Mark Lazarowicz (Edinburgh, North and Leith) (Lab/Co-op): I beg to move, That the Bill be read a Second time.

I shall begin by declaring an interest. The Sustainable Energy Partnership has provided me with support in the preparation and development of the Bill. I also thank the 40 or more organisations, too numerous to name, that have given their backing to the Bill.

Hon. Members across the House will know that climate change is probably the biggest issue we face in the world today. I do not propose to repeat the arguments and facts that are well known to Members across the Chamber. Although most Members and, increasingly, the general public recognise the extent of the problem we face in tackling climate change and many want to do something about it, I have often found that there is increasing defeatism about climate change precisely because it is such a big issue. People sometimes feel resigned to the idea that things will get worse and believe that as individuals they can do little about it. It is important to show them that they can do something and that, although it is essential to get action from Governments and at an international level, individuals can do something to help tackle climate change.

My Bill seeks to link the action taken by the national Government and at an international level with the actions that can be taken by individual citizens—measures that, taken together, can make a significant contribution to reducing emissions and tackling climate change. The Bill is basically about seeking to engage and recruit the public—individuals, families and communities—in that effort.

Robert Key (Salisbury) (Con): I am grateful to the hon. Gentleman for giving way so soon. Does he agree that local authorities have a vital role to play? Some of them, including, I am sorry to say, my own district council, think that if there is a climate change problem, it is to do with sunspots and nothing to do with the intervention of man. Therefore, they are reluctant to support the Bill, a consequence of which will be increased expenditure by local councils. What would he say to my district council? How could he prove to it that there is a link, which it is not sure about, between mankind's intervention, rather than sunspots, and the climate change problem?

Mark Lazarowicz: I suspect that the hon. Gentleman can persuade his district council about the reality more easily than I can, but my Bill will certainly place responsibilities on local authorities, so that they cannot escape from recognising that link and cannot fail to do something about it.

Mr. Philip Hollobone (Kettering) (Con): Is not part of the problem with the climate change debate that those of us who want action to be taken on environmental issues are depressed by the Government's record, because the fact is that carbon dioxide emissions were falling before they came to power and have been rising since?

Mark Lazarowicz: The hon. Gentleman makes a party political point, which he is entitled to do. I think that this Government's record in seeking to tackle climate change has been excellent, but I want us to work on an all-party basis on practical issues that can take the issue forward. I suggest that he concentrates on that aspect of the Bill today, rather than on other agendas.

Ian Lucas (Wrexham) (Lab): Does my hon. Friend agree that the almost unique aspect of micro-generation is that it can give individuals responsibility to produce energy in their own homes? For example, they can have photovoltaic cells producing energy on the roof of their house. Virtually all traditional forms of energy production rely on large power stations many miles away from people's homes.

Mark Lazarowicz: Indeed. Had I waited a little longer to give way to my hon. Friend, I might have come to that particular section of my speech, which will now be somewhat shorter as a result. However, he makes a valuable point. Micro-generation, which is at the heart of the Bill, is simply the generation of energy—heat or electricity—by individual householders or small groups of householders. That can of course include photovoltaic installations, micro-combined heat and power systems, micro-wind, heat pumps, solar thermal systems, fuel cells and micro-hydro systems. A range of systems can be installed in individual homes making it possible for individual householders or groups of householders to generate their own energy.

Several hon. Members rose—

Mark Lazarowicz: I shall give way in a second if my hon. Friends will allow me to make a little progress.

The key point to bear in mind is that micro-generation has immense potential. It is not an activity that needs to be restricted to the select few or that applies only to certain parts of the country. The estimates from the most reputable scientific sources suggest that between 6 million and 10 million homes across the UK could be involved in micro-generation of some form. Clearly, for some communities and households, some technologies will be better than others, but if we look at the whole package, micro-generation can make a major contribution to the country's energy needs.

Joan Walley (Stoke-on-Trent, North) (Lab): Does my hon. Friend agree that the housing market renewal programme taking place throughout the country gives the Government a wonderful opportunity to ensure that what he is talking about is at the heart of new building, and the building of sustainable communities?

Mark Lazarowicz: I agree absolutely. One of the advantages of micro-generation is that as well as contributing to the country's energy needs, it can help to tackle fuel poverty. If houses can produce their own energy and make maximum use of energy efficiency and energy conservation devices, people on low incomes will gain more from that. Particularly in rural areas, where houses are not linked to the grid, micro-generation has a real part to play—although that also applies to the larger urban areas, of course.

Mr. Eric Forth (Bromley and Chislehurst) (Con): It would be helpful for the House if the hon. Gentleman could put this in context. Has he made any estimate of the contribution that micro-generation, even at the top end of his estimate - the 10 million homes - would make to total energy generation in this country? That figure would help us to put the idea in perspective.

Mark Lazarowicz: The right hon. Gentleman will be aware that there are a whole range of estimates, but it has been suggested that the proportion could be as high as 10 per cent. I am not sure whether I would go as far as that, but micro-generation can certainly make a substantial contribution to the country's energy needs.

Mrs. Janet Dean (Burton) (Lab): My hon. Friend mentioned rural areas. Does he see a role for parish and town councils in bringing communities together to try to develop micro-generation schemes?

Mark Lazarowicz: Indeed I do. Part of my Bill deals with the promotion of what is described as "community energy". I shall come to that part later, and I hope that it will meet some of my hon. Friend's concerns.

Micro-generation and micro-power types of technology have clear economic and environmental advantages, but the market is small, which makes it less viable than it should be for households that wish to take advantage of that technology to do so, and for companies to invest in the technology necessary to manufacture micro-power units. The problem is that the installation costs of micro-generation can be quite high, and the payback period is relatively long. That makes micro-generation a niche product, available only to the better-off—although even now, prices are coming down.

Opinion across the industry and in the non-governmental organisations is that we need to get into a virtuous circle, in which prices come down so that the market increases in size, which would lead to further reductions in the price of the product so that we can really take advantage of the potential of micro-generation.

Mr. David Kidney (Stafford) (Lab): My hon. Friend mentioned companies and manufacturing. Does he agree that the Bill gives us the opportunity to come to the aid of a beleaguered manufacturing industry? Renewable energy technologies are labour-intensive, and international concern about climate change would provide huge opportunities for export markets, too. Mark Lazarowicz: Absolutely. One of the things that I have found out in working on the Bill, as I have developed my own research and organisations have contacted me, is how extensive employment in the renewables sector is already. I suspect that if they inquire, most Members will find that tens or even hundreds of people in their constituency are already involved in the industry in some way. The reality is now large, and the potential is even larger.

Andrew Selous (South-West Bedfordshire) (Con): Does the hon. Gentleman agree that this country will have the moral authority to tackle India and China and encourage them to reduce their carbon emissions only if we can turn round the situation here? Does he agree that clause 2 of his Bill is a good way of bringing that about?

Mark Lazarowicz: I certainly support clause 2 of my Bill! Yes, we must ensure that we meet our international targets if we are to call on others to do the same. The hon. Gentleman also highlights another opportunity—the fact that there is a market out there which could be immense, and which we could take advantage of if we had a strong domestic micro-generation market on which we could build export potential.

We need a kick-start for the micro-generation industry in the United Kingdom. That is an important feature of my Bill, as well as of another Bill to be debated later; I must not speak about it at this stage, but it too will have a bearing on this issue. The essential element in my Bill is that by setting targets to encourage the installation of micro-generation we would give a clear signal to the market and the industry that the Government are serious about micro-generation. The industry would then put in the investment to allow prices to come down, and create the virtuous circle of price reduction and greater take-up. The Government have already made a good start, with a micro-generation consultation, and the Bill will allow us to build on that in the most effective way.

Mr. David Heath (Somerton and Frome) (LD): I am grateful to the hon. Gentleman for giving way again; he has been very generous, and I agree with what he is saying. In my part of the world, one of the schemes that I have strongly supported is hydroelectric micro-generation. However, some of the people who have brought water mills into use and contribute a very small amount of energy to the grid, as well as supplying their own needs, are now concerned that they might be assessed for non-domestic rates on that small production. Does the hon. Gentleman agree that the Minister could put their minds at rest by clearly stating that such schemes will not be assessed for business rates, so that there will not be a further disincentive to installing them?

Mark Lazarowicz: I have heard of that concern, and it would be extremely unfortunate if there were a disincentive to micro-generation as a result of that feature of the local rating system.

That leads me to the next point about micro-generation in the Bill. One of the measures is designed to make it easier for householders and groups of householders who produce electricity by micro-generation to sell to National Grid. This is not just a question of individuals' own energy needs; in some cases, surplus energy will be produced. That can be sold on, which makes the cost of installation more viable. Clearly, it is important that there should not be disincentives such as the hon. Gentleman described. Some electricity is already being sold back to the grid, but I understand that there are difficulties in certain areas, and the Bill will address those.

David Lepper (Brighton, Pavilion) (Lab/Co-op): I represent a constituency where there is a great deal of interest in renewable energy, but many of my constituents who are most interested in it live in conservation areas. My hon. Friend has talked about the importance of households and groups of households taking forward what is proposed. Does he agree that it is important that the Minister for Energy, who is on the Front Bench at the moment, should liaise with the Minister for Housing and Planning, who has been in the Chamber this morning already, to examine the regulations that may be putting obstacles in the way of the developments that he suggests?

Mark Lazarowicz: My hon. Friend makes a valid point, and I am sure that it has been heard by the Ministers responsible.

Mr. Nick Hurd (Ruislip-Northwood) (Con): I congratulate the hon. Gentleman on his Bill. Does he acknowledge that there is a structural problem with the payback on investment in micro-generation, in that we have a habit of moving home regularly? Will he share with the House any views that he might have on the level of Government support required to bring the costs of the technology down to offset that factor?

Mark Lazarowicz: I shall have to decline the hon. Gentleman's invitation, because to do so would take more time than I would want to spend on that subject today. It probably relates to a Bill to be dealt with later.

The key point of my Bill is to bring about reductions in the price of the technology by promoting the mass market. Many measures need to be brought into play to allow micro-generation to take off. My Bill concentrates on the target, the link to the grid and the ability of those who make use of micro-generation to get green energy certificates, which are especially important in making the installation of the technology viable for households for which it would not otherwise be viable.

Mr. Peter Ainsworth (East Surrey) (Con): I congratulate the hon. Gentleman on bringing this important Bill before the House. Does he agree that, if micro-renewables are to make the contribution that we all want, it is important to have stability in respect of a Government framework behind them and consistency of policy and funding? What does the hon. Gentleman make of the recent changes announced by the Department of Trade and Industry towards the funding of micro-renewables and the time scale over which it is likely to be provided?

Mark Lazarowicz: I agree with the hon. Gentleman that consistency is important, but if he does not mind, I shall have to decline his invitation to comment on areas of policy that, though relevant to my Bill, would take us down a much longer road. I agree, however, that consistency is important and having targets allows us to show the industry and consumers that we have a clear strategy over a period of time.

Mr. Andrew Dismore (Hendon) (Lab): Does my hon. Friend agree that, when it comes to practical action on the ground, cities are very much centre stage? Does he welcome the Mayor of London's initiative to launch a dedicated London climate change agency, which will work in partnership with the private sector to tackle greenhouse gas emissions in London? That is particularly important for the Olympics in 2012, as we want to ensure that the project is sustainable both environmentally and socially.

Mark Lazarowicz: Indeed, the Mayor's initiative is remarkable and provides lessons for other cities and communities throughout the UK. It is important, however, to ensure that opportunities are available for all types of communities—from rural areas to urban areas and the largest cities. My Bill is thus designed to encourage the development of community schemes whereby local communities can set up their own renewable energy systems that give them a stake in local energy projects. Such projects are more likely to be accepted than if they are viewed as being imposed on communities from outside. Communities can sometimes be unhappy about certain aspects of those developments.

Andrew Stunell (Hazel Grove) (LD): I strongly support the Bill, but I hope that the hon. Gentleman recognises that this is not a London or city-centric issue. To my knowledge, some 21 local authorities—including my own of Stockport, which is also represented by my hon. Friend the Member for Cheadle (Mark Hunter)—have expressed strong support for the Bill. There is considerable support for the Bill among the local government community as well as here in Parliament.

Mark Lazarowicz: I am grateful to the hon. Gentleman for that intervention and for his support. I am pleased that local authorities throughout the UK have contacted me to express their support for my Bill.

Mr. Kidney: My hon. Friend was dealing with community energy. As my hon. Friend the Member for Burton (Mrs. Dean) said, the Bill provides a good opportunity for rural areas that are not on the gas mains to avoid being compelled to buy oil for their heating. They will now have access to renewable energy for their community energy systems.

Mark Lazarowicz: That provides a good example. One of the problems in the UK is that although we have some examples of community ownership, they are, by and large, fairly limited and on a small scale.

Several hon. Members rose— Mark Lazarowicz: Perhaps I should give way to the whole Liberal Democrat party.

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): I thank the hon. Gentleman for giving way and congratulate him on introducing the Bill. It represents an important step in ensuring that we try to meet our Kyoto commitments. He was just talking about the benefits for rural areas and earlier he mentioned the economic and employment benefits of promoting the renewable sector. I particularly welcome the Bill's commitment to renewable heat. If we can promote renewable heat in rural areas, it will also provide an outlet for farming communities that are having to make a transition in their economic activities. It is also important for the forestry industry, which faces the economic problem of what to do with the "thinnings". That problem is undermining the good management of the forestry, so I greatly welcome the hon. Gentleman's attempts to promote renewable heat.

Mark Lazarowicz: I am grateful to the hon. Gentleman for that intervention. One of the clauses indeed enables the Secretary of State to introduce a renewable heat obligation. The hon. Gentleman is right about the immense potential of renewable heat in rural as well as urban areas. It can play an important role in combined heat and power, for example. Given the very welcome renewable fuel obligation announced by the Government yesterday, it is appropriate for a renewable heat obligation to be the third pillar of the package. It could make a huge difference.

Mr. Alistair Carmichael (Orkney and Shetland) (LD): I particularly commend the hon. Gentleman for his words on community ownership and community benefit. He will be aware of the Viking Energy project in Shetland, which is a significant community development of significant scale. However, it risks being thwarted by the transmission charging regime operated by Ofgem. The cap in energy legislation is not proving to be adequate in practice. The Bill could be a vehicle for an amendment to the Energy Act 2004. Has the hon. Gentleman heard from the Government whether they would be prepared to support such an amendment?

Mark Lazarowicz: It is for the Minister to speak for the Government, but I am pleased to say that the Department has approached me about using the Bill as a vehicle for dealing with part of that problem. I hope that it will prove possible to do so. The issue is important not just to the hon. Gentleman's community, but to the whole of the UK. Evidence shows that the Scottish islands could contribute as much as 1 per cent. of the country's entire energy needs if the renewable sector fully reached its potential.

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): I congratulate my hon. Friend on bringing his Bill before Parliament. On the renewable energy clauses, has he made any assessment of the contribution that biomass could make to increasing the market for bioethanol products in this country? Our position on that is very low compared with the United States, for example. Clearly, another element of the Bill can contribute to the diversification of work available in rural areas.

Mark Lazarowicz: My hon. Friend is right. That is why the proposal to make progress on renewable heat is particularly important.

Richard Ottaway (Croydon, South) (Con): I am in my place to support the hon. Gentleman's Bill today. He is discussing the renewable heat obligation, which is by far the most controversial and most complex aspect of the Bill. Progress cannot possibly be made without Government support. Has the hon. Gentleman heard from the Department of Trade and Industry about its attitude to that particular measure?

Mark Lazarowicz: I have had an indication, but let us see what the Minister says about that. The debate about how best to progress renewable heat obligations is still ongoing.

John Hemming (Birmingham, Yardley) (LD): One difficulty is the fact that the Inland Revenue frequently seeks additional sources of revenue. From time to time I have heard about the possibility of the Revenue obtaining national non-domestic rates from domestic micro-generation. I note that one clause deals with fiscal incentives, but one hopes that the Bill will also deal with preventing fiscal disincentives, perhaps looking for a threshold level at which generation rates become free.

Mark Lazarowicz: The hon. Gentleman makes a very important point. If I can make some progress, I may be able to say a few words about that part of the Bill later.

I want to deal with community ownership. The United Kingdom has an opportunity to take advantage of developments that are already evident in other parts of Europe. In Denmark, for example, 50 per cent. of the country's wind power capacity is owned by individuals or co-operatives. Similarly large schemes exist in Austria and Germany—and even in the US. We should try to promote community energy here in the UK.

As I said in reply to earlier interventions, the Bill is designed to promote renewable heat, but it also recognises that micro-generation must be part of a wider agenda and overall Government policy. That is why the Bill has 12 important clauses that place a duty on the Government. The first relates to maximising the use of fiscal incentives. We have already seen a number of valuable measures in that respect, but a whole array of measures could further encourage energy efficiency and micro-generation. They include council tax rebates for householders who install energy-saving devices, stamp duty rebates for house purchasers, measures to encourage the purchase of energy conservation materials for houses, and so forth. Many measures could be taken and it is important to examine them collectively across government. That is what the Bill is designed to do.

John Barrett (Edinburgh, West) (LD): The hon. Gentleman is being generous in giving way and I am delighted to be able to support his Bill today. Does he agree that it is important to give equal emphasis at local and national level to measures to introduce energy efficiency savings? Discussing different methods of generating power is not good enough on its own; we must also place great stress on implementing measures to save energy.

Mark Lazarowicz: Absolutely - the two go together. We could make immense savings through energy efficiency alone, and if we combine it with micro-generation, we could make a real impact on the country's energy needs and consumption, and on tackling our climate change targets.

Emily Thornberry (Islington, South and Finsbury) (Lab): I thank my hon. Friend for allowing me to intervene in this debate, and may I add my voice to those who welcome the introduction of this Bill? We hope that it has an easy passage. Does my hon. Friend agree that, although climate change is one of the biggest challenges faced by our generation, too many people feel that there is little that they can do as individuals? Micro-generation is exactly the sort of thing that people can do, and it is encouraging to hear that in Denmark, 50 per cent. of wind generation is created by people's own individual wind plants.

Mark Lazarowicz: I agree absolutely. In developing this Bill, I discovered that there is a real interest across the country in these issues. People want us to facilitate such developments.

Mr. Hollobone: I thank the hon. Gentleman for giving way. One of the big attractions of micro-generation is that, because electricity generation takes place far closer to where the electricity is actually used, it automatically improves efficiency of energy delivery. Micro-generation would reduce the transmission and distribution losses that this country currently suffers from as a result of most of our electricity being generated away from big population centres.

Mark Lazarowicz: I agree entirely.

Meg Hillier (Hackney, South and Shoreditch) (Lab/Co-op): I thank my hon. Friend for giving way and I congratulate him on introducing this important Bill. The majority of my constituents live in council or social housing, and although they would very much welcome the benefit to their pocket of reduced energy costs, they are not in control of such matters. What discussions has he had with the Minister for Housing and Planning on how to support social landlords and councils in providing such facilities in council housing?

Mark Lazarowicz: The detail on this subject is probably more a matter for my hon. Friend the Member for Southampton, Test (Dr. Whitehead), who seeks to introduce a Bill on related matters later today. However, in promoting not only national but local authority energy conservation targets, my Bill would encourage discussion with local communities about how best to meet those targets and to promote micro-generation. Such developments can benefit communities of all types throughout the country.

Mr. Oliver Letwin (West Dorset) (Con) rose—

Mark Lazarowicz: I want to move on, but before I do so I give way to the right hon. Member for West Dorset (Mr. Letwin).

Mr. Letwin: I am grateful to the hon. Gentleman. Does he agree that one of the most encouraging things about this morning's debate so far is the sign that not only the shadow Minister for Energy, my hon. Friend the Member for North Essex (Mr. Jenkin), and I, on behalf of the Opposition, but the Liberal Democrats and, it appears, the Government, support the general thrust of his Bill? Does he also agree that this should be the harbinger of things to come—a tripartite effort to advance the climate change agenda, of which his Bill could be the signal beginning?

Mark Lazarowicz: The more of a genuine consensus that we can achieve on the way forward—not only in Parliament, but among the public and communities as a whole—the better. I look forward to the Bill's proceeding through the House.

David Lepper: In the spirit of the comments made by the right hon. Member for West Dorset (Mr. Letwin), will my hon. Friend also pay tribute to the role of the Co-operative party, the co-operative movement and Labour/Co-operative MPs in supporting his Bill and the principles behind it?

Mark Lazarowicz: As a Labour/Co-operative MP, I am certainly happy to pay tribute to us all individually, and to the Co-operative movement's support for the promotion of community energy, which is a key aspect of this Bill.

As I said at the beginning, this is an issue that requires not only individual and community action, but national and international action. An important part of this Bill is the clause requiring an annual report on the how the UK is performing in meeting its greenhouse gas emission targets; on areas where we have, and have not, been successful; and on what we are doing to ensure that we meet our climate change targets. We need to ensure that this issue is at the centre of Government policy, which is why we must also see micro-generation in the context of the contribution that it can make to the country's overall energy needs.

Sarah McCarthy-Fry (Portsmouth, North) (Lab): I, too, welcome this Bill, especially its emphasis on reporting on targets. Does my hon. Friend agree that it would be beneficial if, as part of corporate responsibility reporting, organisations reported how much of their energy is generated through micro-generation?

Mark Lazarowicz: That is an interesting suggestion. Some companies already do so, and such an idea is worthy of consideration by other companies as well.

Mr. Bernard Jenkin (North Essex) (Con): I, too, congratulate the hon. Gentleman on getting his Bill before the House; he is demonstrating that it is great fun to introduce a Bill in the House of Commons. Should not Government Departments also be subject to the injunctions just described? Should they not have an obligation to generate a certain amount of energy from renewable sources? Is such an idea included in his Bill?

Mark Lazarowicz: This is only a humble Back-Bench, private Member's Bill, and there are limits to how much I can achieve with it; but yes, it has certainly been fun introducing a Bill. I am not sure that Front Benchers always regard the introduction of Bills as fun, but I have certainly enjoyed introducing mine.

I have been genuinely surprised at the level of support that the Bill has received throughout the country. There is a real wish on the public's part for the Government to facilitate the development of such activities. People want to contribute to tackling climate change, which is why it is important that the Bill proceeds and emerges at the end of the process—assuming that a Second Reading is granted—in sufficiently comprehensive a form to ensure that it makes a real difference.

I have had some productive discussions with the Department of Trade and Industry and the Minister for Energy. I shall hear in due course what aspects of the Bill the Government are happy with; there are doubtless other aspects about which they have reservations. I certainly look forward to working with them to try to get a Bill that reflects my aspirations, and the aspirations of those who sponsored it. I hope that during its subsequent stages—if it gets that far—we will recognise that the public genuinely want us to allow them to make this contribution to tackling climate change. It is important that we do not let them down—either today or during the Bill's future stages.

Ms Dawn Butler (Brent, South) (Lab): I, too, congratulate my hon. Friend on the Bill. Does he agree that there is growing interest, especially among young people, in issues such as micro-generation, and that we must ensure that such technology is produced on a larger scale and more cheaply, so that low-income families can afford to use it and to contribute to the reduction of carbon emissions?

Mark Lazarowicz: Indeed. The interesting suggestion has been made that every school in the country's having a micro-generation device would not only contribute to their energy needs, but would in itself be a good educational tool.

Mr. David Chaytor (Bury, North) (Lab): I congratulate my hon. Friend on introducing this Bill. I want to point out that my local authority was the first in the United Kingdom to publish its own climate change strategy. My colleagues in, and the officers and members of, Bury metropolitan district council will be delighted to see the Bill before the House today. Clause 1 uses the phrase "viable . . . energy supply". The Government normally use the phrase "security of energy supply". Does my hon. Friend agree that the advantage of micro-generation is that it enhances our security in terms not only of self-sufficiency, but of safety? In the world post-9/11, can he envisage any circumstances in which a terrorist organisation would be interested in mounting an attack on a wind turbine?

Mark Lazarowicz: My hon. Friend makes an interesting point.

Mr. Andrew Love (Edmonton) (Lab/Co-op): I thank my hon. Friend for giving way and I, too, welcome his Bill. There appears to be an emerging consensus across the House. It will be interesting to see whether the right hon. Member for Bromley and Chislehurst (Mr. Forth) enters into that consensus.

Mr. Forth: No.

Mr. Love: I thought that might be the answer.
 
I am interested in my hon. Friend's speech—whenever he gets the chance to make it. He has talked about targets and encouragement: we definitely need the Government to move on research into renewable resources, but there is no mention of that in the Bill. Is that research an important consideration?

Mark Lazarowicz: It is, indeed. Obviously, the Bill as it stands will encourage research, but my hon. Friend will appreciate that it is a private Member's Bill and there was only so much that I could cover. I resisted the temptation to set out my personal energy policy on every aspect of Government activity, trying to restrict the Bill to some achievable goals.

Norman Lamb (North Norfolk) (LD): In response to an earlier intervention, the hon. Gentleman made an important point about the role that schools can play. Is he as depressed as I am at the Government announcement on 2 November that the single source of grant from the Department of Trade and Industry for school and other community projects has come to an end? The replacement for photovoltaic and clear skies programmes will commit less money per year than they did. Are the Government not moving in the wrong direction?

Mark Lazarowicz: The hon. Gentleman will, I am sure, understand that I want to concentrate on the positive things that can be achieved from the Bill, but he has made his point.

Mrs. Theresa Villiers (Chipping Barnet) (Con): I thank the hon. Gentleman for being generous in giving way to me, having given way to so many hon. Members. Does he agree that setting clear targets for increased take-up of micro-generation will create the conditions in which a market can develop in that technology? Hopefully, that will bring prices down and make the technology more available to anyone who wants to be involved in cutting carbon emissions and tackling climate change.

Mark Lazarowicz: Absolutely. That takes me back to where I was a little while ago before I received a few more interventions than I had expected.

We have an opportunity to encourage the market and the industry to respond to undoubted public interest. If the Bill obtains a Second Reading today, we must make sure as it goes on that it reflects public concern and interest. This is an immense opportunity for the United Kingdom. Let us take it, and let us go forward on the basis outlined in the Bill.....

The Minister for Energy (Malcolm Wicks): I congratulate my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) on presenting an important Bill and a well-researched and considered case on climate change and sustainable energy. In the interests of time, which I know we all take seriously, I will not comment in detail on all that has been said—I hope Members will forgive me—but I will say that, at times, the talk here this morning has been as green as the House of Commons Benches. I find that significant.

The private Member's Bill procedure is important. Some 10 years ago I had the opportunity through the ballot and the privilege through the House of introducing what became known as the Carers (Recognition and Services) Act 1995, with much support from the then Conservative health Ministers. I have told my hon. Friend the Member for Edinburgh, North and Leith privately that if I, a mere Labour Back Bencher in those days, could present a Bill under a Conservative Government, surely it may be possible for a Labour Member to do so now.

My hon. Friend is himself a renewable source of energy, as he moves around the Chamber simply to confuse me! [Laughter.]

Mr. Forth rose -

Malcolm Wicks: The right hon. Gentleman has not had much of an opportunity to intervene today, so I shall give way to him.

Mr. Forth: Is the Minister aware that during the last three Fridays when we have discussed private Members' Bills, it has been his ministerial colleagues who have systematically talked out three of his Labour colleagues' Bills?

Malcolm Wicks: I was not aware of that, because, unlike some, I like to spend some time in my constituency on Fridays. I always feel that that is part of my duty. I am sometimes teased at meetings when I am reminded that I am the seventh Minister for Energy in eight years. I do not want to comment on that, but it shows the Government's dedication to renewables.

Tackling climate change is a priority for the Government and, I detect, a key priority for all of us, or certainly most of us, in the House. The Prime Minister and others, too, have said that it is the greatest challenge facing the world today. While politicians often wax lyrical that their chosen subject is the biggest challenge, in terms of the evidence climate change claims the dubious crown of being the biggest challenge facing the world today.

Our record on addressing the levels of harmful emissions that contribute to climate change is good. We are on track to meet our Kyoto protocol commitments, with emissions of all greenhouse gases projected to be approaching 20 per cent. below 1990 levels by 2010. However, we recognise that there is much more to do to meet our more ambitious target of a 20 per cent. reduction in carbon dioxide emissions by 2010. That is a challenge. Through the current review of the climate change programme, we are evaluating existing measures to reduce emissions and assessing new options for getting back on track to meet our ambitious target. Mr. Harper: If, as the Minister and the Government's chief scientific adviser have said, climate change is the most important challenge facing the world, will the Minister explain why these measures, which he has just said are valuable and well thought out, have had to be introduced by a Back-Bench Member rather than by Her Majesty's Government?

Malcolm Wicks: This House has a great tradition—I cited my own modest contribution to it—of making societal progress through the contribution of Back Benchers, and that has to be good for Parliament. However, I believe that the Government have a good record on micro-power, not least the work to meet our target of 10 per cent. of electricity coming from renewables overall by 2010.

Mr. Hurd rose—

Malcolm Wicks: Obviously, I need to give way once or twice but most of us are anxious to make some progress on moving towards a judgment on this important Bill.

Mr. Hurd: I know that the Minister wants to get on, but he acknowledged the challenge of the 2010 CO 2 reduction target. Will he take the opportunity to confirm that the Government will neither drop nor seek to adjust that target in the climate change review?

Malcolm Wicks: Our Kyoto obligations are absolutely clear. Indeed, our own targets are absolutely clear and we are committed to them.

Micro-generation, as we have discovered, is a generic term for a suite of technologies that allow for the production of heat and electricity in close proximity to communities and to the consumer.

Jo Swinson (East Dunbartonshire) (LD): Will the Minister give way?

Malcolm Wicks: Yes, because I was able to get out a whole sentence of my speech and it would be extremely churlish of me, given that I have a reached a full stop, not to stop momentarily.

Jo Swinson: I welcome the opportunity to put on record my support for the Bill, particularly its provisions on micro-generation. Does the Minister agree that, by generating their own electricity at home, people will understand how much energy they use and that that will motivate them to reduce their energy use, which is key to reducing emissions overall?

Malcolm Wicks: That is an important point. I shall touch on that briefly in a few moments.

When we talk about micro-generation, we are talking about a range of technologies: solar power to heat water and produce electricity; harnessing the wind through individual micro-wind turbines; and using the earth's heat to heat our homes through ground source heat pumps. Energy efficiency involves a closely related family of measures, including, as was confirmed today, the thatched cottage, and it was useful to be reminded of that important example by the hon. Member for Lichfield (Michael Fabricant). We have an array of technologies that can make a significant contribution to our long-term targets for reducing carbon emissions. By exploiting our own natural resources, increased levels of micro-generation would reduce our reliance on imported fuel and contribute towards our objective of secure energy supplies. That issue requires more debate in the months to come, and I think that we shall achieve more debate.

The Government have long recognised the potential of micro-generation, which is why I announced only last week a £30 million low-carbon buildings programme to support these technologies. In announcing the details, I was anxious to bridge any gap in funding that was of concern to the industry. That brings total Government funding for micro-generation installations to £83 million since 2002. Creating a sustainable market for those technologies will not be done solely through capital grant programmes, which is why we are developing a strategy for the promotion of micro-generation technologies to remove some of the wider barriers preventing widespread take-up.

Mr. Heath: Will the Minister touch on the point that I raised with the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) about the concern among people who use micro-generation water turbines that they could be brought within the compass of the non-domestic rate? Can he allay their fears?

Malcolm Wicks: My understanding is that business rate valuations do include renewable energy installations, but that business can benefit from the financial gains associated with renewable obligation certificates and levy exemption certificates. [Interruption.] On the domestic side—no, householders' own micro-generation would not make those individuals or households eligible for business rate. That is an important clarification.

One important theme has been raised by one or two colleagues, such as the hon. Member for East Dunbartonshire (Jo Swinson) and my right hon. Friend the Member for Oxford, East (Mr. Smith). Many people watching their television screens and hearing about global warming could be forgiven—although I am saying that they should not be—for thinking that the future of the planet is by definition an issue for big people, such as presidents and prime ministers, and big institutions, such as the UN, the G8 and the rest. Of course it is an issue for those big players, but what my right hon. Friend the Member for Oxford, East said is also important. He was once my Secretary of State, and I am rather in the habit of agreeing with him, so I am happy to agree with him on this important point. To use his phrase, this is about thinking globally and acting locally.

When an individual or a community organisation—a school, a church or a community centre—starts to invest in photovoltaics, say, or a micro wind turbine, they are not only making a contribution to their own energy supply but sending out a signal that they are taking responsibility. All of us as individuals—that would certainly be the case for us in the House—are more part of the problem of the misuse of carbon than the solution, but micro-generation enables us, locally and as individuals, to start becoming part of the solution.

Now I shall turn to some of the details of the Bill.

Martin Horwood (Cheltenham) (LD) rose—

Malcolm Wicks: I shall give way one more time, and then make some progress.

Martin Horwood: I would like to add my support for the Bill. Does the Minister agree that one of the barriers to popular participation in the technology is the cost, and that one of the valuable aspects of the Bill, as with the biofuels initiative this week, is that it will give a boost to the market, which will bring down the cost of these technologies and make them more affordable for more people?

Malcolm Wicks: That is right. The technologies are at the stage where television was, perhaps, in the first few months of production. Clearly, with growing popularity, there are economies of scale and cost reductions. If the Bill is passed by both Houses, that will show the will of Parliament, which in itself will make an important impact.

Before I turn to specifics, let me make it clear that the Government support the key principles that underpin the Bill, but that we have concerns about some of the detail. However, if my hon. Friend the Member for Edinburgh, North and Leith accepts the changes that I propose, I will be happy to work with him—although I do not know where he is at the moment. [Interruption.] Oh, there he is. I wish to be his friend; I do not know why he is hiding from me. I shall be happy to work with him to get the Bill on to the statute book. [Hon. Members: "Hear, hear!"] Before we have too many "Hear, hears", let me go into the detail.

Clause 2 gives the Prime Minister a duty to table an annual report on progress towards meeting targets for reducing greenhouse gas emissions. The UK already has an existing requirement to submit data to the EU on greenhouse gas emissions annually, so ensuring that the report is laid before Parliament would not be problematic. Indeed, we welcome the idea.

Although the Government see no problem with the general thrust of the clause, however, we would not support a final version that required the Prime Minister, rather than a Secretary of State, to table the report—and we do not believe that there is a need for a resolution approving the report.

Bill Wiggin: The fact that the Prime Minister makes the report is one of the most important aspects of the Bill. The Minister will be aware that the Secretary of State for the Environment, Food and Rural Affairs has stated:

"We will not, on the basis of current policies alone, achieve our ambitious domestic goal of a 20 per cent. cut in carbon dioxide emissions."

A few moments ago, the Minister said that the Government would. That is why it is so important for the Prime Minister to make the report. Malcolm Wicks: The Prime Minister has led from the front both domestically and internationally on climate change. A report on micro-generation should, in our judgment, come from my Secretary of State rather than the Prime Minister.

Clause 3 requires that Her Majesty's Treasury produce a fiscal and economic strategy for micro-generation and energy efficiency. As hon. Members will be aware, all consideration of fiscal measures is undertaken as part of the normal budgetary process, so a separate fiscal and economic strategy for micro-generation and energy efficiency is unnecessary and would risk prejudicing the outcome of the overall budgetary process. I should add that the Chancellor has asked the Government's chief economist, Nick Stern, to review climate change and economic instruments.

Norman Baker: I do not wish to take up too much time, but I want to return to the point about the Prime Minister. The reason why the Bill suggests that the report should be done by the Prime Minister, at least in name, is that responsibilities are set out in clause 2 for greenhouse gas emissions—not just micro-generation—which involve the Department of Trade and Industry, the Department for Transport, the Department for Environment, Food and Rural Affairs, among others. It is important to aim for cohesion and accountability across government. That is why the Prime Minister's involvement is an important aspect of the clause.

Malcolm Wicks: The Government could not be more joined up, Mr. Deputy Speaker, on issues surrounding climate change, energy efficiency and the rest. I do not believe that we should get into too much of a lather about who presents the report. I have explained why I think that it should be my Secretary of State. The hon. Gentleman should beware of casting himself in the role of talking the Bill out by making too many interventions.

Clauses 4 and 5 relate to the setting of national and local targets for micro-generation. Let me remind the House that the Government already have two targets to micro-generation contributes: 10 per cent. of electricity generated from renewable sources by 2010 and 10 GW of combined heat and power capacity installed by 2010. A formal requirement to set targets for micro-generation would be premature at this stage.

We recently held a consultation exercise on the development of our strategy to promote micro-generation and we are analysing the responses before putting together a package of measures in the final strategy. There are also difficulties associated with setting a realistic target for an industry that is still in its very early stages. However, I understand the importance of targets in providing long-term signals to the industry, particularly for those looking to make significant investments. Although we could not support the clause as drafted, the Government would accept an enabling power in relation to the setting of micro-generation targets.

It goes without saying that we would report on the progress made in implementing our micro-generation strategy on a regular basis, so clause 6 poses no problems—[Interruption.]

Mr. Angus MacNeil (Na h-Eileanan an Iar) (SNP): I notice that the Minister has accepted the importance of finding ways and means of alleviating fuel poverty, to which clauses 1 and 6 relate. What specific extra measures do the Government propose, particularly for constituencies such as my own of Na h-Eileanan an Iar, which has some of the highest fuel poverty in the whole of the United Kingdom?

Malcolm Wicks: Fuel poverty is a crucial issue. In the context of the Bill, one of the issues that I wish to explore in detail over the coming months is how best to use micro-power to help to address the fuel poverty agenda. They are often seen as different subjects, but I do not think that they should be. We have heard about areas that may be off the gas mains and having to pay higher costs. We need to explore further how micro-generation and energy efficiency can play a part. I am rather with the thrust of the hon. Gentleman's comments.

Clause 7 gives the Secretary of State a duty to establish a scheme enabling the sale of electricity by domestic micro-generators. Such a scheme could then require electricity suppliers to buy at the market rate the electricity produced by their domestic customers by micro-generation. Micro-generators can already sell their electricity, so legislation is not required to achieve this. To require suppliers to buy that electricity at the market price risks distorting the electricity supply market and would be incompatible with our liberalised arrangements. This Government would like more suppliers to engage in the market for this exported electricity, perhaps through an obligation on them to offer terms, in a manner similar to their obligation to offer terms for supplying electricity to householders. So we are looking at this issue and I am anxious to make some progress on it, but I am unable to accept the clause as drafted.

Clause 8 appears to put a duty on any public authority, including Ofgem, to have regard to the needs of micro-generators when carrying out any function relating to various green energy certificates. I have some concerns about imposing a specific duty on Ofgem in respect of micro-generation. It already has a clear set of duties that govern its work, including a duty to contribute to sustainable development. A requirement to have specific regard to the needs of micro-generators would inappropriately skew its focus toward this still relatively small section of the energy market. But the Government support the general thrust of this clause, in so far as it would encourage actions that help micro-generators to gain access to the benefits associated with green certificates, such as renewable obligation and levy exemption certificates.

Mr. Carmichael: On Ofgem's remit and possible changes to the Bill, the Minister and I have discussed informally the possibility of varying the cap arrangements in the Energy Act 2004 to allow Ofgem's transmission charging regime to work more favourably for projects in island communities. Can the Minister offer any prospect of using this Bill as a means to achieving that end?

Malcolm Wicks: Our policy is this area is still under review, but I hope to announce a conclusion in two pages' time. [Laughter.]

Clause 9 gives the Secretary of State a duty to promote community energy. I am happy to say that this Government already do much to promote community energy schemes. The clear skies initiative provides funds for renewable installations in the community, and the new low carbon buildings programme will continue to fund such schemes.

Dr. Roberta Blackman-Woods (City of Durham) (Lab): I am pleased to be able to put on the record my support for this Bill. Does the Minister accept that the enormous advances taking place in photovoltaics and solar energy research, particularly in respect of materials and efficiency, could bring costs down and support the development of community energy?

Malcolm Wicks: Yes, which is why we have supported photovoltaics and hope to do so in future. It is still a relatively expensive renewable technology, but we hope to see the developments that my hon. Friend describes.

The Secretary of State for Environment, Food and Rural Affairs has provided £60 million for the community energy programme, which aims to increase the development and installation of community heating schemes throughout the UK, so our record on supporting community energy is clear. The imposition of a duty to promote community energy would not have any significant impact on our activities in this area, so we do not see the immediate need to include clause 9 in the Bill.

Clause 10 enables the Secretary of State to introduce a renewable heat obligation. I am aware that the House has debated this subject at length, particularly during the passage of the Energy Act 2004. There is no doubt that we need to take action to support renewable heat, but it is important that that action be appropriate and effective. We have the evidence base provided by a recently published study on biomass, and by the recommendations of Sir Ben Gill's taskforce, to help us to provide suitable measures to promote renewable heat. At the moment, there is nothing to suggest that a renewable heat obligation is the definitive way forward, so to commit to such an obligation at this stage would be premature. We will of course look carefully at the possibility of introducing such an obligation alongside other policy options suggested in Sir Ben Gill's report, and we will be happy to discuss the matter with colleagues in Committee.

Mr. Weir: Is the Minister prepared to accept that the Bill does not commit him to the renewable fuel obligation, but merely gives him the opportunity to bring it in? If the Bill is passed and he decides in his wisdom—as he should—that the renewable fuel obligation is necessary, he will have the power to bring it in without further legislation. Will he not reconsider on that point? Malcolm Wicks: We can discuss that in Committee, as much of the Bill needs to be discussed.

It has been brought to my attention that when we were discussing whether the Prime Minister himself or the Secretary of State should table the report, I referred to my own Secretary of State, the Secretary of State for Trade and Industry. It is evidence of the fact that we are so joined at the hip on these issues that I should, of course, have referred to the Secretary of State for Environment, Food and Rural Affairs. Frankly, we DTI Ministers are so often in and out of DEFRA that I sometimes forget which Department I am a member of—such is the extraordinary joined-up-ness of this Administration.

Hon. Members will be aware that my Department has been in the process of reviewing the renewables obligation. Some measures included in the preliminary consultation, and now the statutory consultation, require primary legislation to be tabled. They are aimed at making it easier for micro-generators to benefit from the obligation. They will make it easier for agents to handle much of the administrative process on behalf of householders who wish to claim renewable obligation certificates for the electricity that they generate. They will also remove the need for micro-generators to have a sale-and-buyback agreement in place with their electricity supplier before they can claim their obligation certificates, which are known, in the jargon, as ROCs. That will help to make the whole process a lot smoother. The Bill seems an appropriate piece of legislation in which the Government can make those changes at the earliest opportunity.

Mrs. Betty Williams (Conwy) (Lab): I fully support this excellent Bill, but will my hon. Friend undertake to hold close discussions with the Welsh Assembly Government about its progress and any developments?

Malcolm Wicks: Yes, indeed. My hon. Friend the Member for Edinburgh, North and Leith will also hold such discussions.

Mr. Harper: Will the Minister give way?

Hon. Members: No!

Malcolm Wicks: Well, very briefly.

Mr. Harper: I am a little confused about whether the hon. Member for Conwy (Mrs. Williams) supported the Bill in the form promoted by the hon. Member for Edinburgh, North and Leith (Mark Lazarowicz) or as filleted by the Minister.

Malcolm Wicks: Yes. There is a difference between effective parliamentary scrutiny and speaking for the sake of it.

Another issue subject to recent consultation is the adjustment of transmission charges for renewable generators in the north of Scotland. In March, we announced our intention to use the power in the Energy Act 2004 to make such adjustments with respect to renewable generators in Shetland, Orkney and the Western Isles. Since then, I have had an opportunity to consider these matters with many hon. Members and a welcome chance to visit delegations from those islands. As things stand, the power in the Energy Act enables us only to adjust charges until 2014, but the long lead time for developing projects on the islands mean that they will not be in operation until early in the next decade and would derive only minimal benefit from a scheme ending in 2014. Extending the scheme to 2024 would provide additional support to island projects and bring environmental and economic benefits to those important island communities. The Bill once again provides an opening to make the required legislative change at the earliest opportunity, and I know that my hon. Friend the Member for Edinburgh, North and Leith is in accord with that.

Mr. Carmichael: I welcome most warmly the announcement that the Minister has just made, which will make a significant difference to the development of renewable projects in the island communities. If we have a successful and happy conclusion to the Bill, which I certainly hope for, may I urge on him an early imposition of that power?

Malcolm Wicks: That will be subject to the will of the House and the other place, but I also hope that that will happen.

I wish to say a quick word about the application of the Bill to the devolved Administrations, which I know my hon. Friend has been considering. As it stands, aspects of the Bill legislate for Scotland in devolved policy areas or impact on functions exercised by Ministers of the Scottish Executive. My hon. Friend will have discussions on the issues, but if he does not secure agreement amendments will be required in Committee to exclude Scotland from the provisions of the Bill where necessary. I am sure that that will not happen. It would be curious if a Bill introduced by a Scottish MP would benefit Croydon but not his constituency, and I suspect that he will be able to reach agreement on the issues. That is a matter for him, but we will do our best to help.

In conclusion, the Government are pleased to offer overall support, subject to the caveats that I have outlined. We see an opportunity for the Bill to include further clauses that would help to tackle climate change and energy supply. We look forward to working with my hon. Friend and I hope that the House will give the Bill a Second Reading.

Mr. Forth: My hon. Friend makes a fair point. If she were to have the privilege of serving on the Committee, she could seek to table an amendment to strengthen the Bill in the way that she suggested.

As I said earlier, there is just enough scope—especially given what the Minister said—for the House to give the Bill a Second Reading. The Minister can attempt to persuade the Committee of the strength of his arguments and then we can all look forward to Report, when we can give the Bill an even more thorough going over.....

Mark Lazarowicz: With the leave of the House, I shall reply. My hon. Friend the Minister suggested that he would require certain changes to the Bill before it received Government support. That will be a matter for the Committee, but I am happy to work with the Government to that end. My hon. Friend said that there will be room for discussion in Committee, which I welcome, and it will no doubt be vigorous. I ask the House to support the Bill.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).