Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I beg to move amendment No. 41, in

clause 1, page 1, line 4, leave out from 'State' to end of line 5 and insert

', having regard to the regulatory arrangements, shall have a duty to enable the framework whereby the market can ensure the security of electricity and gas supplies and the Secretary of State shall make regular reports to Parliament on these matters.'.

Mr Bill O'Brien (Normanton, Labour)

With this it will be convenient to discuss the following:

Amendment No. 38A, in

clause 1, page 1, line 5, at end add

', in particular by promoting energy efficiency in all sectors'.

Amendment No. 72, in

clause 1, page 1, line 5, at end add—

'(2) The Secretary of State's duty under this section shall be wholly delegated to GEMA save and except after—

(a) GEMA has made a report to the Secretary of State setting out its reasons for believing that it has insufficient powers to carry out this duty, and

(b) the expiry of one year's notice of intended reversion of the duty to the Secretary of State.'.

Amendment No. 73, in

clause 1, page 1, line 5, at end add—

'(2) Such a duty shall in particular require the Secretary of State to have regard to—

(a) provision of supply in a national emergency,

(b) estimates of the long-term requirements for energy at the point of use, and

(c) the reduction in energy use achievable through conservation and efficiency measures.'.

Amendment No. 74, in

clause 1, page 1, line 5, at end add—

'(2) In the exercise of this duty he shall have regard to the reports and recommendations of the Joint Energy Supply Security working group in respect of their responsibility for monitoring and assessing risks to security of supply.'.

Clause 1 stand part.

New clause 13—Security of supply report—

'The Secretary of State must in each calendar year, beginning with 2005, publish a report (''a security of supply report'') on the progress made in the reporting period towards maintaining and enhancing, if necessary, UK security of supply.'.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

The clause has aroused great interest throughout the industry, the House of Commons and the House of Lords. I first want to discuss the background to the clause, which was inserted in another place, before explaining why my hon. Friends and I have tabled amendments to it. It is important to put the issue in context, given what the industry has said.

The Electricity Act 1989, which the Conservative party introduced when in government, freed up the market through privatisation. There was also the privatisation of gas. Indeed, much of what we did then put us ahead of Europe in terms of liberalisation. The freeing-up of the electricity market led to the lowering

of electricity prices. Nothing in the clause should be seen as a reversal of that privatisation policy, and none of the words that I may utter should be taken to endorse such a reversal. I merely intend to explain the background to the Lords amendment and to our subsequent amendment to their amendment.

The House of Lords was persuaded to table an amendment after industry representatives expressed concerns about future security of supply because investment was not as forthcoming as they might have wished. Great concern was also expressed by many experts in the field, including Dieter Helm—who spoke about such matters on a visit to Tewkesbury—and Professor Ian Fells. I accept that much of that concern was expressed following the power cuts in California, New York and Italy and, in particular, those in London and the west midlands.

Mr Paddy Tipping (Sherwood, Labour)

The hon. Gentleman mentioned the power cuts in London and Birmingham. Were they the result of a lack of generation capacity or of systems failures?

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

The hon. Gentleman is right; there were different reasons for the power cuts. The problem arose mainly because of the system network, and that requires investment. There was deliberate confusion in the press about the two issues, which, in some ways, have nothing to do with one another.

Overall, however, there is concern about security of supply, and the Government's response has given us no comfort. The engineering inspectorate's investigation into the cuts in London and the west midlands was not published but kept secret; that was certainly the case initially, although the Minister will correct me if I am wrong. That did not help in terms of industry confidence.

I tabled a parliamentary question, which was answered on 29 October 2003, to ask what discussions the Secretary of State for Trade and Industry had had with National Grid Transco about the failures. The answer was that she had not had any but that she was being informed of the situation. The Government, having instructed the engineering inspectorate at the Department of Trade and Industry to investigate, did not help matters by not releasing the information.

I asked a further parliamentary question, which was answered on 11 February, as to whether the report's findings would be made public, and the answer was that they would not. Again, the Government's response to the problems in London and the west midlands gave us no real confidence.

We cannot blame consumers for feeling the way they do. During the past 30 years, people have not leapt out of bed in the morning and thought about energy, unless they have leapt out of bed, switched on the light and found that it has not come on. The power cuts in London and the west midlands brought the issue back on to the agenda.

There are problems and concerns in the industry, and I have been at meetings with the Minister where those concerns have been expressed. Following the

incidents and concerns, on 10 March the BBC ran the now famous programme, ''If . . . the lights go out''. That caused some alarm, but there would have been more alarm had it been announced in the programme, or in the subsequent debate on it, that, earlier that day—I do not know whether hon. Members remember, but it was a very cold day—National Grid Transco had given a notice of insufficient margin. That meant that its margin of surplus electricity had fallen below the desirable level. On that day, the margin fell to just under 7 per cent., when, as stated in a parliamentary answer on 26 February, it should have been 20.3 per cent. If that had been known when the programme went out, it would have had an even greater impact. Indeed, in 2003, 13 such notices were issued by National Grid Transco.

Added to the concern in the programme, those notices, the cuts that we have discussed and the industry concern about a lack of investment contribute to a general concern about the electricity supply in the medium term. As we discussed on Second Reading, our indigenous gas supplies are running down, and coal generation, coal-fired power stations and the mining industry are under great environmental pressures, particularly from EU directives such as the large combustion plant directive and the emissions trading scheme. As things stand, the nuclear industry will see further decommissioning from 2008; indeed, the Bill is largely about decommissioning. With renewables struggling to meet their target and further targets looking increasingly unlikely, the medium-term supply situation is not as comfortable as we have enjoyed in the past 30 years.

As I said, the Government's response to those problems has not been entirely reassuring, especially with the privacy over the engineering inspectorate's report. I am concerned that discussions with countries such as Russia regarding gas supplies are not as advanced as one would hope, given that we will become net importers of gas by 2006 and that the Norwegian gas pipeline, a treaty for which has been signed, will not deliver gas until 2007. We have had what can be described only as vague and ambiguous references to the future of the nuclear industry and an apparent obsession with wind power as the only renewable alternative. None of that is reassuring to the industry or the country. Against that background, the Lords understandably felt that they needed to act and so tabled what has become clause 1.

The clause concerns who is responsible for the security of supply. The Minister of the Crown, who is paid by the taxpayer, clearly has responsibilities; if the Energy Minister's role is not to keep the lights on and ensure that sufficient energy supplies are available to satisfy the demands of the fourth largest economy of the world, I do not know what it is. The question is not whether the Minister has that responsibility—he clearly does—but how it is exercised.

I know that concern has been expressed in the industry about whether clause 1 would lead to interference, and I would certainly not want that. However, we do not have a free market in energy,

which, in some ways, is to be regretted. Freeing up the industry helped enormously in terms of efficiency and price, and constraining the market might have the reverse effect, so I repeat that nothing I have said should be taken as endorsing a reversal of the privatisation policy, which we initiated. I have merely been explaining the background to the Lords amendment.

As I said, a free energy market does not exist. To start with, Ofgem regulates the proceedings to a greater or lesser extent, and it is ultimately responsible to the Secretary of State. The Government must implement EU directives. The renewables obligation was constructed by the Government. Although we do not oppose it, we recognise that it will, by its very nature, have an increasingly distorting effect on the free market as it increases from 4.9 per cent. this year to 15.4 per cent. The Government give capital grants to offshore wind farms. Planning policy is dictated by central Government. There is also taxation policy, such as the climate change levy that they introduced. My point is that the Lords amendment would not introduce distortion into the market; distortion is, in some ways inevitably, already there.

Added to the distortions are the functions relating to security of supply that only the Secretary of State can carry out, such as the signing of treaties with foreign countries for the building of gas pipelines. As was the case with Norway recently, that role is performed by the Government. The fact that National Grid Transco reports its notices about insufficient capacity or margins to the DTI also shows that the DTI has a responsibility in the matter.

Far from the Lords amendment being a ringing endorsement of state interference—I would not hesitate to vote against it if it were—it represents an attempt, in an uncertain energy world, to get the Government to take their existing responsibilities seriously and to address them urgently. The question is how the responsibilities are best exercised. I recognise the effect that the Lords amendment would have on the industry. However, the responses of industry representatives have been rather too similar to be coincidental. I suspect the presence of the heavy hand of Whitehall in the manoeuvrings. I am anxious to ensure that this place does nothing to destabilise further the already nervous potential investors in the industry, particularly on the generating side. That would be counter-productive; hence the amendment that we have tabled.

We have attempted to address the concerns of many people in the industry about the medium-term security of the supply of electricity—that point also concerned their lordships—and to address the concerns of those in the industry who feel that the Lords amendment might inadvertently impede the investment that the industry needs. It is a fine balance to try to strike, but I hope that our amendment has struck it. The market can provide and it has provided. That is why we have tabled this amendment instead of just sticking with the Lords amendment.

We want to create a duty, so that the Secretary of State can enable the framework to ensure that the market delivers and, importantly, to ensure that she regularly reports to Parliament on the effectiveness of her strategy. By framework, we mean the right remit being given to Ofgem, the right planning regulations, treaties being in place in time to secure gas supplies, the right taxation regime, an interpretation of EU directives that is sympathetic to our industry, a renewables obligation that delivers what it is supposed to and so on. We do not mean interference by Government that would be counter-productive.

Of course, we endorse the main objectives of the White Paper: security of supply, reduction in carbon emissions and affordable heating for everyone. We recognise that those objectives conflict, and that it will be difficult to achieve them all at once. Nevertheless, we support attempts to achieve them, and we hope that our amendment will provide the right setting to enable the Government—whichever Government that may be—to achieve them.

Mr Brian White (North East Milton Keynes, Labour)

I seem to have been talking about these issues for a long time—often under your chairmanship, Mr. O'Brien—as I was a member of the Committees that considered the Utilities Bill in 2000 and my private Member's Bill, which became the Sustainable Energy Act 2003.

It is important to understand the sentiments behind clause 1, so I will make a few points on that before I talk about amendment No. 38A. Security of supply is one of the primary objectives of the energy White Paper. We must not be afraid to make that objective statutory, or to state that we are committed to it and that we are confident that we can achieve it. What is the worry about clause 1? It is important that the Government send out a strong message to the market that they will back their words with responsibility.

The clause would send a message to beneficiaries of the policies in the White Paper—the renewables and the combined heat and power industries—that they can take heart from the Government's serious commitment. The Government may say that they are already on board because of legislation such as the Electricity Acts, but to be seen simply to remove the clause without replacing it would cause serious damage.

There have been many misleading comments about last year's blackouts, and about the industry being down on capacity; my hon. Friend the Member for Sherwood (Paddy Tipping) asked about that. The blackouts are not an excuse for Government intervention in the market, but they were, as the hon. Member for Tewkesbury said, a wake-up call to the Government and industry to plan for the long term. There is a functioning, competitive wholesale market, which can deliver security of supply, but only within a properly regulated framework. That is where I part company from the hon. Gentleman.

The market has always been subject to short-term fluctuations, but it is important to get long-term investment decisions right. The message that we send out, particularly through this clause, about security of supply is important. The obsession with low prices and

small margins has not created a good environment for investment, but neither will a regulator without clear objectives. We need a clear set of objectives for the regulator, which signal to the market that there is a commitment to security of supply. I accept that there are several ongoing infrastructure projects, and they are to be welcomed. Of course, the industry will say that it does not want extra bureaucracy for Ofgem, because generators will simply pass costs on to suppliers, who will pass them on to customers, but we need a strong framework if there is to be investment in capacity over the long term.

One thing that worries me about this debate is that we talk about the upstream supply and about capacity in relation to supply only, but we do not consider the demand side of the equation. We must consider the different stakeholders. Plenty of companies could contribute to security of supply—for example, the whole CHP industry—as could our use of renewables and micropower, but we talk about pipelines in Russia and terrorist incidents, rather than the bread-and-butter issues that will ensure our security of supply. The Minister and the Government need to address them.

The regulatory impact assessment, which we received just before the Committee began, stated that no benefits would be accrued from clause 1. I would make a different argument; there are benefits. The clause is a signal to the market for long-term investment in some of these companies.

The regulatory impact assessment states that the provision would not have a direct impact on small firms. Again, I would argue to the contrary. Small firms in the microgeneration industry could ensure that each house could have microgeneration for a short time, which would enhance the security of supply. It is not enough simply to look at the upstream supply side; we also need to look at the demand side and at some parts of the grid where issues surround the security of supply.

We ought to be putting the work done by the joint energy security of supply working group on a statutory basis, and the Minister might consider that as an amendment on Report. My amendment is not meant to be put to a vote, but to draw the attention of the Committee to the issues about demand-side management. Given that we are looking for extra capacity, we ought to provide that by reducing demand.

I could go on for some time about some of the Government objectives, but I will not. I will concentrate on a rather parochial matter—I apologise for doing so, but it illustrates the point that I am trying to make. Over the next 30 years, 70,000 new houses will be built in Milton Keynes. If the Government remove clause 1 and say, ''It's all there—don't worry'', the message will go to the construction industry that building houses with zero carbon effect is not an issue of security of supply.

Measures could be introduced on how those houses are constructed that would enhance the security of supply for the country: building the houses with zero carbon effect and, as we build those houses, taking measures for renewable energy and combined heat and power. If those security measures are built in to the initial construction of houses, they will reduce demand and provide security if there are problems upstream.

If the clause is retained, the Government will send the message to the construction industry that the industry is part of the solution. Not taking demand-side management on board would say to the construction industry that the matter was a problem for the electricity companies and for international treaties. Security of supply is a matter for us all, and I urge the Minister to take that point on board.

I understand that the EU is also considering security of supply. I hope that the Minister will make sure that the issues of the supply side and the demand side are taken on board during those discussions. The Government have a good record over the last four years of making such points on a range of issues concerning climate change. There are opportunities, if we are prepared to take them. Clause 1 and my amendment, in particular, give us the opportunity to send a strong signal to the market that the issue is not simply about the upstream concerns.

Mr Andrew Stunell (Chief Whip; Hazel Grove, Liberal Democrat)

I wish to speak to the amendments tabled in my name and that of my hon. Friend the Member for Lewes (Norman Baker). Both of the speakers so far have made essentially the same point. The clause in its present form may need moderation, but its fundamental assertion, which the Bill ought to contain, is that the Secretary of State must take overall responsibility for delivering the United Kingdom's energy policy. I was disappointed that the Minister circulated a letter saying that he intended to oppose the clause, although I was a little encouraged by his suggestion that he might be persuaded to introduce something on Report. I very much hope that he will say more about that.

The reality is that we live in a sophisticated economy, the fourth largest in the world, as the hon. Member for Tewkesbury said. There are many overlapping markets and in some places the market leaves gaps. In the meantime, the Government have quite properly set the country some complex environmental objectives, which everybody recognises as challenging and difficult to attain. That process has highlighted the fact that the gaps in the market are bigger than they perhaps appeared at first.

Then again, the markets are changing. The sources and availability of supply are constantly on the move, as is the demand end of the market. The common assumption is that demand is inexorably rising, but it is not doing so as much as the scare stories would suggest. Gross energy consumption in this country over the last 10 years has increased only by between 2.5 per cent. and 3 per cent., despite a 30 per cent. increase in gross domestic product. The hon. Member for Milton Keynes, North-East (Brian White) suggested

that those trends might be due to the more efficient use of energy by those at the consumption end of the pipeline. The most profligate and least efficient users of energy are now those in the domestic sector.

Given those factors, the obvious signs that the market cannot and will not deliver on such key objectives as energy efficiency and conservation and the evidence of investment starvation caused by the difficulties and uncertainties that have already been mentioned, the Secretary of State has an obligation to plug the gaps in the market. Doing so might mean ensuring improvements in efficiency and conservation in the domestic sector or reinvigorating the combined heat and power sector. The hon. Member for Milton Keynes, North-East mentioned the possibility of micro-CHP, which we will no doubt discuss later.

There are problems with getting investment in generation and transmission renewal under way, particularly with a changing market externally. There are also problems in achieving another of the Government's objectives; to reduce fuel poverty. The market has delivered a significant reduction in fuel poverty but, with oil likely to stay at its current price of about $40 a barrel for some time, it is doubtful whether the market can continue to deliver such reductions.

The underlying assertion of the clause and of the amendment is right. For the Minister, to use the classic phrase, ''resistance is futile''. If the clause does not get him, events will. Sooner or later, a Secretary of State will find himself standing at the Dispatch Box or sitting in a TV studio saying, ''It's not my fault''. I am sorry to say so, but at that point there will be no escape, either for the Minister or the Secretary of State or for their successors.

I diverge a little from the hon. Member for Tewkesbury, in what I took to be his advocacy of the BBC programme about the planet shutting down in the near future because of energy shortage. That is not going to happen now, or soon. NGT's scenarios for next winter envisaged the bleakest possible set of circumstances that could arise; I will not detain the Committee by listing the eight or nine things that could simultaneously go wrong. But even if all that happened, NGT said that there would not be a shortage of power next winter.

The joint energy security of supply working group says the same thing in its predictions for the next seven to 10 years. We are not talking about an imminent crisis in energy supply. Perhaps that is okay from the Minister's point of view; I notice that the average stay of Energy Ministers in the Labour Administration since 1997 has been one year and five months, so he is probably in the clear, whether or not clause 1 is retained.

However, in the long term, the UK should acknowledge that the Government—of whatever party—must take the ultimate responsibility. I suggest to the Minister that he should gracefully accept that now and sign up either to the clause, or to one or more of the amendments that we are discussing. No doubt he will tell us that if he were to do that, it would lead to the end of civilised life on the planet and a lurch

back to the economic stone age, but it will not. I accept that if the Liberal Democrats assert that that will not happen, that assertion might have little credibility, but the Conservative spokesman also made that assertion.

It is time for the Minister to accept that such an acknowledgement is not about reversing the liberalisation and privatisation of the past 15 years. It is about ensuring that the UK has a secure energy supply for the future and that the Government of the day acknowledge in advance their responsibility for that, so that they plan for it, rather than being caught in a disaster at the last moment.

Amendments Nos. 72, 73 and 74 offer alternative and overlapping helpful suggestions to the Minister of some of the things that he might want to include on Report. Amendment No. 72 examines the mechanism by which the Secretary of State's responsibility might be exercised. It says that energy supply would continue to be wholly the responsibility of the Gas and Electricity Markets Authority, unless GEMA itself reported to the Secretary of State that, having examined its powers, its regulatory authority and the market, it could no longer deliver the security of supply objectives that it had been commissioned to fulfil.

If that were the case, GEMA would give 12 months' notice, and the Secretary of State would be required to take action—or at least his delegation to GEMA would be withdrawn. The 12-month notice period provides a soft landing; an opportunity for negotiation, and possibly for new guidelines or legislative powers to be put in place. We believe that the amendment offers a simple way of expressing more clearly the thinking behind clause 1 in its original form. The aim is not to take back all the powers and regulatory apparatus from the existing structure, but to acknowledge that that regulatory structure might, at some time in the future, find itself unable to deliver the overall objectives. The amendment would provide a clear mechanism for reverting that power to the Secretary of State, with the trip wire of GEMA acknowledging it.

Amendment No. 73 is rather a different animal. It tries to delineate the key areas in which action will not be easily achievable through the market; the areas in which the Secretary of State might, if he is to achieve his overall objectives, have to take action that it would be difficult for the regulatory environment to deliver. One of those areas is the estimation of long-term requirements for energy at the point of use. The words ''point of use'' are important; it is not just about generating capacity but, as the hon. Member for Milton Keynes, North-East made clear, it is about what happens at the demand end as well as the supply end. It is also about the reduction in energy use that is achievable through conservation and efficiency measures.

There is a paradox in trying to use the market to reduce the consumption of any product. It is difficult to encourage and incentivise a manufacturer to sell fewer cars. It is hard to incentivise an electricity generator to sell less electricity to make more money, and the current system struggles to achieve that. It is

also difficult to incentivise domestic consumers to take account of an almost insignificant marginal cost—their energy use—and invest in conservation and efficiency measures, even though that would further reduce their marginal costs. No market action has been effective at penetrating those problems, so it might be reasonable for the Secretary of State to have reserve powers. Proposed new subsection (2)(a) in amendment No. 73, which deals with the ''provision of supply in a national emergency'', is obviously of a different order but is also outwith the ability of the market to deliver.

Amendment No. 74 would improve the decision making about long-term investment or potential intervention by the Secretary of State. It would write into the Bill the role of the joint energy security of supply working group. I was interested to hear the hon. Member for Milton Keynes, North-East's suggestion that it would soon be time to write that into the Bill. I do not know whether he got far enough through the amendments to notice that amendment No. 74 would do exactly that.

New clause 13 addresses the question of reporting the action that the Secretary of State has taken or thinks should be taken. At the moment there are various streams of reports on security of supply, which come to the Secretary of State from the JESS committee, NGT, Ofgem and others. New clause 13 would require the Secretary of State to produce at least an annual report that draws that information together and sets out what action has been taken in the past year and is planned for the following year. The new clause could stand on its own and be a weak alternative to clause 1, but it could also stand together with clause 1 or any of the amendments. It would introduce a reporting requirement on the Government simply to say what advice they received in the last year and what advice they intend to take.

My hon. Friend the Member for Lewes and I will happily support the two previous amendments, but I should be particularly happy to support the amendment tabled in the name of the hon. Member for Milton Keynes, North-East were he to move it; I understand that he may not. Sparring partners may not be the right phrase, but he and I have certainly been co-workers in the fight to ensure that the United Kingdom has a workable and sustainable energy policy. His amendment would build into clause 1 something that is otherwise missing.

Unfortunately, the Bill is not, in fact, an energy Bill. Our amendments aim to ensure that a broader vision is taken of what needs to be done; they are not about destroying the market but about filling the gaps that are left when the market has done the things that it does best. That includes addressing efficiency and conservation and some long-term investment and direction issues where the signs are that an approach based on a short-term market vision, although good in many ways, cannot deliver results.

Mr Colin Challen (Morley & Rothwell, Labour)

It is a pleasure to serve under you, Mr. O'Brien. I support the objectives of my hon. Friend the Member for Milton Keynes, North-East and, although it has not yet been moved, amendment No. 7, which adds environmental objectives to clause 1.

Mr Bill O'Brien (Normanton, Labour)

Order. Amendment No. 7 has not been selected and will not, therefore, be debated.

Mr Colin Challen (Morley & Rothwell, Labour)

I am grateful for that correction, Mr. O'Brien. I support the amendment in spirit. Nevertheless, my view remains the same. I hope that, on Report, the Minister will return—as he has indicated he might—with something to replace clause 1 that includes environmental objectives. It is important that the Bill should set out such objectives. At the moment, going by the regulatory impact assessment, we are giving great weight to the markets. As the hon. Member for Hazel Grove said, that does not necessarily meet all needs; in particular, it does not address global warming.

Recent experiences, particularly the dash for gas, have lulled consumers into a false sense of security about low-cost energy. Clearly, supplies are not infinite and will eventually run out. We have recently had to deal with new electricity trading arrangements, which have made it virtually impossible for combined heat and power schemes to operate because the prices are too low to sustain them. The markets alone cannot achieve our objectives. I doubt whether, without Government intervention and support, wind energy would have taken off as it has done.

The pressure to reverse the trend comes from many quarters, including the nuclear industry, which claims that it can produce energy at some 2.5p per kW. That is absurd. The original claim for nuclear energy was that it would be too cheap to meter. Some elements in the markets want to blow the Government off course in relation to their environmental objectives, so that they can rule the roost. I hope that if clause 1, as amended, is not agreed today, the Minister will offer us an alternative that ensures that the market is not left to its own devices and that that intention is at the forefront of the Bill, not buried somewhere where it can be quietly forgotten.

Mr Michael Weir (Spokesperson (Environment & Food; Health; Rural Affairs; Trade & Industry); Angus, Scottish National Party)

I shall be relatively brief. I support what the hon. Member for Milton Keynes, North-East said. I shall be sorry if he does not press his amendment, because it is important. It adds to clause 1 the recognition that security of supply is not only about generation but about use of electricity.

I do not know why the Minister is so frightened of the clause. The paramount duty of any Government or energy Minister will be to ensure that the lights stay on. No Government will last for long if the lights start going out. All too often, when we have talked about security of supply, it has been code for the nuclear industry to keep nuclear power stations going. We have heard about the gas situation in Russia and the former Russian republics, which are politically

unstable. It is probably true that to have genuine security of supply, one must have control of domestic supply. To use an old-fashioned phrase, there has to be an element of command economy from the Government. Whatever energy policy we choose to pursue, we must ensure the continuity of supply that is so important for our economy.

Later, we will discuss many amendments that, in one way or another, consider how, in moving towards greater use of renewables, we ensure continuity of supply. I made the point on Second Reading, and I make it again; I very much support the move towards renewables, but before we go too far down that route, we must ensure that they will all work and that they will provide enough electricity at a cost that we can live with. In many cases, that has not yet been proven. At present, the vast majority of renewable energy, apart from the old hydroelectric schemes, comes from onshore wind, which is meeting increasing resistance. The Government must oversee the security of supply, and it is important that the Bill contains such a duty.

I shall press the hon. Member for Milton Keynes, North-East to put his amendment to a vote, because it adds an important caveat. If we are to pursue the future of renewables, we shall need investment, particularly in the grid, as much of the potential for renewables is in areas to which the grid does not necessarily extend, or is fairly fragile, such as the north and west of Scotland and parts of Wales. If that investment does not come from central Government, I suspect that it will not come at all, and the renewable energy future would be stillborn.

However, I oppose the amendment tabled by the hon. Member for Tewkesbury, which relates to the market. Although he talked about previous privatisations and the role of the market, the fact of the matter is that we have a skewed market in energy, particularly electricity. The Bill will skew it further by setting up the Nuclear Decommissioning Agency. We are currently giving huge sums of money to bail British Energy as a nuclear provider, and are setting up the agency.

The Bill appears to give the agency the power not only to take over nuclear power stations but to continue to run them, so it will become an energy provider. It will be a Government agency generating energy and, presumably, putting it in to the national supply. There is almost an element of potential re-nationalisation of some parts of nuclear power. The amendment tabled by the hon. Member for Tewkesbury contradicts some of his later amendments concerning the agency, which seem to look forward to it running nuclear power stations, or at least the possibility of keeping them going. I am prepared to support clause 1 and amendment No. 38, but not to support amendment No. 41.

Dr Desmond Turner (Brighton, Kemptown, Labour)

I have a lot of sympathy with my hon. Friend the Minister in wanting to knock out clause 1 as it stands because it is clearly redundant. He already has the responsibilities for keeping the lights on, and he knows that. We do not need to repeat that, as the opening statement of the Bill sets out the grand design from

which everything else follows. I fear that, apart from the amendment tabled by my hon. Friend the Member for Milton Keynes, North-East, all the amendments before us this morning either legislate for the present or, in the case of the Conservatives' amendments, for the past. That is not helpful. We must legislate boldly for the future. That was the purpose of my amendment No. 7, which sadly was not selected.

I hope that, on Report, my hon. Friend the Minister will bring back a new clause 1 to set out a simple, broad objective for the Bill, from which everything follows. I suggest something along the lines of ''promoting the most rapid progress towards a non-carbon fuel economy, having regard to the need to maintain security of supply.'' That would set out the fact, which must not be forgotten, that the White Paper recognised the overarching importance of reducing CO2 emissions by 60 per cent. by 2050.

Since that White Paper was published scientific opinion has been that even greater reductions may be necessary. Not only that, we have to start making them as soon as possible. If it is left too late to start making the reductions, the climate change scenarios that are already in process will be irreversible. There will be little or no amelioration of the consequences for our grandchildren or even our great-grandchildren. That is why we should legislate for the future and set out a Government intent to reduce carbon dramatically and as fast as possible. That is not in any way inconsistent with maintaining security of supply.

Members have referred to sending signals to the market. Such a move would send a strong signal to the market, telling investors to invest in renewable energy. By that I do not just mean wind power—it seems to have bewitched everybody yet can take us only so far—but all forms of developing renewable energy technology. If the Minister puts such a simple, radical, straightforward clause into the Bill, a lot will follow from it.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

It is an honour to serve on this Committee, especially under your chairmanship, Mr. O'Brien. I should declare my interests in PEPs and ISAs in BP and Shell, and a number of general ISAs that will cover the privatised utilities, which are an achievement of the last Conservative Government.

It is a pleasure to be working with the Minister in this Committee. As he mentioned, the security of supply pervades the Bill, and indeed was the purpose behind the energy White Paper. He has written to all members of the Committee to say that the Government propose to delete clause 1 as it is incompatible with the independent regulation of energy markets. The hon. Member for Hazel Grove alerted us to that. The Government may consider tabling an amendment on Report, and it would help the Committee if the Minister told us what the basis of such an amendment would be.

The hon. Member for Milton Keynes, North-East did the Committee a great service in speaking to his amendment, even if he decides not to press it. I would

go further than him and join my hon. Friend the Member for Tewkesbury in saying that either the original clause 1 or—if the Minister and the Committee prefer—our amendment No. 41 is needed, because I do not believe that the objective of placing a duty on the Secretary of State to ensure the integrity and security of supply of electricity and gas is met by existing legislation.

I do not want to go into great detail, but the Gas Act 1986—passed under the last Conservative Government—places a general duty on the Secretary of State and the director to exercise functions under the Act, one of which is

''to secure that persons authorised . . . to supply gas through pipes so far as it is economical to do so, all reasonable demands for gas in Great Britain''.

As my hon. Friend the Member for Tewkesbury said, we are looking at being a net importer of gas. Therefore, by definition, we have to consider the security of supply. I will come to the EU aspect of that in a moment. The Electricity Act 1989 placed a similar duty on the Secretary of State and the director in respect of electricity. The Utilities Act 2000 amended that provision.

Mr Paddy Tipping (Sherwood, Labour)

The hon. Lady mentions the Electricity Act. Will she confirm that the Secretary of State and the regulator have a joint responsibility to ensure security of supply?

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

Indeed, and I shall develop that point in the EU context, which greatly alarms my hon. Friends and me.

We are told that, under the Utilities Act 2000, the Secretary of State shall carry out these functions in a manner that will take account of the need to secure an economical supply of gas and a diverse and viable long-term energy future. The Act goes on at length, setting out its regulatory aims. The wording of clause 1 is fundamental in this regard: there is a duty to ensure the integrity and security of electricity and gas supply.

I had the honour to serve on the European Scrutiny Committee, which was considering a draft EU constitution, the status of which, especially in regard to energy provisions, was not clear. That is a matter to which I and several of my hon. Friends, supported by the shadow Secretary of State and SNP Members, drew attention. I ask the Minister to give the Committee and the House a categorical undertaking that the Government will robustly reject any proposed European Union intervention in ensuring the integrity and security of energy supplies. That is relevant to the point just made by the hon. Member for Sherwood.

I shall refer to one or two provisions from the EU constitution. If it is recognised that it is possible for the EU to intervene in the security of our energy supply, for whatever reason—for example, liberalisation and opening up the energy market—it appears that we would be faced with an EU regulator.

The Minister identified a concern in the energy industry about clause 1 as drafted, which is why the amendment suggests helpful alternative wording.

Surely he must appreciate that it would be preferable to state categorically that it would be better for the industry to face a British regulator, albeit in a privatised, deregulated market, than the spectre of an EU regulator. I say that as someone whose pro-European credentials cannot be in doubt, as I spent 10 years as an elected Member of the European Parliament and before that worked for the Conservatives in an advisory capacity for five and a half years.

Mr Bob Blizzard (Waveney, Labour)

Is the hon. Lady aware that the so-called energy chapter has been deleted from the draft treaty, so the prospect that she raises could not possibly occur under the new constitution?

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

Unfortunately, I am in the same position as the hon. Gentleman: I have read newspaper reports and the comment from the diplomat—presumably from the UK representation—who will be negotiating on behalf of the Government and this country. Until the draft constitution comes before the House, we are not in a position to comment. That is why I have asked the Minister, in the most open and helpful way, to give a categorical assurance on the matter.

The newspaper report tells us that the article referring to energy will be deleted from the chapter, but there are several articles. The key one—the one that we need to know is no longer in the constitution—is article 13, which sets out areas of shared competence. The Minister will, I think, accept that this is not a tidying-up exercise. As a non-practising Scottish advocate, I am from the camp that is wedded to the British constitution in its present form. Our greatest strength is our unwritten constitution, which is built on convention, Acts of Parliament and court cases. The spectre that we face, for the first time ever, is energy, in the guise of liberalisation policy as set out in article 13, becoming an area of shared competence.

Section X of the constitution is devoted to energy, and it specifically says that the matters set out in clause 1 will be taken from the exclusive competence of the UK Government and Parliament and passed to the Commission of the European Union. It gets worse, because the co-decision procedure will be used. Those are the relevant articles. All I seek this morning is an assurance on various provisions. I am concerned about article 13 and the whole of section X—article III-157 as well as articles III-129 and III-130, in particular the references in the latter to measures affecting directly or indirectly the availability of resources and

''measures significantly affecting a Member State's choice between different energy sources and the general structure of its energy supply'',

which run counter to the energy policy that the Government have set out in the Bill.

The Minister must come clean today and confirm that at the earliest opportunity a revised draft of the EU constitution will be presented, perhaps to the Committee. The Committee, in the context of the Bill—

Mr Bill O'Brien (Normanton, Labour)

Order. I have listened intently to the hon. Lady. While we accept that continuity and guarantee of supply are important, I hope that we shall not stray too far into what is said in European directives. I would prefer hon. Members to discuss the matter before the Committee and the amendment.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

I was not intending to stray, but the Minister needs to know that Members on both sides of the House are concerned that clause 1 should state categorically that any issue relating to a duty to ensure the integrity and security of electricity and gas supplies must remain with the Secretary of State. That was my point in quoting: what I read out was word for word the text from the draft EU constitution, which we are now told that does not refer to energy. However, we cannot see that for ourselves until it has been agreed. Can the Minister say that this is a red line and that the Government will block any reference to energy?

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

Even if the reference is deleted from the constitution that is being prepared, we have heard much in the past about how the EU will not gain competence over a certain matter only to find that it gains that very competence in the next treaty.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

I hope that the Minister will help the Committee and give a categorical assurance on the matter. He must now be in no doubt about why clause 1 has been drafted in this way; it is almost word for word the same as the draft EU constitution. The Acts to which he referred—the Electricity Act 1989, the Gas Act 1986 and the Utilities Act 2000—are not nearly as clear as clause 1 or our revision in amendment No. 41. I see no reason why Parliament cannot be privy to the draft EU constitution. I presume that the European Scrutiny Committee will have access to it to give him a steer.

More imminently, the Government are only too familiar with the fact that they may have to rely yet again on emergency powers because of another potential interruption of supply. The Committee is keen to progress with its work, but I wonder whether the Minister will comment on one final point. In September 2000, the Government exercised their powers under the relevant legislation, on which the House was not consulted. Those emergency powers may be used again later this year, if there is another fuel demonstration. In such circumstances, would he see fit to allow the use of those powers to be scrutinised by the House?

Ms Joan Walley (Stoke-on-Trent North, Labour)

I rise briefly to add my support to the amendment tabled by my hon. Friend the Member for Milton Keynes, North-East. My major concern is that Government new clause 7 is not part of this group of amendments. That would have given us the chance to put environmental concerns at the heart of what we are discussing. In the absence of that new clause, amendment No. 38A is the next best option for including environmental considerations. It is important that we move as quickly as possible to a non-carbon-fuel economy.

If amendment No. 38A is the next best thing, we need to consider how to promote energy efficiency through various other measures. It also anticipates new clause 3. When we come to debate the next group, we must consider carefully the undertakings that I hope the Minister will give us. That will lead us to think about where in the Bill we are placing environmental issues.

It is important that we have joined-up government. Any commitment given by the Department of Trade and Industry should be matched by the Treasury in the comprehensive spending review. We need to look closely at amendment No. 38A, and we want the Minister to give some indication, as we move from consideration in Committee to consideration on Report, of how the Government intend to place environmental considerations at the heart of the Bill.

Mr Bill O'Brien (Normanton, Labour)

Order. I am waiting for the hon. Lady to refer to security and integrity of supply. I know that the environment is important, but we will discuss that later. We are discussing security and supply. I ask her to stick to that.

Ms Joan Walley (Stoke-on-Trent North, Labour)

Absolutely, Mr. O'Brien. I was addressing security and supply in respect of this group of amendments. I refer you and the Committee to the amendment tabled by my hon. Friend the Member for Milton Keynes, North-East.

Many of us see energy efficiency as integral to security of supply, but we cannot have that unless we change the culture and how we look at energy supply itself. How can we achieve that? Many of those who have been involved in these issues over the years—as you have been, Mr. O'Brien—recognise the fact that unless we have a change of culture and unless that change is reflected in how we define security and integrity of supply—unless we take account of environmental issues in that way—we will not make progress, nor will we be able to give commitments on our own energy supply. Neither shall we be able to use our experience to influence negotiations taking place at the global level, which will be very much on the agenda when the UK takes the G8 presidency next year.

Mr Andrew Stunell (Chief Whip; Hazel Grove, Liberal Democrat)

I have been following the hon. Lady's argument closely. Does she not agree that to worry about security of supply without worrying about demand is like turning on the bath tap and pulling out the plug?

Ms Joan Walley (Stoke-on-Trent North, Labour)

I agree—that is the theme that the hon. Gentleman and my hon. Friend the Member for Milton Keynes, North-East developed earlier. The issue has also been debated in relation to transport policy. We hope to move away from a demand-led transport policy and to look instead at what the earth's finite resources are as well as how we can meet our transport policy commitments. Similar considerations apply to energy policy.

For those reasons, I urge the Minister to look carefully at the thinking behind amendment No. 38A and to assure us that even if he cannot accept it now, he will bring us some comfort on Report.

Mr Norman Baker (Shadow Secretary of State for the Environment, Environment, Food & Rural Affairs; Lewes, Liberal Democrat)

I hope that the Minister has noted that no one has spoken in defence of his position that the clause should be deleted and nothing should be put in its place. Everybody has either supported the clause or suggested an alteration to the form of words, as a replacement. That is because there is unanimity among all parties in the Committee that some words are needed to fill in the gaps on the issues we have identified.

The problem of the lights going out is the final, back-stop problem that the Minister or one of his successors might have. It is inconceivable that he would sit in a darkened television studio lit by candles and say, ''I'm afraid the lights going out is nothing to do with me—it's Ofgem's responsibility. I have no role whatever. The fact that there's been a market failure is, I'm afraid, the consequence of an Act that was passed a long time ago. My hands are clean.''

If the country's energy supplies were threatened, by terrorist activity or whatever, the Minister and the Government would of course get involved. It would be ludicrous to think otherwise. Will he set out explicitly what powers or duties he already has under existing legislation to ensure the integrity and security of electricity and gas supply, so that we can have an informed debate? It has been suggested that he has powers under the Gas Acts and the Electricity Acts, so he should list them.

Will the Minister say what duties or powers he or the Secretary of State would have under the Civil Contingencies Bill to ensure the integrity and security of electricity and gas supply? It is inconceivable that that Bill, which is approaching enactment, would not place a duty on the Minister, or at least give him a power, to ensure that the lights are kept on. If it did not do so, it would be a faulty Bill. Its purpose is to ensure that life as we expect to enjoy it carries on normally in difficult circumstances. Can he say what powers would be introduced under the Civil Contingencies Bill? If he does not know, I hope that one of his officials passes him a note with the answer.

I refer the Minister to comments that the Economic Secretary made in response to an Adjournment debate that I introduced yesterday on the effect of economic instruments on environmental policy. I have a lot of time for the Economic Secretary. He seems to talk a lot of sense and what he said yesterday is germane to this group of amendments:

''The Government believe that markets provide the best means of allocating an economy's resources. However, many markets are subject to imperfections and failures, and that is particularly true for environmental matters.''

He continued:

''Evidence of the nature of market failure may mean that we have to use a range of policy instruments, including economic instruments, and the Government are committed to using such a

range of policy levers to pursue environmental objectives when appropriate.''—[Official Report, Westminster Hall, 19 May 2004; Vol. 421, c. 309-10WH.]

Members of the Committee, including the hon. Members for Milton Keynes, North-East and for Brighton, Kemptown (Dr. Turner), as well as my hon. Friend the Member for Hazel Grove, have suggested that levers are appropriate in a case such as this in which there is market failure because the market will not deliver energy conservation or energy efficiency. Nor, incidentally, will it deliver a new generation of nuclear power stations unless this or a future Government seek to intervene. So, it is quite clear that there is a need to intervene.

I wholly commend the comments made by the Minister's colleague, the Economic Secretary. I do not understand the Minister's objection to the clause, which seems almost philosophical, or does he object simply because the provisions were introduced by Opposition Members? We need a more lucid explanation of the need to remove the clause than the one we have had so far from his colleagues in the House of Lords. However, the Minister and his successors will ensure that there is integrity and security of supply for electricity and gas, whether the clause is included or not.

Ministers will ensure that the lights are kept on. They will pursue, as they are currently pursuing to some extent, a policy of energy conservation and efficiency. They will ensure, as they have ensured under the renewables obligation, that renewables are promoted. These things are happening, so what is the objection to writing them into the Bill so that everyone knows where we stand?

Mr Bob Blizzard (Waveney, Labour)

I, too, am delighted to serve under your chairmanship, Mr. O'Brien. I look forward to hearing the arguments of my hon. Friend the Minister on whether the clause is necessary. I believe that the wording is inadequate and that the clause should not stand part. It does not recognise that energy policy, although primarily about security of supply and keeping the lights on, must also be about reducing CO2 emissions, as set out in the energy White Paper. Unless we move towards that target of a 60 per cent. reduction in CO2 emissions by 2050, it will be increasingly difficult for any Government to keep the lights on throughout the country. I say that as a Member who represents a coastal constituency in which climate change has an even starker relevance.

On Second Reading, it was widely recognised that the main problem with our energy policy is that even if we meet our renewables targets of 10 per cent. by 2010 and 20 per cent. by 2020—it will not be easy to do so—zero emissions generation will simply replace the current 21 per cent. of nuclear power generation as those nuclear power stations reach the end of their lives. We need to do something else if we want to exceed that 20 per cent. target—indeed, if we want to improve our current position.

Many hon. Members favour the nuclear option, but I believe that it is wrong to have only one option. We need to consider not only zero emission generation, but near-zero emission generation and carbon

sequestration. Those options require immediate and thorough examination. When I raised the matter during Environment, Food and Rural Affairs questions—

Mr Bill O'Brien (Normanton, Labour)

Order. I draw the hon. Gentleman's attention to the fact that the subject to which he is referring relates to a later debate. I ask him to stick to speaking to the amendment to the clause, whose title refers to security and integrity of supply. That is what I said to the hon. Member for Stoke-on-Trent, North (Ms Walley) earlier.

Mr Bob Blizzard (Waveney, Labour)

I obviously respect your guidance, Mr. O'Brien. I am simply trying to make the case that we will be able to ensure security of supply only if we also have regard to our policy on emissions. The part of the country that I represent cannot have a secure supply if it keeps being flooded because sea levels are rising as a result of global warming. I also argue that, to maintain security of supply, we will need to rely on fossil fuels for some time. To make that fossil fuel generation acceptable, however, we need to consider carbon sequestration. I hope therefore, Mr. O'Brien, that you will allow me to pursue this point a little further.

Mr Bill O'Brien (Normanton, Labour)

As I said, if the hon. Gentleman sticks to the question of the Secretary of State's duty to ensure the integrity and security of supply of electricity and gas, I will welcome his contribution.

Mr Bob Blizzard (Waveney, Labour)

The main point that I want to make is about carbon sequestration and, in particular, a form called carbon capture and storage and enhanced oil recovery. That entails capturing the carbon from the power station, which we need to ensure security of supply. It is then buried in depleted oil reservoirs in the North sea, squeezing more oil out of those reservoirs, which also helps to maintain security of supply, and enriching the oil to make it more effective as a source of energy for security of supply. That is my case.

Beyond that, the carbon can also be buried in the aquifers deep beneath the North sea, so it is not just a medium-term solution to ensure security of supply but a long-term solution. That was recognised in the energy White Paper, which recommended that a report on it be commissioned by the Department of Trade and Industry. That report appeared in April and showed that oil producers regard CO2-based EOR as a proven technique from experience with onshore applications and that they know how to apply it in the North sea without the need for a demonstration project.

The consultation also confirmed the conclusion of the carbon capture and storage review that, under current market conditions, EOR using CO2 is not a commercial option for the North sea. However, it has the advantage of providing some financial return partially to offset the costs, and the injection of CO2 into the oil reservoirs underlying the North sea is accepted as permissible under the London and OSPAR treaties controlling the dumping of waste in the North sea. It is a solution to ensure security of supply because it does not conflict with those treaties.

The point is that we may not be able to ensure security of supply while also working towards our CO2 emissions reduction targets if we rely on just the two pillars of renewables and energy efficiency. We have to consider the carbon capture technology. We must also consider its time scale. As with any major project, there is a long lead-in time, and the opportunity to use the depleted oil reservoirs will not exist in 10 to 20 years, because current pipelines, which could be used, will have to be decommissioned. However, there will be another use for those pipelines and that infrastructure if we follow the carbon capture route.

To sum up, we have a real opportunity to bury carbon and to get the last drops of oil out of reservoirs, which is good husbandry of resources. That must be part of the efficiency referred to an amendment No. 38A, but we have a chance to take the world lead in the technology, which will be good for jobs and British industry.

Developing countries that are using fossil fuels, and perhaps not so keen to turn away from them as us, will need the technology if we want to achieve global environmental targets. The market will not deliver that; the Government need to give direction. They know that the market has not been able to deliver renewables on its own, which is why there are obligations, and we know that the market will not deliver nuclear power stations on its own. What I am saying is let us explore the option. We need to move now and commit ourselves, because in it we have the missing link in our energy policy.

Mr Paddy Tipping (Sherwood, Labour)

I am pleased that you are chairing the Committee, Mr. O'Brien, because you, above all, understand the importance of security of supply and the role that the coal industry can play in providing such security.

I support the White Paper. It is challenging; it takes us to a carbon-free economy from the old fossil-based economy. The plan is ambitious and will be difficult to achieve, but I support it. I do not believe that there are security of supply issues in the short term. There may be issues to do with systems failure, but the market showed in the winter just gone that it can respond to market signals. In the mid-term, however, if we do not achieve our renewables targets, if our nuclear energy begins to decline—as looks possible at the moment—if coal is subject to environmental constraints and if we are heavily reliant on gas, there could be some security of supply issues. According to Department of Trade and Industry figures, by 2025, 70 per cent. of our energy needs could be met from imports, 90 per cent. of which would be gas. That explains my interest in the clause.

What powers does my hon. Friend the Minister have? That has been the subject of discussion in Committee already. It is clear that one of the four pillars of the White Paper is security of supply; that is writ large. The hon. Member for Vale of York (Miss McIntosh) has drawn our attention to the Gas Act 1986 and the Electricity Act 1989, both of which place responsibilities on the Secretary of State.

The hon. Member for Tewkesbury made it clear that a Secretary of State who did not deliver security of supply would face difficulties. I want to contrast the amendment proposed by him and his colleagues with the comments made on Second Reading, when, in the winding-up speech, the hon. Member for Eddisbury (Mr. O'Brien), supported by the hon. Member for Tewkesbury, made it clear that clause 1, as it then stood, was acceptable. The hon. Member for Tewkesbury has now changed his position, as is shown by amendment No. 41.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

The hon. Gentleman's recollection of what was said by my hon. Friend the Member for Eddisbury and me is not accurate. My hon. Friend extended an invitation to the Minister to discuss clause 1, as we were not entirely happy with it for the reasons that I have given. If the hon. Gentleman checks Hansard, he will find that that is the case.

Mr Paddy Tipping (Sherwood, Labour)

Let me quote Hansard. The hon. Member for Eddisbury said:

''I have made it crystal clear that the intention is not to be interventionist''.—[Official Report, 10 May 2004; Vol. 421, c. 55.]

I pressed him on that point: clause 1 is interventionist. The hon. Member for Tewkesbury is right that an offer was made to have further discussions. I am pleased that the letter from the Minister states:

''These are concerns which are also shared by the industry. We continue to discuss with the industry how we might address the issue in a way that is helpful to them.''

The letter acknowledges that a further amendment may be introduced on Report.

Our discussion today has focused on how far clause 1 is interventionist. It is clear to me, from my discussions with the generators, that they have real concerns. Hon. Members will have seen the briefing from Powergen and received a briefing from Centrica. I have had the opportunity to discuss the clause with Scottish Power, which says, interestingly, that no one has leaned on it and that the DTI has not been in touch with it on the issue. Nobody is, as the hon. Member for Eddisbury said on Second Reading, talking ''behind cupped hands''.

There is, however, clearly an issue with the clause 1 as it stands. Industry is saying, ''We are concerned. We want to invest in the long term. We believe in a regulatory framework. We also believe that clause 1, as it stands, gives the Secretary of State the opportunity to intervene.'' The hon. Member for Tewkesbury acknowledged that by tabling amendment No. 41. It is a helpful step forward, but there is still an element of conflict in it, because the Secretary of State would have a duty to have

''regard to the regulatory arrangements''

as well as

''a duty to enable the framework whereby the market can ensure the security of electricity and gas supplies''.

He will then have to

''make regular reports . . . on these matters.''

On the one hand, the regulatory framework should be left intact; on the other, however, the Secretary of State must still consider matters. The tension is still there.

There is a tension in clause 1. I strongly believe that the private sector—the generators and electricity companies—has invested immensely in energy supplies. Even if we accepted amendment No. 41, there would still be difficulties with the clause. I accept, as the hon. Member for Lewes said, that everyone who has spoken in the debate is concerned about security of supply. However, the clause is not acceptable as it stands, and amendment No. 41 does not take us much further.

Mr Andrew Stunell (Chief Whip; Hazel Grove, Liberal Democrat)

I have been following the hon. Gentleman's argument closely. Would amendment No. 72, which is in my name and that of my hon. Friend the Member for Lewes, solve the problem by leaving it to GEMA to safeguard the regulatory system, except in cases where it brings matters before the Secretary of State?

Mr Paddy Tipping (Sherwood, Labour)

Such a proposal—whether we are talking about GEMA or the joint energy security supply group—certainly takes the discussion forward. However, those bodies report to the Secretary of State, so he would still be in conflict with the regulator.

I am simply saying that there is a problem, and I am delighted by the Minister's comments on Second Reading and in his letter to members of the Committee. He said, ''Yes, there is a problem. I know that I've got to provide security of supply—it's a political imperative, if nothing else. The form of words isn't right. I'm backed by one of the four pillars of the White Paper on security of supply, but I need to do some more work and get back to you.'' I look forward to what he has to say now and to a proposal that will help us move forward on Report.

Mr Denis Murphy (Wansbeck, Labour)

It is a great pleasure to serve on the Committee, especially under your chairmanship, Mr. O'Brien.

Like many other hon. Members, I am concerned about future security of supply. One of the main guarantees of the security of the electricity supply is a sensible fuel mix, and the mix is just about right at the moment, with 38 per cent. gas, 35 per cent. coal and 22 per cent. nuclear and renewables. However, the energy White Paper projects that, by 2020, the electricity supply industry will use 70 per cent. gas, 8 per cent. coal and just 9 per cent. nuclear. There will be almost total reliance on one fuel, most of which will be imported. Yet, coal is currently the cheapest fuel used in electricity generation, at about 1.5p per kWh.

The Institute of Civil Engineers has little confidence in the system coping with heavy winter demand for energy, especially if gas is allowed to dominate energy supply. The institute argues forcefully for a balanced fuel mix as the only way to ensure a stable and secure power supply in the United Kingdom. In its response to the White Paper consultation, the Institution of Chemical Engineers pointed out that:

''The energy review was complacent about future gas supplies. It looked at the UK in isolation and overlooked the impact on process of Europe's parallel growth in gas demand. Prices will

inevitably rise because of growing European dependence on gas supplies imported from far flung countries. Major new infrastructure will be required but—even when that is installed—the UK will be vulnerable on the end of a complex international gas grid.''

Two major organisations are warning against further reliance upon gas.

In 2003, the Trade and Industry Committee contended that much more investment was needed in gas infrastructure. It also concluded that the regulator's concern to drive down costs should not be the only policy aim. Reliability and security always come at a price. British coal can continue to play a major role in providing the secure supply of electricity for the nation, and the Government should be congratulated on the financial support that they have given to Britain's mining industry. That support must, of course, be maintained.

Mr Norman Baker (Shadow Secretary of State for the Environment, Environment, Food & Rural Affairs; Lewes, Liberal Democrat)

Does the hon. Gentleman accept that although the benefit of security of supply from the use of indigenous coal can last for hundreds of years, there is, nevertheless, an environmental problem with it? Does he share my disappointment that little seems to be happening with regard to the gasification of coal and other techniques that would make coal's use more acceptable environmentally?

Mr Denis Murphy (Wansbeck, Labour)

The hon. Gentleman makes an excellent point. I agree with him. I was about to say that we can guarantee the coal industry for the long term only by investing heavily in clean coal technology, which will only be able to be used in an environmentally acceptable way. Perhaps the Minister can enlighten the Committee as to what investment he intends to make in clean coal technology and how he intends to support the mining industry so that it can play a genuine role in ensuring a secure supply of energy.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

We have had a valuable debate and I am pleased that we have started the work of the Committee with a serious consideration of energy security. That is the central issue for energy policy, along with the imperative of reducing carbon emissions and tackling the challenge of global warming, as my hon. Friend the Member for Stoke-on-Trent, North reminded us at the outset. We had a good discussion on the topic on Second Reading and have had another useful debate now. I hope that the Committee will continue to talk about the issue and to find shared ground, drawing on the submissions from industry and taking forward the discussions to which my hon. Friend the Member for Sherwood referred.

We all want to achieve the same objectives. We just have to find a way to encapsulate that in the Bill without creating any of the knock-on problems of which we have become aware in recent weeks and that have been mentioned in the debate.

Ms Joan Walley (Stoke-on-Trent North, Labour)

Is my hon. Friend saying that the kind of debate that we have had will continue in subsequent sittings and right up until Report and that a genuine attempt will be made to get things?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

I do not know how long it will take to reach the end point. I hope for, and am optimistic that we will achieve, the situation that my hon. Friend describes. I shall explain a little more about how that is to be done.

The Committee has been reminded that maintaining reliable supplies of energy is one of the four key goals in the White Paper and, as my hon. Friend the Member for Brighton, Kemptown said, ultimate responsibility for energy security must rest with Government—in particular, with my right hon. Friend the Secretary of State. There is no escaping from that and nobody would want us to escape from that responsibility.

I listened with great interest to the hon. Member for Tewkesbury, and my hon. Friend the Member for Sherwood is right to say that there has been a shift in the position of Opposition Members since Second Reading. I welcome that, as it rightly reflects a response to representations that have been made to us by industry. The hon. Gentleman referred to the BBC 2 programme about what happens if the lights go out, and I noted with particular interest the fate of the Energy Minister in that dramatic broadcast. I welcome the greater spotlight on energy policy since that programme, and some of the discussions that have arisen from it. However, the scenario that was presented—of a pipeline somewhere in Russia being blown up and, a few hours later, the whole of the south-east of England being plunged into darkness—is rather implausible, because we are working on a range of diverse sources of supply of gas and, more broadly, energy. If there is a problem in a particular area, alternatives will be available to address it. Nevertheless, looking forward, there are certainly some challenges for us in the UK as we become net importers of gas and oil in future, having depended on the North sea for the past 30 years or so. It is important to have a public debate about managing the transition successfully.

The hon. Member for Tewkesbury referred to the fact that we had agreed a treaty with Norway. That is not quite right, so I should clarify the position. Last October, I signed an agreement with my counterpart the Norwegian Minister, which has, I am pleased to say, allowed work to go forward on the proposed new pipeline from the Orman Langer field in the Norwegian part of the North sea to the UK. There will need to be a formal treaty, and I hope that it will be signed later this year.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I think that the Minister would acknowledge that the point that I was trying to make is that the Secretary of State has a role in the delivery of gas to this country.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

I take that point entirely; the hon. Gentleman is quite right.

The other point that the hon. Gentleman made, with which I want to disagree, is that we are obsessed with wind power. I do not think that that is right. I expect wind power to contribute more than any other form of renewable form of energy by 2010, but that is a reflection of the different stages of the current

technologies. What is driving the large amount of activity and investment in wind power is economics, not a Government obsession. Beyond 2010, a more diverse range of technologies will be deployed, a number of which will make a substantial contribution to meeting UK energy needs. The renewables obligation—the main lever here—is technology blind. It does not force the introduction of wind power or any other sources.

Through capital grants, we currently support the development of biomass, solar energy, photovoltaics, wave power and tidal power. By providing funding, we can improve technology and bring down future costs. We are not putting capital grants into onshore wind farms, so the economics are driving their expansion. As the hon. Member for Tewkesbury said, we are putting capital grants into offshore wind farms, which are just starting. The first is operating at North Hoyle off the coast of north Wales, and I am looking forward to visiting tomorrow the second offshore wind farm currently being constructed at Scroby Sands offshore from the constituency of my hon. Friend the Member for Waveney (Mr. Blizzard).

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

The Minister has anticipated the point that I was going to make. The Government have committed £117 million to developing offshore wind farms, so it is not correct to say that wind power is developing because of its own economics. It is being pump-primed by the Government. He mentioned the money being allocated to other forms of renewables. I do not expect him to have the figures on that to hand but, for comparison, it would be useful if he could obtain them for the Committee, so that he could demonstrate the Government's commitment to other forms of renewable energy.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

The figures are published, and I will be happy to show them to the hon. Gentleman. However, the central point that I wanted to put to him was that the Government are not putting capital funding into the development of onshore wind. Someone listening to the debate and hearing him charge us with being obsessed with wind power might think that we were doing so, but we are not. The current—and welcome—expansion in onshore wind energy is being driven by economics.

Mr Bob Blizzard (Waveney, Labour)

Is not the key point that some of those other technologies, such as tidal current, are not yet ready for commercial production. If we wait until they are—although I hope that they will be soon—we will not maximise the use of wind. Is it not also the case—to return briefly to gas—that as well as getting gas from Norway and from pipelines from Russia, we are also likely to import a lot of gas as liquified natural gas, which will be shipped across the seas? We will therefore not be reliant on single pipelines.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

My hon. Friend is right on both those points. With regard to gas supply, there is the pipeline from Norway, to which I referred. I also hope that the existing interconnectors between the UK and

continental Europe will be expanded. Moreover, as he rightly says, there are three projects to import LNG into the UK, which I hope will make rapid progress. We will therefore have a diversity of sources for the supply of gas and, for the longer term, discussion is taking place about a pipeline from Russia.

My hon. Friend is also right about the state of other renewable technologies. I caution everyone against taking the view that we support renewable energy except the form of renewable energy that is most cost-effective at present. As he rightly said, if we adopted that position, we would not be doing anything at present. Once those new forms of renewable energy are at a stage at which they can be commercially deployed—thanks to Government funding and support, that should be sooner rather than later—I have no doubt that the concerns now being expressed about wind power will also be raised in respect of those technologies. We will then need to address those concerns. We would be mistaken if we took the view that there are other alternatives a few years down the track and that if we wait for them, we will not have any problems.

Clause 1 would give the Secretary of State a duty to ensure the integrity and security of electricity and gas supply. It was brought forward as an amendment to the Bill by both Conservative and Liberal Democrat peers during consideration on Report in the Lords. I understand that their intention was to strengthen the security of supply obligations in legislation, and to make it clear that responsibility for that matter rests with the Secretary of State. I have no doubt that Members in the other place who introduced the amendment did so with the best of intentions.

It has since become clear, however, that the clause as drafted would have unintended and harmful consequences. In particular, it could require widespread intervention by the Secretary of State in the operations of the market and the decisions of Ofgem. Numerous industry spokespeople have made clear their worry about consequent uncertainty in the market and the danger, in particular, of undermining firms' incentives to invest in secure energy supplies and to commit themselves to investment in a timely manner.

The hon. Member for Lewes asked me to spell out the problem. I hope that he has seen the representations that we have received. The problem, in a nutshell, is that the provision creates a good deal of regulatory uncertainty. It would be an invitation to people who disagreed with decisions that were made to go to the Secretary of State or to apply for judicial review, and to say, ''In our view, this step or decision does not maximally secure energy security and should therefore be challenged.'' There would be a great deal of uncertainty and the consequence, perversely, would be to harm the security of our energy supplies.

Mr Norman Baker (Shadow Secretary of State for the Environment, Environment, Food & Rural Affairs; Lewes, Liberal Democrat)

I hear the Minister's argument with interest, although I am yet to be convinced by it. So that I can judge his argument in context, would he set out his existing duties and powers under previous Acts

so that we can see what else is being proposed? Secondly, will he deal with the point about the Civil Contingencies Bill?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

If I am able to convince the hon. Gentleman, I shall be absolutely ecstatic. I shall certainly have a go.

The principal obligations currently set out are in the Electricity Act 1989 and the Gas Act 1986. Section 3A(2)(a) of the Electricity Act requires both the Secretary of State and Ofgem—the key point is that they both have obligations in respect of the security of supply—to exercise their functions

''having regard to . . . the need to secure that all reasonable demands for electricity are met''.

Section 4AA(2)(a) of the Gas Act has a similar obligation in respect of gas, to secure that

''so far as it is economical to meet them, all reasonable demands in Great Britain for gas conveyed through pipes are met''.

The Electricity Act also contains another subsection, which requires both parties—the Secretary of State and Ofgem—to carry out their duties under the Act in the manner best calculated

''to secure a diverse and viable long-term energy supply''.

Those are the principal obligations as currently set out.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

As I said earlier, I did my homework—I quoted the draft constitution earlier—and did not have to rely on the Minister to do it. He is no doubt aware that paragraph 1(a) of article III-157 states:

''In establishing an internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim to''—

and continues in sub-paragraph (b)—

''ensure security of energy supply in the Union''.

Are the Government in favour of that and are they adding that to their red lines in negotiations with the European Union? Does the Minister wish responsibility for security of supply to remain with the Secretary of State and Ofgem, or are the Government now in favour of EU regulation of energy supply?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

The hon. Lady asked those questions earlier. I will come on to where our discussions with Brussels have reached. I want to make crystal clear the obligations on the Secretary of State and Ofgem, which will continue to apply. Those obligations are the principal sources of confidence about the security of energy supply in the UK.

In its current form, the provision should not stand part of the Bill. Members of both Opposition parties have recognised that there is something of a problem with the clause as drafted and they have tabled and proposed amendments, which we have argued about already. In the light of what has been said in the debate, I am hopeful that we may find an agreed way forward, which would allow me to make another proposal on Report.

I want to respond in detail to the proposals made to the Committee this morning. Amendment No. 41, tabled by the hon. Member for Tewkesbury, and new clause 13, tabled by the hon. Member for Hazel Grove, would both place a duty on the Secretary of State to make regular reports to Parliament on security of

supply. Amendment No. 41 would provide that the report should deal with how the Secretary of State enabled the framework for market delivery of secure electricity and gas supplies, whereas new clause 13 would require her to report on the progress made each year towards maintaining and, if necessary, enhancing UK security of supply.

I want to make it clear that placing a duty on the Secretary of State to report annually to Parliament on security of supply is a helpful idea, and I am grateful to both hon. Members for tabling their proposals. Such a duty would clearly reflect the Secretary of State's ultimate responsibility for security of supply, which I have gladly acknowledged to the Committee, and her accountability to Parliament for its delivery. It would give Parliament an opportunity every year to scrutinise her account of how security of supply is being delivered.

I am also aware that the industry favours such a basic element in the approach, so I am happy to consider the amendment and new clause with a view to introducing something on Report that will command widespread assent. I hope that there will be further discussions, as my hon. Friend the Member for Stoke-on-Trent, North suggested, with industry and the Opposition in order to reach such a conclusion.

Amendment No. 41 would remove the existing requirement for the Secretary of State

''to ensure the integrity and security of electricity and gas supply''

and replace it with a requirement for ''having regard to'' and so on. I say to the hon. Member for Tewkesbury that I shall certainly give that form of words further thought, although I am concerned that it could give rise to undesirable consequences. It helpfully reflects important elements of the way in which the system currently operates—for example, regulatory structures are in place, including an independent regulator—and the fact that we have a market-based approach, which the Secretary of State seeks to facilitate. I have no problem at all with any of that, but I am concerned about the consequences of such wording.

I do not believe that it is possible for the market to ''ensure'' supplies will always be secure. Putting that into statute could give rise to enormous costs being placed on consumers in the interest of delivering levels of security that are much higher than they are willing to pay for. The form of words in the amendment could well result in uncertainties in the market about how the duties would be exercised, and the representations that we have received from the industry have constantly underlined the potential harm that uncertainty would cause to investment. I shall reflect on the wording in the amendment, but I do not want to raise too many expectations that I will necessarily introduce a provision reflecting it. However, I welcome the central idea in the amendment and the requirement for an annual report, as suggested in the new clause tabled by the hon. Member for Hazel Grove.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

I appreciate the Minister's sympathetic approach to the amendment. He will acknowledge that I said that we were attempting to strike a balance to satisfy those in the industry who were concerned about the medium-term security of supply and those who thought that the Lords amendment might inadvertently impede that. I am grateful to him for saying that he will consider introducing a sympathetic amendment on Report. How does he intend to finesse that? Does he intend to hold discussions with the Opposition parties?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

That would be very valuable. I suggest that we have a fairly informal discussion shortly after the recess to determine whether we can come up with a form of words that would obtain general support. That is my aim and the time scale that I suggest.

On the other amendments in the group, amendment No. 72 is helpful in reflecting the important role that Ofgem already plays. However, it does not adequately take account of the existing framework of the respective functions of the Secretary of State and Ofgem as set out in the Electricity Act 1989 and the Gas Act 1995; it would disrupt that framework. I hope that the hon. Member for Hazel Grove feels able, in the constructive way that he has approached the debate, not to press the amendment.

I assure the hon. Gentleman that the Secretary of State and Ofgem already have regard for the three issues set out in amendment No. 73. As a result, the Department of Trade and Industry's electricity and gas industries emergency committee has detailed contingency plans in place to deal with energy supply emergencies, and we review those plans regularly. He will be aware that the JESS committee considers the long-term requirements for energy at the point of use as part of a wider examination of the security of supply. I agree with him about the importance of reducing energy use through conservation. There are several important Government initiatives on that. However, in setting out those three issues, the amendment does not take account of other important considerations such as the need to safeguard the interests of consumers. Therefore, it would be damaging to pick out those three issues.

Mr Andrew Stunell (Chief Whip; Hazel Grove, Liberal Democrat)

The point that I made about conservation and efficiency measures is absent from the Bill; surely it ought to be there in some shape or form. In the spirit of what the Minister has already said, perhaps that is a matter for further discussion outside this Committee, which I would be happy to take part in. He must recognise that there are market gaps and that his role will still be of great importance if he is to deliver the objectives that he has set out to the Committee.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

There are important things that the Secretary of State and I have to do to achieve objectives that we all agree on. As the hon. Gentleman will know, a couple of weeks ago, we published the annual report on energy efficiency, which sets out that there is much work still to be done. I am pleased to see that he has a copy of the report.

Leaving aside the wider debate on the clause, I assure the hon. Gentleman that the Secretary of State and Ofgem already have regard for JESS when exercising existing legislative duties. It is one of a number of important sources of information that are examined closely. Another such source is NGT's winter outlook report. I hope that he feels that amendment No. 74 is not necessary.

On amendment No. 38A, I agree with my hon. Friend the Member for Milton Keynes, North-East that promoting energy efficiency is key to achieving security of supply, as well as our objectives on climate change and fuel poverty. We have set out our intention to deliver substantial improvements in energy efficiency and reductions in emissions of greenhouse gases in the climate change programme, the energy White Paper and the action plan published a couple of weeks ago.

I pay tribute to my hon. Friend's work on the Sustainable Energy Act 2003, which he was responsible for, and on a number of avenues that he has actively pursued for this purpose. He will know better than anyone that, under that Act, the Government are required to report annually on progress towards our carbon reduction and wider energy policy goals. We are specifically required to set a domestic energy efficiency aim for England and take all reasonable steps to deliver it. That is also covered in the recently published plan, which sets out in detail the steps taken to improve energy efficiency across the UK and establishes the energy efficiency aim in accordance with the Act for which he was responsible. We are subject to binding obligations under the Kyoto protocol. We have made it clear that we will strongly support further, more ambitious international agreements. Improvements in energy efficiency will have to play a major part in meeting those commitments.

Mr Norman Baker (Shadow Secretary of State for the Environment, Environment, Food & Rural Affairs; Lewes, Liberal Democrat)

The Minister is setting out what he intends to do, which is welcome. The concern being expressed by some hon. Members is that the regulator does not necessarily have a clear responsibility to promote energy efficiency in the same way as the Minister indicated the Government would like to do. Are they planning any further guidance to the regulator to promote energy efficiency?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

We already provide the guidance on sustainability. We now have a set of levers that will enable us to deliver our objectives.

I am grateful to my hon. Friend for saying that he is not going to press his amendment to a vote. The difficulty with the amendment is that it would leave the Government open to challenge by groups with wide-ranging views on what promoting energy efficiency should entail. That would increase uncertainty and have all the undesirable effects that we have discussed. That is an important point that reflects the Government's central objective.

Mr Brian White (North East Milton Keynes, Labour)

There is a whole range of Government activity that has an impact on security of supply. Can the Minister assure the Committee that there will be joined-up government and that other Departments

will buy into the measures that they need to take, particularly in the planning sphere, to enhance the security of supply? Will he consider that point in the light of the amendment that he will table on Report?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

My hon. Friend is right. That is why we have set up an across-government committee of Ministers, chaired jointly by the Secretary of State for Trade and Industry and the Secretary of State for Environment, Food and Rural Affairs. It will bring together Ministers from other Departments such as the Office of the Deputy Prime Minister, the Ministry of Defence, the Foreign and Commonwealth Office in exactly the way that my hon. Friend describes. They will work together to achieve both our security of supply objectives and our climate change and carbon emissions objectives the other aims set out in the Energy White Paper. I can give my hon. Friend the assurance that he seeks.

I should like to take a couple of minutes to respond to some of the other points that were made in the debate. I am particularly grateful to my hon. Friend the Member for Sherwood for pointing out to the Committee that the serious power cuts that we had in London and Birmingham last year were the result not of a shortage of generating capacity, as was suggested at the time, but of technical problems within the network. Those problems need to be rectified. They are serious and should not have happened. I hope that they will not happen again.

My hon. Friend the Member for Milton Keynes, North-East was right to say that we need to look at the demand side, too. I am sure that he will be pleased that both the National Grid Transco winter outlook report, which is being published this week, and Ofgem's response to it discuss the important contribution that can be made to security of supply on the demand side. He was right to make that point.

My hon. Friend and the hon. Member for Vale of York asked a number of questions about the European dimensions of all of this. There was concern for some time about the initial proposals for the energy chapter in the European Union constitution. I pay tribute to my hon. Friend the Member for Waveney who did much to draw attention to the concerns about the impact on prospects for investment in the North sea if the original proposal had gone ahead.

We made representations in the earlier round of negotiations about the constitution and, by and large, people were reassured. The North sea industry was certainly reassured by the amendments to the energy chapter. However, matters have now moved on and the Irish presidency has proposed the complete deletion of the energy chapter and, to pick up the point made by the hon. Member for Vale of York, the reference to energy in the list of shared competencies in article 13. I do not know what the ultimate outcome of the negotiations will be. We shall have to wait and see. However, when there is a final and agreed version of the constitution, we shall have ample opportunity to

debate it. The Government have repeatedly said that we will not sign up to a proposal that is inconsistent with the United Kingdom's energy interests.

Mrs Anne McIntosh (Shadow Minister, Environment & Transport; Vale of York, Conservative)

I am most grateful to the Minister for his clarification. Is he confirming that we now have a red line? The wording of clause 1 is almost the same as the wording of the energy section, which is why the concern arose. Will he confirm that a red line will be written in the sand if another delegation tries to reinsert energy in the article and that there will be no regulation of energy at European Union level? [Laughter.] I am trying to stay in order and be fluent, too, Mr. O'Brien, but it is not always easy.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

I cannot sign up to the hon. Lady's last point. There have been welcome moves to open up the European gas market—for example, in the European Union. Discussions are taking place at European level about energy, and rightly so. I am not sure what colour line in the sand we are talking about, but we will not sign up to a proposal that is contrary to the United Kingdom's energy interests. The direction of recent developments in discussions has been helpful in that respect.

Mr Paddy Tipping (Sherwood, Labour)

Before the Minister leaves that point, would it be in the British interests if the European market were liberalised? Companies such as Electricite de France and the gas market could benefit from greater liberalisation and British industry would be in a position to capitalise.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

My hon. Friend is right. He has made an important point. We are moving substantially in the direction of a genuinely liberal energy market in the European Union, and it will make a big contribution to the assurance of the security of the UK's supplies and a proper market operation.

I do not want to take up too much of the Committee's time, but I want to refer to a couple more points. My hon. Friend the Member for Milton Keynes, North-East expressed his worries about what would happen when 70,000 new homes are constructed in Milton Keynes—a parochial, but important, point. A revision of part L of next year's building regulations will further raise the standard of new and refurbished building. That will be helpful.

I remind the hon. Member for Hazel Grove that statutory fuel poverty targets are already in place, thanks to the Warm Homes and Energy Conservation Act 2000. He said that, while prices were going down, making progress on fuel poverty was not too difficult. However, I think that he will acknowledge that improvements in benefit levels during the past few years have also made an important contribution to reducing the incidence of fuel poverty since 1997. They have more than halved it. However, there are already statutory targets that require the Government to take all reasonable steps to eradicate fuel poverty among vulnerable households and groups by 2010 and in all groups by 2016.

I ought to respond to the points made by the hon. Member for Angus (Mr. Weir) about nuclear issues. He talked about the nuclear decommissioning

authority running nuclear power stations. I need to make it clear that the NDA will not be able to run nuclear power stations, except pending decommissioning, and it will not be able to operate non-nuclear stations, except in support of its functions in relation to clean-up management of designated sites. The hon. Gentleman gave the impression that something rather larger was intended.

Mr Michael Weir (Spokesperson (Environment & Food; Health; Rural Affairs; Trade & Industry); Angus, Scottish National Party)

Will the Minister give way?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

Let me just comment on the other point and then I will give way very briefly.

The hon. Gentleman talked about a partial nationalisation of British Energy. That is another rather misleading phrase. We are playing our part, along with other stakeholders, in allowing British Energy to attempt a solvent restructuring. We have made a loan available to British Energy. There are currently no outstanding drawings on that loan. I hope that he will accept that what has happened with British Energy certainly cannot be described as partial nationalisation.

Mr Michael Weir (Spokesperson (Environment & Food; Health; Rural Affairs; Trade & Industry); Angus, Scottish National Party)

The Minister has accepted that the NDA would be able to run nuclear power stations prior to decommissioning, but there is no time scale in the Bill for decommissioning a station once it has been taken over by the NDA. In fact, the NDA could conceivably run nuclear power stations for a considerable period prior to decommissioning.

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

I assure the hon. Gentleman that the NDA's running of power stations will be limited, in the nuclear case, to the Magnox situation, with a defuelling and decommissioning programme being established. The role of the NDA is about decommissioning.

Mr Bill O'Brien (Normanton, Labour)

Does the Minister want to reply to the hon. Member for Wansbeck (Mr. Murphy)?

Mr Stephen Timms (Minister of State (e-Commerce & Competitiveness), Department of Trade and Industry; East Ham, Labour)

I am grateful to you for reminding me that there are a couple of other points that I ought to respond to, Mr. O'Brien.

The points made by my hon. Friend the Member for Waveney about carbon capture and the use of carbon for enhanced oil recovery, and those made my hon. Friend the Member for Wansbeck about clean coal technology are very important. We will publish a carbon abatement strategy later in the year. I have to say to my hon. Friend the Member for Waveney, who is very close to the industry, that I get the sense that the industry does not have not a great deal of enthusiasm for enhanced oil recovery. We will need to take that further and there will need to be some enthusiasm. Clean coal will feature in the carbon abatement strategy to be published later in the year. We are currently committing resources to the development of clean coal technology, and I agree with my hon. Friend the Member for Wansbeck that that technology has the potential to make an important contribution to our energy needs in the future.

Mr Laurence Robertson (Shadow Minister, Economic Affairs; Tewkesbury, Conservative)

We have had a long debate—two and a half hours—on this clause, but it has been worth while. I think 13 Members have taken part and a good many points have been raised.

On Amendment No. 41, I listened carefully to what the Minister said and, as I said in an intervention, I thank him for his sympathetic approach. My understanding is that he wants to consider our amendment and that discussions with the Opposition parties will take place shortly after the recess at the end of next week. Given that he recognised that the Government have responsibility for energy supplies and security—I think that his exact words were that that responsibility must rest with the Government—

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.