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22 Oct 2002 : Column 208—continued

Mr. Michael Weir (Angus): Does the hon. Gentleman not accept that the climate change levy argument is a bit of a red herring? Should British Energy finally go under, the inherent cost of dealing with nuclear waste would offset any savings made by the non-emission of carbon.

Dr. Cable: That is absolutely right and it is one very good reason why any attempt to introduce such exemption from the levy would not be plausible. Of course, the sums involved are also much smaller than the losses that are being incurred, so the problem would not be solved.

The second mechanism—the one that I think the Government are taking seriously—relates to a technically complicated area. We must closely watch what the Government are doing. They are discussing offloading British Energy's obligation to reprocess waste through Sellafield and BNFL. There is a perfectly good environmental reason for questioning that process. I do not know whether any hon. Members representing the Sellafield region are present, but there are all sorts of worries about Sellafield and sea pollution. I can understand the environmental factors that are involved, but using such issues as a financial mechanism will simply shift the losses upfront from British Energy shareholders and on to the taxpayer through a publicly owned entity. It is a subsidy by the back door.

Mr. Geoffrey Robinson (Coventry, North-West): I think that the hon. Gentleman is trying to make the point that the switch from the pool system to the new trading arrangements has imposed a heavy burden on nuclear energy. I am sure that I can carry him in that assessment. However, the point is surely that vertically integrated operators, such as EDF—Electricite de France—have been able to buy downstream retail operations and transfer the burden in that way.

Dr. Cable rose—

Mr. Robinson: If the hon. Gentleman will wait one second, I shall finish the point. Of course, BNFL and others have not been able to do the same thing. All that he is doing is trying to transfer a solution from one area to another, but the simple fact is that we need a balanced—

Madam Deputy Speaker: Order. The hon. Gentleman's contribution is rather long for an intervention. Perhaps he could draw his remarks to a close.

Mr. Robinson: We need a balanced arrangement for the pricing of energy throughout the country.

Dr. Cable: The fact is that the people who run British Energy had the option of buying into the downstream. They considered it and walked away. They made a very bad commercial misjudgment and the Government are now expecting taxpayers to pay the bill for the error.

Mr. David Chaytor (Bury, North): Does the hon. Gentleman accept that even if British Energy had

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acquired an electricity retail business, that would not have disguised the essential point, which is that the generation of nuclear power is intrinsically uneconomic and will always remain so?

Dr. Cable: The hon. Gentleman makes the point with considerable eloquence and I thank him for doing so.

In conclusion, the Government are risking very large amounts of public money to support a failed enterprise in the nuclear power industry for very questionable long-term reasons. If they have large amounts of public money available for that purpose—I did not think that they had—there are other ways in which it could almost certainly be used more cost-effectively. For example, they could support energy conservation. There are probably Labour Members present who, like me, were members of the Committee that scrutinised the Home Energy Conservation Bill before it was sunk because the Treasury was not willing to give the relatively small support that was required. If the money is available, the Government could provide pump priming support for renewables.

I hope that I have posed a series of questions to Ministers. I think that they are legitimate questions about where their intervention is leading. I hope that the Minister can answer them, but I fear that the Government are creating a subsidy on a scale that will eventually make the millennium dome look like a very small leakage indeed.

8.16 pm

The Minister for Industry and Energy (Mr. Brian Wilson) : I beg to move, To leave out from XHouse" to the end of the Question, and to add instead thereof:

What we heard from the hon. Member for Twickenham (Dr. Cable) was mainly a restatement of anti-nuclear arguments dressed up in a slightly different context. The thrust of his argument is that the Government have acted wrongly in relation to British Energy by giving the loan. After he had said that, I sensed some confusion in his argument. I believe that the Government have acted absolutely properly in relation to British Energy because we are motivated by two overriding imperatives: the absolutely safe operation of nuclear power stations and the

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maintenance of security of supply. According to those criteria, what the Government have done is both proper and absolutely necessary.

Gregory Barker (Bexhill and Battle): Will the Minister give way?

Mr. Wilson: I shall do so shortly.

I understand that the Liberal Democrats have a big problem on energy policy. They are against lots of things, including nuclear power, and if all those things were withdrawn from our energy mix, the lights would go out and carbon emissions would rise. Therefore, they must also purport to be in favour of things, however hypothetically, to resolve their dilemma. What could be cleaner and cuddlier for them to support than renewables? As we have again heard, they want to outbid the rest of us on renewable targets.

The problem is that the Liberal Democrats did not reach their current mighty heights by being in favour of things. They got there largely by jumping on every opportunistic local bandwagon that happened to be passing. Notoriously, from my point of view, local bandwagons tend to be against renewable energy schemes rather than in favour of them. That is why, in the real world, two thirds of proposed renewable energy developments never happen and why one leading figure in the wind power industry recently said that three issues were obstructing the growth of renewables—planning, planning and planning.

Malcolm Bruce (Gordon): Will the Minister give way?

Mr. Wilson: No; I shall first give the hon. Gentleman something more to feed on.

So what are the Liberal Democrats doing, as opposed to saying? Let us remember that they are saying that we must abandon existing sources of energy, drive nuclear companies into bankruptcy and replace them with renewables targets far more ambitious than the wimpish ones that we are striving to achieve.

Let us go on a little tour of Liberal Democrat Britain, beginning with the Solway Firth, one of the best areas in the country for developing offshore wind. Only a couple of weeks ago, the rainbow coalition of Dumfries and Galloway turned down the Robin Rigg project, with the Liberal Democrat chairman of the environment committee—yes, folks, the environment committee—leading the opposition. A few years ago in Langholm, it took a public inquiry to overcome Liberal Democrat opposition to a five-turbine wind farm.

Let us travel north to Skye, where the leader of the Liberal Democrats is also the local Member of Parliament. One might have thought that that provided an opportunity to show leadership in the movement to triple or quadruple our renewables targets. However, wind farm proposals in Skye have inevitably met with noisy, albeit minority, resistance. The website of the group that opposes wind farms on Skye includes a letter from the leader of the Liberal Democrats. He does not support the opposition, but comes as close as possible to requesting that the application be called in. He writes, XAny proposal will require at the very least the approval of the Highland council and will be closely scrutinised at every stage. I would imagine a proposal of this scale may

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require the approval of the Scottish Executive. I will certainly be monitoring developments closely." With such leadership, how can the renewables revolution fail?

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