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Energy Bill

My Lords, I do not intend to follow the road taken by the noble Lord, Lord Palmer, because the strategic interests of this Bill are to be seen more in Part 1 than in Part 2. I remind the House that the 2050 target for carbon dioxide emissions for this country is 20 per cent of the 1990 emissions figure. This country passed that limit in about 1850, when the population was about 22.5 million. To achieve that target, therefore, we need nothing short of a revolution in our energy systems. I sympathise with the Minister and indeed understand his anxiety that carbon capture and storage should work. The issue is not whether it will work. We have heard the noble Lord, Lord Oxburgh, and we can be absolutely confident that it will work. The question that we cannot answer, and one of the reasons why we need a heavy subsidy to produce experimental plant, is we do not know what the economic cost of this system will be. It is not a question of whether the technology will work that will judge what part it plays in our future energy supplies, it is what its economic competitive position will be. It is not even a question of national energy security, partly because today a lot of the coal consumed in power generation is imported. Disregarding that issue, for me the security of supply position was compromised a little over 100 years ago when the British Navy which of course was fired by coal, switched to oil, which had to come from the Middle East, because it was more efficient and effective, increased the range of our ships and so on. There are measures and assessments which have to be made, and it remains to be seen whether this huge subsidy which will go into carbon capture and storage actually produces a system which will survive economically after we have installed it. I shall be very interested to see this, because there are many other sources of energy coming forward which may well be a better buy, if you like, for the great British consumer. I have every sympathy with what my noble friend Lord Reay said on the question of what will work. We do not know the answers. I understand the Government’s dilemma in this matter; I merely remind the Minister that if he can remember as far back as last Friday morning there were huge headlines in the national papers about a horse that was bound to win a race in the afternoon, and it did not. I wish he had a little less absolute confidence that carbon capture and storage will work, because if it is uneconomic here it is also likely to be uneconomic, or uncompetitive economically, in other countries as well. Even India and China with their huge populations, energy demand and difficulties in modernising their societies will have to face the hard reality that if CCS is not economically competitive it will not provide a solution—and they will be the first to change their systems. I come back to the Bill. I have a little difficulty with it because this evening we are having to have in effect not just a Second Reading debate but also a Committee stage and a Report stage. Its next stage is going to be this awful thing called a wash-up when what can be agreed is agreed and what cannot be agreed is passed over; it remains to be seen what will happen at that stage. I would welcome some assurances if the Minister is in a position to give them. I accept the need to subsidise these experimental installations, but I regret it. It seems that one of the reasons we need this subsidy is the complete failure so far of the European Emissions Trading Scheme to have any real effect on energy markets. If that was working properly, perhaps we would not need this degree of subsidy, at least. I wonder if the Minister will give an assurance that after these installations have been made and the levy has been put in place, the levy and indeed the charge on consumers will only last as long as they are required to pay for those installations. I have an awful memory of what happened to the Dartford Tunnel tolls. When the latest Dartford Tunnel installation was established—under an Act of Parliament —it was agreed that the tolls would pay all the running and construction costs, a reasonable profit to the developer who undertook the latest bridge installation and so on, and then they would cease. Shortly after this Government came to power in 1997, one of their first actions was to have a little slip in one of the Transport Bills to enable the tolls to continue ad infinitum because they rather enjoyed the revenue stream. That is life, and I worry that it might happen in the case of this other subsidy. The second point is that all the powers under this part of the Bill are dealt with by the Minister under regulation. We always have difficulty with regulations. Many of us have spent happy hours on them, and no doubt the Minister has also spent happy hours answering requests for information about how these regulations are to be made and what will happen. One of the requirements in the Bill is that the Minister will consult the regulator, Ofgem, and such other persons as he may choose. I make a plea, which I hope he will answer, that the consultation will be very widespread: it should go across the broad industrial and commercial sector because there are very particular views. He will also have power under the regulations described in the Bill to choose particular sectors that might be affected by or exempt from the levy. Under those which might be exempt, perhaps emissions-free energy should not have to pay the levy: that seems wholly sensible and would also give a little added incentive for people to produce emissions-free energy if that were possible. I admit that I had a particular plea from a section of the electronics industry: computer centres—perhaps they might be considered for special treatment. I have no interest in this but I was happy to listen to their plea. They made the point that they supply services which are fundamental to the City and so many other aspects of our modern life. It really does not matter to them whether they are in this country or Timbuktu. Nowadays, computer communication is so simple, fast and universal that these services can be provided from anywhere. The particular concern of these companies is to maintain their competitive position in this country so that they can stay here. Those are considerations that it would be entirely proper for the Minister to take into account. I do not say that he necessarily has to accept the argument or the position, but he should look at those aspects in relation to the powers that appear to be given to him by the Bill. I plead with him to give some assurance that his consultation process on that part of the Bill will be sufficiently wide to take account of that sort of thing. I hope that the Bill will largely survive. Enough political points have been made already, so I will only make one. My comment on the political situation is this: the Government have done enough to lose the election, but it remains to be seen whether the Conservatives, in the judgment of the electorate, have done enough to win it.