HC Deb 13 July 2004 vol 423 cc1365-79

Amendment made: No. 17, in page 201, line 23, leave out '1988' and insert `Taxes'.—[Mr. Timms.]

Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, and Prince of Wales's consent, on behalf of the Duchy of Cornwall, signified.]

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

I beg to move, That the Bill be now read the Third time.

I am particularly grateful to my hon. Friend the Minister for Energy, E-Commerce and Postal Services for his highly skilful and assiduous handling of the Bill during Committee and Report stages, and also to my hon. Friend the Minister for Small Business and Enterprise for his valuable contribution at both stages. May I express my thanks to them and to all hon. Members who served on the Standing Committee?

The Bill is part of the Government's continued commitment to deliver a sustainable energy future for the United Kingdom. We face enormous challenges—climate change, declining indigenous energy supplies and ageing infrastructure. We cannot ignore those challenges, for our own sake and for the sake of future generations.

In the energy White Paper that I published last year we set out how we would tackle fundamental changes in our energy environment, and we set challenging goals—to cut greenhouse emissions by 60 per cent. by the middle of the century, with real progress by 2020, to secure reliable energy supplies, to maintain competitive markets at home and abroad, and to ensure that every home in our country is adequately and affordably heated. We are working hard right across Government to deliver on all those commitments and, following my right hon. Friend the Chancellor's announcement yesterday, we have the resources to do so.

The Bill is an even larger picture of activity delivering on the white paper. Much of the discussion that we have had in the House and in Committee during the passage of the Bill focused on that bigger picture, and rightly so—the Bill presented an excellent opportunity for debate. In April, we published our first annual report on the implementation of the white paper, setting out what we are doing to deliver our commitments.

I refer particularly to the issue of security of supply, which is of huge importance and is recognised as such in all parts of the House. The new duty to report annually to the House on security of supply underlines how seriously we in Government take that issue. But we know from business and consumers that primary legislation is not always the answer. We have to be creative and flexible to overcome many of the challenges that we face. As ever, we will regulate only where it is appropriate and with a light touch.

Many other issues have arisen during our debates. Energy efficiency was mentioned by a number of my hon. Friends and by Opposition Members. We remain committed to increasing investment in energy efficiency, as it is by far the most cost-effective way to meet all our energy goals. The energy efficiency action plan aims to deliver more than 12 million tonnes of carbon saving—well beyond the 10 million that we anticipated in last year's White Paper. There is also the potential of saving consumers more than £3 billion a year by the end of the decade.

I recognise that there has been some disappointment that our goal of delivering annual savings of more than 4 million tonnes of carbon for the household sector by 2010 is lower than what we initially projected in the White Paper. Since that was published, we have continued to refine the projected savings that we can achieve in that sector. None the less, the objective that we are setting currently represents a demanding increase in activity from the industry. It also requires us to promote sustained consumer demand for greater energy efficiency.

We will review our progress on the energy efficiency aim for the household sector in the review of the climate change programme later this year, and in the 2007 review announced in the energy White Paper action plan. If we find that we can go further than we set out in the action plan, we will do so.

Brian White

Many industries in the sector are in the market for investment at the moment. Will my right hon. Friend assure them that they will be taken into account when the climate change review is under way, and that there will be constant dialogue with the industry?

Ms Hewitt

I am happy to give my hon. Friend that assurance. One of the best ways for us to ensure that we deliver our energy efficiency aims is to involve the industry. It is at the leading edge of energy efficiency technologies, and can help make sure that we design a regulatory framework—and take other action to deliver the results that we want—in the cheapest and most effective way.

In the context of delivering affordable and low-carbon heating, combined heat and power can make a significant contribution. Again, we have set ambitious targets. A recent analysis by Cambridge Econometrics suggests that we are likely to be within 1.5 GW of our target by 2010. In other words, there is still more to do.

Just yesterday, my hon. Friend the Minister for Energy, E-Commerce and Postal Services and my noble Friend the Under-Secretary of State with responsibility for food, farming and sustainable energy met key partners engaged in the CHP industry to discuss the long-term options for increasing the support that we give to CHP. We remain committed to our target, and we have a strategy in place for achieving it, which we published alongside the White Paper annual report earlier. We will continue to monitor progress, and to work with the sector to see what more we can do.

Renewable energy is a source of some controversy, in this House and elsewhere. After just two years, the renewables obligation is proving popular with both investors and developers. It is backed by £350 million in capital grants and research and development support for those renewable technologies that are still some way from being commercially competitive.

Mr. Salmond

In the Secretary of State's opinion, does Ofgem act in accord with the Government's renewables targets in everything that it does?

Ms Hewitt

We had extensive discussions with Ofgem in the preparation of the energy White Paper. I am quite satisfied that Ofgem fulfils its statutory duties, as laid down by Parliament, and that it takes into account our commitment to deliver on our climate change goals, and on all our other goals, through an increase in renewable energy.

Mr. Salmond

In that case, why were two Ofgem officials unable to give an answer to that very question, which I and my hon. Friend the Member for Angus (Mr. Weir) put to them three times during a meeting yesterday evening?

Ms Hewitt

I speak to the chairman, chief executive and other members of that authority, and I am satisfied on that matter. The members of the authority are well aware of the need to support renewable development, both through an appropriate regulatory framework and through ensuring that the necessary infrastructure is put in place to enable renewable electricity to connect to the grid.

Mr. Wilson

Perhaps I can help my right hon. Friend, as we both know that there are two approaches to renewables, and especially to those that come from peripheral areas. The Ofgem approach is that it does not want to touch them with a bargepole, as it is not interested in them. The Government approach is to encourage renewables, particularly in those parts of the country where the resources are at their best. It is admirable that the Secretary of State has recognised the problem and tried to bridge it with the capping proposal. Should she not, even in the dying breaths of this Bill, take that logic further and remove the sunset clause, which limits capping to 10 years? That at least would ameliorate what Ofgem has tried to do in the past year. It would be greatly welcomed and would be a positive signal to renewables rather than a negative one.

Ms Hewitt

My right hon. Friend has played a sterling role in supporting renewables both in his role as a Minister and now in his present position. As he rightly says, we recognise the need to make a further change in the legislative framework. That is why we have taken the power in this Bill to cap transmission charges for remote renewable generators. We did so under the European renewables directive.

My right hon. Friend raised the issue of the 10-year sunset clause on this provision. I should stress that the clock will start to run only when we start to use the power. It is our judgment that 10 years will be adequate for any remote renew able generators to benefit because transmission charges are only one cost to the generator. We believe that, as the renewables industry becomes established, the costs will decline. We have seen that happen with onshore wind farms and we will see it happen with offshore wind farms. If 10 years proves inadequate and there is a need to address the matter again, that can he tackled by the Government of the day.

Mr. Wilson

There is not much dividing us here, but this is so important Ten years is not enough of a signal to investors in major projects in many parts of the country where renewable resources are greatest. It would be a relatively modest change for my right hon. Friend to give herself the flexibility to vary the terms of the sunset clause rat her than putting 10 years in the Bill. If she had that flexibility, someone—

Madam Deputy Speaker

Order. I really do think that the right hon. Gentleman's intervention is rather lengthy.

Ms Hewitt

I understand well the point that my right hon. Friend makes. We have discussed it on a number of occasions. The important thing is to recognise that the power that we have taken in the Bill for a 10-year cap on the transmission charge, if that proves necessary, comes on top of the extensive support that we are giving to the renewables sector through the renewables obligation, which will amount by the end of the decade to some £1 billion a year of support as well as the £350 million programme of capital grants and R and D support to which I have already referred. I do not think that our enthusiasm for the renewables sector can be challenged in any way. We are certainly putting our money, or the taxpayer's money, where our mouth is.

Mr. Calum MacDonald (Western Isles) (Lab)

I accept the point that my right hon. Friend makes. The incentives are equally available to all developments throughout the United Kingdom, but there is a particular problem with the peripheral areas such as my constituency, which will be meeting these high charges. The point needs to be made that it is a question of encouraging banks and other institutions to provide lending for well over a 10-year period. Therefore, the sunset provision creates a danger that banks will be put off investing in those areas of Scotland where the resources are at their very best and the economic impact is potentially the greatest.

Ms Hewitt

I absolutely understand my hon. Friend's concern. He has been assiduous in promoting the possibilities for renewable technology, especially in his constituency. It is precisely the argument that he and my right hon. Friend the Member for Cunninghame, North (Mr. Wilson) have made that has persuaded us to take the new capping power in the Bill. It applies only to the remote peripheral areas. We have discussed that carefully with the sector, and my judgment and that of my colleagues is that, on top of the already extensive incentives and grants, a 10-year capping power— with the possibility of further extension if necessary—will do what is required to encourage the development of the industry in my hon. Friend's constituency and in other parts of Scotland. However, other issues arise, especially in connection with the planning regime. I had the opportunity to discuss those issues in Edinburgh yesterday with the First Minister. I know that he and my right hon. Friend the Deputy Prime Minister will continue to play their part in ensuring that the planning regime is favourable towards the development of renewables, because it can be another barrier to the full realisation of that sector's potential.

We seek to create an entirely new energy sector that will provide the cleaner, greener energy that consumers undoubtedly want and help to give our country and our economy the diversity that we need to ensure security in energy supply. This is a market-led solution, but with Government intervention to ensure that the market develops. It is working. We see Centrica planning to invest £750 million in renewables. RWE Innogy ION has attracted £400 million of investment from the City for its renewable energy projects. The City is showing its confidence in the sector, and that is good news.

Mr. Bob Blizzard (Waveney) (Lab)

One of the problems that the renewables sector faces is the approach that the Opposition have adopted during the passage of the Bill. They have tried to set up one obstruction after another to the development of offshore renewable energy. They say that it is intermittent and expensive, and they seem to want to give a power of veto to one sort of pleasure boat on the establishment of wind farms. We have seen this before— the Opposition say that they support renewable energy, but not offshore wind generation.

Ms Hewitt

My hon. Friend makes his point with great force—

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab)

May I just point out that far from referring to one pleasure boat when we talk about wind farms in shipping lanes, we are talking a Knit major shipping lanes around the UK that are an extremely important part of our economic development?

Ms Hewitt

My hon. Friend makes an important point. We have looked very carefully at the report from her Select Committee and we will respond to it. Indeed, we have had a valuable debate on it. We took all such interests into account when we originally designated offshore areas as potential sites for offshore wind farms, including shipping interests; radar and other defence interests; and environmental concerns, including nesting of particular species of birds. All of those partners have been carefully involved in our plan; for developing the sector and I do not minimise the difficulties.

I shall be interested to see where the Opposition end up on the issue. Will they support the development of renewable power that will make a hugely important contribution to our energy supplies in future, or will they line up with those who think that the future lies only in nuclear energy?

Mr. Salmond

The Secretary of State appears to agree with the hon. Members for Waveney (Mr. Blizzard) and for Crewe and Nantwich (Mrs. Dunwoody), but they argued diametrically opposed positions. Genuinely offshore wind power might be the answer that reconciles those positions, but under the Secretary of State's sunset clause it will become impossible to make the necessary billion pound investments, such as in the Beatrice field in the Moray firth. Scottish generators were promised a better arrangement that would reduce connection and interconnector charges. However, the Secretary of State's proposals, which Ofgem helped to draw up, could actually result in generators in the north of Scotland paying more under the new system. How can that be fair, equitable or just and how will it help renewables and other forms of generation?

Ms Hewitt

That matter was dealt with pretty extensively at earlier stages of the Bill and is one for Ofgem to decide. It is examining the issue extremely carefully with both the National Grid Company and the industry and I have no doubt that they will make the right decision and that we shall get the infrastructure as well as the generation investment that we need.

Finally on renewables, I remind the House that last December my hon. Friend the Minister for Energy, E-Commerce and Postal Services announced measures to increase the obligation to 15.4 per cent. by 2015–16 and to continue that level of support until 2027, providing exactly the long-term framework that is needed.

There has been much debate on the future of nuclear energy. There is no change to our policy and I echo the comments of my right hon. Friend the Prime Minister when he appeared before the Liaison Committee last week. Although he acknowledged the carbon-free benefits of nuclear power, he emphasised the point that the public still need to be persuaded both of its safety and its economic viability.

The plants that currently provide a rather important share of our total electricity are coming to the end of their life, building new stations is economically unattractive at present and we have yet to resolve serious issues relating to the disposal of nuclear waste. Alongside those issues, the Government have always recognised the importance of supporting the social and economic development of west Cumbria, which is so dependent on our nuclear industry and the skills of our excellent work force.

Tony Cunningham (Workington) (Lab)

I thank my right hon. Friend for restating the Government's commitment to the economic and social development of west Cumbria, and also for establishing the West Cumbria strategic forum. It is important that the forum meets quickly, so can my right hon. Friend tell us when it will meet for the first time? Will local groups and local partners be involved, especially the local councils—Cumbria, Copeland and Allerdale? Their involvement will be vital to the success of the proposals.

Ms Hewitt

I am grateful to my hon. Friend not only for making that point but also for his work supporting the establishment of the West Cumbria strategic forum. It will indeed involve not only Whitehall Departments with a direct interest in west Cumbria, but also regional partners, including of course the Northwest Development Agency, and local partners, especially the local authorities of Cumbria, Copeland and Allerdale, as well as local community groups. Obviously, the nuclear decommissioning authority will also be represented.

I confirm that I shall be chairing the first meeting of the forum and that it will take place in early October. It will bring national focus and energy to bear on the long-term strategic issues that west Cumbria faces. We remain completely committed to supporting the Northwest Development Agency and its delivery bodies as the prime regeneration agency for the area.

Once the nuclear decommissioning authority is up and running, it will provide long-term strategic direction for the clean-up of our civil nuclear sites and will have responsibility for safety, security, environmental protection and value for money. It is the major achievement of the Bill and we all, on both sides of the House, want to see the NDA established by April next year, and the new electricity trading arrangements for Great Britain implemented in the same time frame.

In conclusion, I repeat my thanks to hon. Members from all parties for the constructive and positive approach they have taken to the scrutiny of the Bill. I have no doubt that we have a better Bill as a result of that scrutiny, building on the pre-legislative scrutiny that began in January 2003. Our improvements to the Bill will enable the NDA to engage in environmental schemes in local communities and we have set out in much more detail the scope of the annual reports required under the Sustainable Energy Act 2003. We have built in flexibility to deal with the effect of transmission charges on remote renewables generators—the problem we have just been discussing. We have given Ofgem a statutory duty to have regard to the principles of best regulatory practice. We have given more flexibility to customers on pre-payment meters to vary the terms of their supply agreements.

The Bill is an extremely important part of achieving those big energy goals that we set ourselves in the energy White Paper. I am grateful to all hon. Members for the consideration that they have given to the Bill, and I commend it to the House.

6.35 pm
Mr. Stephen O'Brien (Eddisbury) (Con)

I welcome this Third Reading debate. The substantial elements of the Bill have our support, not least because of the extent to which it was revised and improved by the Opposition teams in the other place, where it was introduced and subjected to rigorous and expert scrutiny under the leadership of my noble Friend Baroness Miller of Hendon, and during debates here in Committee and on Report, which were expertly and responsibly conducted by my hon. Friend the Member for Tewkesbury (Mr. Robertson). Not for the last time this evening, I record my enormous gratitude to them for their positive contribution, and, indeed, to all members of the Standing Committee, particularly those of the official Opposition, who made important, cogent and expert contributions then and today. I pay tribute to the unfailing courtesy of the Minister for Energy, E-Commerce and Postal Services, who was responsible for steering the Bill through the House.

The principal effect of the Bill will be to extend to Scotland the electricity trading arrangements for England and Wales, by replacing NETA with BETTA, and to establish a structure to safeguard and manage the clean-up of Britain's nuclear legacy. by establishing the nuclear decommissioning authority and a civil nuclear constabulary.

The Bill follows the 2003 White Paper, "Our Energy Future: Creating a Low Carbon Economy", which sets out the four goals of the Government's energy policy: to put ourselves on a pith to cut the UK's carbon dioxide emissions by 60 per cent. by 2050; to maintain reliability of energy supplies; to promote competitive markets in the UK and beyond; and to ensure that every home is adequately and affordably heated. Measured against the Government's criteria, which I have just recited, no doubt, to their pleasure, the Bill substantively deals with only one of the four declared policy goals: the promotion of competitive markets.

Given that energy Bills are a relative rarity, the Government must concede that the Bill represents something of a missed opportunity, particularly in the context of the urgent need to address the challenge of climate change without jeopardising long-term access for the UK to safe, reliable and affordable energy supplies. That is not to say that none of the measures in the Bill is constructive. Many such measures were inserted at the Opposition's behest. Among the new clauses added to the Bill since Second Reading, I particularly welcome new clause 5, which secures the Government's concession to a commitment to make an annual report to Parliament on the availability of short-term and long-term energy supplies, to which I shall return in a moment, and which was secured only on the instance of and after protracted negotiations with the Opposition teams in both Houses.

I acknowledge the merit of introducing the renewable transport fuel obligation, although I note that the Secretary of State is merely awarding herself powers without specifically proposing to use them. Still on renewables, I welcome the amendment to clause 100 on duties in relation to navigation that prevent installations of offshore wind turbines in areas where they would interfere with international shipping lanes, although it is an inferior replacement to the similar amendment originally inserted in the other place under the authorship of Lord Jenkin, whose experience in energy matters is beyond dispute. I commend amendment (b) to Government amendment No. 5, which was agreed to during the last minute nod-through that we suffered in the guillotine on Report and successfully secured by the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) to help to safeguard shipping.

I am pleased that the Bill contains a clause on microgeneration, noting again that its presence in the Bill is another triumph for the Opposition. However, we must wait to study the details of the strategy before we know how serious the Government are about promoting it. I welcome the fact that the Government have agreed that copies of the nuclear decommissioning funding account should be laid before Parliament, and I pay tribute to my colleagues, particularly my hon. Friend the Member for Tewkesbury, for securing its inclusion.

Notwithstanding those positive improvements and additions, the Government's reluctance to address the wider policy goals that they identified in the White Paper has been an enduring theme during the Bill's passage through the other place and then on Second Reading, in Committee and on Report. The most notable instance of the Government's aversion was seen during the flurry that followed the insertion of the so-called security of supply amendment by Opposition Members in the other place, which tried to formalise in statute the Secretary of State's responsibility for setting a framework that would enable markets to deliver energy supplies over the medium and long term. Ministers opposed that suggestion by claiming that such a clause would usher in re-nationalisation of the industry. I made it crystal clear on Second Reading that the Conservative Government liberalised energy markets in the teeth of blind opposition from the Labour party of the day, and Conservatives do not have an ounce of nationalising blood in them, unlike several Labour Members. In the same breath, the Government went on to argue that the provision would be unnecessary, and thus flawed, because it simply restated a clearly recognised reality. The logic of those claims was cancelled out when the Government made them simultaneously, but the individual claims do not stand up to close inspection either, especially when examined in conjunction with the Government's response to a similar provision in the constitutional treaty to which they, if not the energy industry, British business or the British public, are keep to sign up. Article III-157 of the constitution states that for the first time the Commission will henceforth take charge of policy to ensure security of energy supply in the Union". I note that the United Kingdom Offshore Operators Association called on the Government in October 2003—forlornly in the end—to make conceding that co-competence a red-line issue.

The Minister for Energy, E-Commerce and Postal Services told the European Scrutiny Committee on 2 December 2003 that the fact that there is an Energy Chapter in the constitution in itself is something that we are happy with. He may be happy that energy policy will be a co-competence between the democratically elected UK Secretary of State and the unelected EU Commission, but he has not explained during the passage of the Bill—or at any other time—the effect that that will have on Ofgem's present duties to regulate the UK energy market or the Secretary of State's duty to negotiate bilateral treaties with non-EU Governments on, for example, the building of gas pipelines, let alone the possible powers of the Commission to intervene in our domestic energy markets.

While I am on the subject of the European Union, will the Secretary of State give us a categorical assurance in relation to the Bill that the nuclear decommissioning authority will not run into difficulties with the competition commissioner? Is she entirely satisfied that the Bill is in line with EU rules on state aid? If she does not want to intervene on that point now, will she consider the matter and write to me, placing a copy of the letter in the Library of the House?

Mr. Blizzard

Will the hon. Gentleman give way?

Mr. O'Brien

Very briefly, because the hon. Gentleman has already had a go—it did not work then.

Mr. Blizzard

As chair of the all-party group on the offshore oil and gas industry, I have had several discussions with that industry. Everyone in the industry has told me that they are more than happy with the wording of the new energy chapter, which was negotiated by the Government. Indeed, I have received letters setting that out precisely. The industry is not unhappy with the new wording of the energy chapter.

Mr. O'Brien

I am grateful to the hon. Gentleman for telling me what he has heard, but I have naturally held my own consultations on the matter, as he would expect, and we are receiving representations of a different character. The interpretation of what the Government have agreed—I am glad to say that it has not yet been agreed by the British people—has yet to be determined, so we must wait to see what happens. I suspect that the record will show that the argument was not as clear cut as the hon. Gentleman hopes, against all expectations.

The fact that there is an energy chapter in the European constitution makes an annual report on the availability of supply of electricity and gas in the UK all the more vital. Again, I pay enormous tribute to the work of my colleagues in the other place, especially my noble Friends Baroness Miller of Hendon, Earl Attlee and Lord Jenkin of Roding, and Members of this House, not least my hon. Friend the Member for Tewkesbury, who deserves special recognition, for using their patient negotiating skills to secure the commitment to that annual report. They also secured numerous other key amendments that I shall not have time to cover, which have improved the Bill immeasurably.

I must put it on the record that we have experienced the Government's habitual practice of tabling important and serious amendments on Report at the last minute, despite the fact that many could, and should, have been tabled much earlier in the process to allow full scrutiny. Additionally, they have yet again imposed a deliberately mean timetable on the House, which has meant that important groups of amendments, especially those tabled by the minority nationalist parties, have been excluded from debate, although their consideration would have formed an important part of the Bill's passage. The annual report does more than any other aspect of the Bill to put pressure on the Government to pay due regard to their role in setting the medium to long-term framework through which markets remain able and are further enabled to deliver security of supply.

That is important, because the Government's record in that respect is suspect. On their watch, normal operative standby has fallen sufficiently low to provoke concerns among academics and industry experts, as well as in a recent report from the other place. They have refused to rule out the possibility of blackouts as soon as this winter. Our nuclear reactors are mothballing, to the extent that they will contribute just 2 per cent. of our energy supply in less than two decades. The contribution of renewables to the energy mix has remained disappointing, at 2 to 3 per cent. since 1997.

With every passing day, the hole in the nation's energy mix looms closer—it is debated whether there is a low or high probability—and every day, the Government's response is to set an ambitious or stringent new target. Two headline examples from last year's White Paper are the commitment to cut carbon emissions by 60 per cent. by 2050 and the pledge that renewables will contribute 20 per cent. of our energy supply—at least, that is now the aspirational target— by 2020.

The Government also want to achieve at least 10,000 MW of installed, good-quality combined heat and power capacity by 2010, despite the fact that they have opposed an Opposition clause tabled in another place, which my colleagues have sought to influence them to reinsert, that sought to exempt CHP when determining the electricity from a supplier that is subject to the renewables obligation. The Government have a poor record in encouraging the CHP industry to invest. Striking that clause from the Bill will do little to encourage investor confidence, and still less to help the Government reach their CHP target for 2010, which it is currently estimated they will miss by 20 per cent.

Needless to say, the Government are on target to miss their targets, but given their record, they are also on target to move their targets— downwards only, of course. Meanwhile, the energy intensive users group has recently calculated that electricity prices will be pushed up 40 per cent. by 2010 because of the EU carbon emissions trading scheme. We are also set to become net importers of gas for the first time. That is not inherently a concern, but we may be relying at times on supplies from unstable or distant parts of the world.

We are still waiting for legislation that will produce a strategy for moving towards a low-cost, low-carbon, balanced mix of energy supply. That is the big elephant in the Chamber that the Bill does not seriously address. Indeed, members of the public with an interest in energy matters, of whom there are now many more than there were a few years ago, may read the Bill and wonder why it has so little to say about the topics driving public concerns about energy supply.

For example, since Second Reading, important contributions have been made by a range of parties, including Lord Browne of Madingley, Professor James Lovelock, the originator of the Gaia theory, and even, in the past few days, as the Secretary of State mentioned, the Prime Minister himself. Those contributions have, at the very least, sought to highlight the challenge of climate change and the range of options for supply in the future, not excluding the need for a debate about new nuclear build.

As the Prime Minister put it, nuclear power must be on the agenda if you are serious about climate change. That reflected the statement by Professor Lovelock, which has set a tough challenge for those who regard themselves as seeking exclusively to push green credentials. Why, then, is the issue not on the Prime Minister's agenda? Why were the only references to keeping open the option of new nuclear build contained in amendments tabled by the Conservative party but struck out by the Labour Government? Why did last year's White Paper. which the Prime Minister described as a "milestone" in energy policy, make only a passing reference to keeping the nuclear option open?

As I confirmed on Second Reading, my party and I are happy with that approach. For the avoidance of doubt, and given that the Minister for Energy, E-Commerce and Postal Services kept suggesting that we did not have a policy, I point out that the Leader of the Opposition has said on the record, and in terms, that nuclear energy will be a vital part of future energy and electricity supply.

Mr. Timms

On Second Reading, the hon. Gentleman said that his party was neither for nor against nuclear power. Does that remain the position, or has it changed since Second Reading?

Mr. O'Brien

I would have thought that the Minister, who usually has a good memory, would recall my words. I not only said that I had an open mind, but put it on the record that the Opposition, too, were completely happy with the idea that the nuclear option should be kept open℄something that the Government have been saying. As has been mentioned, we have given an assurance that nuclear energy will be a vital part of energy policy under a future Conservative Government. That is a lot clearer than what we have heard from the Government.

We are keeping the nuclear option open while our present facilities are run down and the number of qualified nuclear scientists in the UK diminishes. I pay tribute to the former Energy Minister, the right hon. Member for Cunninghame, North (Mr. Wilson), for his speech, which I was able to catch on the monitor. He said that we must ensure that we do not lose our capacity for new nuclear build through the flight of the necessary engineers and scientists whom this country has developed and retained in the past, thereby gaining competitive advantage. That significant point gave reality to the idea of keeping the nuclear option open. Last but not least, why did the Secretary of State for Environment, Food and Rural Affairs tell us to come back in another generation if, in the national interest, we need to debate new nuclear power generation?

Neither the public debate nor today's debate have focused only on nuclear energy—far from it. A series of prominent figures, including the environmentalist, Sir David Bellamy, and the editor ofThe Ecologist, Zac Goldsmith, have expressed concern about wind turbines on environmental and aesthetic grounds. At the same time, Jorgen Abilgaard. director of Econ, which acts as consultant on wind and renewable energy for the Danish Government—Denmark's proportion of wind power is the highest anywhere in the EU—says of wind power that it is not a long-term solution to any of the problems of climate change". It is alarming that the White Paper and, to a lesser extent, the Bill, choose to focus so exclusively on wind power as the long-term replacement for carbon-based fuels. Clearly, wind has an important role to play in meeting the UK's renewable energy targets, but in the face of growing public opposition, Ministers are deluding themselves if they believe that it is the unique solution to making the transition to a low-carbon economy.

We might have had the chance to explore some of these issues had the Liberal Democrats not called a rather unnecessary Division just before the end of Report, perhaps to avoid the exploration of their own embarrassment over wind turbines, which they seem to favour, because they are renewables, so long as they are not in Liberal Democrat-held constituencies. Wind turbines are unsightly to growing numbers of the public, and their power generation is worryingly intermittent. They are also uneconomic, as is reflected by clause 177 on the adjustment of transmission charges.

Mr. Alex Salmond (Banff and Buchan) (SNP)

On a point of order, Mr. Speaker. In terms of the rules and Orders of the House, is any protection offered to Scottish Members who have waited to debate vital Scottish matters, such as the biased use of system charges and the question of renewables for the north of Scotland, only to find that the Government's contemptuous use and abuse of procedures and unwillingness even to listen to debate on these matters leave us in a position whereby they are not being aired, let alone voted on? Is that an argument for removing them to the power of a Parliament that might find the time to debate them?

Mr. Speaker

That is not matter for the Chair. I would say to the hon. Gentleman that it is not a matter of calling Scottish Members, but of calling Members of the United Kingdom Parliament. I am bound by the rules that the House has given me, and those rules say that these proceedings stop at 7 o'clock. I have no powers to stop any hon. Gentleman, although I do say, while I am on my feet, that Front Benchers should bear in mind that there are Back Benchers in this House of Commons.

Mr. O'Brien

I am grateful, Mr. Speaker. I am sympathetic to the position of the hon. Member for Banff and Buchan (Mr. Salmond), but I note that I have not taken nearly as long as the Secretary of State, and these points need to be debated on equal terms.

I am not convinced that the Government have made much effort to inform consumers of the financial cost of wind power that is designed to be passed on to them. I commend the amendments tabled by Lord Jenkin of Roding in the other place—sadly, they were ultimately unsuccessful—because they would have required greater transparency and public consultation.

The Government need to be aware that they are giving the impression that their energy policy is getting lost in internal disputes. The message from the Minister to wind power companies is to "go out and build", while Professor Howard Dalton, chief' scientist at the Department of Environment, Food and Rural Affairs, says: Wind power can make a contribution but do we really want windmills all over the countryside and covering swathes of the ocean? I don't think so. He goes on to describe them as an "eyesore".

The Prime Minister tells us that he has "fought long and hard" with his party to make sure that the nuclear option is not closed off". He said that only the other day. However, I fear that the content of last year's White Paper and this Bill suggest that the Secretary of State for Environment, Food and Rural Affairs must have fought even longer and harder.

We support the provisions to promote more competitive markets. We support the nuclear decommissioning authority and the new Government commitment to prepare an annual report on availability and security of supply with an accompanying debate on the Floor of House, as the Minister for Energy, E-Commerce and Postal Services previously promised and confirmed today. We shall hold the Government to that, and we look forward to the debate, subject to the receptiveness of the Leader of the House to granting it in Government time each year.

Mr. Key

Will my hon. Friend confirm that we also support the civil nuclear constabulary? It was most unfortunate that chapter 3 received so little attention in Committee and that we have not had the opportunity to debate it this afternoon. It is extraordinary that the jurisdiction of the civil nuclear constabulary will be reduced. It will be less able to look after our nuclear industry in future than in the past.

Mr. O'Brien

My hon. Friend makes an important point. We welcome the new civil nuclear constabulary. I pay tribute to the shadow Minister for Homeland Security, who has assisted greatly in providing advice, as well as to my hon. Friend the Member for Salisbury (Mr. Key), who brought his expertise to the debate. It is regrettable that we could not explore some of the issues in greater depth.

The Government have alighted on the right questions in their White Paper. However, Ministers are clearly at loggerheads over the solutions to reducing carbon dioxide emissions while ensuring the reliability and affordability of energy supplies. We do not fundamentally object to the Bill. We broadly support its contents, as far as they go. However, we do not pretend that it papers over the fault lines or, indeed, the movement of plates in the Government's uncertainty and indecision about the way in which to execute their clearly stated broader energy policy goals.

6.56 pm
Mr. MacDonald

Given that we are running against the clock, I shall try to be as brief as possible. Although the Bill has huge merits and I was proud to serve on the Committee that considered it, a question remains at the heart of clause 177. We debated it in Committee, but we did not emerge from the debate much the wiser about the reason for the need for a sunset clause. The worries expressed in Committee have become more serious in subsequent weeks. For example, Scottish and Southern Energy representatives have approached me to say that they believed that their discussions with Ofgem and the national grid were heading towards a reasonable conclusion, but they are now going backwards. They are worried about the viability of investment in renewables in the north of Scotland.

Such worries are even greater for communities that have decided to venture into renewables. Several communities in Scotland are developing community-owned operations, which will maximise the benefit to the local community as well as contributing to the national need. They are especially dependent on longterm financial backing. Such finance will be much harder to get with the 10-year horizon, beyond which lies uncertainty about the user charges that affect those companies.

I want to make two requests of the Secretary of State and the Minister. First, will they urge Ofgem to accept the need for a fair, reasonable and stable set of charges that will allow renewables to develop even in the most peripheral parts of the north of Scotland? The issue should be resolved as quickly as possible to provide some certainty to the industry.

My second request is whether the Secretary of State and the Minister would be willing to meet a delegation from not only my constituency but from Orkney and Shetland, and to discuss the matter with the hon. Member for Orkney and Shetland (Mr. Carmichael) and me. A delegation from the island communities would be especially useful, given the vast resources in those communities and the fact that they will be most affected by the uncertainty that remains at the heart of clause 177.

6.59 pm
Mr. Stunell

We support the Bill. It has more vision and ambition than it originally possessed, and I am delighted that the Lords have managed to impose on it security of supply, the renewables transport fuel obligation and microgeneration requirements, which the Government had omitted. Plenty more could and should be done, and we shall come back to the Government time and again to ask for an ambitious energy policy, an implementation plan that works and a long-term vision.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.