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Richard Younger-Ross: I hope that if I am the straight man, the Minister is not the comedian.

A company in my constituency, British Ceramic Tiles, has a CHP unit that it is not using because of NETA, so it is sitting there wasting away. Reform of NETA is urgent if CHP technologies are to progress.

Mr. Wilson: The hon. Gentleman cannot make the ex cathedra statement, "It's all because of NETA." Other factors affect CHP, and I should be pleased to receive correspondence from him about the particular concerns of the company, or, indeed, for the company to talk to my officials or Ofgem to try to identify more closely what the mix of problems is.

Nuclear power makes an important low carbon contribution to our energy mix. While the PIU report stressed the potential for renewables, it also recognised that nuclear, which provides around a quarter of the UK's electricity, offers a low carbon source of electricity which is larger than any of the other foreseeable options. The report also acknowledged that nuclear is effectively an indigenous energy source, and it therefore argues that there are good grounds for keeping the nuclear option open and for taking practical measures to do that.

The key issues for the consultation are how confident we can be that other low carbon options will be available, and what needs to be done to give substance to the words, "keep the nuclear option open". In parallel we also need to consider how quickly we can find an acceptable long-term solution to the problem of managing nuclear waste effectively, although that is overwhelmingly a legacy issue, which is added to only incrementally by current and future generation.

Mr. Tom Watson (West Bromwich, East): My hon. Friend will be aware of the 1976 royal commission chaired by Professor Flowers, which said that the nuclear industry should be extended only if we found a solution for the long-term management of nuclear waste. Does he agree that if we are to get public consensus on how to achieve that, Nirex must be totally independent of the industry, and that we should consider setting up an independent foundation that has an eye not on shareholder value but on the long-term management of waste?

Mr. Wilson: The status of Nirex is a secondary issue. I agree that there has to be progress in resolving this issue

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if we are to gain public acceptance. This is a complex public debate, and the better people understand the difficulty of reaching our Kyoto targets and fighting climate change without the nuclear industry, the more balanced that debate will be. Of course waste is a big issue, and that debate will continue.

Dr. Ladyman: I wonder whether my hon. Friend has studied the Finnish experience, in which consultation identified sites and methods of disposing of waste material and gained reasonable public consensus. Will he consider that experience to see whether it could be repeated here?

Mr. Wilson: I am familiar with the Finnish experience, the Japanese experience, the Canadian experience and the American experience, and they all lead to the conclusion that nuclear should be replaced with nuclear. Of course there are other experiences, and they too can form part of the consultation.

Although it is largely outside my direct responsibilities, transport accounts for a major proportion of our energy use, and it too has a key role to play in the shift to a low carbon future. The Government have issued and invited comment in our draft powering future vehicles strategy for promoting the development, introduction and take-up of low carbon vehicles and fuels. I cannot over-emphasise the importance of transport to this debate. One point that stands out in my mind is that if we did all the things that we say we will do in our energy policy but did nothing on transport, carbon emissions would still have risen by 2050, rather than fallen.

I cannot finish without saying something about coal, because of the interests of my colleagues. The PIU report sees coal as having a continuing medium-term role to play in the energy mix, but in the longer term, I emphasise, its contribution, too, will depend on finding ways of handling the CO 2 that it produces. The cleaner coal technology review, published on 5 February, reached similar conclusions. It sets out the work that is needed to remove a number of legal, practical and environmental uncertainties relating to CO 2 capture and storage. I very much want to make progress on clean coal technology, not only for domestic reasons but because globally it has at least as much to offer in reducing carbon emissions as any other strategy that might be conceived. I am acutely aware that there are other more imminent coal-related issues that will be closer to the forefront of the minds of some of my colleagues. I look forward to responding to any points that are raised when I wind up the debate.

It is clear that although energy policy is complex, it is also fascinating and has important implications for us all. There are a range of key objectives: meeting our environmental obligations, guaranteeing security of supply, ensuring competitiveness and contributing to our social objectives, both domestically and internationally, as a Labour Government. All those imperatives have to be prioritised, and as far as possible, made compatible with each other.

I have done what I always said that I would not, and spoken for too long, but I hope that it is acknowledged that in doing so I have taken many interventions and, I hope, dealt with points as we have gone along. In the spirit of wanting an open and informed debate, I look forward to hearing contributions from hon. Members on

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both sides of the House, and I urge everyone to participate in the consultation exercise. This is an exciting period in energy policy and we can all contribute to it, in the interests of this generation and of our children and their children.

2.59 pm

Mr. John Whittingdale (Maldon and East Chelmsford): I welcome the fact that the debate is taking place. We had originally expected that we might have a debate or at least a statement when the energy review was published in February. When that did not happen, we hoped that there would be an opportunity to discuss these issues when the Government published their consultation paper in May, but that also did not come, so my hon. Friend the Member for Salisbury (Mr. Key) tabled an early-day motion calling for the debate, which was signed by some 40 Members.

Today's debate is very welcome and long overdue. Nevertheless, with all due respect to the Minister of State, whose expertise in this area I fully acknowledge, I regret that the Secretary of State did not think it appropriate to open the debate.

I consider it at the very least unfortunate that the Government have chosen to hold the debate on a day when the members of the Select Committee on Trade and Industry are absent on an overseas visit that has been planned for several months. The Select Committee's report on security of supply is rightly one of the documents listed for today's debate. Although I may not always agree with the hon. Member for Ochil (Mr. O'Neill), his Committee has produced a valuable report, and I fear that the debate will be the poorer for the absence of the hon. Gentleman and his colleagues.

On the face of it, we in the United Kingdom are relatively fortunate. We are blessed with our own natural resources of oil, gas and coal. We have a high level of diversity and supply. We have more generating capacity for electricity than we need, and since privatisation, we have competitive energy markets that have helped to bring about a fall in electricity prices for domestic consumers of almost 40 per cent. in real terms. If we look further ahead, we can already see that some of those advantages will not continue indefinitely. The Government are therefore right to say that we need to consider what actions must be taken now to avoid problems in the future.

In considering energy policy, we should bear in mind four key objectives: economic efficiency, security of supply, environmental benefit, and the relief of fuel poverty. The performance and innovation unit report is a valuable document, as it sets out a large part of the context in which decisions must be made, but it does not fully address certain fundamental questions about the balance that needs to be struck between what are sometimes competing objectives.

At present, our electricity needs are met roughly in the proportions 40 per cent. sourced from gas, 30 per cent. from coal, 25 per cent. from nuclear and 5 per cent. from renewables and imports. However, the domestic production of coal is falling and it is becoming steadily less viable to exploit our remaining stocks. Our nuclear stations are reaching the end of their working lives. Just 12 weeks ago, I attended the ceremony to mark the most recent switch-off of a nuclear power station, which was at Bradwell in my constituency. Within 20 years, all but

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one of the remaining nuclear power stations will have closed, and nuclear's contribution to our energy mix will have fallen to just 7 per cent. unless there is replacement.

On present policies, it is likely, as we have already heard from several Members in the debate, that instead of the present diversity of supply, within 20 years we may be dependent on gas for 70 per cent. of our energy needs.

Mr. Drew: Is there not an element of hypocrisy involved? Anyone who wants to discuss what will happen when we import gas from eastern Europe ought to speak to representatives of Ukraine and Russia, both of which have made it abundantly clear that they will use the investment stream to build nuclear stations in their countries. In other words, all we will be doing by importing gas is encouraging nuclear industries elsewhere. That is a strange way of running future energy policy.


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