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Future Energy Needs (Scotland)

– in Westminster Hall at 12:00 am on 1st December 2005.

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Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Watts.]

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central 2:30 pm, 1st December 2005

It is nice to see so many colleagues from different political parties, particularly the million man from Scotland, David Mundell.

I thank colleagues on the Liaison Committee for supporting my bid for a Westminster Hall debate. Given the reports in recent weeks that we face the harshest winter for decades, energy crises, possible power cuts and strikes by gas engineers, and the small matter of the Prime Minister's speech to the CBI, the debate is timely. I pay tribute to my predecessor as Chairman of the Scottish Affairs Committee, Baroness Adams. The day after our report was published, a letter from Alan Wilson, chief executive of the Scottish Council for Development and Industry, was printed in The Herald. It stated:

"Anyone doubting the continuing usefulness of the strong Scottish voice at Westminster should read the excellent report . . . by the Scottish Affairs Committee".

The fact that our strong Scottish voice produced such an excellent report was due in no small part to the leadership of Baroness Adams.

I thank members of the Select Committee in the previous Parliament, some of whom are present today and who may try to catch your eye, Mr. Amess. I wish to mention former Committee colleagues such as John Lyons and Peter Duncan, both of whom demonstrated a keen interest in energy and other key issues that face Scotland. Perhaps they will be returned to serve at Westminster in future, although I do not know for which constituencies. As always, I am grateful to our Clerk and his hard-working team for their tremendous support of the Committee. The inquiry on energy needs was typical of inquiries held by the Scottish Affairs Committee—it was short, sharp and highly effective. We took formal evidence on four occasions and undertook two informal visits.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

I am grateful to my hon. Friend for giving way, and I should declare an interest in that I receive support from the Sustainable Energy Partnership for my current private Member's Bill.

I accept that the general election got in the way of proceedings, but does my hon. Friend agree that the report might have carried more weight if the Committee had called more than one independent witness who is well known for having a particular view in favour of nuclear power? Professor Lovelock is a well known scientist, but I am not sure that he is an expert on the economics of the energy industry, which, after all, is what the report should have been about.

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

I thank my hon. Friend for his intervention. His views, along with those of other members of the Committee, will be taken on board.

I have an apology to make on behalf of the Committee. At paragraph 7 of the report, we listed those whom the Committee met in Sacramento, but omitted to mention the Lawrence Berkeley National Laboratory. That was an oversight and I am happy to rectify it. Hon. Members who are attending the debate will have read our report and the Government's response. I thank the Minister for that response and look forward to his contribution today. I shall not repeat the arguments that are set out in the report, but will seek to move the debate forward. I shall be brief so that other hon. Members have time to speak.

We identified three fundamental issues and produced 12 recommendations. The first point is the job prospects for people employed at the Dounreay plant when it is finally decommissioned. We are pleased to note that the Nuclear Decommissioning Authority will continue to work closely with local communities. That will lessen the impact of decommissioning and the ultimate closure of sites such as Dounreay. Although not a recommendation, we suggest that the United Kingdom Atomic Energy Authority might usefully make contact with the authorities in Zion City in Illinois. They impressed the Committee in relation to tackling problems similar to those that face Dounreay. Shortly after the publication of the report, UKAEA wrote to confirm that it had followed our suggestion and looked forward to learning from the Zion City experience. I welcome that positive response to our comments. UKAEA is making every effort to look after its work force.

Dounreay contributes approximately £80 million to the highlands through salaries, pensions, contracts and subcontracts. Help must be given to Caithness and the rest of the highlands to overcome the problems that might be faced in a few years' time.

The second issue tackled by the Committee is the long-term strategy for the management of radioactive waste, with a focus on intermediate-level waste. Until people feel that existing waste has been safely disposed of, the matter could affect their views on any option to generate electricity through nuclear power stations. We hope that next July's target date for a final decision on how to manage such waste is not allowed to slip. The Government's response confirmed that that target date will be met.

The Committee also comments on disturbing reports that radioactive waste was not dealt with properly at Dounreay. Unfortunately, our timetable meant that we were unable to ask UKAEA for its comments. It accepted that, but was disappointed that it did not have the opportunity to set the record straight. If there had been time, it would have advised us that the stories related to things happening decades ago and lacked relevance to current practices at the site. I am pleased to put that rebuttal on the record now.

The report's final strand asks how the energy shortfall can be met once nuclear power no longer provides for Scotland's energy needs. There is no single solution, and no "silver bullet", as the Government put it. It is fair to suggest that nobody seriously advocates sole reliance on either renewables or conventional energy. Scotland has tremendous potential for renewable energy. In the Committee, hon. Members championed diverse forms of energy production. Some favoured wind power; others favoured wave, solar, coal or nuclear power.

It is generally accepted that a mix of energy forms will be needed. The debate now rests on three vital questions: which energy forms should be the market leaders? What mix of energy forms is most appropriate? Is there a future for nuclear power stations? I hope the Minister has time to address some issues on which the Government's position is not immediately clear.

The response to our second recommendation states:

"It is not for Government to reserve particular shares for individual technologies."

That is true, but I would welcome research on which emerging technology is most appropriate for Scotland and which is the most costly for taxpayers and consumers. If such information exists, it would be useful for it to be published.

It also seems that the Government could have replied more fully to our recommendations on demonstrating their commitment to the UK coal industry. Will the Minister confirm that the Government believe that the industry has a future and that they would underwrite the costs of installing sulphur and carbon dioxide capture equipment? Is the £25 million mentioned in the response all that the coal industry would receive?

Finally, the most contentious aspect of the report is the suggestion that it might be time to consider the rehabilitation of nuclear power. As we say in the report, nuclear fusion seems

"a . . . benign and efficient way of producing electricity".

It offers one solution to global energy needs, but it could be decades before such a reactor is available. The decision must be taken urgently as to whether the Government should build new advanced gas-cooled reactors or pressurised water reactors, or even update existing reactors. I hope the Minister addresses the pressing concerns about that.

The Scottish Parliament and the Executive would be responsible for granting planning permission for the building of any new power stations. Such permission could not be assumed. What would the Government's approach be if they decided that new nuclear power stations were needed? Would they legislate for new stations and be optimistic that Members of the Scottish Parliament would pass a Sewel motion to allow Westminster to legislate on a devolved matter? If it was decided to update existing nuclear stations, would consent still be needed from Holyrood? What if no consent was forthcoming from the Executive? Would the Government close down Hunterston B in 2011, as planned, and simply rely on electricity from England or Norway? Although we are discussing Scotland's future energy needs, this issue is of pressing relevance to much of the UK.

Photo of Brian H Donohoe Brian H Donohoe Labour, Central Ayrshire

I commend the report to all our colleagues: it is excellent and one that should have been produced some time ago, given the circumstances. However, is it not also the case that, with the recent advent of increasing prices, there is a place for a further report to update us on Scotland's energy needs? In my constituency, about 400 jobs were recently lost as a consequence of high energy costs. A survey was undertaken by three of the biggest users. One, Caledonian Paper, is the single biggest user of electricity. Its costs have increased by some 120 per cent. over the last year.

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

I agree with my hon. Friend that the price increases to domestic consumers and to industry are unwelcome. If we want to secure the future of industry in Scotland and elsewhere in the United Kingdom, we must have a proper consultation on our future energy needs and whether they can be met through nuclear power, coal or other means. We should have a proper debate on the issue and meet the challenge head on.

Photo of Alan Reid Alan Reid Shadow Minister (Trade and Industry)

The hon. Gentleman is right to say that more consultation and investigation are required. Will his Committee undertake to carry out an inquiry to find out the total cost of generating electricity by nuclear power? Decommissioning and dealing with the waste should be included so that we know the cost, with all aspects of nuclear power involved.

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

I agree with the hon. Gentleman that there needs to be proper costing so that we know the affordability and competitiveness of sources of energy. It is easy to say that nuclear energy is probably a cheap option, but when decommissioning and waste management are taken into consideration, they increase the budget. We must take all those factors into account before we make a final decision.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee

If the Committee decides to carry out such an inquiry, which I would welcome, will it also—to be even-handed—look into the cost of importing 70 per cent. of the gas that our country will need in another 10 years and make the comparisons? There are also the issues of security of supply and where the gas comes from to consider.

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

I thank my hon. Friend for his intervention. Of course, it is important to remember that when we make ourselves dependent on other countries by importing gas as a source of energy and in order to produce electricity, that factor, as well as the reliability of the source, must be taken into consideration.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I am listening intently to what the hon. Gentleman is saying. I am particularly interested in what he is saying about security of supply and cost. However, if he is talking about a nuclear future, can he tell us about the security of supply and cost of uranium?

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

All those issues must be discussed properly, which is why we are urging that there should be a proper debate and consultation. I will probably not agree with the hon. Gentleman on his point, which is that even if we have to live in the dark, with no electricity, and even if our industry has to pay double or triple prices, we still should not go for nuclear energy. I will not rule out nuclear energy, but I stress that we should explore all the options available to us.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

Is the hon. Gentleman assuming that we can survive only with nuclear? We have not had that discussion yet. Is that not the point of this debate?

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

No one form of energy production is perfect. There are drawbacks to each system, whether coal, nuclear, solar, wave or biomass. We should debate such issues in the larger interest of the community and consider what the views of industry and domestic consumers would be if prices were two or three times higher because energy or electricity was being produced from one source.

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Energy and Climate Change), Shadow Spokesperson (Scotland)

One trigger for the report was the concern about the United Kingdom's declining gas supply. Was there any reason for the Committee choosing not to consider what could be done about the industry on our own doorstep, to ensure that it maximised its benefits and contributions to the UK economy? It may be reaching its peak, but there is still a long future to be had if it is managed properly.

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

We had to have a cut-off date because we did not know when the election would be called. That is why we could not produce a comprehensive report. We did not even ask UKAEA to get involved. There were some negative stories in the media, and we did not have time to ask its opinion on those issues.

I thank hon. Members for listening to me and for their many interventions.

Several hon. Members:

rose—

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

Order. There is a large attendance this afternoon. I want to call everyone who wishes to speak, but, as I am entirely in the hands of the House, all I can do is ask for speeches to be brief.

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland 2:48 pm, 1st December 2005

I have a strong constituency interest in the energy industry. My constituency encompasses most of the issues that are covered in the report. In the northern end are some of the largest open-cast mining developments in Europe, and clean coal technology should not be forgotten in the debate. I am not, as sometimes portrayed, against open-cast mining. I welcome SPP16, the Scottish Executive's new planning policy on open-cast, but those, such as Scottish Coal in my constituency, who operate open-cast mining must pay more attention to the concerns of residents and communities such as Douglas, Glespin and Rigside.

The Lockerbie area in my constituency is about to get the largest biomass station in the United Kingdom. E.ON is at present constructing it, and I welcome that station and the power that it will produce. The plant will provide for the needs of some 70,000 homes and displace the emission of 140,000 tonnes of greenhouse gas annually. I very much welcome such renewable developments.

What I do not welcome is the industrialisation of the Scottish countryside by large-scale wind farm developments which, regrettably, are the obsession of the Scottish Executive. Because my constituency borders the M74, which is the line of the national grid, we are inundated with applications. In fact, there are currently applications for 421 turbines, which are each of the scale of Big Ben, within a 15 km radius of the latest proposed development at Limmer Hill in South Lanarkshire. That is simply unacceptable.

Fortunately, in this House we do not have the lunacy that we had from the Green politicians in the Scottish Parliament. I condemn Greens for not speaking out against the large-scale wind farm developments that industrialise the countryside. The proposed Clyde wind farm near Abington in my constituency, for example, would have required more quarrying and concrete than the construction of the M74 motorway. I am at a loss as to how that can be regarded as environmentally friendly.

Our Green friends believe that the production of those massive turbines is a physical manifestation of their progress in making the Green argument. At least they are consistent, unlike the Scottish National party, which always tells us of its support for Scotland becoming a hub for renewable industry in Europe and the world, but opposes every single wind farm development that comes along. That is simply unsustainable. Those of us who represented the south of Scotland know that Christine Graham, of whom I am a great admirer, is one of the most redoubtable opponents of wind farm policy in the south of Scotland.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I am interested to hear what the hon. Gentleman says, but he must realise that throughout all parties there has been some opposition and some support for wind farms. Since he is telling us about the Tories' opposition to wind farms, will he tell me why, of the three wind farms proposed in Angus, the Tories strongly opposed two, and about the third, which happens to be on land owned by a prominent local Tory, they have not uttered a word?

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

I am not familiar with the individual circumstances of the hon. Gentleman's constituency. We have made it clear that we are not opposed to every wind farm development, but we are absolutely opposed to large-scale wind farm developments. We are dispelling the metropolitan belief that wind farms somehow provide small communities with cheap or free electricity, when in fact their scale overwhelms small communities to no economic benefit.

I may feel on my own as the sole Conservative Scottish MP at Westminster, but I felt very much on my own six years ago in the Scottish Parliament, as one of the few proponents of the nuclear industry. In the Scottish Parliament it was an unpopular stance. Then, as now, I believed passionately in the nuclear industry, and I made that case.

Fortunately, Scottish Parliament Labour Members such as John Home Robertson and the Deputy Minister for Enterprise and Lifelong Learning, Allan Wilson, came on board. Even Liberal Democrats such as Jamie Stone made the case for nuclear power. I am pleased to see the emergence of a Scottish Parliament nuclear group. The dinner held jointly by the Westminster all-party nuclear energy group and the Scottish Parliament group was a positive step forward.

One of the main impediments to the nuclear industry in Scotland comes sadly from our First Minister, Mr. Jack McConnell, who only last week in the Scottish Parliament was back to his more negative pronouncements on the nuclear industry. I do not know whether it has something to do with keeping the Liberal Democrats happy, but I do not think that many people in this Chamber would regard it as a priority. Nor do I know whether it is to do with newspaper talk of a possible coalition with the Greens after 2007. However, Mr. McConnell must present a more positive tone in his discussion of the nuclear industry.

Photo of Philip Hollobone Philip Hollobone Conservative, Kettering

I want to make a point from south of the border in support of my hon. Friend's contribution. Is it not the case that Scotland has played a leading role in the development of Britain's nuclear industry, and that Britain's nuclear industry has played a leading role in the world development of nuclear technology? Scotland should hold its head up high and be proud of its involvement in this technology.

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

I agree with my hon. Friend. I have evidence for that in my constituency at the Chapelcross nuclear power station, which has been a centre of expertise, not just for the nuclear industry, but in terms of the amount that it has contributed to the local economy and development in that area.

When people ask, "Where will we build the new nuclear power stations?" I have a clear answer, as do my constituents and the Nuklear 21 trade union group. We will build them on existing sites, such as Chapelcross, Torness or Hunterston, where the communities clearly understand the benefits that these stations have brought the community. For example, some £29 million a year over the equivalent of 50 years has been brought to Lower Annandale. It is clear that my constituents, reflecting broader public opinion on this issue, would welcome new nuclear development at the Chapelcross site.

One of the things that I should like the Minister to take forward from today's debate and convey to the Prime Minister is that although I welcome his review—it is a pity that we are constantly in a cycle of reviews and that some of these decisions were not taken six years ago—I want him to be clear that despite what he may hear from SNP members, who are determined to use this issue as a constitutional bulwark, and despite what he might hear coming out of the Scottish Parliament, many people in Scotland are positive about future nuclear development. If we are to have further nuclear power in the United Kingdom, at least one of those sites should be in Scotland.

Photo of Tom Harris Tom Harris PPS (Rt Hon Patricia Hewitt, Secretary of State), Department of Health

I am grateful to the shadow of Secretary of State for Scotland for giving way. [Laughter.] I did not want him to continue with his speech without making something clear.

The hon. Gentleman seemed to misrepresent the view of the First Minister, as far as nuclear power is concerned. The First Minister has been clear that there would be problems with the planning permission for new nuclear power stations, but only while there remains a question mark over the safe disposal of nuclear waste. I do not think that the hon. Gentleman made that clear. Jack McConnell has not said an absolute no to nuclear power in Scotland.

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

Indeed, the hon. Gentleman is right, and if he had listened carefully to what I said, he would know that it is the tone of Mr. McConnell's approach to the nuclear issue that needs to change. Mr. McConnell needs to make it clear that if the UK Government determine that we will have future-generation nuclear power, such a power station would be welcomed in Scotland. That is what I want to hear Mr. McConnell say.

It is a red herring to suggest that we cannot proceed with planning for new nuclear power stations at the same time as the waste committee is meeting and making its deliberation. That is wasting time on these issues.

We have a debate, which is welcome. I would welcome a further report by the Scottish Affairs Committee on all the issues that are likely to come up today. However, as the Committee identified in its original report, we face the danger of the lights going out. It would be unacceptable to the public in Scotland and throughout the UK if politicians were still debating this issue as the lights went out.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

The hon. Gentleman has a great deal of passion about this issue, and people have been passionate about it in different parts of the debate. However, it is important for all of us to try to be dispassionate in analysing the facts and figures.

The hon. Gentleman will be aware that anyone could build a nuclear power station now, if they thought that it was a financially sensible thing to do. That is not happening, so it is widely accepted that the development of nuclear power would require some sort of subsidy or intervention in the market to make it possible. Can the hon. Gentleman, being—from time to time—a good right-wing Tory, tell us which type of market intervention or how large a subsidy he would want to see to make nuclear power possible?

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

Mr. Amess, I am being characterised in all sorts of ways this afternoon, and being given designations that are not necessarily accurate.

The reason that no-one is proceeding now with nuclear development is that it clearly does not have general Government support. Indeed, in Scotland it clearly does not have Scottish Executive support, because noises are not being made to support and promote the industry. As I have just said, if Mr. Jack McConnell stands up and says that he would welcome and, indeed, encourage new nuclear development in Scotland—with all the jobs and economic development that such a station would bring to the area in which it was located—then we would see a seminal change regarding the industry.

Several hon. Members:

rose—

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

I am seeking to conclude my remarks, to allow others to speak on this important topic, but I will take an intervention from Mr. Brown.

Photo of Russell Brown Russell Brown PPS (Rt Hon Alistair Darling, Secretary of State), Scotland Office, PPS (Rt Hon Alistair Darling, Secretary of State), Department for Transport

I am delighted that David Mundell has given way. As he is my local MP, I would have been disappointed if he had not. He has given a clear indication that there has been delay in all this. What part within that did the failed privatisation of British Energy cause?

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

I must advise my constituent that it has not been as significant as the failure of the Government, since 1997, to back the industry fully. But I assure the hon. Gentleman, and all my constituents in Annan, that I am in the front line of making the case for the nuclear industry. I hope he will continue to work hard within his own party to persuade the doubters. I also hope that proceeding with new nuclear power across the United Kingdom, including Scotland, will not fall foul of certain members of the Labour Party not being keen on that development. I am sure that we will hear a positive endorsement of the nuclear industry from those Members, which the Minister may take back to the Prime Minister.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office 3:03 pm, 1st December 2005

Thank you, Mr. Amess, for allowing me the opportunity to speak. It is important that we do not have a misrepresentation of the facts, and that we stick to what is true, in order to have an informed debate rather than a slanging match between people whose names I am unsure of. But I digress.

At this point, I should declare that I am chair of the all-party nuclear energy group. Over the past few weeks, the question of nuclear build has become a major news item and been given considerable time in the media. The Scottish Affairs Committee, in deciding to hold its review of Scotland's energy needs, looked at all forms of energy. Scotland, in particular, has been extremely fortunate in its rich abundance of oil and gas, but it is recognised that all those reserves are in decline. We are now a net importer of gas, and it is estimated that we will depend on gas imports for around 70 per cent. of our future energy needs. Those imports will be from Russia and countries in the middle east, which may be regarded as less than stable.

Other problems have become apparent in a world that uses more and more natural energy resources. While living in a market economy, we will have to compete with the US, China and India—and even those within the European family—for energy supplies. In a market-driven economy, what price gas and oil in a world vying for diminishing energy sources?

Some say that we previously depended on imported energy, but surely we all recognise that world energy demand is increasing at an alarming rate. We will have to compete in a free-market economy for our gas supplies, which will result in the highest bidder winning the supply. What price gas and oil in those circumstances? At a time when we are looking to make poverty history, what chance does Africa have?

Another factor is that in Scotland the largest contributor to our energy supply is nuclear power—the 2003 figures show that the relevant figure is more than 37 per cent. The industry has an outstanding safety record. That is why I welcome the recent media attention. If such interest leads to a grown-up, open and informed debate about nuclear energy, security of supply and our future energy needs, the media will have done this country a real service. It is about time they stopped seeking sensational headlines and represented the facts about our energy future to the nation.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

The hon. Gentleman has made a valid point about the need to import gas and the security of supply, but does he accept that if we opt for new nuclear build we will also have to access uranium? There is a finite supply of uranium in the developed world, which means that if we have nuclear power stations requiring uranium, we will end up importing it from unstable countries of the sort that we now rely on for natural gas.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

I am sure that the unstable position of Canada will come as an extreme shock to the people there. I am quite happy to bandy around the facts. I assure the hon. Gentleman that there is more than enough uranium to last quite a few lifetimes, never mind his and mine. If he does not agree, I am happy to furnish him with the information so that he might become a convert somewhere on the road to Damascus.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee

Is it not the case that new build nuclear facilities will produce a tenth of the waste of the existing nuclear power stations?

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

My hon. Friend makes a good point. It is even better than he says: if we had 60 power stations for 60 years, we would be talking about a tenth of what we have already used. The waste in question is not part of the argument. The waste we currently have and what we do with it is where the real argument lies.

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Energy and Climate Change), Shadow Spokesperson (Scotland)

The hon. Gentleman talked about the market and predicted high prices, long-term, for energy. Why is the market not saying, "We will build new nuclear power stations now."? The Prime Minister triggered an argument with his review. He will be considering what extra incentives have to be given and what financial burdens have to be put on users to achieve viability, because there is no physical impediment to building new nuclear power stations. The impediment, currently, is economic.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

I disagree with the hon. Gentleman, because I see part of the impediment straight across the Chamber from me: parties such as his have caused so many problems in the planning area that it has become practically impossible for anybody to have a new build anywhere in this country. Perhaps planning and how we go about arranging whether planning permission should be given are issues that we need to examine in relation to new build.

Photo of Tom Harris Tom Harris PPS (Rt Hon Patricia Hewitt, Secretary of State), Department of Health

Was my hon. Friend lucky enough to catch the interview with Iain Smith MSP on "Newsnight" the night before last? He perfectly encapsulated the Liberal Democrat position on nuclear energy, which is that the party is perfectly open minded on every option, provided it is not nuclear. Is that not the equivalent of Henry Ford saying, "You can have any colour of car you want, provided it is black."?

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

My hon. Friend makes a valid point. Mr. Carmichael, who sadly was in his place earlier and has now departed, made a similar argument during the launch of the report. He said that he would not accept nuclear, as did Mr. Weir. They would not accept nuclear in any shape or form and said that nuclear must not be part of any form of energy policy in the United Kingdom. Such an argument is contrary to the report, which asks for a balanced energy policy for the country.

I will move on. The green lobby has been successful in perpetuating the myth that the media have inadvertently assisted with. Professor James Lovelock, of whom my hon. Friend Mark Lazarowicz is obviously a fan, has said:

"I am deeply concerned that public opinion and consequently the government listen less to scientists than they do to the Green lobbies. I know that these lobbies are well intentioned but they understand people better than they do the Earth".

This is a man who was a member of Greenpeace for more than 30 years and who planted more than 20,000 trees in his bid to help the environment.

Under the heading, "How best to meet the shortfall?" the Scottish Affairs Committee says:

"The most appropriate way of introducing this section of the Report is by quoting from a recent 'postnote' from the Parliamentary Office of Science and Technology (POST):

'The UK's gas reserves are declining. Government . . . analysts estimate that by around 2006 the UK will no longer be self-sufficient in gas . . . and will revert to being a net gas importer.'"

How true is that? It did not take long before that fact was proved correct, which shows how well our Committee did.

Photo of Jim Devine Jim Devine Labour, Livingston

I have become a very sad individual since I came to this place, as this week I read "Raising the Standard", a paper issued by the Scottish National party. It says that, for those people in Scotland stupid enough to have voted for independence, it has issued a road map. It will negotiate with the Government, the EU, the BBC, the Driver and Vehicle Licensing Agency, the Post Office and the boundary commission, as well as on social security and the currency. The one thing it will not negotiate away are the people who provide gas for this country, so people who vote for an SNP Government will be voting to put the lights out in Scotland.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

I say to my hon. Friend that I do not think that the SNP could draw up a street map, let alone a road map.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I am sorry that Mr. Devine is so challenged in his reading. If he were not, he would know that Scotland—it is Scotland's energy needs that we are supposed to be discussing—produces more gas than it uses. The UK is a net importer of gas.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

I shall treat that input with the contempt it so richly deserves.

To move on, gas is a large proportion of the UK's energy supply. Gas-fired power plants are the main method of power generation. As I said, the UK will become a gas importer. If we go down the gas road, more emissions will go into the environment.

The Committee's report made 12 recommendations, and the Government provided a response. I again highlight a recommendation that is, in our view, important: the need for an urgent energy audit. That recommendation arose from the evidence available to the Committee. We strongly believe that such an audit would identify the energy sources available. It would also allow an analysis of the effectiveness of our current investment in, for example, renewable energy and show its cost-effectiveness—whether renewable energy sources are delivering consistently, and how effective they might be as a guaranteed source of power generation.

Such an audit would identify our energy strengths and weaknesses. The issue is not a matter of arguing for one source in preference to another, but of identifying our energy portfolio and ensuring that we have the correct energy mix, as well as a balanced energy policy most suitable to the needs of Scotland and the UK. That is what the report is all about.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Home Affairs)

I caught the hon. Gentleman's earlier reference to me on the monitor as I left my office. If he had told me that he was going to refer to me, I would have taken care to be in my place during his speech. I must say that he misrepresented my position, and I hope he will correct the record. At no stage during the launch of the report did I say that I am opposed to nuclear power in all circumstances. I said that I would not countenance nuclear power unless and until the waste issue was clarified or resolved. Nothing that he has said—nothing that I have heard, anyway—makes me think that he has any answer to that.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

I thank the hon. Gentleman, whom I hold in high regard. Because of that high regard, he should have known that I would mention him. So much for hindsight. On his question, my recollection is more, shall we say, simple. I know what a yes is, and what a no is. He can sugar it up any way he likes, but I know where he is coming from. As for the waste, I tell him, and all Liberal and SNP Members, that if I could solve their waste problem, assuring them that waste could be stored securely and safely, and could be recovered in case of any other emergency, would they be willing to back nuclear energy? If so, I look forward to writing to them to provide that information, and they can join my group as soon as they like.

Photo of Alan Reid Alan Reid Shadow Minister (Trade and Industry)

Will the hon. Gentleman give us the information now?

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

No. [Laughter.] Having said that, I think the information may be further on in my speech. It is, so I am being a bit cheeky. I shall come to that suggestion.

Although the debate seems to have turned into a debate about nuclear energy, I am trying to tell Opposition Members and my hon. Friends on the Government Benches that the Select Committee report is not about nuclear energy; it is about a sustainable energy policy for the needs of Scotland. We—apart from two Members—thought that nothing should be excluded. That was sensible, and it is probably why the report has been well received in several quarters, and not only the nuclear lobbies. Other lobbies consider it balanced, and I commend everybody who took part and who gave evidence to the Committee.

There has been a mad dash down the wind farm route. Many Members have mentioned that, and I am sure that many Opposition Members shall mention it. At the moment, we cannot make wind farms work effectively. I am being generous, but wind power is intermittent at best and will be only about 30 per cent. effective. There are a substantial number of wind farms, and an audit is under way to establish their contribution. It would be beneficial if we assessed their value and obtained the figures.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

I am grateful to my hon. Friend for giving way again, given the number of interventions he has taken. No one suggests that wind energy can meet all the energy needs of Scotland or anywhere else, but on the question of wind energy should he not bear in mind the latest figures from the Department of Trade and Industry, which suggest that the cost for onshore wind is now significantly lower than that for new nuclear build? The projection for offshore wind is that its cost, too, could fall below that of nuclear by 2020.

May I suggest to my hon. Friend that the report is a little too critical of the possibility of renewable energy, which it describes as somewhat uncertain? That contrasts with its description of nuclear fusion as a possible major source of power in the not-too-distant future, which is somewhat optimistic to say the least.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

It all depends on what my hon. Friend means. If 30 or 40 years is in the distant future, that possibility is in the distant future. However, we have a short time in which to secure the world's climate, so we may not be able to wait for fusion. Costs move all the time, and I shall come on to them. I accept what he says, because I do not have the figures to hand. I am happy to receive them, if he wishes to send them to me.

I am aware that other Members want to speak and I am trying to cut out parts of my speech, but I want to mention the Royal Academy of Engineering. It conducted an excellent study of price comparisons, and nuclear energy came out favourably. Renewables cost approximately double, and there were concerns about safety. The nuclear industry has some of the highest safety standards in the world. We should continue to ensure that there are supplies worldwide.

More than 30 new reactors have been built. Russia is building nuclear power plants in order to sell its gas and oil to us. I wonder why. Finland, rather than depend on its neighbour Russia for gas, is building its fifth nuclear power plant. China has built six of which I know, and many more are being built. France, our near neighbour, depends on nuclear energy for more than 70 per cent. of its energy. I am aware that none of these arguments will change the minds of the energy troglodytes today, but we must try to educate them.

Our energy policy should not become subject to party politics; it is much too important for that. We need to develop an agreed energy policy framework, and it should have cross-party support. Unfortunately, the Liberals and the Scottish National party will continue to endanger the future energy policy of the country. Their rejection of the nuclear option would mean dependence on imported gas for the bulk of our energy needs. They will argue for other forms of energy, knowing that their policies are simply a leap in the dark because those forms of energy currently represent neither a core source nor a proven technology on the scale we require to maintain our security.

Sweden voted to phase out its nuclear industry some 25 years ago. It now recognises the folly of that decision. It found that the alternatives were not as cost-effective as it first thought, and it is now Europe's third largest consumer of nuclear-generated energy.

This week, it was reported on Teletext that Ofgem had asked for an inquiry into why the rest of the European Union is not selling more gas to Britain, when prices have been so high. We should remember that when we start talking about importing gas from places such as Russia and the middle east, and about a pipeline that crosses the whole of Europe. There have been claims that rules in other EU countries mean that gas held in storage is not released for export. According to the BBC, Ofgem has asked the European Commission for an investigation into the recent high prices.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Home Affairs)

I am grateful to the hon. Gentleman for giving way again. Please can he explain this to me: if Russia is such an unstable nation that we should not buy our gas from it, why is it stable enough to be trusted with nuclear power stations?

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

The hon. Gentleman knows that the Russians have their own technology and have built their nuclear power stations themselves. It would have been very difficult to stop them doing so, particularly as Russia used to be one of the most powerful countries in the world, but that is not to say that I would not have liked to have done that.

I want to move on to green matters. We must listen to those who, because of the current serious situation, have converted and become supporters of nuclear energy. An article in The Sunday Times reported the comments of Professor James Lovelock—a pal of my hon. Friend the Member for Edinburgh, North and Leith. He gave evidence to the Committee, and he has impeccable credentials as an environmentalist and a scientist.

Several hon. Members:

rose—

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

I will not give way.

Professor Lovelock described global warming as

"the greatest test humanity has ever had", and he called for a nuclear programme

"whose scale dwarfs the space and military programmes".

He also said:

"I find it extraordinary that the one safe and proven energy source that has minimal global consequences, nuclear power, is so readily rejected."

The same article reported that Hugh Montefiore, former Bishop of Birmingham, had quit the board of Friends of the Earth after coming out in favour of nuclear power. He said:

"I have concluded that the solution is to make more use of nuclear energy."

The report also referred to Sir John Houghton, a well known and respected scientist and former head of the Met Office. He said nuclear power is "increasingly attractive".

I recognise that environmentalists are used to scientists suggesting that more technology can solve such problems, but I believe that they were shocked when Peter Harper and Paul Allen, leading green thinkers from the Centre for Alternative Technology, made a similar suggestion.

If we are serious about solving the problem of our CO 2 emissions and ensuring security of supply—if we want to avoid the lights going out—we must be bold and have a serious debate to find the best solution to the energy problems we might face in the near future.

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West 3:25 pm, 1st December 2005

I am delighted to contribute to this discussion about a tremendously important issue for the future of Scotland. The debate on how to meet our future energy needs clearly provokes strong opinions on both sides of the Chamber. However, I believe that there are a number of issues on which we can all agree: our declining gas reserves; the fact that, if current trends continue, the country will miss its targets on lowering carbon emissions; and the absence of a "silver bullet"—as the Committee put it—to solve our energy needs.

We all seem to agree on the problems, but there are different opinions on how best to deal with these truths. In that regard, I have several real concerns about the Committee's findings and recommendations.

I agree with several of the Committee's recommendations. One, which I hope that the Minister can discuss, relates to the importance of the Scottish Executive clarifying their position on whether the target of 40 per cent. renewables by 2020 relates to generation or consumption. Assuming that Scotland remains a net exporter of electricity, a target of 40 per cent. of generation would be much higher than a target of 40 per cent. of consumption, and vice versa if Scotland becomes a net importer. Clarification would be most welcome.

I am also pleased that the Committee recognised the importance of improving energy efficiency, which is the best way of ensuring that our energy supply is maintained while helping to cut CO 2 emissions. It is also far more cost-effective than investing billions of pounds in new nuclear power stations.

I join the Committee in commending the good work of the Energy Saving Trust and its energy efficiency campaign. Indeed, it helped me cut carbon emissions in my constituency office by recommending a change in heating system. However, the real challenge is to convince people that they really can make a difference. Energy saving on a national scale is vital, and the potential benefits are enormous. I hope that the Government will wake up to the vast opportunities in that regard.

However, there are problems with the report. Although the Committee has made several positive recommendations, I have a number of real concerns. First, I simply do not see the need for another energy audit. There has already been an extensive review of the UK's renewable energy resources, and the state of our gas and coal reserves is well documented. What is needed is an energy policy and mechanisms that allow it to be implemented in a privatised electricity supply industry. Decisions such as the likely Scottish Power closures at Longannet and Cockenzie show how little control the Government and the Scottish Executive have over major decisions about Scotland's generating capacity.

As the report states, no single form of energy production is perfect, but some are less perfect than others. I am sure that I am not alone in my disappointment at the way in which the report seems to rule out the long-term prospects for renewable energy, only to use that as a de facto reason for supporting a return to nuclear power. Clearly, we will face extremely difficult questions on energy generation, but nuclear power is not the answer to any of them.

Although I agree with the Committee that it might be sensible not to rely on emerging renewables for a quarter of the renewables supply, the evidence from the Scottish Renewables Forum was indicative, and renewables technologies are clearly reasonable as an aspiration. Only by encouraging them will we ascertain their economic potential.

Furthermore, while reports of the development of nuclear fusion are certainly interesting, the Committee admits that the prospect of a new generation of nuclear power stations is still a long way down the line. Indeed, it feels as though nuclear fusion has been 10 to 30 years off for the past 50 years.

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

Can the hon. Gentleman clarify one point? Should the Liberal Democrats be in the Scottish Executive when the UK Government determine to follow a nuclear energy policy, will they accept that legitimate decision given the constitutional settlement?

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

I clearly look forward to a time when the Liberal Democrats are the majority party in the Scottish Executive and perhaps form part of the Government at Westminster, so the scenario that the hon. Gentleman paints is unlikely to unfold.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee

Perhaps I have missed it, but is there a new technology in the Liberal party's thinking? Is it the technology of aspiration? What percentage of Scotland's energy generation will aspiration generation meet?

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

I did not quite understand the question, to be perfectly honest. It is perfectly reasonable to have the aspiration that renewables will account for an increased percentage of power generation in the long term.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

Perhaps the hon. Gentleman can tell me what will turn on the lights when those renewables do not supply the electricity? Aspirations?

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

We are looking for a mix of electricity generation, and that can be provided in the long term without a nuclear component. With that in mind, it is strange that the long-term nature of the next generation of renewables seems to rule them out as a viable major energy source, while the equally long-term next generation of nuclear power stations is held up as something of an energy holy grail.

That bias towards nuclear energy permeates many areas of the report; perhaps it could have been avoided if the Committee had not leaned so heavily on the opinions of pro-nuclear experts. For example, the report makes extensive use of the evidence of Professor Lovelock, who is quoted four times and is the most referenced expert in the report. It should be noticed that his views on the nuclear industry are not shared by all, and certainly not by the vast majority of the environment movement.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

In his speech, John Robertson cited Professor Lovelock as a new adherent of nuclear power. Has he read the evidence given by Professor Lovelock on 22 February 2005? When asked why he came to be a nuclearphile, the professor said:

"It is a view I have held for the last 25 years, at least. It is on record in a book I wrote in 1985."

Strangely enough, he was answering the hon. Member for Glasgow, North-West.

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

That statement comes as no surprise to me; I shall add to that.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

On a point of information, Mr. Amess. The gentleman was 83 years old; that might have something to do with the fact that he was in the Green party for 30 years.

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

Well, one of the important points made by Professor Lovelock referred to the storage of high-level nuclear waste under the floor of his house to provide heat and sterilise food. His Gummer-like decision to offer to have his grandchildren sit on top of nuclear waste to have their photograph taken also sticks in the memory. Needless to say, I am not too keen on accepting as gospel a report that has drawn so heavily on the views of Professor Lovelock.

Photo of Mark Lazarowicz Mark Lazarowicz Labour, Edinburgh North and Leith

Perhaps we can now see why the speech of a previous speaker was written in green ink. I ask the hon. Gentleman to be a bit more positive about the prospects for renewable energy. No one suggests that it can meet all of Scotland's needs, but is there not now increasing evidence that renewables could easily supply 40 per cent. or 50 per cent. of Scotland's energy needs, and could also provide an increasing export potential to the rest of the UK? Is not the fact that renewable energy prospects are underplayed significantly one of the problems with the report? The report, I am afraid, does Scotland a disservice: it leaves that possibility underplayed.

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

I agree with the hon. Gentleman's comments; I shall come to that issue. The combination of the use of renewables with energy saving is not fully explored in the report.

I was saying that I was not keen on accepting Professor Lovelock's guidance as gospel. Although it is clearly important that the report should take evidence from people on all sides of the debate, the fact that Professor Lovelock is such a key witness illustrates its pro-nuclear bias.

Photo of Anne Moffat Anne Moffat Labour, East Lothian

Can the hon. Gentleman confirm whether he was on the Committee? Did he ever press for a Division on any parts of the report, given that he is slagging it off all the time?

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

I happily confirm that I am not a member of the Committee. However, that does not stop me reading its report and drawing my own conclusions.

Those pro-nuclear tendencies were revealed again when the report discussed the relative cost of nuclear energy and renewables. I am sure that many hon. Members will share my confusion over why the Committee, in comparing the prices of renewables and nuclear power, chose to quote from a single source that gives a favourable price for nuclear energy and an inaccurate one for wind power. The price cited for nuclear power is a nuclear industry fantasy, based on an unproven new generation of nuclear stations that have not been built or run, and on their being built in large numbers.

At best, 2.3p per kWh can be seen as the minimum possible cost if everything goes to plan and the Government underwrite the risks. Renewables industry sources put the average cost for onshore wind power at 3p to 4p per kWh and at 2p to 3p per kWh from the best sites; they put the price of new nuclear at 4p to 7p per kWh. So there are alternative views on the issue. The Government's own figures put the future cost per kWh for onshore wind at 1.5p to 3.6p and for nuclear at 2.5p to 4p.

Photo of David Hamilton David Hamilton Labour, Midlothian

It has become clear that with all the interventions, we are having a one-line debate and coal has not been debated. Is it not the only fuel, according to the report, that does not receive a subsidy?

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

I accept what the hon. Gentleman said, and heard with interest his comments on his experience in the industry and the difficulties of storing nuclear waste. He made a valid point.

The Committee stated that it would have welcomed more time in which to take evidence before producing its report. Perhaps it could have explored the matter more fully if it had had more time, but the general election got in the way. More time might have allowed it the opportunity to balance better its findings and recommendations.

On a more serious note, have we forgotten why we gave up nuclear power in the first place?

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

If the hon. Gentleman had read the report, he would have seen the written submission from Scottish and Southern Energy which set out the scenario in Scotland. It states that

"Scotland is faced with the prospect of the following sequence of events unfolding: closure of the nuclear power stations; closure of the coal-fired power stations; question marks against the viability of gas-fired and large hydro stations; question marks against longer-term deployment of new renewable energy".

Can the hon. Gentleman tell us whether in any circumstances when facing a stark choice he would rule out nuclear energy?

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

I would have to be convinced about a number of issues. It was not just storage that was mentioned earlier. Cost and safety are also issues and I am not convinced about the safety issue.

In the Committee, my hon. Friend Mr. Carmichael asked Professor Lovelock about deaths following Chernobyl. Professor Lovelock said that be believed that 45 deaths were attributable to Chernobyl. My hon. Friend asked whether he was aware of the figures suggesting that between 25,000 and 85,000 deaths were associated with Chernobyl.

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

The evidence from the World Health Organisation was that there were tens of thousands of deaths, and when Professor Lovelock was asked whether he would stick to 45 he said yes. I was in a cancer hospital in Ukraine 10 years after Chernobyl and it was full of 10-year-old children who were suffering as a direct result of Chernobyl. The doctors confirmed that. There were more than 45 people in that one ward and I do not believe Professor Lovelock's figure.

The nuclear industry has no answer to the storage problem. Moreover, the storage problem at Dounreay does not inspire confidence. Revelations that high-level radioactive waste has been pumped into the sea and that that action was covered up by reckless management must set alarm bells ringing. I am extremely disappointed that the Committee was unable to call UKAEA to account on those accusations.

Hon. Members may be aware that 11 farms in Scotland are still subject to statutory controls and monitoring of sheep for radioactivity as a result of continuing contamination from the Chernobyl accident. Hon. Members do not need reminding that the accident happened 19 years ago and 1,500 miles away. It is interesting that the problems of nuclear power are always couched in language such as "people have fears about nuclear power". They are not just fears; they are very real problems. The problem of how to deal with nuclear waste has not been solved and few are predicting that the report from the Committee on Radioactive Waste Management, which is due out next year, will provide any answers.

Photo of Eric Joyce Eric Joyce PPS (Rt Hon Margaret Hodge MBE, Minister of State), Department for Work and Pensions

Does the hon. Gentleman exclude the possibility that a scientific solution will be found? If one were found, would he agree that it might be possible to dispose of waste safely and would he then revise his position on the nuclear industry?

Photo of John Barrett John Barrett Liberal Democrat, Edinburgh West

A scientific solution would have to be available or on the near horizon, but the issue goes wider than just storage. Cost and safety issues also arise.

The problem of nuclear waste has simply not been dealt with. The least bad option of finding somewhere to store or dump existing nuclear waste is not a solution and should not be a taken as a green light to create more nuclear waste. If we in Scotland, with the wealth of natural resources at our fingertips, are unable to commit fully to renewable energy and instead fall back on nuclear power, what message are we sending out to the rest of the world? How can we preach to the Irans of the future about alternatives to nuclear power when we ourselves are bowing to a knee-jerk pro-nuclear response to our own energy problems? We have a great responsibility on our shoulders that we cannot escape and must not try to avoid. Scotland should be the world leader in renewable energy. We have the natural resources, the skills and the ambition, yet this report and the Government's response seem to indicate a lukewarm political will.

Photo of Frank Doran Frank Doran Chair, Administration Committee 3:40 pm, 1st December 2005

This is an important debate, but I am becoming a little concerned that the focus is on the nuclear industry only. It is important to widen the debate a little, particularly as Scotland is so rich in energy sources. We have coal and, as my hon. Friend Mr. Hamilton rightly said, we have oil and gas. We have hydro, wind and wave, and we might even have tidal. As colleagues said, Scotland also has a substantial chunk of the UK nuclear industry.

One big problem is that we have not always been able properly to exploit our advantages in energy. For example, we have not built a new hydro station since the late 1960s, yet the hydro stations are still functioning. The oldest one, the Foyers power station, was privately built more than 100 years ago by British Aluminium to feed its plant in the highlands. It is still functioning and producing electricity for the grid. All the stations that were built after the war in the North of Scotland Hydro-Electric Board area are still functioning. They are producing clean, low-cost energy.

Photo of Danny Alexander Danny Alexander Shadow Spokesperson (Work and Pensions)

On a point of information, is my hon. Friend aware that consent has recently been given for a new hydroelectric power scheme at Glendoe near Fort Augustus in my constituency?

Photo of Frank Doran Frank Doran Chair, Administration Committee

I am aware of that, but I was not aware that I was the hon. Gentleman's hon. Friend.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

Is the hon. Gentleman aware that the Glendoe station to which Danny Alexander referred faced the same problems as wind farms? There were objections to it, and that is one of the problems with the communities.

Photo of Frank Doran Frank Doran Chair, Administration Committee

The hon. Gentleman is absolutely right. In fact, every one of the hydro schemes in the 1940s, 1950s and 1960s faced a torrent of objections and abuse, yet now they are seen as a natural part of the landscape. Indeed, the Pitlochry power station and dam are huge tourist attractions.

Photo of Tom Harris Tom Harris PPS (Rt Hon Patricia Hewitt, Secretary of State), Department of Health

On a point of information, my hon. Friend may be interested to know, if he does not already, that the Cruachan hydroelectric dam is, in fact, a net user of electricity. It uses electricity to push water up the hill when electricity is cheap, then the water flows back down when the demand is higher and the cost of electricity is therefore higher as well. Would he agree that hydroelectric may not play that big a part in meeting the energy gap in the years to come?

Photo of Frank Doran Frank Doran Chair, Administration Committee

My hon. Friend simplifies the issue far too much. Cruachan was built to meet the peak offload. It was expensive in those days to have a full coal power station burning, so cheap electricity was used to pump the water. Then, when surplus energy was needed, Cruachan filled the gap. That is why it is there. It is part of the security of supply system, which is so important.

My hon. Friend the Member for Midlothian mentioned the coal industry, which, since privatisation, has been completely run down. Two major power stations in Scotland are still burning coal; Cockenzie and Longannet. At one time, Fife had an experimental coal gasification project. Part of the by-product went to the chemical plant further along the road. Fife and Grimethorpe were world leaders in developing gas from coal, but we lost that position because there has been no attempt since privatisation to find new markets for coal. However, we are moving into a new era, and exploiting coal and developing ways of exploiting it will be much more important than some of the other issues that we have been discussing.

Twenty years ago, Scotland was a world leader in wind technology, but that technology was not developed, mainly because the Government refused to put any money into it. We lost the lead, which has gone to the Netherlands. Wind technology is not rocket science, but we had the control to develop that technology 20 years ago and lost it. Likewise with wave power; we have all heard of Salter's duck, which was a world leader. It may not have been the most efficient device, and a great deal of work needed to be done to it, but it was never properly developed, again because money was not invested by the Government.

There was one simple reason why the money was not invested by Government; all the money was going to pay for nuclear. I worked in the electricity industry. When I left school, I went to work for the North of Scotland Hydro-Electric Board. I can remember the push for nuclear in the 1960s and 1970s. Everything was dropped in favour of nuclear. No investment was made in virtually any other type of station because everything had to go into nuclear. It is important to recognise the faults of the past and the problems that we created for ourselves by losing our lead in wind technology, by not developing alternative uses of coal and by focusing so heavily on nuclear. The Government need to take that lesson seriously.

Oil and gas is obviously an industry that I am more familiar with today. I thought that it would be interesting to mention some figures because there is a sense in the debate that the oil and gas industry is finished and that its days are over. The figures that were handed to me today by the United Kingdom Offshore Operators Association, the trade body for the offshore operators, show that capital investment in the North sea for 2005 is £4.5 billion. That is more than 20 per cent. of all the investment in manufacturing industry in the UK. That is not an industry that is finished. In fact, the majority of oil companies tell us that we have at least 30 years—perhaps more—of oil and gas left in the North sea. My experience of forecasts on the future production of oil and gas around the world is that they are always wrong. Technology improves the ability to extract more fuel and we keep finding more sources. Of course, we are talking about finite fuels but, at the end of the day, we have a long history in front of us, if I can put it in that rather tortured way.

The total expenditure by the oil and gas industry in the UK in 2005 is £11 billion, a staggering figure. I do not have an estimate for this year's tax take by the Government, but the oil industry estimates that, over the longer term, there is as much as £120 billion still to come to the Treasury from the oil and gas industry. Those assumptions were made with a price of $40 a barrel; at the moment, the price is more than $60 dollars a barrel.

Photo of David Hamilton David Hamilton Labour, Midlothian

Is my hon. Friend aware that BP, along with Scottish and Southern Energy, has announced a power plant at Peterhead in Aberdeenshire? CO 2 will be piped through the Miller oilfield, extending the life of the oilfield by another 25 years.

Photo of Frank Doran Frank Doran Chair, Administration Committee

That is what the next part of my speech is about. It is important to consider where the oil industry is. We are talking about private operators that know the energy market around the world. My hon. Friend quite rightly pointed out that BP, along with Scottish and Southern Energy—the old hydro board—decided to invest up to £600 million in a brand-new project, which marks a first in the world. Again, Scotland is at the forefront of technology and developments in energy. The existing Miller oilfield will be used as a dumping ground for carbon dioxide produced by the separation of natural gas to produce hydrogen, which will be burned to produce electricity.

The project is enormously important. I was lucky enough to have a briefing from BP on the matter recently. BP is already discussing the project with Governments around the world. We hope that, in the future, technology developed and applied in Scotland will be driving the power stations of China and India, two of the biggest potential users of energy in the world and two of the biggest potential polluters. The technology is clean and will help to protect the environment.

It is also important to record the fact that in the city that I represent, Aberdeen, we are obviously preparing for the downturn in oil and gas, because they are in decline. The experts say that we have produced roughly half the gas and oil that there is to produce and we have the other half still to produce. If that forecast is correct, we are in the decline phase. Aberdeen, as a city—together with the Scottish Executive, the DTI, Scottish Enterprise and all the bodies that matter in the oil industry—is advancing the technology that we have developed in north-east Scotland. Importantly, the Peterhead power station is not just an anomaly. Virtually all the world's offshore oil and gas environments are using technology that was developed offshore in Aberdeen.

Based in Aberdeen and Aberdeenshire, we have the largest, most innovative, most forward looking sub-sea technologies operation anywhere in the world. At every offshore oil and gas field worldwide, there will be people and companies based in Aberdeen carrying out the sub-sea technology. They are now moving from working in the oil and gas industries to looking at other ways of using their technologies, such as tunnels and cables. There are amazing things spinning off from the oil and gas industries.

We reckon we have the largest concentration of IT specialists anywhere in the UK. Cambridge claims that it is top, but we think we have more and are putting in our claim. So the message is, when looking at energy, look where the oil companies are going. Look at the Peterhead station, which I mentioned. BP announced this week that it is about to invest up to $6,000 million over the next few years in alternative technologies from renewables. It has already invested massively in other technologies, as has Shell and other companies, and is increasing that investment. I have not checked the figures, but BP may be spending almost as much on renewables as it has in the past on the development of oil and gas supplies.

For me, there are three lessons from the report and the discussions around it. First, it is important to develop diverse sources of supply. I must go on record as not being a supporter of nuclear, but it is important that the nuclear case be examined. It is also important not to repeat the experience of the 1960s, when other forms of energy were relegated and seen as less important than developing nuclear.

Secondly, private sector investment will be important, but Government support and investment is crucial. If that dries up, it will be a disaster for the country in the longer term, as we have to replace the nuclear facilities. Finally, it is important that we continue to invest in clean sources of energy. Scotland has them in abundance.

Photo of Danny Alexander Danny Alexander Shadow Spokesperson (Work and Pensions) 3:53 pm, 1st December 2005

Thank you, Mr Amess, for calling me to speak in this debate. I am grateful for the opportunity to do so, not least because I am now also a member of the Scottish Affairs Committee. I would like to congratulate the Chairman of the Committee, Mr. Sarwar, on his eloquent opening to the debate, which set out the various conclusions and recommendations in the report.

As several other hon. Members have said—not least Mr. Doran—our debate has been dominated by a discussion of nuclear energy. I myself do not propose to go into that, but would like to associate myself with the remarks made by my hon. Friend John Barrett.

There are a couple of issues that I am keen to address. The first is the issue of renewables. The second recommendation of the report was on emerging technologies and the need for further research and development into them and renewables. That is a very important point, and the Government response to that particular recommendation was weak. It took a passive approach to developing these emerging technologies, rather than the more active approach which would be much more useful, not least, in relation to what might be termed wet renewables. That is, the possibility of generating electricity from wave, tidal and, indeed, offshore wind power.

Wave and tidal power, in particular, offer a huge opportunity; a steady source of electricity generation, unlike the problems, in some circumstances, that were described around wind power. It is a form of technology that has not yet been much developed or exploited by other countries, so it also offers us in Scotland—especially in the highlands and islands—an enormous opportunity to develop a new industrial sector. We can take the lead there.

The hon. Member for Aberdeen, North made the sensible point that we were ahead in the field of wind power 20 years ago, but we lost that lead because investment was diverted into the nuclear industry. We have the opportunity again, particularly in the highlands and islands, to take the lead in a new industrial sector: wave and tidal power. Companies are already pursuing that and the UK Government need to take a much more active role in pursuing and encouraging those forms of renewable technology. The Scottish Executive recently announced a new generation of renewables obligation certificates specifically targeted at generation from wave and tidal power, which will offer more of an economic incentive for companies in that sector to develop technology in the knowledge that there will be a market for it when it is ready to go to that level.

Photo of Tom Harris Tom Harris PPS (Rt Hon Patricia Hewitt, Secretary of State), Department of Health

I am following the hon. Gentleman's argument very carefully and I wonder whether he can offer the House a specific time scale as to when those forms of power will generate a sufficient level of energy to meet Scotland's future energy needs. I hope that he will give us a definite time scale because his party has already said on the record that it will not support nuclear energy until a definite time scale is given on the solution to the problem of nuclear waste disposal. If he is so keen on time scales and deadlines, perhaps he could give us one for this sort of energy.

Photo of Danny Alexander Danny Alexander Shadow Spokesperson (Work and Pensions)

I am not sure that it was me who introduced the question of time scales and deadlines; it was the hon. Gentleman who did that. However, it is a good point and the answer we get to that question depends on whom we talk to in the wave and tidal power industry. For example, Mr. Jimmy Ferguson of Wavegen gave evidence to the Committee during the production of its report and his company—former company as it is now—estimated that it would take somewhere between five and 10 years before that particular form of generation would be ready to make the enormous contribution it has the potential to make.

Photo of Danny Alexander Danny Alexander Shadow Spokesperson (Work and Pensions)

I think it will make a substantial contribution, not least because, for example, in the Pentland firth between the north coast of the highlands and the Orkney islands, we have one of the greatest natural power houses in Europe for the generation of tidal and wave energy. As I said earlier, the Scottish Executive recently announced a new generation of renewables obligation certificates for those forms of generation and I hope that that will be followed up at Westminster. So far, the Government in Westminster have not chosen to offer such incentives.

It is worth referring to the European marine energy testing centre that has been developed in Orkney for the pursuit of such technologies, which offers an enormous opportunity for those developments. I hope that the energy review that the Government have recently announced will not be a simple-minded dash for nuclear. I hope that due emphasis will be given to the technologies that I mentioned.

Recommendation 7 of the Committee's report sought to address the transmission infrastructure, which is very important to us in Scotland. The Committee made a specific recommendation about the charging regime, calling for it to be reviewed. I welcome the announcement that was made during the debate on the private Member's Bill of Mark Lazarowicz regarding the time scale for the cap—

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee

The hon. Gentleman refers to a dash for nuclear. Does he understand that the argument is not to dash for more nuclear but for new build to keep the proportion of generation that we have at present, rather than increase it?

Photo of Danny Alexander Danny Alexander Shadow Spokesperson (Work and Pensions)

That is the argument made by those hon. Members who have spoken in favour of nuclear in this debate. I am not sure that it is an argument I necessarily agree with, but I understand that it is the argument presented by him and his pro-nuclear colleagues.

I was talking about the development of the transmission infrastructure and the charging regime. The cap for transmission charges from the islands has been extended in time, which is clearly a positive development, but I want the Government to consider extending that cap to electricity generated in the mainland highlands of Scotland as well. Many of the reasons why the charging regime is a disincentive to electricity generation in the islands also apply to the highland areas.

There are currently proposals to upgrade the electricity transmission infrastructure between Beauly and Denny and the proposed route would pass through the constituencies of some hon. Members including my own. That raises a number of issues relating to the transport infrastructure. Although the decision about whether the development should go ahead is a matter for the Scottish Executive and the Scottish Parliament, the framework within which such decisions are taken is influenced and, to a large extent, set at a UK level, not least because of the rules through which these sorts of developments are financed. We need a framework for such decisions at a UK level that allow community wishes and environmental needs to be taken into account, and a process that allows a full assessment and a strategic approach to look at all the options for developing the transmission infrastructure.

Hon. Members will be aware that the company AMEC came forward earlier this week with a proposal, saying that it would be feasible to develop a sub-sea transmission cable taking electricity from the western isles to Hunterston, rather than transmitting it from the western isles via pylons through the mainland. Such a sub-sea transmission option could help to support the long-term objective of promoting wave and tidal power that I have described. It would also offer advantages from an environmental point of view. I hope that that idea will be given active consideration in due course.

I hope that the Minister will respond to the following question. Because of the cost rules, the regulatory environment at the moment for extensions or upgrades to the transmission infrastructure means that longer-term proposals to meet the needs of a long-term energy strategy are harder to justify than the shorter-term developments, such as Beauly-Denny, which, although they may satisfy immediate needs, may not be the best route for the long-term energy development strategy for Scotland.

Another issue relating to the framework in which such developments are financed is the undergrounding of cabling in sensitive areas, for example, around Beauly, an area of heavy population, and the part of the route that passes through the Cairngorms national park. There is a good case for allowing the proposed upgrade to the transmission of infrastructure to be undergrounded in such areas. Again, that is at least partly an issue for Ofgem and the financing regime for such development. If funding can be made available for undergrounding through Ofgem and the regulations, it will allow the upgrades to take place.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

Has the hon. Gentleman seen the briefing from the Scottish Renewables Forum e-mailed to Members today, regarding Beauly-Denny and particularly the question of undergrounding, which says that it is impossible to underground a line of this voltage because, due to the strength of the line, it would require a trench the size of a modern motorway? Is it not important not to mislead people on this point?

Photo of Danny Alexander Danny Alexander Shadow Spokesperson (Work and Pensions)

I am grateful for the hon. Gentleman's point. I have not seen the briefing. I have not spent as much time in my office today as I should, awaiting that e-mail.

It is equally worth while pointing out that undergrounding cables of similar voltage has taken place, for example, in the Vale of York, as has already been highlighted. We need to ensure that that option be given active consideration, and that all the options are assessed before a decision is made and are not blocked purely for financial reasons, when there could be other longer-term environmental benefits.

Community benefit is not explicitly addressed in the report, but as hon. Members will know it has increasingly become part of the policy framework for renewable energy developments. It ensures that local communities get some benefit from a wind farm, for example, or from the new hydro dam that is being built in Fort Augustus, which I mentioned earlier to the hon. Member for Aberdeen, North. Perhaps I should not have called him my hon. Friend, although I agreed with much of what he said. Community benefit has taken place in many of areas and that concept should be applied to developments of the transmission infrastructure and the major pylon developments that we will see.

Recommendation 10 in the report refers to the energy efficiency of buildings and talks specifically about tax breaks for it, which is important in the sphere of industrial buildings. As many hon. Members will know, industrial buildings are often built on a speculative basis, so the developers look to do so on a least-cost basis. For the person who takes over the building, whether buying or renting it, having a more energy-efficient structure will not only be good for the environment but will reduce their costs in the long run. Some tax incentives, perhaps through the industrial buildings allowance so that additional relief could be given to developers of energy-efficient industrial buildings, should be considered so that that recommendation of the report can be taken forward in fiscal policy. I hope that the Minister will pass that suggestion on to the Chancellor of the Exchequer for the forthcoming Budget because such measures could make a big difference.

Several hon. Members:

rose—

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

Order. I do want to call everyone and I appeal to the Chamber to bear that in mind.

Photo of David Hamilton David Hamilton Labour, Midlothian 4:06 pm, 1st December 2005

I will try to make my speech as quick as possible, Mr. Amess and I have already ditched half of it. I want to thank my hon. Friend Mr. McGovern, who is not here now, for giving me his glasses last night. I was not able to read the papers until this morning. Until then I did not realise that I was going blind; it is really bad nowadays.

I am delighted to be associated with the Scottish Affairs Committee's report, particularly with its clarity and conclusions. I resent some of the comments that have been made about it being one-sided. As someone who does not come from a nuclear background, I did not think that it was skewed. The debate has become skewed with people's opinions about what should happen. The report, as I hope to show, has been clear in delivering that. Indeed, we were congratulated by all sectors, including those involved with renewables, because of our balanced view. We gave everybody the opportunity to go forward.

The report develops a picture of our energy needs that is objectively considered and takes into account all the viewpoints in the energy debate. It is not only relevant to Scotland but to the rest of the UK and although it is a Scottish Affairs Committee report, we should always keep in mind that we are part of the UK and we have to consider the balances that take place over a period of time.

One absolute in the debate is that we face a decline in gas and oil. I take the point made by my hon. Friend Mr. Doran that that decline is on a much longer time scale than some people suggest. On that point alone, we should remember that nuclear provides 37.2 per cent. of energy in Scotland; hydro, which is being extended but can be extended only by a small amount, provides 6 per cent.; gas provides 20.3 per cent.; coal provides 29.4 per cent.; renewables provide 1.7 per cent. As renewables grow, others will begin to decline. Even in the long term, if we were to take gas out, we would require renewables to fill a 20 per cent. gap. If we take nuclear out, there will be a 37 per cent. gap. Over the next 20 years, there is no way that renewables can fill the gap that will be left.

At the end of the day, the question must be what can fill that gap. Coal can fill that gap as well as other sources. The coal industry has been put forward and a lot of discussions have taken place about it, which I believe underlines its powerful position. We have a generation gap that is limited. The emergence of renewables has to be taken seriously. I have taken a view that over a period of time what seemed like the view of tree-huggers and environmentalists now has to be taken as realistic. Ten years ago, we were talking about it in such terms. We are now talking about environmentalist issues and at the beginning of any debate about energy we must consider the environment and what the cost will be, and not just in financial terms. After all, all such sources are subsidised to some extent.

In the Committee, on 1 February, I asked Mr. Mortimer, from Scottish Power, whether Scottish Power would be involved in windmills and renewables if they were not subsidised. The answer was no. The Government must give encouragement for all sources of power to be considered. Apart from coal, gas and oil, everybody is subsidised to some extent.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee

Obviously, my hon. Friend and I, coming from the same background, have similar views on the need to support the coal industry. As he rightly says, there is a future for coal in Scottish energy generation. However, David Mundell says that he supports open-cast coaling but then adds a caveat about the SPP16, which will devastate coal production in Scotland so that the coal burned will be imported. We are going to be exporting jobs and importing coal. What does my hon. Friend think of that?

Photo of David Hamilton David Hamilton Labour, Midlothian

My hon. Friend makes a good point. I further suggest that instead of considering Chapelcross as a potential for nuclear power, it should be considered as a potential for biomass. That would allow development of open-cast and deep mining of coal to take place in Dumfriesshire. We could then take the coal directly to a reconditioned area.

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

I am sure that my hon. Friends will be pleased to know that I am supportive of the open-cast development at Glenmucklock near Kirkconnel in my constituency. I am, indeed, supportive of the open-cast industry, as Mr. Hood just said. When Labour Ministers in Scottish Parliament considered the SPP16, they were not convinced that the open-cast industry would be massively devastated by its introduction. Is the hon. Gentleman aware of any evidence to suggest that it would be?

Photo of David Hamilton David Hamilton Labour, Midlothian

I shall come to that point in my remarks about the Scottish Executive making decisions without looking above the horizon. It is one thing to make provision where the possibility of open-cast mining can be restricted, but the people who oppose open-cast mining will also oppose windmills being put in their back yards. I, as a local Member—there are others here who do not belong in the cities—must understand that if applications are being put forward in that area. I have received numerous complaints about the possibility of wind farms being established some distance away. Of course, people do not want that. The same arguments apply with open-cast mining, but it is far more productive and does not require the same subsidy.

I come to the extremely important point of the research being carried out by Professor Peter J. Hall from the university of Strathclyde. I met him some time ago when I went to Fife and he told me about what they were producing and how they can put CO 2 emissions back into the earth. Of course, what would come out would be pure methane. That is a diversion from what is being done with oil, but the great thing about it is that CO 2 emissions can be absorbed like a sponge. That development was talked about in the coal mining industry 25 years ago; the development was there when the industry had its own research and development.

We have lost the game on this one. The United States of America is making an investment to the tune of £10 billion to consider how a new strategy can be developed. The Americans will not turn their backs on the abundance of coal that they have. It is dire that this country is sitting on billions of tonnes of coal, and that we have extracted only 15 per cent. of our coal. Some European countries look at us with envy because of what we have and what we could do with it. We turn our back on those possibilities at our peril.

I remind colleagues that China is expanding at such a rate that it is becoming the engine house of the world. It is considering establishing 20 nuclear and 500 coal-fired power stations. We in the UK and Europe have developed a structure in which CO 2 emissions can be incorporated into a power station—the Germans are considering a development that will do that—and there is an interested party to export it to; China is interested in that expertise. We should develop it for ourselves too. That would allow the expansion of the Longannet complex; Scottish Power told me, when I went to visit, that it would like to take it further than its 2015 schedule. However, it also said that it will not invest the money without a guarantee that it can run the coal over that period. It is looking at using carbon capture, but it needs incentives to do so.

We must consider what happens throughout the world. Virtually all the coal coming out of Australia is being poured into China. New Zealand has doubled the size of its mining industry due to one client; China. India and the US are not far behind. At our peril, we in Europe will take our eye off the ball and we must look towards the goal, which must be to develop a structure and a strategy within the country whereby there is enough room for everyone around the table. Over time, I have had to open my mind to the possibility of nuclear power becoming part of the jigsaw.

I draw the Minister's attention to a one-liner in the report. It is not good, but the Committee makes a recommendation about new house and property build, and planning issues. That is the remit of the Scottish Executive, but we must consider that it is far cheaper to build a new house and install insulation at the same time rather than encourage the population to insulate houses after they have been built. Such matters might be within the planning remit of the Scottish Executive, but the United Kingdom Parliament must decide that we should take such action. I have spoken to major building contractors, who said that if such decisions are made across the board there will be no problem. After all, those with whom they will have to compete must deal with the same standards.

Photo of David Hamilton David Hamilton Labour, Midlothian

This will probably be a speech rather than an intervention.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

No. I thank the hon. Gentleman for giving way but, strangely enough, Sarah Boyack—a Labour MSP—has introduced a private Member's Bill in the Scottish Parliament to deal with the matter.

Photo of David Hamilton David Hamilton Labour, Midlothian

It was a good point to make and I am glad that a Labour MSP has introduced such a Bill. If we could have, we would have supported it. If we were serious about saving energy and delivering an energy policy to the British people so that we can compete on a even keel with the rest of our European partners—an important factor—that would be right for the people of Britain. The report is balanced. All those from whom I have received information said that it was very fair and some unfair comments have been made.

Photo of Charles Walker Charles Walker Conservative, Broxbourne 4:17 pm, 1st December 2005

I am obviously not from Scotland, Mr. Amess; you can tell that by my accent. I represent a seat that is north of the M25 by about 500 yd. I am here at the invitation of my Chairman, Mr. Sarwar, and the Clerk of the Select Committee.

The debate is timely. For the first time since 1996, the United Kingdom is a net importer of gas. We have 11 days' gas storage in reserve compared with an EU average of 55. Since 2003, the cost of electricity has increased by nearly 40 per cent. That is having an impact on Scottish business and Scottish domestic users. Moreover, Scotland obtains 39 per cent. of its energy from nuclear reactors. Torness is due to close in 2023 and Hunterston is to close in 2011. In response to the looming energy crisis in Scotland, the Scottish Executive suggested that the focus for renewables should be 40 per cent. of Scotland's overall energy usage. A quarter of that comes from hydro, a half from wind power and a quarter from emerging technologies.

When considering energy, there is no free ride. All the so-called environmental solutions have pitfalls. Hydroelectricity produces very little useful electricity. The environmental implications for the ecosystem, rivers, upstream erosion and migratory fish runs, are fairly significant. Wind tends to divide communities. A sea of windmills all over the place may seem a good idea to the Greens who do not live in the area, but if people see windmills from their back door, the idea might not seem so good to them. Members of the Royal Society for the Protection of Birds are appalled by the number of birds that are sliced up—Kenwood Chef'ed—by propelling blades. Wind power is also unreliable.

I like to spend a lot of time in Scotland.

Photo of Gordon Banks Gordon Banks Labour, Ochil and South Perthshire

We are debating wind farms and renewables. Is the hon. Gentleman aware that in the case of responsible applications for wind farms, the RSPB plays a significant role in determining whether the siting of windmills is appropriate for the migrating paths of birds?

Photo of Charles Walker Charles Walker Conservative, Broxbourne

It is good that the RSPB is involved and I am sure that it will continue to be involved, but wind farms are not the long-term solution to meeting future energy needs, in England or in Scotland. The cost is not outweighed by the reward.

Photo of Eric Joyce Eric Joyce PPS (Rt Hon Margaret Hodge MBE, Minister of State), Department for Work and Pensions

Is the hon. Gentleman saying that there is no place for wind farms, full stop, or do they have a place in an intelligent energy mix?

Photo of Charles Walker Charles Walker Conservative, Broxbourne

I think that the people promoting wind farms have rather overplayed their hand. Wind farms are not the long-term solution. They will produce a bit of energy, like hydro does, but they will not meet the energy needs of Scotland or the UK. Tidal wave schemes have been mentioned, but in the Cardiff bay area we have seen their impact on estuary environments. Nuclear fusion has possibilities, but other hon. Members have mentioned that it might be 50 years away.

That leaves us with coal, which pollutes, creates greenhouse gases and does not put us in good favour with our Kyoto partners, and gas, which we know is running out.

Photo of David Hamilton David Hamilton Labour, Midlothian

The hon. Gentleman should have listened to some of the debate. I will give an example of one of the things that coal is involved in. The Monktonhall colliery in my constituency of Midlothian closed in the 1980s. That colliery is now being considered for a pilot scheme involving hot water to heat some 4,000 houses in the Midlothian area. There are 250 ex-mines in the whole of Scotland, two thirds of which could be similarly utilised for housing heating systems throughout Scotland. That is a way of using money to examine things that are outside the envelope. It is about time that we had a bit of horizon thinking here, because it is not happening.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

Perhaps I was a little flippant about coal. Of course there is a place for it; there are clean coal technologies and there is scrubbing. However, I do not think that any leader of a global power, beyond George Bush—I know that Labour Members do not perhaps rate him as highly as others—believes that coal is the long-term future in terms of meeting the world's energy needs. That leaves us with the option of nuclear power. Again, that divides the House. However, if France can generate 75 per cent. of its energy from nuclear power and Belgium, Sweden and Switzerland can respectively generate 55 per cent, 50 per cent. and 40 per cent. of their energy from it, and those countries can get rid of their waste in a way that does not cause a great deal of public concern, I do not understand why nuclear energy and its advancement in Scotland and the United Kingdom meet with such hostility.

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Energy and Climate Change), Shadow Spokesperson (Scotland)

The hon. Gentleman says that all the countries he listed have already got rid of their nuclear waste with no problem. Will he enlighten the Chamber as to how they have disposed of their nuclear waste on a permanent basis?

Photo of Charles Walker Charles Walker Conservative, Broxbourne

I am afraid that I cannot enlighten the Chamber on how they have done that and I am perfectly happy to say so. However, 75 per cent. of France's power comes from nuclear fuel.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

In Finland, they put the waste into granite, 5 miles down in the ground. They have it securely contained. They are building a new heavy duty repository. I can also point to the report that has just been submitted by Canada on doing something similar by putting all its waste in one area deep underground.

Photo of Charles Walker Charles Walker Conservative, Broxbourne

I thank the hon. Gentleman for his helpful intervention.

Nuclear power and nuclear power technology has come a long way in the past 30 years. There are now off-the-shelf designs for nuclear power stations. They cost between £1 billion and £1.5 billion. A new nuclear power station can be built within five years, but of course the timeline would be longer because planning permission and the consent of local people would be required.

I take the point that nuclear power creates a lot of concern. It is perceived in this country as a secretive and dangerous industry. Some of that concern is misplaced, but it is the responsibility of Government and those who are promoting nuclear power to try to meet the concerns and persuade the public that if we are to meet this country's long-term energy needs, we cannot rule out nuclear power out of hand. There is certainly a place for nuclear power. I hope that over the next 10 to 15 years we will start to win the argument and that more of our energy will be produced by nuclear power, because it offers the best long-term solution to our energy needs. As has been rightly pointed out, there is enough nuclear material buried underground, which has not yet been mined, to last generation after generation.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee 4:25 pm, 1st December 2005

I draw the attention of hon. Members to my declared interest in the Scottish coal industry. I have, like my hon. Friend Mr. Hamilton, cut down my speech to make time for other hon. Members to speak. I thought that I had a balanced speech that would serve the report well. However, the contribution of Mr. Walker almost tempted me away from balance. As a member of the all-party group on nuclear energy, I would not invite the hon. Gentleman on to a platform on which I was speaking, if that is how he argues.

I welcome the debate on the report, which, as hon. Members have said, is balanced. It identified the need for debate. It is apt that the House is now giving more consideration to energy than it was when the inquiry was undertaken. Credit is due to the Scottish Affairs Committee of the previous Parliament.

Perhaps I may be allowed to do a bit of personal bitching. I have enjoyed the debate immensely so far. Holding Westminster Hall debates was among the best decisions of the House in the past few years. They allow Back Benchers an opportunity that they did not have in the past to discuss issues of great importance. However, I think that today's debate should have taken place in the Scottish Grand Committee. I think that I have seen Halley's comet since we last had a Scottish Grand Committee, and I want to mention it, not as a criticism but as a wee point to be mentioned in a chat over a cup of tea later.

It has been said that Scotland is rich in energy generation. We produce 60 per cent. more than we need at present. We are exporting generation. However, in that richness we should not be complacent. As other hon. Members have mentioned, referring to the White Paper, nuclear generation in Scotland is more than 37 per cent. Coal burn is almost 30 per cent. and 20 per cent. is gas. [Interruption.] I am sorry if I am interrupting my hon. Friend Mr. Joyce. The renewables are way down at 1.7 per cent. It is beyond belief that politicians can seriously argue, as they do, that we should close down nuclear and coal generation and fill the gap. That is mathematically impossible and we need to get that point across.

Do we want—this is the main point of the debate—to put our energy supply in the hands of suppliers outside our country? Do we want, for example, Mr. Putin or any of his successors to make decisions on the price of gas here, or on whether we are to have gas? I remember about 15 years ago listening to debates in the House about how in 20 or 30 years we would have to get all our gas from Russia. It went over my head, but it is not going over our heads now. It is a reality. We are now a net importer of gas and by 2020 we will be importing 70 per cent. of it. Hon. Members should try to get their minds round the problem before they start to cherry-pick and say, "Oh, we'll have renewables here. We'll have nice wind farms."

David Mundell, who is my Member of Parliament at present, talks about problems with his windmills. [Interruption.] My hon. Friend the Member for Midlothian says rightly so. It is beyond comprehension that people think windmills are a good idea in someone else's village or community. Frankly, the Government should have introduced the issue of new nuclear build two years ago. That is when we should have been arguing about it.

I said earlier that the argument is not about a dash for nuclear, to use that expression; no one argues that we should supply more energy through nuclear power than we do at present. The issue is whether there should be new build, which will mean less waste to deal with, and whether, at the same time, we should look to our other strong energy producer, clean coal technology.

That technology is with us. My hon. Friend Mr. Doran talked about Grimethorpe 30 years ago; I remember Grimethorpe. I also remember going to Houston, Texas—Mr. Bush's stronghold—18 years ago, and looking at clean coal technology; coal gasification was being developed there, so the technology is in place. As was pointed out, Nye Bevan once said that we are a country built on coal, and so we are. We have so much natural energy that it is nonsense to argue that we go elsewhere for it. We go to the most dangerous part of the world for it. The lack of rationality in this debate beggars belief. I tell hon. Members that although this is a wonderful debating exercise for us—the political classes—believe me, the people outside will not understand it.

Photo of Eric Joyce Eric Joyce PPS (Rt Hon Margaret Hodge MBE, Minister of State), Department for Work and Pensions

I got slightly confused there; my hon. Friend was talking about coal one minute, and gas the next. Does he not agree that the point is that one can get gas from a variety of sources? Indeed, we already do; we will shortly be importing gas from Kuwait, for example, so that we can maintain security of supply through gas. That is not to say that we do not want other sources of energy, but we can maintain security of supply—even though we are talking only of gas—by bringing gas from different sources, and by different means.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee

I am sorry if my hon. Friend misunderstood my speech; he was probably not listening, and chatting to his colleague instead, as he did earlier.

I hope that this will make sense to my hon. Friend: we need to have a debate about how we will supply Scotland's energy needs without relying on imported fuel over which we do not have control. If we do have to rely on imported fuel, the issue will be security of supply, and we will then address that argument. If we have that debate, then—as my hon. Friend the Member for Midlothian said—everyone will come to the table.

I am not arguing the case for nuclear power. I am pro-coal, having been a miner for 23 years. However, I accept the reality that we cannot talk about security of supply without accepting that nuclear has to be part of the mix. There is the development of clean coal technology, into which the Americans are rightly putting billions of pounds. That technology is being developed in this country, too. We should embrace the new technologies, and not get into our trenches.

Let me say something about the coal industry, and the debate held in the House a fortnight ago on the threat to gas supplies this winter, which we are told will be bad. Last winter, coal produced 48 per cent. of this country's requirements when we needed it. We would be very foolish to walk away from our coal industry. I am sure that we will not. We would be equally foolish to walk away from the reality, which is that we are not going to rely on renewables saving the day for us. If that is the debate, we welcome it. I hope that the report is an important part of the debate that the country needs to have.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry) 4:35 pm, 1st December 2005

I am pleased to be able to take part in this debate, because I served on the Committee that produced the report. I was the only member who in the vote opposed the report's nuclear parts. The report covers much more than nuclear, and I should like to touch on those aspects first, and come to the blood-on-the-carpet stuff later.

Before doing so, I should like to echo what Mr. Sarwar said about the Chairman of that Committee, the now ennobled Baroness Adams of Craigielea. She was a fine Chairman, and the Committee's members got on very well together, despite our differences about nuclear power. The Committee produced a good report. I do not agree with all that was said by Mark Lazarowicz about its defects. Apart from the nuclear aspects, I have no problem with it; it is a fine report.

We all agreed that doing nothing is not an option. We should still agree on that. Our first recommendation was for a full audit, and it is interesting to note the Government's response to it:

"The government were fully committed to the framework for UK energy policy set out in the 2003 energy white paper."

Given the Prime Minister's speech to the CBI this week, I am not sure that that is now entirely correct, since the White Paper stated that on economic grounds the nuclear option did not add up.

I have no problem with the review of energy need, if it is a genuine review. My problem with the Prime Minister's proposal is that I suspect that the review will consist of going to the filing cabinet at No. 10 and taking out an already written report. We shall return to that.

Unfortunately the Government have not done much about other technologies. That takes us to recommendation 2, in which we unanimously—I stress unanimously— expressed some doubt about the ill-defined emerging technologies, and whether they would meet one quarter of Scotland's energy needs. We urged further research and development, and I am still of that opinion.

I am pro renewable energy; I have doubts about nuclear energy. I want to ensure that renewables meet the advertised targets. It was interesting that even the renewables forum—and others—would not say that that would definitely happen. We must sort that out. I have seen little progress from the Government on that front. We do not seem to be any nearer to a commercial wave or tidal generator in Scotland, other than the small-scale one on Islay. As David Mundell mentioned, Eon recently announced that it is establishing a biomass generator, although it may be some time before it is up and running.

The Government have so far staunchly resisted attempts by myself in a Private Member's Bill and by the hon. Member for Edinburgh, North and Leith in his private Member's Bill to introduce a renewable heat obligation that would give a significant boost to the use of biomass energy.

Although the Government's response to the recommendation stated that their support needed to be technology-neutral, most new technologies, and even old technologies such as nuclear, would none the less need support to become a significant part of the energy mix.

It is interesting that we are discussing what the Government have to do for nuclear, because as has been pointed out, there is nothing preventing any energy producer from applying for a new nuclear power station. The reason why they do not do so is that they want to know that they will be able to sell electricity at a price that will make it economic. I understand that Electricité de France—strangely enough, the French-run entity that owns London Electricity—has recently suggested that it might be interested in it, but that before doing so, it is looking for long-term guarantees about the price of electricity. That should be borne in mind.

Photo of David Hamilton David Hamilton Labour, Midlothian

If the hon. Gentleman were being fair and equal, he would also acknowledge that renewables would not exist if they were not subsidised.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I accept that, but as energy prices rise, the need for subsidy falls. Every energy source, whether renewable, nuclear or whatever, becomes more economic the higher the energy prices are.

Photo of John Robertson John Robertson PPS (Dr Kim Howells, Minister of State), Foreign & Commonwealth Office

That is not strictly true. There is a Canadian company that would be quite willing, given the opportunity, to provide new build in this country. That would be at no cost to the Government.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I am surprised to hear that, because there is nothing to prevent that company from entering our liberalised market.

That brings us to recommendation 7, which relates to electricity transmission charges. Danny Alexander, who is no longer present, alluded to the issue. We have reached an absolutely insane position, which is being driven by Ofgem. The regulator determined that the further a generator was from the centres of population, the higher the charges should be for it to enter the grid system. The rationale—if we can give it that name—is that energy companies should be encouraged to site new generation nearer to centres of population.

The problem is that the areas most likely to produce a significant amount of renewable energy are not near centres of population, but in the north of Scotland and the islands. That has an impact not only on renewables generators, but on all generators, including the Peterhead gas cycle station and anything new that is built in the north, because it puts a massive hurdle in the way of making those stations and facilities viable. In passing, it might be worth noting that if we took that approach to its logical conclusion, any new nuclear generator would probably be built on Ibrox or Princes street gardens.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I just wanted to get the hon. Gentleman going.

That approach has been subject to a long campaign. Indeed, as the Government response to the report states:

"The Government also accepted that high charges facing generators in the most remote parts of the Highlands and Islands might inhibit development of new renewable energy generation in an area of considerable potential."

As a result, section 185 was introduced into the Energy Act 2004. Unfortunately, it provides a cap only for a short period—from five years to a maximum of 10. It also relates to area charges, not individual charges. That means that there is insufficient time to allow payback from many of these new processes.

To be fair, the Minister for Energy recognised the extent of the problem during the Second Reading of the Bill introduced by the hon. Member for Edinburgh, North and Leith. He has extended the provisions for the islands but done nothing to help those on the mainland, to whom the hon. Member for Inverness, Nairn, Badenoch and Strathspey, who has now resumed his seat, alluded. That effectively stymies much potential from renewables generators and any other generators who might wish to set up in northern Scotland. That is plain crazy, and I appeal to the Minister—even if he takes nothing else from this debate—to take this matter up again with his colleagues at the Department for Trade and Industry get them to tackle this stupid situation.

Photo of Russell Brown Russell Brown PPS (Rt Hon Alistair Darling, Secretary of State), Scotland Office, PPS (Rt Hon Alistair Darling, Secretary of State), Department for Transport

Danny Alexander raised a similar point, but I did not intervene then. However, it is important for hon. Members present to understand—if they do not already—that Mr. Weir and his colleague Mr. Salmond continually suggest that we in Scotland are totally disfranchised and get no support. What they always fail to point out, however, is that some transmission charges have been reduced. That is perhaps not the case in the north of Scotland, but it is in other parts of the country. Given that we export power to this side of the border, the transmission charges for tying into the Anglo-Scottish interconnector have been done away with altogether.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I understand from discussions with the electricity generators that the effect of doing away with the interconnector charges has been more than wiped out by the other charges for the grid.

The problem that we now face—today's proceedings are indicative of it—is that the debate on this issue is basically a matter of wind versus nuclear; it is a false debate. We have to be honest about the fact that whatever energy supply we have, there will be problems. Wherever a new energy development of any kind is suggested, people will complain about it.

Photo of David Mundell David Mundell Shadow Secretary of State for Scotland

As I understand it, the debate is about meeting Scotland's energy needs. The hon. Gentleman has spoken for 10 minutes, and it would be quite helpful if he would set out how the SNP would meet Scotland's energy needs. Adam Ingram, a colleague of his who represents the South of Scotland in the Scottish Parliament, is strongly opposed to open-cast mining. His colleagues are also opposed to wind farm developments, and his party is clearly anti-nuclear. No technology has been presented to us that will materialise in the next couple of years and meet Scotland's energy gap—unless the hon. Gentleman is saving that for the 2007 elections.

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

Order. I am mindful of the fact that one Member who served on the Committee is still waiting patiently to speak.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

Thank you, Mr. Amess. I will come on to the matter that has just been raised shortly, but the point I was making is that there will be a planning and environmental impact whatever route we go down—such as windmills, with their associated new pylons. If we go down the nuclear route, there will also be an impact; wherever we build new nuclear power stations, if we are closing down other options for generation we will have to build new pylons to cover for that.

I turn to the nuclear issue. It is interesting that the nuclear energy body is now talking about itself as being emission-free and green. Those Members who read Private Eye might have noticed an interesting piece about the Nuclear Decommissioning Authority and Bell Pottinger Public Affairs. That company produced biographies of the members of the Trade and Industry Committee, and described their attitude to the nuclear option. I am a member of that Committee, and I have had a look at my biography. It states:

"In January of this year he introduced his Private Members Bill to the House, 'Renewable Heat Obligation Bill', which proposed the boosting of renewable energy resources in order to help greenhouse gas emissions. His wish for a reduction in such emissions does not foster a support for nuclear power."

It sounds like the nuclear industry's own public relations people do not believe it.

We are opposed to nuclear power; I make no bones about that. [Interruption.] I feel like Daniel in the den; if I am given a chance to speak I will say something about this matter. I agree with Mr. Hamilton—that is a statement that is not heard often—about coal. There are massive coal reserves under Scotland. It is crazy that we do not make use of them, and of clean coal technology. I disagree with Mr. Hood about Scotland's energy production; according to my figures, nuclear accounts for 24 per cent. of Scotland's energy generation, and coal accounts for 34 per cent. If we close down our coal stations without an alternative, we will have a problem.

Scotland is energy rich. As well as our coal reserves, we are Europe's biggest oil and gas producer. We talked about the country being a net importer of gas. The United Kingdom is a net importer of gas; Scotland is not—it produces more than it uses—and, surprisingly, this debate is about Scotland's energy needs.

We have the potential to become Europe's renewable powerhouse. We have 62 per cent. of the EU's oil, and 25 per cent. of its potential wind and tidal energy. Nuclear energy is not necessary in Scotland. We export more energy than we generate from nuclear. If we are talking about Scotland's energy needs, we do not need nuclear.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

No; I want to finish to give other Members a chance to speak.

Scotland is energy independent—it is a net exporter of electricity—but UK Government policy on transmission charges is driving essential investment in the electricity industry away from Scotland. If this damaging policy continues, when our power stations need to be replaced, Scotland will have to import electricity.

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee

I am enjoying hearing this road map to the galaxy. I was quoting from a White Paper of 2003; the figure for coal in Scotland is 29.4 per cent.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry)

I was quoting from the Scottish Executive paper; the hon. Gentleman can take his pick.

If we go down the nuclear route, will that give us security of supply? It will not, and I shall say why. We talk about the importation of gas, but we will also have to import uranium to drive nuclear stations. John Robertson says that the modern nuclear stations, which he is keen on—I think they are called pebble bed stations—produce less waste. He is right; they do so because they use more uranium and constantly have to be fed uranium.

Uranium is finite; we cannot rely on getting Canadian uranium for ever. If we go down the nuclear route, we shall end up importing uranium from the 'Stans and other less stable countries, as the rest of the UK is having to do with gas now; Scotland does not need to do so.

Nuclear energy is unnecessary. Scotland is already self-sufficient in energy. We cannot meet Scotland's energy needs because Scotland needs political independence to maintain energy independence, take decisions over its energy future and develop clean, green technology instead of nuclear technology. Until that glorious day comes, I shall dust off my "Nuclear power—no thanks" badge and oppose this move to nuclear.

Photo of John MacDougall John MacDougall Labour, Glenrothes 4:52 pm, 1st December 2005

Thank you, Mr. Amess; I am grateful for your help. I shall limit my speech; given the speeches so far, I do not think I have much time.

I have no difficulty with having an open policy and reviewing energy again. It would be a nonsense to rule out any energy source without calculating what its loss would involve. It makes sense to have that review, look into next year and make an input into that review. That is what is being asked through the consultation process that will be built into the review. The Minister for Energy will be leading on the issue and I should like to take the opportunity to put to him some ideas that I hope the Government will take on board.

I want to end on a positive note. We have heard a lot about wind—I make no comment about that. My hon. Friend Mr. Doran mentioned Westfield in Fife. Just now, it has exciting prospects. I do not intend to elaborate too much on that, as that would take much of the gist that is here away from the content of it. However, I should like to advise the House of the potential of our renewables energy project at Westfield and my constituency of Glenrothes.

Fife Energy Ltd has developed an advanced fuel technology and gasification plant, which could produce huge benefits for the whole country. The plant was pioneered by British Gas between the late 1970s and early 1990s and involved an investment of more than £1 billion at today's prices. British Gas knew then that natural gas would run out. Fully developed, Westfield would make a huge contribution towards filling our energy gap and it would help Scotland meet its targets on emissions and biomass diversion.

We are not talking about incineration. There is no burning; no chimney is involved. The process uses steam and oxygen to break down the fuel to produce energy, which can then be fed into the gas interconnector and the national grid. The energy produced is constant—that is, it is not subject to conditions such as wind—and would be supplied at below current pipeline price. That would ensure that the country was not held to ransom by suppliers from abroad, as we saw happen during last week's gas price increase.

The small amounts of waste created by the process can be used productively—for example, in building roads and sea walls and in the chemicals industry. The advanced fuel technology would use all of Scotland's sewage sludge, which in Scotland can no longer be dumped at sea and which we will not be able to incinerate as of December. Most of Scotland's municipal waste could be used in the process of providing this form of energy. That would present our local councils with options that they do not have at present to deal with the masses of compost for which they have no use. The process involves creating solid briquette pellets from sewage sludge, municipal waste and coal. Those briquettes would be created in local areas and transported to Westfield by an existing rail link.

The Scottish coal industry, at present threatened by the limited lifespan of the two remaining coal-burning power stations in Scotland, could have a new life. A large number of jobs would be created in the construction process and on a permanent basis, and security of energy supply would be established. A fully developed Westfield site of four or five gasifiers would produce as much energy as one nuclear power station, and there would be a huge benefit to the balance of payments—we would no longer need to pay foreign suppliers for gas, coal and oil.

The scheme would provide an opportunity for politicians to work together, whether in Westminster, Brussels, Holyrood or locally. Perhaps we should take a leaf from the book of the United States, where the Energy Policy Act of 2005, passed by Congress in July, offers 80 per cent. loan guarantees and 50 per cent. grants to kick-start the first gasifiers. After that, financial institutions will provide loans, because they will have seen the technology at work. It will cost £50 million to build the first gasifier at Westfield. That sounds like a lot, but it is not, because the company is not asking Government for a grant; it merely wants them to act as guarantor.

In the 1970s and early 1980s British Gas had the vision to spend £l billion at today's prices developing the technology, having predicted exactly the circumstances in which we now find ourselves. We have the opportunity to exploit that vision and, in the process, to plug the energy gap, meet environmental targets and make good use of waste.

Next year's energy review offers us an opportunity to look to the future. We should take it. Projects such as the one that I have mentioned deserve every incentive and every encouragement, and should be put firmly on the political agenda. They represent a serious way forward. If they provide an alternative to nuclear power, surely pure coal technology and pure development technology deserve every chance to be invested in, encouraged and taken forward so that they can help to meet the energy needs of the country.

We have spent a lot of time talking about the negative sides of energy and nuclear power. Let us base our agenda not on what we are against, but on what we are for, and not on what we cannot do, but on what we can do. I have suggested one way in which we can go about that. I intend to take the matter up with my hon. Friend the Minister for Energy. I hope that he will reflect on what has been said this evening, and will take it into account in his future consideration of the issues.

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Energy and Climate Change), Shadow Spokesperson (Scotland) 4:59 pm, 1st December 2005

I must declare an interest in connection with the oil and gas industry—it is in the Register of Members' Interests. I join other Members in congratulating the Chair of the Scottish Affairs Committee on securing the debate and on his presentation of his Committee's report; it has been most enlightening. I also thank the noble Baroness who chaired the Committee in the previous Parliament. She served this House well in that capacity and her contribution was much appreciated.

I understand that the report was cut short by the election and that it does not, therefore, discuss fully some of the matters on which evidence was taken. Perhaps the Committee will be able to do more in this Parliament, although it seems that most Select Committees are now concentrating on energy.

Sitting suspended for a Division in the House.

On resuming—

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Energy and Climate Change), Shadow Spokesperson (Scotland)

I think we may have lost a few people during that Division. I wanted to get back to the context of where the Committee started and a point raised by Mr. Doran; the shift in the amount of gas coming from the UK continental shelf. The hon. Gentleman made a powerful point. There is great danger in thinking that it is no longer a major industry because we are getting slightly less. We must not lose sight of how important the industry is in contributing to the UK economy and to our supply needs.

It seems evidently sensible, in looking at our energy supply, to look at the existing one—which has done so much for the country already—and make sure that we do nothing to damage it. We should maximise its potential in the years to come. To that end, the strongest message that the Minister can ultimately give today is that the Chancellor plans to do nothing on Monday to frighten off vital investment. One question we might ask, given that we have found gas supplies dwindling slightly sooner than expected, is about past levels of investment in exploration and production. What may have happened is that the Chancellor frightened off investors three years ago with a surprise tax change.

It is extremely important, in managing the tax system of an industry that makes such a contribution—in tax revenue, as the hon. Member for Aberdeen, North outlined, in supply of gas, and in jobs and investment—that nothing is done to frighten that investment off with a surprise windfall tax. If the Minister can take that message back to the Treasury to reinforce it in its mind, it would do much to improve the chances of investment.

Scotland's energy, which we are looking at, is part of the UK system. One of the two gas issues which urgently need to be addressed—as well as thinking long-term—is the need both for more storage in the United Kingdom system and for the European market to be genuinely liberal. The market failures identified by the Commission need to be tackled. With the Energy Council on today, can the Minister update us as to what the Government have been trying to do to achieve the liberalisation they claim to want to see?

The North Sea links well to the other part; an issue which several members, most recently Mr. MacDougall have raised. That is the future of coal in our economy. We must not lose the potential for the North sea to be a storage for carbon sequestrated from the burning of coal, or from coal gasification. The North sea infrastructure is extremely important to that being maintained, and for gearing that investment.

We have heard about the exciting Miller project; taking gas, removing the carbon, burning the hydrogen, exporting the electricity to the grid and putting the sequestrated carbon back offshore to enhance oil recovery. That can be done to enhance oil recovery, but the problem that we face under the OSPAR conventions is that storing CO 2 underground looks difficult at the moment. Regulations, burdens and international agreements should not stand in the way of this vital part of re-establishing carbon as a safe fuel, one to use without a global warming impact. Can the Minister outline what the Government are doing to prepare that ground? If we can establish carbon sequestration, our coal resources become an environmentally friendly, indigenous resource for our economy. As has been said already, an extremely important technology would be developed with major export potential.

While other countries may be looking at nuclear to a certain extent, China is looking at coal with a vengeance. It has so much coal on its doorstep, and is desperate for new energy sources as it grows its economy. A briefing that we had from BP at the all-party oil and gas group showed that China is already surpassing the incentives coming from Europe to look at that technology. It is dealing directly with that industry and is excited about it, because the Chinese Government recognise that global warming can have a major impact on their own economy, with such low-lying areas.

So the coal industry is an important one, and not to be forgotten. We need to unlock its potential. It should be recognised that coal is not going to go away worldwide as a major fuel. If we do not tackle the carbon emission problem, we shall have a serious environmental impact upon the world. Therefore that technology has to come forward.

Another crucial thing, if we are looking at energy supply concerns, is the reduction in demand. Energy efficiency must be at the top of our agenda in trying to tackling this balancing act over energy sources. In warm homes week in Scotland, this week, I was helping to install cavity wall and loft insulation in a constituent's house in Westhill. I took two things away from that. One is that with that many of the schemes we have used, we may now have done many of the easy houses. We need more innovative ways of putting insulation into our housing stock and, as hon. Members have said, ensuring that new housing stock meets high environmental standards.

Perhaps the Minister will enlighten the House on how many more people will suffer fuel poverty this winter because of higher fuel prices. Some estimates suggest that 1.5 million people in the UK will be taken back into fuel poverty because of high energy prices. That shows the importance of energy efficiency and a reduction in demand in tackling fuel poverty instead of just relying on low energy prices. If we can improve the housing stock in this country, people will still be able to keep themselves warm without major expenditure when they move or their circumstances change.

The Committee's fifth recommendation referred to the Scottish Executive's demand and perhaps the Minister will be able to confirm what it will be, although it is for the Scottish Executive to decide how they will implement their renewable commitment. I understand that they have decided to measure it in terms of 6 GWe when interpreting how they meet the 40 per cent. target. Perhaps the Minister would confirm that.

Transmission charging has been raised and, again, perhaps the Minister could enlighten us on the Government's response to Ofgem inviting the National Grid Company to undertake further work on these aspects and to consult on possible improvements during the next couple of years. What exactly has Ofgem asked the National Grid Company to look at? A target date of the next couple of years for dealing with problems with the transmission system is rather vague.

Perhaps the Minister would reinforce what the Committee said about not just the islands but more rural and peripheral parts of the transmission network on the mainland having the cap extended. The highlands need to be able to export what they produce and the national grid charging system should not be a barrier.

David Mundell made a point about biomass. It is attractive not just because it is a continually renewable non-carbon production system, but because it can underpin a rural economy that is going through major changes in the common agricultural policy and the way in which we support our rural economies by providing new outlets for what we can grow and new ways of supporting the forestry industry when forest thinnings are not finding a good market. That makes a big difference.

The private Member's Bill of Mark Lazarowicz could create the power for Ministers to use renewable heat obligations to try to drive biomass forward. The hon. Gentleman is seeking to give Ministers the power to do that. Ministers south of the border say that they do not want that power, but if Ministers north of the border want it, will the Minister explain how the Government intend to respond to that private Member's Bill and recognise that enabling legislation would at least put another tool in the box to encourage renewables?

Other forms of renewables have been discussed. The Danes and others have stolen the economic benefit of the onshore wind power industry by getting in first, but we still have the potential to be a major player in offshore wind, wave and tidal energy. We have the skills from North sea sub-sea technology which the hon. Member for Aberdeen, North talked about. Those skills are transferable to other aspects of working offshore. The exciting Pelamis project is unfortunately going to produce electricity for the Portuguese. Full-size wave-generation equipment is being built in my constituency and a tangible industry is beginning to build up. The Government must take that on board.

The Committee looked at the Dounreay work force but we have not discussed them much in this debate. The country made a major change to the Caithness economy when Dounreay went there and we have a moral obligation to deal with the decommissioning consequences for jobs and the economy there.

We should continue to support fusion research internationally. The report says that the debate should not be about nuclear versus renewables and, in an ideal world, it should not, but as the hon. Member for Aberdeen, North showed us, there is a concern that the history shows that that was a problem in the past. We must be mindful of the signals that are sent to the market when the Government say that they want to start up the nuclear industry again and of whether the investment in renewables that is finally beginning to take off will be starved as the market starts to realise that there is another outlook.

We also need to consider the legacy of nuclear waste and the £50 billion that we are using to clean up the current public-sector liability in relation to nuclear. Imagine what we could have done if that money had been invested in alternative sources of energy. Nuclear is the only source of power with its own police force. That sends a signal about some of the security issues and concerns that still need to be addressed.

There is much to be done in the future. If we can cut demand and ensure that we have the right climate for investment in maximising renewables, that we do not damage the full potential of the North sea and that we open up to the recognition of the markets around the world for clean coal technology and carbon sequestration, we have the potential to meet our energy needs, get our security of supply, improve our environmental impact, and develop our export industry and vital new jobs for the Scottish economy.

Photo of Peter Atkinson Peter Atkinson Whip, Whips 5:27 pm, 1st December 2005

I apologise on behalf of my hon. Friend Mrs. Laing, the shadow Secretary of State for Scotland. She has been involved with the Committee on the Equality Bill, so I have the privilege of taking her place. I have a great affection for the Scottish Affairs Committee because I was put on it the moment that I was elected to the House and served on it for five years; basically, on the basis that my constituency has a border with Scotland, which, in the Conservative party, immediately makes one eligible to join the Scottish Affairs Committee. The other thing to do is to have a Scottish name and then one is guaranteed to be put on it straight away.

I commend Mr. Sarwar—his constituency used to be known as Glasgow Govan, but sadly we have to call it Glasgow, Central these days—and the Committee on their very good report. The visit of members of the Committee to Dounreay—obviously they suddenly realised that there was a much bigger issue in relation to energy supplies in Scotland and indeed the United Kingdom—prompted the report. I appreciate that it was a short report because of the general election.

I do not think that anybody could disagree with recommendation 1. It is right for the Government to have an audit of energy resources and to produce a plan of what they propose for the future. Interestingly, the response from the Government on 25 October was anodyne, to say the least, but, lo and behold, just a few days later—at the CBI; not in Parliament, of course—the Prime Minister announced the energy review. The official Opposition welcomed that. We have had eight years of vacillation on this issue. Secretaries of State have come and gone and each appeared to have a different view of what energy requirements should be. The issue has been allowed to drift and the Government have been pushed between the green lobby, the nuclear lobby and coal lobby without making their mind up.

The situation is now urgent. Mr. Hood—as I now have to call him—put things very clearly in relation to Scotland. Curiously, there appear to be differences in the figures showing what proportion of fuel provides what energy. However, the fact of the matter is that, with the vast majority of Scotland's energy coming from both nuclear and coal—which are going to run down—if nothing is done urgently, there will be a major problem, not just in Scotland, but in the United Kingdom as a whole. I suspect that one of the reasons why the Prime Minister launched his initiative when he did is because he realised the lesson that history has taught him: Governments who let the lights go out soon get dismissed from power. These days, with the whole of our economy dependent on energy, that would be a complete economic disaster for this country.

I take issue with something that Sir Robert Smith said. He talked about a reduction in demand. Of course, it is important that individual householders insulate their houses and make them more economic in terms of energy use, but the reality is that energy use will go up. Energy use, and electricity use in particular, has been increasing exponentially, one year after the other. Following the big bang in the City of London, energy use went up by 20 per cent. because of the need for air conditioning to cool servers and so on. Every new commercial building will now have air conditioning, which creates more demand. We have to expect a growing demand for electricity and power in the future.

Photo of Robert Smith Robert Smith Opposition Deputy Chief Whip (Commons), Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Energy and Climate Change), Shadow Spokesperson (Scotland)

It is still possible to do things in a more efficient way. If the hon. Gentleman considers the way that the economy has grown and the growth in energy demand, he will see that the economy has managed to grow far faster than the demand for energy. There is a lesson there about what happens when we make the right decisions. A building like Portcullis House does not use air conditioning; it has a more efficient system of cooling. There are ways to do that.

Photo of Peter Atkinson Peter Atkinson Whip, Whips

I agree but, globally, I predict that demand will continue to rise at a rate of 2 or 3 per cent. a year.

I would like to deal with various issues that were raised. My two colleagues sounded great enthusiasm for nuclear power, as did John Robertson. I agree; there is opposition to it, but we should explore all possibilities. Renewables will play a role and clean coal technology is extremely important, as several hon. Members have said. This country is sitting on a great mound of coal and we cannot ignore that resource.

In the end, however, it comes down to what we do about nuclear. It is becoming evident that we need to replace the nuclear power stations that are going to close if we are to maintain the nuclear share of energy output in Scotland. The power station in the constituency of my hon. Friend David Mundell at Chapelcross would make an ideal site for a replacement station.

Attending the meeting of the all-party group on energy last night, I was able to talk to some nuclear engineers on the subject. The interesting thing about the new AP1000 generators is that they are much smaller and two could be placed on some of the sites of existing nuclear power stations. Setting aside the planning position, I also learned that new power stations could generate power three years from the day that the first sod was cut. That is a shorter time scale than those we have talked about in the past. It runs the risk of planning difficulties, which would be ameliorated if new stations were put on existing sites where there is already a work force and people are used to having a nuclear power station in place.

On wind energy, if we consider all the outstanding applications in Scotland, the whole of the country would be covered in wind farms. I agree with many people who have deep reservations about that form of renewable energy. It is not just a question of the damage that it can do to the landscape, but the concerns that the Royal Society for the Protection of Birds recently outlined. I read the other day that it was very concerned about the huge wind farm plan for the Isle of Lewis, which will chop up golden eagles at the rate of four a day, if I read the report right. There are real concerns about that.

My hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale mentioned biomass. He has a new biomass power station in Lockerbie in his constituency. That is to be encouraged because it helps the forestry industry to get rid of its surplus capacity. As always, there are two sides to this story and one of the problems with the Lockerbie power station is that it will predominantly be using woodchips to start with. Woodchips are destined for a large factory in my constituency, which will now have to pay much more for them because the renewables obligation means that the purchase of woodchip in Lockerbie will be effectively subsidised. It is never very easy to square the circle with regard to energy issues.

The Minister has to reply and we want to hear from him, but I shall say one last thing. There is a problem with the transmission arrangements and a review of those is somewhat urgent. There is a sort of illogic, whereby a power station at Peterhead has to pay £18 a kilowatt to transmit, while one in the south of England receives a bonus for generating. The Scottish Executive are talking about a subsidy—to put it that way—for the connectors to the islands, but nonsense is beginning to brew up in this situation and it ought to be addressed. It is important that Scottish power stations are not put at a disadvantage as far as other power stations in the United Kingdom are concerned because there is a good legacy of engineering skills and knowledge in Scotland that we would not want to be lost.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office 5:35 pm, 1st December 2005

May I begin by joining the chorus of congratulations for the Chairman and members of the Scottish Affairs Committee on securing the opportunity for us to debate energy issues in the Scottish context? I join the Chairman in thanking Baroness Adams of Somewhere in Paisley. [Hon. Members: "Craigielea."] A fine place. I also thank the Committee members, and I join the Chairman in paying tribute to John Lyons and Peter Duncan, who made a significant contribution to the report.

There is zero prospect of me addressing many, if any, of the points raised in the debate, or the specific questions asked, in the fewer than nine minutes remaining. However, the report has drawn sharp attention to many important aspects of the problems facing us in Scotland when we consider our future energy policy. As has been said, the Government have formally responded to the Committee's specific recommendations and I shall speak about some of those in a moment.

The debate gives Parliament its first opportunity to discuss energy matters since my right hon. Friend the Prime Minister announced the energy review earlier this week. It is particularly fitting that this first debate should focus on energy policy relating to Scotland, given the importance of energy matters—ranging from those involving the North sea to our great renewables potential—in Scottish life. We have heard many excellent speeches, which reflected the variety of the issues across Scotland, from the south-west to Orkney and Shetland, and to the Western Isles and so on.

Photo of Eric Joyce Eric Joyce PPS (Rt Hon Margaret Hodge MBE, Minister of State), Department for Work and Pensions

Does my hon. Friend agree that the Beauly-Denny power line—Denny is in my Falkirk constituency—is fundamental to the future of renewables in Scotland? Scottish Power and the Scottish and Southern Energy Group proposed a sound project that minimises the environmental risk and has considerable support in my constituency.

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

My hon. Friend is right. The planning decision for the Beauly-Denny line rests with Scottish Executive Ministers, but it is clear that if one is going to generate renewable energy from sources in the far north of Scotland, or on the isles, it has to get to market somehow. Various ways of doing that have been suggested, including undergrounding, higher pylons and sub-sea cables. Those are matters for the Scottish Ministers. However, there is no getting away from the fact that it is essential to have some way of getting the electricity from where it is generated to the market. My hon. Friend is a strong supporter of the Beauly-Denny upgrade.

We have heard uniformly excellent speeches from my hon. Friends the Members for Glasgow, Central (Mr. Sarwar), for Glasgow, North-West (John Robertson), for Aberdeen, North (Mr. Doran), for Midlothian (Mr. Hamilton), for Glenrothes (Mr. MacDougall) and for Lanark and Hamilton, East (Mr. Hood). There were speeches of variable content from the hon. Members for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), for Edinburgh, West (John Barrett), for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander), for Broxbourne (Mr. Walker), for Angus (Mr. Weir), for West Aberdeenshire and Kincardine (Sir Robert Smith) and for Hexham (Mr. Atkinson). The points that they made stand for themselves. I am sure that this debate will be drawn to the attention of my hon. Friend the Minister for Energy and those responsible for the conduct of the energy review, about which I shall speak in a moment.

On the energy scene last winter, the Committee identified the fundamental significance of the UK becoming a net importer of gas. As my hon. Friend the Member for Lanark and Hamilton, East said, we have been talking about that for many years, but it has not sunk into people's thinking. The Committee mentioned that last winter, but now it is significantly on the agenda and is one of the major factors behind the decision to have an energy review.

The Committee noted—this has been echoed in contributions today—the potential closure of much nuclear and coal-fired generating plant in coming years in Scotland, the cost pressures on remaining large-scale plants in Scotland and the challenges to be faced in bringing renewable generation forward. The importance of those challenges across the country was fundamental to the Prime Minister's announcement of the energy review.

I will not flatter the Committee unnecessarily by saying that its report was a trigger for the energy review, but undoubtedly the issues that it addressed and identified with great perspicacity also contributed, in the wider body politic, to the review's announcement.

The review will build on the goals set out in the 2003 White Paper, look at the supply and demand for energy beyond 2010 and consider the role of all forms of generation—gas, coal and nuclear. It will look at various renewables and consider the new technological opportunities of carbon capture. It will also—this is vital—consider transport and energy efficiency.

Photo of Mohammad Sarwar Mohammad Sarwar Labour, Glasgow Central

We have huge coal reserves in the UK, so coal must play a part in our future strategy. I understand that Scottish and UK coal are high in sulphur, so flue gas desulphurisation equipment will have to be fitted to plants. Will the Minister give a commitment that the Government will underwrite that cost to the coal industry?

Photo of David Cairns David Cairns Parliamentary Under-Secretary, Scotland Office

My right hon. Friend the Prime Minister announced the review on Tuesday, and on Thursday afternoon my hon. Friend is looking for the answers. I cannot give him that commitment. I understand that the cost of installing such equipment is very high. As a result of the energy review, and when all the issues have been considered in the round, such a case may be made, but I am not in a position to give such an assurance at this stage.

The energy review will go a long way towards meeting the first recommendation in the Committee's report, which is that the

"Government undertake an audit of the energy resources that are currently available, and then . . . use that as a basis to work out the energy requirements that will be needed in the future."

As we have explained in the past couple of days, the context for energy policy has moved on in various ways since the White Paper was published almost three years ago. There is now overwhelming evidence of the nature of climate change, which we have not spoken about much in this debate. I believe that everyone accepts it as a given. No one is arguing that it is not happening, so we are considering the next stage. The evidence for climate change and the impact that that has on public policy are overwhelming.

Oil and gas prices have risen rise steeply—my hon. Friend the Member for Aberdeen, North made that point—and demand from the developing economies of China and India has increased. That has been referred to repeatedly by hon. Members, as has concern about the future security of UK energy supplies. Those things coming together mean that energy policy is back on the agenda with a vengeance, as the Prime Minister said on Tuesday. He spoke of the feverish rethinking that is taking place around the world on this paramount issue.

The review will consider the options for moving towards the goals set out in the energy White Paper. It will not be a nuclear review, or a review of a single technology. It must be about ensuring that we make the best use of a mix of technologies and sources of energy, and that we continue to press for greater efficiency in the use of energy. That point came up towards the end of the debate.

Inevitably, difficult decisions—or unpopular decisions, in some quarters—and trade-offs will have to be made. The Government intend to stimulate informed debates such as—all joking aside—the highly informed debate that we have had this afternoon. It is important that the debate move out from this Chamber to the whole of Scotland: it must engage the public, the business community, industry, academics, the private sector, non-governmental organisations and other experts, as well as members of the public. The Scotland Office and the Scottish Executive are already engaged with the review team, which is based at the Department of Trade and Industry. We will continue to engage with it, and, in the next six months or so, take forward many issues that have been mentioned today and in the Select Committee report.

Energy policy is mainly reserved to the UK Government, but many important aspects are devolved. The Executive will rightly have considerable interest in such matters. The Government fully recognise the importance of the Executive and the other devolved Administrations in energy policy issues, and we are committed to engaging with them during the review.

It is in everyone's interest to have a continuing dialogue in areas with a strong Scottish dimension. As with other aspects of ongoing energy policy, close contact between Whitehall and the Executive and an understanding of each other's concerns are important to securing the best outcome for Scotland and for the UK. Throughout the public consultation that will be launched at the turn of the year, we will make every effort to ensure that views in Scotland are fed into the review and taken into account in the recommendations. A series of events are planned to explain the review process and to hear the views of people in all parts of the country.

Question put and agreed to.

Adjourned accordingly at fifteen minutes to Six o'clock.