My Lords, the description of the Bill by the noble Lord, Lord Lawson, bears no relationship to what I and many others understand to
be its nature. It is a curious document that is suffused with the free-market ideology that accompanied the privatisation of Britain’s energy industry in the latter years of the Thatcher Administration. The Bill contains evidence of the dangers of global warming and the effects of carbon emissions associated with fossil fuels, which have been well understood. However, notwithstanding its pieties in that respect, the Bill does very little to promote the cause of climate protection. It poses some ineffective and non-binding constraints on the rates of emission and, in truth, will not help in reaching the targets set out in the Climate Change Act 2008.
The truth is that the Bill is attempting to appease a powerful faction within the Conservative Party that is strongly opposed to any measures that might be taken to staunch the emissions of greenhouse gases. There is solid and highly disturbing scientific evidence that should alert every one of us to the perils that we face through global warming. However, many in the Conservative Party believe that they are as entitled to their own contrary opinions on such matters as any of the scientists are to theirs. The climate change deniers have a powerful ally in the Chancellor of the Exchequer, George Osborne. He envisages a dash for gas based on fuel that might be conjured up by fracturing the ground on which we stand. This vision has strongly influenced the Bill. Such a dash for gas would utterly negate the purposes of the Climate Change Act 2008, which proposed that the emissions of greenhouse gases in 2050 should be 80% lower than those in 1990.
The Labour Party brought the matter to a head in the Commons by tabling a reasoned amendment declining to give the Bill a Second Reading in the absence of a decarbonisation target. In the absence of full support from the Liberal Democrats, the amendment was defeated by 279 votes to 206. Perhaps now we can trust that the Liberal Democrats are not bound by whatever agreement it was that made them adhere to the Government’s position on the amendment, and that they will support the amendment of the noble Lord, Lord Oxburgh, which surely accords with their natural instincts. There is clamorous support from industry for a binding emissions target. A target somewhere between 100 grams and 50 grams of CO2 per kilowatt hour, to be set in 2014, would indicate that the UK Government are genuinely committed to their climate change obligations, and give much needed confidence to investors.
The privatisation of the power industry, according to the nostrums of free-market economics, has given rise not to a competitive market but to a dysfunctional oligopoly consisting of six big companies. On the sidelines are a few small independent companies specialising in renewable power generation. Given adequate protection, the independent companies could be expected to provide a large proportion of the new investment in renewable power generation. At present, there is a danger of their being squeezed out of the market by the big six, who are intent on fulfilling their renewables obligations with their own power plants. The Government and the Department of Energy and Climate Change have paid scant attention to the plight of the independent generators. They need to act with urgency to protect these players.
The Government’s free-market ideology and aversion to government sponsorship and national ownership have severely prejudiced the prospects for nuclear energy in the UK. It is an outstanding irony that in their pursuit of a free-market ideology they have bequeathed our nuclear future to two foreign state-owned monopolists, Électricité de France and the China General Nuclear Power Company. These suppliers are expecting a rate of return in double figures as a consequence of a high price for their electricity that is guaranteed for a period of 35 years. This return is supposedly justified by the risks inherent in the project and the difficulties of raising the necessary finance on the open market.
However, in their attempt to attract firms to undertake nuclear projects, the Government have provided a so-called infrastructure guarantee that guarantees 65% of the necessary funds. Surely under such circumstances, it would have been appropriate for the Government to raise the necessary funds by selling bonds and to commission the building of the nuclear power stations directly, thereby taking them into national ownership. Such a course of action would have given the Government powers to ensure that native suppliers would be fully exploited and that our nuclear industry would stand a good chance of revival. Instead, foreign suppliers will predominate and Britain’s taxpayers will have the burden of supporting a much troubled French nationalised industry.