John Redwood
Main Page: John Redwood (Conservative - Wokingham)
Callum McCaig
Speed is the operative word, I think. We have called for the re-devolution of the power and for the grace periods to be dealt with in the most appropriate manner. In its manifesto and in debates the Conservative party has professed a desire to see local control of this matter, and nobody would argue with that. However, that requires that we respect local decisions, but the grace periods as they stand do not do that. That is why the new clause and the amendments are necessary, particularly amendment 8, in the name of my hon. Friend the Member for Coatbridge, Chryston and Bellshill, which relates to planning decisions at committee that were dealt with before the closure date, but where the approval certificate was not granted, in Scotland, owing to section 75 of the Town and Country Planning (Scotland) Act 1997, on planning gain—in England, I think it is section 106 of the Town and Country Planning Act 1990. This issue is clearly about local decision making, and the Government should give their consent so that it can be included in the Bill.
We accept that the change is going to happen. Having been explicitly opposed to it, the industry now sees that it is better to have some certainty, rather than continued uncertainty. However, that certainty needs to be correct certainty—it needs to be fair certainty and it needs to be certainty that does what it is intended to do.
We should respect local decision making. Where locally elected bodies—councils in England, Scotland, Wales and Northern Ireland, although there are different stipulations there—have agreed to projects but have not been able to get their certificate to allow them access to the renewables obligation because of the technical nature of decision making around planning gain and other such issues, that is simply wrong.
John Redwood (Wokingham) (Con)
Will the hon. Gentleman remind the House why he wishes to burden his constituents and others with much dearer electricity from an interruptible source we cannot rely on?
Callum McCaig
Onshore wind has clearly been demonstrated to be one of the cheapest forms of renewable energy. If we were having a tête-à-tête, I would ask the right hon. Gentleman why he supports the obscene waste of money that will be spent on the Hinkley power plant, which will cost considerably in excess of what would be spent on onshore wind. However, as we are not having a back-and-forth, I will resist that temptation.
The issue is straightforward: we need to press ahead. The industry needs to be given certainty. The issue has been handled incredibly badly, but there is time, particularly taking cognisance of last week’s Energy and Climate Change Committee report, for the Government to make amends, to change some of the stipulations on the grace periods and to allow things to happen in the best way possible. Repenting, however late, is better than carrying on regardless.
Mr Speaker
Order. The hon. Gentleman is not giving way—he has concluded his remarks.
Mr Speaker
No. We will take Mr Chris Heaton-Harris and then come to the hon. Member for Southampton, Test (Dr Whitehead).
John Redwood
Can my hon. Friend tell us what the fix is for this? Is there a realistic way of suppressing the noise?
Chris Heaton-Harris
The best way to suppress the noise is to turn the turbine off for the period of time when the noise is likely to occur. As acousticians have demonstrated to me, the noise is more likely to occur at night when other background noises have dropped down. We can predict it, because we know which way the wind is blowing and at what speed. It drops down to ground level in a certain way, so we can know exactly which houses and which zone it will affect. Therefore, with sensible meteorological readings using the correct monitoring equipment, which is now remarkably cheap to purchase—it used to cost an awful lot—we can do a lot better.
Dr Alan Whitehead (Southampton, Test) (Lab)
I rise to speak to our amendments 24 to 33 and 40 to 46, which, although standing individually, form a collective whole and refer to successive amendments the Government made to the Bill in another place in Committee to bring forward the closure date of the renewables obligation from 31 March 2017 to 31 March 2016. Our amendments would move that date and those of the various grace periods to 1 March 2017. They would therefore bring forward the closure date by one month, rather than one year, as is the present proposal.
I have some fears about the robustness of the present closure date in the face of the Bill’s passage. We are discussing a closure date that is very close to the day on which we are actually discussing it. The passage of the Bill, given that it came from the other place in the first instance, will have to finish in the other place shortly. The fact that the closure date before us is just a fortnight or so away from today creates considerable difficulties for the closure of the RO itself. It is not the case that we are discussing something that does not exist that can be brought into existence under legislation. We are discussing something that not only exists but, if we do nothing by way of legislation, will continue to carry on until 31 March 2017. We are discussing something that is in the legislation already, in that there is a specific mention in the Bill that the RO comes to an end on 31 March 2017, so if nothing happens to stop the RO carrying on, it will carry on until that date. In a sense, then, we have just one go in this place at changing the date in the legislation. If the Bill continues its passage through Parliament after the closure date has come into being, we will be dealing with retrospective legislation.
John Redwood
Is it not the case that from the moment people knew who had won the general election, they knew what would be Government policy in this area and they knew that it would be done as expeditiously as possible? Surely everyone could plan perfectly well around that obvious point.
Dr Whitehead
The right hon. Gentleman might have jumped the gun in respect of the point he wanted to make about the effect of the proposed closure, but it is a different point from the one I am making about the closure. My point is that we stand in danger not only with respect to investor confidence, investor certainty or other considerations about what investors should do, which I shall come on to in a minute, but in respect of what we do, potentially exposing this House to legal action. Although the Government will have closed the renewables obligation administratively, they will not have closed it legislatively. There could be difficulties if discussions here and in the other place mean that the Bill receives Royal Assent after 31 March 2016.
John Redwood
Is the hon. Gentleman inventing a new doctrine: that Governments should never try and change the law because the Opposition might delay it?
Dr Whitehead
Again, the right hon. Gentleman misses the point I am making. This is not about the Opposition attempting to delay the imposition of the law. It is about the rush to close the renewables obligation on the part of the Government, not the Opposition, and the subsequent, rather dilatory way in which the Energy Bill was placed before this House—and, indeed, the way in which it has been scheduled in this House and the distinct possibility that further stages of the Bill may be scheduled. The net result of that dilatoriness in the legislative process is that the Government, not the Opposition, may put us in a position where retrospective legislation is apparently the case and the possibility of legal action is also apparently the case. It is important that we remember that today. One reason I am suggesting that the closure of the RO ought to be much later, albeit still early, is that it would avoid that potential legal action.
In reality, we know that the proposed closure of the renewables obligation a year early is not about implementing a manifesto pledge. The RO is not a new subsidy—that is what was in the Conservative manifesto. Indeed, we had discussions about that in Committee. The proposals before us are not only about putting an end to something that has been in place for a considerable period, that has worked well and that was about to change, in good time, to a new system that allows for degression in underwriting and a path towards effectively dissolving subsidies for a technology that has achieved close to market parity; they are about putting an end to something that industry investors were clear and confident about. Investors were confident not just because the renewables obligation had worked for a while; there was also a clear process whereby it would come to an end and a clear line of progression to contracts for difference—the new system, which we discussed at some length during the passage of the Energy Act 2013—and an orderly roll-out of renewable energy as something progressively more effective and cheaper.
Dr Whitehead
The question of whether the capacity auction should have been brought forward is secondary to the extent to which the Government believe that the auction will actually produce new capacity, as I am sure the hon. Gentleman is fully aware. Like the levy control framework, capacity auctions warrant a much deeper reorganisation than the rather tepid arrangement undertaken by the Government. Simply bringing an auction forward by a year, using roughly the same parameters about the likely clearance price and the distance between the clearance price and the likely price necessary to secure any new investment over a 15-year period for new gas-fired power stations, does not strike me as the smartest way to procure longer-term capacity in the capacity market. A deeper reorganisation of capacity auctions is required to secure that aim over the next period.
Before that intervention, I was briefly thinking about the subject of my amendments 23 and 52, to which I wish to draw the House’s attention. If the Government were serious about the proposals in their manifesto—that schemes that have local support should proceed—they should immediately adopt these amendments. They are about schemes where all the right moves in getting local agreement to the plans have been undertaken, all inquiries, concerns and planning arrangements have been dealt with, the schemes are on the cusp of getting agreement at planning and local authority level, and they have the support of local communities, but the Government have just pulled the plug on them and they now cannot proceed. The Government ought to adopt these amendments if they were, in principle, serious about their own principle that local areas should decide on local schemes and that those local schemes could be supported where local communities support them. Conversely, I fear that if clause 80 remains in the Bill, as amended, we will have in store a programme of onshore wind execution and not the execution of an onshore wind programme.
Labour’s vision is for a locally supported, appropriate programme of onshore wind deployment, complementing other renewables such as solar, biomass, offshore wind and tidal in reaching renewable targets, not because we have to, but because it is the right thing to do in ensuring that we have a balanced, low-carbon energy mix for the future. This clause points us squarely in the opposite direction and I urge hon. Members to support amendments that put us back on track again.
John Redwood
I rise to support the Government and to urge the rejection of amendments that would delay getting rid of the subsidies for wind power. Our country desperately needs more electrical power to be available, and I am pleased that the Government are now taking action, with capacity auctions, to try to get some more power available. We need more affordable power. We need to tackle fuel poverty and have power at prices that households can afford. We also need to have affordable power for extra industry, which is one of the Chancellor’s aims. We need reliable power; we want to know that the power is there whether the wind is blowing or not, and whether the sun is shining or not. People expect continuous power, in order to light and power their homes, and industry needs continuous power for its processes. On all those grounds, wind does not cut the mustard, and I am glad that we now have a Government who recognise that.
When the history of the past 15 or 20 years comes to be written, what the European Union is doing and what the previous Labour Government did on energy policy will go down as one of the catastrophic failures. It will be at least as big as the exchange rate mechanism, which destroyed so much activity, jobs and prosperity in our country. It may not be as big as the disaster of the euro, but it will be one of the big, classic disasters of the European Union that Europe as a whole is becoming an area of too little energy and very high-cost energy, driving industry out of the European Union area and into Asia and America, where more plentiful and affordable energy is available. Far from sparing the planet extra carbon dioxide, all this mad policy is doing is making sure that the carbon dioxide is produced somewhere else, rather than within the European Union itself.
Germany has much more wind power than we do and many Opposition Members admire it in this respect, but what happens when the wind does not blow? I will tell them what happens: Germany relies on a large number of extremely dirty coal power stations to churn out the electricity, producing more carbon dioxide than it would if it had opted for a fleet of modern gas stations in the first place. On average, that would have been better than this strange mixture of intermittent wind, which is very good on carbon dioxide when the wind blows, and back-up power, which in Germany and elsewhere in Europe is often generated from coal, and is extremely bad on carbon dioxide when the wind does not blow.
David Mowat
Germany uses coal all the time and the wind power is the intermittent stuff. Germany’s carbon emissions are 30% higher than the UK’s per unit of GDP and per capita just because it uses so much coal and fossil fuels, even though its renewables level is quite high as well.
John Redwood
Yes, but, as my hon. Friend will agree, when the wind does not blow, Germany has to use more coal. When there is no wind energy, the replacement must come from fossil fuel. A wind system with fossil fuel back-up does not even work on its own terms, and he is right that the German merit order is somewhat different.
I was going on to point out that from an economic point of view, we in this country have managed to damage every kind of power generation. If we insist on giving priority to dear, interruptible, intermittent sources such as wind, the more reliable, cheaper sources such as gas become intermittent, as they are switched off every time the wind blows and switched back on every time the wind is not blowing, which in itself is difficult and expensive. That undermines the economics of what would otherwise be good-value power. It means that we cannot run the plants flat out. We have higher operating costs because of the complications of switching on and off and managing the furnaces accordingly, with much less revenue coming in because less power is generated and power cannot continuously be sold to the market.
The ham-fisted interventions—[Interruption.] The hon. Member for Southampton, Test (Dr Whitehead) does not seem to understand the policy that his party put in place and that the European Union supports. The ham-fisted interventions in our energy market mean that we have less reliable energy, because we deliberately subsidise a lot of intermittent and unreliable energy; that we have dearer energy, because, as is commonly accounted, renewables are considerably dearer; and that we have much dearer energy overall, because of the extra cost, which is not included in the way that the cost of renewables is accounted for, which means that non-renewable power becomes a lot dearer per unit as well.
Jonathan Edwards
Has the right hon. Gentleman had an opportunity to reflect on the complete U-turn by Energy UK, which now says that the Government need to promote renewables instead of fossil fuels? Indeed, it says that an energy policy based on fossil fuels is a smartphone equivalent of placing all our bets on Nokia as opposed to Apple and Samsung.
John Redwood
No, I have not had the chance to reflect on that, but it does not seem to be a very interesting observation given the fundamental truth that I have just given him, on which the hon. Gentleman has not reflected at all. The truth of our current energy policy—
John Redwood
Let me just deal with the hon. Member for Carmarthen East and Dinefor (Jonathan Edwards), and then I will happily deal with the shadow Minister. The truth about our energy policy is that the various interventions have conspired to make less power available at a much higher price and that, unless we start to reverse some of those interventions, we will get those pernicious effects. If he is saying that, yes, the price of energy from fossil fuels is variable, depending on the world market price, that is self-evidently true, but it does not mean that it is a good idea to put in something that is very unreliable and intermittent and is dearer than fossil fuel at more or less any realistic market price that might be commanded in the market by fossil fuel.
Dr Whitehead
Has the right hon. Gentleman had the opportunity to go to the national balancing services centre, which is in his constituency, as it undertakes a great deal of work balancing the system? There are substantial constraints on non-fossil fuel as well as fossil fuel inputs to the system, which cause shortages in power delivery at various stages, whether non-fossil fuel or fossil fuel delivery. Perhaps he could reflect on that in his comments.
John Redwood
Of course, as Member of Parliament for Wokingham, I have visited the centre on several occasions, and met the dedicated group of people there. The last time I visited was quite recently, and they were saying to me how much more difficult it is to manage a system that relies on wind, which is becoming more and more intermittent. That is self-evidently true. I am grateful to the hon. Gentleman for reinforcing my point, although I am not sure whether that was what he was trying to do. It used to be much easier when we had baseload power that could be relied upon and that was not interrupted by changes in the weather or the wind, and where the swing factor could be accounted for primarily by the pumped storage systems at Dinorwig. A command could be sent from Wokingham to Dinorwig. The water would come down the hill very quickly, and the kettles could boil in the interval of the big movie or whatever it was that was causing the surge in power demand. It is much more difficult now to call up power if, at the same time, the wind suddenly drops.
That is leading to our having to put in more and more interconnectors with other countries, so we become a net importer of power on a more regular basis, which is not something I value. I want us to have security of energy supply in our own country. We are, after all, an island of coal in a sea of oil and gas, and one would think we could find environmentally acceptable ways of exploiting that and burning it to produce the power we need. As I want an industrial revival in this country, that could well start with us importing less electricity.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
The right hon. Gentleman talks about security. Does he share the concerns that I have and that have been expressed by my hon. Friend the Member for Southampton, Test (Dr Whitehead) about the operation of the capacity market? That is costing us a great deal of money and it is manifestly failing to bring on new gas, which is its central aim.
John Redwood
As I have been trying to explain, the reason we end up with dear gas is all the other subsidised interventions we have been making. We cannot run gas flat out and get the benefits of running it in the most economical way possible. Yes, I would rather have a much simpler market. The market worked a lot better in the 1980s and 1990s when we first set up a pretty open competitive market and power prices came down a lot. We had roughly a 25% margin of extra supply so that we were secure and we never had to worry that, if there was a cold day with the wind not blowing when industry was doing quite well, we would have to tell industry to switch its machines off. We did not get to such a position under that regime.
Now that we have a grossly intervened regime with all sorts of subsidies and priorities that do not reflect the economics of power production, we get to exactly the point that the hon. Gentleman rightly identifies, when we have to bid quite high to get people to provide gas-based power because we cannot guarantee full access to the market on a continuous basis. Of course, the more interventions there have been over the years of Labour and coalition and now the Conservatives, the more changes are needed in that intervention regime as the Government tinker or try to change it to make it work better, and the higher the prices tend to have to be because people become more suspicious if Government have so much power and if Government keep changing their mind.
So it is quite easy to get from a relatively free, successful market to a badly damaged, rigged, subsidised market. It is quite difficult getting from a badly damaged, subsidised market where the interventions are not very helpful to one that works better, because there is suspicion in the minds of investors, and they need longer contracts, bigger guarantees and higher prices to give them some kind of offset as they fear the Government may tinker unnecessarily.
This debate is about the amendment. I support the Government in their view. I want the Government to get on with removing the subsidies to onshore wind, as we said we would do. I hope the Opposition and the other place will not delay that further. We gave plenty of notice of this, and the sooner we do it the sooner we will get a bit closer to having a less damaged energy market.
Philip Boswell
Onshore wind is one of the most inexpensive forms of renewable energy, and it is therefore critical to maximise its input into a renewable energy solution across the UK to enable Scotland and the rest of the UK to meet our climate change targets.
Closing the RO early puts in jeopardy £3 billion-worth of onshore wind investment in Scotland alone for a forecast 30p saving in energy bills. This is a false economy because £3 billion of onshore wind investment equates to 63 million tonnes of CO2. That is from DECC’s own analysis and represents a missed opportunity both economically and in terms of hitting climate change targets.
I spoke at length in Committee on the grace periods and the importance of getting them right, so I will not labour the point here. However, it is important that they are fair and do not disadvantage projects which, through no fault of their own, fall through the crack owing to early closure of the RO.
My hon. Friend the Member for Aberdeen South (Callum McCaig) and the hon. Member for Southampton, Test (Dr Whitehead), who is no longer in his place, spoke eloquently about the real and very difficult deterioration in investor confidence caused by the early closure of the RO. Now that that is proceeding, it must be done fairly and with a view to the critical part that onshore wind plays in the overall energy solution for the UK. We must keep the lights on, which is why we intend to press amendment 8 to a Division.
Lisa Nandy (Wigan) (Lab)
With the important exception of its provisions relating to the North sea industries, the Bill has absolutely nothing to say about the major energy challenges that we face. It constitutes a missed opportunity to mend our broken energy market, and to make good the promise that the Prime Minister delivered four years ago when he told the House that he would legislate to put every household in Britain on to the cheapest energy tariff. It is extraordinary that, during the Bill’s passage, we have learnt that that broken promise has cost Britain’s households an extra £1.7 billion every year, and that, once again, an Energy Bill led by this Government has let the energy companies off the hook.
Despite our best efforts, the Bill is also silent on the growing risk of power shortages. That is astonishing, given that official figures from National Grid show that next winter Britain could be forced to rely on back-up measures and imports from abroad just to keep the lights on. We sought to address that in Committee, especially in view of the doubt that has been cast over Hinkley Point C, the failure of which would blow a major hole in the Government’s energy policy. Where is the plan B? It is not in this Bill.
Against a background of failure—the failure to get new power stations built—it is a great shame that Ministers rejected our attempts to amend the Bill in order to correct that failure and provide incentives for the building of a number of new gas plants by changing the design of the failing and expensive capacity market scheme. Our proposals would also have had the benefit of ending the absurd practice of increasing household energy bills to provide generous handouts for dirty diesel generators. Now, however, there is nothing in the Bill that will help to address the power crunch and secure the investment in the new power stations that we so urgently need.
John Redwood
Will the hon. Lady remind us why, when Labour was in office for all those years, it made no decisions to put in new capacity?
Lisa Nandy
The right hon. Gentleman is wrong. As a matter of fact, he is wrong about a number of other things, but I will stick to the point that he has just raised. It was a Labour Government who initiated the new nuclear process for Hinkley Point C, but, six years after the right hon. Member for Witney (Mr Cameron) became Prime Minister we have seen no further progress. In fact, the only new gas station that has appeared under the present Government was initiated and commissioned by the last Labour Government.
Remarkably, the Bill will actually make our energy security position worse. It seeks to shut down, a year early, a major energy investment scheme that has been helping to ensure that wind farms are built. Wind farms already provide a substantial amount of electricity—enough power for more than 8 million homes every year—but, because of their ideological crusade against green energy, the Government do not want to increase their number even if that means that they are sending our power supply into the red. [Interruption.] Ministers can protest, but the reality is in front of us. It is there for us all to see—not just Labour Members, but Ministers’ constituents, who will pay the price for it. The Government will pursue their proposal even if it means retrospectively blocking projects whose development is well advanced and even if it means ruling out one of the cheapest energy options that are available to us, thus breaking their manifesto promise to cut emissions as cheaply as possible.
The aim of every one of our amendments has been to attract new investment in new energy projects, to create jobs and to improve our energy security, but the Government have rejected all of them. Energy UK, the trade body that represents businesses across the sector, recently called for more clarity from the Government about what was expected from companies on reducing carbon pollution. It stated:
“It is essential the industry gets a clear signal of the focus, direction and speed of travel to 2030 and beyond.”
It is hardly surprising that Energy UK wants more clarity, because while Ministers talk about their action on climate change, they are simultaneously dismantling the clean energy schemes that could help to address the problem. We proposed to amend the Bill, in response to calls from business leaders, by requiring the Secretary of State to offer clarity on the direction and speed of emissions reduction to 2030, but the Government rejected our proposals. Together with other parties from across the House, we tried to close a loophole that will enable Ministers to square this circle through carbon accounting tricks, but that move was also rejected. This all means more uncertainty for investors, rather than less.
I welcome the fact that the Government have accepted the principle, put forward by my right hon. Friend the Member for Doncaster North (Edward Miliband), that we must ultimately build a carbon-neutral economy. I welcome the spirit in which they accepted that principle and the basis on which they accepted it, which was that we need to develop a strategy that will give a clear signal to the top businesses that are supporting my right hon. Friend’s campaign as well as to the leading environmental campaigners who have shown that energy policy need not be contentious.
The truth is that few people in this country beyond those on the Conservative Back Benches doubt the need to act on emissions. Only today, NASA reported shocking levels of global warming, and one top scientist said this morning that we are in a “climate emergency now”. Despite the Energy Secretary’s words today, however, people will be left scratching their heads over what exactly the Government’s plan is to make good on their new commitment and on the promises that the Prime Minister made at the historic Paris summit in December.
Let us take carbon capture and storage as an example. The Government’s own advisers say that without this cutting-edge technology the cost of achieving emissions reduction in Britain could double. Some experts say that, without it, making good on the Paris agreement might even be impossible. As my hon. Friend the Member for Stockton North (Alex Cunningham) pointed out, however, the Chancellor has shamefully pulled the rug from under from businesses that were on the cusp of pioneering CCS projects in Yorkshire and Scotland. Investment and jobs have gone, and the possibility of a new maritime industry in our North sea has been put on hold. We proposed that a comprehensive new CCS strategy should be adopted within a year to undo the damage caused by that decision but, despite strong cross-party support, our reasonable proposal was rejected.
When the Bill arrived here from the other House, it was in a much better state than we now find it in. That makes it difficult for us to support it this evening, but the low oil price means that our North sea industries need and deserve our support. We have all benefited from the revenues produced by North sea oil in better times, and we owe it to those industries to support them now that times are hard. The Bill contains important measures that act on the recommendations of the Wood review which can support workers in this crucial sector of our economy.
Yesterday, with my support, colleagues in Scottish Labour rightly called for the Government to go further and to invest directly in strategically important offshore assets in the North sea. I hope that the Energy Secretary will support that call. The fact is that substantial reserves remain unexploited and it is essential that we work on a cross-party basis to support investment in those untapped opportunities. For that reason alone, we will not oppose the Bill tonight.
However, I say to the Energy Secretary that the poverty of ambition encapsulated in the Bill is increasingly clear, and that it is increasingly untenable to dismantle plan A without putting a plan B in its place, to duck the challenges of the coming century and to set Britain’s face against the opportunities that that century presents. I should like to thank my hon. Friends the Members for Southampton, Test (Dr Whitehead), for Norwich South (Clive Lewis) and for Brent North (Barry Gardiner). Together, we will look to Ministers to do much better than this in future.
John Redwood
I welcome the Bill because it attempts to deal with some of the damage that has accumulated in recent years as a result of the policies of the Labour Government, who neglected the need for more energy and security of supply, and some of the European Union’s interventions.
I welcome the cross-party attempts to breathe some life into the North sea industry, which has been crucial over many years. As many have pointed out, it is going through a troubled time and anything that can be done by the Oil and Gas Authority or directly by the Government is to be welcomed. For example, now is a good time to remove the petroleum revenue tax, which is a rather silly, unpleasant tax introduced by the Labour party for internal political reasons near the beginning of activities in the North sea. It yields no revenue at the moment, so it would be a good time to get rid of it to show that we want normal profit and revenue taxes, not super-taxes, on North sea activities when the good times return. I hope that the Chancellor will bear in mind the needs of the industry in his forthcoming Budget, because things could be done on tax to promote more investment against the background of a weak oil price, which is no great incentive for making new things happen.
I hope that the Bill will contribute towards taking security of supply seriously. The Government regularly tell us that they want our country to be secure—an aim that I hope is shared across the Chamber. An important way for a country to become more secure is through controlling its own energy resources. The United Kingdom is a relatively privileged country geographically, because it has substantial reserves of oil, gas and coal. We have recently discovered the likelihood of new gas reserves onshore, which should be available to exploit sensibly. We also have plenty of water around that allows us to have hydro-type renewables, which are genuinely renewable and continuously available, unlike the unreliable wind, about which we had a good debate earlier. As the Government go about implementing the Bill, I trust that they will have security of supply at the forefront of their mind.
George Kerevan (East Lothian) (SNP)
Where does the security of supply lie in the Prime Minister flying to Paris to ask the French President to fund a nuclear power station that will supply 7% of our electricity, when France clearly will not do so?
John Redwood
That must be worked out between the contracting parties. I have not been urging them to do that, but I wish them well in whatever negotiations are under way. I accept that if they can find a way of producing relatively sensibly priced power on a continuous basis from a nuclear power station, that has all sorts of advantages for the security of supply. I assume that they will ensure that all the technology and the ability to control, repair and maintain the station will rest in the United Kingdom, because we can have true security only if we control the technology and have the industrial resources to be able to build and mend the facility being created. We must also bear that in mind for weapons procurement. If we want a secure country, we need an industry that can support it and is capable in adversity of seeing us through. We cannot rely on imports for everything, and we are already relying too much on imports in the crucial area of energy, so I hope the Bill will help us to stop thinking that we can automatically rely on French electricity and Russian gas indirectly through the European system.
George Kerevan
On that point, after France, the Chancellor of the Exchequer seems bent on handing over the entire British nuclear industry to China.
John Redwood
I trust not. I have not seen all the documents, but I am sure that we will see more of the detail in due course as and when more decisions are taken. If my right hon. Friend the Chancellor is negotiating such a deal, I urge him to ensure that we have control over and an understanding of the technology. I see from the nods from my Front-Bench team that that is exactly what they have in mind. A country does not have secure power if it is dependent on those abroad to maintain a power station and does not understand how to mend it, improve it or make it function at a crucial moment. Of course we need to probe to make sure that the Government are doing the right thing, but we get that security only if we control the technology.
Let me return to the point about security vis-à-vis imports and our own capability. We are becoming too dependent on imported power, and we have to remember that if our imports are to come from the European continent, that area is short of energy in general, and it has a policy to make energy scarce and very expensive. The west of the continent does not get on well with Mr Putin, yet indirectly it relies on his gas, and that is not a strong strategic position to be in. I want our country not to be in any way beholden indirectly to Putin’s gas or to the general network on the continent, which is clearly weakened by the necessity to have Russian supplies in the eastern part of the system. The UK, as an island nation, with access to such riches both onshore and offshore, and with the ability to generate more genuine renewables that are continuously available, should be able to have a secure supply and sufficient capacity in reserve when need arises.
We wish to be a greater industrial power than we are. We are the fifth largest economy in the world but we are very dependent on a very big service sector and our industrial sector has, under Governments of all persuasions in the past 30 years, shrunk as a proportion of it. We still have some great companies and some great technology but we need more of them and we need to broaden the industrial base. In order to have that capability in Britain, so that we can make our own power stations, generators and engines, we need to make sure that we have sufficient and cheap energy to fuel those factories, forges, facilities and blast furnaces.
We meet tonight against the backdrop of our steel industry gravely at risk. One of the main contributory factors to the risk to our steel industry is scarce and dear energy; there are also chronic problems with steel prices and Chinese competition now, but this began with an energy problem. We cannot hope to be one of the big world forces in energy-intensive industries if we do not have more plentiful energy at cheaper prices.
I wish the Bill and the Secretary of State well. The Government must have as their fundamental aim security of supply, because without secure energy a country is very limited in its foreign policy options and has to tailor its diplomacy accordingly. I see us becoming too dependent. We wish to correct our balance of payments, and getting into energy surplus would not only be a very good contribution to that aim, but would strengthen our diplomatic and political security. As we wish to reindustrialise, we need more and cheaper energy. We are not going to get that on a diet of wind farms and speculative renewable technologies that are not yet available, and are very expensive and difficult to scale up. We can get that affordable energy if we extract the oil, gas and coal, and process it in an environmentally friendly way to the extent that can be achieved, if we have more gas turbine power stations and more reliable baseload power stations. We are going to leave ourselves vulnerable and insecure if we depend on a combination of European imports and too many wind farms. I therefore say: may the OGA do well, may it find ways of bringing on stream the new reserves we are just discovering and may it find ways of extending the lives of the existing fields and of the pools of talent and expertise we have, particularly in Scotland, where we need them still.