Energy Policy: Nuclear Power

– in the House of Lords at 1:58 pm on 16th February 2006.

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Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 1:58 pm, 16th February 2006

rose to call attention to the role of nuclear power in energy policy in the light of the consultative document, Our Energy Challenge; and to move for Papers.

My Lords, I am particularly pleased that we are to have two maiden speeches today by the noble Lords, Lord Cunningham of Felling and Lord Turnbull, and we very much look forward to hearing what they say.

It has been suggested to me that this debate on the Government's energy consultation paper is premature on the grounds that the consultation has only just started and will last for three months. I say at once that no one will expect the Minister in any way to anticipate the outcome of the consultation. The debate is intended to give your Lordships a chance to say what we think should be the outcome and to express our views on the energy review, and that I shall certainly do. I also have a few specific questions to put to the Minister.

I am delighted that there is to be a full review of the policies set out in the 2003 White Paper, and, as many have said, "not before time". Why is that? It is because, for the first time in our history, we are heading towards becoming a net energy importer. Our own oil and gas reserves are now falling faster than was forecast. Rising world demand for fossil fuels, especially from China and India, has had, and is bound to continue to have, a sharp impact on prices. The surge in gas prices this winter forced some big user industries to cut back on production. We face a threat to the security of our gas supplies. The Russian readiness to cut supplies to Ukraine and Georgia was just a foretaste of what might be to come. With Europe's increasing dependence on pipelines from and through unstable regimes, the 2003 assumption of ultimately depending on gas for up to 80 per cent of our requirements now looks dangerously unwise.

The liberalisation of continental energy markets is essential. But, despite what I regard as an over-optimistic interim report from competition Commissioner Neelie Kroes, published this morning, those who heard Mr Andrew Duff, chief executive of RWE npower speaking to the All-Party Energy Studies Group on 24 January, were left in no doubt that liberalisation is going to be a long time coming.

It is clear that ambitious energy saving targets in the White Paper are not going to be met, as the Secretary of State, Mr Alan Johnson, was starkly warned by his officials last year. Though there has been much investment in wind power, the 2010 and 2020 targets for renewables are most unlikely to be met. But what must be most disappointing for Ministers, who have rightly put climate change and cutting greenhouse gases as a high priority, is that the past three years have seen an increase, year by year, in carbon dioxide emissions.

The White Paper model, of exactly three years ago this month, is seriously flawed. It cannot be business as usual. That is why I, and many informed people outside, have welcomed this review. In particular, as almost everyone has recognised, the nuclear option, which formed part of the White Paper—and which, only a few months ago, Ministers in this House were confidently asserting would not be needed—is now very much back on the agenda. Indeed, last week, I listened to an environmentalist claiming that the review is no more than a camouflage for a decision that has already been made to go nuclear. I happen to think, in fairness to the Government, that that is quite untrue. I sincerely hope it is untrue, because there must be much more to this review than new nuclear build.

So what do I want to come out of this review? Top of my list is the imperative that energy policy must start with a clear, consistent and long-term policy for carbon, to address the threat of climate change. It must not be the other way round, making carbon abatement in some way an add-on to energy policy. All the experts, from whom I have taken a great deal of advice, and I am most grateful to them, have warned that it is the longer-term uncertainty about the Government's policies on carbon that is likely to prove the greatest disincentive and inhibition to investment.

Another imperative is security of supply. We must not leave ourselves at the mercy of unreliable sources, and more self-sufficiency is one way to ensure that we can "keep the lights on". Then there is investment. The UK has a lot of ageing generation and transmission plant, and a huge new investment programme is needed. British Energy has put the generating gap at,

"perhaps as much as 60% of the power generated in 2004".

It is now widely accepted that we need a mix of generating technologies, certainly including renewables. But, as everyone now recognises, there is a limit to that before the grid becomes unmanageable. You only need to look at the experience of a company like E.ON in northern Germany to see that. Of course, the mix must include combined heat and power, and distributed generation, where these are appropriate and cost-effective. There is no quick alternative to continuing with fossil fuel generation, despite its serious environmental penalties. Cost-effective clean coal technologies are still some way off, but new technologies, including integrated gasification combined cycle—IGCC—must be developed. I find it bizarre that that hugely important future development is relegated to a footnote in an appendix in the consultation paper.

We must press ahead with energy saving and energy efficiency, and I am sure that more can be done. But there must be a clear-headed appraisal of what can be achieved as compared with what many regarded as the starry-eyed optimism of the White Paper. But all this will still leave a wide gap between supply and demand in the next two to three decades, a gap that can realistically be filled only by a new programme of building nuclear power stations. I shall return to this in a few moments.

Continuing my list of what I want to see coming out of the review, the Government must not attempt to pick winners. There is wide recognition that investment decisions are best left to the market. The role of the Government is to set a clear framework within which the market can assess the risks and finance the investment. That framework must be set for the long term and, despite Ofgem's protestations, the present regulatory regime is essentially short term, as the noble Lord, Lord Tombs—who I am glad to see in his place—has warned this House on many occasions. I shall quote from the important note that was issued by all the main engineering institutions earlier this year:

"The long time scale for investments in nuclear power makes them very sensitive to policy reversals, and uncertainty acts as a major deterrent to private investment".

Finally, the Government must establish a level playing field for the achievement of these objectives. It is now widely recognised that nuclear power has a lifecycle carbon footprint as low as wind power. Last year, the noble Lord, Lord Sainsbury, wrote an important letter to the noble Lord, Lord Redesdale, in which he said:

"nuclear power has one of the smallest environmental footprints of any source of electricity or any manufacturing process".

That was a very important statement and we need to take full account of it. It has been endorsed by a recent study of the Torness nuclear power station by British Energy, which was mentioned in December, by Bill Coley, its chief executive. Given that, it is absurd that nuclear power has to pay the climate change levy. It has the lowest carbon footprint and is a benign source of power. Yet, it does not qualify for any of the incentives for reducing carbon emissions, which a programme certainly would. The review must recommend a level playing field.

My list is not comprehensive and I know that other noble Lords will have their own additions, but my feeling is that the review will have failed if it does not do all the things that I have mentioned.

I return to the nuclear option. The Prime Minister, to his great credit, recognised that this option must now be firmly placed on the agenda. In the light of that, I shall ask the Minister some questions, of which I have given him notice. The proposition behind my questions is that since 2003 there has been an assumption on the part of many Ministers that the nuclear industry is to be wound down and will eventually disappear. The instrument for that is to be the Nuclear Decommissioning Authority—I emphasise the word "decommissioning"—and there has been more than a whiff of visceral ministerial hostility to the nuclear industry. But we have now had the first hints that that is changing. I mentioned a few moments ago the Prime Minister's words, and we have had the confident assertion of the noble Lord, Lord Sainsbury, in response to my noble friend Lady O'Cathain, that nuclear must be regarded as a renewable source. We have also had his statement about the life cycle carbon footprint. Now we have the energy consultation paper, with its clear message that nuclear has to be a serious contender. Nobody can read section 4 of annex A of the paper without recognising that.

So what needs to change to respond to this new message? In the words of the song, "Love changes everything". That is what we must have here—a change in the entire climate towards the nuclear industry. First, therefore, is radioactive waste. The Science and Technology Select Committee was much encouraged by our recent meeting with the members of CoRWM. It is now on course to produce its report. I have seen a first outline draft. Although paragraphs have to be filled in, it now looks as though it can be confident of producing its report on time. It is widely assumed that it will recommend, as this House did some years ago, that the solution is to have a deep underground repository. So, my first question to the Minister is: what is the Government's timetable for moving on to the next stage of identifying sites for a deep underground repository? Seeing the way ahead on waste is regarded by the public as a critical issue for any new nuclear build.

Secondly, there is technology. The most recent nuclear station built in the UK was Sizewell B—a US designed pressure water reactor, but built 20 years ago almost exclusively with British skills and labour. Now that BNFL is selling Westinghouse to Toshiba, we are left with no alternative but to buy foreign-owned technology for any new nuclear programme. There are competitors from a variety of countries in Europe, America and Canada. But we in the UK must have our own scientific and technological expertise if the UK industry is to play its part. So my second question is: what are the Government and industry doing to ensure that we have that expertise? Yes, I have studied the papers of the Cogent skills council, and it has certainly made a start, but it does not seem to be doing nearly enough to provide us with what we will assuredly need.

Thirdly, there is the question of regulation. The Nuclear Industries Inspectorate, now part of the HSE, is crucial to any new nuclear build. All the players in the game have told me that they are undermanned. So I asked the chief inspector, Mike Weightman, about this. He told me that against an establishment figure of 179 inspectors he has only 163. But it is much more serious than that. He said:

"This number does not take account of", and he mentions the planned defence expenditure; secondly,

"extra work associated with the impact of the new Nuclear Decommissioning Authority"; and, thirdly,

"the impact on our resources of any decision by the Government, after considering the outcome of the . . . Energy Review".

It does not have enough people. So my next question is: what are the Government going to do about that? Without it, we cannot make any progress at all. It is amusing that the HSE published a large document last November called The Regulation of Nuclear Installations in the UK, but it is difficult to see the purpose if there are not going to be any inspectors to do the work.

Then there is nuclear fuel. This comes from BNFL and supplies the existing reactors, but it depends on two plants at Sellafield. What will the Government's decision be about restarting the Thorp reprocessing plant, and what are they going to do to help increase the output of the Sellafield Mox plant, SMP, which is well below its capacity? Will the Minister tell us that?

My last question is about decommissioning. The NDA strategy is to reduce everything to a greenfield site. Of course that fitted the 2003 scenario, but that is changing—love changes everything. It cannot approve that strategy, which is being put to it; how can it possibly do that in the new circumstances?

I have one final point. In the 1990s nuclear attracted about 19 per cent support from the public. By January of last year that had risen to 35 per cent. The latest MORI poll relating nuclear to climate change and to the reliability of supply—I will quote two figures—indicates that 54 per cent are now willing to accept new nuclear build if that would help climate change and 63 per cent—nearly two out of three people—believe that reliability of electricity supply would need to be ensured though a mix of energy options including nuclear power and renewable resources. If you want to keep the lights on and you want to fight climate change, then the answer has to be a new nuclear programme. I beg to move for Papers.

Photo of Lord Cunningham of Felling Lord Cunningham of Felling Labour 2:15 pm, 16th February 2006

My Lords, I begin by recording my great appreciation of the warm, friendly welcome that I have received since taking my place in this House from noble Lords in all parts and not least from the staff. It has been most helpful, if a little unnerving on occasion.

I also congratulate the noble Lord, Lord Jenkin of Roding, on his excellent introduction to a very important and timely debate, which he has initiated. We are of course old political adversaries from the other place. Nevertheless, I have a high personal regard for him. Despite the occasional rancour and asperity of the political debate, we have always remained good friends. Then, as now, we shared a broad agreement on the essential role of nuclear power in a diverse, balanced energy policy. I might reflect that it is just a little sad, given some of his comments, that this debate is not taking place on 14 February rather than 16 February.

It is a debate of huge importance and its importance cannot be underestimated. Future energy policy will directly affect the social and economic well-being of people—of our country, our environment and our security—for decades to come. We face a well defined, imminent energy supply gap converging with increasing demand and the vital importance of more effectively acting against those gaseous emissions driving climate change. These are formidable challenges indeed.

There are, and always will be, conflicts between energy demand, emissions reduction, energy price relativities and the market. Such conflicts are not new, nor can they be wished away; so some compromises are not only inevitable but essential. The need urgently to consider options and decide on new policy directions should be clear to everyone. If we are to meet our climate change objectives and the other imperatives of controlling demand where possible, meeting affordability and security of supply, the status quo simply will not do. We are faced by some very hard choices. The movement of gas prices and the doubts about the security of supply are reminiscent of the oil price shocks of the 1970s, though not yet as severe or as threatening. At that time, I had the honour to be an energy Minister in the Administration of the late Lord Callaghan. Policy then was balanced on a mixture of coal, oil, gas and nuclear power. In addition, there was a vigorous energy conservation programme and broad political and industrial consensus about the direction that we should take in these policy areas.

At that time, in spite of the difficulties, most of the policy objectives were secured. Today, after years of dispute, I am pleased to say that there is again a growing consensus in favour of renewing a diverse policy in which nuclear power plays a significant part. I believe that we should encourage that trend and help to develop that growing consensus. Of course, much has changed since the 1970s, and the days of energy self-sufficiency are gone, but similar challenges face us now. We have the advantage of greater knowledge of the issues, of better technology and better engineering, and, increasingly, the availability of renewable sources of electricity generation.

In addition, we in Britain have demonstrated over many years that we can safely and successfully manage nuclear power and the nuclear industry generally. In 2003, the nuclear industry provided almost 22 per cent of the electricity generated in the United Kingdom, with an average load factor of 76 per cent for the generating stations. This year, 2006, is the 50th anniversary of the advent of civil nuclear power in our country. Calder Hall was commissioned then and we have been safely generating reliable, everyday outputs of nuclear power for 50 years. Some 2 million million kilowatt hours—I am not suffering from a speech impediment; I mean 2 million million kilowatt hours of electricity generation—has taken place in nuclear power stations with a negligible discharge of carbon dioxide. Indeed, that nuclear production has avoided the emission of 1.6 billion metric tonnes of carbon dioxide over the same period from the fossil fuels which otherwise would have been burnt if the nuclear option had not been available.

Yet, at the very moment when fundamental energy and environmental policy decisions must urgently be made, some advocate abandoning a very significant weapon in our industrial armour. To do so would simply be folly. It would disable our economy and our industry at the very time when we should be thinking of strengthening it. It would jeopardise our hopes and aspirations of sustainable development for decades to come.

It is clear that elsewhere in the world, nuclear power is seen as an essential part of energy policy. In Japan, China, India, France, Finland and—significantly, especially since the Energy Bill last year of Senator Domenici—in the United States, the commitment to nuclear power is strengthening. I certainly share the view of the noble Lord, Lord Jenkin, that at the very least nuclear power should be given a level playing field, but subsidies are neither sought nor are they required if we are to build new nuclear power stations.

My own view, put simply, is that Britain, indeed the world, is not going to get by without nuclear power if we are to achieve sustainable development as one of our fundamental objectives. We can build all the renewable sources we can and take the most aggressive approach to energy efficiency and conservation while trying to manage millions of daily disaggregate demands for electricity—which is what demand is made up of—but those actions will never fill the gap. Indeed, by their very nature many of the renewable sources are interruptible supplies. Of course we should support more R&D on new and emerging technologies such as clean coal technology, and I welcome the Government's recognition of the need to do that. I also welcome the Government's production of this review, marking the urgency and fundamental importance of these issues as set out in the paper itself. The approach is refreshing and I wish the Government well.

Photo of Lord Chorley Lord Chorley Crossbench 2:23 pm, 16th February 2006

My Lords, it is a privilege to be the first speaker to congratulate the noble Lord, Lord Cunningham of Felling. He comes to us after a career of great distinction in another place, and for me it is an added pleasure to follow someone who I hope I can regard as a fellow Cumbrian. He was the MP for Whitehaven and Copeland for 35 years. He has spoken to us with real authority and robustness, with just a touch of controversy that always adds a little spice to a maiden speech. I am sure we all look forward to his future contributions here, as we will to the maiden speech of my new noble friend Lord Turnbull, whom we will listen to shortly.

I add my thanks to the noble Lord, Lord Jenkin of Roding, for giving us an opportunity to discuss the Government's consultation document, and to do so explicitly in the nuclear context, for surely that is the key issue. It is an issue that the Government have consistently ducked. Nevertheless, one detects a wind of change—and not before time.

It seems sensible to start with the Government's four goals: first, to cut our carbon emissions by 60 per cent by 2050; secondly, to ensure reliability of supplies; thirdly, to promote competitive markets—I prefer the words "competitive energy supply", but I will leave that; and, fourthly, to ensure affordability. I go along with those goals except for "affordability", because that surely is a social issue and should be dealt with as such. We need to remind ourselves, however, that these goals are not independent of each other and how we weigh them is a matter of judgment—and so, by simple extension, is the importance of the different fuels, the fuel mix. Here I take exception to the statement in the consultation document that,

"it is not the role of Government to decide the fuel mix".

I do not see how the Government can possibly duck fuel mix in broad policy terms.

In the short time available, I shall restrict myself to renewables, gas, coal and nuclear. I do not think that we will get very far with renewables, notwithstanding the biomass lobby, the wave and tidal enthusiasts and the wind farm fan club. Even with the considerable implicit subsidy—the Government put it at £30 billion by 2020—we have made little progress. We all know the problems with wind: the need for back-up above 10 per cent; its dispersed nature; the environmental costs, not least the huge land take; and the huge cost of offshore. Of course renewables have a role to play, but I suggest that it will be of the second order.

Then there is gas, which is by far our major energy source today. We all know that we will have exhausted the North Sea by 2020. We may be prepared to rely on the Norwegian interconnector, but, as others have suggested, we should surely not rely on gas from the former USSR area. Moreover, the advent of China and India on to world energy markets makes it seem likely that gas prices have reached levels which will remain for some years to come. We also need to remind ourselves that gas has 50 times the carbon emission rate of wind or nuclear on a lifetime basis. Nevertheless, it is probably only realistic to assume that it will be our major energy source until at least 2030.

Thirdly, there is coal. One suspects that coal in cost terms will be as attractive as gas. But it produces twice as much carbon and so, surely, it is important—and one acknowledges the interest that the Government are beginning to take—to put considerable effort into tackling the costs of carbon sequestration and capture in coal. The same goes for gas, of course. It is surely also important that any new coal stations are designed to allow retrofitting in due course. Coal can, of course, be stored much more readily than gas, so I am sure that in due course it will become a major and reliable contributor.

Finally, there is nuclear. It seems generally agreed that the stations now being ordered and built around the world will score highly on reliability and are probably cost-comparable to gas—nuclear has gained from the China factor. There is of course a caveat as to how they will be financed as the unit costs are sensitive to the discount rate. So there is the important question of what sort of regime would enable nuclear stations to be part of a commercial market.

Decommissioning and waste disposal is the controversial issue, and here we have to wait for the waste management committee's report. In the mean time we should remember that the new stations will produce only a fraction of the waste of the old ones, especially low-level waste, and that we have a large legacy of waste from both the old stations and military sources which in any case will have to be dealt with. I therefore conclude, from what has inevitably been a quick tour d'horizon, that a balanced, competitive and reliable UK industry would include a substantial nuclear share and that this will be the only way of achieving our carbon emissions target.

The White Paper asked five questions which I hope I have answered adequately. In return, and in the two minutes left to me, perhaps I could pose a few questions which relate to what the Government envisage will be the institutional framework to carry forward their policy—a policy that will have to ensure that the appropriate levels and timing of investment take place. Where will the boundaries between the state and the commercial sector be drawn? How, for example, will the nuclear licensing process be dealt with? Here one must put in a plea for the choice of a single standard design so that new stations will save time and uncertainty by being pre-licensed. That is being done in America, as the noble Lord, Lord Jenkin, reminded us. Equally, of course, in the significant savings from serial production there is surely a lesson to be learnt from the successful French programme.

Then again, thought will have to be given to the contractual arrangements on the revenue side, as this will affect the financing arrangements, and so forth. What will be the future of the renewables obligation? Will it apply to nuclear? As the noble Lord, Lord Jenkin, said, it is absurd that it does not get the same subsidy as renewables. Is thought being given to revisiting carbon taxes? There are a large number of difficult technical, economic and administrative issues and one wonders whether the DTI has the expertise and the manpower to tackle the subject. One wonders whether it would be best to proceed by way of an energy agency responsible for nuclear licensing, overseeing the investment in general terms and acting as the price regulator—in other words, to do away with Ofgem, and so on.

If we are serious about global warming, time is not on our side—and I see it is not on mine, either.

Photo of The Bishop of Southwell and Nottingham The Bishop of Southwell and Nottingham Bishop 2:32 pm, 16th February 2006

My Lords, a key question is: how imminent is this environmental crisis and catastrophe? According to James Lovelock's recent publication, The Revenge of Gaia, we face huge upheavals in the climate and environment within the next 20 to 50 years. It may simply be too late to do anything—a hard thing for humans to face, particularly those of us in the West who like to think we can control our destiny.

Even Lovelock thinks there are things we can do. He advocates nuclear power. There are reasons why nuclear power may be the answer—fuel security, for example. To be able to generate the energy we need in our own country must be preferable to relying on sources within politically unstable territories, as the noble Lord, Lord Jenkin, mentioned.

Another reason is having nuclear as part of a mixed economy with renewable energy. Renewable energy sources can be created close to people's homes where populations are sparser, but the current development of renewable technologies cannot provide enough constant energy to fuel larger conurbations. A nuclear power plant near a city will ensure energy in the vast quantities and concentrations needed, while renewables could work elsewhere.

Another reason is generating power close to where it is needed. The environmental cost is reduced and the efficiency of energy is greatly increased if the energy does not need to travel. This could be the case for nuclear power stations close to cities. I also suggest that it could meet some of the concerns expressed by the Campaign to Protect Rural England.

Yet another reason is that the technology is well developed. We should be in a position to open more nuclear power stations now, whereas renewables technology is still in its infancy by comparison. If the problem needs a solution urgently, nuclear power may be the way to go.

If there are some reasons for nuclear power, there are also reasons why it may not be the answer. Let us look at some of the statistics on uranium mining. About 36,000 tonnes of uranium are mined each year to meet current needs. The European Commission estimates there may be only 2 million to 3 million tonnes of exploitable uranium sources globally. On current projections of nuclear capacity, uranium mining operations will need to increase by 100 per cent within 10 to 20 years, at which rate uranium will run out within 30 to 40 years.

Again, on the practical reality of new-build nuclear reactors, optimistic predictions are that they will not be ready until 2021 because of the time taken to design the reactors, gain the consent of the Nuclear Installations Inspectorate and the Environment Agency, gain the formal planning permission and then build the thing, by which time old nuclear reactors will be coming out of service. Although the technology is ready, the capacity to use it is not.

Nuclear may not be the answer because of waste issues, which have already been mentioned. Claims that highly toxic spent uranium fuel rods can be made safe have not been fulfilled yet. We leave a deadly legacy to the generations that come after us. Research and development into new technology to neutralise waste residue will cost us a phenomenal amount of money and there are uncertain delivery dates.

Another reason for not having nuclear is profligacy. Nuclear allows us to be profligate. Reduced energy sources or renewable energy sources, which demand us to live more simply, place constraints on human greed. With nuclear power we are using the energy source that gives us as much energy as we want and then leaves the mess to future generations. There are profound ethical issues concerning energy.

Some may say, "What about nuclear fusion?" Nuclear fusion is claimed by some to be the answer. It does not use uranium and is, therefore, in theory limitless. Its waste products are thought to be less toxic than those of nuclear fission. However, the technology is still relatively new; there are problems in the containment of such energy; and even if the waste is less toxic, it is still toxic.

Mr Carl Hughes, the UK head of energy, infrastructure and utilities at Deloitte, writing in the preface to its recent publication, 2020 Vision, stated:

"Given the differing agendas of key stakeholders in the energy policy debate, and the need to strike the right balance between ensuring security of supply, reducing emissions and optimising affordability, finding an acceptable solution to this challenge will be both technically and politically demanding. Compromise, which is never popular, will be essential if the Government is to succeed.

"We look across the whole of the energy and fuel supply value chains to take an holistic view of the challenges ahead. While we do not purport to have found 'the solution', we believe that we have created an agenda for discussion that reflects our conclusion that the UK is unlikely to achieve its overall objectives if decisions about the future of power generation are left entirely to the private sector. It is, we believe, up to Government to set policy and facilitate development of the necessary market levers that will incentivise investment in the most appropriate infrastructure and technology".

I return to the issue I raised at the beginning: is it simply too late to do anything about our climate and environment in the midst of what I believe is our growing energy debate? I refuse to be pessimistic. As Sir Nicholas Stern says on the economics of climate change:

"it is not too late to take actions to avoid the worst impacts of climate change. If Government set clear, credible, and long-term incentives, then businesses and individuals will respond, and emissions can be shifted to a more sustainable pathway".

Photo of Lord Woolmer of Leeds Lord Woolmer of Leeds Labour 2:38 pm, 16th February 2006

My Lords, I add my congratulations to the noble Lord, Lord Jenkin of Roding, on securing this debate on nuclear power and on his excellent introduction. I also add my welcome to the warm reception already given to the maiden speech of my noble friend Lord Cunningham of Felling, who I have known as a good friend for over 25 years. Today, he was typically clear in his thinking and delivery, clear in his strategic outlook and balanced. I am sure that we look forward to many more contributions from him in this Chamber.

When the wider public in households and businesses across the country think about energy policy, first and foremost, they think of price. People are worried about the rising price of electricity, gas and gasoline and the stability of those prices. They are not at all sure what on earth will happen. They want to feel that their energy supplies are secure and they feel uneasy when they see us increasingly depend on imported supplies of oil and gas from countries that too often give cause for concern about the reliability of their exports to us. Oil and gas are once again seen as economic weapons in political disputes.

There is little doubt that governments, including our own, underestimated the likely path of oil and gas prices only three years ago. The Government's energy White Paper of February 2003 based its assumptions on an oil price in the mid-$20 range. How long ago that world seems. It will never return.

On price, stability of price and security of supply, nuclear power for electricity generation has come into its own. The real price of nuclear power has been falling consistently for two decades. It is now competitive with oil, gas and coal, and, as my noble friend Lord Cunningham said, what it needs is not subsidies, but certainty, clarity and support. The real price of nuclear power is predictable for 30 or 40 years—as far ahead as you can look. The only risk to the cost of nuclear power generation is that it will fall. What a delightful choice that would be for households and businesses. Nuclear energy offers households and businesses a stable, even falling, price of electricity for as far ahead as we can look, and it offers security of energy supply.

The other big concern in energy policy, which rightly loomed large in the 2003 White Paper and in the January consultation paper, as well as in the minds of others in the public, is the role of energy in climate change. The European Union has set its member states some ambitious targets for reducing greenhouse gas emissions during the next 45 years. I do not think that people in this country realise quite how ambitious those targets are. The United Kingdom Government have committed themselves to reducing carbon emissions by 60 per cent by 2050. If our economy is to grow by 2.5 per cent a year in that period, we must reduce the amount of carbon produced per unit of output by 90 per cent from current levels. It is therefore envisaged that we will produce only 10 per cent of current levels of carbon per unit of output. They are truly vast ambitions, but they are essential if we are to tackle climate change.

What will achieve this? The January consultation document is frank. On transport, it states that people will not be forced out of their cars or prevented from flying for holidays or on business around the world. Transport has to be tackled. Aviation has to be brought into the emissions trading system in Europe, but that will not stop it growing. If we are going to tell people, "Sorry, you were born too late to go on holiday abroad", that will not do any good. If we are going to tell people in China and India that we will price them out of coming to Europe in aeroplanes, they will go elsewhere.

Increased energy efficiency is extremely important. Will it enable us to consume 10 per cent of current energy used in households, offices and businesses? What is current energy policy? Oil, gas and coal are expected more or less to balance each other out. They are in the European emissions trading system. The price of carbon will rise, forcing improvements in efficiency, but consumers will face increasing electricity prices. That is what happens when the price of carbon goes up. So the mechanism envisaged for households and businesses to meet the climate change targets is higher prices.

What is the current policy on renewables? It is intended that the use of renewables will increase to meet 20 per cent of electricity production, but that nuclear power will cease to exist in 20 or 25 years. There will be no contribution from nuclear energy. It is clear to anyone who thinks about these matters that renewables and nuclear energy are critical if we are to get carbon emissions down to merely 10 per cent per unit of output of today's levels in 45 years. To ignore the important contribution of nuclear energy to tackling climate change is reckless. Failure to tackle the nuclear energy issue will mean increasing prices of energy and electricity and increasing prices for aviation and using cars—all of which will happen anyway, but which will be even worse.

The case for nuclear energy is now indisputable. It is one of political will and ambition. A Government who can have the ambition to reduce carbon emissions per unit of output by 90 per cent must surely have the ambition and confidence to recognise that that will not be achieved unless the nuclear energy issue is addressed.

So what is required? The noble Lord, Lord Jenkin of Roding, summed it up. It wants certainty of government policy and it wants governments of all persuasions in future to be not hostile but supportive. It wants clear regulatory frameworks that offer certainty and it wants policies that have a timeframe consistent with the huge capital investment required with nuclear energy. The consultation paper in my view, for the first time in a long time, offers a ray of hope. Let us hope that the hopes are realised.

Photo of The Duke of Montrose The Duke of Montrose Deputy Chief Whip, Whips, Shadow Minister (Environment, Food & Rural Affairs (Also In Scotland Team), Environment, Food & Rural Affairs, Shadow Minister, Scotland 2:46 pm, 16th February 2006

My Lords, it is a daunting task to follow such a knowledgeable speech as we have just had from the noble Lord, Lord Woolmer of Leeds, but I must thank my noble friend Lord Jenkin for giving us such an early opportunity to address the consultation paper on such an important subject.

The paper sets two very demanding criteria: that we should secure energy that is not only clean but affordable. When the Minister launched the consultation in a Written Statement to the House on 23 January, he drew it to our attention that the review was considering both supply and demand. There is very little in the consultation that would let us know what the Government consider will be the demand in 2012 or 2020, two of the first years in which they have undertakings as to what percentage of total generation should come from renewable resources. In the review itself we are offered only a black-line graph in chart 13, which is supposed to indicate what gas consumption might amount to. Surely for an agency that is responsible for energy supply, there must be some working guide that would at least show the area in which the Government hope that demand will rest.

The year 2020 is of particular relevance to today's discussion because by then, we are told, nuclear generation capacity will have fallen from the current 22 per cent to 7 per cent of our electricity output without any further plant refurbishment projects. If one considered Scotland on its own, the future would look even more serious, as currently 39 per cent of Scotland's electricity comes from nuclear and almost half of that will have disappeared. We have heard of an extension programme that has been launched for the Dungeness B generating station. In an article in the Scotsman on 9 December, British Energy was quoted as saying that it is technically possible to keep the Scottish facilities running for much longer than their current expiry date. Can the Minister tell the House whether that approach is considered a cost-effective option and whether it is likely to result in any major increase in radioactive waste, compared to scrapping and building some of the more modern, efficient nuclear reactors?

Apart from the comment made a few minutes ago by the noble Lord, Lord Jenkin, I have regarded the cleanest energy—though not yet the cheapest energy—as still to be found in renewables. As a rural land manager, almost every aspect of this is liable to excite my personal interest. The Government are obviously counting quite heavily on the potential for obtaining energy from renewables in Scotland. The Scottish Executive have kindly obliged by setting themselves the renewables obligation target of 40 per cent by 2020; that has triggered the need for refurbishment of the Scottish grid system, including the interconnector with England, for which Ofgem has announced a £650 million programme. That is obviously just an initial cost before trying to equate the cost of connecting all the individual generating sites.

That and any future development along these lines should surely be weighed up against another source mentioned in the consultation document, micro-generation. I was interested to see that the figure produced by the Energy Saving Trust for the potential of micro-wind was 15 gigawatts. This, almost by definition, can be put in place with much less demand for long-distance conductors, and the output figure quoted is almost on a par with atomic power stations. I am sure the House is looking forward to seeing the Government's microgeneration strategy, which I believe they are required to produce by April this year under the terms of the Energy Act 2004. Will the Minister tell us if they expect to adhere to this timescale and whether they can include in the proposals some weighting for the fact that it will be less reliant on new infrastructure, such as I have described?

In the document on which this debate is based, it strikes me how little mention is made of securing energy from biomass. Perhaps that is just unfortunate timing, as the review was produced in 2005, but the Minister will be aware that there was a major report by the biomass task force in October 2005. Is the review's scant mention of this subject a reflection of the Government's opinion that there is not much future in biomass as a source of energy and of reducing CO2 emissions?

The biomass task force report opens up some interesting possibilities, with its estimates that renewables should be able to increase the proportion they contribute to the heat market from 1 per cent to 3 per cent by 2010. It also estimates that 1 million hectares of land could be available for non-food crop production with a potential yield of 8 million tonnes of energy crops, though it will be interesting to see if this proposal meets with less public outcry than other forms of energy production and distribution. Not far away from where I live, there was a proposal to put a woodchip-fired heat production unit on the island of Arran, which was turned down because the locals felt that pollution levels might be too great. The report also estimates that between 7 million and 9 million tonnes go to waste. Admittedly they see capital costs as the current economic stumbling block to making use of these assets, and the answer they favour is an appeal to the Government for capital grants. While both biomass heating and atomic energy can offer savings in CO2 production, they both suffer from being unable to benefit from the price premium available under the renewables obligation. Again, though, both can be seen as more economically justifiable as we enter a period of higher fossil fuel prices and insecurity of supply.

To pick up on the final point made by the right reverend Prelate the Bishop of Southwell and Nottingham, we are seeing an interesting parallel these days between how we use resources and manage our occupation of the planet. Here in the south-east you have an imminent water shortage. Water companies are beginning to offer warnings about measures to overcome shortages. Perhaps soon they or the Government will have to issue instructions to every household. From previous experience, there is likely to be quite a generous and patriotic response. As a study in 2000 showed, British households have the fourth greatest demand for energy in Europe and the fourth greatest energy consumption per car. Should Her Majesty's Government not be doing more to focus the attention of the ordinary man in the street on the measures he personally can take to use less, and therefore cheaper and cleaner, energy?

Photo of Lord Taverne Lord Taverne Liberal Democrat 2:53 pm, 16th February 2006

My Lords, I too congratulate the noble Lord, Lord Cunningham, on his magisterial maiden speech. I agreed with almost every word of it, as I did with the speech made by the noble Lord, Lord Jenkin. There are two reasons for pressing for nuclear power: security of supply and the need to reduce carbon dioxide emissions. It is fair to say that, on recent developments, the second seems to have become more urgent. I do not regard the case that this is the most serious problem we face as conclusive, but it is certainly quite strong.

It is significant that so far in the debate no one has spoken out against nuclear power. Renewables obviously have a role to play and many people favour them, but they are, with one exception, still a long way off. The one exception, which is perhaps environmentally the least attractive and the least efficient, is perversely the one that the Government have favoured most; namely, wind power. The best bet for the next two or three decades seems to be nuclear. We do not have to design a new form of power station—feasible designs are available. If we press on, it should be feasible to build one within the next 10 years. I meant to look the figures up beforehand but I believe that either Japan or South Korea has built a station in fewer than six years.

I am worried by the opposition to nuclear power. Much of it is emotive and based on misinformation, whereas the issue should be judged on evidence. Unfortunately, some of the NGOs that are most strongly opposed to nuclear power are somewhat cavalier in their treatment of evidence. One argument against nuclear power which has not been mentioned is that it will increase the danger of nuclear proliferation. That may be true in the case of Iran and North Korea but it cannot conceivably apply to the United Kingdom, Europe, the United States or, for that matter, China or India. Let me put the question this way: if we do not go for nuclear power, does that mean that Mr Ahmadinejad will then say, "Ah, well, in that case we are not going to go ahead either with our development of nuclear military power"? Of course, the argument is absurd.

Next there is the question of terrorism. One cannot entirely dismiss that. It is sometimes asked, "What would happen if you flew a 747 into a nuclear power station"? The concrete casing round the reactor would simply mean that the plane would explode. It is suggested that one might fly a 747 into the storage facilities at Sellafield. They exist anyway but the interesting thing about future nuclear power stations is that they will generate very little waste. Indeed, a year's production of waste could be contained within one cubic metre or, as somebody put it, inside a taxi. However, I do not see a 747 being flown into a taxi.

The next argument is often regarded as one of the major objections to nuclear power—the disposal of waste. CoRWM was set up to look at that although, given its terms of reference, it seems mainly a delaying device on the part of the Government. The Sense About Science organisation of which I am chairman has a panel of experts. Interestingly, they are unanimous that there is no particular problem about the disposal of waste—that is, deep geological disposal. Indeed, the Royal Society put it slightly more cautiously when it stated:

"The confidence that could be placed in geological disposal in UK sites has been understated".

It was put rather more decisively by the Geological Society of London, which stated:

"Informed geoscientific opinion is united around a central belief that only deep geological disposal can provide a long-term, safe and sustainable solution for radioactive waste".

That is a solution which Finland and Sweden are going for, and which Japan and Canada are likely to go for. I do not believe there is any doubt that CoRWM will recommend that when it is in a more sensible frame of mind.

Then there is the argument about safety. This is often used as an argument against nuclear power when it is one of the strong arguments in favour of it. In 2001 the Paul Scherrer Institut—a Swiss body—did a comparison of the number of deaths per million million watts of electricity per year. Its findings were as follows: gas, 85; coal, 342; hydro-electric power, 883; and nuclear power, eight. People are scared of radiation. James Lovelock went to Sellafield with a Geiger counter and was rather surprised to find that the level of radiation there was very much less than in his native Cornwall, which comes in the form of radon produced naturally. Indeed, there is some evidence that small doses of radiation can be good for you.

Chernobyl is the greatest disaster one can imagine. In that case people disabled the safety mechanisms and then increased the heating. It was a badly built, incompetently managed station. It was a disaster, and it led to 51 deaths. None of the prognostications about terrible consequences have been realised. As far as safety is concerned, there is no evidence against nuclear power. That leaves the question of cost. Several speakers have recommended, and I completely agree, that the right policy is to create the right long-term framework with incentives for the reduction of carbon dioxide and then to let the market decide. What are completely irrelevant, although often cited, are the huge costs of decommissioning, cited sometimes at £50 billion or more. Decommissioning has to take place anyway. It is not part of the cost of building new nuclear power stations which, as many speakers have pointed out, create so very much less waste than they did in the past.

The Royal Academy of Engineering, after very careful consideration, came to the conclusion that nuclear power was only just more costly than gas—though since then the price of gas has gone up. Taking into account the need to back up wind power with fossil fuel power stations—because wind power is effective only part of the time—if you compare nuclear with wind power, it is two and half to three times less costly. It seems to me that there is a very strong case indeed for nuclear power and it should be judged on the basis of evidence, not on misinformed scare stories.

Photo of Lord Turnbull Lord Turnbull Crossbench 3:01 pm, 16th February 2006

My Lords, as I speak in this House for the first time, I too am grateful for the help I have been given by its staff, for the wise advice given to me by the Convener of the Cross Benches—the noble Lord, Lord Williamson—and for the welcome offered by many noble Lords, many of whom I have encountered in an earlier incarnation. I worry, however, that this fund of good will might not survive a detailed scrutiny of my record working deep within the executive branch.

It is a great privilege to enter this House at a time when a number of issues which were previously in the tray marked "politically too difficult" are surfacing on to the agenda, foremost among which is the subject of this debate—energy policy and the role of nuclear power within it. I too am grateful to the noble Lord, Lord Jenkin, for giving us the opportunity to debate it. There will be some, in responding to the DTI's consultation document, who will want to make powerful pleas for or against nuclear power, renewables or coal. My plea today is different. The biggest mistake a detective can make in an investigation is to jump too quickly to conclusions. I have seen this mistake made many times in policy reviews.

At this stage, whether in this House or outside, we do not need competing advocacy of one source of energy or another, or worse still, an attempt to strike something off the agenda. What is needed is an open mind plus the best understanding of all the relevant evidence—the likely demand for energy here and abroad; the best scientific view of the impact on the environment; the prospects for supply, including a realistic assessment of the contribution from renewables and their true cost; and the prospect for scientific advances in energy production and the use of energy. How far, for example, will fuel cells have developed? How much will nuclear reactor design have advanced in the quarter of a century since we last commissioned one? What are the real prospects for clean coal technology or carbon capture? What economic incentives, taxes, subsidies or tradable permits are needed to provide the right incentives to produce and save energy? This work needs to recognise that a coherent energy strategy is not just about adding up the sources of supply and then comparing them with total demand. It is about how an overall energy market interacts as a system, when prices are high or low, when the wind blows and when it does not, and how robust it is to unexpected shocks.

There are many conflicting policy objectives to be reconciled—energy which is cheap, to improve our competitiveness; energy which is affordable to all; energy which is correctly priced and taxed to give the right incentives; a pattern of energy supply which is secure politically and which hedges our bets against different outcomes. I too endorse the view that the different options should be assessed against a level playing field. First, the full carbon footprint of each option needs to be calculated, including not just carbon emitted in operation, but that generated in construction and in acquiring the fuel. My hunch is that when that calculation is done it will do less damage to the nuclear option than some people are hoping.

Secondly, it is correctly pointed out that, before reopening a nuclear programme, we need to find a solution to the problem of nuclear waste that does not impose unreasonable liabilities on future generations. But what we demand of nuclear power we should also demand of fossil fuels. It is fine to draw attention to the hazards of nuclear waste and how long it lasts, as long as we remember that the principal waste of fossil fuels, CO2, may have consequences for mankind that last well beyond the 10,000-year life of nuclear waste.

The work I am seeking is intellectually very taxing. There have recently been two attempts at an energy review by the Strategy Unit and the DTI, neither of which have cracked the problem, as the noble Lord, Lord Jenkin, noted. By starting with the kind of analysis I have suggested, I hope that we can eliminate many of the wilder claims and counterclaims and come to an informed assessment of the options. I wish those involved in that review every success, particularly the DTI team who will have to draw together the responses to the consultation exercise. I hope that on this occasion they will be given the time, space and absence of preconditions to make a good job of it.

Photo of Baroness O'Cathain Baroness O'Cathain Conservative 3:06 pm, 16th February 2006

My Lords, it is a great privilege to thank the noble Lord, Lord Turnbull, for a first-class maiden speech. The official biography of Andrew Turnbull is, as one would expect, of stellar proportions. Educated at Enfield Grammar School and Christ's College, Cambridge, he became an economist—a member of that illustrious group, like many of us here, a "dismal scientist". There is nothing dismal about the noble Lord, however. He has a wonderful sense of fun, as witnessed by several of us at the Bloomsday celebrations in the Irish Embassy last June, when he made the Irish-born in the gathering feel totally inadequate by his amazing rendition of Joyce. I do not think that I should go any further. Another humorous occasion was when he was asked by a journalist about club membership—was it Pratt's, Boodle's or White's? No, it was Tottenham Hotspur.

The first steps in the career of the noble Lord, Lord Turnbull, were as an economist in the service of the government of Zambia, shortly after independence. A close friend of mine told me that he played a significant part in the economic development in that country at a seminal time in its history. He has kept up his links there. I feel that it is not out of order to quote my friend's assessment of him:

"He is very upright—there is a great morality in this man".

My friend has never yet been proved wrong.

His career in the Civil Service in HM Treasury seemed to be marked by major promotion every two to three years, but I am afraid that his promotion here will not be as advanced. His career culminated in the role of Cabinet Secretary and Head of the Home Civil Service from 2002 to 2005. Throughout his career in the Civil Service he was regarded as an administrative reformer. Perhaps he can come to our help here, too. To the honours of CB, CVO and KCB is now added the peerage—he is a great addition to our House. We welcome him and truly hope that he will continue to contribute at such a high level, as he did today, for many years to come.

I also thank my noble friend Lord Jenkin for being lucky in securing the ballot for this debate, and for being perspicacious in choosing such a topical issue.

We have been around this course many times—probably too frequently—but at least that shows that we are persistent and consistent. We have raised the issue of nuclear time and again, but, to give credit where it is due, the Government have listened and acknowledged that nuclear will almost certainly be part of the solution to the two big problems facing us—the security of our energy supplies and the issue of clean energy, which of course means a reduction in carbon emissions to counter their terrifying effects on the climate.

The consultation document, Our Energy Challenge, is a step forward; but time is of the essence and that sense of urgency does not seem to have permeated the conscience of the Government. Why not? Is the subject in the "all too difficult" basket, or is it a case of, "It won't be our problem and we can muddle along for a few more years before we are forced to take a decision"?

Lest this is regarded as unfair, just let me list the evidence. In 2003, there was an energy review. In 2006, there has been a consultation document with, I grant, a cut-off time of April for submissions. But a promise on page 15 of the document says:

"DTI will publish revised projections for the UK shortly together with updated assumptions for future fossil fuel prices . . . Comments will be invited on these projections and assumptions, which have been used to inform the consultation document".

How long will that take? We have publication, then consultation, then review of responses on projections and assumptions, on top of the consultation on the whole document. More worrying than all this is the fact that this excellent background data publication nowhere mentions any date at which a decision will be taken to put an energy policy, as opposed to an energy review, in place and to take action to start proper provision for secure and clean energy for our country in the long term.

Many years ago, as a very junior young economist in business, I was told that above all one should avoid "paralysis by analysis". I suggest with some trepidation that the Government should give some thought to that quotation. This is not in any way to decry the document. There is a brilliant analysis of the past, entitled "Progress So Far", but what about the future? The graphs showing future trends are based on, as the document says, "current measures only". The details of emissions by sector are just an attempt to decide what is likely to happen, although the document states:

"An important input for the Review will be work currently being done on comparative costs of emissions reduction"— yet another review and yet more delay before even an attempt is made to formulate policy.

I know that the noble Lord, Lord Turnbull, said in his wonderful maiden speech that we should not rush this thing too much, but, as the right reverend Prelate said, the lights will go out. It is no excuse to state, as the document does, that:

"One source of uncertainty in our projections is that we do not know when new technologies might begin to make a material contribution to our generation mix".

We will never know. What we do know is that new technologies will always be developing.

The impression is—I hope that it is only an impression—that the Government want to keep all their options open until technological development stands still. That will not happen. The document goes on in this vein, analysing the past and current state and making feeble attempts to forecast trends, but always with the caveat that another review or piece of work will clarify the situation. Where is the courage to be upfront and propose policy, and when will that happen?

The window of opportunity to take firm decisions on the nuclear issue is closing fast. Electricity generation from nuclear will have reduced from its current level by a third by 2012, which is only six years hence, and will continue to decline inexorably from there. Even if a decision to give the go-ahead for new nuclear installations was announced today, it would be at least 2016 before such installations could be adding to electricity generation. In the interim, we will have to rely more and more on methods of electricity that will add to carbon emissions overall. Is this a situation of which the Government, or any of us, can be proud? Can we even regard it as progress?

An additional concern is that the gap is not just in nuclear. A similar situation pertains in generation from coal-fired power stations, where the gap is likely to be a 40 per cent reduction by 2020. Yes, I know that such a gap will not have a deleterious effect on carbon emissions, but it will be filled by other carbon emission generation—namely from gas. The noble Lord, Lord Chorley, reminded us that gas has 50 times greater emissions than nuclear over the lifespan of the operation. I am highlighting these facts to draw attention to the reality that the new technologies of wind and wave power and all the other renewables, very worthy though they are—and I believe that we must have a mix of generation types—will in no way fill the gaps that are now known to us.

It is irresponsible to delay. The future economic prosperity of this country depends on policies being proposed now. The current inability to devise a nuclear policy was described to me yesterday in this way: "We have stopped drinking in the last chance saloon and closed the shutters". We cannot rely on over 80 per cent of our electricity being generated by gas. Recent events in Ukraine and only this week in Italy are a stark reminder of the unstable nature of contracts and actions in the gas-supplying countries of the globe. And why are we being like Janus, looking in both directions—committed to clean energy yet banking on gas, which has an inherent carbon emissions problem, while delaying a commitment to nuclear, which does not?

Although our current nuclear capacity has had extensions to reactor lives, I am told that we cannot plan any more life extensions. We were the first in the world to use nuclear for domestic electricity generation—50 years ago, as the noble Lord, Lord Cunningham, said in a great maiden speech—but the nature of the facilities now is such that they are not capable of further life extensions. The new nuclear technology, however, would be much more efficient and would have great possibilities for life extensions.

The Institution of Mechanical Engineers, in its response to the consultation document, states:

"Current estimates indicate that the economics of new nuclear plants are robust and will not require financial support from the Government".

The cost of nuclear has been a continuing concern but the Institution of Mechanical Engineers believes that, if the financial community regained its past confidence in the sector, there should be sufficient funds to finance nuclear projects, as well as projects in fossil fuel—of a low or no-carbon emission kind—and renewables. That is surely a policy option that should be investigated, actively, by the Government.

For confidence-building, we need a strong commitment from the Government that a comprehensive energy policy will be forthcoming in the very near future—at the latest, by the end of this calendar year. My noble friend Lord Jenkin has given us a great opportunity to push this seriously and now.

Photo of Lord Flowers Lord Flowers Crossbench 3:16 pm, 16th February 2006

My Lords, I greatly enjoyed the two maiden speeches that we have had today and I hope, and expect, to hear from the two noble Lords frequently and soon. I, too, am grateful to the noble Lord, Lord Jenkin of Roding, for giving us this opportunity to speak about the merits of nuclear power and our urgent need of it in the circumstances of the 21st century.

I want to contribute to this timely debate by saying a few words about the radioactive waste inevitably generated by the nuclear process, which has to be isolated from man and the environment for thousands of years. It is a subject on which I last spoke in your Lordships' House just over a year ago in the debate initiated by my noble friend Lord Oxburgh on the management of nuclear waste. On that occasion, I argued that in today's circumstances the regrettable absence of a long-term nuclear waste strategy in this country should not in itself, contrary to current policy, prevent the Government and the nuclear industry revealing, and getting approved and agreed, their plans for the next phase of development of nuclear power.

In this country, the high-level waste is increasingly being stored in vitrified form, safe for many decades to come—a third of it is already vitrified. Other wastes are likewise being treated appropriately. The issue of how and where their eventual disposal is to take place—presumably in deep geological formations, which, as has already been said, has been demonstrated abroad, especially in Finland—is consequently now more a political than a technological matter. We can give ourselves a little time finally to settle precisely how and where in this country we shall dispose of nuclear waste, knowing that it has already been shown to be technologically feasible elsewhere. We have the geologists and the engineers; we can do it too.

That is not to say, however, that we can now all heave a gigantic sigh of relief, thinking that the waste management problem has gone away. It has not. It is very much with us still. The Committee on Radioactive Waste Management is trying to make progress with it and I hope that it succeeds. For there is no doubt in my mind that the people of this country will not approve the future development of nuclear power, desirable as it may be for other reasons, until they come to believe that a strategy for the safe, long-term disposal of nuclear wastes is at least within reach. They will expect that a definitive strategy can be announced and agreed by government, Parliament and the nuclear industry, certainly before the first new stations are commissioned and are therefore producing their own waste.

Approval in principle of the preferred method and site, or sites, of waste disposal must not be left until some indefinite future date. Ideally, it should be announced no later than the announcement of a new nuclear build. That is still possible—just. But between the announcement of a new build and the commissioning of the first new reactor, there will be a period of about 10 years. During that time, the waste strategy must be agreed and promulgated, and the sooner the better. This obviously implies a degree of public trust in the Government's competence and integrity, and a great deal of hard work.

There are, as the noble Lord, Lord Taverne, has reminded us, some people who will always say "Nuclear power? Over my dead body!"—oblivious, perhaps, of the fact that we burn nuclear-generated electricity every day of the week; some produced here and some imported from France, where over three-quarters of their electricity is nuclear. But I believe that most people in this country are more sensible, and will sensibly accept a compromise of timing such as I have proposed, given all the weighty reasons—global warming, vulnerable gas supplies, severe practical limitations on renewable generation and soaring energy prices—that now exist for a new phase of development of nuclear power. There is a safe window of opportunity in which to decide on disposal.

I am trying to help the Government in this contentious matter. I shall be very interested in the Minister's response.

Photo of Lord Lea of Crondall Lord Lea of Crondall Labour 3:22 pm, 16th February 2006

My Lords, I should perhaps first declare an interest as patron of Trade Unions for Safe Nuclear Energy and point out in that connection that the TUC and CBI are both—and have been for a long time—in favour of a balanced energy policy. For the TUC, this policy has been able to withstand many challenges, even that of Chernobyl in April 1986.

I remember that at a TUC review at the time, and on earlier occasions, I had conversations with the noble Lord, Lord Cunningham of Felling, and visited his most beautiful constituency on several occasions. I remember walking around Wastwater; it could not be a more joyous place to visit.

I congratulate the noble Lord, Lord Turnbull, on a predictably polished, level-headed and far-sighted contribution. We look forward to many similar contributions—perhaps on easier subjects, like transport policy and congestion charging or, as he has experience of Zambia, on Africa. There is no shortage of scope.

The general perception of the public is without doubt that it is the Government's duty to keep the lights on, as the noble Lord, Lord Jenkin of Roding—who we congratulate on this debate—will ruefully remember from 1973-74. It is not the perception of the public that it is the Government's duty to ensure an adequate supply of dog biscuits. It is worth seeing why it is necessary to say what the limitations of market forces are in this debate. There is certainly no wider social market externality that I can see in the supply of dog biscuits. But the question of what a market is, and what comes into it, is central to the arithmetic of the different forms of energy. I congratulate the DTI on its transparent approach to this and gently remind the noble Baroness, Lady O'Cathain, that the Labour Party's precept is "softly, softly, catchee monkey".

Another factor is that a lot of the long-term calculations in the equation of generating costs per kilowatt hour were done at a time when gas was 23p per therm. The last time I looked, it was 55p per therm. One does not change the arithmetic every time the spot price changes, but it is self-evident that the long-term change in gas and oil prices will change the balance of advantage in the arithmetic towards nuclear.

To go back to dog biscuits versus keeping the lights on and why market forces have to be seen in a different light, we all recognise that there must be an energy policy. We need to consider the market externalities and how we bring in such questions as carbon dioxide. I have read a lot of the Green lobby's submissions, and it has been a little inconsistent. It thinks that energy policy should be market forces, and nothing but market forces—of course we say, "no subsidies"—but in other respects it demands as a central item of policy that all the environmental externalities be brought within "market forces". Our Kyoto obligations should also be brought in as market externalities in terms of "market forces". I agree with the noble Lord, Lord Jenkin, and other noble Lords who have called for the renewables obligation to be drawn to the attention of the Treasury as something worthy of applying to the nuclear industry.

As the noble Lord, Lord Woolmer, said, a 60 per cent reduction in carbon in 50 years is, if not almost unbelievable, certainly getting on that way. It is difficult to see how we are going to do it. I was a member of the round table on sustainable development after Rio de Janeiro in 1991 and a member of the government delegation to the Earth Summit. I was on a committee with the Chinese and others and at that time we were saying that the Chinese and the Indians had to be brought on board. This is not a question of saying to the Chinese and Indians, "Stop your economy growing. Pull up the drawbridge". We must put a lot more leverage on the Americans, along with the Russians. President Putin is a very far-sighted player of this poker game, which is why he, with a cold Siberia in his backyard, wants to be part of Kyoto. He knows the name of the game.

The question is not whether we develop the nuclear industry, but whether we shut it down because if we do nothing, we are shutting it down. At the moment, it supplies 20 per cent of our needs; in 2020, it will be seven per cent; and 75 per cent of all electricity generating sets, whether coal, nuclear, gas or oil, must be replaced within 10 years. I have some sympathy with the noble Lord, Lord Taverne, in calling for a lot more political courage in telling people that it will not be possible to blow London up as if it had been struck by an atomic bomb. Although public opinion is moving in a more neutral to positive direction, it is the responsibility of my friends in the Government to say that the worst case scenario is something a little like Chernobyl and that all the ideas about the genetic effects of low levels of radioactivity are scientifically unfounded.

The other public opinion point which has to be brought out much more into the open is about legacy waste and, indeed, military waste. We all know how the nuclear industry started, but it is there now and I support its development. But even creating 40 per cent, not just 20 per cent, of electricity by nuclear is only a blip on the amount of legacy waste that we have to deal with. The ethical questions raised by the right reverend Prelate the Bishop of Southwell and Nottingham cut both ways. We have ethical consideration about CO2 for the next thousand years.

In conclusion, I remind the House that at the end of the Callaghan government, of whom my noble friend Lord Cunningham was a member, we had an energy commission with all the stakeholders. It is a pity we do not have such a body now. We need to secure the maximum amount of stakeholders within the big tent, and I hope that the Government will appreciate that that is the way to maintain a consensus as we go along.

Photo of Lord Tombs Lord Tombs Crossbench 3:31 pm, 16th February 2006

My Lords, I congratulate the noble Lord, Lord Jenkin, on giving us the opportunity to discuss nuclear power as the pivotal contributor to our future energy strategy. I should also like to congratulate our two new colleagues, the noble Lord, Lord Cunningham, with whom I have spent many hours on energy strategy in the past, and the noble Lord, Lord Turnbull. They will come to see that discussion of energy matters is a recurring feast, if that is the appropriate word, in this House. I hope we shall hear from them again on this subject.

The latest government consultation document, modestly titled Our Energy Problem, makes no pretension to be a strategic one. Indeed, it follows its predecessors in its somewhat rambling, dissertational style and offers neither analysis nor guidance to its unfortunate consultees. I do not understand its purpose, if, indeed, there is a purpose, but I fear that it is likely to disappoint the Government in their apparent hopes that wisdom will be achieved by an absence of leadership.

The claim that this document is necessary because of unforeseen changes rings hollow. There were many voices in this House and elsewhere warning the Government of the limitations of their heavy reliance on wind power to meet the CO2 reductions envisaged, as there were about the perils, in security and financial terms, of their blind reliance on gas as the main fuel of the future.

Overlying all of this was the naive belief that the internal forces of a manipulated market mechanism would provide a long-term strategy for the energy market. As though that was not enough, there was an astonishing belief that international gas markets would operate freely. Toytown economics indeed, made worse by political procrastination and, I am sorry to say, prejudice. But there are some signs that the threat of climate change is becoming more widely recognised and there seems to be a growing recognition worldwide that nuclear power will be a part of the solution. We should therefore seek ways of reinforcing these nascent indicators by suggesting ways of facilitating the resumption of nuclear power station building.

The first requirement is for government to abandon the anti-nuclear measures which have, for a variety of reasons, become embedded in government thinking and actions. These are well known, but I will repeat them in order to refresh ministerial memories. They are: the imposition of a CO2 tax on a non-CO2 producing industry, a point made by the noble Lord, Lord Jenkin; the imposition of selectively punitive local rates on nuclear generation; the exclusion of nuclear generation from the national fossil fuel obligation; and, more recently, the oppressive financial terms imposed on British Energy by a government "rescue" of the company from a crisis purely of the Government's making.

We need a government approach shorn of the hostility and procrastination of recent years and concerned with the solution of problems rather than their creation. Three problems have often been mentioned as difficulties in the way of resuming a nuclear power programme. I should like to deal with these in turn, in a constructive attempt to help the Government escape the artificial situation into which they have talked themselves.

The first is that of affordability. The economics of nuclear power have been greatly improved by the new generation of reactors, which are substantially smaller than their predecessors, as well as being more inherently safe. Ample information of high quality is available around the world, but the Government seem to prefer in-house assessments by such groups as the PIU, which bring little to the examination beyond their obvious discomfort with the political climate in which their analysis is conducted.

The charge has been made that investors show no great willingness to promote new nuclear power. That is hardly surprising, given the lavish subsidies for wind power: £30 billion—I will echo the noble Lord, Lord Cunningham, and say £30,000 million—to the year 2020, according to the most recent government estimates. There is also the short building time and fool's gold of cheap gas, which have dominated industry policy for the past 10 years. The recent acknowledgement by the noble Lord, Lord Sainsbury, that nuclear power can now be regarded as a renewable source invites a logical response in the form of inclusion of nuclear power in the NFFO.

The second reason for delay has been the safe disposal of nuclear waste, about which we have heard quite a lot today. I had the honour of chairing a Select Committee of your Lordships' House which reported in March 1999 in favour of deep geological disposal. That solution has been widely adopted internationally but has been studiously avoided by the Government for the past seven years—largely, I fear, as a means of that procrastination, to which I and many other noble Lords have frequently referred.

Finally, there is an apparent belief that nuclear power is opposed by the public. Recent surveys have shown a steady improvement in public acceptance, aided by growing concern about the likely effects of climate change. I shall dwell on the topic of public acceptability by recounting two experiences from my period with the South of Scotland Electricity Board, a doughty enthusiast for nuclear power, in the mid-1970s.

At that time, we were applying for permission to build a nuclear power station at Torness, on the east coast. Local concerns were met by introducing local inhabitants to those from Hunterston, on the west coast, where we already had two nuclear stations. Indeed, at the time, there was a proposal to build a gas terminal on the Hunterston peninsula, which prompted local residents to send me a petition asking for a new nuclear power station instead. Since then, Torness has been built and nationally we have had a further 30 years of successful operation of UK nuclear power stations. The evidence shows a ready acceptance of existing local communities, who have discovered that nuclear power can be a very good neighbour.

At about that time, in partnership with Sir John Hill, then the chairman of the UKAEA, I approached the late Lord Porter, who was then director of the Royal Institution, to hold a debate at the institution on the merits and problems of nuclear power. The debate lasted for three days and was open to the public, It dealt with uranium mining, uranium enrichment, safety, waste disposal and weapons proliferation. Speakers for the industry were matched with opponents from environmental organisations. Understandably, the event attracted substantial media interest and two live television debates followed.

The result was a triumph for nuclear power. The issues of concern were dealt with fully and in public, and the necessarily technically complex issues were explored patiently and thoroughly in a way which had never been attempted before and was a resounding success at the debate itself, on television and in the press.

I would encourage the industry today to repeat the experience and so demonstrate that there are satisfactory answers to the public's apprehensions, rather than adopting a defensive stance in responding to alarmist media statements which make their impact before a defence can be mounted.

Finally, my Lords, let us recognise the reality that nuclear power, as a baseload contributor to our energy demand, can allow us to build a less polluting society and at the same time preserve our strategic and economic independence in the energy field. It also offers, through hydrogen production, the best hope available of tackling that mammoth polluter, transport.

Photo of Lord Redesdale Lord Redesdale Spokesperson in the Lords (Energy), Environment, Food & Rural Affairs, Spokesperson in the Lords (Energy), Trade & Industry 3:40 pm, 16th February 2006

My Lords, I start by thanking the noble Lord, Lord Jenkin, for his rather inspired speech, although I think I will leave the love analogies to others. I also thank the two maiden speakers for their contributions. The speech of the noble Lord, Lord Cunningham, was excellent. I knew that I would have to mention him, so I looked at his entry in Dod On Line. Perhaps I should mention that the noble Lord has a great deal of humility. Under the heading "career" he states that he was a research academic at Durham University, and that is it. He has left out of Dod completely his political career, which is an inspired move. I look forward to hearing more speeches from the noble Lord, Lord Turnbull, after his illuminating contribution. He understands the arcane workings of decision making from the inside of government.

Like the noble Lord, Lord Tombs, I read the consultative document Our Energy Challenge in preparation for this debate, a fine document featuring a picture of the planet on the cover. That is always a worrying aspect. But given that it is a consultation document, I did not bother to read most of it. Initially I went to page 7, which lists the key questions for review. Those key questions guide consultees on what they are supposed to be answering. It is clear, as the noble Lord, Lord Jenkin, pointed out, that the whole purpose of the consultation paper is set out in the third question:

"The Energy White Paper left open the option of nuclear new build. Are there particular considerations that should apply to nuclear as the government re-examines the issues bearing on new build, including long-term liabilities and waste management? If so, what are these, and how should the government address them?".

I believe this document makes the point that the Government are looking at new build. As many noble Lords and many in my party know, I am sceptical about the case for nuclear. I must say that the nuclear industry has done an incredible job over the past 10 years, taking itself out of a position where it looked like nuclear power stations were to be phased out without reprieve to one where it is now seen almost as an environmental champion, coming forward to save the planet. Moreover, I accept that nuclear will have to be reconsidered in the light of global warming.

However, a few questions should be asked, ones that the nuclear industry will have to answer. First, I want to ask a question of the Government. The whole debate assumes that the consultation will be taken into account and weighed up, but a number of people have said that for new nuclear build to move forward, primary legislation might well be needed and therefore Parliament will make the decision. But I am not certain that that is the case. If it is not and the consultation reveals a majority in favour of new nuclear build, does it mean that this document will set the parameters for a White Paper leading to the Government declaring that they will move towards nuclear new build? Will Parliament be given the opportunity to debate the option of any nuclear new build, or will the decision be taken? The Prime Minister has already stated that he is keen on the argument, but that might not remain the case because costs will come into it and the decision probably will not be taken before we have another Prime Minister. For that Prime Minister, this will certainly have cost implications.

It has been stated that nuclear is needed to keep the lights on. This has been said in three debates in your Lordships' House, but I challenge it. Although nuclear makes an important contribution to the energy basket as it is made up, it does not provide the baseload. That is supplied by coal and gas, and in the future gas will embrace a larger percentage. Some 19 per cent of our energy is supplied by nuclear generation. Therefore it could be said that to take out the nuclear option would not be to remove the major component.

There is also a question mark over how many nuclear power stations will have to be built significantly to increase the proportion of energy supplied by nuclear. The present figures refer to four new nuclear power stations, but they certainly will not replace the 25 per cent of energy that was provided by nuclear.

If we are going to build a large number of power stations, it raises the question of who will build them. As the noble Lord, Lord Jenkin, pointed out, Westinghouse, of course, has now been sold to Toshiba. One of the reasons given for that was the risk implications of building nuclear power stations abroad and the fact that the Treasury would not want to underwrite them. But if the Treasury is unwilling to underwrite the risk factors of building nuclear power reactors abroad, who will underwrite the new nuclear build in this country? If the new nuclear build is to take place, will the Treasury underwrite it or will it be underwritten by whoever builds the new reactors?

I believe that nuclear reactors could be built a great deal quicker than many people set out. Of course, if the new nuclear reactors are built on sites where there are nuclear power stations at present, that will get rid of many of the question marks over planning. The four new nuclear power stations that have been built in China have come in under budget and under time.

But, as was pointed out by the right reverend Prelate, nuclear power still has two hurdles to face, the first being waste. It has been pointed out by my noble friend Lord Taverne that waste is now an issue of lesser magnitude. Of course, much of our nuclear waste in the past was built up through military activities, but it is still an issue. It is not any less difficult to deal with; we do not have a solution. A deep-level storage facility is not a solution but a management factor. Do the Government have any estimate of the costs of such deep-level storage facilities?

The other hurdle is cost. We have referred to many of the aspects of cost, but I am quite concerned about the cost of electricity. If we build these major nuclear power stations, which will last for 50 years—and some of them could last for 50 years—we will need to discuss how we are to set the price for the electricity produced by them. That will have an interesting effect on the cost of electricity from other suppliers. It seems strange that while we are discussing the liberalisation of the gas market in Europe—and I press the Government to do as much as they can to move forward on that issue; it seems ridiculous that we are paying vastly inflated prices for gas when compared with other European customers—we would not expect a set price for energy from the gas suppliers but we might from nuclear.

The noble Lord, Lord Turnbull, said that one of the issues that have to be addressed is that the present power stations produce carbon waste. That factor has to be taken into account and I would press the Government to look at the work of Professor Peter Hall of Strathclyde University, who is looking into methods of carbon storage and capture. The aspect of clean coal should be looked at. Professor Hall deals with prototype work carried out in Scotland by industry and the University of Strathclyde to sequester carbon dioxide in unmineable coal seams 3,000 feet down under the central belt. They are about to undertake a two-year programme which would see flue gas similar to that produced by the Longannet coal-fired power station injected deep down. As a by-product, the methane gas which would then be pumped to the surface could be burnt, the sales revenue from which could cover the drilling costs. Billions of tonnes of carbon could be placed underground safely. It would bond with the coal and therefore would not come to the surface. A question for the Government is: why are they not investing more in clean coal-fired technologies? If we are to make coal and gas—which produce so much of our energy—carbon neutral and prevent global warming, we have to start investing seriously in this technology.

Will the Government look again at co-fired biomass which is under threat due to the capping of the renewable obligations? This issue has to be addressed; it is one way of making clean coal sustainable if biomass is to be grown and burnt alongside coal. However, the big changes to the renewable obligations, where a cap on this is being considered, are not supplying the amount of security for farmers to grow the stuff in the first place. We are looking at another collapse in the biomass market.

I was going to talk about wind and the possibility of a new 10 megawatt turbine that is under development, but I have run out of time. However, I will finish on this one point. I understand that the energy review is looking at a basket-case of energy.

Noble Lords:


Photo of Lord Redesdale Lord Redesdale Spokesperson in the Lords (Energy), Environment, Food & Rural Affairs, Spokesperson in the Lords (Energy), Trade & Industry

My Lords, I am sorry, that was my view of nuclear. I mean that the review is looking at a basket of energy producers. I believe that nuclear should be taken in the round and that we should look much more closely at clean coal and gas firing.

Photo of Baroness Miller of Hendon Baroness Miller of Hendon Shadow Minister, Trade & Industry 3:51 pm, 16th February 2006

My Lords, like other noble Lords, I congratulate my noble friend Lord Jenkin on securing this debate and thank him for introducing it, as he always does, so well. It is also a pleasure to have heard the two maiden speeches. I hope that both noble Lords will speak very many times, particularly on this subject, on which they seem to have such a lot of expertise. Indeed, there is a lot of expertise on this matter on all sides of the House.

The debate is particularly timely as the Government's consultation has only just been published. My party has just announced that it will conduct its own separate energy review. No doubt our energy review will take into account the various views expressed today by your Lordships.

We have to ask ourselves why, less than three years after a White Paper which was to be the road map for the Government's energy plan for the foreseeable future, they are coming back with a fresh consultation. The answer to the question about the need for this consultation is to be found in the refreshingly frank executive summary to the Government's consultation paper. Let me quote just a few of the phrases:

"Fossil fuel prices . . . are now much higher than at the time of the White Paper . . . The UK has become a net gas importer sooner than expected and is also becoming a net oil importer . . . Progress in introducing truly open energy markets in the EU has been slow".

The last point underlines the warning that we have given Ministers several times, that for gas supplies, we are at the far end of a long supply line. As we have seen in the recent Ukrainian crisis, what we get is only what the Germans, the French and others are prepared to allow to pass. Three German and French energy companies are facing an EU inquiry into allegations that they have abused their dominant positions. Today the underuse of the interconnector from Belgium when we were having gas shortages was reported. We pay for this, in the form of rocketing fuel prices.

As part of their diversity programme, the Government are encouraging the building of 10 new gas-fired power stations in the next five years, to serve a quarter of the population.

In the consultation paper, the Government coyly admit:

"There has been a general heightening of sensitivity . . . affecting perceptions of the security of supply from major exporter countries".

I am not the sort of person who says, "I told you so", but I and many others, as the noble Lord, Lord Tombs, has said, have been saying so to the Government for a long time—not once, but on numerous occasions. In the passages I have quoted, the Government are confessing that the assumptions on which they have based their entire energy policy, as contained in the White Paper, were disastrously wrong. Furthermore, as we have repeatedly said, they now realise that dependence on supplies of imported gas and oil from unstable and possibly unfriendly regimes was one day going to make us a hostage to fortune.

The dispute between Russia and Ukraine had enormous repercussions. It led to the Government threatening the industry with the possible introduction of a three-day week. More than that, it indicated how the Russian Government are ruthlessly prepared to use gas supplies as a political weapon. The reason why my party believes that a separate review is needed is the same as the Government's current review of their own policy. As we know, the policy as set out in the White Paper was a potential disaster, but we all recognise that we need diverse sources of energy if the Government are to meet their legal obligation to ensure security of supply. As my noble friend Lady O'Cathain mentioned, we believe that the Prime Minister has been listening and is possibly changing his mind.

Our review will look into every aspect of the diversity of supply, whether fossil fuels, biomass, carbon capture, clean coal, wind and wave power and the important question of energy conservation. Important as all those topics are, we need to know what will happen now. The problem with carbon is very fast-moving. Even the president of the greatest fuel-using country on the planet, the United States of America, has recently warned his fellow citizens that they have to reduce their dependence on imported power supplies. While the Government's new consultation is about the reappraisal of what the paper calls "Our Energy Challenge", the role of nuclear energy is the aspect of the challenge that my noble friend examined, as have many others, in the debate.

In response to persistent questioning on nuclear power by my noble friend, by me, indeed by Members all around the House and certainly Members on the Government Benches, we have always heard the answer, "Well, we are keeping the nuclear option open". I believe that they are now thinking that they have to do something about it. If that is so, that is all to the good. I refer, of course, to new nuclear build to replace the present installations which, currently, contribute to a major part of our energy requirements but which are due to be decommissioned in the not-too-distant future. That is what the debate is specifically about.

As this is a timed debate, I do not have the time to reiterate the many advantages of nuclear power, especially for the United Kingdom, which, in a generation, will be reduced to the same state as Japan of having no indigenous fuel supplies of its own. I simply add, on the environmental aspect, something of the new danger that arises from the constant burning of fossil fuels. We all know about the destruction of the ozone layer and the effect of global warming on the climate and especially on the ice caps in the Arctic, the Antarctic and Greenland. We are also aware of the problems to trees and plants caused by acid rain. However, it now emerges that the sea is becoming more acidic. That is an international problem. It is significant that China and India, which contend with the United States and Russia to be the greatest polluters, are already taking steps to use more nuclear power as an alternative to carbon fuels.

I would like to use the little time available to me to deal with some of the anti-nuclear myths and deliberate distortions that surround debates on the subject. First, there is the argument that constructing and supplying nuclear power stations uses more energy than it produces. I shall not go into detail on that because my noble friend Lord Jenkin has already mentioned it.

There is also the suggestion that high-grade uranium ore will soon be exhausted. I hate to take issue with the right reverend Prelate the Bishop of Southwell and Nottingham, but I have been advised that that is not true. In fact, the available supplies that we have will certainly outlast the proven reserves of oil and gas and that is without taking into account the recycling of the so-called waste into MOX fuels, which increasingly are used in many water reactors.

The cost of decommissioning plants is also greatly exaggerated, especially if one assumes that every obsolete station is to be returned to a greenfield site. I believe my noble friend mentioned that, as did the noble Lord, Lord Tombs. The policy for new nuclear stations should be, wherever possible, that they be built on the sites of the old ones. That would certainly shorten the time required for planning and avoid NIMBY objections. People in those areas are happy to have them because so many jobs depend on their being kept in the area.

The Independent recently repeated the myth that there are 2.3 million cubic metres of nuclear waste. We all know that 90 per cent of waste is low level. That is what we are really talking about. Only one six hundredth of 1 per cent is high level. We need as a realistic contribution to this debate the expected recommendations from CoRWM and not the distorted figures published by a newspaper.

The clock is ticking, and ticking very fast at that. By their own admission in the consultation paper that I quoted, the Government have got totally wrong all those assumptions on which current energy policy was based. Even today, the question of nuclear power generation is buried away on page 63 of the consultation document as a sort of reluctant afterthought, but I suggest that the Government will look at it differently. If the Government have not finished with keeping the nuclear option open, what do they propose to do?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 4:01 pm, 16th February 2006

My Lords, I, too, am grateful to the noble Lord, Lord Jenkin, for introducing this timely debate and for expressing himself in his usual cogent way. He asked me a series of questions. I will do my best to reply to them, but in a debate such as this, I have obligations to all Members of this House who have contributed. It has been a very full and insightful debate. Every contribution is worthy of a considerable response, but I, too, am under the constraints of time.

Perhaps I may reply first to the noble Baroness, Lady Miller, not least because her remarks are still ringing in my ears, but also because she made a charge which I shall refute. A great deal was said about a review. In an outstanding maiden speech, the noble Lord, Lord Turnbull, suggested that the Government ought to follow certain principles when they consider the report on such a difficult issue. He said it was one of the great untouchable issues of our time. It is certainly one of its greatest challenges. None of us who has contributed to this debate doubts that the future of energy supplies is of conspicuous importance to our nation and one of the most difficult to confront. The noble Lord, Lord Turnbull, indicated the principles on which the report should be considered. I assure him that I expect to see those principles followed. We will take into account all the factors which he indicated without prejudice and make a real assessment of the options available, while, as he said, hedging our bets against changing circumstances.

After hearing the contribution of the noble Baroness, Lady Miller, anyone would think that it is easy to deal with certainties in the energy debate, but it is not. It is absolutely not the case that that White Paper of 2003 has been destroyed by recent developments. That White Paper outlined broad areas of strategy for the development of our energy supplies. Most obviously, it envisaged an increase in imports of gas from elsewhere, because we were aware of the run-down of North Sea gas. In doing so, it raised the whole question of the security and diversity of those supplies; the capital installations at ports which are necessary for liquid natural gas; and the pipelines across the North Sea and further east into Asia. All these factors the Government have been active upon in recent years. It is the case that all experts, including all those who advised the Government, were taken by surprise at the very rapid rundown of North Sea gas stocks. That presents a challenge, and that is why the review is necessary—and that is why the nuclear issue is a relevant factor. As the Prime Minister made clear, nuclear is part of the overall assessment that the Government will make in this report on the future of energy supplies.

I emphasise that this debate today was bound to attract noble Lords with a real interest, insight and perception of the values of nuclear—none more so than my noble friend Lord Cunningham, who brought to the debate very long experience with regard to the industry, not only in terms of his advocacy from the Front Bench in the other place, but also because of the constituency that he represented, and his deep understanding of the issues around Sellafield. I am grateful to my noble friend for having carried on the opening statement that the noble Lord, Lord Jenkin, made, in a way that set a pattern of constructive approach to the nuclear issue. That was followed by other noble Lords, who also emphasised the values of nuclear.

But let me just enter one caveat—and I address it most in relation to the remarks of the noble Lord, Lord Tombs. He knows how much I hold him in respect for his work with regard to the energy industry. I listened very carefully to the points that he made today. However, it is not a question of a government running away from issues and procrastinating about decisions of this kind over recent years. The noble Lord will know, as all noble Lords will recognise, that nuclear presented for a long time for this nation, as it did for other European nations and for the United States, the real problem of public aversion to nuclear in the wake of Three Mile Island and Chernobyl and the anxieties that were intensified by what were often reflected in this debate as somewhat ill-informed anxieties about the nature of terrorist attacks and the dangers that they might produce with regard to nuclear. But the noble Lord, Lord Tombs, will recognise that governments have to tread carefully in areas where public opinion needs persuasion and needs a fuller identification of the facts. I shall give way to the noble Lord, despite the constraints on my time.

Photo of Lord Tombs Lord Tombs Crossbench

My Lords, the Minister has succeeded in provoking me. My point about procrastination does not in fact relate solely to the question of building new nuclear power stations. It is seven years since the committee of this House reported on disposal of nuclear waste, which is a problem that has been with us for a very long time, and the Government's action has been to appoint one consultative committee after another for the past seven years. If that is not procrastination, I do not know what is.

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, it is also a reflection of what we all recognise is the most difficult of all issues and, if I dare say so to noble Lords, of political issues. What was the first issue that the previous administration faced when they looked at the question whether they could find a site for nuclear waste? One of the most promising sites was in a constituency that happened at the time to be represented by the government Chief Whip. It caused an intake of breath—and the intake of breath and the pause lasted years. Identifying sites for nuclear waste is a very acute political problem, and there is no point in noble Lords simply bringing to this debate expertise about the technology that is required and the progress that could be made with regard to nuclear. I recognise how valid those points are, and how much today's debate would have enlightened the nation about the strengths of the nuclear case, but I also enter the obvious caveat that it is not easy to persuade the British people that the disposal of nuclear is not a major problem. Unless we are secure about that issue, we cannot expect the nation to regard the proposal to extend the nuclear industry in anything else except hostile terms.

The committee will be reporting this year. The noble Lord, Lord Jenkin, asked whether there would be a timetable consequent upon its report. I cannot give him that assurance. We need to look at the nature of the report and then evaluate how we move on from there. But the Government's review on energy issues will be related to the crucial report of the committee on radioactive waste management, and, as I say, there is no question of us being able to evaluate nuclear in the way that has been sought on many sides of the House today with regard to its potential merits and contribution, unless we have effective and convincing answers to questions about nuclear waste.

The review does not in any way change the principles on which we are conducting our energy policy, but the situation has moved on since we set up our energy policies in 2003, in particular the question of changes in our North Sea production. There have also been changes beyond our borders. We have seen an illiberal process in the European Community, to which the Government have reacted sharply. We expect and demand that the EC makes more rapid progress than in the immediate recent past. That has been a factor with regard to the supplies of gas to this country and the price that has been charged for them—again, issues that were referred to in the debate. We also have to take account of the substantially increased demands upon energy in global terms with the massive increase in the economies of China and Russia. So this review is not concerned with the immediate reaction to this winter, but with evaluating major features in the overall climate with regard to energy.

A number of noble Lords have spoken with considerable conviction and passion about the role of the nuclear industry, identified the inhibitions and limitations upon it in the past and expect to see those removed in the future. But we do not expect the review to produce easy yes and no answers for British energy. We all recognise that, even if changes occur with regard to component parts of the supply, we are bound to be dependent for as far any of us can expect to see on a mix of energy supplies, of which some will certainly be from outside the United Kingdom. With the percentage of gas we are reliant upon at present and our own limited resources in the North Sea, we cannot hope to see our situation transformed in the short term, so it is our role to guarantee security of supply and have the necessary investment to make possible a range of potential suppliers of imported gas.

I stress that the review will take that very much into account. However, nuclear energy is already part of the mix. The noble Lord, Lord Jenkin, emphasised in his opening remarks that unless action was taken, the part of the mix that nuclear energy occupies would decrease over time. He advocated that it ought to be sustained or even increased. Even by 2020, around 7 per cent of our electricity will still come from nuclear if we do nothing with regard to new build. New build would not require fresh legislation but it would require the approval of the Secretary of State. I cannot imagine that being granted without substantial public interest being reflected in very intensive debates in both Houses of Parliament. I say to the noble Lord, Lord Redesdale, that legislation would not be required for an expansion of the nuclear industry.

I was grateful for the contribution of the noble Lord, Lord Flowers. I believe that he was one of the first speakers to mention the important issues concerning nuclear waste. It is crucial for public opinion to be reassured on that point. It is one of the biggest problems and one that we all know has been considered by the committee for a number of years. It will be settled this year.

I thank the right reverend Prelate for his contribution. He mentioned the matter that we also need to address—whether the expansion of our energy demands is exponential or whether changes in public attitude will reduce some of the pressures in that area. None of us is facile about this issue. We all know that energy demands are generated in a growth economy. I was grateful to the right reverend Prelate for introducing that element as he put the consumption of electricity into context.

I reassure the noble Duke, the Duke of Montrose, with regard to Scottish nuclear power that decisions on power stations are commercial decisions taken by the generator concerned. It is not a question of government constraints in that regard or of political constraints but it is very much a question of economic constraints. Noble Lords identified that difficulty for the industry. If the review concluded that we had significantly to increase nuclear generation, we would require nuclear build. To get it we would need to change the terms of trade for the industry for such construction. Economic factors have been accurately identified that militate against the industry. I believe that my noble friend Lord Woolmer was the first to mention that but other speakers added that a level playing field would be needed.

Of course, I recognise the anxieties of the noble Lord, Lord Redesdale, about aspects of the nuclear issue. He made clear where his party stands on that issue. It has its representative role in British public opinion and national life. If the case is to be made for nuclear expansion, that opinion needs to be confronted. Noble Lords advocating the case of nuclear in this debate were a little prone to being somewhat dismissive of the opposition to it that exists. It is easy to destroy the scepticism with regard to nuclear, but that scepticism is founded on considerable principles and experience of problems in the not-too-distant past. That is why we had substantial areas to cover in managing changes in public attitude.

I am not in any way, shape or form minimising the challenge that still is set before the Government on energy policy. I emphasise that the policy is on very sound foundations at present. I hear from time to time, and I recognise, that the margin of safety of supply in winters in recent years has been much lower than in the more generous past. It is also the case that the lights have not looked like going out, nor will they go out as long as a careful, considerate and intelligent government pursue policies based on a careful evaluation of the facts, which is exactly what the noble Lord, Lord Turnbull, enjoined us to do.

We all owe the noble Lord, Lord Jenkin, a particular debt with regard to the debate, which he initiated on this most timely occasion, and I will respond to his questions. He asked what the Government are doing to strengthen the Nuclear Installations Inspectorate, which is already below establishment. I emphasise that the HSE and the inspectorate continue to review the complement to meet the changing business environment, which is part of the programme of continuous improvement. The inspectorate is taking steps to increase its productivity by better targeting inspectors' activity in securing improvements in nuclear safety. He asked me whether the NDA strategy document is based on the assumption that all nuclear activity is to cease and all sites are to be returned to green-field status. That is not entirely true. Of course, the NDA is responsible for the decommissioning of the United Kingdom civil nuclear legacy, which is made up of the facilities created some 30 or 40 years ago. That legacy needs to be dealt with irrespective of whatever decisions are taken on new nuclear build. We need to be able to show that we can deal with clean up and clear up as well as, potentially, extension and advance.

I emphasise that the Thorp plant will not restart until the Nuclear Installations Inspectorate is satisfied that it is safe to do so. I understand that the operator of the site, British Nuclear Group, hopes, subject to the agreement of the Nuclear Decommissioning Authority and the nuclear inspectorate, to be ready to restart the plant this summer. The noble Lord had a number of other cogent points that we all respected in his opening contribution, and those points were reinforced during the debate. I hope that I have met his points in my general response. I apologise to those noble Lords whose immediate points I have not directly responded to. The House will recognise that limiting a speech to just over 20 minutes would tax the abilities of almost anyone to respond adequately to such an extensive and well-informed debate; least of all me. I hope that if noble Lords have outstanding issues they will speak to me, and I will write to them on those further points.

Photo of Lord Jenkin of Roding Lord Jenkin of Roding Conservative 4:24 pm, 16th February 2006

My Lords, in the two or three minutes before our time runs out, I express my very warm thanks to all those who took part in the debate. It has been a worthwhile debate, with a lot of extremely valid points being made. There can be little doubt that we have made some progress when the noble Lord, Lord Redesdale, has finally agreed that the nuclear issue has to be examined. What one of my noble friends in an earlier debate called the Liberal Democrat Party's "Clause 4 moment" may have arrived.

I am grateful to the noble Lord, Lord Davies of Oldham, for his answers to my questions. He said two things, one of which greatly encouraged me. He said that the issue of waste will be settled this year. We shall want to hold the Government to that. He also said that the review does not change the principles on which we are conducting energy policy. If it does not, the review is simply not worthwhile.

Perhaps I may quote one sentence from the stack of evidence I used in preparation for this debate. It states:

"Current investor uncertainty in key issues such as Government future targets for carbon dioxide emission reduction is inhibiting new build".

Unless the Government set a long-term consistent policy on carbon, everything else will fall by the wayside. I hope that the Minister may have taken that message home.

I thank all noble Lords and extend congratulations to the two maiden speakers and I hope that we shall hear them again, particularly the noble Lord, Lord Turnbull. He was offered eight minutes and managed to do it in four. That is an example which the rest of us should be prepared to follow. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.