[Miss Anne Begg in the Chair] — UK Energy (Coal)

Motion made, and Question proposed, That the sitting be now adjourned.—(Barbara Keeley.)

9:30 am
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David Anderson (Blaydon, Labour)

It is a great privilege to be here this morning in front of you, Miss Begg, and some eminent colleagues. I declare a number of interests: I am the chair of the all-party coalfield communities group and of the clean coal coalition, and I am very proud to be a member of the Durham Colliery Mechanics Association.

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David Taylor (North West Leicestershire, Labour)

Does my hon. Friend acknowledge how highly predictable it is that not a single member of the Conservative party is present for the start of this debate? It just goes to show that on the 25th anniversary of the coal strike, the only miners that they are concerned about is our noble Friend—Lord Myners—the banking Minister.

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David Anderson (Blaydon, Labour)

I could not possibly comment, except to say that their absence is not unusual, because they have never shown any interest in coal, apart from when the issue was how to get rid of the coal industry and to destroy working-class organisations. If they do not attend today, it will show even more that they are not interested in what we are talking about. But this is not just about what has happened in the past; this is about the future for this country.

We live in very strange times. Everybody wants to be green and to have clean power, but, at the same time, everybody wants more power, more gadgets, fridges the size of wardrobes, air conditioning, ice for their drinks, and to drive 4x4s. There is huge demand, but, at the same time, resources are dwindling. Newcastle university supplied me with figures showing that production of oil and gas in the North sea reached its peak in about 1999. Global production is projected to peak between 2017 and 2021, and BP's own estimate is that oil will have depleted by 2050 and gas by 2070.

So, we turn to nuclear. But building and decommissioning nuclear plants is very carbon-intensive, and even if we get everything right—including transportation, construction and decommissioning—about nuclear, and that is a big if, one thing that strikes me is that figures, again supplied by Newcastle university, show that there are estimated to be only 50 years' worth of viable uranium reserves in stable countries—in Canada and Australia, in particular. Beyond that, we would damage other parts of the environment to get at uranium.

I am a big supporter of renewables and want a massive move towards such energy in this country, because that is the way to engage our young people in engineering and in the whole move forward. But, sadly, no matter what we put in place, be it wave power, artificial islands, turbines or bore holes, they will all be good and contribute but they will not contribute enough to fill the energy gap. On wind power, in particular, the coldest days in this country, when we need more power than ever, are the days when the wind does not blow, so what good is that to sustaining base load electricity production? The world is rising to the challenge, however. Jeep, in America, is developing electric Jeeps—big 4x4s—that can do about 90mph and 400 miles on eight gallons of petrol, so we know that we are in a different world from that we have been in for most of our lives. Hyundai is developing people carriers, and this country is developing electric Range Rovers, which could cut running costs by a projected 80 per cent.

The truth is, however, that we cannot fill the energy gap in this country unless we use coal. In my constituency, we are promoting the development of new types of technology. We are going into something that is talked about time and again in these debates—carbon capture and storage. One North East, the regional development agency, has given me a brief for this morning's debate, and Members should listen to what we are putting forward in our area: a carbon grid and storage proposal on Teesside; £1.5 million of planned investment by Progressive Energy and Centrica in a 1 GW coal-fired gas station at Eston in the Tees valley; £2 billion of planned investment by RWE npower in a 2.4 GW power station on the site of the former Blyth power station in Northumberland; and the potential use of Rio Tinto Alcan's plant at Lynemouth in Northumberland for retrofit solutions to get rid of stored carbon. That plant was fed for years by Lynemouth and Ellington collieries, which have both closed in the past two years as a direct result of the failure by the people who run those companies to invest properly and to keep them open at a time when we need them.

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Bob Spink (Castle Point, Independent)

I congratulate the hon. Gentleman on bringing a most important subject to the attention of the House. He mentioned carbon capture and storage but moved on very quickly, although I am sure that he will return to the subject. Does he share my slight disappointment that although we could lead the world in that technology, our demonstration plant will not come on line until 2014 or, given how the Government have invested in it, become commercially viable until 2020? That is just too long, and I want it brought forward so that we can use the coal that we have in this country.

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David Anderson (Blaydon, Labour)

I will return to that issue, because everybody is talking about it. But that is all we appear to do—talk about it. One thing that I will put to the Minister is that the time for talking is finished.

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William Cash (Stone, Conservative)

The hon. Gentleman may deal with this issue later, but does he agree that we must concentrate on—according to estimates that I have seen—the 300 years' worth of coal that we have in this country? If carbon capture and storage were put forward seriously, it would safeguard this country, in terms of foreign security, let alone energy security, from the potentially disastrous consequences of depending on other countries for our energy supply.

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David Anderson (Blaydon, Labour)

I thank the hon. Gentleman for that intervention. That is one key issue to which I shall return. The change that I have seen in my short time as a Member relates to what happened last summer, when petrol prices got out of control across the world. It made people in this country, particularly Ministers, finally realise that what some of us had been saying for many years about coal was true. The Americans have also realised it, and they are going at it in a big way.

I come from an area with one of the world's oldest coalfields, yet it is estimated that we have tapped only 25 per cent. of the north-east's reserves, and that is why the north-east branch of the National Union of Mineworkers has asked the Government to support it in conducting feasibility studies of two drifts near Sunderland and near Amble in Northumberland. They could enable access to 400 million tonnes of proven reserves and create 7,000 jobs. The branch is working alongside One North East and north-east universities such as Durham and Newcastle and saying to us that if we are serious, the reserves are there and we need to go and get them, because they will give us long-term protection.

We need coal. It is a con that we do not burn coal in this country. We talked earlier, before Opposition colleagues arrived, about what happened 25 years ago when we stopped using British coal, but the truth is that we still burn half as much coal—65 million tonnes—as we did 20 years ago. During the past 12 years, we have imported 372 million tonnes of coal. In 1996, coal imports represented only about 26 per cent. of the total, but, by last year, they had gone up to 72 per cent.—a huge leap.

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Jim Devine (Livingston, Labour)

Does my hon. Friend know from which countries we import that coal, and how stable they are?

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David Anderson (Blaydon, Labour)

I do, and I shall come on to that. My hon. Friend will not be surprised to know that they are not very stable.

In 2007, we imported 43 million tonnes of coal, of which 22 million, more than half, came from Russia. Responding to a question that I raised, the Minister with responsibility for coal said that the value of those imports was £2.072 billion. So, we have exported more than £2 billion of our money to bring in foreign coal. The cost to our balance of payments has been a massive £2 billion, and our dependence on Russian coal is both startling and frightening. This whole debate is about how green we are, and it is not very green to transport millions of tonnes of coal halfway around the world.

The real scandal and even greater cost, however, is the human cost, because that coal is covered in blood. More than 5,000 deaths a year occur in the coal mines of China: four deaths for every million tonnes of coal that are mined. That is bad. But it is even worse in Ukraine, where the death rate is seven deaths per million tonnes. To put those figures into perspective, the last time the death rates in the UK industry were as high as those in China was in the 1920s, and we have to go back to the 1880s to find rates as high as those in Ukraine. Hon. Members should consider what life was like in the 1880s in the places that they represent, compared with now. That is what we are talking about. That is whywe are subsidising coal. We have done away withBritish Coal—the cleanest, safest coal industry in the world—and we are relying on cheap imports based on death and dying. There is blood on the coal; there is no doubt about it. We are doing this for cost.

I should like hon. Members to think about something tonight when they go home. On walking into their houses or flats, putting the light on, turning the television on and turning the heating up, and even putting the electric blanket on if it is cold, they should just think that tonight 20 Chinese miners will not be going home—not tonight; not ever again. That is the cost of importing coal into this country. There will be more deaths than that in Ukraine.

About 10 years ago there was a potential disaster at a mine called Quecreek in Somerset county, Pennsylvania. Guys were trapped underground in an air pocket and, thankfully, thanks to bore holes being drilled, they were rescued. But for three days the whole world held its breath. There were nine men involved. Twice that many will die in China today, on average.

If we were talking about importing leather footballs made by kids, perfumes that had been tested on animals or cheap T-shirts from sweatshops, we would say, "No, this is disgraceful." But it is coal, so nobody cares. Well, somebody cares. I was approached by one of the boiler manufacturers this morning by e-mail, saying, "Do you think it's wise to mention the true cost of importing coal?" I think it is wise; it is a moral question for our Government. We have to answer the question: "Are we happy to carry on burning coal that has been produced in that way?" It does not have to be like that. This country was like that. In the 1930s, a miner was killed every six hours in this country, but at the height of the mining industry in the 1970s and 80s, the numbers were down almost into single figures. Yes, mining will always be a dangerous occupation and people realise that, but with proper investment and technology it can be made much safer in every sense. That is the reality.

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David Taylor (North West Leicestershire, Labour)

Does my hon. Friend recognise that the international markets are deaf to the cries of Chinese widows and Ukrainian orphans? All they look at is the imported cost per tonne, which has varied between £40, approximately, and £150 a tonne in recent years. UK coal mines need a price of about £50 a tonne even to give a moderate profit in respect of operations. How do we bridge that gap?

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David Anderson (Blaydon, Labour)

Should we try to bridge that gap? Should we be dictated to by companies that say that life is cheap? The last time I was in this Chamber, a number of colleagues were talking about the scandal of asbestos. This is exactly the same argument. We could have carried on using asbestos and we could have accepted that people kept getting killed. But we should not do that. We are a civilised nation and we should not be taking coal and getting it cheap from people who are exploiting others and letting them die. It is out of order.

People might say, "If we do not use coal from Russia and China, where are we going to get it from? We might carry on getting it from Colombia, where it is produced with child labour." However, we could get it from this country. I want to read directly from a note that was prepared for my hon. Friend Mr. Hamilton who was going to address a miners' conference last year. He had asked for a brief on nuclear potential, which I shall read word for word:

"In 2006, the Coal Authority estimated that there were more than 600 million tonnes of coal in established and accessible UK reserves. Importantly, in British Coal's 1992 annual report, it estimated that 190 billion tonnes of coal lay underneath the UK, of which 45 billion tonnes could be extracted using the then known techniques. Of course, a lot of progress has been made since. British Coal estimated that the pits then open—before the 1992 closures—had 1.1 billion tonnes in classified reserves that could be economically extracted. To put those estimates in context, total UK coal output between 1853 and 2006 was only 22.7 billion tonnes. That gives us some sense of what is left now—even after the whole industrial revolution and two world wars. Some 22.7 billion tonnes has been used since 1853, and the estimate is that 190 billion tonnes of coal lies underneath the UK".

That is not Arthur Scargill or the National Union of Mineworkers speaking, but the Department responsible for the coal industry in this country.

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William Cash (Stone, Conservative)

I hope the hon. Gentleman will not mind my mentioning the fact that that is precisely why, in 1992, I was one of only four Conservative Members who voted against the pit closures. That represents the problem that we now have to face in terms of our ability to use that coal to secure our own country's future.

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David Anderson (Blaydon, Labour)

I accept that the hon. Gentleman took the correct decision at that time. Sadly, overall we did not. Everybody who was involved at the time accepted the fact that we were closing mines that were potentially serious competitors, going forward. Those mines should have been protected.

It has been estimated that in the last 40 years in the north-east alone more than 500 million tonnes of coal has been sterilised by premature closures. Nationally, that figure is well in excess of 1 billion tonnes. That figure is for coal at less than 800 m deep, which is easily worked with today's technology.

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Hywel Francis (Aberavon, Labour)

I congratulate my hon. Friend on securing this excellent Adjournment debate. I am sure that he is aware of the Welsh Affairs Committee report on energy, in which there is a strong recommendation that endorses all the points that he makes, particularly in relation to carbon capture technology. The report emphasises that to exploit this coal we need to invest not only in carbon capture technology, but in skills, including higher-level skills, and mining degrees. Has he undertaken any survey of what is available in terms of skills training across the UK and would he endorse my view that it is underdeveloped and needs to be focused on, particularly by the UK Government and the devolved Administrations?

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David Anderson (Blaydon, Labour)

That is a key question. The average age of miners in this country is 49 and the skills will be lost when they go. We have raised that issue with the Secretary of State and he is clear that, if we are going to have a mining industry, we have to look at the skills level. The truth is that the National Coal Board had some of the best training facilities anywhere in the world, which led to our having the safest, most technologically advanced coal industry in the world, as I said earlier. That is a major issue, whatever we choose to do.

We cannot close the energy gap without coal, wherever we get it from, and we must burn coal more cleanly, which means investing in carbon capture and storage. There is, as was mentioned earlier, a proposed demonstration project out for tender. But everyone in the industry who I speak to is saying, "When's it going to happen and will it be enough? Is it going to be big enough." One demonstration project will not show the way. We must get on as quickly as possible with demonstration projects. We should also give further support, particularly, as I have mentioned, to some of the initiatives in the north-east and certainly the positive one advanced by Yorkshire Forward, linking with Hatfield colliery in the Secretary of State's constituency, which will allow the infrastructure that is already in place to bring oil and gas out of the North sea to be used to take carbon back out and store it under the North sea. We can lead the world on this if we get our act together; if we do not, we will be left behind.

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Simon Hughes (North Southwark and Bermondsey, Liberal Democrat)

I fully endorse what the hon. Gentleman says. A delegation from California that leads on these issues in the United States is in the UK and Brussels this week. I asked the delegates expressly whether the technology is available to develop the carbon capture and storage that they need and we need. They were clear that it is not about a lack of technology, but is a question of will: being willing to have the finance in the right place and having the priorities right.

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David Anderson (Blaydon, Labour)

The hon. Gentleman is correct. Everybody accepts that the technology will work. However, it has not been tested on the scale that we need. It all comes back to a discussion that we had before about where the investment is coming from. A private stakeholder in BP would probably say, "I don't want you investing in clean coal and carbon capture. I want you to go out and exploit some more Chinese miners or get some cheap gas from somewhere else in the world and we will drag it round the world in tankers." But as serious, legitimate people who are worried about the impact on our country in terms of stability, security, jobs and climate, we must say, "Sorry, but these things do not add up." We must say to the investors that we as a Government will play our part, and we will not ask but insist that they do what is necessary, or we will not work with them.

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William Cash (Stone, Conservative)

Proposals for wind turbines in my constituency are complete rubbish. Vast subsidies are available, but Professor Dieter Helm and even Sir David King, chief scientific adviser to the former Prime Minister, say that wind turbines do not work well onshore. Money is being pumped into those ridiculous proposals, which will achieve nothing, when we could be putting it into the extremely important area that the hon. Gentleman is discussing in his very good speech.

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David Anderson (Blaydon, Labour)

I do not accept that wind turbines will do no good. I believe that they will not do as much good as some people preach. The huge carbon footprint involved in building and maintaining them is ignored, and that will probably be even worse with offshore turbines, but that does not mean that we should turn our back on them—

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David Anderson (Blaydon, Labour)

Neither onshore nor offshore wind turbines are the panacea that some people claim. My clear argument is that there is a key role for coal, but one process should not be set against another; they should all be used together.

We should exploit our reserves, including those in the vale of Belvoir, Margam in south Wales, south-west Scotland, and other proven areas throughout the country. I mentioned the reserves off the North sea coast and—I am sure that my hon. Friend Paddy Tipping will pick this up—the Minister is aware of the trade unions' request to help them to move strategically from Welbeck colliery to Harworth colliery to access 40 million tonnes of coal, and to keep hundreds of men in work. My understanding is that the current position of the Department of Energy and Climate Change is that it cannot get involved because of European legislation. I am sorry, but we must get involved and we must provide support.

9:52 am
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Willie Rennie (Dunfermline and West Fife, Liberal Democrat)

Coal has been a key part of Fife life for generations, and never more king than in the kingdom of Fife. The connection between coalfields and communities in Fife has been broken in recent years. The last coal mine at Longannet closed in 2002, when there was a massive influx of commuters from Edinburgh, which changed the nature of the Fife community and the relationship with coalfields. That has had a significant impact on the coalfields' viability and on the livelihoods of miners. I shall return to some of the issues involved.

There are few signs in Fife of its mining heritage. From the end of my road, I can see the Mary pit winding gear; there is a mining museum at Kinglassie; and at High Valleyfield there is a statue of mothers waiting for miners to return from the 1939 pit disaster. But those are the only connections to be seen in Fife, and that reflects the industry's decline, which is one barrier that we must overcome if we are again to make coal central to the Fife economy. There have been applications for open-cast mines in recent years, which have faced vociferous opposition from people who have moved into the area. Unless we can re-establish that connection, we will not be able to exploit the resources under our feet.

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David Taylor (North West Leicestershire, Labour)

Open-cast mining seems to be a separate issue north and south of the border. In England, particularly in the east midlands and north-west Leicestershire, open-casting is seen as the most environmentally despoiling and economically destructive of all mineral activities. The problem with the expansion of coal-fired generation is that the UK Coals of this world whisper into Ministers' ears and—hey presto!—controversial applications are nodded through with weak environmental constraints imposed on them. Is that not the case in Scotland? It is not just middle-class people who have moved into an area who object; it is people who worked in pits that closed 10 or 15 years ago.

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Willie Rennie (Dunfermline and West Fife, Liberal Democrat)

I think that that is true. It is not just middle-class people who move into such communities who object. People who have lived there for generations also object to open-cast mining. The companies have a huge responsibility to up their standards and to reduce the environmental impact on the communities in which they exploit the coal. If open-cast mining is to continue, they must address those issues. An application for an open-cast mine near Saline was approved by Fife council, but there is huge opposition from the people who live within 500 m of the site. The communities affected feel that the proposal has been foisted on them, so they are resentful. Down the road in Oakley, which is a former mining community, there is less resistance, because, I suspect, it has lived with coal for many years and does not see the negative impacts in the same way. The difference between the two communities is interesting. One is more tolerant of open-cast, but some people object because of the extra lorry movements and the dust and noise. A difference is emerging.

The mining companies must improve their standards substantially if we are to have more open-cast mining, but I want the coal beneath the ground in Fife to be exploited to the full, so that we can fill the gap between now and when renewables are up to speed, although mining could continue after that. We must ensure that we develop coal sustainably, which is why I am keen to see the development of carbon capture and storage technology. I endorse the comments of Mr. Anderson about the urgent need to implement the technology. The technology is supposed to be in place by 2014 and economically viable by 2020, but that is too long. There have already been delays, and the Minister has indicated that there will be an announcement not in 2009, but perhaps in 2010. Will that slip further away, and when will we get an announcement? Will the Minister tell us exactly when it will happen?

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Bob Spink (Castle Point, Independent)

The hon. Gentleman, like me, will have been deeply moved by the compelling speech made by Mr. Anderson, who referred extensively to carbon capture and storage. I want to reinforce the point that the technology exists. Almost four years ago, the then Select Committee on Science and Technology produced a report with evidence showing that political will and investment were required from the Government to get it moving. It is not something that we are discovering today, because the Select Committee said that nearly four years ago.

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Willie Rennie (Dunfermline and West Fife, Liberal Democrat)

That is the case, and I am puzzled why progress has taken so long. There are schemes in other European countries, but I am not sure how fast they are developing. The year 2014 is being talked about for implementation, but I do not know whether that is slipping or whether there are financial or regulatory hold-ups. Why has it taken so long, and why will an announcement be delayed until 2010?

I am keen, for local reasons, for the technology to be developed, because Longannet power station on the west tip of Fife is the second-biggest coal-fired power station in the UK, and could be the winner of the competition. It has easy access to the North sea and to the storage pipework for when oil and gas have been extracted. It also has a community that supports its power station and is keen for it to continue. I am keen for Longannet to win the competition and to know when a decision will be made.

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Katy Clark (North Ayrshire and Arran, Labour)

The hon. Gentleman has experience of coal-powered stations from his constituency interests, and I support everything that he has said about the case for coal. My experience from speaking to energy companies looking to build new coal-powered stations is that they believe that they will be reliant on foreign coal, because of its low sulphur content. Will the hon. Gentleman comment on that and on how we can ensure that the British coal industry has a strong future?

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Willie Rennie (Dunfermline and West Fife, Liberal Democrat)

I shall come to locational charging in a second. We talked earlier about importing coal from Russia and China and the impact that that has on the people who exploit the coal in those countries. We do not have locational charging for the coal that comes from Russia or China. Why do we not have an extra charge for the importation of that coal from other countries, so that we can get some balance in the system and not compete on the lowest cost throughout the world? Ofgem does not have responsibility worldwide, so it will not implement such a scheme, but we need to consider the effect that importing cheap coal from other countries has on the industry in this country. That is why I would like to see some recognition of the cost of importing that coal—the transportation costs from other countries—so that we are not penalising mines in this country and over-supporting mines in other countries. We have hundreds of years of coal under our feet, and we need to consider exactly how we will exploit it sustainably for the future.

I am deeply concerned about locational charging in the United Kingdom. The crude formula exaggerates the impact of the costs of transmission of energy up and down the country. I am not necessarily against some form of transmission charge or locational charge, because we need to reflect the fact that energy is lost as it is transported down the line, but to have such an extreme formula, which penalises in an extreme form energy plants and emerging renewable power resources in Scotland, is unfortunate. It will restrict renewable energy resources and potentially hamper investment in new technology at Longannet and other power stations in Scotland.

I would like Ofgem to change the formula to reflect the fact that those power stations already exist and that we can invest in new technologies that have greater potential to allow the United Kingdom to be energy secure. If we continue the way we are going, we shall destroy the economic case for plants such as Longannet, and we will not have the supplies that we need in 10 or 15 years' time, when we will be short of energy supplies before renewables are up and running at full speed and before we have been able to exploit new technology. I would like Ofgem to reflect on the exaggerated effect that the formula has on the plants that already exist in Scotland.

The figure for Longannet is staggering. It costs an additional £30 million to run Longannet power station because it is in Fife in Scotland as compared with Cornwall. It would be better to put it on a barge and ship it all the way down to Cornwall. It would be cheaper to run it on that basis than to continue to operate on the current basis—a super-barge would be needed to get it down there. It shows how farcical the situation is that a plant that already exists and that is the second-biggest coal-fired power station in the United Kingdom is penalised in such a way. It does not reflect the fact that the power station exists—it cannot just be knocked down and put somewhere else. I would like Ofgem to reflect on that and to have a much more sensible, balanced approach that does not penalise either renewables or plants such as Longannet in Scotland.

Let me return to carbon capture. Chris Davies, an MEP in the European Parliament, deserves credit for the work that he has done to secure, through the emissions trading scheme, about €9 billion-worth of funding for new carbon capture technology, which will boost the future of coal in the United Kingdom. That funding will ensure that we invest significant sums in developing the technology, which could be developed into something much more efficient at a later stage. I am pleased that significant sums will be invested in carbon capture technology by way of the emissions trading scheme through the European Parliament and the work of Chris Davies.

There is a farcical situation at Longannet, because the Scottish Environment Protection Agency does not allow the power station to burn the coal that remains within the ash. There is a company called ScotAsh that takes the ash from the power station and turns it into grouts and cements. The ash has coal in it, and the coal can be extracted, but SEPA does not allow the power station to burn it, because it is regarded as waste. That is a complete farce—a complete misreading of the regulations. I hope that SEPA reflects on that and allows Longannet and other power stations in Scotland to burn that coal, which is being wasted. Tonnes of coal are sitting around and cannot be exploited. They are currently treated as waste, which is a situation that should be changed. If we are to secure coal for the future, we need to ensure that we overcome those barriers. If we do not, we will not be able to fill the energy gap that is coming down the track very fast.

10:05 am
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Paddy Tipping (Sherwood, Labour)

I congratulate my hon. Friend Mr. Anderson on securing the debate, and I want to reinforce some of the points that he made. His central theme is that coal—particularly indigenous coal—is part of a balanced UK energy policy, and he is right to stress the importance of coal.

The only plant being built at the moment, save for renewables, is a new gas plant. I am concerned about the fact that the dash for gas continues. The Department's own estimate suggests that a worst-case scenario is that by 2020, 80 per cent. of our electricity could be generated from gas, 90 per cent. of which could be imported from places such as Algeria and Russia. There are real issues about security of supply.

My hon. Friend also talked about the health and safety record in the coal industry and he is right to talk about blood on imported coal. I just add one caveat: after years in which there were no fatalities in the mining industry in the United Kingdom, there have now been several. That is a stark reminder of the fact that men still give their health and their lives to keep us warm.

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David Anderson (Blaydon, Labour)

May I back up what my good and hon. Friend has just said? Clearly, there are fatalities in the mining industry. I would never pretend that mining will ever be a safe job. The truth is, though, that the technologies that we use in this country are more advanced than those used in other countries. Even the US technologies were decades behind Britain's, but the technologies in China and Russia are centuries behind.

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Paddy Tipping (Sherwood, Labour)

I am sure that that is correct, but I just add the caveat to say that things have gone backwards rather than forwards.

Two challenges face the coal industry: the economy and the environment. I shall talk about both briefly. British miners are the most efficient in Europe. We ought to be backing them, not continuing to lay them off. There are immediate prospects for the UK deep coal industry. My hon. and learned Friend the Minister knows about the discussions on Harworth, where UK Coal is sounding new ground and looking for new reserves. I think that it will be successful. The difficulties are in funding that new development.

The company and the trade unions tell me that the cost of the development will be about £200 million. The Minister and his officials are well aware of that. Given the economic situation, the prospect of borrowing £200 million from the banks is remote, but there are other opportunities.

The European Investment Bank has been talked about. There have been initial discussions with the EIB, but they are not going well. The more support the Government can give UK Coal in its discussions with Europe, the better. Europe is not an obstacle in this; there have been subsidies from Europe in the past. Of course, the EIB lends on commercial terms. The more the Government can do to help, the better, but at the end of the day there may be difficulties with money from the EIB. That means that there needs to be a discussion—I know that there have been preliminary talks—about the notion of the Government acting as a guarantor in some way. We are serious about the fact that indigenous coal can help us with security of supply.

There need to be meaningful discussions with UK Coal about the prospect of underwriting. We are doing that in other industries, and the coal industry has a long tradition in that respect; indeed, the Minister is well aware of that because he represents a mining community and has been in direct discussions with UK Coal and the trade unions. We should at least consider such a proposal, and do so fairly quickly, because as my hon. Friend the Member for Blaydon said, the prospects at Welbeck are limited. Ideally, we should transfer the men who work there to the new Harworth prospects, because that would make sense.

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David Taylor (North West Leicestershire, Labour)

My hon. Friend has mentioned that the Minister represents a mining area, and I believe that Daw Mill is in his constituency. The 600 men there produce well over 3 million tonnes of coal a year, so the pit is highly productive. Not all that far away, in north-east Leicestershire, there remain at least 800 million tonnes of coal, in what my hon. Friend Mr. Anderson described as the vale of Belvoir coalfield. It is possible to provide the capital support that my hon. Friend Paddy Tipping mentioned and to finish up with more secure, low-cost and high-quality coal from the coalfield that I mentioned. The Government could do more to support the growth of new mines in areas such as north-east Leicestershire.

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Paddy Tipping (Sherwood, Labour)

My hon. Friend has been a long-term advocate of Asfordby and opposed its closure vigorously. The point is simple: we can have a demonstration and reopen Harworth colliery, which will give a signal that it is possible to pursue other, more difficult prospects.

The second issue that I want briefly to discuss, which has been the subject of much comment, is carbon capture and storage. I am told, although there are different estimates, that China opens one new coal-fired power station every week. It does not matter where carbon is emitted, however, because it will have consequences for us all. As has been said, it will be in all our interests if we can develop cleaner coal technologies, particularly carbon capture and storage. Again, the Government have a good record on that, although it is a slow record and one on which we need to improve.

The competition to develop a new prospect—a demonstration plant—is way behind schedule, but I am more concerned about where the funding for such developments is, because I have looked closely at the Department's new budget and I cannot identify any such money in it. That causes real concern in the industry. Willie Rennie talked about the money available in the European Union, which might fund 10 to 12 projects, and the Government have just looked at the implications for carbon capture and storage readiness for new plants in the context of Kingsnorth.

I know that the Minister is aware of what I am about to say, and he is in discussions with colleagues about it, but I simply say to him that we need to introduce a new package to take coal into the future. That would include an announcement on the demonstration plant and an attempt to get money from Europe. At the end of the day, we want not one demonstration plant, but three or four—that should be our aim. What is more, we should be looking at pre-combustion as well as post-combustion. Both have a role to play.

I hope that the Government will introduce such a package shortly and make an announcement about Kingsnorth. If I worked for E.ON, the company that is developing Kingsnorth, I would have real concerns. Its application for consent has been stuck in the Department for many months. I understand the reasons why, but if we want to give a signal on the future of coal, we should make an announcement as part of the package that I described.

There is one other issue that we need to consider. The private sector will not be able to develop carbon capture and storage infrastructure by itself. My hon. Friend the Member for Blaydon talked about the Yorkshire Forward initiative. The initiative at Kingsnorth has the potential to encourage other companies to join the project. Ultimately, however, matters cannot be left simply to the private sector.

In an age when the Government have shown themselves to be more interventionist—particularly with the banks—there are opportunities for intervention. We can help Harworth immediately and the UK coal industry in the longer term. We can introduce carbon capture and storage in the UK, as we all want, and that will have the potential to be spread internationally.

Several hon. Members:

rose—

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Anne Begg (Aberdeen South, Labour)

Order. I intend to call the Front-Bench spokespeople at 10.30. Two Members are seeking to catch my eye, and we have 15 minutes. I hope that that is a heavy enough hint.

10:15 am
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William Cash (Stone, Conservative)

This debate is incredibly important, and I pay tribute to Labour Members for how they have handled the issue. For many years, the issue of coal has remained under the surface. It has been there since I first came into the House, almost 25 years ago to the month. In my maiden speech, with the coal strike raging around the place, I made my point about the coal issue, which was controversial in a maiden speech.

Shortly after that, I went to a massive NUM strike meeting in Hanley park in Stoke-on-Trent. I walked in, jumped on the platform, took the microphone from Arthur Scargill and told him to lay off my miners. There were about 7,000 people in the park, and I thought that it was about time that he was given a bit of his own treatment. The reality was that he and others were intimidating the Union of Democratic Mineworkers in the Staffordshire pits, and that needed to be corrected.

Subsequently, however, I voted against my Government on the closure of the pits, under Michael—now Lord—Heseltine, with whom I had many meetings and many serious discussions and rows. It seemed to me that we were doing something that would have long-term consequences and that the whole policy was wrong. As a member of the European Scrutiny Committee, I also noticed that Germany was giving massive subsidies of the order of £4 billion a year, while our coal industry was suffering. However, the UK had these amazing resources, which it should have been developing.

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David Anderson (Blaydon, Labour)

I know that a lot of north-east miners went to Stoke-on-Trent. One thing that I did not touch on—I wanted to avoid discussing issues from 25 years ago and to look forward—is that the deal at the end of the strike involved the Government setting up a review body, but they specifically denied the people carrying out the reviews the right to look at the social consequences of closure. As a result, places such as Stoke-on-Trent, where I and others who have spoken come from, have suffered massively at a social level.

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William Cash (Stone, Conservative)

One reason why I am still vice-chairman of the all-party group on coalfield communities is that I really believe in it. I do not want to get too nostalgic, but when I was a young boy in Sheffield, I used to go to Woodhouse on the outskirts of the city to play cricket at Welbeck. I played cricket and rugger with miners—that is the environment I grew up in. I therefore have a strong sense not only of the social side of things, which the hon. Gentleman correctly mentioned, but of the economic consequences.

Everything that has been said about the reserves and carbon capture is on the record, and I do not need to repeat it. The Minister knows me quite well and he will forgive me for using quite strong language, but I condemn the Government for not really having got their act together on CCS. We have heard about Kingsnorth, and perhaps I can slightly modify what has been said and put it in an encouraging way by saying that we should really start pitching in to ensure that we move things forward.

Why should this be done by companies from abroad? We used to be at the forefront of coal technology, and we still have people with the ability to think about the matter and to do the research. The company E.ON is almost a case in point. It is alarming that we should effectively be in the hands of other countries when it comes to development. We ought to be developing our indigenous resources. We have the brains and the know-how, and we have the tradition. We should be doing it ourselves.

As my hon. Friend Charles Hendry knows, I have grave concerns about our being an integral part of the European Union energy policy. I have said why I was so much against the fact that the Germans had those unbelievable subsidies when we had none. It is all part of a package. Will the House please understand that, and that we are not being given anything, and never have been given anything, under the arrangements of the European Coal and Steel Community or subsequently, despite what was said by one MEP about the amount of money being put back through interventions? The fact is that many of those policies should be developed to ensure our indigenous security policy.

I mentioned earlier, and I repeat the fact, that this is also a foreign policy question. If we consider Gazprom and Mr. Schröder, and how these things are organised—we do not have time to go into all that today—we can see that it is a big landscape. Energy security lies at the heart of national security. We therefore need a proper balance. I do not mean that we should not co-operate with other countries in Europe; I am often misunderstood on that point. Co-operation is one thing, but to have a common energy policy through European government is another story. I must ask people to consider the fact that, for new coal technology and energy security, we need our own policy.

I and my party voted against the Lisbon treaty, which contains the European energy policy. I do not ask my hon. Friend to go into that today, but for heaven's sake, my party should ensure that we look after ourselves. We should co-operate with other countries, and trade with them, but we should not allow the entire energy system ultimately to fall into the hands of subsidy and over-dependence on other countries—and a system of rule making that is governed by a Court of Justice, against which there is no effective appeal.

I feel strongly that this has been a first-class debate and I pay tribute to Mr. Anderson. I was delighted to hear that he came from Stoke-on-Trent; I did not know that.

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David Anderson (Blaydon, Labour)

I was talking to the same men as the hon. Gentleman.

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William Cash (Stone, Conservative)

The hon. Gentleman may have heard a few of the stories about my past activities. The reality is that, in Madeley in my constituency, people were being intimidated. I did not come here only to talk about what happened 25 years ago, but it meant a lot to me then and it still means a great deal now.

10:23 am
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Don Touhig (Islwyn, Labour)

I echo the remarks made today in congratulating my hon. Friend Mr. Anderson on securing this debate.

The volatility of global energy markets has once again pushed the case for coal to the forefront. Twenty- five years ago, we could not have imagined that such a thing would ever occur. Although coal is an abundant source of energy—it is the fuel of choice in newly industrialised countries such as China and India, but without the environmental safeguards that we would expect—in Britain it is has been written off by all sides. Indeed, for many people, even those in my constituency of Islwyn in south Wales, which is a former mining area, people think that the debate belongs to a bygone era. That attitude does not reconcile itself with the fact that clean coal technology can give us a great new opportunity for using this wonderful source of energy.

In recent years, the volatility in global energy markets has made the case for clean coal technology even more powerful. That is why I believe that the pits in south Wales that closed many years ago may still have a vital role to play in providing Britain's future energy needs. Aneurin Bevan once said:

"This island is made mainly of coal and surrounded by fish. Only an organising genius could produce a shortage of coal and fish at the same time."

Even now those words still have relevance. It is complete madness to import billions of tonnes of coal from other countries, when we are sitting on an island of coal. It is those coal reserves that we should be using to meet our future energy needs. It is common sense that we should look to ourselves to help solve some of our energy needs. However, as my mother used to say when I was growing up, "Son, in life you will find that sense is not that common."

Clean coal technology represents a massive opportunity not only to revive the coal industry and guarantee a market for coal, but to make us less reliant on energy from other countries—a point well made by Mr. Cash. I welcome the fact that the Department for Innovation, Universities and Skills supports the Technology Strategy Board, which has done some research on the matter. The board has identified carbon abatement technologies as being a priority. It is supporting 11 projects to the value of more than £13 million. However, that is the tip of the iceberg. More needs to done, and we need to take a long-term approach to using coal in our energy policy. By a long-term approach, I do not mean a five-year strategy, but one of 20 or 30 years, if we are to recoup the benefits of clean coal technology.

Our long-term aim surely must be to attract long-term investment for the production of coal, through clean coal technology. Such a commitment would give confidence to those who are developing the technologies through the knowledge that the Government support them. My hon. Friend Paddy Tipping referred to support from the European Union, which is important. I once borrowed £37 million from the European Investment Bank[Interruption.] I paid it back; I do not owe it a penny. The EU is a source of support that we ought to exploit in such circumstances. We have the opportunity to become a world leader in the new technology, but for that to happen we will need investment. I am sure that we are all keen to hear the Minister's response to the debate, because such a thing will not happen without investment and Government support; it is as simple as that.

At the end of the day, there will be all sorts of wonderful arguments for the environment and for clean coal technology, but without the political will, it simply cannot happen. If we invest in that way, we will have the chance to revitalise the coal industry, providing jobs and helping to improve the quality of our environment. I hope that my hon. and learned Friend the Minister will take the opportunity to give an assurance that the Government are with us on this matter.

When we reflect on what has happened during the past 25 years, with the commemorations of the end of the strike and so on, it would be a tragedy and a betrayal of those men and those communities that fought so hard for that industry and to keep the jobs that would keep their communities going—many were destroyed when the pits went—if we failed now to say, "Here is an opportunity to produce coal in a clean and safe way for our environment." It is something that we owe; it is also something that we can bequeath to a new generation. At the end of the day, it is a political decision, and I look to our Government—a Labour Government—to answer that important call.

10:28 am
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Simon Hughes (North Southwark and Bermondsey, Liberal Democrat)

I sincerely congratulate Mr. Anderson on a timely debate. I hope that the Minister has paid heed, not least so that he can pass the message on to his colleague the Chancellor; as we come to the Budget, the Government could take positive and immediate action to respond to the debate.

I was born at about the same time as the hon. Member for Blaydon. Then, more than 85 per cent. of the country's energy needs were met by the coal industry. The figure is now below 20 per cent. Like Mr. Cash, I am not being wise after the event. I was a Member of the House when the Tory Government—Mr. Heseltine with the then Prime Minister's support—were seeking hugely to reduce the size of the coal industry. My colleagues and I opposed that strategy, because we believed that it was short-sighted and inappropriate.

In those days, we were not thinking so much of CO2 emissions or environmental considerations. I was brought up in south Wales, and a large part of my younger days was spent there, so I also had clear emotional links with the coal communities and understood the importance of coal to their jobs. As my hon. Friend Willie Rennie has argued, the coal industry has never been unwilling to adapt, respond or make itself appropriate to the modern generation. As we debate the future of the coal industry, we should debate the energy industry as a whole and understand the interrelationship between the two.

Last month, HSBC produced a very telling report on the extent to which many Governments and the European Union have taken the opportunity provided by the current global economic difficulties to use economic stimulus packages to advance new green technologies—the two obvious options being renewables and carbon capture and storage. The report states that the only places to have taken the opportunity to push renewables are South Korea, France, the European Union as a whole and the United States. The only ones to have done the same for carbon capture and storage are Canada, the United States and the European Union. The opportunity has not been taken to encourage further investment in renewables and the development of carbon capture and storage, both of which are hugely important, although I probably take a different view from the hon. Member for Stone on renewables. I hope that next month's Budget will go down both those roads and that Britain's fiscal stimulus strategy will commit to a reinvestment in the kitty for science and technology.

I intervened on the hon. Member for Blaydon to point out that yesterday, when the very high-powered delegation from California visited the UK, it became clear that this is not a question of the inability of the technology to deliver. I think that the delegation met Ministers, or will do so later this week—it is in Brussels today and tomorrow. Of course, the process must be a gradual one, and we need demonstration plants to test the technologies—there are various options. However, plenty of evidence on this subject is available already, including, not least, a very good publication written last year by the Green Alliance, with a forward by Margaret Beckett, entitled, "Last Chance for Coal: Making Carbon Capture and Storage a Reality".

My party, at its formal, deliberative, decision-making conferences, has made it clear that we envisage a future role for coal. However, we take a pretty hard-line view on the necessity of carbon capture and storage, and the Minister will know that we do not think that the Government should permit a new generation of coal-fired power stations without that new technology. We welcome the fact, therefore, that the Government now appear to understand that need and that the Secretary of State for Energy and Climate Change has deferred the decision on the Kingsnorth application to ensure that E.ON understands it, too.

Last year, there was interesting speculation in the press that the Government had given in to E.ON, that they would not insist on any technology in advance and that they could live with retro-fitting. However, the situation now appears otherwise, judging from recent press coverage. On 2 March, a headline in The Guardian read, "Decision on new coal-fired plant delayed again". The decision has been delayed until the autumn to ensure the right Government policy. I urge the Government to stand firm on these issues and to make it clear to E.ON and the rest that they must deliver a new generation of power stations with that new technology in place. That applies not only to Kingsnorth, but to other parts of the county, especially the midlands which has a significant interest in the matter, and potentially to Scotland, too. If the will is there, coal-fired power stations can come on stream with the new technology in place. However, we need that double commitment, and the Government must stand firm, although I do not doubt that there will be some tough negotiations with the industry.

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John Grogan (Selby, Labour)

Are the Liberal Democrats in favour of public subsidies for carbon capture and storage? The chief executive of E.ON will make a speech this week in which he will say that he will install a carbon capture project that will take care of all the emissions at Kingsnorth, but he is asking for a subsidy of £1 billion. What is their position on that?

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Simon Hughes (North Southwark and Bermondsey, Liberal Democrat)

We must be robust with the industry, which, of course, will always look to the Government for money. Industry companies have not done badly in recent years, relatively speaking, judging by their profit margins. My hon. Friend Dr. Cable would probably take the same view as the Chancellor and say, "No. Look guys, you have to make this commitment." Everybody, including the industry, has to play their part in ensuring that environmental and emissions targets are met. My party's starting position is to say, "No thank you." In this time of straitened public finances, for a company to tell us how much it needs and for us to finance it is not the appropriate response.

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William Cash (Stone, Conservative)

The hon. Gentleman has said that we might disagree on renewables. Does he agree that compared with some of the ridiculous onshore turbine proposals, such as that for Checkley in my constituency and others near the Shropshire border, subsidies would be better invested in clean coal technology on economic grounds alone? Such subsidies would have a much greater impact, so surely it makes sense to go down that route.

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Simon Hughes (North Southwark and Bermondsey, Liberal Democrat)

Our position is that, for energy security reasons—to start where the hon. Member for Blaydon began—coal has a hugely important part to play. That argument has been made around the Chamber. We believe that our strategy should be for an energy-independent Britain in an energy-independent Europe, although not to the extent that we cut ourselves off without interconnectors and any buying and selling. That has to be our strategy, not least to ensure that we help other countries towards energy independence and to ensure that we do not exploit other countries in the ways set out by the hon. Member for Blaydon. Furthermore, energy independence will give work to our people here.

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Mike O'Brien (Minister of State, Department for Energy and Climate Change; North Warwickshire, Labour)

I am seeking to clarify the position of the Liberal Democrats. I thought that I understood it, but it appears otherwise. The hon. Gentleman's position seems to be that there should be no public subsidy for carbon capture and storage, and that no coal-fired power stations should be built without full carbon capture and storage being an integral part of that new build, despite the fact that there is no commercially viable project yet in place, on a substantial scale, anywhere in the world. Surely he is just saying that there should be an end to the coal industry. How can he make such a case?

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Simon Hughes (North Southwark and Bermondsey, Liberal Democrat)

I was asked by Mr. Grogan whether the Government should respond to the E.ON bid for £1 billion to support its scheme. I said that we should not just take a shopping list from a company wanting to develop a power station. The Americans, especially the Californians, are supporting strategically the science and technology investment, and I have hinted that the Minister could ask the Chancellor to include such an approach in the Budget fiscal stimulus package—strategic support for, and investment in, the science and technology. That support should not go to one company to help its power station through the planning stage.

I shall list my party's priorities in order. The first is renewables, the capacity of which is huge—consider the States, the Danes and others across Europe. If we are not quick, we will lose many opportunities. As the Minister knows, we have a pretty precarious renewables industry, and if we are not careful it is likely to invest in the States and elsewhere. We need to keep the industry here and to develop it, because it has huge jobs and technology potential. In my view, Britain is very well placed.

To pick up the point made by the hon. Member for Stone, investment in renewables should be mainly for offshore wind and tidal technology off the coast of Scotland and down the north-east coast. Obviously, such investment is much less controversial offshore than onshore. It should be done locally, however, and, as the Minister would expect me to say, I believe that there is now the will and capacity for our cities and communities to say, "We are interested in developing renewable schemes and feeding them into the grid to service our communities."

Our second priority should be energy efficiency, from which this country would benefit greatly. It would be in the interest of our whole strategy. The third priority is continued gas supply and the fourth is coal, if it has carbon capture and storage support. We are not there yet: the technology has not been tested and we do not yet have all the answers. However, it is clear to me, from all that I have read and heard from those in the industry, that if the money and support is provided, developing a new generation of coal, in that context, is the right approach. It would give the coal industry a future, retain an energy mix and allow us to do without the nuclear option.

My party and I see no need for this great rush to nuclear power. The Prime Minister is making a speech today about how we have to go down the nuclear road. Such a plan is expensive; it will not produce enough; it will be too late; and it is risky. If we are in a position to influence whoever is in power after the next election, we will make our views very clear. We will say no to nuclear and yes to renewables and to coal in a new, environmentally acceptable context.

10:40 am
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Charles Hendry (Shadow Minister, Energy and Climate Change; Wealden, Conservative)

May I begin with a sincere apology to you, Miss Begg, to Mr. Anderson, and to the other hon. Members in the Chamber for not being here at the opening of the debate? This is one of two energy debates currently going on—the other is in a statutory Instrument Committee. Faced with the challenge of being in two places at the same time, I ended up being in neither place at the right time, and I apologise for that. I am particularly sorry, because the speech that the hon. Gentleman gave was a wonderful example of how such a debate should be carried out: it was extremely thoughtful, it looked back at history and it considered the future potential of coal.

The issue of coal has been one of the big dividing lines of political history. Now that there is a tremendous sense of unity, we can move forward together and agree on the important role of coal in the future. We can see a great opportunity for the UK coal mining industry, and we all hope that this is an area in which Britain can lead the world.

I also want to pay tribute to those who work in the mines. I fought two mining seats—Clackmannan and Mansfield. In fact, I nearly became the first Conservative Member of Parliament for Mansfield. I have incredible respect for those who, day in and day out, work in the mines, and I wish to put that firmly on record. Moreover, I want to thank them for the contribution that they have made to making this a very modern industry.

In the early 1980s, the average output per miner was about 375 tonnes per year; it is now 3,500 tonnes per year. That is an incredible contribution from the people working in the industry. I understand, too, why they often feel frustrated when we end up importing so much coal from elsewhere. We now import more coal from Russia than we produce domestically. As we have heard this morning, it is a matter of concern that more of that market is not being taken by British coal mining.

I should also like to have a brief word about surface mining, because that is an important contributor to this debate. It is an industry that has moved on incredibly in recent years. A year or so ago, I went to a surface mine in Ayrshire to see the way in which the miners backfill. No sooner have they taken out the coal, then they are back filling the mine, replanting it and recreating the scenery that was there before. Often the scenery is enhanced by the sustainability of the habitats. Therefore, we should recognise that this is an industry that has an important contribution to make.

As a nation, we heavily depend on coal for our energy security. Last year, coal accounted for 37 per cent. of our electricity output, and there were times when that percentage went up to 50 per cent. There is widespread agreement that coal should play an important part in our energy future.

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William Cash (Stone, Conservative)

I do not want to enter into controversy with my hon. Friend, but when we talk about energy security on this side of the Chamber, I hope that he understands that it is one thing to have the coal that belongs to the United Kingdom here and quite another to have it effectively developed by companies that come from outside. Combine that with dependence on a European energy policy, and it is not quite the kind of energy security that I have in mind. Perhaps I should leave it at that.

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Charles Hendry (Shadow Minister, Energy and Climate Change; Wealden, Conservative)

I thank my hon. Friend for his intervention and for his remarks earlier on as well. If we look to companies such as E.ON and RWE to invest in this area and build coal-fired facilities in this country, we should understand that they will not take out their investment. They will be keen to run their facilities and make the best return out of that investment that they can get. We should be willing to understand the role that international companies can play in this process.

None the less, there is a big challenge ahead. The large combustion plant directive 2001 means that by 2016 a third of our coal-fired generation capacity should be coming out of commission. That is a massive hole that needs to be filled. As the Minister appreciates, that could come rather sooner, as there are 20,000 maximum hours of generation capacity left. Some plants are getting through that at a very fast rate, and they could have used those 20,000 hours by 2012 or 2013. They have to make active decisions now on whether they spend £200 million to ensure that their plants will be compliant with the LCPD. Some within the industry say that we may need to seek a derogation from that, and I am interested to hear the Minister's view on that. If a derogation is to be sought from the LCPD, businesses need to know that sooner rather than later. If they are spending millions and millions of pounds on something that ultimately will not be necessary, there will be significant arguments afterwards about whether they should be compensated for such payments.

I want to focus on carbon capture and storage. CCS is one of the most exciting technologies in the whole energy sector, and it is an area in which Britain should be leading. When the Government started talking about the matter three years ago, we were leading the world. However, in the time that we have been talking, other countries have been investing ahead of us. Germany now has a small plant working as does Alberta. Moreover, America, Australia, China and Abu Dhabi have such plants. Therefore, we have lost some of our lead, which is a matter of great concern. All of us who have spoken in this debate are giving the Minister a push and some encouragement to go further, to be braver and do a bit more to give Britain the leadership that it should have in this area.

It was very interesting to listen to the chief executive of Kingsnorth this week. We want to see three full-scale plants operating with carbon capture and storage. We would fund the cost of the CCS technology through the receipts that Britain will receive from the next round of the European Union emissions trading scheme, so funding is available. CCS technology is an entirely appropriate way of using the funding and it would give a huge boost to those who are considering taking forward the investment.

When I spoke to people involved in the sector, I found a tremendous sense of frustration. The companies involved want to move forward and do more. Companies such as Shell want to take advantage of their depleted gas fields. Within British universities, such as Imperial college and elsewhere, there are people with incredible academic ability who could make a massive contribution. However, what they are waiting for is the go-ahead from the Government. They want a real signal that we are moving forward and making changes in this area.

Inevitably, there will be aspects and matters that only the Government can provide, such as pipeline infrastructure. If every coal-fired power station is expected to put in place its own pipeline to its own sequestration facility, that will make them unaffordable. That is a natural role where the Government can take the lead. They should put in place an oversized pipeline so that others can tap into it. I commend the work that Yorkshire Forward has been doing in that regard, because it is exactly the kind of proactive, thoughtful work that we need.

Scoping work is not yet under way, so it will be a long time before we identify which of the depleted fields could potentially be used. Again, that is an area in which the Government could be moving further forward and faster. Moreover, such work should be tied to an emission performance standard, like the one in California. Like Simon Hughes, I had a meeting with the people from California yesterday. They see the standard as an integral part of driving change; people know what the level of emissions will be and that they will decline over time. As long as people have a secure outlook and they understand what is expected of them, they can invest to meet that standard; without that ability, the situation becomes more challenging.

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Simon Hughes (North Southwark and Bermondsey, Liberal Democrat)

We both had that opportunity yesterday. Does the hon. Gentleman accept that the opportunity for the Government to get their policy right will come later this year when the private Member's Bill promoted by my right hon. Friend Mr. Kennedy comes before the House? That Bill would allow an emissions trading limit or a cap, which would put in place the policy framework, the process and the structure.

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Charles Hendry (Shadow Minister, Energy and Climate Change; Wealden, Conservative)

That is a very interesting approach. Having the enabling legislation there with the detail to be sorted out in due course is a very constructive contribution towards this debate.

Mr. Touhig is right to say that CCS will not happen without the political will, which is what we need more of at this stage. The Government have revolutionised the approach towards nuclear with the Office of Nuclear Development. They need to do the same with carbon capture and storage with an Office of Carbon Capture and Storage Development which looks at how to remove barriers and make this happen, rather than how we can make it more difficult.

We need greater clarity about where the Government stand on issues such as Kingsnorth. The Minister has said that

"the application of the full chain of CCS technology on a commercial-scale power station has not yet been demonstrated. Until the operation of the full chain of CCS in conjunction with a power station has been proven, it would not be prudent to require new coal plants to be fitted with CCS or to set a date by which this would be required." —[Hansard, 17 November 2008; Vol. 164, c. 112W.]

Yet the Secretary of State, speaking at the launch of the film "The Age of Stupid" a couple of nights ago, said:

"I don't think we should carry on building unabated coal fired power stations".

We agree with him, but he and the Minister clearly disagree, so some clarity would be helpful. This has been an extremely helpful debate. Above all, I pay tribute to the hon. Member for Blaydon for the way he introduced it.

10:50 am
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Mike O'Brien (Minister of State, Department for Energy and Climate Change; North Warwickshire, Labour)

This is an important debate. I join colleagues in congratulating my hon. Friend Mr. Anderson on securing it and on giving such a serious and powerful speech. It deserves a wide hearing, particularly what he said about the moral questions concerning imported coal and the need to ensure that we consider health and safety issues, as well as the case for developing a long-term strategy for coal in this country.

As someone who is proud to represent a constituency containing what is probably the most profitable coal mine in the UK—Daw Mill, which exceeded 3 million tonnes last year and is doing extremely well—I want the coal industry to have a long-term future that does not damage the environment. As in most debates about the role of coal in energy policy, especially UK-produced coal, contributions have been made from a number of standpoints. I particularly welcome the points of view raised by colleagues such as my hon. Friend Paddy Tipping and Mr. Cash, who has a record, unlike most Conservatives, of supporting the coal industry over a long period. His comments on the issue are perhaps regarded as having more credibility than those of most Conservatives.

The Government are committed to the future of coal as part of the UK's energy mix. We want to ensure that it provides the flexibility that is key to energy. We have just had a cold snap, during which more than 50 per cent. of our electricity generation came from coal. Normally, it provides about a third, but when we need to expand our electricity supply quickly and flexibly to meet demand, we must rely on coal. It is an important asset for our energy generation. The lights would literally go off if we did not have coal. Renewables will play an increasingly important part, but the problem with renewables, which we cannot run away from, is intermittency. Unless that issue is addressed, we will have difficulty relying on renewables alone.

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Mike O'Brien (Minister of State, Department for Energy and Climate Change; North Warwickshire, Labour)

Briefly, because I have a lot of points to make.

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William Cash (Stone, Conservative)

I want to ask the question that I put to Simon Hughes, who represents the Liberal Democrat party. Surely we should be shifting subsidy from renewables, which do not really work because of the intermittency that the Minister mentioned, to coal. Given the technology and the evidence that we have heard today, coal can and does work.

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Mike O'Brien (Minister of State, Department for Energy and Climate Change; North Warwickshire, Labour)

Coal can work, but renewables are also an essential part of a proper energy mix to provide long-term security for the energy supply in this country. We need renewables. We need to ensure that they are used, because they do not damage the environment as many other sorts of energy do. We need oil and gas at the moment. We are importing them increasingly because we are depleting the amounts available from the North sea. Oil and gas from the North sea will be available for decades more—they will not disappear overnight—but they are being depleted, which means that we are relying more on imports.

We therefore need to develop our other domestic energy sources. Nuclear is an invaluable base for the production of energy and electricity. It provides the base load that we will need in future. I must say to the Liberal Democrats that I do not believe that any energy policy for this country can be serious without a nuclear base load. Unless that is included, it is not a serious climate change policy.

We need a nuclear base load, but as it is a base load, it does not provide a high level of flexibility. We need renewables because they are no-carbon. We also need to ensure that we have enough flexibility to deal with varying demand, and that flexibility comes, at the moment, from coal. It also comes to some extent from gas, which also emits carbon, although not as much as coal.

We need coal for the long term, which is why we need to ensure that we put the case for coal. Those extremists from the green lobby who say that we should have no coal are proposing a recipe for turning the lights off. That is an unacceptable position. However, we also need to ensure that our coal industry does not damage the environment. Getting that balance right is essential.

My hon. Friend the Member for Blaydon rightly pointed out that deaths occur in coal production in a number of other countries. The destruction of the UK coal industry in the 1980s and early 1990s has made us over dependent on coal imports, often from countries where health and safety standards are poor. He is right to raise the point that we need to ask ourselves questions about that. We have vast coal reserves in this country. If we can get carbon capture and storage going properly on a commercial level, we can exploit the domestic resources in mines in our own country.

We must be aware of the destruction. The Baddesley, Coventry and Birch Coppice pits in my constituency all closed between 1987 and 1992. That was greatly destructive—thousands of jobs were lost in my area—and will be long remembered. We need to ensure that coal is included in the mix for our energy supply, but we must also ensure greater expansion of domestic coal production in this country.

My hon. Friend the Member for Sherwood raised points about Harworth in particular. I am watching closely the developments in UK Coal's wish to expand there. I am keeping in close contact with sources from UK Coal, and we have offered to do what we can to encourage and support the work there. There are limits to what we can do, but UK Coal is aware of them and of our broad support.

There are opportunities for clean coal technologies. The Government accept that coal-fired generation must become cleaner. Although facilities exist in some areas, we need to improve the efficiency of coal extraction. CCS is the key deployment. We will shortly publish our response to the consultation "Towards Carbon Capture and Storage". It will set out details of the implementation of our proposed carbon capture readiness policy, as well as further information about proposed measures for regulating the geological storage of carbon dioxide. We will also consult on what further regulation is required for us to keep coal as an option in our long-term future generation mix while meeting our long-term climate change targets. A decision on the application for a replacement coal-fired unit at Kingsnorth will follow the conclusion of both the carbon capture readiness consultation and the planned new consultation on a new framework for coal-fired power stations.

The UK has been lobbying for and has secured funding from the EU. I heard reference earlier in the debate to an MEP, whom I am afraid I had not heard of, who seemed to be claiming that he had secured it. I must tell hon. Members that—

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Anne Begg (Aberdeen South, Labour)

Order. I am afraid that we are out of time.