John Redwood

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John Redwood Questions Ministers on Northern Rock and Climate Change

Yesterday in the House of Commons, John Redwood questioned the Secretary of State for Business, Enterprise and Regulatory Reform on the costs of low-carbon technology compared to nuclear power.  Later that same day, he questioned Ministers on what they are doing to reduce their departments’ own carbon output, and commented on the need to combat climate change through incentive rather that coercion.  He also pressed the Leader of the House on when Parliament will be asked to approve the £25 billion spent so far on Northern Rock and the £25 billion of contingent guarantees.

 

The Hansard text from yesterday’s debate follows:

Mr. John Redwood (Wokingham) (Con): How do the costs of new nuclear power compare with those of other low-carbon or no-carbon technologies, and what kind of taxpayer guarantee or subsidy would be needed at current carbon prices?

Mr. Hutton: We have published all that information in the energy White Paper, and I am very happy to send it to the right hon. Gentleman. All our work indicates that nuclear electricity will be a very cost-effective form of energy supply for the future. One of the significant challenges that we must also address is that we need our energy to be clean and secure, but the price must be affordable for consumers and businesses. The information is in the public domain; I will happily share it with the right hon. Gentleman, and if he wants to discuss the detail, I look forward to having that discussion with him.

Mr. John Redwood (Wokingham) (Con): When will the House be asked to approve the £25 billion so far spent on Northern Rock and the £25 billion of contingent guarantees? Where did the Treasury and the Bank of England suddenly find £25 billion?

Ms Harman: The right hon. Gentleman will know that he can raise those issues at Treasury questions next Thursday. No doubt the Chancellor and his ministerial colleagues will remind him that we are concerned to ensure that no Northern Rock shareholder, employee or saver loses out. The Chancellor has made statements to the House on the issue and, if there is any further information to give, he will do so again.

Mr. John Redwood (Wokingham) (Con): Can the Minister tell us what percentage energy reduction his Department will achieve this year?

Mr. Woolas: Not off the top of my head, but I can send that information to the right hon. Gentleman. We in the Department take very seriously our role as an exemplar of reducing carbon emissions. Clearly, if we are trying to influence public opinion, we must set a good example. Parliament and not least the right hon. Gentleman will make sure that we do. I thank him for that intervention.

It is important to avoid a gap between the first and second commitment period of the Kyoto protocol. For that reason, we need to secure agreement by the end of 2009. Apart from the need to avoid such a gap, it is
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important that Parliaments and legislatures have time to scrutinise agreements, and perhaps even more important that businesses and organisations, particularly the energy industry, have time to put their policies into place.

I draw the attention of the House to the statement that we published on Monday setting out the approach that the Government believe should underpin a post-2012 framework for international action. There are four key principles. First, the post-2012 regime must fit the scale of the challenge. To avoid the dangerous impacts of climate change, global greenhouse gas emissions must peak within 10 to 15 years and fall by at least 50 per cent. by 2050.

Secondly, the agreement must be fully effective, involving all countries with significant emissions. For that to be real, the Government believe that a truly global carbon market needs to develop, because putting a price on carbon is essential to incentivise new investment in energy efficiency and clean energy sources, not just for the developed world but for the developing world as well.

The third principle is that of fairness. Developed countries such as ours have the greatest responsibility and the greatest capacity to reduce emissions. The larger emerging economies, however, also need to adopt new commitments that reflect their growth and pace of progress, ensuring that their future prosperity goes hand in hand with environmentally and economically sustainable development. Fairness also demands that richer countries play their part to support developing countries as they make the transition to clean energy technologies.

The fourth principle is that a post-2012 agreement must be comprehensive, addressing emissions from energy at the same time as controlling emissions from land use and, as I said to the Forestry Commission yesterday, deforestation.

Mr. Redwood: Does my hon. Friend agree that if one wishes to influence people’s behaviour it is often better to offer them tax incentives and encouragement instead of higher taxes and over-prescriptive regulation that they can get around?

Gregory Barker: My right hon. Friend has hit on the head the difference between the Labour way and the Conservative way. We stand for incentives, encouragement and supporting business, not just clobbering it.

In Britain, we have a clear choice. We can be players on the field of the global economy, looking for solutions, forging new markets and grabbing first mover advantage, or we can be spectators watching from the sidelines while the action takes place without us. We have the research excellence and the entrepreneurs, and in the City we have an abundance of green capital. Let us not repeat the mistakes that we made after world war two, when in the face of change we clung to the old industrial certainties. We failed to modernise and let our competitors invest in change and innovation, and by being so cautious we locked a whole generation into economic decline.

As we enter the new low-carbon era, let us not make that mistake again. We need to embrace change and seize the opportunities that it will create. That is why we
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are drawing on the work of the quality of life review undertaken by my right hon. Friend the Member for Suffolk, Coastal and Zac Goldsmith. That is why we are using this great toolbox of ideas. That is why we propose bold policies such as the introduction of feed-in tariffs for microgeneration, which are working well in Europe, the replacement of the ineffective climate change levy with a focused carbon levy, and the introduction of a waste heat levy to incentivise combined heat and power and drive innovation in the energy sector—and let us not forget the reform of air passenger duty, which would move tax from the individual passenger to the efficiency of the aircraft. There is much more to come from the Conservatives, all of which will be aimed at ensuring that British business is sent clear, long-term market signals from the earliest possible date and that the long-term cost of carbon becomes embedded in economic decision making.

The Climate Change Bill will play a vital role in helping to create the long-term direction that business needs. As the House knows, Conservatives welcome the Bill, and it is to the Government’s credit that they introduced it in the Queen’s Speech. We look forward to working constructively on a cross-party basis to enhance and strengthen it when it begins its passage through the House of Lords next week. However, we must all acknowledge that it is only a framework; it cannot deliver a low-carbon economy on its own. Without coherent, joined-up and ambitious policy to underpin it, it will be little more than an effective way to keep track of the Government’s failure. As it stands, it needs to be strengthened and improved.

I do not want to pre-empt the Second Reading debate on the Bill, but there is one crucial point that the Government need to act on urgently. On Monday, the Prime Minister finally acknowledged that all the latest science says that an emissions reduction target of up to 80 per cent. is necessary to keep warming within the 2° target. Conservatives strongly believe that scientists, not politicians, should drive those targets. He also seemed to acknowledge his awareness that there is a flaw in how the Bill proposes to deal with raising its current reduction target of a minimum of 60 per cent. The Government are to ask the independent committee on climate change to revisit the 60 per cent. minimum target and report back with its recommendations in 2009. However, the committee will set the first 15 years of carbon budgets in 2008—a year before we know what the new reduction target will be. That is nonsensical. It is vital for British business to know the targets now, before we map out how we achieve them.

On Monday, the Prime Minister acknowledged that there is a problem but fudged the response. More clarity is needed. We need the committee to be announced to Parliament now, to sit provisionally before Royal Assent is given to the Bill, and to inform the targets that are proposed in it. Any other route would not provide the clear, credible and long-term signal that business so badly wants from the Bill. Moreover, we firmly believe that the committee is insufficiently independent. Its remit is too broad and vulnerable to political influence. Its recommendations must be driven and informed by the science.