Stronger Towns Fund

Baroness Byford Excerpts

Tuesday 5th March 2019 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord, Lord Beecham, rightly said that the region will receive £15 million a year for the seven years, or £105 million over the length of programme. For reasons that we know, it is an area that is due to benefit more than any other.

The noble Lord asked about the role of the county council in developing proposals. It will certainly be central, as will all councils. We want civic engagement, although, as he said, county councils will not necessarily be in the dominant position; however, they will certainly be there.

How proposals are evaluated will be outlined in the prospectus. I do not want to get ahead of myself by saying that money will go on infrastructure rather than on other projects, but certainly infrastructure will be eligible. We hope that the spending will be transformative, so infrastructure is important. I do not think that we can expect to sort out the bids yet. We do not know the quality of the bids; we do not know the process of the bids. These things are yet to happen.

[Baroness Byford (Con)]

My Lords, I welcome the Statement. Although other noble Lords have pooh-poohed it, which is regrettable, this is new money coming in to help local authorities around the country.

I have two questions for my noble friend. I understand that £600 million will be invested following a competitive process later this year, but my question relates to the £322 million allocated earlier to the Midlands engine. How will that be organised and who will approve it? My question merely follows on from the previous one about the involvement of county councils. The Statement gave no indication as to how bids will be made and how they might be successful. I realise that the £600 million will come later, but there is nothing at this stage on the earlier bit.

Housing: Shared Ownership

Baroness Byford Excerpts

Tuesday 6th November 2018 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, anything that increases demand for housing drives up house prices. People already aspire to own their own homes; it is not that they are adding to the total of people seeking a home—they want to own their own home. We should recognise that that is a widely held aspiration among people. Not all people—many will want to rent, and we seek to provide for that as well. However, home ownership is something that many people want.

[Baroness Byford (Con)]

My Lords, can my noble friend also bear in mind the tremendous challenges in rural areas for affordable housing, whatever scheme it might be? I point out to noble Lords that it is not just about the cost here in London and suburbia; there is a very real problem in rural areas. In particular, in some areas landowners have been quite willing to subsidise and give land, and make it available, and that scheme needs to be looked at again.

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is quite right that, although there are particular problems associated with London and the south-east, we should not forget that there is a range of problems in rural areas, which differ from area to area. We have the rural exemptions, but we are focused on this, seeking to ensure that in parts of rural Britain people can afford their own home.

Non-Domestic Rating (Nursery Grounds) Bill

Baroness Byford Excerpts

2nd reading (Hansard): House of Lords
Tuesday 24th July 2018 Lords Chamber

[Baroness Byford (Con)]

My Lords, it is a great pleasure to follow the noble Earl, Lord Lytton. I will not go into the detail of his speech because he speaks with great knowledge on the valuation agency and how this instance came about.

I very much welcome the Bill. It is the smallest Bill I have ever taken part in—only one side of A4—but I am grateful to the Government for bringing it forward and getting it through Parliament so quickly with support from all sides. The case certainly raised great uncertainty in the industry. In fact, the Government’s response brings great fairness to all those in the business. When he introduced it, the Minister spoke about the need for sustainable growth. I highlight that because I believe that in the next 50 years we will see very different agricultural produce and methods of agriculture than in the past. Much may well come from having an indoor start.

In Leicestershire we have a nursery grower, James Coles. It is a very well-known company that has been going for a long while. When I spoke to it, it had not been affected by the change. It will be interesting if the Minister could tell us why some people have been affected in some places while others have not. The Minister also recorded the Government’s current commitment to £3 billion of grants for farming. That could well go towards looking at new buildings and a new way of producing food.

I record my thanks to the NFU for its briefing. If we thought that the Bill was small, its briefing of seven pages was slightly different. It went into very great detail. I think that all of us taking part in the debate will be fully aware of the various aspects of the issues that it raised. I declare a family farming interest, but, in this case, we do not have an interest in the Bill.

It is of great urgency that we propagate and raise more young plants in this country for sale to other horticultural businesses and to the wider supply trade. Anyone following the vagaries of pest or disease control will know that if we can produce more here and import less we will reduce that risk, which is real. As has been said, the general exemption for agricultural premises stood solidly from 1928 until this case in 2015. Plant nurseries have been treated as agricultural and so are exempt from non-domestic rates, but the court appeal highlighted the gap in the legislation. That is why this legislation is being brought forward today.

As I said earlier, I welcome the legislation, which will enable businesses to flourish. The UK grows excellent products. We are increasing and will continue to increase the amount of homegrown foods, trees and plants, which is important. That will give us greater export opportunities as well.

I shall end by identifying four things that I think are hugely important. The first is to recognise that the agri-food industry is worth some £108 billion. Horticulture, excluding potatoes, is worth some £3.1 billion based on the 2015 figures. The second is the importance of food security and, linked with that, the climate change that we are experiencing now. I am sure that we will need to grow many more trees. The Government have a big push in encouraging the various public bodies and individuals to plant more trees. The third is the importance of new techniques in growing and producing food. Lastly, it is extremely important that we have fairness within the industry. For all those years the industry knew where it stood but then, all of a sudden, the 2015 case gave rise to the need for this Bill.

I hope that the Bill goes through without any need for alteration. It is needed. It affects only a few people, but it could affect more people in future if they diversify in a different way.

Renewables Obligation Closure Etc. (Amendment) Order 2016

Baroness Byford Excerpts

Wednesday 16th March 2016 Lords Chamber

We on this side are asking Her Majesty’s Government to reinstate the renewables obligation for solar PV under 5 megawatts and to guarantee that existing solar projects will not be affected by future changes to policy. We regret the unfathomable and unprecedented attack on the green economy by this Government, and we will bring it to the nation’s attention at every point of attack. In the context of the recent signing of the wonderful Paris agreement, and in the light of our obligations and legally binding targets, this latest assault on our renewables industry is just that: the latest in a very long line of attacks. It is utterly unacceptable. I beg to move.

[Baroness Byford (Con)]

My Lords, I shall comment on some of the points made by the previous speaker. This Government are certainly behind renewables of all sorts for the future. I hope the noble Baroness accepts that we are working towards the benefits of a low-carbon economy and—she did not refer to this in her contribution—that the costs of producing solar energy have come down. Therefore, one of my questions to her is: if those costs have gone down, is it really right that we should maintain the subsidies envisaged when the costs were higher and, if so, what implications does that have for the people who have to pay for them—that is, the consumers? Does she also accept that, as the Minister said in his opening comments, we ran the risk of exceeding the budgets that were originally planned because of the wonderful response we had and that up to four times more could well be envisaged by the end of that time?

For me, it is a matter of looking at projects as they come up, be they in green energy or any other energy. As far as I am concerned, subsidies have always been there to pump-prime—to help new industries take off and become established. In this industry, that has clearly worked very well, and solar is a huge success. I have one or two very small solar panels on my garage, which do not bring in a big income, but we try to do our bit because we believe in renewable green energy, so we have them.

By considering the grace period, the Government have responded. When we debated this before, a question was raised about it. However, I find this quite hard and I say to the noble Baroness in all sincerity: when the industry has become successful and those costs have come down so much, the question must be whether those subsidies should be continuously maintained when the response we have had suggests that they might not be. Therefore, is it right to expect the consumer still to be paying for that project? The Government recorded that £52 billion has been spent on the renewables sector since 2010. That is a huge amount, as the noble Baroness knows from when she was in coalition. However, unless things are tackled, a balance has to be struck. I suspect she and I will not agree on how that should be done. It is a realistic challenge that any Government must face. At the moment, we are in government, and the costs and the response from the industry have done really well. The question is whether the order before us tonight is fair and appropriate. On that, I think the noble Baroness and I will agree to disagree.

[Lord Teverson (LD)]

My Lords, I will be extremely brief. Perhaps I may reply to the noble Baroness, Lady Byford—whose expertise in all these areas I admire greatly —as well as comment on one of the Minister’s remarks.

First, these Benches absolutely want to reduce renewable tariffs and subsidies as the costs come down. That is a fundamental point. We have a track record of doing that, and that is what we do. However, we are not into executing a particular technology. The way that this has worked is that the Government—interestingly, a Conservative Government—have been moving down the road of choosing technologies. The whole strategy of the energy market reform was to move gradually to a more market-based, less technology-specific situation as time went on—but we are doing the opposite.

We absolutely agree on the levy control framework and lowering costs to the consumer, but what have the Government decided to do? They have decided to invest in the two most expensive low-carbon technologies, offshore wind and nuclear, both of which are hugely more expensive than onshore wind and solar, the technologies that cost the least. So I say to both the Minister and the noble Baroness that if that is what the Government want, they need to change the strategy. They can achieve another strategy at the same time as meeting the carbon emissions target and lowering costs to consumers. That is the way it works—it is arithmetic. So, please, let us go for that.

I return very briefly to the issue of investor confidence. As noble Lords will know, the Select Committee on Energy and Climate Change in the other place recently looked at investor confidence in the energy sector. I hate round numbers, because one often does not believe them, but DECC itself estimates that we need some £100 billion of investment up to 2020, not just in generation but in the distribution system as well. As my noble friend said, to achieve that we need real investor confidence. What was the Select Committee’s conclusion? It said:

“It is clear that the confidence of many investors has been dented by the Government’s actions since the election. The sudden, unexpected nature of many of the announcements has unsettled investors who had been used to receiving more forewarning of policy changes. There is a high risk that a hiatus in new developments has been created, pending further clarity on short- and longer-term policy. The Government removed support for renewables due to concerns about costs for consumers. But they have not set out the evidence base for this conclusion or for other decisions, and engagement with the investment community has been poor”.

That is an all-party conclusion in a report on the Government’s action in this area, and the conclusion is to condemn it. The need for investment is huge. We need to make sure that investment is right and that subsidies are low—and we are absolutely for reducing subsidies—but it has led to a hiatus. We no longer have carbon capture and storage or appear to have nuclear, and as far as I can see we do not have a workable strategy to bring in gas—so we have a huge energy problem. We need those investors but we have thrown away their confidence, and through the decisions we have made on renewable energy, by picking expensive winners, we have ensured higher energy costs for the future.

Electricity Capacity (Amendment) (No. 2) Regulations 2015

Baroness Byford Excerpts

Tuesday 24th November 2015 Grand Committee

[Lord Teverson (LD)]

My Lords, it is the first time that I have spoken in any meeting of the House since the Secretary of State announced that coal was going to come to an end within 10 years, and I congratulate the Government and the Secretary of State on that announcement, which is a major step forward. I disagree with a great deal of government energy and climate change policy but that is an excellent move forward, and I would like the Minister to note that and pass it on.

I have a couple of questions about the capacity market, although I have no issues with this statutory instrument. Will the Minister update us on interconnectors and the capacity market? There have been plans to bring on demand reduction aggregators but in the short term rather than the long term. I would like to think that we can bring on institutionalised demand reduction and aggregation much more than we have done in the past, something which is very much in the Government’s interests. On the reduction of fossil fuels, I recall that quite a number of the successful tenderers for capacity payments were coal generators. Do the Government have any plans to exclude them as we move forward to auctions?

We are now down to a very low level of margin, yet the National Grid and the Government seem fairly relaxed. Does that mean that a 20% margin in the past has been a waste of expensive resource that was not needed and that we should have been managing on much smaller margins? I should be interested to hear the Minister’s response on those issues.

[Baroness Byford (Con)]

I should like to make two observations. The Minister has said that the vast majority accept the proposals, so which respondents did not? I have no difficulty with the proposed change from five working days to 15, but there has been a suggestion in the public domain that electricity supplies could be fairly fragile in the coming months, particularly if we have very cold weather. How has that been built into the system? I am glad that feasibility studies were done and were accepted, but what is the comfortable margin of security of supply in the months ahead? Those are my questions: who did not support these proposals, and what do the Government consider a comfortable margin of security supply?

[Lord Grantchester (Lab)]

I thank the Minister for his introduction of the regulations. The amendment they contain is minor and uncontroversial, extending to carbon capture and storage the possibility that it could participate in the capacity market. The Government now seem to recognise the potential of CCS, as evidenced by the amendments recently agreed in the Energy Bill, now passed to the other place. They had previously not considered CCS as sufficiently relevant operationally to the capacity market, and this amendment allows that CCS projects which will in the first instance have received grant support or funding arrangements for early stage developments can now qualify for participation in the capacity markets. The essential feature is that this early stage support should not materially put the provider at an unfair advantage compared with others without that support. The greater matter is that any provider that can shift demand away from periods of greater stress without detriment should be encouraged.

I am content that this proposal was overwhelmingly supported by respondents to the consultation. Will the Minister clarify the Government’s intention a little further? While it is true that there is not as yet any deployed carbon capture and storage in this country, is it intended that CCS will eventually pre-qualify for capacity auctions in its operational phase?

It has been understood from the Government’s scoping document earlier this year that the operation of CCS plant operational support would take place through a form of modified contracts for difference rather than through capacity auctions. I would be grateful if the Minister could signal the Government’s intentions as early and comprehensively as he can to provide certainty about the direction of travel to developers. This amendment, and future intentions, could begin to allow the development of an industry that could be very valuable for the long-term use of fossil fuels. The noble Lord, Lord Teverson, has congratulated the Government on their plans to phase out coal generation, and we certainly support this direction of travel.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lords, Lord Teverson and Lord Grantchester, for their kind words regarding the speech given by my right honourable friend the Secretary of State, Amber Rudd, last week in relation to the withdrawal of coal-fired power stations, with the aim of doing that by 2025. It was most kind and gracious of them to say what they did.

I turn first to the questions raised by the noble Lord, Lord Teverson. Yes, we are looking at interconnectors, I think to Norway and Ireland, in addition to the existing interconnectors as part of the capacity issues that we are addressing, and we are looking at the possibility of them elsewhere, including Iceland. That is a large part of what we are doing.

The Statement on coal was of course subject to a consultation, as the noble Lord will know, which opens in spring next year, I think, subject again to ensuring that we have the necessary capacity in relation to gas-fired stations coming on stream. Still, a clear market signal was given in the speech. Demand reduction is a significant part of what we are doing, and of course there will be a demand response auction as well in the new year.

With regard to the system margin causing concern, there is a trigger for this. At the moment we are very confident of the 5.1% margin with regard to the announcement of the most recent one. To the noble Lord’s suggestion that a 20% margin is more than we need, I suppose the answer must be yes—that must follow. However, obviously one wants to stray on the side of safety so we are seeking to address this. Although the margin is comfortable, we have to look ahead. The next few years look comfortable but we need to bring on the new nuclear and look at other forms, such as small modular reactors and so on. That, too, is important.

I turn to the questions raised by my noble friend Lady Byford. First, on the consultation, I think I am right in saying—the team behind me will correct me if I am wrong—that out of the 22 responses, 21 were supportive.

[Baroness Byford]

That is a majority.

[Lord Bourne of Aberystwyth]

It is a huge majority that a lot of parliamentarians would be content with; it is roughly 95%, so it is pretty convincing. If the noble Baroness wants more information, I am happy to supply it.

The second question was a very fair one: what is a satisfactory margin? It is dependent on many factors. As I say, we are confident that 5.1% is a sufficient margin but it is on the tight side so we are trying to build in additional capacity. It is dependent on many factors, most obviously the weather, as well as political factors, such as where gas is coming from. I remember from my very first visit to the National Grid in Wokingham that someone, armed with the Radio Times, was trying to assess whether there was going to be additional demand on the system, such as England playing a football match. Notoriously, at half-time—or into penalties, as it inevitably goes—people go and put the kettle on. Work is done on looking at factors like that. So there are lots of additional factors, but 5.1% seems to be a sufficient margin although, as I say, on the tight side.

I turn to the questions from the noble Lord, Lord Grantchester. Regarding the ongoing position with CFDs, my right honourable friend the Secretary of State announced in her speech that there would be contracts for difference in 2016, and we will set out nearer the time what the technologies are; I suspect that some will not be there, such as onshore wind, but that is just a view. We will set out closer to the time the precise way that that will work. I very much welcome his kind words.

Renewables Obligation Order 2015

Baroness Byford Excerpts

Tuesday 24th November 2015 Grand Committee

I was going to ask the Minister to explain the formula at the top of page 75 in paragraph 6 of Part 2 as I could not quite work it out. Perhaps he will write to me.

[Baroness Byford (Con)]

My Lords, I shall follow the noble Lord again—we seem to be following each other around this afternoon. The Minister referred to the fact that some of the products will be imported, but the agreement was a domestic standard rather than an international one. My query merely follows on from what the noble Lord has just said. Are we requiring a higher standard of our producers here than perhaps of those coming from abroad? How does the Minister justify that in relation to what we are trying to do, which is to allow us to include biomass as a worthwhile product while, again, looking at sustainability for land, particularly forestry and woodland? I do not have a wood fire but I burn logs that fall off our trees from time to time. If we have a domestic standard, how is that different from the international standard and how will it be reviewed at the end of each cycle? That is not clear within the order.

[Lord Moynihan (Con)]

My Lords, I find it difficult to believe that it was 25 years ago when I was the Minister responsible for energy that I introduced the first non-fossil-fuel obligation, which has subsequently moved into an excellent series of initiatives that I very much support.

I have just two comments. The first picks up on the capacity market, which the Minister has just raised, and which the noble Lord, Lord Teverson, referred to in the context of interconnections. I understand from what the Minister has just said that renewable technologies will certainly be able to bid into that.

I have a question on sovereignty with regard to the development of interconnections. A country just across the Channel will face similar weather conditions to ourselves, and we are focusing our capacity market not only on bitterly cold weather but when the wind is not blowing during that bitterly cold weather for an extended period of time. That is more than likely to be the same in the neighbouring country, which will no doubt have a high level of demand for energy in its own right. How will the Government address the question of sovereignty over contractual arrangements?

My second question is a specific one from the recent consultation on adjustments to sustainability and reporting provisions for biomass. I note that the majority of responses were very positive to the Government’s proposals but there was one exemption to that, which related to the exemption from the land criteria on the timber standard when a number of respondents suggested that the exemption should be applied to a wider range of wood and wood residues. In that context, I see that the Government rejected that series of representations and I wonder if the Minister could give the Committee a little more detail on the reasons for that rejection.

Onshore Hydraulic Fracturing (Protected Areas) Regulations 2015

Baroness Byford Excerpts

Tuesday 24th November 2015 Grand Committee

[Lord Young of Norwood Green]

I assumed that that was the case. I thank my noble friend for that.

We are going to be dependent on gas for 30 years, and some would say for even longer than that. It is ironic that we are prepared to import it. We know that importing liquid natural gas is not good in terms of emissions. Gas, certainly in comparison with coal and with liquid natural gas, will reduce carbon emissions significantly.

I am not by any means opposed to renewables. Since we are burnishing our own contributions, I would mention that the solar panels on my roof are working very effectively and I have ensured that my local primary school has just installed solar panels. I am as committed as anyone to renewables.

This, however, is a sensible and measured approach to developing shale gas and it takes into account the understandable concerns that we should have about protecting sites of outstanding natural beauty, national parks and so on. All the agencies that have been involved with this, including the Environment Agency and the Health and Safety Executive, consider it to be low-risk. We are talking about drilling to very deep levels before the fracking turns and goes underneath: 1,200 metres is a long way below the natural water aquifers, which the Minister referred to as being at 400 metres.

So I welcome the statutory instrument because it is important that we have a balanced and integrated approach to energy. It is unfortunate that it has taken us so long. It would have been interesting to see, if we had produced our own natural gas and if the costs of energy had been reduced, whether the Redcar situation would have been impacted. I do not want to make unreasonable assumptions.

Another point about assessing the potential economic benefits was made by the noble Baroness, Lady Parminter. Most of the figures are usually obtained from the Royal Geological Society. Where I would partially agree is that no one can be sure until you start drilling. I have spoken to some of the world’s leading experts on fracking and they all tell me the same thing: you can drill a well and it may or may not produce. You can move along a few hundred metres and you may strike lucky. There is no certainty.

We know that that there are very significant amounts of shale gas there. We need to be able to assess the situation and do the drilling safely wherever we are doing it. It does not matter whether we are in an area of outstanding natural beauty or somewhere else: we want it to be safe. We want it to be justified in terms of an integrated approach to energy. We also need to take into account whether there is potential for jobs. There is a mothballed training college in the north-west that is ready to go and would give us probably a few thousand apprenticeships and many thousands of jobs. There has been no dash for gas; there has been a sensible, measured and proportionate approach. I welcome the introduction of this statutory instrument.

[Baroness Byford (Con)]

My Lords, I thank my noble friend the Minister for introducing this statutory instrument today, which I welcome. I have listened very carefully to the contributions made by others, and I should like to thank the noble Baroness, Lady Parminter, for her expressions of appreciation to the farming community, which cares very deeply about biodiversity. I should declare an interest as we have a farm in Suffolk, although not where any fracking will be taking place.

Can my noble friend tell us a little more about the urgency of the need to get shale gas into action, bearing in mind the various aspects of gas and oil production that we have been debating over the past year? As noble Lords will know, we had a big debate on setting up the Oil and Gas Authority. At the moment gas seems to be in fair profusion—they are not the words I really want to use but I cannot think of the right ones, so I apologise to noble Lords. I think that we in Committee are all agreed that we need to have a balanced approach to energy production. That is what we are really after and I am grateful to noble Lords for their support in that.

I listened with great care to the noble Lord, Lord Judd, who is rightly very passionate about his concerns on areas of outstanding natural beauty. I also take up the point made by the noble Baroness, Lady Parminter, which I had not picked up, that SSSIs were not included, so I shall be interested to hear what the Minister has to say on that.

In the scenario that I have set out, I wonder if we have slightly more time to review the way in which we use, and explore for, shale gas. I am sure that it is the right thing to be doing, but the gas that has been referred to is not as great as it might have been considered a couple of years ago. That is not to say that I am not in favour of shale gas exploration, because clearly I am. However, I wonder whether the Minister can tell us a little more about the costs involved, or if there are costs that I missed in the impact assessment, because of the decline in the cost of oil and gas, and whether fracking has less of a drive than it perhaps had a little while ago when energy costs were so expensive. I can well understand if the Minister wishes to write to me on that because it might be argued that that is why we are having this debate today. I thought it was important to include it because certainly we need to be looking to the future for a sustainable supply of gas—shale is but one option—and at the same time having a very balanced approach to the biodiversity of the land above the soil and obviously, as noble Lord, Lord Judd, said, to that beneath. I take the point that it is a long way down; it is in fact metres, not feet.

I have raised one or two questions in the broader context and I wonder whether there is slightly less pressure than there was in the circumstance before. It gives us a wonderful opportunity to use the shale gas that is there to be used while at the same time ensuring that we use it in the wisest way and that we have time to review how that development is going. If there are issues on which the Minister does not have briefing, I am more than happy for him to write to me later on.

Energy Bill [HL]

Baroness Byford Excerpts

Monday 19th October 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, government Amendment 20 places controls on the disclosure of information. Clause 7 of the Bill as introduced provides the Secretary of State with the power to require information from the OGA for certain purposes which are listed in subsection (1). The Secretary of State may disclose such information onwards for these same purposes or if required to under legislation, or with the consent of the OGA and, where applicable, that of the original information holder.

This amendment applies restrictions on the ability of any subsequent holders of this information to further disclose such information. It will ensure that they may do so only if required under or by an Act of Parliament or with the consent of the OGA and, where applicable, of the original provider of the information. This will ensure that potentially commercially valuable information provided to the OGA cannot be disclosed by subsequent holders of information except in certain narrowly prescribed circumstances. I beg to move.

[Baroness Byford (Con)]

My Lords, I will contribute to this short debate by thanking the Minister for reconsidering this aspect of the Bill, which certainly caused me, and one or two other noble Lords, slight concerns as to what material was protected and how it should be protected. I welcome the amendment he has moved tonight. It is extremely important that the balance is right between the value of sharing information and the value of keeping protected, in a proper manner, information that really should be protected. I will not delay the House any longer but thank the Minister for having given thought to our discussions in Committee. I am happy to support this amendment.

[Baroness Worthington]

My Lords, I am grateful to the Minister for introducing Amendment 20 and to the noble Baroness, Lady Byford, for her comments. I am sure it is correct that material should be used only for the purpose for which it is provided, but I am left wondering what the concern or fear was. If the Minister will bear with me, I would like just one further clarification as to what, in real-world terms, we are avoiding here. Obviously we do not want unnecessary disclosure if the information is going to be misused, but I wonder what this is really for.

Energy Bill [HL]

Baroness Byford Excerpts

Monday 14th September 2015 Lords Chamber

[Lord Foulkes of Cumnock]

My Lords, I have just remembered that I should have declared an interest earlier, as I did at Second Reading, in that I am a trustee of the Climate Parliament, a grouping of Members of Parliament from around the world concerned with climate change. While we were discussing this earlier, I got an email inviting me to the annual Scottish Renewables reception on 27 October in Dover House, which David Mundell, the Secretary of State for Scotland, is hosting. That should be a very interesting occasion given our debates today and previously, as well as those we will have subsequently. I am certainly looking forward to it, although I do not know whether David Mundell will be.

There is very little to add, noble Lords will be pleased to hear, to what has been said by my noble friend Lady Worthington, by the noble and learned Lord, Lord Wallace, and, particularly, by the noble Lord, Lord Cameron. I thought his arguments about investment and uncertainty were very powerful indeed. I have had a number of letters—I have no doubt other Members have too—of concern from people who have invested money in this area in good faith and really think that the Government have let them down. The noble Lord, Lord Cameron, put that very well.

I find it peculiar and worrying that the Government have taken so long to come up with any indication about what grace period or arrangements might be agreed. As I think the noble and learned Lord, Lord Wallace, said, I hope that the Minister will give us some indication that we will be told as quickly as possible, preferably well in advance of our sitting in October. I was disappointed to hear that it will be in the Moses Room. I hope that that can be looked at again and that it could take place on the Floor of the House, so that there is proper consideration of it. But wherever it is, I hope that we will know well in advance the proposals that the Government are putting forward and, even more importantly, that the industry and all those involved know of them well in advance. I know that my noble friend Lady Worthington and, I am sure, the Liberal Democrats will make it clear to the industry that we will go along with the Government if we agree with their proposals. That will give some degree of certainty to the industry. As I say, since so many good arguments have been made by the previous speakers, there is no need for me to repeat them.

[Baroness Byford (Con)]

My Lords, perhaps I may make a small contribution. I apologise to other noble Lords that I was not able to be in the Chamber when the first amendment was moved, which is why I did not take part then. We come to an area on which I spoke at Second Reading: my slight concerns about the grace period and not having enough information on it. It would be remiss of me not to follow up on that. I have listened to the whole of the discussions on this issue.

I remind noble Lords that we are not talking about a few pennies here. In fact, at Second Reading the Minister rightly reminded the House of the costs. He said that:

“In 2014, operational onshore wind farms in Great Britain received in the region of £800 million”,

which is a lot of money,

“under the renewables obligation”,

and that the Government,

“would expect this to increase to £1.1 billion per year if, as expected, a total of around 11.6 gigawatts of onshore comes forward”.—[Official Report, 22/7/15; cols. 1120-1.]

Because of that, and having listened to the various contributions on uncertainty, I would press the Minister to tell us as much as he can about where we are and how we are to proceed. That is the nub of the question. I do not think there was disagreement; perhaps some would like it to continue and be honoured for ever and ever. However, as I said at Second Reading, when new industries are being started, to me, government money is needed to pump-prime them. It is to start things and get them off the ground and once they are up and running, they should be able to come in at a cheaper rate. Looking to long subsidies was therefore not something I favoured.

I certainly hope that the Minister will be able to tell us a little this afternoon about the Government’s plans for the grace periods. The noble and learned Lord, Lord Wallace of Tankerness, said that litigation might follow. I do not know whether the Minister has information on that, because it would be quite worrying. Maybe the noble and learned Lord can help me a little.

[Lord Wallace of Tankerness]

The point I was making was that if the Government had not done anything about grace periods, litigation might have followed. That is doubtless what has driven the Government to accept that there has to be a grace period.

[Baroness Byford]

I fully understood what the noble and learned Lord said and I took it on board, because clearly one wants to avoid that if we can. Nobody wants to end up there—not only because of the litigation but because of the delays it incurs, which other noble Lords have spoken to.

At the moment, I have slightly mixed feelings on this. In principle, I am quite supportive of what the Government are trying to do. In considering whether the approach should be different, in that a Scottish Minister should be able to decide, we should note that three out of four of these onshore wind farms are based in Scotland, so three-quarters of that money would be coming from England to support what Scottish Ministers might or might not decide to do. That is another debate we could have, but I hope the Minister can tell us more about the grace periods and when we are to receive more information.

I suspect that, like me, other noble Lords—and the Minister and his department—have found it difficult dealing with the Bill after the Recess in what is not the formal, long period for debate. We deserve greater clarification and, if the Minister cannot give it to us tonight, I hope it will be provided quickly in another of his wonderful letters that have kept us up to date with government thinking.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Baroness, Lady Worthington, for moving the amendment. I hope to explain a bit about the Government’s thinking on this area and then to address the points reasonably raised by noble Lords.

Clause 60 introduces a provision to close the renewables obligation to new onshore wind farms in Great Britain from 1 April 2016—a year earlier than originally planned. There are two key reasons why I believe that that is the right approach. First and foremost, I and the department are committed to delivering the Government’s ambition to end any new subsidies for onshore wind while continuing to combat climate change. I appreciate that that is not something that all political parties or all noble Lords want, but I return to the point that there has been an election. I accept that things were said under the previous Government, but they were a different Government. It may be that the transition is more difficult because they were a coalition Government, but it should not have taken noble Lords entirely by surprise that this Government sought to make a change in this area. Secondly, the Government are committed to keeping domestic energy bills as low as possible.

With that context in mind, let me turn to the amendments. Their purpose is to clarify the terms of the grace period applying to the closure of the renewables obligation to onshore wind, specifically allowing those projects which had applied for planning permission as at 18 June—the date of the policy announcement—to continue to be able to accredit until the original renewables obligation closure date of 31 March 2017. In addition, the amendments would provide further detail about how the grace period would operate in certain planning scenarios and propose extra time for projects that have encountered difficulties in securing financing.

When my right honourable friend the Secretary of State announced the early closure of the renewables obligation to onshore wind, she also proposed a grace period to protect investor confidence, as I think noble Lords are aware. The proposal was to offer a grace period to those projects which, as of 18 June 2015, already have relevant planning consents, a grid connection offer and acceptance of that offer—or confirmation that no grid connection is required—and access to land rights.

At the time of her announcement, the Secretary of State also said that she wanted to hear the views of industry and other stakeholders before framing the terms of the legislation. As such, my department has been conducting an engagement exercise to understand whether our proposed grace period draws the line in the right place. This means balancing the interests of onshore wind developers with those of the wider public. That is what we are considering at the moment. We are still reviewing the feedback and evidence provided by stakeholders in order to inform our final policy position.

I am not in a position today to frame the final terms of the grace period, and it is not right that I should trail a running commentary on where we are, as I have been invited to do by noble Lords who, as I can understand, want to hear more. I must wait until the final terms of the grace period are fully thought through, following the conclusion of the department’s analysis.

I appreciate the understandable wish that all this had happened earlier. The noble Baroness, Lady Worthington, the noble and learned Lord, Lord Wallace, the noble Lord, Lord Cameron, my noble friend Lady Byford and the noble Lord, Lord Foulkes, all expressed frustration at the fact that we do not know what the grace period proposals will be. I understand why I am being pressed on this, and I will ensure that the House has reasonable notice of the Government amendments.

I agree that 48 hours is insufficient and hope and believe that we can do better than that. If I may, I will provide a commentary on where we are on this by the usual letters if there is any difficulty with bringing the amendments forward in a timely way. I quite understand that the House wants to know exactly what the Government are doing or seek to do in this area. I confirm that we will endeavour to give appropriate, reasonable notice of the amendments ahead of the day and recommittal in the Moses Room.

Energy Bill [HL]

Baroness Byford Excerpts

Monday 7th September 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, my noble friend makes a valid point about the decommissioning costs and costs in general, which are very much at the forefront of the Government’s thinking. He will be aware that the Oil and Gas Authority is essentially being paid for by the industry. Other than initial seed- corn support of a small amount from the Government and the Government conceivably stepping in in an emergency situation, it is self-financing. But there are aspects that we will come to later in the legislation that talk about the public purse, this being one consideration that has to be borne in mind in relation to relevant activities. I need no persuading that costs are central to what we are looking at here.

[Baroness Byford (Con)]

My Lords, the Minister has said that he is unhappy about having a review within a year, which is too soon. I can understand that, but can we press the Minister to come back with a suggestion of two years? Having followed other Bills through, I fear that this period will get extended. I hope that serious thought can be given, between now and Report, to putting forward a time before the final stages of the Bill are considered.

[Lord Bourne of Aberystwyth]

I thank my noble friend. I do not want to give a figure on the hoof; I am sure noble Lords would appreciate that that would be dangerous. We can look at this clearly between now and Report. If we are going to have a review we will have to say when it should take place. I would not anticipate coming back without a definitive idea of that.

--- Later in debate ---

Moved by

[Baroness Byford]

3A: Clause 4, page 3, line 12, after “from,” insert “its existence and”

[Baroness Byford (Con)]

My Lords, I begin by declaring my interests, which are in the register, and I have shares in oil companies. I also record my thanks to the Minister and his team for the briefing that they gave us prior to Committee and, indeed, for the follow-up work that I have received from them since. My amendment is a very simple probing amendment. The Minister in his letter stated that minimising public expenditure will be limited to that which arises from the relevant activities because this is the only area in which the OGA can have influence. He further stated that in due course a levy and fees will mean that the industry will pay the OGA’s full costs. Indeed, our discussions earlier were about costs.

However, my concern remains. I do not feel that either the wording of the Bill or the Minister’s interpretation mean that those working in and managing the OGA will have a duty to keep their costs as low as possible. As we said this afternoon, the amount of money coming into oil companies at the moment is so low that it is imperative that the OGA sets the standard of making sure that it does its work efficiently but keeps its cost as low as possible. I am concerned, for example, about the nature of office accommodation—it seems very simple—about location, travel, hotels, publicity and all the other parts that go into making the new OGA work properly.

I also share with colleagues that I have been assured that Treasury rules insist that fees should recover full costs and no more. That, however, does not explicitly cover a levy: nor does it limit spending levels. Therefore, in moving the amendment I still seek assurance that the OGA will have a duty to minimise expenditure on its internal operations. I beg to move.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

I thank the noble Baroness for that intervention. I am happy to do that, as I have indicated, but I do not want to give the impression—I do not want to commit us to this—that we are undermining the focus of the Oil and Gas Authority, which is to maximise the economic return from the North Sea.

[Baroness Byford]

My Lords, I beg leave to withdraw the amendment.

Amendment 3 withdrawn.