Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Monday 14th September 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

We had corresponded directly earlier but I accept that the situation is fine. Technically it is not another day in Committee, which I believe is causing the clerks consternation; it is a day for recommital in the Moses Room, and I think that that is understood. I hope that noble Lords will accept that we have endeavoured to accommodate people’s wishes in relation to the subsidies that we will be looking at.

It is very good to see the noble Baroness still in her place. I suspect that she and I will be agreeing much more than she will be agreeing with her leader, and we will perhaps come to that later. We will come on to decarbonisation in relation to nuclear policy. It is important that we have a responsible Opposition because they are an alternative Government, so we will come on to that and it is absolutely right that we do.

[Lord Foulkes of Cumnock (Lab)]

I wonder whether the Minister can tell us how that relates to Clause 59.

[Lord Bourne of Aberystwyth]

The noble Lord has made a fair point but I am coming on to Clause 59 and will happily do so. Of course it has an effect on energy policy across the board.

I thank noble Lords who have participated in this debate and I will seek to answer their points, which have properly been raised. The issue obviously affects the energy mix that helps us to reach our decarbonisation targets. I should say that there is no way that we will reach them if we do not have new nuclear, so my point certainly is relevant.

Clause 59 seeks to amend Section 36 of the Electricity Act 1989 by removing the obligation to obtain consent from the Secretary of State for Energy and Climate Change to construct, extend or operate an onshore wind farm in England or Wales. To be clear, this requirement relates to new wind farms with a capacity greater than 50 megawatts. Smaller wind farms, including those owned by the community, are already consented by the relevant local planning authority.

The change, alongside further proposals to make secondary legislation amending the Planning Act 2008 and the Electricity Act 1989, will have the combined effect of removing the requirement for planning consent to be obtained from the Secretary of State for the construction of new onshore wind farms. Instead, developers will need to apply for planning permission under the Town and Country Planning Act 1990, where the primary decision-maker is the local planning authority.

The Government were elected with a clear commitment to give local people the final say on whether to have a wind farm in their area. This should not have taken anyone by surprise. These changes help deliver just that, as was stated in our manifesto. This is important. The majority of the population do not live in the vicinity of a wind farm. For those who do, we have seen many examples of local community groups vigorously opposing wind farm developments because of local impacts relating to noise, amenity and visual changes. It is against that background that the proposal appeared in the manifesto. By transferring decisions to the local level, we are putting local communities in the driving seat. Onshore wind farms should get the go-ahead only when local people have said they want them, and where. That said, onshore wind will continue to be important to help us deliver our renewables targets. It will certainly not disappear and we anticipate that there will be new onshore wind farms—community wind farms and so on.

I turn to some of the specific points raised. The noble Lord, Lord Teverson, mentioned paragraph 130 of the memorandum. It remains the case that all electricity applications are caught by the policy. I believe that all existing Electricity Act 1989 applications have been decided, and the issue should therefore not arise. If I am wrong, I will write to the noble Lord, Lord Teverson, and to the other noble Lords opposite. We will consider this issue soon when the Electricity Act order comes before us.

The noble Lord, Lord Teverson, and the noble Baroness, Lady Young, also raised the issue of planning authority and neighbourhood plans. There is a transitional arrangement for when a valid planning application for a wind energy development has already been submitted to a local planning authority and the development plan does not identify suitable sites. In such instances, local planning authorities can find the proposal acceptable if, following consultation, they are satisfied that it has addressed the planning impacts identified by local communities and therefore has their backing. This is set out in the ministerial Statement made by my right honourable friend the Secretary of State for Communities and Local Government in another place, and I will make sure that it is circulated to noble Lords so that they are aware of it. That should cover the point.

My noble friend Lord Howell made some powerful arguments on onshore wind, the ongoing situation and the potential—or almost certain—overdeployment of onshore wind, even following this action, in terms of both the budget and the plans for onshore wind. Onshore wind is becoming cheaper. My right honourable friend the Secretary of State for Energy and Climate Change has met with some developers who are happy to carry on deploying without the subsidies. I appreciate that we are not being specific about this at the moment, but we anticipate the continuing importance of onshore wind. However, it is important to look at the whole range of renewables, not just onshore wind.

It would be interesting to know the Opposition’s position on fracking. It is legitimate to ask that because the issue has been raised. We are obviously trying to encourage new energy sources in order to reduce costs and increase energy security. However, local communities, across the range, must be fully involved in planning decisions—be it shale or onshore wind—and we proceed on that basis. There should and will be a full public consultation for both. On that basis, I believe that Clause 59 should stand part of the Bill.

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The most important thing to remember is that, prior to the Energy Act 2013, the RO was devolved and devolved for good reason: because it was believed that it fitted with our devolution commitments to Scotland. We also have the Smith commission, which needs to be honoured in terms of how we continue to devolve power to Scotland where it is appropriate so that it can by and large make its own decisions about its economic development. We have tabled the amendment because we think that the repatriation of powers to Whitehall would be a controversial move and have a big impact on investor confidence. We look forward to the Minister explaining why he believes that the measure is justifiable. As I have said, this is a probing amendment at this stage, but I think that it is an issue that we will return to at later stages in the Bill. I beg to move.

[Lord Foulkes of Cumnock]

My Lords, I first say a word of thanks to the noble Lord, Lord Bourne, because I sounded a bit intemperate when I intervened earlier during his speech. I have known him for a while, both for his work in Wales and as a Back-Bencher before he received his well-deserved promotion. He has been one of the most diligent Ministers in keeping Members of all sides in touch with progress. I have had more letters faxed from his office than from anyone previously. It is really helpful and I am grateful to him for it.

My noble friend Lady Worthington has tabled one of the most significant political amendments to this Bill. I know that the noble Lord, Lord Bourne, will listen carefully, but I hope that he will consider all the implications of this measure. I know because I have worked with him that he understands devolution, because of his Welsh connection having been a Member of the Welsh Assembly, and he will know that there are political implications as far as Scotland is concerned.

As my noble friend said, these powers were repatriated to Westminster under the previous Energy Act on the clear understanding and promise from the Government that there would be no policy implications. It was said that it was just a technical change and that it would not affect any policy decisions. It was accepted by all sides, here and in Holyrood, because of that assurance. The Minister will know—and the noble and learned Lord, Lord Wallace, knows a lot about this—that it is an exceptional thing to repatriate powers. Normally, they are going in the other direction: from here to Holyrood, month in and month out. So it was exceptional and, as I understand it, done without acrimony. But the Government have now used that for an entirely political purpose—a policy purpose—in contradiction and contravention of the promise they made, without any consultation whatever with the Governments of Wales and Scotland. That is why Fergus Ewing MSP, the Energy Minister in Scotland, was understandably very upset. He continues to be annoyed about it.

This action has been taken in bad faith. I see the noble Viscount, Lord Younger, who knows Scotland very well. I remember his father extremely well as a very diligent Secretary of State for Scotland. He would have understood the issue. I hope that the Minister and the Government will consider restoring the powers to the Scottish Parliament and Scottish Government up to 2017 so that decisions within Scotland about onshore wind and ROCs in Scotland should go back to the Scottish Government. That is not a lot to ask and I think the Government are honour bound to consider that in light of the promises they gave when this power was repatriated.

I understand the problems of giving assurances off the cuff and on the spur of the moment, but I hope that the Minister will agree to take this away and consult his colleagues in the department and either accept this amendment or bring forward an appropriate amendment to deal with what is an action taken in very bad faith.

[Lord Wallace of Tankerness (LD)]

My Lords, I welcome the amendments tabled. I thank the noble Lord, Lord Bourne, for indicating that he would be willing to recommit these relevant clauses of the Bill when we have an opportunity to consider the grace period provision that the Government intend to bring forward. That shows a constructive response to the concerns that have been raised.

This is not really an interest to declare but, when I was Minister for Enterprise and Lifelong Learning in the Scottish Executive, as we then called it, I had some responsibility for the renewables obligation. The Labour and Liberal Democrat coalition in Scotland did much to take forward the case for the development of renewable resources in Scotland. To give the figures for Scottish renewables, around three-quarters of United Kingdom’s onshore wind developments are in Scotland. Therefore, that is where the impact of this measure will be most heavily felt. My noble friend Lord Teverson just handed me the Conservative manifesto and there is nothing in the wording on local decision-making to indicate that the period would be brought forward from April 2017 to April 2016, so I do not consider that this provision of Clause 60 is a manifesto commitment.

Given that the Scottish onshore sector directly employs more than 5,400 people and contributes £9 million to local people in community benefit each year, and that some 70% of people in Scotland support further development in wind and the benefits that it brings, it would be helpful if the Government recognised that there is a particular Scottish dimension to this. Obviously, planning matters are devolved to the Scottish Parliament. Clause 59, which we have just debated, does not apply to Scotland so, to that extent, a distinction has already been made. In terms of this proposal, it would be in the spirit of devolution and constructive working with the Scottish Parliament and the Scottish Government if Scottish Ministers were able to determine that the current situation—as we understood it—will continue to 2017. That would allow the position to be tailor-made for the part of the United Kingdom where there is the greatest concentration of onshore wind power.

My understanding is that the particular provision was devolved to Scottish Ministers by executive order under the Scotland Act 1998 and thus it was executive devolution. That is why, when it came to the 2013 legislation, it was possible legislatively for the renewables obligation to be withdrawn. However, as the noble Lord, Lord Foulkes, said, the understanding was reached on a timetable which has suddenly now been changed. I know that the industry in Scotland is extremely concerned about it and I would therefore encourage the Minister to look at what is being proposed to see if there can be a particularly Scottish carve-out for this. If he does not feel he can go that far—I hope he would be able to—when we come to debate what might be done in terms of grace periods, perhaps provision could be made to enable Scottish Ministers to devise their own grace period provisions, given that there are some very particular issues with regard to the development of onshore wind in Scotland.

[Viscount Ridley (Con)]

My Lords, before coming to the substance of the amendment, perhaps I may express my gratitude to the noble Lord, Lord Teverson, for his surprise that I am in my place and remind him that one should never believe everything one reads in the newspapers. I am only too glad to do my best to provide some grit for his oyster.

Before I go on, I should declare my energy interests as listed in the register, mostly in coal, although the wind industry has not in fact been a particular threat to coal. It has been more of a threat to the gas industry, which in some ways would have been a threat to coal. I urge my noble friend the Minister to stick to the Conservative manifesto commitment on this and not to visit upon Scotland a ruination of its landscape that would not be acceptable in England. I would say to the noble Baroness, Lady Worthington, and the noble Lord, Lord Foulkes, that, yes, there is a difference between the policy of the coalition Government at the start of the year and the manifesto commitment of the Conservative Party, but that is because we had a change of government at the election.

The Government should not be taken in by the wind industry’s assertion that most people do not object to onshore wind. The commonly quoted research on this is often out of date and simplistic. For example, a MORI survey which is used to show that people do not mind or are supportive of wind farms was conducted in 2003, when a 15-turbine wind farm was considered large. Nowadays in Scotland they often comprise more than 30 and sometimes as many as 70 turbines. The land area of Scotland from which turbines are visible has dramatically increased over a short period. According to data from Scottish Natural Heritage, 20% of Scotland was theoretically visually impacted by turbines in 2008, whereas by 2013 it was almost 46%.

[Lord Foulkes of Cumnock]

The noble Viscount is making a powerful and coherent argument, but does he not agree that all we are suggesting is that this debate, in which he is taking part, would be better conducted in the Scottish Parliament where these matters are being considered? Indeed, it is now looking at energy in its overall, global sense. Would that not be much more appropriate? That is all the amendment is suggesting?

[Viscount Ridley]

Yes, but the point is that a lot of the subsidy that would go to Scottish wind farms comes from English taxpayers, so English taxpayers do have a role in this. Moreover, we are looking at this as a United Kingdom; I think most of us in this Chamber feel very strongly about that.

The noble and learned Lord, Lord Wallace of Tankerness, mentioned community benefit. It is worth pointing out that community benefit from wind farms is small when compared with other benefits. Supporters of onshore wind argue that community benefits can be substantial, but such claims need to be put into context and their worth assessed against wider factors that are important to communities. The Scottish Borders draft development strategy for 2014-20, which came out in July, compared the value of tourism with the value of current wind farms to the Scottish Borders economy. It found that in 2012 the gross value added of serviced, non-serviced and self-catering accommodation and day visitors was £182 million. In comparison, onshore wind energy contributed around £10.8 million gross value added.

Again, I urge my noble friend not only to stick to his guns on the renewables obligation, but to resist pressure to include the contracts for difference in a different way for Scotland. That would probably affect Scotland and Wales differently from England because of the planning constraints in England. That would beg the ethical question of whether it is acceptable to protect England from further intrusion but allow Scotland’s landscapes to be ruined.

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[Lord Foulkes of Cumnock]

My Lords, I have just remembered that I should have declared an interest earlier, as I did at Second Reading, in that I am a trustee of the Climate Parliament, a grouping of Members of Parliament from around the world concerned with climate change. While we were discussing this earlier, I got an email inviting me to the annual Scottish Renewables reception on 27 October in Dover House, which David Mundell, the Secretary of State for Scotland, is hosting. That should be a very interesting occasion given our debates today and previously, as well as those we will have subsequently. I am certainly looking forward to it, although I do not know whether David Mundell will be.

There is very little to add, noble Lords will be pleased to hear, to what has been said by my noble friend Lady Worthington, by the noble and learned Lord, Lord Wallace, and, particularly, by the noble Lord, Lord Cameron. I thought his arguments about investment and uncertainty were very powerful indeed. I have had a number of letters—I have no doubt other Members have too—of concern from people who have invested money in this area in good faith and really think that the Government have let them down. The noble Lord, Lord Cameron, put that very well.

I find it peculiar and worrying that the Government have taken so long to come up with any indication about what grace period or arrangements might be agreed. As I think the noble and learned Lord, Lord Wallace, said, I hope that the Minister will give us some indication that we will be told as quickly as possible, preferably well in advance of our sitting in October. I was disappointed to hear that it will be in the Moses Room. I hope that that can be looked at again and that it could take place on the Floor of the House, so that there is proper consideration of it. But wherever it is, I hope that we will know well in advance the proposals that the Government are putting forward and, even more importantly, that the industry and all those involved know of them well in advance. I know that my noble friend Lady Worthington and, I am sure, the Liberal Democrats will make it clear to the industry that we will go along with the Government if we agree with their proposals. That will give some degree of certainty to the industry. As I say, since so many good arguments have been made by the previous speakers, there is no need for me to repeat them.

[Baroness Byford (Con)]

My Lords, perhaps I may make a small contribution. I apologise to other noble Lords that I was not able to be in the Chamber when the first amendment was moved, which is why I did not take part then. We come to an area on which I spoke at Second Reading: my slight concerns about the grace period and not having enough information on it. It would be remiss of me not to follow up on that. I have listened to the whole of the discussions on this issue.

I remind noble Lords that we are not talking about a few pennies here. In fact, at Second Reading the Minister rightly reminded the House of the costs. He said that:

“In 2014, operational onshore wind farms in Great Britain received in the region of £800 million”,

which is a lot of money,

“under the renewables obligation”,

and that the Government,

“would expect this to increase to £1.1 billion per year if, as expected, a total of around 11.6 gigawatts of onshore comes forward”.—[Official Report, 22/7/15; cols. 1120-1.]

Because of that, and having listened to the various contributions on uncertainty, I would press the Minister to tell us as much as he can about where we are and how we are to proceed. That is the nub of the question. I do not think there was disagreement; perhaps some would like it to continue and be honoured for ever and ever. However, as I said at Second Reading, when new industries are being started, to me, government money is needed to pump-prime them. It is to start things and get them off the ground and once they are up and running, they should be able to come in at a cheaper rate. Looking to long subsidies was therefore not something I favoured.

I certainly hope that the Minister will be able to tell us a little this afternoon about the Government’s plans for the grace periods. The noble and learned Lord, Lord Wallace of Tankerness, said that litigation might follow. I do not know whether the Minister has information on that, because it would be quite worrying. Maybe the noble and learned Lord can help me a little.