Energy Bill
Public Bill Committee, 5 February 2008.
Joan Humble (Labour, Blackpool North and Fleetwood)
Before we begin, I have a few preliminary announcements. Members may, if they wish, remove their jackets during Committee meetings. They must turn off, or switch to silent mode, all pagers and mobile phones. There is both a money resolution and a Ways and Means resolution in connection with this Bill. Copies are available in the room. I should like to remind members that adequate notice should be given of amendments. As a general rule, I do not intend to call starred amendments.
Furthermore, this Bill is one of three this Session that has been selected for a further experiment with explanatory statements on amendments. All members of the Committee have been sent a leaflet giving details of the experiment. Copies of the leaflet are available in the Committee room and in the Public Bill Office. Members may also wish to seek advice from the Clerk of the Committee.
As we are still in the early days of taking oral evidence in Public Bill Committees, it might help if I briefly explain what is proposed, so that we can all be clear. The Committee will first be asked to consider the programme motion on the amendment paper, for which debate is limited to half an hour. We will then proceed to a motion to report written evidence, and then a motion—which I hope we can take formally— to permit the Committee to deliberate in private in advance of the oral evidence sessions.
Assuming that the second of these motions is agreed to, the Committee will then move into a brief private session. Once the Committee has deliberated, the witnesses and members of the public will be invited back into the room and our oral evidence session will commence. If the Committee agrees to the programme motion, it will hear oral evidence today and on the morning of Tuesday 19 February, before reverting on Thursday 21 February to the more familiar proceedings of clause-by-clause scrutiny.
Joan Humble (Labour, Blackpool North and Fleetwood)
Copies of any submission that the Committee receives will be made available in the Committee room.
Joan Humble (Labour, Blackpool North and Fleetwood)
We will now hear oral evidence from the TUC and the EEF. I welcome the witnesses. Would you like to introduce yourselves to the Committee?
Joan Humble (Labour, Blackpool North and Fleetwood)
Before calling the first member to ask a question I would like to remind all members that questions should be limited to matters within the scope of the Bill and that, in view of the time constraints, both questions and answers should be brief.
Charles Hendry (Conservative, Wealden)
I thank the witnesses very much coming here, and give special thanks to the EEF for being here as the voice of business in the absence of the CBI.
In the TUC’s submissions, you said that you are keen to see a carbon price that is set high enough to create a credible and effective emissions trading scheme. Can you give us more detail about what that means? Are you specifically seeking to have a floor price on carbon, so that it should not drop below a certain price per tonne? If so, I would also be interested in knowing the views of the EEF about the views of business with regard to a floor price on carbon.
Charles Hendry (Conservative, Wealden)
But is it your wish that that should be on a European rather than a domestic level?
Martin Horwood (Liberal Democrat, Cheltenham)
Do you worry that the shadow cost of carbon that has been used by the Government to date is too low, certainly compared to what was envisaged in the Stern review? Do you see anything in the mechanisms recommended in the Bill to do with the renewables obligation that might improve that situation?
Martin Horwood (Liberal Democrat, Cheltenham)
Do you think that the Bill ought to address that?
Stephen Ladyman (Labour, South Thanet)
The Bill is intended in many ways to implement what is in the energy White Paper so can I first ask both organisations to comment on how you see the energy White Paper. Are you broadly supportive? Do you think that it has deficiencies?
Stephen Ladyman (Labour, South Thanet)
One of the biggest areas of controversy is going to be the mix of power sources that are proposed and, in particular, the inclusion of nuclear power in that mix. How does each of the organisations feel about that? Does nuclear need to be in there?
Stephen Ladyman (Labour, South Thanet)
Is that conclusion based on the fact that you perceive it to be sensible to have a mix of power sources for energy security purposes, or have you come to the conclusion that nuclear needs to be part of the mix because you have predicted how much energy we need and you cannot see how we can deliver those needs without nuclear power? Which of those is it?
Stephen Ladyman (Labour, South Thanet)
And in estimating how much energy we are going to need in the future, do you think the White Paper has got it right? What is your view of how the economy is going to grow over the next 20 to 50 years, and how will energy supply change with it?
Stephen Ladyman (Labour, South Thanet)
One final question, if I may. Clearly, the Bill has to be even-handed. We believe in fair trade and there can be nothing in the Bill that particularly benefits British industry, but is there anything in it that you might think could be a barrier to British industry providing our energy supplies, as opposed to overseas suppliers?
John Robertson (Labour, Glasgow North West)
Mr. Radley, in your answer to my colleague’s first question, you said there were some sensible things in the White Paper, which—being an old cynic—would suggest to me that some things in that document were not so sensible. Perhaps you and your colleagues could tell us what they are.
John Robertson (Labour, Glasgow North West)
So I take it that your suggestion is that the Government have invested money in one of two types of renewables, when they should have been more diverse in how they were looking at renewables?
Martin Horwood (Liberal Democrat, Cheltenham)
The witnesses have almost answered my questions. To be absolutely clear, are both of you saying that we should amend the Bill to provide enabling powers to introduce feed-in tariffs and that that should specifically address marine renewables and microgeneration in the first instance but allow the option for a feed-in tariff scheme to gradually replace the renewables obligation?
Martin Horwood (Liberal Democrat, Cheltenham)
But your intention would be that, in particular, microgeneration and marine renewables are appropriate early candidates for feed-in tariffs.
Martin Horwood (Liberal Democrat, Cheltenham)
And do you think that that could operate in specific sectors, such as marine renewables and microgeneration, alongside the renewables obligation working in other sectors of the energy market? Do you think that that is feasible?
Paddy Tipping (Labour, Sherwood)
I wanted to talk about carbon capture and storage and clean coal technology. Before that, can we return to carbon pricing for a moment and talk to colleagues from the TUC about this? It is clear—is it not?—that for new investment in generation, there has to be a high and stable price of carbon in the future? Mr. Pearson, I think, told us that that could be done through the EU emissions trading scheme, the third phase of which will begin in 2012. If we want to make progress on nuclear, however, we have to make some decisions about carbon pricing before that. The nuclear White Paper talks about the European scheme, but it also speculates about the notion of a UK-only scheme before then. How do you think that that would work?
Paddy Tipping (Labour, Sherwood)
We are all in favour of carbon capture and storage. Are the measures in the Bill sufficient to bring forward new schemes?
Paddy Tipping (Labour, Sherwood)
So what more needs to be done to bring forward carbon capture and storage? All our coal plants at the moment are ageing and going to go out of commission. There is a prospect that, unless we can burn coal more cleanly, either via better combustion techniques or post-combustion carbon capture and storage, there will be real problems. What else needs to be done?
Brian Iddon (Labour, Bolton South East)
The Bill favours retrofitting for carbon capture and storage. Do you agree that the Government should put their money on that technology, rather than the pre-capture of carbon through reforming the gas? That has the advantage of producing hydrogen, which would kick-start the hydrogen economy.
Brian Iddon (Labour, Bolton South East)
So why did BP pull out of the Peterhead project?
Brian Iddon (Labour, Bolton South East)
Will the competition that is proposed in the Bill attract BP back in? Its project was pre-capture.
Brian Binley (Conservative, Northampton South)
May I pursue this a little further. There is a feeling in the industry that the Government have been premature in making decisions about the issue through this competition and that they in fact close down activity that ought to be opened up. Is that your general view at this stage?
Brian Binley (Conservative, Northampton South)
Can I come to the industry now, because I understand that money is available and people want to go ahead, but they feel that they are being excluded by the way in which the competition is framed, and so forth. Is that fair?
Brian Binley (Conservative, Northampton South)
This is my final question. Do both of your groups believe that amending this Bill to open up that particular aspect would be a good thing? Is that what you are telling me?
Alan Whitehead (Labour, Southampton, Test)
Just a brief question on competition in securing infrastructure—following on from the question on how competition might develop carbon capture and storage. Are you happy with the potential arrangements in the Bill to stimulate the development of—particularly offshore—grid transmission arrangements through amendments to the Electricity Act 1989 and the power of Ofgem to develop competition for licences? Or do you think that further action is needed to ensure that the delivery mechanisms for the development of offshore wind generation can be sustained?
Alan Whitehead (Labour, Southampton, Test)
So do you have thoughts on what sort of alternative mechanisms might secure the aims that you are talking about, over and above what is presently set out?
Alan Whitehead (Labour, Southampton, Test)
Do you think that the combination of what is in the Bill and the proposed developments in other legislation, particularly the proposed marine Bill, will be sufficient to provide that new framework, or are there other elements to it that you consider necessary?
Jamie Reed (Labour, Copeland)
I apologise if the Committee has covered this while I have been away from proceedings. I think that generating costs are of essential importance here, when we are looking at today’s energy factors and CCS in particular. The last figures that I have available to me show that the generating costs for coal are approximately £29 per megawatt-hour, and roughly £30 or £31 per megawatt-hour for gas. Do you have any fears about rising generating costs, irrespective of the price of carbon, with the introduction of CCS for those technologies?
Charles Hendry (Conservative, Wealden)
The Bill allows for encouraging a whole range of energy generation, perhaps a new fleet of nuclear, with all the work that goes with decommissioning and the waste disposal related to that. It allows for the opening up of carbon capture and storage; and a whole new approach to offshore and marine renewables, with the Severn barrage and things like that. What is your assessment, both from the TUC and from the employers’ side, of the skills base in this country? Can we actually deliver that range of projects, and what needs to be done to ensure that we can?
Charles Hendry (Conservative, Wealden)
May I explore that a bit further? Are you saying that you believe that the nuclear installations inspectorate does not have sufficient numbers of skilled people to assess reactor proposals of the types that are being submitted to them? And is it a general view within the industry that, if it wanted to invest in and build nuclear, there is enough information out there to make decisions on the cost of carbon, the waste disposal regime and the assessment procedures?
Martin Horwood (Liberal Democrat, Cheltenham)
On some of the decommissioning programmes for nuclear and the new nuclear programme, the impact assessment that we have just been given seems to have identified some alarming risks, and one key concern is that there is still a risk that sufficient funds would not in practice be available. In particular, in a company undergoing a restructuring programme, the assets could be diverted and made unavailable to fund the liability. Do both of you think that in the end Government have to be the final guarantor of the costs of nuclear decommissioning and clean-up? Is that the only realistic option?
Martin Horwood (Liberal Democrat, Cheltenham)
How do you see the provisions in the Bill in those terms? Do you think that it allows for the possibility that you have both identified—that the nuclear industry should pay, but as a last resort the Government could pick up the tab?
Martin Horwood (Liberal Democrat, Cheltenham)
Does the EEF have a view on the provisions in the Bill and how they allow or do not allow that to happen?
Martin Horwood (Liberal Democrat, Cheltenham)
That is extremely helpful.
Paddy Tipping (Labour, Sherwood)
Energy prices have been pretty low for a decade, but now they are rising very steeply indeed and clearly that will have consequences for trade unionists. There is little in the Bill about fuel poverty. Should there be and what should it be?
Paddy Tipping (Labour, Sherwood)
Does the EEF have a view on smart meters?
Hugo Swire (Conservative, East Devon)
What is your view on security issues? We hear a lot about security of supply from overseas countries, and our exposure to destabilisation in that respect. Is there enough in the Bill to address the concerns about a decommissioning programme, a nuclear build programme and a uranium enrichment programme, to say nothing of offshore renewable farms and oil and gas pipelines and so forth? What is your view of the security aspect of all this?
Hugo Swire (Conservative, East Devon)
I am aware of that. That was not really my question. I prefaced my question by saying exactly that. My question was about security surrounding the decommissioning of nuclear installations, the commissioning of new installations and offshore wind farms, oil and gas within our own area, not about bringing in supplies from overseas.
Jamie Reed (Labour, Copeland)
The decommissioning costs of nuclear as an electricity generating source are fairly well understood by the industry and by people all over the world. I think that is beyond any meaningful doubt. Do you believe that the Bill does enough to make provision for those other electricity and energy generating sources—such as the oil, gas and coal industries—to cater to their own decommissioning costs and the management of their intergenerational waste, including, in the case of those three energy producing sectors, radioactive waste?
Anne Main (Conservative, St Albans)
Can I just take Mr. Pearson back to the elephant in the room, which he described to us? Fuel poverty and smart metering, which were in the energy White Paper, are noticeably absent in the Bill. Given that there is a degree of sclerosis, with industry wondering whether it can have a nationwide roll-out, do you have concerns that there is not enough direction, and, indeed, that interoperability might be compromised if people just roll this out in small areas without a comprehensive process being put in place?
Anne Main (Conservative, St Albans)
Yes
Anne Main (Conservative, St Albans)
Do you believe that, while it may help people manage the amount of fuel they use, it may also, particularly with pre-payment meters, help to alleviate fuel poverty by possibly switching people to smarter tariffs?
Charles Hendry (Conservative, Wealden)
I have a brief question specifically on gas storage. You will be aware, and those of you from the EEF particularly will be aware from your members’ perspective that two years ago we nearly ran out of gas, and that a huge price hike did tremendous damage to much of British business. Since then, the situation has changed significantly. A pipeline has opened up, and we have new liquid natural gas facilities, but there is still a need for improved gas storage facilities. Is it your perception that the measures in the Bill will do enough to provide sufficient new gas storage, or does more need to be done?
Brian Iddon (Labour, Bolton South East)
How will the transfer of responsibility for electricity safety to the Health and Safety Executive change the way in which it is enforced in view of the fact that HSE is complaining about a shortage of funds and staff? Is that a good idea?
Brian Iddon (Labour, Bolton South East)
So you have no objections to the transfer.
Joan Humble (Labour, Blackpool North and Fleetwood)
If Members have no further questions, I thank our first set of witnesses for appearing in front of us, and call the next set of witnesses.
We will now hear oral evidence from npower, E.ON, EDF Energy, Centrica, Scottish Power, and Scottish and Southern Energy. I welcome the witnesses, and perhaps you would like to start by introducing yourselves, starting with Dr. MacLean.
Joan Humble (Labour, Blackpool North and Fleetwood)
Thank you all. Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill, and that, in view of the time constraints, both questions and answers should be brief.
Steve Webb (Liberal Democrat, Northavon)
You will know that last year the Government talked about legislating for social tariffs, and that not legislating was conditional on action by you on social tariffs. We have all received letters from you telling us the wonderful things you were doing about social tariffs, and I hope that in your response you will not simply list them, because we are familiar with them. Can I put a proposition to you that essentially it is not your job to do the Government’s work for them, that you are in business principally to make money, and that although you spend a few million here or there on social tariffs, it is entirely peripheral to what you do and in the scale of your operations is miniscule? Therefore, if the Government want to achieve the social objective of social tariffs, they should do so by legislation. Having little chats with you and threatening you has failed to deliver, especially even with what is happening with fuel poverty. Is that a fair characterisation?
Steve Webb (Liberal Democrat, Northavon)
I imagine that you would all like to come in on this point but we probably will not get very far if you do. However, I would like to follow that up. Clearly we want people to shop around but the evidence is that low-income households, unemployed families and lone parents are the least likely to shop around, so if we want to protect them, I do not think that we can rely sufficiently just on them shopping around. Given that there is considerable variation among the companies represented here in the proportion of turnover you spend on subsidising social tariffs, are customers not vulnerable? If they are with the worst of you—the company with the least good social tariff that spends the least on such subsidies—and they do not shop around because it is complicated and difficult, are they not at your mercy and would it not be better to legislate minimum standards, which need not be over-prescriptive? Would that not be the best way to protect the customers? Perhaps someone who has not responded yet could reply.
Brian Binley (Conservative, Northampton South)
Can I move on to the question of clean coal carbon storage and the possible relationship between that and extending our North sea energy resources? I know that two of the companies you represent were excluded from the competition and were very disappointed. But I understand that you are still going ahead with working on the technology and producing a plant that could help us in the ways I described. Can you say something about that please?
Brian Binley (Conservative, Northampton South)
Does that mean, in terms of my previous question, that you would want to see that issue opened up in the Bill at this stage? Do you think it important to do so given our energy needs?
Paddy Tipping (Labour, Sherwood)
Can I ask Sara Vaughan, particularly, about the position at Kingsnorth, about which there was some press comment last week when I found myself defending you. What is the position on CCS at Kingsnorth?
Paddy Tipping (Labour, Sherwood)
Following Brian Binley’s point, what will ultimately drive carbon capture and storage and all the new technologies is a high and stable price for carbon. In the nuclear White Paper, there is a curious phrase that says we would prefer a European scheme through the ETS. The White Paper did, however, speculate that, in the short term, there might be a national scheme. What are your views on that? I know that EDF is very active on this, Mr. Linford, because if you want to bring new nuclear on line by 2019, you have to make some investment decisions fairly quickly.
Paddy Tipping (Labour, Sherwood)
I suppose I am asking you whether 2012 is too late for you to make the investment decision.
Paddy Tipping (Labour, Sherwood)
Can I switch to the point that Steve Webb was pursuing on the social tariffs? Unfortunately, Mr. Neville, we did not get a chance to hear Centrica’s view, but I think that I am right in saying that you probably do more in terms of social tariffs than any other company. That puts you at a competitive disadvantage, does it not?
Charles Hendry (Conservative, Wealden)
Can I go back to the issue of carbon capture and storage, particularly in relation to coal? I will then move on to discuss nuclear energy. The Greenpeace submission to us said, “New coal plants should only be approved when they are fitted with carbon capture and storage technology that is demonstrated to work.” There is a world of difference between being carbon capture-ready and having technology that is proven to work.
It is my understanding that E.ON is looking to have Kingsnorth up and running by 2012. A requirement for such a technique would presumably knock that back until 2017 or perhaps beyond that. Given the energy gap that is opening up and the fact that most of our coal-fired power stations are coming out of commission, what would be the impact on our ability to fill the energy gap if we were to require new coal-fired power stations to have proven CCS technology, rather than to be CCS-ready?
Charles Hendry (Conservative, Wealden)
Thank you. Let us move to the nuclear side of things and the other aspect of the energy gap. The Secretary of State has said that he hopes that the first nuclear power plant of a new-build programme could be up and running by 2018. Do those of you in the room—most of the companies that might be interested in building such plants are represented here—think that that is reasonable? What must be done for that to be achieved? What clarity do you need on the price of carbon and on the nuclear waste disposal regime? What further resources does the NII need to be able to approve the different types of reactor that are being submitted? Do you think that the 2018 target is achievable?
Charles Hendry (Conservative, Wealden)
How do you assess the carbon price when it goes up from a few cents a tonne to €30 a tonne? Do you need a floor in that process to make the calculation work?
Charles Hendry (Conservative, Wealden)
When will you need to know the carbon price to make that investment decision? When will you need to know about the nuclear waste disposal regime to make that decision? It would be helpful to know the year.
John Robertson (Labour, Glasgow North West)
Lady and gentlemen, I have been impressed by your line that competition and the marketplace are important, but that goes in line with the fact that you put your prices up together and on a similar basis, so you are obviously working well in tandem. Can you comment on the fact that you say that competition is a primary consideration and that market forces are important? At the time that we are talking about, there are no subsidies for nuclear development and the amount of money that has been ploughed into renewables already with very little return has not exactly been a winner for the Government, so should we allow, or do we need, the same competition, as in market forces, to apply to all forms of energy, and not just to nuclear energy?
John Robertson (Labour, Glasgow North West)
You mentioned Scottish and Southern. You are doing really well, and you have done all that, but 0.6 per cent. of your turnover is used for research and development. Is there a reason why you do not want to get involved in research and development, and why you do not plough money into renewables? Do you think it would be advantageous to introduce something into the Bill requiring a minimum amount of turnover to be invested by companies?
John Robertson (Labour, Glasgow North West)
Do you think that 0.6 per cent. is enough?
John Robertson (Labour, Glasgow North West)
We will keep an eye on that.
Joan Humble (Labour, Blackpool North and Fleetwood)
Order. I am interrupting at this point because, as I said earlier, questions should be relevant to the scope of the Bill and in answering questions perhaps the remaining witnesses can relate their plans to whether the Bill encourages or discourages them from implementing them. Could we focus on the clauses in the Bill?
I interrupted you, Mr. Johnson.
Steve Webb (Liberal Democrat, Northavon)
Ofgem has estimated that all your Christmases have come at once and that over the next few years you will get a £9 billion collective windfall courtesy of HM Government under the next phase of the EU emissions trading scheme. Would you object to us taking all or some of that back to use for some of the things we have been talking about?
Steve Webb (Liberal Democrat, Northavon)
Perhaps I can move on to the renewables obligation section in the Bill. Ofgem will be giving evidence later, so I will put to it that its suggestion is simplistic and ill-informed.
Are you, in principle, in favour of the banding of the renewables obligation? Is that the right strategy? Is there a danger that it becomes Governments choosing technologies and being a bit rigid and over-prescriptive? You want long-term certainty and yet a Government can, by regulation, change any of the bands, any of the relativities and any of the technologies that renewables obligation certificates apply to. How do you view the Bill’s proposed banding of ROCs?
Steve Webb (Liberal Democrat, Northavon)
Can I just press you on that for a second? In a sense we are not where we are because it has not happened yet. The job of the Committee is to make sure that the right thing happens. You might be sceptical of our ability to change the Bill, as am I, but we will give it a try. If you were sitting where we are sitting, what would you change?
Jamie Reed (Labour, Copeland)
Given that the problems the Bill is designed to address are fairly universal across the western world and that the majority of you represent international companies that can invest in any part of the world at any time, do you broadly welcome the aims, goals and provisions of the Bill?
Jamie Reed (Labour, Copeland)
So will you require, as part of the long-term stability and certainty that you require to make long-term investment decisions, a broad lasting political consensus from this place on the provisions of the Bill?
Jamie Reed (Labour, Copeland)
With that in mind, would you be at all interested in making any investment whatsoever in nuclear electricity generation, if it were the view of Parliament, and the Government and parties within it, that it should only be pursued as a last resort?
Jamie Reed (Labour, Copeland)
When it comes to making your investment decisions on nuclear, will you require a fully operating deep geological depository before you are minded to invest or not?
Anne Main (Conservative, St Albans)
Several of you have touched on what I would call the nuts and bolts of this, and that is the planning system. I was interested to hear that you felt you could have a new nuclear power station facility up and running by 2017. There is a crossover with the Department for Communities and Local Government. A Bill dealing with strategic infrastructure is currently being considered. How confident are you that there will be engagement, so that if the Energy Bill is to move forward in whatever form it is refined in Committee, planning will not end up scuppering what is supposed to happen? Recently, there have been criticisms in reports that the DCLG does not communicate its vision outside. You may have the aim of having a power station by 2017, but planning permissions may not be forthcoming. Are you confident that there is enough strength in the Bill to deliver what you think will be needed for our future energy, dovetailing with planning?
Anne Main (Conservative, St Albans)
What about wind, and other renewable developments, which are in some areas equally contentious?
Hugo Swire (Conservative, East Devon)
I think you are a little bit optimistic to think that the Energy Bill is going to solve all the problems of local planning, particularly with the commissioning of new power stations and so forth. I should think there will be tremendously contentious decisions that will drag on for a long time.
Regarding the point made on offshore wind farms, have you altered your thinking or been in discussions with the Ministry of Defence, following the reports about the interference that offshore wind farms could cause to radar and air defence?
Hugo Swire (Conservative, East Devon)
Yes.
Hugo Swire (Conservative, East Devon)
Does this come as news to the industry?
Steve Webb (Liberal Democrat, Northavon)
I am going to dot about on subjects a bit. In the Bill, the nuclear operators have to meet their share of clean-up costs, and we do not know what they will be, so there is a provision for a margin of uncertainty—an element of risk just to make sure. Clearly, the Government could make sure by making that margin huge, but that would be unattractive to you as investors. On the other hand, they could make it very, very small and you would want to invest, but the taxpayer would run a risk. Do you have a view as to the optimal size of the scale of the margin of risk that the Government should allow, that would encourage you to invest but would not leave the taxpayer unnecessarily vulnerable?
Steve Webb (Liberal Democrat, Northavon)
But if they over-egg that margin, might you walk away?
Steve Webb (Liberal Democrat, Northavon)
The Bill has some provisions about metering, but relatively minor ones. Obviously, we have had some discussion about smart metering and the roll-out of it. My worry about some of the models on rolling out smart metering is that five or six of you all turn up with your own individual vans to your own individual customers installing your own individual smart meters in the same road. Is there a way of avoiding that happening while still getting a rapid roll-out?
Stephen Ladyman (Labour, South Thanet)
At the end of the day, you may acknowledge Government targets but I guess that you will do what the law requires you to do or what the market drives you to do. Given what you know about the market, do you perceive that we have the legislative framework in place with this Bill for you to hit the Government’s target on renewables? I am not talking about the Commission target because Dr. MacLean has already said that he does not believe that we can hit it. However, is the Bill sufficient to ensure that we hit the existing Government targets?
Stephen Ladyman (Labour, South Thanet)
I am generalising, but given those caveats, you have basically said that the Government have hit the right mark with the Bill in terms of renewables. Changing the question slightly, in terms of the Government’s desire to cut carbon, will the market and this legislation allow us to hit the carbon target?
Stephen Ladyman (Labour, South Thanet)
If in the Climate Change Bill there is a 60 per cent. carbon target—or possibly an 80 per cent. target, if those people who are pressing for it get their way—is there any way that that could be delivered without a significant nuclear component? If that is the case, do the legislation and the market point us in the direction of delivering that target?
Stephen Ladyman (Labour, South Thanet)
Just to come back to what Dr. MacLean said about constraining demand, I suspect that some of our witnesses later today or in the next session will tell us that if we had loads more energy efficiency, we would not need nuclear. My quick mental calculation—if this is wrong, forgive me—is that if the economy grows by 2 per cent. a year between now and 2050, the economy in 2050 will be about two and a third times the size that it is today, so even if we put in place energy efficiency on a scale that could constrain that, it is likely we would still need as much energy in 2050 as we are producing today, perhaps even more.
Stephen Ladyman (Labour, South Thanet)
If we were to put it to you that we did want to move to a hydrogen economy, what would be your solution for producing that hydrogen?
Stephen Ladyman (Labour, South Thanet)
Given that you have said we cannot even meet the renewables obligation that the Commission has now set us—
Stephen Ladyman (Labour, South Thanet)
So given all the effort that will have to go into meeting that target, which I am sure we will come back to one day, the reality is that if we want to start producing hydrogen and moving to a hydrogen economy, there will have to be an even bigger component from nuclear energy than we currently envisage.
Joan Humble (Labour, Blackpool North and Fleetwood)
Thank you. We have two minutes left. Mr. Hendry, you indicated you wanted to ask a question. It will have to be a brief, with an even briefer answer.
Charles Hendry (Conservative, Wealden)
Dr. MacLean, you were talking just now about the elements of the Bill that you felt had been overlooked in terms of renewable heat. Could you write to us to give us more detail about what you feel should be included in that respect?
Joan Humble (Labour, Blackpool North and Fleetwood)
Thank you for a brief question and an even briefer answer. I thank our witnesses again for attending and answering questions. That brings us to the end of this morning’s session.
Written evidence to be reported to the House
Sir David Amess (Conservative, Southend West)
We will now hear oral evidence from our first set of witnesses, and I welcome them to the meeting. As members of the Committee will fully understand, witnesses are not always experienced in these matters, so if anyone is nervous, they should take deep breaths, relax and enjoy the sitting. May I ask the witnesses to introduce themselves to the Committee from left to right as I look at you?
Sir David Amess (Conservative, Southend West)
Before calling a Member to ask the first question, I remind all Members that questions are to be limited to matters within the scope of the Bill, and in view of time constraints, both questions and answers should be brief—I know that Committee Chairmen say that at the start of all proceedings, but I do mean it.
Malcolm Wicks (Labour, Croydon North)
Having asked questions in the past and more recently answered them, I am well aware which is the easier role and am pleased to be undertaking it, unusually, at the moment. When I discuss the energy market with parliamentary colleagues, as I did this morning in a Westminster Hall debate, I find that there seems to be a sharp divide of opinion between those who feel that we have an energy market that is not only competitive, but probably the best in Europe, to the benefit of consumers, and those who are doubtful about that and who feel that there is a lack of competition and that it is more like an oligopoly than a competitive market. I would be grateful if the witnesses could give their opinion on that issue.
Sir David Amess (Conservative, Southend West)
Who would like to respond?
Sir David Amess (Conservative, Southend West)
Does anyone else want to respond?
Sir David Amess (Conservative, Southend West)
Does anyone else wish so speak, or are we all done?
Charles Hendry (Conservative, Wealden)
May I start with a specific question, primarily to Ofgem, after which I shall broaden it to a slightly larger issue? Suggestions have been made that Ofgem’s remit should be changed, specifically to give it an environmental role or to deal with social tariffs. Would you let us know how you think that would work? Is it possible to have two primary duties, or do you think that there should be only one primary duty and a range of secondary duties?
Paddy Tipping (Labour, Sherwood)
Mr. Buchanan, you gave a curtain-raiser to your appearance before the Committee today in an interview with the Daily Record—I think that it is headlined “Power to the People”—in which you said that customers in Scotland could save £200 million by switching, which you advocate. You also advocate better targeting and identification of customers at risk and better welfare rights advice. By contrast, Mr. Asher, you are keen to see social tariffs, which already exist on a voluntary basis, put on a mandatory footing. Which is the better way to go forward?
Paddy Tipping (Labour, Sherwood)
May I ask Mr. Buchanan for his comments?
Steve Webb (Liberal Democrat, Northavon)
As you mentioned, we had evidence this morning from the companies, and I have a follow-up question that is germane to Alistair and Allan—one each if I may. I shall give you both questions, so that you can get thinking.
To Ofgem, Rupert Steele, director of regulation at Scottish Power, said that your analysis was simplistic, that it did not recognise the £9 billion figure and that it made long-term decisions about investment, so your suggestion that we might have any of it back was naive—my word, but it was implicit in his comments. I should be interested in your reaction.
To Allan Asher of energywatch, we asked about social tariffs, and I said that it spent tens of millions on social tariffs, to which he said, “Yes, but we spend billions on energy efficiency, and isn’t the most important thing for the fuel poor not to give them more money to pay high bills, or to make them pay slightly less, so that they pay less when they heat the open air, but to spend billions on energy efficiency? And aren’t social tariffs therefore a distraction?” In that sequence, can you respond to those two questions?
Alan Whitehead (Labour, Southampton, Test)
I have some questions on investment in transmission and in plant. First, clause 40 relates to offshore energy transmission and gives Ofgem several responsibilities in respect of encouraging grid replacement and enhancement on an offshore basis, particularly through offshore wind renewables. Are you happy that the powers that the Bill provides are sufficient to develop those processes in the time scale that is clearly necessary?
Secondly, are you happy that the general imperative to increase investment, particularly in large renewable plant, will be undertaken on the basis of the present arrangements and brief of Ofgem, when probably at present the quickest and most competitive replacement for plant that is retiring is a combined cycle gas turbine power station with no combined heat and power or any other saving device attached to it? The general point of the question is whether the Bill is sufficient to enable the shape of energy reinvestments to happen in the way that we now feel that we need to direct them.
Anne Main (Conservative, St Albans)
I should like to take you back to two things on your shopping list: smart metering and fuel poverty. Are you disappointed that they are not included in the Bill? Following on from that, you mentioned that some 52 per cent. have switched their energy tariffs between providers. Have you done any analysis of that? Because having mentioned that statistic, you threw in the fact that the most disadvantaged—still the most disadvantaged—were those on pre-paid meters up north somewhere, I think that is what you said. Have you analysed who is switching? If so, is this something to do with access to the internet or information or just being savvy enough to negotiate a complex system of tariffs? I would like to bring the two things together and ask if the lack of smart metering in the Bill is something that you feel is a lost opportunity to allow more people perhaps to switch tariffs or to engage with the best tariffs?
Sir David Amess (Conservative, Southend West)
Who would like to take that question?
Anne Main (Conservative, St Albans)
A sub-question on that. You mentioned your four times estimated gas bill, and gas comes up regularly as an issue. Do any of you have views on electricity display devices being a possible distraction to moving forward to smart metering?
Sir David Amess (Conservative, Southend West)
I am trying to be fair about this. John Robertson was next.
John Robertson (Labour, Glasgow North West)
I would like you to explain the £60 that the consumer is paying? Do the companies claim that they are spending the £60 or do they accept that the £60 comes from the consumers? If so, should the £60 from the consumer be matched by the companies to ensure that there is proper development of energy-efficient designs and energy-efficient housing and so on?
John Robertson (Labour, Glasgow North West)
My follow-up question would be to Ofgem then. What are you doing to ensure that there is some kind of visibility for the money that is taken from customers that is then supposedly matched by companies, and how do you ensure that the money is invested in a proper manner?
John Robertson (Labour, Glasgow North West)
You look at the fact that there is no fraud and that everything is in order in that respect. How many checks have been done efficiently and for the benefit of the consumer and not the company?
John Robertson (Labour, Glasgow North West)
I am sorry to press this point, but do you not have any regulation on how the money is spent?
Sir David Amess (Conservative, Southend West)
A lot of Members are trying to catch my eye. We have only 14 minutes left. I shall now call people who have not yet asked a question.
Martin Horwood (Liberal Democrat, Cheltenham)
My main question is on transmission and distribution, but may I ask a quick chaser to Mr. Buchanan? Are you saying that if the energy companies wanted to protect shareholder value and simply pass on those costs that you were talking about to the consumer instead, you would have no power to stop them doing so.
Martin Horwood (Liberal Democrat, Cheltenham)
I mean the kind of costs that you were talking about that are coming on stream and which are likely to rise. If, as Mr. Asher pointed out, they wanted to prioritise and protect shareholder value and not pass the costs on to their shareholders in effect but pass them on to the consumers, you, Ofgem, have no power to do anything about that. Is that right?
Martin Horwood (Liberal Democrat, Cheltenham)
To move on to my substantive question, to Mr. Winser and Mr. Smith, from the provisions that are in the Bill, particularly relating to changes in the renewables obligation and banding and so on, do you expect any changes in the short to medium term resulting from this Bill in the patterns of distribution and transmission in the UK?
Martin Horwood (Liberal Democrat, Cheltenham)
This is more a question for Mr. Smith than for Mr. Winser, because it is about distribution at a local level. If there were a radical shift towards a more distributed system and if there were more geothermal heat substituting for gas, more small-scale community combined heat and power, wind power coming on stream or more tidal flow in various locations, could your members cope with the pace of change that we are probably looking for, or does more need to be done in the Bill or elsewhere?
Hugo Swire (Conservative, East Devon)
The discussion has moved on a bit, but I want to revert to something that Mr. Asher said about prepay meters and the way in which companies are behaving. Have you ever encountered—or is this a common problem—consumers who pay by direct debit and have variable bills, and the companies stack up the direct debits and do not volunteer to return the money immediately, so the consumer has to prompt the provider to return it or to discount it from the next bill?
Hugo Swire (Conservative, East Devon)
But should it be incumbent on the provider to reimburse the consumer after a certain number of days, regardless?
Hugo Swire (Conservative, East Devon)
What is Ofgem’s view?
Hugo Swire (Conservative, East Devon)
That is not a particularly good use of the ombudsman, if I might say so. This is a mass problem, and it should be incumbent in law for the provider to reimburse the consumer.
Sir David Amess (Conservative, Southend West)
I have four people wanting to ask questions, and six minutes left.
Brian Iddon (Labour, Bolton South East)
Do you think the 20 per cent. by 2020 target will be hit if the Government intend to use secondary legislation to control the renewables obligation?
Sir David Amess (Conservative, Southend West)
There are no offers to respond. Would one of you like to answer?
Albert Owen (Labour, Ynys Môn)
I have two brief points. First, Mr. Buchanan, I hold the citizens advice bureau in high esteem, but is it really its duty to inform people about switching, or is it the regulator’s duty to simplify the process on switching? The buck seems to be being passed to a voluntary organisation when the regulator should take a more robust role.
Secondly, on distribution and the location of some of the wind farms that you said were in isolated and often sensitive areas, will there be additional costs in getting the transmission of some of the northerly ones on to the grid system? Will Mr. Buchanan, and possibly Mr. Smith, address those points?
Sir David Amess (Conservative, Southend West)
I am afraid that I must now call a halt to proceedings. I apologise to colleagues who wanted to ask supplementary questions, but I could not reach you all. I want to thank the witnesses very much for their evidence. Could you kindly leave so that the next set of witnesses can take your places?
Good afternoon, gentlemen, and thank you for appearing before the Committee. I should tell the Committee that the description in the papers in front of us for Dr. Mike Weightman is not accurate. So, gentlemen, could you please introduce yourselves?
Malcolm Wicks (Labour, Croydon North)
As you might know, I have been persuaded that nuclear should be part of the future energy mix. Do you accept that there is widespread public suspicion and distrust of the nuclear industry and its secrecy? If so, how do you think that we can create greater transparency in order to win public confidence at a time of concern about safety and security?
Charles Hendry (Conservative, Wealden)
Could you tell us what your current thinking is about the potential life extensions of the current fleet of nuclear power stations, so that we can have an accurate understanding of when they may come out of commission? Also, do you agree with me that, if there is going to be a new fleet of nuclear reactors, it will be viable only if a number are built to the same design, rather than one of one design, one of another and two of another, and that we therefore need to break from the tradition that we have had in this country? Do you also agree that in the design approval process, we should not add on a huge amount of extra work and cost, as happened with Sizewell B and elsewhere and in Finland, which would make them essentially unaffordable?
Sir David Amess (Conservative, Southend West)
Who would like to answer that?
Sir David Amess (Conservative, Southend West)
Would anyone else like to respond?
Stephen Ladyman (Labour, South Thanet)
Clause 41 requires a costed programme of decommissioning to be submitted when you apply to build a new nuclear plant. First, are you all content that the framing of that clause and associated clauses is sufficiently comprehensive to ensure that the programme is robust? Secondly, what are the industry and the regulatory side doing to ensure that you understand what will be involved in that decommissioning, and the costs involved? Thirdly, what efforts are you taking to ensure that you are learning from international experience, in order to ensure that that costed programme is robust?
Last, but not least, in so far as the regulator will have to oversee the process, and as you are probably pretty stretched at the moment looking at safety cases and given the relatively small number of people that you employ, what level of your resources are you going to put into making sure that the decommissioning plans are robust and well costed?
Sir David Amess (Conservative, Southend West)
You have four questions, gentlemen. Who would like to kick off?
Brian Binley (Conservative, Northampton South)
May we pursue this matter a little further? The Minister already spoke about public perception. Frankly, this impacts on public perception big time, and Members in particular know how volatile public perception can be, so it matters to us.
In management terms, a programme is only as good as the quality of the people at its lowest level—that goes without saying. Therefore, monitoring is vital. You spoke about the robustness of the programmes, but what levels of monitoring and review of the decommissioning programme should the Minister put in place? What would you expect of him and his team over time? Can I connect that issue with the skills problem, which we have heard much about today? Do we have the people to operate at the coal face who are of the quality that we would need to ensure that the public can be reassured on every occasion?
Sir David Amess (Conservative, Southend West)
I think Mr. Parker looked as if he wanted to take this question.
Brian Binley (Conservative, Northampton South)
I am talking particularly about the decommissioning programme.
Brian Binley (Conservative, Northampton South)
So you have the people and the robust programmes in place. What should our Minister do now to make sure he is monitoring and reporting to the people that all is well and the decommissioning programme is going as it should, because reassurance about the whole process will be vital? What should the Minister be doing to ensure that you are doing what you say you will do?
Brian Binley (Conservative, Northampton South)
I did not mean you personally; I meant anybody who wished to answer the question.
Brian Binley (Conservative, Northampton South)
Please do. He will be delighted.
Sir David Amess (Conservative, Southend West)
Dr. Stephen Ladyman wants to come in briefly on that precise point.
Stephen Ladyman (Labour, South Thanet)
The opponents of the nuclear power industry will say that the Government are the funder of last resort when safety matters are concerned, which is true of all industries—the Government are always the funder of last resort. The question that the industry must answer, and we must answer for the Bill, is, when a costed programme is put together, what assurance can we give the public that it will meet the absolute costs of decommissioning, so that it is unlikely that the Government would ever have to step in and become a funder of last resort?
Sir David Amess (Conservative, Southend West)
Who would like to answer that? Dr. Roxburgh?
Alan Whitehead (Labour, Southampton, Test)
The purpose of the White Paper, among other things, was to set out the facilitative action that the Government propose to take to reduce regulatory uncertainty, particularly on nuclear decommissioning and potential nuclear new build. To Mr. Parker and Mr. Spence in particular, do you not think that although regulatory uncertainty may have been thereby reduced, the amount of regulation, justification, site searching and generic design assessment, not to mention the planning and building processes, means that it will take so long to build new nuclear power stations that the energy gap will have been filled by other forms of energy, and that therefore nuclear might have missed the bus? Would you prefer less regulation and more speed in the process, or do you think that the balance is about right?
Alan Whitehead (Labour, Southampton, Test)
To Dr. Roxburgh and Dr. Weightman, do you consider that the prospective regulations on clean-up and new build, particularly those in the Bill, such as the generic design assessments and the number of people employed to undertake them, will evidently lead to substantial delays? Do you consider the full weight of the regulator process to be imperative, or is there a balance to be struck between time scale and the weight of regulation as the process moves forward?
Martin Horwood (Liberal Democrat, Cheltenham)
Given your confident reassurances and the Minister’s robust comments on Second Reading, I am clear that things such as basic decommissioning, initial disposal, safety monitoring and site clean-up are all covered within the funded decommissioning programmes in the Bill. I wish to ask about three specific costs, and I want you to tell me whether you are absolutely sure that they are covered. First, is all long-term waste management covered? Given that we are talking about nuclear waste, we are talking about the very long term. Secondly, are the costs of any accidents or insurance against accidents, if indeed they are insurable, covered? Thirdly, is the cost—I suppose that this question is for Dr. Roxburgh and Dr. Weightman—of your authorities and inspectorates covered?
Martin Horwood (Liberal Democrat, Cheltenham)
Are the costs of running your inspectorates and authorities, which are, in a sense, a cost of the nuclear industry, going to be covered by the funded decommissioning programmes, or by the industry through any other mechanism in the Bill?
Martin Horwood (Liberal Democrat, Cheltenham)
Sorry, just to be clear, we are talking about the Bill and not the White Paper. By long-term life cycle, do you mean thousands of years in the future, potentially?
Martin Horwood (Liberal Democrat, Cheltenham)
So you are expecting there to be no costs attached to that that will not be covered?
Martin Horwood (Liberal Democrat, Cheltenham)
Okay, I will.
Martin Horwood (Liberal Democrat, Cheltenham)
And accidents?
Martin Horwood (Liberal Democrat, Cheltenham)
I am not talking about somebody tripping over a railing.
Martin Horwood (Liberal Democrat, Cheltenham)
According to the risk assessment by the Government’s own assessors, the key concern was that there was still a risk that sufficient funds would not in practice be available and that, in particular in a company undergoing a restructuring programme, the assets could be diverted and be made unavailable to fund a liability. It goes on to talk about issues such as liquidation and in effect making the funds unavailable. Is that still a risk? The TUC and the EEF this morning felt that, in the last resort, it still was.
Martin Horwood (Liberal Democrat, Cheltenham)
But what if the funds are not actually there?
Martin Horwood (Liberal Democrat, Cheltenham)
So none of it would be dependent on cash flow, as you understand it?
John Robertson (Labour, Glasgow North West)
I wonder whether I could develop the waste management point a bit further, because it is probably one of the most contentious parts of nuclear energy. Do we think as a group that the waste from new build should be separated from the old waste? Do you think that reprocessing should form an important part of disposing of or reusing waste? Furthermore, when disposing of waste, should we use deep geological burial or put it in the ground so that it can be retrieved and used for energy in the future, which some people believe will become possible as technology becomes more efficient?
I have one other small question about the skills problem. What Dr. Roxburgh said was really interesting. I think that it is great what you are doing with universities and schools. However, will it meet the needs that we foresee in the near future? What happens to the apprenticeships for local schools, because it is important that they are brought into the equation? What happens with the manual labour also used? Will that be looked at as well in order to bring in the local communities?
Jamie Reed (Labour, Copeland)
I have a few questions—first, for Mr. Parker and Mr. Spence. Do you have any frustration at all with the Bill with regard to other, non-nuclear electricity generating sources and the management and funding of the intergenerational wastes that they produce, particularly the radioactive wastes that the oil and gas sectors produce during their extrapolation and use? Are you frustrated by the way in which those sectors are not expected to fund their intergenerational waste in the same way as the nuclear industry?
Jamie Reed (Labour, Copeland)
On a broader point, may I ask the whole panel, but particularly Dr. Roxburgh, how long do you think it will be before the UK could have a deep geological repository operating?
Jamie Reed (Labour, Copeland)
To the panel more generally, if a decision were taken to postpone investment in nuclear build in this country pending the creation and operation of a deep geological facility, what effect would that have on investment decisions by those who wish to invest in new nuclear now? Given that there are vast international opportunities out there for everyone who wishes to invest in the UK market, what effect would it have on the UK nuclear skills base?
Paddy Tipping (Labour, Sherwood)
May I follow up the investment point? The Government have made it clear that there will be no public subsidy, which means that you, Mr. Parker, and you, Mr. Spence, will have to borrow substantial sums from the market. Are you confident that the price of carbon—carbon trading is still in its infancy—is robust and secure enough to bring comfort to investors?
Secondly, we have spent a lot of time talking to you about the decommissioning programmes and processes set out in the Bill, but at this stage, the actual costs are not known, because we do not know the ultimate way forward. Those are big issues for potential investors. Are you confident that the investors are there?
Paddy Tipping (Labour, Sherwood)
Is that your view, Mr. Parker?
Nick Palmer (Labour, Broxtowe)
My question is mostly for Mr. Spence. You mentioned a review of the lifespan of existing reactors, and in at least one case, you have found that an extension of 10 years is appropriate. The other extension was also significant. You appreciate that regardless of new build, the lifespan of current reactors is important for our planning. Was that substantial extension a surprise, and can we expect similar pleasant surprises when you review the next ones? If so, should we not get on with the reviews so that we have more certainty?
Nick Palmer (Labour, Broxtowe)
On a slightly different point, the panel unanimously decided that it would be good to have a single design for reasons of economy, safety and so on. To play devil’s advocate, one could apply that to many walks of life, such as making all office buildings essentially the same design, but we tend not to do so, because it is felt unwise to put all one’s eggs in one basket. There might be yet further generations who would benefit from having two different designs to compare. In view of that, is the panel sure that it is a good idea to go for just one design?
Nick Palmer (Labour, Broxtowe)
On balance, is a single design probably better?
Brian Iddon (Labour, Bolton South East)
There are two different parts to this. Does the panel have a view on the siting of the new fleet of stations? Are the present sites adequate or, as in the case of Dungeness, perhaps, not adequate? I think that Dungeness was taken up there partly for safety reasons but mainly to provide some jobs up there. Would you be looking for alternative sites, do you think?
Brian Iddon (Labour, Bolton South East)
The second question is about the moneys that will be set aside for future decommissioning way down the line. Are you all satisfied that the build adequately protects those moneys and do you have a view on how those moneys should be invested, or will you be giving the Government a view?
Sir David Amess (Conservative, Southend West)
That is the end of our evidence session. Thank you very much, gentlemen, for your attendance this afternoon. Will our next and final set of witnesses please come forward?
Welcome to our final set of witnesses. I hope that you can invigorate the Committee in our final hour. Will you all introduce yourselves, starting with Mr. Marsh?
Sir David Amess (Conservative, Southend West)
Again, our Minister will kick off this session.
Malcolm Wicks (Labour, Croydon North)
Given what I think is your stance on nuclear energy, is it a stance that can be tempered or even changed by evidence, experience and perhaps even the state of public opinion? Or, is it a fundamentalist article of faith that you are opposed to it for ever?
Malcolm Wicks (Labour, Croydon North)
Can I just ask—are our two very distinguished visitors saying that civil nuclear power would not reduce CO2 emissions? What is the scientific evidence for that extraordinary proposition?
Sir David Amess (Conservative, Southend West)
Would any of our other witnesses like to comment?
Sir David Amess (Conservative, Southend West)
Mr. Marsh, did you have a view?
Sir David Amess (Conservative, Southend West)
Can I say at this point that everyone wants to ask a question? If we are going to be fair, we must try to make the questions and answers brief.
Charles Hendry (Conservative, Wealden)
Thank you, Mr. Amess. I shall be guided by our guests and move the discussion off nuclear, although I suspect that it will come back. In your submissions, you talked about the measures on heat wastage and inefficiency. What specific measures would you like to see in the Bill, and what sort of amendments should be pressed?
Charles Hendry (Conservative, Wealden)
What about energy efficiency?
Paddy Tipping (Labour, Sherwood)
There is a lot in the Bill about carbon capture and storage. The first issue is that in Greenpeace’s evidence you point out that the technology is not yet proven. The second is, as a matter of principle, do you as a group feel that there is a place for coal that is burned cleanly? Are the measures in the Bill, and the Government’s other measures, sufficient to bring forward new, clean-coal power stations?
Paddy Tipping (Labour, Sherwood)
Would you give us a view on a high price for carbon as a driver of technological change?
Steve Webb (Liberal Democrat, Northavon)
I have two questions: one for Miss Webster and one for Professor Burke. This picks up on your crowding-out point, and I shall give you both the questions just to flag it up. Can you expand more substantively on crowding out? Your argument was that if we have new nuclear, the greatest brains of Government will have to think about it and that crowds out renewables. All right, we have this Bill and then they will get on with it; it is mainly the private sector doing it. How real is the crowding out of renewables by new nuclear? With nuclear, people will get on with it because it is a private business and they will just do it, so is it really crowding out renewables?
My question for Professor Burke is on waste. The argument is that we are not starting from a position of no nuclear waste; we have dirty great piles of the stuff and all we are doing is dealing with a bit more. Given that we will need a big hole in the ground somewhere, why is it so bad to put a bit more into that big hole in the ground? There is no issue of principle here and it is quite cheap to put a bit more in a big hole; it is just a bigger hole. So why is it so substantively problematic? Perhaps we can deal with the issues in that sequence.
Jamie Reed (Labour, Copeland)
I have a question for you each individually. Do you advocate the burning of more fossil fuels before any new nuclear energy is used?
Jamie Reed (Labour, Copeland)
I do not think that there is any realism with that confrontation about it; it is a yes or a no.
Brian Iddon (Labour, Bolton South East)
You are supposed to stick up for sustainability; green organisations stand up for sustainability. I put it to you that by burning fossil fuels, particularly coal and oil, we are destroying future chemical sources for future generations. So how can you advocate burning coal and oil?
Sir David Amess (Conservative, Southend West)
I need to keep order here, because I get the sense that everyone wants to get stuck into our witnesses. I think that Mr. Reed wants to finish off his point.
Jamie Reed (Labour, Copeland)
Your answer, Benet—yes or no?
Jamie Reed (Labour, Copeland)
On the crowding-out theory, the renewables versus nuclear dichotomy, which of course should not be a dichotomy—it is counterintuitive—the figures for France, Spain, Italy and Finland, all of them nuclear countries, would suggest that this theory is nonsense. France has 12 per cent. renewables; Spain 14 per cent.; Italy approximately 15 per cent., and Finland 25 per cent. How do you respond?
Jamie Reed (Labour, Copeland)
Is hydro not a renewable?
Anne Main (Conservative, St Albans)
I have different questions, and I shall put them to different people. From Greenpeace, I would like further expansion of your concerns about the lack of provision for marine technology in the Bill. I want to ask Friends of the Earth about their social justice policy engagement with people, and whether you are concerned about the lack of reference to smart metering in the Bill, which may help to reduce energy consumption and help with fuel poverty, which affects many vulnerable communities.
I throw the next question open to anyone. I would like a brief answer, as my colleagues want to speak. You may have heard Dr. Roxburgh say earlier that spent nuclear fuel may be a valuable national resource in future. Please discuss. Do you agree or not?
Anne Main (Conservative, St Albans)
Do you feel that that is a missed trick in the Bill?
Sir David Amess (Conservative, Southend West)
I was going to call Mr. Albert Owen, but Mr. Brian Binley will explode if he is not allowed to speak on that point.
Brian Binley (Conservative, Northampton South)
I was jumping up and down, but I want to have a real feel for your long-term thinking. Let me quote Professor Christopher Llewellyn-Smith, who is reckoned to be one of the leading—perhaps the leading—atomic energy and atomic power experts in this country. He told the Department of Business, Enterprise and Regulatory Reform that if we had the investment, he could get “a viable nuclear fusion station working in 35 to 45 years.”
Brian Binley (Conservative, Northampton South)
Forgive me, he said it six months ago, so we do not need to go back as far as Mrs. Thatcher.
Brian Binley (Conservative, Northampton South)
Are you totally rejecting his authority and credibility?
Brian Binley (Conservative, Northampton South)
Do you see no evolution in those terms?
Brian Binley (Conservative, Northampton South)
That is a very closed mind.
John Robertson (Labour, Glasgow North West)
We ask the questions and you answer them.
Brian Binley (Conservative, Northampton South)
Thank you, John. I am most grateful to you.
Let me now go on. I happen to agree with you on clean coal. However, you are making a leap of faith on clean coal, which you reject with regard to nuclear fusion. Explain that to us.
Albert Owen (Labour, Ynys Môn)
I want to push you a little on your pragmatic approach to nuclear, which you say is not based on dogma. You say that it is a distraction, which is a very interesting analogy. Other countries are looking to extend their current nuclear fleet. One such country is Canada, which already has renewables, and hydro power in particular. It does not feel that they are a distraction.
You also mentioned China. I would not think that they are talking about distraction. What they are talking about is getting a balanced energy policy and achieving economic growth. We have not heard anything about economic growth in your presentation. We have heard about sustained growth and low carbon. Do not every Government in the world have that responsibility? I know that we can talk about the academic reasons why we need different things but, at the end of the day, Governments have to make decisions and these Governments are making decisions. Canada, which is extending its nuclear fleet, has a renewable history.
Friends of the Earth talked about iconic measures such as the barrage in the Severn. In Wales, the distraction is wind farms. Many people ask me why barrages are talked about so much so, Friends of the Earth, do you support the barrage in principle? Also, the two gentlemen who raised the issue about the distraction initially were able to say, “Isn’t economic growth important and isn’t a balanced base load important in that?”
Albert Owen (Labour, Ynys Môn)
Sorry, can we concentrate on electricity, which is important for industry?
Albert Owen (Labour, Ynys Môn)
I have heard this, Mr. Burke, with respect, and I have read your evidence, but I am talking about countries that are looking at extending the current fleet. Does that not help to bridge the gap?
Albert Owen (Labour, Ynys Môn)
So does Canada.
Albert Owen (Labour, Ynys Môn)
With respect, my specific question was about the fact that others are going down the nuclear road and also looking at extension. You may be against nuclear build on principle, but what about extending current power stations?
Albert Owen (Labour, Ynys Môn)
Thank you. If others could answer it as well, please.
Albert Owen (Labour, Ynys Môn)
I appreciate that. What about extension of existing nuclear power stations?
Albert Owen (Labour, Ynys Môn)
Yes.