HC Deb 02 May 2002 vol 384 cc1031-3
3. Miss Anne McIntosh (Vale of York)

What the Government's response is to the performance and innovation unit energy review report; and if she will make a statement. [51998]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt)

The Government will consult shortly on the issues raised in the report and will set out their detailed response in an energy White Paper around the end of the year.

Miss McIntosh

The Secretary of State will recall that her Department has authorised the building of a long string of power lines, which has led to little Eiffel towers appearing across the Vale of York recently. Is she aware that the existing electricity-carrying pylons are operating at only 20 per cent. capacity, which means that the existing line is 80 per cent. surplus to requirements? Following the PIU energy review report, will she introduce legislation to ensure that the electricity generated is as close as possible to demand so that we no longer need those hideous power lines?

Ms Hewitt

I am aware of the concern in the hon. Lady's constituency and elsewhere in Yorkshire about the north Yorkshire power line. Indeed, the energy Minister, my hon. Friend the Member for Cunninghame, North (Mr. Wilson), recently met her and some of her constituents to discuss the matter. We shall consider the broader point that she raises as part of the wider review, but the issues relating to the new north Yorkshire power line, including the possibility of running the cable underground, were examined enormously carefully during six and a half years of consideration and two public inquiries. Unfortunately, the costs proved insuperable.

Miss Anne Begg (Aberdeen, South)

I welcome the fact that the Government are to publish an energy policy White Paper, which I hope will make it clear that the future of the North sea oil and gas industry remains very important to the supply of the UK's energy needs. Has the Department made an assessment of the fiscal changes proposed in the Budget and their impact on the North sea oil and gas industry?

Ms Hewitt

I agree with my hon. Friend about the oil and gas industry's importance to the future of our energy supplies, and of course that will be reflected in the White Paper, as it was in the PIU report. She will be aware that the changes to the taxation of North sea oil have been under Treasury consideration for some years. Although the increase in the special rate of taxation is unwelcome to the industry, I hope that it welcomes the inclusion of 100 per cent. capital allowances for investment, which is hugely important, particularly for the fallow fields, and the ending of the extremely unpopular royalty payments regime.

Mr. Boris Johnson (Henley)

It is good news that the Government have decided that fusion should be part of this country's long-term energy programme. As the Secretary of State is aware, much fusion research takes place at the Culham Laboratories in my constituency. Given the importance of the fusion programme and the potential that it offers for long-term, limitless greenhouse gas-free energy, will she take steps to protect the Culham programme from the cuts that I understand are envisaged by the European Commission? Is it guaranteed that the fusion programme will continue?

Ms Hewitt

The hon. Gentleman is obviously used to writing articles rather longer than speeches to the House of Commons, but he raises the hugely important possibility of generating power from fusion. The Minister for Science and Innovation has been pursuing it, and I remind the hon. Gentleman that we have increased funding for basic scientific research in our country by upwards of £1 billion to start to make up for the cuts made under the Conservative Government. Of course, we shall consider sustaining fusion power research as part of the future of our science research programmes.

Paddy Tipping (Sherwood)

In any response to the PIU report, will the Secretary of State ensure that the country does not depend on a single source of energy, such as imported gas? Will she consider the need for an EU replacement state subsidy scheme for coal, and consider in particular the important issue of burning coal in an environmentally friendly way?

Ms Hewitt

Diversity and security of supply is one of the central objectives in the report, and we shall of course pay close attention to it when preparing our White Paper. Diversity and security involves not simply different energy sources—different fuels—but different parts of the world, including of course the United Kingdom.

We are working with our European partners to establish a new framework for state aid to the coal industry. We have already committed about £120 million by way of operating aid. We are also considering what more we can do to support the development and use of clean coal technologies, which are a hugely important part of environmentally sustainable energy production.

Mr. Robert Key (Salisbury)

I was concerned to hear from the Secretary of State that the publication of the promised White Paper had already slipped from October to the end of the year. When the energy Minister, the hon. Member for Cunninghame, North (Mr. Wilson), returns, will she draw his attention to the fact that Greenpeace, Shell, the British Wind Energy Association, British Nuclear Fuels plc, the Coal Authority, the Carbon Trust, Friends of the Earth, the Energy Saving Trust, the Association of European Transmission System Operators, the European fusion development agreement, Slough Heat and Power, TXU—and myself, sir—are all waiting for a full debate in the Chamber on the PIU energy review?

We know that the White Paper is being drafted, and we know which officials are leading the drafting. If the Government are serious, they must consult the House now rather than waiting until all the decisions have been made.

Ms Hewitt

I am glad to be able to reassure the hon. Gentleman, and all the organisations that he listed at such length, that before the end of the month we will publish a consultation document specifying the issues on which we invite views following the PIU report, so that full consultation and debate take place before we draft the White Paper.