Queen’s Speech

My Lords, after eight years of annual debates during the past decade on the lack of strategy in the privatised electricity supply industry, common sense has prevailed. Those debates criticised the lack of any commitment to nuclear power, the failure to provide for replacement of ageing power stations, the growing reliance on imported gas from unstable markets, the overreliance on expensive and unreliable wind power and the inevitability of extensive power interruptions in the next 10 years or so. I and other noble Lords had these concerns dismissed as unfounded so complacently that I eventually gave up the annual debate on the subject, convinced that the Government were firmly set in their mistaken ways. What a change we have seen recently. Nuclear power is now a priority, the possibility of substantial power interruptions is accepted and we are embarked on a large programme of building many more gas-fired power stations to fill the gap produced by the absence of even the most superficial strategy in this key industry. So far so good, one might be tempted to think. But the national and global economic situations have changed fundamentally for the worse during the past decade and the building of new stations of any kind has now to be undertaken in an unprecedentedly serious economic situation. That is partly due to the worldwide credit crisis, in the creation of which we played our part earlier by economic mismanagement, and partly due to the large increase in money supply caused by the bank rescues and what has become known by the benign description of quantitative easing. Whatever name is given to this massive experiment—for that is what is it—the inescapable fact is that it will have to be followed, and quite soon, by serious corrective measures. The experiment, born of desperation, rests on no experience of money creation on this scale or of any substantial economic theory for the process. So we are rolling the dice with no knowledge of the odds and with staggeringly high stakes. It is difficult to see that we had a credible alternative, but the consequence will be to put severe pressure on public spending and employment, and new power stations will have to compete with other claimants for very limited resources for at least the next decade. Meanwhile, faced with this new problem, the Government proceed as they did for so long on the power capacity front: they pretend that there is not really a pressing problem, so deferring the necessary corrective measures until after the next general election. Both these sagas of complacent disbelief are likely to produce very serious consequences. The example of Mr Micawber seems to lie at the heart of contemporary politics. Among the rival claimants for a share of severely restricted financial resources will be pressure groups, including renewable energy groups. They will have the task of arguing the case for uneconomic sources of low effectiveness in the reduction of CO2 and the fact that all alternatives to wind power are more expensive than that expensive resource. Strangely, the inactivity of the Government in these matters contrasts with their enthusiasm for renewable resources, no matter what the cost and the financial case. This seems to stem from a conviction that an apocalyptic climate change is a matter of fact rather than of conjecture. This impending view of doom, fostered by politicians and the media, overstates the case. The meteorological models in use are horrendously complex and some of the mechanisms that they employ are poorly understood and greatly simplified. Many of the important factors are cyclical in character and many are extraterrestrial in origin. The evidence from these models suggests a causal link between CO2 and global warming which is then extended to an explanation of climate change. But the hard evidence for such a mechanism is slender. That is not to suggest that it should be ignored—the preventive principle may be brought into play—but it must take account of the fragility of the theory, as evidenced by constant revisions and explanations of unexpected anomalies. The research efforts are prodigious and will remain so until a satisfactory predictive base emerges—if it eventually does. In the mean time, the international efforts to reach a reduction in carbon emissions are enthusiastic and unrealistic in equal measure and seem certain to spend huge sums of money to little practical effect. It may be preferable to devote more effort to infrastructure developments designed to reduce the adverse effect of global warming while being of practical use in the present and near future. I believe that such a new realism is likely to emerge from the international financial crisis that is currently threatening world stability and seems likely to fill that role for the foreseeable future. The economic crisis and the proposals for CO2 reductions may otherwise prove to be incompatible. There is no quick fix for these massive uncertainties and certainly not a pain-free one. Politicians should avoid deceptively tidy scientific solutions and concentrate instead on practical measures to minimise the additional problems likely to be caused by misguided enthusiasts.