My Lords, I, too, support my noble friend in his concerns. It is a pity that the noble Viscount, Lord Hanworth, retreated to his usual attack on free enterprise and a glorification of the appalling electricity industry which was there before privatisation. Those of us who worked with it knew that the Central Electricity Generating Board was one of the most inefficient, self-opinionated and dreadful bodies that has ever been created. It was so bad that it hid from the world the cost of nuclear power, and when it was taken to pieces, the Cabinet had to accept that it could not do much of what it wanted to because the facts had been hidden by Lord Marshall—Walter Marshall—whose personal fiefdom it had become. It really is a pity if we have to discuss this via the déjà vu which was extremely biased in the way that the noble Viscount put it forward.
It seems much better if we discuss how it is at the moment, which is that privatisation has done a great deal of good but has a number of problems. One of its problems is that it has ended up with an oligopoly, but that oligopoly has been made more possible by decisions made by other parties as well. Looking back on it, I think that the previous Government would not have made the changes that they did and which have underlined that. Let us not make this into a party-political argument but try hard to see what to do now.
The two things which we have to do now are, first, to stop being argumentative about the fact that it is going to cost money to enable us to have a generating system that will withstand the very many pressures upon it. There is the pressure of climate change; we have to decarbonise our electricity system and do so according to a budget, which I am happy to say has again been accepted by the Government. That budget means that it has to be done relatively fast because we cannot reach the 2050 target, which is a statutory one, unless we do it according to the sort of speed which the budgets lay down. That means we will need a portfolio of generating capacity, because only in that way can we ensure that we do not pick winners and find ourselves in a situation of not having the opportunities as technology changes.
Regarding my noble friend’s slightly offhand remark about the cost of supporting wind generation, there is a very big cost in supporting something that he is very fond of, which is nuclear power. The strike price which we agree now and the commitment to that over a very long period may well turn out to be the most expensive piece of decision-making that we have made. I happen to think that it is necessary but do not let us suggest that it is not expensive—because, frankly, it is extremely
likely that offshore wind will have come down in price to be competitive with nuclear and goes on going down, whereas I am afraid that nuclear is a system which has never actually got cheaper. It has always become more expensive and been less reliable in delivery terms than almost anything else.
Let us realise how difficult is the issue that we are dealing with. We need to have a real mix. However, my noble friend is right to say that one of the ways in which you can ensure that that mix works is to be absolutely clear about the need for competition. Only competition will stop us returning to the easy, comfortable position of the electricity business in the days of its nationalised state. New and small companies that are based here find this extremely difficult. My noble friend has been their advocate over a long period.
I have to ask the Government something terribly simple. If it is necessary to have an offtaker of last resort in the period following the first 18 months, why is it not necessary for the first 18 months? Indeed, I have to ask something much more fundamental than that. I am a businessman, and it seems to me that the process which has brought this to fruition has been one in which the Government have accepted that if you want independent generators, you need to have this protection. When do you need that protection most? You need it at the beginning of the process, when these people have just started, and when it is most difficult for them. If you need it at all, you need it when it begins. The idea that you need it not when it begins but 18 months later is almost incredible. I do not see how you can argue that case. The case must be that you either need it, in which case you need it at the beginning, or you do not need it, in which case you do not need it at all. It is not possible to argue a case which says that you need it, but only 18 months after you start. I find the economic and business arguments for that very difficult to take.
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I will say one final thing. The big six have not covered themselves in glory in recent weeks. Statements from some in the industry suggest that all we need to do is hand over the operation to them and they will deliver, but of course we do not need to be too careful about emissions. The crucial part of electricity market reform is to make it possible for this nation to make its proper contribution to the battle against climate change. That is why this matters. We have to do that in a way that makes sure that the lights do not go out, and in the most cost-effective manner possible, because that is the only way that is proper for a Government.
The Minister will forgive me for not going page by page through these very technical and detailed documents. She will receive a good deal of support and help, and will get a good deal of criticism. However, the central issue of competition is absolutely crucial. It is a pity that we have to have this argument, because the Government ought to be complimented on their willingness to bring forward this extremely important reform. They are following in the footsteps of their predecessors, and we ought always to remind ourselves that in this we are forging a new way forward, and that it is a crucial part of our campaign against climate change.
Therefore, I do not want anything I have said to make the Minister feel that I am not extremely grateful for the enormous amount of work that she, other Ministers and the Government as a whole have done to deliver this. However, let us not lose at the last moment a crucial part of it, which is to make sure that every single one of the opportunities for competition shall be open. Without that, we will find ourselves in the hands of people who have not so far distinguished themselves by an understanding of the national—or, I sometimes think, the international—good. Can we just bring the two dates together?