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Oral Answers to Questions

Volume 512: debated on Thursday 1 July 2010

Energy and Climate Change

The Secretary of State was asked—

Energy-from-Waste Incinerators

We support modern energy generation from waste where local communities want it and where it makes good environmental sense. It is the responsibility of local authority managers and planners, and the local authorities themselves of course, to decide on the best waste management arrangements in their areas. Recognising the concern that incineration can raise, the Government are committed to a huge expansion in energy from waste using anaerobic digestion, and we are taking steps to drive progress and greater ambition in that area. In Germany, for example, combustion recovery energy-from-waste plants provide 7.5% of renewable energy.

I thank my right hon. Friend for that answer. In light of the policy, does he understand the concerns of my constituents in Shepshed, who are facing the building of an incinerator at Newhurst quarry, which is both a site of special scientific interest and on the edge of the national forest, as well as another possible incinerator not 6 miles away? Will he encourage local authorities seriously to pursue alternative waste management strategies?

I am grateful to my hon. Friend for her question. The latest scientific evidence on the health effects of modern municipal waste incinerators—this might be reassuring for her constituents—was reviewed independently by the Health Protection Agency. Its report, published in September 2009, concluded that although it is not possible to rule out adverse health effects completely, any potential damage from modern, well-run and regulated incinerators is likely to be so small as to be undetectable.

I commend to the Secretary of State the report on energy-from-waste issues by the New Local Government Network, which I had a hand in writing a couple of years ago. In particular, will he consider ameliorating some of the concerns that residents can have about incinerators, even the new generation incinerators? Although, as he says, they can be quite successful, local people get very concerned about them. Given the controversies that can arise, giving back to local residents the proceeds from the sale of some of the energy generated could make them slightly more palatable.

That is certainly an interesting model. It has been tried with other schemes, such as with wind turbines. I know of a wind farm in the highlands where that was the case. It certainly helps to get local support for particular schemes. However, fundamentally it has to be a local decision for the local authority. Local authorities know very well that we want to recycle first before going through to waste and energy recovery, but very high rates of recycling and energy from waste can co-exist. In the Netherlands, for example, there is a 65% recycling rate with 33% energy from waste. Local authorities must make their own decisions on this, but if they get the waste hierarchy right they can get the whole mix right.

Nuclear Power

2. What plans he has for the development of nuclear power in the UK.

The Secretary of State for Energy and Climate Change (Chris Huhne): The Government are committed to removing any unnecessary obstacles and allowing the construction of new nuclear power stations to contribute to our energy security and climate change goals, provided that they receive no public subsidy. The Government will complete the drafting of the nuclear national policy statement, which will be put before Parliament for ratification as soon as possible. The Office for Nuclear Development continues. The Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark), has announced a new streamlined system to replace the Infrastructure Planning Commission. We will publish an updated timetable for the production of all national policy statements, including the energy national policy statements, later in the summer. On new public subsidies, the former and new Chief Secretaries to the Treasury have pointed out that there is no money left. (4934)

The Secretary of State has referred to nuclear power and nuclear energy as a tried, tested and failed source of energy with huge costs and huge risks. That is in stark contrast to the policy of the Tory Government. Given this huge conflict in policies within the coalition, will the Secretary of State tell the House what impact those differences will have on the future energy requirements of the UK and, in particular, on the development of new nuclear plants?

The hon. Gentleman knows that it was precisely because there were very clear differences between the Conservative part of the coalition and the Liberal Democrat part of the coalition that we dealt with that as one of the key issues—we reached agreement on how we would treat it—in the first coalition agreement. We set out very clearly that there will be a framework in which there will be no public subsidy for nuclear, but that if investors come forward with proposals they will without any doubt be able to get them through the House of Commons, as there is a majority on the hon. Gentleman’s side of the House in favour of nuclear power, and the Conservative party is in favour of nuclear power.

I must say that the hon. Gentleman does a slight injustice to my personal position, which has been very clear. As an economist, I am sceptical about the economics of nuclear power, but I recognise that it is entirely up to investors to make that decision. If there is no public subsidy and if investors think that it is worth taking the risk, as they increasingly do, looking forward to rising oil and gas prices and a rising carbon price, they will take those decisions.

I am sorry, but I must tell the House that progress is simply too slow. We need snappier questions and snappier answers.

Will my right hon. Friend reassure the House that he will not be put off building nuclear power stations by exaggerated fears of the dangers of disposing of nuclear waste in one or two sites, especially as those who promote those fears seem to have no doubts about the problems of sequestering CO2 from carbon storage and capture in thousands of sites for thousands of years?

My right hon. Friend makes a very good point about the importance of continuing the Government’s efforts to deal with the legacy of nuclear waste and decommissioning as a reassurance to those involved in new nuclear build that the problem will be dealt with properly. The Government have that very much in hand.

Can the Secretary of State explain why it was right to give a grant to Nissan to make electric cars—a proposal we support—but wrong to provide a commercial loan to help a British company, Sheffield Forgemasters, to be at the centre of the nuclear supply chain, particularly in light of the admission by the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), that £110 million would have come back to the Government from that loan and that the Government would have got extra money if the company had made a profit?

The right hon. Gentleman knows that the loan to Sheffield Forgemasters was not a commercial loan. If it had been, it would have been arranged through the banks and not the Government. It was precisely because of the public subsidy element and the fact that that was not affordable that the Government decided not to proceed with it.

The Secretary of State is quite wrong about this, because the money was set aside from the strategic investment fund. A process was gone through at the Department for Business, Innovation and Skills about whether the loan would give value for money, and the Industrial Development Advisory Board concluded that it would be. Is not the truth that we have a combination of the short-sightedness of the Conservative party, which sees no role for Government in creating the green industries of the future, and the prejudices of the right hon. Gentleman against nuclear power?

I assure the right hon. Gentleman that my prejudices, whether they exist or not other than in his imagination, did not enter into this decision. It was simply unaffordable in the context of the fiscal legacy that he and his friends left this House. We have it on no less an authority than his colleague the former Chief Secretary to the Treasury that there is no money left.

Wind Farms

3. What plans he has to take account of local public opinion in determining the location of onshore wind farms. (4935)

We want communities to benefit directly from any wind farms that they host. That is why we will allow councils to keep the additional business rates paid by wind farms and support communities in having a stake in appropriately sited renewable energy projects such as wind farms.

I thank the Minister for that reply. Is he aware of the proposal to build a wind farm near to Stoke by Clare in my constituency, which is in the area of the country that was most often painted by John Constable? What powers will local people have to decide whether that would be appropriate?

I am very much aware of that proposal because my hon. Friend has been so assiduous in promoting the concerns of his constituents. We are very keen to ensure that such developments have local support. We want to see more local community partnerships in this area and more financial benefit going to those communities. Of course, planning decisions should take account of environmental concerns as well.

The Secretary of State has mentioned the coalition Government’s new streamlined planning policy. Does that include, in relation to wind power and large wind farms, a Welsh dimension? Will the Welsh Assembly Government be consulted on it and will there be Welsh representation on the new planning unit?

We have had discussions with members of the Welsh Assembly Government and we are keen to find a way of continuing to make key infrastructure decisions within the Department of Energy and Climate Change, but of course we understand the desire of local communities in Wales to have their voices fully heard.

In addition to considering the opinions of the public and residents regarding the location of wind farms, does the Minister plan to give any guidance to local councils on how close to private homes such wind farms may be built?

We have looked at that issue. It seems rather peculiar to set a minimum distance for a wind farm but not for a nuclear power station. We need sensible and sound national policy guidance that enables local councils to make the appropriate decisions, but we will continue to look at all the environmental issues relating to the applications.

The Conservative manifesto said that 15% of energy should come from renewable sources such as wind. The Secretary of State said that the proportion should be 40%. Who won?

The right hon. Lady is very much aware that we have a legally binding requirement from the EU that renewable sources must supply 15% of our total energy needs by 2020. The former Labour Government set a target for achieving that, whereas we are working out how to deliver it—something that they signally failed to do—in order to make sure that we have a robust policy that stands the test of time.

So the Tories won again. In our manifesto, we said that every council should have a local target to help meet the national target, which was indeed 15%. The Liberal Democrats agreed with that. Is that now the Government’s policy, or have the Tories won again? Will Liberal Democrat and Tory councils still be saying, “Not in my back yard”?

The right hon. Lady fails to understand how the coalition works. We have—[Interruption.] We have identified ways to work very constructively together. We are absolutely committed to the principle of localism, which means allowing local people, communities and councils to decide on the issues that affect them most. That lies at the heart of our approach, but we are working out how to deliver on our policies—something that she significantly failed to do in government. It is fine to have ambitious targets, but without the real road map for 2020—and way beyond, to 2050—that we are putting in place, there was no hope of delivering on her high ambitions.

Energy Supply Security

The coalition agreement set out that we will reform energy markets to deliver security of supply and investment in low-carbon energy, and to ensure fair competition, including a review of the role of Ofgem. We will instruct Ofgem to establish a security guarantee of energy supplies, and we will give an annual energy statement to Parliament to set strategic energy policy and guide investment.

In addition, we are bringing forward a green deal as part of the key legislation for the first Session. That will help to close the gap between energy demand and supply in the cheapest way possible, through energy-saving measures.

Actually, I am a chemical engineer. I believe that engineers should be taken into account when energy security is under consideration. Would my right hon. Friend consider appointing a Government chief engineer to feed into the thinking process?

I have enormous respect for engineers. There are an awful lot of them in my constituency, which is a very manufacturing constituency. Therefore, I think and hope that the country will go on providing greater status to engineers than has often been the case in the past. I am afraid that the question of whether the Government should appoint a chief engineer is above my pay grade, but perhaps my hon. Friend would like to raise it at Prime Minister’s questions.

The UK’s energy import dependency will increase over the next 10 or 20 years, at a time when global demand for energy could increase by 40% over 10 or so years. Given that, what plans are there to reorganise the machinery of government, so that DECC, the Foreign Office, the Ministry of Defence and other agencies can get a better assessment and grip of the geopolitical risks that the UK faces?

I am very grateful for that highly intelligent question which, given his interest in this area, is what I would expect from the right hon. Gentleman. The National Security Council is explicitly charged with the co-ordination of energy security. That will go across Government: it will not be confined to my Department, but will include the Foreign Office and other interested Departments.

The right hon. Gentleman is absolutely right, in that the figures show that, on the worst possible projections, our energy import dependence may well rise from 27% to over half in the space of just 10 years. This is a really key issue, which we need to address.

Green Jobs

5. What discussions he has had with ministerial colleagues on increasing the number of green jobs in the economy. (4938)

The move to a low-carbon and eco-friendly economy is a key priority for the coalition Government. Issues relating to increasing the number of green jobs in the economy were discussed when I met my right hon. Friend the Secretary of State for Business, Innovation and Skills in June, recently in the context of low-emission vehicles when I met the Secretary of State for Transport, and at the regional Cabinet on Tuesday.

I am grateful for the answer. North-east England and in particular the Tees valley have major opportunities to develop green jobs and approaches to energy generation that could make a significant contribution to the national economy. That would be further boosted if the Government stood by the Lib-Dem election promise of £400 million-worth of investment in former shipyards to create those green jobs. Can he please tell me what commitment there is to support the development of demonstration activities such as carbon capture and storage, and to the investment promised by the Lib-Dems but omitted from the coalition’s programme for government?

Let me make it clear that we continue to be committed to carbon capture and storage, and the four demonstration projects are going ahead. It is a key part of our energy strategy for the future, because it is the swing form of electricity generation. If we have intermittent wind and nuclear comes on stream if investors make those decisions, which because of the economics will be running at full tilt, gas and coal carbon capture and storage will be the key elements. That is a clear commitment—I hope—across the House.

We are also looking at the provision through the ports competition scheme of facilities for offshore wind. I was particularly impressed when I recently visited the All Energy conference in Aberdeen and talked, for example, to Burntisland Fabrications about the way in which it has converted from oil and gas to offshore wind.

One of the projects in my constituency which has a great deal of potential to create green jobs is the wave hub project in Hayle. One of the obstacles to taking that forward is the lack of a strategic environmental assessment. Under the previous Government, the Department was slow to look at this issue. Is the Secretary of State willing to have conversations with officials about how to speed things up?

I am happy for my hon. Friend to write with the details. We will certainly do whatever we can to speed up the project. Wave is a key new technology which can provide us not only with our renewable energy needs but give the UK a real comparative advantage.

Given that it has been admitted in a written answer that the coalition has no target for green jobs, would the Secretary of State like to borrow ours? It was 1.2 million by 2015.

I welcome the hon. Lady to her new role and I am glad to see that she is getting stuck in. I thought the whole point about new Labour was that it believed in a market economy. The last sort of organisation that set targets for jobs sector by sector was the Soviet Union’s Gosplan, and we all know what happened to that.

Carbon Dioxide Emissions

6. What recent estimate he has made of the likely cost to the public purse of the implementation of the Government’s commitment to reduce the level of carbon dioxide emissions by 10% in the next 12 months. (4939)

The target will be met at no overall cost to the public purse. Where savings cannot be made through no-cost measures and behavioural change, Departments will be responsible for finding any additional investment in their existing budgets to deliver the Government’s commitment, or using innovative shared saving contracts or similar energy service company—ESCO— arrangements. Showing real leadership in this area is an important part of our plan to be the greenest Government ever and will help us to deliver savings from reduced energy bills, but as I have said, it is only the first step in a long-term strategy to reduce Government emissions and increase efficiency across the whole public sector.

Order. I am sorry, but these ministerial answers are simply too long. Something has got to be done for next time. Let us get it right.

In opposition, the coalition parties demanded a 10% reduction year on year in CO2 emissions across the public sector. In government, they now pledge these reductions only across the central Government estate. Why the retreat?

The hon. Gentleman is slightly misinformed as to what we promised. We said that there was a clear need for Government to take responsibility for getting their own house in order, which the previous Administration signally failed to do in 13 years. We are committed to 10% in the coming year, but we see it as part of a much more ambitious longer-term strategy across the public sector.

Green Deal

7. What steps he plans to take to introduce the proposed green deal on domestic energy efficiency; and if he will make a statement. (4941)

In the emergency Budget the coalition Government confirmed their intention to establish a green deal for all households and for business. The green deal will enable individuals to invest in home energy-efficiency improvements that can pay for themselves from the savings in energy bills, without any up-front costs and without their incurring any form of personal debt or charge on their property. We have committed in the Queen’s speech to legislate in a first Session energy Bill for finance tied to the energy meter, which should allow for the full green deal to be available by 2012. Only yesterday the Government announced that we are extending the carbon emissions reduction target through to the end of 2012.

I thank my hon. Friend for that very full answer. In my constituency many households are living in fuel poverty. Will my hon. Friend explain exactly how households will be able directly to access the grant to help tackle fuel poverty and reduce fuel bills?

The green deal is not a grant; it is designed to be repaid through the savings made on bills over 25 years. The beauty of the green deal is that, unlike any previous proposal, it will be totally unrelated to the household’s ability to pay. It will simply be repaid, regardless of the credit scoring or wealth status of the individuals in the household. Of course, other measures will always be needed to make sure that fuel-vulnerable and hard-to-treat properties have direct financial support.

Is the Minister aware that another source of useful efficiency savings in the domestic sector would be ground source heat pumps, as part of the renewables initiative? I see the Secretary of State nodding. Through his Minister, I can tell him that a company in my constituency which is very big in this area has jobs that it can create and orders in hand that it is ready to commit to. It seeks a meeting with the Secretary of State; it is not for the Minister to reply on that, but I would be grateful if the matter could be taken seriously in the Department.

We are very supportive of new technology, and I am well aware of the potential of ground source heat pumps. We want to enable a whole universe of new technologies to be part of the renewables solution. If the hon. Gentleman’s constituents would like to meet me, I would be very happy to do so.

Oil Fabrication Construction Sites

8. What recent assessment he has made of the potential for former onshore oil fabrication construction sites to be used for construction activity relating to sustainable forms of energy; and if he will make a statement. (4942)

Many UK sites have potential for development in areas such as offshore wind, as indicated in the “UK Offshore Wind Ports Prospectus”, and for wave and tidal energy. Many of them are in Scotland, where the Scottish Government are currently taking a strategic approach to the sector.

In thanking my right hon. Friend for that reply I draw his attention to the great potential offered by the Nigg site, which is built around the largest dry dock in Europe, and, on the west coast of my constituency, the Kishorn site, which successfully contributed to massive North sea oil platform construction in days gone by. Will my right hon. Friend work as closely as possible with the Scottish Government, the Highland council and Highlands and Islands Enterprise to promote internationally the interests of those two sites?

I am very pleased to reassure my right hon. Friend that my officials have already advised me about the potential for Kishorn and Nigg, and we will be working closely with all the relevant authorities to try to create the maximum number of jobs and make sure that their potential is realised to the full.

I welcome the Secretary of State’s announcement. He was scornful about Gosplan a few moments ago, but there is a role for Government, as the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) indicated. The Secretary of State really cannot write Government out of government.

The right hon. Gentleman knows perfectly well that I am not one—nor are any of my ministerial colleagues—to write Government out of government. There is an enormous difference between the Government’s facilitating and setting a framework for the development of decisions made principally by market actors and what the hon. Member for Islington South and Finsbury (Emily Thornberry) was suggesting, which was a sectoral jobs target. I have not seen that in any economy in western Europe or any developed market economy; it has been seen only in the former plan economies.

Electricity Transmission Lines

9. What his policy is on the construction of electricity transmission lines in designated landscapes; and if he will make a statement. (4943)

It is for transmission network companies to put forward proposals for new transmission lines. The regulatory price control and planning processes then determine the appropriate balance between the need, costs and impacts of transmission lines in each location. Each case has to be considered on its merits.

I thank my hon. Friend for his reply. Is he aware that the people of Wells in particular and Somerset generally—some 26,000 people—are hugely dependent on tourism? That is inextricably linked with the environment, the landscape and people’s health, and even though a large area of my constituency has the potential to become the 17th world heritage site, potential is not enough in itself to protect people from the environmental vandalism, attendant health risks and other matters that come with placing 152-ft pylons across the landscape.

My hon. Friend made those points very effectively in her eloquent maiden speech yesterday, on which I congratulate her. I know that she and her constituents will make active representations to National Grid during its consultation process. That is absolutely the right way for her to take her concerns forward, and I urge her to take every opportunity to do so.

Have the Tory-Lib Dem Front-Bench team detected that their lofty ideals are being frustrated at every turn by every Government Back Bencher who is frustrating the development of a real green policy by constantly putting forward objections to any proposals for development in their constituency? How will the Minister solve that problem?

It is called local democracy, to which we are absolutely committed. If people have concerns about 150-ft pylons going through their communities, they should be able to express them. If people have concerns about new development, they should be allowed to express them. We are trying to ensure a realistic balance between bringing on stream renewable energy sources, which are in the national interest, and allowing communities to express their views.

Carbon Capture and Storage

10. What his plans are for expenditure on the development of carbon capture and storage technology for gas-fired power stations. (4944)

I am grateful to my hon. Friend for his question. The Government will continue public sector investment in carbon capture and storage—CCS—technology for four coal-fired power stations. The Committee on Climate Change has recommended that we give serious consideration to funding at least one gas CCS project as part of that programme, and we are carefully evaluating whether a demonstration project on gas would prove beneficial and add value to the programme.

Will the Minister confirm that the Government are committed to providing the long-term infrastructure investments that will make the Yorkshire and Humber CCS cluster a worldwide success?

My hon. Friend puts his finger on one of the most important issues that the previous Government failed to address. If we are to make a real success of carbon capture and storage, we have to develop the infrastructure of oversized pipelines and encourage clusters of those facilities in certain areas. We have to take a long-term strategic view, and a good deal of work is being done in Yorkshire and Humberside, on which I congratulate all those involved.

Has the Minister had any discussions with the Scottish Government about the development of carbon capture in Scotland, and in particular has he received any representations on the proposed new coal-fired plant at Hunterston?

I had an initial discussion with the First Minister last week, and we are determined to work closely through the respect agenda to ensure that the taking forward of devolved issues is fully within the Scottish Government’s remit. We want clean coal to play an active part in our energy policy, but it must be genuinely clean coal.

Projected Electricity Generation

11. If he will bring forward proposals to increase the surplus of projected electricity generation over demand after 2015. (4945)

It will be important to ensure that the UK has secure electricity supplies and an adequate capacity margin over the course of this decade and into the 2020s. Our programme for government is clear: we will reform energy markets to deliver an appropriate security of supply mechanism. The lights will stay on.

Will the Secretary of State be kind enough to tell the House, how close we are likely to come, on current projections, to having major blackouts throughout the country in the second half of the decade?

We will come forward with a lot more detail on that in the annual energy statement, which the hon. Gentleman will be able to examine for himself, but I assure him, as I said, that the lights will stay on. Inevitably, as new generating capacity comes on stream we will see the margin increase, and as the economy recovers we can expect that margin to shrink. However, he should also bear in mind what is going on with energy saving and, particularly, the development of smart meters and smart grids, whereby in the long run there will be a possibility of, for example, turning off freezers during power peaks, to reduce the need for electricity generation.

I gently encourage the Secretary of State to face the House. I understand the natural inclination, but he must face the House and address the House.

The Secretary of State’s faith in market solutions is touching—like that of all those with great religious fervour. However, can he give an example of anywhere in the world where the market has actually allocated secure energy supplies?

The hon. Gentleman should first be aware of what happens with some of the schemes in the United States—we are looking at them very closely—where there is a forward market in supply. That ensures that distributors have to buy forward supplies, while they can also, for example, buy forward commitments to energy saving, and in that way assure security. However, I would not want him to run away with the idea that I am somehow a market fundamentalist. I merely pointed out to the right hon. Member for Rotherham (Mr MacShane) that there is an enormous difference between setting a good framework as regards this aspect of regulation and legislation and making micro-management decisions of the kind that the hon. Member for Islington South and Finsbury (Emily Thornberry) seems to want us to make.

New Nuclear Power Stations

12. What recent representations he has received on his plans to ensure that new nuclear power stations receive no public subsidy. (4946)

I am grateful to my hon. Friend for his question. The coalition agreement is clear that there will be no public subsidy for new nuclear power stations—a view that I have communicated to a variety of stakeholders with a diverse range of views. In particular, I have received strong representations from the Chief Secretary to the Treasury.

I thank my right hon. Friend for his answer. Does he agree that while the costs of generating nuclear power may well be competitive, there is still considerable work to be done to ensure that the costs—as yet unknown—of decommissioning and waste disposal are included in any calculations and do not end up posing a significant risk to future taxpayers?

My hon. Friend is absolutely right to highlight that matter. The effect of failing to take account of these costs can be seen very dramatically in my own Department’s budget for dealing with the nuclear legacy of the very many years when we failed to make adequate provision for waste and decommissioning. It is precisely because of those warnings that we in the ministerial team are absolutely determined that that will not happen again.

The Secretary of State implied that my hon. Friend the Member for Wansbeck (Ian Lavery) and the shadow Secretary of State were in some way misleading—in fact, I think he referred to fantasy—in their suggestions about his prejudice against nuclear power. Does he recall his own representation of 5 November 2007, in which he said,

“Ministers must stop the side-show of new nuclear power stations now”?

Can he reflect on that representation and see whether he is going to take it on board?

The hon. Gentleman knows very well that my line on new nuclear has always been based on scepticism about the economics. As he knows, no nuclear power station has been built on commercial terms anywhere in the world since Three Mile Island. That may be about to change because of the framework of prospective oil and gas prices and carbon prices. It is up to investors to take those decisions.

Carbon Emissions (EU Target)

13. What his Department’s priorities are for the implementation of the EU’s carbon emissions reduction target of 30% by 2020. (4947)

The Government believe that despite the current challenging outlook for a binding global agreement on carbon emissions, the EU should be taking a more ambitious leadership role. We will be urging our European partners to agree an early EU move to the 30% reduction target. That would put Europe firmly on a path to a low-carbon economy, stimulating innovation and efficiency and meeting the twin challenges of climate change and energy security. The details of how the EU would implement a higher target are yet to be agreed.

I thank the Minister for that answer and for the leadership that the Government are giving on this issue. Can he give an indication of the realistic possibility of the EU’s actually hitting that target; and are other countries as committed to it as we are in this country?

I think it is fair to say that we are taking a leadership role. There are concerns among other partners about moving to a more ambitious target, but we will be playing a very positive and constructive role in Europe, and we hope to persuade them of our strong argument.

May I urge the Minister to come to Stoke-on-Trent in the near future to talk to the British Ceramics Confederation and pottery businesses to see how they are implementing their carbon reductions while trying to remain competitive in an increasingly globalised market?

I would be very happy to come to Stoke-on-Trent. It is important that as well as having an ambitious target we understand its impact, particularly on manufacturing industry and efficiency in a global marketplace.

One of the most important European initiatives for our future energy supply and the efficient implementation of renewable energy is the European super-grid. The previous Labour Government equivocated over the super-grid; what is the view of this Government?

We can see the absolute merits of a super-grid, but we do not yet have a fully evolved policy. I am sure the hon. Gentleman will play a key role in helping that policy emerge.

Carbon Pricing

14. What recent discussions he has had with his EU counterparts on carbon pricing; and if he will make a statement. (4948)

The current carbon price is simply not providing a sufficient incentive for low-carbon UK investment. That is one of the reasons why we are pushing for the EU to increase its target for cutting emissions to a 30% reduction by 2020. My right hon. Friend the Secretary of State discussed that when he met our European counterparts at the Environment Council on 11 June.

I thank the Minister for that answer, but is not the truth that the floor in the carbon price is a way of giving a hidden subsidy to new nuclear power stations? Given the difficulties that already exist in the emissions trading scheme with the free permits being given to heavy industry, how will he convince European partners to go along with the idea? If he cannot, is it the Government’s intention to introduce a carbon floor price in the UK alone?

My right hon. Friend the Chancellor of the Exchequer announced in the Budget that we would publish plans for a UK carbon floor price in the autumn. It is a key part of our plans for a transition to a low-carbon economy. We see that transition as an advantage and a competitive economic opportunity for the UK, but critical to that is providing a long-term strategic framework for industry to invest with confidence and certainty.

Energy Supply (Security)

I say to the Secretary of State very gently that that does sometimes happen at Question Time. The fact that something has been raised once has never inhibited several colleagues from wanting to raise it over and over again—nothing new there.

Excuse my reluctance to be repetitive, Mr Speaker.

We are determined to increase the UK’s security of supply, for precisely the reasons that I gave in answer to the hon. Member for Stratford-on-Avon (Nadhim Zahawi) earlier. Our energy import dependence will increase dramatically over the next 10 years as oil and gas production from the North sea gradually diminishes. We have to work on our renewables and on energy saving to try to ensure that we are energy-secure. One element of that is not just physical security but resilience against price shock.

I am grateful to the Secretary of State for reminding me of his answer, but I shall ask him another question. Does he have any plans to support the development of greater gas storage in Britain, both as a means of enhanced energy security and as a method of developing our gas wholesale market?

My hon. Friend will perhaps be reassured to know that yes, plans are under way to increase gas storage. That is likely to continue. There needs to be greater gas storage, and that will help to provide us with greater security of supply.

Nuclear Power

The Government are committed to removing any unnecessary obstacles and allowing the construction of new nuclear power stations to contribute to our energy security and climate change goals, provided that they receive no public subsidy.

Two weeks after the decision was made, will the Secretary of State finally tell the people of Sheffield whether the decision on Sheffield Forgemasters was taken because of that coalition policy of no public subsidy? Yes or no?

I can assure the hon. Lady that the decision on Sheffield Forgemasters was taken because the particular project concerned was simply not affordable. I refer her to the earlier answer that I gave, stating that not just the current Chief Secretary to the Treasury but the former one has assured us that there is no money left.

Wave/Tidal Energy

19. What steps he is taking to encourage the development of wave and tidal energy technology in the UK. (4954)

We are committed to harnessing the tremendous benefits that a successful wave and tidal renewable energy sector can bring to the UK and are considering specific measures, such as marine energy parks, to achieve that.

Will the Minister also take steps to ensure that, when it comes to wave and tidal power, Britain leads the world in that technology, and that we do not allow the technology and the jobs to go overseas?

The hon. Gentleman makes a key point. Under the last Government, 95% of the infrastructure and turbines for one of the largest offshore wind projects was built abroad. We cannot allow that to happen, and we have a policy of marine parks to ensure that that does not happen with this nascent, potentially world-beating British technology.

Will the Minister reaffirm the commitment by his Government to the Severn estuary tidal project to make genuine use of the tidal power there? Can he give a progress statement on the consultation to date?

I understand the hon. Lady’s interest in this potentially important project. Ministers are currently considering the evidence from the two-year cross-Government Severn tidal power feasibility study with a view to deciding whether the Government can support a tidal power scheme on the Severn estuary, and if so, on what terms. I cannot say anything today, but we expect to make an announcement shortly.

Topical Questions

That is a very reassuring answer—[Laughter.] Every family in this country is paying extra on its electricity bill to subsidise non-nuclear wind and solar power. Will the Secretary of State ensure that in future each electricity bill spells out in terms the extent of the extra money that that household has to pay to meet this Government’s policies in relation to the renewables obligation?

There will be measures in the energy Bill that we will bring forward later in this Session to improve the transparency of electricity and gas bills. As part of the annual energy statement, we are also committed to ensuring that there is complete transparency about the levels of cross-subsidy for all forms of activity in which the Department is involved.

May I say to the Secretary of State that the free-market philosophy that he increasingly embraces has led to the announcement this week of the abolition of the regional development agencies? There is real dismay across the country about that. How does he think the abolition will help to promote balanced economic growth and green jobs?

The right hon. Gentleman knows that we are very committed to ensuring that there is growth across the UK, especially in those regions where unemployment is high. That has been a focus of our activity. I do not think that the regional development agencies in their entirety are necessarily the best way of ensuring that, but we are going ahead with local economic partnerships and a range of other measures to ensure jobs and growth in the regions.

T4. The Environment Agency has just failed to make a determination on a much delayed application for a 100 KW hydroelectric scheme on the weir at Avoncliff in my constituency. Will the Secretary of State meet me to discuss the energy potential of the River Avon and how we can prevent the Environment Agency from being an obstacle to making progress in the future? (4961)

I am happy to meet my hon. Friend to discuss those issues. The Environment Agency has a statutory responsibility that it has to discharge in that case and I would not want to comment on its role.

T2. The Minister will, I hope, be aware that there is real uncertainty and nervousness in the energy industry about the decision to scrap the Infrastructure Planning Commission, which is based in Bristol. What reassurances can he give me that whatever replaces that body will not delay the approval of infrastructure projects and will provide certainty to the industry so that it can plan ahead? (4958)

I hope the hon. Lady will have seen the reaction from the major energy companies this week to the statement made by the Minister of State, Department for Communities and Local Government, my right hon. Friend the Member for Tunbridge Wells (Greg Clark). It showed that there is absolute clarity. There will not be a delay and there will be a strict time scale for making decisions in these matters. However, we are determined to introduce greater democratic accountability and to ensure that the risk therefore of judicial review can be reduced.

T5. The loft insulation programme is most welcome from the point of view of saving money for households and for the environmental benefit. However, can the Secretary of State assure the House that there will be a particular focus on the vulnerable and those most susceptible to fuel poverty? (4962)

I am grateful to my hon. Friend for his question. Loft insulation is key. It has a very short payback period—less than a year in many cases—and he is absolutely right that there must be a focus, particularly on the fuel-poor. One of the great difficulties in this area is that the energy use among the people in the bottom decile of income distribution is enormously varied—it varies by a factor of six—which makes it particularly difficult to reach them. Insulation and energy-efficiency measures are key to dealing with that problem.

T3. Does the Secretary of State accept one of the main recommendations of the independent Committee on Climate Change report this week, which is that the Government need to do more to support the development of electric-powered vehicles? If so, does he not agree that it would be a short-sighted cut were the subsidies for the purchase of such vehicles to be removed in the comprehensive spending review? (4960)

The Government are committed to bringing forward low-emission vehicles. As the hon. Gentleman knows, there is an Office for Low Emission Vehicles, which is run jointly by the Department for Transport, my Department and the Department for Business, Innovation and Skills, and we recently had a meeting on the subject to progress the agenda. He can be assured that we are completely committed to it.

I urge the Minister, when electricity smart meters are in place, to look strongly at insisting that new build houses have solar panel roofs, especially in social housing, which will help to reduce fuel poverty.

We are absolutely determined to move forward rather more quickly on smart metering. The position that we inherited—to roll out smart metering by 2020—was pathetically unambitious, and we are determined to bring it forward by some years. It will bring exactly the benefits that my hon. Friend talks about: encouraging microgeneration, helping with fuel poverty and really helping us to move towards a low-carbon economy.

T7. According to a recent Conservative party report, “Rebuilding Security”, the party advocates “policies designed for hunting” new UK oil reserves as well as offering “the right incentives to explore for and extract the remaining reserves of oil and gas”Does the Minister agree that a moratorium on all new deep-sea offshore drilling is essential, at least until a full investigation into the spill in the gulf of Mexico has been completed? (4965)

I do not agree with the hon. Lady on this issue. We have in place in the North sea the toughest environmental regime in the world. In the light of the tragedy in the gulf of Mexico, we have doubled the number of inspections and increased by half the number of inspectors. We have a very tough regime and we have a national interest in ensuring that we get the best possible return from the natural resources in the North sea.

Drax power station takes an enormous amount of natural material from constituencies such as Thirsk and Malton. It is also a renewable power supply and reduces CO2 emissions. How do the Government think we can increase and encourage expenditure in this exciting form of renewable energy?

I am seeing the chief executive of Drax almost immediately after Question Time today, so I will have the opportunity to explore that further with her. The co-firing of biomass can make an important contribution, but we have to be certain that it is done sustainably. There are questions about the great deal of shipping involved in the transportation of biomass, but it can certainly make a contribution to reducing our carbon emissions.

T8. I am sure the Secretary of State would agree that not only is he responsible for energy but that, as far as climate change goes, he has a duty to drive this policy through every aspect of Government. In that light, can he tell the House how many times this has been an agenda item before the Cabinet? (4966)

The hon. Gentleman is right that this is on the agenda across the Government. As I said earlier, we discussed this at, for example, the regional Cabinet meeting on Tuesday. We discussed the importance of green jobs and the impact that the growth of the green economy is likely to have, including outside the golden area of London and the south-east. That will remain a key focus in the Government’s work.

In my constituency there is a reapplication for a biofuel plant burning palm oil and jatropha. There is great fear that although they are renewable sources of energy, they are not sustainable. Can my hon. Friend please tell me what assessment he will be making of the eligibility of such fuels for renewables obligation certificates, which make such applications possible?

We are looking at the structure of ROCs at the moment. We are absolutely clear that biofuels have a role to play, but it must be sustainable. That point will be at the heart of the way in which we look forward on such issues.

The Minister said earlier that he objected to the idea of 150-foot turbines near villages, so is there a planning rule of thumb emerging, of, say, 1, 2 or 5 km away?

I did not say that I objected to them; I said that local communities had the right to object to them. That goes to the heart of local democracy. What we are saying is that local voices have to be heard in the process, and we are absolutely committed to making that happen. We have not set a rule for how far wind turbines should be from habitation—we share that position with the previous Government—because the one house that they are near could be the house of the person who wants to put them up. Therefore, having a rule would be to take a completely self-defeating approach.

The timber industry is a significant employer in Hexham. All of us support wood biomass, but there is currently a cross-party team, with Members from both the Labour Benches and our own, seeking to change the distorted energy subsidy for wood biomass. Would the ministerial team meet the cross-party team?

We are very clear that wood biomass has a key role to play, particularly in local energy economies, which we want to see developed to encourage a greater link between local communities and the energy that they consume—coppicing, for example, has great biodiversity as well as low-carbon advantages—so I would happily meet my hon. Friend and his team.

Will the Secretary of State confirm that no decision has yet been taken on the location of the headquarters of the proposed green investment bank? That being so, does he agree that Edinburgh would be an ideal location, particularly given what he just said about ensuring that green investment is not focused just in the south-east of England?

The hon. Gentleman knows that Edinburgh is an ideal location for many things, including a number of my hon. Friends. Decisions on the siting of the headquarters are perhaps a little way off, as we are still consulting on the exact shape of the investment bank, but I am sure that we will bear in mind the considerable advantages of his constituency when we come to make that judgment.

Is the Secretary of State aware that some extraordinary technological advances are being made by British private companies? One in particular—Marshall-Tufflex in my constituency—would like to come and see Ministers to show them the advances that it has made that could help with general carbon reduction.

As my hon. Friend knows, I have visited Marshall-Tufflex, which has some interesting and exciting products that could be a great help across the Government estate; indeed, I would be delighted to see the company while in office and in government.

What discussions has the Minister had with his colleagues in relation to oil or gas supplies from the Falkland Islands?

The answer to that is that we have had discussions in Cabinet about the situation in the Falklands and the possibilities, in the longer run, of there being oil and gas, but they are not at the stage where decisions need to be taken. However, no doubt when the time comes an announcement will be made.

Following on from the question by my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke), may I ask the Minister whether any steps are being taken to look into evening out the tariffs for electricity usage by card meter payments and by billing? I believe that there is a differential, so are there any plans to sort that out and make it easier for everyone to pay the same tariff, purely and simply because that would lead to energy conservation?

We have been very concerned indeed about the relatively higher tariffs that people on prepayment meters pay for the electricity and gas that they use. Addressing that will be one of the most significant gains of smart metering. If we look at the experience of Northern Ireland, where smart meters have already been largely rolled out, we see that people on prepayment meters pay less than people on standard tariffs. That is the sort of gain that we want to achieve for people right across the United Kingdom.

Can the ministerial team tell me what their assessment is of the effect of the 25% cut facing universities on research into energy efficiency and environmental research generally?

The hon. Gentleman asks an important question about the likely impact on research and development. We will obviously assess that when we know more fully the shape of what will be happening in the wake of the comprehensive spending review, but tough decisions will have to be taken. As I have said already, the former Chief Secretary to the Treasury told us clearly: there is no money left.