Lord Callanan debates involving the Cabinet Office during the 2019 Parliament

Mon 24th Jul 2023
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United Kingdom Internal Market Bill
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Consideration of Commons amendmentsPing Pong (Hansard) & Consideration of Commons amendments

Climate Change

Lord Callanan Excerpts
Monday 24th July 2023

(7 months ago)

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Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)
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My Lords, I join with the rest of the House in congratulating the noble Lord, Lord Krebs, on securing this debate. I also thank the noble Lord, Lord Teverson, for kindly welcoming me to the Dispatch Box. This item spans a number of government departments, but most of it is in Defra and my noble friend Lord Benyon was originally going to be replying. Sadly, he is unavailable this evening, but I am delighted to stand in his place, since my department still has the overall responsibility for delivering net zero.

Before I move on to the substantive parts, I join other Members of the House in paying tribute to the excellent speech from the noble Earl, Lord Russell. He made a number of brilliant points and we all look forward to hearing his future contributions. I note that he is a photographer who does a lot of work for the London Wildlife Trust. I note also that he is a political photographer as well. Since a friend once described me as somebody with a perfect face for radio, I probably will not be taking great advantage of his political photography skills, but I think my right side is my best, should he ever wish to do so in the future. We look forward to working with him and hearing his contributions to the work of the House.

Even with the many successful actions that we are taking to reduce our greenhouse gas emissions—the best record in the G7, as the House is probably sick of hearing me say—we still need to prepare for the way the climate is changing. We must strengthen our national security and resilience, from producing food and securing water supplies to protecting our health and our natural environment, as well as maintaining critical infrastructure and supply chains. To this end, as the noble Lord, Lord Krebs, reminded us, last week we launched our Third National Adaptation Programme—NAP3, as nobody refers to it. This sets out the Government’s plans and policies to address a wide range of climate risks and opportunities to the UK that were highlighted in our third climate change risk assessment, published last year. The publication of NAP3 marks a step change in the UK Government’s approach to climate adaptation, putting in place an ambitious programme of decisive action for the next five years across all sectors of the economy and society.

Given the broad range of questions raised by many noble Lords, I will try to group them by theme and hopefully respond to all the points raised. I start with the new climate resilience board, which has raised interest from the noble Lords, Lord Krebs and Lord Teverson. The Cabinet Office and Defra, working with the Treasury, are currently establishing the new board to oversee strategic, crosscutting climate adaptation and resilience issues and drive further government action to increase UK resilience to climate change.

Membership has not yet been determined but it will be made up of representatives from the key departments across government on the issue of climate resilience. This forum will of course work closely with existing cross-government climate governance, aligning climate adaptation to wider government priorities on net zero and the environment. At ministerial level, this work will continue to be considered as required by the relevant Cabinet committees.

I turn to the points raised by the noble Lords, Lord Krebs and Lord Kakkar, the noble Baroness, Lady Walmsley, and others on heat and public health. Tackling the risks, including to public health, from overheating is of course a key priority for the Government. As a number of noble Lords cited, there were 2,803 excess deaths among those aged 65 and over following the heatwaves in 2022. A number of well-developed warning systems are already in place to alert the public and emergency responders to imminent threats of heatwaves.

The Met Office issued a new extreme heat warning service in June 2021, designed to work alongside the UK Health Security Agency’s health alert system. As outlined in the third national adaptation programme, the Government will implement the adverse weather and health plan published in April this year to support local and national organisations in preparing and building for and responding to future adverse weather events to protect lives and promote health and well-being. This includes provisions to cascade support and guidance to care home managers in the event of extreme weather events such as heatwaves.

In October last year, the Health Security Agency launched its Centre for Climate and Health Security with a mission to deliver a step change in our capabilities in this area. That centre is now leading UKHSA’s climate health activity, providing a focus for partnerships and collaboration with academia, local authorities and other public sector organisations.

In addition to that, NHS England is developing an interactive climate change risk assessment tool to support the identification of local climate change risks to the NHS—I think that addresses one of the points made by the noble Lord, Lord Kakkar. Finally, NHS England will include adaptation measures in the NHS standard contract for NHS buildings and services from this year and include adaptation measures within NHS building standards to increase the uptake of adaptation planning and activity.

On housing, DLUHC implemented Approved Document O of the building regulations in June 2022 to limit excess heat and solar gains across all new residential buildings. DLUHC and the building safety regulator will investigate overheating risk in homes that have been created through a material change of use in 2022-24

On climate change and disease, and another point well made by the noble Lord, Lord Kakkar, the Government are monitoring the occurrence of vector-borne diseases—VBDs—including the number and size of outbreaks, to improve our understanding of the changing distribution and human cases to manage impacts. Defra will develop new tools for assessing the impact of extreme weather events and projecting the influence of climate change on plant pests by 2026. It will conduct a study on the importance of microclimate by 2025 and invest in a research programme on climate change and vector-borne disease. UKHSA will reduce future risks by maintaining and expanding the UK’s surveillance system for ticks and mosquitoes to achieve rapid detection and control of non-native vectors and raise awareness of VBDs.

I turn to points made by a number of noble Lords regarding homes. We are of course committed to ensuring that all homes are fit for the future in a changing climate. To achieve that in all new homes, we have updated building regulations this year to reduce excess heat and unwanted solar gains in all new residential buildings. For existing buildings, we are undertaking a programme of research to fill evidence gaps in our understanding of the existing building stock’s vulnerability to climate hazards and the methods that can be used to most effectively minimise overheating.

On points raised by the noble Lord, Lord Whitty, and my noble friends Lord Frost and Lord Lucas relating to our combined efforts on climate adaptation and mitigation, adaptation and net zero in fact go hand in hand. Achieving net zero actually requires adaptation. We have a huge opportunity to make substantial net-zero investments that are resilient to current and future climate change risks, and doing so, as a number of noble Lords have pointed out, can prevent higher future costs.

For the avoidance of any doubt, I confirm to the noble Lord, Lord Krebs, that delivering net zero is of course vital to this Government—as well as being a legal commitment. That is one of the reasons why the Prime Minister set up the department that I am a proud to be a Minister of, the Department for Energy Security and Net Zero. As the House will no doubt get sick of hearing me say, our track record on this is better than those of the vast majority of other comparator countries, including, for the benefit of the noble Baroness, Lady Jones, countries that have Greens in government. As the Prime Minister confirmed today, we will continue to make progress towards our net-zero ambitions in a proportionate and pragmatic way.

I actually agree with the noble Lord, Lord Whitty—and the noble Earl, Lord Russell, in his maiden speech—that the evidence clearly suggests that it is cheaper to invest early, anticipating and preparing for risks, than to live with the costs of inaction by rebuilding, recovering and compensating for losses. That is why we have already committed significant government investment to a range of adaptation actions. I entirely accept that it is the role of noble Lords to call for even more money to be spent, but we are already investing considerable sums.

The noble Lord, Lord Whitty, mentioned rising sea levels and flood defences. I can tell him that the Government are investing £5.2 billion in flooding and coastal erosion management programmes, precisely to protect the thousands of homes and businesses that are at risk.

We are also investing in nature—a point made by a number of other noble Lords—with more than £750 million in the Nature for Climate fund driving £2.2 billion of accelerated investment through the Plan for Water—a point also raised by a number of noble Lords—to help to secure a resilient, clean and plentiful supply of water now and in the future.

In his opening speech, the noble Lord, Lord Krebs, set out the importance of measuring the outcomes of our actions on adaptation. The Government are committed to monitoring the actions in NAP3 over the five-year programme timescale. To support that, NAP3 includes an annexe dedicated to outlining our approach. Monitoring, evaluation and learning are of course fundamental.

The Climate Change Committee will continue to assess the Government’s progress on adapting to a changing climate in its biennial progress reports on the UK’s current national adaptation programme. In our view, that is the best measure as an independent assessment of government progress against the objectives that we ourselves have outlined in NAP3. To help to support that work, Defra is designing and monitoring an evaluation framework to inform the Climate Change Committee’s first progress report on NAP3, which is due in 2025.

In response to the concerns from the noble Earl, Lord Russell, about our continued commitment to the International Climate Fund, I can tell him that the UK ICF climate finance strategy includes a commitment to spend £11.6 billion between 2021 and 2026, with a balance between adaptation and mitigation measures. That includes targeting priority regions and sectors to enhance locally led adaptation, and supporting many overseas Governments to help them to increase their climate resilience. It also includes a commitment to investing at least £3 billion of international climate finance in development solutions that protect and restore nature. That commitment was repeated in NAP3, which was published last week.

The noble Lord, Lord Whitty, mentioned the Thames Barrier. I point out to the noble Lord that the Thames Estuary 2100 Plan, which is the first adaptive flood risk management strategy of its kind, allows us to plan, monitor and review how we adapt to flood and climate risks to the end of the century and beyond. In May this year, the Environment Agency published an updated plan which confirms that we remain on the right pathway and that current plans for maintenance, repair and improvement of flood defences remain the best value for money.

I turn to the points made by my noble friend Lady Browning and the noble Baroness, Lady Anderson, on global food security and climate change. The UK is stepping up to address international food security, and we are calling for all countries to keep food trade flowing—protectionism is in nobody’s interest. At the World Bank and the IMF’s spring meetings in April, the UK and our partners secured the largest ever financial commitment from the World Bank of $170 billion until the end of June 2023, to support countries faced with economic hardships as a direct result of the Russian invasion and its impact on the world. Together with G7 allies, we are discussing Germany’s proposal for a G7 global alliance on food security to help to scale up a rapid needs-based co-ordinated response, while building on current food security architecture and avoiding a fragmented global response.

More locally, here in the UK the Government are committed to ensuring a resilient food supply, which includes considering the impacts of climate change on domestic food production and its consequent impact on international supply chains. Securing a resilient food supply for the UK by backing British farmers and our rural communities was at the heart of this Government’s manifesto. It is why we have committed to maintaining the £2.4 billion annual farming budget, to help support farmers to become more productive and profitable. We are actively co-ordinating work across the food supply chain to strengthen resilience planning, which will help supply chains respond to climate and other emerging risks. The United Kingdom Food Security Report is a triannual statistical report required under the Agriculture Act 2020. The next report, due in 2024, will continue to improve our understanding of climate risks to UK food security.

The noble Baroness, Lady Walmsley, pointed towards examples from the USA’s Inflation Reduction Act and the EU’s net-zero recovery plan. I can tell the noble Baroness that, since 2010, the UK has been much more successful than both the EU and the US. We have secured nearly £200 billion-worth of public and private investment in low-carbon energy. Obviously, we are pleased to see that both the EU and the US are now trying to follow our lead. The UK’s innovative approach, such as the contracts for difference scheme, is now being copied across the word, so successful has it been. That investment is 50% higher than the US achieved as a share of GDP, and that is why 40% of our power came from renewables last year, which is twice the figure the US achieved. The amount of renewable power is increasing all the time.

Let me shock the House and agree with a point made by the noble Baroness, Lady Jones. I realise that this runs the risk of destroying her social media profile, but she was right in some of the points that she made about the oceans. Through the Marine Climate Change Impacts Partnership, we are improving our understanding of the impact of climate change and rising sea levels. MCCIP engages with a wide range of scientific authors to supply policymakers and the public with updates on the current and predicted impacts of climate change. Defra intends to manage impacts on our fisheries by investing in the creation and restoration of blue carbon habitats, managing anthropogenic pressures in the marine environment and taking advantage of the opportunities posed by climate change for fisheries, such as projected movements of species.

I thank the noble Earl, Lord Devon, for his considered points on the risk that climate change poses to intertidal habitats and the benefits to be derived from their effective conservation and management. Again, Defra will continue to manage and, where appropriate, to reduce non-climate pressure on blue-carbon habitats to help protect them and build their resilience. Our target is that 70% of designated features in marine protected areas will be in favourable condition by 2042, with the remainder in recoverable condition. Following the designation of the first three highly protected marine areas in English water, Defra now intends to identify further suitable sites for consultation and potential designation.

Finally, on the important point made by the noble Lord, Lord Teverson, about climate change and national security, I point out that the Joint Committee on the National Security Strategy recently conducted an important inquiry on precisely that topic. I can tell him that, in response, the UK Government’s resilience framework published in December last year set out their plan to strengthen the systems and capabilities that underpin our collective resilience to all risks to our security, including that of climate change.

I am running out of time, so I thank all noble Lords who contributed to this important debate. The publication of the third national adaptation programme marks an important step at the beginning of five years of concerted action across all parts of government and society to strengthen the resilience of the nation to the changing climate. As this will be my last appearance at the Dispatch Box before the Recess, I will, for a change, agree with the Opposition—specifically, the noble Baroness, Lady Anderson—by wishing all noble Lords a fantastic summer and a very restful period before we resume in the autumn.

Net-zero Emissions: Behaviour Change

Lord Callanan Excerpts
Thursday 20th October 2022

(1 year, 4 months ago)

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Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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I thank everyone who has contributed. On the last point made by the noble Baroness, Lady Blake, she is perhaps attributing more power and influence to me than I might have in the selection of the next Prime Minister, but I thank her for her faith in me.

I thank the right reverend Prelate the Bishop of Oxford for bringing forward this very important debate on steps the Government will take to support behaviour change as part of the pathway to net zero emissions. I also thank the House’s Environment and Climate Change Committee for its report on the Government’s approach, and all those who contributed to that report. I start by assuring the House that the Government recognise that achieving our net zero target will be challenging and will require enormous changes to our energy systems and infrastructure. I want to reassure the right reverend Prelate that we take the concerns raised in the Select Committee report seriously and will carefully consider all its recommendations.

In response to the noble Baroness, Lady Parminter, we know that public concern about climate change is high and has doubled since 2016, with 85% of people telling pollsters that they are either concerned or very concerned, although it is fair to point out that the potential solutions are not as well known to members of the public. Many people think that they are doing their bit by putting their recycling out, which of course they are, but the extent of the additional changes required is quite severe, and I am not sure that there is so much support of that.

Nevertheless, in terms of the information that is given to them, many members of the public have shown that they are willing to make green choices to combat climate change and to reduce their own costs, provided that they are not too severe or too impactful on their everyday lives. As many businesses and civil society organisations are already leading the way in engaging the public on net zero, the role of government is to set the overall direction, our priorities and a narrative to support that transition.

I agree with my noble friends Lord Frost and Lord Lilley that we want to support the public in making these green choices in a way that maintains people’s fundamental choices and freedoms. My noble friend Lord Frost made some excellent points but, based on very good Conservative principles, we should be supporting more renewables because they are cheap. The cost of offshore wind is now a sixth of the price of gas-generated power. From good Conservative liberal principles, we should be supporting more of that. I totally accept that he will say, “but it’s intermittent”. He would be right, so we need more baseload power from nuclear and other carbon-free sources. Nevertheless, at the moment, with sky-high gas prices, renewables producers on contracts for difference are paying hundreds of millions of pounds back into the system, because the prices are above their strike price, and are subsidising people’s bills, which would have been even higher without this production.

Whatever view you take on climate change, however sceptical you are, just from an energy security point of view we should be generating more power on our own shores, rather than paying some very unstable and unpleasant people in other parts of the world for our power, and we should be doing this because it is cheap at the moment. The CfD scheme has been so successful, particularly in generating large amounts of offshore wind power, that the rest of Europe is trying to follow us with essentially the same systems. We have very ambitious plans to roll out more of it, but that will probably be quite difficult, given the supply chains and that everybody else will be trying to do the same.

As referenced by the noble Lord, Lord Grantchester, and the noble Baroness, Lady Blake, in our net-zero strategy we set out clear principles outlining how we will empower the public to make green choices by making those choices easier, clearer and more affordable, and by working with industries to remove barriers to those cleaner choices. I can happily assure the noble Baroness, Lady Blake, and the noble Lord, Lord Browne, that we are indeed helping people to know how they can play their part by supporting them in making green choices. It is not through a hectoring campaign or through compulsion, but by providing people with clear advice on what they can do to save themselves money and save the country money. It is set out in our Heat and Buildings Strategy, which is about enabling people to do the same things differently and more sustainably. It sets our approach for engaging the public, both in communicating the challenge and in giving people a say in shaping future policies.

Let me give some examples of government support. We are putting our principles into action using a range of policy measures that support the public to make those greener choices across different sectors. We are of course helping people to travel more sustainably. We are not preventing them from travelling—that would be wrong—but helping them to do it more sustainably by better integrating transport modes, by having more bus routes serving railway stations, and by improved integration of cycling and walking networks.

The noble Baroness, Lady Sheehan, welcomed the uptake of electric vehicles. We do need that, of course, but we are also investing £2 billion in building more cycle lanes and low-traffic neighbourhoods—which have varying degrees of popularity, depending on where they are implemented. We also announced funding worth £200 million for new walking and cycling schemes across England, through a new body called Active Travel England, overseeing 134 fairly ambitious projects. This new body will ensure that the Government’s unprecedented investment in active travel makes the green travel choice easier for the public.

In response to the noble Baronesses, Lady Sheehan and Lady Parminter, and the noble Lord, Lord Grantchester, the Government’s approach to decarbonising our heat and buildings is set out in the Heat and Buildings Strategy, which provides a clear long-term framework to enable industry to invest and deliver the transition to low-carbon heating and retrofitting measures, In this strategy, the Government have set out a combination of policy measures to address a range of practical barriers to some of those choices.

From good conservative principles I am also a great believer in energy efficiency. The cheapest energy is that which we do not use. There is some practical advice that we can offer to people—again, not in a hectoring way but clear and simple advice. The one that I am the keenest on is turning your boiler flow temperature down. You can achieve the same heat in your house and be just as warm, but you can do it about 8% to 10% more efficiently, saving on your gas bills, saving the country money—saving taxpayers money at the moment, because we are subsidising energy prices—and helping our energy security. What is not to like about these measures? This is something that we can clearly and easily support, and we will provide advice to the public on how to do things such as that. Many energy companies and others are already doing that, and we will support them in those advice sessions.

We are making the transition to low-carbon heating cheaper for households because—I again agree with my noble friend Lord Frost—people will not make these choices until we make them simple and easier, and we can demonstrate to them that they will save money by adopting measures such as heat pumps and other low-carbon heating measures. We can do that by rolling them out and decreasing the costs over time, but it is very much in its infancy at the moment, so it will take time to build these policies up. Nevertheless, we are supporting the transition with the £450 million boiler upgrade scheme, which is providing £5,000 in capital grants to households. We are also rolling out a consultation on a new market-based incentive for heating system manufacturers.

In response to the noble Lord, Lord Grantchester, who referenced the ECO scheme—the energy company obligation—we are boosting its value under ECO 4 from £640 million to £1 billion a year from 2022 to 2026. That will help an additional 450,000 families with measures such as insulation and better boiler control. The noble Lord also referenced the ECO Plus scheme, one of the measures that so far seems to have survived from the mini-Budget.

In response to the noble Baroness, Lady Sheehan, and my noble friend Lord Lucas, on addressing information gaps and helping consumers make informed decisions, this summer we launched a new energy advice page on GOV.UK. I encourage all noble Lords to check it out. This is a website where you can put your personal details in, and it links to the EPC database and provides home owners with personal, tailored advice about the energy performance of their homes. We hope to extend it even further to provide signposts to the different measures of support that are available to people in future. Nevertheless, it provides excellent advice to home owners on how they can save themselves money and increase the country’s energy security.

These policies, which seek to address some of the major practical barriers to individual behaviours, will bolster the low-carbon heating market and create new opportunities for businesses and better choices for consumers. My noble friend Lord Lucas and the noble Baroness, Lady Parminter, made some acute observations on the affordability of making green choices. Both noble Lords will be aware that Chris Skidmore MP is leading a rapid review of the Government’s approach to net zero to ensure that we deliver on that now legally binding target in an economically efficient and sensible manner. I do not want to pre-empt the findings of the review but I believe his intention is to publish by the end of the year.

As I have set out today, the Government recognise that achieving the legally binding net-zero target has to be a shared endeavour and requires action from everyone in society, including people, businesses and the Government. We are committed to taking practical steps to support the public in making green choices in a way that supports their fundamental freedoms, supports their freedom of choice and maintains their individual freedoms. We will continue to take this approach across net-zero policies to support the UK’s transition to a green and sustainable future. As I said, we are carefully considering the recommendations in the Environment and Climate Change Committee’s report. We will publish that response in due course, in line with normal parliamentary procedures. I thank the committee for its consideration.

Moved by
Lord Callanan Portrait Lord Callanan
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That this House do not insist on its Amendment 8L to which the Commons have disagreed, do not insist on its insistence on its Amendments 13 and 56 to which the Commons have insisted on their disagreement, and do agree with the Commons in their Amendment 15C.

15C: Clause 10, page 7, line 25, at end insert—


“(4) Before making regulations under subsection (2), the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.


(5) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.


(6) If regulations are made in reliance on subsection (5), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”

Lord Callanan Portrait The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
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My Lords, this group covers Amendment 8M, which relates to exclusions from the market access principles. The noble Lord, Lord Stevenson, has made changes to the amendment since the debate was last in this House. These move the proposed exclusions text from Clause 10 to Schedule 1 and narrow the list of reasons for derogating from the market access principles to two: environmental standards and protection, and the protection of public health.

While this acknowledgement of the issues created by replacing Clause 10 with a lengthy list of exclusions is appreciated by the Government, it does not address our fundamental problems with this approach. The noble Lord’s Amendment 8M would cut right across the Government’s objectives and leave businesses exposed to new burdens and barriers. Despite the reduced list of aims, vast amounts of public policy could be excluded from the market access principles.

I have previously explained that the narrow approach to exclusions that we have taken ensures that certain policy areas can work effectively within the clearly defined market access principles. Many of these, such as the exclusion relating to threats to human, animal or plant health, will ensure that necessary environmental and public health measures can continue to operate under the bespoke constraints necessary in those areas, all without the need for the wide-ranging environmental and public health derogations which the amendment, even in its revised form, would add to Schedule 1.

However, the way in which the noble Lord’s list of exclusions would work with the test in his proposed new paragraph is also problematic, as I shall explain. To be excluded, a requirement must only “make a contribution to” the achievement of one of the aims from the list, meaning that a policy need only have an extremely tangential relationship to a social policy objective to be taken out of scope.

The amendment would also lead to uncertainty as to when the market access principles applied, not least by a very unusual use of the term “proportionate”. It would fall to courts to determine the relative extents to which different policies met one of the aims, with no consideration of the burdens introduced. This would not deliver the certainty that business needs. The amendment could bring blatantly protectionist measures out of scope of the market access principles because it was unclear what “disguised restriction on trade” meant. We cannot accept protectionism within the UK.

In the previous debate, the noble Lord, Lord Stevenson, also raised the differences with the EU system. It should be quite clear that the EU system is designed for different circumstances—that is, bringing together 27 countries. Now that we are an independent trading nation, the market access principles are naturally more tailored for the UK than they were in the EU system, so it is right that the approach to exclusions in this Bill should be more narrowly focused.

However, I must stress the following point to the House: the market access principles do not prevent the devolved Administrations introducing innovative policies designed to meet their own goals and objectives, including those relating to the environment and public health. We are adamant that requirements which prohibit the sale of a particular good should generally be in scope of the mutual recognition principle; otherwise, we would see a decrease in consumer choice, increased prices and additional costs for business. This is an outcome that I do not believe your Lordships desire, nor is it a good one for the citizens of the United Kingdom.

Of course, if there are initiatives that are of serious concern to the UK Government and the devolved Administrations, we should work together as a United Kingdom to implement them. Furthermore, manner of sale policies, which have typically been the most innovative types of policy, will not be impacted by the market access principles as long as they do not discriminate and are not designed specifically to circumvent mutual recognition. This covers innovative policies such as plastic bag charges and minimum unit alcohol pricing, which many noble Lords have cited. In this respect, our system has much greater flexibility in these areas than the current EU system would allow.

For all these reasons, I strongly encourage noble Lords to reject Amendment 8M.

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Lord Fox Portrait Lord Fox (LD)
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My Lords, I welcome the noble Baroness, Lady Bennett, back to her seat—just in time for tier 3 to arrive. We have again had a short debate. As we have seen the evolution of this argument—in the amendment’s approach to common frameworks it is, in a sense, the yin to the yang of the noble and learned Lord, Lord Hope—we are now looking at a different way of trying to ensure that diversity can survive under the automation of the market access measures.

In the past, the Minister has brought to bear the Government’s disapproval of the breadth of the exclusions that previous versions of this amendment made. As the noble Baroness, Lady Bennett, pointed out, many of those have now dropped off. So, in a sense, the Government have already pushed this to a narrower set of exclusions. The Minister highlighted his uncertainty around the word “proportionate”. Of course, none of us would want to do something disproportionate, but I cannot help thinking that the Government, in all their wisdom and with all their clever legal people, could come up with a frame of words that will prevent hideous problems developing in the courts—so I cannot help thinking that that is something of a red herring.

As the noble Lord, Lord Stevenson, said, this is getting more modest than was previously attempted, but it still has the overriding aim of dealing with the problem which keeps coming up throughout this debate. The Minister has magnanimously said that the devolved authorities are perfectly at liberty to develop new and innovative ways of doing things—so far, so good—and then, of course, the market access principles mean that those innovations will get undercut if someone else in the British Isles is doing it differently. I do not understand how the Minister can keep linking those two sentences without seeing that the one excludes the other. If it does not do it in governmental terms, it will do it in the courts. This will be a creature of the courts, because there will be businesses that will be going at a legal opportunity to get their products into devolved authorities that have sought to raise standards, as they see it.

The issue of minimum-unit alcohol pricing often comes up, and it is quite clear that this legislation will not affect that at all. We are all in agreement there. But if we were seeking to bring that in once this legislation was in place, what chance would it have of surviving the courts? That is why we will support this amendment.

Lord Callanan Portrait Lord Callanan (Con)
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I thank everybody who has contributed to what has been a very good, albeit brief, debate. I have listened very carefully to the points that have been raised, and I will respond directly to the points of the noble Lords, Lord Stevenson and Lord Fox. Innovative policy-making relating to public health and the environment will be fully possible under the Bill, within the clearly defined market access principles. Schedule 1 sets out a clear exclusion process for:

“Threats to human, animal or plant health”.


There are also several other exclusions relating to the environment and public health: chemicals and pesticides, for example. All of these are drafted tightly to strike the right balance between these objectives and the integrity of the market.

It is also essential to remember that neither of the market access principles affects the devolved Administrations’ abilities to uphold and enforce rules governing how consumers use goods. Neither would they prevent reasonable “manner of sale” restrictions, as long as they are not discriminatory. If an Administration wanted to introduce minimum alcohol pricing or the plastic bag charges, they are fully able to do so and can use them to fulfil environmental or public health aims in future; the principles would not be an obstacle to that, as long as those rules do not discriminate. I say to the noble Baroness, Lady Bennett, that she is wrong: if a future devolved Administration wanted to introduce the plastic bag charges, they would be able to do so under these market access principles, as long as they were non-discriminatory.

--- Later in debate ---
Moved by
Lord Callanan Portrait Lord Callanan
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That this House do not insist on its Amendment 50C to which the Commons have disagreed for their Reason 50D.

50D: Because, while the Commons agree to Lords Amendment 50B, it is not appropriate to link the operation of the reservation proposed by Clause 50 to Common Frameworks.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, I turn once again to the thorny issue of subsidy control. I will begin by addressing Amendment 50E from the noble Baroness, Lady Finlay, before moving on to Amendment 50F from the noble Baroness, Lady Bowles.

I start by saying how pleased I am that we have reached agreement in both Houses on the necessity of Clause 50, which is, of course, the reservation of subsidy control. I welcome the agreement that we should continue the UK-wide approach, which this reservation now confirms in law. However, despite both Houses agreeing to the principle of the reservation of subsidy control, concerns remain about the process for reaching an agreement with the devolved Administrations on designing our future approach.

We recognise the importance of working constructively and co-operatively to design a unified approach that meets the needs of the UK economy. Both Houses supported the Government’s amendment to create a specific duty to consult the devolved Administrations on any response to the forthcoming public consultation. This will bolster the ongoing engagement that already exists between the Government and the devolved Administrations, and it ensures that, at the critical decision point for our future regime, the devolved Administrations will have advance sight of, and the opportunity to comment on, the Government’s conclusions.

The amendment proposed by the noble Baroness, Lady Finlay, would provide a different process for working, through the common frameworks programme. This amendment, like the Government’s amendment that both Houses have now approved, concerns the period between now and a decision on the design of our future subsidy control approach.

The noble Baroness’s amendment reflects the recent proposals put forward by the Scottish and Welsh Governments. While we are grateful for their constructive engagement on this issue, the Government do not believe that this approach is suitable. I emphasise once again that state aid has never been included in the common frameworks programme. The common frameworks programme was designed to operate in policy areas where regulatory powers previously held at EU level intersect with devolved competence.

As I have said many times to your Lordships’ House, state aid has always been reserved. The devolved Administrations have never previously been able to set their own subsidy control rules. This was covered of course by the EU state aid framework. Therefore, the approach proposed in this amendment would, in our view, not be appropriate. Indeed, by accepting the reservation clause both Houses have confirmed the position that subsidy control should not be devolved. Therefore, it is not eligible for inclusion in the common frameworks programme.

The practical effect of the amendment would be to delay the agreement and implementation of any new UK-wide approach. Such a delay, with the unacceptable uncertainty it would create for business on our future approach, would come at a time when the Government are focused on supporting the UK’s economic recovery.

In the previous debate, the noble and learned Lord, Lord Thomas, queried whether this reservation would cut across part III of Schedule 5 to the Scotland Act. I reassure noble Lords that the purpose of this reservation is not to affect devolved competence on other issues, but to allow for the provision of a single national subsidy control regime.

As I have said previously, there has sometimes been a misplaced conflation between the devolved spending powers and the overall system that regulates the potentially harmful and distortive effects of this spending. It is important to note that these are two distinct and separate responsibilities. All UK public authorities are and will remain responsible for their own spending decisions on subsidies, for how much, to whom and for what, within any subsidy control regime. I hope that noble Lords agree that the Government’s Amendment 51B to consult the devolved Administrations is the best way to ensure that we reach a collective and timely agreement on the future of the UK’s approach to subsidy control.

I turn now to Amendment 50F from the noble Baroness, Lady Bowles, which seems to try to determine particular aspects of the UK’s future approach. By pre-empting the outcomes of the forthcoming consultation, the amendment would limit Parliament’s ability to legislate on subsidy control in future. The effect of the amendment would be that the Secretary of State could not make changes to the tests for a harmful subsidy, for remedies, for the scope of exceptions and for the conditions or time limits associated with such subsidies.

It is important to note that most of the elements referenced in this amendment are aspects of the state aid rules. As the noble Baroness will know from her participation in the recent SI debate on this matter, the current state aid rules will not apply to the UK from 1 January. The State Aid (Revocations and Amendments) (EU Exit) Regulations, which were passed in both Houses, provide absolute legal certainty on this point, so it is unclear what the noble Baroness is trying to achieve in trying to prevent the Secretary of State making changes. Most of the elements referenced will not exist in UK law from 1 January, apart from in a more limited way under aspects of the Northern Ireland protocol. “Approvals”, for example, is a concept that does not exist under WTO rules, which the UK will continue to follow from 1 January.

As such, and as I hope noble Lords will understand, I cannot support the amendment. It would be inappropriate to determine particular aspects of the UK’s future approach or to seek to limit the Secretary of State’s ability to design those aspects at this stage. Through the forthcoming consultation, the Government will develop the details of any future domestic subsidy control regime, including the appropriate definitions and mechanisms for oversight. Should the Government then decide to legislate, these proposals will of course be brought before this House and the other place. I reiterate that the purpose of this reservation is to ensure that any future legislation is a matter for the UK Parliament to determine, and that if any legislative regime is introduced, following the agreement of both Houses, it would apply to the whole of the United Kingdom.

For all the reasons I have set out, I cannot accept Amendment 50F from the noble Baroness, Lady Bowles. Moreover, I cannot accept Amendment 50E from the noble Baroness, Lady Finlay, as it is not appropriate to link the operation of the reservation proposed by Clause 50 to common frameworks, and as we have addressed the concerns in Amendment 51B. As such, with this explanation, I hope that the noble Baronesses will not press their amendments.

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Lord Stevenson of Balmacara Portrait Lord Stevenson of Balmacara (Lab) [V]
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My Lords, I agree with others who have spoken that this has been an interesting debate. It is clear that good discussions have taken place between Ministers and the movers of the amendments, which is a good sign and reflects changes.

The Government have made a concession and a commitment to extensive consultation prior to bringing forward proposals for their state aid regime. That is a major change compared to where we were at the start of this Bill, which we welcome.

Like the noble and learned Lord, Lord Thomas, we agree that control of state aid and the regime which underpins it must lie at the UK level, but, as we discussed when debating a recent regret amendment to the statutory instrument referred to by the Minister, we think that policy development in this area has been quite bizarre. How on earth Parliament is expected to opine on state aid rules without first knowing what those state aid rules might be—whether we are continuing where we were, whether we are changing to WTO or whether it is somewhere in between—is beyond me; it is not the way we normally do things, as we made clear in that debate. I imagine, and it has been said by others, that it is because this issue is still at the heart of the never-ending discussions in Brussels about the future of the EU free trade agreement. We may begin to see progress once that is resolved, but we are where we are, and we are moving to World Trade Organization rules—much discredited—on 1 January and have yet to consult on an appropriate state aid regime. This is not the way we should do things.

However, we on this side of the House accept that Ministers have given assurances at the Dispatch Box, and they have been repeated today, that spending on state aid, as opposed to the control of policy on it, is an issue that has to respect the devolution settlement. It needs to be done in a way which brings forward the consultation and the seeking of consent that have been discussed by just about everybody who has spoken today. However, a final assurance from the Dispatch Box is required to take the trick on this matter. If the Government repeat that they will make every effort to work consultatively and seek the consent of the devolved Administrations, I do not think that this is right amendment on which to divide the House on this issue or the right time to do it, so we would not support that.

The noble Baroness, Lady Bowles, on the other hand, is moving ahead of the game, looking to future changes and asking how they would be introduced. She is right that these are big decisions that need to be thought through very carefully. If they are to be slipped through in some form of secondary legislation, they will not achieve the scrutiny and debate that they should. She makes some good points about that, and about the gap that will emerge if there is no primary legislation, let alone the need for consultation and discussion with those who have to implement the legislation once it is brought in. Although I discussed it with the noble Baroness prior to this evening’s debate, I suspect that this amendment has been picked up too late to be included in the Bill at this time. As she said, however, it would be good to hear the Minister set out his plans at the Dispatch Box. Again, if he does so, I would not be prepared to divide the House on this issue.

Lord Callanan Portrait Lord Callanan (Con)
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My Lords, I have once again listened carefully to the points made in the debate today. It is always particularly entertaining to listen to the noble Lord, Lord Adonis, who has once again benefited us with his Brexit prejudices. I give some advice to the noble Lord: he just needs to accept that we had a referendum on this subject as well as a general election that was mainly devoted to it. He really needs to use his considerable talents in other areas and get on with his life. The issue is settled; we are leaving the European Union. I respect his ideas and opinions, but he lost. As a Conservative from the north-east, I know when I have lost an election, and there have been plenty of them in the past.

Regarding devolution, in my previous job I chaired the Joint Ministerial Committee with the devolved Administrations on ongoing EU business. I attended many meetings with both Scottish and Welsh Ministers. Of course, we did not always agree on the outcomes or the issues, but we certainly had a very good personal relationship. I listened to their concerns very closely, as indeed they listened to mine; as I said, we had a good working relationship.

I reiterate, first, that I welcome the shared consensus in this House to continuing the UK-wide approach to subsidy control and confirming this in law. While I am grateful for the time and the effort that has been devoted to scrutinising this provision as is right for your Lordships’ House—perhaps too much time and effort, but we are where we are—it is important to note that we have asked the other place, the elected Chamber, to think again on the relationship between subsidy control and common frameworks. It has been clear that subsidy control does not fall within the common frameworks programme, and that any undue delay is not something to be supported. I hope that noble Lords will be able to respect that decision. I recognise the concerns of the Welsh and Scottish Governments, but I reiterate that the noble Baroness’s amendment is not the best way forward. This amendment is inconsistent with the reservation clauses that both Houses have now agreed should remain in the Bill.

I also reiterate that state aid has always been reserved and, as such, has never been part of the common frameworks programme. This amendment seeks to reverse a decision which has already been made. We need to move forward on this issue as I have indicated, and this will be done through the forthcoming consultation.

The noble Baroness, Lady Finlay, asked me for an assurance that we will make every effort to get devolved Administrations’ support. Amendment 51B demonstrates that the Government are committed to maintaining a constructive, collaborative relationship with the devolved Administrations, as it is in all our interests to ensure that a new regime works for the whole of the United Kingdom. We hope that this amendment will enable us to discuss and resolve any such issues before the publication of any consultation response, and we will commit to listen very carefully to the devolved Administrations’ concerns.

We all agree that the UK Government and devolved Administrations should work constructively and co- operatively in this policy area. That is why, as I have said, the UK Government have set out an amendment that commits to consulting them. The amendment ensures that, before publishing any relevant report relating to the outcome of the UK subsidy control consultation, the Secretary of State will provide a draft of the proposed response to the devolved Administrations, inviting them to make representations. The Secretary of State will then consider any representations and determine whether to alter the report in light of that consideration. If after all that we decide to legislate, it will, of course, come to this House.

This process will ensure that the devolved Administrations’ voices are heard, but it avoids creating the unnecessary delays and confusion that a legislative requirement to try to agree a common framework would introduce. Potentially waiting 18 months for a UK-wide system to be agreed would create uncertainty for UK businesses and damage our efforts to promote the UK’s economic recovery. For these reasons, I respectfully suggest that the approach put forward in the amendment from the noble Baroness, Lady Finlay, is not appropriate at this time.