Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 320-327)



  320. It was the Treasury that promoted it and you then had to pick up the pieces, is that correct?
  (Mr Wilson) Pejorative —

  321. It may well be but I think that there are a number of people who question the validity of it. Now that everything is up for grabs under a PIU inquiry surely industrial competitiveness and the CCL should be a consideration, the environment and the CCL should be a consideration and whether a carbon tax might be a more satisfactory way of meeting the environmental objectives should be a consideration.
  (Mr Wilson) All I can say is the PIU would not be precluded from commenting on that.

  322. Will you be contributing to such a discussion? Will you be telling us what your thoughts might be on the matter?
  (Mr Wilson) No. The advisory group to the PIU team, which I chair, is meeting on Thursday to consider a draft report. I think it would be premature to comment on anything which is going to be in the PIU Report.

  323. Are you satisfied you are going to have enough information to address that issue that I have just raised given that it has only been in place for six months?
  (Mr Wilson) I think anything to do with energy with fiscal policy is ultimately the responsibility of the Treasury but equally obviously on something as significant as the Climate Change Levy there is constant monitoring of its actual effect.
  (Mr Eppel) On the Climate Change Levy and agreements, the Climate Change agreements are the responsibility of DEFRA and in that context for the energy intensive sectors—and there are 39 sectors with a total of 43 agreements covering some 13,000 facilities, so there is quite a significant bulk of energy intensive industries connected to these now—what we have seen is the impetus provided by the Climate Change Levy has been a very real one for those industries to look at the potential for energy efficiency. I think that has been very encouraging. Whether the total energy efficiency potential is realised through that one could discuss but certainly that has been a real spur for those industries to look at potential for energy efficiency including combined heat and power.

  324. We wanted to ask you about fuel poverty but we are conscious that the strategy is being produced tomorrow so I think it might be more appropriate if we were to, maybe, send you some written questions on that once it is published if we think there are any areas we need to cover on that.
  (Mr Wilson) Yes.

  325. Can I just ask one last point. When we had some people here from the nuclear industry last week, they seemed to make the point that nuclear at the moment is a realistic option, it will require some kind of favourable treatment in the way that renewables gets support, whether it is by a fiscal instrument or by an obligation or whatever. Is that part of your consideration to look at obligations? The coal industry have also promoted that as an idea as well.
  (Mr Wilson) Again, Chairman, I do not want to be unhelpful but the future of nuclear power is obviously a big part of the PIU study. I am not going to say anything which pre-empts their recommendations. Having said that, the PIU Report is to Government rather than of Government and any measures which the PIU recommends will be assessed through the normal policy making processes. I think it is worth recalling that there has never been a nuclear moratorium in this country, it is simply that companies have not chosen in the past 20 years to bring forward plans for new nuclear power stations. The question of whether new nuclear power stations are built or whether the life of existing ones are extended will be conditioned by the context which Government creates and that will in turn, I think, be influenced by the PIU Report. Obviously the nuclear industry, like everyone else just now, is lobbying, which it is perfectly entitled to do, and it has made its position clear in submissions to the PIU Report but exactly how much of that case has been accepted by the PIU team will become apparent very soon.

Dr Kumar

  326. Minister, just a short one. You said that the report is to the Government from the PIU. Can you say what is going to happen to the report once it is submitted to the Government? What will happen to that report then?
  (Mr Wilson) The exact sequence of events has not been determined yet. The PIU is obviously part of the Cabinet Office and the report is to the Prime Minister. The intention is still that the report will go to the Prime Minister by the end of the year. At some stage the report will be published and then the subject, I am sure, will stimulate very intensive debate. Then it will be up to Government across Departments and centrally to decide what to do on the basis of the PIU Report and what parts of it to accept and give priority to.

  327. The point the Chairman mentioned about the Climate Change Levy and all those, we do not know, everything is in the air, we may have to wait a further long time for action on that?
  (Mr Wilson) You certainly will not have to wait a further long time for the PIU Report, the whole thing has been done within six months which has been a very intensive period of activity. I have no doubt that in some areas the PIU team will and should say that these are areas which need further work. You do not compile the definitive volume on British energy policy in six months so where further work is needed then let us have further work. I would also hope that there are pointers in it which will lead to early action.

  Chairman: Thank you very much. If there is anything else we will write to you.

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