HC Deb 22 April 1998 vol 310 cc731-51

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dowd.]

9.34 am
Mr. Jeremy Corbyn (Islington, North)

I am pleased to be able to open this debate on energy policy following the Kyoto summit. I do so as part of an effective parliamentary conspiracy known as the GLOBE group, which stands for Global Legislators Organisation for a Balanced Environment, which has members in all Parliaments in Europe and, indeed, in many Parliaments throughout the world. We view effective lobbying in national Parliaments as part of our work, but also aim to ensure that major events such as the Kyoto conference are followed by effective parliamentary action, so that all national Governments keep to their targets.

It could not be more appropriate that we are debating this issue today because, tomorrow, the Minister for Science, Energy and Industry will sit before the Environmental Audit Committee, which will question him at some length about the methods by which the Government will carry out the policies that were agreed at Kyoto. That is a step forward: this Parliament now has a Select Committee where such questions can be raised.

In the past, environmental policies were entirely linked to the Department of the Environment, which was obviously heavily dominated by local government interests. Because of that domination, environmental matters tended to take a back seat. It would be useful if Parliament as a whole had a specialist environment Committee—as opposed to a Committee linking other Departments—in addition to the Environmental Audit Committee. There is a strong case for that.

In June, European Union Ministers will meet in Aarhus in Denmark to discuss the continuation of environmental policies, but we must take other things into account. For example, there are headlines in all today's newspapers about the transport of plutonium waste from Georgia to Britain. That exposes the dangers of nuclear waste and nuclear reprocessing, and effectively challenges all those who believe that the nuclear option is somehow safe and environmentally sustainable, and will ensure clean energy supplies.

I do not believe that there is anything clean about nuclear waste or nuclear power. If anyone proposed that we should start a new energy source that would be dangerous for more than 1,000 years, people would think that they were completely mad. It is time that we seriously challenged the whole nuclear argument.

This Friday, the House has the opportunity to complete the stages in this place of the Road Traffic Reduction (National Targets) Bill, which has been through Committee. It is a great tribute to the hon. Member for Ceredigion (Mr. Dafis) that it has got that far. I just hope that certain members of the Conservative parliamentary party do not go on yet another outing of trying to destroy an environmental Bill, as they have unfortunately tried to do on various other occasions. The Energy Efficiency Bill is also coming up this Friday. It is important that the House puts together all those issues, so that we have joined-up thinking and joined-up actions in improving our environment.

In many ways, the Kyoto conference was a great milestone in this planet's history. Before Rio, many people throughout the world had been arguing for a more sustainable attitude towards our environment, energy consumption and energy production, but it had not come together. The Rio summit was a major turning point. Likewise, the New York meeting and Kyoto were a major step forward in recognising the limits to growth and to what we can do to our environment and planet, and placed requirements on each country to carry out the work.

However, the background to Kyoto was raging fires throughout south Asia, which were caused partly by drought, but partly because people were seeking to clear forests by burning them down. The news now is that, despite all the campaigning by so many people throughout the world over the past 20 years, the rate of destruction of that huge carbon sink otherwise known as the beautiful Amazon rain forest is proceeding at an even faster rate than ever before. There is no room for complacency in energy policy or environmental protection matters.

The world might look with great hope to Kyoto, post-Rio and all that goes with that, but all Governments appear to be accepting that there is an uncontrollable global economy and that growth is the order of the day. The environmental damage done by excessive transportation, excessive destruction of forests and excessive use of fossil fuels appears to be viewed as the necessary consequence of the eternal growth theory. Therefore, humankind has a long way to go in trying to control what it does to this planet, as, at present, it is merely trying to mitigate the effects on the globe of a free-market economy. Those issues must be brought together.

Having said that, I found the British Government's approach to Kyoto very welcome, especially as they sought a large reduction in greenhouse gas emissions. The result—an 8 per cent. agreement—was not good enough; much better could have been achieved. I do not blame the British Government's representatives at the conference, but I am laying some blame on the United States, which is the biggest consumer of energy and the biggest global polluter. Many of the right-wing think tanks in the USA say, "The problem is caused by the third world", but the reality is that every American consumes 10 times as much energy as every person in Bangladesh, south Asia or China. That is the reality of what is happening to this planet. I hope that when my hon. Friend the Minister replies to the debate, he will tell us what steps the Government intend to take to cut CO2 emissions.

The global economy is having disastrous effects on the environment—for example, the destruction of the rain forests and the fires in south Asia. However, we can also identify and measure global warming. I am aware that there is a scientific argument, of sorts, that there are normal climatic variations and changes anyway and that we just happen to be moving into a warmer period. The truth is that the speed with which global temperatures have risen over the past 15 years is astronomical. The link with the large-scale and increasing burning of fossil fuels around the world suggests that we are doing something dramatic, dangerous and possibly irreversible to our climate. That must be reckoned with.

The many surveys carried out in the Antarctic allow us to measure the degree of pollution throughout the globe. We can date and almost time where the pollution comes from and see what we are doing to the climate. We can also look at the way in which ice caps are melting in the northern and southern hemispheres. Traditionally, the northern hemisphere ice caps have been melting while the southern hemisphere ice caps have been expanding—now they are both retreating, so there is bound to be a rise in global sea levels. That is the consequence of not doing anything.

Although Kyoto was an important step forward, other measures need to be taken. After the election last May, the Government correctly presented themselves as concerned with environmental policies. They reflected what a large number of ordinary people thought, because people recognise what is being done to their environment. Those concerned with protecting the environment live not just in rural communities; they are not only the people trying, rightly, to preserve woods, forests, hedgerows and habitat vegetations—protecting the environment is just as much a concern to people growing up in council estates in inner London or anywhere else. They want a decent environment and clean air to breathe. That is why our energy policies matter.

I am an active member—indeed the chair—of my local Agenda 21 group in Islington. The effort made by so many ordinary people is quite moving. They are desperate for a better world and a better environment to leave to future generations. That is a fairly new phenomenon in politics throughout the world, but especially in this country.

We need to make a number of important changes in policy. Currently, our primary sources of energy are coal, oil and, to a more limited extent, hydro and other forms of renewable energy. Oil prices, if not at an all-time low, are certainly somewhere near that. Even with North sea oil, which is expensive to produce, there is still a profit of about $10 a barrel between production costs and sale prices, despite the current low oil prices. Oil companies are busy stocking up huge amounts of oil, either in large storage spaces or by keeping it under the ground, having gained prospecting licences.

On the figures produced by Greenpeace—I agree with that organisation, as do many others—the maximum amount of carbon that we can burn on our planet without causing major climatic changes is 225 gigatonnes. The amount in storage or available for exploration is far greater than that. When my hon. Friend the Minister replies, will he tell us the rationale behind continuing to grant exploration licences in the north Atlantic, knowing full well the environmental damage that will be done? It is unsustainable, in world terms, to start a whole new round of oil exploration when we should be looking towards sustainable energy sources rather than fossil fuel sources. We must protect the environment.

The world managed to change course on the Antarctic. I have been in the House long enough to see the issue go full circle, from the Antarctic being a place of scientific exploration, to being a place of mineral exploration, and then a place of preservation of the natural environment and prevention of any mineral exploration and exploitation—of the Antarctic shelf itself, but not of the sea around it, unfortunately. Surely we can do the same with the north Atlantic licences that the Government are considering granting. Perhaps my hon. Friend the Minister will give us some hope that the Government will not grant those licences.

My hon. Friend may know that I have tabled a number of questions to the Foreign Office about Rockall and whether Britain actually has the right to grant licences for the sea surrounding Rockall. It is not clear who owns Rockall. Would it not be better to reach an international agreement to preserve that pristine stretch of ocean from exploration and all the damage that goes with it? It should be used as a signal, a pressure and a catalyst for moving towards a more sustainable energy policy.

Britain does not do very well in the new European renewable energy league. In 1990, 0.5 per cent. of our energy came from renewable resources. By 1995, that had risen to the fantastic amount of 0.7 per cent. I suppose people could argue that that is a huge increase, but it is meaningless because it is growth from a very low base. Every other country in Europe does considerably better, the best being Sweden with 25.4 per cent. Much lower down, even France manages 7 per cent. Germany is rather low with less than 2 per cent. The country nearest to us in the league is Belgium, with 1 per cent. There is no excuse for Britain's position, other than the attitude of previous Governments and, within that, attitudes towards Government spending, investment and tax regimes.

I hope that my hon. Friend the Minister recognises that enormous strides could be made. Indeed, I know that he wants to promote greater use of solar, wind-powered and wave-powered energy and much less reliance on fossil fuels and all the damage that comes with them.

We must also consider the question of energy conservation. Energy requirements are dictated by industry, by transport and heating needs and so on, but we must bear in mind the fact that an initial investment means savings in the long run. About half my constituents live in local authority or housing association accommodation. Most of them complain to me about high heating bills, poor insulation and generally poor living conditions. Indeed, many people living in private accommodation say exactly the same.

Every time we neglect to install roof insulation, cavity walls or a more efficient form of heating, we might save a little on the construction cost of a house, but, in the long run, we are piling huge costs on the people who live in that house and we are doing enormous damage to the environment. A conservation policy is beneficial to everyone even though the initial cost is considerably higher.

In this country, 8 million people suffer from some energy deficiency, in that they are unable to heat their homes or keep themselves warm. Because of the inadequate heating in so many houses, there are 30,000 more deaths in winter than in summer, a fact which appears to be related to the conditions in which people live. Clearly, the attempts made by some hon. Members to introduce private Members' Bills relating to energy efficiency or heating conservation—we shall be debating such a Bill on Friday—are very important.

It is essential that the toughest possible energy conservation requirements are imposed for all new buildings. We must recognise that investing now in good-quality insulation and efficient heating systems means in the long run a saving not only to the individual but to the environment. Of course, if one marries that notion to the free market, there is a conflict between the needs of the environment and those of the gas and electricity companies, whose sole motive is to encourage greater consumption.

I know that several hon. Members want to contribute to the debate, so I move on to my final point, on transport. Transport is a huge but inefficient consumer of energy and is the single biggest source of pollution in most cities around the world. If one has a mind to do such things, one has only to go to the top of Canary Wharf tower to see the effect of transport pollution. There is very little industry left in London to cause pollution, but from the top of the tower one can see a pollution cloud or dome—it is like the millennium dome on a grander scale—stretching across central London. Most of that pollution is caused by transport, mainly cars carrying one person. It is preventable, but we must be prepared to invest more in public transport and reduce the energy consumed for transport.

On a more global note, my hon. Friend the Member for Nottingham, South (Mr. Simpson) made a good speech earlier this year about the concept of food miles and the amount of pollution caused by goods being dragged around the world. It is crazy that countries in central Africa, where there is a food deficiency and where many people do not eat terribly well, are being encouraged by international institutions such as the International Monetary Fund and the World bank, of which we are members, to grow early vegetables that are air-freighted to Europe. One can imagine the enormous pollution involved in flying early strawberries grown in Zambia to London, Frankfurt, New York or Paris. When one sees beautiful strawberries, mange-tout and so on in the supermarket, one thinks that they are clean, pollution-free vegetables, but what about the fuel that has been burnt to bring them here and the consequent damage to the environment?

I recall going to a supermarket last year in Worcester. There were millions of apple trees only half a mile from that supermarket, but the apples on sale there came from New Zealand—what a crazy world.

The constant global effort to increase export production and trade is seen as a form of growth, but it damages the environment. Ships pass each other carrying washing machines from one end of the world to the other and back again, but that can hardly be called a sustainable form of growth.

I know that the Government are keen to integrate environmental and transport policies, but it has to happen quickly, or we shall not be able to make the 8 per cent. reduction in greenhouse gas emissions agreed at Kyoto, and we shall certainly not meet the much higher targets proposed by the Government. Parliament needs to be assertive and to keep returning to the issue. If various sections of the Government are not fully apprised of the need for joined-up thinking on the environment, they need to be encouraged to be so. That is Parliament's job.

If, at the end of this century, we cannot turn things round and start to develop technologies that use the energy available from the sun, wind and water, but instead we carry on in the smokestack tradition, the damage to the planet's climate might be irreversible.

Some people say that those of us who look to a sustainable environment are backward-thinking and conservative. On the contrary; we are by no means anti-technology. We want the cutting edge of technology to be used to develop solar, wind and wave power and all the renewable and sustainable methods possible. We want to use that technology for better control systems and less polluting forms of energy use. Unless we get fully involved, we shall be losing jobs in the fossil fuel industries, as has happened already, but we shall not be gaining jobs in the sustainable industries, for which there is a huge global market. I am thinking, for example, of the production of solar panels.

There needs to be a change in attitude. Kyoto provided an opportunity for that, but if we do not recognise that poorer countries need help to develop sustainable energy, the enormous damage will continue. I hope that today's debate will be one of a series of regular debates, so that we can monitor what is happening, what the Government are doing and what pressure we can put on them.

9.58 am
Mr. Andrew Stunell (Hazel Grove)

I greatly welcome the debate and congratulate the hon. Member for Islington, North (Mr. Corbyn) on securing it. It should be seen as a plea for fewer warm words and more hard action. There has been a tremendous change, in that 10 or even five years ago, it was believed that only extremely strange people such as the hon. Members for Islington, North and for Hazel Grove supported the concept of sustainable energy, but it is now one to which Governments worldwide are committed.

I remind the House that the targets that we are discussing relate to reductions in emissions between 1990 and 2010. We are already eight years into that 20-year period, but we are still debating precisely what policies should be in place to achieve those targets. Therefore, it is not a question of our rushing the Government or of the House being impatient; rather, it is a recognition that time is passing, and passing very quickly.

I shall spend a minute or two considering what the Government have done, as opposed to what they have said, since 1 May last year. There are some bad signs, which I shall enumerate, but there are also some good ones. We need to examine not only what the Government say but what they do and the impact of that.

The Government have implemented a manifesto pledge to cut value added tax on fuel. Of course, that helps the poor, and we understand and support that. However, we need to recognise that it will increase fuel consumption and, therefore, carbon dioxide emissions.

There has been a somewhat grudging cut in VAT on energy conservation materials. The Government have done a brilliant job of persuading the public, but they have provided only a limited concession that may allow energy conservation materials to be installed in 40,000 homes, when 8 million homes have poor insulation and bad energy conservation.

I shall not say too much about the Government's policy on coal, as I am sure that others will want to speak about that. However, I have made a point before of drawing attention to developments in respect of our non-fossil fuel obligations and the fact that we now have legislation in place that, remarkably and paradoxically, allows a levy to be placed on renewable energy generators as well as those using fossil fuel.

The Government promised us a Green Book that would be produced alongside the Red Book. Not only would it list all the financial implications of the Budget and the Finance Bill, but it would give us a clear signal as to their environmental and green impact. I asked parliamentary questions about that and was assured that the Green Book was on page 73 of the Red Book. It consists of one page listing 15 items and their environmental impact. Of those 15 items, three are for consultation and not for implementation and will have no environmental impact this year. Two of the items show a small increase in carbon dioxide emissions and only three of the remaining 10 show quantified reductions. Therefore, despite some bold, brave and welcome words about the direction of Government policy and the integration of all Government policies into environmental concerns, the Green Book has become a green page and only three of the 15 policies listed on it will provide any reduction in greenhouse gas emissions.

Over the past few months, I have been asking about energy consumption by the Government, as I have been trying to establish how much energy Government Departments use. I asked how much vehicle mileage was covered by Government employees, but the information was not available. I asked how much energy was being consumed by Government buildings and fixed assets in the United Kingdom. Some Departments have been very helpful and have provided figures, but others have said that the information is not available within the scope of parliamentary questions.

The Minister for Science, Energy and Industry (Mr. John Battle)

It strikes me as ironic that we meet every day in a darkened room where we have the lights on to have our debates.

Mr. Stunell

I thank the Minister for that intervention and I agree with him. As hon. Members are not allowed to read their speeches, having the lights on should not be necessary, except for Front-Bench speeches.

If Government Departments do not know how much energy they are consuming, how will they know whether they have reduced energy consumption by 8 per cent., 10 per cent. or 20 per cent.—20 per cent. of what and from when? We need to recognise that it is not just a matter of slogans and targets; it is about real plans and real progress if we are to achieve what we all want.

I could also mention the Government's hesitant approach to the European Union White Paper on renewables. I discussed the issue with the Minister in the European Standing Committee, and I understood the political logic of what he said. However, the hon. Member for Islington, North was right to draw attention to the United Kingdom's poor record in respect of renewable energy.

Belgium's percentage of renewables is 40 per cent. greater than ours. When people hear the figures for Sweden, they say that it has rivers and mountains and not very many people and that there are many reasons why Sweden might have an entirely different energy budget from ours, but Belgium is not exactly dominated by mountains.

Mr. Battle

It is appreciated that although the hon. Gentleman was not a member of the European Standing Committee, he took an interest in it, but he will recall that we debated the fact that Belgium burns all its municipal waste, which raises other environmental issues. Therefore, I remind him that the matter is not quite as simplistic as he appears to suggest.

Mr. Stunell

I welcome the Minister's intervention. He is quite right that the issue is not as simplistic as it seems for the pros or the antis. I understand that he is working in a complex political and economic environment, and I would be the last person to underestimate that.

I do not know what the Minister would say about Ireland, where the percentage of renewables is three times higher than ours. Perhaps there is a particular reason for that, but we need to examine the issue and understand why the United Kingdom is at the bottom of the pile and not at the top.

There are opportunities for the United Kingdom to raise its percentage of renewables without the conflict implied in the Minister's intervention in respect of waste incineration, for example. During the Easter break, I visited the Centre for Alternative Technology and, on behalf of the Minister, I received praise for the Government's investment in the photovoltaic installation there. There are opportunities, but we are not exploiting them.

I expect that the Minister would be a little indignant if I did not mention the good signs. There is clearly wide public acceptance of the need for action, and the Government are being offered a great deal of good will. Their warm words and investment in respect of photovoltaics or renewable energy installations at Ford, for example, are widely welcomed. There are opportunities, and the public are ready to accept them.

Returning briefly to the Government's policy on coal, I welcome the fact that they have now backtracked somewhat on their ban on the installation of gas generators and have lowered the threshold at which it applies. That is common sense, but it underlines the fact that there is much work still to be done before we can be said to have a genuine energy policy for the United Kingdom. It ought to be easy to get started, and it is good that the Government have given a fair wind to the Road Traffic Reduction (National Targets) Bill, the Waste Minimisation Bill, the Energy Conservation (Housing) Bill and the Energy Efficiency Bill, but they are all private Members' Bills. We need strong, positive, Government-directed action.

My plea is twofold. First, will the Government tell us what their energy policy is? It has to be integrated with the environmental policy issues that we are discussing and with fiscal and economic policy, but until that foundation is laid, publicly discussed and agreed, the conduct of the entire debate is extremely difficult. Secondly, I make a far wider plea: we need to get away from the impression that growth, wealth and prosperity can be purchased only at the expense of high energy use and low environmental conditions for the work force and the general population. What should be done next? Liberal Democrats were disappointed that the Budget did not contain a bigger commitment to public transport. Although the figures that were announced were high, careful reading of the Red Book shows that they have to be divided by four, as they apply over four years.

We were disappointed that the changes to vehicle excise duty for next year will not be implemented this year. It is worth noting that, in the European Union, the car fleets with the smallest engine sizes are in Italy and Denmark, which seems to be connected to the fact that the taxation of vehicles in those countries is based on mileage and fuel consumption rather than on a flat-rate tax such as vehicle excise duty. By contrast, the car fleet engine size in the United Kingdom has increased throughout the 1980s and 1990s. I ask the Minister to make those points as clearly as possible—wearing both his Department of Trade and Industry and his energy hats—to his ministerial colleagues.

Growth, wealth and prosperity are often thought to conflict with an environmental policy. Countries that have high standards of living, high gross domestic product and, indeed, high energy costs are among the most prosperous, but one need only look at Germany and—perhaps through half-closed eyes at the moment—Japan to see that it would be wrong to claim a connection between a strong environmental policy and a weak economy with low prosperity.

Will the Minister say plainly and clearly what the Government's energy policy is? Do the targets for the United Kingdom that were announced before Kyoto still obtain? Are the Government committed to investment in renewable energy sources and to conservation and the promotion of energy efficiency? He should understand that a strong message is coming from both sides of the House: we want the Government to be positive, purposeful and prompt in tackling the issue.

10.11 am
Mr. David Chaytor (Bury, North)

I congratulate my hon. Friend the Member for Islington, North (Mr. Corbyn) on securing this debate, and I welcome the opportunity to make a brief contribution to it. I also congratulate my right hon. Friend the Deputy Prime Minister on the international role he has taken in recent months to make Governments across the world accept their responsibilities to respond to climate change and to reduce emissions.

It is extremely interesting that we are having this debate this week, not only because of last night's news about an unfortunate incident in the nuclear industry or because of the consideration of the Finance Bill, in which the effect of green taxation on emissions has been a theme, but because on Friday, we shall debate a series of private Members' Bills concerned with energy efficiency, each of which could make a small contribution to our achievement of the Kyoto targets.

My message to Opposition Front Benchers is not to block the progress of those Bills. An unfortunate trend in recent weeks has been that a particular Conservative Member has tried to block every private Member's Bill, regardless of its merits. I hope that the Opposition will take cognisance of the fact that this Friday is an important day for those Bills.

In recent months, as public awareness of the implications of the Kyoto conference has increased, the nuclear industry has attempted to assume a new role and to project itself as the answer to all our CO2 emission and climate change problems. There is no doubt that nuclear power has a role to play in a balanced energy policy; there can be no dispute about the fact that nuclear energy does not add to CO2 emissions. However, we would be naive—and do the public a great disservice—if we accepted that nuclear energy was the answer to Kyoto, for the simple reason that the nuclear industry has tried to sweep under the carpet the fundamental problem of nuclear waste. Until there is a safe, secure and scientifically accepted solution—I do not rule one out—to the problem of safeguarding the increasing storage of nuclear waste, I do not believe that nuclear power is the way forward.

Mr. David Heath (Somerton and Frome)

Some years ago, I had some involvement in the fight to prevent the pressurised water reactor from being built at Hinckly C. I know that many of my constituents are concerned that the Government have not yet made it clear whether there is a moratorium on new nuclear power installations. Does the hon. Gentleman agree that it would be helpful if the Minister today made a clear statement on the Government's intentions on new nuclear installations?

Mr. Chaytor

That is one of the points that I was going to make, and I am sure that my hon. Friend the Minister will comment on it in his response.

Last night's incident was significant. The disclosure of the secret deal with the Georgian Government to reprocess 5 kg of uranium at Dounreay will serve to reignite public awareness of the dangers of nuclear power, particularly the storage of waste and the transport of waste for reprocessing.

Does my hon. Friend the Minister believe that the time has come for the Government to call in and give their view on the British Nuclear Fuels application to establish a commercial facility at Sellafield for the production of mixed oxide fuel? The deal between Dounreay and Georgia is the tip of the iceberg of what is being proposed in the British nuclear industry—BNFL wants to establish a fully fledged commercial facility to reprocess waste from across the world. The 5 kg of uranium is a drop in the ocean in terms of the total amount of nuclear waste that could come to Britain to be reprocessed. It is critical that the Government intervene and take a special interest in the matter.

I think that I am right in saying that transport creates about 25 per cent. of our total CO2 emissions. Public opinion has shifted considerably in the past five years, and there is now a general understanding that we cannot sustain our chronic dependency on the private motor car, and that we must greatly improve public transport and pursue a more balanced and mixed transport policy—We all look forward to the White Paper on integrated transport which will be published shortly.

It cannot be stressed often enough that the Government's responsibility is to use the tax system to engineer the shift away from the dominance of the private car and to encourage the use of public transport and more walking and cycling, as well as to encourage people to question whether their journeys are strictly necessary. The Budget contained important steps towards a green taxation policy, but those steps were tentative, and I hope that, in the coming months, the Government will pursue the agenda with greater confidence, and that the next Budget will introduce a more positive form of green taxation.

We welcome the initial changes to vehicle excise duty, the continuation of the fuel escalator and the action proposed on company cars, but other things can be done. Significantly, the motoring public now accept the annual price rise in petrol. Perhaps the Government are a little behind what the general public are prepared to accept. I hope that my hon. Friend the Minister will discuss that with his colleagues, and that a much stronger green taxation policy will emerge.

We must not only shift the balance of taxation away from labour and employers' costs to take account of pollution and waste, but consider what we should do with the resulting revenue. We cannot avoid the issue of hypothecation. I know that the Treasury has historically been opposed to it, but the time has now come when we can win public support for green taxation if we can show clearly that the extra revenue is being used for investment in public transport. That is another shift in attitude that will have to come about.

On Friday, several private Members' Bills concerned with minor improvements to energy efficiency are due to be considered. I especially commend the Warm Homes and Energy Conservation (Fifteen Year Programme) Bill, with its ambitious programme for improvements to the 8 million homes in Britain in which households still experience fuel poverty. As my hon. Friend the Member for Islington, North said, improvements will cost money in the short run, but bring enormous benefits in the long run. I welcome the fact that our Government have put enormous emphasis on long-term investment and improvements, getting away from short-term thinking, and the Bill is a perfect example of that.

The current review of the utilities regulators is crucial to energy efficiency. Since privatisation, there has been chaos in the marketplace, with many companies competing desperately to sell more and more fuel, which is obviously incompatible with our Kyoto obligations.

Mr. Battle

I am grateful to my hon. Friend for raising that matter. The review was published a fortnight ago and was warmly welcomed precisely because we built into it those environmental considerations.

Mr. Chaytor

I am grateful for that information, and I shall make a point of studying the review carefully.

The new code for fiscal responsibility in the Budget did not have the high profile of some of the green taxation issues. The code was a welcome development by the Chancellor and established five important criteria—transparency, stability, responsibility, fairness and efficiency—but it does not mention environmental sustainability.

We should consider in the next few months whether we should add the sixth key criterion of sustainability. We cannot continue, as an industrial society, to use up resources as we have in the past 150 years. One way in which to draw attention to that fact and to concentrate the minds of the public and the Government on it is to build into the very structure and principles of taxation the concept of environmental sustainability.

We need to consider the limits of economic growth. It has been our society's basic assumption for 100 years or more that, through the application of technology and the plundering of natural resources, we can generate economic growth that is self-sustaining and will gradually increase prosperity for everyone. In the past 10 or 20 years—in this generation—more and more people have begun to question whether that infinite expansion of economic growth and the alleged extension of prosperity for everyone can really be feasible.

There is a growing understanding of the fact that there are limits to economic growth in both social and environmental terms. That represents a major challenge, because it means that we are at a fundamental turning point in the development of our society, and a whole new set of assumptions needs to be made about how we generate prosperity and equality of opportunity. I hope that, in the next few years, Governments throughout the world will take on board the limits of economic growth.

There will soon be a major opportunity for the Government to play a leading role in pursuing the environmental agenda and ensuring that the Kyoto agreements are adhered to, when the G8 summit takes place in Birmingham in the middle of May. Our Government, and our Prime Minister, will have an important opportunity to take the lead again on the international stage.

Even though the Kyoto agreement was signed in December, the most important signatory, the United States, has yet to get the agreement passed through Congress. President Clinton and Vice-President Gore have given it their blessing, but there is still a battle to be fought in the United States Congress. The G8 summit provides the perfect opportunity to ensure that that battle is won.

10.26 am
Mr. Cynog Dafis (Ceredigion)

I, too, congratulate the hon. Member for Islington, North (Mr. Corbyn) on securing this debate.

Kyoto was an important success. Now the problems follow: first on ratification and then on working out emission levels, trading conditions and so forth. It is important to recognise that the cuts envisaged at Kyoto are insufficient.

It is probably impossible to prevent some damaging climate change. That will happen in any case, but we must be determined to prevent it from becoming too serious. We must consider how we can deliver international agreements for substantial cuts in CO2 emissions beyond the 8 per cent. agreed at Kyoto.

We know what the obstacle is: the United States will not agree to significant cuts, and may not even ratify Kyoto, unless developing countries are brought on board and agree to make their own reductions, or at least stabilise. Developing countries, on the other hand, say that they will not agree to fetter themselves by denying themselves development of the kind that the developed world has enjoyed as a result of its ability to burn fossil fuels.

We have to find a formula that satisfies both parties. We shall not get an agreement unless equity is built in. That brings us to the idea of contraction and convergence, which is proposed by Aubrey Meyer of the Global Commons Institute and has been adopted by the Global Legislators Organisation for a Balanced Environment, or GLOBE International, of which GLOBE UK is a part.

The idea of contraction and convergence is to bring together sustainability and equity in a programme for reducing emissions by a target year on the basis of per capita rights, which become tradeable. It is compatible with the idea that came from Kyoto, but unless we set the target year for sustainability and agree the principle of equity, nothing will happen. I must re-emphasise what the hon. Member for Bury, North (Mr. Chaytor) said about the opportunities for the United Kingdom Government to take up that agenda and to use it as their platform at the G8 conference in Birmingham. It would be a great service indeed—a new, additional service—if they did that.

We all hope that the Government intend to keep to their own target of a 20 per cent. reduction by 2010. Confirmation of that this morning would be useful, as we have heard rumours that that is not the case. To deliver such a reduction and, indeed, the sort that will have to follow after that, we need action in three areas: efficiency, renewables and cutting demand.

We know what energy efficiency measures can be taken. The question is what the mechanism is that can ensure that they are. The fundamental change must be to the way in which the energy supply companies operate. They have to be persuaded to see their function not simply in terms of selling units of energy and making their profits on the basis of how much they sell, but of selling energy services. How that can be done is the question—how can their function be changed? It comes down to regulation and the function of the regulator, and the Minister has already spoken encouragingly about that.

A recent Institute for Public Policy Research study put it like this: the question is how to ensure that firms compete on total bill, rather than unit price. That same, useful study considers how regulation could achieve such a change.

We all now understand the enormous potential in renewables, and it is terribly important that we take it seriously. The organisations looking into that issue are convinced that we can achieve significant gains. Greenpeace is arguing for fossil fuel phase-out in 30 or 40 years. Whether that is realistic, I am not competent to judge, but we can certainly have major advances.

We want to hear what the Minister has to say about the European Union White Paper on renewables. The EU argues that the share of renewables in total energy demand can be increased from 6 to 12 per cent. by 2010, which would involve significant public investment, but would generate a significant number of jobs—between 500,000 and 900,000 in that period. We are, therefore, talking about an important market opportunity as well as an environmental imperative.

As has been said, the United Kingdom is at the bottom of the league in terms of the share of energy produced from renewables. The position is improving, but not as much as it should. The Government have set a 10 per cent. target of electricity from renewables by 2010, which is good news, but it is not enough. Furthermore, we need to set longer-term targets. The EU framework provides an opportunity to do so.

The Minister for Science, Energy and Industry has been described—I hope inaccurately—as not being particularly enthusiastic about EU targets. I hope that he will take this opportunity to correct any misapprehension that may exist.

Mr. Battle

If the hon. Gentleman had been able to attend the whole of the Committee in question, he would have found that the following day, The Times published a letter saying exactly the opposite and that I was probably too enthusiastic about renewables. The original report was inaccurate.

Mr. Dafis

It is useful to have such a statement on the Floor of the House and in Hansard,and I am delighted to hear it.

I am looking forward to a serious expansion of renewables, partly because I live in Wales which is an energy-rich country, where there are important opportunities for jobs in rural areas and agricultural diversification as part of the renewables programme.

I shall conclude, as other hon. Members want to speak. The Government have said that the environment is at the heart of their policy and that they are committed to sustainable development. Getting energy policy right in the wake of Kyoto is the most important element; of that there is no doubt. The IPPR publication states in its introduction: To most people, energy is not a central political issue". I would go so far as to say that energy is the central political issue and that everyone has to bend their energies to ensuring that we get energy policy right.

10.33 am
Mr. Andrew Miller (Ellesmere Port and Neston)

I am grateful to the hon. Member for Ceredigion (Mr. Dafis) for allowing me a few minutes of the remaining time.

I wish to compare the constituency of my hon. Friend the Member for Islington, North (Mr. Corbyn) with mine. I know his constituency well as I lived in north London some years ago, and I recognise the importance of the needs of his constituents and the huge benefits that could emerge from energy efficiency investment—the better use of public transport, and integrating work and the telecommunications system more closely. Huge advances can be made, and the hon. Member for Ceredigion made some important points about Wales.

I represent Ellesmere Port and Neston which is at the other end of the spectrum. It produces some of the products that all our constituents demand as of right—petroleum, obviously, and vehicles—and there is a nuclear enrichment plant in Capenhurst just next door. I therefore look at the equation from a slightly different perspective from my hon. Friend's. I agree that the carbon dioxide targets to which he referred must be taken extremely seriously and that we must bend over backwards to achieve them. However, I think that he would agree that many of the nations in the developing world have a right to expect the use of energy. We cannot impose some colonial will and say that they will not have access to energy. That is where the arithmetic of the whole debate becomes extremely complicated.

The hon. Member for Ceredigion referred to the possibility of a 12 per cent. increase in renewables not being enough. What of a nation such as China, which has some 1.2 billion people—50 times the population of our nation—and uses per capita one twelfth of the amount of energy that we use? China has an enormous amount of brown coal, and if it achieved a quarter of our energy usage by utilising it, Kyoto would be a useless exercise several times over.

That is the crude arithmetic of the situation that the world faces. I am not saying that we should turn our backs on the problem, as we have to take it extremely seriously, on the one hand, recognising the right of emergent nations to have access to the benefits that energy gives them and on the other, recognising the need to improve the climate for our children and grandchildren.

The only point on which I potentially disagree with my hon. Friend the Member for Islington, North is the unilateral writing out of nuclear power from the equation. In his opening remarks, my hon. Friend the Member for Bury, North (Mr. Chaytor) pointed out that nuclear power had its place. Of course, we have continuing problems with the safe disposal of waste material. My hon. Friend the Minister is, I suppose, the principal shareholder in British Nuclear Fuels so I am perhaps patting him on the back when I say that it has a world-class business in the transport and safe storage of such material, but we should not be complacent. We should continue to invest in the science that will enable us to reduce the potential risks and the time frames to which my hon. Friend the Member for Islington, North referred.

This is a wide debate, and I ask hon. Members to consider the point that there is no such thing as a clean energy source. Even renewables need investment in metals, buildings and so forth, which are of themselves energy consumers. I think that all hon. Members would argue that the dash for gas may not have been the best use of a valuable resource in the long term. We all know the problems inherent in coal, nuclear power and other sources.

We must have a balanced debate, and I urge hon. Members to address the matter in such a way. We must look not only at the targets that this nation can achieve—we must stand up for that—but to the achievement of objectives beyond the minor steps taken by the United States in particular. We must do far better than that. I am not arguing in favour of one or another energy source, but we must never forget that the global equation is so enormous and the arithmetic so complicated that no particular source should be excluded from the debate.

10.40 am
Mr. Tim Yeo (South Suffolk)

I congratulate the hon. Member for Islington, North (Mr. Corbyn) on securing the debate and on his speech. I was interested in a number of his remarks, such as his question to the Minister about Government policy on granting exploration licences in the north Atlantic, which is an important subject about which a number of organisations are concerned. I hope that the Minister will make the Government's attitude clear.

A number of hon. Members referred to private Members' Bills, including the Road Traffic Reduction (National Targets) Bill and the Energy Efficiency Bill. Let me make it clear that Opposition Front Benchers support those Bills; indeed, my hon. Friend the Member for Daventry (Mr. Boswell) and I are sponsors of the latter. I regret, however, that the matter has been the subject of an Adjournment debate, which must be introduced by a Back Bencher. The Government would make time for such a debate if they were serious about the issue and wanted to back up the Prime Minister, who said last June that the 20 per cent. target for cutting CO2 was not a conditional target. The issue was last debated in November, also in an Adjournment debate introduced by a Back Bencher.

Mr. Battle

Will the hon. Gentleman give way?

Mr. Yeo

No, I am sorry. The Minister will have a chance to reply, and I have only 10 minutes in which to speak.

We have not debated how to meet the targets since November, which shows the low priority that the Government attach to the subject.

My hon. Friend the Member for Daventry, who is a shadow Department of Trade and Industry Minister, has been present throughout the debate, but the Minister is not accompanied by a Minister from the Department for the Environment, Transport and the Regions, which is disappointing. That Department is closely involved with implementing the strategy, if there is one, for achieving the target for cuts in carbon dioxide emissions.

Four months after the Kyoto conference, there has been no clear statement from the Government on how they intend to meet those challenging targets. The Minister for the Environment told hon. Members that the delivery mechanisms will be set out in detail in our White Paper in the spring."—[0fficial Report, 19 November 1997; Vol. 301, c. 258.] Spring is more than half over, so will the Minister say when the White Paper will be published? Without waiting for its publication, will he answer the hon. Member for Ceredigion (Mr. Dafis), who asked what the Government's target was? Is it 20 per cent., which was in the Labour manifesto and referred to by the Prime Minister, or is it the European Union target of 8 per cent? We note that the Chancellor of the Exchequer referred only to the 8 per cent. target in his Budget speech. Was he hoping that the commitment to the 20 per cent. target would be quietly forgotten?

The target is only a small part of the story. More important is the strategy for hitting it. Are the Government looking to achieve cuts in emissions from households, from the transport sector, from electricity generation or from other sources? I hope that the Minister will at least say what relative contribution is to be made by each of those sources towards achieving the cut. As the hon. Member for Hazel Grove (Mr. Stunell) said, the Government made a curious start with households by cutting the tax on energy consumption, then waiting another eight months before making a much less dramatic cut in respect of energy saving.

The Government have not put the environment at the heart of their decision-making process, or even at the edge of it. The only substantial tax change in the Budget Red Book listed under environmental measures was the huge rise in petrol tax, the second in the last eight months. Increasing petrol tax is a substitute for coherent policy. Experience has shown that petrol tax rises have relatively little effect on car use. Under this Government, petrol tax is not so much an environmental policy as a reflection of their hostility to the motorist. The burden on motorists is especially heavy in rural areas, where no alternative to using a car exists. That is a further example of the Government's lack of concern for the countryside.

It is disappointing that so little has been done to explore other ways in which to encourage greater fuel efficiency in cars. A cut to £100 in vehicle excise duty for less-polluting cars, which is still only a consultation proposal, is a start, but much more could be done to reform VED on a revenue-neutral basis to give manufacturers and motorists a real incentive to achieve greater fuel efficiency.

Why was there no Budget Green Book? Hansard reports at column 1062 that on 10 July, the Financial Secretary promised the House that a Green Book would be published with this year's Budget Red Book, setting out the impact of Budget changes on the environment. I have not seen a Green Book. I wrote to the Financial Secretary earlier this month to ask for a copy, but have not received a reply. I fear that the hon. Member for Hazel Grove is right: the commitment to publish a Green Book has shrunk to a single page of the Red Book. There has been virtually no indication since the Kyoto conference of the Government's strategy for tackling climate change. Energy policy is crucial within such a strategy, so the Minister has a chance to put that right today.

I wrote to the Minister for the Environment following a leak which suggested that the Government were about to guarantee coal a share of the electricity generation market. Will the Minister tell hon. Members the Government's targets for the relative share of power generation from oil, from gas, from coal, from nuclear power and from renewables? How do the Government reconcile them with the targets for cutting carbon dioxide emissions? What are their implications for consumer prices? Are reports that coal will be guaranteed a market share true? Can the Government's target for cutting carbon dioxide emissions be met if the market share for coal is to be protected in the way that has been reported? Is not there a clear dilemma? Why has coal been singled out for a guaranteed market share, when renewables, to which Labour Members have referred, have not?

How do the Government expect to raise the proportion of energy generated from renewable sources from its current level of about 1 per cent. to 10 per cent. in the next 12 years? What specific steps are they taking to achieve that goal? Does the Minister believe that allocating 5 per cent. of his budget for energy research on renewables is sufficient? What will the Government say at next month's meeting when the European White Paper on renewables is discussed?

We are now almost two thirds of the way through the British presidency of the European Union. What lead has Britain given to the European Union since 1 January on climate change issues? How is the EU's climate change strategy coming along? Is the Minister satisfied with the progress that has been made on agreeing burden sharing within the EU? Does he agree that, after four months in the chair of EU Council meetings, Britain has little or no tangible progress to show on the environmental front? As the hon. Members for Bury, North (Mr. Chaytor) and for Ceredigion said, the Government can offer leadership, not only within Europe but at the next G8 meeting, and carry forward the Kyoto agenda.

We should not overlook nuclear energy. Does the Minister accept that it is, at least in terms of carbon dioxide emissions, a clean fuel? Does he believe that it has a role to play in helping the Government to reach their carbon dioxide emission cuts targets? Will he redress the disgraceful and alarming secrecy surrounding the Government's decision to accept fuel from Russia for reprocessing at Dounreay by being open, at least about Government policy on nuclear energy?

Do the Government believe that energy policy should be primarily dictated by the market? If so, does the Minister believe that that will protect the environment? Are the Government willing to use the tax system to influence the market in an environmentally friendly direction and, if so, how? Have the green Ministers met to discuss energy policy since Kyoto? How often have they met and what has been the outcome of those meetings? Will the Minister publish the minutes of them? What have the Government done to promote energy efficiency on their own estate and when will the latest figures be published?

After a year in power, it is no longer acceptable for Ministers to hide behind endless reviews. The hard choices of which the Prime Minister speaks so frequently cannot be ducked for ever. The time comes to stop reviewing and start deciding. For energy policy, that time is now. Four months after Kyoto, Britain's strategy on climate change is shrouded in obscurity. Our international influence will start to wane if we do not set out how we intend to achieve those challenging targets.

When the Prime Minister addressed the earth summit last year, he did not qualify his green rhetoric by saying that any action would have to await the outcome of the comprehensive spending review. Given the difficulty of extracting any information from the Government about their follow-up to Kyoto, I conclude with one simple suggestion. Why do not the Government publish half-yearly a progress report about how they are meeting the Kyoto targets? I am confident that such a report would be welcomed on both sides of the House. Even if the Minister cannot accept the other suggestions made in the debate, surely he can at least make that one commitment.

10.50 am
The Minister for Science, Energy and Industry (Mr. John Battle)

I am grateful to my hon. Friend the Member for Islington, North (Mr. Corbyn) for introducing this debate and for the terms in which he did so. It has been an excellent debate. My only frustration is that I have only about 10 minutes to reply to it, and that others wanted to take part and have not been able to.

The debate has been wide ranging. I enjoyed the phrase "joined-up thinking" that my hon. Friend used. I am usually accused of insisting on joined-up thinking between Government Departments. The thought that we should take away from this debate is that perhaps we need to move to holistic action. The debate has cut across transport, energy conservation, the Environment Agency, nuclear power, energy generation, gas, electricity and renewable sources of energy, and the technologies behind new sources of energy. That leads into science and technology, and the new industries of the future. It is to the credit of my hon. Friend and other hon. Members that we have raised this matter on the Floor of the House. It is thanks to my hon. Friend today, and we need to continue the conversation.

I will not have time to reply in detail to all the points, much as I would like to. I am always tempted to adjourn to another room to continue this important conversation. It has been said that the two key issues of the new century will be the world's needs for water and for energy. My hon. Friend made the point well. We need to consider the international complexity, and to make the international connections as well as local connections.

We often get hung up on lighting and heating, but most energy will be wasted this summer through the use of fans and cooling systems in Britain. That will be the key source of carbon dioxide and energy loss, although we often do not connect summer conditions with the need for energy conservation. We do not do the joined-up thinking that we need to do in analysing these matters.

I welcome the fact that our Government put environment right at the heart of policy making. I got the impression from the hon. Member for South Suffolk (Mr. Yeo) that he did not even talk to his colleague, the hon. Member for Daventry (Mr. Boswell). Perhaps he does not know that we had a full debate in Standing Committee on the European paper on renewables. Perhaps he does not know that we put renewables on the agenda in Europe, or that we have had debates in the House on energy policy and the role of coal and renewables. But then, the hon. Member for South Suffolk sticks to the environment and perhaps he does not talk to the shadow spokesman on energy. We have a different response from the Conservative party on energy every other day, so we are not clear where we are with the Opposition.

Our manifesto made it clear that a commitment to diverse, secure and sustainable energy sources was at the heart of our policy. We committed ourselves in our manifesto to reducing greenhouse gas emissions. We set a challenging target of a 20 per cent. reduction to 1990 levels by 2000. On energy, we set the tough target of increasing renewable sources of energy—wave, wind, biomass, landfill gas, energy from waste, energy efficiency and combined heat and power schemes—by 10 per cent. by 2010. That is an ambitious target and we have already taken action to get there. The hon. Member for South Suffolk obviously has not heard of the non-fossil fuel obligation scheme that his own Government introduced. We extended it in November to double the amount of renewable energy. We shall reach 5 per cent. by 2000 as a result of that action and investment.

We inherited from the previous Administration a context in which the old nationalised, centralised system of energy generation, distribution and supply was atomised, separated out and privatised. The national grid was privatised and energy was split into generation by National Power or PowerGen, Scottish Power, Scottish Hydro-Electric and Nuclear Electric. They were all privatised. We expressed reservations about where the free market approach would lead. The system was originally divided into 12 separate regional electricity companies. We saw the opening up of competition in electricity and in gas. We have inherited an energy market system. There is the privately owned Pool for power generation. Spot markets are developing in gas and electricity. Seventy companies are now licensed to sell gas and 25 to sell electricity. In that context, how on earth do we deliver diverse, secure and sustainable sources of energy and ensure that environmental objectives are not undermined by the market system? That is precisely why we have considered regulation. We cannot have pure economic regulation; we must bring into account environmental factors.

Under the previous Administration, 74 per cent. of energy was generated from coal—not from oil as my hon. Friend the Member for Islington, North said, which is included in total energy use, including transport. In 1980, only 1 per cent. of energy was generated from gas. By 1996, as a result of the dash for gas, and the squeeze on and practical shut-down of the coal industry, gas had moved to 23 per cent. and coal had slipped back to 41 per cent. Renewables were still languishing at 0.7 per cent. So there was not a push in the direction of renewables. There was simply a dash for gas under the previous Government. We felt that that was irresponsible, which is why we have checked it to see what we can do to deliver a balanced energy policy. That includes promoting renewables and insisting on a larger share of generation from them.

One could argue that Britain has achieved its targets for carbon dioxide emissions. It did so because the previous Administration closed down manufacturing. When manufacturing shrinks from 52 per cent. of the economy to 22 per cent., we should not be surprised if carbon dioxide emissions are reduced. That is not the way in which to do it. We want to see a shift from fossil fuel generation to renewable energy sources. Renewable sources, combined with energy efficiency and conservation, will achieve the objectives without undermining our economic capacity.

I was asked about offshore oil and gas licences. I have to say to the hon. Member for South Suffolk that when the Labour Government came in, we insisted immediately that environmental impact assessments be imposed on the energy generation industry. The previous Government ignored that, for all their rhetoric about environmental concerns. We have made enormous strides by insisting that environmental considerations are taken into account.

I share the reservations expressed by my hon. Friend the Member for Bury, North (Mr. Chaytor) about the nuclear industry. The Government are not in the business of building power stations, because the industry has been privatised. I suggest to him that the cost of building further nuclear power stations is now prohibitive. I cannot see any private power company establishing an economic, let alone any other, case for doing so. The question of the waste still remains, as my hon. Friend eloquently spelt out.

Yes, we have clear targets as a result of Kyoto. My right hon. Friend the Deputy Prime Minister was indefatigable in brokering the negotiation at that conference. There were rumours that it would not get off the ground and could not possibly be a success. It is a mark of the achievement of my right hon. Friend that a conclusion was successfully reached. Under the Kyoto protocol, all developed countries now have a legally binding target to reduce emissions of greenhouse gases. Together, they have agreed to reduce emissions of six greenhouse gases to 5.2 per cent. below 1990 levels over the commitment period from 2008 to 2012. We will work through our share of that target and present our proposals on how to meet it.

We have already instituted work on policies to promote renewable sources of energy, in addition to our work on supplementing and carrying forward the fifth round of the NFFO. We have already reviewed sources of power and are looking at the flawed market system set up by the previous Government to determine how to deliver sustainable, secure and diverse energy generation.

We shall take forward the climate change programme with the contribution of renewables. In the next two years, the use of renewables will double from 1 to 2 per cent. Our programme will result in an improvement to 4 or 5 per cent. in the years to come. We need to work with the Commission's White Paper on renewables; as I spelt out in Committee, we shall respond positively so as to develop a strategic approach that will enable us to meet targets to increase the use of renewable energy sources across the European Union. The fifth round of the NFFO order will ensure that we reach a target of 5 per cent. of energy derived from renewables by 2000, which will be no mean achievement.

In my work as Minister with responsibility for energy policy and science, I look at scientific programmes with a view to investing in new technologies, for example, tidal power. A grant from my Department—

Mr. Deputy Speaker (Sir Alan Haselhurst)


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