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Topical Questions

Volume 518: debated on Thursday 11 November 2010

Since our last departmental questions, we have launched a consultation on the revised draft national policy statement on energy calling for a surge in investment in new energy. We have worked with colleagues in the Treasury to secure a spending review settlement that allows us to deliver on our key policy objectives, and we have published our departmental business plan setting out how we will honour our commitments in the coalition agreement.

In the past few years, bonuses and other allowances paid to the Minister’s Department and its four quangos have totalled more than £30 million. What action is being taken to reduce these spiralling costs?

My hon. Friend raises an important issue. Targeting payment to specific staff, rather than building it into a general salary, is a more efficient use of public spending. For example, it does not increase long-term costs such as pension entitlement. We are, however, looking closely at such issues. We have already taken measures to tighten controls in areas such as travel, and we have implemented a pay freeze this year and next year for all staff other than those earning less than £21,000. The use of bonuses has been significantly reduced.

Moving from housekeeping to international issues, I note that next week there will be a debate on the Cancun climate change conference, thanks to the hon. Member for Chippenham (Duncan Hames). That debate is very welcome, but until we heard some snippets from the Minister today, it underlined the fact that there has been a deafening silence from the Government in the House about what they want to achieve. We all want a good outcome, and we recognise the challenges, as the Minister said, about legally binding international agreements. Will he tell the House clearly what the Government hope to achieve in the UK, and whether they are planning to make a statement in Government time?

We hope that there will be good progress at Cancun. In contrast to the sentiments expressed earlier, however, I think it is unlikely that we will get a legal agreement. We are certainly one of the most progressive nations, and we are following the example of the previous Government, to whose work on the international climate stage I pay tribute. It is tough but, as the Secretary of State said, there are grounds for optimism that we can make progress on measurement, reporting and verification, on finance architecture and on clarifying the next steps for the United Nations framework convention on climate change to make further progress towards a legally binding agreement. I would be happy to meet the hon. Lady and her team to talk this through in more detail.

T2. I represent a constituency in the Pennines, where it already feels significantly colder than it does here in London. May I ask the Minister to explain what he is doing to ensure that we have adequate gas supplies at times of peak demand? (23167)

My hon. Friend raises a critical issue. We have already started to take action. I have licensed the Saltfleetby facility, which will give us a 15% increase in our gas storage, and the Deborah facility, which, if it gets the final investment decision, will double gas storage in this country. We shall also take steps in the Energy Security and Green Economy Bill this autumn to require greater security of supply from the energy companies.

Following this week’s publication of the “World Energy Outlook” by the International Energy Agency, have the Minister and his Department made any assessment to see whether they agree with the view that we are facing a global glut of gas? Has he also analysed the connect, or disconnect, between that fact and the rising gas prices that our householders and businesses in the UK are facing?

I am grateful to the right hon. Gentleman, who was two of the best of the last batch of Energy Ministers. I had a meeting with the executive director of the International Energy Agency this week to talk about its work and about the energy outlook. We broadly share the analysis that we are moving into a period of widely available and relatively affordable gas, but the danger of that is that it could put off investment in gas development internationally, which could create shortages further down the line.

T3. Over the past couple of years, work has commenced in countries other than the UK on about 60 nuclear power stations, which will provide cheap, economically sustainable energy across the world. Does the Minister agree that this represents an opportunity for our own office for nuclear development, and will his Department support it in its endeavours to secure exports? (23168)

One of the advantages that we have is that, because we do not have a national champion, we have an independent regulator who is robust and understood to be very forceful and effective. We can encourage other countries to look at that as well. The work we are doing across the piece on nuclear decommissioning and development is also critical.

T8. The Minister has acknowledged the importance of private sector investment in the green investment bank. Will he outline to the House what practical steps are being taken to obtain such investment, and does he recognise that the delay in making a detailed statement about the bank’s function and structure is causing uncertainty in the sector, which will frustrate that investment? (23173)

We are not rushing to get this right in a matter of weeks. We are talking at length and in great detail with all the major participants in the City of London, and we have great support—as witnessed by a letter to the Prime Minister from the chairman of the green investment bank commission this week—from the major institutions and investors who know that the important thing is that we get this right. Compared with the speed of the previous Government, we are moving like lightning.

T4. When the previous Government introduced the Climate Change Act 2008, they estimated the costs at £200 billion, which they revised a few months later to £400 billion, or £20,000 per household. What is the latest estimate of fully implementing the Act? Is there any advance on £400 billion? (23169)

These are big figures and it is difficult to get one’s head around them. No new data are available, but I remind my hon. Friend that the cost of not acting is far greater than the cost of prudent early action. Lord Stern estimated that the cost would be between 5% and 10% of GDP. Moreover, this is a huge opportunity for UK plc.

Does the Minister recall that a couple of months ago I raised with him the question of planning applications for the installing of wind turbines close to villages? I asked him if the Department had decided whether the turbines should be 5 km or 2 km away, and I had the impression that he would have a look at it. Has he made his mind up yet?

The hon. Gentleman has raised an important point on which there is strong feeling on both sides of the House. We do not believe that that sort of distance restriction is appropriate, although we know that a different approach is taken in Scotland. We think it important for local communities to own the decisions, which is why we have a localism agenda. We want such developments to have the active buy-in and support of local communities, and we are determined to deliver that.

T5. Can the Minister assure me that he is working closely with his ministerial colleagues in the Department for Communities and Local Government to ensure that their approach to localism in the context of planning does not unreasonably restrict the diversification of farm businesses as they enthusiastically embrace small-scale renewable energy incentives? (23170)

Yes, I can assure my hon. Friend that there is a great deal of cross-departmental working in the coalition. There are plenty of opportunities for farmers, particularly in the sphere of anaerobic digestion, which we consider to be capable of huge expansion.

As scoping work continues in relation to the green investment bank, can Ministers assure us that the bank will be geared to support projects in Northern Ireland? Can they assure us that the mistake involving the renewable obligation certificates regime will not be repeated, and that worthwhile projects will not be precluded because of their cross-border character when that is what makes the most economic and environmental sense?

The hon. Gentleman makes some very good points. I am pleased to tell him that the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry), had an excellent meeting with members of the Northern Irish Government yesterday. We are determined that the whole United Kingdom should be able to share the benefits and the investment involved in the transition to a green, low-carbon economy.

T7. Smart meters have a great potential to benefit both consumers and the national interest in reducing our carbon emissions. What discussions are the Government having with industry and regulators to ensure that the vital spectrum is still available to ensure that the roll-out of smart metering extends to the whole United Kingdom, including difficult-to-reach rural areas? (23172)

My hon. Friend has put his finger on an important point. A number of communication technologies may be appropriate in the context of smart metering. In July my Department, together with Ofgem, published proposals for the establishment of a national smart meter communications organisation. Ofcom is also directly involved, and we are working closely with it to deliver exactly the sort of solution that my hon. Friend wants.

As Ministers are no doubt aware, the Sustainable Livestock Bill will be before the House tomorrow. I appreciate that it is led by the Department for Environment, Food and Rural Affairs at the domestic level, but what is the Minister doing to ensure that the issue is on the agenda at the international climate change talks?

It is a DEFRA issue, and obviously we will be asking our DEFRA colleagues how they think we, when representing the United Kingdom at Cancun, can best present the wider green agenda. However, I will talk to my colleagues in DEFRA, and if the hon. Lady wishes to make particular representations to me, I shall be glad to receive them.

Absolutely. Recovering energy from waste can play a very important part in tackling climate change, improving energy security and creating green jobs. However, given the waste hierarchy, before we use waste for energy we must reduce it, and recover it in ways that have less damaging environmental impacts.

In a number of his earlier, longer answers, the Minister referred to the green deal and the holistic approach that is to be taken. May I ask what discussion he or his officials have had, or plan to have, with the Scottish Executive about how the regimes in Scotland will marry with the green deal?

My officials have had such meetings, and I hope to have meetings myself as we develop the detail of the green deal. It is important that such opportunities are available throughout the country.

What can Ministers say to reassure the House that Government policy will result in the building up of UK industries in renewables and energy efficiency rather than simply our sucking in imports?

That is where skills come in. It is vital that we have the skills, and investment is therefore also vital. That is why the Government are investing in skills, science and innovation and the green investment bank. All three of them received substantial funding in the comprehensive spending review, and they are a key part of the mix. It is vital that we secure green jobs here in the UK and that we build up the supply chain not only for the green economy, but to help rebalance the UK’s manufacturing industry

Given that Longannet power station is now the only bidder left in the carbon capture competition, will the Minister move quickly to make a decision on that, and will he come to my constituency and see the work first hand?

I should be delighted to come to the hon. Gentleman’s constituency. This is potentially one of the most important projects in the country, and I am delighted that the spending review was able to give £1 billion to taking forward carbon capture. That is the greatest single contribution any Government anywhere in the world has made to a single plant, and I very much hope we can make the Longannet project work. I should be very pleased to visit it with the hon. Gentleman.

This country has a liberalised energy market, but the previous Administration failed to persuade some of our European Union colleagues to liberalise their energy markets. What progress is this Government making?

Progress is indeed being made, such as in unbundling and separating the vertical integration of some of the larger European countries. They are also making particular progress in energy security, in terms of the development of gas and electricity connections. That will play a very useful role by greatly enhancing our security in times of international stress and pressure.

In response to a question from my hon. Friend the Member for Stockton North (Alex Cunningham), the Minister acknowledged the huge potential of Teesside and the north-east in the manufacture of renewable energy. That requires Government support, yet business support is being cut, particularly in the regions. Given the enormous potential of Hartlepool, Teesside and the north-east, what can the Minister do to make sure we realise that potential?

It is a tradition of these exchanges that I discuss when I will visit the hon. Gentleman’s constituency, and I shall do so before the next exchange. I will be there in early December, so that I can better understand the massive contribution businesses in his constituency and thereabouts can make in respect of our energy security and the development of low-carbon technologies in this country.

The Government’s current target is for 15% of energy to be produced from renewable sources by 2020. If the measures we are taking to encourage renewables prove successful, will the Government consider being more ambitious and revise that target upwards?

We have asked the Committee on Climate Change to look at whether that level of ambition should be raised. We are also examining whether we can do more through international co-operation: have some areas of renewable energy been locked out because they cannot be used for other countries’ domestic markets, so can we go further by looking at a “whole islands” approach around the British isles to maximise the resources that are available?

Will the Minister update the House on the progress, or otherwise, being made in the development of the carbon capture and storage projects involving clean coal technology here in the UK?

As I have said, the spending review settlement allocated £1 billion to project 1. We will then take forward three further projects, and we have now announced that that could be open to gas as well. We are looking at three further projects because we believe Britain should be leading the world in this technology, and we are absolutely determined that it will.

The generation tariff payment is not the consideration of any supplier and is therefore outside the scope of VAT. If a commercial company wishes to assign its income to a third party in exchange for the supply and installation of solar panels, will the funder of the panels be able to claim back the input VAT?

I apologise to my hon. Friend for not quite catching all of his question, but I think it relates to solar panels and VAT. I should be very happy to look at the issue, and if he writes to me, I will examine it in detail.