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The bottom line is that companies in this country could be penalised for expanding their production to
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meet rising world demand, while companies in other countries with higher levels of carbon emissions expand their production to meet the shortfall. The perverse consequences of that would be the loss of production here coupled with an overall increase in the level of carbon emissions internationally.

I want to suggest a solution, which I know the industry is putting to the Minister and which involves adopting a sectoral approach. It would not penalise investment or increase production, but it would relate carbon credits to energy efficiency. In steel, it would mean that a series of CO2 emission factors could be calculated and then averaged according to the type of process used. At the end of the accounting period, each company would have its actual emissions assessed against its baseline figures and multiplied by the volume of steel produced. If a company’s performance was worse than the baseline, it would have to buy allowances, and if its performance was better than the baseline it would receive allowances for sale, thereby incentivising companies to reduce emissions and to increase profits. Furthermore, by recalculating the baseline downwards after each accounting period, the target would get tougher, which would provide a long-term drive for greater energy efficiency and a model that would enable companies from other countries to join.

I welcome the current dialogue between my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and business to develop a unified position for phase 3 of the emissions trading scheme by 2012. I hope that he will take my remarks and argument on board as the most coherent way to make an international impact on carbon emissions.

On the role of environmental technology and renewable energy in reducing carbon emissions, given the inevitability of global manufacturing expansion to meet the demands of developing economies, it is essential that we offset the increased carbon emissions from industry by reductions through environmental technology and consumer behaviour. There is a danger that environmentally friendly lifestyles will become synonymous with a reduced quality of life. People want to fly and travel, and although improvements in public transport can help, it is ultimately changes in technology that will assist lower carbon emissions without dramatic changes in people’s quality of life. Education in more environmentally friendly lifestyles is necessary, but provision within the climate change Bill must go with the grain of people’s aspirations and not frustrate them.

My region, which is known as the black country, has been synonymous with heavy dirty industry, but it is now intent on driving the development of new environmental technologies. The Black Country chamber of commerce is holding an environmental technology summit in the new year with the intention of making the region a world leader in the field. Although research and development are vital to develop new products to reach those goals, there is a whole range of other Government functions that need to be changed to assist the process.

A company in my constituency, Forkers Ltd, is in the vanguard of geothermal technology and heat pump products. The earth is a huge battery of energy that could be used to fuel new buildings. Amazingly, the use
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of geothermal energy in this country is very low at the moment, especially in comparison with Scandinavia and countries such as Iceland. Given the difficulties in developing wind farms and other forms of renewable energy, the Government need to concentrate on geothermal energy. We need to work with planners and developers and examine building regulations to ensure that where the technological potential exists, new buildings use geothermal energy to conserve energy from other sources.

RegenCo, the vehicle for the regeneration of the black country, has ambitious plans for an environmental technology park near West Bromwich, but it needs cash and a commitment from local planners to prepare the site for development and to line up companies that are pioneering environmentally friendly and recyclable products. I trust that the Government will ensure that the regional development agency, working with the local agency, will develop that resource and play its part in changing the image of the black country from an area with traditional industries to one that is in the vanguard of new technologies.

In conclusion, I congratulate the Government on both commissioning the Stern report and responding to it. Climate change legislation must reflect the scale of the challenge and cut across all Departments, because the matter is not only DEFRA’s responsibility. We need investment in new technologies, education on changes in lifestyle and changes in planning priorities and, possibly, in tax priorities, too. It is for Departments to take a lead and, above all, it is for Britain to be a driver of change in both Europe and the rest of the world.

6.46 pm

Mr. Alex Salmond (Banff and Buchan) (SNP): I will address some of the points made by the hon. Member for West Bromwich, West (Mr. Bailey) on carbon abatement, but first I want to express on behalf of the Scottish National party and Plaid Cymru our condolences to the service families who have been mentioned by hon. Members on both sides of the House. Our thoughts are with those families and all those who have experienced recent losses in the current conflict.

Our thoughts are also with the families of all right hon. and hon. Members who have died since the previous Queen’s Speech, and I hope that the House will forgive me if I mention just three of them. First, Rachel Squire was an outstanding Member of Parliament. I never heard her in or outwith this place make a cheap political point in any political discussion—that can be said of few of us in our political careers—which was remarkable. Secondly, I had many conversations with Robin Cook about horse racing, and I wish that I had had more conversations with him about other matters. Thirdly, I think that I disagreed with every single thing that Eric Forth ever said politically, but I find myself missing all those comments that I disagreed with. We offer our condolences to all those families.

Some have looked for the mark of Brown—the influence of the Chancellor—in this year’s Queen’s Speech. It is difficult to detect in most of the legislation, some of which seems familiar—the
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Government are going round and round in a “Groundhog Day” process. However, I detected the hand of the Chancellor in the two opening speeches of this debate. The first speech was made by a Welsh Member, who had a lot to say and who bemoaned Plaid Cymru and all its works—he did not like the Conservative party either. The second speech was made by a Scottish Member, who bemoaned the SNP and all its works, so it seems to me that there was an element of Brown management in the Queen’s Speech debate.

The speech by the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch, East (Rosemary McKenna) had the virtue of being humorous, and it was successful for that. However, I was puzzled by her point that she has relatives in England, Wales and Ireland, which she claimed is an argument for the United Kingdom. As I understand it, her relatives are in the Republic of Ireland, which is an independent country, but I do not think that the hon. Lady’s contact with those relatives has been inhibited as a result of Irish independence.

A few years ago, the Prime Minister addressed the Dail, where he pointed out that Ireland is an outstanding example of a small nation that leads Europe in so many ways. He received a standing ovation, which he is unlikely to receive ever again—at least in this House. I have often wondered why the Prime Minister cannot see his way to making the same point about Scotland’s potential as a small European nation. In so many things, there is one rule for Ireland and another for Scotland.

I agreed with the right hon. and learned Member for North-East Fife (Sir Menzies Campbell) about his proposal for a freedom Bill—I call it the “Braveheart” Bill—that the Liberals intend to introduce. I am sure that I will avidly support that Liberal initiative, which I might take in directions not suspected by the right hon. and learned Member for North-East Fife.

There is no absolutely pleasant way to say this, so I shall say it anyway: I want to defend the right hon. and learned Member for North-East Fife against the attack made by the hon. Member for Middlesbrough (Sir Stuart Bell). For those hon. Members were not present at the time, the suggestion was that the right hon. and learned Member for North-East Fife was lessening support for service families because he was arguing a case against the war in Iraq. I am sorry that the right hon. Gentleman is not present to hear this directly. I doubt that there is a family in Scotland—even more so perhaps than in many other parts of this kingdom—and certainly not my family or that of the right hon. and learned Member for North-East Fife, who have not had immediate relatives killed in action or indeed serving in the armed forces. The right hon. and learned Gentleman’s family member may be known to many of us, because he was played by Sir Sean Connery in “A Bridge Too Far”; that was his father-in-law. The reason some of us are so hostile to what we regard as avoidable conflict is that very many of us see the consequences of such conflict.

One of the proudest moments in my recent life occurred during the play “Black Watch”, which took this year’s Edinburgh festival by storm. It was the huge success of the festival, performed in a drill hall in Edinburgh. It was a squaddie's-eye view of the history of the regiment, throughout the conflicts of previous generations right back to the foundation of the
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regiment. It was an outstanding production by the National Theatre of Scotland. The company was kind enough in that production to show an extract from a parliamentary debate, from one of the speeches that I made about the war in Iraq. Those of us who argue that position really need no lectures from the hon. Member for Middlesbrough about our support for service people and service families, or our support for troops in action. And if people cannot argue a position in favour of a conflict without recourse to that sort of cheap argument, they would be better not to argue their position, against the right hon. and learned Member for North-East Fife or anyone else.

In my opinion, one of the outstanding television moments of the 1980s was the confrontation between John Nott, as he was then, and Sir Robin Day on the Falklands conflict. Sir Robin asked why anybody should believe the then Defence Secretary because he was going to be a “here today, gone tomorrow” Defence Secretary. I remember it perhaps because John Nott, who was about to retire from politics, in a live interview flung off the microphone, said “I have had enough of this” and stomped out of the television studio. As I watched the here today, gone tomorrow Prime Minister during today’s debate, I was dying for him suddenly to say, “I have had enough of this” and march out of the Commons. But no such luck. Chance would be a fine thing. He is clinging on by his fingernails, but we are in an unprecedented situation. As far as I know, never before in the history of this place or politics has a Prime Minister introduced a Queen’s Speech when everyone knows that he will not be around to see the legislative programme through.

There is a variety of opinions about how soon that departure should be. The Scottish First Minister revealed to the Financial Times, and indeed on television at the weekend, that his preference was now for the Prime Minister to stay in office. I am sure that the Prime Minister will take that submission carefully into account when he decides his time scale for leaving either before or after the Scottish elections. Despite my best efforts to accelerate the departure in recent weeks, it looks as though the Prime Minister is clinging on there. So we are on unprecedented ground.

We are also in uncharted waters because, as I understand it, the current position of the Prime Minister is that when he is interviewed, perhaps under caution, by the Metropolitan police he still intends to stay in office in Downing street—no doubt on the grounds that everybody must be innocent until proven guilty. If things come to such a pretty pass I think that Opposition Members will insist on a jury trial, because a jury is an essential defence of people’s rights, even up to the Prime Minister. We are in unprecedented times and in uncharted waters, but no one can underrate the Prime Minister’s determination to stay in office. Of course he could claim that these things illustrate that he has not lost his appetite for constitutional innovation; certainly it is innovative constitutionally for a Prime Minister to stay in office under these circumstances.

As I promised, I shall say a little about my hopes for the climate change Bill. It is remarkable that, on a measure that I thought would attract consensus across the House and given the scale of the challenge that is
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faced, the front page of today’s The Independent should point out that all the political parties in these islands are on one side and the Prime Minister is standing on the other, shoulder to shoulder with the United Kingdom Independence party, in opposing an annual register of the impacts of carbon emissions. I am not certain why the Prime Minister is so adamant about that; no doubt we shall find out during the passage of the Bill.

Rob Marris: May I gently correct the hon. Gentleman on his use of language? The front page of The Independent was about whether there should be annual targets; it is that which the Government have said that they do not support. Annual reporting was specifically mentioned in the speeches today. The Government support annual reporting, in contradistinction to annual targets.

Mr. Salmond: I accept the correction. I am just fascinated by the fact that when the Government have so many targets on so many things, something of such importance should not be set targets, like every other facet of human existence.

Mr. Evans: Does the hon. Gentleman accept that the Government have missed so many targets that we can understand why they would not want any more? And if they are going to have annual reporting, what will they report on if there are no targets?

Mr. Salmond: That is an excellent point. Aha!

I think my main point stands, in terms of that dramatic front page in The Independent. I cannot understand why the Prime Minister has chosen to isolate himself on this point on a measure on which, presumably, he is trying to generate cross-party consensus given its importance. Certainly that has been the rhetoric. I am interested to see whether the rhetoric on this will match that on other policy issues and the Government's attitude to other matters.

Let us take for example globalisation, for which the Prime Minister is a huge enthusiast, as is the Chancellor. I have here a press cutting that describes what is happening at present in Annan in south-west Scotland. Young's Seafood is cutting 120 jobs in a processing plant. It processes Scottish langoustines—prawns to the uninitiated. We are now calling them Scottish langoustines because they command a substantial premium in the French and Spanish markets. The proposal is to send 600 tonnes of langoustine each year to Thailand, where they will be processed, and then sent back to Scotland for packaging and sent to France or Spain and other lucrative markets. That is the impact of globalisation and the fact that people in Thailand are paid 25p an hour. The carbon impact of what seems a crazy policy is that 47,500 tonnes of carbon dioxide are produced by each shipment that goes across the planet and back again to be re-exported.

I have this question for the Government. In their enthusiasm for globalisation, it should be accepted that some aspects of globalisation will conflict with carbon emissions targets aimed at saving the planet. And in a market that is created— [Interruption.] I can hear another correction coming from the hon. Member for
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Wolverhampton, South-West (Rob Marris). And in a market that is created in these matters, the Government must have some kind of—in the Prime Minister's old phrase—joined-up government.

I want to offer a couple of additional illustrations of this point. The hon. Member for West Bromwich, West spoke about the carbon market and carbon abatement. At present there is the potential for the north-east of Scotland, and indeed the north-east of England, to lead technology on carbon capture and carbon abatement. At Peterhead we have a billion-dollar project that is just awaiting the signal on how carbon reduction will be treated within the climate change or other legislation. That is a project for the separation of methane and carbon dioxide into hydrogen, with a hydrogen clean-burn power station—not a hydrogen nuclear station but a hydrogen gas station: the onset of the hydrogen economy. The carbon dioxide would then be put back into an oilfield in the North sea, getting 20 million barrels of extra oil out of the oilfield. It is a billion-dollar investment that would impress even the hon. Member for Wolverhampton, South-West. That project is available, awaiting a signal. It is world-leading; and perhaps, because carbon capture offers immediately huge substantial gains in terms of carbon reduction, it might even be planet-saving.

I just hope that the policy of climate change is carried through into all aspects of Government policy. For example, Ofgem charges for electricity connections to the grid—we are not talking about transport costs—at the rate of £20 or more a kilowatt in the north of Scotland where the opportunities for alternative renewables and carbon capture technology are huge. In inner London, where the opportunities for windmills and other alternative energies might exist but are much fewer, there is a £6 a kilowatt subsidy because Ofgem is keen to encourage new power stations in inner London, despite the fact that resource economics tell us that vast opportunities lie elsewhere. It is another example to show that, if we want to seize the opportunities, Government policies must be connected or wired up properly.

Mr. Ian Taylor: The hon. Gentleman is raising some interesting points that too often get forgetten—I am sorry, I have been waiting too long to speak and I mean get forgotten—in the debate on climate change. Carbon sequestration is an absolutely fascinating technology and it is viable, but it has not had the attention it deserves. The problem of integrating renewables into the national grid, however, is a very serious one. It is extremely complex and it cannot happen in only one direction. Wind farms have to be working all around the country; otherwise, it causes serious technical problems with the grid itself. Those problems have not been adequately discussed.

Mr. Salmond: But that is not the reason for the locational charging of Ofgem. The reason is that it has calculated where it wants power stations to be and is sending out market signals. A former Member of the House, David Ricardo, arguably the greatest economist England ever produced, developed a theory of comparative advantage and put it forward here. Ofgem economists seem never to have read David Ricardo, as if he wasted his time in developing his economic work.
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Ofgem argues that it is entitled to send out market signals so that it can dictate where power stations should or should not be. That is nonsense. Transportation costs across the grid are not acceptable, but Ofgem is trying to influence where power stations should be located. It is a disastrous policy. According to Talisman Energy, which is developing a gigawatt—1,000 MW—deep offshore wind farm in the Moray Firth, that policy is the single greatest impediment to the commercial viability of its project. It is a daft policy, which conflicts with other policies and needs to be changed.

Mr. Weir: Does my hon. Friend recall that he and I went to visit Ofgem to put those very points to it? We specifically asked whether it supported the Government’s proposals for renewable energy, but it would not answer. It is obsessed wholly with its own idea of the market rather than having any good ideas about how to further renewables or find other ways of tackling climate change.

Mr. Salmond: My hon. Friend is absolutely correct. The cock crowed three times for Ofgem economists, who three times refused to acknowledge that the Government’s own targets for renewable energy should, when it came to decisions such as locational charging, play any part in their framework. That is nonsensical, as I have said. Hon. Members have been waiting for some time. I see that there is plenty of time left on the clock, but I have only a couple of further brief points before I come to my final main point.

I had an exchange earlier with the right hon. Member for Leicester, East (Keith Vaz), who was kind enough to say that he agreed that the Home Office was perhaps suffering from a surfeit of legislation and a lack of implementation. After a quick check, I found that out of 57 Home Office Bills over the last 10 years, only 36 applied to Scotland. We have missed out on 21 of those marvellous pieces of Home Office legislation. I have to say that I do not feel that Scotland is any less safe as a result of missing out on those legislative provisions.

I believe that the administrative “not fit for purpose” argument may have some relationship to the legislative flow, which must be committing huge amounts of Home Office administrative time in order to cope with what amounts to an average of five and a half pieces of legislation every year. The permanent revolution in legislative competence over those last 10 years cannot be contributing to the efficiency of the Department. There are many other issues, but that is certainly one of them and we hope that, at some stage, the Government will recognise it.

Mr. Robathan: The question I ask is, who would want to be a judge? The law keeps changing dramatically in so many ways every year, so it must be extremely difficult for a sensible judge sitting in court in Scotland or in England to remember the changes in law in any particular year.

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