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5. Mr. David Stewart (Inverness, East, Nairn and Lochaber): If she will make a statement on the decision to grant commercial freedom to Consignia. [25549]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): Commercial freedom for Consignia, which is provided by the Postal Services Act 2000, was widely welcomed on both sides of the House as well as by management and unions. That freedom is essential to enable Consignia to improve its services and performance.

Mr. Stewart: Will my right hon. Friend raise in future discussions with Consignia the issue of rural areas in which the post office is not just a business, but a community centre where postmen and women both deliver the mail and act as social workers? Does she share my view that with commercial freedom comes social responsibility?

Ms Hewitt: Yes I do, and that is precisely why the 2000 Act places on the regulator the primary duty of ensuring that the universal service obligation is maintained. My hon. Friend the Minister for E-Commerce and Competitiveness and I have already discussed with Consignia the steps that need to be taken to maintain not only the delivery service in rural areas, but the rural network. That will prevent avoidable closures, and we are investing substantial sums in it.

Mr. Peter Lilley (Hitchin and Harpenden): Is not the unique achievement of this Government and this Secretary of State driving Consignia—the Post Office—into sustained and substantial deficit for the first time? Does she have any view as to why that has happened? There can be only two reasons: either sales have fallen or costs are out of control. Which is it?

Ms Hewitt: There is a simple reason for Consignia's current state of affairs: the complete failure of the Government of which the right hon. Gentleman was a member to deliver commercial freedom to the Post Office when it started to ask for it 10 years ago. If it had been given commercial freedom when it should have been—when management and unions wanted it—it would have been able to begin the necessary restructuring instead of delaying that until now.

Alongside that is the fact that the growth in volume of mail and parcels has been dropping off, not least because of e-mail. The Post Office and Royal Mail in particular have high fixed costs that they simply do not have the income to cover. That is why management and unions must work together. They need to create an effective partnership to deliver a much better service to their customers and much better conditions to their workers.

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Wind Energy

6. Mr. Bob Blizzard (Waveney): What time scale she expects for the development of offshore wind energy. [25550]

The Minister for Industry and Energy (Mr. Brian Wilson): The Government are vigorously encouraging the development of all forms of renewable energy, including wind energy, both onshore and offshore. We expect offshore wind energy to make a significant contribution to the UK energy mix by 2010. Eighteen offshore wind farm projects, each of 30 turbines, successfully pre-qualified for sea bed leases from the Crown Estate earlier this year. Construction of the first of those projects could begin in 2003.

Mr. Blizzard: Does my hon. Friend agree that offshore wind power is not only an important new energy source with huge environmental benefits, but a great opportunity to create more jobs if British companies can get ahead of their German and Danish competitors in developing, constructing and installing the wind turbine structures? What encouragement can he give British firms in the supply chain so that they have the confidence to make the necessary investment to secure the jobs in this country, particularly in coastal communities with high unemployment such as Lowestoft, which is trying to diversify from oil and gas fabrication? Will he visit Lowestoft to see the pioneering work being carried out by a local firm, SLP, which is involved in a project to build the largest wind turbine in Europe?

Mr. Wilson: I know about SLP, I would be delighted to visit Lowestoft and I could not agree more strongly with the premise of my hon. Friend's question. The link that must be made between renewables and manufacturing is exciting and challenging. This country lost the lead in wind power 20 years ago, because we had a Government who did nothing to support it, and the Danes picked up what is now a £4 billion a year worldwide manufacturing industry and market. We shall not let that happen again with wave, biomass and other technologies in which we still have the worldwide lead. We can catch up on wind power, but to do so we must have both projects and domestic demand offshore and onshore, which means tackling what is obstructing that.

Mr. Henry Bellingham (North-West Norfolk): When the Minister comes up to Lowestoft, will he also visit King's Lynn? He will learn that, subject to planning permission, the Crown Estate has indeed let a contract for 60 turbines at King's Lynn and one for 30 turbines offshore from Cromer. Does he agree that, however desirable offshore renewable wind energy is, it is vital that fishery interests are considered when locations are decided? Otherwise, irreparable damage could be done to the cockle, whelk, mussel, shrimp and crab fishery off the Norfolk coast.

Mr. Wilson: The hon. Gentleman makes a fair point. I am due to meet the National Federation of Fishermen's Organisations to discuss all these matters.

As in everything, we must strike a balance. Of course other maritime interests must be consulted and considered, but we must not have blocking mechanisms,

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and stalking horses of initiative that appear to be environmentally based but whose objective is actually to block renewables projects including this major potential source of energy, offshore wind.

Mrs. Joan Humble (Blackpool, North and Fleetwood): The Minister will know of proposals for not just one wind farm but three off the shores of my constituency. May I reinforce the point about consultation with the local community? In my area there are two issues, tourism and fishing. I hope the Minister will ensure that there is full and frank discussion with representatives of both those interests, especially representatives of the fishing industry, which was mentioned earlier. In my constituency, the proposal is to build the three wind farms on the Shell flat, which is the prime fishing ground for Fleetwood fishermen.

Mr. Wilson: My hon. Friend makes a good constituency point. Of course there must be consultation, and people have a right to expect account to be taken of all possible impacts when applications are considered. What we must not have, however, is institutionalised objection to every project that is proposed. That applies to offshore wind, onshore wind and all other renewables. At some point, a contradiction will arise if we as a Government, and the country generally, pay lip service to renewables without willing the means to deliver the necessary contribution. Obviously each project must be scrutinised, but there must also be a generally positive attitude to the development of the industry.

Mr. Robert Key (Salisbury): The Minister did not answer the question from the hon. Member for Waveney (Mr. Blizzard) about the time scale. How confident is he that the growth in renewables will be fast enough to fill the gap left by the 25 per cent. drop in our baseload generating production with the gradual disappearance of nuclear generation—or will he replace it?

Mr. Wilson: The country currently has a healthy energy mix, and the Government and I have an obligation to ensure that it is maintained. That is why the Prime Minister established the energy review, whose recommendations he has now received. They will be published in the near future.

The earlier part of the hon. Gentleman's question related directly to my previous answer. We will not meet 10 per cent. targets unless projects go ahead, which is why we must maintain the momentum behind renewable energy that exists for the first time in this country. It did not exist 20 years ago, or 10 years ago. I shall not dwell on the failures of the last Government, but we now have a great potential contribution to our energy source and a potentially great new manufacturing industry.

Miss Anne Begg (Aberdeen, South): May I associate myself with what was said by my hon. Friend the Member for Waveney (Mr. Blizzard)? Offshore wind will be important for the diversification of the economy in the north-east, and important to Aberdeen. I can tell the hon. Member for Salisbury (Mr. Key), however, that there is another source of energy that can plug the gap he mentioned. Yesterday's announcement of licences out of round for fields that were previously abandoned, and this morning's announcement of the 20th round for oil and gas

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licences in previously rediscovered and explored fields in the North sea, prove that there is still a future for oil and gas, and for the economy of the north-east.

Mr. Wilson: I could not agree more enthusiastically, having returned from Aberdeen only this morning. We have heard three wonderful announcements. We have heard about the revitalisation of the Argyll field, the first from which North sea oil came ashore, and about the initiation of a 20th licensing round. Late last night, the news came from Canada that Pan Canadian has identified the Buzzard field as the biggest discovery in the North sea since 1998.

We must make the link. This is not some abstract energy issue; it is about jobs. Many thousands of jobs related to North sea industry will be both protected and created as a result of those three excellent events.

Mr. Simon Thomas (Ceredigion): Does the Minister agree with the earlier comment from a Labour Back Bencher that many people are in despair at the proliferation of onshore wind farms, which do not even produce the amount of energy that offshore wind could produce? We need that to happen in the Celtic sea especially. Ireland is taking advantage of that resource and the Irish Government are investing in the biggest offshore wind farm in the whole of western Europe. Should not that be happening in UK territorial waters? What infrastructure will the Minister put in place so that offshore wind farms can be developed off Wales and in the Celtic sea?

Mr. Wilson: On the last point about infrastructure, I have initiated a feasibility study on a sub-sea cable off the west coast, so that all the areas that have the potential to contribute to our renewables industry can be linked to the grid. The grid was geared to a coal and steel economy and we must now change it so that it can also be linked to a renewables economy. I am sure that the hon. Gentleman realises the problem: he wants us to build large offshore wind farms all over the place, but the opposite view has been expressed by other hon. Members. People must take a balanced view and we must act collectively. If we are to have a serious renewables industry, we must be able to drive forward projects without them being blocked for years, sometimes on unreasonable grounds. At the same time, we must protect the right of scrutiny.

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