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895 National Policy Statements 1 DECEMBER 2010 National Policy Statements 896 Huw Irranca-Davies: The hon. Gentleman would not expect me to agree that our position is in tatters. As I made clear to him in the debate on the justification orders in Committee, when they went through with our support, we would very much welcome an opportunity for the Minister, alongside his colleagues, to go back to Sheffield Forgemasters and argue the case for making sure that it can be part of the supply chain. He is continually reluctant to do so. I suspect that that is not necessarily because of his reluctance, but because his colleagues are reluctant to argue the case. Charles Hendry: I had hoped that the hon. Gentleman, for whom I have the highest regard, was going to explain what his shadow Cabinet colleagues had done in that vote. During that debate two weeks ago, we had agreed fundamentally on the need for regulatory justification and he was speaking officially on behalf of the Opposition, yet when it came to the deferred Division in this House a week ago today three of the most senior members of the shadow Cabinet voted against those reactor designs being approved. If they had won that debate, the whole nuclear programme in this country would have been brought to a standstill. If the Opposition are to have credibility in this area, we need to understand why the shadow Chancellor, the shadow Business Secretary, who is the one who will lead on issues relating to Sheffield Forgemasters, and the shadow Education Secretary, who is one of the most senior members of the Labour party, chose to try to stop nuclear power in its tracks. Mr Stewart Jackson (Peterborough) (Con): Is the stark contrast between those on the two sides of the House not shown in the fact that the financing arrangements for Sheffield Forgemasters were cobbled together in the dying weeks of the Labour Government whereas just five months into a Conservative-led coalition Government we have a comprehensive, coherent national infrastructure plan for the next five to 10 years? That is the difference between government and opportunism. Charles Hendry: My hon. Friend makes a very important point. In the months just before the election an enormous number of commitments were made, and one of the first things that we had to do as an incoming Government was to identify which of them were affordable. We went through that process extremely thoroughly—I think we have been robust about it—and Sheffield Forgemasters entirely understands the decisions that we have made. The Department for Business, Innovation and Skills leads on supporting businesses in these areas and my Department feeds closely into that process. We want Sheffield Forgemasters, which is an outstanding example of a British manufacturing company, to have a key role to play in the future. However, on the basis that I have outlined, we did not believe it was appropriate for the loan to go ahead. John Woodcock: I hope the Minister will accept that it is important to correct what the hon. Member for Peterborough (Mr Jackson) said if the Government are to retain credibility on this issue. Does the Minister accept that the issue of this loan was being negotiated for more than a year, including the time when Lord Hutton was Business Secretary, and that it was very carefully considered by that Department over that period? Charles Hendry: I am grateful to the hon. Gentleman for that intervention. As a new Government coming in, we had to look at the financial commitments that we were inheriting. We had to decide which were bad decisions—the Sheffield Forgemasters loan absolutely did not come into that category—and which were the decisions we viewed as simply not affordable. Of course we would love to be able to shower money on a range of good projects around the country, but there is no scope for doing so. As we know from the former Chief Secretary to the Treasury, there was no money left. That was what the outgoing Government told us. Several hon. Members rose— Charles Hendry: I am keen to get back to some of the areas where there is consent and general agreement, but I will of course give way to the Opposition spokesman. Huw Irranca-Davies: I thank the hon. Gentleman for giving way. Will he acknowledge that this issue is pertinent to our debate on our national infrastructure and the supply chain? It is my clear understanding, unless the Minister can disabuse me of this, that only one other global supplier makes the piece that Sheffield Forgemasters was going to make. If the company had been given that repayable loan, which would have been repaid to the Government in short order, it would have led the global supply chain—not just for the UK but for export—in the reactors that we passed the justification orders for last week. It is a clear own goal. I ask the Minister to go back to his BIS and Treasury colleagues to see whether there is still an opportunity to bring the measure forward. It is not too late. Charles Hendry: The hole in the argument is that the hon. Gentleman makes that case on behalf of the Opposition when the shadow Business Secretary, shadow Chancellor and shadow Education Secretary voted against the nuclear programme. As long as the shadow Cabinet has anti-nuclear sentiments at its highest level, any suggestion that the Opposition want a nuclear renaissance is fundamentally questionable. Albert Owen rose— Charles Hendry: I am keen to move on to other issues, but as the hon. Gentleman has such a strong constituency interest in new nuclear I shall give way. Albert Owen: The hon. Gentleman and I were both very solid on nuclear power in the last Parliament when the then Leader of the Opposition thought that it should be a last resort. I am pleased that the new Secretary of State and the Prime Minister have made their journey and are in the same position as the Minister and I. The point about the supply chain is important. I know—the shadow spokesman is right—that if this work does not go ahead in Sheffield, Korea is the next port of call. That is not in the British interest. Will the Minister consider that as we go through these new policies and talk about infrastructure, so that we can keep British jobs and British business in the supply chain to help the nuclear industry? Charles Hendry: I have said several times that our decision is no reflection on the quality of the workmanship at Sheffield Forgemasters. The Government came in,
897 National Policy Statements 1 DECEMBER 2010 National Policy Statements 898 identified that £1 in every £4 of Government spending was borrowed, believed that that position was unsustainable and had to make difficult, tough choices about the right way forward. Several hon. Members rose— Charles Hendry: I would give way to my hon. Friend the Member for Dover, but he was the one who made me depart from my extremely consensual speech into this area of great contention. I am keen that we should get on to the issues of planning policy that are at the heart of our debate. Dan Byles (North Warwickshire) (Con): To come back to the future of nuclear power in the UK and the comments made by my hon. Friend the Member for Dover (Charlie Elphicke) about keeping the lights on, Germany is now considering extending the lives of its reactors by up to 12 years. I am a great supporter of the idea that we need to replace our nuclear reactors with new nuclear reactors, but is there any scope in the Department’s plan to extend the lives of our current reactors to try to bridge that gap? Charles Hendry: My hon. Friend raises an important issue. The situation in Germany is very different from the situation here. The plan in Germany had been to have an artificially early closure of the nuclear fleet, and Chancellor Merkel’s Government have allowed them to operate for their full lives. They have reversed a decision that would have brought about early closure. The approach that we have always taken in the United Kingdom is that plants should operate for their safe life. If there is an independent assessment that they can operate for longer than had been planned, that should be considered. The case here is based on safety and security issues and some recent life extensions have been given, which we welcome. At the end of the day the extensions are a bonus rather than a building block in energy policy, but my hon. Friend makes an important point. I want to get back to some of the key areas of the debate. Our concern is that the existing market framework will not deliver the scale of investment needed in renewables, nuclear and carbon capture and storage, all of which have significant up-front costs. Our electricity market reform programme will examine the reforms necessary to restructure the electricity market to decarbonise the power sector by the 2030s while maintaining security of supply and affordable prices. We must move quickly to give investors certainty about our reforms because of the long lead-times in developing new generation capacity. Our reform of the planning system for major infrastructure, including for major energy infrastructure, also has an important role, as does the consultation on the revised draft energy national policy statements. Reducing demand for electricity wherever possible is important in meeting our energy objectives. Our 2050 pathways analysis shows that total UK energy demand from all sources will need to fall significantly by 2050. As I have mentioned, the green deal will save energy in the home and non-domestic buildings. We will also roll out smart meters to help to reduce demand. However, those savings will be offset by increases in other areas, such as the increased use of electricity in industrial and domestic heating and in transport. Our 2050 pathways analysis suggests that demand for electricity may even double by 2050, as we plug into the grid to power our cars and heat our homes. Decarbonising surface transport is essential to meet our target to reduce greenhouse gas emissions by 80% by 2050, as we are required to do by law. We expect electrification to play a major role in achieving that. While electric vehicles can be powered up overnight by fluctuating electricity generation, trains, for example, will need more base load generation. We have already announced £900 million of investment in the electrification of train lines from London to Didcot, Newbury and Oxford, and for lines serving Liverpool, Manchester, Preston and Blackpool. In the new year, we will consult on the next steps for building a national high-speed rail network, which will free up capacity to allow a shift of freight from road to rail and provide an attractive low-carbon option for travelling between our major cities. Some 80% of journeys in the UK are currently made by car, and cars will continue to play an essential part in our national transport infrastructure. The Government announced in the spending review investment of more than £400 million in measures to promote the uptake of ultra-low-carbon vehicle technologies. That includes the plug-in car grant, which will be available from January 2011 and which will provide a grant of 25% of the vehicle price up to £5,000. We are also continuing the plugged-in places programme, which supports the development of electric vehicle recharging infrastructure in strategic locations. As part of the coalition agreement, we have also undertaken to mandate a national network of vehicle recharging facilities. We want to see more decentralised and community energy systems, such as microgeneration, make a contribution to our targets on reducing carbon emissions and increasing energy security. However, we do not believe that decentralised and community energy systems are likely to lead to the significant replacement of large-scale energy infrastructure, which is why there is an urgent need for new major energy infrastructure. Neil Carmichael (Stroud) (Con): I have flicked through the plans, and I cannot see any reference to hydro-power in the context of micro-schemes. Do the Government intend to support hydro-power and particularly small-scale projects? Charles Hendry: The Government are committed to taking us forward, and I welcome my hon. Friend’s support in that respect. Hydro has an important contribution to make. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who has responsibility for climate change, set out how we can hope to achieve that ambition in his recent speech on the subject. Most issues that we are discussing today relate to major applications of more than 50 MW. Most hydro schemes will fall below that threshold and will therefore be subject to local planning decisions. The section of the energy policy statement that deals with renewable energy does not cover major hydro schemes, such as major schemes involving tidal flow, because at this stage there is no evidence of a serious application for such a scheme of more than 50 MW. If that happens, we will need either to review the national
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