Queen’s Speech

The gracious Speech confirmed that we will have the Energy Bill, which has already had its First Reading in another place. I will resist the temptation to comment on the Bill, save for one point. It outlines a new electricity supply levy, as the noble Lord, Lord Adonis, described, to provide financial support for the clean coal policy via carbon capture and storage demonstration projects. Of course, we must look at the merits of the scheme when we have the Bill, but the details will be in regulations: that is very clear. I applaud the provision in the Bill that these regulations will be subject to scrutiny in both Houses of Parliament. Those who remember the Planning Bill and the community infrastructure levy will remember that when we sought that procedure for that levy we were very firmly rebuffed by another place. After that, the noble Baroness the Leader of the House told me that she very much wanted to avoid that happening again, and I have to say that she appears to have been as good as her word. Whether or not she was responsible, we are grateful to her. It also shows that it pays to make a fuss! The draft national policy statements published on 9 November require scrutiny by both Houses of Parliament. How will that be handled in this House? They are huge documents and very detailed. I believe that the handling may have been discussed through the usual channels, but when will the rest of us know how that will be done? In the remaining few minutes I will raise two issues on nuclear energy policy. First, so far it has been claimed by the nuclear industry and firmly accepted by both major political parties that there should be no subsidy for new nuclear build. The market will provide. Companies and consortia have been buying land, developing applications and working with the regulators in order to put themselves in a position to invest. The Government are for their part—and I agree with my noble friend on the Front Bench: after wasting years in delay and dither—now working hard to remove the barriers and facilitate progress so that the first new nuclear power station may come on stream by 2017 or 2018. But is that enough? Any major investments face uncertainties, but given the long timescales, the uncertainties of future electricity prices and doubts about future carbon prices, it has been suggested in some quarters that more reassurance is needed. In particular, those people are asking for some guarantee that the price of carbon will not fall to the point where the low-carbon advantage of nuclear is reduced compared with other sources. Putting a floor under the carbon price has become a watchword and would reduce the risk to investors, but could the UK conceivably do that on its own? We are, as the noble Lord, Lord Adonis, reminded us, participants in the EU Emissions Trading Scheme, which is where the carbon price is set. For the life of me, I do not understand—and have not had a convincing explanation—how this country could act unilaterally to put a floor under the carbon price. I suggest an alternative. A better response would be to develop, on our own, the concept of a carbon credit for low-emission technologies. The ETS is intended to impose a high and rising penalty on the high emitters in their bids to buy and pay for permits. But why should not the proceeds of that be used to reward the low emitters through a system of carbon credits? I spelt out that argument in rather greater length in a recent issue of The House Magazine. I am advised very firmly that it would not be regarded as a subsidy. It is simply the converse of the penalty on high emitters. It has also been suggested that it would not fall foul of the ETS or contravene EU competition laws, but it needs further study. It is a possible solution. Are the Government studying this solution as a help to the investors? My second question is about nuclear waste. The national policy statement EN-6 says that we now have an acceptable solution for waste, that it will be developed and that this can be relied on by the Infrastructure Planning Commission when dealing with individual applications. It will deal with spent fuel from new build as well as legacy waste. However, the relevant paragraph in EN-6 says that there is, ""a presumption of a once through fuel cycle for new nuclear power stations, as set out in the Nuclear White Paper (and therefore assuming no reprocessing of spent fuel)"." This is described as an assumption, but does it reflect settled policy? A once-through fuel cycle leaves spent fuel with vast potential reserves of fissile fuel for further use in reactors, provided it is reprocessed. Moreover, it could be used in conjunction with the stocks of plutonium which are currently in store to produce mixed oxide fuels. This is happening abroad but not yet in this country. I ask again: what consideration are the Government giving to recycling spent fuels so as to use this potential energy source, rather than putting it away in a deep repository? I am told that the Minister’s department is considering proposals for a new MOX plant, perhaps via a PFI. Could this possibly be feasible without recycling? We await the Energy Bill’s arrival in this House. It will certainly, as my noble friend on the Front Bench said, need very careful examination. I look forward to taking part in that process.