European Union (Referendum) Bill
Debate between Lord Davies of Stamford and Lord Teverson(10 years, 9 months ago)
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Lord Teverson
Yes, I do. I am just putting a principle. My noble friend kindly introduced this probing amendment, and I am exploring some of the issues.
Lord Davies of Stamford
The noble Lord says that the vote should be based purely on citizenship, whether the voter is resident in this country or elsewhere. What is his view about citizens of the Irish republic who are resident here and are on the electoral roll?
Lord Teverson
My Lords, I should state that I have dual Irish and British nationality. I am putting forward an argument. I do not think there is a perfect answer to this, but I would exclude purely Irish citizens under this definition. In fact, you could argue very strongly that the Republic of Ireland would be by far the most affected other EU member state and therefore perhaps you should include all Irish citizens. I do not think one could sustain that. I just want to make the point that as Britain we need to make up our mind on this area, and we need to be responsible for our decision. I do not think the argument is total, so I put forward a potential opposite view. I take a great interest in this small debate, but I do not think it is quite as straightforward as noble Lords who have spoken so far have said.
Energy Bill
Debate between Lord Davies of Stamford and Lord Teverson
Lord Teverson
My Lords, I shall have to be brief, as we are supposed to finish the Bill today, I think it says, so we will need to set quite a pace. The target for the day: to complete. The easiest way to do that is for the Minister to say yes—perhaps not; I suspect that will not happen.
I tabled Amendment 51N specifically under Part 2, Electricity Market Reform, under Chapter 1 entitled “General Considerations”. This is not just about the capacity payment or all the other bits that make up energy market reform; it is about energy market reform as a whole. Clause 5(2) contains a number of general considerations and it goes through those very carefully. Clause 5(2)(c) refers to,
“ensuring the security of supply to consumers of electricity”.
Clearly that is very important. It also mentions a number of things around cost.
One thing that everybody has agreed, particularly the Secretary of State and Ministers at the Department of Energy and Climate Change, is that as this Bill has been considered in its draft stage and by the informal group of this House, it emerged that it had a bias towards supply. That may have come from old thinking from many years ago and had not caught up with a new way of looking at the overall issue of energy provision within the United Kingdom. I very much welcome the fact that the Secretary of State and the Government have started to take this on board and there are a number of mentions within the Bill of the demand side of the equation, in terms of both demand reduction and demand-side response. Of course, the previous Energy Bill was all about energy reduction in terms of the Green Deal so this is an agenda that is live.
I still think it is really important within this Bill to put down as part of these general considerations the fact that the demand side must be taken into consideration in terms of the exercise of the various functions to do with electricity market reform. That is why I seek to add these two additional paragraphs; first,
“to give priority to demand side management and demand reduction measures”.
I have put very strongly,
“in preference to increased generating capacity”,
but I have made the constraint, which ties in with the whole cost area,
“whenever and wherever this is economically appropriate”.
We need to move our mindset on from being dominated by the supply side to ensuring a much more level playing field in terms of how the Secretary of State and future Secretaries of State have to look at the way in which electricity market reform is implemented. So it is a reminder. It is exactly the thing that needs to be in the Bill to make that clear so that in the future civil servants know that when they are advising Ministers about how this Act is applied, these issues have to be taken into consideration.
We had a long debate on the first day of Committee on decarbonisation targets but we never mentioned energy-efficiency targets. In many ways, this is equally if not more important in terms of the way that we plan our electricity usage and our energy usage within the economy more generally as we move forward.
Clearly, I understand that some of this comes within a European Union context, in that we have the energy efficiency directive, the non-statutory target of 20% energy efficiency for the EU as a whole by 2020—one of the three major targets to be met by that time. It is also important to bring that requirement into this Bill.
The Minister might say that I am absolutely right, and that the United Kingdom is one of the most energy-efficient economies in Europe and indeed the world. Part of the reason is that we have a relatively small but, I hope, rebalancing manufacturing sector. We do not have many energy-intensive industries, but we rely on our service sectors—commercial and retail—which are not energy efficient.
On the other hand, we have a housing stock and a building stock which are still very inefficient: in fact DECC estimated in its energy-efficiency strategy, which came out towards the end of last year, and which I welcomed at the time, that 14 million homes were not insulated to an acceptable standard, from a stock of 27 million. For those of you who can do maths—even if they could not do the equation we dealt with earlier this week—that is just over 50% of total housing stock. In fact around 40% of total housing stock was built before the end of World War II, and a significant proportion of that before the end of World War I. That shows the issues we have around energy efficiency in this country, some of it being dealt with, we hope, as the Green Deal becomes more effective as time goes on.
What I intend to do here is to rebalance this Bill in a key area of electricity market reform, where we set out what we are trying to achieve. We are not removing the supply side; we are adding demand as an equal factor. We are saying that there should be a preference for not spending rather than spending, but only where that makes economic sense. In the cost abatement curves shown in the many multicoloured DECC documents, energy efficiency always comes out on the left-hand side of the graph, which means it is the most cost-effective way to attack our energy needs and to shape how the energy market works in the future. I beg to move.
Lord Davies of Stamford
My Lords, I agree with the second part of the amendment proposed by the noble Lord, Lord Teverson, and the noble Baroness, Lady Parminter. It would be rather strange if nothing at all were said on the face of the Bill about the importance of energy efficiency, as it is quite clearly one of the criteria the Secretary of State must always have regard to in conducting a sensible energy policy.
However, I have a problem with the first half of this amendment, which reads:
“to give priority to demand side management and demand reduction measures in preference to increased generating capacity whenever and wherever this is economically appropriate”.
In improving this Bill we are drafting the law. The law has to be unambiguous. The law places obligations on the citizen; the citizen needs to know precisely what those obligations are if the law is going to be effective, dignified and respected. This provision could not possibly from part of a law in that sense. The phrase “economically appropriate” is so vague that it is almost impossible to know what it might mean and where one would need to decide, using this principle, between an energy-saving investment and an energy-generating investment. I notice that the noble Lord, in introducing this amendment, did not actually refer to “economically appropriate”: he used the term “economically sensible”, which he perhaps feels is a synonym. However, the use of a different word only adds to the vagueness and uncertainty, which should not come to rest in the corpus of the law of the land.
I suppose that what the noble Lord might have had in mind with the phrase “economically appropriate”, or even “economically sensible”, is the solution that has the highest economic return, but even that would be a very vague phrase to place in a Bill in the corpus of law. After all, in choosing between one particular project with a relatively high capital cost and a relatively high return and another with a lower capital cost and a lower return, or between a project with a high capital cost and a long payout period and another with the same capital cost and a different payout period, which one to be chosen would depend on the cost of capital, on which one was discounting the projected cash flows. If you wanted to make this a precise obligation, you would have to specify what the cost of capital would be. It would be and should be, of course, different according to the different risks for different types of energy projects, because they would have different risks. Therefore, I do not see any prospect here of reducing the unambiguous guidance that is necessary in law so that the citizen or, indeed, the Secretary of State would know precisely whether he was observing the law or not.
Lord Davies of Stamford
My Lords, I am grateful for the contributions to this short debate. On the issue of “may” versus “must”, nothing has been said to persuade me that I was wrong. On the contrary, everybody who has spoken has persuaded me that I am right to make a point about this. If a nonsense is systemic, that is no reason for not combating it and trying to get it right. I shall now feel even more emboldened when the word “may” comes up. I shall feel very sceptical about it; I shall look at it and may very well—not just in this Bill, but in others—put forward amendments of the kind I have today. I hope colleagues who also think that the present system is pretty nonsensical will be emboldened to do the same.
In a free society permissive legislation is otiose. Anything in a free society which is not specifically prohibited is allowed. Therefore, there is no purpose in passing a Bill with a clause saying somebody “may” do something. The issue is whether they must or must not do it. Those are the only things worth including in a legal obligation.
Turning to the more substantive issue, I reiterate that I was in no way suggesting that people had not been talking about the requirements of small businesses or of families and households. I am well aware that the Government have addressed, as the previous Government did, the issue of fuel poverty. We are all conscious of the importance of that, given that energy prices are bound to rise in real terms as a result of our very necessary policies. However, it is extremely important to draw the attention of everyone in this debate to the need to make sure that these new smart methods of monitoring the price of energy through the day, from minute to minute, are available not just to big sophisticated companies and energy users, but to households and small businesses. Only in that way will we get the full benefit of these new technologies, reduce energy demand in the way we need to do, and address the fairness problem and the lack of a distinction between smaller and larger businesses which are substantial consumers of energy.
On the relationship between the capacity market and demand reduction, all I say to the Government is that they had better get on with it. They have got the timing the wrong way around: I repeat, they cannot know what additional capacity they need to meet peak demand, plus a safety margin, until they know how successful the demand reduction efforts are likely to be. The two things are related all the way along: they are reciprocals, as I have said from the beginning. They need to get started with these energy demand methods and pilots very rapidly; they have taken far too long to do it. That is my main message to the Government.
Lord Teverson
I completely agree with the noble Lord over this. However, one thing which happened quite recently was that the National Grid set out to really get moving in this area of demand management in relation to major companies. Smaller ones have, if you like, to be aggregated. That process has started to some degree. The sad thing about it was that the press reported it as being a necessary response to what they saw as a symptom of the crisis in energy supply, rather than as a positive move to get the mental side of supply in line with demand reduction at certain times. That was combined with a number of other government moves at that time. It is not quite as black as that, but the noble Lord is absolutely right to press for even more.
Lord Davies of Stamford
I think that we are all very much agreed. I am grateful to everybody who has contributed. I am grateful to the noble Lord and I am delighted I gave him the opportunity to make that intervention. A very similar message going out from both sides of this Committee about the urgency and importance of these matters is exactly what I wanted.
Piracy: Operation Atalanta (EUC Report)
Debate between Lord Davies of Stamford and Lord Teverson(14 years ago)
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Lord Teverson
My Lords, for those of us who have young children, or even grandchildren, pirates are a great topic of play, conversation, enjoyment and reading, particularly in children’s books. Those of us who go to the cinema might see Johnny Depp or Keira Knightley playing roles in films set in the Caribbean. We enjoy that fun and think of piracy in terms of skulls and crossbones, sailing ships, the Caribbean, gold bullion, pieces of eight and possibly parrots. However, piracy nowadays is nothing like that at all; it is modern day and real. In many ways, it constitutes job sharing, as Somali pirates are sometimes fishermen, sometimes people traffickers between Yemen and Somalia and sometimes pirates. It is a very different trade and a very dangerous one that threatens not just individuals but international trade and security on the high seas. It is in that context that Operation Atalanta was started at the end of 2008—it is about to reach its second anniversary.
Let me give the House some background. Some 25,000 vessels a year pass through the Gulf of Aden and on into the Indian Ocean, so in some ways the 47 vessels that were hijacked last year and held to ransom seem a very small number. The 30—the number will probably be slightly larger by the end of the year—that have been hijacked during 2010 again seem a very small number in comparison with the 25,000 vessels passing through. However, that in no way represents the scale of the problem and the sore that this is to the carrying on of free trade and free movement across our oceans. For instance, as we speak, there are more than 400 detainees—people who are being held for ransom as hostages. Ransoms have risen from something like £2 million per vessel to £3 million per vessel from last year to this. There is an increasing amount of violence and the pirates are increasingly sophisticated, using mother ships and various ways to get round the technology and the forces that the western world in particular deploys. There are all these issues and some are getting worse.
Operation Atalanta is the first European naval operation and our committee reports that it has had considerable success in that, although the number of hijackings remains approximately the same, the number of attacks has gone down. The EU Atalanta force is just one of three in the area: there is also a NATO force and there are the combined maritime forces led largely by the United States. The great thing is that all these three operations, together with a number of individual navies from as far and wide as China and India, have been working closely together to overcome this problem. That is the good news. However, we also have on the other side the fact that the radius of pirate attacks is spreading far away from Somalia itself, out into the Indian Ocean. What the Navy often calls the risk-to-reward ratio—the amount of money that can be gained set against the risk of being caught—is very much still in the pirates’ favour, despite all this international effort. However, there are also a number of agreements—two at the moment, with Kenya and Mauritius—under which pirates who are captured can be prosecuted. Those processes are moving forward as well, although there are some questions in this area on which I shall come back to my noble friend the Minister.
As I said, we have a number of good things happening, but the problem is far from solved. When the committee visited the operational centre at Northwood—this operation is very much run by the British military—we saw how well the situation room operates. The co-operation was not just between different national militaries but also with the merchant navies of many nations. That side is working extremely well and I congratulate Northwood on its operations and, in particular, the past commanders, Admiral Hudson and Admiral Jones, who appeared as witnesses before the committee to present their case and who ran Operation Atalanta very successfully.
Our report brings out a number of issues that we feel could still be put right and where matters could be improved quickly and effectively, often without greater resources.
Lord Davies of Stamford
I am most grateful to the noble Lord for giving way. Everybody will be grateful to him for bringing this important issue to the House. Does he agree that it is quite absurd that the taxpayers of the European Union should be supporting the deployment of all these warships in the Atalanta task force and that the lives of our sailors should be at risk in this way while we do absolutely nothing to inhibit the payment of ransoms to these pirates—for example, using the money-laundering rules, the terrorist asset-freezing rules or whatever other mechanisms might be available to us—and while the pirates continue to accumulate their ill gotten gains with complete impunity?
Lord Teverson
I thank the noble Lord for his intervention; in fact, I should like to come on to some of those issues, because they are important. I note that the noble Lord, Lord Sewel, is nodding strongly and I am sure that he will intervene on some of those areas.
A key point is that this is a personal and dangerous issue to a number of people, not least the Chandlers—the two British subjects being held in Somalia. I should be interested to hear from the Minister about any progress there, as real lives are threatened. There is increasing violence and a risk that lives will be lost, either of hostages or of naval forces. Perhaps I could come back to that.
On the areas that the committee saw as particularly important, not many people realise that one of the prime objectives of the EU Atalanta force is the protection of the United Nations World Food Programme’s deliveries of key aid into Somalia, without which much of the Somali population would hardly be able to survive at all. In this area, all the vessels delivering aid have been protected successfully, yet many of them, because of the World Food Programme’s tendering system, are among the slowest and least capable of even staying afloat; they are often delayed for many days in port, while our own expensive and otherwise-to-be-used naval forces are waiting to convoy them in and out of those ports. We feel strongly that there should be an agreement in the tendering process that vessels delivering aid are up to the international standards of modern shipping, so that they can be properly guarded and therefore not so susceptible to piracy. Also, the EU naval forces should be able to board those vessels, rather than having to use a whole ship or asset to protect a vessel. That is an important area.
At the moment, there are no unmanned surveillance vehicles or aircraft that can be used. Understandably, they are not available to the United Kingdom forces because they are being used in Afghanistan, where the mission is more important. However, we believe that other EU forces could put such vehicles into operation and be far more effective in seeing and predicting attacks.
We believe that the insurance industry in particular is not taking enough responsibility for the vessels that it insures. The industry does not put enough pressure on international shipping to comply with best practice for vessels moving through the area. The statistics show that, for captains who comply with the strong procedures for booking in, going through the Gulf of Aden at certain times and being looked after by naval vessels, the rate of being hijacked is extremely low by comparison with others. Therefore, insurance companies should ensure that the best management practices are complied with by commanders and captains of vessels moving through the area. Improvement could well be made by the industry in various other areas. I know that the noble Lord, Lord Sewel, will talk about that.
The EU’s Operation Atalanta has been a reasonable success, but I should like to ask the Minister one or two questions. First, on prosecutions, many people ask, given all the resources that we put in, why, when we capture pirates or people who clearly have that purpose, they may be sent back to Somalia to reoffend, although their boats may be sunk. In Kenya, a number of prosecutions are taking place. It would be useful for the committee and the House to have an update on that. However, the agreement is faltering. Although it seems to be reconfirmed by Kenya every now and again, where is it actually going? Has the Mauritius agreement now been concluded and how are we going to make sure that pirates who are captured are properly prosecuted, jailed and removed from the scene?
The key thing that the report underlines is that this problem will not go away while we have a lawless state in Somalia. This sore will be there not just this year but next year and the year after, unless we are able to solve the problem of a failed state that is clearly unable to police its coastline. We all know that there is no easy solution, but I ask the Government how they see the international mission to assist the Somali forces progressing and what other areas of international co-operation they think can achieve what is needed.
The EU’s Operation Atalanta, as I understand it, is about to be extended for another two years—the proposal will come before the Council in December. Although our committee has not yet considered it, I personally believe that that is the right decision. However, I warn this House that, if we do not solve this problem, there will be a number of dangers ahead of us. One is that we have, in ransom and hostages, a whole black market and black economy, involving very large sums of money. We do not know where that money goes. It certainly goes into criminality and no doubt some of it goes into supporting very poor communities, but there is an ongoing risk that this money will be diverted and used by others for terrorism.
A second concern is that, although so far there have not been deaths of crew members and hostages, the committee believes that this is a very real prospect for the future. However good we get at finding ways around and avoiding hijacks, at some point lives will be lost. This means that this subject must remain a top priority for all of us.
Thirdly, it will not just be us here in Westminster, in this House, who are looking at this problem and seeing that an estimated £100 million was raised by piracy last year. Elsewhere in the globe, this will be copied in other failed states or in places where the writ of government does not extend throughout the territory. I know that there have already been incidents off the coast of west Africa. This is a cancer that could grow.
We like to see Johnny Depp, Keira Knightley and pirates on our cinema screens and we like our children and grandchildren pretending to be under the skull and crossbones. However, this is a dangerous area, particularly for those hostages—some 400—who are held at the moment. It is a problem that the world community must solve. Operations such as the EU’s Operation Atalanta may be successful, but they are sticking plasters. At the end of the day, the core of the problem is about bringing failed states into proper government. I beg to move.