Climate Change Act
Debate between Barry Gardiner and David Mowat(10 years, 7 months ago)
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David Mowat
I do accept that, and that cost of £500,000 translates into jobs lost.
The real problem is that the Act is unilateral. It has been said that Britain produces 1.5% of the world’s emissions, which is about the amount China’s emissions increased by last year. The Act was predicated on the assumption that we would take a world leadership position in all this stuff and that the world would follow us. However, it increasingly appears that the world does not wish to follow us, and we are seeing that in a number of ways; there are words and there are actions. The Minister mentioned Germany, and I alluded earlier to its decision to abandon nuclear power, build dirty coal stations at great pace and to refuse to use carbon capture and storage technology, despite the fact that its carbon emissions are higher than ours.
Even more significant, however, is the fact that the EU has recently voted to abandon its emissions trading scheme.
Energy Bill
Debate between Barry Gardiner and David Mowat
Barry Gardiner
My hon. Friend is absolutely right. One of the great mistakes this Government have made on energy policy is to confine it simply to energy itself, and not to consider it in the wider context of British industry. That is why I am delighted that the new Minister for Energy, the right hon. Member for Sevenoaks (Michael Fallon), has a spanning brief over the two Departments. I hope he will be able to bring that to bear, because we must see how our energy policy is related to our exports. Unfortunately, last night the Government did not accept the amendments on carbon capture and storage, but we must understand that the growth of CCS as a new technology in this country will impact not only on our own energy policy here in the UK, but much more widely in terms of the exports and the impact we can make on climate change across the globe and in countries such as China and India, which will be using coal for the next 30 or 40 years. That is the true prize. Our own energy consumption and our own emissions are small compared with those of the rest of the world, but the impact that our industrial policy can make is enormous. That is why we have to integrate energy and business, as my hon. Friend says.
Potential investors in the UK have a policy risk concern; they are concerned about what the future shape of our energy policy might be. Siemens told us if we wait until 2016 to set a decarbonisation target for 2030, it and many of its competitors are likely to delay or cancel planned investment in the UK. The Energy Secretary is shaking his head. I know he is not shaking his head to indicate he disagrees that that is what Siemens said, as he has read the Hansard Committee reports and he knows that is precisely what it said. He may disagree with those comments, but that is what industry is telling us, and we ignore what it is saying at our peril.
David Mowat (Warrington South) (Con)
The hon. Gentleman mentions Siemens. In Germany emissions per capita and per unit of GDP are higher than in the UK, and in the UK they are falling more quickly, yet he seems to think that the best way forward for us is to have targets and increasingly to act unilaterally. Why are our European neighbours going in the opposite direction?
Barry Gardiner
That point is often made; it is often said that Germany is getting rid of its low-carbon nuclear and is embracing coal as the fuel for the future. The hon. Gentleman is diligent on these matters, and I am therefore sure that he has examined the Pöyry report commissioned by his Government—by DECC—which was published in April 2013 and which made it clear that this is not a sustainable pathway for Germany. It concludes:
“It is our opinion that there will be no major new unabated coal or lignite projects in Germany for the foreseeable future beyond those currently under construction. Our view appears to be endorsed by the German companies: three majors have very publicly announced that they have no intention of building additional coal-fired power stations in Germany until at least the end of the decade.
The Netherlands has many parallels to Germany in that legacy circumstances are responsible for a wave of new coal-fired power stations, but that these conditions are highly unlikely to repeated.”
It then goes on to talk about Spain.
The hon. Gentleman knows that the decision on nuclear in Germany was taken at a time when highly political conditions were in play. Those conditions are not going to be replicated in the future, and, importantly, the business sectors in these countries have seen that this is not a credible future pathway.
Barry Gardiner
I shall give way to my hon. Friend the Member for Ynys Môn (Albert Owen) first, and then to the hon. Member for Warrington South (David Mowat), if he wants to intervene again.
Barry Gardiner
If the hon. Gentleman will forgive me, I will not, as I have tried to give way as much as possible and I wish to respect Mr Speaker’s advice. I am conscious that I have spoken at great length, so I will now conclude my remarks.
Earlier this year, the Chancellor of the Exchequer received a letter from many of the companies referred to by the hon. Member for South Suffolk, in which they make the situation very clear:
“Projects can take 4-6 years from investment decision to construction and operation. We are already close to the point where lack of a post-2020 market driver will seriously undermine project pipelines. Supply chain investment decisions depend on reasonable assurance for manufacturers that a production facility to be constructed during this decade, costing hundreds of millions of pounds, will have an adequate market for its products well into the 2020s.
Postponing the 2030 target decision until 2016 creates entirely avoidable political risk. This will slow growth in the low carbon sector, handicap the UK supply chain, reduce UK R&D and produce fewer new jobs.”
The Government must reconsider.
UN Framework Convention on Climate Change
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Barry Gardiner
I think that the right hon. Member for Hitchin and Harpenden will not dispute the fact that we are living through the greatest period of extinctions that has been known in the fossil record; he has not disputed that. What he has sought to dispute is whether it is in any way linked to a change in climate, and therefore whether it is in any way linked to the rise in the use of fossil fuels. He should look at the way in which species are migrating—he talked about a loss of habitat, but the reason why there is a loss of habitat in many parts of the world is, of course, because of the change in climate, which has actually destroyed the habitat that used to be there. I do not think that he can separate out, in the way that he seeks to, the effects of climate change from the effects of habitat destruction. To do so is precisely to ignore what is going on.
We have to understand that 50% of the GDP of the poorest people in the world is dependent on their immediate environment, and it is that immediate environment that is under such significant threat. In parts of Africa, we have seen whole habitats destroyed. I sometimes wonder why we spend millions of pounds protecting our vessels as they pass the coasts of Ethiopia and Somalia but never give a thought as to why the pirates that we are protecting them from are there in the first place. Of course, they are there in large part because of the desertification that has taken place in that part of Africa—because of the loss of agriculture and of economic opportunities there. Not to link what is happening with climate change to the sustainable development goals would be a serious error indeed.
Let us consider the Durban platform for enhanced action that has been established, and let us look at the way in which, by 2015, we are to try and arrive at an agreement between countries as to what will happen in 2020 in respect of the commitments made there. Many hon. Members have talked of the difficulty in securing those commitments and the difficulty of some countries agreeing their programme of action without certainty and knowledge of what other countries are prepared to do. Russia, Canada and Japan have been mentioned as examples. These are extremely difficult negotiations because, as the Committee’s report acknowledges, every country will act in its own national interest. During the negotiations, we have been true to form and have very often acted in our national interest as well.
I would challenge the Minister on some of the positions that our country has adopted in the negotiations. Let us consider the position that we have adopted with respect to Russia. We have been saying, “With all the hot air that they had after the demise of the Soviet Union, they have arrived in a much more fortunate position, and we want now to discount that.” But in that negotiation any Russian with common sense would say simply, “Look, our economy suffered an enormous transition—an enormous hit on our domestic economy. We’ve paid the price for being in the position that we are now in, with that hot air, with those emissions credits.”
The original intention of Kyoto was simply that we should see the reduction below 1990 levels. Perhaps due to the collapse of the old Soviet economy, Russia has achieved that reduction, but it has not achieved it without substantial cost. That is just one example of the way in which the negotiations that we believe we are entering into in good faith may be perceived by the other side as negotiations that are not being conducted in good faith. Sometimes we have to look much more carefully at the principles of equity when we consider how one reaches a just settlement in this area.
For example, in discussions that are often entered into about what is happening in China and India—we will debate China more specifically later—we often say, “These are the emerging economies and emerging powers and, of course, China is building so many more coal-fired power stations and its emissions are growing at a tremendous rate.” Yet somebody in India will say, “Yes, but let’s look at our population and let’s see what our emissions per capita are.” They will say that, in India, the emissions are approximately 2 tonnes per capita, whereas in this country they are well into double figures and in America they are probably 10 times what the average Indian would expend.
We have all entered into the negotiations at the UNFCCC from a position of national self-interest. Unless we understand that this is genuinely a boat in which we all either sink or float, we will not arrive at a resolution that is fair and has any chance of success.
David Mowat
I am interested in the hon. Gentleman’s analysis, particularly in respect of the national point and Russia. Some countries—how can I put this?—might benefit from climate change, including Russia, because there is a lot of tundra there. I wonder whether the COP might look at the possibility of globally taking advantage of that phenomenon, given that my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) may be right in saying that we are not going to stop coal being burned at the present rate.
Barry Gardiner
The hon. Gentleman makes an important point. I do point out that he has conceded that climate change is real, and that it will have a differential effect in different parts of the globe. It is difficult to predict what that differential effect will be, but one of the core predictions is that there is every expectation that parts of Russia that are now tundra and unfarmable will gradually be released as good agricultural land. Therefore, from the Russian point of view, climate change, if and when it happens, will not be a significant problem. However, the problem is that with the release of that land into farmable condition, a lot of methane will be released into the atmosphere, which will turbo-charge the process. But the hon. Gentleman is right to mention that.
The international negotiations must take on board the fact that although there are real downsides for some economies—indeed, small island states are in danger not just of their economy, but of their whole territory going down the pan—countries such as Canada and Russia may make substantial economic gains through this process. That is why we cannot simply go into the negotiations with the viewpoint that climate change is a universal disaster and we must stop it at all costs. We have to understand that some people expect to gain and some expect to lose. That makes these negotiations all the more intractable, and makes it more difficult to get a just resolution. I absolutely endorse the hon. Gentleman’s point.
David Mowat
It might be a more fertile route for the world to look at that interaction between those that are gaining and losing, rather than trying to stop what would appear to be the unstoppable, in terms of coal burning at scale.
Barry Gardiner
The negotiations absolutely have to consider where the balance of costs and benefit lies and take that into account. Without doing that, we will not get anywhere; I agree.
The funding of the climate negotiations process is critical. I congratulate the Government on the way in which our country has stepped up to the plate with the short-term funding committed in 2009 through to 2012. They have delivered that, if not 100%—it may be 100%—then pretty damn close to 99%. They have not just committed and delivered the funding, but ensured that 50% of it went to adaptation. Many countries that promised such start-up funding committed themselves to the principle of at least 50% going to adaptation but then did not deliver. It is absolutely vital that such commitments are honoured, because they are the ones that build trust into the negotiation. When countries see other nations commit funds and then deliver them in the way that has been promised, it builds trust into the whole process.
When Christiana Figueres, the executive secretary of the UNFCCC, came to London in January and spoke in the Locarno suite of the Foreign and Commonwealth Office, she made it clear that the only way in which we would achieve success on the Durban platform and see a resolution and a conclusion to the negotiations in 2015 was to build trust at national level. She made it clear that any agreement in 2015 would as much reflect what was going on at the national level—the legislation that was being passed and the regulations and policies that were being enacted by Governments—as it would define climate legislation into the future.
For many years, Governments across the world appeared to think that all we needed to do to solve the problem of climate was to get together and reach a legally binding agreement. Well, that was always a chimera; it was never going to be the case because, no matter what Governments agree to, it must be brought back and legislated on in their Parliaments. That legislation must then be implemented. Funds have to be voted to ensure that the legislation is implemented properly and fully, and the implementation must be monitored, audited and carried out.
That is why I refer to the study launched by Christiana Figueres in the Locarno suite—the GLOBE International climate legislation study—which focuses on climate legislation enacted in 33 countries. The study sets out the progress that each country is making on enacting its own legislation and regulation, and that builds trust into the whole system. Often countries ask, “Why should we act to the detriment of our own industry by enacting climate legislation? It will put us at a disadvantage to everyone else.” But actually, countries are not acting alone. Countries throughout the world are taking positive steps to enact legislation on climate because they perceive the problem. Such a study is perhaps the best way to show the sceptics that their country is not alone, to build trust and enable the negotiations to proceed in the way alluded to by Christiana Figueres.
Finally, since the Bali conference, REDD—reducing emissions from deforestation and forest degradation—and REDD+ have been one of the most important ways of advancing our aspirations for reducing emissions into the atmosphere. Emissions from deforestation and forest degradation amount to about 17% to 20% of emissions produced each year. I pay tribute to legislators in Brazil for the work that they have recently concluded on the forest code, and for reducing their own emissions so substantially over the past three years. I pay particular tribute to legislators in Mexico, who passed important REDD+ legislation to enable REDD funding to come through.
We often find that, in countries that are major forested domains, property rights are very difficult to establish because there are different layers and levels of rights, such as customary use rights, that sometimes make it impossible to disentangle who has the right to operate, to log or to use a piece of land in a particular way. By teasing those out and codifying all the issues, REDD+ will be enabled, as part of the international negotiations, to reduce really effectively the emissions from that most important sector.
Colleagues are keen to move on to the second part of our debate, so I will draw my remarks on the UNFCCC to a close. I believe that the process is worth while, but I recognise that it is not simply the international negotiations process, in which thousands of people come together every year, that will resolve the matter; it is by detailed work at national level, open to scrutiny by national Parliaments and enacted through national legislation, that we shall build the trust in the international community that will enable the executives, through the UNFCCC, to arrive at a negotiated agreement, we hope, in 2015.
[Mr Clive Betts in the Chair]
Energy Generation
Debate between Barry Gardiner and David MowatWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Barry Gardiner (Brent North) (Lab)
It is a great pleasure to follow the hon. Member for St Ives (Andrew George). I congratulate him on securing the debate, and even more on being absolutely true to his principles and honouring the pledge that he and a number of his colleagues made more than a year ago. It is absolutely right that he has raised the matter in this forum, where we can take some time to develop the arguments, because, as he suggests, during consideration on Report of the Energy Bill in the main Chamber it will perhaps be more difficult to go into the same detail and depth. I am, therefore, very grateful to him for introducing the debate in this way.
I pay tribute to the Government—and to the Secretary of State for Energy and Climate Change for his interlocutions and iterations with the Treasury—for their commitment of £7.6 billion under the levy control framework up to 2020. That is a significant achievement, which will be important for low-carbon generation in this country. It is £7.6 billion from people’s energy bills to pay for new low-carbon energy generation that will increase energy security, reduce the cost of energy bills in the long term and ensure that we meet our moral and legal obligations to reduce our greenhouse gas emissions. So far, so good; I am with the Minister and with the Government.
Industry has welcomed the commitment, but has also clearly said that it is not enough. The £7.6 billion is security for only seven years. In the words of DONG energy,
“it is a case of having a cliff edge at the moment; 2020 is a big milestone”––[Official Report, Energy Public Bill Committee, 15 January 2013; c. 58, Q175.]
Andrew Buglass from the Royal Bank of Scotland told the Energy Bill Committee that the cliff edge is making it very difficult for supply chain investors to invest in the UK. Overcoming the insecurity created by the 2020 cliff edge does not require more public money, or even the promise of more money; it requires coherence, in the form of a 2030 target that proves to industry that the demand for low-carbon energy will continue to rise beyond 2020. The shadow Minister, my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex), quoted Mr Buglass in a sitting of the Energy Bill Committee, saying that
“a 2030 target ‘is absolutely critical from the conversations I have with potential supply-chain investors because they quite rightly point out that it is very difficult for them to take investment to their board if they really only have visibility on three or four years-worth of work.’”––[Official Report, Energy Public Bill Committee, 7 February 2013; c. 570.]
It is clear that what we are facing in 2020 is a cliff edge—a milestone—and the Government, without necessarily committing considerable excess funding at this stage, somehow have to be able to give a signal to industry and investors that this is the direction of travel the Government are taking and that they can confidently lay down their investments in the knowledge that they will get a clear return.
David Mowat
I am listening carefully to the logic flow of the hon. Gentleman’s position. What puzzles me a little is that Germany has four times as many renewables as the UK, in spite of its much higher carbon emissions per capita and per unit of GDP. It would be a step in the right direction if we emulated Germany. Germany does not, however, have a target—how did that happen?
Barry Gardiner
If the hon. Gentleman reads the record of the written evidence that was given to the Energy Bill Committee, he will see that no less a figure than David Kennedy, chief executive of the Committee on Climate Change, which independently advises the Government, said that the context in Germany is different. A low-carbon trajectory has already been established there, precisely for the reasons the hon. Gentleman suggests—four times as many renewables are already in place. People in Germany are not in doubt about what their Government are going to do or about the direction of travel.
David Mowat
We often take Germany as an example of best in class in such matters, so it is right to make absolutely sure that on the record we have the point that Germany’s carbon emissions are 20% higher per head and 23% higher per unit of GDP than the UK’s, principally because of the amount of coal burnt, which makes the renewables activity irrelevant. I thank the hon. Gentleman for his answer.
Barry Gardiner
I am happy to allow the hon. Gentleman to get what he wishes on the record. He is at perfect liberty to make his own remarks later, and I trust he will do so, but I point out that Germany, by going away from nuclear generation, will see a significant rise in emissions—not only there, but in neighbouring countries. Germany has been a net exporter of low-carbon electricity to its neighbours, and that also is going and will create substantial problems for Europe as a whole in meeting its emissions reduction targets. It will also present severe problems for Europe’s response to the challenge of global warming. Ultimately, I think Germany will move through that transition, away from coal.
Energy Supply
Debate between Barry Gardiner and David Mowat(11 years, 8 months ago)
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Barry Gardiner (Brent North) (Lab)
I am delighted to speak in this important debate, and I am particularly delighted to welcome the Minister to his position. His work within his previous skills portfolio was much respected, and I think that many of us hope that he will bring not only the dedication that he showed in that role, but his focus on developing green skills, into this new portfolio, where he is considering the UK’s energy supply. It is a difficult time to be taking on the brief, and I think that we all sympathise with him for taking over at this juncture, with so much on his ministerial plate. I assure him that the Committee—both sides of it, I think—will seek to co-operate with him to ensure that he gets his feet under the ministerial desk as quickly as possible and can take the brief forward.
I do not want to go over the ground that the Chairman of the Committee and the hon. Member for South Thanet (Laura Sandys) have already covered—I entirely agree with most of what they said, particularly the hon. Lady’s call for certainty in policy. She is absolutely right; that is one of the key things that will hold back—is already holding back—the investor community from pressing ahead with the sort of investments that we need, if we are to see the £200 billion investment come on stream and ensure that we have the continuity of a secure supply of energy over the next decade.
I want to focus on subsidy and the importance of getting subsidy right. Earlier this summer, there was a contretemps between the Treasury and the Department of Energy and Climate Change on the subsidy for onshore wind. The debate was not phrased in that way; it was phrased, “How much can we cut from that subsidy?” Should the subsidy be cut by 10%, which is the Department’s public position? Or should it be the far more severe cut of 25% proposed by the Treasury? Interestingly, the Department won the day in that political debate. In a straight fight between the Chancellor and the Secretary of State for Energy and Climate Change, most people in most circumstances would back the Chancellor, but in this case the Department won.
We need to consider the economic case for onshore wind. The new Minister has previously commented on onshore wind. We subsidise the technology, which operates intermittently. Wind does not blow all the time and cannot provide the base load of electricity supply. On a number of occasions, the Minister has remarked on the way in which the technology adversely affects communities in the countryside.
Long-term subsidies are not good. I think we can all agree with that. In my view, we should not subsidise any energy in the long term. Subsidies should never be a permanent feature of any market. Subsidies should be introduced only to address market failure and they should be withdrawn gradually as such market distortions are addressed. I hope even the Chancellor and the Treasury accept the economic rectitude of those remarks. Whether they can square that with this country’s ongoing fossil fuel subsidy is an entirely different matter.
Last year, the OECD estimated that, in 2010, UK subsidies for coal, gas and petrol amounted to £3.6 billion. Additionally, the Chancellor announced in his 2012 Budget further exploration and production subsidies of £65 million to develop the west of Shetland fields. The market failures addressed by those subsidies are unclear. On the contrary, fossil fuels appear to have an entrenched subsidy culture in which such taxpayer handouts are regarded as a right, rather than a means of addressing an otherwise unlevel playing field.
By contrast, the total subsidy paid to onshore wind amounted to less than £400 million in 2010-11, or £6 on the average household’s annual bill. That gives a better sense of the subsidy onshore wind currently enjoys against the £3.6 billion in consumption subsidies that fossil fuels enjoy before factoring in the cost of carbon emissions.
David Mowat
I am interested in the make-up of the £3.6 billion. Are we talking about tax reductions, or am I missing something?
Barry Gardiner
I hesitate to speak for the OECD, but my understanding is that the £65 million is composed of production subsidies, VAT subsidies and other things. I am sure information on the figures is available from the OECD, because they are the OECD’s figures, not mine.
David Mowat
I am sorry, but I do not understand that answer, because £3.6 billion is a very large amount of money. The hon. Gentleman makes a powerful point if that figure is a true reflection of the situation, and it is reasonable to ask how the money is being transferred at that rate to the energy companies and, presumably, their shareholders, because that had previously passed me by.
Barry Gardiner
Members of Parliament are not noted for admitting ignorance, but I am happy to do so. I cannot give the hon. Gentleman a detailed breakdown, but that figure has been given by the OECD. As I said in response to his previous intervention, my understanding is that the subsidy is accounted for in VAT subsidies and in other production subsidies, such as the ones I mentioned. I cannot go further than that. I do not claim to be the economist or accountant who worked out the figures published by the OECD, to which I refer him.
The real market failure is that the environmental, economic and social costs of greenhouse gas emissions are not properly factored into our fossil fuel price. The Government recognise that and have tried to attribute a price to carbon emissions through the EU emissions trading scheme. Unfortunately, the carbon price has neither been stable enough, as the Chairman of the Select Committee mentioned earlier, nor high enough to redress that market failure, even for the 40% of UK carbon emissions covered by the ETS. Fossil fuels are operating in a market tilted distinctly in their favour. Those who support renewables such as onshore wind that do not produce polluting carbon emissions are perhaps entitled to claim that there is clear justification for that level—albeit a very low level, as I have shown—of subsidy.
Bringing new technologies to market can be difficult, and many technologies have died in the valley that lies between demonstrator a prototype and full commercial development. If the UK is to develop world-leading renewable technologies, such as those mentioned by the Chairman of the Select Committee, particularly marine technologies, we need further subsidies to enable renewables to make that transition from prototype to full commercial scale. The renewables obligation subsidy introduced by the previous Government was designed to do that to some extent and supported new wind generation as the technology successively improved and economies of scale reduced production costs. It is worth noting that it is onshore wind’s positive trajectory in reducing costs that led the Department to argue that the subsidy could be reduced by 10% in the first place. As the technologies become cheaper, it is right to scale down the subsidies. That trajectory has led some in the industry to project that onshore wind will be cost competitive with gas by 2020, which brings another element to our discussion. Indeed, the hon. Member for Warrington South (David Mowat) highlighted that differential and the possibility of seeing cheaper gas in the UK because of shale gas in the United States.
Clear social and environmental costs are associated with shale gas in the United States, and the Committee flagged them up in its report on the potential for shale gas in the UK. However, at every point we should aim to factor the cost of pollution into the true cost of the fuels that we use. That is really how we should evaluate the cost. We do not, for example, factor into the cost of fossil fuels the cost to the health service of people with bronchial or asthmatic conditions caused by carbon emissions from diesel and petrol engines. If we want to get a far better handle on our energy needs and supply, and the security of that supply, let us compare the true costs of the separate parts of our energy mix, and not simply look at the market cost.
I want to go off slightly on a tangent and mention, in response to the shale gas debate, one other aspect that I think it important to draw to the attention of the House. As shale gas provides the USA with increasingly low-cost fossil fuel, there will be a substantial shift in American foreign policy, which has been fixated on the middle east—for good reason. Its fossil fuel supply has substantially depended on stability in the middle east providing continuity of supply. The discovery and exploitation of shale gas in the United States significantly changes that perspective, and when we look to the future of European and UK energy we need to factor that in too. The drivers that caused the US to be so involved with middle east countries will shift. We need to recognise that, as much as we recognise the shift happening in the gas fields in Siberia, and the rise in demand from India and China.
There is one further thing I want to comment on: the fourth pillar of the Government’s proposals on electricity market reform—the emissions performance standard, the carbon floor price and the way in which they interact. Is not it strange that the emissions performance standard was set at 450 grams per kWh? Whom did the Department think it was fooling by setting that figure? It is clear that it was set because it excludes dirty coal without carbon capture and storage, but it has a beneficial effect on investment in nuclear, boosting the price.
In the past year and a half, the Committee has spent a lot of time talking to the investment community, which has been generous with its time and views and has made clear the way in which the risks associated with different technologies and energies manifest themselves. There are planning, construction, operational and price risks and, particularly with the nuclear industry, a decommissioning risk. The key matters on which the investment community focused in discussions with the Committee were construction risk and the period during which capital is exposed in the construction of new nuclear, as opposed to new gas, technology, and the different lengths of time needed to get production in place and price coming through. The investment community made clear to the Committee its belief that without Government subsidy—not covert subsidy by way of price subsidy through the EPS but real subsidy in relation to those risks and the extra cost of capital—there will not be the level of nuclear infrastructure development that the Government have said they want.
I come back to where I began on the question of subsidy: without a much more transparent understanding of the subsidies going to fossil fuels, and the lack of accounting for their cost in damage to health and the environment, and pollution; without factoring those things in; without a clear understanding of the subsidies necessary as technologies develop, and the reduction in subsidy necessary as they become more cost-effective; and without transparency about the real subsidies that the Government are offering the nuclear industry, and the structuring necessary to get the development we need, we will not have a successful energy policy.