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Lord Goodlad: My Lords, it is a great honour to be a Member of your Lordships' House and to participate in your deliberations for the first time. After six years away from the Palace of Westminster, five and a half of them in Australia, I have been made to feel very much among friends. Indeed, some of my noble friends of very long standing have reacted to the warmth of my greetings on return with a surprise that clearly betokened an unconsciousness of my period of absence. Like others before me, I have been greatly struck by the kindness and efficiency which officers and officials of the House have shown in helping a new arrival to adjust to unfamiliar surroundings. It is very much appreciated.

My predecessor as Member of Parliament for Northwich, who represented the division from 1945 to 1974, was the late Sir John Foster. When I was adopted in 1973, he said to me, "You will find that the people here are not much interested in politics. They are much more concerned with good humour and good manners". Your Lordships' House is proof positive that politics, good humour and good manners can happily and constructively co-exist.

I congratulate my noble friend Lady O'Cathain on her choice of Motion and on her moving of it and thank her for her very kind words. I recollect our shared privations in eastern Europe many years ago. I also congratulate the noble Lord, Lord O'Neill, opposite whom I sat for so many years, on a knowledgeable and authoritative maiden speech.
 
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I also acknowledge the enormous authority of the noble Lord, Lord Tombs, who made such a great contribution to the industry during his career.

Long-term energy supply is a matter of vital importance to us all. As we have heard from other noble Lords, the country will soon be a net importer of oil and gas. Our existing nuclear power stations and thermal power stations will reach the end of their working lives over the next few years, with the exception of Sizewell B. Increased energy efficiency, which has been promoted by governments for many years and practised for economic reasons by industry, and renewable sources, on which governments and the private sector have spent great sums on research, are unlikely to meet more than a fraction of our growing energy needs. Fusion remains, at best, a distant prospect.

Other countries, such as India, China and France, are reacting to the ever-growing pressure on the world's limited reserves of fossil fuels and rising energy demands and costs by building new nuclear power stations. For reasons adumbrated by the noble Lord, Lord Tombs, I believe that, despite the difficulties, we should do the same.

As international trade expands, the world and our own economy will become ever more vulnerable to supply disruptions. Climate-destabilising carbon dioxide emissions are likely to continue to increase, raising ever harder questions over the sustainability of our current energy arrangements. Many of the world's poorest people, currently 1.5 billion, will continue to lack access to the basic services provided by electricity which we take for granted.

We have in this country a world-class nuclear capability. It is vital that it is encouraged and nurtured, both in our own interest and in that of the wider world. Building a new generation of nuclear reactors will require public support. Such support will need more widespread understanding of the work of the Nuclear Decommissioning Authority and the Committee on Radioactive Waste Management. Public opinion towards nuclear power is now historically at a relatively favourable level, but the undecided currently hold the balance. A similar pattern is apparent in Parliament, although support is less strong than once it was, and is inconsistent between the parties.

There is still an atmosphere of mystery—some even say witchcraft—about nuclear power. It is my belief that complicated issues can be simplified without sacrificing truth or accuracy. I remember giving evidence to the House of Commons Select Committee on the Environment on the subject of the disposal of radioactive waste, a very few days after taking office as a Minister in the Department of Energy. My compendious departmental brief, which reached me shortly before the meeting was due to take place, was of a density equalled only by its opacity. When the first complicated question from the committee came my way, as I dwelt at generous length on the importance—indeed, centrality—of the question while my mind groped for a reply, an unseen hand from behind placed before me a piece of paper suggesting an answer of
 
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pellucid simplicity. The truth was revealed to the committee. In fairness, I see that the committee is still addressing itself to the identical subject matter over 20 years later.

Immediately after the Chernobyl disaster in the mid-1980s, public support for civil nuclear power plummeted. A few months later, thanks largely to the work of the then newly established Nuclear Energy Information Group, ably led by Dr Tom Margerison, public support had climbed to previously unachieved heights. I believe that what people want are unvarnished facts and clear policy options, simply stated. That is what they deserve, and that is what I hope they will receive. Aspects of our future will depend on it.

12.25 pm

Lord Woolmer of Leeds: My Lords, it is a great honour to follow the maiden speech of the noble Lord, Lord Goodlad. He will not remember this but, for the one term that I was in the other place in 1979–83, the noble Lord was in his second term, as it were, of what turned out to be 25 years of distinguished service in the House. At the same time my noble friend Lord O'Neill also entered the other place. It was also a privilege to hear his speech today.

The noble Lord, Lord Goodlad, served with distinction in the other place. I recollect, going back many years, that he was a spokesman on energy and foreign affairs. He has the unique distinction, certainly under the Labour government of 1979, of being the only opposition politician appointed to an ambassadorial high commission post abroad. He served there with the distinction that we expected. We will benefit greatly from the noble Lord's wisdom. We look forward to hearing many more speeches from him.

I touch briefly upon the work of Sub-Committee B of the European Union Committee. Two years ago that committee considered the whole question of the security of gas supplies. At that time the committee's report stated that the succeeding three winters posed the danger of a tight situation arising in that regard, and that it could be even more serious. This winter could pose a similar danger. I share the view that politicians should never scaremonger or exaggerate but should exercise careful judgment. However, a severe winter is forecast this year by independent forecasters. Such a winter could and, in my judgment, would result in genuinely severe disruption to parts of industry. Households are protected as a matter of public policy but business and industry are the risk bearers in the marketplace. Two years ago we warned of such a danger arising. It would be interesting to hear my noble friend the Minister say a few words on his view of that situation as people outside the Chamber are always worried about the immediate position as well as the long term.

Sub-Committee B stated in its report that in the longer-term gas supplies globally were more than adequate to last many years ahead as far as one could see, but that prices would rise. We acknowledged that
 
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there were some problems in that regard. We said that we needed to spread political risks, that prices would rise and that, critically, liberalisation of markets in Europe needed to be genuine and implemented. I do not believe that that latter step has been taken since we published our report. Consumers and businesses in this country have suffered the consequences of that as regards prices. Many major European generators act as quasi-monopolists. They are vertically integrated and able to spread their prices throughout the energy chain and over time in a way that we cannot. They buy on our liquid markets, push up the price—which in the rest of Europe is largely oil-linked—and the consequences of that hit our businesses and consumers severely. Although this touches only the immediate next few years, it would be extremely helpful to hear my noble friend the Minister say what progress is being made under this presidency to secure the liberalisation in the European energy markets that should have started for businesses last year. It should have been implemented already.

I turn to wider issues of energy policy. Under this administration—going back to 1997—and before that, energy policy was based on market forces for very good reasons: the energy market in the UK had not been liberalised, there was excess capacity, there were inefficiencies and prices were higher than they need be. There is no doubt that over the past few years the liberalisation of energy markets in this country has done a great deal for those markets. On the other hand, things have probably changed a little since then. What has changed? In the short term global energy markets have been a lot more volatile in the past couple of years than one would have said would be the case five or even three years ago.

Even my own Select Committee, apart from that volatility, did not really take on board the enormous consequences of the growth of India and China in the years ahead. This coming winter may—let us hope that it does not—remind us that markets can do some things but they can lead to problems. There are problems in markets as well as benefits.

What about the longer term? It is always worth reminding people that this winter, a reasonably cold winter, coal will supply 45 per cent of the peak load and nuclear 23 per cent. Some 68 per cent of electricity generation this winter will come from two energy sources that the Liberal Democrat Benches today said they want to close down. Do people really want to close down energy sources that contribute nearly 70 per cent of electricity production this winter? It is a brave statement to say that you will sweep that away without regard to balance. Can we have balance in our energy mix? We have a balance at the moment—we have gas, we have oil, we have coal, we have nuclear and we have a growing amount of renewables. I regard that as a potential balance. Our question on policy in this country is not whether we have a balance but whether we want to destroy a balance. That is the question. Do we want to go from that balance to a situation where gas contributes by 2020 at least 70 per cent of electricity, quite apart from as a direct fuel? We should be aiming to get the best of both worlds. We
 
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should aim for a balance, and we should aim to have market forces in a framework that gives balance and efficiency.

There has been another change in the position of India and China. In China they are building the equivalent of a new power station every week. Most of those are coal; it is dirty coal. In reality, the world situation is that two of the major drivers for growth in the rest of the world are burning coal on a huge scale and will continue to do so. They are not rich in gas or oil and the only alternative they have is nuclear power stations; and they are building them.

Gas is no longer the cheap alternative that we thought. It will be a critical and important source, but that should not be an excuse for dismissing other energy sources. I say to the noble Baroness, Lady Miller, that some of her remarks about nuclear power were not entirely informed. She referred to the problems with THORP, which has nothing to do with nuclear generation. It is to do with reprocessing; it has nothing to do with nuclear power generation.


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