§ 4. Mr. Andrew Stunell (Hazel Grove) (LD)
What recent assessment she has made of the (a) environmental and (b) economic performance of British Energy.␣
§ The Minister for Energy and E-Commerce (Mr. Mike O'Brien)
British Energy is subject to stringent environmental regulation. The Environment Agency raised some concerns about British Energy's environmental performance, but the company is working closely with the agency to address those concerns. British Energy's economic performance is regularly assessed as part of its current restructuring.
§ Mr. Stunell
I thank the Minister for that reply and welcome him to the Dispatch Box. He is the sixth Minister with responsibility for energy in seven years; I hope that he enjoys his stay, however long or short it might be.
Has the hon. Gentleman had an opportunity to read the Public Accounts Committee report on British Energy transactions, and do the Government intend to accept those recommendations? Can he assure the House that he will resist the shareholder revolt, which is seeking to overturn the arrangements that have been made, and does he agree that it is very important to safeguard taxpayers' money and the environment of the United Kingdom?
§ Mr. O'Brien
Of course it is important to protect the UK environment; however, the Liberal Democrats' policy—which is, it seems, to get rid of the Department of Trade and Industry—would undermine that objective. We have seen the PAC report, which we welcome, and we will respond to it in detail in the normal way. I should point out, however, that the privatisation of British Energy undertaken in 1996 involved the traditional structure and left the Government with few tools with which to mitigate any risk. So many of the problems that have arisen since can be laid at the door of those who created that privatisation. On restructuring and the views of shareholders, we are watching carefully what is happening, and we have a great deal of interest in ensuring that such restructuring is carried out effectively.
§ Mr. Bill Tynan (Hamilton, South) (Lab)
The hon. Member for Hazel Grove (Mr. Stunell) is interested in doing away not only with the DTI but with nuclear energy. Is my hon. Friend aware that if we had substituted gas-fired power stations for British Energy production, we would have created an extra 27 million tonnes of carbon emissions from August 2003 to August 2004? Is he not concerned about our being dependent on gas in future, and our losing energy production capacity in this country?
§ Mr. O'Brien
We need to ensure that we have diverse sources of energy, and we intend to do so as part of our 1441 strategy. That will include developing renewables, for example, which can make a substantial contribution. However, the Government are not committed to building new nuclear power stations because new build is currently economically unattractive and important issues such as disposal of nuclear waste need to be resolved. Any decision to proceed with nuclear build in future must be based on a full public consultation.
§ Mr. Robert Key (Salisbury) (Con)
Does the Minister agree that British Energy needs all the help and support that it can get as it faces the future, and that we need to start building a consensus on the energy gap that we face, on Kyoto, and on the question of where we are going to derive our energy source from? We therefore need to encourage a sensible public debate, based on science and good information. If we do not encourage the British nuclear industry, we are likely to see—in addition to the Liberal Democrats wishing to cut electricity cables from France, through which we receive nuclear-generated energy—bids from Electricité de France to build nuclear power stations in this country, because we will have lost the capability.
§ Mr. O'Brien
I certainly agree that we need to have a broad-based debate on how to reach our emissions targets. I welcome the various contributions that have been made in the past week; indeed, we heard very strongly from the Prime Minister on these issues. The Government have shown that we are prepared to take the practical decisions necessary to meet those emissions targets, and we intend to continue developing our renewables policy and efficiency targets. There will doubtless be a debate on nuclear energy in due course, but at this stage we are not committed to new nuclear power station build.
§ Mr. Parmjit Dhanda (Gloucester) (Lab)
When considering the economic implications of our policy regarding British Energy, will my hon. Friend continue to take my constituents into consideration? British Energy employs 1,000 people in my constituency, and they welcome the support that the Government have given—not least the provision of £500 million in loan payments, as and when required. The Liberal Democrats oppose that policy, without which unemployment in my constituency would double. Such opposition is doubtless supported by Jeremy Hilton, who is the Liberal Democrat candidate for Gloucester at the forthcoming general election.
§ Mr. O'Brien
We have seen historically that the Liberal Democrats jump on any old passing bandwagon. I would say to my hon. Friend that the Government's aim is to ensure that the restructuring of British Energy is done effectively. We need to work with the company and engage with the unions to ensure that the restructuring is effective and that British Energy has a future. That will, in the long term, protect the jobs in my hon. Friend's constituency. That is our hope, so we must ensure that the restructuring is undertaken effectively.
§ Mr. Laurence Robertson (Tewkesbury) (Con)
I welcome the Minister to his new role and pay tribute to his predecessor. I wish them both well for the future. I 1442 remind the Minister, however, that shareholders did not lose out because of the privatisation of British Energy; it is the restructuring that is in question. Given the rise in electricity prices and the subsequent better financial position of British Energy, will the Minister give due consideration to the revised proposals for restructuring to ensure that all stakeholders get a fair deal, particularly the 230,000 individual shareholders?
§ Mr. O'Brien
We want to ensure that the restructuring is carried out in a way that looks to the interests of those who work for British Energy and ensures that the company can continue to operate so that shareholders feel that they have a fair deal. However, I would say to the hon. Gentleman that the Public Accounts Committee has expressed concern about the way in which the privatisation was carried out. Under that privatisation, the Government retained no rights of information or control over the company's decision making. The PAC criticised aspects of the privatisation process, so it will be interesting to see whether the Conservatives continue to defend their actions.
It is clear that we are now talking about a private sector restructuring of British Energy. The Government are watching how that is happening and we want it to succeed. We will remain engaged in the process, but in the end it is being done in the private sector. We want to ensure that the British people—the consumers—get a good deal, as well as the shareholders.
§ David Taylor (North-West Leicestershire) (Lab/Co-op)
The Prime Minister has described global warming as the most serious environmental threat to the planet, and we know that a major accelerator is the emission of carbon dioxide and other carbon gases. British Energy has pointed out that the generation of about 64 TWh—or 64,000 GWh—by its nuclear power stations avoids the production and generation of about 40 million tonnes of carbon dioxide. Does the Minister believe that the Government should keep well under review, on a regular basis, their attitude towards nuclear power?
§ Mr. O'Brien
Yes. As I have already said, we operate on the basis of the energy policy set out in our White Paper, which keeps the nuclear option there in the long term. At the moment, however, our view is that it is not the most economically viable approach and there is no investor interest on a substantial scale in new build, so our aim is to ensure that we move towards our emission targets by developing renewables and through energy efficiency. Those are the areas in which we can make substantial progress now. We may look at other options in the future, but that remains to be seen.