HC Deb 13 July 2000 vol 353 cc1053-4
6. Mr. Michael Clapham (Barnsley, West and Penistone)

What steps he is taking to liberalise the energy market. [128945]

The Minister for Energy and Competitiveness in Europe (Mrs. Helen Liddell)

Since the election, the Government have been committed to the liberalisation of energy markets. As my hon. Friend will know, the Utilities Bill is continuing its progress through the House. Once it receives Royal Assent, it will bring into play new electricity trading arrangements.

Mr. Clapham

Does my right hon. Friend agree that the key to liberalising energy in this country is the new electricity trading arrangements, which will bring benefits to consumers? In that context, does she also agree that the coal industry contributes to the energy mix, and may need further protection in the post-Kyoto period? Will she look at ways in which more investment can be made in clean coal technology? Will she also ensure that the negotiations on the interconnector bring about a reciprocal flow of electricity, so that we can connect this country's electricity grid with the European energy market?

Mrs. Liddell

My hon. Friend raises three very important points. New electricity trading arrangements are being introduced because the previous Government's policy of haphazard privatisation of the energy industry, together with their failure to get to grips with the abnormalities in the operation of the electricity pool, put the coal industry at a disadvantage. The new arrangements will make for a much more transparent market. They will also mean lower electricity prices, which will benefit domestic and commercial consumers. Assuming that the Utilities Bill will gain Royal Assent, we are on target to have the electricity trading arrangements in place next winter.

My hon. Friend asked about cleaner coal technology. That is an important matter. To secure the future of the coal industry, we must make sure we have coal that is environmentally friendly. That is why, in April 1999, we commenced a six-year programme of development and research into cleaner coal technology. We expect an initial Government expenditure in the region of £12 million to generate an additional £60 million of private investment in the development of cleaner coal technology.

Finally, my hon. Friend asked an important question about access to the interconnector. Yesterday, I met Mr. Rousseli of Electricité de France, and I raised with him our anxiety about access to the interconnector. I have also raised the matter with the French Government. Rules for access to the interconnector come up for renegotiation in March 2001. It is imperative that we have clear, transparent and good-cost access to the interconnector. I believe that that point has been well made, and it was backed up when the Heads of Government at the Lisbon summit advanced further proposals for the liberalisation of European energy markets.

Miss Anne McIntosh (Vale of York)

Does the right hon. Lady agree that the best way to liberalise and rationalise the electricity market is to follow the Scandinavian example? Is she aware of the recommendations by the royal commission on environmental pollution that the Scandinavian model should be adopted in this country, that overhead pylons and cooling towers should be done away with, and that we should revert to sourcing electricity as close as possible to demand?

Mrs. Liddell

I am well aware of the campaign that the hon. Lady has pursued on behalf of her constituents on that matter, and we have corresponded a number of times. I appreciate the anxiety of constituents worried about pylons and cooling towers, but costs must be taken into account by the relevant planning authorities in any planning consideration. I know that the hon. Lady will continue to pursue this matter.

The hon. Lady mentioned the Scandinavian model. I believe that we must have a model for energy distribution that suits this country's needs, but I am not unmindful of the anxieties of communities about energy lines despoiling their environment and its beauty.