Clegg and Cable quiz Brown on Europe, Zimbabwe, fuel prices and oil supply

7.53.00pm UTC (GMT +0000) Tue 24th Jun 2008

' . . to compel energy companies to help the fuel poor and to promote energy efficiency in our homes on the scale that is now urgently needed?'

[June 23] Nicholas Clegg (Party Leader; Sheffield, Hallam, Liberal Democrat): I am grateful to the Prime Minister for advance sight of his statement.

Compared with other six-monthly European Union summits, last week's was not a hugely significant one. In truth, it was more about catching up with fast-moving developments than about setting the pace for the future. Rather than their master, the summit was in many ways a slave to events, whether the aftermath of the Irish vote on the Lisbon treaty or the unscheduled spat between the French President and the Prime Minister's good friend, the EU Trade Commissioner.

On the Lisbon treaty, the Prime Minister is right, of course, that we need to respect the need for the Irish Government to consider their next steps before October. However, as a supporter of the treaty, I none the less worry that we might soon make the best the enemy of the good. Uncertainty beyond October would genuinely raise the spectre of a paralysed European Union, unable to deliver concrete benefits to European citizens. So will he give some assurance that the treaty's fate, whatever one thinks about it, will be sealed one way or another in October and that we will not be pitched into months of further uncertainty about the treaty?

On the issue of Zimbabwe, I welcome the Prime Minister's commitment to working in the European Union and the United Nations. I hope that the international community will consider all the options available, including the case for stopping foreign currency remittances into Zimbabwe, restricting electricity supplies from South Africa and Mozambique, and encouraging the Southern African Development Community to take more action. However, does the Prime Minister agree that there are more things that he could do now, here? Will he, for instance, consider allowing asylum seekers who are fleeing Mugabe's brutal regime to live and work temporarily in the United Kingdom, until such time as Zimbabwe is more stable and they can return home?

I also welcome the summit conclusions in favour of carbon capture and storage technology. However, how does the Prime Minister square that approach and the summit's unambiguous conclusion with the strong indications that his Government will go ahead with a new generation of dirty coal power stations that are CCS ready, but not CCS functional, such as the one at Kingsnorth?

Finally, it is good to see the European Union grappling with the issue of food and fuel prices. However, the Prime Minister's summit-hopping, from Europe to Jeddah, is not enough. We need him to take practical steps here at home, too. So will he emulate the example of other European Union countries, such as Spain, whose Government have clawed back some of the massive subsidies that energy-generating companies have been handed on a plate through the European emissions trading scheme, to compel energy companies to help the fuel poor and to promote energy efficiency in our homes on the scale that is now urgently needed?

Gordon Brown (Prime Minister; Kirkcaldy & Cowdenbeath, Labour): I agree with what the right hon. Gentleman said about Zimbabwe. All of us are appalled by the violence taking place, and all of us are looking for a way forward. Each asylum case is dealt with on an individual basis, but I will consider what he has said about that. However, he must agree that the priority is to see an end to the violence in Zimbabwe and a way forward that allows democracy to be properly in existence there, and then, once democracy is restored, to see how we can help with the reconstruction of that country.

The right hon. Gentleman mentioned carbon capture. We are leading the rest of the European Union in seeking to have the first demonstration plant, and then the first commercial plant, for carbon capture. We want the EU to provide a mechanism by which that will be possible, because it is an expensive thing to do. We are urging the Council-I hope that he would support this-to ensure that, from the budget of the European Union, there is a means by which carbon capture can be given some support.

The right hon. Gentleman also mentioned food and oil. I agree with him that they are the major problems that many households up and down the country face, with the cost of food in the supermarket and the cost of petrol at the petrol pumps, as well as gas and electricity bills being higher as a result of the oil price. However, he underestimates the extent to which we have raised the winter allowance. We have provided additional help for insulation, which was billions of pounds in previous years and will be billions of pounds in the years to come, to help people insulate and draught-proof their houses, and to make energy-efficient and environmentally sensitive adjustments. When the right hon. Gentleman talks about the utility companies, I think that he has forgotten that we have just negotiated a deal that gives us £150 million a year after next year-the deal will go for many years-to provide extra money to give help to low-income households.

The right hon. Gentleman's first point was about the report on Ireland. We have said to the Irish Government that it is for them to come forward with their proposals. It is for them to suggest, as they have done, that they need time to look at this. They will then submit a report to the Council in October. At a time when we have 26 other countries moving towards ratification, the Irish will come to us with their views about what can be done, and we will look at the matter in October. It is fair to give the Irish Government the time to assess the situation and then bring their proposals forward to us.

. . Vincent Cable (Deputy Party Leader; Twickenham, Liberal Democrat): After the Jeddah meeting, can the Prime Minister answer some of the myths about the oil market, notably the myth that oil producers are deliberately withholding supply when spare capacity is only 2 per cent., and the myth perpetuated by the Conservative leader today that prices are where they are because of financial speculators rather than the underlying reality of rapidly rising demand and fixed supply?

Gordon Brown (Prime Minister; Kirkcaldy & Cowdenbeath, Labour): On speculation, I have said in answer to another question that the Treasury is looking into that matter. An inquiry is going on within the IMF and the US authorities are conducting an examination. If there has been market manipulation, that will be exposed by the work being done. On supply, I am satisfied that many of the largest oil producers are trying to supply the market. The problem is that there has been insufficient investment in capacity and refining in previous years, and another problem is that some oil-producing countries get their oil to the marketplace in inefficient ways. These forces should be examined. That is why British oil companies, and oil companies from outside the region, should be allowed to invest, so that we have higher production and better refining in these areas. It is also why, reciprocally, we should agree that the oil producers should be able to diversify their portfolio and invest in other aspects of energy so that they have an interest in the stability of the whole energy market.