Infrastructure Bill [Lords]

Brian Binley Excerpts

Monday 8th December 2014 Commons Chamber

[Charles Hendry]

The hon. Gentleman is absolutely correct. The head of the British Ceramic Confederation, Laura Cohen, and a group of its members, who employ thousands of people in this country in important industries, wrote to the Prime Minister last year to highlight just that point. They said that there was much greater volatility in prices for industry in the United Kingdom than elsewhere and that that volatility was unacceptably high. They said that the solution was more gas storage and that a public service obligation on gas storage was required.

[Mr Brian Binley (Northampton South) (Con)]

My hon. Friend and I have battled on the same side on this issue for a number of years. In fact, I have been battling on this issue for most of the time I have been in this place. Does he, like me, hope that we will hear something more positive from the Government this evening than we have heard to date? The Labour Government and this Government have prevaricated consistently on the issue of storage. We want to hear something definite about it—tonight, hopefully.

[Charles Hendry]

I seek, on most issues, to be on the same side as my hon. Friend; we do not always manage that, but we often do. The Government introduced a new market mechanism, which we hoped would introduce more gas storage, but it has delivered only a small amount more. There are projects that have essentially been abandoned for the time being because, if they are to be funded on market principles, there has to be a bigger difference between the summer price and the winter price. That does not exist at the moment in a way that would enable those facilities to go ahead.

The Government have rightly looked at market mechanisms, but my conclusion is that we need to look more fundamentally at what is necessary to move this matter on, especially given the time it takes to build such facilities. It will be five years before a big facility can be brought on stream. Some have planning permission and could start very quickly. Billions of pounds of investment are ready to go into them, but a public service obligation on gas storage is needed to make that happen. I hope that the Government are prepared to look at an amendment along those lines in Committee or on Report. I will happily work with them on that.

In conclusion, we are right to explore market options. Normally, in most winters, that will be enough. However, too much of our energy policy in this area in recent years has depended on luck. We have always been on the right side so far, but one day our luck will run out. Taking steps now, with the support of the energy industry and the major companies that use gas, would be a fitting amendment to a Bill on infrastructure. It would help us to go forward with an even more robust infrastructure in the years ahead.