Caroline Lucas
Main Page: Caroline Lucas (Green Party - Brighton, Pavilion)
Caroline Lucas (Brighton, Pavilion) (Green)
Does the Minister agree, however, that the Government’s position on nuclear ought to be guided by the coalition agreement, which clearly stated that new nuclear should “receive no public subsidy”? Is he not acting rather like Humpty Dumpty in “Through the Looking Glass”, in that he is making words mean what he wants them to mean? Subsidy means giving extra money to that technology; it does not matter that he is also giving subsidies to renewables. He seems to be arguing that it is not a subsidy if it is being given to renewables and to nuclear, but it is still a subsidy. Will he not recognise that and stick to the line in his own coalition agreement?
Michael Fallon
Of course I stick to the line. On this side of the House we all stick to the terms of the coalition agreement, and it is important that we keep doing that. I do not see any reference in the Bill to the word “subsidy”. When the hon. Lady sees the terms of any contract that might be concluded with EDF for Hinkley, or indeed with Horizon Hitachi for the next two stations, she will see that the word “subsidy” is not involved.
Amendment 25 would prohibit the Government from underwriting, or providing in investment contracts, guarantees to cover nuclear construction costs. Let me reassure the House, if there is a concern about construction cost overruns, that such overruns for new nuclear will be borne by the developer. There are two scenarios, however, in which it might be reasonable for certain construction risks to be shared. They include cases involving less mature technologies such as carbon capture and storage, reflecting the high level of uncertainty around those construction costs, and those relating to certain events outside a developer’s control, such as specified change in law events. An example could involve a law that specifically discriminated against nuclear.
More widely, I can assure the House that we will only sign a contract in respect of Hinkley that is fair, affordable and represents clear value for money for consumers. Amendments 26 and 27 would delay the Government’s making CFD regulations relating to nuclear power or signing an investment contract until the National Audit Office had first carried out a value-for-money assessment of nuclear power or the relevant investment contract. It would not be right to hold up the delivery of a major Government programme that is vital for economic growth and jobs across the country until the NAO had undertaken a review. We have already put a significant amount of expert scrutiny into the decision-making process to ensure a robust evidence base, and will be consulting on the draft electricity market reform delivery plan to augment that.
More generally, the major CFD regulations will be consulted on and will be subject to affirmative parliamentary approval. Investment contracts are already subject to close scrutiny by external advisers to ascertain whether they represent value for money. Combined with my earlier commitments and amendments to the Bill, this will ensure transparency of investment contracts.
Michael Fallon
I want to be fair to the hon. Member for Brighton, Pavilion (Caroline Lucas), too, but I give way again to the hon. Member for Stoke-on-Trent North (Joan Walley).
Michael Fallon
It is for Ministers to take these decisions and for Ministers to be accountable to Parliament for them. It is for Parliament to scrutinise the decision taken. I am sure the hon. Lady is not suggesting that Parliament itself should take this decision; in the end, it is for the Executive to take their decisions about investment and infrastructure and for those decisions to be fully accountable to, and scrutinised by, Parliament.
Caroline Lucas
I reiterate the point that the hon. Lady has just made because the National Audit Office cannot look at the issue at the key point where we need the information. My wider point is this. The Minister keeps saying that nuclear offers value for money, is fair and affordable and so forth, but how can that possibly be the case when this Government envisage locking taxpayers into a 35-year contract to pay around twice the current market price for power, with the money then going to line the coffers of the French nuclear power station operators?
Michael Fallon
I wonder how the hon. Lady seems to have more information about the final details of the contract than I do, as I would suggest to her that I am a little closer to it than she is. When the details are published, she will find that not everything that has appeared in the newspapers is wholly accurate.
Martin Horwood
I did not say 10, I said 100, and figures as high as 165 have been discussed and contract times as long as 40 years speculated about. The Minister has been unable to reassure us about that in the debate. It is true that high prices are talked about for offshore wind, but that is an emerging and quite competitive technology that deserves support. It is not a 56-year-old technology that has already proved to have a massive record of cost and time overruns. I am happy with supporting offshore wind but unhappy with supporting nuclear.
The effect of new clause 5 and a panel of expert scrutiny would be to ensure that all technologies negotiating contracts for difference were subject to scrutiny, including offshore wind and other renewables. New clause 5 and new schedule 1 are not specifically anti-nuclear, but they are anti-unearned subsidies. The Energy and Climate Change Committee called for that in its report, and Which? addressed it in the drafting of these provisions—I am grateful for that. Such scrutiny and transparency are particularly relevant when, as the Committee pointed out, a mature technology dominated by a single large supplier means there is little competitive pressure and the strike price naturally tends to rise in such a situation—even more so, as the hon. Member for Rochester and Strood (Mark Reckless) pointed out, if one side has almost conceded that it needs to sign the contract at the end of the process.
Alternatives have been discussed, such as scrutiny by the National Audit Office and others, and in a parliamentary debate some months ago it was suggested that the Public Accounts Committee play a role in this kind of scrutiny. The problem with all these suggestions, however, is that they investigate after the event. As I said in my intervention on the Minister, if we are talking about a contract of 20 or 30 years, it is practically useless to investigate whether it is good value after the event because we are locked into it for a whole generation. Right now, negotiations are under way with EDF for this contract.
New clause 5 and new schedule 1 would establish an independent expert panel, which would differ from the expert panel that the Government have already established. As the affordable energy campaign by Which? pointed out:
“A panel of technical experts has been established by the Government to scrutinise the evidence National Grid presents for the setting of CfD strike prices. However this panel does not have a sufficiently broad role. For example, it does not have value for money as part of its remit. The panel must have a clearly defined oversight role set out in the Bill”.
If the Government support the concept of an expert panel, why on earth can they not put it in the Bill, as defined in new clause 5 and new schedule 1? I would have thought they would have absolutely nothing to fear from that.
New clause 5 and new schedule 1 are in the same spirit as amendment 162, although I do not buy everything the hon. Member for Daventry said in support of his proposals. However, energy bills are a major cause for concern among consumers—all hon. Members know that. Whether we are proposing renewables or nuclear, a strong case needs to be made, and transparency and accountability need to be at the forefront. Consumers need a good deal as well as a green deal. The Bill does not guarantee to deliver that, which is why I shall press new clause 5 to a Division.
Caroline Lucas
I rise to speak to my proposals and give notice that I will press amendment 24 to a Division.
I am pleased to follow the hon. Member for Cheltenham (Martin Horwood), who made a compelling case, demonstrating that, even if the word “subsidy” does not appear in the document, we are talking about a public subsidy for nuclear, which goes against the coalition agreement. The bulk of my proposals on new nuclear simply seek to return us to the coalition agreement, which said that new nuclear should receive no public subsidy. Many people are hugely disappointed that Ministers are ditching their commitment so shamelessly.
A Government who genuinely want to tackle high electricity bills would not sign taxpayers and bill payers up to a 35 or 40-year contract—we do not know how long the contract will be for, but that is the ballpark figure out there. The contract would also involve paying around twice the current market price for power. As has been said, that money will line the coffers of French nuclear corporations.
If we were serious about tackling fuel poverty, we would not be going down that route, yet that is precisely what the complex mechanisms for providing financial support for nuclear in the Bill do. We should add the liability cap, underwriting, and indirect subsidies such as for decommissioning and for the unsolved waste problem. Essentially, we are writing a blank cheque for an expensive, inflexible old technology that we cannot afford and simply do not need.
A Government who were serious about tackling fuel poverty and high energy costs would instead pursue more effective ways of meeting our energy needs and decarbonising our power sector, namely through renewable energy, energy efficiency, demand reduction, and demand-side measures such as energy storage, genuinely smart grids and interconnectors.
The UK has the potential to be a massive industrial leader in renewables and efficiency—solutions that could deliver huge cost reductions and a substantial boost to the UK economic recovery, manufacturing and jobs, yet the Bill goes in the opposite direction. Moreover, the secrecy of the Department of Energy and Climate Change negotiations with EDF further undermines confidence in the credibility of the Government’s claims that the deal represents value for money for consumers.
Even if hon. Members are happy for the coalition to break its promise of no public subsidy for nuclear, one would hope that they had some interest in the Minister’s claim that any deal reached would be fair, affordable and value for money. Nuclear costs more than the alternatives and does not represent value for money. We have the opportunity to test that via the expert panel, or by giving the National Audit Office a role in ascertaining value for money, which one of my amendments would do, but Ministers do not look favourably on those proposals.
The truth is that nuclear is a mature technology that has enjoyed nearly 60 years of support. Despite that, the price tag keeps going up. The hon. Member for Cheltenham mentioned the price of nuclear in Finland and France. We should compare that with the fact that the costs of renewables are falling across the board. Last month, Citi Investment Research and Analysis highlighted that, in many cases, renewables are at cost parity with established forms of electricity generation. Recent analysis by Bloomberg New Energy Finance found that the levelised cost of onshore wind had fallen dramatically in recent years, that the best onshore wind farms in the world currently produce power as economically as coal, gas and nuclear generators, and that the average onshore wind farm will reach grid parity by 2016.
That is the point of my first three proposals. They are not anti-nuclear; they would simply ensure that Minister’s warm words on cost-effectiveness and value for money for bill payers were kept. They would also introduce transparency to a shockingly opaque process. If nuclear power is as cost-effective as we are told, I can see no reason why hon. Members would not support my proposals to ensure it. Amendment 24, which has cross-party support, would simply ensure that payments under a CFD for nuclear electricity are not greater than payments for any form of renewable generation, in terms of price per megawatt-hour and taking into account the length of the contract provided.
Amendments 26 and 27 deal with transparency and parliamentary scrutiny of investment contracts and CFDs. They are essential if the public and the House are to have any hope of deciding for themselves whether the terms provide anywhere near value for money compared with alternatives. They would require the Secretary of State to ask the NAO and Parliament to examine whether the contracts represent value for money, in line with the motion debated in a Backbench Business Committee debate on 7 February, and a letter sent recently to the NAO by a cross-party group of MPs and academics.