Greenhouse Gas Emissions

Debate between Lord Duncan of Springbank and Lord Teverson

Wednesday 5th February 2020 Lords Chamber

[Lord Duncan of Springbank]

Never will it be moved away, not that I will never confirm.

[Lord Teverson (LD)]

My Lords, COP 15 back in 2009 was organised by the Danish Government in Copenhagen. It was chaotic and Denmark suffered humiliation globally—I must put it as strongly as that. We do not know who is leading for our country, there are question marks about the location and we are supposed to be chairing the conference partly with Italy, so there are many unknowns. My question is simple: do the Government understand that if they do not get this right and the conference is chaotic, this country will be humiliated on the global stage?

[Lord Duncan of Springbank]

The stakes could not be higher. The question of who is to lead on this issue is simple: the Prime Minister will set the direction and the pace. The question of who delivers that has yet to be put in place, but the important thing to recognise is that there are fewer than 7,000 hours until we reach that point. The strategy we put in place will deliver, but equally we must ensure that other nations are able to step up to the plate and deliver alongside us. Even if we reach net zero tomorrow, the problem will remain. We must do more to bring others alongside.

Climate Change: COP 26 and Civil Society

Debate between Lord Duncan of Springbank and Lord Teverson

Wednesday 15th January 2020 Lords Chamber

[Lord Duncan of Springbank]

The noble Baroness is right to state that COP 25 in Madrid did not have the full participation of civil society. One of the simple reasons was that COP 25 was due to be in Santiago. I suspect that a number of people had booked tickets there and discovered that they could not get a refund. However, I suspect that in Glasgow there will be full participation in those proceedings, because right now there is a great appetite to explore and express those views. In response to the second part of the question, I can say that Glasgow was chosen because it is seventh-highest in the world in the global destination sustainability index. We also have a direct train line into the venue, which will ensure a lower carbon footprint. I believe that there will be a legacy left in Glasgow, and that the Governments of Scotland and the UK will continue to build on it.

[Lord Teverson (LD)]

My Lords, I congratulate the Government on getting COP 26 in Glasgow. It is a great thing for the country. It is also important because of the climate emergency which the other place has declared. I was pleased to hear the Prime Minister say in October that there would be a cabinet committee for climate change, to ensure that it was across Government. How many times has it met under the chairmanship of the Prime Minister?

[Lord Duncan of Springbank]

The noble Lord will be aware that very soon after that was announced, there was an election, and shortly after the election there was Christmas. Unfortunately, the cabinet committee has not yet met, but it will meet this month, very shortly. I will report back to this House on what has been discussed at that meeting.

European Union (Withdrawal Agreement) Bill

Debate between Lord Duncan of Springbank and Lord Teverson

Committee: 1st sitting (Hansard continued) & Committee stage & Committee: 1st sitting (Hansard continued): House of Lords
Tuesday 14th January 2020 Lords Chamber

[Lord Duncan of Springbank]

Yes, I am content to put in a letter the elements I have set out today, with the appropriate detail and clarity which I may have lacked in my explanation this evening, so that the Committee can see exactly what I seek to put on the record. I am occasionally guilty of being expansive—I know that my Chief Whip looks daggers at me occasionally—but I am happy to put that down in a letter in appropriate time, so that the Committee can consider it and make sure that there is no dubiety in what I seek to put forward. I am happy to give that commitment and I will ensure that it is there in good time.

Again, I bring myself back to the important point: I believe that we seek the same outcome, which is to secure Northern Ireland’s place within the family of nations that is the United Kingdom, and to ensure that there are no impediments to the trade within the Province of Northern Ireland as it seeks to trade within its important relationships with the rest of the UK. On that point, I am sorry that I am not able to give more positive support, but I will do all I can in the next few days to set out in writing the Government’s position.

[Lord Teverson]

For simple clarity, can the Minister confirm whether he agrees with Monsieur Barnier in his analysis?

[Lord Duncan of Springbank]

Having been a Member of the European Parliament, I know that one of the challenges is that Commission officials can sometimes be too expansive in the way that they express themselves, for purposes that are not always clear. I am afraid that I do not know exactly why Monsieur Barnier said what he did but he may well fit into that category. I am also conscious that I did not answer the question of the noble Lord, Lord Bruce. If he will forgive me, I will write to him, and on that point, I conclude my remarks.

Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2019

Debate between Lord Duncan of Springbank and Lord Teverson

Wednesday 23rd October 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con)]

My Lords, it is like I have never been away. This statutory instrument amends the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015. The existing legislation supports the competitiveness of energy-intensive industries by exempting eligible businesses from a proportion of the costs of funding renewable electricity. This instrument amends the existing legislation to: include the manufacture of grain mill products; clarify the application of state aid requirements which exclude firms in difficulty from the scheme; and improve the scheme’s overall operation.

The sectors eligible for the existing exemption scheme employ over 300,000 workers and account for more than a quarter of total UK exports. Many are located in areas of economic disadvantage and provide good, well-paid jobs. While our industrial gas price is internationally competitive, our electricity prices for medium and large industrial users are the highest in western Europe and have been for some time. Clearly, electricity costs have a significant impact on the competitiveness of such enterprises. The industries affected operate in international markets, so higher electricity costs place them at a competitive disadvantage, resulting in the risk of carbon leakage, which is when companies choose to move their production to countries with less ambitious climate policies.

Existing legislation covering energy-intensive industries allows eligible businesses to receive an indirect exemption of up to 85% of the costs of funding renewable electricity schemes. When an eligible business applies successfully for the exemption, its electricity supplier receives a reduction in the costs which it passes on to the eligible business. This approach mitigates the cost of the renewable electricity schemes, supports industrial competitiveness and provides certainty for businesses. The costs of the exemption are distributed to other electricity users.

As I said, the regulations add the grain mill products sector, as it now meets the criteria for inclusion in the scheme. The regulations clarify the information that applicants must give to enable the department to assess their eligibility. They also improve the scheme by ensuring that a business that uses a new meter will have to accrue only three months of data before applying; and that, when electricity meters are shared by more than one business, the proportion of electricity which is exempted will be updated more rapidly. Certificates will now expire at the end of June rather than March, thereby reducing the risk of businesses facing a gap in receiving the exemption. Businesses are also now able to submit their quarterly reports on any day of the quarter, resulting in increased flexibility for them.

In conclusion, these regulations will extend and improve the existing legislation and support the competitiveness of energy-intensive manufacturing industries in the UK. I beg to move.

[Lord Teverson (LD)]

My Lords, I am interested that the Minister did not mention carbon leakage, because that is absolutely the core of what this is about. It is about reducing our own carbon footprint. If industry migrates to China or to south-east Asia, that has no effect in any way on global emissions even though it reduces our carbon footprint. At that point we lose employment and all the advantages of business that he outlined.

There is a completely different and topical approach to this issue. Professor Dieter Helm, in his report earlier this year or at the end of last year to the department, said that one of the things that needs to happen if we are serious about electricity prices, energy prices and a carbon-neutral economy is that we should have external carbon tariffs. On our European position, whether we are inside or outside, it is interesting that the President-elect of the Commission, Ursula von der Leyen, said that external carbon tariffs were a way forward as a core part of her Green Deal package for Europe. Whether we have equivalence when we are outside is another question.

Has the Minister’s department looked at all strategically at this question, rather than fiddling around with which industry, sector, business, conglomerate or corporate should be in this definition? I have no idea why flour milling should be, but it is great that it needs to be. I have no argument with that. I have not come across that industry in this context before. Would moving forward in this external way not solve all these problems at a stroke? I suspect that a lot more might be produced internationally, but it seems the direction of travel.

I am not sure that the Minister mentioned businesses in distress, which are now excluded from this for state aid reasons. I do not necessarily disagree with it, but I want to understand it more. Has that exemption been used in the past? Perhaps we can understand some examples and what effect it had.

[Lord Lennie (Lab)]

The contracts for difference scheme demands that certain high-energy industries pay what is in effect a tax to fund a levy to help subsidise and encourage the generation and production of renewable electricity. Within the scheme, energy-intensive industries, or EIIs, can apply for an exemption from having to pay. This SI adds flour milling to the list of those industries eligible to apply for an exemption, to help the milling industry remain internationally competitive—what you might call flour power.

The SI also seeks to hasten the responsiveness to applicants seeking such exemptions. Where a meter is used for shared purposes either within or between companies, it allows speedier and more accurate removal from the scheme of those activities which do not qualify for such a reduction. It extends EII certificates from the end of March to the end of June each year, giving business more time to report and lessening the chance of a gap between reporting and granting of exemptions

I have some questions. Does the scheme apply to all flour millers and all flour milled, or is it restricted to flour milled for the human food chain only? Graded grains make finer flour, as the phrase goes. Is the scheme just for human-chain flour, or is it for other flour used for animal feed purposes? Is the Minister satisfied that the changes proposed in the scheme will ensure the long-term future of the flour milling industry internationally as well as helping to stabilise food security post Brexit?

The next review of the EII scheme is not due until 2023. Given the Government’s welcome shortening of their climate change targets, should not this review also be brought forward to determine any revisions that may be necessary to the scheme to help meet these obligations?

I understand that the feed-in tariffs scheme closed in April 2018, so why does paragraph 2.3 of the Explanatory Memorandum state that eligible EIIs,

“are also eligible for reductions in the costs of funding two other policies that support renewable electricity generation, namely the Renewables Obligation (RO) (in England and Wales and in Scotland) and the small-scale Feed-In Tariff (FIT) schemes”?

If that scheme has closed, why does the Explanatory Memorandum use an active word, or has the scheme been replaced and renewed in ways that we have not yet heard?

The Government announced a control mechanism for low carbon levies in 2017: in effect, that they would have to prove that they were value for money. Can the Minister provide any up-to-date assessment of that decision?

[Lord Duncan of Springbank]

It has been a remarkably short and sweet debate. Long may such debates continue. I say to the noble Lord, Lord Teverson, that I did mention carbon leakage, as it happens.

[Lord Teverson]

I apologise.

[Lord Duncan of Springbank]

Not at all. The noble Lord is quite right in one respect: the notion of carbon leakage is potentially worse for global emissions, because moving from an area where there are high standards to one where they are lower runs the risk of one’s emissions being increased.

The issue of carbon border tariffs is fascinating. I spent a great deal of time as a Member of the European Parliament and a rapporteur looking at carbon border tariffs around the emissions trading scheme. The challenge with that was that, even at an EU level, it was hard to get a consensus to support it. I do not want to set any hares running, but I want to consider it carefully because we cannot rule anything out in the future.

However, the present scheme is designed as best we can to ensure a level of competitiveness, which I think we can appreciate. We need to recognise where the energy-intensive industries can become more efficient and thereby reduce their emissions, and where there are certain process emissions which are simply the output of an equation in chemistry and will always produce a certain number of carbon dioxide molecules. There are important things that we need to explore.

On businesses in distress, an example that might fit here is the steel industry but, in truth, it would have qualified even had it not been in distress, because it was already within the carbon intensives. We are looking at the supply chain, as we drop down from the larger sector to the smaller parts of the supply chain which may be in distress as a consequence of a bigger impact somewhere higher up. Rather than me simply saying this, I will write to the noble Lord to set this out in some detail and I will happily place a copy of that in the Library so that he can see exactly where that rests.

The question raised by the noble Lord, Lord Lennie, relating to the flour mills themselves is an interesting one, because it is a question that I also asked myself. Do all flour mills automatically qualify? The answer is, no, they do not; they still have to meet the obligations set inside. A flour mill would be eligible to take part because it is now within an industry that is recognised as qualifying, but the individual mill itself would still have to meet the criteria to qualify for inclusion in order to secure the benefits. That would apply to all sectors, so it is not an automatic inclusion, although some industries or sectors are pretty much in their entirety all within that.

As to the longer-term question, I would hope that this will help flour milling to be competitive at the European and global levels. Food security remains one of the prime considerations across the EU and here at home. On the issue of whether we will review this, I think we should in fact be constantly reviewing these issues. I appreciate that my making that statement and a review actually occurring might not be hand in glove, but I recognise that, on the glide path to COP 26 next year in Glasgow, we should look at all our obligations in this regard to make sure that they are all being delivered as expected. If we are not careful, we could become complacent and simply rely upon that which worked in the past. We want to make sure that it works going forward.

When the noble Lord raised the question of feed-in tariffs, I also had a little twinkle in the back of my mind that they were closed. They are in fact closed to new entrants but there are existing recipients who benefit from the payments, and that is why they are cited in the body of the Explanatory Memorandum. They are few in number and, if the noble Lord would like, I will happily set out how many still qualify under the feed-in tariff scheme within this wider obligation.

On that basis, I think I am content to move these regulations forward.

Frequent Flyer Airmiles Schemes

Debate between Lord Duncan of Springbank and Lord Teverson

Monday 21st October 2019 Lords Chamber

[Lord Duncan of Springbank]

I would much rather that we were able to address 100% of the individuals who take flights. That is why we are participating very strongly in the International Civil Aviation Organization—ICAO—to try to make sure that it addresses this matter at an international level. There are means which can be taken; the next meeting will take place in 2022, and the Government stand ready to play their part.

[Lord Teverson (LD)]

My Lords, the Minister will understand that that is an international offsetting mechanism, which will not work. As individual car drivers we pay 58p per litre in fuel duty, and on top of that we pay VAT. The airlines pay absolutely zero tax on aviation fuel. Surely that is wrong. Would it not be an excellent way to address this, when we chair COP 26 in Glasgow next year, to have as one of our objectives that all airlines internationally should pay their fair tax and their fair contribution to remedying environmental damage?

[Lord Duncan of Springbank]

To be very clear, the UK has an air passenger duty which raises £3.6 billion a year. It is the highest such tax in Europe—many countries in Europe do not have such a tax—and that money goes a long way to address climate change issues, which are of importance to the Government.

International Climate Action

Debate between Lord Duncan of Springbank and Lord Teverson

Thursday 26th September 2019 Lords Chamber

[Lord Teverson (LD)]

My Lords, I thank the Minister for repeating the Statement. He has made me feel like a climate criminal because part of his Statement was on replacing wood-burning stoves internationally. I have two of them, I am afraid, but I burn my own wood—it takes three years to dry—and I replace the trees on my very modest property. I hope he will forgive me.

I do not mean this negatively, as everything the Labour Front Bench said was true, but it is easy to sermonise on this stuff. I know this from my own experience: I have solar thermal panels to heat my water; I have wood-burning stoves; and there are various other things that I do. Even I, as an individual, can criticise hugely in terms of the agenda set by Greta Thunberg at that conference. Her speech—my goodness—is not the sort we would make in this place. It was very different—not a politician’s speech—but it was very hard-hitting and absolutely bang on in terms of what we have all managed to do so far. We can congratulate ourselves on our 42% reduction, which is good in terms of other international indices, but we have a long way to go. The Government, since 2015, have lost pace on this, but they have started to pick up again.

I welcome this Statement. I welcome the fact that our Prime Minister went to New York, went to the United Nations, spoke with other people and made this announcement about international aid when, so often within the government party, there is a lot of criticism of how much money we spend abroad as opposed to in the UK, so I give him full credit for that. It is good to hear that the United Kingdom was seen as one of the positive countries trying to push this agenda forward. I also welcome from his Statement a fact we knew already: that we have captured the COP 26 conference, which is at the end of next year. That puts a pressure on all of us as parliamentarians here and at the other end to push that agenda consistently, not just when it is fashionable—over the period at least leading up to 2026. It was being advertised as a joint Italy-UK conference, so I would be interested to understand from the Minister how this will happen.

What representations are the Government making to President Bolsonaro of Brazil about the Amazon—not necessarily in New York, because I understand the Prime Minister’s visit there was cut short for some reason? The President has has made very strong statements that the Amazon is a completely sovereign issue for Brazil. As it is an ex-colonised country, I sort of understand that, but how are we making representations there? I would also like to understand where the money is coming from—I do not mean this negatively. Is this additional money or is it part of the DfID budget? I would be very interested to hear where those funds come from and over what time they will be expended.

Those are my questions, but I want to be positive here. I welcome that we have this emphasis on green growth. I also welcome the commitments made at the Labour Party conference in terms of climate, green growth and green package—we did a similar thing in the Liberal Democrats’ one. What has been quite clear is that, over the last three or four years, this topic has not been very often debated in this House. We now need to make sure that this remains a permanent part of our agenda—and in Parliament generally—over the long term and is not a one-off.

[Lord Duncan of Springbank]

My Lords, I welcome the contribution from both noble Lords. Tackling climate change will be, perhaps, the most significant challenge that we as a planet face. It is important to recognise that there is work to be done at home and abroad. That is why the UN conference in New York was important, because it gave us an opportunity to talk to the wider communities about not just what we want them to do, but how we can demonstrate what we have been doing ourselves. That is how we will make the difference. We have to able to show that we are not just talking the talk but walking the walk.

I will address some of the key issues brought forward by the two speakers, beginning with the noble Lord, Lord McNicol. The commitment made by the Labour Party to reach net zero by 2030 is quite an ambitious claim. We have taken advice from the Committee on Climate Change which says that we can move there by 2050. We would welcome the Labour Party submitting its proposals to the Committee on Climate Change to establish whether indeed they can be realised in that time available. The advice we have just now from that committee is that that is not possible, but we will welcome any information that Labour is able to supply on the functional pathways which have been explored by the Committee on Climate Change.

This is an area in which there is rhetoric all too often. That is why it is important to look at commitments here. We are the first major economy to commit to net zero by 2050, following the advice of the Committee on Climate Change, which has again set out the clear pathways we can follow to achieve that. We have committed to increase our individual commitments to climate change. We have doubled our international climate finance, which is a not insignificant amount of money. We have committed to align all our overseas development aid with the Paris agreement—one of the first major nations to do that. There is clearly much more that we have to do, but that is at least the beginning of the process.

When it comes to international support, our climate finance has so far helped 57 million people cope with the effects of climate change in the adaptation and mitigation sectors. Some 26 million people will have improved access to clean energy; 16 million people have avoided or reduced their greenhouse gas emissions via the funding. We have installed 1,600 megawatts of clean energy capacity. Some £3.8 billion of public finance has been mobilised for climate change. As to where the money comes from, for the declarations we have made it has been new money, coming primarily from taxpayers. It is the commitment of taxpayers themselves that we need to be able to ensure as we go forward. As to what we are doing at home, it is important to recognise that there is a role for government and for individuals. The noble Lord, Lord Teverson, raised wood-burning stoves, which have become very popular. We need to make sure that we address the sustainability issues of these, and the example that he gave suggests that his approach is sustainable.

We are making great headway. As the noble Lord, Lord McNicol, has pointed out, the decarbonisation of energy generation is extraordinary. In a very short period, we have moved towards certain days of the week when no coal is used in the generation of our electricity; that is extraordinary. In some respects, and this is where the gas bridge concept will come in, moving towards lower or lighter hydrocarbons is critical in helping us to decarbonise. This is seen in the Americas, where lighter hydrocarbons are easing out the use of coal. This is the first area in which we have achieved significant decarbonisation.

When we come to the concept of, “Ask not what your country can do for you; ask what you can do for your country”, each household will have to answer particular questions. How well insulated are our homes and roof spaces? Are we moving forward considering the efficiency of different types of boilers? There will come a point when we will ask about the use of gas as a means of providing heat and energy in our homes. We have made substantial progress with the UK car fleet but that is quite modest compared against the journey yet to be taken. That is why we need to think about new technologies and ensure that the prices of the vehicles themselves are within the reach of the ordinary household. There is no point in trying to use a stick when modestly priced cars are not available to take this forward.

I could go on at some length, but I suspect that other questions will reveal some of the answers.

Gas Tariffs Code (Amendment) (EU Exit) Regulations 2019

Debate between Lord Duncan of Springbank and Lord Teverson

Thursday 26th September 2019 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy and Northern Ireland Office (Lord Duncan of Springbank) (Con)]

My Lords, I did not expect such a packed House for my statutory instrument. Let me give your Lordships some background. EU legislation governing our energy markets will be incorporated into domestic legislation via the withdrawal Act retained law. The department is working to ensure this energy legislation continues to function smoothly after exit, and supports a well-functioning, competitive and resilient energy system for consumers.

What does this statutory instrument do? The Article 50 extension to 31 October means that additional EU law will now be retained. Chapters 2, 3 and 4 of the TAR code, which established network code on harmonised transmission tariff structures for gas, have applied since 31 May. We need to amend our previous legislation, the Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019, to address inoperabilities in these additional chapters—for example, with reference to the naming of EU institutions. This supports our aim to retain regulatory functions and frameworks in all eventualities by keeping Great Britain and Northern Ireland’s gas markets working effectively, and by providing continuity for UK industry and its consumers.

The aims of TAR are to increase transparency and the coherence of tariff structures for gas sale and purchase and procedures used to set tariff structures. Tariff structures cover ways in which transmission system operators collect revenues associated with the provision of services at entry and exit points, and collect via capacity and commodity-based transmission tariffs and non-transmission tariffs.

Chapters 2, 3 and 4 applied across the UK and the EU from 31 May 2019. Regulations need to be amended by this statutory instrument to correct deficiencies in what will be the retained EU law—namely, where we state EU entity functions and references to EU institutions and bodies. Deficiencies need to be removed or replaced with reference to UK entities—for example, replacing “member states” with references to UK elements. The regime introduced by TAR is retained, subject to these amendments. The statutory instrument aims to maintain existing domestic rules while amending or removing provisions no longer functioning on exit day. It also aims to retain technical specifications wherever possible, with the result of maximising business continuity for market participants and cross-border gas trading.

In conclusion, the regulations are an appropriate use of the powers of the withdrawal Act to maximise business continuity for UK market operators, facilitate continued efficient international trade in gas, and help to protect security of affordable gas supplies for UK consumers. On that basis, I commend these regulations to the House.

[Lord Teverson (LD)]

My Lords, first, I welcome the Minister to his role. I know this has already been done by our official Front-Bench spokesman, but I very much welcome that he has taken on this broader brief, particularly when the areas of climate change and energy are of great importance—globally as well as within this country. I have no issue with this secondary legislation, but it enables us to ask some key questions related to energy markets, Brexit and, in particular, gas.

The first area that I want to explore is the island of Ireland. As the Minister will be well aware, there is a single energy market across the Irish Sea. I notice particularly that this statutory instrument covers the whole United Kingdom, including Northern Ireland. It is important for the Minister at this stage, particularly in the context of potential no deal, which this secondary legislation is about, to assure us that the single energy market, which includes gas as well as electricity, remains coherent. There are ways of making it remain coherent, given the total dependency that there is on energy supplies between both sides of the border in a no-deal situation. The Republic of Ireland is almost completely dependent on the UK for its gas supplies—gas is starting to come through from its own fields, but that is far from full at the moment—and any disruption of that totally integrated market would be very negative for both the Province of Northern Ireland and the Republic.

I also want to ask about interconnectors, which are an increasingly important part of our energy strategy, and rightly so; I have welcomed many times the fact that we have pushed the interconnector concept forward in relation to energy balancing within the UK, particularly with the increase in renewables. When it comes to gas, we have three interconnectors: one is with Ireland, of course, but we also have them with the Netherlands and Belgium. Again, I seek the Minister’s reassurances—I hope with some reason—that those interconnectors will continue to work, given the fact that we have had, albeit on the electricity side rather than gas, a number of energy incidents recently that mean that our energy security is particularly important in this area. As I understand it, PRISMA and the systems around it will stay in place but, as we come out of the internal energy market if we have a no-deal Brexit, I am not confident that those interconnectors will be quite so straightforward as they might be.

I wish to push the envelope slightly into the important area of oil. As I understand it, the Government have said that when we leave the European Union, however we do so, one area that has not been dealt with in terms of a rollover of European law will be the reserves of petroleum held by the UK after Brexit, and that the Government do not feel bound by the European Union rules on fuel reserves, which I think would mean some 85 million barrels of petroleum being held within our reserves. Rather, they are looking to the International Energy Agency rules, which would reduce that to 35 million barrels, under half that figure. I understand that some of that reserve is actually held in the Rotterdam/Antwerp area. If that is the case, I wish to be reassured by the Minister that in the event of no deal we would still have access to those reserves abroad.

Given the situations in Saudi Arabia with the drone attack, in the Strait of Hormuz, in Iran and in Venezuela, I caution strongly that at this time we should not look to reduce our petroleum reserves in the United Kingdom. This is fundamental to our national security and I urge severe caution on the Government. I would be very interested to hear the Minister’s response to that.

In the Mansion House speech by the previous Prime Minister, and indeed this has since been confirmed by the previous Minister, Claire Perry, we intended to remain—if we could, difficult though that may be outside the single market—a member of the internal energy market, where we have been one of the greatest proponents of liberalisation and one of the countries that has done most to set up that internal market. I wonder whether it is still government policy to try to remain within that energy market, which covers gas as well as electricity.

One of the fears of the gas industry on Brexit is about our need for labour mobility. This industry, more than almost all others, depends on the mobility of expertise and the way that it operates. Why should the Minister be confident of keeping that expertise in circulation following Brexit?

Lastly, this statutory instrument mentions the transmission systems operator. Since the electricity brownout during the Summer Recess, there has been a question about conflict of interest and whether National Grid is the right body to remain as the transmission systems operator. Will the Minister comment on this with reference to the gas side of that operation?

--- Later in debate ---

[Lord Duncan of Springbank]

I thank all noble Lords for their participation in this short but none the less instructive debate. I will begin where the noble Lord, Lord McNicol, left off, to answer some of the questions specific to the statutory instrument.

The issue to remember is that because we did not leave on 31 March, the legislation that had been passed at that point as retained law had to incorporate the fact that this piece of EU law was passed on 31 May and therefore became part of EU retained law. The reason we have brought this back now is that there are certain elements of that retained law which would need to be adjusted to be functional after Brexit within domestic law. The changes are relatively modest but none the less critical.

The answer to why it was done via the affirmative procedure is simple: because it has elements in relation to fees. As to whether it represents any shift in our policy, at a fundamental level the answer is no. This is simply a tidying-up exercise, which is modest in its implications but none the less critical to make sure that there is a functioning statute book after Brexit. As to the transfer of powers to Ofgem—it was not in my briefing pack but it is now—in the transfer of powers from the EU regulator ACER to Ofgem, no additional powers are created.

Those are the specific answers to the questions on the statutory instrument. I will now turn to the questions raised by noble Lords and begin, in order, with the noble Lord, Lord Teverson. One of the important things to stress about the market on the island of Ireland is that it is a single electricity market, not a single gas market. The gas does not cross the borders, only the electricity. The UK Government remain fully committed—as do the Irish Government—to ensuring the single electricity market on the island of Ireland. We believe that will be a priority for both Governments to ensure.

There is an interconnector transferring gas from the United Kingdom into the Republic of Ireland and we do not anticipate that that will be affected by any of these issues. The gas market across the EU is a remarkably—I want to use the term without meaning it as a pun—liquid market, but it is a very significant and successful market.

When it comes to interconnectors with the EU, touching on some of the issues raised by the noble Lord, Lord Liddle, we secure only 5% of our gas from the EU. It is a modest amount. Will that be affected by some of the geopolitics on the continent of Europe? We do not anticipate so, but have reserves which will allow us to secure continued use of gas during any such period.

My noble friend Lord Howell raised the wider situation on the continent of Europe. It is important to look at some of the real challenges this creates for the continent, the EU and ourselves. The first thing to stress is that we believe the Nord Stream pipeline is a problematic reality, which is why we are supportive of where Ukraine stands. However, there are also serious issues for the states to the east of the European Union. In this country we are moving swiftly towards decarbonisation but Poland, the Czech Republic, Slovakia and others are presently faced by the impossible devil’s dilemma of having to continue with their indigenous coal reserves being utilised or importing from Russia. Noble Lords can appreciate the dilemma that creates for the EU as it seeks to determine a decarbonised agenda. We have been, as a number of noble Lords have noted, a very liberalising influence in trying to secure the movement going forward to help those countries decarbonise, but it is, as my noble friend Lord Howell correctly stresses, one of the greater challenges faced by the continent today.

We will seek to continue to be participants in the energy markets of the EU. Brexit will have an impact on that and it is very difficult for me to anticipate exactly how we shall continue in that area. For example, one of the issues on which we have been a great leader inside the European Union is emissions trading, where we have sought from a leadership position to encourage the decarbonisation through a market-based regime. Exactly how we will continue to do so after Brexit remains to be determined. Part of the difficulty, with which noble Lords will be very familiar, is that we are unable to begin to negotiate the future relationship until we have established the departure. Some of these questions which rightly should not only be answered now but should have been some time ago have not been answered. On that basis, we cannot do it unanimously and must wait until such time as we can move this forward with the EU after Brexit.

[Lord Teverson]

I thank the Minister for giving way. What I am trying to get at here is that the previous Government—the previous Prime Minister and her Ministers—were able to say, “We want to remain a part of the internal energy market. We may not achieve it, but that is our intent”. I am very aware that the present Prime Minister is trying to quite substantially change the political agreement within any withdrawal agreement, and I am trying to determine what government policy relating to this is known. Is the position the same or has it changed?

--- Later in debate ---

[Lord Duncan of Springbank]

I do not believe that the Brexit situation changes the dynamic of how we approach the wider question of gas storage. We need to make sure that the storage is adequate for any—in fact, every—eventuality. Brexit itself has not changed the policy on that. It will be our intention to ensure that it is not only adequate but able to anticipate whatever challenges come ahead. We will remain committed to that end.

[Lord Teverson]

I will not interrupt again. However, I feel that this is a really important national issue. Will the Minister confirm or give us assurance that, following Brexit, the Government will not—immediately or within a short period of time—reduce the amount of petroleum reserves that have to be held in this country?

Nuclear Power Stations

Debate between Lord Duncan of Springbank and Lord Teverson

Monday 9th September 2019 Lords Chamber

[Lord Duncan of Springbank]

The noble Lord will be aware that the French nuclear system is based primarily on riverine cooling, whereas that in the UK is based on marine cooling. Two plants in France had to be turned off because of the situation in the rivers. We do not have any issues in that regard, but we will learn lessons because it is important to do so. The Office for Nuclear Regulation must learn lessons not only from what happens at home but from what happens abroad.

[Lord Teverson (LD)]

My Lords, before the Summer Recess, the Government agreed that the UK should have a zero-carbon target for 2050. I cannot remember if that was from this Government or the May Government. Can the Minister confirm that that is still the Government’s position, although what is more important is meeting the recommendations of the Climate Change Committee? When will we have an updated clean growth strategy?

[Lord Duncan of Springbank]

It was our Government. We will have an updated clean growth strategy because it is absolutely vital. We will need to be bold about taking ourselves forward to net zero by 2050, because our present initiatives are not adequate to deliver that. There will need to be a significant refresh not just of the wider clean growth strategy but of all aspects of this covering all government departments.