With permission, Mr. Speaker, I should like to make a statement about the UK low carbon transition plan, which we are publishing today.
All of us in this House know the gravity of the challenge that climate change poses. We know that to rise to the challenge will mean comprehensive changes in our economy and our society. We are one of the few countries in the world to exceed our Kyoto targets, we are now the leader for offshore wind generation and we are the first country in the world to legislate for carbon budgets, but the proposals published today represent the first time that we have a set out a comprehensive plan for carbon across every sector—energy, homes, transport, agriculture and business.
A decade ago, the carbon impact of most policies was not even measured. Last year this House passed legislation for legally binding carbon budgets—measurable caps on our carbon emissions. That was a dramatic change in approach, but we need to go further because every part of Government needs to be responsible for meeting those budgets. So I can announce that from today not just the country as a whole, and not just the biggest Departments, but every Department has its own carbon budget. Having been the first country in the world to set legally binding carbon budgets, we are now the first country in the world to assign every Department a carbon budget alongside its financial budget.
The plan sets out how we will meet the carbon budgets set out by the Chancellor for an 18 per cent. reduction on today’s levels by 2020, or a 34 per cent. reduction compared with 1990. Let me announce to the House how we will make the 459 million tonnes of carbon savings. In agriculture and waste, there will be a 6 per cent. cut in emissions—20 million tonnes—by 2020, made possible by new policies on waste and new commitments on farming.
In the transport sector there will be savings of 14 per cent., or 85 million tonnes, by 2020, as is set out in the sustainable transport strategy published today by my right hon. and noble Friend the Secretary of State for Transport. This includes plans for electrification of rail, tougher car and van emission standards, and the new £30 million fund to get low-carbon buses on the roads in the next two years. We are also doing more to bring about the transition to electric cars, with new funding making possible a recharging infrastructure in up to six cities.
Across business and the workplace, we show how we can make 41 million tonnes of savings, or 13 per cent. on today’s emissions, including through the carbon reduction commitment to be introduced next year.
The most important reductions to meet our carbon budgets will be in how we generate and use energy. In the power and heavy industry sector, we show how emissions will be reduced by 22 per cent., or 248 million tonnes. With North sea gas production declining, if we carried on with business as usual, over the next decade our imports of gas would double. On the basis of the low carbon choices I announced today, our forecast is that rather than our gas imports doubling, they will be kept to 2010 levels for the whole of the following decade, so that with more low-carbon, home-grown energy, we avoid an ever-increasing dependence on imports.
I have listened to representations on renewable energy and have concluded that, for reasons of energy security and climate change, it is right to go ahead with plans for 15 per cent. domestic renewable energy by 2020. In the final decisions in the Government’s renewable energy strategy, published today, we show how we can secure about 30 per cent. of our electricity from wind, marine and other renewable sources. We are also publishing the shortlist of Severn tidal schemes.
I believe it is right that we shall also go ahead with our plans for new nuclear power stations. We will publish our national policy statements on nuclear and other energy issues in the autumn, and the industry is planning at least 12.4 GW of new stations—more than current capacity. Alongside the most environmentally stringent coal conditions in the world, the Government have proposed up to four carbon capture and storage projects, and we have proposed legislation for the next Session of Parliament to make that happen.
Let me be clear: I believe that for the future of energy in Britain, clean coal has an essential role to play. As the plan sets out, renewables, nuclear and clean fossil fuels are the trinity of low carbon and the future of energy in Britain. It would be fatal to pick and choose between them; all of them should be part of our future energy mix. In total, our plans show that we will get 40 per cent. of our electricity from low-carbon energy by 2020 and more in the years that follow.
To deliver the changes in our energy supplies between now and 2020, we must make it easier for investors to turn low-carbon projects into reality. Having tackled the planning rules, I believe we now need to do more to deal with the issue of grid connection, so I am today announcing that I will exercise the reserve powers provided under the Energy Act 2008 for Government, rather than the regulator, to set the grid access regime. The new rules should be in place within 12 months, so that instead of waiting for more than a decade for grid connection, as can happen now, we can get the fast access to the grid that renewable projects need.
We also know that as we generate power in a cleaner way, we also need to use energy in a smarter way in our homes. In the plan we show how, in total, cleaner sources of heat and better use of energy can cut emissions from our homes by one quarter compared with today. We must also transform the information on energy use available to all of us, so as well as putting in place new funding today for smart grids, we propose to roll out smart meters to 26 million homes by 2020.
We need new incentives as well as better information. The plan makes it clear that in energy efficiency, we need a house-by-house, street-by-street transformation, like the transition from town gas to North sea gas in the 1970s. Over the next decade, our plan sees families not having to pay up front, but being able to spread the costs over many years, paid for out of the savings on their energy bills. Today we take the first steps with the first pilots of the new pay-as-you-save scheme.
As well as information for individuals and the right incentives, we know from the transition towns movement about the power of community action to motivate people, so we will provide £500,000 each to 15 areas of the country for people to come together to trial the newest technologies and be beacons for how other communities can cut their carbon emissions. In addition, I can confirm that from next April, individuals and communities alike will be able for the first time to generate their own renewable power and sell it back to the grid, with guaranteed feed-in tariffs. The details of the rates and levels on which we are consulting are set out today.
We need reforms not only in how we produce energy and how we use it, but in how it is regulated. In the energy world of today, unlike that of 20 years ago, the job of the regulator is to help to deliver on our climate change commitments, because failure to act now will store up greater costs later. I therefore propose to change Ofgem’s principal objective so that for the first time, reducing carbon emissions, as part of protecting the future consumer, will be explicitly set out as part of its guiding mission. Competition is essential, but we know from the experience of prepayment meters that it has not delivered for all consumers, so I will also make it clearer in Ofgem’s principal objective that when competition does not deliver, it is its duty proactively to stand up for consumers throughout this country.
With greater expectations of the regulator should come greater powers, so I also propose to legislate to provide Ofgem with tough new powers to take action where it believes that there is anti-competitive practice in the generation of electricity. Strong regulation is all the more important given the upward pressures on prices in the coming years. Making the energy transition will have costs, but for households those costs are significantly offset by savings resulting from energy efficiency and reduced energy demand. Today’s plan will not increase average household energy bills by 2015, compared with now. For households in 2020, the plans today will mean, on average, 6 per cent. on domestic bills—£75 a year—compared with today. If we include all previous policy announcements on climate change, the figure is 8 per cent.
Given the costs of transition and the priority of tackling fuel poverty, we need to do more to protect the most vulnerable consumers, so I propose to reform the system of social tariffs, as has long been urged. More than 800,000 households now receive discounts and other help with their energy bills. That is part of a voluntary agreement with the energy companies. I propose that when the voluntary agreement ends in 2011, discounts for the most vulnerable will continue not through a voluntary arrangement but through legislation for compulsory support from the energy companies. We will legislate to increase the amount spent, and we intend to target new resources at the most vulnerable consumers, particularly older, poorer pensioners. We must make the transition to low carbon on the basis of energy security and fairness, and we must also seize the industrial opportunities, using the money that the Chancellor allocated in the Budget. We have set out plans for carbon capture and storage and, today, for new investment in nuclear manufacturing.
As for renewables, Britain has half the usable tidal energy in Europe. Today I am committing up to £60 million to build our wave and tidal industries so that we can test new technologies and expand port access and deployment in key parts of the country. We also need to nurture the offshore wind industry, in which we have a unique resource, so I am making available up to £120 million to support the growth of a world-leading offshore wind industry in Britain. As well as supporting the demonstration and testing of offshore wind, the money will be used to attract offshore wind manufacturers to the UK. We estimate that those investments will help to nurture industries that can support hundreds of thousands of jobs in our country. We can make that investment today only because, even in the tough times, we made the choice to invest in the economy of the future.
Climate change is the moral issue of our time. In five months’ time, the world must come together at Copenhagen and follow through on last week’s commitment by world leaders to stop dangerous climate change. Today we show how Britain will play its part. Our transition plan is a route map to 2020. It strengthens our energy security, it seeks to ensure that the decisions we make are fair, and above all, it rises to the moral challenge of climate change. This is a transition plan for Britain, and I commend it to the House.
I begin by thanking the Secretary of State for advance sight of his statement. After the briefings in the weekend press, which were even further in advance, he has been generous in informing us all about the content of today’s policy announcements. Like the Secretary of State, I read all the best bits months ago in the Conservative Green Paper “The Low Carbon Economy”, which, I am reliably informed, has lingered on his desk. That being the case, of course I welcome his remarks. This area of policy is crucial for Britain. Its consequences will affect our lives and those of future generations. Investments worth billions of pounds need to be made in a very short period. There is plenty of risk in that—risks inherent in the capital markets, in future energy prices, and in the technologies. However, for too long, public policy in this country has been a source of additional risk for investors. I am determined that instead of amplifying uncertainty, our policy, with its clarity, rigour and consistency, should be a haven from it. That means that on this issue we should not pursue narrow short-term partisanship; instead, the long-term interests of the country must come first.
If we are to have a fresh start, will the Secretary of State be candid in accepting that we start from a poor position? In 12 years there have been 15 Energy Ministers, but no energy policy. Does he recognise that while other countries have spent the past decade diversifying their supplies of energy, Britain has become even more dependent on imported fossil fuels? He talks about preventing that from happening in future, but I have news for him: it has already happened, and is threatening our energy security, economic competitiveness and climate change objectives.
Britain has some of the best natural resources in the world, so will the Minister explain why no other European country, apart from Malta and Luxembourg, generates less energy from renewables than we do? Does he accept that we have the least efficient homes of any major European country, and that one consequence of that is soaring fuel poverty? Social tariffs are of course important, but we must recognise that they are a sticking plaster rather than a cure for the problem.
Does the Secretary of State recognise that he is presenting Britain’s consumers with the bill for this decade of dereliction of duty? Everyone one knows that doing things in a last-minute rush means that one always pays more than if one had planned and acted ahead of time.
While we welcome the intention of the proposals, we will judge them against the rigour, ambition and urgency of the proposals in our paper on the low-carbon economy. Will the Secretary of State therefore confirm that the home energy efficiency scheme will be available to every household in the country, not just to a few pilot areas? With the roll-our of smart meters already under way in America and elsewhere, why will he not set an earlier target than 2020? Does he accept that, by any logic, the required carbon capture from a power plant must be proportional to its size, and that that could best be achieved by an emissions performance standard?
Will the right hon. Gentleman scotch the rumour that he plans for just 2 per cent. of Britain’s energy to be generated under the feed-in tariffs by 2020? Above all, is he committed to the radical change required by the 2050 target, or will he dilute the low-carbon economy with imported offsets that would rob Britain of moral and industrial leadership, and developing countries of the easy wins that they need to achieve their own targets?
Last week, the Secretary of State’s brother, the Foreign Secretary, said:
“We have to be honest…change has been incremental and continuity has been strong…our low carbon revolution is still to come.”
The Secretary of State stands in a position of great moment. He must decide whether he will break with the past and implement rigorously the measures that both he and I know need to be taken, or whether the next six months, like the last 12 years, will prove to have been a time of opportunity lost.
Let me start by saying that I welcome the hon. Gentleman’s opening remark that we should conduct the debate in as bipartisan a way as possible. I therefore regret the tone of his subsequent remarks, and I advise him that it does not make much sense for him to come to the House and say that he wants bipartisanship and then engage in attacks that are pretty much without substance.
I shall deal first with a point that the hon. Gentleman made that I consider to be very important for people watching in the country. He would have us believe that the reason why we will pay a higher price for the switch to renewable energy is something to do with what has happened in the past few years. He knows that that is not the case, and that the transition will have costs. I advise him in all seriousness that as we conduct this debate, we need to level with people about that. I have been very open about saying to people, “Look, there are costs to the transition.” We will never persuade people to make the transition if we say that the costs are a result of Government inaction in the past: they are not, and the hon. Gentleman knows that, just as he knows that there are costs to the transition.
I hope that the hon. Gentleman will reflect on his remarks later, but let me turn now to the other points that he made. I did not hear him ask any real questions about the substance of my proposals, although I appreciate that he has not had much time to absorb them. However, I should be happy to answer any questions on the substance of the proposals, when he has some.
The hon. Gentleman mentioned the roll-out of smart meters, and I can tell the House that 48 million meters will be rolled out in the next decade. It is easy for an Opposition to say, “Let’s do it more quickly,” and that would be fine if there were ways to do that. However, we believe that 5 million meters are quite a lot to install in one year, and we are open to any quicker way of proceeding.
The hon. Gentleman asked about offsets. The Government have taken an ambitious approach to offsets, as did the Chancellor in the Budget. We have said that we will achieve the 34 per cent. reduction through domestic action, and exclusive of the EU emissions trading scheme. That remains the case. As he will know, because his deputies will have taken part in the debate on this, we have set the credit limit for the first budget period at zero. In fact, in our plans we over-achieve on our carbon budgets, but I hope that he is not falling for the idea that any offsetting abroad is automatically a bad thing—
The hon. Gentleman may say, “Ah,” but the truth is that for Copenhagen we face a massive financing challenge, and developing countries are saying to us, “We need the finance to be able to make the transition to low carbon.” If we are to make that transition to low carbon, we need all the means at our disposal, and that means private and public finance. We have in place domestic action to meet our 34 per cent. target, but we will not say that we will never engage in buying credits from abroad, because that is the right policy.
We have set out the rates for consultation on feed-in tariffs. We have listened to what people have to say, and we think that we have set a realistic estimate of what tariffs can achieve—but if they can achieve more, that is a good thing. Let me just end—[Interruption.] Let me just end—[Interruption.]
Order. I am sorry to interrupt the Secretary of State, but I fear that the shadow Secretary of State and the hon. Member for Wealden (Charles Hendry) were probably not present in the Chamber during Wales Office questions, in which I indicated that this habit of wittering away from a sedentary position on the Opposition Front Bench must stop.
Let me finish by saying this to the hon. Member for Tunbridge Wells (Greg Clark): we are debating serious issues and we need as much consensus as possible. I regret the tone of his remarks, and the fact that he does not have anything of substance to ask about our proposals today. I look forward to debating them in the coming months.
I thank the Secretary of State for his statement, and I congratulate him on his personal commitment to ensuring that we move to being a low-energy country. I welcome the announcement of carbon budgets throughout the sector as well as for the Government as a whole, and I thank the right hon. Gentleman for announcing that the regulator will be given new requirements.
I am going to ask the Secretary of State questions, not because I want to be confrontational but because his policy is lacking in certain areas. Will he confirm that the Government will wish to be judged at the next election not on words but on delivery? Will he therefore explain why, on the day that we have heard that the only company producing turbines in this country is going to close, the Government have done nothing specific to support the growth of UK-based industry in the sector? What is his estimate of the amount of new technology that will be produced in this country, as opposed to abroad, by the end either of next year or of the next five years?
Given that we are at the bottom of the European league table on renewables, with a contribution of 2 per cent. compared with more than 30 per cent. in Sweden and almost 10 per cent. in Germany, is not the reality that, although the Chancellor announced incentives for the renewables sector in the Budget, he has subsequently failed, because the renewables industry has been waiting three months for the promised meeting to discuss how the European Investment Bank money can be accessed, and no meeting has taken place? Why have all the English regions bar one failed to reach their renewables target? What will change that situation over the next year, and the next five years? Will individual communities, including counties such as Cornwall and countries such as Wales, be able to get on with their own policies to deliver the green peninsula, in Cornwall, and the green country, in Wales, without the Government telling them what to do?
On fuel poverty, given the criticisms by the Secretary of State’s own advisory body and the fact that the number of people in fuel poverty has gone up from 1 million to 4 million, will he give a categorical promise that none of the policies that he has announced will adversely affect those on low incomes—not just the 800,000 whom he mentioned in his statement, but the millions of people on low incomes—and that they will not be forced to pay the bills for the policy that he has announced? Will the bills fall on the private sector, with its big profits, and on those of us who can afford to pay, so that in the end we have a fairer Britain, not just a greener Britain?
The Secretary of State knows that my party does not share the Labour-Tory love-in with the nuclear industry. Is it not true that no new UK nuclear power station has ever been built on time or to budget? Is it not also true that the more that he and his friends cosy up to the nuclear industry, the more likely it is that the renewables industry will not get the support and technological investment that it needs?
On the grid, I welcome what the Secretary of State has said as far as it goes, but how soon will there be flexible access, which has been denied for years, so that people can start to contribute as they have been waiting to do? Are we as a country now committed to the European super-grid? If so, what are we going to do about it?
Two last things, if I may. First, are we going to—
Mr. Speaker, I am grateful.
Are we committed to decarbonising the power sector fully by 2030? And, what will the Government do to help the biofuels industry? Many small businesses have supported it but now believe that it is being regulated out of existence. For example, it has produced fuel from used chip fat and wants to contribute to a new renewables industry, but it has been told that it cannot do that in the future.
The Liberal spokesman asks serious questions that deserve answers. Let me try to answer them as best as I can.
We had discussions with Vestas, but I want to make it clear that it never wanted grants or money to persuade it to stay in this country. The option was obviously considered with the company, but there were two factors in its decision. The first aspect is that it was making turbines for America, where it had a factory. The second aspect is related to the hon. Gentleman’s point about renewables, and is a big issue for everyone in the House. It is about planning—not so much the planning rules, because we are changing them, although unfortunately the Opposition want to reverse that change, but the question whether one can get onshore wind turbines built. Vestas’ speciality is onshore wind, and that requires political persuasion—a hard job for all parts of the House. The job is to persuade people that although onshore wind turbines may be unsightly to some, the bigger threat to the countryside is not wind turbines but climate change. Of course there are areas where wind turbines would be inappropriate, and we have proposals today in our renewable energy strategy about how we can work with local people to site the turbines more sensitively, but they have to go somewhere, and we all need to focus on that necessity.
We are proceeding with the investments via the European Investment Bank, the money will be going out of the door soon—in the autumn, I think—and we are going as fast as we can. If there is an issue about meetings with representatives, I am happy to address it.
On fuel poverty, the hon. Gentleman is right to say that we face a massive challenge. It will be an even bigger challenge in the future. I am happy to work together on the issue, but we need to find all the ways to tackle fuel poverty that we can. Reforming social tariffs is a good start, but if there are other ways we should definitely use them, because given the upward pressures on prices, fuel poverty will be a big challenge over the next decade—and, frankly, beyond that.
The hon. Gentleman and I disagree about nuclear energy. I am not engaged in a love-in with the nuclear industry, but I do think that nuclear energy has an important role to play. On grid access, I said that the new plans would be in place within a year, and that that is how we will speed up the connections, because I did not want the stand-off between the industry and Ofgem to continue.
The super-grid is an interesting idea, but it is expensive. None the less, we are happy to explore it, and we are doing so. I would be happy to talk to the hon. Gentleman separately about some of the other questions that he raised.
I very much welcome the statement, because I think—or at least, I hope, because I have not read the White Paper yet—that it represents a big break from the energy policy of every Government since the time of Gladstone, which has been “Dig it up and burn it.” Latterly, of course, that has included uranium. I hope that we are going to shift away from that territory, but I would welcome a statement by my right hon. Friend about how we will convince the likes of BP, Centrica, Shell and the owners of Scottish Power to reinvest in renewables, because during the recession they seem to have backed off.
I think that it would be over the top for me to claim that this is an historic moment comparable to those associated with Gladstone; I shall settle for a lower level of ambition than that. My hon. Friend raises an important issue, however, about what those energy companies have been doing. The Chancellor’s decision in the Budget to look into support for offshore wind was important, but we then come back to issues such as sorting out planning and grid access. People need to be convinced not just that there is a theoretical financial investment worth making in the UK, but that it will be made on time, that it will start, and that it will not be obstructed by planning rules. That is why it is regrettable that there is not all-party support for our planning reforms.
May I commend the Secretary of State for adopting many of the recommendations on low-carbon economies and fuel poverty made by the Environment, Food and Rural Affairs Committee? In that context, why will the total budget of the Warm Front scheme be reduced in the next financial year? After all, the right hon. Gentleman has put a strong emphasis on improving home energy efficiency for those on low incomes and the Committee has recommended that one way of dealing with the financial deficit is to deny higher-rate taxpayers access to the winter fuel payment.
I do not agree with the proposal that the right hon. Gentleman mentioned in the second part of his question; we need a balance of universal and targeted measures. On the first part of his question, I should say that we have brought forward a lot of the Warm Front spending, and that is one of the reasons why the budget goes down. We always seek to do more on such issues.
I warmly welcome my right hon. Friend’s statement. He is absolutely right to concentrate on the recalibration of the grid and on the makeover of homes in the domestic energy sector, and absolutely right to look fundamentally at the reconstitution of Ofgem’s responsibility for renewable energy. In parallel with those moves, will he talk to his colleagues in other Departments to ensure that we have the necessary skills, training and work force equipment so that the new low-carbon economy that his moves presage can be developed effectively, using the skills of UK workers and technicians?
I am sure that the Secretary of State will accept that some of us have been pressing a whole range of these things on him and his predecessors for a long time. Now I press him again on a specific point. Will he agree that every Department of State will now never rent or buy offices that use hydrofluorocarbons in their air conditioning? Will he accept the Dutch understanding, which is that that is one of the major impacts on global warming? Finally, will he stop the British Government being one of the dirty Governments who have not voted against HFCs and in favour of their being banned in the near future?
I shall quickly pay tribute to the right hon. Gentleman for all his work on a whole range of issues, including this one. I shall take up the matter that he has mentioned with my noble Friend Lord Hunt, who has direct responsibility for such issues. We certainly want to make progress on HFCs as quickly as possible.
I hope that the Secretary of State will take the opportunity to remind the press, as well as the House, that the one comprehensive study on the costs of introducing an ambitious framework of feed-in tariffs has shown that, by 2020, the UK energy account would be £12.5 billion better off as a result of our being able to produce our energy rather than importing it. That, however, depends on the introduction of an ambitious scheme.
I would be grateful if my right hon. Friend came back with a specific answer to the question of percentages. Is he still working to a 2 per cent. contribution of renewable energy from feed-in tariffs? That figure was first set out in the Element Energy report and it was limited to assumptions about a threshold of 50 kW. The Secretary of State was responsible for a hundredfold increase in that. Does the scale of our ambitions now match his original intentions?
We are consulting on those questions. Let me say to my hon. Friend, who is a long-standing campaigner on these issues, that we are talking about two sets of things: the feed-in tariffs and the renewable heat incentive. Both can make a contribution. As I said, there is a consultation and we look forward to hearing his views.
Why did the Secretary of State’s reassuring figures on the impact of these measures on household budgets contradict the figures in his most recent impact statement, which showed that the cost of renewables currently adds 15 per cent. to electricity bills—a figure set to rise to nearly 50 per cent.—and that the increase in gas bills will be 46 per cent.?
The figures are all set out in the documents. As I made clear in my statement, we need to look at the cost of renewables and the benefits of energy efficiency, smart metering and all the other measures that we are implementing as a result of climate change. That is the right way to look at the average impact on bills.
How does my right hon. Friend justify offering the airline industry a virtual exemption from the disciplines that will apply to almost all other industrial sectors? According to projections, by 2050 the rise in aircraft emissions is expected to negate the cuts made in all other industrial sectors. Surely this cuckoo-in-the-nest protection of one highly polluting industry is simply no longer tenable.
I want to make one thing clear. We were the people who pushed for aviation to be included in the EU emissions trading scheme and for a price to be put on aviation. We are raising air passenger duty, and we are the first country in the world to say that by 2050 we will get aviation emissions back to current levels. We are the first to have set a framework for aviation emissions. The truth is that we cannot have equal cuts across the board if we are to do things in the most cost-effective way.
The Secretary of State’s announcement on social tariffs will be of no benefit to those who rely on unregulated fuels, such as oil and liquefied petroleum gas, to heat their homes. What assurance can he give the rural fuel-poor that they will not be penalised to pay for the low-carbon strategy?
There is a whole range of schemes to help the fuel-poor, including in rural areas. There is the carbon emissions reduction target, or CERT, scheme and the new community energy savings programme, or CESP, scheme that my hon. Friend the Minister of State has been taking through this House. We know that there is more to do on fuel poverty, particularly in relation to the rural fuel-poor.
I draw my right hon. Friend’s attention to the Scottish fossil fuel levy fund, which stands at £150 million and is rising almost exponentially. The money can be spent only on the promotion of renewable energy, yet the Scottish National party-controlled Administration in Edinburgh will not draw it down. I ask my right hon. Friend to use all his influence to encourage them to use that money for the purposes for which it has been raised.
I warmly welcome the Secretary of State’s statement and the measures that he has announced. They are a sign that the Government are at last addressing the task of decarbonising Britain with the necessary urgency. In view of the importance of early progress towards what he has set out, does the Secretary of State accept that disentangling the effects of the recession on what will probably be a short-term reduction in emissions from the effects of the measures that he has announced is important to the process of evaluation over the next few years?
The hon. Gentleman has made an important point. He does important work in the Environmental Audit Committee on these questions, and I enjoy talking to him about them. It is true that in meeting our carbon targets we should not rely on what has happened in the economy in the past 18 months or so. That is part of the reason why it is right that we have been ambitious in the numbers that we have set out and why I said that we should over-achieve on our carbon budgets. We also have to tighten the budget when it comes to an ambitious deal at Copenhagen.
I am pleased that my right hon. Friend is recognising the potential contribution of wave and tide technology towards our renewables targets, and I am glad that he has made provision for its support. However, that provision does not account for even 50 per cent. of the £405 million provided in the Budget for renewable energy support. Furthermore, on the face of this statement, it does not take into account the special difficulties faced by the wave and tidal industry at present: there is a zero market for it.
Offshore wind, however, has the double renewables obligation certificates regime, which is fine for such a well established technology. Many severe problems face the wave and tide technology industry, which needs Government help to get it over the hurdles. Can my right hon. Friend be more specific about what he plans to do about that?
My hon. Friend has made an important point. We need to consider how to drive forward marine and tidal technology, including in respect of the ROCs issue, which he raised. As for the £405 million, we are spending the money carefully and will make further announcements in due course.
When will work begin on the first new nuclear station and carbon storage plant identified in the Secretary of State’s statement? If it is not soon, the epitaph of this Government will be that they turned the lights out and left us all in the dark.
The right hon. Gentleman obviously practised that one in advance. Construction of the new nuclear stations begins in the early part of the next decade because we have to go through the consultation, the strategic siting assessments, and so on. It is a bit rich of the Conservatives to accuse us of being too slow on these questions given that they opposed our proposals right up until the last minute. We want to move forward as fast as possible on carbon capture and storage.
I welcome the statement, particularly in relation to transport. Can my right hon. Friend assure me that spending restrictions will not cut across any of these proposals?
That depends on how quickly the plans move forward. From 2018, the new stations will start to be built. As I said, the companies have plans for about 12 GW, which is more than existing capacity. I do not think that all of it will be built by 2020, but it will probably be built in the early part of the following decade.
My right hon. Friend will appreciate that the Government have set themselves some challenging targets for reducing CO2 emissions. What role will the Climate Change Committee have in monitoring the progress and success of the substantial measures that he has announced?
As Longannet power station is in my constituency, I am obviously keen for it to win the CCS competition, in which Scottish Power is an enthusiastic bidder. We are keen for the decision to be announced as soon as possible. Can the Secretary of State go further than saying that he is enthusiastic for it to move forward as fast as possible and give us an indication of when the result will be announced?
We are engaged in a competition and the invitation to negotiate has gone out to the companies involved, which will put forward their proposals. They will then have to do the engineering and design studies, for which they will receive funding to help them, and we will choose a winner next year.
Will my right hon. Friend join me in congratulating Kingspan on recently winning the Queen’s award for enterprise? As he knows, Kingspan, which has a factory in Glossop, creates high-quality insulation materials. What will he do to promote the use of insulation, both in retrofitting and in new property, before the 2016 zero-carbon new homes limit, not just in the homes of the fuel-poor but in all buildings?
I had the pleasure of attending a Kingspan reception before it got its Queen’s award, and I pay tribute to the work that it does. I did not get a chance to announce in my statement that we are extending the CERT scheme to the end of 2012, which means that on top of the plans that we have already announced, another 1.5 million homes will be insulated. I hope that that will involve the use of a whole range of materials from a whole range of companies.
The Secretary of State may not know of my long-standing support for renewable energy, but he will know of the plethora of planning applications for onshore wind farms in the crowded east midlands. I shall not oppose those on the grounds that they are in my back yard, which they are, but my constituents are concerned about the proximity of some wind turbines to dwellings. Will he please look carefully at the paper by a consultant in sleep disorders that I have sent him, which says that the low-frequency noise resulting from proximity to wind turbines can have an impact on sleep? I would be grateful if he would take account of those concerns, address the issue quickly and give a clever answer.
As the world’s only new nuclear power station is already three years late in its construction and €2 billion over budget, is it not better to concentrate on the wonderful opportunities that we have for marine energy? In this country, we have half the amount of all the potential in Europe for exploiting tidal power. Is not the way forward to concentrate on power sources that are carbon-free, British and eternal? Why is the opportunity vast but the investment puny?
I think that the investment is quite significant. On the delay to the Scandinavian nuclear power station, those involved did not undertake the generic design assessment that we shall undertake in this country. Part of the delay was caused by their not agreeing the design with the regulators in advance. As I said in my statement, we need all the low-carbon technologies. Marine is important and wind is important, but nuclear is also important.
Does the Secretary of State appreciate that scepticism about his policy on wind turbines, fed by the feeling that insufficient account is taken of their cumulative impact on flat landscapes such as the fens, where they can be seen in all directions for miles, would be exacerbated if he granted permission for new fossil fuel power stations fed by imported gas in those same vulnerable landscapes?
May I particularly congratulate my right hon. Friend on his announcement that the Government, not the regulator, will set the grid access regime? Does he agree that our centralised transmission system means that on microgeneration we are years behind countries such as Germany and Denmark? On the feed-in tariff, which he understands is absolutely vital, will he do all that he can to move forward with urgency, for which, of course, we need the full co-operation of National Grid plc?
The Scottish Government have a world-leading target of a 42 per cent. reduction in emissions in anticipation of agreement at Copenhagen. That obviously involves a large increase in renewables. I welcome what the Secretary of State said about grid access, but will he also think about transmission charges and balancing charges, which are a real problem for some renewables generators in Scotland? Any help that he can give us in prising the fossil fuel levy from the Treasury would be very welcome.
I do not want to get involved in an argument between the Treasury and the Scottish Government, as I might come off worse. We will consider the point that the hon. Gentleman raises. Grid access is a very important in every respect. Separately from my decisions, Ofgem is looking at the rates that will be set for the fifth round of grid access charges. I hope that that may help on the issue that he raises.
I thank the Secretary of State for his statement and welcome many of the commitments made in it, although some of us are not persuaded on the cost or contribution of nuclear in this context. The test will be in the detail of delivery. Does he recognise that there are eight different Administrations in these islands who have different interests and involvements in energy, renewable energy, conservation measures and fuel poverty, and that he will therefore need to co-ordinate all those Administrations, possibly through the British-Irish Council, to ensure that these islands become a positive and strong centre for renewable energy?
In developing these policies, what account has the Secretary of State taken of two recent but rather unexpected pieces of scientific evidence? One is the Hadley Centre’s series of global temperatures, which is one of the four series used by the intergovernmental panel on climate change, and which shows cooling since 1998. More recently, the American series developed by NASA, which uses measurements from satellites in space and is thought to be the most accurate of all, shows global cooling over the past 30 years.
I was not aware of the second piece of evidence that the hon. Gentleman mentioned. On the first piece of evidence and more generally, one problem is that the results of studies taking 1998 as a starting point are very adversely affected by the impact of El Niño, which caused a significant amount of global warming. Therefore, it may look as though there has been overall cooling since 1998, but the evidence over a longer period of two decades that I have seen and have been advised on suggests that climate change is getting worse, not better.
Does my right hon. Friend recall that in the 1980s this country was the world leader in the development of clean coal technology via the fluidised bed plant at Grimethorpe colliery in my constituency—until the Thatcher Government pulled the plug on its funding? Does he agree that Yorkshire again has a leading role to play, this time not just in the development of clean coal technology but in the development of carbon capture and storage?
I agree with my hon. Friend. I know that the hon. Member for Tunbridge Wells (Greg Clark) was not in the Conservative party in those days—he was in a different political party—but mistakes were made. There are imaginative proposals from Yorkshire Forward about these matters, as well as from a number of other regions of our country. I hope that they can benefit from our proposals on carbon capture and storage.
I am sure that everyone will welcome the Secretary of State’s announcement of a definite day—1 April 2010—for the introduction of feed-in tariffs. For those companies and individuals that are producing renewable energy with the benefit of the ROC system, will there be an opportunity to change to a feed-in system if that is more appropriate?
What assessment has the Secretary of State made of the environmental impact of uranium mining, the energy usage in refining uranium and the long-term costs of storage and clean-up after nuclear power stations have run over their time?
My hon. Friend asks an important question. On the first part, we are convinced that the carbon gains from nuclear power far outweigh the costs that he was talking about. On the second part, waste and clean-up are a big legacy issue in Britain. That is why we passed legislation to place the responsibility for those costs on the private sector.
The Secretary of State said that cuts in emissions in agriculture would be made possible by new commitments on farming. Can he tell the House how he expects the agriculture industry to face those challenges? Surely it is important that we do not challenge the profitability and sustainability of farming throughout the UK.
The hon. Gentleman is completely right. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs will want to work with farming communities across the UK on how that can be done. Innovative methods have been produced by a range of farmers across our country, and we will want to do this sensitively.
I welcome the statement, and particularly the fact that households will now be incentivised. The idea of spreading the cost of energy-saving equipment in the home is excellent.
May I come back to the issue of social tariffs? Hundreds of thousands of rural households cannot benefit from social tariffs for their heating. Can the Secretary of State assure me that, in the legislation that he is proposing, rural households and particularly the oil companies that supply them, which are currently making billions in profits, will be part of a social tariff for rural communities?
I very much welcome the recommitment to both renewable and nuclear power as part of the trinity that my right hon. Friend described. He has answered the very important question about developing a skills base for the future, but we also need a UK supply base for these exciting developments. Will he ensure that that happens and work with local assemblies and local authorities so that we get a proper UK supply base for the future?
In welcoming his excellent statement, may I ask my right hon. Friend the following? Will he examine how the large energy and engineering companies and vehicle manufacturers can partner smaller would-be developers, which are sometimes in the academic world and sometimes just small venture companies, to ensure that we maximise the national advantage to jobs and so on and get the maximum commercial advantage out of the exciting revolution that he proposes?
I am glad that my hon. Friend raises that point, because there are proposals in the low-carbon industrial strategy about how Government can work better on electric vehicles. I believe that an office is being set up to tackle the matter in the Department of my right hon. Friend the Minister for Business, Innovation and Skills. We need to bring together the incentives, the charging infrastructure and the huge opportunities in the UK for the production of such vehicles.
I warmly congratulate my right hon. Friend on his excellent statement. He will know that the Severn is designated a Natura 2000 site by the European Union. Given his announcement of the publication today of the shortlist of tidal proposals, can he advise the House of the progress that has been made in identifying the alternative ecosystems that we would have to provide under the Natura 2000 provisions in order to proceed with de-designation?
My hon. Friend speaks with great authority on these matters. My understanding is that we have now published the shortlist, and that the process that will now take place will include an examination of all the different aspects, including the environmental pros and cons for climate change and local environmental habitats. I am sure that that will be taken into account.
Order. Before I take points of order, given my exhortations about brevity I would like very warmly to thank hon. and right hon. Members from the Back Benches, and those speaking from the Front Benches, for the fact that they have taken heed of them. Aside from the Front Benchers, no fewer than 33 hon. and right hon. Members spoke from the Back Benches. It shows what can be done.