New Clause 5 — Annual report on security of energy supplies

Energy Bill [Lords] – in the House of Commons at 3:45 pm on 13th July 2004.

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'(1) The Secretary of State must, in 2005 and in every subsequent calendar year—

(a) publish a report dealing, as regards both the short term and the long term, with the availability of electricity and gas for meeting the reasonable demands of consumers in Great Britain; and

(b) lay that report before Parliament.

(2) The report must include, in particular, overall assessments, as regards both the short term and the long term, of each of the following—

(a) generating capacity in Great Britain and its offshore waters so far as it will be utilised for generating electricity for introduction into transmission systems in Great Britain;

(b) the availability of capacity in those systems and in distribution systems in Great Britain for transmitting and distributing electricity for supply to consumers in Great Britain;

(c) the availability of capacity in infrastructure in Great Britain for use in connection with the introduction of gas into licensed pipe-line systems in Great Britain; and

(d) the availability of capacity in those systems for conveying gas to consumers in Great Britain.

(3) The report must be prepared jointly by the Secretary of State and GEMA.

(4) In this section—

"consumers" includes both existing and future consumers;

"distributing", "distribution system", "transmission system" and "transmitting" have the same meanings as in Part 1 of the 1989 Act;

"gas" and "gas transporter" have the same meanings as in Part 1 of the Gas Act 1986 (c. 44);

"infrastructure" includes pipe-line systems, terminals and other facilities but does not include licensed pipe-line systems;

"licensed pipe-line system" means a pipe-line system that is operated by a gas transporter for the conveyance of gas to any premises or another pipe-line system as authorised by his licence under section 7 of that Act;

"offshore waters" means, in relation to Great Britain—

(a) so much of the territorial sea of the United Kingdom as is adjacent to Great Britain; and

(b) waters in a Renewable Energy Zone (within the meaning of Chapter 2 of Part 2 of this Act).'.—[Mr. Timms.]

Brought up, and read the First time.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

I beg to move, That the clause be read a Second time.

Security of supply is vital to the UK—a key underpinning for our economy, and something that we all take for granted in our daily lives. Debates on the Bill both in the House and the other place have reflected the strength of feeling and concern on the issue among hon. Members of all parties. At the outset, I should like to thank the hon. Members for Tewkesbury (Mr. Robertson) and for Hazel Grove (Mr. Stunell) for their contributions to identifying what is now a broadly acceptable way forward to address security of supply in the Bill.

A provision agreed to on Report in the other place would have given the Secretary of State a broad duty to ensure the integrity and security of gas and electricity supplies. However, it was pointed out to us through numerous subsequent representations that it would unintentionally create great uncertainty in the market and undermine the independence of the regulator and incentives for investment. The provision was taken out of the Bill in Committee, but I undertook to think further about a proposal made by both Conservative and Liberal Democrat members of the Committee to require the Secretary of State to report annually to Parliament on security of supply. I said at the time that I thought that that was a helpful suggestion, so I am pleased to be moving a provision along those lines today, which I have been able to discuss with the hon. Members for Tewkesbury and for Hazel Grove. The new clause reflects the Secretary of State's ultimate responsibility for security of supply and her accountability to Parliament for its delivery.

New clause 5 will place a duty on the Secretary of State to publish an annual report. She will also be required to lay the report before Parliament, which will provide an opportunity for an annual debate in Parliament during which hon. Members may scrutinise her account. I hope that that opportunity will be taken up. The report will have to cover energy security in both the short and long term. I envisage that the short term will relate to the next year or so, and I would expect the long term to cover 10 years ahead, although certain aspects of the report will lend themselves to different time scales. For example, National Grid Transco currently forecasts plant margins seven years ahead in its seven-year statement, whereas the effects of the renewables obligation will extend well beyond 10 years. I do not think that we can put a firm figure on the time covered by "long term", but I hope that I have set out the sort of period that the report will cover.

Photo of Mr Brian White Mr Brian White Labour, North East Milton Keynes 4:00 pm, 13th July 2004

It was said in Committee that security of supply was not only a supply-side, but a demand-side issue. Will the Minister assure me that that will be considered in any report? Will the term "reasonable demands" allow the consideration of demand-side issues that should be addressed?

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

Yes, account will have to be taken of those issues. As my hon. Friend will know, we will report separately on progress made on energy efficiency, but the report about which I am talking will certainly need to take account of future realistic levels of demand and the extent to which we can identify reductions to that as a result of headway made on energy efficiency. My hon. Friend makes a good point.

We have specified areas that the report must cover: the availability of electricity generating capacity, or the plant margin; the availability of gas infrastructure, which we have defined as including pipelines and terminals for importing liquefied natural gas; and the availability of electricity and gas networks to get supplies to consumers. Those factors are especially important, and they focus on electricity and gas infrastructure located in Great Britain, which reflects the fact that that is where the Secretary of State and Ofgem have direct responsibilities.

The list is not exhaustive, but subject to the more general requirement that the report must deal with

"the availability of gas and electricity for meeting the reasonable demands of customers in Great Britain".

We will have to consider wider issues such as the one to which my hon. Friend Brian White referred. If the report were published now, for example, it would be appropriate for it to cover measures taken to liberalise energy markets in Europe and to agree international treaties for gas pipelines. Those issues will change over time, and it is thus right for the specific focus of the report to be the availability of electricity generating capacity, gas infrastructure, and electricity and gas networks.

There has been discussion of whether the report should also address the security of oil supplies. Oil security is firmly on the Government's agenda and we play a full part in the work of the International Energy Agency, including its emergency oil-stocking arrangements. The IEA is a centre of expertise for oil analysis and publishes regular analyses on the long-term availability of oil. However, I suggest that this report is not the best or most appropriate vehicle to deal specifically with those issues. Its focus on gas and electricity reflects the fact that those are both regulated areas in which the Secretary of State and Ofgem have important duties in relation to security of supply. The situation is rather different in respect of oil, which has an internationally competitive market.

The new clause also specifies that the report is to be prepared jointly by the Secretary of State and Ofgem, reflecting their complementary roles. Areas such as enforcement of licence conditions are properly delegated to the independent regulator, as the necessary expertise lies with Ofgem. Of course, the regular discussions that we have with industry at ministerial and official level about security of supply will also help to inform us as we draw together the report.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee

My hon. Friend has just mentioned energy efficiency, but since the responsible Ministry is the Department for Environment, Food and Rural Affairs—at least, it has a substantial part of the responsibility—should it not be included in the Bill, and even if not, should not a nod be given in its direction to say that its information will be utilised as well?

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

I can certainly give my hon. Friend the reassurance that we will work with DEFRA and other Departments in compiling the report, but the legislation vests the legal obligations for ensuring security of supply in the Secretary of State and Ofgem. Hence, they have lead responsibility in preparing the report.

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South

Will the report contain a plant margin percentage that would require to be met every year?

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

Yes, the report will specifically address the question of the plant margin.

The new clause represents an important step forward. It will enable Parliament, industry and the public to scrutinise the Secretary of State's assessment of the security of energy supplies in Great Britain and to call her to account. Again, I am grateful to Opposition Members for making this helpful suggestion and for the constructive way in which both they and the industry have helped in developing the proposal. I hope that the whole House will feel able to support the new clause.

Photo of Laurence Robertson Laurence Robertson Shadow Minister (Treasury)

I thank the Minister for the generous and courteous way in which he has dealt with the new clause. He has certainly involved me at every stage, for which I am grateful to him. We have got to a position that is acceptable to hon. Members in all parts of the House, and that is very sensible.

I wish to go back a little bit in time and explain what the Lords—certainly the Conservative Lords—were thinking about when they proposed the original provision, which placed a duty or even burden on the Secretary of State in respect of the integrity and security of gas and electricity supplies. Of course, that provision came on the back of power cuts in California, New York, Italy and, more relevantly, London and the west midlands. Those problems arose for different reasons that were not necessarily related to the actual generation of electricity, but following those incidents, the BBC programme "If . . . the Lights Go Out" was broadcast. On that day, which was particularly cold, the national grid and Transco issued a warning of insufficient margin, as the margin fell to about 7 per cent. That is not necessarily a dangerously low position, but put together, all those factors had an effect and inspired those in another place to table an amendment to the Bill that placed responsibility for securing energy supply with the Secretary of State.

The issue also went wider. We now face a situation in which our indigenous gas and oil supplies are starting to decline; I shall not put it any stronger than that. There are a lot of environmental pressures on the coal industry from the large combustion plant directive and the emissions trading scheme. Rightly, we have our own targets for reducing emissions. Over the next 20 years, unless extensions and new build are embarked upon, the nuclear industry will decline from its present 22 per cent. of electricity generation to just 2 per cent. We all support renewables in terms of the practical challenge of building them and bringing them online, as well as in a philosophical sense, but there is a long way to go to make up the potential loss of the nuclear and coal generating industries.

The point that I am making, in a roundabout way, is that there is a question mark over the security of supply and our ability to generate sufficient electricity in the medium term. The medium term could be two, three, four or five years, or slightly longer—it is a moveable feast—but however we define it, the problem remains. It is not only Conservative Members who put forward that proposition—as the Minister and Liberal Democrat Members know, many industry commentators share our concern. They are worried that falling wholesale prices will make many investors nervous about investing in the generating business, given that they have to make money and can choose to invest anywhere.

That was the general background to the drawing up of the amendment that the Lords originally added to the Bill. The Minister is right to say that that was perhaps misinterpreted by the industry. People came to us and said, "You were the party which freed up the electricity industry in the first place—why are you supporting a clause that could reverse that?" Of course, it would not have had that effect, because it gave the Secretary of State no more power than he—or she, in this case—already had. There was alarm, however, and the last thing that we wanted to do was to create any more uncertainty in the market. I readily agreed to discuss it with the Minister, and we have reached a sensible compromise whereby the Government will produce an annual report on the position with regard to gas and electricity over the short to medium term.

I entirely accept the Minister's explanation as to why the report will not deal with oil, because that situation differs in many respects. However, it is serious and needs addressing. We all remember the difficulties in the early 1970s following the huge hike in oil prices, and we have all endured the recent scare over the security of oil supplies, not to mention price. But I digress slightly.

The Minister said that the report could provide the opportunity for a debate in the House. That is important, because I would not like the report to be hardly seen, heard about or debated. People like me can come to the Dispatch Box and ask for a debate, but if the Government are not willing to provide the time, it will not happen. Will the Minister confirm that he intends the report to be debated in Parliament every year? If he can give that assurance in clear, unequivocal terms, I see no reason why we should not support the new clause.

Photo of Mr Martin O'Neill Mr Martin O'Neill Chair, Trade & Industry Committee, Chair, Trade & Industry Committee 4:15 pm, 13th July 2004

I agree with Mr. Robertson that such a debate should take place in Government time. We hold several debates on, for example, the armed services. The issue that we are considering is also a matter of life and death. Perhaps it is not as dramatic as some other subjects but it is as important. The Government new clause constitutes a good compromise.

When the relevant amendment came from the Lords, I thought that there was a wee bit of mischief making and opportunism, but that is the function of the Opposition and we cannot complain about it. However, it was always acknowledged that, regardless of who owns oil, gas and electricity utilities and generating capacities, if the lights go out, the Government get the blame. A more formal structure is therefore welcome. We used to have documents, such as the brown book on the North sea, which continue to be published; but something that is more pointed and better focused will assist.

We must try to hold a more mature and better informed debate on issues such as security of supply. We wasted a lot of time considering whether the American experience was relevant and whether that on the east coast or the west coast applied more to the British position. We also examined whether it was appropriate to take account of what happened in Italy or, indeed, in London and Birmingham. When the Select Committee considered the matter, it became clear that events in London and, to a lesser extent, Birmingham were probably accidental. However, they were wake-up calls that conveyed a warning that we cannot afford to be complacent about the organisation of maintenance—that was the difficulty in London—or taking off supply specific power stations that have not been called in for many years. That was the case with the Lotts Road facility. [Interruption.] We had a problem with a fly, but I think it has been sent away.

My hon. Friend Mr. Tynan made the point that margins should be considered seriously because they are important. There has been a debate about whether some sort of payment should be made to companies for keeping plant available. The increase in electricity prices, at least in the short term, may have resolved that matter, because it is now worth a company's while to keep its reserve stations ticking over so that they could be used.

More attention should be paid to gas supply and storage. We have long established a number of days' supply of oil and, in the past, we had coal reserves in power stations. The demise of the coal industry has meant that such precautions no longer form part of the physical landscape of Britain. The power stations that I pass have nothing like the supplies of coal that they used to hold. Before long, we must not only pay more attention to the provision of reservoirs and undersea salt caves, which will doubtless be used for storing gas, but we should have proper accounting of the number of days' supply, especially as dependence on gas increases.

In Britain, we have been incredibly fortunate for many years in being self-sufficient in energy. In transport, we have had a bit of elbow room for essential services. However, we could find ourselves in the position of being no different from many other countries in our dependence on imported gas, while having nothing like the provision for emergencies that they have had to adopt as a matter of course over a number of years. That is an area of adjustment that we have not fully addressed. We are getting supplies through the deal that was struck with the Norwegians last year, in which my right hon. Friend Mr. Wilson played an important role, but we need to ensure that if there are to be interruptions, there will still be a sufficiency of supply necessary to deal with them.

It has been pointed out that pipelines and interconnections are outwith British shores. They are significant, however, and I should like to think that they would be included in the proposed annual report. My hon. Friend the Member for Hamilton, South mentioned the question of margins, but we also need to address the issue of the predicted lifetime of a number of the major generating facilities, so that we can see which will be coming off supply and which will be remaining. That would be of assistance to our debate. It would also strengthen the hand of Ministers wishing to encourage investment programmes in particular ways or areas, seeking to persuade the Chancellor that a more sympathetic fiscal regime might be necessary, or assisting a regulator to change the nature of pricing to make it more attractive to undertake investment of this kind over a period of years.

The new clause is an extremely worthwhile attempt by the Government to bridge the gap that existed between themselves and the Opposition parties in the Lords. It is essential, however, that proper weight be given to the request that the debate on the annual report should be held in Government time. It will involve the Government's report and the Government will be held to account here. It is therefore appropriate that they should make the time available to the House for the debate. I appreciate that the Minister might have difficulty in doing that, but he ought to recognise that the significance of this report should be no less than that of a Defence White Paper, for which we offer a number of days of parliamentary time. I realise that the Whips' Office and the Leader of the House are not always the most flexible institutions in this place. I have never found them, after years of Labour and Conservative Governments, to be very flexible or enlightened, but perhaps the strength of this argument, and of the advocacy of my hon. Friend the Minister, is such that he will be able to ensure that those sometimes immovable objects can be shifted a little so that time can be made available for an increasingly important debate that would attract attention from both sides of the House.

Photo of Andrew Stunell Andrew Stunell Shadow Chief Whip (Commons), Shadow Spokesperson (Environment, Food and Rural Affairs), Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Environment, Food and Rural Affairs)

The Liberal Democrats will support new clause 5. I certainly do not recognise the description of Mr. O'Neill of the provisions as mischief-making by the Lords. It is a fundamental part of the Bill that some attempt should be made to set out a strategy for this country's energy supply, and I believe that such an attempt has been made, with the support of Conservative and Liberal Democrat Members in the other place. I want to acknowledge my opposite number at the other end of the building, Lord Ezra, who worked exceptionally hard on this and other aspects of the Bill.

I am very pleased that the Government have agreed that a modified version of those proposals should go into the Bill and that they have produced this new clause. They have understood that the Secretary of State would have an inescapable obligation to give an account of themselves and their Government, if the moment came when the lights went out. For them to have a rain check every year, with an annual report coming to the House, is therefore an important way of guarding against that eventuality and of protecting themselves against that nasty, unpleasant surprise, should it happen.

I hope that the Minister will pick up the case made by Brian White who, as so often in these energy debates, made a very useful point. He said that it is not just a question of pushing stuff into the system, but of sucking stuff out of it. It is one thing to control the taps that run into the bath, but we must also make sure that the plug is in the bath and that we do not waste the energy that we have. I hope that he will acknowledge that we need to consider efficiency of use and energy conservation as part of that annual reporting and planning process. Perhaps he will reflect on the fact that, while those two important functions are split between two different Departments, there is an inherent risk of things falling through the gaps. This process could be a way of making sure that that gap is closed and that Government policies are coherent and joined together.

The Minister had a number of things to say about defining what "long-term" and "short-term" meant. I was interested to hear what he said, not least because I had alerted him to the fact that I would be on my guard to see that "long-term" covered the full range of options. I remind him and the House that we are talking about an industry that, over the next 40 years, will have to renew every part of its infrastructure—all the generating capacity currently in existence will need to be replaced, along with all the transmission equipment, and for that matter, all the equipment in our homes and in industry that consumes the energy. There will be a complete turnover of infrastructure. One of the most fundamental questions for the Government in developing their energy policy is whether to be proactive or to let a like-for-like replacement policy dominate, without taking advantage of the technological and market changes that are available.

I therefore hope that the Minister will confirm that "long-term" will be as long as it needs to be and, if we are considering the overall patterns of generation, transmission and consumption, that the longer view will be taken into account and factored in. The decisions taken in the short or medium term will determine whether we can reach the long-term solutions that I believe that he wants. Certainly, the White Paper said that the Government wanted such solutions, but they cannot be achieved simply by leaving matters to chance.

We will support the new clause, which is a very important part of the Bill. It is the nearest there is to a provision that considers an overall long-term strategy. From that point of view, it is the core of the Bill.

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South

May I add my welcome for this vital new clause? It gives the Government and the Opposition an opportunity to examine annually how we maintain security of supply in this country. That will become an increasing problem over the next few years, with the phase-out of coal-fired power stations because of the European emissions targets and the situation in relation to nuclear power.

We must consider what the best source of energy for this country would be. I happen to believe that it would be nuclear rebuild. I know that that will not gain much support in the Chamber today. Mr. Page referred to the Government's cowardice on energy supply. I would level that charge at the Opposition, who believe in a nuclear policy but have so far failed to demonstrate their support for it in the Chamber.

Photo of Laurence Robertson Laurence Robertson Shadow Minister (Treasury)

May I read out part of a letter from my right hon. and learned Friend the Leader of the Opposition? In reply to a constituent about energy policy for the future he says:

"I can assure you that nuclear energy will be a vital part of this".

That is pretty clear.

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South

I am delighted to be corrected and accept the evidence of that correspondence. Certainly, it helps me to feel a lot better, because it means that I am not alone in my support for nuclear energy.

Carbon dioxide emissions will be another major problem over the next few years. I asked the Secretary of State

"What estimate she has made of how much carbon would be emitted if all gas fired power stations that have been approved, but are yet to enter into service, entered service."

The Minister told me:

"There is currently around 4,800MW of gas-fired capacity comprising six large stations, approved but yet to enter into service."

That sends signals to me that there could be a move to a gas economy. The Minister also said:

"emissions from these stations would amount to around 3 million tonnes of carbon per annum."—[Hansard, 15 June 2004; Vol. 422, c. 814W.]

There is no such thing as a carbon dioxide emission from nuclear power.

I understand the waste problem, but that already exists, especially with military and civil waste. It must be dealt with and I am glad that the nuclear decommissioning authority is being set up to deal with it.

Other major issues are security of supply and global warming. It is said that either 20 or 40 per cent. of our energy must come from renewables. I welcome the news of a renewables obligation and of an increase in the use of renewables—although I believe that the Scottish environmental and culture committees said that there was a problem with wind power and that we should move towards tidal power. I am sure that that will be the subject of a future debate.

How can we ensure security of supply? If we intend to obtain 70 per cent. of our energy from gas—which would presumably feature in the report—and if it is to come from, say, Russia or the middle east, I do not think that we can guarantee secure supply. Given renewable power and a 20 or 40 per cent. target, and given all the measures relating to domestic heating referred to in new clause 4, security of supply will be the big issue in connection with gas coming into this country. I understand that we have kept the nuclear option open, but unless the Government make a decision on our new nuclear power build—perhaps we shall have to wait until the next general election for that—I do not believe that we can maintain security of supply.

I certainly do not believe that we can do that with wind power. I visited Dunlaw, a wind farm on the east coast of Scotland. It had 26 turbines with a capacity of 17.26 MW and on a windy day, it was producing 4 MW. That was the standard level. The problem with wind power is that it is an intermittent source of energy. I welcome the news that we are to use it, but without some back-up we shall have a problem. I understand that in 2015 Longannet power station will be phased out, not because of any problem with transmissions but because unless it changes to clean burn, European emissions arrangements will ensure that it disappears. Wind power is, however, the most flexible power source we have at present.

I welcome the idea of an annual report. It is an essential means of holding the Government to account and I am pleased that Government time will be available for the report to be discussed. It will be interesting to see what it contains and how secure supply will be. I believe that history will show that, unless we change the mix that we propose in the future, with the majority of energy coming from gas, we will fail the people of this country badly. To those who want no nuclear power, let me say that the people of this country will never forgive the Government if we lose power for a day, two days or three days. If that happens, people will not care which energy source the power to light their homes comes from. The report could be used as a serious measure in the development of power and security of supply.

Photo of Mr Richard Page Mr Richard Page Conservative, South West Hertfordshire 4:30 pm, 13th July 2004

As the House knows, clause 1 originally placed on the Secretary of State the duty

"to ensure the integrity and security of electricity and gas supply".

Placing that duty on the Secretary of State's shoulders was responsible and justifiable, but Mr. O'Neill feels that it would be too much for any Secretary of State to bear. With a verbal flick of the hand, the Minister condemned the clause to oblivion with the same relaxed attitude as a Roman emperor would dispatch a group of Christians to the lions. That said, I am grateful for new clause 5. It is perfectly possible to accept the assurance from the Minister for Energy, E-Commerce and Postal Services in his famous letter of 28 June, which I like to quote, that the new clause is designed to

"emphasise the Secretary of State's responsibility for security of supply", although "security of supply" and the Secretary of State's accountability to Parliament for its delivery are not mentioned. However, the new clause is obviously better than the vacuum in Committee, and I therefore welcome it.

I support the request from the hon. Member for Ochil for a debate in Government time. As a former Parliamentary Private Secretary to a previous Leader of the House, I know that the timetable is subject to competing pressures, and even the best intentions of Ministers as responsible and mature as the Minister for Energy, E-Commerce and Postal Services may get pushed to the back of the queue, so the debate should be set in tablets of stone.

I want to make three quick points. First, I endorse the remarks made by other hon. Members about the various time scales. I can see short-term and long-term strategies, but I cannot see a medium-term strategy, and I wonder why we do not have such a strategy on energy production—I do not know whether I am being pedantic or whether the point is relevant.

Secondly, I support Mr. Tynan on the importance of nuclear power. New clause 5(2)(a) states that an assessment must be made of the

"generating capacity in Great Britain", and I hope that that includes an assessment of the generating capacity of nuclear power. I shall give a little encouragement to those faint hearts who do not believe that nuclear power has a significant role to play, by quoting last week's The Sunday Telegraphit must be true—which states:

"In total, there are some 30 nuclear power stations currently under construction around the globe . . . Together they will generate 2610TWh of power without emitting greenhouse gases. Coal-powered stations generating the same amount of power would spew 2.4bn tonnes of carbon into the atmosphere every year."

If that saving is not significant, I do not know what is. I hope that the evaluation and monitoring of what is available from our nuclear industry is kept at the forefront, because as much as we all want renewables to win through and provide our energy, if the wind does not blow, it is difficult to obtain a satisfactory base load.

Thirdly, on annual reports, our energy requirements will increasingly be met from abroad. Our gas will come from further and further afield, and it will go through areas and regions that may not be stable. The annual report should look at security of supply of oil and gas from other countries to ensure that we do not get caught without any power. As has been said, if the lights go out, people will not say, "Oh, it is because of this or that." They will rightly look for someone to blame.

Having said all that, I welcome new clause 5, which helps to fill the vacuum that was created. I still think that the original phraseology was right, because it would have focused the Secretary of State's attention. Nevertheless, the Minister has taken such responsibility off the shoulders of a future Secretary of State and we now have a reasonable compromise.

Photo of Mr Brian Wilson Mr Brian Wilson Labour, Cunninghame North

I was always surprised to discover how little impact the statistics on prospective gas use had on the public, or, indeed, on political opinion. It is a startling prospect that a country that has been a net exporter of energy since the beginning of the industrial revolution is about to become a net importer on an enormous scale. The course that we are following will mean that by 2020, we will be between 70 and 80 per cent. dependent on gas for our electricity, and 90 per cent. of that gas will be imported. Those are remarkable statistics and the very least that we should do is to monitor their credibility from year to year. I therefore welcome the new clause.

I am pro-nuclear and pro-renewables because I am pro-carbon reduction—it is as simple and straightforward as that. As the decade advances and global warming's profile rises as a political issue, so nuclear and renewables will be seen as two sides of the same coin. In the context of the new clause, the crucial question is: what are we doing to keep the nuclear option open? Contrary to the spin that was applied to the energy White Paper by some sources, it was not an anti-nuclear tract. It was very firm on the need to keep the nuclear option open, which means maintaining this country's existing nuclear skills, being full participants in international research into reactor design and doing everything else necessary to remain a credible force in the global nuclear industry.

One reason for keeping open the nuclear option and keeping up the skills base is that many parts of the world whose nuclear industries do not have the same technical qualities as ours look to the United Kingdom for support. We should not lightly throw away that pool of expertise. I therefore hope that the Minister can assure us that the yearly review will include an update on how we are doing in giving substance to the White Paper's commitment to keeping the nuclear option open. In my view and that of many others—including thinking environmentalists who are not bogged down in the anti-nuclear obsession—we are going to need the nuclear option. Describing the practical steps that we are taking to keep it open must therefore form part of any such review.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

The latter part of the debate was particularly concerned with nuclear energy and as my right hon. Friend Mr. Wilson rightly pointed out, the energy White Paper made it clear that we want to keep the nuclear option open. However, we are not yet in a position to say whether we will need new nuclear power stations.

I listened with the interest to the exchange between my hon. Friend Mr. Tynan and Mr. Robertson about the Opposition's policy on this issue. My hon. Friend was perhaps too optimistic about the hon. Gentleman's quotation from the letter from the Leader of the Opposition. Although the latter said in his letter that the Conservatives will have a policy on nuclear as part of their energy policy, it was not clear to me what that policy would be. Perhaps I missed something, but I did hear—

Photo of Mr Bill Tynan Mr Bill Tynan Labour, Hamilton South

Perhaps I have more faith in the Opposition than my hon. Friend does.

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

On Second Reading, Mr. O'Brien said:

"Let me say for the record that we have an open mind on the future of nuclear energy."—[Hansard, 10 May 2004; Vol. 421, c. 57.]

That sounds rather like the policy of keeping one's options open.

I welcome the support for the new clause. We have had a useful debate, which has highlighted some of the detailed issues that the proposed report will have to address.

As my hon. Friend Mr. O'Neill rightly said, we have arrangements for annual debates in Government time on matters such as defence. I have to say to the hon. Member for Tewkesbury, who fairly raised the matter with me earlier, that I have not yet had an opportunity to raise with the Leader of the House whether we could guarantee an annual debate. As a former Energy Minister himself, my right hon. Friend takes a close interest in these issues, so I am sure that he will be receptive to the suggestion. Fortified by the strong arguments made on both sides of the House in the debate today, I will certainly do all that I can to ensure that we do indeed have the annual debate that has been called for. I agree that it would be valuable and add to our confidence in taking these matters forward.

Photo of Laurence Robertson Laurence Robertson Shadow Minister (Treasury) 4:45 pm, 13th July 2004

I am concerned that the matter has not yet been raised with the Leader of the House. Will the Minister confirm that, in line with the new clause, it is the Government's intention to have the report debated in Government time every year? Is that the intention of this particular Minister?

Photo of Stephen Timms Stephen Timms Minister of State (e-Commerce & Competitiveness)

It is certainly my intention, though I would not want to look too many years ahead. It is not, of course, in my gift to deliver that aim into the indefinite future. However, it is certainly my intention and I will do all that I can to ensure that we achieve it.

Question put and agreed to.

Clause read a Second time, and added to the Bill.