Badger Cull

Debate between Charles Hendry and Caroline Lucas

Thursday 13th March 2014 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

I thank the Backbench Business Committee for granting time for the debate and the hon. Member for St Albans (Mrs Main) for her work in securing it. Like others, I appreciate her courage in leading it this afternoon.

Let me start by echoing the words of the hon. Member for Southend West (Mr Amess), who is no longer in his place. The debate is not about people who love badgers versus people who love cattle. It is not about those who find a cull distasteful, to use the words of the hon. Member for Carmarthen West and South Pembrokeshire (Simon Hart), versus those who do not. It is about how we can most effectively address the scourge of bovine TB.

The science points us towards the fact that culling badgers in England is not an effective policy. I wish that the hon. Member for North Herefordshire (Bill Wiggin) were still in his place, because I would say to him that it is him, not me, who has his science wrong. I might also be tempted to point out to him that although I know I am guilty of many sins, I am not aware that I have been guilty of spreading bovine TB myself. That was among the many things he accused me of earlier this afternoon.

Let me be serious. It is important that we address the clichés. Even though I represent an urban constituency, I have spent a lot of time with farmers. I was a member of a European Parliament special committee on foot and mouth disease and I visited many farms and sat with many farmers in their kitchens. I am under no illusion about the enormous distress they experience at the thought of the destruction of their animals. I have cried as they have cried facing the loss both of their livelihoods and of animals that they love. This is not a competition about who loves animals most; it is a debate about the evidence for what works. There is no monopoly on either side of the House on caring for animals. What there is, I think, is a determination among some of us to try to look at the evidence with a bit more rigour.

I welcome this debate, because it is important that MPs are properly involved in any future decisions about the control of bovine TB, and that those decisions are subject to a vote in this House. As other hon. Members have indicated, the pilot badger cull can only be judged a spectacular failure, including against the Government’s own terms of reference.

The leaked IEP report makes it clear that the pilot failed two of the Government’s tests. It failed on humaneness, as more than 5% of badgers took longer than five minutes to die, and it failed on effectiveness, as fewer than 50% of badgers have been killed in either pilot area. Yes, those are only leaks, but we know that they echo the empirical evidence of so many people who have been monitoring the culls. We know, for example, that one of those culls took more than 11 weeks and that people involved in those culls stopped free shooting quite early on because it was not effective. We know as well from the people who were following those culls that many of the animals were not shot in a clean way.

It is not the case that, because this report has not been published, we cannot make statements about it. I wish, as others do, that the Minister had brought it forward earlier. As one of the co-sponsors of the debate, I can say that, when we went to the Backbench Business Committee, we fully expected the report to be out. The reason we wanted it out fairly swiftly was that we know that this Government have a habit of moving fast without consulting Parliament. They did that when they extended the culls in the first place—the extended period did not come back to Parliament for a decision—so it was right to ensure that the Government heard the views of the constituents whom we represent.

The leaked IEP report makes it clear not only that the pilots failed some of the tests that the Government set, but that costs have soared, particularly when policing costs are taken into account. Preliminary estimates put the pilot costs at an eye-watering £4,000 per badger killed. Shockingly, despite that, the Government have refused to rule out the extension of culling in up to 40 additional large areas in the west and south-west of England in the coming years.

Much has been said about the importance of evidence-based policy making. Let us remind ourselves about what some of these scientific experts have said about culling. Others have already quoted Lord John Krebs, who called the cull policy “mindless”. He was one of the architects of the landmark 10-year culling trials that ended in 2007. He said:

“The scientific case is as clear as it can be: this cull is not the answer to TB in cattle. The government is cherry-picking bits of data to support its case.”

Lord Robert May, a former Government chief scientist and president of the Royal Society, said:

“It is very clear to me that the Government's policy does not make sense.”

He added:

“I have no sympathy with the decision. They are transmuting evidence-based policy into policy-based evidence.”

I want to highlight some of the myths associated with the culling strategy and to suggest some alternatives. Before I do that, let me state again that I absolutely accept that bovine TB is a serious problem that needs to be tackled. However, the evidence shows that badger culling makes the problem even worse for some farmers, and risks making it worse for all of them. Today’s debate is not about whether we want to protect cattle or badgers; it is about the most effective way to protect cattle, which, as the evidence shows, is not by killing badgers. That is not because badgers do not necessarily contribute to the cattle TB problem, but because badger culling tends to increase the proportion of badgers infected and to spread the disease to new areas. That is because of the perturbation effect, as fleeing badgers spread the disease further afield while the vacuum caused by culling attracts new badgers into newly vacated territory.

[Charles Hendry (Wealden) (Con)]

The hon. Lady will be aware that there is a high-risk area in Sussex, which spreads broadly from her constituency to mine. It is a fairly ring-fenced area. We understand the nature of the problem there, and it is causing real difficulties. Does she recognise that that is an ideal example of where vaccination could be made to work? As the disease is geographically confined, we could see the effects of perturbation and whether, with vaccination, there were different issues that could be managed more effectively.

[Caroline Lucas]

I welcome the hon. Gentleman’s intervention and completely agree. I know that in previous debates, he has raised, as I have, the work of the Sussex badger vaccination project, a volunteer-run service that offers landowners and farmers in east Sussex the chance to have badgers vaccinated at very low cost, thereby providing a humane and less controversial method of tackling the disease. I hope that as many farmers as possible in the area will take up that offer.

I want to talk about some of the myths about culling. One that even DEFRA is promoting—we have heard it several times already today from Government Members—is that results from places such as New Zealand support the strategy of badger culling in the UK. Let us be clear that there are no badgers in New Zealand. The wildlife host there is the brushtail possum, an invasive species introduced from Australia. Possum ecology is completely different from badger ecology. Although culling reduces TB in possums, rather than increasing it, that result cannot simply be transposed to a different species with a different ecology in a different country. Professor Charles Godfray of the Royal Society of Biological Sciences puts it clearly:

“Differences in the regulatory and social structure of farming, the countryside, and the ecology of the different reservoirs all mean that lessons from other countries have to be taken with great caution.”

The bottom line is that bovine TB is too important for us to be cherry-picking the evidence. As we reflect on the pilot culls, it is essential that we put science at the heart of future policy.

Similarly, evidence from the Republic of Ireland has been cited to support claims that culling badgers will help to control TB in England. As with New Zealand, the evidence shows that TB reductions cannot be attributed solely to culling. Crucially, Ireland has much lower badger densities than England, so the badgers respond differently to culling. In England, culling has consistently increased the proportion of badgers with TB. The evidence most applicable to the TB problem in England is information collected in England.

We have heard that during the pilot culls, when the Government’s policy on badger control was in place, the conditions deviated massively from the conditions of the randomised badger culling trial, so any reliance on the results of the RBCT in predicting the likely outcome of culling is completely invalid. Let us not forget that even in the best case scenario the RBCT only reduced the incidence of bovine TB by between 12% and 16%. In other words, even if we were to take Herculean measures and do absolutely everything in the right amount of time and as cleanly as possible, we would still not be tackling at least 84% of TB in cattle. That is what makes me feel that it is even more important to look at alternative strategies, and chief among them, as many other Members have said, is badger vaccination.

Badger vaccination makes sense for a number of reasons, but I want to mention just two. The first reason is that it works. It reduces the probability of infection by between 70% and 75%. Even allowing for the fact that not all badgers will be reached and vaccination needs to be repeated year on year to include new cubs, it is still more effective and more cost-effective than shooting, not least because vaccination allows the badgers’ population structure to remain in place, granting considerable benefits for disease limitation.

Vaccination does not remove infected badgers, but it makes it more difficult for those animals to pass infection to other badgers. Over time, the infected animals die off, and the proportion of infected badgers is expected to decline. That contrasts with culling, which increases the proportion of infected badgers and spreads infection in space.

The second reason is on grounds of cost. Vaccinating badgers is cheaper than culling them, for at least three reasons: First, the poor performance of free shooting suggests that both culling and vaccination would entail cage trapping, with vaccination slightly cheaper because there is no need to dispose of carcases. Secondly, vaccination is unlikely to require policing. As other members have said, DEFRA estimates the cost of vaccinating badgers to be £2,250 per sq km per year, while policing the first two pilot culls alone cost roughly £4,400 per sq km. Thirdly, as with the example of the Sussex badger vaccination project, many wildlife organisations can draw upon hundreds of volunteers to help with badger vaccination, markedly reducing the costs.

As I have said in all the other parliamentary debates on the subject, we also need to devote more resources and political capital to overcoming the challenges with cattle vaccination, as well as to addressing the role that modern husbandry practices can play in placing chronic stress on intensively farmed animals. Professor John Bourne, chair of the independent scientific group that oversaw the RBCT, stated in his final report that

“implementation of cattle control measures outlined in this report are, in the absence of badger culling, likely to reverse the increasing trend in cattle disease incidence.”

Improving biosecurity must also take priority, as well as stricter testing and movement restrictions. We can see that measures are already playing a part in bringing down the incidence of bovine TB. Others have mentioned the figures recently released by DEFRA showing that during 2013 there was a 14% reduction in the number of cattle slaughtered as TB reactors or direct contacts. We have also seen the evidence from Wales, where a combination of biosecurity, cattle movement restrictions and vaccination is being used to reduce bovine TB, and where the number of cattle herds with the disease fell by 23.6% last year.

This is a complex topic, but my asks of the Minister are simple. First, he should look at the evidence and stop the badger culls for good. He should grant no more licences to shoot badgers, and stop wasting time, money and energy on an approach that is making matters worse. As others have said, bovine TB is too important for us to cherry-pick the evidence. As we reflect on the culls, let us make sure that we put science at the centre of future policy. If the Government were minded to continue with any kind of culling programme, they absolutely must come back to this House first and subject that decision to a vote, because I am convinced that we would win it.

Badger Cull

Debate between Charles Hendry and Caroline Lucas

Wednesday 11th December 2013 Westminster Hall

[Caroline Lucas (Brighton, Pavilion) (Green)]

I add my congratulations to those given to the hon. Member for Derby North (Chris Williamson) on securing the debate. It is critical that MPs should be properly involved in future decisions about the control of TB, and that those decisions should be voted on by the House.

The pilot badger cull can be judged only a spectacular failure, including against the Government’s own terms of reference. No one is leaping to premature conclusions because some of the figures speak for themselves. The policy specified that a minimum of 70% of the badger population should be removed within a single six-week period but, as colleagues have said, contractors are estimated to have removed 65% of the population in the Somerset zone after nine weeks of culling, and less than 40% of the Gloucestershire population after 11 weeks and two days.

We know that killing too few badgers over an extended time frame not only risks further reducing the already modest long-term reduction of new herd TB incidence in cattle that the Government were predicting, but crucially is likely to make things even worse for farmers because of perturbation of the remaining badger populations leading to increased prevalence of bovine TB infection among badgers.

The pilots were also supposed to determine the humaneness of controlled shooting as a method of culling badgers, but only 155 badgers have been subject to post mortem examination during the pilot culls—almost 100 fewer than the low number that DEFRA originally said would be examined. There are no guarantees that all the badgers will have died as a result of shooting. Like me, hon. Members will have heard reports of contractors picking up badger carcasses from roadsides, for example, to meet their quotas.

I have asked the Minister how many of the badgers submitted for post mortem examination were killed as a result of free shooting. He assures me that any cause of death other than shooting would have been identified, but he has so far been unable—perhaps unwilling—to give me the numbers. The issue is important because it impacts on whether we have sufficient evidence to judge the humaneness of controlled shooting. I hope the Minister will provide the information today.

I am anxious that any assessment of humaneness should take account of badgers shot and wounded but not immediately killed. DEFRA has not released details of the exact criteria that the independent expert panel will use to determine humaneness. Having observed the shambles in the pilots to date, I have no confidence that the remainder of the process will be scientifically robust.

The pilots have proved conclusively that shooting is ineffective in removing the number of badgers required if there is to be any chance of reducing the incidence of bovine TB. We know that contractors resorted to cage trapping, which has been more effective than shooting and which any badger expert could have told DEFRA about before the start, but it is more expensive and ineffective overall compared with the alternatives to culling.

I want to make two key points. First, vaccination is a far better way forward.

[Charles Hendry (Wealden) (Con)]

Does the hon. Lady agree that newer approaches to vaccination are emerging and could reduce the cost significantly? Is she aware of the work of the Sussex badger vaccination project, which has a team of volunteers who want to vaccinate? Such organisations should be given a chance to demonstrate their work.

[Caroline Lucas]

I thank the hon. Gentleman for his helpful intervention. I agree with him absolutely, and I am familiar with the Sussex badger vaccination project. As he rightly said, it is a service run by volunteers to offer landowners and farmers in East Sussex the chance to vaccinate badgers at very low cost, thereby providing a humane and less controversial method of tackling the disease. It has said that there is strong evidence that a programme of badger vaccination, combined with a robust cattle control programme, will produce better medium and long-term results than culling in eradicating bovine TB. It has many volunteers on hand to do that. It is just one example of how we could, with the right political commitment, take action that would make real gains in reducing bovine TB and its terrible consequences for our farmers.

The cost of the culls has spiralled out of control when the increased cost of cage trapping and expenditure on policing is taken into account. Based on analysis of DEFRA’s estimates, badger vaccination would cost the equivalent of £2,250 per sq km per year compared with the estimated £2,400 price tag per sq km for the pilot culls. Vaccination is the cheaper option and many other figures show that culling is even more expensive than the DEFRA figure that I cited.

My second reason, and the last point I want to make, is that vaccination works. It reduces the probability of infection by 70 to 75%, even allowing for the fact that not all badgers will be reached and that vaccination needs repeating year on year to include new cubs. It is still more effective and more cost effective than shooting, not least because vaccination allows the badger population structure to remain in place, granting considerable benefits for disease limitation.

My plea is that the Minister should focus on vaccination and rule out gassing, which is inhumane and ineffective. I have asked questions about that, and I am concerned about the responses. Investigation of a cattle vaccine should be a priority to provide some chance of getting rid of the disease.

Energy Bill

Debate between Charles Hendry and Caroline Lucas

Wednesday 4th December 2013 Commons Chamber

[Charles Hendry]

I refer hon. Members to my entry in the Register of Members’ Financial Interests.

Like most other Members, I have received many postcards and e-mails from people urging me to support the Lords amendment, but those e-mails seem to have been based on a misunderstanding or a misapprehension, based on misinformation. That has been either wilful or accidental, but it is certainly there. They start by saying that, although the Government said that they would be the greenest ever, we are now burning more coal than we have done for many years. Those two statements need to be examined.

This Government are the greenest ever. We have seen an increase in renewables generation from 5% in 2010 to 16% now. We have seen the biggest investment in nuclear power for a generation, and we hope to see more coming through. We have also seen an added impetus being given to the renewable heat incentive today. All those factors demonstrate our direction of travel.

The suggestion that the Government have somehow been promoting an increased use of coal is fundamentally wrong. We are using more coal than we were just a short time ago. I looked at the figures just before the debate: 39% of the electricity being used in the UK as we sit here today comes from coal. That equates to 18 GW of the 46 GW. That is happening for two reasons. First, the price of coal is historically low compared with that of gas. The shale gas revolution in the United States has meant that the coal that used to go into the US market is now being deposited in the European market at a low price and people are therefore burning it.

Secondly, the owners of the coal-fired plants know that they have only a limited number of operating hours left, and they want to use them while the carbon floor price is lower, rather than as it continues to rise. People should not see this as a fundamental shift to coal; it is a short-term increase in its use and, as we have heard, those plants will be closing down in the near future. Some are closing this year, and more will close throughout the decade. The concern expressed in those e-mails by those who support the amendment has therefore been based on a misunderstanding.

I am concerned about the implications of the amendment for several reasons. The first relates to political risk. This is another measure that would increase the political risk attached to investment in the energy sector. We know that we need many tens of billions of pounds of new investment in the energy sector, right across the electricity spectrum. The people who own the plant that would be closed down by the proposal are the same people who we are asking to build new gas plant, new CCS plant and new renewables plant. If they see the UK becoming more unpredictable, that will make it harder to secure the levels of investment that we need. We must be wary of going down that route and adding further political risk to the issue.

My second concern relates to the coal industry in the United Kingdom. When I was a Minister, I tried hard to increase the proportion in the mix of coal from UK mines. It had been one third, and we got it up to over a half. I suspect that it is now below one third again, and probably falling. If we want to achieve the necessary investment in British mines to enable them to provide coal to the power stations—or indeed to ensure their existence at all—when CCS plant comes on line in due course, the investors will need to know that there is still a reason for them to invest in the sector. The Lords amendment would make it more difficult to secure that investment and therefore more likely that our own deep and shallow coal mining facilities would close down, which is something we would regret. We should not deliberately put ourselves in the position of being more dependent on imports than we need to be.

My final point relates to CCS. We are trying to send a message to people around the world that this country has the aspiration to lead the world into carbon capture and storage, and we have every reason to be positive and confident that we can do that. We have the expertise, and we have the depleted oil and gas reserves in the North sea that can be used for it. We should be going out and saying to all those people around the world who are interested in this technology that the United Kingdom is the place to do it.

However, I disagree with the hon. Member for Southampton, Test (Dr Whitehead) in that I do not think that the amendment would make investment in CCS more likely. I think that it would make it much less likely, because we would be seen as having a general hostility towards coal in the mix and we would therefore struggle to make the case for that investment. Given the challenges that we are facing, do we really want to link ourselves to a policy that would bring forward the closure of plant while doing nothing to speed up the opening of new plant? The amendment would be bound to enhance the energy security challenges facing this country, which would make it more difficult to decarbonise. That, in turn, would push up prices. For those reasons, I hope that the House will reject the Lords amendment.

[Caroline Lucas]

I welcome Lords amendment 105, as we need to close the Government’s loophole that would exempt existing coal-fired power stations from the emissions performance standard if they fit equipment to meet air pollution standards.

However, even if we vote today to put common sense and climate science above the special pleading of the coal lobby, the EPS will not be strong enough. The Energy and Climate Change Committee has called the EPS “at best pointless” and the Committee on Climate Change warns that allowing unabated gas-fired generation right through to 2045 carries a huge risk that there will be far too much gas at the expense of low-carbon investment, which would bulldoze the Government’s climate objectives. It is therefore a shame that the Lords amendment does not go further and that the official Opposition are not yet accepting the need to leave existing coal reserves in the ground, unlike their sister parties in places such as Norway, whose Labour party this month proposed banning the country’s $800 billion sovereign wealth fund from coal investments. I have some reservations about the level of the EPS, but none the less I firmly support the amendment as a step in the right direction.

Energy Suppliers and Prices

Debate between Charles Hendry and Caroline Lucas

Tuesday 28th February 2012 Westminster Hall

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

It is a pleasure to serve under your chairmanship this afternoon, Ms Osborne. I congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this debate. It is a shame that we did not have a longer debate—an hour and a half—because we have had an unusually large number of interventions, which shows the interest that the subject attracts. I hope that all hon. Members will understand that I want to use the remaining time available to respond to the debate, rather than take further interventions.

The hon. Lady has secured this debate at a time when we have started to see some prices coming down. In recent weeks we have seen price reductions, which will see around a 2% weighted average decrease in retail prices. Prices on wholesale markets are beginning to reduce and companies recognise that they can start to take some of the pressure off consumers. We all share the hon. Lady’s ambition that consumers should be supported at a time when they are inevitably extremely worried about the level of energy prices.

I will talk about some of the measures that we are taking to address the issues. First, it is important to state that we need a market that operates and functions better. Some of the measures that the hon. Lady has set out would make the situation worse. We need to get £200 billion of new investment in our energy infrastructure over the next 10 to 15 years. The more that we make this an unattractive place for people to invest—they are mostly international investors—the greater the likelihood that we will see energy and electricity being rationed, because of a lack of investment in new supply and a lack of investment in the other associated areas of energy efficiency. The consumer will therefore end up picking up the tab.

I was also disappointed that we did not hear any recognition of the global issues that must be addressed. We are having this debate at a time when oil and gas prices are at their highest levels in recent years. The increase in wholesale prices is being driven partly by instability in the middle east and partly by other geopolitical measures. We therefore cannot divorce the issue of energy prices from what is happening globally. However, we can do and are doing a significant amount to assist consumers in paying their bills.

[Caroline Lucas]

Will the Minister give way?

[Charles Hendry]

I will not. I hope that the hon. Lady will understand. She has raised many issues, and I want to try to respond to them comprehensively. I am more than happy to meet her separately to discuss the ideas behind her initiative and campaign.

We are already requiring energy companies to provide help to 2 million of the poorest and most vulnerable households through the warm home discount, at a cost of £250 million this year, an increase of 40% over earlier arrangements. Over the next four years, suppliers will provide support worth £1.1 billion. Citizens Advice and Ofgem have received their highest level of funding yet from suppliers for the Energy Best Deal campaign, which helps vulnerable consumers shop around for the best deal. We have extended the carbon emissions reduction target until the end of the year, which we expect will benefit 600,000 of the most vulnerable low-income families, including those with elderly people and people with disabilities, and suppliers will be investing some £400 million in heating and insulation measures to help those households. In addition, the community energy saving programme, CESP, is expected to deliver about £350 million in energy efficiency measures to 90,000 households.

Looking forward, we are introducing the energy company obligation, which will include support to provide affordable warmth to low-income vulnerable households through heating and insulation measures. The ECO will provide £1.3 billion in support each year to householders who cannot achieve significant energy savings without additional support, and will have a specific target to provide heating and insulation to the low-income vulnerable households at greatest risk of fuel poverty.

We are also spending £110 million through Warm Front on heating and insulation to help households make their homes warmer. During the current winter, the winter fuel payment, worth £250 for households with members aged up to 79 and £400 for those with members aged 80 and over, will help 12.7 million older people in 9 million households with their fuel bills.

As I hope the hon. Lady will understand, significant support is going into measures to mitigate the effects of high energy bills, and particularly to ensure that we do not just help with this year’s bills but provide support in addressing the issue year on year in future through greater emphasis on energy efficiency, for which she called in her comments.

--- Later in debate ---

[Caroline Lucas]

I thank the Minister for his response. He says that the Government are tackling the problem by, for example, providing the new ECO, but we know that the amount of money in the ECO is £1.3 billion and that by the time we subtract the money being ring-fenced for hard-to-treat homes, there will be far less money left for tackling fuel poverty than came from CERT, CESP and Warm Front. We also know that the money is being raised by a levy on all householders, which will push more people into fuel poverty, whereas Warm Front and the other programmes were funded by taxpayers’ contributions. In the rest of his remarks, will he address the issue of a public inquiry? I do not think that what he is saying addresses the key point, which is about profits, not prices.

[Charles Hendry]

I will of course address those issues, but it is important to provide the context of what else is being done. A tremendous amount of help is being given, more than ever before, to insulate hard-to-heat homes and direct support to people to pay their fuel bills. That is part of the overall energy picture, and it is important to take a holistic approach and understand the issue that way.

In addition, it is important to highlight the impact that the green deal will have. Through the green deal, we are determined to move this country from being one of the least energy-efficient in the whole of Europe to being one of the most. That is an extraordinary challenge, and one that we are determined to address. We recognise that we as Government should be trying to create an environment in which we can make lasting changes to our households so that people can reduce their bills over time.

To come directly to the points raised by the hon. Lady, I think that we all recognise that energy companies need to make a profit and invest in infrastructure for the future. They must also make a return for their shareholders. We have considered pricing here and elsewhere carefully. As my hon. Friend the Member for Warrington South (David Mowat) said, prices here for both electricity and gas are some of the lowest in Europe. However, that is not the same as having the cheapest bills. Our bills are often higher, because our energy efficiency is less good. Again, that reinforces the hon. Lady’s point that we need to make much more progress on energy efficiency in order to contain those bills.

It is also worth considering how suppliers’ profits here stack up against other countries. Their profitability in the United Kingdom is worse than in almost any other jurisdiction where they operate. If we want suppliers to continue to invest the £200 billion necessary, they must see the UK as a good economic area in which to invest. The more measures we put in place to make ours an unattractive investment regime, the worse we will make things in the longer term for consumers in this country.

This is not a case in which one must be on the side either of consumers or of industry. In the longer term, we can only be on the side of the consumer by creating an environment in which businesses want to invest. Through our market reforms and other measures, we are trying to make the UK an attractive jurisdiction and ensure that the regulator, Ofgem, takes strong action to prevent excess profiteering in the sector.

The hon. Lady discussed having new entrants into the market. We are absolutely committed to making that happen. One measure of the success of our market reform proposals will be whether we increase liquidity by bringing more companies into play in the market, but we should be clear that six is already an unusually large number, larger than in any other European country. Most other European countries have one or two dominant players and low levels of switching. Levels of switching here are three or four times higher than in countries such as Germany, which she held up as a good example. There are many aspects of our market that create better opportunities for consumers, and we must be determined to protect those aspects as we go forward.

It is essential for Ofgem to monitor the market closely. My concern about the sort of public inquiry that she suggested involves the consequences. The companies looking to invest in Britain are exactly the companies with the funding and expertise to invest in renewables, which she says—and I agree—are important. However, if we hold an inquiry, they will defer, making it much more challenging to get new investment during the two years of that investigation. Our scope for meeting our renewables targets will therefore start to slip away. The approach that she suggests would have consequences, and I believe that there are better ways to protect consumers in the short term rather than the long term, as her approach would do.

Part of our approach is boosting competition. We have already gone a long way to cut red tape for smaller suppliers, and have increased from 50,000 to 250,000 the number of customers that companies must have before being required to participate in environmental and social schemes. We are making it easier for small companies to get a foothold in the market.

In December, Ofgem published for consultation radical proposals to require suppliers to simplify their tariffs and billing information so that consumers can compare supplier deals much more easily in order to decide whether they will be better off switching. Currently, more than 400 different tariffs are available—that is the scenario that we inherited when we came into Government—which inevitably leads to great confusion and makes it much more difficult, as the hon. Lady said, for consumers to make an informed choice when they are looking for the best deal.

Progress is being made on simplifying the approach. British Gas and SSE have announced that they intend to simplify their tariff structures; SSE has pledged to reduce the number of tariffs that it offers from 68 to just four. Once we get into a world where people can understand much more clearly what they are paying for and see more effectively how it compares with what other companies are offering, consumers will be in a much better position to exercise choice. The big six still cover about 99% of the domestic retail market, so it is important to have additional suppliers and players in the retail sector to ensure that we get the best deal for consumers. I am pleased to see that significant work is happening.

I also welcome the move towards collective switching, an issue taken up by Which? in the past few weeks, which brings together a range of consumers to give them much more confidence and to buy on their behalf. There is more liquidity, more companies are coming into the market and the market will operate better. A tougher regulator is taking action to ensure that comparison between companies is easier and that profitability is not excessive. Above all, we are creating a market in which businesses will be keen to invest, in order to ensure, in the most affordable way, security of supply and low carbon in the longer term.

Oral Answers to Questions

Debate between Charles Hendry and Caroline Lucas

Thursday 1st December 2011 Commons Chamber

[Charles Hendry]

My hon. Friend raises the important issue of whether people should pay more for the additional units they use or whether the level should drop. Our concern about moving to a rising rate is that children, pensioners or people with disabilities who are at home more and need more warmth could be adversely hit by such a change. Not only the larger properties and the richer families would be affected; it could easily also affect those whom we are most keen to support and help.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the green deal Minister remember telling the Energy Bill Committee that he fully expected the energy company obligation to provide a far greater level of support to tackle fuel poverty than either the carbon emissions reduction target or Warm Front? In what way is ECO’s pitifully small £325 million a year for fuel-poor homes a far greater level of resource than the 2010-11 Warm Front spending of £370 million or CERT spending of about £600 million on priority groups?

[Charles Hendry]

I am sure that the hon. Lady is aware that this is funding that people can have in addition to the green deal support. It is designed to make sure that there is a comprehensive approach. We have sought to ensure that we have an holistic approach and that we do more on energy efficiency and on assisting poorer households. We are trying to make sure that we do this in the most effective way possible.

Oral Answers to Questions

Debate between Charles Hendry and Caroline Lucas

Thursday 20th October 2011 Commons Chamber

[Charles Hendry]

The renewable heat incentive, as my hon. Friend will be aware, is a world beater and a new approach on which we are very glad to lead. We have taken it forward for commercial industrial premises. There has been a challenge from the European Commission that we are in the process of sorting out, and we are finalising the details for the domestic sector because we recognise that it is an important way of encouraging people to consider alternative ways of heating their homes.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Analysis commissioned by G20 Finance Ministers shows that applying a carbon price to international transport fuels will both reduce emissions and generate billions of pounds for climate finance for developing countries. What assessment has the Secretary of State made of that report, and what discussions is he having with ministerial colleagues about agreeing a UK position on it in advance of the Durban climate conference?

Energy Bill [Lords]

Debate between Charles Hendry and Caroline Lucas

Wednesday 14th September 2011 Commons Chamber

[Charles Hendry]

We now move on to a series of technical and miscellaneous new clauses and amendments, which cover nuclear decommissioning transmission charging, the process of consultation and the Home Energy Conservation Act 1995 and how it applies in Scotland.

I shall first address the issue of the nuclear decommissioning programmes. In Committee, hon. Members raised concerns about how any agreement that sets out the manner in which the Secretary of State will, or will not, exercise his power to propose a modification to an approved programme will deal with “unforeseen circumstances” in the future. I have listened very carefully to hon. Members’ concerns, we have had very useful meetings and I am very grateful for the constructive way in which they have engaged to ensure that we have a new clause that is acceptable to both sides.

I recognise that the funded decommissioning programme and any agreement entered into under the new clause are very long-term arrangements, and that the arrangements will need to take account of “unforeseen circumstances” that may arise in the future.

In the light of the Committee’s concerns, we wish with new clause 11 to amend the relevant measure in order to require that the Secretary of State enter into an agreement only when he is satisfied that it includes adequate provision for the modification of a programme if the programme no longer secures prudent provision for the liabilities.

Let us be clear: we would not impose an additional test to the existing requirement that the Secretary of State must be satisfied that the programme and the agreement as a whole secure prudent provision for the liabilities. The new clause would make it explicit that, as part of ensuring prudent provision, the Secretary of State needed to be satisfied with the arrangements for making modifications to the programme when he entered into the agreement.

[Caroline Lucas]

Will the Minister be a little more precise about the exact definition of the word “prudent” in this context?

[Charles Hendry]

We have chosen to use the word “prudent” not only because it is a concept that is established in law but because it was important to give the Secretary of State the ability to decide, in future, whether something has ceased to be prudent. We looked at some of the wording that had been discussed in Committee relating to unforeseen circumstances and moved away from that because we were concerned that the legal debate would then be about whether something was foreseen or unforeseen. If people could point to one speech by a Minister who had talked about such issues, then nobody could say that they were unforeseen because they had been discussed in this House. I will clarify that further in a few moments.

It is clear that over the years foreseen and, potentially, unforeseen events will occur that may require modification of the arrangements set out in the programme. The new clause is not limited to unforeseen circumstances, but when the Secretary of State enters the agreement he will need to be satisfied with the arrangements for modifying the programme when it is no longer prudent, be that in unforeseen circumstances or those which were foreseen. The new clause also allows the agreement to set out matters that may be determined by a third party, and for the Secretary of State, if he so agrees, to be bound by that determination. This provides reassurance to operators that there can be a mutually agreed and mutually binding process between the Secretary of State and the operator where disputes can be resolved in an impartial manner. Such a third party would need to be impartial and independent of the operator and the Secretary of State. In addition, both parties would need to be satisfied that the third party in question had the expertise to perform the role required of them. The exact terms of the agreement, including any process for third-party determination, and the method for appointing a third party will be decided on a case-by-case basis with the operator and after taking into account the programme submitted by that operator.

I turn now to amendments (a), (b) and (c) to new clause 11, which are in the name of the hon. Member for Brighton, Pavilion (Caroline Lucas). Under amendment (a), the Secretary of State would not be able to set out in the agreement when he would not use his section 48 power. This would leave him with broad scope to use his section 48 powers and so render the agreement ineffective from the perspective of providing investor confidence, which is the whole purpose. Amendment (b) would have the same effect. Amendment (c), which would omit the word “prudent” and insert

“adequate to protect the interests of the public and taxpayers”,

would not provide further protection for the taxpayer. Arguably, it would reduce protection by introducing a looser term that could be subject to conflicting interpretations and be inconsistent with the rest of the Act, for which the test is prudence.

New clause 17 would amend subsection (2)(c) of section 48 of the Energy Act 2008. That would have the effect of allowing others with obligations under the programme to propose modifications to a site operator’s programme without first seeking their consent. It is clearly unreasonable, we believe, to expect an operator to agree to this. In any case, the Secretary of State would need to seek the views of the site operator and take those views on board before deciding whether to approve the modification.

There is also a legal issue involved in the new clause. The effect of modifying subsection (3) of section 48 in this way would probably be exactly the opposite of what the hon. Member for Brighton, Pavilion intends. Under the Act, if it were amended as proposed, the Secretary of State would be able to impose obligations only on an associate of the operator and not the operator itself. Modifying subsection (3)(a) and removing subsection (3)(b) altogether would mean that obligations placed on an associate of the operator could not be removed even if, for example, those obligations were no longer relevant because they had been fulfilled. This is clearly inappropriate and impracticable. On that basis, I hope that the hon. Lady feels sufficiently reassured to withdraw the amendments.

I will now speak to Government new clauses 12, 41 and 44, which relate to transmission of renewable electricity and the role that renewable generators in peripheral parts of Great Britain could play in meeting low carbon energy targets. Section 185 of the Energy Act 2004 allows the Secretary of State to introduce a scheme adjusting transmission charges in a particular area of the country to help to mitigate any material hindrance to renewables development caused by these charges. Section 185 was introduced to address concerns that a GB-wide charging regime for the electricity transmission network might hinder the development of renewable generation in a particular area of the United Kingdom—for example, in the north of Scotland and the Scottish islands. Under the regime, transmission charges are cost-reflective. In effect, the further electricity has to travel, the higher the transmission charges.

Any scheme introduced under section 185 can be applied for up to 10 years—an initial period of no more than five years with renewal for up to five further years. Currently, any scheme must terminate by October 2024. The new clauses merely extend that time limit until 4 October 2034. This power has never been exercised, and it is possible that a review of the transmission charging regime currently being carried out by Ofgem under Project TransmiT will address any perceived problems in other ways. However, it is not certain that Ofgem’s review will address all such perceived problems in every case—for example, renewable generation on the Scottish islands, where forecast transmission charges are significantly higher than elsewhere in Great Britain. The lead times of proposed developments also mean that no renewable generators on the Scottish islands will be connected to the transmission network by October 2014, and so they would not be in a position to benefit from the full possible extent of any section 185 scheme. It therefore makes sense now to extend the sunset clause by 10 years to October 2034. This will allow maximum flexibility to take account of the outcome of Ofgem’s review and give developers time to bring forward renewable generation and associated transmission links without concerns of exceeding the current 2024 deadline.

Government amendments 43 and 51 relate to the Home Energy Conservation Act 1995. As hon. Members know, having listened to concerns raised during the passage of the Bill, the Government were convinced of the desirability of retaining HECA in England, and this was agreed in Committee on 21 June. Schedule 3 makes a number of amendments that were necessary when HECA was being repealed. However, with HECA being retained, the consequential amendments listed in schedule 3 are no longer necessary. Government amendment 43 is therefore a purely technical amendment that I hope raises no issues of concern for hon. Members.

Regarding amendment 51, I would like to reassure the hon. Members for Kilmarnock and Loudoun (Cathy Jamieson) and for Rutherglen and Hamilton West (Tom Greatrex) that we have fully consulted colleagues in the Scottish Government during the development and passage of the Bill. The intention to repeal HECA in Scotland was at the request of Scottish Ministers, who indicated that they believe that the Climate Change (Scotland) Act 2009, together with the local housing strategy guidance, will be sufficient to ensure appropriate promotion of energy efficiency and the opportunities that the green deal will bring to this. On that basis, I hope that the hon. Members can withdraw their amendment.

[Charles Hendry]

The hon. Gentleman is absolutely right. This is a devolved matter that we have discussed with the Scottish Government. We are implementing this measure as the easiest and quickest way of delivering on that.

Finally, I refer to a small set of Government amendments regarding consultation—Government new clause 13 and consequential Government amendments 35, 37, 38 and 39. The purpose of the new clause is to ensure that consultation with key stakeholders carried out before, as well as after, Royal Assent can contribute towards fulfilling the various statutory consultation duties that arise under, or by virtue of, the Bill. Consulting stakeholders is an important part of developing and implementing any policy. Throughout the Bill, there are several provisions that impose a statutory requirement to consult before exercising powers to make secondary legislation. These include, for example, consultation with devolved Administrations or energy companies. In many cases, the consultation requirement can be satisfied by a consultation that takes place before, as well as after, the passing of the Bill. The new clause seeks to ensure parity of approach throughout the Bill.

I hope that I have assured hon. Members that the Government have listened during the passage of the Bill, and I urge them to support our amendments. Similarly, I hope that I have reassured them sufficiently that they feel able to withdraw their amendments.

[Caroline Lucas]

I am seeking to amend new clause 11, which was based on a clause that was withdrawn by the Government in Committee because of cross-party concerns. I have not been fully reassured by what the Minister has said about the new clause, which has not met all those concerns. My amendments therefore seek to ensure that the Secretary of State cannot decide not to exercise his powers to modify a nuclear decommissioning programme; that a nuclear decommissioning programme can be modified only by the Secretary of State on his own, not working with an operator; and that we clarify what is meant by the word “prudent”. The Minister has helpfully expanded on that term so I feel a little reassured, although I still think that it is a little open.

--- Later in debate ---

[Caroline Lucas]

If the liabilities are fixed so that uncertain messages are not being given to the investors, but the costs rise in an unforeseen manner, how is that not a subsidy if the person who is going to meet the difference between the liabilities and the real cost is not the taxpayer?

[Charles Hendry]

The hon. Lady raises an entirely separate issue. A funded decommissioning programme is constantly reviewed. If there is evidence that not enough money has been put aside for decommissioning issues, that money will have to be increased. The operators entirely accept that if the costs rise, they will have to contribute more towards the decommissioning pot. The new clause is about whether the Secretary of State should be able to say, “You know, I’ve decided that rather than you putting that money into a pot over 20 years, I’d like it in 12 months.” That would be a fundamental change which, under the existing legislation, the companies would not have been able to challenge. There will be no change in the measures ensuring that enough money is put into the decommissioning pot. If that goes up or down, the amount put in will have to reflect that. That is not touched in any way by the changes that we are making through the Bill.

On the hon. Lady’s new clause 17, at present anybody can write to me as a Minister and say, “We don’t think this is adequate,” and we will consider that. That, as she says, would not be a legal power, but an advisory power. It would still be for the Secretary of State to decide whether to take it forward. The Secretary of State has a number of choices. He can choose to modify, to modify in part or to take no action, so considerable power rests with him.

That comes to the heart of the questions that we were asked by the hon. Member for Southampton, Test. There is something vaguely Rumsfeldian about the concept of unforeseen. What are foreseen unforeseen circumstances and what are unforeseen unforeseen circumstances? I think we have been wise to move away from that. A prudence test is a better one, which both Government and industry are more comfortable with. The Secretary of State will have the power to make those decisions, but we will also make clear in those programmes the role of the third parties.

We have had a considerable amount of discussion with the hon. Gentleman about the nature of those third parties. It would clearly have to be somebody who was acceptable both to the Government and to the operators and who was not prejudiced towards one side or the other. That is a role that the Government are used to developing. The Secretary of State would have significant powers but there would also be a role for third parties. Critically, the Government and the operator would be bound by the decision of the third party. This gives the extra degree of certainty and comfort that the hon. Gentleman sought. I hope we have been able to reassure him.

We have had a useful exchange. I thank the official Opposition for the constructive way in which they have engaged with the issue, so that the nuclear aspects of the Bill are stronger and more effective than they were before.

Question put and agreed to.

New clause 11 accordingly read a Second time, and added to the Bill.

New Clause 12

Adjustment of electricity transmission charges

‘In section 185(11) of the Energy Act 2004 (areas suitable for renewable electricity generation: end date for schemes adjusting transmission charges) for “2024” substitute “2034”.’.—(Charles Hendry.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 13

Consultation

‘A requirement for the Secretary of State to consult which arises under or by virtue of this Act may be satisfied by consultation before, as well as consultation after, the passing of this Act.’.—(Charles Hendry.)

Brought up, read the First and Second time, and added to the Bill.

New Clause 1

Energy efficiency aim

‘(1) The principal purpose of this Part is to deliver energy savings from the building stock which will make commensurate contributions to—

(a) the fulfilment by the Secretary of State of the duties under section 1(1) (reduction of net UK carbon account by 2050) and section 4(1)(b)(carbon budgets) of the Climate Change Act 2008; and

(b) the elimination of fuel poverty by the target date required by section 2(2)(d) of the Warm Homes and Energy Conservation Act 2000.

(2) In performing functions under this Part the Secretary of State will have regard to—

(a) the principal purpose set out in subsection (1) above, and

(b) the recommendations from time to time of the Committee on Climate Change where these are adopted by the Secretary of State.’.—(Luciana Berger.)

Brought up, and read the First time.

National Policy Statements (Energy)

Debate between Charles Hendry and Caroline Lucas

Monday 18th July 2011 Commons Chamber

[Charles Hendry]

We all have to be very mindful of the situation in China. In the time it will take us to build one nuclear power station in this country, it will be building dozens. We have to understand the pressure that that creates for the construction process and the skills challenges. However, I have visited the hon. Gentleman’s constituency and have seen, along with him, the investment going into nuclear skills there, and more generally into the low-carbon economy, and I am very encouraged by what I have seen not only in Hartlepool, but in many other places around the country: businesses, councils, trade unions and others are working together to ensure we have the necessary skills to deliver the construction of plant.

This is not the time for explicit single-sector emissions caps. We recently set the level of the fourth carbon budget in line with the Committee on Climate Change recommendation. This amounts to a 50% reduction in emissions against 1990 levels for the period between 2023 and 2027. It would be wrong to introduce new planning conditions for one part of one sector in the national policy statements when we have already introduced legislation on emissions for all sectors together. Each technology-specific NPS sets out particular issues that apply. As the need case in the overarching NPS states, it is vital to have investment in clean fossil fuels to ensure that we have a secure supply of diverse energy generation.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Tyndall Centre has said that even the targets of the fourth carbon budget would provide only a 56% to 63% chance of avoiding a 2° C rise in average global temperatures. Is it not therefore the case that even the fourth carbon budget is not setting the right targets?

[Charles Hendry]

The hon. Lady knows what has happened. The Committee on Climate Change has made recommendations to us, and we have responded to them, and we were widely seen as one of the world leaders in this respect; the United Kingdom is well ahead of most other countries. It would be helpful if she would sometimes welcome the changes and the advances being made, rather than always saying it is not enough. It is appropriate to recognise in the course of these debates that Britain has shown real global leadership. There is cross-party agreement on that, and it should be welcomed.

The fossil fuels NPS—EN-2—explains what drives site selection for power plants and the practical requirements for carbon capture and storage. Together with relevant bits of EN-1, the EU emissions trading scheme and our own policies on an emissions performance standard, it will give developers confidence that there is a stable regime under which they can invest in the fossil-fuel generating stations that are necessary to provide the essential back-up for intermittent generation from some forms of renewable energy, or perform as low-carbon generators themselves, fitted with carbon capture and storage.

Deep-water Drilling (Shetland)

Debate between Charles Hendry and Caroline Lucas

Thursday 18th November 2010 Commons Chamber

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

It is a pleasure to respond to this important debate. I am grateful to the hon. Member for Brighton, Pavilion (Caroline Lucas) for securing it, although I have found it hard at times to understand what her motivation has been. Has it been in general opposition to drilling for oil and gas at all? That is what she indicated in Westminster Hall last week. Alternatively, is it specifically about the deep-sea issues west of Shetland, on which she has focused tonight? It would be helpful to have a clear understanding of exactly her objective and whether she is trying to end what is, for Britain, an extremely important industry. There is a great deal of confusion in the arguments that she has put forward. I shall try to clarify some of the issues, the Government’s approach and why we have reached the decisions that we have made.

It is right to put this debate in context. We have all been profoundly concerned about the terrible accident at Deepwater Horizon earlier this year. It was a very serious and tragic event. Eleven people died and there have been huge consequences for the gulf of Mexico and those who make their living there. As new developments focus increasingly on more challenging prospects, including deep water, the situation presents Governments, regulators and the industry with a real challenge, which they must address. That has been recognised by the Energy and Climate Change Committee, which is conducting an inquiry into the matter with great thoroughness.

I want to pick up on one of the issues that the hon. Lady was talking about towards the end of her speech. She spoke about tax breaks, as if they involved money that could be spent somewhere else. The reality is that the companies pay in tax 50% or 75% of their profits from oil and gas production. To encourage them to go into more difficult, challenging and expensive waters, the Government have reduced that rate so that they pay slightly less tax. The consequence of what the hon. Lady is saying would be that those billions of pounds of funding from the North sea oil and gas sector would simply dry up completely. Far from having £12 billion, which could be reallocated to other facilities and services, we would be billions of pounds short in the public finances, and massive cuts would have to be made elsewhere. That is the reality. We are talking not about a subsidy, but about a reduction in one of the highest rates of tax that any industry pays in this country.

[Caroline Lucas]

I want to clarify two things. First, I want to make very clear my motive for securing this debate: it is indeed to try to secure a moratorium on any new oil licensing, including the Lagavulin prospect, until the result of the judicial review and until we find out what happened at Deepwater Horizon. The Minister is correct: over time, of course, I would like to see a transition away from fossil fuels and towards green energy. However, I am not suggesting that we do that via a moratorium now; I am suggesting that the particular risks off Shetland are such that we should be acting.

[Charles Hendry]

I am grateful to the hon. Lady for that clarification, and I shall respond in the same tone. We have looked extremely carefully at the UK regime. We believe that it is absolutely paramount that we in the United Kingdom should have the toughest safety standards. We have a long record of safety. The UK was one of the first areas worldwide in which offshore exploration and production took off. We have four decades of experience. More than 10,000 wells have been drilled in UK waters, including more than 300 in waters more than 300 metres deep.

Our regulatory system has been developed to meet the evolving challenges faced by the industry. Following the Piper Alpha disaster, safety regulation was brought under the Health and Safety Executive umbrella, to get the benefit of its expertise in regulating major hazards. The Department of Energy and Climate Change, of course, plays a vital role in overseeing the environmental performance of the offshore industry.

In the light of the evidence, we have taken further steps to strengthen our regulatory regime by doubling the number of environmental inspections of mobile rigs, and we are satisfied that the regime remains one of the most robust in the world. I am sorry that the hon. Lady cannot recognise that. With great care and scrutiny, we have reassured ourselves about the steps in place, decided what more should be done to maintain our gold standard in oil and gas security and safety mechanisms, and made sure that we have gone a bit further to enhance that. People should welcome what the Government have chosen to do. Of course, we have been looking extremely carefully at all the information from the Macondo incident, and we will continue to do so. When those investigations are complete, we will determine what more, if anything, needs to be done to reinforce our regulatory approach.

The hon. Lady questioned the ability of the inspectors to do the work that is most important. We do not believe it is necessary to inspect every single offshore facility every single year, but we focus on those more challenging operationally, which is appropriate.

[Caroline Lucas]

It is interesting to talk about the checks that went on. In fact, Deepwater Horizon had been checked just two weeks before the tragedy happened, so we can put to one side arguments about the regularity of the checks. The hon. Gentleman talked about doubling them, but I understand that that still means only going from two to four, so that is not going very far. The point is that we do not know why Deepwater Horizon happened. One of the complicated aspects is that it was checked two weeks before, so why are we putting so much stress on that as a way of being able to say that we are certain that we will be safe?

[Charles Hendry]

I hope that the hon. Lady accepts that there has always been a fundamental difference between the way that safety is handled and monitored in the United States and how it is done here. We have had significant contact with the American Administration since Macondo, and they are looking to see what lessons they can learn from our regime. After Piper Alpha, we separated out the licensing roles and the health and safety and environmental roles, so the body responsible for health and safety—the HSE—has no financial involvement whatsoever in the licensing rounds. As a result, over 20 years we have had in place an extremely robust mechanism.

We believe that there is an imperative national interest in ensuring that we get the best of the resources available. The reality is that for all the ambitions the hon. Lady may have—we want to decarbonise this country as well—by 2020, and well beyond, we will still be dependent on a significant amount of oil and gas. We can either find those resources within our national waters or import them. About 17% of our remaining reserves in the United Kingdom lie in deepwater areas west of Shetland. About 3.5 billion barrels of oil of the remaining 20 billion or so on the entire UK continental shelf are in that area. We think it is a matter of great national importance that we should be maximising the economic recovery of those resources, and there is a great deal more that needs to be done in this entirely legitimate and proper activity. That is why we were pleased recently to offer 144 new licences in the 26th round. That shows the continuing confidence of the industry in the UK continental shelf and provides a strong basis for continuing exploration and development activity. We will encourage industry to continue to invest in exploration, development and production while maintaining high standards of management and minimising environmental impacts.

[Caroline Lucas]

On safety, I want to come back to the quote from the Health and Safety Executive’s offshore division, which says that it is

“particularly disappointed, and concerned, that major and significant hydrocarbon releases are up by more than a third on last year”

and calls on the industry to up its game. The HSE itself is expressing that concern. How is that consistent with the hon. Gentleman’s words about how safe everything is and how fantastic our record is?

[Charles Hendry]

If one looks further into the figures, one sees that the volumes released have been gradually coming down over time. We are safer, we have fewer leakages, and every single leakage is required to be reported. Any leakage is unfortunate and should be avoided or stopped, and any threat to human well-being has to be addressed, but I have never seen any industry anywhere with higher safety standards than the offshore oil and gas sector. Those people are constantly driving and striving to improve standards, and the Government will work with them in ensuring that they achieve that.

Let me turn to the Chevron consent at Lagavulin. The hon. Lady questions why we announced that while the House was not sitting. There is no requirement on the Government to announce the issuing of new rounds of licences to Parliament, but we have always done so, as we believe that it is right and proper that Parliament should know about it first. However, individual consents do not require to be announced to Parliament. Before we could make the announcement of the consent, we needed to be absolutely satisfied that Chevron’s plans were fit for purpose, had been thoroughly assessed, and, in the light of any additional evidence from the challengers in the gulf of Mexico, had been tightened up even further. That meant, for example, that we required an update of the oil pollution emergency plan. We considered that very carefully, and not until Chevron was able to satisfy the additional requirements was consent granted.

The additional requirements included an exercise to co-ordinate the work of all the key contractors and to examine the roles, plans and procedures in place to prevent incidents and identify gaps and mitigations, taking into account the Macondo experience. Workshops were required for key onshore and offshore Chevron drilling and service personnel, to secure the alignment of all parties with Chevron’s safety and environmental principles. An audit of Halliburton’s practices and procedures by Chevron’s in-house cementing experts was required, as was comprehensive checking that all relevant Chevron and Stena personnel held up-to-date certification in well control. Regular well control drills were required to test the equipment and crews weekly or more frequently. A dedicated safety meeting of all key rigging contractor crews was required, to review the key findings of the Macondo well experience. There were further steps to ensure that the blow-out preventer would operate reliably if needed, including a third-party audit of the equipment and the presence of a Cameron engineer on board at all times to maintain the equipment and its control system.

A further reason why we can have confidence in the system in this country is that we have also made progress in putting in place capping devices, so that if there is a disaster we can respond much more quickly. Since 1974, some 315 deep-water wells have been drilled in UK waters, with no blow-out or drilling-related oil spill, but we nevertheless require detailed contingency plans that can be brought into force in the event of a spill. Those requirements have been updated in the light of what happened in the gulf, and every single well is subject to detailed case-by-case scrutiny. We now also have containment devices from the gulf of Mexico in the UK, based in Southampton.

The work of OSPRAG is aimed at adding a third dimension to the equation—a capping device that can be deployed on any well head, not just deep-water ones, to mitigate and capture oil flows in the event of failures such as we saw in the gulf. That should be available by the end of 2011 or sooner. In addition, Chevron has developed a quickly deployable capping device that is located in Scotland and could be deployed on the Lagavulin well within nine days of any incident.

[Caroline Lucas]

Will the Minister answer just two questions? First, why was it so urgent to grant the licence now, before we have understood what happened at Deepwater Horizon? We do not know why that happened, so could we not have waited a few more months to find out before going ahead? Secondly, I go back to the HSE’s stating that

“major and significant hydrocarbon releases are up by more than a third on last year.”

Surely those two things should give the Government pause.

[Charles Hendry]

On the second point, the hon. Lady should examine the long-term trend and give the House the full details. She will see that, over time, there has been a steady reduction in injuries, leakages and emissions, and that there has been continual progress.

On why we made the decision when we did, we did not believe that there was any case for holding back the decision once we had been fully satisfied that every necessary safety mechanism was in place and every safety issue had been properly addressed. After all the extra questions that were put to Chevron, we believed that it had been able to satisfy that requirement. One must also consider the commercial factors involved. When a ship is available to do the drilling work, it costs thousands of pounds a day. Once we were satisfied that it was entirely safe and proper for the work to go ahead, there was no case for holding back further.

The hon. Lady made comparisons with the US approach, pointing to a difference between its prescriptive approach and our safety case approach. Our practice already includes, and goes further than, the measures being proposed under the new US rules. The US Government themselves have examined what needs to be done and lifted the ban on deep-sea drilling in the gulf of Mexico, which is beginning again. They have recognised that it can be done safely, even with all the tensions and pressures that exist in the United States on the matter.

In addition, we have established processes for environmental management that require operators to have an effective environmental management system in place before starting operations. The new US rules will require a similar system, but they will not be in place for another year. Whereas we already have third-party audit of the environmental management system, the US is still considering whether to adopt it.

We have looked carefully at the systems that operate here and elsewhere in the world and we have talked to the companies involved. We should not shy away from the fact that nowhere, apart from Norway, has such exacting standards on safety and environmental protections. The hon. Lady says that Norway has put in place a moratorium, but that is not correct; it has not adopted a moratorium on deep-water drilling, and a number of deep-water wells have been drilled in Norwegian waters this year since Macondo.

[Caroline Lucas]

In fact, I was careful not to say that Norway had put in place a blanket moratorium. I said that it had allowed ongoing drilling under the 20th round of licences, but that it will not release any licences under the 21st round—the new round—until it has learned the lessons. Surely that is the kind of model that we should follow. I come back to my point that I do not understand how Ministers can reassure the House that deep-water drilling is safe until we know why the blow-out happened. We do not know what went wrong, so we cannot be sure that we have put it right or made sure that it will not happen again.

--- Later in debate ---

[Charles Hendry]

We have looked at the safety mechanisms—the tests, structures, emergency procedures and fail-safe devices—to see how they are imposed in the United Kingdom. What happened in the gulf of Mexico happened under a very different licensing and safety regime. We have looked at practices here, and we believe that it is safe to go forward, particularly given the many years of deep-water drilling in the United Kingdom. That is the basis of our decision.

In addition, we have looked at the oil pollution emergency plans. We had a review of their format and content. As a result, plans submitted for all drilling activities must now assess the worst-case scenario, where all containment barriers have failed, resulting in a well blow-out that cannot be controlled in the short term. All ongoing drilling operations now have revised oil pollution emergency plans to assess the worst-case scenario. All OPEPs submitted by operators contain a section relating to oil spill modelling. Operators conduct computer modelling on worst-case scenarios to give an indication of the consequences that could arise if the scenarios were to occur. As such, that information gives an indication of where oil might beach on shore and of the time factors involved. That allows pre-planning to take place to address such issues.

The UK has a tough regulatory regime. Everyone anywhere who has looked at the approach in the UK believes that it is a gold standard to which others should aspire. However, we will continue to look at any evidence from anywhere in the world, and we will refine and improves things as necessary. We have made a number of changes in the light of Macondo, such as increasing the number of environmental inspections and seeking revised oil pollution emergency plans.

All drilling applications are considered on a case-by-case basis, and no consents are issued until DECC and the HSE are absolutely satisfied that the drilling proposals are sound and have taken into account the issues that contributed to the Macondo incident. More than 300 deep-water wells have been drilled to the north and west of Shetland with no incidence of a blow-out or oil spill. Deep-water drilling is not a new concept in this country; the industry has been conducting such activities here since 1974.

Taking account of those factors, we do not believe that there is a need to halt deep-water drilling on the UK continental shelf. As I said, the US has recently lifted its moratorium, and Norway has never had one.

The UK oil and gas industry is a great success story, but it does not always receive the praise and attention that it deserves. I have been offshore and seen first hand the dedication, determination and skill of the work force. The industry has shown continuous technical innovation to meet the tough challenges of operating in the North sea and beyond. It is of course vital that operations are carried out safely and that environmental impacts are minimised, and we must ensure that lessons are learned from the US incident. However, the UK regulatory system already provides one of the toughest regimes for the upstream oil and gas industry to operate in.

[Caroline Lucas]

Will the Minister give way?

[Charles Hendry]

I am about to conclude.

The industry’s track record, particularly post-Piper Alpha, demonstrates its effectiveness. As I said, we have been looking closely at information from the Macondo incident and we will continue to do so. When those investigations are complete, we will determine what more, if anything, needs to be done to reinforce our regulatory approach. However, I can give the hon. Lady and the House an absolute undertaking that we will take no gambles or risks in making sure that we do these things in the most effective and safest way possible.

Question put and agreed to.

Oral Answers to Questions

Debate between Charles Hendry and Caroline Lucas

Thursday 1st July 2010 Commons Chamber

[Charles Hendry]

We are absolutely determined to move forward rather more quickly on smart metering. The position that we inherited—to roll out smart metering by 2020—was pathetically unambitious, and we are determined to bring it forward by some years. It will bring exactly the benefits that my hon. Friend talks about: encouraging microgeneration, helping with fuel poverty and really helping us to move towards a low-carbon economy.

[Caroline Lucas (Brighton, Pavilion) (Green)]

T7. According to a recent Conservative party report, “Rebuilding Security”, the party advocates “policies designed for hunting” new UK oil reserves as well as offering “the right incentives to explore for and extract the remaining reserves of oil and gas”Does the Minister agree that a moratorium on all new deep-sea offshore drilling is essential, at least until a full investigation into the spill in the gulf of Mexico has been completed?

[Charles Hendry]

I do not agree with the hon. Lady on this issue. We have in place in the North sea the toughest environmental regime in the world. In the light of the tragedy in the gulf of Mexico, we have doubled the number of inspections and increased by half the number of inspectors. We have a very tough regime and we have a national interest in ensuring that we get the best possible return from the natural resources in the North sea.