Energy Bill [HL]

Baroness Young of Old Scone Excerpts

Wednesday 21st October 2015 Lords Chamber

[The Lord Bishop of Chester]

My Lords, I did not speak in Committee, although I attended it, partly because I found almost a sense of the ground moving under my feet as all the amendments were produced. This, of course, was a recommittal in Committee under these clauses. At the end of the debate, the clauses were removed. I think that it was the noble Lord, Lord Foulkes, who referred to “liquid legislation”. There is a phenomenon emerging in the Church of England called “liquid worship”. I can only say that when I am told that that is what I am to expect on a Sunday when I go to a parish, my heart does not leap with joy at what might be in prospect for me.

In Committee, I began by thinking that the Government had done a deal with the industry through withdrawing the clauses and bringing them back in the recommitted meeting of the Grand Committee. But then I listened to the noble and learned Lord, Lord Wallace. If Members of the House think that we have just heard a tour de force, they were not there in Committee, which saw an even greater tour de force, complemented in a different style by the noble Lord, Lord Foulkes.

The noble Lord refers to the need to “draw a line”. He mentioned that phrase five or six times in his contribution. The problem is that the line was drawn at March 2017. It is a redrawing of the line by the Government which has put us into this situation and raised the question of how one does it in a way that is reasonably fair all round given the complexities of the planning process, which have been so well described.

At this stage, I simply ask: what are the real benefits of this liquid legislation, which may prove to be even more liquid in the coming weeks and months? What savings will be made by trying to redraw the line from March 2017 to a date somewhat in advance of that? As I understand it, it is a somewhat moving and shifting date. What is the game worth? Given the vast subsidies that are to be paid out over coming years for wind turbines, what will the savings be in comparison with those subsidies that are being paid out?

I must emphasise that I speak as someone who has been critical of that subsidy regime from the beginning. As some noble Lords will know, I was a founding trustee with the noble Lord, Lord Lawson, of the Global Warming Policy Foundation, which seeks to scrutinise policy from that perspective. I sometimes say that my real title here is that I am chaplain to HMS “Lawson”, although I do not speak with the authority of the captain. I would be interested to know what the anticipated saving is and whether the game is really worth the candle, given the complexity that has emerged.

[Baroness Young of Old Scone (Lab)]

My Lords, I had not thought that what we were dealing with was liquid legislation. I thought we were dealing with piecemeal transitional arrangements dreamt up on the hoof as we go through the process. But I am quite prepared for the right reverend Prelate to give us this liquid legislation definition in perpetuity. It is a rather splendid phrase.

This has been a really unsatisfactory Bill and we must not allow ourselves to see this as an argument about onshore subsidy protectionism. It is not about that at all. I think that everybody in the House recognises that the period of subsidy for onshore wind may well come to an end at some point in the nearish future. It is much more about what it is that we want to try to do to send signals about our climate change intentions and to adhere to our own regulatory principles. I have been a regulator three times on behalf of the Government and on each occasion I have absolutely worked my socks off to make sure that we are as fair as possible to British industry. Fairness means giving clarity of policy and adequate times for industry to adjust, meaning that companies are not caught with their foot on the wrong side of a piece of change and penalised as a result of their previously sensible decisions in line with what previously had been government policy. Even with the very welcome changes to the grace periods that the Minister has laid before us, we are still not there.

The noble and learned Lord, Lord Wallace, talked about the statement made yesterday by the Energy Minister in another place. I was a bit distressed to hear the Minister here say that we have made lots of concessions and we now have enough renewable energy from onshore wind in the pipeline. I do not think that that is the point. The point is, have we dealt fairly with British industry and given anybody who could reasonably consider themselves not to have been fairly dealt with the benefit of the doubt in this circumstance, where, all of a sudden, policy has shifted? The Minister said that there had been extensive consultation with the companies and stakeholders, yet many noble Lords will have been lobbied and briefed by players in the energy business, who, even this morning, have been listing a series of situations where, through no fault of their own, they continue to be penalised by the graceperiod arrangements.

I simply ask the Minister to consider some of the circumstances that the noble and learned Lord, Lord Wallace, aptly summarised in such an eloquent fashion to ensure that the statement made by the Energy Minister yesterday about fairness is adhered to and that we do not continue to see liquid legislation that is simply piecemeal, illogical and very damaging, both to our climate change image in the world and the image in terms of British industry about whether reliable frameworks in which companies can realistically work will continue to come from this Government.

[Lord Howell of Guildford (Con)]

My Lords, I was not going to intervene at this stage, but the right reverend Prelate’s intervention and his association with my noble friend Lord Lawson’s Global Warming Policy Foundation prompted me to pursue the point that he raised. A lot of our discussion has been on the penalties —in other words, the removal of subsidies from people who thought that they had a chance of the subsidy when they started their projects. That is aside from whether the project is environmentally okay or whether they get local government approval for planning reasons and so on; it is simply the question of whether they were caught by various delays and, therefore, would not get the subsidies that they thought they would get when they set out.

We are not in any way trying to stop the development of the very successful parts of the onshore windfarm industry. As the noble and learned Lord, Lord Wallace, reminded us, electricity from wind power is getting cheaper. If it is getting cheaper, it will in due course need less subsidy. Remarks from outside this country—particularly an ill-informed remark by the UN adviser, Professor McGlade, that somehow Britain was putting a stop to its movements towards low-carbonisation by putting a stopper on all wind power and so on—are way out of kilter and far from representing where we stand.

It is no less interesting to work out to what extent these grace periods will help the situation—I thoroughly approve of all the amendments that my noble friend has brought forward with such assiduity. Presumably, as a result of these grace periods, we will see slightly more subsidy paid out, which has to come from the consumer—the industrial consumer in particular—than we would have done before he introduced the amendments. The money that was not going to come from somewhere has to come from somewhere. Somebody will have to pay for it. This is on a day when we are staggering under the colossal redundancies that have been announced throughout the steel industry—including the steel industry in Scotland—which, we are told, are overwhelmingly the result of very high energy costs. Apparently, for electricity, we are paying twice the German level. In turn, of course, energy costs for the steel industry of Europe are leading people to predict that the entire industry will be wiped out. At a time like this, we need to watch with needle sharpness what is happening to the costs that are falling on the industries where all these jobs are being destroyed. How much more of that cost is still going to persist in meeting all the grace period conditions which the noble and learned Lord, Lord Wallace, with his massive legal knowledge and detailed grasp of the situation, has described as being necessary and fair? How much more will this kind of fairness cost in the end in burdens on the electricity users of Scotland and the rest of the United Kingdom in ways which will precipitate even further these appalling redundancies? We need to keep that side of the argument very clearly in our minds.

--- Later in debate ---

[Viscount Ridley]

I do not know where I was five or 10 minutes ago then, when I was listening to a lot of very wide-ranging remarks about whether our opposition to the wind industry was ideological.

I find it odd that the parties opposite are so keen to defend one particular industry—one that is really good at taking money from poor people and giving it to rich people while doing the square root of nothing to reduce emissions, killing eagles, hurting tourism, spoiling landscapes and killing jobs.

[Baroness Young of Old Scone]

The noble Lord is probably going to move on to it being conducive to falling arches and making children more delinquent. We are talking about correcting an administrative lash-up. Yesterday, I looked briefly at the words that the Government put forth on the consultation on the renewables obligation cessation and the transfer to contracts for difference. That was aimed at making a smooth, seam-free transition between the two subsidy schemes. What we are talking about here is the fact that the transition that came as a result of earlier closure is far from seam-free and smooth; that is all that we are talking about.

On the other hand, I cannot, while on my feet, not challenge the noble Lord on his assertions that any of the environmental or carbon reduction measures are the primary cause of a lack of competitiveness in some of our energy-intensive industries. Our energy-intensive industries have been helped, quite rightly, with the burden that has been placed on them by carbon reduction measures. However, if one looks at the range of factors that makes us competitive in the world compared with other countries, particularly the emerging economies, one will see that labour costs by far and away outweigh any impact that carbon reduction could have.

[Viscount Younger of Leckie (Con)]

My Lords, I am ready to reply to the noble Baroness’s speech, but I believe that that was an intervention on another speech.