Small Business, Enterprise and Employment Bill
Debate between Lord Berkeley and Viscount Ridley
Lord Berkeley
I am grateful for that clarification. I do not know whether the noble Lord is aware that a dozen or so tenants of Punch and Enterprise Inns have gone public today, listing all the defects that have not been corrected by their owners—including unsafe gas appliances, leaking roofs, unsafe fire exits and so on —with the companies claiming that they have done the work and having put up the rents to some extraordinary degree to cover that when they have not actually done it. It confirms that something is seriously wrong and needs to be put right.
Viscount Ridley (Con)
My Lords, I declare an interest in that I own two properties that are operated as pubs but they are not beer-tied pubs. I congratulate my noble friend on guiding us through the complexities of these amendments. I have to say, I found the topic of mitochondrial heteroplasmy two weeks ago much easier to understand.
On the whole, I subscribe to the revolutionary idea that people should be free to come up with any commercial arrangements between consenting adults that they wish to, but I certainly recognise that there is a clear wish in this House and the other place for some version of a pub code and a market rent only option. I welcome the Government’s sensible and measured approach to bringing all sides together in this but, as my noble friend Lord Hodgson said, the key question is whether this will keep pubs open.
The industry is clearly warning us that the Bill, unamended, could cost a lot of money—maybe £20 million a year—and could result in the closure of hundreds of pubs. This is confirmed by an independent study by London Economics. It may be wrong and it may be crying wolf, but if it is not, the Bill will have done precisely the opposite of what we all want: it will have closed pubs and thereby damaged communities. It behoves us to tread carefully.
The Government have listened carefully to all sides of this debate and made, as the Minister said, a proportionate and targeted response. They have made important changes to the MRO which will make it more workable, less open to legal challenge and fairer to all stakeholders, while maintaining its spirit. Without the government amendments, there is a risk that we would see less investment. It is a simple fact that many beer-tied pubs have received significant investments. Without the safeguards, the MRO would create uncertainty that deterred investment. We would thereby also lose a low-cost entry into the sector: tenants without the capital to invest in a free-of-tie pub would not necessarily come forward at the same rate—we have heard something on that already. It is crucial that if tenants want to go to an MRO and find investment outside they can do so, but if they want to defer MRO to the next rent review in exchange for investment they should be able to do that, too.
The one law that we keep passing in this House is the law of unintended consequences. Can my noble friend give the House some reassurance that these complicated amendments will minimise the risk of widespread pub closures?
Energy Bill
Debate between Lord Berkeley and Viscount Ridley
Lord Berkeley (Lab)
I support the amendment in principle, but I am concerned. The noble Lord, Lord Cameron, has made some interesting points. I have been told that the biomass market, as we see it today, probably has a life of about 10 years. Investment is going into ports at both ends for the wood, as well as in shipping lines and transport from the ports. I declare an interest as chair of the Rail Freight Group. A lot of investment is going into new wagons or converting coal wagons to keep this stuff dry, because if it gets wet it is not very nice. The message in the industry is that they have got 10 years and then the nuclear power station at Hinkley point, and perhaps others, will be on stream, after which there is no guarantee of what will happen.
If that is the case and if, in the interim, the furniture industry of which the noble Lord, Lord Jenkin, spoke, is decimated, that will not be very good. We will have had 10 years of biomass but no furniture industry after that. I do not know whether that is the case. There are clearly many millions of tonnes of biomass in other parts of the world, but there are problems certifying where it comes from. Also, I am told that if it comes in pellets you cannot convert it to woodchips and vice versa. I would hate to see an industry like that decimated just for 10 years of using local biomass which then proves to be uneconomic and where the plant closes down.
Viscount Ridley (Con)
My Lords, I wish to speak briefly in support of the amendment. I think I am right in saying that the Secretary of State has expressed a view similar to that of the amendment. Speaking to the BBC on 18 July, he said:
“Making electricity from biomass based on imported wood is not a long-term answer to our energy needs—I am quite clear about that.”
We are in a bit of a bind here, because the Department of Energy and Climate Change has said it expects about 90% of the biomass that will be burned in power stations to be imported. However, the wood panel industry is clear in saying that even if 10% of what is going to be burnt is produced domestically, it will have a devastating effect and could displace a lot of the wood panel industry, which it estimates would increase carbon emissions by about 6 million tonnes, because if you are burning something today instead of incorporating it into a piece of furniture, you are turning it into CO2 much sooner. Making furniture also produces carbon emissions, but considerably less—about one-quarter or one-fifth of the amount.
Perhaps I may also take this opportunity to ask the Minister for clarification on my Written Question earlier this year about carbon dioxide emissions from burning biomass. It is clear that in the short term, biomass is about the highest carbon dioxide-emitting fuel there is. If you recapture that over a period of 35 or 40 years for softwood, and rather longer for hardwood, one can in the long run perhaps make the case that biomass is carbon neutral. However, all the calculations that I have seen show that because of the need to drive off water, and due to its chemical composition—there is a difference between cellulose which has hydrated hydrogen in it as opposed to coal which does not—the use of biomass will increase our carbon emissions over several decades. I thought that that was the period we are most worried about, so I am a little puzzled about the current dash for wood, as I call it.
Energy Bill
Debate between Lord Berkeley and Viscount Ridley
Lord Berkeley
My Lords, I tabled the amendment as a result of a lot of communication from the renewables sector about its concerns about raising finance, given the current uncertainties that are going on, not only around the Bill but around a few others things that I will mention. The sector says that that is making it difficult to raise finance, which of course means that less electricity will be produced.
The risks and uncertainty are around the strike price and whether and how much of their power these companies can sell. In addition to that, there are other uncertainties such as planning. The planning system has become better in recent years with the legislation that both Governments have taken forward, but it is still uncertain. We still sometimes see ministerial decisions that look a little odd. It takes time and a lot of money, as we all know. But there is also the question of political risk. However, it is not helpful when Ministers and, I am sorry to say, Prince Charles make statements about not liking windmills or something. This does not apply only to windmills, but these technologies should be developed and commissioned and permissions sought for their planning on their merits, be they offshore or onshore. We have even heard about how successful PV is in Germany today, because the sun is shining.
There is a risk to these new developments. The renewables sector has said to me very strongly that if it could get 25 years, duration of support for CFTs, it would encourage companies and their investors to go for a greater volume of the different technologies, not only the ones that are going up already quite successfully but new ones, much more quickly and easily. I beg to move.
Viscount Ridley
My Lords, I know that particularly in the case of offshore wind a Royal Academy of Engineering report is forthcoming, which I hope we will see before Report. Rumours are that it is extremely negative about the risks and dangers of the practicalities of installing wind turbines on a large scale, and in particular on their likely lifetime.
If we were to consider giving an offshore wind company a 25-year contract for a technology that is supposed to last 20 years, and many engineers think will not last more than 15 years, we will not have done the consumer and indeed the taxpayer a service. We would have let them down very badly. We have to take into account that a lot of these technologies will turn out not to last as long as we thought and deliver the benefits that we thought they would. In the case of offshore wind, once again, it is becoming clearer by the day that the carbon dioxide savings that offshore wind will deliver will be very disappointing because of the need for backup power, the need for that backup power to be open cycle, as has been mentioned, and because of the cost and carbon cost of some of these technologies.
It would be a mistake on behalf of the consumer to enter into these eye-wateringly high, £155 per megawatt-hour, strike price costs for a quarter of a century when all sorts of things may change over that time.
Energy Bill
Debate between Lord Berkeley and Viscount Ridley
Lord Berkeley
My Lords, I shall intervene briefly because I do not want to pre-empt what I am going to say in moving Amendment 53.
The noble Lord, Lord Deben, and my noble friend Lord O’Neill both hit the nail on the head when they emphasised the problems that we are facing in the market. However, whatever else we do with other amendments, it is important that we have an amendment such as Amendment 52, which puts a duty on government and regulators to promote competition and look after the interests of consumers. There is similar wording in legislation relating to water and the railways but it is the principle on which all other negotiations and discussions are based. It may be meaningless but it is there. There have been many occasions when I have used the railway principle against a particular Government who seemed to do something stupid or something that I did not like, but it is a very important principle. Whatever we do later as we go into more detail, it is very important that we have this kind of policy right at the top to show where the Government and the regulator should be going.
Viscount Ridley
My Lords, I had not intended to intervene on this amendment and I shall do so extremely briefly, mainly because I have been moved by the words of my noble friend Lord Deben and the noble Lord, Lord O’Neill, to say that I heartily agree with them. As I do not always agree with them on everything, I suspect that that is terrible news to them, but I think that this little outbreak of what one might call “free-market anti-capitalism” is a very good point. The point of competition is to drive co-operation between producers and consumers—to cause producers to do things that help consumers both by innovation and by the lowering of prices. I shall not go on any further; I just wanted to record that fact.