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Energy Bill

My Lords, in some ways I am tempted by what the right reverend Prelate says. For 26 years I represented mining communities of a similar character to those in Durham. In the first instance, it would be difficult now to recruit men to go down the shafts to do the preparatory work for UCG. It is also the case that one of the casualties of the privatisation of the coal industry was the laboratories of old British coal, which probably had centred in them more expertise and inventive researchers than any other body in the world. When we talk, as we will this evening, of carbon capture and storage, as the man asking the way to Cork was told, "We would not start from here". I welcome this Bill. It has been chastised as being modest. I think it is one of a succession of steps that the Labour Government have taken up a learning curve that some of us wished they had moved up a little more quickly. However, the emphasis in the Bill on carbon capture and storage, the alleviation of fuel poverty in a limited way, and also consideration of the powers of Ofgem are all welcome. I do not want to say too much on carbon capture and storage. We know that the technologies are limited at present. Operations are around 30 megawatts and they need to be in the order of 400 megawatts to make them comparable to at least one of the turbines of any major power station. The UK is not alone in pursuing this technology. There are companies presently generating electricity in the United Kingdom from gas-fired powers stations; E.ON and RWE in Germany have quite interesting and important research work going on. South Korea, India, China and the United States, and to a lesser extent Japan, are all engaged in research work of this nature. We have to guard against the presumption that the provision of public funds by the United Kingdom Government will in itself produce a solution; that we will somehow have a bullet painted not silver but red, white and blue and that will somehow solve the problems of carbon capture and storage. It is an industry that we hope will take off and even the Government’s modest, but not unrealistic, ambitions say it will be at the earliest 2020 or 2022 for the first stage and perhaps 2025 for a bolt-on development. If that is the case, it will be seven to 10 years beyond the large plant directive which will make coal burning and some aspects of gas burning very expensive if there is an interim period before this new technology comes in. I am not negative about CCS. I want it to work but I recognise that we have to be careful and not over enthuse about it. On the front page of this morning’s Scotsman spokesmen for the Scottish National Party were saying that they are confident that 500 jobs a month will be created in green technologies in Scotland alone over the next 10 years. God knows how they are going to do that but I leave that to others to work out. There are a number of research laboratories across the United Kingdom and institutions have been mentioned already—the bright ideas bank has many borrowers at the moment. I am not sure how much of it will actually deliver the kind of returns that we would want. I certainly wish the Government well. I have argued that when we are going to have competition it should be limited. Now we are not really having competition of the same order but we are going to have a bet on CCS; there are a number of other countries that might beat us to the punch. However, it is worth being there not necessarily because it will make a dramatic impact on UK generation but rather because it will give us an opportunity to sell our wares elsewhere in the world where they are of greater significance. One obviously thinks first of India and China, both of which have people of talent equal to our own and probably working twice as hard as we are. I do not mean any disrespect to the people we have in the United Kingdom, but it is a fact that they have so many people whom they can put to it. I spoke about fuel poverty in the Queen’s Speech debate in anticipation of this Bill but I think it bears repetition to a small extent. This Bill formalises the social tariff which will enable a number of poorer people to be given some assistance by clever use of Government data. We will see the alleviation to an extent of fuel poverty for a number of pensioners over 70 who are currently on pension credit. I speak here as the vice-president of the National Energy Action and the president of its Scottish equivalent, Energy Action Scotland. They have provided quite compelling figures which suggest that the £80 that is going to be available for pensioners over 70 on pension credit could be made available to other groups of vulnerable households. The groups have been quite clearly indicated in the winter payment arrangements—households where there is disability, severe disability, a disabled child, higher pensioners, households with children under five and households receiving child tax credit. In this context, there are some 4.1 million households: 2.7 million of them are covered by pension credit; 1.4 million are affected by disability and the other groupings previously mentioned. It would currently cost in the order of £320 million to pay the individuals. That would account for something like £13 a household. Currently we consumers are paying some £84 per household for environmental ROCs and other forms of assistance and subsidy. For a relatively modest amount of money we could do a lot for other vulnerable groupings. Some noble Lords may well have received letters from Macmillan Cancer Support containing quite disturbing statistics about the number of people who are not in receipt of benefit and are suffering from cancer and deserve support. I was quite shocked— I did not appreciate the extent of such disadvantage. In the summer consultations which the Government are required to fulfil under the legislation, I would hope that some of these specific cases that I outlined, and in particular the cancer sufferers, will be given some kind of assistance. I am not one of those who will go out of my way to criticise the Government for what they have done about fuel poverty because in a number of respects they have worked very hard to deal with households and with individual circumstance. The problem is that energy prices have oscillated in such a bizarre and unkind way over the past five or six years, in circumstances beyond the control of the British Government. The Government deserves credit but it must be extremely frustrating when we see that so many of these matters are now beyond the control and capability of the national Government. Indeed, it has to be said that the European Union is coming towards some kind of regulatory understanding. I would not use the word "regime". There are efforts being made but, sadly, they are probably not going to be capable of assistance. Therefore more and more will be dependent on the use of the social security system and the inventive use of statistical information now available to the Government following the legislation allowing information on pensions and other social security benefits to be switched from one department to another. I also welcome the extension and the refining of some of Ofgem’s roles. I have often felt that Ofgem as a regulator left a bit to be desired. When we discussed the NPS statement there was a certain degree of impatience, uncharacteristic impatience, in the Minister’s views about certain views expressed by the Ofgem. This Bill is fairly modest and could be handled quickly before an election. However, I would like to think that after the election we would look afresh at the regulation of energy. After 10 to 12 years and have gone from the adventure playground of the free marketers, the Hobart House brigade over at the Institute of Economic Affairs—people whom I, as a student in the 1960s, thought represented the dark side of the moon. They were given virtually complete control of energy pricing and regulation. A number of them, engaging intellectually though they may have been, failed the British consumer and the economy on energy pricing. If we are to review the role of Ofgem post the general election, the people opposite have to recognise the sort of things we have to look at. We have to consider security of supply and whether it should be the responsibility of the state to have the appropriate places in which to store the gas we need. We do not have enough at the moment; we do not need as much as the French and the Germans because we have rather a large store in the North Sea. Nevertheless, we need an enhanced amount. An example of market failure has been the inability of energy companies to bend their minds to this issue. They have not dealt with it adequately. As chairman of a Select Committee in another place, I banged on for years about having better storage facilities for LNG and the like. We will have an opportunity to do something post the election, regardless of who wins—and noble Lords know who I want to win. A Government of any complexion must look at energy security, the role of regulation and the role of the state. There is a case, in light of the market failure over the past 20 years, for which I am not castigating only the present Government—the previous ones were just as culpable—for doing that. This is a relatively modest piece of legislation which goes quite a way to meet concerns a number of us have on specific issues, and I am happy to give it my support. I would like to think that the Government will be concerned about fuel poverty as well as about the poverty of ambition regarding some of the objectives that we could achieve. If there is one reason above all others for having another Labour Government, it is that nothing I have heard from the Benches opposite suggests that they are as ambitious or as capable of dealing with these matters as my noble friend.