Lord Lilley
Main Page: Lord Lilley (Conservative - Life peer)
Callum McCaig
The oil industry is going through a difficult period, but there is a fair degree of resilience and optimism in these difficult times. A concerted effort is being made to show that it is not a sunset industry, and that it will work through what needs to be done. As was clear in the quote that I cited, the industry is making efforts to reduce costs. We in this Chamber can do nothing about the price of oil, but we can do something about the investment climate, which I think would be significantly enhanced with changes to the fiscal regime. Aberdeen is seeing job losses on a fairly sizeable scale, but it is probably still performing above average, and I certainly hope that it continues to do so.
The issue of tax revenues is not only about the supplementary charge in corporation tax or the petroleum revenue tax, because the full range of tax revenues needs to be factored in, including income tax, national insurance and the corporation tax paid by the supply companies. This is a major sector, and if we can invest in the skills and ensure that we bridge over what everyone agrees will be a temporary downturn in the oil price—how temporary is a matter on which I shall not speculate, because that could end up with my looking daft—that support will help.
Changing the tax regime would send a very powerful message to those looking at investment. If investment is not made in the UK continental shelf, because of the nature of the business the investment will be made in west Africa, Kazakhstan, Brazil or the gulf of Mexico. It is not a zero-sum game. Precisely because very little tax is being paid—unusually so—the Treasury is not banking on North sea oil to deal with what it needs to pay for, so it can afford to make the changes. The revenue forecasts for the next few years are low, and changing the regime now would make that viable. It would also send the clear message that this is a basin that is worth investing in. If there is investment, there are jobs, the skill base is maintained, and the supply chain is supported in a way that ensures that it can invest in and develop products not only for the North sea but for the global oil and gas industry, into which the United Kingdom supply chain—particularly around Aberdeen—is making great efforts to diversify.
I am very much in favour of the OGA’s establishment as an independent regulator. I am sure that, as we enter the next stage, there will be discussions about the nuts and bolts, but we want it to happen, and happen very soon.
Let me now move on to the closure of the renewables obligation. [Interruption.] Excuse me?
Mr Peter Lilley (Hitchin and Harpenden) (Con)
We thought that the hon. Gentleman was moving on to the closure of his speech.
Callum McCaig
I am sorry to disappoint the right hon. Gentleman. I will be brief, to a degree. I do not need to rehash the arguments about the closure of the renewables obligation, which is disproportionately affecting Scotland, because 70% of the wind farms that are in the pipeline would be there. I know that the Government have said that they want to try to reintroduce the closure in order to meet a manifesto commitment, but I urge them not to do so. If they do, we shall oppose the move.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
It is a great pleasure to follow the two previous speakers, my hon. Friend the Member for Selby and Ainsty (Nigel Adams), who made an extremely realistic speech, and the hon. Member for Aberdeen South (Callum McCaig), who I thought was amazingly complacent about the primary industry in his constituency, which is going to suffer very considerably for a considerable time from the run-down in the oil industry. It is amazing to me that the SNP can abort two potentially valuable industries in Scotland—underground coal gasification and fracking—which might have provided alternative jobs for the people in his constituency, and I hope he will look closely at that.
Wherever we are on the spectrum on global warming, from sceptical to alarmist, we can surely all agree on one thing: that we should try to achieve the targets to which we are committed for reducing CO2 at the least cost to our constituents, because it is ultimately they who bear it either through their budgets or their jobs. So when my right hon. Friend the Secretary of State found that subsidies were proving unnecessarily generous to achieve our targets and we were achieving them ahead of time, so that without changing those targets she could reduce those subsidies, she assumed the whole House would be in universal agreement with what she was proposing; even I, for once, was on her side. But it was not so: there were calls from the green lobby and the Opposition to keep subsidies higher than necessary for longer than necessary to achieve the targets to which we are committed, and key amendments in this Bill seem designed, likewise, to increase the costs of achieving our targets.
Clause 80 will not allow the use of the emissions trading scheme to achieve our targets, yet the whole purpose of the ETS is to ensure that those who can abate emissions at the lowest costs, do so. So by excluding the use of that, we are ensuring that higher costs are incurred to achieve a given abatement in emissions. Another amendment prolongs the subsidies for onshore wind for longer than needed, even though that is unnecessary. So I shall, unusually, be supporting the Front Bench in seeking to have both those amendments from the Upper House removed.
Above all, we have created a framework that commits us to load higher costs on UK consumers and businesses via the Climate Change Act 2008 and all its ramifications than any other country in Europe. Despite all that, we will ensure, because of the way the system works, that we do not reduce the amount of carbon dioxide emitted into the atmosphere by one molecule more than would be the case if we were doing the same as the rest of Europe.
Let me explain why that is so. At Paris all the countries of the world agreed to make commitments on what they were going to do in future to curb the growth of their CO2 emissions. The only exceptions were the countries of Europe, who put in a total figure for the whole of Europe and are now to allocate that figure among the member states. Because we are committed to doing so much more than the average in Europe—indeed, than anybody else in Europe—all that does is to reduce the amount by which the other countries in Europe will have to reduce their emissions. So we have increased the burden of costs on British households and business, reduced the burden of costs incurred by our partners in Europe, and not reduced the emissions of CO2 by a single molecule.
That is an extraordinary thing to achieve. It has puzzled me a for a long time how it is that we have a political class, particularly the green lobby that straddles both sides of the Gangway—
Mr Lilley
Indeed, not universally on the Opposition Benches. It puzzles me that the political class is committed to such perverse policies. Then I found a possible hint of an explanation, when someone mentioned to me, Madam Deputy Speaker, a book that I am sure that, like me, you have not read but have heard about called “Forty Shades of Grey”. It is apparently a mildly pornographic—
Mr Lilley
It is apparently “Fifty Shades of Grey”. [Interruption.] Have I any higher bids? I have not read it; I have not even read the title of it. However, the surprising popularity of that book demonstrated that sadomasochism, or the infliction of pain and the submission to pain, are far more widespread tastes than we had previously thought. It seems to me that in the political sphere there is a similar belief that it would be popular to inflict pain or submit to pain by green policies. We might say that what we are suffering from in this country is “Fifty shades of green”.
The trouble is that Members who are committed to this doctrine measure the success of their policies not by what they will achieve, but by what they will cost, and not by how effectively they will reach a given destination, but by how onerous are the burdens they can place on Britain, British households and British business.
That pain is very significant. The Committee on Climate Change worked out the costs of climate change policies in 2014-15, and it came out at about £250 per household. [Interruption.] The right hon. Member for Doncaster North (Edward Miliband) may disagree with the Committee on Climate Change, which he helped set up; if so, please intervene—but of course he cannot sustain his position. That figure is set to double by 2020, to double again probably by 2030, and to double again by 2050. That is the direct effect on household budgets both through their energy bills and the cost of more expensive products because energy prices feed through to product costs.
There is also the cost on jobs. We have lost the aluminium industry already, and earlier today we were seeing the serious the impact of job losses in the steel industry. Of course, the basic reason why there are job losses in the steel industry is that there is a worldwide glut of supply, but the reason that falls excessively on this country is that our industrial energy costs are higher than those anywhere else in Europe. That is why we are suffering disproportionately at the moment. I am reliably informed by my right hon. Friend the Member for Wokingham (John Redwood) that we are importing bricks. I recently had lunch with a businessman who said that 7% of his output comes from the UK but that 28% of his energy costs were in this country.
John Redwood
Is it not the point that these green targets can bear down very heavily on our country without reducing carbon dioxide emissions at all, because these products are being made somewhere else and perhaps producing even more carbon dioxide?
Mr Lilley
My right hon. Friend is absolutely right. This is yet another example of the perverse effects of what we do. We impose costs on our own country, our own industries and our own households but we do not even achieve the objective of reducing carbon dioxide emissions. In fact, in these cases we probably marginally increase them.
My appeal to the House is that we start looking at this whole business in a rational way. Let us take all the targets to which we are committed as a given. Like the hon. Member for East Antrim (Sammy Wilson), I think they are unnecessary and unwise, but let us take them as a given and seek the least costly way of achieving them. Let us seek to achieve them in a way that will place the fewest burdens on British households and result in the fewest job losses and the least destruction of industry and output. Let us not measure our success by how much pain we can inflict and how much harm and burdens we can submit to, as we have done through the 50 shades of green up to now.
Caroline Lucas
Given that the right hon. Gentleman is apparently genuinely concerned about costs, why does he not extend that same analysis to nuclear energy? For example, Hinkley is going to put a massively greater strain on household budgets than renewables would do and it will not help us to get emissions down for at least a decade.
Mr Lilley
When the Energy and Climate Change Committee produced its report, I voted against that project precisely because I was worried that we were committing to an unnecessarily high cost, although I am not against nuclear in principle. I do not agree with the hon. Lady that it is much more costly than offshore wind. In fact, I think it is less costly. It is still unnecessarily costly, however, and we should therefore look again at options such as modular nuclear. If she were to put forward a motion to reduce the subsidies for offshore wind so that they were equal to those for onshore wind, I would happily second it. I would happily join her in that because I am genuinely in favour of reducing costs.
Chris Heaton-Harris
Madam Deputy Speaker, I am sure you would agree that my right hon. Friend’s speech is spanking this out of the park. Does he agree that the way in which we have moved forward by introducing an element of the market into the mechanism of bidding for subsidy in our energy profile is the right way forward, and that the renewables obligation is the wrong way forward? I also support the Government.
Mr Lilley
I agree. It was very late in the day when we introduced that system, so at least we incurred the minimum cost of subsidy to achieve the given objective rather than just plucking out a number, which would inevitably have been high, given that civil servants always are rather generous with public money and set targets high, just so that they can say, “Oh look, we have achieved our quantitative solution, even if we have done so at unnecessary expense.”
Graham Stuart
My right hon. Friend is making an entertaining speech. Offshore wind has a price of around £140 per MWh, but the industry expects to bring that down to around £100 by 2020, and by the time we have any nuclear power stations, it is pretty likely that it will be below the cost of nuclear and falling, whereas the cost of nuclear will be fixed for the entire time.
Mr Lilley
My hon. Friend is normally very rational, but on this occasion he is being irrational. He is suggesting we should invest in very expensive and currently inefficient products in the hope that the next generation of such products will be cheaper. However, other people would also be able to invest in those cheaper products and compete with us. If they are going to be cheaper in five years’ time, we should wait five years and do it then.
Edward Miliband (Doncaster North) (Lab)
It is a privilege to follow the unique speech of the right hon. Member for Hitchin and Harpenden (Mr Lilley). I bow to his greater knowledge about 40 or 50 shades of grey—or green, for that matter. It is also fair to say that he has taken a consistent position on these issues. He was one of the three Members of this House—
Edward Miliband
I beg his pardon. He was one of the five Members who voted against the Climate Change Act 2008, which was supported right across the House. It will not surprise hon. Members to hear that I approach this subject from a slightly different perspective, and I want to focus on how the Bill can be improved. Given the scale of the challenge we face, the right question to ask about any energy or climate Bill before the House is this: will it do everything necessary to meet our obligations and the requirements placed on us to take a leading role in tackling climate change? I believe that things can be done to the Bill to ensure that it does so.
This Bill is unlike many other Bills that have come before the House, in that a very important event has happened in between its being introduced in the other place and its Second Reading today. That event was the historic Paris climate change agreement. I paid tribute to the Secretary of State when she made her statement on the Paris agreement, and I do so again today for the incredible job that she has done.
My case to the House is that we need to reflect the high ambition of Paris in the Bill. In particular, I want to set out why the Government, in the light of the Paris commitment to a long-term global goal of zero emissions, should use this Bill to legislate for the same objective here in the UK. We need to legislate for zero emissions in law, with the date to be advised by the independent Climate Change Committee. I want to thank Members across the House whom I have talked to about these questions. They include Members on my Front Bench, the hon. Member for Brighton, Pavilion (Caroline Lucas), Liberal Democrat Members, Scottish National party Members and, indeed, the hon. Member for Beverley and Holderness (Graham Stuart), who plays an important role as the chair of GLOBE International, the international parliamentarians’ committee. If other hon. Members want to know more about this subject, a paper has been published today by the organisation Sandbag, setting out the case. My case is threefold. It is about consistency between international agreements and domestic action; it is about the economic case; and it is about the effect we can have on other countries.
Mr Lilley
Given what I said earlier about the effect of our having commitments that are higher than those of the other countries in Europe, which simply reduces the amount to which they are committed under the Paris agreement, if the right hon. Gentleman wants to raise our target even higher, would he not be reducing to an even lower level the amounts by which those countries would have to reduce their emissions in order to reach the EU global total?
Edward Miliband
No, because the EU target is set on the basis of effort-sharing between different countries, and we are one of the most important countries contributing to that effort-sharing: the more we do, the higher the EU target can be. That is part of being in the European Union and playing our role in raising these objectives.
My first case for acting relates to consistency between international agreements and domestic action. When I set a target of 80% by 2050 in the Climate Change Act, that was agreed on a cross-party basis and we were at the most radical end of the spectrum. That target was formulated to give us a fighting chance of keeping global warming below 2°C. However, Paris has crucially moved the world on from that. Paris sets a twofold objective: to try to keep global warming below 1.5°C, given that we are already at 1°, and, crucially, to achieve the long-term goal of zero emissions.
Stephen Kinnock
I absolutely accept there have to be exemptions for energy-intensive industries. The steel industry has needed the energy-intensive industry compensation package for over four years. The Chancellor recognised the need for that in 2011 and it has taken until now to get it sorted. One reason for that is that we are expending so much political capital in Europe trying to negotiate a Brexit, but that is another case altogether.
Does the Secretary of State really think that investors are going to choose the UK, where one could be liable to see governmental and regulatory support wiped away overnight with no warning, or choose to invest in an environment of ever-increasing certainty? In fact, would she not consider investing in emerging markets, such as China, which is now investing more in clean energy than the whole of Europe combined, or in India, which is planning a fivefold increase in its clean energy investment by 2020, instead of putting money in an uncertain British market? We must be clear: the uncertainty will affect not only the renewable sectors explicitly covered by the changes; there will be contagion elsewhere from this assault on investor certainty.
On today of all days, I feel the need to talk about a specific example of where the Government’s failure to act decisively to support sustainable energy and create certainty for investors is costing our country dear: the Swansea Bay tidal lagoon. As hon. Members will be aware, Tata Steel announced over 1,000 redundancies today, with 750 of them at the Port Talbot plant in my constituency.
Mr Lilley
I can scarcely believe that I would hear such a clear example of sadomasochism: an hon. Member representing a steel constituency calling for the highest-cost energy in the western world to go ahead. That can only make the problem of the jobs of his workers even worse. I just cannot imagine how he stands any chance of being re-elected.
Stephen Kinnock
I thank the right hon. Gentleman for his excellent advice. I will leave the last bit of his intervention for my constituents to decide. As I explained to the hon. Member for Warrington South (David Mowat), there is a need for a compensation package for energy-intensive industries. As I have mentioned many, many times in interventions and speeches on the steel industry, the Government’s foot-dragging on the compensation package is a major reason why we are seeing the crippling of the steel industry. It has been too little, too late.
This happened because of the Government’s failure to act against the dumping of subsidised Chinese steel, the failure to produce a long-term industrial strategy for steel, and warm words backed up with no concrete action on procurement and energy. The priorities for my constituents are preventing further job losses and Government action to support retraining and transition for those made redundant. The Swansea Bay tidal lagoon project is an opportunity for both job creation and support to the steel industry, because steel turbines would be at the heart of the lagoon project. The Government, however, have dodged and delayed the decision. Every missed deadline sets the project back. Every day or week of delay costs months or years—and it costs jobs. The Swansea Bay tidal lagoon would be the first of its kind in the world and shows how important it is for the Government to act decisively and create certainty. My constituents urge the Secretary of State to take urgent and decisive action to support the project. We have been let down by the Government too many times, today being a prime example. It is about time the Government took action, so I would appreciate a specific answer from the Secretary of State about the tidal lagoon project in her wind-up.
It is not just on the tidal lagoon and the arbitrary scrapping of the renewables obligation that the Government are failing. The decision to axe the carbon capture and storage programme, just when Britain is on the brink of securing major investment from the private sector, puts the entire future of UK CCS at risk. CCS technology not only offers the chance of decarbonisation and of transforming non-renewable energy into something that can be made part of a viable sustainable energy mix, it supports jobs. But, again, we see a Government who are unable to create an environment of certainty for investors, employees and our country, and so our energy security is put at risk, as is the future of our planet. There can be no doubt about it: the Government’s actions are being noted around the world. The Prime Minister will parade his signature of the Paris accord, but colleagues around the world, as well as in this Chamber, see him slashing vital support for clean energy.
The UK's reputation as a world leader on climate change is under threat, and we now face an uphill battle to meet our legally binding EU renewable energy targets. We should ask: what is the theme running through all this? It is of a Government and a party driven by the politics of now. That is why in 2005 we saw “hug a husky” and in 2010 the pledge to be the greenest Government ever; that is why we saw the ditching of the green deal when those pesky Liberal Democrats had left the Cabinet table; and it is why today we see an end to support for wind, solar and CCS. Government Members have had too many complaints at their local association meetings. Government Ministers have been too preoccupied with expensive nuclear projects and cosying up to China. The Government—or Mr Lynton Crosby—do not feel green issues and the environment are fashionable any more, and the internal politics of the Conservative party pushes them again back to their comfort ground and away from a commitment to a sustainable future.
The climate challenge cannot be met by the politics of now. It cannot be met by short-term thinking and internal party management. The Conservative party claims to be the party of entrepreneurs. I say it is about time it started acting like it, with an entrepreneurial state willing to collaborate and work with the support of all those in the private sector who want to build a sustainable future. There has to be a collaborative approach between business and Government. At the heart of that, there has to be an environment of certainty. That is how we will secure investment and how we will secure jobs. Most importantly of all, it is how we will secure a sustainable future.
I implore the Government today to rethink and to go back and pay heed to those saying stop. They should stop destroying investor confidence, stop the uncertainty and start supporting a sustainable energy market and future.
Philip Boswell (Coatbridge, Chryston and Bellshill) (SNP)
It is a pleasure to follow the right hon. Member for Wokingham (John Redwood). In their manifesto for the 2015 general election, the Conservatives undertook to
“meet our climate change commitments, cutting carbon emissions as cheaply as possible, to save you money.”
Although I welcome action towards achieving this goal, and particularly the introduction of the OGA, recent action seems at odds with the climate change agenda. While I agree with the Secretary of State when she says that this is one of the biggest challenges facing this generation, with the advances in technology, clean renewable energy can be less expensive to the consumer than traditional carbon-based energy.
Philip Boswell
The £92.50 strike price at double the current rate for Hinkley C, guaranteed for 35 years, is a case in point. As for alternatives that might be cheaper in future, one possibility is compressed air energy storage, allied to the admittedly intermittent nature of wind power.
I could also tell the right hon. Gentleman about advances in technology in the context of the carbon capture projects in Scotland and Yorkshire. Before coming to this place, I was fortunate enough to work in the energy sector for 13 years, and for some time I was Shell’s contract leader for the carbon capture project. I moved it from the coal-fired power station at Longannet to the Peterhead gas-fired power station, so I understand all too well what “advances in technology” means.
When we were talking about the amine process—before the rug was pulled from under our collective feet—we likened the technology to that of the mobile phones of the 1980s; the right hon. Gentleman is not young enough not to know about those clunky phones. The process would have captured 90% of emissions. Given the advances in technology, were we to retain and develop that process, the figure could rise to 92%, 94% or 96%, with ever-reducing costs. This was a missed opportunity: that is the point that I was making.
Creating market incentives to achieve the two-pronged goal of cheaper and cleaner energy requires a reworking of the United Kingdom Government’s involvement in the energy sector, and a rethinking of their relationship with energy. In the Bill, the Government propose to close the renewables obligation to new onshore wind projects from April 2016, a year earlier than originally planned. Given that the RO is the only current mechanism that enables large-scale onshore wind to enter the power market, the proposed closure poses a significant threat to the future of the onshore wind sector and the United Kingdom’s growing green manufacturing, export and investment potential, while increasing the difficulty and costs associated with meeting the challenging decarbonisation targets.
In the House of Lords, the Government proposed a number of grace periods designed to allow projects that had already committed significant investment on the basis of an expectation to deliver before April 2017 to proceed. Peers rejected the clauses on the RO closure, calling for the Government to respond more fully to the substantive concerns expressed by industry about the closure and the grace periods. I support that position. Investors and developers need clarity from Parliament on the future of the renewables obligation. Without that certainty, investors will be unable to proceed with projects that were expected to be delivered on the basis of RO grace periods. The Government must also explain how new onshore wind projects will in future be able to access and compete in the market for low-carbon power.
Dr Alan Whitehead (Southampton, Test) (Lab)
We have had a wide-ranging debate on the Bill. Indeed, it has been so wide-ranging that in some instances I forgot there was a Bill in front of us. I was pleased to hear from the hon. Member for Waveney (Peter Aldous) who, in a thoughtful contribution, kept us on track. I intend to talk about the Bill in my closing remarks, as well as about what various hon. Members who did address it had to say.
My hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) spoke about the original Bill being thin gruel, improved by amendments in another place. He is exactly right. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) dispelled some of the myths and inaccuracies of some of the anti-renewables contributors tonight. He was also right about the missing parts and the ambition of the Bill, as was my hon. Friend the Member for Wakefield (Mary Creagh), who reminded us, in the light of our move to an Anthropocene age, of the ambition we need to have for our energy policy, in particular in relation to fuel poverty and energy efficiency.
The hon. Member for Brighton, Pavilion (Caroline Lucas) appeared to suggest that the best idea we could take was to close down the North sea. That is not something I buy into. Since we know gas and oil will be with us for some time, albeit in reduced amounts relative to the overall energy mix and more concentrated in transport and heating, it is better that it is sourced from a secure resource in the North sea than bought in from across the world. The North sea is a great sustainer of jobs, industry and supply line for the UK, as we have heard from a number of hon. Members. It is right we look to gain the best out of it for those jobs and that industry and for the security of the UK. It is not an either/or. It is right that we should pay full attention to the climate change commitments we have made. Labour will be seeking to strengthen some of the commitments as part of the Bill. The creation of the OGA to secure the best outcomes for the next phases in North sea development is an essential plank of Sir Ian Wood’s report. We fully support its creation as a free-standing body with powers to develop and co-ordinate the industry.
The North sea is, as Sir Ian Wood states, a mature resource. While we inevitably strain to know knowns and known unknowns, a number of authorities estimate that the North sea is up to 80% exploited already. Future finds and future fields will be small, possibly increasingly difficult to exploit, and will require support from existing infrastructure to ensure that production is logistically and economically possible. Increasingly, production will be underpinned from now on by co-operation and sharing of resources. One of the OGA’s particular tasks will be to ensure that this works equitably and effectively—a point underlined by the hon. Member for Richmond (Yorks) (Rishi Sunak), who in his contribution quoted a reminder from his local Unite official about the importance of jobs and security in his region.
There must be concerns about current responses to the low price of oil and their effect on longer-term considerations of the future development of the North sea. BP has just announced further job losses in the North sea that may well impact on maintenance work, safety and operation, and readiness for exploration, which reminds us of the sort of short-termism that, if the OGA works well, it can tackle effectively. Through the MER—maximising economic recovery—consultations, we need to see that the OGA really has suitable powers to sustain the UK offshore skills space and that phrases such as “cost reduction” are about efficiency and operation, not just code words for stripping back safety and imposing longer shift patterns and cuts to pay and conditions.
In thinking about the future of the North sea, it is right that we take care to ensure that what is there in the form of infrastructure—both in structures and skills—is used to best advantage. That is not a theoretical point about future exploration; it is a very practical point about present realities. According to Oil & Gas UK, there are currently some 300 finds that have not been exploited further, some dating back 10 or so years. That is due not only to the current low oil price but to difficulties with infrastructure, and since the bulk of those fields are below 50 million barrels of oil equivalent, they are unlikely to sustain infrastructure connections by themselves.
The OGA has some powers in the Bill to ensure that decommissioning is thought about, and that platforms and pipelines are not just taken away and disposed of in a rush to develop what some might see as a new industry for the North sea—important though that is. That thought carries over to what could be a very important future for the North sea as a repository for carbon dioxide sequestered as part of the carbon capture and storage process. This is not just for the UK, because the capacity and extent of potentially available strata for deposit mean that the North sea could be Europe’s depository of choice in the future. An elegant underpinning of the need for a carbon capture strategy came from my hon. Friend the Member for Greenwich and Woolwich.
The fact that the Government very unwisely scrapped the UK’s plans to get ahead of most of the world in CCS at scale technology does not mean that CCS will not come or that it is needed any less for future energy and intensive industry production. It just means that we will be buying someone else’s technology more slowly at a greater cost, but the least we can do now is to ensure that the storage end of the process is secured in one of the best places in the world to undertake such activity and, on the back of it, to develop jobs, supply chains and income in parallel with the continuation of that mature field—and possibly at some stage even securing crossover between what is happening with oil recovery and the storage of CO2.
I do not agree with the hon. Member for Aberdeen South (Callum McCaig), who said that these two issues, though connected, should be proceeded with separately. They are completely connected in respect of how the North sea will work now and for the future, so it is important to take careful note of what CCS has to offer the North sea in the longer term. We will therefore be pressing in Committee to secure a better overview of CCS by the OGA, and indeed to ensure that for the future the Government have a full strategy for dealing with CCS both in the North sea and across the country.
We will not divide the House tonight because some of the work to improve the Bill, which comes to us from the other place, has already been done. We shall seek in Committee to maintain those improvements, particularly in the part that deals with renewables and low-carbon energy, most notably in the Government’s clear intention—it is yet not with us as the Bill goes into Committee—to close the renewables obligation for offshore wind early. I am reminded of the strong contribution from my hon. Friend the Member for Sunderland Central (Julie Elliott), who told us just how wrong-headed a decision that looks to be.
I am afraid that the agenda that we have seen over the past few months—one of downgrading options for renewables in order to pursue a gas-based strategy overall —is at the heart of this particular issue. We say that there is, and should not be, a contradiction between supporting the continuing secure supply of the gas and oil that we will need for the foreseeable future and the development of renewable energy as a key component of the United Kingdom’s energy mix.
The hon. Members for Selby and Ainsty (Nigel Adams), for Daventry (Chris Heaton-Harris) and for Hertsmere (Oliver Dowden), who talked about subsidies for renewables, should be reminded that all energy is in effect now subsidised in one way or another. Indeed, we have just completed an exercise that subsidises gas, coal and nuclear generators to the tune of £940 million in one year —just to be there, not to produce anything. Perhaps that puts the figures for renewables subsidies that we have heard today into context.
In Committee, we will seek to defend the present status of the Bill without early closure of the renewables obligation, and will remind ourselves that we are talking about an existing subsidy rather than a new one. We will also seek, by means of new clauses, to clarify Britain’s longer-term low-carbon energy targets.
Dr Whitehead
I am afraid that I have no time to take interventions.
My right hon. Friend the Member for Doncaster North (Edward Miliband) gave a clear and lucid indication of his wish to go further, and to table amendments in an attempt to underpin those longer-term targets. I detected strong support for that position on the part of the hon. Member for Beverley and Holderness (Graham Stuart).
We have an opportunity to forge, in a spirit of joint endeavour across the House, a key piece of legislation that will provide security and a clear way ahead for energy investors and operators, and for Britain’s energy workforce. My hon. Friends the Members for Aberavon (Stephen Kinnock) and for Ynys Môn (Albert Owen) reminded us of the need for coherence, long-term planning and stability in energy policy. We all know that that clear way ahead will be necessary for the health and prosperity of Britain’s future energy activities, and for clarity about the future direction of our country towards a low-carbon economy. Let us hope that, in Committee, the Government will recognise that compromise and discussion on both sides provide a joint opportunity to make that vision a reality, and that the Committee stage will produce a Bill that truly represents the interests of the whole House and moves us towards a low-carbon economy that will take account of our oil and gas in the context of that wider ambition.