Queen’s Speech — Debate (4th Day)

Part of the debate – in the House of Lords at 6:52 pm on 14th May 2013.

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Photo of Lord Redesdale Lord Redesdale Liberal Democrat 6:52 pm, 14th May 2013

My Lords, I start by welcoming the maiden speech of my noble friend Lord Ridley. He is not in his place, but I was most impressed by the fact that his sons spent more time in the Chamber than many other Peers have managed—a number of hours. I welcome him particularly because he is a neighbour of mine in Northumberland. I miss his father, who was a great friend of the red squirrel in Northumberland, an issue we were both passionate about. I also liked his point about being an ex-hereditary, although as an ex-hereditary myself, and now a life Peer, I took a slightly different route to address the House this evening.

I wish to speak on three aspects of the Queen’s Speech, and start by focusing on energy. I have noticed, having taken part in a vast number of debates on Queen’s Speeches over the years, a depressing aspect of this one. Scientists have recently pointed out that we might well have passed 400 parts per million of carbon dioxide in the atmosphere, but this seems to have been completely neglected in many of the speeches about energy. Carbon was a very important issue on all sides of the House, especially for the introduction of the Climate Change Act 2008, which I think the Labour Party has a great deal of credit for introducing. It is very unfortunate that that has been missed.

I welcome the Energy Bill to come, especially when it talks about greening up aspects of energy, but we should not misunderstand the situation that we are facing. The noble Lord, Lord Oxburgh, mentioned that we face an energy gap. I declare an interest as the CEO of the Energy Managers Association and the Carbon Management Association, which represent all the energy managers in the country. They are absolutely dumbfounded that politicians fail to understand that we will not have enough power generation to meet our needs in peak demand in a couple of years’ time. At a conference recently, I put up on the board when they thought the first blackouts would be. Out of 2015, 2016 and 2017, 80% said 2015. That is not so good if you live in Reading or Oldham, as those are the places on the grid that are about to drop off first. Blackouts will not hit universally but they will be quite widespread. We have a major issue, the very simple reason being that Governments have failed to build power stations of whatever hue: coal, gas or renewable energy.

I was asked recently why we have not been building power stations. The answer is very simple: for nuclear power stations, which the noble Lord, Lord Jenkin, has been pushing for, we are talking about a 50-year planning cycle. You have to get the money, plan it, build it and then decommission it after its run cycle. That could be longer than 50 years. That has to be put to a Parliament that now has a maximum period of five years. The politicians then have to explain their decision to the press, who are running on a 24-hour news cycle, and to an electorate who are worrying about last month’s bills, not where the energy bill is coming from in the next 50 years. That is why we have a massive backlog.

Privatisation has been a bit of a con. We have sweated the assets on power generation and on the distribution grid. To put it in context, a recent report talked about £100 billion being needed. The figures came out anywhere between £100 billion and £800 billion to renew the whole grid, depending on whether you take down all the power cable lines, but they are many years old and we are going to have to eventually. The average figure that the experts came to was about £360 billion. If we were to do that over the next 10 years, to get the grid up to where we believe it should be would mean £36 billion a year, which is about the equivalent of a banking crisis each year for the next 10 years. I see no pot of money put aside to pay for that.

Ofgem’s report on the fact that we have problems and that energy prices are going to go up has nothing to do with environmental costs. Indeed, one of the great myths going around at the moment is that Europe is responsible for us shutting down our power stations. Yes, the emissions objectives are going to bring that forward but the trouble is that most of the power stations are 30 to 40 years old. They are steam-driven power stations with thousands of miles of steam pipes. They have a run-time cycle: after 30 or 40 years you do not have a power station, you have what one engineer described to me as a colander. They are just not efficient enough to run and will have to be scrapped. We are looking at losing about a fifth of our power-generating capacity. This is a problem because we might then have to move. None of the generators, after the experience they have had, will actually build a coal-fired power station, so we will have to go to gas.

We should be careful about another myth, which is that we can get rid of gas from the system. Eight out of 10 homes are on gas and I cannot see many people wanting to change their boiler. The big problem is that we are now going to generate the majority of our power through gas-fired power stations. A gas-fired power station loses about 70% of the fuel up the chimney, just to get you the electricity. We talk about decarbonising the grid by going for electricity when we are actually losing most of the energy in the generation at that point. We should not go down the road of saying there is a silver bullet.

Unfortunately, there are not really many silver bullets in energy generation. We are going to have to build nuclear power stations. I know there are some in this Chamber who will be surprised to see me promoting nuclear after the many years I spent fighting it. When I was energy spokesman for the Liberal Democrats I was asked whether I would take part in some debates on nuclear because they had to have somebody who was going to be against it. The noble Lord, Lord Hunt, remembers those debates. My problem with nuclear is that it is not going to provide cheap electricity and is not going to come on until the 2030s anyway—it is not a short-term solution. We have major problems with our energy infrastructure, and politicians have to realise that it is going to be a lottery. Whoever is in power when the first blackouts hit are going to take the blame, not the fact that we have not built power stations for a very long time.

The second aspect is a problem that is linked to that. We have problems with power generation, but we also have a massive problem with the water industry. The water Bill, as far as I am concerned, is a complete load of twaddle. I am sorry, but I find the idea of competition in water incredible. The noble Lord, Lord Freud, said that we are going to sell water and that you will be able to pick your water up from anywhere. Yes, I can go to Newcastle, to Kielder Water or Catcleugh reservoir—I have a private water supply as a damned great pipe runs through my land, although I cannot actually get any of the water out of it—get a bucket from there and bring it down to London, but the energy cost of shifting water is incredibly high.

Ofwat is illiterate. I went to a presentation on competition, which showed a picture of water competition. It was a fantastic map. It showed in yellow where all the bits joined up, and the biggest concentration was around Bristol, south Wales and north Somerset. I said, “Am I the only one to realise that the Bristol Channel runs through there, so you cannot actually link up because there are no pipes between?”. The whole policy is based on that.

The trouble with Ofwat is that it is all about the cost of water now. Have we learnt nothing? I plan to be alive in 20 years’ time. I plan for my children to be alive a lot longer. If we do not do something about resilience now, we are going to be the consumers who pay for this. Yet we have a regulator that fired all its sustainability officers and employed more economists to talk about the cost now. It makes no sense. In the White Paper the Government said that they were minded to consider making sustainability a primary rather than secondary objective for Ofwat. I do not think that anybody around the House thinks that sustainability should be a primary objective, and I certainly will move an amendment to that effect.

Sustainability is one of those words that actually came from international development. It has moved in the political sense and now means carbon and a number of other things. Of course, if you do not have water you die. At a Defra briefing last year, Defra said, “We are going to have hosepipe bans and even more serious issues if we do not have 200% of normal rainfall”. Last summer we had 220% of normal rainfall and everybody said that was fine. We are now seeing groundwater flooding because we have had so much rain. The climate is changing. This is not a question of whether or not you believe in climate change. The evidence over the past 10 years shows that we have a real issue.

I have gone over my time, but as the noble Lord, Lord De Mauley, is in his place, I should say that I also welcome the Government’s intention to do something about dangerous dogs. I very much hope that that is an issue we can have some agreement on.