Baroness Smith of Basildon
Main Page: Baroness Smith of Basildon (Labour - Life peer)Energy Bill [HL]
Baroness Smith of Basildon Excerpts
Lord Best
My Lords, the amendments that I tabled called for a legally binding minimum standard of energy performance by the year 2016, but the Minister has not been able to concede that. I accept that the amendments that he has tabled are a small but helpful step in the right direction, but I want to place on record that I fear that the private rented sector will not do what it should do without a legally binding minimum standard being introduced by the Government for local authorities to implement. Without that, I fear that the Green Deal will not be as effective as it otherwise should be. But it is now for another place to discuss and I am grateful for the modest but important concessions that the Minister has made with these amendments.
Baroness Smith of Basildon
My Lords, I echo the Minister's comments about how the Bill has been conducted. It has been a great example of your Lordships working together to bring forward suggestions. I praise the Government for their efforts to look at the suggestions and amendments and bring forward amendments of their own. I recall at Second Reading the Minister said,
“I will clarify that this is a framework Bill on which there is a lot of work to be done”.—[Official Report, 22/12/10; col. 1151.]
During our deliberations, particularly in Committee and at Report, we have undertaken a lot of that work and brought forward amendments.
I also echo the Minister’s thanks to his officials who have been very co-operative with us. We are grateful for that help and support. I also place on record my thanks to the many organisations that contacted us during the course of the Bill, such as Friends of the Earth, the Association for the Conservation of Energy, the World Wide Fund for Nature and many others. Their work and that of the energy companies have been endless. I have had more e-mails and briefing on this legislation than I have ever had in my entire parliamentary career. It has been very welcome and appreciated and we do not take that support and advice for granted.
“3A Report on compensation for petroleum spills
(1) The Secretary of State must publish a report every five years about the arrangements in place in the United Kingdom for petroleum companies to compensate for any damage caused, or loss suffered, as a result of petroleum being accidentally released during the operation of licences under this Act.
(2) The report must, in particular, include—
(a) the amount of insurance coverage that industry members have agreed should be available in the circumstances outlined in subsection (1);(b) the Secretary of State’s opinion about whether the amounts are adequate to compensate for any damage caused in the circumstances outlined in subsection (1);(c) the factors that the Secretary of State took into account in reaching the Secretary of State’s opinion under paragraph (b); and (d) the actions that the Secretary of State intends to take, in the event that the Secretary of State considers the amounts to be inadequate.”
Baroness Smith of Basildon
My Lords, in replying to the first group of amendments, the Minister expressed regret that, having made very modest but nevertheless welcome amendments, he was not carried aloft from the Chamber in jubilation. Never liking to disappoint the noble Lord, I offer him another opportunity. My foot may not be fully recovered but I might manage to carry him aloft should he want to accept the amendments that we are putting forward today. I reassure the Minister that the only reason that we on this side have put forward any amendments is to seek to improve the Green Deal and to ensure its success, and I assure him that the same applies to this amendment.
The noble Lord will recall that I raised this matter in Committee and on Report. When, on Report, I raised a similar issue about compensation and payments relating to petroleum spills, he assured me that he knew more about this issue, having been involved in insurance himself, and he patiently explained that he would write to me with further information. He has done so and I thank him. It has helped to clarify the situation, and I appreciate his responding in such detail. However, it is that response that has led to our tabling this amendment.
I was seeking assurance in the Minister’s response about where the liability would fall in the event of an oil spill, and I referred to Deepwater Horizon, which we had previously discussed in your Lordships’ House. He informed me that the Oil Spill Prevention and Response Advisory Group had set up an indemnity insurance group to review the current provisions of the OPOL agreement, as well as the financial and cross-indemnity arrangements behind the current mutual co-operative industry’s mechanism on this issue. I understand that, at the department’s request, the group has reviewed the modelling based on worst-case scenarios, on which the liability limit is based. It has also commissioned modelling of alternative spill scenarios with the aim of providing a more comprehensive picture of potential oil spill costs, and there will be further discussions on this. The Minister told me that the work is ongoing. However, he also assured me that, if that work indicates that a credible worst-case scenario could result in damage exceeding $250 million, the Government will require higher levels of cover. All that my amendment would do is build on what the Minister said a moment ago when he referred to his commitment to transparency and to monitoring the situation. It would be helpful for Parliament and those who are interested to know that the insurance available to deal with these catastrophes is at the appropriate level. That will happen only if there is a review and transparency.
The amendment requires the Secretary of State to publish a report every five years about the arrangements that are in place and specifies some issues that must be included. I hope that the Minister will look at this amendment. If he is unable to accept it today, perhaps it can be discussed with colleagues in the other place. I welcome the opportunity to carry him aloft from the Chamber should he wish to accept the amendment at this point.
Baroness Northover
My Lords, we are very sympathetic to the concern expressed behind the amendment and we have debated both in Committee and on Report the issue of compensation for oil pollution. The main concern in these debates was that arrangements should be in place to ensure that companies could meet any liability arising from oil pollution during their licensed operations.
We explained in these debates that there are indeed appropriate requirements in the licences and that the industry has in response formed a voluntary liability pool, the Offshore Pollution Liability Association—OPOL. OPOL membership requires operators to demonstrate provision to meet clean-up costs and associated damages of up to $250 million on a basis of strict liability in the event of a pollution incident. OPOL also collectively provides a back-up mechanism that in the event of default by any operator, the other members will meet claims for clean-up and associated damages up to the same financial limits. That liability pool is unique to the North Sea, and we believe that it provides a very solid assurance that all pollution liabilities will in practice be met. I particularly stress the significance of the acceptance of strict liability by OPOL members, which means that anyone who has suffered loss as a result of pollution from an oil installation does not have to show that the operator is at fault. He or she merely has to establish that the damage or loss is a result of the pollution. As I have said, it is unique to the North Sea.
Since Report, my noble friend Lord Marland has written to the noble Baroness, Lady Smith, with further details of this arrangement and I thank her for her very positive response to that correspondence. This amendment, however, addresses a slightly different point from the amendments tabled in Committee and on Report. We made the point that the amendments tabled then were unnecessary as appropriate requirements were already in place. The focus of this amendment is rather that the Secretary of State should publish a report on the arrangements in place, the amount of insurance cover provided, and so on. We are wholly sympathetic to the idea that more public information should be available on these matters. As the noble Baroness notes, further work is ongoing under the auspices of OSPRAG, in which government and industry are working together to review the industry’s practices in the light of what has been learnt from the Macondo disaster. One of the OSPRAG working groups is specifically addressing liability and indemnity issues. We are happy to undertake that the Government will make an appropriate statement in the House on the outcome of this work and any changes that may appear necessary or desirable. I hope that that reassures the noble Baroness.
As for future developments, the department is committed to laying an annual statement before the House, and we will, of course, use that to report on any new developments or proposed new measures. In the light of those reassurances, I hope that the noble Baroness will feel able to withdraw her amendment.
Baroness Smith of Basildon
I am grateful to the Minister for her response. It covers a number of the points that I was seeking to address, mainly transparency and the responsibility of government in reporting back to Parliament. On the basis of her response, I am happy to withdraw the amendment.