Electricity and Gas Transmission (Compensation) Bill
(Limited Text - Ministerial Extracts only)
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The Minister for Industry and Investment Security (Ms Nusrat Ghani)
I thank my right hon. Friend the Member for North Somerset (Dr Fox) for raising awareness of this important issue and for his serious, measured and thoughtful contribution, as have been so many contributions from both sides of the House. He is, indeed, a private Member’s Bill specialist and, in my experience, it is best not to go against what he wants to achieve with his Bills. Hopefully I can satisfy him today.
I thank my hon. Friends the Members for Broadland (Jerome Mayhew), for North Herefordshire (Sir Bill Wiggin), for Meon Valley (Mrs Drummond), for North Devon (Selaine Saxby), for Newcastle-under-Lyme (Aaron Bell), for Darlington (Peter Gibson), for Southend West (Anna Firth), for Bury North (James Daly) and for South West Hertfordshire (Mr Mohindra), and my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning), for their thoughtful contributions. If I have time, I will go through each of their questions.
The Government have a clear long-term plan to accelerate our transition away from expensive fossil fuels and to meet our net zero targets. The electricity network is fundamental to this transition, and it needs to be transformed at an unprecedented scale and pace to allow the system to accommodate new renewable and low-carbon generation. The network also needs to accommodate an expected doubling in overall electricity demand by 2050, as we electrify sectors including transport, heat and industry. My right hon. Friend the Member for North Somerset identifies a clear problem that needs to be addressed.
To give colleagues an idea of the scale of the challenge we face in this country, the onshore electricity network had more than 20,000 km of high-voltage transmission cables and approximately 800,000 km of low-voltage distribution lines in 2021, which is enough to stretch around the world 20 times. By 2050, we will need between 1 million and 1.5 million km of distribution network cabling.
As more renewable generation joins the network, its physical capacity to transport electricity can be exceeded if new network infrastructure is not ready in time. National Grid, the electricity system operator, has to monitor and sometimes curtail generation to ensure it does not overload the network. Building new network infrastructure reduces these constraints and, therefore, the cost of managing them by enabling electricity to move more efficiently from where it is generated to areas of high demand.
However, it currently takes between 11 and 13 years to build or reinforce new onshore transmission network infrastructure, from initial planning to final completion and commissioning. Consequently, the system operator estimates that constraint costs funding via consumer bills could increase by £1 billion per year in 2022 to £4 billion per year in 2030. That explains why the electricity network is such a critical enabler of our net zero, affordability and energy security objectives and why the Government aim to dramatically accelerate these build timelines.
My right hon. Friend the Member for North Somerset mentioned the meetings he has had with the energy Minister, which I believe have been incredibly productive, and they will continue. He is right that we must bring people with us as we ramp up delivery of this critical infrastructure. He raised the important issue of determining claims for compensation in cases where land has been subject to the acquisition of rights or land either through compulsion or by agreement for the purposes of building electricity and gas transmission network infrastructure. I have highlighted the importance of network infrastructure for our climate and energy security ambitions. However, we recognise the concerns raised by my right hon. Friend. An unprecedented expansion of our electricity network is required, but the Government agree that this new network infrastructure must be built in a way that protects the rights of landowners and communities. If landowners are not happy with their settlements, there must be an avenue for redress.
I agree that the upper tribunal can be expensive for claimants who lose a case. While the vast majority of cases between the network operator and the landowner end in amicable agreement, disputes do arise. That is where the alternative dispute resolution that already exists and is in use can play a valuable role. It can provide a quicker, cheaper, more flexible route of resolving a dispute. The upper tribunal encourages the use of alternative dispute resolution before a case is referred to it. Indeed, failure by a party to pursue alternative dispute resolution without good reason can have cost implications in tribunal proceedings—for example, limiting the ability of a party to recover costs or potentially leading to an adverse cost order being made against the refusing party.
The Department for Business, Energy and Industrial Strategy published a call for evidence earlier this year seeking views on whether the current land rights and consenting processes for electricity network infrastructure are fit to accommodate the rapid, transformative change that will be required in the coming decades. Our call for evidence closed on 15 September, and increasing the use of alternative dispute resolution was mentioned by many respondents. The evidence suggests that the issue here is about both raising awareness of existing alternative dispute resolution and increasing its use where relevant.
We wish to see a clear, cheap, quick and enforceable solution, in line with what I understand to be my right hon. Friend’s objectives. We agree that there should be a quicker, affordable alternative to the upper tribunal readily available for landowners, and I thank my right hon. Friend for raising these issues for us to consider. As alternative dispute resolution mechanisms are already in use, we want to ensure that any legislative approach avoids prescribing a specific mechanism that duplicates existing options, creating unnecessary bureaucracy and costs for bill payers or taxpayers. In addition, different situations will suit different types of dispute resolution—for example, mediation, evaluation or arbitration. Prescribing a one-size-fits-all approach would likely increase costs and timescales for certain types of dispute.
In summary, I hope Members will agree that alternative dispute resolution should be encouraged. The Government are prepared to work with my right hon. Friend to develop the best solution to this issue, and we look forward to working with him in Committee.
As I have a few minutes, I will try to address some of the points raised by Members. My hon. Friend the Member for Darlington raised the issue of land rights, the rights of landowners and how legal costs can constrain constituents in bringing their cases forward. Hopefully, through this private Member’s Bill, we can try to resolve that. My hon. Friend the Member for Newcastle-under-Lyme talked about the luck it takes to win the ballot. I am not sure what is involved there, but he raised an important point about infrastructure, distribution, network cabling and compensation. We hope that, by taking the Bill forward, those issues can be addressed.
My hon. Friend the Member for Bury North talked about the mechanisms to allow constituents to access compensation. We have discussed how important it is to make people aware of where this compensation is available. He also mentioned 5G. That sits with the Department for Digital, Culture, Media and Sport, but he will no doubt get a response on that.
My hon. Friend the Member for North Devon talked about stored carbon in peat and seabed. As she is an expert on these issues, I am nervous to touch on what she already knows, but we will work with colleagues to understand their issues with regard to water infrastructure, and we encourage discussions on this matter. I will ensure that meetings take place with my right hon. Friend the Secretary of State, so that she can continue to represent her constituents on that issue. My hon. Friend the Member for North Herefordshire, who is a farmer not just a landowner, talked about compensation and access rights. Of course, he raised the grassroots perspective; we are all here to represent our constituents—the David against the Goliath—when we are dealing with big energy and infrastructure companies. He said that 63% of land is used by farmers, so it will be incredibly important to ensure that the new process puts in place arbitration, compensation and communication.
I assure my right hon. Friend the Member for North Somerset that we agree that he is right. We need to make sure that we have appropriate processes for compensation, and that any compulsion agreements are in line with the laws that are already established and in place. We want to make sure that the process is clear, affordable and fair. I recommit that the Government are prepared and will work with him to develop the best solution to the issue. We look forward to working with him in Committee and I hope that he is pleased with the outcome of the debate.