warning from my right hon. Friend the Member for Holborn and St. Pancras that we should be considerate of our neighbours in this matter, as in every other, and that we should be wary of losing public support by going too far too quickly.

The hon. Member for Bexhill and Battle also asked me to confirm that we will consult on fiscal measures. I have given the example that there would soon be consultation on feed-in tariffs, and I am sure that each step of the way as we consider other fiscal measures, we will want to consult hon. Members and all the organisations that he mentioned.

I turn to my own contribution to the debate. Met Office projections demonstrate that changes that sound small, such as a 2° C global temperature rise, will actually have serious impacts on the whole world through rising sea levels and extreme events such as droughts, hurricanes and floods, leading to disruption—[Interruption.] Hon. Members really should pay attention. This is very serious stuff. It will lead to disruption to natural and man-made habitats. Many communities across the UK will struggle to cope with the effects of warmer summers and wetter winters. The resulting disruption to their homes and lives will be the physical consequences of doing nothing now, and of failing to get an international agreement at Copenhagen.

In the absence of effective international effort, greenhouse gas emissions will continue to grow rapidly over the coming decades. On current projections, that will result in warming of between 1.7° C and 4° C by 2100. Rising temperatures will cause a range of stresses to our planet, causing radical changes to rainfall patterns; water shortages; loss of glaciers; loss of agricultural land; and extreme weather events of increasing frequency. We have seen in the dramatic flooding in the UK in recent times, which caused social upheaval and severe economic effects in flooded towns all over the country, how easily such weather events cause chaos. We have also seen how much it costs to tackle and remedy them. Stern was undoubtedly right about the costs of not acting.

Those are some of the reasons why the Government and Parliament have committed to cutting greenhouse gas emissions by 80 per cent. by 2050. We are not suggesting that reaching that target will be easy. It will require radical action, and we will need to roll out cost-effective quick wins such as insulation. We will also need to decarbonise the supply of electricity and heat, which we cannot live without. The challenge is clear when we consider, for example, that space heating accounts for 47 per cent. of our overall carbon emissions. In that context, it is critical to encourage renewable heat technologies.

As hon. Members know, microgeneration technologies are varied. They can deliver both renewable electricity, through micro-wind, photovoltaics and micro-hydro generation, and renewable heat through heat pumps, biomass and hopefully in future micro fuel cells. Microgeneration can help us contribute towards our 2050 target of reducing our emissions by 80 per cent. It can also help communities and householders work together to tackle the damaging effects of climate change, and it has the potential to increase the diversity as well as the security of UK energy supplies. In many cases, fitting microgeneration will help us to be aware that we must use energy more efficiently.

In the shorter term, those technologies, some of which are mature already and some of which are still developing, have the potential to help us meet our EU 2020 targets on renewable energy. We all know that those are challenging targets, which require a significant increase in renewable generating capacity. Indeed, we will need no less than a tenfold increase in renewables, which is a very daunting prospect. Our recent domestic supplies of gas and oil have come from domestic sources, putting our starting point for renewables behind that of many other EU countries. That is one more reason for supporting the Bill, which represents a second push towards reaching the microgeneration levels that will make a serious contribution to our 2020 targets.

We have already put in place an energy strategy to generate a baseload from technologies such as nuclear power, and to develop carbon capture and storage. Last year, the Energy Act 2008 set the framework for moving forward to ensure that the market is capable of delivering the changes that we need now and in the future. However, it is important that householders, communities and businesses can also play their part effectively. We are therefore working on a smaller community and householder scale strategy, too.

When we talk about energy saving, we must fully consider the fact that about 80 per cent. of the housing that we see around us today will still be standing in 2050. Those buildings include many millions of homes that are today highly energy inefficient. Problems can range from the cost and difficulty of double-glazing old windows to the lack of flues in houses that were built for gas central heating.

It is deeply unfortunate that much of the most energy inefficient housing is in the most deprived areas of Britain. However, with a need to ensure that everyone can heat their homes when it matters, initiatives like Warm Front will continue to be important. Hon. Members may be pleased to learn that yesterday I signed the new regulations on Warm Front, which will permit some installation of microgeneration technologies through Warm Front grants for properties that are off the national gas grid.

The Government’s forthcoming heat and energy saving strategy will try to tackle many of those issues. It will aim to support and encourage everyone—individuals, communities and the Government—to work together and make the changes needed in the fairest way possible.

We all know that homes and buildings currently use a lot of energy inefficiently. Wasting electricity on inefficient appliances and losing heat through poorly insulated walls and ceilings could cost the average household more than £300 a year. We are therefore looking at new delivery models and packages to provide whole house, house-by-house and street-by-street approaches, targeted particularly at the poorest communities. We are also considering ways of linking financial support to the property, rather than to the householder, so that subsequent house owners take on the overall costs, as they save money on their own energy bills. We will examine new measures to stimulate community-scale generation. Pilots of pay-as-you-save may be an important driver of the wider take-up of microgeneration technologies.

It is a sobering thought that about a quarter of all UK emissions come from the domestic homes sector. To meet our target of reducing emissions by 80 per cent. by 2050, we will have to eliminate emissions almost completely from households. That sounds like a tough ask, but when we consider how difficult it will be to hit those targets in other sectors, there is little option.

There are two separate but complementary ways of radically reducing domestic carbon emissions. The first is radically improving energy efficiency and the second includes looking at ways of generating energy more sustainably. That means that we need real growth in small-scale, low-carbon and renewable energy technologies. Microgeneration will definitely have a key role to play, if we are to get where we want to be by 2020.

By brigading the concept of energy efficiency with renewable and low-carbon sources under the broad definition of “green energy”, the Bill enables us to promote their use at that smaller scale. We recognise that, to tackle climate change, each and every person needs to play their part. We need to make it easier for individual householders and businesses to install microgeneration equipment and increase the amount of green energy generated. That is exactly what permitted development rights do—they grant planning permission at a national level and remove the financial and administrative burden of submitting a planning application. The Government have already made progress on that and granted householders permitted development rights for technologies such as solar panels and ground source heat pumps. However, we also know that that we need to go further.

Micro wind turbines and air source heat pumps have a big role to play in contributing to the generation of green energy. The Bill recognises the Government’s commitment to those technologies by ensuring that we will grant permitted development rights for them in a domestic setting in six months of the Act’s coming into force.

However, home owners are not the only ones who can help. The potential for green energy generation on land occupied by farms and premises used for commercial purposes, such as offices, is huge. Our job is to grant permitted development rights that allow developments in the right place without adverse impacts on neighbours. Let us not pretend that that is easy—what is acceptable to one person is a nuisance to someone else. It is important to get the balance and the pace of change right.

The Bill commits us to consider introducing permitted development rights in a non-domestic setting within six months of the Act’s coming into force. We have already started work on proposals, and we will produce a consultation paper later this summer.

Of course, those are not the Government’s first steps on promoting microgeneration. I mentioned earlier that we have already had one microgeneration strategy, which was published in March 2006, and had the objective of creating the conditions for the technologies to become a realistic alternative or supplementary source of energy generation. Of the 25 actions that the strategy contained to tackle the barriers to widespread uptake of microgeneration, 21 were completed and three were closed. The only outstanding action was in relation to “deeming” under the renewables obligation. That is now covered by provisions in the Energy Act 2008 to introduce a feed-in tariff for small-scale electricity generators.

Work on the microgeneration strategy allowed us to benefit from a greater insight into how the market for microgeneration works and to understand better its potential as we move towards creating a low-carbon economy. As I have already mentioned, relaxed planning from permitted developments, for example, will help communicate to a wider audience the real need to act on climate change now. By facilitating an easier process for installing microgeneration, we hope to encourage schools to take a more active role in developing renewable and low carbon microgeneration projects, allowing children to gain valuable, practical knowledge about what they can do as contributors in a lifelong effort against dangerous climate change. The Building Schools for the Future programme gives immense scope for acting sooner rather than later in both primary and secondary schools.

While it is vital to engage readily with home owners, small businesses and community actors, we must ensure that future generations will be keen to act, able to judge what it is possible to deliver in homes and communities, and equipped with skills to use that knowledge positively.

Another key achievement of the microgeneration strategy was the introduction of the microgeneration certification scheme—MCS. I am pleased to say that it is making good progress, in terms of product and installer certification, with more than 310 installer companies certified. To bring down costs, we opened up the scheme to 14 new certification bodies, five of which—BRE, NAPIT, British Board of Agrément, NICEIC and Action Renewables—have already achieved accreditation from the United Kingdom Accreditation Service for MCS. In the next few weeks, they will be joined by EC Certification and TUV NEL. That is an excellent opportunity to build on what BRE has achieved, and a new microgeneration strategy will ensure that we continue to push forward with a robust certification process.

MCS will not only provide consumers with impartial certification of installer companies and products but offer enhanced consumer protection and a means to register complaints. Through MCS, consumers can have confidence that complaints will be dealt with effectively and faults corrected. The scheme will also ensure that consumers get accurate estimates of the likely performance of the largely unfamiliar energy technologies before they sign up to them.

That is all terribly interesting, but the Under-Secretary has been on his feet for nearly an hour. Will he assure us that he is reaching the conclusion of at least his opening remarks?

The hon. Gentleman is too cruel. I can assure him that we are almost there. I hope he will agree that certification is important for ensuring the greater use of microgeneration technologies and for the reassurance that it gives to the public about the standards that are set for them. Certification to robust standards is the key to delivering a sustainable industry in the UK. We have learned lessons from countries where negative media reports about installers over-promising energy outputs or about low-quality or even unsafe installations have scared off potential consumers, deeply damaging the wider microgeneration industry.

Confidence is key to moving forward. We recently convened a citizens’ dialogue about how we will need to heat and power our homes and communities in the future—in other words, about how they will make the big energy shift. Participants from communities in England, Wales and Northern Ireland came together for that dialogue. It was clear from their questions that, as well as economic incentives to make microgeneration attractive, they want free, impartial and reliable advice before making investment decisions on such a scale.

People also want information about the support and services available to them. Last year, the Act on CO2 helpline was accessed by 1.5 million people and was able to point home owners towards the best and most cost-effective means of saving energy, and of course money, by raising awareness of the opportunities for energy efficiency products in the marketplace today. I am also informed that the Energy Saving Trust’s online interactive diagnostic tool for microgeneration technologies is now live. It will allow consumers to enter details about their properties and get advice on which technology would be most suitable, and equally importantly, which would not. Information provision, support and skills are just some of the issues for consideration as work begins in earnest on the new microgeneration strategy required by the Bill.

As action elsewhere continues apace, we need to ensure that the financial support is available. The Government are working hard on two financial incentives that will have a genuine impact on pushing microgeneration into the forefront of our energy future. Our renewable heat incentive will be one of the world’s first financial mechanisms to support the generation of renewable heat. As with feed-in tariffs, our aim is to make the renewable heat incentive as accessible, flexible and user- friendly as possible for potential investors in renewable heat at all scales, from the domestic up to large industrial installations.

We are building the renewable heat incentive from scratch, as currently there is no physical or regulatory market for heat, so there is a lot of work ahead of us. The powers in the Energy Act 2008 are broad and allow maximum flexibility in designing the details of the incentive. That flexibility will allow us to work with all parts of the energy industry and other stakeholders to understand better any issues that could arise from implementing the mechanism. The details of the renewable heat incentive have not been finalised, but we will be consulting on these towards the end of the year. We aim to have the incentive in place by April 2011, and through it we expect to see a genuine impact on domestic heating technologies such as solar thermal, and air and ground source heat pumps.

That is one financial incentive. Feed-in tariffs will also act as a major incentive for the development of small-scale electricity generation. We are committed to having them in place by April 2010. The tariffs are intended to be a simple, easy-to-understand mechanism to provide certainty of reward to make small-scale low-carbon electricity generation a more economically attractive proposition to anyone wishing to invest in it. We will consult on the feed-in tariffs this summer, alongside a consultation on changes to the renewables obligation. There is much work yet to be done. My Department will look particularly at lessons learned from abroad where similar schemes have already been introduced.

At this moment, I am unable to say what the levels of the feed-in tariffs reward will be, as they may differ for different technologies and may depend on the size of the installation and the initial cost to buy equipment. Such features can be decided only following further analysis and the consultation that I have described. However, there is no doubt that they will offer the opportunity to draw small-scale generation fully into the mainstream. By not restricting such incentives to the domestic sector, we hope to allow for plant of a size used for community-scale generation. That includes buildings such as schools and hospitals, and small businesses. We wish to open up the opportunities offered by small-scale energy generation to all who can benefit from installing such technologies.

Another support mechanism to encourage take-up of microgeneration is the low-carbon buildings programme, which I mentioned earlier. The programme has delivered very successfully, not only by helping to create the first microgeneration capacity in the UK, but by helping to create the supply chain needed to support the introduction of feed-in tariffs and the renewable heat incentive. In light of that ongoing success, in this year’s Budget the Chancellor announced a further £45 million of funding for the low-carbon buildings programme. That additional £45 million will help to avoid a potential gap in funding before the new incentives are put in place and will bring the total level of support through the programme to more than £130 million.

On Wednesday of this week, phase 2 of the extended programme for the low-carbon buildings programme opened to new applications. We have introduced a pot for solar PV of £9 million, bringing the total budget committed to solar PV through phase 2 to more than £40 million. The remaining budget will support a wide range of technologies. We want to provide support for the heat technologies through to the intended start of the renewable heat incentive in April 2011. That is excellent news for microgeneration technologies and demonstrates the Government’s commitment to helping microgeneration move to a sustainable position.

I want to emphasise that there is already a great deal of activity to support microgeneration. Over the past few years, we have begun to develop the tools with which to tackle the energy challenge ahead on the small scale. As a consequence, it is now time to draw on the lessons that we have already learned and build on the successes of the first microgeneration strategy. In order further to promote the use of renewable and low-carbon sources, the Green Energy (Definition and Promotion) Bill provides us with the opportunity to consult on, and thereafter publish, a new microgeneration strategy, which will take us into the coming decade. That will be critical in giving greater certainty to industry and the microgeneration sector. Although the new strategy will be applicable only to England, I am sure that the devolved Administrations will join us in our commitment to deliver a prosperous future for microgeneration throughout the UK.

I am pleased to draw my comments to a close. I know that there is already much support for the Bill. I am sure that it is about to receive its Third Reading in this House, before passing to the other place, where I wish it equally great success and approval and, given what we said earlier about the shortness of time a speedy passage on to the statute book.

May I thank the Minister for his exhaustive speech? By the time he reached his “live diagnostic tool”, I think that even he was losing the will to live. However, the other place will notice the thoroughness of his remarks, which will no doubt be helpful when it considers this legislation.

I thank all right hon. and hon. Members who have contributed to what was, until the last hour and a bit, a fascinating debate. I apologise to the citizens of Bexhill and Battle for an unwarranted slur on their character. I did not mean to single them out: they are no more nor less selfish chimpanzees than the rest of the human race. Finally, may I again implore the Government to do all that they can to ensure that the other place expedites its consideration of the Bill? Otherwise all our labours will have been in vain.

Question put and agreed to.

Bill accordingly read the Third time and passed.

Industrial Carbon Emissions (Targets) Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

I should like to add my congratulations to all those involved in the debate that we have just listened to and, in large measure, enjoyed. I congratulate the hon. Member for East Surrey (Mr. Ainsworth) on his success in getting his Bill this far. Let us hope that it is given a fair wind in the other place. I also thank him for his kind comments about my Bill, which were much appreciated, as were the understanding and supportive comments of my hon. Friend the Member for North Southwark and Bermondsey (Simon Hughes) and the right hon. Member for Holborn and St. Pancras (Frank Dobson).

I am a bit new to the specifics of these proceedings and to the process that the hon. Member for East Surrey has been dealing with in regard to his Bill. He was talking about having dealt with three Ministers. I have had some dealings with the Under-Secretary of State for Energy and Climate Change, the hon. Member for Stafford (Mr. Kidney), and I have been equally impressed by the dealings I have had with the civil servants involved. However, anyone listening in might have thought that the hon. Member for East Surrey was being a little uncharitable to the Minister. I timed the Minister’s speech. He devoted 44 minutes to one of the most detailed replies to a Back Bencher that I have heard in my 26 years in the House, before going on to make his own, fresh contribution to the matter for a further 21 minutes. I shall be charitable and take that as an indication of the seriousness with which this Minister—if not the Government generally—views these matters. I find that encouraging.

The right hon. Gentleman is not a regular attender on a Friday. If he were, he would know that Ministers often make very detailed responses to Back Benchers’ Bills.

There are advantages to having a constituency that is an awfully long way away—it provides a very useful excuse at times.

My Bill aims to help the United Kingdom to meet its targets under the Climate Change Act 2008, and to help to craft an adequate energy policy to ensure that the UK becomes a genuinely long-term low-carbon economy. Its main purpose is to require the Government to introduce regulations that set an emissions standard for new power plants in the UK, known as an emissions performance standard. It intends to provide—in a constructive way—greater clarity on all sides of this important issue.

What should the United Kingdom’s energy policy look like in a new, low-carbon age? The environment needs a firm guarantee that any new coal plants will be fully fitted with carbon capture and storage—CCS—facilities by a given date. Equally, companies need clear, long-term regulation which, along with a finance mechanism to fund demonstration projects, will give them the confidence to invest. The provisions of the Bill will contribute substantially to the delivery of both those objectives.

I shall explain briefly what the emissions performance standard is. It is a carbon intensity target for power generation that could be applied to all new power plants in the UK. If the standard were set at a certain level, consent applications for new coal-fired power plants would be able to proceed only if there was a commitment to fitting a substantial proportion of their generation capacity with CCS. It is important to note that CCS would need to operate at the plant from the outset. The operation of renewables and other low-carbon technologies would be unaffected by the standard as they have much lower emissions.

My right hon. Friend is making the important point that new coal-fired plants would have to be fitted with a working CCS capability, rather than simply being carbon capture ready, as seems to be the present policy. When I was the energy spokesman for our party, I investigated what “carbon capture ready” meant, and it turned out to mean simply that there needed to be a big field in which something might happen later.

I thank my hon. Friend for that contribution; he has hit the nail on the head. The Bill aims to encourage much more specific definitions in these areas.

The EU has set emission limits for other pollutants—sulphur dioxide, for example—so the concept behind the Bill is already well established. Perhaps the most well known example of an emissions performance standard for CO2 is the one applied to power plants in the state of California—and, indeed, it is being extended to other states in the US. It was implemented in California in 2007 and it requires that any new power station—or, for that matter, any energy imported into the state—meet carbon intensity limits. These are set so that new unabated coal plants without CCS cannot go ahead. If CCS is added to a new plant, however, it complies with the standard and it can proceed—precisely the point that my hon. Friend the Member for Cambridge (David Howarth) made.

I thank my right hon. Friend for his interest and initiative in introducing this Bill. I met some of the people involved in the Californian project earlier this year when they visited the Government and others here. They were very clear that the development of this technology is entirely possible within the time limits needed to ensure that the next generation of power stations are fitted. This is not undiscovered science; it is science already worked out, but it needs to be expanded to fit the plants. It can be done.

I am grateful to my hon. Friend for that intervention. What he says about timing and readiness is very apposite; one of the reasons for introducing the Bill is that we are now at a key moment in deciding climate and energy policies for our country. Decisions made now will determine our success—or, for that matter, our failure—in becoming a low-carbon economy over the next few decades.

Why do I say that? Well, Parliament has passed the Climate Change Act 2008, which contains strong emission reduction targets, and we are about to take long-lasting decisions on the nation’s future energy mix. We should remind ourselves that coal-fired power stations have life spans of more than 40 years, so once they are built they represent huge investments, and companies obviously do not want to shut them down prematurely.

On the environmental aspects, the independent Committee on Climate Change made it clear in December last year that it sees the power sector as absolutely key—and “key” is its own word—to the UK achieving its targets. Furthermore, the committee said that the power sector should be almost completely decarbonised by 2030. That is because technologies such as electric cars will not reach their full potential for reducing CO2 emissions unless they are powered by clean sources of energy. However, the committee expressed its concern that the carbon market established by the EU emissions trading scheme, in which many people have placed their faith over the years, would be insufficient on its own to drive the necessary low-carbon investments in time. Additional measures would be necessary to “buttress”—again, the Committee’s own word—the carbon price.

It seems to me that that conclusion has profound implications for energy policy. It means that we must not rely solely on the carbon markets to decarbonise the power sector, as complementary regulation will be required. The Committee on Climate Change made it clear that all coal-fired power stations in the UK would either have to have full CCS by 2025 or shut down. Finally, it called for a clear policy on coal to be stated now, as this would be so essential to meeting the 2025 deadline.

What have the Government proposed? Up until a few months ago, I think it would be fair to characterise the Government’s essential stance on this issue as, “Let’s build new coal plants, make them capture ready and hope the carbon markets deliver full CCS at some point.” That takes us back to the point made by my hon. Friend the Member for North Southwark and Bermondsey. We had a competition under way to demonstrate CCS on one plant, but the Government seemed happy to let other plants go forward without that measure of CCS.

To be fair where fairness is due, I have to say that today it is clear that the Government have taken a big step in the right direction, which I very much welcome, although they still have much further to go.

In April, the Secretary of State declared that the “era of unabated coal” had come to an end. No new coal plants would be allowed unless they demonstrated some level of CCS, and the United Kingdom has said that it will fund up to four demonstration projects. A consultation on new coal was launched very recently, on 17 June, and has revealed that the Government hope that CCS will be technically and economically proven by 2020 and scaled up to cover the full generating capacity of new plant by 2025.

Much as I welcome the movement on the part of Government, if it is measured according to the standards of the Committee on Climate Change it is clear that there is scope for much greater improvement. The problem with the Government’s proposals is that there is no absolute, firm guarantee of when full CCS would be required. There is no mandate, and that must be cause for concern.

Under the current proposal we could see four new coal-fired power plants built in the United Kingdom, fitted with small-scale CCS but failing to fit the technology fully to the whole generating capacity. According to that scenario, which is by no means implausible, a plant could continue to operate largely unabated, emitting some 80 per cent. carbon dioxide into the atmosphere at precisely the time when a marked reduction in emissions is needed. I cannot believe that the Government, or indeed the House generally, would want that to happen. The four demonstration power plants proposed by the Government may capture only 20 per cent. of their annual emissions from the outset. Over its lifespan, one of those plants could emit nearly 240 million tonnes of carbon dioxide if it was not fully fitted.

The right hon. Gentleman is making a very important point, and he is not scaremongering. He is absolutely on the money. We need only look at the size of coal-fired power plants historically, relative to the size of other power generation facilities, to see what he means. I understand that Drax, our largest coal-fired plant, accounts for nearly 10 per cent. of emissions.

It is certainly no wish of mine to scaremonger, but in the context of what was said by the Committee on Climate Change, there are real worries ahead unless we move things further forward—which, obviously, is the aim of my Bill.

The Government hope that the new plants will be fully fitted with CCS by 2025, but they do not propose a firm guarantee. If the technology is proven by 2020, both technically and economically, the plants will have five years in which to fit CCS fully. However, even the Government acknowledge that there could be delays. The technology might not work, or it might not be economic by 2020. The United Kingdom would then be in danger of failing to comply with the recommendations of the Committee on Climate Change, and could be seriously off track in terms of its long-term policy of decarbonising its power supply.

As we know, the Government are considering the idea of a safety net should such a scenario occur, but propose not to consider the option itself until 2020. That is completely the wrong approach to such a serious issue. If delays occurred or the technology did not work, closing the plants less than 10 years into their operation would become a real possibility. I think that any future Government who built their energy policy on the assumption that the plants would continue for their likely lifespan of 40 years would be unwilling to consider such an economic option. Certainly they would feel very uncomfortable about it.

From an industry perspective, what business needs above all else is the confidence to be able to make long-term investment decisions that deliver an expected financial return. I do not think there is any sensible disagreement in the House about that, and I certainly hope not. That confidence depends on whether there is a credible regulatory framework set by Parliament, and whether there is clarity and transparency in what will be required of companies and by when it must be done. A policy that breeds confusion about whether 100 per cent. CCS will ever be required in new power plants would create unwelcome unknowns and risks for companies seeking to invest in coal. It would be a massive financial disincentive from a commercial point of view.

The benefit of an emissions performance standard is that it provides long-term clarity. Government, industry and non-governmental organisations all need to know what must happen and when. What is needed is regulation that brings about clear and unambiguous action. An EPS applied across the whole power sector would, by proxy, set a clear timetable for how much CCS had to be fitted to new coal power plants and by when. If it were supported by the finance mechanism for demonstration projects to which I have referred, it would provide a clear legal framework allowing power companies and investors to decide what best to invest in; it would be clear in 2009, just as it would be in 2020. That is exactly the kind of approach that is needed.

Clause 1 would place a requirement on the Secretary of State to introduce regulations introducing an EPS. That would amend the Electricity Act 1989 so that no consent for a new power station could be granted unless it complied with these regulations. Clause 2 sets out how compliance with the standard could be calculated. CCS is explicitly stated as a means of compliance, and the useful heat captured by combined heat and power can also help to meet the targets. Renewables can also be fast-tracked through this requirement, which is a useful addition. This is, of course, an enabling Bill, but it requires the Government to come back with regulations after 12 months. Clause 4 sets out who should be consulted on the level of an EPS and how the statutory instruments should be introduced. Finally, when setting the EPS, the Secretary of State needs to consider the latest science and any further advice from the Committee on Climate Change.

I believe that an EPS is not only necessary but a good way forward—arguably, the best way forward. It would show that, as a country, we are serious about driving investment that would contribute towards a decarbonised—or as close as possible to decarbonised—power sector by 2030, and it would provide the certainty and guarantees that other options cannot offer.

An early-day motion in favour of the idea of an EPS has attracted the support of 186 Members—colleagues from all parties, without exception, across the House. I am not speaking in a party capacity at present of course, but the EDM is officially supported by the Liberal Democrats and by the Conservatives, and 71 Labour MPs have signed up to it, too. I believe that this is a timely debate, and I hope the Government will be able to respond to it constructively.

In a different context, in the earlier debate this morning the Minister rightly referred to the fact that mañana could not be an option. In the west highlands of Scotland where I come from there is an old joke about a person who has never previously been up and experienced the lifestyle there. He cannot believe how much more leisurely it is than the city lifestyle he is used to, with all its pressures and attendant difficulties. He is listening to two old boys talking to each other in Gaelic in the local bar, and says to them, “I can’t believe the pace of life here. It is so much more idyllic than what I am used to. It is like mañana. What is the word in the Gaelic language for mañana?” The old boys look at him, and then one of them says, “There is no word that conveys that sense of urgency.” I say to the Minister that we do need that sense of urgency, and I hope he can convey it in his response.

I support the Bill and I do not wish to take up more than a few minutes in adding to what my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy) said, but I want to make one point.

The necessity for this Bill comes from the fact that carbon markets are not acting in the way that many people hoped they would. The original policy idea of the carbon markets was that before long, with the right set-up, there would be a high and stable carbon price, which would drive forward technological change and carbon saving throughout the economy in a predicable and effective way. Unfortunately, that has not happened, because the carbon price has, on the whole, remained low and there is no obvious prospect of its reaching the levels necessary for it to be effective in the way that was originally hoped. The carbon price also seems to be quite variable and that is, in itself, a problem, given what my right hon. Friend rightly said about predictability being an important part of the policy objective.

There are a number of reasons why the faith that many people had in the carbon price and carbon markets as a way forward has been deeply damaged, but I wish to focus on one. Such reasons include those relating to enforcement costs, certainty of enforcement and the necessity for proper regulation of carbon markets—those things have come to the fore and will do so again in future—but the central point is that because carbon permits are issued by Governments, the setting of the total amount of carbon permitted in a particular economy is, in the end, a political act. We are not dealing with some natural property that is limited by physical factors; we are dealing with a property right created by the state.

The problem is that whenever some difficulty affecting a particular industry comes to the fore in the political debate, the reaction of Governments is to give way to that particular industrial lobby. The long-term effect of that approach is to reduce the confidence of people generally in the long-term prospects of a rising carbon price. If the pattern that establishes itself is that politicians give way and issue more permits every time a problem arises, the carbon price cannot rise in the long term to the level necessary to drive the policy forward. That is why we must now turn to a more regulatory solution, as proposed in my right hon. Friend’s Bill. I was very glad that in the previous debate the Minister said that we have to look to regulatory solutions, not just incentives. With that in mind, I hope that the Government will give the Bill a fair wind.

It is a pleasure to follow two excellent speeches. I thought that the right hon. Member for Ross, Skye and Lochaber (Mr. Kennedy) put the case for this important measure succinctly but very powerfully, and the hon. Member for Cambridge (David Howarth) also made very important points about the effective use of market instruments.

Two years ago, I was fortunate enough to go to California specifically to look into energy efficiency, the emissions performance standard and the market mechanisms that had been used there in order to reduce carbon emissions. I was fortunate to meet a number of the key policy makers who had been involved in the development of that suite of policies, of which the EPS has certainly had the most important impact. I was struck then by the simplicity and effectiveness of emissions performance standards and how they have made a real change to the way in which electricity is generated in California and imported into the state. Although California has its problems, it has, typically, been the first to embrace several exciting and progressive policies on climate change, the environment and energy efficiency. The great attribute of the EPS is that it is a firm measure that gives clear, simple and long-term market signals that act as key drivers on innovation and efficiency, and aligns the long-term interests of investors with the over-arching objectives of driving down dangerous CO2 emissions.

When I returned to the UK and the rumblings of support from the Government for a new generation of coal-fired power stations, and with Kingsnorth coming up the political agenda, my party began urgently to explore the potential of adopting such a policy here to head off such an eventuality. The EPS is important for three reasons. The first is the impact that it would have on our own carbon emissions. The second is the message of international leadership that it sends out, and the third is that it would help to put the UK at the very forefront of the development of carbon capture and storage technology, with the creation of those green jobs that we may struggle to define but nevertheless understand to be important.

The key point about international leadership on CCS is that simply having an impact on our own emissions will not be enough, but if it can be implemented effectively and on a sufficient scale, the potential impact of its introduction in the developing world on a global solution to climate change would be far greater than anything that we can do on our own. We are in a position to drive forward that agenda because of the tremendous expertise that we have in our universities and research houses, and in industry with our heritage in oil, gas and coal. We should use that positively and progressively to push this agenda forward.

All these factors convinced us that we needed to ensure that the UK would play a leading global role in the development of scalable solutions for carbon capture and storage. We therefore needed to take a clear stand and make a break with our old dirty coal past. Just before Christmas 2007, my right hon. Friend the Member for Witney (Mr. Cameron), the leader of our party, visited China and used the occasion to announce the Conservatives’ EPS policy and our ambitions should we form the next Government. It was right that he chose to make that statement in China, because nobody can be taken seriously on the issue of climate change without addressing the building of new coal-fired power stations in that country. We saw the opportunity to drive the development of CCS technology with an appropriately calibrated performance standard, backed up by serious strategic investment to support CCS pilot projects for new power stations, but on a whole new level to that anticipated by the Government.

Our endorsement and support for carbon capture was well ahead of Government thinking and, I think, ahead of most parties’ thinking. That position has not only become Government policy but has been backed by many of the green non-governmental organisations and, crucially, by the Committee on Climate Change. The Government had to be dragged on to this agenda, however, and their previous use of competition as a main tool for encouraging CCS was woefully inadequate. I am glad that we are now shot of it and have something that is far more ambitious and looks far more like the policy that my right hon. Friend the Member for Witney articulated two years ago. That is welcome. Indeed, the Committee on Climate Change has also recommended the use of an EPS as a tool to help drive the decarbonisation of the UK electricity supply.

This excellent Bill and the measures that it would facilitate have seen incarnations as amendments to the Bills that became the Climate Change Act 2008 and the Energy Act 2008, but I think that this is the first time that we have had a sole focus on EPS, and that is to be greatly welcomed.

Despite the growing consensus from industry and the green lobby, the Government have remained entrenched in their objections to the mechanism of an emissions performance standard, despite having done so well in adopting so many other areas of Opposition policy through their conversion to feed-in tariffs and an incentive for low-carbon heat generation. The Government have had a welcome change of heart on those matters, so I hope that the Bill will be the catalyst for another Government U-turn. This matter is incredibly important.

I obviously support the Bill in its detail as well as supporting its overarching aims. The right hon. Member for Ross, Skye and Lochaber has been very smart to keep it so permissive and relatively loosely drawn in its ambition. Giving flexibility to the Secretary of State to set the EPS through regulation will allow a Government gradually to reduce the cap over time according to a trajectory that could give industry the certainty it needs in order to invest in decarbonising electricity generation. The long-term certainty that business needs to plan major capital investment has been a recurrent theme in speeches from both sides of the Chamber this morning and from the Minister himself. It is vital that regulations on compliance with the new standard are detailed, clear and reached in consultation with the industry. Again, it is only by giving business clarity that we can expect it to trust a Government enough to make bold yet vital investments in emerging sectors.

I am glad to see the inclusion of a consideration of the benefits of captured heat in determining the carbon intensity of a power station. That will not only give a much-needed boost to combined heat and power deployment, but encourage more medium and small-scale local generation where a heat load is often better matched to production. Too often, consideration of heat capture at power stations is cursory, and this provision will sharpen the demand to get heat capture and transmission infrastructure into the ground.

Stipulating a time scale for introducing the regulations is also a sensible precaution given the Government’s enthusiasm for endless iterative consultation and their track record of delivering regulation on time. In the face of the challenges of potentially catastrophic man-made climate change in this decade and our stringent targets for emissions reductions, we have little choice but urgently to tackle, head on, emissions from our power sector.

Electricity generation in the UK accounts for a substantial portion of our CO2 emissions, and we will need to achieve cuts of well over 80 per cent. in that sector by 2050. Renewables will play an increasing role, but certainly, through this century, we will need to continue to rely on fossil fuels as the backbone of our energy mix. An emissions performance standard will be essential to give innovators and investors in industry a clear signal of the pace of change expected by the Government and the rate at which we expect carbon capture and storage technology to be developed and deployed. An EPS will catalyse the deployment of CCS—a technology that is vital to reducing emissions in the UK, and absolutely vital to reducing them in the developing world, in countries that are more reliant on coal, and in countries that are without the rich resources for renewable energies that we enjoy in the UK.

The UK is extremely well placed to develop export CCS technologies. I hope that CCS will become a real engine of economic growth for the UK in the coming years. The potential for the creation of jobs to do with that technology is very significant. We have world-leading centres of expertise on the chemical, mechanical and civil engineering skills that are essential to CCS, and we have institutions, such as Imperial college, that have a long and impressive heritage in the sector. We have rich resources of storage sites at depleted oil and gas wells in the North sea. What we stand to gain in intellectual property, jobs and wealth creation through CCS as a result of an EPS should not be overlooked.

The Bill’s provisions should have been included in major legislation a year ago, but it will provide Government with a hugely powerful tool to cut emissions, will give certainty to industry, and could drive innovation, investment and job creation. I am proud that my party has played an important part in promoting the CCS agenda in the UK, and energy performance standards as a means of promoting CCS, but I commend the right hon. Member for Ross, Skye and Lochaber for having the gumption to bring the measures together in one Bill, and for securing legislative time for it. I hope that the Government will respond to that agenda as positively as they responded to the previous Bill discussed today. I hope that they realise that we simply cannot afford to delay or defer these measures any longer.

I, too, am delighted to welcome the Bill introduced by my right hon. Friend the Member for Ross, Skye and Lochaber (Mr. Kennedy). He made it clear that our party has taken the two opportunities given to us by good fortune this year, through the private Members’ Bill ballot, to come forward with practical proposals to deal with the climate crisis that we face. Earlier in the Session, my hon. Friend the Member for Somerton and Frome (Mr. Heath) introduced his Fuel Poverty Bill, but frustratingly he failed, by a handful of votes, to get it over the hurdle of Second Reading on its first outing. It is on the Order Paper to be considered later in the year, but I guess that that means that it will not get on to the statute book this year.

The Fuel Poverty Bill signified the importance of the energy efficiency agenda, to which the Minister says that he is committed. The right hon. Member for Holborn and St. Pancras (Frank Dobson) reaffirmed the importance of that agenda earlier, and we are all signed up to it. Now my right hon. Friend the Member for Ross, Skye and Lochaber has added to that by making another specific proposal in his Bill. As was evidenced by the support from my hon. Friend the Member for Cambridge (David Howarth) and the hon. Member for Bexhill and Battle (Gregory Barker), the proposal has growing support in politics, and huge support outside. There is huge support for ensuring that we do not just proceed as we are doing, but put some regulatory constraints in place for the future, so that people can plan for the future and adapt the energy industry accordingly.

The most important first point to make in support of my right hon. Friend is that the core proposition is that if we regulate now, everybody knows where they stand and they will work to live within that framework. If we do not regulate, there is uncertainty and the risk is that people will not understand the crucial importance of moving quickly to avert climate crisis. This is not a Bill for which he plucked an issue out of the air, so to speak, and said, “This is important because it will add to the agenda.” It is a Bill that relates to our country because coal has been so important and remains so important. We expect it to continue to be important, but if it is to play a responsible part in our future energy mix, it must be produced in such a way that coal-fired power stations do not send huge amounts of CO2 out into the atmosphere, contributing to the climate crisis.

My right hon. Friend mentioned the widespread support in Parliament for the Bill and the 186 signatures on the early-day motion in the name of the hon. Member for South Suffolk (Mr. Yeo), who chairs the Environmental Audit Committee. It is significant that the motion is proposed by him, because that gives it the gravitas that deserves recognition. Having totted up the figures today, I am pleased to say that 49 Liberal Democrats are signatories among those 186 names, including my right hon. Friend the Member for Ross, Skye and Lochaber, my hon. Friend the Member for Cambridge and me.

The second strong point, which the hon. Member for Bexhill and Battle rightly highlighted, is the importance of countries such as China to the debate. My right hon. Friend pointed to the importance of what has been happening in the United States, particularly in California. China is the obvious place where there needs to be a change in energy production in response to the environmental agenda. According to the figures that I have, China is now the largest greenhouse gas emitter in the world, getting three quarters of its energy from coal. We get a substantial part of our energy from coal, as do other European Union countries, such as Poland.

The Chinese have recently shown their understanding of the need to adapt and change, which is exceptionally welcome. We must do all we can to encourage that. The new American Administration in the White House has shown its determination to change the agenda. There was the first legislative move in Congress, in the House of Representatives a week ago today, which, though modest in some respects, is none the less a move in the right direction.

The world is moving to realise that we need an energy mix that has the maximum renewable energy component, but that if we continue to presume that coal will play a part, coal must in future be produced within the constraints necessary to ensure that it does not pollute the atmosphere more and contribute further to the environmental crisis. That is important for our country, the European Union, the United States, China, India and other such countries. Whatever its merits and its huge contribution in the past, coal is the dirtiest large-scale power generation method that we use.

The second point implicit in the remarks of my right hon. Friend is that we should see the current situation as an opportunity for Britain. We have the technology, the scientists and the engineers, and there are many people raring to go. As I learned from my discussions with the Californians, and as I assume the hon. Member for Bexhill and Battle also learned from his conversations, they are not in any doubt that the technology can be delivered. They do not say that they are only at the beginning of the research and development process. They know what they have the capability of delivering.

It was interesting that in the United States, as I understand it, once California had legislated, which it did in 2006, the neighbouring states also legislated. The danger was that if California legislated and neighbouring states did not, people could import energy from neighbouring states into California, circumventing the whole strategy. Washington state, Montana and Oregon have all now legislated, so this is not an area of policy or legislation that is not beginning to be accepted broadly. This is not an idea whose time has not yet come.

The hon. Gentleman is absolutely right to say that California created a wave that is now being followed and encouraged by the Obama Administration. However, on a point of detail I should say that the emissions performance standard in California applies to all energy, whether generated in the state or imported, so there is no danger of neighbouring states exporting dirty coal. That has meant that some of the coal states, in the heart of the coal producing areas, that export energy to states as far away as California are having to make changes and think again about how they will develop in future.

I am happy to be corrected on that point. The Minister has probably not made an official visit to California to see these things, but I am sure that he has been briefed about the strong public support, as well as political leadership, in favour of the initiative.

There is widespread support among the informed community in this country for the proposal. As the Minister will know, WWF and the Royal Society for the Protection of Birds, which has huge public support, with a membership of more than 1 million, as well as Christian Aid and the other faith-based organisations, are all clear about the matter. They have written to many MPs asking us to support my right hon. Friend’s Bill because they realise that, given that coal contributes half our CO2 emissions, we will not grasp the nettle unless we deal with the coal industry. The hon. Member for Bexhill and Battle mentioned the fact that single power stations can contribute. Anyone going up the east coast main line has only to look out of the window to realise the history of and prospects for what is going on. My right hon. Friend has adopted a straightforward ring-fenced area of policy.

The proposal in the Bill is entirely straightforward. It is a model private Member’s Bill; I hope that the Minister has no objection to how it is drafted. It makes provision for Ministers to set the limit and the date by which the measure has to be put in place and to have a consultation period before doing that, with all the obvious suspects. It also stipulates that there should be a deadline of a year after the Bill is enacted, so that we know that the issues are not being put into the long grass.

All the advice that I have been given, since I took over this brief in its newly constituted form at the beginning of this calendar year, is that we need to be robust about the policy that should be adopted by Her Majesty’s Government, of whatever party, on the issue. So far, the Government have not been robust enough, and the Bill is an attempt to make colleagues more robust.

I want to say only a couple more things, as I do not want to give the Minister an opportunity not to be entirely positive about the Bill in his response, and I want him to have time to be positive. There is external evidence other than that from places such as California, which have legislated; there is evidence from groups that are supportive. I pray in aid Dr. James Hansen, the well- respected director of the NASA Goddard Institute for Space Studies. He has expressly said that there must be an end to building new coal-fired power stations in the developed world unless carbon capture and storage technology operates in them from the outset. There lies the rub. The difference between the Liberal Democrats and the Government is that the Government have not yet signed up to the idea that such technology should be in place from the outset.

On the day after the Budget announcement, the Secretary of State for Energy and Climate Change made a statement—it was responded to by my hon. Friend the Member for Cheltenham (Martin Horwood) because I was in the United States at the time—in which the Government set out their proposals, whereby there can be carbon capture and storage plans, and the capacity to put the technology in place, but not at the beginning. Therefore, someone could build, say, Kingsnorth power station, get it going and allow it to do its work, but it would not have the controls put on it until later. The danger of that is that as little as a fifth of the emissions might be caught from the beginning. The idea that the sector that contributes half the emissions in the UK might, in its new generation, have only a fifth of its emissions captured, and only later have all of them captured, is, bluntly, not good enough.

When the Government launched their consultation on 17 June, they proposed that new plants should fully fit carbon capture and storage technology within five years of the technology being technically and economically proven. They acknowledged that it might not work, might be delayed or might not be economic, and therefore proposed that we accept a safety net, as it were, to deal with emissions from new plants. They actively considered that an emissions performance standard—my right hon. Friend’s proposal—should be an option, but said that we should not decide on it until 2020, which is in 11 years’ time. My right hon. Friend has come to the House to say that we need to decide on this imminently—not today, but so as to have the legislation in place this year in order for the date to be fixed next year. That would mean that next year the big energy companies will know the date by which they must have the technology in place, and that they will not be able to get Kingsnorth, or any other power station, to start producing until it is in place. Following all my consultations, I have no doubt that if that were the law, they would comply with it and understand it. They know they have a market out there, and they know that coal has a future in this country. It is important that it does, within the constraints, but we must set the regulations now.

My right hon. Friend has brought his heavyweight experience as a politician to a subject which, as he says, is probably not the thing that people on Skye wake up in the morning thinking most about. Nevertheless, he is very clear that we, as a party, now need to put it at the top of our agenda. I hope that we will all sign up to the fact that, as my hon. Friend the Member for Cambridge argued, it is not sufficient to leave it to the market. The crisis is so great that we have to regulate. I am not someone who instinctively wants to regulate and legislate; as a liberal, I always come to that view as a matter of last resort. However, we can all read the advice of the Committee on Climate Change and look at the science in the build-up to the Copenhagen talks. I am persuaded by the science, as we should all be, that it is necessary to act now, not, as the Government propose, in 10 years’ time—that is not good enough.

I hope that the Minister will be very positive about the Bill and robust in understanding its importance. If we can make progress on it, this will be a doubly good day for the environment in the House of Commons.

I congratulate the right hon. Member for Ross, Skye and Lochaber (Mr. Kennedy), who presented the case for the Bill, on his choice of subject. It is one of the major issues of the day, and he has his finger on the pulse in bringing it before us. I always thought that he led his party with great skill and great good humour, and he brought those qualities to bear in leading this debate, which he did adroitly and persuasively.

I know that in the previous debate some hon. Members were a touch impatient to hear my full arguments, so I shall give them a synopsis of what I am going to say. The Government’s position is that in our general policy direction, we are where every Member who has spoken has urged us to be. We have already commenced a consultation on the best way to get a detailed policy so that we can travel forward. Unlike the hon. Member for Bexhill and Battle (Gregory Barker), I believe that consultation is a very good thing and an important component of getting policy right. In that context, the Bill is premature in the solution that it proposes. The solution will look something like the Bill, but we will know better how precisely it will look when we have concluded the consultation.

For those who read or hear our debates, will the Minister put on record the closing date of the consultation, so that people know by when they need to respond?

I think that it is 9 September, but I will come back to that in a moment and correct it if I have got it wrong. As the right hon. Member for Ross, Skye and Lochaber kindly said, the consultation is currently open, and it will close in the autumn.

Having congratulated the right hon. Gentleman on his Bill, I confirm that reducing emissions from our power stations is imperative if we are to achieve our climate change goals. I was pleased to be able to have a meeting with him recently. For a new Minister, every day seems to last an eternity, so I cannot remember whether it was last week or the week before, but it is reasonably fresh in my mind. The hon. Member for North Southwark and Bermondsey (Simon Hughes) mentioned the many powerful non-governmental organisations that support the Bill, and I was pleased to see some members of WWF at that meeting. I said privately then, and I am happy to say publicly today, that I am a keen supporter of WWF’s environmental campaigning in many areas, and I have personally supported many of its initiatives in the past. I am grateful to it for the expertise that it brought to the meeting and the arguments that its representatives made. It was a valuable exchange because they not only listened to and understood the Government’s position but teased, pressed and probed it, so that I genuinely had to think about the issues that they raised. In every sense, the meeting was very helpful.

Even in the short time since we had that meeting, there have been three key developments that are relevant to today’s debate. The first was that my right hon. Friend the Secretary of State for Energy and Climate Change published the Government’s manifesto for the negotiations in Copenhagen at the end of this year in a document called “The Road to Copenhagen”. It set out our case for an ambitious international agreement on climate change in December. Hon. Members will know, and I hope it becomes widely known by the public, that the full document contains a detailed exposition of the Government’s position. For people who want a handy and accessible summary of the position, there is a shorter document that they can obtain. There are plenty of paper copies of it, and it is on the Department’s website. During the launch of that document last Friday, my right hon. Friend the Prime Minister was once again at the forefront of international efforts to secure what perhaps matters most, which is the finances to ensure that the world goes forward practically.

The second crucial development since the meeting was mentioned by the hon. Member for North Southwark and Bermondsey. The US Clean Energy and Security Act completed its passage through the House of Representatives at the weekend. As he said, among its provisions is a requirement that all new coal power stations permitted after 2020 must have carbon capture and storage fitted.

The third element of the package, which is important, is the Government’s announcement on Monday of our draft legislative programme for the next Session of Parliament. The Prime Minister stood at the Dispatch Box and explained the programme, in which his No. 1 measure was an energy Bill. Clearly, the Department is pleased that such priority has been given to its work through a new energy Bill to implement the financial support mechanism for up to four carbon capture and storage demonstration projects that were announced in the Budget this year.

So much meaningful activity in under two weeks demonstrates the pace of change. We all understand that urgent action is required to tackle dangerous climate change. The Government’s own thinking is developing at speed—that is shown by the fact that, when the Bill had its First Reading in January, the Government had not pronounced publicly on an emissions performance standard—EPS, as everyone calls it—as part of our portfolio of measures to tackle emissions from power stations.

Following the report from the Climate Change Committee, which the right hon. Member for Ross, Skye and Lochaber mentioned today, and responses to our previous consultation on the subject, “Towards Carbon Capture and Storage”, we have moved forward and are exploring in our current consultation the possibilities of using an EPS to support our aim of reducing emissions from power stations. The consultation document, of which I have copy before me, was launched in June and contains a great deal of discussion about what an EPS might comprise, how it could be applied, and—perhaps the most crucial point in the right hon. Gentleman’s speech—the timing of its introduction.

The Government have the same agenda as all hon. Members who have spoken in the debate, but the point at issue is that, while we greatly support the Bill’s intentions, there are several reasons for being unable to support its further progress at this time. I will go through them in detail later on—the right hon. Gentleman and I have discussed them previously. Let me first emphasise that the wider issues relevant to the Bill, including the development and deployment of carbon capture and storage technologies, without which it would be difficult to achieve any meaningful emissions performance standard, are a priority for the Government.

Reducing our carbon emissions to avoid dangerous climate change is an increasingly urgent challenge. Without urgent action, by the time that a child born today reaches 50, average temperatures worldwide could have increased by up to 2.5° C above pre-industrial levels. Local and seasonal increases in temperature could be significantly higher, and the effects on society and the environment would be dramatic. For example, some 20 to 30 per cent. of plant and animal species could become extinct; food production may start to decline; and a 60 per cent. reduction in glaciers in the northern hemisphere could affect the drinking water supply of a sixth of the world’s population—a billion or so people. “The UK Climate Projections 2009”, published on 18 June, shows the extent of the changes that the UK might face as a result of climate change: warmer, wetter winters and hotter, drier summers, with more drought, heatwaves, flooding and sea level rises.

Tackling climate change is a global challenge and we need co-ordinated global action. A global climate change deal, if it can be won in the negotiations in Copenhagen this year, will affect all our lives and the prospects for generations to come. As I said earlier, my right hon. Friend the Secretary of State for Energy and Climate Change has set out the UK’s position for the global climate change negotiations in “The Road to Copenhagen”.

The overriding goal of the Copenhagen agreement must be to limit climate change to an increase in global average temperature of 2°. That means that the deal needs to establish a credible trajectory for reducing global emissions by at least 50 per cent. on 1990 levels by 2050, and to put in place now the measures to ensure that emissions start to fall in the next decade. We will be working intensively with other countries to resolve the issues and remove the barriers to reaching an effective international agreement at Copenhagen. We are also determined to ensure that the UK’s domestic emissions reduction effort contributes to achieving that global deal.

Through the Climate Change Act 2008, the UK became the first country in the world to introduce legally binding carbon budgets, which commit us to carbon savings of 34 per cent. by 2020 and at least 80 per cent. below 1990 levels by 2050, to be achieved through action at home and abroad. The four key measures by which we can meet those ambitious targets will be: first, from 2013, a progressively declining cap on emissions in the power and industrial sectors, through the EU emissions trading scheme; secondly, incentivising low-carbon sources of energy; thirdly, bringing about dramatic improvements in energy efficiency; and fourthly, facilitating a switch in energy demand in the heat and transport sectors to low carbon electricity and renewable fuels. The first two of those measures are of most relevance to today’s debate.

There have been some less than wholehearted endorsements of the EU emissions trading scheme in this debate. The scheme is the first of its kind—and the first of such size, ambition and scope—anywhere in the world. The revised EU ETS directive was agreed last year and will come into effect from 2013. It sets an annually declining trajectory for the cap on emissions to 2020 and beyond, which will deliver emissions 21 per cent. below 2005 levels by 2020 and is consistent with keeping the EU on track to deliver a 60 to 80 per cent. cut in emissions by 2050. The EU ETS cap will also be tightened up to the 30 per cent. greenhouse gas reduction target when the EU ratifies a future international climate agreement—in other words, if we reach a robust agreement at Copenhagen.

This is probably the crux of the issue. The increasing academic consensus among economists is moving against emissions trading, especially emissions trading as the only measure. The reason is that if what the Minister has said were fully accepted and there were no problems of public choice—that is, of people thinking that the agreements might not be kept to—then the futures price of carbon would be rising, but as we can observe, it is not. The problem that the Government must face is that the facts have changed, and therefore their policy must change.

I am someone who is instinctively concerned about putting all the eggs in one basket, so I take the hon. Gentleman’s point about not claiming everything for one approach, in this case emissions trading. However, he should bear in mind the scheme’s fairly recent arrival and the fact that it is necessary to learn from early experiences, including the giving out of permits at the beginning to get the scheme going. As we move forward and learn the lessons of the first phase, we can have a much more effective scheme in the future.

For our part, the UK will be auctioning 100 per cent. of EU ETS allowances to the power sector from 2013, and at least 60 per cent. of allowances will be auctioned in the UK by 2020. That will provide a more economically efficient way of allocating allowances and help to reinforce the incentive to reduce emissions and invest in and develop cleaner technologies. As the hon. Gentleman said, that was the original goal of the scheme and that is the intention that we support. Overall, the combination of a tighter cap with a set declining trajectory, auctioning as the primary means of allocation and reduced access to project credits from outside the EU will result in more predictable market conditions, with a more stable price and improved certainty for industry. As the EU-wide cap on carbon emissions tightens, the carbon price should rise and options for reducing emissions will become progressively more economically attractive.

With 35 per cent. of the UK’s emissions coming from the generation and supply of electricity, making the shift to low carbon electricity generation is an essential part of our overall transition to a low-carbon economy. The challenge is to achieve this transition while ensuring that we maintain the security of our electricity supplies. This means ensuring that we have sufficient generation capacity available, that we maintain a diverse energy mix so that we are not over-reliant on any one fuel or technology, and that electricity is affordable. To ensure that we have a full range of options available, the Government are working to overcome the barriers to deployment of the three key technologies expected to contribute to the decarbonisation of UK electricity generation: renewables, nuclear, and carbon capture and storage.

Our electricity mix will change significantly over the next decade. By 2018, between 18 and 20 GW of generation capacity is expected to close. Seven nuclear power stations will reach the end of their licensed lifetime, while six coal and three oil power stations will close as a result of EU environmental legislation to reduce emissions of sulphur dioxide and nitrogen oxides. We therefore need substantial investment in new electricity generation capacity if supply is to continue to meet demand reliably. [Interruption.] I seem to have the Obama problem with a fly.

New generation capacity will come from all generation types. Our renewable energy strategy, to be published before recess, will drive a step change in renewables deployment. We are taking steps to facilitate investment in nuclear, and we expect further applications for coal and gas power stations to come forward. Investment in new fossil fuel power stations is needed to provide sufficient generation capacity through the next decade and to provide flexible back-up to increasing levels of intermittent renewable generation. We cannot avoid the fact that fossil fuel power generation will continue to play a significant role in our energy mix for the foreseeable future, but we must also recognise the need to take steps to reduce emissions from fossil fuel power stations, both in the UK and—crucially—internationally. That is particularly important in relation to coal-fired power stations. Coal provided 41 per cent. of the world’s electricity in 2006, and the International Energy Agency predicts that this could increase to around 44 per cent. by 2030. Yet it is the most carbon-intensive means of generation, with emissions from the UK’s existing coal power stations in 2007 averaging 940 kg per MWh, compared with 400 kg per MWh from our gas power stations.

Any credible strategy for tackling climate change must address effectively the challenge of reconciling nations’ energy security needs with the urgent need to tackle global carbon emissions. This is where carbon capture and storage technologies have a crucial role to play. By capturing, transporting and safely storing the carbon dioxide produced by power stations, CCS technologies can reduce power station emissions by around 90 per cent. The International Energy Agency estimates that the global costs of tackling climate change would increase by 70 per cent. without the availability of CCS as a proven technology for reducing emissions.

However, CCS is not yet commercially deployable. Each of the different stages has already been demonstrated successfully over a number of years. Capture technologies are already deployed commercially in industrial processes, albeit on a smaller scale than that required for a power station, and 3,000 km of pipelines are currently used to transport about 20 million tonnes of carbon dioxide a year for use in enhanced oil recovery in the US and Canada. A number of significant projects are demonstrating the safe storage of carbon dioxide in geological formations, including a project that has been storing carbon dioxide under the North sea since 1996, and one in Canada that has been storing around 2.8 million tonnes a year since 2000. But there are no operational projects demonstrating the full chain of technologies in a commercial-scale power station, and it is this transition to commercial scale that is the critical next step.

We have made significant progress in the UK on putting the framework in place to support CCS. In the Energy Act 2008, we introduced one of the world’s first legal regimes to permit the permanent storage of carbon dioxide in geological formations under the sea. Following a consultation exercise last summer, in April this year we announced a requirement that all new power stations in England and Wales will have to be carbon capture ready—I appreciate that this is the crux of our debate—in order to gain consent for construction under section 36 of the Electricity Act 1989.

Will the Minister give us an absolute definition of this much bandied-about term “carbon capture ready”? When I was in California, someone told me that their driveway had been Ferrari ready for years and years, but the Ferrari had still to arrive. What does the Minister mean by carbon capture ready—not building on the car park?

I would ask the hon. Gentleman to be patient while I make a bit of progress. If I have told him that there is no commercially scaled-up project in the world, how can I then tell him what a future scheme will look like? It means as a minimum, and as the hon. Member for Cambridge (David Howarth) said, ensuring that there is space for the technologies to fit into, that the connections are in place to make the transportation and storage part of the process work, and that the building design itself is capable of taking the addition at a later stage of the carbon capture technology. What this means for developers is that they will have to leave sufficient space for the carbon capture equipment; they will have to demonstrate that it is feasible to retrofit the equipment; and they will have to identify a suitable offshore storage site and demonstrate that it is possible to transport the carbon dioxide from the power plant.

We could all probe this issue all afternoon, but we will not. Let me ask the Minister the reverse question: why do the Government baulk at the idea of telling producers, “You must have this in place”? We all know where the science, technology and development is, so if the crisis in the science is so grave, what is the difficulty in saying, “Sorry, guys, but the next generation has to comply—go to it”?

If the hon. Gentleman had read the consultation document, he would agree that it is an unfair characterisation of the Government’s position to say that we baulk at imposing a standard. The document sets out some of the risks involved in setting a standard—or certainly setting it before having undertaken appropriate consultation and assessment of the likely outcomes. Would not the hon. Gentleman agree that it would be a risk if we set a standard that deterred anyone from investing in these technologies at this time, especially if they could either postpone the investment completely or make it somewhere else where the same standard had not been set at the same time? There are risks of proceeding in an ill-considered way, which is the whole point of asking for the consultation to be completed before we legislate—or before we take the necessary decisions, if they can be taken without primary legislation, which is possible. That is why we should hold our horses—at least for today.

In November 2007, we became one of the first countries in the world to launch a competition to select a commercial-scale carbon capture and storage demonstration project, with Government support.

I am trying to follow the logic of saying, “We should not proceed with this Bill today, because the consultation that might result in doing the same thing is going on at the same time.” The Bill allows the Secretary of State to set the maximum level. I can see an argument for saying that we should not set the maximum level today, but the Bill does not do that—it allows the Government to do that. Why not let the Bill go into Committee, which would allow further progress to be made in October after the consultation comes to an end, so that we could then get on with it quickly rather than wait for a new Bill in the new Session, which might not get through Parliament before the election?

It seems to me inappropriate for any legislature to proceed on the basis that if it pops in place permissive powers for the Government to take action in advance, those powers might be made use of one day in the way that was contemplated on the day the permission was given. Surely it is appropriate to conclude what the policy is first—rather than put the cart before the horse—before proceeding with the necessary legislation, although the hon. Gentleman will have heard me say a few moments ago that some actions urged on me today might not require primary legislation. It is sensible to decide the policy first and the actions that flow from it, and then take those actions. That is the Government’s position in their opposition to the Bill today.

It is not a case of putting the cart before the horse; it is a question of whether the Government have a horse at all. The Bill allows them to have a horse, and they can change the cart later.

In that sense, we have the horse. We will have an energy Bill in the fifth Session in any event. It is possible, however, that we will not need to take the horse out of the stable because we have the powers already. I am sure Members have got my drift and understand my synopsis. The argument is about prematurity, not technical defectiveness, as the hon. Member for North Southwark and Bermondsey pointed out earlier.

We have also been working actively in the global arena to ensure that the UK’s efforts are part of an international effort to prioritise the development and deployment of CCS. We were instrumental in securing EU funding to support a programme of up to 12 EU demonstration projects and a G8 commitment to launch 20 demonstration projects by 2010. The UK has also led the EU approach to the development of a commercial-scale CCS project in China, providing up to £3.5 million for a technical study which will be completed by autumn this year and will inform the demonstration and development of CCS in China. Earlier this week, I had the great good fortune to meet the team of officials in my Department who are doing that work with the authorities and the Government in China. Their expertise, enthusiasm and commitment to the project are deeply impressive.

However, progress is still not being made quickly enough if CCS is to achieve its potential in tackling emissions from power stations within the time frame required to prevent dangerous climate change. That is why the Government published, on 17 June, a consultation paper containing proposals for a new regulatory and financial framework to drive the development of clean coal. The consultation remains open until the date that I did remember correctly earlier: 9 September.

What we propose would provide financial support for up to four commercial-scale CCS demonstrations here in the UK, require any new coal power station in England and Wales to demonstrate CCS on a defined part of its capacity, and require new coal power stations to retrofit CCS to their full capacity within five years of its being independently judged technically and economically proven. I said earlier that the technology had not yet been established on a commercial scale anywhere in the world, and, as I am sure Members appreciate, there is more than one technology. It is not yet clear which will become the defining technology for the future. The fact that we can have a range of demonstration projects in this country, in the European Union and around the world will enable us to test the various possible technologies more fully.

As Members will know, the first of those technologies is called pre-combustion capture. Carbon is extracted from the fuel before it is burned, which means that the fuel must first be “gasified” by being heated in only small amounts of oxygen. That produces “syngas”, which is primarily a mixture of carbon monoxide and hydrogen. Steam is then added to convert the carbon monoxide to carbon dioxide, producing additional hydrogen. The carbon dioxide can be chemically separated, leaving hydrogen that can be used as a “clean fuel” in a power plant, as a fuel for vehicles, or for other chemical processes. Only a few integrated gasification combined cycle coal plants exist, as they are not yet an established technology, and all those that do exist are without CCS.

Capture of carbon dioxide through the second technology, oxyfuel-combustion, involves burning fossil fuels in almost pure oxygen rather than air. The oxygen is obtained through the removal of nitrogen and other gases from air, which is 79 per cent. nitrogen by volume. Burning the fuel in oxygen results in a flue gas of almost pure carbon dioxide and water vapour. The carbon dioxide can then be separated relatively easily from the mixture for transportation and storage.

The third technology is post-combustion CCS, in which the carbon dioxide is removed after the fuel has been burned, just before the combustion products are released in the atmosphere. A chemical solvent is usually used to capture the carbon dioxide from the flue gas. Subsequent heating of the mixture allows the solvent to be recycled as it frees the carbon dioxide to be compressed, transported and injected into a storage site. This technology is particularly suited to retrofit applications, which is the main reason why it was selected for the first UK-based CCS competition.

Our consultation also discusses the merits of an emissions performance standard, which brings me back to the details of the Bill. The Bill would require the Secretary of State to introduce an emissions performance standard for all power stations—coal, gas and oil—that would specify the maximum amount of carbon dioxide that could be emitted per unit of electricity generated. The details of the standard would be set out in secondary legislation.

Emissions performance standards have long been used to regulate emissions of other pollutants. For example, the first Europe-wide limits on air pollutants from motor vehicles were introduced as long ago as 1970 and the large combustion plants directive, which sets limits for sulphur dioxide and nitrogen oxides from power stations, has been in force in one form or another since 1990. That directive and the more general integrated pollution prevention and control directive, which is also based on the setting of emission limit values for various pollutants, are to be subsumed by a comprehensive new, revised and consolidated EU directive: the industrial emissions directive, which is at an advanced stage of negotiation, and may have an impact on plant closures in about 2020.

Using an EPS as a tool to tackle carbon dioxide emissions from power stations is certainly an idea the Government consider worth exploring, particularly in relation to coal-fired power stations. Several US states have already introduced an EPS for power generation. For example, California and Washington have introduced an EPS based on emissions levels from gas-fired power stations for new base-load generation. Proposals have also been put forward at the federal level through the US Clean Energy and Security Act that I mentioned at the start of my speech, although the legislation has yet to complete its passage. Page 35 of the consultation document contains a very useful description of the American legislative attempts to set EPS standards; it sets out the position in California, Oregon and Washington, as well as giving more details about the Clean Energy and Security Act.

An EPS can be absolute, so that a power station is expected to meet the standard at all times, or it can be averaged over a period of time, so the power station has to ensure that emissions meet a specified average over a year, for example, or a lifetime. Our consultation document sets out two broad approaches to the possible use of an EPS as part of the regulatory framework. One approach would reflect the development of CCS technologies, ensuring that the timing and level of any EPS implementation was linked to progress made on CCS. This would mean setting an initial EPS at a level that would support CCS demonstration and then, once CCS was proven, tightening the standard to a level that supported retrofit.

The second approach would be to set the EPS in advance of demonstration of CCS technology; that is the approach urged on me by the right hon. Member for Ross, Skye and Lochaber. This would mean setting an EPS with a downwards trajectory for emissions in line with climate change objectives. Our consultation also looks at the critical issue of the level at which the standard should be set in either scenario.

Our proposal is that if an EPS is introduced, it should be based on average emissions over a period of time, possibly with a maximum emissions level that could be tightened for individual sites if they were judged technically and economically able to meet that standard. In setting a maximum level, there are various possible approaches. One of them is linking the standard to emissions of gas power stations. This would create a level playing field for coal and gas power stations in terms of emissions. Very high levels of co-firing with biomass could take coal power stations some way towards meeting such an emissions level, but in practice they would need to fit CCS.

An alternative approach is to link the standard to the minimum achievable emissions at each site while allowing economic operation of the plant, based on an assessment of best available techniques. Until we know more about the operation of CCS on a commercial scale and future carbon prices, it is difficult to make an informed judgment about what this level might be.

Another option is to link the standard to modelling projections of the contribution that reductions in emissions from power stations could make to delivering climate change goals. In this case, assumptions would need to be made about factors such as the carbon price and the availability and costs of options for reducing emissions across all sectors.

That is a very helpful canter through the consultation document, but can the Minister say that he does not anticipate arriving at a conclusion whereby there would not be some form of EPS? Will he say that the Government are committed to the EPS in principle, even if he cannot specify to which particular scheme or number they will attach themselves?

I thank the hon. Gentleman for showing such an appreciation of my summary of the consultation document. He will notice that in none of the options I proposed is there not to be an EPS in one form or another. I hope that in a moment I shall be able to discuss contingencies in case CCS is not proved on a commercial scale by 2020—our ambition is that it will be—and even in such circumstances the EPS may well have a role to play.

Another key issue in the development of a position on an EPS is an understanding of how it would fit with the EU emissions trading scheme. At the moment, the ETS is the only mechanism for controlling emissions of carbon dioxide from our power stations and other large industrial installations. Whatever measures we wish to take in the UK, the EU ETS will remain the central measure for reducing emissions throughout Europe. It is therefore essential that any approach to an EPS in the UK ensures that it complements the EU ETS and is fully consistent with EU law and policy throughout the rest of the European Union.

The Bill suggests that the EPS should be implemented through the development consent process. That is certainly one option, but there are others. Our consultation set out two options for implementing an EPS in order to implement a requirement to retrofit CCS technologies once the technology has been assessed as proven. In both cases, the Environment Agency would take a leading role. In the first option it could use the environmental permitting regime that it already uses to limit emissions of other harmful gases, such as sulphur dioxide and nitrogen oxides, in setting an EPS. Operators would have the flexibility to determine how to meet the set standard, and could take actions such as co-firing with biomass, improving operational efficiency or fitting CCS or any other new emissions-reducing technologies that might be developed. Alternatively, in the second option, the Environment Agency could simply specify in the environmental permit that the power station has to fit, or retrofit, the CCS technology and operate it.

If an EPS is to be effective in helping to achieve our climate and energy security objectives, a full analysis of the various options and their impacts on the energy mix has to be undertaken. A full consultation process is an integral part of gathering the evidence required for such an analysis, which is why we included the discussion of an EPS in our consultation on the framework for the development of clean coal. I was sorry that the hon. Member for Bexhill and Battle, who speaks for the official Opposition, appeared to take against consultations, given that they are such a valuable part of the process in ensuring that we get the law right.

Supporting this Bill would cut across that consultation. Although we are keen to take the most effective action that we can to encourage the development and deployment of CCS technology as quickly as possible, it would be premature to legislate now to impose an EPS. In addition, as I have outlined, there are a number of significant policy issues still to be worked through before it will be possible to take an informed decision about whether an EPS is the most effective approach to driving the transition to a diverse and secure low-carbon energy supply; about when and how an EPS should be introduced if it is found to be the most effective approach; and about its effect on other existing EU measures, including the EU ETS, to which I have referred.

It is also important to ensure that we have a comprehensive framework in place to support the development and deployment of CCS technologies in order to reduce emissions from our power stations. This is why our consultation covers a range of proposals, not just the EPS itself.

The right hon. Member for Ross, Skye and Lochaber was on the money, as the hon. Member for Bexhill and Battle said, about the timeliness of this debate and his proposals. He is right to press the Government on taking action sooner rather than later. I enjoyed the Gaelic humour over the word “mañana” and it is interesting how something that I said in one debate about not being able to wait for tomorrow was used against me in the very next debate. However, I hope that the right hon. Gentleman will agree that the Government have the right sense of urgency about doing what he wants us to do, although we are determined to do it right.

The hon. Member for Cambridge is no longer in his place, but he was right to say that the carbon price has not yet developed under emissions trading in the way that was anticipated. I told him of the actions that we are taking to try to put that right for the future. The hon. Member for Bexhill and Battle let party politics creep into his contribution a little too much. In the first debate, we all said how important a long-term cross-party approach would be, so it does not help to take cheap shots at the Government and say that we have had to be dragged kicking and screaming towards a policy position. We have reached that position without any help from him and his colleagues, thank you very much.

I have been urged on more than one occasion to travel to California, no doubt in a carbon-emitting aeroplane. When I served on the Joint Committee that carried out the pre-legislative scrutiny of the Climate Change Act 2008, we heard from representatives of the administration in California by live video link. I shall obtain information from those representatives in that form in the future, and keep my emissions as low as possible.

I agree with the hon. Member for Bexhill and Battle that it is important to get this policy right and ensure that we give long-term, stable signals to the market to provide confidence for private sector investment in what is not yet commercially proven technology. It is important for the Government to show their commitment at the beginning so as to start the process, which is why Government support for the demonstration projects is an important part of the whole. I agree also that it will be crucial in international negotiations to be able to engage on the basis that CCS will be an important method of reducing carbon emissions in the future, especially in those developing countries that are so reliant on coal as part of their energy mix.

We want to be at the forefront of the technology for CCS, because it offers huge potential for jobs and exports in the future. As the hon. Gentleman says, huge sectors of the Chinese economy are dependent on burning coal in power stations. The world has hundreds of years of stocks of coal, so we have to get CCS or similar technologies fitted in this country and others around the world if we are to keep emissions low. Of course, no amount of legislation here will make China take such action: it is the international negotiations that will be important in reaching that position. The hon. Member for North Southwark and Bermondsey made the same point about China and developing countries that are so reliant on coal as an important part of their energy mix.

In conclusion, this Bill raises an important issue and I welcome Members’ contributions to the debate. I trust that we will continue to have the debate as we develop our policies over the coming months. I hope hon. Members will agree that the Bill is premature at this stage, and I ask the right hon. Member for Ross, Skye and Lochaber to withdraw his Bill, now that we have had such a useful debate. I wish to end where I began, by referring to the meeting that I had with him and representatives of the WWF recently. I told them that this is an important issue and we want to ensure that we have everyone’s support. We must take the right arguments into account, and I suggested that we meet again in the autumn to discuss—I hope—the Government’s position on the responses to the consultation and in the light of a new energy Bill. Clearly, we now know that both of those things will happen. There will be responses to the consultation, because it has already been launched, and we have now heard that there will be a fifth Session energy Bill.

Let me say to the right hon. Gentleman, as my personal commitment at the end of this debate, that I look forward to meeting him and the representatives of WWF who came with him last time later this year.

Order. The right hon. Gentleman must say, “With the leave of the House,” to respond—[Interruption.] He should ask the leave of the House.

With the leave of the House, Mr. Deputy Speaker—I have now forgotten what I was going to say.

I want to thank the Minister for his characteristically courteous and, on today’s evidence, characteristically thorough reply to the debate. He has not quite matched the record that he set earlier this morning, but he is not far off. Although I have one hour left at my disposal, I can assure him that I do not intend to make use of it.

As the Minister quite fairly said, if we go back even a few months to January, when the Bill was first introduced, we can see that things have moved on a lot. They have even moved on a lot in the past two weeks, on the principle that a week is a long time in politics—I think that our meeting took place a week ago last Monday, and things have moved on quite a lot since then. However, I think he was perhaps being a bit unfair. He said that three great developments had taken place: first, the publication of the “Road to Copenhagen” document; secondly, the legislation, in so far as it has been enacted, in the United States; and, thirdly, the welcome confirmation that there will be an energy Bill. There is of course a fourth development, which is today’s debate. We should not knowingly undersell the global impact that we seek to have.

There is movement, and that is to be welcomed. I take on board the Minister’s point that there is not necessarily a disagreement in principle, as things stand at present, with what the Bill proposes, as we know from the early-day motion and from what has been said today. We have heard helpful and welcome comments from the Conservative spokesman, the hon. Member for Bexhill and Battle (Gregory Barker), whom I thank, and from my hon. Friends the Members for Cambridge (David Howarth) and for North Southwark and Bermondsey (Simon Hughes). Members of the Labour party and other parties have also expressed their concerns, not orally today but in other forms, on the Order Paper. Let us see how things progress as we move towards the autumn.

Let me draw one comparator from the 1980s, in reference to a point that was raised more than once in the debate. It concerned acid rain regulation. I remember that there was quite a debate in the House at that point about how best to go about tackling it. The Government had a target to fit coal-fired power stations with sulphur scrubbers, as they were known. The opportunity was repeatedly missed because the framework, the Government of the time said, was not firm enough. Despite the fact that public funding was made available for the new technology, the power companies were able to delay and it was only when an EU directive came into place mandating the technology that in the late 1990s, lo and behold, the companies found the money and the technology was introduced.

As was said in the debate on the Green Energy (Definition and Promotion) Bill, in public policy as well as in private behaviour there is a need for a degree of the carrot-and-stick approach. However, I hope that the Government will not resile in due course from setting firm dates and setting them as soon as possible.

In conclusion, I hope that that this has been a useful and timely contribution to an ongoing, fundamentally important issue. As well as WWF, to which the Minister has been kind enough to refer on several occasions in the context of the meeting that took place, the cause has had the support of the Royal Society for the Protection of Birds, Greenpeace, the World Development Movement, Christian Aid and ClientEarth. One reason that so many Members, in such numbers, signed the early-day motion is that the constituent members of many of those organisations have been lobbying their MPs to try to secure their active support for what is being proposed. That having been started, it certainly will not go away in the next three or four months, which will take us until after the consultation period; I say that with a view to the next Queen’s Speech, assuming that this Parliament gets that far. On that basis—I hope I get my terminology correct on this occasion—I beg to ask leave to withdraw the motion and the Bill.

Motion, by leave, withdrawn.

Human Rights Act 1998 (Meaning of Public Authority) Bill

Second Reading

I beg to move, That the Bill be now read a Second time.

The purpose of the Bill is to ensure that when the private sector carries out public functions—for example, by providing contracted-out services—the Human Rights Act 1998 will apply. This is my third attempt to introduce the Bill. That pales into significance when one considers that I am on my seventh attempt with the Crown Employment (Nationality) Bill. The persistence with which I keep bringing back the Human Rights Act 1998 (Meaning of Public Authority) Bill shows its importance and the fact that the problems have not gone away.

The Bill seeks to reinstate unambiguously the wide interpretation of “public function” that was understood to be the meaning of section 6 of the Human Rights Act 1998 when it was first passed. That interpretation has now been cancelled out by court judgments. My intention is to ensure that human rights protections apply comprehensively, directly and consistently to all those who receive public services from private providers, including the most vulnerable members of our society. The Joint Committee on Human Rights, which I have the honour to chair, is extremely concerned about the issue and continues to press the Government to resolve it.

The Human Rights Act brought home the rights set out in the European convention on human rights. Previously, British people had to go to Strasbourg to challenge breaches of their human rights. However, the protection of the Act has been less comprehensive than Parliament intended because of our judges’ interpretation of the meaning of “public function”. Under section 6, it is unlawful for a public authority to act in way that is incompatible with a convention right. The Act states that a public authority includes

“any person certain of whose functions are functions of a public nature”.

During the passage of the Human Rights Bill, the then Home Secretary and then Lord Chancellor made clear that privatised or contracted-out public services were intended to be within the Bill’s scope. We were told that the “public function” definition emphasised the functions rather than the institutional status of the body performing them. Since the Act came into force, a series of court cases has considered whether a specific private company or organisation that provided services came within the ambit of the Act. The result has been to disregard utterly the wide interpretation that was originally intended, and to exclude the private sector completely.

In 2002, the local authority-funded residents of a care home run by Leonard Cheshire, a private charity, wanted to challenge the decision to close their home. They claimed that the decision broke their right to respect for their home under article 8 of the European convention. The Court of Appeal found that the care home was not a public authority under section 6, so the residents could not enforce their rights, even though the council still had its obligations to them. In a more recent case, now known as the YL case, the Law Lords put the matter beyond doubt.

YL was an 84-year-old lady with Alzheimer’s. The council in Birmingham organised her care in a private home. Her family raised concerns about her treatment, and as a consequence, the home gave Mrs. YL 28 days’ notice to quit. Care home residents have no security of tenure whatever. That is perhaps a more important separate issue. There was evidence that Mrs. YL’s condition would deteriorate if she was transferred to an unfamiliar setting, so the decision to evict her was challenged under section 6 of the Human Rights Act. However, the Law Lords ruled that care homes run by private companies, even when they have a contract for the placement of residents at public expense, are not public authorities for the purposes of the Human Rights Act.

In 2004, the Joint Committee on Human Rights concluded that the test being applied by the courts in such cases was “highly problematic”. It resulted in many instances in which an organisation stood in the shoes of the state but did not have the state’s legal responsibilities under the Human Rights Act.

I congratulate the hon. Gentleman on his persistence in bringing back the Bill, which I fully support; I have said so publicly, in debate, on several occasions. In fact, I support it so much that I might not even bother to try to catch your eye, Mr. Deputy Speaker. That will give the Minister more time to explain the Government’s position. May I ask the hon. Gentleman about the YL case? In that case, the local authority arranged for the client to go into the home, but its duties under the National Assistance Act 1948 did not really go beyond that. Is it his intention, in this draft of the Bill, to reverse the YL case as well as the Leonard Cheshire case?

The responsibility of the local authority went beyond arranging the client’s care. The local authority was also paying for it. The consequences in the YL case have been rectified, as I shall describe in a moment.

The point that I was making was that without the state’s legal responsibilities under the Human Rights Act, there was a serious gap in the protection that the Act was intended to offer. The judgment in the YL case made matters worse, creating a problem with immediate practical implications of much wider significance, because so many services previously delivered by public authorities are privatised or contracted out. The case of Mrs. YL was resolved amicably and to the family’s satisfaction after the decision of the House of Lords. As far as she was concerned, there was no longer a problem, but the issue remained until recently.

The implications of the YL case extend across the range of especially vulnerable people in society—not just elderly people in private care homes, but tenants in housing association properties, those with physical or learning disabilities, or looked-after children, for example. In November 2005 the Government published guidance to local authorities on contracting in the light of the Human Rights Act. My Committee found that guidance alone could not solve a problem, and the guidance has proved utterly useless. It dissuaded procurement officers from taking a positive approach. No model process was recommended, nor model or standard contract terms.

The guidance was badly written and difficult to follow, and was unpublicised. It lacked accessibility. It was written in highly technical language and was difficult to understand. It was hard to find, hard to follow and did not give any practical examples. There were no mechanisms in place to monitor the impact on procurement. Local authorities were generally unaware even of the existence of the guidance. Guidance can never be a substitute for the direct application of the Human Rights Act to service providers.

The Government strategy of intervening in court cases has also proved utterly unsuccessful, following the YL judgment. The legal position for other services is now extremely uncertain and must not be left to the vagaries of judicial interpretation. There is an urgent need to ensure that our human rights law clearly and unambiguously protects vulnerable people. My Committee’s report on the treatment of the elderly in hospitals and care homes drew attention to appalling evidence of woeful neglect, lack of dignity and respect, and ignorance of the human rights of the elderly.

The then Under-Secretary of State for Health, my hon. Friend the Member for Bury, South (Mr. Lewis), who had responsibility for care services, and the Minister of State, Ministry of Justice, my right hon. Friend the Member for North Swindon (Mr. Wills), who has responsibility for human rights, both agreed that the position was anomalous and should be addressed. My hon. Friend the then Under-Secretary of State for Health told me in a written answer on 13 November 2007:

“Publicly funded residents of private residential and nursing homes should be covered by the 1998 Act and I believe that that was Parliament’s original intention . . . I shall consider what instructions we can give to the regulator to ensure that homes, including independent-sector homes, are regulated on the basis of their meeting the requirements of the 1998 Act.”—[Official Report, 13 November 2007; Vol. 467, c. 526-27W.]

In evidence to my Committee two years ago, my right hon. Friend the Minister with responsibility for human rights said:

“We will start addressing this issue in the consultation process on the British Bill of Rights and Duties which is beginning early in the new year”—

that is, early in 2008. As we now know, that did not happen. The consultation on the Bill of Rights still has not begun, though the Green Paper has been published. Hopefully the consultation will begin later in the year.

However, we also now know that the consultation will not include this issue. We are now told that it will be the subject of a separate consultation. During last Thursday’s debate in Westminster Hall on my Committee’s report on the UK Bill of Rights and Freedoms, I was told by the Minister with responsibility for human rights that the consultation would begin “soon”, but he would not be drawn on what “soon” meant. That is the sort of language that we hear from Ministers who want to be relatively vague. When the Under-Secretary of State for Justice, my hon. Friend the Member for Lewisham, East (Bridget Prentice), replies to the debate, perhaps she can tell us whether “soon” means before the recess.

My hon. Friend the then Under-Secretary with responsibility for care services referred to regulators, but I am not persuaded that the problem can be rectified in that way. The Health and Social Care Bill provided the opportunity to address the specific anomaly identified in the YL case. The Government accepted my Committee’s arguments that the Bill should be amended to ensure that providers of health and social care should be brought within the Human Rights Act, and that indeed happened.

Although that approach provided a short-term fix for the immediate victims of cases similar to that of YL, however, it did not resolve the underlying bigger and wider issue. We need a legislative solution to achieve the broad scope of the Human Rights Act originally envisaged by Parliament. In the absence of that comprehensive approach, every time there is a Bill that creates powers to contract out services, there is interminable and regular correspondence to departmental Ministers from me, on behalf of the Joint Committee on Human Rights, seeking assurances that the Act will apply. I am forever tabling amendments on behalf of my Committee to ensure that the application of the Human Rights Act to the service concerned is debated and considered.

There is also regular litigation. The more recent case concerned the applicability of the Human Rights Act to privatised custody transport services and the rights of detainees in immigration removal centres. I understand that the case has now been settled, but the terms of the settlement are not clear. Given that one of the defendants was the Home Office, perhaps the Minister can enlighten us on what the terms of the settlement actually were.

I thank the hon. Gentleman for giving way a second time. There is another problem. If he is forced to try to amend each Act one at a time, the courts might say that that confirms their general approach that unless a particular Act gives an exemption or changes the rule in respect of itself, the general rule will be that the Human Rights Act does not apply—hence the great necessity for the hon. Gentleman’s Bill.

The hon. Gentleman makes an important point. In practice, the YL case has made that pretty clear anyway; I am not sure whether our having to amend Acts one at a time will particularly affect the outcome of any court cases. However, it is certainly time-consuming for my Committee, for me and the Departments concerned to have to consider the issue every single time and make sure that it is reflected in the explanatory notes, where it is usually forgotten about, or in amendments that usually end up being moved in the other place because the issue had not been thought about at an earlier stage.

The case of Weaver v. London and Quadrant Housing Trust, which is about the applicability of the Human Rights Act to registered social landlords, has been under way for two years. The High Court said that the Human Rights Act applied in housing management and lettings, a view more or less upheld in the Court of Appeal. Although no petition for permission to appeal has been lodged with the House of Lords, I understand that such a move is likely to follow. If there is a Lords appeal, will the Government seek to intervene—and if so, on which side?

Yesterday, I spoke at the British Institute of Human Rights seminar on the applicability of the Human Rights Act to private sector providers. At the start, we saw a video of a disabled person who had been forbidden to take his disability scooter on the Newcastle metro, which has a blanket ban on them. He has no way of challenging that; if the Human Rights Act applied to contracted-out public transport, which of course is a public service, he would have had a remedy to question that questionable decision. I ask the Minister what his remedy would be in other circumstances.

In their evidence to the Joint Committee on Human Rights inquiry into business and human rights, the Government said:

“It is clear both in law and practice when a function should be considered a function of a public nature. It is only at the very margins of the concept that certainty may not exist. However, such marginal uncertainty would be an inevitable consequence of the duty having been defined in any manner other than by reference to a list of those subject”

to the Act. That was certainly not the view of those at the seminar yesterday—people who are very involved in the issues. I certainly do not agree that the current position is clear. If it were, litigation on mainstream issues, such as the position of prisoners or tenants of registered social landlords, would not occur; they are major, mainstream issues. Even if the issue were at the margin, which I do not accept, the clearer definitions would at the very least reduce the level and extent of uncertainty.

My Bill adopts the approach suggested by the eminent jurist, Baroness Hale, in the minority judgment, with Lord Bingham, on the issues in the YL case. The judgment sets out a list of factors that should be taken into account. Clause 1 sets out that list of criteria, against which a given service can be judged—the “function”, in Human Rights Act language—to determine whether the body delivering that service is a public authority, for the purposes of the Human Rights Act. Clause 2 makes it clear that the service—not the legal status of its provider or the basis of the arrangement under which it is delivered—is the determining factor. That provides a simple solution to what is a simple problem to resolve.

In June 2006, the then Lord Chancellor made the extraordinary proposition that a “widening” of the definition of “public authority” could have the effect of driving private providers out of the market. I say that it was extraordinary, because it would be not a widening of the definition but on all fours with what Lord Irvine of Lairg, the then Lord Chancellor, told Parliament was intended when the Bill was before it.

Moreover, the appalling implication is that users of services contracted out to the private sector are not to have the right to challenge human rights abuses in our courts. That makes them second-class citizens—and in growing numbers, as local authorities continue to contract services out. The contractor’s commercial interests are put before the decent treatment of the vulnerable. I hope that that is not the official position of the Government at present. Indeed, that position was rejected by the former Prime Minister, Tony Blair, when I questioned him about it during a Liaison Committee meeting in February 2007. The Government should not toy with the idea of settling for narrowing the scope of the Human Rights Act in any sector.

As I said, I proposed similar Bills in the previous two Sessions. On Second Reading the first time round, the then Minister, my hon. and learned Friend the Member for Redcar (Vera Baird), said:

“We are committed to taking action this year”.—[Official Report, 15 June 2007; Vol. 461, c. 1047.]

When I pressed her, she said that she meant “this calendar year”. I am disappointed that despite that commitment, more than two years later there is still no decision on how to resolve the chaos of the YL case and no plan for legislation to solve the problem comprehensively. Time is of the essence for vulnerable people who ought to benefit from the full protection of the Human Rights Act but are currently denied it, no matter who provides the public services to them. The Government are not moving quickly enough to deal with this problem. I therefore hope that the House will give my Bill a Second Reading today.

I congratulate the hon. Member for Hendon (Mr. Dismore) on his persistence in supporting his cause, although we shall not be supporting him on this occasion.

Previous incarnations of this Bill and its subject matter, including the lengthy deliberations on the definition of a “public authority” by the Joint Committee on Human Rights, have often focused on whether private care homes come under the definition of a public authority when providing care to an elderly person funded by the local authority pursuant to its statutory duties. Conservative Members supported the concept of extending the definition to private care homes in that context. However, we have reservations about the scope of this Bill, as it goes much wider, with an unknown regulatory impact on private bodies engaged in public functions.

Let me go into a bit of the background. Section 6 of the Human Rights Act 1998 makes it illegal for public bodies to act in a way that is incompatible with a convention right. The definition of a public body is a broad one, and includes a court or tribunal and

“any person certain of whose functions are functions of a public nature”.

The Act allows a person who claims that a public body has acted, or proposes to act, in a way that is made unlawful by section 6 to bring proceedings against the body under the Act. However, they can do so only if they are, or would be, a victim of the unlawful act.

The hon. Gentleman referred to the need for an impact assessment. As my Bill proposes what was the original intention of the Human Rights Act, the original impact assessment for the Human Rights Bill, as it then was, will be exactly the same as it would be for this Bill.

I think that this Bill significantly extends the issue, and we would certainly want to see a full impact assessment were it to be taken any further.

When the Human Rights Act was passed in 1998, it did not seek to specify an exact list of what constituted a public authority. A large number of cases since then have been involved with privately run care homes that are subcontracted to provide local authority care. As the hon. Gentleman said, in the case of YL v. Birmingham city council in 2007, a majority of the House of Lords held that a private residential care home was not performing a public function for the purposes of the HRA when providing services to an elderly person funded by the local authority pursuant to its statutory duties. However, I appreciate that the Joint Committee on Human Rights has consistently taken the view that it was clear from the HRA that this was meant by Parliament in 1998 to be included within the Act’s definition of public function.

The Health and Social Care Act 2008 reverses the effect of the YL judgment on care homes. It states that any person who provides accommodation with nursing or personal care in a care home for an individual under arrangements made under the relevant statutory provisions is to be taken for the purposes of subsection (3)(b) of section 6 of the Human Rights Act to be exercising a function of a public nature in doing so. Given the changes in the 2008 Act, it seems to us that this proposal is a significant proposed extension of the scope of the HRA.

As the hon. Gentleman said, according to the Joint Committee on Human Rights, of which I appreciate he is the distinguished Chairman, there is an unresolved problem with the meaning of public authority in the Human Rights Act, which should be able to be resolved by passing the Bill. However, it is clear that questions remain unanswered about amending or clarifying the meaning of the term, and they prevent us from supporting the Bill.

There needs to be clarification of which bodies would be likely to be caught by the extension of the definition. Is the hon. Gentleman sure that what he described in his opening remarks covered the Bill’s scope fully? Many private bodies receive state funding. If the Bill were passed, would an employee of one of those bodies be able to use rights under the Human Rights Act in employment cases? It is clear that Parliament did not intend that publicly funded residents living in private sector establishments would not be covered by the Act.

Questions have to be answered about the scope of the Bill. There is a risk that any care provider involved in a private transaction could be brought within the scope of the Human Rights Act.

Will the hon. Gentleman expand on that? I fail to see how that could be the case. There is an argument among those involved in the care homes fraternity and relevant non-governmental organisations that it should be, but my Bill has been drawn up to ensure that that does not happen, as was the previous change in the law in 1998. That is another issue to consider, but my Bill is not intended to address it.

I am pleased that the hon. Gentleman makes that clarification, but we have concerns and do not want uncertainty. We do not want a pharmacy, or even a bank, to come within the definition of “public authority” in relation to the Human Rights Act. It is clear that Parliament did not intend that to be the case when the Act was passed, and if we accepted the Bill we could be acting contrary to the intention behind the Act and introducing a whole raft of unnecessary regulation of private bodies engaged in some way with public functions.

I do not think that I need remind the House that since 1998, Labour’s new regulations have cost the British taxpayer in excess of £76 billion. We would be negligent in our duty to protect the interests of the British people if we subjected them to further and unnecessary regulation, particularly as we have not had the opportunity to conduct in-depth analysis and scrutiny of the far-reaching proposals in the Bill.

It is clear to us that the Bill’s scope is simply far too wide. The question is not simply whether a private care home comes under the definition of a public authority when providing an elderly person with care funded by the local authority. The Bill has the potential to go much further, but the case for that has not been made. Parliament cannot afford to make a mistake about the meaning of public authority, and business cannot afford that either.

We must consider this important issue within the wider context. As far back as 2003, service providers expressed concerns about widening the definition. A number were worried that it would jeopardise both the perceived and actual status of organisations such as housing associations as being independent of Government. Furthermore, many service providers believe that by being labelled a public authority, they may be prevented from raising money outside Treasury controls, for instance.

We cannot simply redefine public authority in the broad manner that the hon. Gentleman advocates, especially as there is an extremely high risk that it will lead to unnecessary regulation of businesses that, let us face it, are in the grip of one of the worst recessions we have experienced. Conservatives must also assess his proposals in the context of the future Bill of Rights, with which we intend to replace the Human Rights Act.

To my knowledge, there has been no assessment of the costs of implementing this Bill. We believe that they would be significant. This is not the time to be putting a significant burden on business and on the taxpayer, particularly as no one knows what the cost will be and we are experiencing a deep recession. The truth about the real cost of widening the definition of public authority in the Human Rights Act must be determined before anyone can even contemplate supporting the Bill.

We support widening the definition of public authority to include private residential care homes where publicly funded patients are resident. However, the Bill goes much further, creates too many possibilities for labelling private sector enterprises as public authorities and does not take it into account that the cost in time and money for those private sector enterprises could be immense.

The hon. Gentleman focuses on the cost to business. Has he considered the cost to the consumers of those services that businesses provide? The Human Rights Act requires, for example, elderly people and children in looked-after accommodation to be treated with dignity and respect. What cost is involved in that?

The hon. Gentleman should consider the cost not only to business but to the taxpayer, particularly as we are talking about the public sector. However, concentrating on the specific examples that he gave might be a better way of proceeding than through the general sweeper with which he has presented us today.

The hon. Member for Huntingdon (Mr. Djanogly) finished so succinctly that I was almost taken unawares.

I congratulate my hon. Friend the Member for Hendon (Mr. Dismore) not only on securing Second Reading of a private Member’s Bill, but on his persistence in pressing a particular issue. He has brought to the forefront of our minds the Human Rights Act 1998, and it was interesting to hear the hon. Gentleman put on record again that the Conservatives would abolish it and replace it with something else.

The Human Rights Act may be a technical document, but it is not a mere technicality. It is a difficult and sometimes sensitive subject and, for reasons that I shall detail shortly, I must tell my hon. Friend that I cannot support his approach in the Bill. However, let me make it clear at the outset that there can be no doubt about the importance of the issue that he has raised. I agree that it is fundamental to the operation of the Human Rights Act—that is why the Government are implementing an effective programme of action to tackle it. I shall explain that in detail in a moment.

I also want to put it on record that my hon. Friend is the Chairman of the Joint Committee on Human Rights. He has been an assiduous Chairman and a vocal champion in this House of human rights—a very good thing, too. Human rights matters are sometimes perceived as arguments that are best left to lawyers and judges—I am conscious of the fact that I am the only person speaking in the debate who is neither—and that may be why they tend to be raised more frequently in the other place. Through my hon. Friend’s amendments to Bills, he has put human rights on the agenda of the elected House—where they belong, at the heart of our democratic process.

My hon. Friend’s commitment is clear. He has raised the public authority question in connection with at least three Government Bills in this Session alone, and this measure is the third Bill that he has presented on the subject. Before I go into detail about the Government’s response, I want to deal with some of the questions that he asked.

My hon. Friend asked about the commitment of my hon. and learned Friend the Solicitor-General to take action in the calendar year 2007 while in her previous post. Her commitment was fulfilled late in 2007, when the then Minister with responsibility for care services tabled an amendment to the Health and Social Care Bill to reverse the effect of the YL judgment.

My hon. Friend also asked whether the Government would intervene in the Weaver v. London and Quadrant Housing Trust case, should there be an appeal to the House of Lords. Obviously the detail of that case must remain sub judice, so it would be irresponsible of the Government to make a decision until we can assess what issues will be raised on appeal.

If the Weaver case had been sub judice, I would not have referred to it. It is not sub judice, because the Court of Appeal has finished with it and there are no current proceedings unless and until there is an appeal to the House of Lords.

My hon. Friend makes a perfectly valid point. My response to whether we would intervene in that case and on which side would very much depend on what issues were raised by an appeal. We would then have to assess whether any intervention would be merited. At this stage I cannot comment further on the case.

The third thing that my hon. Friend asked—I think that I am going to disappoint him again—was what the term “soon” meant when Ministers say that some consultation or other will take place soon. There is also the problem of the difference between “soon” and “in the near future”, and other phrases of that ilk. The consultation on the subject that my hon. Friend has raised will take considerable time and effort if we are to do it properly. We therefore do not expect “soon” in this context to mean before the summer recess, although how soon the consultation will take place thereafter is another matter altogether.

If “soon” does not mean before the summer recess, which most people would think it did, does it mean before we come back in October?

My hon. Friend may be trying to lead me down a path down which, at this stage, I do not wish to go. As I have said, to do it properly the consultation will take some time to put together. I will, of course, come back to him and the House when I have asked my right hon. Friend the Minister of State, the Member for North Swindon (Mr. Wills) whether he can be more precise about how soon “soon” might be and, specifically, whether it will mean before the end of the recess or before the beginning of the next Session.

I pay tribute not only to the Chairman of the Joint Committee on Human Rights, but to the Committee as a whole. The scrutiny that it gives legislation is excellent and forms a vital part of ensuring that we take human rights fully into account when we make law in this place.

I also posed my hon. Friend a fourth question. What remedies are available to the poor chap with the disabled scooter who is not allowed on the Newcastle metro because of its blanket ban?

When I heard that, my initial reaction—the reaction that I think every Member of this House would have—was that it was an appalling decision by that organisation. Without being an expert on the subject or in a position to give my hon. Friend chapter and verse, I would have thought that there ought to have been some remedy through the Disability Discrimination Act 1995, if not the Human Rights Act 1998. Again, however, I shall be happy to look into that further, so that we can ensure that no one with a disability is prevented from travelling on what is, essentially, public transport, so that they are allowed to conduct their activities in the same way as those who are able bodied.

The Joint Committee’s detailed reports do not always hit the headlines in the way that some other Select Committee reports do. Furthermore, the Government do not always agree with every opinion that it expresses. That is to be expected; the democratic debate would be all the poorer if that were not the case. However, I commend the Committee’s expertise, and the attention that it gives to the detail of our legislation, because that clearly benefits the process of making legislation. That is why our Joint Committee is seen across Europe as a model of excellence that others look to and seek to emulate.

The Bill is functionally identical to the one that my hon. Friend introduced in December 2007. That Bill was not reached on the day that it was set down to receive its Second Reading in May last year, so I am pleased that, 13 months later, we now have the opportunity to respond to it. It would add an additional layer of interpretation to section 6 of the Human Rights Act 1998. It would not amend the Act, but it would sit alongside it. It is not entirely clear whether it would erase the existing case law on the interpretation of section 6, which I shall discuss later, or whether it is intended only to influence its future development.

Clause 1 sets out a list of factors that must be taken into account when determining whether a particular function is a function carried out by a public authority within the meaning of the Human Rights Act. My hon. Friend referred to the fact that two of the dissenting judgments had, in effect, given him that list of factors. Each of the eight factors is a test for the publicness, if you like, of a function. Clause 2 adds a further test for publicness, based on the involvement of public expenditure. The clause itself states that this test is for the “avoidance of doubt”. However, the test is not consistent with the current jurisprudence on section 6, or with any conception of how section 6 was intended to operate.

As I said, the current Bill is, with a few exceptions, the same as that introduced by my hon. Friend in the last Session. Further to this, however, it is worth noting that it differs considerably from the first approach that he took to this subject, in a Bill that was introduced in January 2007. That Bill was debated on Second Reading in June 2007. It was a much shorter Bill than this one—I think that it was the one that the hon. Member for Huntingdon (Mr. Djanogly) felt more comfortable with—and instead of the list of factors and the additional test in clause 2, it had just one simple test, based on the contractual relationship of the body performing the function to a public authority.

The Solicitor-General, my hon. and learned Friend the Member for Redcar (Vera Baird)—then the Parliamentary Under-Secretary of State for Justice—responded for the Government in that debate, which took place just a few days before the decision of the House of Lords in the YL case, about which I shall say more later.

My hon. Friend questioned my interpretation of the assurance given by my hon. and learned Friend the Member for Redcar, by saying that the Government had honoured that commitment by the action that they took in relation to the YL case at the end of 2007. As my hon. Friend has just said, however, the YL case was decided afterwards, so that assurance related to the generic problem, which remains unresolved, not just to the YL issue.

I stand by the position that we believe that the amendment in the Health and Social Care Act 2008 responded to the issue that my hon. Friend raised at the time.

It might assist the House if I were to explain some of the background to the Bill. I want to do this because there is sometimes a perception that issues such as these are merely lawyers’ arguments, and that they have no relevance to the everyday lives of people in this country. I hope, however, that this debate will help us to see that the Human Rights Act 1998, for all that it is misrepresented and criticised, is a vital piece of legislation. The issue that my hon. Friend raises through the Bill goes to the heart of it.

The European convention on human rights was agreed in the aftermath of the second world war. It drew its inspiration from the universal declaration of human rights proclaimed by the General Assembly of the United Nations in 1948. The rights protected by the convention have a long British pedigree, rooted in the Magna Carta, the Habeas Corpus Act of 1679 and the Bill of Rights of 1689. Those rights form an essential part of our constitution and have been part of our common law for many centuries.

Sir Edward Gardner, QC, a senior Conservative MP who first called for the incorporation of the convention in 1987, said that the language of the convention

“is language which echoes down the corridors of history. It goes deep into our history and as far back as the Magna Carta.”

The convention was in large part, of course, the work of British jurists—not least of Sir David Maxwell Fyfe who later as Lord Kilmuir became Lord Chancellor—so while the convention may be European by name, it is very much British by heritage. In some respects, given that history, one wonders why the Conservatives are so keen to unpick so much of what is in the Human Rights Act.

The United Kingdom was one of the first countries to sign the convention in 1950 and to ratify it the following year. In 1966, we accepted the right of individual petition to Strasbourg. Then, of course, a person seeking to claim that their rights had been breached by a party to the convention applied to the European Commission on Human Rights. Since the 11h protocol to the convention came into force in November 1998, individuals have been able to apply directly to the European Court of Human Rights.

Althoough we were so instrumental in the convention’s development, it sadly took another 50 years before we incorporated it in our domestic law. Until 2000, UK citizens had to join the back of a very long queue if they wanted to access their rights at the European Court of Human Rights in Strasbourg. I am very proud, as I am sure is my hon. Friend the Member for Hendon, to be part of the Government who introduced the Human Rights Act in 1998. By putting that Act on the statute book, we in a sense brought rights home, making it possible for the first time for people who felt that their rights had been breached to take action in our domestic courts. Those rights—the convention rights—were drawn directly from the rights under the European convention itself.

There are those who have taken to using the term “human rights” in a disparaging way, so let me remind the House of the sort of rights that we are talking about. We are talking about the right to life, the right to freedom from torture or inhuman or degrading treatment, the right to freedom from slavery—

Order. I am reluctant to interrupt the Minister, but I remind her that we are debating a Bill that is intended to clarify the meaning of “public authority” in section 6 of the Human Rights Act 1998. At the moment, however, she is talking about generalities, whereas the Bill is rather more specific than that.

Thank you, Mr. Deputy Speaker. I was, I hope, trying to set this particular Bill in the context of the Human Rights Act, although of course I accept your point.

Bringing rights home has not been an easy legislative task. The Human Rights Act represents the first time—indeed, the only time—we have incorporated the text of an international treaty into our law. It works through several different mechanisms. The statement of compatibility in section 19, for example, means that every Act must be compatible with it.

Section 6 is the linchpin of the protection that the Act provides. Subsection (1) makes it unlawful for a public authority to act in a way that is incompatible with a convention right. The only circumstances in which that obligation does not apply are specified in subsection (2). They are circumstances in which a public authority could not have acted differently owing to provisions of primary legislation, or was acting to enforce such provisions. Those exceptions ensure that the sovereignty of Parliament is respected.

As many Members will recall from the debates on the Bill 11 years ago, the concept of a “public authority” is not defined absolutely. That is, I think, at the heart of my hon. Friend’s Bill. Instead, section 6(3) provides that a public authority includes any court or tribunal, and

“any person certain of whose functions are functions of a public nature”.

Again, there are a number of exceptions. Section 6(3) makes it clear that “public authority” does not include either House of Parliament, or any person exercising functions in connection with proceedings in Parliament. However, it should be noted that that does not include the House of Lords in its judicial capacity, and that it will not include the Supreme Court when it starts work later this year. Section 6(5) also makes it clear that a person is not a public authority in relation to a particular act if the nature of the act is private.

Despite those specific exceptions, the definition of “public authority” in section 6 represents a broad approach. That can be contrasted with the provisions in many other Acts, such as the Freedom of Information Act 2000.

My hon. Friend is going through the whole of section 6. I presume that that is in order, Mr. Deputy Speaker, because otherwise you would have stopped her. The Bill, however, is very narrowly drawn in relation to that section: subsection (3)(b) is the only part to which it refers.

I am perfectly aware of that. However, subsection (3)(b) is part of section 6, and I think that if we are to change part of that section it is incumbent on me to tell the House what the effect will be on the section and, indeed, the Act as a whole. Tinkering with one small part of an Act can make a very big difference to the way in which the Act will be interpreted elsewhere.

The broad approach to which I have referred was entirely deliberate. It was intended to provide human rights coverage that was both flexible and comprehensive. Generally speaking, two categories of body are caught by section 6(3). The first consists of “core” public authorities or bodies that are clearly public—for example, Government Departments, local authorities and the police. They are required to comply with convention rights in everything that they do. The bodies in the second category, about which I think my hon. Friend is most concerned, are often described as “functional” public authorities. They may be private companies, or charities that are exercising public functions. An example might be a private company running a prison on behalf of the Government. The way in which section 6 is drafted means bodies of that kind are also required to comply with the Human Rights Act in respect only of those specific public functions.

In that context, will my hon. Friend tell us what attitude the Government adopted in relation to the case involving immigration removal centres and, in particular, the transport arrangements for detainees provided by a private sector company? I think it was GS4, although I may be wrong.

I do not know the details of that case, but I will reflect on what my hon. Friend has said and consider it in some detail, following which I hope to be able to tell him and the House why the Government took a particular line in that instance.

Anyone who performs a function of a public nature will be obliged to respect people’s convention rights. That approach reflects the significant changes that have taken place over the past two decades in public service delivery; I hope I may be able to return to that later.

In the 1997-98 debate, the then Home Secretary, my right hon. Friend the Member for Blackburn (Mr. Straw), made it clear that the Government intended that a broad interpretation should be given to the concept of

“functions of a public nature”.

Those objectives were echoed in February 1998, when he argued that:

“The Bill had to have a definition of a public authority that went at least as wide and took account of the fact that, over the past 20 years, an increasingly large number of private bodies, such as companies or charities, have come to exercise public functions that were previously exercised by public authorities...it was not practicable to list all the bodies to which the Bill’s provisions should apply. Nor would it have been wise to do so. What was needed instead was a statement of principle to which the courts could give effect. Clause 6 therefore adopts a non-exhaustive definition of a public authority. Obvious public authorities, such as central Government and the police, are caught in respect of everything they do. Public—but not private—acts of bodies that have a mix of public and private functions are also covered.”—[Official Report, 16 February 1998; Vol. 306, c. 773.]

The Minister has been speaking for 26 minutes now. We know she opposes the Bill, but we do not know why. The hon. Member for Huntingdon (Mr. Djanogly) was very clear that he opposed the Bill because it imposed costs on business. I support the Bill, as does the hon. Member for Hendon (Mr. Dismore). Can the Minister say in just a few words why she opposes the Bill?

I hope that in a moment or two I will be able to give the hon. Gentleman some comfort by explaining why I am not prepared to accept the Bill as it currently stands.

If the Minister is not prepared to accept the Bill as it stands, will she at least be prepared to allow it to pass into Committee so that it can be amended into a form that she might approve of?

If I am allowed, I shall go into some detail as to why the Bill is unacceptable and would not, even with attempts to amend it, be a satisfactory way of dealing with the important issues my hon. Friend rightly raises.

Clause 1 would, in effect, wipe the slate clean in terms of the interpretation of section 6 of the Human Rights Act 1998. My hon. Friend has previously expressed his disappointment that the law in this area is uncertain, and I gently suggest to him that clause 1 would greatly increase that uncertainty. The Government are simply not prepared to accept that consequence at this stage. [Interruption.] Well, the list of factors has been drawn from the speeches of their Lordships in the YL case. The only guidance that a court would actually have would be the words in the Bill. Therefore, it is significant that no account is given in clause 1 of the weight that should be given to each factor, or whether each factor points towards or away from any given function being a function of a public nature.

The Minister has just said that the only guidance a court would have would be the words of the Act, but that is true of any Act. She has just given a reason for never passing any new legislation.

Absolutely not; I refute that entirely. If my hon. Friend will reflect, he will remember that in debates on, for example, the Legal Services Act 2007 we made it clear which factors had greater weight than others, so that is not at all unusual in legislation. However, the facts as laid out in clause 1 of my hon. Friend’s Bill have not been weighted or prioritised, so it would be entirely a matter for the individual judge to make that interpretation. I cannot believe for a moment that that is what my hon. Friend intended. Indeed, the widely differing views in the case of YL indicate just how individual interpretation of the same factors can result in very different decisions. There is no indication that the approach outlined in clause 1 would resolve or significantly clarify the issue.

I was also asked what other reasons I have for opposing the Bill. Well, there are a number—

The debate stood adjourned (Standing Order No. 11(2)).

Ordered, That the debate be resumed on Friday 16 October.

Business without Debate

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illegally logged timber (prohibition of sale) Bill

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home repossession (protection) bill

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torture (damages) (nO. 2) bill

Motion made, That the Bill be now read a Second time.

On a point of order, Mr. Deputy Speaker. We have just seen 13 Bills on the trot objected to by the Government Whip. Is there any way we could discover whether objections are ever on a point of substance or whether they occur simply because the Government do not like private Members’ Bills?

The hon. Gentleman is a very experienced Member of this House and knows precisely how these things operate. There may well be room for change or improvement, but it is certainly not for me to advocate it this afternoon.

Domestic Energy Users

Motion made, and Question proposed, That this House do now adjourn.—(Mr. Frank Roy.)

I congratulate the Minister on his appointment to his post, but I shall reserve further congratulation until I have heard how he answers this debate. I could not have chosen a much more appropriate time to call for it, because in the past week Ofgem has published its report on complaint handling by energy companies, Consumer Focus has published a major report on energy pricing, and Ofgem has intervened to criticise aspects of that report. I shall discuss those events and link them to some constituency experience.

First, let me sketch where we have come from. Until October 2008 consumers concerned about the practices of their energy company could approach Energywatch to assist them in their complaints. During the long period in which British Gas struggled with its billing system, I made heavy use of Energywatch to tackle repeated errors and overcharging. It handled individual complaints and sought to champion consumer interests generally.

The Government decided to merge Energywatch with other consumer bodies to form Consumer Focus. They transferred to Ofgem—until then largely a regulator of competition within the energy sector—the task of oversight of complaint handling. The argument was that energy was a mature market: consumers could readily vote with their feet if they were unhappy, and companies should be the main focus of complaint handling. Presumably, it was argued that the existence of Energywatch, as a quasi governmental substitute, led companies to invest fewer resources in customer service and complaint handling.

Such a robust, market-centred strategy would have much to commend it if the underlying assumptions were right. Those would be that consumers had appropriate information to prompt choice; that transferring to another supplier was straightforward; that there were sufficient variations in price and customer service to make changing suppliers worth while; and that the companies’ handling of customers was of a sufficiently high standard as not to require assistance. None of those assumptions is true.

A small number of consumers switch suppliers, often playing the special offers. However, most of the market is inert, with people staying with whatever company inherited the supply from the former state provision on privatisation. Most consumers find it hard to make comparisons. The study by Which? of consumer views on their bills showed widespread difficulty in understanding how the bills work and how consumers’ own behaviour might influence their bills. One customer said:

“It is impossible from my bills to see exactly how much I am paying per ‘unit’ of gas or electricity, or to compare offers by different suppliers. We need a system which is completely transparent and answers the questions: how much have I used? How much did each ‘unit’ cost? and sets this out so I can then compare with other suppliers’ charges, like for like.”

Another said:

“I find it very difficult to understand my energy bills. I endeavour to be as economical as possible but have no idea whether I am succeeding.”

Those are typical comments from the survey.

There is also some mistrust in the market. People doubt how genuinely competitive it is, and some recall the hard selling of the initial period of competition. They have also heard, as most MPs have, of problems arising when a supplier is changed—I have dealt with some such cases myself. Energy provision is so important that few like to take risks—it is not like testing a new brand of breakfast cereal. This is a sticky market, and as such it is exploited by the companies. There is evidence from one of Ofgem’s studies of overpricing in companies’ core, inherited market, deliberately taking advantage of the conservatism of loyal customers while offers are pitched at areas of the country where they seek a greater market share.

What advantage would a consumer gain from changing supplier? There may be a short-term price advantage. The bundling of electricity and gas may offer gains, but those offers are not relevant in areas without mains gas. However, the prices tend to move in tandem and there would appear to be few long-term gains. As for customer service, it is uniformly abysmal.

Ofgem’s study of complaint handling—accompanied by characteristically tepid advice to the companies and an expectation of better results next year—presents data that suggest this must be the worst service offered by any industry in our country. The best company at handling domestic complaints, E.ON, managed to leave 57 per cent. of customers surveyed unhappy with the quality of its complaint handling. The worst, npower, to which I will return in a moment, left a staggering 70 per cent. dissatisfied with the way that their complaint had been dealt with. There is clearly no competitive pressure whatever to provide high standards in that key measure. The chief executive of Ofgem, however, is perhaps more optimistic. He opined:

“It is in suppliers’ best interests to ensure that the service they provide is of a high standard. This is clearly an opportunity for them to raise the bar to retain existing customers and attract new ones.”

Would that that were true.

Back in the spring and summer of last year, while Energywatch was facing its demise, I anticipated that problem and tabled parliamentary questions and wrote to Ofgem about how to establish proper complaint handling standards. One specific area, as an example, came up in its current survey, in which it identified the difficulty of mapping precisely what a complaint was for one customer—exactly the problem that I anticipated 12 months ago in correspondence with Ofgem.

So the Government’s assumptions about the maturity of the market and the ability of consumers to lever gain is flawed. The consumer support infrastructure designed around those assumptions is struggling and, as I will illustrate, squabbling. Ofgem has the lead role. It commissions studies into the sector. It does not assist consumers directly but can address group complaints as it did on npower’s price sculpting activities. Ofgem leaves individual support to an ombudsman and to Consumer Focus. There is a lengthy time limit before a complaint may be referred to an ombudsman and Consumer Focus, as a body covering most aspects of consumer assistance, is not able to give the scale of support previously offered by Energywatch to energy-specific complaints. One senses some degree of turf war behaviour between the organisations.

Last week, Consumer Focus released a study suggesting that the common consumer concern—I would be amazed if other hon. Members did not have examples of such problems—that prices seem to go up further and faster than they come down when wholesale prices vary over a period of time. Consumer Focus used Ofgem data and model assumptions to suggest that consumers were right in that view and that they were being substantially overcharged. Ofgem publicly contradicted that. The two bodies should share a common interest—to serve consumers. It scarcely breeds confidence that that goal is central to either of them if they squabble in public.

Let me now turn to one example of the industry’s poor quality service to customers—npower’s foray into what has been called gas price sculpting. I will not seek to explain its model in detail. I have not got time—the company offered a five page text on its website to consumers who did not understand that method of calculating their gas prices, so I certainly will not attempt to read it out. It is sufficient to say that it introduced a two-tier pricing model with a quantitative start date for the trigger for the higher scale price set by the company. Several of my constituents spotted that they might well face higher bills and complained.

As I have mentioned, the company produced material that was well nigh impenetrable. I read the five pages and, frankly, if I had been one of their customers I would not have been able to work out how it affected me. Most ordinary consumers presumably just trusted that whatever it meant, they would not be mistreated. Ofgem, at the initial prompting of Energywatch, instituted an inquiry into the practice that took nearly a year to report. When it did, it failed to condemn the company’s practice, merely expressing concern about the company’s failure properly to inform customers. Perhaps surprisingly, bearing in mind the mildness of the reproof, npower agreed to pay £1.2 million to 200,000 consumers—that is, about £6 a head.

An apparently minor victory for consumers, however, rapidly dissolved when scrutinised in more detail by people such as my constituents, Mr. Stratton and Mr. Vallis, who were determined on the matter. They and many others did their own calculations—to be honest, they were better than I in that respect—and were able to pursue claims against npower. One of those gentlemen received an £85 ex gratia payment. I shall come back to one of the interesting aspects of that payment at the end of my speech. Far higher sums than that are quoted on the web, particularly in cases where court action was threatened against npower.

I have drawn the apparent inadequacy and weakness of the Ofgem judgment to Ofgem’s attention. The relaxed response essentially drew attention to any consumer’s right to pursue the matter further with npower; there is, of course, that right, but only a minority of consumers are equipped to pursue the matter further. Our purpose, in a complex marketplace—as I have suggested, some companies seek to make it as complex as they can—is to assist the individual householder who must fight a giant company. Our purpose is not to empower the capable and well organised in our constituencies to do that, but to protect the vulnerable.

In correspondence with one of my constituents, attention was drawn to the possible legal constraints on Ofgem insisting on compensation because of time delays since the original price increase. The leisurely course of the investigation clearly did not seem to have been affected by that concern. In my correspondence with npower, I was requested to treat the payment made to my constituent as a matter of commercial confidence, and was told not to disclose it to any third party under any circumstances. I had not asked to be treated in that way and, prima facie, I would have said that it was a breach of parliamentary privilege to suggest that I should not be able to discuss what my constituent had received. I can well understand the company’s embarrassment in that matter, but I have never before been told by any company that I owe any duty other than to my constituent in a matter of that kind.

So what do I seek from my hon. Friend the Minister? First, I seek clarity on consumer assistance in the marketplace; there should be no more squabbling or turf wars. Secondly, I seek recognition that the market remains complex for most consumers, and that additional specific assistance is required. Thirdly, I seek a far more robust approach to the companies on their customer complaint handling capability. Their current shocking performance will not be corrected by market pressure. Fourthly, clear obligations should be placed on companies to ensure that bills and billing models are clear. Obscurity and complexity are two of the few areas in which the companies seem genuinely to compete; they try to make what they offer customers as difficult to understand as possible. Fifthly, if there are legal constraints on a regulator when it comes to tackling activities such as npower’s price sculpting, let us address them. In the meantime, the investigation by Ofgem should itself be examined. How long did it take? How were data collected? How did consumers and the company have their say? That would be a test of Ofgem’s fitness for purpose in such matters.

Finally, in spite of Ofgem’s qualified all-clear last year, most consumers do not believe the market to be genuinely competitive. Its price movements appear to be like an elephantine dance programme, and the normal triggers prompting quality improvements and sustained price advantages simply do not seem to function. Let us have the Competition Commission examine the market.

I congratulate my hon. Friend the Member for South Derbyshire (Mr. Todd) on his choice of subject—it is an important subject, and he showed a great command of it—and on the timeliness of this debate, to which he referred. To the events that he described at the beginning of his speech, I would add the publication yesterday of the Government White Paper, “A Better Deal for Consumers: Delivering Real Help Now and Change for the Future”. A lot of the publicity that the White Paper received, yesterday and today, was about those consumers with personal debt, but there are factors relevant to this debate. For example, in the White Paper, there is mention of breathing space relief for consumers who are overburdened with arrears on their utility bills and other secured debts. There are to be reviews of how effectively energy and water suppliers protect vulnerable customers from disconnection. There is to be help for customers with problem debt, and programmes to reduce household energy bills.

It is to the great credit of my right hon. Friend the Secretary of State that within my portfolio at the Department of Energy and Climate Change I have responsibility for consumer interests. I appreciate that the Department is young, but this is a first and I believe it is a very welcome development. I agree with my hon. Friend that we need to be active and demanding in relation to consumer concerns about energy, and I am happy to take on that responsibility.

With that in mind, let me say at the outset that the Department regards it as essential that all consumers should have confidence that they can use energy reliably, safely and affordably. I regard the description of “consumer” as all-encompassing, so, for example, it incorporates industrial and commercial consumers of energy, just as it covers domestic householders. My job is to ensure that consumers will be treated fairly by the companies that deliver our energy. I want everyone to have confidence in the rules and arrangements under which those energy companies operate. In particular, that means that people and organisations should have the right help and information to make good decisions about the way they buy their energy, and about how to save energy and save money.

Last year, the gas and electricity regulator Ofgem registered public concern about prices, and about other aspects of the energy supply markets. Ofgem responded by launching a detailed probe into the energy supply markets. I have seen Ofgem’s report of those findings. Ofgem concluded that the markets were working well overall and that there was no evidence of collusion between companies in the sector, but it also discovered some areas where real improvement is needed.

Ofgem’s work revealed that many consumers were suffering significant disadvantages in what they were paying for their energy. Some practices relating to prepayment meters may have attracted most public attention and reporting at the time, but there were also broader issues of unfair charging, as described by my hon. Friend today. Under pressure from Government and the regulator, suppliers have taken action to remove those unfair practices, and that is a start, but all the suppliers need to continue to take responsibility for putting an end to such practices and avoiding any repetition in future.

Ofgem is in a position to make changes to the suppliers’ licences to secure better, fairer practices from now on, and I shall be watchful to ensure that consumers get the benefits of these changes. I want people and organisations to have confidence that they will be treated fairly however they pay for energy, and that they will be properly and clearly informed about charges. They need to know that suppliers are competing actively and fairly for their custom. We would all like to see such problems solved more quickly. Nevertheless, the Ofgem probe has been of great value. It has provided evidence to show where specific problems are. It is only with such evidence that the right changes can be made to achieve real improvements.

As my hon. Friend said, clarity is an important factor for householders and business customers alike. Ofgem’s investigation showed that consumers are not always able to make the best choices about tariffs, payment methods and energy use. Ofgem accordingly proposes new obligations on suppliers to provide clearer information to their customers which includes a standard annual statement including the tariff name, the customer’s consumption and a reminder of the right to switch, and simplified information on tariffs to make comparison easier, including a clear price scorecard.

One of the other elements that has been discussed is an obligation on the company to point the way to a cheaper source within its own suite of offerings. Does my hon. Friend see that as an obligation that would be placed on the company as well?

I will take that as a representation and think about it. I remind my hon. Friend that in the fifth Session legislative programme there will be an energy Bill, in which we might be able to come back to that issue.

Clearer information and the avoidance of confusion about tariffs offer consumers much-needed confidence. They, and the proposed licence condition changes to prevent unfair tariff discrimination, will go a long way towards avoiding the kind of problem that my hon. Friend describes.

I fully appreciate my hon. Friend’s concern about customer information; other hon. Members raised similar concerns in a debate in Westminster Hall on 10 June. My hon. Friend the Minister of State responded to that debate. In doing so, she offered hon. Members the opportunity of a meeting with Ofgem to discuss the concerns. I am currently making the arrangements for that meeting. Ofgem has consulted on its proposals, and I will ensure that my hon. Friend’s concern and constructive suggestions are fed into that consultation process. I am sure that many interested parties will have responded to the consultation, and I know that consumer bodies have been involved.

It is essential to get the matter right and to make sure that in future all consumers have the appropriate level of information in a user-friendly format. Whether they are basing their decisions on their past energy usage or on their response to marketing, consumers must be able to rely on the information provided to them by others. On the subject of marketing, I should mention that Ofgem has also addressed standards in doorstep selling. It is proposing new rules to require suppliers to offer written quotations following doorstep sales and to provide that the offer made and accepted on the doorstep must be better than the customer’s existing deal. Taken together, those actions represent significant strides forward in ensuring that in future consumers can have much more confidence that they are paying fair prices for their energy.

With respect to the npower case mentioned by my hon. Friend, I understand that the company failed to notify consumers of changes in some of its tariffs; because of that, those consumers were unable to take action to move to a different tariff or supplier. Clearly, it is essential that suppliers meet their licence obligations in relation to changes to tariff rates and that the regulator has the powers that it needs and is prepared to use them. That, I think, is my hon. Friend’s message to me. Ofgem’s recent proposals on improving consumer information should also impact on the issue.

As my hon. Friend said, last year the Government changed the arrangements for consumer representation, bringing together the public’s representatives in the energy, postal services and water sectors. We believe that we have put in place a more effective system. However, we are not complacent. I agree with my hon. Friend that the new arrangements must be monitored to ensure that they are working as intended and that there are no gaps. The guiding principle in judging their effectiveness is whether they are serving the best interests of consumers.

I assure my hon. Friend that the Department for Business, Innovation and Skills is planning a review of the new arrangements in the autumn, and I will be looking carefully at the current arrangements myself. We need to make sure that all the organisations involved are working effectively together.

Would the Minister use as one of the criteria the way in which individual consumers are assisted? The great strength of Energywatch was its ability to pick up an individual complaint, understand its greater significance, assist the individual and apply some of the lessons to the companies.

I understand what my hon. Friend is saying and as a constituency MP myself I certainly recognise what he said about Energywatch. However, I am not prepared to go as far as him and say that the new organisation will not be as effective as Energywatch. It can be as effective—if not more so, given the time and support. I will not take up the particular suggestion made by my hon. Friend, although of course I want the consumer representatives and the companies to be consumer-focused.

On prices, a subject of popular discussion and debate is whether reductions in the wholesale costs of energy are passed on to consumers promptly by energy companies. We have evidence that, in the past, competition in the UK’s markets has pushed down prices following wholesale price falls more quickly here than in countries with less competitive supply markets. However, the subject is of such keen and continuing interest among all consumers that I want there to be constant reassurance that that remains the case today and for the future. Are suppliers still competing on price? Is competition working in favour of the people who have to pay the bills?

It is precisely because Ministers, like everyone else in the country, want the answers to those questions that we asked Ofgem to get involved and stay involved. Ofgem now tracks the link between wholesale and household prices and provides greater transparency. In this way, we can give consumers answers. So far this year, Ofgem’s analysis is that the price cuts of 2009 appear to reflect the falls in wholesale costs to date. I am encouraged by that news, but the effectiveness of this work depends on keeping it going. I shall be watchful of this, as I want to be sure that competition is working and that consumers are getting fair treatment from suppliers and from the energy system.

I am aware of the Consumer Focus news release on price movements that my hon. Friend mentioned. My officials are discussing the data with Consumer Focus. Our initial assessment was that we did not recognise the figures and analyses used. However, I agree that it is important that bodies in the sector, while being able to question and interrogate each other constructively, ought not to fall out in public, and it is certainly regrettable if confusing information is thereby provided to consumers.

As my hon. Friend says, Ofgem’s recent report on complaint handling showed some very disappointing results in terms of consumer dissatisfaction with suppliers’ performance. It is not sufficient for suppliers to have the necessary systems in place, although that is a start. They need to improve the consumer’s experience of those systems. I believe that Ofgem is meeting stakeholders this month to discuss how to ensure that. I agree that price will be the most important factor when consumers choose between suppliers, but satisfaction is also a significant issue, and suppliers have a real interest in getting the procedures working more effectively. I will pursue that issue actively in my discussions with companies and consumer bodies. There may be a case for the regulator to take action where the supplier does not meet the standards that are laid down. Ofgem has powers to fine suppliers up to 10 per cent. of turnover for a breach of these standards.

As regards my hon. Friend’s concern about competition, compared with many markets there is a high level of switching. The process of switching has been made easier. As I mentioned, there are new proposals to make doorstep selling—probably the most controversial channel for switching—much safer for consumers. A small number of consumers are very active, as my hon. Friend says, but large numbers of other consumers have moved to better deals. Those who have not yet switched can still make considerable savings if they do so.

Suppliers have sometimes changed prices within a similar time frame, but they share many of the same cost pressures, particularly movements in wholesale prices. In most sectors, businesses will price with an eye on the competition: this is not proof of a failing market. In fact, when it comes to lowering prices following falls in wholesale prices, it is easy to become concerned if one or two companies do not move with the others. As my hon. Friend says, Ofgem found evidence of unfair differentials in pricing, and it has taken action to prevent this in future; the Government have strongly supported that action. We need to ensure that competition is working and to act where it is restricted, but we need to base actions on real understanding of what is happening, and what is not happening.

Our energy markets in the UK have ensured that over the past decade household consumers have benefited from some of the lowest energy prices in Europe. However, that is history: we need always to be vigilant on behalf of the consumer. I recognise that none of us, least of all Government, can be complacent about the services that paying energy customers receive. I am aiming for the best and the fairest service for all consumers. To achieve that ambition, I shall be calling on the regulator, the energy companies, consumer representation groups and consumers themselves to help me. I take it that I can say with confidence that my hon. Friend is willing to help, and I shall seek support from other right hon. and hon. Members. Regulation needs to be active and effective, attuned to current business and social standards. Where necessary, rules must be amended now and in the future to stop unfair practices. Those investing and operating in the energy sector need to work for the steady improvement of the ways in which the markets function for consumers.

I appreciate the interest that my hon. Friend has shown in the serious subject of protecting current and future energy consumers. I pay tribute to his personal efforts on behalf of his constituents. I hope he can see that I am determined to act upon the issues that he has raised in this debate.

House adjourned without Question put (Standing Order No. 9(7)).