---

Security of Supply

I am surprised at the last comments from the hon. Member for Glasgow, North-West (John Robertson). I remind him that his party is in government with the Liberals in Scotland. The House will not be surprised to learn that the situation in the North sea is of particular concern to me and my party. I pointed out earlier that the existing gasfields west of Shetland were not being exploited, partly because of the tax regime. I was not encouraged by the response from the Secretary of State, which we have heard so often before. We were told that last time the Chancellor changed North sea taxation, he had created a stable tax regime. We are told now that there will be no more changes, but that is two years after he allegedly created a stable tax regime. Security of energy supply does not mean that we necessarily have hands-on control of every part of our energy supply, but it does mean that we maximise what we have of our own. It makes sense for us to maximise the use of the gas in the North sea. After all, the dispute between Russia and Ukraine can hardly have come as a surprise. The use of energy as an economic weapon is well tried. Some of us are old enough to remember the oil price shocks of the 1970s. We should be cynical about what is being said about the North sea. Papers released over the Christmas recess show that what was effectively a conspiracy was hatched some 30 years ago to deny the true level of oil and gas in the North sea and prevent Scotland from moving towards independence. At that time, we were told that if Scotland achieved independence, we would lose the entitlement to supplies in much of the central North sea, but the documents show that that was totally untrue, because Scotland would have been entitled to at least 80 per cent. of the oil. The documents also note that under the proposals advanced by the SNP, the life of the oil fields could have been extended to 100 years as opposed to the current situation. Although the Minister for Energy has said that up to 80 per cent. of the UK’s gas supply could come from abroad by 2020, that need not be the case in Scotland, which produces much more gas than we actually use. The Minister has said that the outcome of the energy review has not been decided, but the Prime Minister seems to be going out of his way to suggest that the outcome will be new nuclear power stations, which Scotland neither needs nor wants. At the moment, Scotland has 60 per cent. of Europe’s oil reserves, more than 12 per cent. of Europe’s gas reserves, nearly 70 per cent. of the UK’s coal reserves—8 per cent. of the EU’s total coal reserves—a quarter of the EU’s potential for wind power, 10 per cent. of the EU’s potential for wave power and 25 per cent. of the EU’s potential for tidal power. A report commissioned by the Scottish Executive in 2001 found that renewable energy could produce six times Scotland’s current electricity capacity. Indeed, offshore wind power alone could meet Scotland’s needs two and a half times over, and the Pentland firth has been described as the Saudi Arabia of tidal power. The Minister will not be surprised that I am going to raise the question of transmission charges with him again. Although we have heard a great deal about decentralised energy supply, which I support, the reality under the present regime is that if we are to invest in renewable power, we must get the transmission charging regime right. Scotland’s potential for renewable power is being undermined by the regime imposed by Ofgem, which makes renewable power more expensive to produce in Scotland than, for example, in the south of England, yet there is no demand in the south of England and a great deal of demand in Scotland. To be fair to the Minister, he has announced that he will change the regime for the Scottish islands, but he has not done so for the highlands of Scotland. For the umpteenth time, I ask him to reconsider the matter. We have heard a lot about the possible liberalisation of the gas market within the European Union. At the outset, the Minister said that gas in the UK is not expensive in European terms, but I refer hon. Members to Ofgem’s evidence to the Trade and Industry Committee, which probed the issue. In response to my question on the difference in energy prices in the UK and Europe, Ofgem told me that it had carried out a"““‘gas probe’, which identified that effectively UK customers had paid an additional £3.8 billion in the 2003–04 period, and we equally identified that between 50 and 60 per cent. of that was due to the oil indexation which European gas contracts have””." The difference between the very liberalised market in the UK and the much more regulated market in the European Union results in a real cost to consumers of gas. I was interested to note that at the Hampton Court summit at the end of the UK’s presidency of the EU, the Prime Minister suddenly seemed to convert to the idea of an integrated European market, which the Government had resisted for a long time, including a common energy policy, a pan-European electricity grid and shared reserves of stored gas. I am sure that the European Commissioner is grabbing that with both hands. I understand that proposals will be presented by the end of the year. If that means a liberalisation of the market on the continent and a reduction of prices in the UK, it might be welcome, but we wait to see whether that will be the outcome of any such European policy. Scotland has great potential as an energy producer. Scotland could be energy independent, but the problem is that it is not politically independent. Political independence would mean real potential for energy to power the Scottish economy as well as the potential to export.