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John Robertson (Glasgow North West) (Lab)
Thank you, Mr Brady, for this opportunity to seek assurances from the new coalition Government on their energy policy. I have considerable concerns, which are well founded and based on the track record and previous rhetoric of the Ministers now responsible for delivering a comprehensive, balanced energy policy that will provide security of supply and reduce our CO2 emissions. Internationally, there are tremendous concerns regarding the effects of climate change, and the UK must continue to play a major role in delivering. There are many hon. Members present, and quite a few will want to intervene or speak, so I will try to keep my remarks as short as possible. Having said that, I have a number of things to say and a number of questions to ask.
We have had considerable discussions on the subject over many years, started by scientists and political leaders who believe that climate change is the most dangerous and life-threatening issue facing the world. That, along with security of supply, has been my focus for a number of years, and we need clarity and a positive response to the issues that I will raise in this brief but important debate.
The UK’s security of supply is a major concern, and it is vital that the Government take appropriate action to ensure that we do not run out of power and end up with black-out Britain. The demise of the coal-fired power stations, and the closure of nuclear power stations at the end of their life cycle, will create tremendous challenges for the Government, and it is important that they are united in the pursuit of a coherent energy policy.
All energy sources must be developed to reduce our carbon footprint and allow us to meet our emissions targets. Although I am in favour of a balanced energy policy, it is time that we looked at the ever-increasing subsidies for renewable energy. Onshore wind energy, which is intermittent and requires 100% back-up, has benefited enormously from the renewables obligation, but it is extremely expensive and it is not the best way to use our huge levels of investment.
I must declare an interest as the chair of the all-party group on nuclear energy. Over the years, we have had considerable success in highlighting the issue of nuclear energy and promoting solutions to the problems that the UK faces over its security of supply and the devastating effects of climate change. As chair of the APG, I had hoped that the general election—no matter what the result—would not affect the nuclear industry and the future of new build. However, there is a problem with the Con-Dem coalition, because the Government said one thing—or, should I say, two things—during the election and another after it. That has been a regular occurrence with the coalition over the past few months.
Despite considerable misfortune, recent polls clearly demonstrate that those who support having a nuclear component of a comprehensive energy policy are winning, and may indeed have won, the argument. The majority of the general public are now convinced that we need to build new nuclear power plants. When the APG was formed, nuclear energy was on the back-burner, but leading environmentalists who have spent a lifetime opposing nuclear energy have recently gone public in support of it. The former head of Greenpeace, Mr Tindale, has openly come out in support of nuclear and is lobbying for it. It is interesting to look at his reasons for once opposing, and now supporting, nuclear energy; his reasons for having opposed it are shared by many of those who oppose it today. He says that
“nuclear power was wrong, partly for the pollution and nuclear waste reasons but primarily because of the risk of proliferation of nuclear weapons…My change of mind wasn’t sudden, but gradual over the past four years. But the key moment…was when it was reported that the permafrost in Siberia was melting massively, giving up methane, which is a very serious problem for the world…It was kind of like a religious conversion. Being anti-nuclear was an essential part of being an environmentalist for a long time but now that I’m talking to a number of environmentalists about this, it’s actually quite widespread this view that nuclear power is not ideal but it’s better than climate change”.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
Given that analysis of the global impact of carbon emissions, the melting of the permafrost and the release of methane, what contribution will nuclear make to the reduction of global carbon emissions?
John Robertson
I thank the hon. Gentleman for his question. As I develop my argument, he will get the answer to it, but I will happily let him intervene again before the end of my speech if he wants to repeat his question.
As I said, I am concerned about the new Government’s policy, because their strongly held, differing views will not be coherent and will lead to the development of a mishmash of energy policies that does not meet the country’s needs. We are fast running out of time, and my concern is that we will end up with a dash for gas that leaves us dependent on imports for our energy supply. Any delay in delivering new nuclear build would be disastrous. Unfortunately, the history of some members of the Government raises major concerns about the new nuclear build programme. If Government policy is less than positive, the delivery of new nuclear power stations in the UK will be undermined.
Across the globe, there is strong demand from many countries that wish to build new nuclear power plants. The Government’s recent decision to withdraw funding for Sheffield Forgemasters must be viewed with deep concern.
Mr Tom Watson (West Bromwich East) (Lab)
My hon. Friend is making a strong case for a low-carbon future, but does he agree that what happened to Forgemasters was not just a tragedy for British jobs? The only other company that makes these reactor pressure vessels—these large components for nuclear reactors—is Japan Steel Works, in Hokkaido, Japan. We therefore face a huge lost export opportunity. Forgemasters has tripled its order book in recent years, and there is now a waiting list. Not only have we have lost an opportunity to be a major exporter of a key component in nuclear growth, but we may be at the end of a waiting list, which may jeopardise the future build programme in the UK.
John Robertson
My hon. Friend is absolutely right, and I will go into that in more detail later. The situation with Forgemasters is symptomatic of the problem that we will face in years to come. The previous Government pledged cash to Forgemasters to enable the Sheffield company to build parts for nuclear power stations—it was as simple as that.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I have a simple question that touches on the Forgemasters issue. Should there or should there not be any direct or indirect public subsidy to the nuclear industry?
John Robertson
The hon. Gentleman makes a fair point, which he has made many times. It has been said on many occasions that no subsidy will be given. Indirect subsidy is a different thing; it would be about what was happening with the carbon price in European markets and so on. We can never say never about anything, but the Labour Government said that they would not give any subsidy, and that it was down to the companies to cover the cost of not only building plants but dismantling them at the end of their life cycle. I hope that that answers the hon. Gentleman’s question.
When the loan to Forgemasters was announced in March, it was clear that it would make the plant one of two in the world—the point that my hon. Friend the Member for West Bromwich East (Mr Watson) made—able to make large forgings for the nuclear energy industry. Apart from creating employment opportunities and highly skilled jobs, it would lead to international order opportunities for the product. Those of us who have been involved in nuclear energy know that a number of nuclear stations are being planned all over the world. It does not come as a surprise to me, although it will to some, to hear that even Sweden is jumping on the bandwagon. As we speak, people all over the world are tackling the issues of security of supply and the need for a base load that includes nuclear. On that basis, it is essential that the Government look again at the decision. We need world leaders, and the Sheffield plant, with the investment, would have an opportunity second to none.
I do not feel the need to rehearse the concern about climate change and emissions targets; we have expressed it many times. However, I seek assurances from the Government about their intent. It is vital that we hear at first hand what position Ministers at the Department of Energy and Climate Change and the Prime Minister will take not just on climate change but on nuclear power. I have some concerns about their policy on new build. The Secretary of State for Energy and Climate Change has long been completely and unequivocally opposed to nuclear build. He has said:
“No private sector investor has built a nuclear power station anywhere in the world without lashings of government subsidy since Three Mile Island and Chernobyl. The World Bank refuses to lend on nuclear projects because of the long history of overruns.
Our message is clear, No to nuclear, as it is not a short cut, but a dead end. Yes to energy saving, yes to renewables, and yes to a sustainable energy future.”
That view—that nuclear power is not the answer to future energy needs—is the view, of course, of the Secretary of State.
On Friday 12 May 2006, the Secretary of State said, responding to an affirmation by the then Secretary of State, my right hon. Friend the Member for South Shields (David Miliband), that the Government were considering a new generation of nuclear power stations:
“While Mr Miliband’s acknowledgment of the scale of the climate change challenge is welcome, his comments on nuclear power are worrying.”
He went on to say:
“Not only does nuclear cause a great threat to the environment through the large amounts of waste produced, but it is also economically unviable.
The Government intends to use private investment to fulfil our future energy needs. However, since the Chernobyl disaster, no nuclear power station has been built anywhere in the world without huge amounts of government subsidy.”
That is the point that the hon. Member for Bermondsey and Old Southwark (Simon Hughes) was making earlier. Such statements cause problems for those of us who want a balanced energy policy, because it is the Secretary of State making them, and one would expect him to be writing the policy.
I want to quote Melanie Phillips of the Daily Mail, although it is not a paper that I quote very often, and is not known to be a friend of mine—
John Robertson
As my hon. Friend says, I shall do so just this once. The Secretary of State’s former colleague at The Guardian highlighted the dilemma of the coalition when she wrote:
“Or look at the farce about to play out in the energy ministry. To stave off Britain’s looming power crisis, the Tories are committed to building more nuclear power stations.
Yet the new Lib Dem Energy Secretary Chris Huhne is viscerally hostile to nuclear energy. So to stop the lights from going out in Britain, Mr Cameron has apparently given the Tory junior energy minister Charles Hendry responsibility for civil nuclear power.”
I have great respect for the Minister. We both served on the Select Committee on Energy and Climate Change, as did several other hon. Members who are here—I thought I was at a Select Committee meeting when I came into the Chamber. I think I can say that the Minister and I have been singing from the same hymn sheet for some years, even if that did upset the Front Benchers of our respective parties. Melanie Phillips continued:
“But with Mr Huhne so opposed, is it not all too likely that Mr Hendry’s boss will find ways of kicking the nuclear power station programme into the long grass—thus provoking a possible nuclear explosion in the energy department?”
No pun intended.
I know that I should not believe everything that I read in the Daily Mail, or other media, for that matter, but will the Minister give this House an assurance that nuclear new build will go ahead, that the Secretary of State has changed his stance, and that the Secretary of State’s complete dismissal of the building of any new nuclear power stations has been sacrificed for his present position?
Mr Iain Wright (Hartlepool) (Lab)
I appreciate my hon. Friend’s obtaining this debate. I am completely confused about the coalition’s policy on nuclear. “The Coalition: our programme for government” states:
“We will implement a process allowing the Liberal Democrats to maintain their opposition to nuclear power while permitting the Government to bring forward the National Planning Statement for ratification by Parliament so that new nuclear construction becomes possible. This process will involve: the Government completing the drafting of a national planning statement and putting it before Parliament; specific agreement that a Liberal Democrat spokesperson will speak against the Planning Statement, but that Liberal Democrat MPs will abstain; and clarity that this will not be regarded as an issue of confidence.”
How on earth can we keep the lights on when we have such confusion at the heart of such an important part of Government energy policy?
John Robertson
My hon. Friend played an important part in the previous Government and should be thanked for all the work that he did—and for all the work that he will do in opposition. He makes a fair and valid point. The Minister must answer those questions. Those of us who are not trying to make political points— [Laughter.] I am shocked by that reaction. The point of the debate is to clarify exactly where we are on energy, where the industry stands, and where we are on this country’s security of supply. I know that the Minister does not mean to be flippant, and takes his job seriously, and will be able to answer all my questions to my satisfaction—I say that tongue in cheek.
While the Minister is confirming the change that I spoke of, will he also confirm the position of the Prime Minister, who has also seen the light, like Paul on the road to Damascus, and who no longer feels that new build can be seen only as a last resort? Will the Minister comment on that? If the Prime Minister is not behind a nuclear programme and a balanced energy policy we certainly have a problem.
Damian Collins (Folkestone and Hythe) (Con)
Given the strong points that the hon. Gentleman has made about the need for nuclear power and, in the light of the potential energy gap, the need to press ahead with the nuclear programme as swiftly as possible, does he share my concern that it was premature of the previous Government to take Dungeness off the list of approved sites?
John Robertson
I welcome the hon. Gentleman to the House and hope that he has a long and happy career here—but perhaps not too long. I totally agree with him, but that will not be a surprise to the Minister. Options must be kept open. Acting prematurely for the sake of looking good is a mistake. I asked a question in a similar vein yesterday, but did not get an answer, but I hope that the Minister will answer me today.
It will be the Government’s fault if we end up with power cuts. If they do not pull their finger out, that is exactly where we are going. It says here in my speech that I have tremendous respect for the Minister, and I do; I hope that that has not affected his political career or job prospects, as I am sure that he would like to move up at least one place. I hope he will. In a recent speech at Chatham House he said that he welcomed the opportunity to focus on one of the biggest challenges facing Government—the issue of energy security and how we decarbonise society. He went on to say:
“This is a green coalition with a shared priority. Both to create a low carbon economy to meet the urgent challenge of climate change and to help achieve energy security.”
That sounds a bit like “peace for our time” because there was no mention of nuclear power.
Sir Robert Smith
The hon. Gentleman made the point that if the lights go out, the Government will be at fault. The Government on watch must deal with the situation on the day, but with his knowledge and experience of the energy industry, the hon. Gentleman must accept that there is a huge lead time in the development of energy policy and in capital planning. We have had 13 years of a Labour Government; does the hon. Gentleman accept that the legacy of their decision making will contribute to the consequence, if the lights go out?
John Robertson
The hon. Gentleman has obviously read the next paragraph of my speech. I give him credit for his X-ray vision; perhaps what I say next will position me exactly as he has said.
Low-carbon technologies have an important role to play, not only when it comes to meeting our climate change targets, but with regard to building recovery from the recession and creating new jobs and industries in the coming decades. We face the greatest energy challenge of our lifetime. Over the next 10 to 15 years, we will need something in the order of £200 billion of new investment. How does the withdrawal of funding from Sheffield Forgemasters fit in with that rhetoric?
The need for a balanced energy policy that uses all proven sources of generation has been reinforced by the events of the last few years. The increased price of oil, and the effect that that has had on the economy, has highlighted the need to reduce dependence on imported gas and oil. Petrol prices have gone through the roof, with knock-on effects for transport and food bills, and inflated electricity and gas prices. The UK cannot be left at the mercy of imported oil and gas, but the demise of coal and nuclear would leave us dependent on our core source, gas, for at least 50% of our electricity needs. If, as is hoped, we go down the clean cars route with electric vehicles, we will need more electricity to cover the increase in demand. To ensure cheap, reliable electricity, we will need more than simple efficiency savings or more clean-generated electricity—either that, or the answer to our energy needs will have to be magic or come from thin air.
I have raised my concerns. It is essential that we have a coherent energy policy, but that requires total agreement within Government. I seek assurances that they will deliver a comprehensive balanced energy policy that includes a nuclear component. The decision to withdraw funding from Sheffield Forgemasters must be reversed, as that is contrary to delivering the skills and the means to make Britain a world leader in nuclear technology. As the Minister has said,
“Time is not on our side, and we recognise the scale of the challenge. We see low carbon technologies as the way forward to meet our climate change commitments, but also to enhance our energy security.”
He alluded to the fact that if we do not plan now—we should have planned already— we will hit a spot when there are real problems. That, of course, is where the dash for gas comes in.
When we get to about 2016-17, we will be in a particularly vulnerable position. It is hoped that the first nuclear power station will soon be given planning permission, and that it will be available and ready for commissioning in 2017-18. The most important time is between 2020 and 2025, when other power stations go offline and new power stations will have to be built. The Government have to make a commitment today: if they do not, those power stations will not be built. Indeed, that was said by my predecessor on the all-party group in 2002-03, when it was not popular to be a member of the group. It is amazing how time has proven him to be correct. Our original goal—when I say ours, I mean everyone’s; I am referring not only to you, Mr Brady, but Opposition and Government Members and the people of this nation—was to make Britain the most attractive place to invest in energy. In order to provide secure, low-carbon energy, we need to keep bills affordable.
In conclusion, I must tell the Government that talk is cheap and that actions speak louder than words; they must lead, proving that they have the solutions to our energy needs. If they act, they will have my full support and that of my party, as well as the support of everyone else in the country. If they do not act, I shall look forward to the next Labour Government being here—but we will probably need candles to see one another.
Damian Collins (Folkestone and Hythe) (Con)
I congratulate the hon. Member for Glasgow North West (John Robertson) on securing this important debate. I may not be able to say this a huge number of times in my parliamentary career, but I can say this morning that I agree very much with the thrust of his argument on the importance of nuclear being part of our energy mix. In an intervention this morning, I spoke of the Dungeness nuclear power station in my constituency, a subject that I also mentioned in my maiden speech. My hon. Friend the Minister knows that I take a strong interest in the matter; I am grateful for his reciprocal interest, as it is important to my constituents.
As I said earlier, in their consultation on the nuclear new-build programme, the previous Government removed Dungeness from the national policy statement on approved sites. That caused great concern in my constituency, and it was something of a surprise. There has been nuclear power at Dungeness since the 1960s, and there have been two generations of facilities. Dungeness A is being decommissioned, and Dungeness B is due to run until about 2018. It has always been anticipated that there would be a third—and, potentially, a fourth—generation of nuclear power stations on the site, which is strategically important; it is the only nuclear facility to the south-east of London, and it is in an area of high energy demand. It produces enough power to provide electricity for the whole of Kent.
I share the concern expressed by the hon. Member for Glasgow North West: if that facility is no longer available, and there is no new nuclear power, where is the energy to come from? It is likely to be imported, and the sources of that energy may not be as secure and certain as we would like. That will have a knock-on effect for consumers in the prices that they have to pay.
Like many Members who have nuclear facilities in their constituencies, I am aware of the excellent safety record of the British nuclear industry, and of the large number of jobs created by the building and running of nuclear power stations. They create an important economic infrastructure for the local economy. It is estimated that Dungeness B nuclear power station puts £20 million into the economy that it serves; in the current economic climate, I struggle to see where else that funding could be found, or what other investment could match it.
I wish to consider why the right hon. Member for Doncaster North (Edward Miliband) decided to take Dungeness off the list of potential new nuclear sites. Was it a lack of local support? No, not at all: there is a huge amount of support for the Dungeness nuclear power station. Research conducted in that area of Kent shows that the nearer one gets to Dungeness, the more popular it is. Was it because of the risk of coastal flooding? The Environment Agency says that it is perfectly content with managing the flood risk at Dungeness. If anything, maintenance of the flood defences there has a knock-on benefit for the whole of the Romney marsh area, which is largely below sea level and is considered to be one of the areas most at risk from sea flooding, so it was not that. Was it, as some in my constituency have suggested, concern about the proximity of a small, local airport? In evidence to the previous Government, the Health and Safety Executive said that that was not a concern, either now or if the airport should expand; it would not be a reason for not progressing with the Dungeness site.
The European Commission is not a body that I would normally draw upon for supporting evidence, but it clearly considered Dungeness to be a site for potential new nuclear build, because when EDF Energy completed its takeover of British Energy, it requested the new company to consider selling sites where new power stations might be built, so that it did not have a monopoly. Dungeness was earmarked as a site that might have to be sold. Clearly, at the macro level, the European Commission considered that it was logical for Dungeness plans to be taken forward, which is interesting.
It seems that Dungeness was taken off the list because of an interpretation of the habitats directive, and because of the Natura 2000 reserves, which are set up at a European level, although enforcement takes place on a national level. The Dungeness site would fall foul of the environmental protections under the habitats directive. That was certainly the view of Natural England, the Government’s statutory consultee. My predecessor, Michael Howard, raised that point with the right hon. Member for Doncaster North before the general election, asking whether Natural England had a veto on Government policy in such matters—its objection would seem to be the primary reason why Dungeness plans have fallen—but the right hon. Gentleman said that it did not. I hope that that is so.
We know that overwhelming national interest can take precedence over concerns about enforcing the habitats directive. Given what the hon. Member for Glasgow North West said about the huge need for nuclear power, I hope that we will consider it a matter of great national importance to have as many new-build nuclear sites as possible. I know that there would be problems with planning, and local opposition to grid connection points in various sites around the country. However, in evidence to the Select Committee on Energy and Climate Change before the election, EDF Energy said that it considered Dungeness to be an excellent site for grid connection, and that it could potentially be online and producing energy before 2020.
Mr Watson
The hon. Gentleman makes a compelling case, and he will have a very long career in this House if he makes arguments as potent as the one that he makes this morning. I suspect that part of the reason why Dungeness was taken off the list is that it does not work well—or occasionally does not work very well. Does he think that it would be useful for the Minister to forge links with the nuclear industry work force, and to perhaps meet Mr Dougie Rooney of the Amalgamated Engineering and Electrical Union, who could build common cause with him on the work force of Dungeness?
Damian Collins
I am grateful for the hon. Gentleman’s comments. I am assured that there is a lot of life in Dungeness B power station yet, and I hope that continues. As regards his other comments, I am sure that my hon. Friend the Minister can speak for himself.
Sir Robert Smith
The intervention from the hon. Member for West Bromwich East (Mr Watson) was confusing, because the performance of an existing power station does not have anything to do with the performance of the next power station on the site. Not to defend the previous Government, but I am sure that the decision was to do with the environmental impact locally, and the fact that the Government found sites elsewhere to fill the quota that they were looking to hit.
Damian Collins
The hon. Gentleman makes an important point about the nature of the environmental objections and whether they are well founded. Natural England’s objection is that Dungeness sits on a peninsula of shingle. It is the second largest shingle peninsula in the world; the largest is Cape Canaveral in Florida, so clearly either NASA has found ways of managing the natural environment, or the Americans are working to different rules. We are talking about a living, moving landscape, with nuclear power and other development. There is a need to intervene to prevent coastal erosion of the shingle peninsula, which is moving, and to maintain the defences and protect the existing power station; that means moving shingle from Lydd-on-Sea to the western end of the peninsula. That work has to go on, and people who have lived in Dungeness all their lives are aware that human intervention is natural.
Natural England is right to raise concerns about this important ecological site, which is unique in our country and, in many ways, in Europe. The history of Dungeness is the history of man working in successful partnership with nature. The site is excellent for meeting the energy demand for nuclear power in our country, and it should be considered as a site for a station. Given that the development area for the new power station sits alongside an existing power station, and is on land previously disturbed and developed as part of the building of the first two power stations, we are talking about potentially less than 1% of the entire protected area that covers Dungeness and Romney marsh and the Rye site of special scientific interest. That is a relatively small area of development; development could not be said to bring into question the integrity of the whole site. Only a very small part is affected, so some mitigation may be possible.
The national case and demand for nuclear power is such that we should seriously look at that option. We should not get into a position where any area of development is considered impossible, or where Natural England has, on certain sites, a veto over whether anything happens at all. There are even objections to the movement of shingle from one area of Dungeness to another to maintain the sea defences; there are questions over whether that should be stopped, and whether the building aggregate should be dumped into the sea instead, at great cost to the taxpayer.
Mr Iain Wright
I am following the hon. Gentleman’s argument closely. Like him, I have a nuclear power station in my constituency, and there is the possibility of a replacement power station next door. There is also an area for birds, which is of scientific interest, so we have very similar views. I would like nuclear power to be part of a balanced mix of energy for Britain. We need that to happen as quickly as possible, and I think that he agrees with me. On that basis, does he think that the Government’s abolition of the Infrastructure Planning Commission is a good or a bad thing?
Damian Collins
The hon. Gentleman makes an important point. The question is, what planning framework should deliver the nuclear new-build programme? Regardless of what takes the place of the IPC, all Members want a structured and coherent plan to take the sites forward. My concerns and argument are about the bit that comes before the IPC—the consultation on the list of nuclear sites. My concern is that that system has fallen down.
I am aware that the Government have inherited a live and open consultation from the previous Government. Ministers are still considering the evidence given by my constituents and many others during the consultation period, as well as the evidence in the report of the Select Committee on Energy and Climate Change. Those things will be taken into account, and I look forward to reading the report. I hope that Ministers will consider some of the points that I have made on the suitability of Dungeness as a key site.
Joan Ruddock (Lewisham, Deptford) (Lab)
Of course Natural England does not have a veto, but new build will take place only at a certain rate, and that is determined entirely by the private sector. It makes a great deal of sense for a Government to choose the sites most likely to progress at speed. In the case of Dungeness, the consultations necessary would be complicated. It was a purely pragmatic, straightforward and reasonable decision for the Government to withdraw the site from the consultation.
Damian Collins
The right hon. Lady makes an important point about the nature of consultation and how it is conducted. From the evidence of the Department of Energy and Climate Change on the consultation on Dungeness—available on its website—it seems that Natural England raised the issue early, and that meetings were called between it and EDF Energy very early on in the process. I am not certain how much interrogation there was of Natural England’s argument, or whether it was just accepted. Were the Government concerned that Natural England might make a serious challenge? Natural England said that it potentially had concerns about a number of the sites, but it had the greatest concern about the one at Dungeness. My concern is this: how much exploration has there been of Natural England’s argument, and what cases for mitigation have been made?
I am conscious that other right hon. and hon. Members would like to contribute. I obviously want Dungeness back on the list of sites, maybe with caveats at the planning stage that a very detailed plan for managing the local environment must be part of the consideration of how that power station could be built. I am sure that the right hon. Lady is correct that there will be issues with a number of the sites, whether or not they are included in the national policy statement on nuclear power. It would therefore be sensible to have as many sites on the list as possible that can contribute to our energy needs. We can then progress as many as possible and hope that a good number are delivered.
Mr Mike Weir (Angus) (SNP)
I am pleased to make a brief contribution to the debate. I congratulate the hon. Member for Glasgow North West (John Robertson) on securing the debate. He is, of course, a well known and passionate advocate of nuclear power, as is the Minister—these debates often seem like a meeting of old friends. While I respect their positions, it will not come as a great surprise to either of them that I take a somewhat different position. The Scottish National party remains opposed to new nuclear power stations. We believe that Scotland neither needs nor wants such stations, and there is a clear majority in the Scottish Parliament against them. This debate centres on the new Westminster Government’s policy, and I do not want to debate the pros and cons of nuclear power as such, but will focus on what their policy is.
Before the election, the Conservatives made no secret of their support for nuclear power, and their manifesto clearly supported new nuclear power stations
“provided they receive no public subsidy”.
The Liberal Democrats clearly stated that they
“reject a new generation of nuclear power stations”.
However, the coalition agreement states unequivocally:
“We will implement a process allowing the Liberal Democrats to maintain their opposition to nuclear power while permitting the Government to bring forward the National Planning Statement for ratification by Parliament so that new nuclear construction becomes possible”—
a fudge if ever there was one. It gets worse, in that the Liberal Democrats can speak against it but are committed to abstain on any vote. That seems to lack principle completely. The present Liberal Democrat Secretary of State for Energy and Climate Change, the right hon. Member for Eastleigh (Chris Huhne), who once described nuclear power as a “failed technology”, has stated that it is very clear that there will be a new generation of nuclear power stations. No doubt the Conservative party are relying on a temporary coalition with Labour to ensure the measure goes through.
We should not be unduly surprised; the Liberal Democrats were against nuclear weapons, but now appear to be in favour as long as they cost less than Trident. The position appears to be that there will be new nuclear power stations provided the private sector meets all the costs, but how will that work? In November last year, Citigroup published a fascinating report entitled “New Nuclear—the Economics Say No”, in which it describes the “three Corporate Killers” and says:
“Three of the risks faced by developers—Construction, Power Price, and Operational—are so large and variable that individually they could each bring even the largest utility company to its knees financially. This makes new nuclear a unique investment proposition for utility companies.”
I presume it does not mean that in a good way. It makes the point that
“No where else in the world…have nuclear power stations been built on this basis”,
and concludes:
“Nor will they be built in the UK—We see little if any prospect that new nuclear stations will be built in the UK by the private sector unless developers can lay off substantial elements of the three major risks. Financing guarantees, minimum power prices, and/or government-backed power off-take agreements may all be needed if stations are to be built.”
Dr Thérèse Coffey (Suffolk Coastal) (Con)
Has the hon. Gentleman not seen the comments by the head of EDF, Vincent de Rivaz, about how his organisation welcomes this new development and how it will continue to put forward its programmes despite there being no subsidy from the public sector? Such comments will be very pleasing to my constituents because it should mean that Sizewell will get built.
Mr Weir
I have heard Mr de Rivaz’s comments, but he seems to be the only one to make such comments. Different comments have been made by the head of E.ON UK, who is also interested in new nuclear power stations.
Let me return to what Citigroup was saying. I should add that the report was written before the oil spill in the gulf of Mexico, where BP has found that legal maximum liabilities are meaningless. Already, it has paid out more than the legal maximum under United States federal law and is facing many billions more in compensation payments. Just what would the cost be to any operator of a nuclear power station should—God forbid—there be a serious incident? The fact that there is a serious potential liability should be a red light to utility companies, and all those who invest in them. It is also worth noting that the present Secretary of State has already reported a black hole in the budget of his Department to meet the cost of decommissioning current stations and of containment of our existing stock of nuclear waste. Given that situation, how will the Government ensure that the new nuclear power stations will be built without public subsidy, especially as that has never been done anywhere in the world?
The coalition agreement gives us a clue when it states:
“We will introduce a floor price for carbon, and make efforts to persuade the EU to move towards a full auctioning of ETS permits.”
It seems that that is the answer as to how nuclear power is to be given a subsidy. Nuclear is to be made commercial by introducing a floor price for carbon. In a recent speech to the Nuclear Industry Forum, the Minister said:
“The carbon price is not a subsidy for new nuclear, it is to drive forward low carbon investment.”
An argument can be made that that is the case, but it is also undoubtedly true that new nuclear will be the main beneficiary of such a policy. It will have the effect of driving up, perhaps very substantially, the price of energy produced by fossil fuels, thus making nuclear much more attractive, which is why the nuclear industry is the cheerleader for this particular policy. In his speech, the hon. Member for Glasgow North West said that without nuclear power, we faced the prospect of very high energy prices, but if this policy is pursued, we may face very high electricity prices across the board with or without nuclear power.
In effect, the introduction of a floor price would be fixing the market, which I thought would have been anathema to free market Conservatives. It will no doubt be argued that that is a move that will help all other low carbon emitters, and that there are already many subsidies on different kinds of renewables. That point was also made by the hon. Member for Glasgow North West. Some of that is true, but other forms of renewables are new technologies that are receiving help to get them to a take-off postion in the market. The previous Government’s proposals to stagger renewables obligation certificates recognised that some of them had almost reached that position.
Nuclear is not a new technology; it is an old technology that has already had a shedload of money from the taxpayers. I am old enough to remember when it was said that nuclear power would be too cheap to meter. That did not happen, and we have seen the vast amount that will be needed to deal with the legacy of waste, now and far into the future.
It seems, therefore, that rather than making private investors take the risks, it is again the taxpayer who will do so, and I would be interested to know whether the Minister can give us more details on how the policy of the floor of the carbon price is to work. For example, when and how is it to be introduced? I noticed that The Independent suggested that it will be introduced when new nuclear power stations would be up and running in 2025. Will the policy apply only within the UK if he is unable to persuade the EU to adopt such a position, and how will that work with the competition laws within the EU?
Finally, I ask the Minister to confirm that the coalition Government remain signed up to the respect agenda with the Scottish Government that the Prime Minister talked so much about, and that there will be no attempt to amend the powers of the Scottish Parliament in that area so that we might continue to be nuclear-free.
As I stated at the outset, the SNP remains opposed to new nuclear power stations. We believe that Scotland has great potential to be the green powerhouse of Europe and that the determination of all three Unionist parties to pursue new nuclear power stations is an horrendous mistake that will cost the taxpayers dearly in the future.
Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)
I congratulate the hon. Member for Glasgow North West (John Robertson) on securing this debate and on putting his case for nuclear power, as he did so many times in the previous Parliament. As he recognises, one of the legacies that this Government will have to address is the previous Parliament’s lack of momentum in decarbonising electricity generation in the UK.
The hon. Gentleman did not address my specific question about nuclear power’s global contribution. Although nuclear power will be embraced by some countries, it will not be the solution to providing a low-carbon future across the world. Therefore, it is very important for us to develop other low-carbon energy systems, such as carbon capture and storage, especially if they can be retrofitted in China. That will have a far greater impact.
John Robertson
I thought that I had addressed the hon. Gentleman’s point; if I did not, I apologise. As we speak, power stations are being built around the world. Still more will be built when people see the low-carbon output—it is practically nil—of nuclear power stations.
The hon. Gentleman is absolutely right. China is the market that we have to get into, and CCS would help us do that. Nevertheless, the case has to be proven and the technology has to be there, and it is not there at the moment. The hon. Member for Angus (Mr Weir) said that nuclear power is an old energy. It is, but it is also a tried and tested energy that can be relied on.
Sir Robert Smith
Historically, the nuclear industry has required public subsidy for the purposes of trying and testing. Even the great white hope in Finland, which was meant to show how the market could deliver, has turned out to need an underpinning of public subsidy. I recognise that the carbon market is an important way of incentivising whatever means of low-carbon electricity generation comes before us, and anything that can be done to get a better price for carbon will be an important part of driving forward alternative energy supplies.
I must declare an interest here as a shareholder in Shell. I also represent the north-east of Scotland, where the oil and gas industry is extremely important. The hon. Gentleman said that he was worried about us relying on gas. This Government will have to address one of the legacies of the previous Government and make sure that we maximise our own gas production, because in that way we will reduce any immediate worries about having to rely on imported gas.
Moreover, the Government must recognise that the big change resulting from the near-decoupling of the oil and gas markets following the discovery of the means of producing shale gas—a new means of producing gas—is altering the whole concern about a further dash for gas. Gas is one of the cleaner fuels. Although it produces CO2 , it produces less than other fuels. Therefore, it can play an important part in our electricity mix without too much concern.
Mr Weir
I hear what the hon. Gentleman says, and I agree with him in many ways, but does he not accept the point that raising carbon prices will affect the cheapness of gas? It will substantially push up the price because gas is a fossil fuel and will be hard hit if we put a floor on the carbon price to benefit nuclear power.
Sir Robert Smith
What the hon. Gentleman has to accept is that we want a low-carbon future. Can he suggest a mechanism other than putting a price on carbon? The EU has embraced the idea of putting a price on carbon as the only means of producing a low-carbon future for the European Union.
Mr Weir
The EU has not accepted a floor price for carbon, as is proposed by the coalition Government. So we may have a position in which the UK is the only country trying to impose a floor price for carbon while remaining within the emissions trading scheme. I cannot see how that is workable.
Sir Robert Smith
That is why we have to convince the EU that, if it is going to deliver on a low-carbon agenda and if it has embraced the ETS, it will have to put a floor on carbon to make the ETS deliver the treaty commitments and other commitments to having a low-carbon future.
The hon. Member for Glasgow North West said that the world is facing the major problem of there being too much carbon dioxide going into the atmosphere. There is no way of not putting CO2 into the atmosphere unless we are willing to pay the costs of producing alternatives to CO2. Nuclear is one alternative, which we do not think is the right alternative, but marine renewables also need a floor on carbon—all low-carbon energy systems, if they are going to take off and be delivered, will need a floor on carbon. That is the only way. The EU has decided to embrace the ETS and unless we actually make the ETS work, we will not deliver on all our commitments.
Graham Stringer (Blackley and Broughton) (Lab)
I think that this debate about the European ETS is at the heart of European energy policy. Would the hon. Gentleman go as far as I would and say that the introduction of that scheme has been a catastrophe, that the low level of carbon is actually subsidising polluting industries and that it would be better to start again?
Sir Robert Smith
The EU cannot keep inventing new schemes. I think that we need to make the ETS work now that we have embraced it and we actually need to deliver it, because at least it uses the market to try to come forward with the best and most efficient solutions for achieving the low-carbon future that we need to embrace. So that is an important point.
There is another situation with nuclear. When we on the Energy and Climate Change Committee were looking at the planning statements, it struck me that the long-term solution for nuclear waste may well be a deep repository, but the plans now are to keep the waste on site for a considerable time. Therefore, all these communities must be managed for a long time, to protect those waste sites. They are all in low-lying floodplains, so we had this vision of little islands of nuclear waste being protected by flood defences, as the sea level rises and the legacy of the new nuclear generation is left for future generations to pick up.
So it still seems a major challenge for this country to go down that route of nuclear if we can embrace other technologies, such as carbon capture and storage and marine. We have a massive tidal resource around our coastline, which we have failed to tap and failed to launch. Those of us who are committed to marine renewables and the alternative technologies have been frustrated about the legacy of so many resources going into nuclear. That has diverted resources away from what could have been another great export industry and a very substantial source of low-carbon energy for this country, and it does not pose the risks of pollution that we would still face with nuclear.
Simon Hughes
I just want to make one other point. My hon. Friend has huge experience in all of these areas. However, the statutory body that advises on waste and nuclear waste, and that gave the official advice to the last Government, has not said so far that there is a safe method of disposing of nuclear waste. Yes, it has accepted methods of storage of nuclear waste, and the communities where that waste is produced and stored understand that, but there is not yet an agreed safe method of disposing of nuclear waste. Going ahead with a programme of new nuclear without a safe method of disposal being objectively agreed would be another folly.
Sir Robert Smith
Yes. It seems that we should deal with the legacy that we already have before adding to that legacy.
I am conscious that other Members want to speak. As the hon. Member for Glasgow North West said, we have the serious challenge of ensuring that the lights stay on. We need electricity to be generated. There is also the serious challenge of producing a low-carbon future. We need long-term investment, and we need the incentives that have been mentioned. I think that a price on carbon is an important incentive to low-carbon energy industries and that nuclear is not the great white hope that will solve the problem, although it is portrayed as such.
I also think that we need to embrace marine renewables and carbon capture and storage, and ensure that we achieve the most effective gas production from our own gas resources before we waste them and leave them locked in the ground. There is a low-carbon future in which we can keep the lights on, but I do not think that nuclear is the means of achieving that future.
Dr Alan Whitehead (Southampton, Test) (Lab)
I congratulate my hon. Friend the Member for Glasgow North West (John Robertson) on securing this debate. It is, of course, a debate about Government policy on new nuclear; we are not talking about the overall advisability of going down the nuclear route. My view remains that nuclear power is not renewable. We have no nuclear fuel in or around the UK and I have my views on that subject. However, Government policy on new nuclear is the important issue that we need to concentrate on right now.
In that context, the Minister has an enormous responsibility on his shoulders. I, too, have a great regard for him and for his skills in tackling these matters. However, he will need at least the skill of those responsible for putting in and removing the nuclear cores from Three Mile Island to keep the coalition on track as far as its policy is concerned, because although the provisional wing of the coalition is in for this debate, the official wing is apparently locked into Government policy on nuclear, in respect of the decisions that will need to be made as far as the Department of Energy and Climate Change is concerned.
Of course, we have clarity about what those decisions will consist of—indeed, we had that clarity in a speech that the Minister made to the Nuclear Industry Forum very recently. In that speech, he stated:
“We will keep the fast-track process for major infrastructure, but planning decisions will be made by Ministers thereby ensuring democratic accountability”.
There is a national policy statement on nuclear. Incidentally, the new Government are going to take that statement apart and put it together again, which I think will ensure further delays in the process. Among all the national policy statements that have come out, the statement on nuclear is unique in that it is site-specific. We have already heard mention this morning of the inclusion or exclusion in that statement of a particular site at Dungeness; in total, 10 sites have been identified in the statement.
If that is to happen as far as those sites are concerned, the decision taken by the Minister will mean that he will have to frank each of those sites and so will, among other things, give an enormous use value to those people who are then commissioned to develop them. The Minister will have to take a positive decision; he cannot remove himself from it.
As my hon. Friend the Member for Hartlepool (Mr Wright) mentioned, we will therefore have the spectacle of an agreement that appears to suggest that the Liberal Democrats can maintain their opposition to nuclear power while permitting the Government to bring forward the national planning statement for ratification. But that same Minister, in agreeing to that national planning statement, will specifically have to frank those sites, thereby allowing those particular nuclear stations to be developed.
Dr Whitehead
I was just going to reflect on that issue very briefly. As the Minister mentioned in his recent speech to the Nuclear Industry Forum, these decisions will come before Parliament. Presumably, therefore, the Minister who has made the decisions will be in the position of abstaining during votes on them. That will be an interesting piece of choreography, if the policy is to go ahead.
In his recent speech to the Nuclear Industry Forum, the Minister also emphasised that there will be no cost to the public purse as a result of the new nuclear programme. We need a little more clarification of what that actually means. In the past, one of the reasons why potential builders of nuclear power stations said that they might go ahead with nuclear build was that their clear underlying view was that they really did not believe that the new proposals would present no cost to the public purse.
It is one thing to say that there should be a floor price for carbon—that would not be a cost to the public purse, but generic assistance for all forms of low-carbon energy—but there is also the question of subsidising or giving guarantees of last resort on insurance, waste and storage, and of giving assistance on how all that works. Those are subsidies. If the Government are saying out of one side of their mouth that there will be no subsidies but out of the other side that, actually, there will be subsidies in several areas, that may be the way forward that they wish to assume as far as their policy is concerned. However, if they really do mean that there will be no subsidy from the public purse, there will also be no timetable for the build of new nuclear.
That is the crucial issue that we need to face in respect of future policy. If there is no subsidy at all from the public purse, a company may come forward and build a new nuclear power station, two or three companies may come forward and build two or three new nuclear power stations, or perhaps no one will come forward to build a new nuclear power station. We cannot easily afford that uncertainty, given our energy supply situation.
The previous Government’s timetable for the arrival of the first new nuclear power station was 2017-18. My hon. Friend the Member for Glasgow North West mentioned that potential date today. Interestingly, a policy document issued in 2007 by the then Department of Trade and Industry, “New nuclear power generation in the UK: Cost benefit analysis”, gave a different date—the early 2020s—for the arrival of the first new nuclear power station. Indeed, several industry analysts and others suggest that a realistic date is more likely to be in the mid-2020s.
That is important because, by that date, some 8 GW of coal-fired power stations, 3 GW of oil-fired power stations and 7 GW of nuclear power stations will have gone out of commission—for various reasons, including the large combustion plant directive, the age of the plant and the difficulty of maintaining or extending the life of nuclear power stations. That capacity will definitely be out of the system, so the question is what we do in the meantime to replace it. If no nuclear power stations are likely to come on stream until the mid-2020s, it will have to be replaced by other means.
Damian Collins
Does the hon. Gentleman share my regret that the previous Government did not get into the timetabling much sooner? We should have developed the process much earlier.
Dr Whitehead
Personally, that is not a source of regret to me, but there certainly is an argument that, because of the long-term scale of the planning, if one were to develop a range of new nuclear power stations to replace power stations as they ran down, replacement should be on that basis: as they run down. However, successive Governments have not taken that view on nuclear power; it was not only the previous Government for whom it was not an issue. However, we are in a position where like-for-like renewal would mean an enormous fleet of new power stations coming on stream at an early stage.
If that does not happen, base-load power, which is so important for our energy economy, is likely to be replaced by other means such as carbon capture and storage-fitted coal-fired power stations or—the Committee on Climate Change recently wrote to the Government to emphasise this—CCS-fitted gas-fired power stations. That would then be a new generation of base load, on the back of which new nuclear power would have to compete.
If new nuclear power has not been planned in any way, it will have to compete with that new form of base load, and whether it can compete on price for its power will be entirely determined by whether there is a subsidy for new nuclear power or whether there is some form of carbon pricing that enables nuclear power, at the point at which it comes in, to compete effectively against other forms of power. The time scale is crucial as far as new nuclear power is concerned.
That is the central issue for this country’s future energy policy. The challenge that we face is to keep the lights on, to replace an enormous amount of generating capacity—not just base-load, but other forms as well—and to ensure that that generating capacity is low carbon for the low-carbon economy that we must move towards. Above all, that needs planning. Planning is needed to ensure that that happens over a period of time.
For the new Government to announce a policy that says, in essence, that there will be no planning as far as new energy supplies are concerned seems perverse, given the imperatives ahead of us. Whether we plan to have a fleet of CCS-fitted power generators, large-scale renewables—wind, wave and tide, and large deep-sea wind arrays—or a new generation of nuclear reactors to provide energy, we have to ensure that there is planning at some stage.
I am concerned that the new Government’s announcements in their early days about how they will manage the energy economy, and what they are doing in respect of national policy statements, the Infrastructure Planning Commission and nuclear power, appear to be moving away from ensuring that we plan our energy economy so that we can keep the lights on for the next 50 years.
Joan Ruddock (Lewisham, Deptford) (Lab)
I congratulate my hon. Friend the Member for Glasgow North West (John Robertson) on his success in securing the debate and on the way in which he made his case. He has always been a supporter of nuclear power and has worked hard to keep the issue before the House. Not all of us in the Labour party have shared his enthusiasm over the years. Indeed, my own position was not dissimilar to that of the Prime Minister, who said that nuclear energy was an energy of last resort. However, in any consideration of nuclear energy, we need to ask why so many people have changed their minds in favour of new nuclear, and what that means for those who have not.
As my hon. Friend said, the twin imperatives of tackling climate change and achieving energy security have focused and changed minds on new nuclear—but only some minds. Despite constantly challenging the Labour Government to do more on climate change, the Liberal Democrats in their manifesto explicitly rejected a new generation of new nuclear power stations, and we have heard contributions this morning that have entirely underlined that.
Perhaps the Minister could say whether he remains committed to a reduction in greenhouse gases of 34% by 2020, and at least 80% by 2050, as specified in Labour’s Climate Change Act 2008, given the Liberal Democrats’ brake on his nuclear ambitions. Does he recall the warning given by his newly acquired friend, the hon. Member for Cheltenham (Martin Horwood), who stated:
“I assure any investors who may be watching our debate…that their investment will be at risk if we play a part in any future Government, because if we had the chance we would seek to slow down, and if possible to stop, the development of nuclear power.”—[Official Report, 30 April 2008; Vol. 475, c. 322.]?
That is in stark contrast to the Minister’s statement that clarity is essential if new investment is to happen.
What are business and industry to make of the coalition Government’s position? It is clear that there is no united Government position on nuclear energy. As my hon. Friend the Member for Hartlepool (Mr Wright) said, there is not just one or even two but three positions. The coalition agreement states that the Government will introduce a national planning statement, so they are notionally in favour of nuclear. But a Liberal Democrat representative will speak against it, and the Liberal Democrat party will abstain in any vote. We always knew that being a Liberal Democrat in opposition meant not having to choose. It seems that old habits die hard and that Liberal Democrats do not accept the responsibilities of government, so perhaps the Minister will tell us whether his right hon. Friend the Secretary of State is committed to nuclear power. Was not one of the very first actions of his Government to create the very risks to investment, and slow-down in the development of nuclear power that the hon. Member for Cheltenham threatened?
Much has been said about Sheffield Forgemasters, and some of it bears repeating. Surely the Minister—I have the greatest regard for him and welcome him to his new position—must have shared my astonishment at the decision to cancel the loan to that company. I well remember him in opposition constantly banging on about energy security and investing in manufacturing, so what is his explanation? The deal took two years to negotiate, and would have put the UK at the forefront of an expanding market with great export opportunities. There must have been collusion between a Liberal Democrat Chief Secretary and a Liberal Democrat Energy Secretary who are determined to slow down the nuclear replacement programme that we were putting in place. Exactly what role did Liberal Democrat opposition to nuclear play in the Sheffield Forgemasters decision, and can we have a full explanation? How will that decision affect the timetable for new nuclear?
Without the new investment by Sheffield Forgemasters, the waiting list for pressure vessels is too long. Korean and other companies, including two in China, intend to enter the business of making large forgings, but the work necessary to ensure that steel is made to the right quality is bound to take several years. Any failure of the reactor core would be catastrophic, as the Minister knows, and customers will be wary about buying from a company without sufficient experience. Sheffield Forgemasters is one of a small number of businesses in the world that could increase the speed of roll-out of new nuclear. Forgemasters might have been the central company in a nuclear renaissance in the UK.
So what now? In government, we systematically developed the instruments and legal frameworks necessary for the transition to a low-carbon economy. We believed that the energy revolution was vital to our security and to tackling climate change. Planning was clearly an obstacle, so we created the Infrastructure Planning Commission. Despite the CBI saying that it is vital for strategic infrastructure, we understand that the coalition plans to scrap it. In response to that announcement by the Secretary of State for Communities and Local Government, Clare Spottiswoode, chair of Energy Solutions Europe, which helps to manage five nuclear sites in the UK, said:
“People are already nervous...the risk is they will just take their money elsewhere.”
Who will make the decisions on new nuclear plants under the coalition’s proposals? I believe that it will be none other than the Energy Secretary, who opposes nuclear power. Does his hon. Friend the Minister of State have any confidence that new nuclear plants will be built? Will the Secretary of State chair the Nuclear Development Forum, or will that also be scrapped? If he does not want to support British manufacturers of components for new nuclear, how does he plan to encourage industry? Is he aware that in the real world where private finance is hard to come by, support through soft loans, tax breaks and procurement policies is commonly provided by our competitors?
In the run-up to the election, both parts of the coalition talked about the need to make Britain less dependent on financial markets and property speculators as the engines of growth. They talked about green investment banks. They talked the talk, but clearly they have no intention of walking the walk. Frankly, cutting investment in a highly skilled and productive British manufacturing company is economically illiterate. Last week the Minister talked about skills, and praised the chief executive officer of the National Skills Academy for Nuclear, John Llewellyn.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
Jean Llewellyn.
Joan Ruddock
I am grateful for the Minister’s advice. I shall call him Mr Llewellyn—I do not know him.
Joan Ruddock
I accept entirely that I have made an error, but I obtained the information from a good source, so I blame that source and not myself. I accept that the chief executive officer is a woman. I have never met her, but she praised the Northwest Regional Development Agency and said that the sector’s collaboration in skills training with the agency’s backing
“was an example envied by other countries”.
Will the Minister tell us his Government's intentions for that agency?
What is left? Is it correct that there will be no assistance with planning, no assistance with investment and no assistance with skills? I anticipate that the Minister's answer will be to create a floor price for carbon, something that we, of course, considered when in government. Unusually, I join the hon. Member for Angus (Mr Weir) in asking what progress has been made. How effective does the Minister believe he can be in trying to set a floor for a single member state, at what level might it be set and what might be the effect on energy consumers? What talks have he or his officials had with other member states on the functioning of the EU’s emissions trading scheme and the carbon price? I can tell him that there is no easy solution.
The Labour Government transformed the UK's approach to energy security, and recognised the finite future of North sea oil and gas, the challenge of imports and the need dramatically to increase renewables in the face of climate change. We added to that mix the need for a new generation of nuclear power stations and the development of carbon capture and storage to enable us to burn clean coal. We put everything in place to achieve a low-carbon economy. This should be a time of great opportunity. Instead, it is a time of confusion, contradiction and lack of confidence. The Government have made a bad start.
I am grateful to my hon. Friend the Member for Glasgow North West for giving us all the opportunity to make these issues clear to the coalition, and I congratulate him and all other Members who have contributed to this debate. I look forward to the Minister’s reply.
The Minister of State, Department of Energy and Climate Change (Charles Hendry)
I welcome you to the Chair, Mr Brady, in this important debate, and I congratulate the hon. Member for Glasgow North West (John Robertson) on securing it. He has had an interest in this area of policy for many years, and we welcome his commitment. He delivered his speech with the degree of mischief that we have come to expect from him. I hope that we all approach the matter on the basis of needing to find common ground. In opposition, we approached the nuclear debate by asking how we could best co-operate with the previous Government’s approach and how to take the matter out of politics. I hope that that approach will continue during this Parliament, because some of the most important decisions will have to be made during it. I will try to answer as many as possible of the points that have arisen during the debate, but if I do not respond to any, I will be more than happy to make an early appearance before the hon. Gentleman’s all-party group on nuclear energy to try to provide the assurance that its members seek.
The hon. Member for West Bromwich East (Mr Watson) asked whether I would meet the trade unions. I have already had contact with some of them. They are all part of the family, and I am keen to work closely with them because they have a significant contribution to make on skills, safety issues and the whole approach to new-build nuclear in this country.
This has been a good debate and I am grateful for the kind comments that people have made to me personally—they normally say that they respect me just before disagreeing with virtually everything they think I might be about to say. This is perhaps a bit of a replay of the work of the Energy and Climate Change Committee, to which I am sure we will return more formally in due course. We have heard some extremely useful contributions. My hon. Friend the Member for Folkestone and Hythe (Damian Collins) made an extremely impressive speech. He will understand that I am constrained in what I can say about Dungeness, but it is very encouraging indeed that it has such a strong advocate in Parliament for its interest and for the nuclear agenda more generally.
The hon. Member for Angus (Mr Weir) asked about the respect agenda. We absolutely understand that those planning issues are a matter for the Scottish Government, and it will be up to them to decide whether there should be new nuclear plants in Scotland. We have a fairly clear idea where they are coming from on those issues. The national policy statements covered only England and Wales, so the process for Scotland has not been considered, but if one talks to the investors, one realises they have essentially ruled out investment in new nuclear plants in Scotland for the time being. Many people will feel that that is a mistake and is unfortunate. However, we completely respect the position of the Scottish Government.
The hon. Member for West Aberdeenshire and Kincardine (Sir Robert Smith) talked about the range of other low-carbon technologies that we should also be considering. I agree with him. This is not just about nuclear; it is about marine development, in relation to which the United Kingdom is not taking the lead that it should. The issue is also about carbon capture and storage, and we must up the game in terms of our contribution to that. As he said, the matter is critically also about the offshore oil and gas industry and having policies in place that enable us to get the maximum potential out of the resources that are there. That is a central part of our national interest in relation to energy policy.
Mr Iain Wright
The hon. Gentleman commands the respect of all parties and I welcome him to his position. He mentioned the issues of nuclear on the one hand and renewables on the other. I agree with him that those matters are not mutually exclusive—in fact, a range of infrastructure is needed to have a degree of compatibility. In Tees valley in my constituency, there are great opportunities to have not only a nuclear power station but a range of renewable energy. What help and support can he give my area to make sure that we become a real centre of excellence and an engine for growth for energy policy in the UK?
Charles Hendry
I absolutely understand that it is not just a nuclear matter. The Tees valley can play a crucial role in the development of carbon capture in nearby Teesside, and there are also many offshore opportunities there. We want to try to find the best way we can to encourage a supply chain to invest in Britain. That is not always going to be through Government grants and subsidies, although there is a role for that and such an approach can make an important contribution. Other issues will also determine whether people invest in Britain. It is mostly—although not exclusively—international companies that will be making such investment, and there is a wide range of issues surrounding the regulatory and tax environment that will be central to whether they invest here. Nuclear is part of an overall approach. I hope I will have the chance to come up to Hartlepool to see some of those opportunities, and perhaps be shown around by the hon. Gentleman.
Some of the issues raised today have to be considered against the backdrop of the challenge that we face as a country. In the course of the next few years, we will see a third of our coal plant being taken out of commission because of the large combustion plant directive, and most of the rest will go as a result of the industrial emissions directive. Much of the remaining oil plant will also be closed because of those measures. Based on current plans, if there are not life extensions, apart from Sizewell B, the nuclear fleet will have closed down in little over a decade. We therefore have an incredible challenge to face.
The hon. Member for Glasgow North West, who introduced the debate, talked about £200 billion of new investment, which compares with about £350 billion of new investment in energy infrastructure in the other 26 nations of the European Union. We have a uniquely serious challenge, and part of the problem is that not enough has been done soon enough. If the five-year moratorium on nuclear had not taken place, we would obviously be five years further forward in the development of those plants. The pressure points in our energy security to which he and others have referred exist because we have not been securing enough investment at an early enough stage during the course of the process.
The coalition agreement is absolutely clear. By definition, a coalition agreement brings together people of differing views to work together for the national good, and that is what we are seeking to achieve. It has been made clear that nuclear will be part of the mix as long as that is done without subsidy. Above all, we have to know whether the industry itself is comfortable with that position and whether the people who will be required to invest billions of pounds in each plant are happy with that agreement. The discussions that we have had since the election suggest that they are comfortable with that arrangement and with the position of myself and the Secretary of State.
Some people opposed nuclear for philosophical reasons; others believed that it would not happen because it would never be economically viable. The Secretary of State has always questioned the economics. However, he is happy that if people come forward with an application for a new nuclear plant without subsidy, it should be part of the mix going forward. We have a clear position, which the investors themselves have been very keen to clarify and which they are now able to support. I hope hon. Members will give us the credence to work forward on that basis, because it is critical for investor confidence that they see a broad coalition in Parliament in favour of a future role for nuclear in this country.
We will go to great lengths to ensure that the taxpayer is protected—no subsidy means no subsidy. We are considering areas in which there may have been hidden subsidies and dealing with those. For example, we will certainly maintain—and reinforce if necessary—measures put in place by the previous Government to ensure that the operators of new plants are required by law to set aside money from day one to pay for the waste and clean-up process. The industries themselves will have to carry out the investment, but the Government will be responsible for the regulation of the safety and environmental aspects that go with that.
The Office for Nuclear Development will continue its crucial work in trying to remove barriers to investment. I give the right hon. Member for Lewisham, Deptford (Joan Ruddock) an assurance that the Nuclear Development Forum will be a key part of taking that forward. It has been an extremely important part of that process, in which both the Secretary of State and I will be very involved. We want people to see that we are at one on these issues.
There has been much discussion of planning during the debate. A statement will be made to Parliament in the near future that will set out exactly how the changes will work. We want the national policy statements to be ratified by Parliament because that reduces the risk of judicial review and makes them stronger and more robust. We want investors to see that there is a strong majority in Parliament in favour of new build, as that sends a strong signal to their overseas boards. We will certainly take account of the representations made by Dungeness to be included in the list, but we will also give similar weight to the representations from community groups in areas concerned about new build, so that we can ensure that their views are fully taken into account. We are currently considering our response to the NPS consultation process and we will make it clear as soon as we can.
On the Infrastructure Planning Commission, we will be introducing a degree of democratic accountability. There will not be delays as a result of that process because we totally understand the urgency of driving these decisions forward, not just in nuclear but right across the board in the energy mix. However, we are keen to ensure that there is parliamentary accountability—again, because we believe that reduces the risk of judicial review.
Charles Hendry
I hope the hon. Gentleman will understand that, with just two minutes left, I shall do so for just a few seconds.
John Robertson
Will the hon. Gentleman mention Sheffield Forgemasters, because a number of colleagues have mentioned that matter?
Charles Hendry
I am grateful for that intervention. Other issues have also been raised, on which I will certainly write to hon. Members. On Sheffield Forgemasters, the decision was not a reflection of the quality of its workmanship or the nature of the company. We simply had to look across the board at a vast number of projects to which significant sums of money had been committed at a time when the nation could not afford it. Essentially the Government were having to borrow money to lend money. If one went to a bank and said, “I need an overdraft because I want to give more money to charity,” the bank would question the wisdom of that approach.
Charles Hendry
It is not, but the similarity in the situation I outlined exists. I am not suggesting that the money was for charity but, however good the cause, it does not make it right to borrow money when one cannot afford to do so. As a Government, we clearly recognise that the previous Government committed us to borrowings that we cannot afford. Sheffield Forgemasters is not a charity; it is a very important business and a key part of the Sheffield community. We will work with Sheffield Forgemasters, which has indicated that it is looking for commercial routes to make its plans possible. We very much want to see that happen, but we do not believe that it is possible to provide Government funding to do so. We will obviously want to return to some of the other issues, and I will certainly write to hon. Members on them. Once again, I thank the hon. Gentleman for giving us the opportunity to discuss such a crucial subject.