Renewables Obligation Closure Order 2014
Debate between Lord Deben and Baroness Verma
Lord Deben (Con)
I want to be sure about the relationship between this and the national Governments. In the Climate Change Committee, we are much impressed with the work that is done in Scotland, Wales and, increasingly, Northern Ireland. As this refers specifically to Scottish waters, I am concerned that the Scottish Government should be happy about it.
Baroness Verma
My Lords, I thank my noble friend for his intervention. We have consulted with all devolved Administrations.
Infrastructure Bill [HL]
Debate between Lord Deben and Baroness Verma
Lord Deben
I am impressed by the Minister’s statements and very much support them, but I do not quite understand why it would not be satisfactory to include this in the Infrastructure Bill. If we are doing all these things, perhaps the Government will not find it too onerous to do so. Surely she would agree that it would mean that we would put it in the right context, with the other things being done on infrastructure. I hope that, despite her feelings before the debate, she will accept that the debate suggests that it would be worth while thinking about this again and putting something in the Bill. I cannot see that there is any down side to that; I see a lot of upside, but as yet I cannot detect a down side.
Baroness Verma
I thank my noble friend for his intervention. However, I would err on the side of caution: if we do not look at this in greater detail, we might inadvertently restrict ourselves from looking at other technologies that may come on stream by putting into legislation things that are going to be restricted because we have mandated it in the legislation, when we are already doing many things that meet what noble Lords are asking for. It would probably be much more constructive to be able to say that this would not be necessary, given that we are already doing it. However, as with all things, I am very happy to talk to noble Lords outside the Room to see where they feel that I am not fulfilling this condition.
I would like to respond to the noble Lord, Lord Cameron, about new build and RHI. I do not have the details for that here, but perhaps he would allow me to write to him and send copies to other Members of the Committee.
I hope that the noble Lord, Lord Whitty, will withdraw his amendment.
Energy: Action on Bills
Debate between Lord Deben and Baroness Verma
Lord Deben (Con)
I welcome the Statement that has been read, and particularly the fact that the Government have taken on board two recommendations of the Committee on Climate Change, of which I am chairman: first, in the use of more loft insulation and cavity wall insulation, which, against our recommendation, were previously excluded; secondly, in the fact that we were proposing a reduction in stamp duty to help people to go in for energy efficiency. I also welcome the fact that the Government have repeated their commitment to the reduction of our emissions, in line with the statutory requirements and the very tough policies necessary to achieve those. The Committee on Climate Change will look at the 33% reduction to see whether it will in fact be as the Government suggest; that is its duty and will be part of its job in the coming year.
The important thing is that, as far as we can tell at this moment, what is proposed today means that we will still be able to meet our carbon budgets as required—the first, second, third and fourth of those—and that there will still be more stringent matters to be taken on later. Above all, after all the discussion that the Government might perhaps remove themselves from their commitments, it is quite clear that this is not part of it. However, we recognise that next year the Government will have to face up to the most stringent investigation as to how far the actualities meet the promises.
Baroness Verma
My Lords, I thank my noble friend Lord Deben for his endorsement of the Statement. Like him, I am very concerned that we meet all our commitments, particularly on carbon emissions, which are not just important for us but a global problem that we all need to work on. I remind the House that, since we came into government, we have seen a reduction in carbon emissions, perhaps not of the scale and size that we would like, but it is going in the right direction: 4% is still better than the rising emissions that we were seeing.
Energy Bill
Debate between Lord Deben and Baroness Verma
Lord Deben
My Lords, I am sorry not to have been able to be here earlier. I declare an interest, given that in the past I have assisted firms of this kind to try to get a wider application of their equipment. There are certain drawbacks with this, but what I find so interesting is that it is a particularly British problem. It is simply because we have gone along with a voltage that is out of line with that of other people. Given that everybody manufactures to a voltage that is common elsewhere, we have something that is less than optimal. That is all. If the system is less than optimal we waste significant amounts of energy and our equipment works less sensibly and wears out more quickly.
I do not to repeat what the Committee is perfectly well aware of but simply to say that this is another example of how much can be done in very simple and small ways, which all add up. One of the things that worries me about governments of all kinds—this is not a comment about the present or the previous Government—is that small things that add up do not get the same attention as big things that very often do not add up at all. There seems to be a kind of desire to do things people will take note of, rather than understand how much there is which, if we add it up, makes a huge difference.
I do not want to go over it all, but I am sure that there has been a significant saving of energy simply because kettles now show you how much water has been put in, so that you know what you need for a cup of tea and do not put in too much. All those simple mechanisms actually make a difference. The trouble is that people tend to laugh at them, because in themselves each one does not matter. If we had voltage optimisation as a built-in feature of every new home, for example, and if it was automatically offered in every circumstance, we would save a significant amount of energy.
I therefore hope my noble friend will be able to say that her department will concentrate on the small things that add up but which will not get headlines in the Guardian. That is the fact. Let us see if we can do some of that because it would certainly make a big difference to meeting our energy demands.
Baroness Verma
My Lords, I am grateful to the noble Baroness, Lady Worthington, for the amendment. Over the past few months, a number of questions on voltage optimisation have been raised in this House and the other place. This is the result of having an industry that is passionate about its product and its estimates of potential savings. The Government, however, have to look at this objectively and consider the evidence of performance. I am not sure whether my noble friend Lord Deben was here during our previous debate but it demonstrated that the Government look at smaller projects. Perhaps my noble friend would look at Hansard to see how we are already supporting some smaller projects.
Voltage optimisation is a piece of electrical technology that could potentially reduce the energy consumption of household appliances and industrial machinery by lowering the supply voltage. Manufacturers of voltage optimisation devices have asked for recognition of this potential to save energy through its adoption in government-sponsored schemes, including the Green Deal, which the noble Baroness, Lady Worthington, mentioned. The Green Deal is an example of how a government strategy has been introduced that encourages householders and businesses to invest in technology, as long as it has a measurable and verifiable energy saving and can be recommended for a given building. These criteria are important to ensure that we realise real energy savings and ensure good value for money to consumers.
There is an established process for admitting new technology into the Green Deal, which entails the industry submitting its evidence to the Government’s contractor for entry to the standard assessment procedure, which is the tool for determining the energy efficiency of domestic buildings. In the case of voltage optimisation, this evidence has been reviewed by BRE, and its report has confirmed that there was a saving from the installation of voltage optimisation in some of the properties tested. In all these instances, however, part of this saving was found to result from a reduction in the level of service provided to householders—for example, by making lights dimmer. This cannot be counted as a real energy efficiency saving.
The report also highlighted further reductions in the estimated savings from voltage optimisation arising from the impact that EU directives are having on the energy efficiency of household appliances. The effect is that appliances are becoming more tolerant to, and efficient at, working within a range of supply voltages. A realistic projection of the likely take-up of modern appliances reveals that the potential saving from voltage optimisation will reduce each year, such that by 2020 the saving is likely to reduce to zero in a typical home and then become negative in later years. This is due to the voltage optimisation unit’s own power consumption.
In the commercial sector, it is more difficult to make generalisations about the efficacy of voltage optimisation due to the wide range of electrical plant that could be in use. However, this sector, too, is subject to improvements in the energy efficiency of electrical plant due to EU directives, which will reduce the savings from voltage optimisation. It is against this backdrop of evidence that the Government cannot commit to supporting voltage optimisation. There already exists a strategy within the Green Deal that allows industry to get its technology recognised and adopted, subject to it meeting key criteria. If the evidence for voltage optimisation were to change, then we could reconsider whether the market forces found within the Green Deal were sufficient to encourage its uptake.
I should also like to touch on the scale of savings that the noble Baroness believes will be made with voltage optimisation. We found that the indicative costs and savings were as follows: voltage optimisation units could cost around £300 plus the cost of installation but may save, on average, only £2 per annum. It has been suggested that by 2020 the units will use more energy than they save and will therefore have to be removed at further cost. This is evidence provided by the industry to the BRE, and the organisation Which? agrees with DECC about this. Given that, I hope that the noble Baroness is reassured that we are taking every possible opportunity to look at new entrants, and that on that basis she will withdraw her amendment.
Lord Deben
My Lords, I very much oppose the amendment, which seems unnecessary. A great deal of advice is available and it is not necessary to have yet another committee. A committee has been proposed with a different role, which seems to me to have a much more sensible and wider view. That was in an earlier amendment—which has been withdrawn but which I have no doubt will come back—proposed by the former chairman of Shell UK, the noble Lord, Lord Oxburgh. That seems to be a much better proposal than this one. It is not necessary to shove this in at this point. The Secretary of State will have at his behest a whole range of people on whose advice he can rely. This gives him permission to do that, and although I am all in favour of giving him that permission, I do not want him to have yet another committee. I think that this is the wrong way to do it and I very much hope that my noble friend will resist the amendment. I rather suspect that she will, and it is always a pleasure to end such an afternoon, now almost evening, by entirely supporting my noble friend.
Baroness Verma
I am extremely grateful to my noble friend. I thank the noble Lord, Lord Whitty, for his amendment, which would set up an expert panel to advise the Secretary of State on the exercise of his powers relating to CFDs, investment contracts and capacity payments. I reassure the noble Lord that we are working hard to ensure that the process through which final contracts for difference and strike prices are set is transparent, robust and informed by a full range of expert input. The consultation on the draft delivery plan, as well as workshops and events with stakeholders, will allow industry, consumer groups and all other stakeholders to scrutinise the figures, and the evidence used to develop them, and provide us with feedback to inform the final plan.
Prior to the consultation, the draft strike prices were also informed by two pieces of independent advice: the analysis provided by National Grid, which helped the Secretary of State understand the potential impacts that different strike prices could have on the Government’s objectives and, of course, the independent scrutiny of that analysis by the panel of technical experts. Both these reports were published alongside the draft EMR delivery plan and copies have been deposited in the Libraries of both Houses. The panel of technical experts in particular, which consists of experts in relevant areas such as economics and generation costs, was appointed through an open competition. It is impartial and independent of any particular viewpoints. I do not therefore think that we need to create another expert advisory panel. We have used existing powers to appoint the current interim panel of technical experts and, following Royal Assent, we intend to establish an ad hoc advisory group. Clause 139(2)(c) provides the spending authorisation to support this work.
Energy Bill
Debate between Lord Deben and Baroness Verma
Lord Deben
I assure my noble friend that the industry realises how strong the powers are. That was the reason for the visit of those Americans, who did not like those powers. Also, the Committee would want her to know that we have all experienced businesses who claim that they are in trouble from some government action when in fact there is an entirely different reason. I remember the oleochemical industry made a great deal of fuss about government environmental standards when in fact it had every intention of moving abroad in any case and just wanted somebody to blame.
Baroness Verma
Of course, my noble friend is far more experienced in these matters than I and I am always open to learning from him.
These sources of data have confirmed the forecasts for UK wood use made in the renewables obligation banding review last year, which did not conclude that demand for UK wood for electricity generation would have significant detrimental impacts on other wood-using sectors. That was mainly because we estimate the vast majority of biomass for power to come from imports from countries such as the United States—to which my noble friend Lord Deben referred—which have larger forestry industries and whose companies are able to give power companies the long-term fuel contracts they need. Given the analysis undertaken for the bioenergy strategy and the renewables obligation banding review, and given the latest data we have on demand for wood for electricity, currently we do not see sufficient need to add the new regulatory burden proposed in this amendment on the electricity industry.
The amendment would introduce a new layer of complexity and potential for delay and uncertainty in developing both potential new generating stations and existing plants. It would also be likely to reduce investor certainty in the sector, introducing questions around disqualification from support under CFDs, should the Secretary of State not like a plant’s proposed fuel strategy. Establishing the basis on which a plan is judged satisfactory would be complex and open to legal challenge. Furthermore, the voluntary approach that we have taken is a light-touch regulatory approach that has delivered to us the information we need. We have used this industry-wide data to help develop the sustainability criteria framework on which we have made the proposals. This includes strengthening further some of the reporting requirements.
With these actions, I hope noble Lords will see that the Government are taking this issue seriously and are keen to continue to work with the wood processing and other sectors to give them further confidence that non-energy sectors should not be significantly detrimentally impacted by energy policy.
The noble Baroness, Lady Maddock, asked about Blyth power station. Perhaps I may write to her and the Committee with the details.
I hope that my noble friend Lord Roper finds my explanation at least partly reassuring and on that basis will withdraw his amendment.
Energy Bill
Debate between Lord Deben and Baroness Verma
Lord Deben
Before my noble friend sits down, I return to the question that I asked. This is not my amendment, and it is not one with which I agree. I did say that, as there is so much concern, it would be helpful to try to allay that concern. I wonder whether my noble friend feels that over the summer I could take her up on what she has just said so that we can allay the concern, which is widespread. People who are not known for being extreme, on either side, have suggested that this may work in a way that is inimical, so perhaps she would be willing to look at that and see what needs to be done to ensure that people are not unnecessarily concerned and do not unnecessarily attack a Bill that we all want to get through.
Baroness Verma
My Lords, as I said in my speaking notes, I and my officials will be happy to meet noble Lords. The invitation, of course, goes out to all noble Lords who are here today. I will make sure that that is extended to the Lords informal scrutiny committee.
Energy Bill
Debate between Lord Deben and Baroness Verma
Baroness Verma
My Lords, I am extremely grateful to the noble Lord, Lord O’Neill, and of course I look very carefully at all amendments and consider their impact. I am extremely grateful to my noble friend Lord Deben for rightly raising the important points about the information that is already available and the cost burden that it may impose further down the line on consumers. We must be very careful that we do not add to what is already a large pool of requirements put on suppliers and generators.
We are concerned about accountability. The Bill places sole responsibility on the Secretary of State to meet any target range. Once that is set, recognising that it is the Secretary of State who is responsible for setting energy policy in the UK, it is he who will be ultimately accountable to Parliament. My concern about the amendment is that it would be unfair for us to ask suppliers to manage their portfolios in order to meet national carbon intensity limits because, as has been said, it would be incredibly complicated to oversee and would confuse the responsibilities of the state in setting the target range with those of suppliers by specifying the annual level of carbon intensity that they must meet.
The question of the merit order, the order in which generation is dispatched, which is currently in response to price signals, is a commercial decision for industry and I would certainly have reservations about government interfering directly with it. There is, however, a role for government in seeking to achieve decarbonisation by supporting a market framework that will make it more attractive. I think that is what the noble Baroness alluded to by prioritising low-carbon electricity. That is exactly what we are doing through contracts for difference and the carbon price floor to improve the relative economics of low-carbon generation.
Those measures provide a much better means of addressing the gap raised by the noble Lord, Lord O’Neill, under his amendment. To quote my noble friend Lord Deben in the fifth report of his Committee on Climate Change:
“The gap between actual and achievable carbon intensity will be closed as coal plant is retired as the relative cost of coal increases under the rising carbon price floor and given tightening EU legislation on air quality”.
We are reaching that point but we do not need to add extra pressures to provide further information when there is more than adequate information around.
I will finish, and ask the noble Lord to withdraw his amendment, by saying that the Electricity and Gas (Energy Company Obligation) Order 2012 and its predecessors, the CERTs and CESPs, have always required energy companies to save carbon dioxide by promoting energy efficiency measures in households. There is enough going on in the system.
Lord Deben
Before my noble friend sits down, I did not suggest that there should be further weight further down the system, I was suggesting that we are already asking all that needs to be asked for this to work.
In what has been an increasingly long life, I have discovered that in most cases it is better to have “both/and” than “either/or”. I hope that she will at least leave a chink open to consider whether there might be some advantage in something after this sort of mechanism, even if it were permissive, so that it was clear that it was something that the Secretary of State could be asked about if he had not done it. Even if she went only as far as that, it would be of considerable help. Would she be willing at least to say that before we get to Report, she will have another look at this, because it seems to me that “both/and” might be better than “either/or” in this case?
Baroness Verma
First, I stand corrected by my noble friend. Secondly, I think that the measures we are taking address the noble Lord’s amendment. If I were to take it away, my response would probably be the same coming back. For clarity’s sake, I hope that the noble Lord will feel that I have addressed his concerns and withdraw his amendment.
Lord Deben
My Lords, on the controversial comment that was just made, I find it very difficult because I do not believe that the noble Lord, Lord Whitty, has quite got it right. The sort of error that would cause there to be a special need to be able to sue would be suable under the law without the breach of statutory duty, which is a very narrow statement that you can sue for the statutory duty being breached irrespective, in a sense, of the effect. The kind of concern that the noble Lord, Lord Whitty, has raised, which he does not mention but is pressing towards, is something that I cannot conceive could possibly not be available in a law case for someone who was damaged by it.
I have a particular reason why I hope that the Government will not give way to this proposal. One problem of nuclear sites—I have dealt with them for much of my adult life, with Sizewell A and Sizewell B—is that for the most part they are like any other site. One difficulty of treating them as if they are always nuclear rather than like any other site is that often quite unnecessary concerns are raised. I always remember a very small fire in a small shed a long way from the actual nuclear site, but on the nuclear periphery, and the sort of headlines that it got, whereas if it had been on an allotment there would have been no news about it at all. It became a nuclear accident.
I hope that the noble Lord, Lord Whitty, will understand that the sort of issues that might properly excite him, the Daily Mail and the Morning Star—although whether anybody would notice that the Morning Star had been excited by it would be a real question—are covered by the law in any case. To make a special exemption here would cause a problem to those of us who have to deal with those sites, because it suggests that they are so different from other sites that they should have special protection, of the sort that we talked about in the previous debate. I hope that noble Lords opposite will remember that I was not entirely a supporter of the Government on many aspects of that Bill, so it is not because I am trying to defend it. However, this amendment would be a mistake, is unnecessary and would not be worth having, because it has a disadvantage in how it treats nuclear sites that would be damaging.
Baroness Verma
My Lords, in creating the ONR as a statutory body, it is important to ensure that the tenets of health and safety will continue to apply to the regulated community. Before I go on to respond to Amendment 38E, I should like to respond to Amendment 38U first, because it is important that I allay the noble Lord’s fears early on.
We considered in detail during the drafting of this clause that the amendment ensured that existing rights of compensation continued to remain available if people developed cancers or were subject to accidents. It is clear that it is still covered under the Nuclear Installations Act 1965, which puts in place a regime for compensating those who suffer injury or damage as a result of a nuclear incident. The regime covers nuclear incidents at nuclear-licensed sites or Crown sites, and claims are permitted to be made up to 30 years after the incident. I hope that has helped to address the noble Lord’s concerns lying behind the amendment.
In Amendment 38E, the noble Lord seeks to ensure that Section 2 of the Health and Safety at Work etc. Act continues to apply to nuclear sites in Great Britain regulated by the ONR. I can reassure him that the Health and Safety at Work etc. Act and relevant legislation made under it will continue to apply to ONR-regulated sites. This will include Section 2, and therefore I do not think that the amendment is necessary.
For clarity, amendments to the HSWA in Schedule 12 to the Bill will create the statutory ONR as an enforcing authority on nuclear sites and, as such, the statutory body will be responsible for the enforcement of all non-nuclear health and safety legislation, including operators’ compliance with the requirements for the provision of information and representation of workers. I think that that addresses the noble Lord’s fears.
Amendment 38T deals with civil liability. Clause 65 of the Bill sets out the application of civil liability for a breach of a duty contained in nuclear regulations and the safety provisions of the Nuclear Installations Act 1965.
As noble Lords may recall—I think that the noble Lord referred to it earlier—in the last parliamentary Session the Enterprise and Regulatory Reform Act amended the civil liability provisions contained within the Health and Safety at Work etc. Act 1974. The amendment would remove the provision setting out that breaches of a duty imposed by health and safety regulations would always be actionable where they gave rise to damage. Such regulations would include any made for the ONR’s nuclear safety, security, safeguards and radioactive materials transport purposes.
The amendment seeks to undermine the decision made in this House and the other place that civil liability should apply to health and safety legislation only where specific provision is made. Therefore, rather than making clear provision reversing the situation, the amendment would remove the clear wording of the existing clause, making it unclear whether a claim for breach of a statutory duty could be brought. The amendment does not seek to amend parallel provision in the Health and Safety at Work etc. Act 1974. By not doing so, it would create an unequal regime between the two major pieces of health and safety legislation in the field—this Bill and the Health and Safety at Work etc. Act. It would be inappropriate and untenable for us to create a statutory regime between the civil nuclear industry and others.
I hope that the noble Lord has found that explanation reassuring. However, if he would like further clarification and would like to meet with officials, I shall be more than happy to extend that invitation to him and to other noble Lords.
Lord Whitty
My Lords, I am grateful to the Minister for that. I am very satisfied with at least one and a half and possibly two out of three. I certainly accept her assurance that the provisions in Amendment 38U are not necessary. I was concerned that the Bill should not affect a scheme which provides a set level of damages for minor radiation activities and which has run for 30 or 40 years. I was party to the negotiations that set it up. Although there will now be very few people claiming under that scheme, there are some, and I hope that it will not be affected by the change of jurisdiction. Therefore, I am grateful for the Minister’s reassurance, which I hope is sufficient.
I do not expect the Government to change their mind about civil liability but I think that it was right for me to table this amendment because it draws attention to the consequences. The noble Lord, Lord Deben, says that we should not treat such sites any differently from any other sites. However, for all sorts of reasons, nuclear sites are dealt with differently, and the whole of this legislation deals with them differently. There is a highly subjective dimension to it and, in effect, he referred to that. If there is an incident on a nuclear site, it gets blown out of all proportion. I think that all sides of this Committee are in favour of an extension of the provision of our nuclear energy sources in this country.
We also know that it would not take a lot to turn public opinion in the wrong direction—we need only look at Germany—and for the whole strategy to fall flat on its face. It would be quite wrong if that arose because of a health and safety issue that was not provided for in the nuclear regulations, whether it concerned an omission regarding nuclear waste or nuclear material, or some other breach by the management at a nuclear plant. The reality is that the level of safety on nuclear sites, not only in respect of nuclear issues but on all others, has to be—the industry recognises this—of the highest order, and any breach must lead to a sanction.
Atmospheric Carbon
Debate between Lord Deben and Baroness Verma
Baroness Verma
My Lords, I agree with the noble Lord that a large majority of scientists around the world agree that there is evidence of global warming through carbon emissions. We as a Government remain committed to reducing carbon emissions and I hope that my first Answer gave the noble Lord some reassurance on that.
Lord Deben
Does my noble friend accept that we recognise the very fine record of the Government in sticking to their policies up to now? However, the important thing is this: how do we deliver from now onwards? It is very important that the explanations around the Energy Bill are clear, concise and very decided. Furthermore, we should have a carbon intensity target for 2030 if we are going to get the investment that Britain needs to ensure that we have a low-carbon electricity supply.
Baroness Verma
My noble friend is absolutely right to say that we need to ensure that there is certainty for investors. The Energy Bill, which is to come to your Lordships’ House next week, will set out exactly what the Government are doing through the electricity market reform project. We are working hard to ensure that there is certainty in the renewables sector and we are on target to meet our carbon emissions reduction goals. I think that noble Lords will find, during the passage of the Bill, that this Government plan to be one of the greenest Governments because of the measures they are currently taking.
Climate Change
Debate between Lord Deben and Baroness Verma(11 years, 7 months ago)
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Baroness Verma
My Lords, the noble Lord of course knows that renewables will play a vital role in both the UK and the EU’s low-carbon energy mix. We will continue to ensure that that is the case after 2020. Our own electricity market reform proposals will provide strong support for renewable electricity generation, and at EU level we need to consider, within the proposed broader 2030 climate and energy framework, how best to support renewables and other low-carbon forms of energy.
Lord Deben
My Lords, did my noble friend notice that our noble friend who has just asked a question was not present at the launch of the Committee on Climate Change’s report on competitiveness, which showed clearly that electricity market reform and working towards a carbonless energy system do not diminish Britain’s competitiveness but indeed increase it? Would it not be helpful if my noble friend listened to the science and to what the Committee on Climate Change put forward?
CRC Energy Efficiency Scheme Order 2013
Debate between Lord Deben and Baroness Verma
Lord Deben
My Lords, I declare an interest as chairman of the Climate Change Committee. I am pleased that we are looking to make such arrangements as simple as they can be. One of the most important things that we have to do is ensure that this very important business of making Britain able to meet the statutory target of an 80% reduction in emissions by 2050 is accomplished with as little harassment and difficulty as possible. When the original scheme was introduced, I criticised it because of its complication. We now all agree that it would have been better to make it less complex, but it was an important step that I am not undermining in any way.
I have a particular question for the Minister, the answer to which I found hard to discover in the documentation. It is about the half-hour meter. This is a boring technicality but it is very important. For reasons that no one has ever understood, the original system depended not just on the amount of energy used but also on whether one had a half-hour meter. The difficulty is that many firms with a half-hour meter use less energy than firms without a half-hour meter. More importantly, there is a competitive problem. Some companies that have them—restaurants, for example—are competing with other companies that do not. One is paying and the other is not. It may be my own ignorance and inability, but I have been unable to discover whether the new CRC Energy Efficiency Scheme Order will overcome this problem. I was promised by the then Minister in the House of Commons that this would be put right “when the opportunity arose”, which I think was the phrase used. I should very much like to understand whether that comes into the purview of this order, and if not, why not. Will we now put this right? With a Government who are very committed to competitiveness, it would be sad if this quirk in the system should continue to make things difficult.
Let me explain why I feel strongly about this. There are many organisations which, in the aggregate, meet the requirements of the CRC. It was very important to have an aggregated system, because, if we had not, we would not have reached out. I congratulate the former Government on recognising that, for example, franchisees had to be part of the system, otherwise there would have been a major disadvantage for other companies which were not so organised. However, the difficulty is that some franchised organisations have a clear advantage over others because of the half-hourly meter arrangement. I shall say something that I hope the Minister will not be upset about. When I inquired into this matter previously, it became quite clear that the only reason for it was none of the reasons which Ministers of both sides have proposed; it was just administrative convenience. It happens to be true that people think that this is a convenient way of doing it rather than the right way of doing it. I do not want to make it more complicated—nor do I want to get into names of particular companies—but I can think of two restaurant chains, one of which pays the CRC and the other does not, yet their customers and turnover in many of their individual restaurants are very similar. That does not seem to me something that we should allow in this structure. Therefore, I hope that the Minister will be able to reassure me that, under these arrangements, the half-hourly meter element will be removed and that we will go to a much more sensible system, which is a proper, basic amount of energy used on this narrower basis of gas and electricity. It would be de minimis arrangement, but one which did not discriminate between organisations.
Baroness Verma
My Lords, I welcome noble Lords’ support for the order. Whereas the previous order was very complex, I am pleased to say that I am bringing balance to the debate by trying to make this measure simpler. We have tried, through engagement with stakeholders, to ensure that we have much better informed and not excessively burdensome regulation for industry. We are trying to make sure that there is a reason to use CRC as a means of reducing carbon emissions.
The noble Lord, Lord Grantchester, asked a couple of very poignant questions, so I shall respond first to those and then go to those of my noble friend. The noble Lord asked why schools in England had been removed from the CRC. Due to the continued growth of academies and their independence from local government, the CRC is not the best mechanism to achieve energy efficiency across the English schools estate. The Government therefore decided to withdraw all state-funded schools in England from CRC participation and implement alternative measures to incentivise and support those schools in obtaining both energy cost and emission savings. However, that does not mean that schools will not partake; it just means that they will take a different route.
The noble Lord asked whether the benefits of the scheme would be reduced. The loss of emissions coverage is very small, being less than 5%. The key drivers—awareness, publication of data and the financial incentives arising from needing to buy allowances—will still be part of the scheme. As I said in the previous debate, we want continually to review what we are doing so that we get the best outcomes from these measures.
My noble friend Lord Deben asked about half-hourly metering. I welcome his support for the order and thank him for it. If the Committee will allow me, I shall take away my noble friend’s question and perhaps give him a much more detailed response—I shall ensure that the opposition Benches also have a copy. If I was to give him a half-hearted response now, it would not satisfy the Committee and certainly not my noble friend.
Overall, I am pleased that noble Lords have seen the benefits of simplification and the fact that it will reduce administrative costs to industry by quite a large sum. It also allows greater flexibility for industry to organise its own businesses as it sees fit. I welcome the support of noble Lords and commend the order to the Committee.