Clause 78

Energy Bill – in a Public Bill Committee at 2:15 pm on 6 March 2008.

Alert me about debates like this

Energy reports

Question proposed, That the clause stand part of the Bill.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to take new clause 5—Annual report on gas storage —

‘The Secretary of State shall, in each calendar year following that in which this Act is passed, lay before Parliament a report on—

(a) his assessment of the appropriate volume of onshore gas storage to ensure long-term energy security, and

(b) the progress that has been made towards reaching that target.’.

New clause 25—Energy usage in homes and businesses

‘The Secretary of State shall, in each calendar year following that in which this Act is passed, lay before Parliament a report on—

(a) total energy consumption in domestic housing,

(b) total energy consumption by businesses, and

(c) the impact of government measures to assist energy efficiency.’.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs) 2:30, 6 March 2008

It is good to give the Minister a little rest, even though we are enjoying his numerous speeches on the subject. In the explanatory notes, we are told that the clause removes prescriptive and outdated reporting requirements. That is strange. Since those requirements were introduced only in the Sustainable Energy Act 2003 and barely seem to have  had time to settle in, how can they be outdated? Further, if they prescribe the provision of accurate information, I do not see how that is such a bad thing.

The first part of clause 78 seems to relieve the Government of some of their reporting duties under the Sustainable Energy Act, including what they have done to develop renewable and micro-generation energy sources and to ensure the necessary expertise to develop potential energy sources. That may not just apply to the energy sources that I am quite fond of, such as tidal power, biomass, or even biogas; the hon. Member for Copeland might be interested to know that it could include ways in which we are developing expertise in nuclear energy, which is quite an issue. The clause also appears to relieve the Government of reporting duties on what they have done to achieve the energy efficiency aims set out in the Sustainable Energy Act.

The clause goes on to remove the requirement for the Government to report on activities undertaken during the previous year, although not the requirement to publish a report each year. However, that means that they could report on any period that they decided. In other words, the time scales could be adjusted so that, for example, good things could be re-reported, or they could miss out particular months so that some things went under-reported.

Again, we hit the succession problem for the Minister. We all know that he is an honourable man and I know that he would never, under any circumstances, re-present, or re-package good news year after year. Nor would he—perish the thought—adjust time scales to produce the best possible spin on statistics. However, I know that he will be shocked to discover that that sort of thing sometimes goes on in government. The CO2 and greenhouse gas emissions targets under the Kyoto protocol spring to mind. We are constantly told that we are on course to meet those targets, despite the fact that the basket of greenhouse gases has gone up under this Government and that since 2002 they seem to have been on an upward trend. Yet we are still apparently on course to meet the greenhouse gas targets. The fact that we are missing the domestic CO2 targets is rather glossed over. That offers an example of the kind of trap that Ministers might inadvertently fall into when they present these numbers.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

I am interested in the way in which the hon. Gentleman is introducing the clause. Does he agree that another example is fuel poverty targets? When the numbers of people suffering fuel poverty were going down, the Government managed to produce the figures every year, but now that they are going up, we have not seen the figures since 2005.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. I hope that the hon. Gentleman will not be tempted to respond to that particular point.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

I think that we may come back to the subject of reporting on that front later in the Bill, Mr. Amess. We will obey your instructions.

The risk is that some statistics will inadvertently be presented in an overly generous way. It is important that, having set up these specific requirements for reporting on particular issues and on particular time scales, we do not change that regime unless there are very good reasons to do so. It would surely be wise to remove the temptation from the Minister’s successors—whoever they might be—to organise the statistics to their own advantage. I question the necessity for the clause to remove those reporting requirements and allow the temptation for future Ministers to massage statistics.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

Clause 78 is one of the most important in the Bill, about which I very much share some of the concerns set out by the hon. Member for Cheltenham. I am particularly indebted to Andrew Warren, from the Association for the Conservation of Energy, for pointing out the possible consequences of the clause, about which we should be profoundly concerned.

The hon. Gentleman implied that we should strike out the clause, under which, as he pointed out, the Government would not have to report on, for example, specified energy sources, the expertise to develop potential energy sources and energy efficiency. As he also pointed out, the clause will change the time at which the Government will produce their reports. Currently, they have to produce them for the year in question, but, as I understand it, that requirement would be removed by the proposed changes. It would not remove the requirement to produce a report every year, but it does remove the requirement for that report to cover the whole year or, as is currently the case, the year ending on 23 February, which ensures consistency in what is covered.

Under the clause, the Government could in theory choose to report on any period that takes their fancy, including a period of less than a year—it could be six months or less. It is extremely unlikely that they would choose to do that, but they could produce pre-dated reports. We have serious grounds for concern about the implications of the clause. Indeed, some months could be missed out of a report all together, if appropriate, or the Government could cover a period longer than a year. We are very concerned that, under the clause, some of the requirements on the Government will be removed.

New clauses 5 and 25 would provide for additional requirements for the Government to report to Parliament every year. New clause 5 relates to energy security and gas storage and new clause 25 relates to energy use and, in particular, energy efficiency. We all accept that good gas reserves give us energy security. We could have a long debate about whether there is a risk of our gas supplies being cut off. In a very good article in the Financial Times this week, Gideon Rachman explained why he did not think that that was a likely scenario. However, it is in all of our interests that we take steps to ensure against that scenario anyway.

There is general agreement that this country’s gas reserves are too low. Typically, we have 12 days of winter gas storage, which compares to 70 or 80 days in France, Germany, Italy and other European countries. The situation will, of course, improve as a result of liquefied natural gas facilities being built and the  pipelines that are now operating, particularly the Langeled pipeline, which has made a significant difference. However, I still believe that more should be done to improve gas storage facilities, which new clause 5 would do. Under it, the Secretary of State would have to make an annual report to Parliament on his assessment of the appropriate gas storage levels, which would be taken in days rather than an absolute amount. It might say that there should be 20 days of average winter use, for example. That assessment would provide us with details of the energy security that he believes that we need. He would also have to set out our progress towards achieving that level, which would give us an opportunity to have a debate in Parliament every year about the level of gas storage that we believe is necessary, in the light of changing circumstances at home and abroad, and about what more needs to be done to improve the situation if necessary.

I find it difficult to see a reason why the Government would say no to that proposal, although I am sure that the Minister will come up with one any moment now—he normally does. The only one that I can think of is that he might want to be secretive about how much gas storage he believes we need to maintain our energy security. In France, and elsewhere, there is a legal obligation to keep a certain number of days of gas storage. We are not suggesting that we do that. One of the reasons for the problems two years ago was that the French could not legally send us gas through the interconnector, because they would have fallen short of their legal requirements for gas storage in their own country.

We are not going that far. We are trying to get a more informed debate, and to ensure that we make sensible progress each year and never put ourselves into a situation in which we do not have the storage necessary to protect our energy security.

New clause 25 would ensure that we do rather more about energy efficiency than we have done to date. The UK is lagging behind seriously, and this would be one of the most important contributions to our energy security. It is a great shame that the Bill has missed out altogether the issues of energy security. In a note to me, Andrew Warren said:

“It is rather difficult to provide you with a brief upon it, other than as that it is like that proverbial dog that doesn’t bark in the night. No part of it is designed to do anything to forward energy efficiency in any shape or form.”

Sadly, the Bill focuses rather more on electricity generation, but fails to look at energy use and wastage in our homes. We are at a stage when people want to do more to conserve energy. There is a great thirst for knowledge, and a thirst to do things, but people are unclear about exactly what they should be doing. It is worth the Committee spending a moment looking at some of the facts.

In 2005, total UK CO2 emissions were 554 million tonnes. The energy that we use to heat, light and power our homes accounted for 153 million tonnes, or 27 per cent. of those emissions. The shameful fact is that at the moment only 10 million, or 40 per cent., of our homes are sufficiently and properly insulated. Around 33 per cent. of the heat lost from an uninsulated house is lost through the walls, and the people who live in those homes could typically save £90 a year on energy bills by insulating their wall cavities. There is not just a  cost to them: this would save £720 million worth of energy overall, and 9 million tons of carbon. That is enough to power 1.8 million homes for a year. There is very significant wastage here, and no reason for people not taking this basic step to insulate their homes. Insulating lofts is another way in which people would save significant sums of money—typically about £110 a year.

We in this country are not good at switching things off. We are three times as likely as the Germans to leave our mobile phone chargers on and our appliances on standby. Sky is being very innovative in this area, and will be able by the end of the year to turn off remotely the standby buttons on every single digibox. Business is doing very significant work in this area, but in too many other walks of life we rely on the individual to take action. All too often, they simply do not. According to the Energy Saving Trust, leaving mobile phone chargers and lights on results in an extra 43 million tonnes of carbon dioxide being pumped into the atmosphere every year—that is the estimate for the period 2006-2010—and a waste of £11 billion worth of energy.

The UK could reduce electricity requirements by as much as 3 per cent. if all non-essential household appliances were turned off when not in use. That equates to the entire output of one medium-sized coal-fired power station producing 500 MWe, or 3 million tonnes of carbon a year. Switching to energy-saving light bulbs could save up to £60 of electricity over the bulb’s lifetime. Now, multiply that by the number of bulbs in the typical home. If, as a nation, we switched to energy-saving light bulbs, the carbon emissions saved would fill the Albert hall 3,000 times over.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

If one of his colleagues had her way, they would not be singing anything at all. The Minister of State, Department for Culture, Media and Sport suggested that the last night of the Proms should be stopped, because it does not appeal to all parts of the nation. I am talking about energy efficiency—an issue that does appeal to all parts of the nation and is relevant in every home.

The best high-efficiency condensing boilers convert more than 90 per cent. of their fuel to heat, compared to 78 per cent. for conventional types. If every household had one of these, the energy saved would power the west midlands for a year. Double glazing cuts heat loss through windows by 50 per cent., and could cut the average heating bill by 90 per cent.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. I am reluctant to interrupt the hon. Gentleman, but I have been listening very carefully and he is increasingly talking about things which are not in the Bill. Can I kindly ask him to draw his remarks a little closer to the new clauses that he is asking the Committee to consider?

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform) 2:45, 6 March 2008

You have been very generous, Mr. Amess. I hope that we have explained some of the things that we could be doing and what the new clause  could help to address. We are not very good at energy efficiency in this country, and we have the bizarre situation that VAT is charged on energy efficiency measures at the full rate, whereas wasted energy is charged at only 5 per cent. We have a perverse way of dealing with this issue.

Clause 78 will reduce the reporting requirement, whereas we think that the Minister should be required to report more clearly on some of those issues. New clause 25 would drive forward energy efficiency. Other measures would help more, but, as has been pointed out, they could not be included within the scope of the Bill. There should at least be more information about what we are achieving. The new clause would require that an annual report be made to Parliament on the total energy consumption in domestic housing, the total energy consumption by business and, most importantly, the impact of Government measures to assess energy efficiency. That means that every year, we could see what effect those energy efficiency measures are having and whether we are managing to reduce demand for energy or simply to stabilise it or reduce its growth.

The lack of energy efficiency measures is a major hole in the Bill, and it is unfortunate that, because of the way in which the Government have phrased the Bill, it is out of order to talk about energy efficiency. The new clause would at least help us to address some of those failings.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

The proposed new clauses are important, and I support them. I give the Minister the benefit of the doubt, as I think that there has been a sin of omission rather than of commission. However, anyone who reads the reports of our deliberations—I am sure that there will be thousands of people up and down the country hanging on every word that we utter—will expect information. As my hon. Friend the Member for Wealden has said, we need some kind of guideline and incentive to meet the energy reduction targets that we have been discussing. For whatever reason—no doubt the Minister will articulate his reasoning—the whole thrust of clause 78 is an attempt to reduce the amount of information available, and to make it less incumbent on Government to meet certain targets and to be held to account for those targets.

New clause 25 is indicative of my party’s thinking. We have a desire to be open and to have targets in the public domain to which we will eventually, when we are in government, be held to account. I should have thought that the Minister would want to meet that aspiration. Those of us who have children are very aware of the deliberations that they have at school on energy conservation, climate change and so on. You are looking at me in a forbidding way, Mr. Amess, so I shall not stray too far on this. They will find it very strange that we are introducing an Energy Bill that covers so many aspects of energy, but does not address how we use that energy and how we can establish where we are expending our limited resources. The new clause is uncontentious and positive, and I very much hope that the Minister will find some way of including it in the Bill.

New clause 5 is different. I am not an authority on these matters, and I was interested by my hon. Friend’s comments about the amount of onshore gas storage on the continent. I think he said that the law in France obliges it to keep a certain amount of gas at any time, which is why the French were unable to help us out when we ran low. I think that my hon. Friend has been unambitious with his new clause. Paragraph (a) talks about his assessment of the appropriate volume of onshore gas storage to ensure long-term energy supply. I would be intrigued to know about mid-term energy supply. We were down to about 12 days of gas at one point quite recently. Given the geopolitical situation with some of our suppliers and the choppy waters of our current relationship with the former Soviet Union—and we have seen how Russia has behaved in the past to some of the former Soviet republics in turning off supplies, as a political tool—I think that there is a real desire in this country to know what supplies we have. The Minister will remember how forward-thinking it was of a Conservative Government to stock up on coal supplies so that they could head off any future disruption in the coal industry back in the 1980s—

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

Is the hon. Gentleman going to say more about the Conservative record on the coal industry?

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. I hope that the hon. Gentleman will not be tempted.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

I certainly will not be tempted by someone who clearly knows more about nationalisation than denationalisation, as we have seen with Northern Rock.

To go back to what is an important point. People are interested in the security of our supplies. I take on board the fact that things are going to improve and that we are increasing our capacity for storage but I think that most people were very concerned when we were down to 12 days—

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

Twelve is our normal amount. That is as much as we would usually have in gas storage, compared to 70 or 80 days in France. At the time of the particular gas shortage we were down to much less than that—just a couple of days.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

That is even more worrying and I would like the Minister, if he is allowed, to say what his aspiration is for storage. We have heard that storage capacity is going to increase. Why is it that by law the French are obliged to have 70 or 80 days and that the average in this country is apparently 12 days? I was wrong: I said that it had come down to 12 days and then that it had come down to two or three days. In fact, that is not a supply at all: it is an emergency if your supplies are down to 48 or 56 hours. It is completely unacceptable.

The Minister does therefore need to include this in the Bill. I do not think that national security concerns should mean that people do not know what energy supplies this country, perfidious Albion, has for survival. I think that it should probably be in the public  domain. The public have a right to know. They have that expectation. I cannot see why the Minister is shy of putting it in the Bill. The entire thrust of this clause is to reduce the information that the Government are obliged to supply to the public whereas the new clauses submitted by my party would achieve the reverse. In this spirit of openness, the Minister should rise to the challenge and accept the new clauses.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I will certainly rise from my seat. I am still reflecting on the hon. Member for Wealden’s request about his amendment. Is it not wonderful that this report is going to be such an important document because—[Interruption.] I would not say your ruling was wrong, Mr. Amess though possibly a little late in the day [Laughter.]. No, it was timely. It was such a fantastic speech that it made one think that, if only we could get this report right, we would be well on the way to tackling climate change and global warming. I am therefore greatly encouraged. The authors of the report will be greatly encouraged about its importance because I suppose that the cynic might think that the major contribution of reports like this would be to lag the odd loft or two. I thought that it was very interesting and I was waiting for the end of the lecture because I found it fascinating. I thought that the punchline might be, “Would the last person to leave the Albert hall turn off the lights”, but we never quite got there. I am encouraged by the interest in the report.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

No, I do not think so.

The purpose of the clause is twofold. First it introduces flexibility around the timing of our annual report on the Government’s four energy goals, and secondly it removes unnecessary or overly prescriptive reporting requirements.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

I am sure that, like me, the Minister is nostalgic for the days when Tories were Tories and they thought carbon reduction was about closing coal mines. I find myself yet again in the uncomfortable position of supporting Conservative new clauses. I would not want the Daily Mail to think that it will become habit forming, but these new clauses are well intentioned and seem to be very important. They are the result of the rather frustrating situation that all members of the Committee have found ourselves in: we have been unable to table more substantial amendments on energy efficiency because it is outside the scope of the Bill. It is wrong for the Minister to make light of the fact that we have had to bring the subject of energy efficiency kicking and screaming into this Bill through means of reporting. It is an important provision, which I hope that he will address properly in his remarks.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I did not follow events in the detail that I should have done, but as I understand it, the hon. Gentleman did not vote with his party last night. Now, in an overture to the Conservative party he is supporting the Conservative new clauses. We will see how the rest of the narrative develops.

As we said at the outset of our deliberations, the Bill is very important. It does things that need to be done, but it is not a kind of Christmas tree on which we can hang every aspect of our energy or climate change strategies. We have a good policy on aspects of energy efficiency. A number of things are being developed that do not require legislative cover. The purpose of a Bill is to reform the law and introduce new laws where that is required. It is not an election manifesto. I will not have anyone say—well I will, of course, but I will not agree with them—that we are not fully committed to energy efficiency measures. Outside the Committee I am happy to debate that at any time, within reason, and in any place.

Photo of Anne Main Anne Main Conservative, St Albans

I hope that the Minister will reconsider his position. During his speech on Second Reading he said that the whole point of the Bill was to implement the major aspects of the White Paper. That is why we feel we have to press the bits that are missing from the White Paper in some way now. Could he reconsider that?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I have reconsidered and the answer is no. The purpose of the Bill is to do what we need to do in amending the law and providing new regulatory frameworks and all those things that we have been discussing. For example, we do not need legislative cover to pursue our energy efficiency commitment into a new phase or to do many other things that we are doing. It would be absurd if I introduced proposals for zero-carbon housing by 2016. That is one of our policies and we will do that, but nothing needs to be said about it in the Bill.

In respect of timing—[Interruption]I am worried about my timing, because I have manfully struggled through just four lines of my speech, but of course I will give way.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

That is because the Minister keeps interrupting his own speech. I have now completely forgotten what my intervention was going to be.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

I am most grateful to the Minister for giving way again so rapidly. Does he not feel that the refusal to address these issues in the Bill will lead people to feel that the Government are complacent about these subjects? We have an appalling lack of energy efficiency in this country. Our homes are massively under-insulated. There is a real crisis, and overcoming it would make a significant difference to our ability to meet our carbon challenges, but the Minister does not want to discuss the issues.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. I hope that the Minister will not be tempted to respond to that; we should discuss things which are specifically in the Bill.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform 3:00, 6 March 2008

Thank you, Mr. Amess, for that ruling—I was trying to resist that temptation. Certainly, we do not believe currently that we need any additional primary legislation beyond that set out in  the Climate Change Bill, which is the powerful sister Bill to the Energy Bill. The Climate Change Bill covers many elements relating to energy efficiency, as I am sure that the hon. Member for Wealden would recognise.

Let us remember that we are talking about a report—a humble and important report—and I think that the Chairman is encouraging us to discuss it. There may be more interesting things to talk about—Arsenal’s victory over Milan, for example—but we are debating the clause. I have to be the borehole and talk about it.

In respect of timing, we are seeking to remove the requirement in section 1 of the Sustainable Energy Act 2003 to report by a certain period in a given year. Our objective in doing that is to ensure that the information that we produce is current and complements, where possible, other key reporting requirements. At present, we publish various reports at different times in the year, driven by timings currently set out in statute, and sometimes when the most up-to-date data are not always available. The proposals in the clause will allow us greater flexibility in choosing the timing of our publication and adapting its contents to reflect priorities.

With the introduction of the Climate Change Bill, it is even more important that we align the publication of the sustainable energy report with the carbon budget reporting cycle proposed in that Bill. The idea that we will choose the month to suit us—one year, it might be February, and another year, it might be November—is incorrect. We will still publish the reports annually, and we expect to do so around the month of May. The reports will specify the period to which they relate.

The clause will also enable the Government to include the most up-to-date data on fuel poverty. When we have up-to-date data on fuel poverty, we publish them. The data are available generally in about spring, after the reporting period set out in the legislation has ended.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

The Minister’s intentions sound good, so will he confirm that he will maintain, for the sake of consistency and ease of comparison, the reporting year that is set down by statute in the Sustainable Energy Act 2003, when these reports are published, whenever that is? Will he maintain that specific 12-month period in future reports?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I may need to take advice on that, because I am not absolutely clear of the precise reporting year, but I will come back to the hon. Gentleman.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

No, because I will come back to that, and if I need the hon. Gentleman to provide clarity later, I will avail myself of it; but if this helps, our intention is always to ensure that the report covers progress made in the year since the last report, as well as looking forward. I do not know whether that is the point that he is making.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

As I understand it, the current requirement is to publish a report specifically on a whole year, with the year ending on 23 February. In the interest of all of us being able to compare like with like and having a consistent pattern of reporting, will the Minister confirm that, whatever clauses we pass, he will stick to that specific reporting year?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

Let me make some progress and I will return to that. I certainly see the need, as someone interested in these things, for long-term data sets, but I will get some specific advice on that.

The second reason for introducing the clause is to remove outdated or unnecessary statutory reporting requirements. Since 2003, a number of reporting requirements have been created on a variety of energy-related issues.

Subsection (1) will repeal section 81 of the Energy Act 2004, which requires the Secretary of State to report on specific energy sources and technologies. Section 81 also includes a requirement to report on scientific and engineering expertise in the UK, as well as energy efficiency aims designated under the Sustainable Energy Act 2003. If hon. Members will bear with me, I will explain why we believe that those requirements are no longer needed.

First, the list of energy sources or technologies provided in section 81 is over-prescriptive. In the Government’s view, the annual energy report should focus on the most important issues that affect the energy sector. Those issues are likely to change as markets develop and as technologies become more effective and new ones emerge. It would not be right, therefore, to have a statutory requirement to report on a specific list of technologies, irrespective of whether their state of development continued to be a relevant consideration. We need reporting to be sufficiently flexible to allow us to exclude less relevant technologies and include more relevant ones, as developments dictate. Our change will facilitate that.

Secondly, on energy sector skills, we are already working with the sector skills network to deliver a report on skills commissioned under the 2007 energy White Paper. It is not right prescriptively to require the Government to report annually on energy skills. The development of skills is a medium to long-term issue, and the picture will not necessarily change dramatically from year to year. My Department has managed relationships with key sector skills councils—Cogent and the National Skills Academy for Nuclear—and has close links with the oil, gas and power industries. Those relationships will enable the Government to gather intelligence and work with industry to guide policy action on energy sector skills.

On energy efficiency, which has understandably led to a great deal of interest, we aim to remove duplication and overlap.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

On the point about the skills base, surely, the concern is that the Government will liaise with academic establishments and industry but that information will be private? If we want to ensure that we have the necessary skills base for a new fleet of nuclear power stations or for developing renewables or carbon capture and storage, Members of Parliament  should have access to the Government’s assessment of the skills base and how any shortage is being met? We will be denied that information, as a result of the changes that the Government are making under the clause. Although the Government may have that information and they will have those conversations, Members of Parliament will be denied the opportunity to discuss that.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

There is clearly great suspicion and cynicism about our attempt to rationalise the reporting procedure to bring greater clarity to Parliament and the public. Those suspicions are not reasonable.

The hon. Gentleman has not taken account of what I said: we are proposing to deliver a report on skills that we commissioned under the energy White Paper. Surely, that shows our keen interest. The launch of the National Skills Academy for Nuclear also shows our keen interest. The fact that the sector skills councils also report publicly shows that we have nothing to hide. We should not be over-prescriptive about the report that would be most useful to present to the public and Parliament.

With the clause, we will remove the requirement imposed by the Sustainable Energy Act 2003 to report on progress towards energy efficiency aims, as there is overlap with that report and the requirement on energy efficiency targets in residential accommodation under the Housing Act 2004. In addition, we produce the UK energy efficiency action plan, which we will regularly update as required under the energy services directorate. Therefore, there will be a regular report on energy efficiency. We would also expect to capture energy efficiency issues as part of our reporting on carbon emissions in the annual sustainable energy report.

Subsection (1) will also remove the requirement under section 172 of the Energy Act 2004 to report on the short and medium outlook for security of supply. As for energy efficiency, we are already obliged under Community legislation to report on issues that relate to the security of supply of gas and electricity. Those obligations are fulfilled by our new energy market outlook, which provides an update on the key drivers of the security of energy supply and provides scenario-based analysis of the future supply-demand balance. The energy market outlook will be published annually. We therefore believe that section 172 is unnecessary.

Before I discuss the new clauses, I should like to make it clear to hon. Members that the clause will not remove our duty to report on the four key energy goals. As part of the annual report, we will include progress on key targets, such as the energy efficiency of residential accommodation, the implementation of the microgeneration strategy and promoting community energy projects. In addition, the annual publication of the fuel poverty strategy will continue.

With new clause 5, the hon. Member for Wealden raises an interesting issue about the need for increased gas storage capacity by 2020. By that time, it is estimated that we will be importing between 50 and 80 per cent. of our annual gas demand, because of declining production from the UK CS in the North sea. He appears to be seeking to establish the volume of gas storage that will be needed to secure our long-term energy security and to ensure that the Government  report annually on progress towards achieving it. In effect, the new clause states that they should propose a target.

We believe that new clause 5 would interfere with the developing gas market by specifying the appropriate volume of gas to be stored onshore within the UK energy market. It is not for the Government to specify to what extent one form of gas market flexibility is appropriate to help secure energy supplies. Given the complexities of the energy system, companies are far better placed to manage risks and to identify and deliver the types of investment that are needed. In considering which investments to make, companies must take account of a range of uncertainties, including current and future fossil fuel prices, carbon prices and energy demand. I believe that new clause 5 would send the wrong signal to industry—that there is an ideal amount of gas to be stored and that it should be stored onshore.

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

So is the Minister sanguine about the fact that this country was down to two or three days’ gas supply or does he feel that there is an amount that we should have stored?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I am not at all sanguine. Historically, since the mid-1960s, there has been a natural store in the UK CS in the North sea. Given the decline in that and the need to import more gas, we need more gas storage. We have made that clear. We believe, and I would have thought that the hon. Gentleman believes, that it is best left to the market to store the gas and to determine these matters. We are not passive bystanders because, for example, we are taking action by introducing a regulatory framework for gas storage under the Bill. Our planning reforms will also facilitate the timely arrival of gas storage facilities. I am not sure if the hon. Gentleman is saying that the state should set a target or that the state should build such stores. What is he saying?

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

I am very clear in what I am saying. Of course it is up to the market to supply the gas. However, I find it extraordinary that effectively the Minister is saying that the Government of the day should have no view on how many days’ gas storage should be available to the country at any one time. Is that what the Minister is saying? Even in a private capacity as an individual, does he not have a view whether two days or 20 days is acceptable, or 70 days, as in France? I am not saying that that should be enshrined in law as it is on the continent, but it is very worrying that the Minister and the Government seem to be complacent about having an idea of what is acceptable.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I do not think that we wish to be prescriptive about how much gas storage is required. We will clearly need more in the future. Our regulatory framework will enable that to come on stream, as will our planning framework. I think that the hon. Gentleman needs to look at this issue in wider terms. We are all concerned about energy security and it is an aspect of a nation’s security, but we can achieve it in different ways. One is by having an appropriate mix in terms of energy—not all of our eggs in the gas basket, or any other basket. Much of the Bill is enabling that to happen, with more renewables and a future generation of nuclear power.

Of course in terms of the gas that we need to import, the Government have been active on many fronts with the commercial sector to help to bring on the Langeled pipeline from Norway, for example, and to help to facilitate liquefied natural gas capacity at this end; I am referring to Milford Haven. The hon. Member for East Devon needs to see all of that in the round. I am confident that the market will provide far greater amounts of gas storage in future.

Mr. Swire rose—

Photo of Hugo Swire Hugo Swire Chair, Speaker's Advisory Committee on Works of Art

I just want to say that of course I understand that we are moving towards an energy mix—we all know that—but increased nuclear capacity is, as I think the Minister would concede, some way off. Clearly, he is talking about the regulatory and planning frameworks that the Government are looking at, and of increasing onshore gas storage—

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. The debate is going extremely wide now. We are specifically talking about energy reports, so will the Minister please direct his response to those matters?

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

Yes, tempting though it is. This may help the hon. Member for East Devon. Companies may decide in some instances that it is more cost- effective to store gas offshore than onshore. Equally, they may prefer instead to enter into long-term contracts, as I was implying, for liquefied natural gas, or to take steps to provide non-gas back-up fuel, such as distillate, for gas-fired power stations as a coal substitute. It is also interesting to note that, during that difficult winter two years ago when gas prices were very high, there was quite a move to coal by power stations. Whereas on an annual average coal was accounting for perhaps a third of electricity, in those few months of that winter, that rose to 50 per cent. I hope that that makes my point about the need for a range of energy sources.

Let me assure the hon. Gentleman that I very much want to ensure our long-term energy supply, including sufficient supplies of natural gas. However, I believe that the way to do that is to ensure that we maximise the options available to companies to import and to store gas for the British market. We have already discussed the proposals contained in the Bill for a new licensing regime, which will enable offshore gas storage and import projects to be built in future. The Energy Bill does not itself deal with onshore gas storage, which is the subject of the new clause. However, provisions to modernise and reform the planning consents required for onshore gas storage are going forward in the Planning Bill, and will similarly enable the market to respond to the need for increased gas storage and import facilities.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

I do not think that any of us are questioning the direction of travel of Government policy on energy security—indeed, we welcome it—but how is he to judge the success of the policy if there is  no sense of what the benchmark is? At least the new clause deals with the appropriate volume of onshore gas storage. The new clause is actually fairly modest. It does not even suggest that an exact number of days of supply should be specified. It simply asks about the volume of storage capacity. The Minister cannot seriously be suggesting that that is something that should be left up to the market. What if the world market—as does not seem entirely unlikely—ends up being dominated overwhelmingly by one company, such as Gazprom, that might not be entirely friendly to our national interest? To leave that entirely to the market is an extraordinary proposition.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

With respect, it is an exaggeration to say that one company dominating the world gas market is a likely scenario. That is extremely unlikely in my judgment. I have been trying to make the point that the new clause relates only to onshore gas storage, and I have said that companies may well decide that offshore gas storage, partly because of the provisions of the Bill, might be a more commercially sensible decision. It seems slightly foolish to be prescriptive about one approach to energy security, and say that it has to be onshore, not offshore.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

The Minister misunderstands the issue here. The clause has been phrased to be as flexible as possible, so that every year the Minster can say, “Actually, we think that we need a bit more” or, “Now we need less, because we have more offshore storage and pipelines and LNG terminals.” It is not prescriptive at all and simply means that he will have to come to Parliament every year and say, “Look, taking into account the offshore storage, the LNG terminals and the pipelines, this is how much we should be having for onshore storage.” That is not prescriptive and offers tremendous flexibility, and I think that it is an incredible abdication of responsibility by the Government to leave that to the market. The crisis occurred partly two years ago when the Rough gas storage facility was damaged by fire, because overnight we lost a huge proportion of our gas storage facility. The market could not react to that and could not put it right, but this is one way of trying to ensure that our energy security is guaranteed.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

I am enough of an amateur political scientist to note with interest the call for greater statism from the Opposition Benches and my advocacy of a market approach on these Benches, and I understand the irony there. I do not want to repeat myself too much, because we are talking about a report, but I think that the issues about energy security, which I take extremely seriously, are much wider than simply those relating to onshore gas storage. I repeat that we want to see more gas storage in the future, as we have made clear. We think that the market will bring that about, and we are facilitating that through changes in this Bill and in planning.

Data are important, and in the Government’s digest of UK energy statistics, which is of course published annually, we cover a wide range of important energy statistics, including energy consumption and oil and gas production. That report also includes details of the projections and capacity of existing and planned gas storage facilities, so I hope that the hon. Gentleman is  reassured that the data are available. It would be pedantic to say that the data should be somewhere else, rather than there. It is out there and available for public and parliamentary debate.

In addition, we are providing clear and transparent information on energy supply and demand generally, and that type of information is published in the energy market outlook, which I mentioned earlier—it seems a long time ago because of the number of interventions. That is intended to provide information and analysis to help potential investors and those with an interest in the UK energy market to form a comprehensive overview of the likely supply and demand balance in energy over the next decade or so. I hope that I have explained why I do not think that the new clause would be helpful. I might not have convinced everyone entirely and still detect certain suspicions, but I have also explained the steps that we are taking to encourage a solution. I hope that the hon. Gentleman will not seek to press his new clause to a vote.

I will now turn to new clause 25, which I will also ask the Committee to resist. The new clause, which was proposed by the hon. Member for Wealden, relates to the important issue of energy efficiency. Saving energy is a key part of the Government’s strategy to tackle climate change and help ensure secure supplies of energy. For example, energy efficiency can often be a cost-effective way of reducing carbon emissions. Equally, saving energy can reduce the need for energy imports and the level of overall new investment needed in large-scale electricity generation, thereby reducing security of supply risks.

Once fully implemented, the measures set out in the 2007 energy White Paper are projected to deliver an additional 7 million to 12 million tonnes of carbon savings, so no one can reasonably say that we do not take energy efficiency seriously. Our policies include helping consumers make more informed decisions about the energy that they use through improved awareness, information and services, such as better billing, the raising of standards for the products that we buy, and increasing the energy performance of new homes and buildings. We have also increased the obligation on energy suppliers to deliver carbon savings and energy efficiency measures in domestic homes, including loft and cavity wall insulation. For the largest industrial users of energy, the European Union emissions trading scheme, together with the climate change levy and climate change agreements, incentivises companies to improve their energy efficiency and save energy. We will also announce a new mechanism to drive energy and carbon savings in the large non-energy intensive sectors such as banks and supermarkets. Although the hon. Member for Wealden and I agree on the importance of energy efficiency, I must sadly confirm that I cannot accept the new clause.

We already compile the information that he suggests under the guise of other reports. Information on energy consumption in the UK is contained in my Department’s digest of UK energy statistics which, as I said earlier, is updated regularly and published annually. Under provisions in the Climate Change Bill, the Secretary of State will also have a duty to prepare and lay before Parliament an annual statement on emissions. Similarly, the Climate Change Bill will mandate the committee on climate change to assess and report on progress and delivery of  climate change policies annually, including on energy efficiency measures. The Government will be required to provide a response to the report that it will lay before Parliament.

I noted that the hon. Gentleman opposite said that it was a great disappointment that there was nothing about energy efficiency in the Bill. I have outlined a whole raft of measures that we are taking on energy efficiency, and the million tonnes of carbon that will be saved. However, I do not think that I have yet heard from him any specific proposals or amendments to bring forward energy efficiency measures in the Bill. He dealt with it in a more general way, and I am sure that he will be satisfied that, through the raft of other measures, we have a more than satisfactory strategy. Perhaps on another occasion he could table a specific amendment.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

I am astonished by the Minister. He will have read the opening sentence of the Bill where it says “A Bill to”. Amendments can be tabled and are in order only if they relate to the issues in the Bill. I would have thought that the Minister was aware of that. If he wanted to have a discussion and give us the opportunity to debate energy efficiency, he should have included a reference to energy efficiency in the legislation. That is why we have not been able to table the amendments, and why the Committee has been denied the opportunity to speak about it—it is due to the way in which he has phrased the Bill.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform

If the hon. Gentleman makes a technical point, I accept that. However, he has been speaking about energy efficiency at some length on a number of occasions—I may have forgotten the technical point, but I am not clear why he is not satisfied with the ambitious energy efficiency strategy that we have in place.

Much as it pains me to bring the debate and my speech to a conclusion, I hope that the hon. Gentleman will feel reassured that the Government take these issues and their duty to report to Parliament seriously, and that he will not press the new clause to a vote.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

I am sorry. The Minister has managed to reassure me on many occasions during the debates that we have had so far—it has been fairly good natured and worked well. On this occasion, however, he has not reassured me at all. My concern about the clause is fundamental. The Government are removing the requirement for them to report to Parliament on certain factors, and the Minister asks us to take that on trust. Everything that we see about this Government shows that when the news is good, they like to announce it, and reannounce it again and again, and hope that nobody notices that it is just the same bit of good news. When the news is bad, they like to tuck it away—“A good day for announcing bad news”, as one of the ministerial spin doctors told us in the past.

We believe that the Government are moving away from reasonable reporting requirements without a good reason for wanting to do so. I am suspicious about their motives because it will be used in years to come—not by the Minister who I know is a decent, honourable man—but by someone who could say,  “There’s a general election coming up. I’m not sure that it will be useful to put those figures into the public domain at this stage. Let us hold back the report for a little longer.” There will be a row about why the report is being held back—lots of technical reasons, lots of reasons for why it should not be put forward at that time, but it means that the Government will be let off the hook of being held accountable for the decisions that they make.

With regard to the two new clauses, I am astonished that the Minister does not believe that the Government have a responsibility to have a view on energy security and on how many days of gas storage we should have. Yes, he tells us that the data are available and published in other ways, but the data do not include an assessment of need and that is what the new clauses require. They would also enable us to monitor the progress towards that goal, which the Minister would have set up. I find that very disappointing, and it is an issue to which we will most certainly return.

On energy efficiency, the Minister enjoyed a bit of knockabout. We would have truly loved to use the Bill to discuss energy efficiency, and members of his own party would have been keen to do so, too, as was evident on Second Reading. However, we have been denied the opportunity because of the narrow way in which the Bill is phrased. Similarly, we have been denied the opportunity to discuss fuel poverty, which is another matter of fundamental concern to people. Through the new clauses, we are asking not that we try to change the world regarding energy efficiency, but that we start to monitor our progress. The fact that 40 per cent. of our homes are effectively insulated is not good enough. We do not know the Minister’s target by 2010 or 2015; it is not available to us. However, every year, a report should be made about energy consumption by business and in domestic homes, and about the progress that is being made to improve energy efficiency. People watching this debate would then feel that the Government were taking the issue seriously.

Photo of Malcolm Wicks Malcolm Wicks Minister of State (Energy), Department for Business, Enterprise & Regulatory Reform 3:30, 6 March 2008

But the hon. Gentleman would concede that we have done something far more important, would he not? Namely, we have set a long-term target that by 2050 we want at least a 60 per cent. reduction in CO2 levels when compared with those in 1990. The Prime Minister said that if we get representations from the new committee that we are establishing under the chairmanship of Adair Turner, we may consider a higher target—an 80 per cent. target. That really is the point—

Photo of Sir David Amess Sir David Amess Conservative, Southend West

Order. I hate to interrupt the Minister, but we are being taken far wider and referring to matters that would be more appropriately discussed under the Climate Change Bill.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

I am obviously not grateful to the Minister for that intervention, because it was out of order. However, the principal objective of the two new clauses is that we want the Minister to have to come to Parliament to tell us what is happening each year on  gas storage, what his assessment of need is, and the progress that is being made on energy efficiency. His refusal to do so just means that we must go away with the impression that he does not want to be scrutinised properly on those matters. That is very unfortunate, and I remain profoundly concerned about the inclusion of clause 78 in the Bill. I hope that the Liberal Democrats will support us in trying to remove it.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

The Liberal Democrat. The hon. Member for Cheltenham will not be able to vote against himself on this occasion. We hope that he will give us support, because this is a bad clause. The clause represents the Government rowing away from their reporting commitments; it is political rather than managerial, and it was very misguided to include it.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

Perhaps the hon. Member for Wealden should not push his luck in assuming my support, or even that of the whole Liberal Democrat party. My hon. Friend the Member for Northavon and I will both be present when the new clauses come to a vote, probably next week, but I might change my mind and choose to abstain, which I gather has been the increasingly fashionable thing to do this week.

I shall restrict my remarks to the hon. Gentleman’s new clauses. I am still perfectly supportive, and the Government have not produced adequate replies to the question why the new clauses should not be included. In the case of new clause 5 on energy security, the Government’s replies were quite alarming. I am more inclined to support the new clause now than I was when we started.

I, like the hon. Gentleman, was not reassured by the Minister’s remarks on the clause stand part debate. The Minister has gone to enormous lengths to assure us that the Government have a great record on energy efficiency and are absolutely committed to developing it. However, if that is true, and it is equally true on renewable energy and microgeneration, I cannot see what possible justification there is for removing the reporting requirements from legislation. Surely the Government should leap at the opportunity to report in a standardised format that none of us can criticise either for inconsistency or for being presented in an obscure or difficult way.

The Minister suggested that we were being suspicious, but his replies rather fuelled that suspicion. He did not answer my question about how the reporting requirements can possibly be outdated. What has changed since 2003 to make them outdated? How could they have been appropriate then and overly prescriptive only a few years later? If the list of technologies specified in Sustainable Energy Act might become out of date in due course—I allow for that possibility—why did the Government not draft a proposal to allow for amendment of the list, perhaps by secondary legislation? That would have been a perfectly acceptable route. However, by not doing that and given his reluctance to commit to the specific time scales by which he will be reporting in a substitute format, the Minister has increased the fears of perhaps more suspicious people than us that the Government  might be tempted to take the opportunity to obscure bad news and possibly repackage and represent good news to their own advantage. That would be a shame. For all Governments, it should be right that we can compare and contrast statistics on a reliable basis. That has been the direction of much of the presentation of Government statistics during recent years, and the clause seems a completely retrograde step.

Photo of Charles Hendry Charles Hendry Shadow Minister (Business, Enterprise and Regulatory Reform)

Does the hon. Gentleman agree that it is a matter of frustration that sometimes when we ask a parliamentary question, we receive the response that the data are not collected centrally? By removing a requirement to report, there will be more areas about which the Government say that they have not collected the data. At the moment, they are required to do so and we know that the data are there. It actually makes the job of parliamentary scrutiny more effective and accountable.

Photo of Martin Horwood Martin Horwood Shadow Minister (Environment, Food and Rural Affairs)

The hon. Gentleman has made an extremely valuable point. The net effect of the clause will make the whole issue of reporting on such vital issues as energy efficiency, microgeneration and the development of necessary expertise in new energy sources from nuclear to tidal power more contentious and less of a discussion of objectively presented statistics. I wish to press the clause to a Division.

Question put, That the clause stand part of the Bill.

The Committee divided: Ayes 9, Noes 6.

Division number 4 Nimrod Review — Statement — Clause 78

Aye: 9 MPs

No: 6 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly agreed to.