Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Tuesday 10th May 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the elected Members in the other place have again sent a very clear message to this House. I do not wish to prolong the debate on this issue. We have discussed many times now the importance of ensuring that the Bill comes to a swift conclusion. As I noted during our last debate, industry bodies such as Energy UK, RenewableUK and Scottish Power have highlighted the need for swift passage of the Bill. In addition, the GMB Scotland secretary, Gary Smith, said today:

“'The Energy Bill contains important measures to help alleviate the severe pressures on jobs… across our oil and gas sector”.

He went on:

“It makes no sense whatsoever to compromise the Bill and the future of Scotland's oil and gas sector over a taxpayer subsidy that will only end up in the pockets of the hedge funds and wealthy landowners”.

He added that,

“some 200,000 jobs in Scotland depend on our oil and gas industry”.

He then urged MPs and noble Lords to get the Bill passed —I agree.

I do not wish to repeat the arguments that have been much debated both here and in the other place. We are all aware that this is a manifesto commitment which was signalled well in advance of the 18 June announcement last year. Indeed, the noble Baroness, Lady Parminter, acknowledged as much in the previous debate.

[Lord Foulkes of Cumnock (Lab)]

The noble Lord quoted Gary Smith, whom I know well. He is the Scottish secretary of my own union—the GMB. We all want the Bill passed in relation to oil and gas, but there are different ways of getting it passed. It could be passed very simply if the noble Lord, Lord Bourne, agreed to accept our amendment. There would be no problems; it would be passed straightaway. Am I not right?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord appears to disagree with the general secretary of the GMB, who said quite clearly that we did not need taxpayer subsidies. That is where the Government stand and that is where he stands, and 200,000 jobs are at stake, of which we should be conscious.

Onshore wind is a well-established technology, the costs of which continue to fall, so it is right that Government should scale back subsidy. The Government have a mandate to deliver on their manifesto commitment to end new subsidies for onshore wind. Yesterday, Members in the other place removed Amendment 7TB, inserted at our last debate on the Bill. Amendment 7TB sought to widen the scope of the grace period to allow certain projects to accredit under the renewables obligation beyond the early closure date. As I have said before, these are projects that did not have planning permission when the early closure was announced on 18 June last year, and therefore do not meet the grace period criteria proposed by the Government. The date of 18 June 2015 was set out as a clear, definitive line for industry, and the Government have continued to maintain the importance of this as a clear cut-off date. As I have said previously, the prolonged debate on this issue is stopping the Bill proceeding to Royal Assent—Royal Assent which is so urgently needed so that we can implement the much-needed measures relating to the Oil and Gas Authority.

As my honourable friend the Minister of State for Energy and Climate Change, Andrea Leadsom, noted in the other place:

“It is vital that the Oil and Gas Authority gets the functions and duties it needs to maximise the economic recovery of the UK’s remaining oil and gas reserves, while building its capacity and capability to attract investment and jobs, and helping to retain valuable skills in the UK. I received an email just this morning from the head of Oil & Gas UK urging me to ensure the safe passage of the Bill at what is a very challenging time for the industry. The need for an independent, robust and effective regulator for the North Sea is greater than ever. We cannot afford the loss of confidence that delaying the establishment of the Oil and Gas Authority would generate among existing operators and the regulatory uncertainty it would generate among investors”.—[Official Report, Commons, 9/5/16; col. 447.]

The policy as set out by the Government strikes a fair balance between the public interest, including protecting consumer bills and ensuring an appropriate energy mix, and the interests of onshore wind developers.

Once again, I urge noble Lords to take careful note of what Members in the other place have said and not seek again to undo the Government’s clear position by insisting on amending the Bill repeatedly. I beg to move.

Motion A1 (as an amendment to Motion A)

--- Later in debate ---

[Lord Wallace of Tankerness (LD)]

My Lords, I support the Motion which has just been so eloquently moved by the noble Lord, Lord Grantchester. I do not intend to rehearse all the arguments that we have been through, but I will make some points which have arisen in our lengthy debates and again this evening. The Minister seeks to raise the red herring of this Bill being totally threatened and of the threat to the oil and gas industry. There is no division across your Lordships’ House on the importance of setting up the Oil and Gas Authority. We want to see it as much as he does and, as the noble Lord, Lord Foulkes of Cumnock, said, the simple way for the Government to do that would be to accept the amendment which your Lordships’ House passed last week.

We have also heard another red herring about the manifesto commitment. I will not go into all the details again about how ambiguous, or not, it was. Let us take it at its best from the Government’s point of view and accept that it was a manifesto commitment. They are actually going to get that commitment because a substantive clause which brings forward an even earlier closure of the renewables obligation for onshore wind is already passed: it is there. What this amendment is about, what we are currently debating and what we have been ping-ponging about is a very limited point about the kind of grace period given to developers who have spent millions of pounds—not to mention time, energy and effort—to try and bring their projects to fruition but who have been thwarted by a very arbitrary cut-off date. It was probably a date which had to be fitted in with other announcements in the No. 10 grid, yet these people are being frustrated in taking forward their developments.

This begs the question of what is the scrutiny role of your Lordships’ House. We have accepted the principal manifesto position, but if your Lordships’ House means anything it must go into detail and try to ensure fairness. There has been no movement whatever from the Government on these points since, very late in the day, they brought forward their amendments immediately before Report in this House. The Opposition have put forward a number of improvements to the grace period which we have whittled down and down until we now have one which applies to only about four developments, all of them in Scotland.

The Minister has been very generous with his time; he has wanted to engage with us and I have huge respect for him, as he knows. But I must ask myself: what was the point of it all? What was the point of all these cups of tea and discussions in the tea room if the Government never intended to give anything? I think I know where the noble Lord is: I think that he does recognise the strength of the arguments. No doubt—well, I am not going to speculate but will stop there. Your Lordships’ House would hope that there might be some give and take, but we have not seen any of that.

This is a very limited amendment. It will affect the confidence of investors who will no longer trust what the outcome will be when they have made investments. The Minister referred to public subsidy. On the four developments we are talking about, the amount of public subsidy will be infinitesimally minimal compared to the amount that Hinkley Point will be getting over 35 years. So the public subsidy argument does not ring true.

I will finish by talking about the constitutional role of your Lordships’ House. Having conceded that the manifesto commitment will be substantially delivered, we are just looking at the detail. It is important that there is one House of Parliament that will stand up and look after the interests of developers and private individuals who invest their money and yet find that their rights and reasonable expectations are thwarted by an arbitrary decision of government. I repeat that when Andrea Leadsom was asked the purpose of the grace period by the Energy and Climate Change Committee in the other place, she said that it was to ensure fairness, and,

“that those who have spent money in a significant investment and achieved everything technically to meet the cut-off date, but through reasons beyond their control have not actually made it, are not penalised for reasons beyond their control”.

I do not think that it could be put any more succinctly or eloquently. That is what this amendment tries to do for a very limited number of cases and that is why it is worthy of support.

[Lord Foulkes of Cumnock]

My Lords, I also speak in favour of my noble friend’s Motion. Unfortunately, the noble and learned Lord, Lord Wallace, has stolen just about every point that I wanted to make, so I shall be mercifully brief. I remind the Minister of what I said earlier. As the noble and learned Lord said, we are all in favour of the Oil and Gas Authority. The Government could have had this Bill weeks ago if they had accepted the arguments that we have been putting forward. It is the Government’s recalcitrance which has delayed the Bill.

I will make just two points. In the House of Commons yesterday, Andrea Leadsom said:

“The other place has seen fit yet again to try to overturn that manifesto commitment”.—[Official Report, Commons, 9/5/16; col. 446.]

That is not the case. We are not trying to do that. I do not know how many times we need to repeat that and argue the case before noble Lords and honourable Members understand it.

Whether we like it or not, the subsidy date has been brought forward. All that we are talking about now are the grace periods. Three of these have been accepted: we are down to the last one. I cannot say it any better than my honourable friend Alan Whitehead, who said in the other place yesterday:

“The amendment from their Lordships’ House does not seek to alter the premise of grace periods. It does not seek to overturn the early closing date for onshore renewables, sad though that is. It does not seek to alter in any way the vast bulk of this well-crafted Bill, with all its important provisions concerning the North Sea oil industry. It simply seeks to put right one of the great anomalies in the grace period sections of the Bill, and, in that way, strengthen the proper application of those periods. As the Minister may have noted, it now does so in a way that it did not do in a previous amended incarnation. It places a specific time limit after the cut-off date of three months, reflecting the view that grace periods should be just that. This is now a very brief grace period window in which to put right the most difficult cases frozen out for doing the right thing”.—[Official Report, Commons, 9/5/16; col. 449.]

As I said on a previous occasion, one example of doing the right thing is in Sorbie. This family farm has, unfortunately, not been running so profitably in past years. Under advice, guidance and suggestion from the Government, they diversified into onshore wind and are now suddenly being told that they cannot get the subsidies that they were promised. As a result, they are in danger of going into liquidation. These are the kinds of small employers who are going to suffer if the Government press ahead with their policy.

I will make one last plea. I know that the Minister in this place has some sympathies. We have had the tea and we have had some sympathy: we have not had the result. We have not had anything because people down at the other end are so blind that they cannot see. I hope that Members of this House will understand it and that we will send it back and ask them, once more, to think again.

[Lord Bourne of Aberystwyth]

My Lords, I am grateful to noble Lords who have participated in this debate. They are three of the most fluent and persuasive Peers on the other side and I quite understand their intent and the passion that drives them. I will come to the points in the order in which they were raised. First, the noble Lord, Lord Grantchester, very generously acknowledged that it was in the manifesto and that we have moved on grace periods to address radar/grid delays. In his words, he “applauded” the concessions we have made. We have also made some on the investment freeze. But he seemed to suggest that we were engaged in some kind of ideological and belligerent—I think those were his words—warfare against renewables in general and wind in particular.

The United Kingdom has a proven track record of growth in renewable electricity, which goes on. We will be spending more this year than we did last year, and in every year of this Parliament we will be spending more on renewables. Nearly £52 billion has been invested in renewables since 2010. More than half the total investment in the EU in 2015 occurred in the United Kingdom, and that was just another record year based on several earlier record years. So I hope the noble Lord will accept that that is not the case. We recognise the vast importance of renewables.

One reason for the action and for it being in the manifesto was that we were deploying at a far speedier rate than had been anticipated. It was not anticipated by the coalition Government that we would be well above the top range of what could be expected. We are not taking action for any ideological reason. We have massive deployment and that deployment goes on. But we are reaching the end of subsidies for solar and for onshore wind because they can be deployed without the subsidy. It is widely recognised, including by the general secretary of GMB Scotland, whom I quoted, that we do not need these subsidies any longer and that often we are subsidising people who do not need the subsidy. That is another reason for the action.

The noble and learned Lord, Lord Wallace, put the case very eloquently, as he always does. I think he accepted that we had moved on grace periods. He suggested, as did the noble Lord, Lord Grantchester, that the date we set was arbitrary. Well, it was—only in the sense that any date is arbitrary. The noble and learned Lord will know very well that dates are set and they are very often arbitrary and somebody will fall the other side of them; even if you move the date, somebody else will fall the other side of it. I do not accept that it was arbitrary in the sense that he seemed to be suggesting—that it was somehow capricious. That was not the case and it was not a question of it fitting in with the grid. It was the date that the Government chose to announce the policy that had been signalled in the manifesto. I hope he will accept that the case is borne out: we accepted many amendments on the Oil and Gas Authority as the legislation went through; and we have amended the position on onshore wind to take account of grace periods, appeals and radar grid delays. All these things we have done.

The noble Lord, Lord Foulkes, was very generous and spoke with great passion and very eloquently, as he always does. Yes, I accept that the intentions are benign but the will of the other place has been expressed now three times. Surely now is the time to recognise that this House should not keep overriding the will of the other place on an issue where it has expressed its position very clearly.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Tuesday 26th April 2016 Lords Chamber

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the elected Members in the other place have sent a very clear message regarding the amendment made in this House on 12 April. The continued toing and froing on this issue is preventing the Bill proceeding to Royal Assent in a timely manner. Until that happens, we are unable to implement the much-needed measures relating to the Oil and Gas Authority. In the other place, there was much discussion of the importance of ensuring that the Bill now comes to a swift conclusion. The honourable Member for Aberdeen South, Callum McCaig, said, in relation to the Oil and Gas Authority functions:

“I urge the Government to put their eyes back on the ball and allow the Energy Bill to proceed. If we go back and forth with ping-pong we risk delaying that further”.—[Official Report, Commons, 20/4/16; col. 945.]

Indeed, previous representations from industry bodies such as Energy UK, RenewableUK and Scottish Power have also recognised the need for the,

“swift passage of the Energy Bill, with clear, fair and consistent RO grace period provisions”,

as those bodies have jointly said. We must move forward with the Bill to provide certainty in this sector and to allow projects to benefit from the investment freezing condition, which has been broadly welcomed by the industry.

Once again I find myself reminding your Lordships why the onshore wind measures were introduced in the Bill. The Government have a mandate to deliver on their manifesto commitment to end new subsidies for onshore wind. The Government remain intent on delivering this commitment and bringing forward the closure of the renewables obligation to new onshore wind in Great Britain. Noble Lords will recognise that the manifesto proposals were put before the country at the general election last year, which resulted in the present Government taking power. The Government have a mandate to act on this manifesto commitment, which was based on plans signalled well before the election. I know that the noble Lord, Lord Grantchester, was surprised by the result of the election but noble Lords should not be surprised that this action is being taken. It was very clearly stated in the manifesto and well signalled. Nobody should have been taken by surprise.

Back in March 2015, the right honourable Member for West Suffolk, Matthew Hancock, then Minister for Energy and Climate Change, stated in the other place:

“We have made it absolutely clear that we will remove onshore wind subsidies in the future”.—[Official Report, Commons, 6/3/15; cols. 1227-28.]

Prior to that, in December 2014, the Prime Minister said of wind farms in a House of Commons Liaison Committee:

“We don’t need to have more of these subsidised onshore, so let’s get rid of the subsidy”.

The Government, the Prime Minister and Members of the elected Chamber have continued to make their position clear.

Members in the other place have removed Amendment 7T, inserted after our previous debate on the Bill. Amendment 7T would have allowed certain projects, which did not have planning permission as of 18 June last year, into the renewables obligation beyond the early closure date. I say again: these projects did not have planning permission as of 18 June last year and therefore do not meet the grace period criteria proposed by the Government. Amendments such as the one removed in the other place would lead to an increase in deployment under the renewables obligation, which would come at a cost to consumers. As my honourable friend the Minister of State for Energy and Climate Change, Andrea Leadsom, noted in the other place:

“Opposition Members suggest that just because there is local agreement, it is fine to add to the bills of all consumers across Great Britain, but that is simply not the case. It is our duty as consumer champions—at least on the Government Benches—to keep down the cost to consumers, and this is what we will do”.—[Official Report, Commons, 20/4/16; col. 952.]

The policy set out by the Government strikes a fair balance between protecting consumers and addressing the concerns of industry. Noble Lords should take careful note of what Members in the other place have said and should not seek to undo the position by amending the Bill again. I beg to move.

[Lord Foulkes of Cumnock (Lab)]

My Lords—

Motion A1 (as an amendment to Motion A)

Moved by

--- Later in debate ---

[The Lord Speaker (Baroness D'Souza)]

My Lords, I should inform the House that if this amendment is agreed, I cannot call Amendments A2 to A4 by reason of pre-emption.

[Lord Foulkes of Cumnock]

My Lords, I am grateful for that explanation. My Amendment A2 is dealt with in this grouping, so it would be appropriate for me to speak to it now, as I understand it. One of my noble friends said to me earlier, “This issue is hellishly complicated” —I am not sure whether that is an unparliamentary phrase or not—and then added, “I do not think all these three amendments make it any simpler”. I apologise if that is the case.

All three amendments are very similar to each other, but perhaps rather immodestly, I think mine makes the issue a bit clearer than the others, particularly in relation to one case that the Minister knows I have a particular interest in—I know this sounds like special pleading, and I will come to that in a moment—which is the Sorbie project near Ardrossan in North Ayrshire. I know representations have been made to him about it, and I tried to intervene—I should perhaps have got up a bit earlier—to try to get some clarification in relation to Sorbie. Government legislation can be interpreted in different ways, and if the Minister had been able to say then that Sorbie is covered by his amendments and that they will be interpreted as allowing it, it would have saved me having to speak at all. That would have been merciful, but I will speak and then see if he can say in his reply whether or not it is included.

The key difference is that my amendment expressly covers the situation where the planning authority’s decision to grant planning permission was subject to a planning agreement being entered into. I do not think that the wording of the amendment of the noble and learned Lord, Lord Wallace, covers that scenario.

The lawyers who have been advising me say that my wording removes any uncertainty over whether a planning authority decision which was subject to a planning agreement being entered into can actually meet the criterion, “a grant of planning permission was resolved”. With my wording, Ofgem would not be able to say that if the planning authority made the decision subject to the planning agreement being entered into, it would not qualify.

Ultimately, the difference between the amendments is very slight and—this is the point—Ofgem might take the view that “resolved to grant” would include where this was subject to a planning agreement being entered into, because the most likely reason for a delay between a planning authority decision and planning permission, or a decision notice, being granted is that a planning agreement was required. So the principle behind both amendments is the same: that a planning agreement delayed the grant of the permission. My wording is slightly clearer on that point.

My noble friend Lord Grantchester’s excellent amendment in Motion A4 is the same as that of the noble and learned Lord, Lord Wallace, subject to one difference. As I understand it, my noble friend’s new amendment requires the planning permission to have been granted within three months of 18 June 2015, that is, by 18 September 2015. This amendment would not work for Sorbie or for Crookedstane, as the decision notices were not issued until December 2015 and January 2016 respectively. I am arguing that they should be included.

Subsection (f) of my amendment is specific to Sorbie, as it clarifies the different legislation which applied to this project as it was dealt with under delegated authority in Scotland. The existing legislation does not deal in any way with a planning application which was processed under delegated authority under the Planning etc. (Scotland) Act 2006.

I want those included. It may be a bit of special pleading, but I think that noble Lords who heard me last time will agree that it is a very good case, and I want to mention it briefly again. Sorbie Farm is a dairy farm in North Ayrshire. The price of milk was going down, and it was in financial difficulties. It was advised to diversify, and one of the obvious ways of diversifying in that area was to plan a wind farm, and it decided to go ahead in that way. A great deal of effort was put into it, and a lot of investment; the farm had already invested a great deal.

If the amendment were to be carried, it would in no way challenge government policy or the whole principle. Whether or not we agree with the points made by the Minister in his introduction, that would not be contested. The position in relation to Sorbie was that North Ayrshire Council approved it in June 2014. However—my noble friend Lady Liddell will understand this very well—it was called in by the Scottish Government due to an aviation objection which was subsequently withdrawn. The application was then granted on appeal in November 2015. Although the grace period wording would, on the face of it, allow the project to proceed, it is threatened by what those advising me consider to be inadequate drafting in the Bill, which my amendment is intended to clarify. It is not clear whether the approval date would be November 2015 or the original date when it was approved.

If the Minister can consider the matter and let me know at some point during the debate that Sorbie would be included, I would certainly be happier—no, I will not say that; I am never happy about government legislation, but I would be less distressed by it as it goes through.

Notwithstanding all that, and the special pleading for Sorbie, I support the amendment proposed by my noble friend on the Front Bench. It does not challenge the Government’s policy; it does not undermine the manifesto on which they were elected; it does not threaten any of the basic policy, but it brings justice to developers who were encouraged to develop renewable energy projects and who, in some cases, have invested up to £1 million each in getting them off the ground—or on the ground. They did it in very good faith, and then the ground was taken from beneath their feet by this Bill, which they were not expecting. The specifics of it were not included in the manifesto.

I hope the Minister will give serious consideration to accepting the amendment put forward by my noble friend Lord Grantchester, and even more serious consideration to accepting that Sorbie should not be excluded on the basis of this legislation as currently drafted.

--- Later in debate ---

[The Duke of Wellington (Con)]

My Lords, I immediately declare an interest in land in South Ayrshire, as detailed in the register of interests.

I support the Minister. Recently, I read very interesting figures showing that, in Scotland, there is now 16 gigawatts of installed or consented capacity of onshore wind farms, against a peak demand of 6.5 gigawatts. The shocking figure has emerged that, in 2015, £90 million was paid in constraint payments—that is, to pay wind farm owners not to allow their turbines to turn. Surely this is mad economics. There is no justification whatever for allowing any extension of the deadline for subsidies to wind farms that are consented, and I therefore urge noble Lords opposite to support—

[Lord Foulkes of Cumnock]

Will the noble Duke not admit that we are not looking to extend the deadline at all? The Government are proposing to bring it back, so it is not an extension but a reduction in the deadline. Since I used to represent his interests, if not get his vote, I hope he will consider that.

[The Duke of Wellington]

My Lords, my understanding is that the Conservative Party announced in its manifesto that it wished to terminate these subsidies earlier than originally anticipated. That is a manifesto commitment that we in this House are now asked to agree. My argument would be that, however deserving the case may be, there is no justification for extending beyond the deadline established in the Bill. That is why I urge noble Lords opposite to support the government amendment.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

We Conservatives have put forward our own definition of justice, rather than seeking to put a gloss on it in a way that is helpful to the noble and learned Lord’s argument.

The essential difference is one of deployment. Every proposal put forward by the noble and learned Lord would increase deployment. We feel that we are doing the right thing in balancing the interests of investors with the wider interest, what was in the manifesto and votes in the other place.

The noble and learned Lord raised the issue of steel, suggesting that this measure would make a massive difference and therefore we have to adopt it. As is widely recognised, the Government are committed to doing everything they can on steel, and indeed are delivering—on procurement, on relief on energy costs, on action against dumping. I hope that we will have his support in those matters.

I turn to the noble Lord, Lord Foulkes, who, with his customary passion and fervour, put forward arguments in relation to an area that he knows well. I respect where he is coming from—of course, I understand that—but I do not think that there is any ambiguity in relation to Sorbie. I have checked this and do not want to give a running commentary on planning issues—I should not seek to do that and it would be unwise to do so—but it seems to us that it is very clear that Sorbie falls the other side of the line. I do not think that there is any ambiguity there but, as I said, I cannot really give a running commentary on it.

[Lord Foulkes of Cumnock]

I do not seek a running commentary; I just seek a specific answer to a specific question. Sorbie was approved well in advance. It was delayed because of the aviation objection, which was subsequently withdrawn. Therefore, it is reasonable to assume that it was approved prior to the relevant date, and that is an interpretation that could be put on it by the department or by Ofgem. I am seeking an indication that at the very least the Minister will have this examined to see whether that is a possible interpretation of the current position.

[Lord Bourne of Aberystwyth]

The noble Lord is being very creative. I do not think that there was any legal doubt about it. He has referred to it previously as a technicality in a broader sense. I will write to him if I am wrong on that. We will double check but I do not think that there is any uncertainty in relation to that matter.

I move on to what was said by the noble Baroness, Lady Worthington, in relation to CFDs. That of course goes wider than the current debate, which is focused on wind deployment, but I take on board what she said. We have made statements about new technologies within CFDs. The CFD system is designed with this in mind. As I think the noble Baroness knows, CFD auctions for less-established technologies will be taking place later this year in relation to pot 2, and further details will be issued in relation to that.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Tuesday 12th April 2016 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the Government remain committed to delivering our manifesto pledge to end new subsidies for onshore wind. To deliver on this commitment the Government are intent on bringing forward the closure of the renewables obligation to new onshore wind in Great Britain. It is the Government’s view that all the government amendments in this group are consequential on each other.

Commons Amendment 6 reinserts the early closure clause removed at Lords Report stage. It gives effect to the manifesto commitment to end new subsidies for onshore wind. As I set out during our earlier debates, the Government have engaged widely on their intention and have considered in detail each of the proposals that have been raised, not only by noble Lords and Members in the other place but by many valued industry stakeholders during the passage of the Bill. The Government are committed to protecting consumers from the rising costs of energy bills while also protecting investor confidence. It is the Government’s opinion that the new clauses presented here do exactly this.

To protect investor confidence, the Government have proposed a grace period for those projects, meeting certain conditions as at 18 June last year, as outlined in the Statement on that date by my right honourable friend the Secretary of State for Energy and Climate Change, Amber Rudd. The grace period conditions set out in Commons Amendment 7 are intended to protect those projects which already had the following as at 18 June last year: first, relevant planning consents; secondly, a grid connection offer and acceptance of that offer, or confirmation that no grid connection is required; and, thirdly, access to land rights.

In addition, and to address feedback from industry, certain projects which have been granted planning permission following a successful appeal will also be eligible for the grace period. This will include those projects which have, as a result of a judicial review or an appeal, had a negative planning decision which was made on or before 18 June last year subsequently overturned.

The Government have also taken on board concerns raised by industry about an investment freeze. Following industry engagement after the 18 June announcement last year, we have seen evidence that certain projects have been experiencing difficulty securing funding due to legislative uncertainty caused by the Bill’s passage through Parliament. We have, therefore, sought to address this through the investment freezing condition. This will ensure that projects which meet the approved development condition, and which would otherwise have been able to commission and accredit under the RO by the original closure date, 31 March 2017, are not frozen out of the process. This investment-freezing condition has been designed specifically to protect the projects that were intended to be able to access the grace period as proposed on 18 June last year but which have been unable to secure debt funding pending Royal Assent due to legislative uncertainty. Indeed, feedback from industry suggests that it supports and welcomes such a measure.

The Government want to take a consistent approach to all onshore wind projects eligible to accredit under the RO. The Commons amendments therefore also seek to ensure that an existing grace period for delays caused by grid or radar works will continue to apply. Let me reiterate so no ambiguity remains: this is a manifesto commitment based on plans which we signalled well before the election. The honourable Member for Coatbridge, Chryston and Bellshill, Mr Philip Boswell, said at Committee stage in the other place:

“We agree that swift passage of the Bill with clear and consistent RO grace period provisions is needed in order to provide certainty to investors in the onshore wind sector as quickly as possible. The renewables industry fears that the longer legislative uncertainty over RO closure persists, the greater the risk of otherwise eligible projects running out of time to deliver under the proposed grace periods”.—[Official Report, Commons, Energy Bill Committee, 2/2/16; col. 127.]

On Commons Amendment 8, the Government would like to see an equivalent approach to closure of the RO to onshore wind taken across the UK. Commons Amendment 8 gives the Secretary of State a power to make regulations, which, if made, would prevent suppliers in Great Britain using Northern Ireland renewables obligation certificates. These would relate to electricity generated by new onshore wind stations and any additional capacity added to existing wind stations after the onshore wind closure date. This power allows for circumstances to be specified in regulations when such Northern Ireland renewable obligation certificates may still be used, and for the setting of a later date than the onshore wind closure date. The power has been included with an intention to protect consumers in Great Britain from the costs of any additional support which Northern Ireland chooses to provide.

This is a backstop power; it would be used only if Northern Ireland does not close its renewable obligation to new onshore wind on equivalent terms to the rest of the United Kingdom. As my honourable friend the Minister of State Andrea Leadsom confirmed in the other place, this power would be used only in relation to new onshore wind stations and additional capacity in Northern Ireland that do not meet closure conditions equivalent to those in Great Britain.

I am pleased to say that renewable obligation in Northern Ireland has now closed to large-scale new onshore wind stations with a capacity above 5 megawatts with effect from 1 April 2016, and that Northern Ireland is currently consulting on closing stations at 5 megawatts and below on equivalent terms to the rest of the United Kingdom. The Government continue to engage with Northern Ireland with a view to effecting closure on equivalent terms to Great Britain through Northern Irish legislation, but this backstop power is included with a view to delivering on our manifesto commitment across the whole of the United Kingdom.

Amendment 10 seeks to ensure simply that the provisions set out in Commons Amendments 6, 7 and 8—that is, the early closure of the RO to new onshore wind in Great Britain, together with the related grace-period provisions, and the backstop power relating to the RO in Northern Ireland—will come into force on Royal Assent. As my honourable friend the Minister of State Andrea Leadsom set out in the other place, the Government intend the provisions implementing the early closure of the RO to come into force on the date of Royal Assent and do not intend to backdate these provisions.

Government amendments to Commons Amendments 6, 7 and 8 further clarify that the onshore wind closure date will be the date on which the Bill achieves Royal Assent. These changes are set out in government Amendments 6A, 6B, 7A to 7S, 7AJ to 7AL and 8A to 8C. The amendments also include a number of consequential changes to the investment-freezing condition, extending it by one month to account for the additional period of legislative uncertainty. The amendments further ensure that projects seeking to access the grid or radar delay condition would continue to have an additional 12 months to accredit where they satisfy the relevant eligibility requirements. The Government are making these changes to provide clarity and certainty for the industry, and our policy makes it clear that we are taking steps to protect consumer bills while also balancing the interests of industry. I beg to move.

[Lord Foulkes of Cumnock (Lab)]

I shall speak to Amendments 7U, 7V, 7W, 7Y, 7AC, 7AD and 7AE which are in my name. The Minister is a good friend of mine, and I have great respect for him. Before he became a Minister, he and I used to work together on the great issue of devolution of powers to Scotland and Wales. We worked very well together, so I want to reassure him that I have every interest in him continuing in his post. I do not want him to do anything that would threaten his future. That is why I want to reassure him that everything that I am suggesting is in line with the Conservative election manifesto pledge.

[Lord O'Neill of Clackmannan (Lab)]

That is a first.

--- Later in debate ---

[Lord Foulkes of Cumnock]

It is indeed. Absolutely. As my noble friend Lord O’Neill said, it is unusual—exceptional—for me to do that.

[Lord Hain (Lab)]

Unprecedented.

[Lord Foulkes of Cumnock]

It is unprecedented, as my noble friend Lord Hain says. I also want to reassure the Minister that no constituencies of English Conservative MPs will be affected by this because I know some of them are genuinely worried about the effect on their constituencies. What I am suggesting in my amendments and what others are suggesting in theirs deals with proposals principally in Scotland and with very important community projects in Scotland. Two categories are dealt with in my amendments. The first category is those covered by Section 75 which are unable to go ahead not because they do not have planning permission —they have managed to get that—but because of some technicality. We are suggesting that that technicality is creating huge problems for them. The other category is in relation to grid connections. There is a particular problem in Scotland with the transmission and distribution grids not necessarily being as easily available as south of the border and having different arrangements. Some projects have fallen foul of these regulations.

If we put the schemes together, they amount to only just under 90 megawatts of generation. It is not a huge amount we are asking for. It is a relatively small amount. They all have the democratic consent of the local council, which is one of the matters raised in the Conservative election manifesto. I shall give the House a couple of examples. There is a scheme in Sorbie, a working dairy farm in Ardrossan in north Ayrshire, that has full planning consent and for which bank finance has been secured, a turbine contract has been agreed and design work has been started. Nearly £1 million has been spent on the scheme by the people concerned. The family-run working dairy farm is already suffering because of the low price of milk. If this project were to be cancelled because of the Government not accepting the amendments being put forward today, it would be in real difficulty. That is the kind of problem that is being faced.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Wednesday 4th November 2015 Lords Chamber

[Lord Howell of Guildford (Con)]

My Lords, perhaps I may say how sorry I am to hear that the noble Baroness, Lady Worthington, is leaving the Front Bench; it is news to me. I have learnt a lot from listening to her. I do not agree with everything she says, but her grasp of climate issues is unquestioned and she has added a great deal to the debate.

I also thank my noble friend for the way he has conducted this complex debate. I hope that the Bill goes to the other place with the clear message from our debates on it, and from yesterday’s debate on electricity resilience, that the whole of our energy policy needs rebalancing. Not that one necessarily wants a lot more energy Bills to come through your Lordships’ House, but I hope that this is just the beginning of a move to a better balance than the current position, which has led to some quite serious muddles. The noble Baroness mentioned one of those last night: that, in our attempts to establish good capacity three, four and five years out, we appear to be ending up with a lot more diesel engines, which is the opposite of what was intended. That arises from the lack of balance between subsidies for wind, which we discussed, and the unwillingness of people to invest in new combined cycle gas turbines.

That is not strictly connected to the government amendments, but I thought I should register my admiration of the amazing grasp that the noble Baroness, Lady Worthington, has of this very complicated subject.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I think I speak on behalf of all my colleagues on the Back Benches who have sat through debates on the Bill when I say that we, too, will miss the enthusiasm and inspiration of my noble friend Lady Worthington on the Front Bench, but we know that she will still be with us in different ways, and we look forward to that.

As I am on my feet, I take this opportunity to ask the Minister to explain. Perhaps I have missed it, but I am still not exactly sure that he has explained when and how the Government will respond to the decision of the House of Lords on the former Clause 66, so that the uncertainty in the industry can be lifted. I hope that he will give us some indication of when and how the Government will respond when he replies.

[Lord Bourne of Aberystwyth]

My Lords, first, I thank the noble and learned Lord, Lord Wallace of Tankerness, for his most kind comments. It was a pleasure working with him and his colleagues, as it was with the noble Baroness, Lady Worthington. They were not difficult colleagues to deal with on the Bill, and I am sure that it is in many respects a better Bill than it was.

I also thank my noble friend Lord Howell for his comments and echo what he said about the noble Baroness, Lady Worthington. I am not sure that I can echo what he said about more energy Bills—I think I heard a thud from the Bill team behind me when he said that, as they thought of another energy Bill coming down the tracks—but we are looking at crafting a fresh approach on energy policy. This is a fresh Government, so you would expect that. At the moment we are in the middle of a spending review, but we are very conscious as a ministerial team of the importance of crafting a vision on energy policy bearing in mind the three issues that we need to address in the trilemma which is at the heart of our policy.

In response to the question of the noble Lord, Lord Foulkes, we responded immediately in a statement. The democratic House of Commons will look at it. I am not a Member of the House of Commons, and it is a matter for the House of Commons. As I made clear, we regard this as a manifesto commitment and all noble Lords will agree that the elected House will express its will and the matter will come back to us in due course.

[Lord Foulkes of Cumnock]

The Minister is not naive; I have worked with him before he became a Minister and I know that he has a lot of experience and knowledge of these matters. He knows that whatever is put to the House of Commons will be put to it by the Government, and he is a member of the Government, so he must have some idea what they propose and how it will be dealt with.

[Lord Bourne of Aberystwyth]

My Lords, I cannot make it any clearer. It is very clear what we are proposing. It was what we proposed to this House and it is what we will be proposing to the other House, as a Government. It is then for the House of Commons to give its view as the democratic Chamber on that issue. I beg to move.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Wednesday 21st October 2015 Lords Chamber

[Lord Wallace of Tankerness (LD)]

My Lords, I think that the noble Baroness, Lady Worthington, will say something about Scotland when she comes to speak to her amendments. As I said in Committee, the onshore wind industry in Scotland directly employs 5,400 people and contributes £9 million per annum in community benefit. I think that the work which I would like to claim my noble friend Lord Stephen and I started when we were in the coalition Government in Edinburgh and which has been carried on by the present Scottish Administration, and the work done by previous Secretaries of State at DECC, has resulted in onshore wind power being an increasingly cheaper source of power. However, the position as I set out in Committee on the Scottish dimension was that if the Scottish Government choose to extend the period, as was first envisaged when it was agreed with them that the renewables obligation would end, that is something that they should be able to do.

On the grace periods, which were the substance of the Minister’s amendments, I first and foremost acknowledge his engagement both before last week’s recommittal and subsequently, in terms both of meetings and phone calls. It might also be fair to acknowledge his private office, because I received an email from it timed at 00:54 on Saturday morning, which is quite remarkable. I know from experience just how hard private offices work.

While I welcome some of the changes which the Minister has referred to, with regard to the investment freezing condition and to making it clear that it was grid or radar and not cumulative, that is as far as the Government have gone, and the rest of the government response has been more than a little disappointing.

[Lord Foulkes of Cumnock (Lab)]

Is the fact that the Minister, who is well respected in this House, has had to work so hard—his private office has to work past midnight—not illustrative of the chaotic way in which the Government as a whole have dealt with this Bill?

[Lord Wallace of Tankerness]

My Lords, I think that everyone who has dealt with this Bill would agree that it has not been a satisfactory process. We have had late tabling of amendments; even the amendments before us were tabled only on Monday, meaning that if we wished to table amendments to amendments we were under considerable pressure to do so.

Perhaps I may put in context what we are discussing by drawing to the House’s attention what was said yesterday in the Select Committee on Energy and Climate Change in the other place. My right honourable friend the Member of Parliament for Orkney and Shetland asked the noble Lord’s ministerial colleague, Andrea Leadsom, “So what is the purpose of the grace period, then?” To which she replied, “As I say, to ensure fairness—to ensure that those who have spent money in a significant investment and achieved everything technically to meet the cut-off date, but through reasons beyond their control have not actually made it, are not penalised for reasons beyond their control”. It is with these words in mind that we must examine the Government’s position and the amendments that have been put forward. As the noble Baroness, Lady Worthington, said, an estimated £350 million has been put in to take forward projects which may not now proceed.

Our amendments relate in one respect to all applications which were in train at the time of the somewhat arbitrary date of 18 June—that was the date that the Secretary of State made a Statement; it has no more magic than that—and which had received planning committee approval. The reason for emphasising committee approval was that, in an earlier clause in the Bill, the Government set great store by the fact of local determination. A local determination means that, after considerable discussion, debate and consultation, the local planning committee has approved a particular proposal. It may just be that it is due to the cycle of planning meetings that the application has not yet gone to the full council for endorsement. I refer back to what the Minister, Ms Leadsom, said about applicants achieving everything technically to meet the cut-off date, but through reasons beyond their control, not actually making it. A lot of developers do not have control over the cycle of meetings of a local authority and it seems very unfair that, if they have passed muster after scrutiny by a planning committee, they fall foul because the full council has not ratified that decision.

Our Amendment 78RA contains a provision that it should refer to planning applications that were in place and had been accepted 16 or more weeks before 18 June. The reason for that is that after 16 weeks it is possible, if the local authority has not made a determination, for the developer to say that there has been a non-determination, so it is a deemed refusal and to appeal to Ministers on that basis. But the noble Lord and others who were at the Committee debate last week will remember that I gave an example from, I think, Tayside where extensive work had been done in terms of discussions between the developers, local communities and the planning authority to try to ensure that concerns had been meet and the opportunities to work with other environmental projects going on in the area were maximised. I believe, along with I am sure most Members of your Lordships’ House, that it is good practice for developers to work alongside the planning authority and try to get an agreement and outcome that is satisfactory to all. And yet, if the developer did that and missed the 18 June cut-off date, it will be penalised for it, whereas those about whom it might be said that they are not using best practice—I would not necessarily say that it was bad practice—might take a slightly legalistic view and say, “Well, it has been 16 weeks, so that is it. We are going to appeal because there has been a deemed refusal”. If that is subsequently granted on appeal, their applications will be satisfied. That does not appear to be a fair way of proceeding. If we are looking for an element of fairness in this, where is the fairness in penalising those who have demonstrated good practice?

Also with regard to Section 75 and Section 106, the Minister said in his letter to me that, where the planning committee could have been minded to approve on or before 18 June subject to Section 75 or Section 106 agreements but no formal consent was granted on or before 18 June, unfortunately, there is no legal consent given that they are minded to approve and we understand that the negotiations can be lengthy and not always successful. People from the industry who have been talking to me find that an unduly legalistic approach. The industry has been working with planning authorities for some 10 years on the Section 75 or Section 106 agreements that emerge in these situations. By and large they are already negotiated, but it may take time to put in place some of the detailed provisions. For example, if it is part of the development that there has to be a new habitat on neighbouring land—not the land on which the development is to take place—it has to be shown that the developer has the right to undertake the building of the habitat on that land. That is part and parcel of what happens and it is both practical and common sense that it should be recognised. Again, reminding us of what the Minister’s colleague said, it is to ensure fairness so that people are not penalised for reasons that are beyond their control.

Perhaps I may also take up what the Minister said on the question of variations. He helpfully stated in his letter to me and then repeated it in the House just a moment ago that, where consent is granted for a development on or before 18 June and is subsequently varied in this way, it will continue to fall within the approved building condition in proposed new Section 32LJ. I raise this because it is helpful that the Minister has now put this on the record, but I have also had representations from those who have taken legal advice that they do not necessarily believe that it does what the Minister says. I would ask him to look at it again. The fact that we have something that could be referred to in a Pepper v Hart way is helpful, but some would find greater reassurance, and it would be clearer to me, if there is something on the face of the Bill.

I refer to Amendments 78RA and 78RB with regard to Section 36 of the Electricity Act 1989. The purpose and effect of these amendments is to address what we believe is an anomaly by applying the principle of proposed new Section 32LJ(4)(b) to an analogous position under the Section 36 regime. Under Section 36 of the 1989 Act, the relevant planning authority is not the decision taker, but it can object to the proposal, after which there must be a public inquiry and then a decision by the Secretary of State. That is closely analogous to refusal under local planning followed by an appeal, and indeed for around half of the affected projects DECC’s renewable energy planning database describes the projects as being at appeal. Indeed, the last time that the people briefing me looked at the DECC website they were described as being at appeal. However, the proposed provisions cover the local planning version of this process but not the Section 36 version. This means that small extensions of larger sites, which have to follow the Section 36 route, are going to be treated less favourably under these grace period provisions than some sub-50 megawatt, stand-alone developments which go ahead under the local planning process. Reverting back to the question of fairness, there should be consistency in the Government’s approach. This amendment seeks to ensure that, and I hope the Minister will think again on it.

I also draw the Minister’s attention to the fact that, because of the Planning Act 2008, which has superseded Section 36 in England and Wales, that section mainly affects plants in Scotland. The functions of the Secretary of State under Section 36 and Schedule 8 are transferred to Scottish Ministers under Article 2 of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999, so far as they are exercisable in or as regards Scotland. Accordingly, the amendment does not explicitly refer to devolved Ministers. Would the Minister look and see if it is the case that they are not covered? I am sure he would not wish to put Scottish developers in any less favourable position than those in England and Wales.

We have proposed a relatively simple amendment regarding grid works, with a different cut-off date for grid works agreements. In Committee and subsequently, I raised with the Minister a case involving a joint venture between an energy company and a private individual. The energy company carried on the transmission entry capacity for a substation but the joint venture finished and the private individual carried on himself. Transmission entry capacity has therefore been lost and has to be reapplied for. It has had that connection for five years in the past but, crucially, did not have it on 18 June. It seems very unfair that they should lose out in a very bureaucratic process. We tried to find a way to capture that in an amendment and we thought we would do this by putting in a different end date, because you cannot just conjure up a grid connection agreement. It would not have taken any more capacity than was already the case, but this might give some clarity.

In another circumstance which has been drawn to my attention, changes were made. Grid capacity that was for one developer was then to be shared and this required a new agreement to be made. There was a clerical error and the developer sent the agreement back to get this sorted. Unfortunately, it was sent just before 18 June and did not come back until after that date. It would be reassuring to know whether that counts as a variation or whether it could be addressed by extending the period for grid connection.

In the recommittal, I made a point about radar and the problem developers are finding with the length of time it is taking the Ministry of Defence to process applications. The grace period that has been given may, therefore, not be effective because of the time it takes to get agreements reached. One developer who has made representations has said, about a particular mitigation which the MoD is looking for: “There are no guarantees that the work programme will deliver mitigation at this stage. In any event, the current MoD position is that the first part of the variation condition allowing development to commence cannot be discharged before 2018. There are some ongoing discussions between onshore developers and the MoD, seeking to find ways of earlier condition discharge but this is proving problematic. Overall, the costs and timescales of this ATC radar mitigation programme do not fit with any of the onshore projects”. It would be perverse if delay on the part of the Ministry of Defence meant that the grace period which the Government have sought to give does not actually cover these circumstances. This is why we have put in a particular date, though it may be that March 2018 is too early. I hope the Minister will take that serious point about trying to get agreements out of the Ministry of Defence if he wishes to give substance to what he sought to do with the radar works part of his amendment.

I am sorry to take up time but I had a lot of important points. I hope that the Government will move. I do not believe that they have met the letter or the spirit of what Andrea Leadsom said yesterday to the Select Committee in the other place.

--- Later in debate ---

[Lord Foulkes of Cumnock]

I endorse what my noble friend has said. She is absolutely right. When we come to the next amendment, which she is going to move, I will make it absolutely clear, in endorsing my noble friend, that we have been misled by the Government in relation to the manifesto and the interpretation of the manifesto. The Minister is shaking his head but my noble friend is absolutely right and I will underline that in more detail when we get to the next amendment.

[Baroness Worthington]

I am grateful to my noble friend for his support. The concerns that I have raised consistently throughout the passage of the Bill relate to the Government’s analysis which concludes that we simply do not need any more onshore wind. This is based on false projections of how we are doing in relation to our legally binding EU renewable energy targets. Those targets relate to power, heat and transport. It is true that we are doing reasonably well on power but we are not on track for delivery of our targets on transport or heat. The projections that the department is now having to produce to pretend that it will get to those targets stretch credibility. There is a hockey stick of deployment expected in the other two sectors which is simply not credible. We are tying our hands behind our back, removing from our low-carbon armoury one of the cheapest, safest and most easily deliverable technologies—onshore wind.

I almost feel that I ought to be presenting a eulogy for the wind industry in the UK because it deserves respect. It has a 25-year history. The House almost certainly knows that it was first supported by Margaret Thatcher in 1990. The first support mechanisms were brought in for wind around that time. She recognised the science of climate change and she knew that we needed to address it. She also knew that it would be sensible for the UK to make the most use of its assets. We happen to be one of the windiest countries in Europe, something we should celebrate. In fact, we have been one of the best markets for wind technologies. Our shores have seen innovations and the development of new technologies that we can be very proud of. We have seen investment in jobs and infrastructure, particularly in those parts of the country that need inward investment—I am referring to Scotland and Wales—a great pouring-in of interest and money that has helped to generate jobs at a time when they are sorely needed.

I am not saying that wind farms need to be put everywhere and that everyone should accept them. I actually think that the Government’s other manifesto commitment that local people should have a say in them is a sensible measure. That is something that the Government have sought to introduce through planning. The closure of the support mechanism has to be taken in the context of the other things the Government have done to stop onshore wind, including quite significant changes to planning.

--- Later in debate ---

[Baroness Worthington]

I sometimes also wonder about the European policy and in particular why we have not moved further and faster on carbon capture and storage. It makes sense to me that that should be the technology that will enable us to have steel and still meet our climate change targets. As with many things in Europe, it all boils down to what Germany thinks, and unfortunately, Germany has set its mind against carbon capture and storage. We do not need to, thankfully, and we should press ahead.

To return to another form of low-carbon energy which has an important role to play—onshore wind—I have made it quite clear that I do not believe that this is good legislation, and I have not been reassured why it is being pursued other than it seems to be quite a political move by the Government. The costs certainly should not be a reason for us to consider that this should be brought through. As regards meeting the EU targets, it is simply not true that there is no more room for onshore wind and that we should be throttling back.

We have greatly destabilised investment in the UK, which used to be one of the leading destinations for investment. The hasty, rash and poorly thought-through policies of this Government in their early months in government have produced shock waves. Many other people are also saying this, such as John Cridland at the CBI, and the Government’s funder, Dennis Clark, has sounded an alarm that the Government’s policy now appears to be having very little positive effect and a great deal of negative effect on investor confidence.

For all those reasons and for the reasons I have outlined with regard to it being inappropriate to proceed with this poor legislation, I suggest that we delete it, give the Government more time to consider this in the other place, where I am sure the debate will continue. I beg to move.

[Lord Foulkes of Cumnock]

My Lords, I have been wondering during the entire consideration of this debate why there has been such undue haste. This is a very important technical measure, yet great suggestions put forward by the noble Lord, Lord Oxburgh, and others that we might have pre-legislative scrutiny and bring some experts together to look at aspects of it have all been cast aside. This is being rushed and pushed through because of some ideological desire which the party opposite seems to have.

The Minister mentioned the manifesto again and again in his speech. I notice, because I was just checking earlier on, that Norman Smith of the BBC has been saying that this is another area where the Lords might challenge the Government on something in their manifesto, and the Salisbury convention is being held up and waved at us.

I therefore took the elementary step of going back, as my noble friend did and mentioned earlier, to what is included in the Conservative manifesto. Do all noble Lords opposite know exactly what was included? I wonder if they really do. It said:

“Onshore wind … makes a meaningful contribution to our energy mix and has been part of the necessary increase in renewable capacity”.

That is a very positive statement. It continues:

“Onshore windfarms often fail to win public support, however”—

well, if they do not get public support, and are not supported by the local planning authority, they do not go ahead—

“and are unable by themselves to provide the firm capacity that a stable energy system requires”.

No one is suggesting that “by themselves” they provide a firm capacity for a stable energy system—they contribute towards a diverse energy capacity. It goes on:

“As a result, we will end any new public subsidy for them”—

as my noble friend said—

“and change the law so that local people have the final say on windfarm applications”,

which I agree with. But is it a new public subsidy? I argue that it is not. It is a public subsidy which we all knew about and which the investors understood was going to continue until the end of October 2017. It is not new. Presumably it was budgeted for by the right honourable Chancellor of the Exchequer. Presumably it was all taken account of in the department’s budget and the department knew that it was happening, so it is not a new public subsidy. The Conservative manifesto is quite clear and our amendment to remove Clause 66 does not in any way go against it.

[Lord Spicer (Con)]

Does the noble Lord at least accept that because wind is unreliable, you have to double up in the entire system. That is the whole point about wind power—you have to double up in the system in order to have it.

[Lord Foulkes of Cumnock]

No. If we have a diverse energy supply, with nuclear, wind and a whole range of other ways of producing our electricity, we do not need to double up. When the wind is blowing, we take advantage of that; when it is not blowing, we do not need to take advantage of it. However, that is part of a much wider discussion. I am saying that the amendment does not in any way go against the Conservative manifesto.

In the House of Commons, a few Tory Back-Benchers got really agitated about wind farms, for one reason or another, and in the last Parliament a Private Member’s Bill was introduced to abolish subsidies for wind farms in England and Wales only. Yet we are talking about abolishing subsidies for the whole of the United Kingdom when two-thirds of the proposed wind farms are in Scotland. As my noble friend on the Front Bench said earlier, Scotland is going to suffer immeasurably and disproportionately from what this Government are proposing. The Minister said that he listened to the devolved Administrations. Yes, he listened to them but he paid no attention to what they said; he did the opposite of what they said. That may be listening but it is not acting on what was said.

In an earlier intervention, the noble Viscount, Lord Ridley, said that this is all going to help the big landowners. I know that he speaks on behalf of the big landowners. Of course, if you want to deal with land ownership, that is another matter. I would support a major change in land ownership, and indeed that is being proposed in Scotland, although, as far as I am concerned, it does not go far enough. I would support such a change so that big landowners did not benefit from this. However, as my noble friend said, some of the schemes in Scotland, such as the one that we have had representations about from Skye, do not involve big landowners; there are community schemes that are also very important.

I hope that this House will exercise its judgment in relation to this matter by removing Clause 66 and, quoting from a well-known Scottish anthem, sending the noble Lord, Lord Bourne, and his Government “homeward tae think again”. I hope that on Report or in the House of Commons they come up with something that takes account not of their political dogma but of the real needs and the real situation in the country.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Monday 19th October 2015 Lords Chamber

[Lord O’Neill of Clackmannan (Lab)]

My Lords, perhaps the Minister could tell the House why the provisions in these amendments, which all seem to be worthy and sensible, were not included in the original wording of the Bill. That would have saved us a great deal of time, because I do not think that any of us are going to complain about any of them. Equally, the additional information should have been taken account of when the Bill was drafted. I do not want to take any more time, because I am accusing the Government of wasting our time by doing this now when we could have had these provisions in the Bill at First Reading.

[Lord Foulkes of Cumnock (Lab)]

My Lords, my noble friend makes a very important and relevant point. This illustrates a great feature of this Bill, which is that we are having foisted on us all sorts of detail at short notice and at the last minute. As my noble friend said, this kind of thing should have been included in the original Bill. If it is true, as the Government claim, that they had planned this and that it is all included in their manifesto—that they had thought a lot about it and they knew exactly what they were up to—it ought to have been included in the original Bill. It is clear that they did not know what they were up to. We found this the other day when the Bill was recommitted, when we looked at pages and pages of detail that were foisted on us at the last minute. As I understand it, we still do not know some of the amendments that we are going to be discussing and approving, or otherwise, in two days’ time—major amendments with huge implications.

The Minister took a little bit of umbrage in Committee, but I do not blame the Minister personally. I would say he is piggy in the middle, except that we must not use that kind of expression anymore; he is the meat in the sandwich—you know what I mean—and is getting squeezed. He is between the devil and the deep blue sea—I am trying to think of metaphors that do not bring in animals. We are rightly demanding more details and advance notice; the industry, even more so, should know well in advance exactly what the Government’s intentions are. It is really quite unacceptable that such important things are dealt with at short notice on Report. No doubt even more will come in at a later stage in the other place.

That raises the question of why the Bill was commenced in the House of Lords. My understanding is that only non-contentious Bills are dealt with first in the House of Lords, but this is one of the most contentious Bills that has been considered for some time as a House of Lords starter. An unfortunate result is that we are having so much debate and discussion at this early stage. The Bill has to go to the House of Commons where, no doubt particularly in relation to things that affect Scotland, there will be some even more acrimonious debate and amendments will be proposed, and then the Bill will come back to us. This is really going about it in a cack-handed way.

In relation to staff who are being transferred, what happens to those who are required to move as part of the new arrangements? How many will be asked to move from one part of the United Kingdom to another? Will there be any? Will there be many? It is very important that we should know that. If there are some, we should know exactly how they are being treated and whether they will be helped with their removals from one area to another and be given other assistance in relation to that. For example, if they are moved from a rural area in the United Kingdom to London, their expenses will be far greater. If they are moved from England to Scotland, there are important implications in relation to the differences between provisions in one part of this United Kingdom and the other. It would be very helpful if the Minister in his reply can indicate the situation with regard to staff moving between different parts of the United Kingdom.

[Lord Howell of Guildford (Con)]

My Lords, I fully understand why these amendments are necessary, because we are dealing with the setting-up of a gigantic and very important new authority. The usual problems of pensions and the transfer of staff are major administrative problems and inevitably they always require some adjustment and amendments in legislation.

We are dealing with a rapidly changing world situation and national situation. At this moment, thousands of people are being laid off in the North Sea and North Sea-related firms. The industry is under immense pressure. It has even been described as one of the worst crises facing the North Sea industry since the high days of the 1970s, 1980s and 1990s. Are any of the amendments relevant to this enormously changing scene? What account is being taken, even while we are taking this Bill through Parliament, of the immense blows inflicted on the North Sea by the prospect of far lower oil prices for a long time to come combined with many other difficulties? A newspaper yesterday said:

“North Sea oil producers face a perfect storm”.

There are difficulties and challenges that they have never had to face before. Over the years, costs have been allowed to rise, and suddenly revenues have collapsed. Will the Minister explain what, if any, changes in the Government’s mind were triggered by the fact that we are dealing with a situation that has totally changed since the Bill was first printed and which, if any, of these amendments relate to that? That would be very helpful.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

My Lords, I will now speak to the third group of amendments, which relates to the devolved Administrations, and will start with our proposal to enable Welsh Ministers to contract out functions to the Oil and Gas Authority before turning to a technical matter on the applicability of the objective to maximise economic recovery to Northern Ireland.

Amendment 10 amends Clause 3 on the contracting out of functions to the OGA in relation to Welsh Ministers. In establishing the OGA we have been careful to keep the devolution implications in mind. The OGA currently, as an executive agency of DECC, manages the onshore oil and gas licensing regime across Great Britain. Following the recommendation of the Smith and Silk commissions, onshore petroleum licensing is expected to be devolved to Scotland and Wales respectively. The Scotland Bill is currently being considered by Parliament and makes provision for the devolution of onshore petroleum licensing. The Government intend to publish a draft Wales Bill tomorrow.

Following engagement with the Welsh Government, I am now introducing these clauses which would enable the Welsh Ministers, should they choose, to enter into an agreement with the Oil and Gas Authority authorising them to exercise any of their functions. The aim here is to provide flexibility in the delivery of onshore oil and gas licensing functions once devolved. Equivalent provision is not being made for Scotland as Scottish Ministers are content that they may rely on the Deregulation and Contracting Out Act 1994 to achieve a similar effect.

I will, of course, continue close co-operation with the devolved Administrations on oil and gas issues in general and the implementation of the Wood review specifically. Our existing close working relationship is demonstrated through initiatives such as the PILOT group, of which the Scottish Energy Minister is a member. This aims to deliver a quicker, smarter and sustainable energy solution to secure the long-term future of the United Kingdom continental shelf and ensure full economic recovery of our hydrocarbon resources.

Amendments 75, 83 and 86 relate to MER United Kingdom and Northern Ireland. The Oil and Gas Authority will be formally established so that it is an effective, robust and independent regulator of the petroleum industry. The first steps in this direction were taken in the Infrastructure Act 2015, which made provision, among other things, for a strategy to maximise the economic recovery of petroleum from the United Kingdom territorial sea and the United Kingdom continental shelf. In relation to Northern Ireland, those provisions were created with a mismatch between their territorial extent and application. They apply to Northern Ireland’s territorial sea: however, they do not form part of the law of Northern Ireland. Amendment 75, therefore, amends the MER UK provisions so that they form part of the law of Northern Ireland as well as of England, Wales and Scotland, which is currently the case.

This also requires an amendment to Section 9H of the Petroleum Act 1998 so that a relevant upstream petroleum pipeline, a relevant oil processing facility or a relevant gas processing facility is included if it is situated in Great Britain, the territorial sea adjacent to Great Britain or the United Kingdom continental shelf. This is also achieved by Amendment 75.

We considered extending the third party access regime under Chapter 3 of Part 2 of the Energy Act 2011 to Northern Ireland’s territorial sea. However, this could not be done easily. This is because upstream petroleum infrastructure can be found onshore as well as offshore and the intention is for the third party access regime to be unified. We note that the onshore regime is a matter that has been transferred to Northern Ireland. However, we do not consider this to be a problem at the moment as there is currently no upstream petroleum infrastructure in Northern Ireland or the territorial sea around Northern Ireland.

Amendments 83 and 86 are consequential upon Amendment 75 and respectively ensure that Amendment 75 has the correct territorial extent and the short title of the Bill recognises this too. I beg to move.

[Lord Foulkes of Cumnock]

My Lords, I confess that I do not have an exact understanding of all the details in relation to this issue—I hope I will be forgiven by any Members who do, if there are any—especially in relation to the devolved Administrations which inevitably seem to complicate matters. Can the Minister answer one question in relation to fracking? What is the position of the Scottish Government in terms of permissions for and control over fracking now, and how will it change if we pass this Bill?

[Baroness Worthington]

My Lords, I am grateful to the Minister for presenting these amendments. I have no real questions on their detail, but I suspect that this is not the part of the Bill which has the most controversy in relation to devolution, and it is not Wales and Scotland that will be the most contentious aspects. However, I reiterate the question of my noble friend Lord Foulkes about fracking. If we could have an answer from the Minister, that would be welcome.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord and the noble Baroness for their comments. On the specific question about fracking, I have to confess that I am not certain about the position, but I am endeavouring to find an answer, and perhaps I may come back to it during the course of the debate.

[Lord Foulkes of Cumnock]

Perhaps I may expand slightly on what I said. Fracking is generally a very controversial issue in the United Kingdom, and it has become increasingly so following the recent conference of the Scottish National Party where there was a major debate about a moratorium on fracking. It is going to be a lively issue over the next few months and I think it is important that we know exactly what the current position is before the Bill gets to the House of Commons, and whether it will make any material changes to it.

[Lord Bourne of Aberystwyth]

My Lords, it has now been confirmed that the Bill does not do anything in relation to fracking, but that the Scotland Bill does. So I hope that the controversy and the heated debate on fracking can be transferred to the Scotland Bill rather than to this one.

I thank the noble Baroness, Lady Worthington, for her comments on this part of the Bill. I quite agree that this is not going to be the most controversial of its aspects. We have dealt with the devolved Administrations with what I hope is sensitivity and I think that we are going forward in a united way. With that, I urge noble Lords to support these amendments.

--- Later in debate ---

[Lord Howell of Guildford]

My Lords, carbon negativity, which the noble Lord, Lord Oxburgh, has just mentioned, is the concept I was groping for in an earlier amendment and is of course all part of the picture that is emerging: one of several very rapidly changing technologies for handling the carbon issue in ways that may not involve heavy pipelines into redundant oilfields and gas fields in the North Sea or anywhere else. However, that is an aside.

The question I have about this amendment is as follows. I suppose, having criticised the last amendment—our criticisms have been slapped down by the vote of your Lordships’ House and the amendment has been passed—I ought to be consistent and raise an eyebrow about this amendment. Can my noble friend explain why it is necessary and why it is not covered by Clause 4(1) of the Bill? There is an item in it on innovation:

“The need to encourage innovation in technology”.

This is a requirement already in the Bill and seems sufficiently open to allow all the vast variety of new technologies to come along. I have no quarrel with the other amendments from my noble friend about samples and information and I am sure that they are totally right, but this amendment again focuses on carbon emissions and the storage of carbon dioxide in the North Sea. I would just sound a warning note that we are again close to a dangerous tendency to pick winners, something which has led to so much grief and sorrow in the past because it led to a huge waste of resources and delayed the moves that we all want to see towards a more efficient energy industry and one more in line with meeting our climate obligations. Why does subsection (1) of Clause 4 not meet that, and why is the amendment necessary at all? The amendment states at the end that its aim is,

“to meet the target in section 1 of the Climate Change Act 2008”.

That of course is the point. There are many paths to meeting our carbon budget in the climate change obligations. Earlier, I think the noble Baroness, Lady Liddell, mentioned the UN official Professor Jacquie McGlade, who was given airspace on the radio this morning about the UK’s energy and climate policy. She seemed to be talking complete nonsense and seemed to believe that renewables targets were more important than our emissions targets, and that subsidising particular renewable technologies, regardless of their contribution to CO₂ reduction, was the key aspect of our commitment. That is precisely the trap into which the European Commission and European Energy Commissioners have fallen in the past; namely, trying to lay down the precise pattern of renewables to be backed and not backed. They have been trying to extricate themselves from the mess that they caused by that perception ever since at great cost, with great difficulties and with much uncertainty for the industry. When I see this kind of addition I realise why the Minister has probably put it in.

However, we have some real dangers to avoid. From the previous coalition we have inherited a legacy of considerable confusion, although I admit that I was part of that coalition. We have a legacy in the energy sector which is not at all happy and is leading to considerable ructions and many more difficulties ahead. I will pass over the fact that the targets have not been met at all when one takes into account per capita carbon emissions, let alone the other trilemma targets of affordability and reliability. That is for another debate, but can we please be careful that we leave open the path for all kinds of innovation in the future to meet our climate obligations, and that we do not get trapped into overemphasis on one particular path in order to meet the enthusiasms of those who believe that CCS is essential to be brought into everything? Perhaps it is or perhaps it is not, but let us be careful not to overegg this particular pudding.

[Lord Foulkes of Cumnock]

My Lords, I want to take up a point made by the noble Lord, Lord Oxburgh, with which he reinforced our concern about this Bill being rushed through and consideration not being made. We have just heard from the noble Lord, Lord Howell, about whether renewables can be equated with carbon production, which he challenges. As the noble Lord, Lord Oxburgh, said, these are the kind of things that could be and should be dealt with in pre-legislative scrutiny in the kind of get-together that he suggested.

I am not a fan of this non-elected House. I want to see a move towards a senate of the nations and regions. When we eventually get a Labour Government, we will move in that direction. However, again and again I hear from those who do like this nominated House that we have lots of experts on various subjects, and why do we not make use of them and get them together to provide that experience, insight and knowledge into the legislative process? If we get things rushed through in the way in which this is being rushed through, we are not able to do that.

We saw that again today at Question Time. Members who were present will have heard my intervention when I got really irate concerning the noble Lord, Lord Prior. I think that it was the noble Baroness, Lady Maddock, who said that it was not for the first time. The noble Lord seemed to be acting like a disinterested observer of what is happening in social care, which is being reduced enormously, and it was as if he could do nothing about it. He seems to forget that he is a member of the Government who is supposed to report to us and supposed also to take our views back to the Government to try to influence what they do. Ministers are not here just to read out the instructions that they get from the Civil Service and from down the corridor. They are here to listen to what Members of the House of Lords say, to take account of it and to pass it on. To be fair to the noble Lord, Lord Bourne, as my noble friend Lady Worthington said, he has taken account of some of the specific aspects that have been raised. But there are others that have been overlooked and I fear that there will be others that will be overlooked. I hope that I am proved wrong on Wednesday and that some account will be taken.

The noble Lord, Lord Howell, is about to disappear but I think even he would agree that, if not a direct equation between CO₂ emissions and renewables, renewables have a high correlation between their development and their expansion, and the reduction of CO₂. Not every renewable energy source is perfect and does not have some carbon emissions in the production of the equipment that it uses and so on, but producing this clean energy must be considered much better than the alternatives and all the ones that we have had in the past.

Incidentally, I should have declared an interest right at the start; I did so on previous occasions. I am a trustee and treasurer of the Climate Parliament. We argue very strongly at every opportunity we have in every parliament around the world to try to ensure that all countries, including the United Kingdom, are doing as much as possible to reduce carbon emissions.

Before I ask a specific question, I must say that the Minister is an eloquent man. As a Welshman, he is, like me, grieving at what happened over the last few days with the rugby results; in our case we were cheated out of a great victory. I have had dealings with him before he became a Minister and I have great respect for him, but even he, with all his Welsh eloquence, cannot argue that there has not been a deep depression in the renewable energy sector with what has happened over the last few months in solar energy—where we have seen and are seeing job losses because of the cutbacks—and now in onshore wind. We will talk more on this on Wednesday.

I ask the Minister one particular question: tomorrow we will hear the wit and wisdom of the President of China. It has been suggested that we should make all sorts of representations to him on human rights and discuss with him a range of issues concerning trade and co-operation in a variety of fields. Specifically, will we talk with him about energy in general, and in particular about the Green Grid alliance? At the United Nations, the Chinese President said that he is in favour of a global energy network for clean energy. The Chinese corporation dealing with this has put a lot of resources and thinking into developing a grid that takes energy from areas where it is produced cheaply and regularly, such as the deserts where solar energy is produced, and channelling it through a green grid to areas where it is used and needed.

I hope that at some point in his visit, Ministers—if not the Prime Minister—will raise with the Chinese President how the United Kingdom Government can co-operate with the Chinese Government on this. They are very far-thinking. They have great resources, a great number of people and great knowledge. I hope that we will pursue this with them, that we will take the opportunity to raise it with him when he is here and follow it up in the weeks and months to come.

[Lord Teverson]

My Lords, I shall speak to my Amendments 15 and 18, and to Amendment 72 in the name of the noble Lord, Lord Oxburgh. I am very pleased that the noble Lord, Lord Foulkes, mentioned the President of China because tomorrow we have to interrupt an Economic Affairs Committee meeting. I suggested that we might ask the President to be a witness on some of these issues, but unfortunately I do not think that that got anywhere.

I welcome a number of the government amendments in terms of their nod to the environment. My amendments look to try to place the OGA and this part of the Bill in the context of the broader climate change and environmental debate. We do not have those amendments completely right. In fact, I rather prefer the amendment of the noble Baroness, Lady Worthington, although I am not sure how far she will press it. As I said previously, although the OGA needs to focus on its prime areas in doing its day-to-day business, it needs to operate within this broader environmental area, as does the whole regime.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Wednesday 14th October 2015 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, I start by speaking to government Amendments 1 to 13, which seek to amend and supplement Clause 66. I thank noble Lords for extending this debate and allowing us the time for a fuller and thorough discussion.

[Lord Foulkes of Cumnock (Lab)]

I am sorry to interrupt but may I put on record in the Grand Committee what I said in the Chamber? It would have been better for all of us if this debate had taken place in the full Chamber rather than in the Grand Committee.

[Lord Bourne of Aberystwyth]

I thank the noble Lord for his intervention but I make the same response as I gave previously. I know that is the noble Lord’s view but I have heard contrary views, and not from the Conservative Benches, that Members prefer this Bill to be in the Moses Room. However, the point is noted.

As previously set out in the Secretary of State’s announcement on 18 June regarding the early closure of the renewables obligation, we proposed a grace period to protect investor confidence in the wider renewables sector. A grace period was proposed that would provide for those projects which had, as of 18 June this year, planning consent, grid connection and land rights. The grace period was designed to allow for projects that meet certain criteria to continue to accredit under the renewables obligation until the original closure date of 31 March 2017. Following this announcement, we undertook a significant period of engagement to understand better the views of industry and other stakeholders on our proposals.

I recognise that the Government’s amendments, which were tabled last week, are somewhat technical and have the potential to be seen as complex. I reassure noble Lords that, from the outset, the Government have been alive to the issues of investor certainty and clarity, which is why the provisions have been drafted to reflect the approach taken in existing renewables obligation legislation, in particular the Renewables Obligation Closure Order 2014 and the 2015 closure order relating to large-scale solar. This approach aims to ensure consistency and ease of understanding for industry. Following our previous Committee debate on 14 September, we have now carefully reviewed the feedback and evidence provided during the engagement exercise. We have since developed amendments to our original policy to ensure that it strikes the right balance. The amendments aim to protect consumer bills and ensure the right mix of energy, while balancing this against the interests of onshore wind developers and the wider industry.

I am also pleased that the amendments and the revised impact assessment were made available to noble Lords on 8 October in advance of today’s debate and as promised at our last sitting. I hope that noble Lords have had time to review the amendments and that they go some way towards addressing concerns raised during the debate in our previous Committee sitting on 14 September.

Amendments 1 to 13 amend the Bill to introduce the proposed grace period criteria for the early closure policy as outlined in the announcement on 18 June and make a number of additional supplementary amendments.

Amendments 1 to 12 make a number of changes to Clause 66, which introduces a new provision into the Electricity Act 1989 to implement the early closure of the schemes to new onshore wind in Great Britain. The amendments seek to remove the delegated power with a view to setting out the terms of the grace period in the Bill. Amendment 13 sets out the detail of the grace period in the Bill. I hope that these amendments will be welcomed by noble Lords, as initial feedback from the industry to the department following the publication of these clauses has indicated.

I again apologise for the delay in bringing these amendments forward, but hope noble Lords understand the complexity of the policy that has been drafted and appreciate that we will now have an appropriate amount of time in which to debate them today.

I turn first to the terms of the initial grace period criteria as outlined in the Secretary of State’s announcement in June. The proposal was—and, following detailed industry engagement, remains—to offer a grace period to those projects which, as of 18 June 2015, already have, first, relevant planning consents; secondly, a grid connection offer and acceptance of that offer, or confirmation that no grid connection is required; and thirdly, access to land rights.

In addition to this, in certain circumstances, projects that have been granted planning permission following a successful appeal will also be eligible for the grace period. In particular, those projects which have, via an appeal or judicial review, had a negative planning decision that was made on or before 18 June overturned, should be eligible for the grace period. This is because had the correct decision been made in the first instance, they would have had planning consent on or prior to the 18 June cut-off date. These key grace period terms are referred to in the amendments as the “approved development condition” and are referred to in proposed new Section 32LJ.

I turn now to investor confidence. At the time of the announcement outlining the initial grace period, the Secretary of State also said that she wanted to hear the views of industry and other stakeholders before framing the terms of the legislation. The department engaged with hundreds of stakeholders, including the devolved Administrations, supply chain, investors and developers, over the summer. The evidence gathered during that engagement exercise demonstrated the views of individual developers and the wider industry. Evidence was collected though online representations, individual meetings, representations from trade bodies and investor round-table sessions.

Following this engagement, we now have evidence that certain projects which already meet the proposed grace period criteria are experiencing difficulty securing finance. Feedback has shown that a number of financiers may be unwilling to lend to projects due to legislative uncertainty created by the parliamentary Bill process. Therefore, to ensure that projects which meet the grace period criteria and would have otherwise been able to commission and accredit under the renewables obligation by 31 March 2017 are not frozen out of the process, we are offering those projects which meet the approved development condition additional time to seek accreditation. The extension available is broadly equivalent to the period between the date of the Secretary of State’s announcement—18 June—and likely Royal Assent to the Bill, which is approximately nine months. To be eligible for this extra time, projects must be able to provide evidence that they have been impacted by a lack of investment during the period to Royal Assent.

This investment freeze condition I have just described is intended not to increase the pipeline of onshore wind projects that are able to accredit under the renewables obligation but rather to ensure that those projects which were intended to be protected by the grace period, as proposed on 18 June, are afforded this protection.

To provide a consistent approach to all onshore wind projects eligible to accredit under the renewables obligation, we also ensure through these amendments that a pre-existing grid and radar delay grace period applies here. This entitles projects affected by unforeseen grid and radar delays an additional 12-month period in which to accredit.

We are confident in our amendments and the proposed grace period. We have actively listened to stakeholders and worked to ensure that the final policy strikes the right balance between the interests of onshore wind developers and those of the wider public. I beg to move.

--- Later in debate ---

[Baroness Quin (Lab)]

My Lords, I have not spoken before on the Bill but have followed the proceedings closely, particularly as I live in Northumberland, the county that has had more onshore wind farms installed than any other county in England. I know that many people have made the point during debates that Scotland is the part of the UK that feels the major effect of both the previous policy and what is now being proposed, and I accept that completely, but in England Northumberland has a key role and a key interest both in the policy and in the changes that are proposed to it.

I speak as someone who is strongly supportive of the renewable energy sector generally, and indeed I was concerned today at what seems to be the direction that the Government seem to be taking over solar energy. None the less, I have a problem with onshore wind installations in my part of the country, which probably relates more to the planning process than to anything else simply because in Northumberland so many applications were approved in the face of not just the majority of the local people affected opposing them but an overwhelming majority. In many cases it seemed to those residents as though those investing in and pushing for such schemes had little connection with the local area, and little commitment to it other than making a financial gain with generous public support. For that reason, I am glad that the Government started to listen.

I know that comments have been made during the proceedings about the role of Conservative Back-Bench MPs. Having been a long-standing Labour Member in another place over many years, this is perhaps the first time that I might be saying something kind about Conservative Back-Bench MPs. I assume that they were opposing onshore wind not because they suddenly felt like it but in response to constituents’ concerns, which is what MPs of all parties can and should do. In my area, plenty of people who are not Conservative supporters were concerned about some of the inappropriate intrusive wind farm schemes that, for example, led to very familiar views of our iconic coastal castles disappearing behind a circle of turbines, or, in another case, threatened to overshadow ancient standing stones that had stood proudly amid beautiful countryside for thousands of years.

Organisations that are normally very concerned about environmental issues and about climate change, such as the Northumberland and Newcastle Society or the Northumberland branch of the Council to Protect Rural England, have expressed their concerns very loudly about this. I should declare a non-financial interest as president of the Northumberland National Park Foundation. I have a lot of links with those who are concerned to protect and enhance the Northumbrian countryside and ensure its continued attraction to tourists and residents alike.

I should like the Government to give us some more information about the effect of what they are now proposing for areas such as Northumberland. A lot of very reasonable questions have just been asked by the noble and learned Lord, Lord Wallace of Tankerness, which obviously need addressing. But a breakdown as to how different parts of the UK will be affected by the changes that the Government are proposing would be welcome to all of us, whatever views we take of onshore wind and its future.

I also understand some of the points about investor confidence that have been made by my noble friends. As I said, I also understand what has been said by my honourable friends about the situation in Scotland and ensuring that there is proper and meaningful consultation with the Scottish devolved authority on these issues. However, I support local people wherever they are in the UK having their strong views taken into account. In many areas and in many cases there is strong public support for the renewable energy sector, whether in onshore or offshore development. I believe that we can meet our targets. But at the same time we need to be determined to conserve and enhance our precious national landscapes and countryside, not least in Northumberland.

[Lord Foulkes of Cumnock]

My Lords, I understand that we are dealing with all the amendments grouped together, so we can discuss aspects of any of them. Amendment 18, which I tabled, is really a technical amendment given to me as a way of tidying up the amendments that the Government have proposed. I will not speak to it today but I am happy to table it again on Report and speak to it on that occasion if necessary.

I fully understand what my noble friend Lady Quin just said. She and I were together in the other place, along with the noble Lords, Lord Deben and Lord Howell, and others, and we know the importance of representing constituents and making sure that their views are represented in relation to major planning issues such as wind farms. In my old constituency of Carrick, Cumnock and Doon Valley—I never had to explain to anyone that that was in Scotland; they knew straightaway once I had pronounced it—we had a number of wind farms and they were welcomed locally. We did not have the kinds of objections that my noble friend obviously experienced in Northumberland, but I understand that and she made her points very well.

I was tremendously impressed by the explanations of the noble and learned Lord, Lord Wallace, of his own amendments—they were detailed and forensic—and by his clear knowledge and understanding of them. I noticed that the noble Baroness, Lady Maddock, was, like me, slightly perplexed on one or two occasions, but he managed to explain them to us. As I whispered to my noble friend Lady Quin at the time, “You can easily tell that he is a very good lawyer by the way he takes a brief and manages to explain it to lesser mortals like me and others”. I was very impressed by that.

However, I am not as equable and relaxed about what the Government are proposing as some of my colleagues in this Grand Committee appear to be. People in Whitehall and Westminster sometimes do not understand what is going on in the real world outside. I wish that the Minister had experienced the kind of anger, fury and despair that I have experienced in the representations made to me about what the Government have done and are doing on this. I am astonished that they are pursuing this and treating it with such equanimity.

This has been an exercise of the greatest incredible incompetence and betrayal that I have known for a long time and I have seen some degree of incompetence and a lot of betrayal from time to time. I want to go through that statement and explain it, even in terms of the procedure. I tabled my Amendment 18 with the very helpful clerks in the Public Bill Office upstairs. I asked how frequently Governments have to resort to this astonishing procedure of re-commitment. Apparently, it is a very infrequent procedure and it is astonishing that the department has had to resort to it. It is a procedure where we are dealing with 12 pages of detailed amendments which have a huge effect, as the noble and learned Lord, Lord Wallace, has pointed out, on investors, consumers, producers and everyone, and we are trying to rush them through in this way. Next week, we have two days of Report, when we are supposed to deal with the whole Bill yet again. This is an astonishingly incompetent way of dealing with legislation.

I want to turn to the betrayal and the reneging on promises that have been made. I took part in a referendum in Scotland and went on platforms—much to my disadvantage, I may say—with Conservative spokespersons. It was a bit easier with the Liberal Democrat spokespersons. The SNP and others have taken us to task—to some extent understandably—for appearing shoulder to shoulder with Tory spokespersons. I feel really annoyed now that some of the things that were said on behalf of all of us, but put into government documents, are now being reneged on by the Conservative Government. Perhaps if it had been a coalition, they would not have been reneged on.

I will give two examples of the documents that went out to electors in the referendum. One said:

“The UK Government is now introducing the Contracts for Difference scheme, which will provide long term support for all forms of low-carbon electricity generation. These contracts provide industry with the long-term framework to make further large scale energy investments at least cost to the consumer.”

Does not that ring hollow in the light of what the Government are now doing? It continues:

“Whilst the Renewables Obligation has been successful in incentivising renewable electricity deployment, a new market mechanism is now required to provide industry with the framework to make further large scale energy investments at least cost to the consumer. Therefore in its place, the UK Government is introducing the Contracts for Difference mechanism, which will provide long term support for all forms of low-carbon electricity generation—including nuclear, renewables and carbon capture and storage. Such contracts will allow investors to be confident about the returns on their capital in advance of investing billions”—

this is in a government document—

“into new infrastructure, remove exposure to volatile wholesale electricity prices and produce a more competitive market; therefore ensuring electricity remains affordable.”

That is really astonishing. This pledge in a government document to electors in the Scottish referendum was totally reneged on by the new Conservative Government.

Let us take the second betrayal by the Government. I will quote the noble Baroness, Lady Verma, who in the Chamber on 4 November 2013 said:

“My Lords, Amendment 66 provides the Government with the power to close the renewables obligation to new capacity. As noble Lords know, this closure is planned for 31 March 2017 as part of the transition to contracts for difference. We had previously considered that the renewables obligation could be closed using existing powers within the Electricity Act 1989. However, we have now concluded that a specific power in this Bill will put the closure arrangements on a more reliable and transparent legislative basis”.—[Official Report, 4 November 2013; col. 28.]

That enabled the power, which had been devolved to the Scottish Parliament, to be brought back here on the pretence that all this would be done on a proper, comprehensive, United Kingdom basis. The Scottish Government were betrayed on that promise, too, made by the noble Baroness, Lady Verma.

The third betrayal relates to the Conservative Party 2015 manifesto, which, as the noble Baroness, Lady Quin, said, explicitly committed to ensuring that,

“local people have the final say on windfarm applications”.

Independent generators, as other Members will have seen from their paper, are concerned that the Government’s proposed grace period for the early closure of the RO unfairly excludes projects with democratic local planning consent, contradicting that manifesto commitment to give local people the final say. Like the noble and learned Lord, Lord Wallace, they give examples of that. I will not go into the full details, except to say that the Section 75 agreement was made on 2 July 2015, which of course was after the cut-off date, because of a technical delay. That means that the will of local people, contrary to what the Government say, will not be taken into account. We keep being told that we should all abide by the Salisbury convention, but the Government are betraying their own manifesto. Those are the three betrayals.

We are told that all this is being done to keep prices down, but Bloomberg has just produced a report, which says, according to the Guardian—I know that not all Members like the Guardian, but I am sure that they like Bloomberg more:

“New onshore windfarms are now the cheapest way for a power company to produce electricity in Britain, according to Bloomberg New Energy Finance … Costs have dropped to $85 … per megawatt hour … compared with the current costs of about $115 for constructing coal or gas-fired plants”.

The costs for nuclear are assessed by Bloomberg at $190. The noble Lord, Lord Howell, said earlier in the Chamber that he was looking forward to the day when we do not have to subsidise renewables such as wind, but he should perhaps think about how much subsidy is going into Hinkley Point and look forward to the day when we do not have to subsidise nuclear.

These matters go beyond the terms of today’s debate, of course, but it is clear that, if we are to help consumers and keep our pledge to them to provide the cheapest form of electricity, using onshore windfarms is one way of doing that, according to the Bloomberg report. It is most unfortunate that we are dealing with this matter in this way.

I do not know who is going to the climate change conference in Paris in December. I once went to a climate change meeting that the noble Lord, Lord Deben, in his previous capacity, chaired—in a brilliant way, by the way—with everyone discussing the issues rather than reading out reports prepared by civil servants back home. It was a very good and constructive debate.

--- Later in debate ---

[Lord Foulkes of Cumnock]

I would like to resume. I was thinking ahead to Paris in the week beginning 7 December, wondering which poor Minister—I hope it is not the noble Lord, Lord Bourne—is going to have to go there and explain how we are going to manage to achieve our targets for reducing carbon emissions by the appropriate date, given what we are doing in relation to solar energy, and now in relation to onshore wind. I certainly would not like to be doing that.

In the light of the fact that there has been this betrayal and that the Government are trying to rush us through some very complicated and detailed amendments with serious long-term effects that will affect not just investors, customers and suppliers but many more people, I must give the Minister notice that I am minded to oppose all his amendments in this Grand Committee unless he can give me some very clear assurances. I will be listening very carefully. If we do not agree this today, it will give the Government another week to try to get it right.

I ask the Minister to go back to his Secretary of State and his other Ministers and ask whether it is really worth the candle to push this through the House of Lords and then go to the House of Commons and try to persuade it, with 55 SNP Members of Parliament snapping away at Ministers’ heels, just for the relatively small amount that it would cost to go ahead as originally planned, and for the relatively small amount of generation involved? Is it really worth pushing ahead with that?

I wonder whether the Government are now regretting having introduced this Bill into the House of Lords. We are supposed to deal with Bills that are not contentious but this one is proving very contentious indeed. The Minister should go back and explain the problems that he is having getting the Bill through the House of Lords and warn his colleagues that it is going to be not just twice or 10 times as hard but many times more difficult to get it through the House of Commons. The Government have a majority there but there are all sorts of ways that it can be upset. I hope that he will consider changing his mind, withdrawing Clause 66 completely, finding some better arrangement that protects onshore wind schemes and keeping the three promises that I mentioned earlier, which the Government have reneged upon. I give him that very serious warning. Perhaps he will reflect that if he had taken my advice to have this matter dealt with in the Chamber, he might not be in the pickle he is in now.

[Lord Howell of Guildford (Con)]

My Lords, I declare my interests, including as president of the Energy Industries Council, which I cease to be tomorrow evening so I shall not need to declare it after that.

I applaud the very balanced assessment of the situation given by the noble Baroness, Lady Quin. It reflected very sensible views about the way this issue should be handled and approached. As for the noble Lord, Lord Foulkes, perhaps he was not in the Chamber at Second Reading, or if he was he seems to have completely forgotten what I said about Hinkley Point. I am very pro-nuclear indeed, but I do not mind saying in front of my noble friend that I have very serious reservations about whether the Hinkley Point C programme is the right way to get our nuclear renaissance going. I just remind him of that before he makes a further comment.

[Lord Foulkes of Cumnock]

I apologise for forgetting that. I was only recollecting what he said in the Chamber this afternoon. I accept that he made that point previously.

[Lord Howell of Guildford]

I thank the noble Lord for that. Turning to the amendments, they are very generous and I congratulate my noble friend on bringing them forward, even though they are rather extensive. They are what we used to call in the other place “liquid legislation”; that is, legislation going through Parliament that all the time is massively amended so that it changes from day to day. The amendments are indeed extensive but also very generous. This is a very exciting industry, part of the great low-carbon renewables transformation in the world that most of us want to see. All around the world, costs not only for solar power, which we were discussing earlier in the Chamber, but for all forms of wind power, onshore and offshore, and all sorts of other associated technologies are coming down dramatically. Really amazing technological advances are being achieved.

I listened to the expert legal commentaries of the noble and learned Lord, Lord Wallace, and I am all for speeding up the planning. However, it has to be remembered that what we are doing here is not legislating to stop all onshore wind. That is a vast industry that will continue and contribute to the energy transformation of the entire planet. What we are legislating for is to bring to a halt, with the various adjustments embodied in the amendments, further subsidy that falls upon consumers. This has to be weighed in the balance. We hear horrid stories about the closure of businesses; the Redcar steelworks is perhaps the most dramatic recent one. When you look at the small print, you find that one of the difficulties is that they are facing much cheaper imports from countries that are not carrying such heavy energy costs. We have to put that in the balance and not just ignore the other side of the argument. There are consumers and taxpayers, often poor households and consumers with very low incomes, at the other end of this process, and we cannot ignore their position.

In addition, it has to be remembered that many of the investors behind the projects we are talking about have not just entered into them entirely from the goodness of their hearts or because they want to save the planet. Investors enter into these great projects because they can make a profit, and I have nothing against that; that is excellent. Less excellent, however, is that they sometimes enter into them because the subsidies seem so juicy and attractive and they think that they are going to make exceptionally large profits. So I just say to my noble friend, and I am sure he would agree, that we should bring to an end—with these many concessions and in a very balanced way—this particular growth of additional subsidies. In future, let us make sure that investors in these industries understand, as I believe the wise ones do, that the projects that they want to go for are the ones that are really likely to be extremely profitable, particularly in Scotland, and very competitive with all other forms of energy. They should be careful if they think that they are just going to ride on an indefinite continuation of very large subsidies because Governments and policies change. Wise advisers to wise investors will always warn them that the best projects are those for which the subsidies are a minimal part of the reward, and the profitable and efficient operation of the industry itself, and the rapid adaption of new technology, are the larger part of the profit generated. In every case, we advise that subsidies can end.

--- Later in debate ---

[Lord Foulkes of Cumnock]

With respect to the noble Lord, Lord Deben, the promise was not that it would continue for ever but just to the end of March 2017. That is the promise that has been reneged upon.

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.

--- Later in debate ---

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.

--- Later in debate ---

[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.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Monday 7th September 2015 Lords Chamber

[Baroness Worthington (Lab)]

My Lords, I rise briefly before the House commences Committee to raise a very serious objection and concern that relates to the Bill. At present we do not have the impact assessment for the Bill, which we were promised before our deliberations began, and they begin now. I would like to hear from the Minister why this delay has happened—in fact, why the Bill was not published with an impact assessment in the first place. I also seek assurances that when the impact assessment is published, it will contain full details of the assumptions on which the Bill is based. Namely, there is the Government’s continued assertion that we are on track to meet our renewables targets, which relates to Part 4. That is incredibly important and sensitive, since we have had many representations from industry about the impact of the Bill. It should be recalled that those elements of the Bill were not subject to public consultation, so the impact assessment is incredibly important for us to be able to consider the impact of the Bill. The other assumption that the Government now seem often to quote is that the levy control framework is spent and there is no more money left. We need to see details of those assumptions and the figures that underlie them but we do not have an impact assessment. I am very concerned about this issue and I look forward to a response from the Minister.

[Lord Foulkes of Cumnock (Lab)]

My Lords, I should like to say a word in support of my noble friend Lady Worthington because this is not just an isolated example of the Government treating this House, and Parliament, in a cavalier fashion. If I may give another example, next week we were due to have a debate on English votes for English laws. It was promised again and again by the Leader of the House, the noble Baroness, Lady Stowell—I notice that she has disappeared—yet it has been switched. We are to have a debate on the size of the House, which is not an immediately urgent matter, yet the Commons will make a decision at some point about English votes for English laws and we were given the assurance that we would be able to feed into that. My understanding—I hope that the Chief Whip will answer this—is that the decision to move the debate on English votes for English laws off the agenda for next week was taken unilaterally by the Government and that when the Opposition were consulted, we said that we did not want to change. We wanted to have the English votes for English laws debate because it was promised to this House. That is another example of the cavalier way in which the Government treat this House, wanting to bulldoze their business through. It is about time that some people in this House stood up and said that Parliament has a responsibility to challenge the Government. The Leader of the House may think that we should come in only one day a week when we want to say a few words but we are here to hold the Government to account.

[Lord Taylor of Holbeach (Con)]

The noble Lord has asked that I say something about the decision to change the agenda for the coming two weeks to allow the House to discuss the whole business of its membership. I think the House is acutely conscious of the issues raised in the media and by other noble Lords. I felt it was right and proper, as did the Leader of the House, that we should have an opportunity to debate this while we are here. As the noble Lord will know, we had promised a debate on EVEL. He made a point about that. Subsequently, this House decided to support very strongly a Motion from the noble Lord, Lord Butler, for a Joint Committee of both Houses to consider this matter. There has been no reply to this Motion from the House of Commons and, in the absence of a reply, if I am honest, there is not much that the Government could say in this House on this issue at this time.

I felt it was proper that we should deal with something of immediate concern to this House. That is why the Leader informed all sides of the House. There were consultations and there were reservations about changing business, but nobody does this freely or without proper consideration of what is right and proper. I am sure all noble Lords are pleased that we will have the opportunity to debate in full the future of this House and its future reform in terms of the Motion tabled by the Government and the Motions of the noble Lord, Lord Pearson, and the noble Lord, Lord Steel, which will be debated at the same time next Tuesday.

Energy Bill [HL]

Lord Foulkes of Cumnock Excerpts

Wednesday 22nd July 2015 Lords Chamber

[Lord Foulkes of Cumnock (Lab)]

My Lords, it is a great privilege to follow my good friend and mentor, my noble friend Lord Judd. I share his concerns about the excessive use of energy late at night in this place and elsewhere. When he comes to visit me, he will see that I go round the house switching things off all the time, which I confess is much more to do with Scottish thrift than energy saving—although the energy saving is a consequence.

I get really annoyed with government, Ofgem and others saying that if I want the lowest tariff, it is easy for me to switch supplier. Why should we have to switch supplier to get the lowest tariff? I say as a trustee of Age Scotland—I see in her place my good friend the noble Baroness, Lady Greengross, with whom I worked at Age Concern—why should elderly people, or anyone, have to through the bother of switching suppliers to get a lower tariff? Why cannot we ensure that the lowest tariff is supplied anywhere? It seems very strange.

It is also very pleasing that quite a lot of Scots are participating in this debate—three from the Labour Party and, shortly, we will have a contribution from the Scottish Liberal Democrats—because it is a matter of particular concern to Scotland. I shall come back to one particular aspect of that later. Before that, I join in the widespread expressions of concern that the Government have ended new public subsidies for onshore wind farms, with no more renewable obligations certificates for wind from 1 April next year. Ending it one year earlier than planned is shifting the goalposts and has caused investors and potential investors great dismay. In 2014, wind provided only 5% of the total of our electricity needs, yet the Cabinet Office Minister Matthew Hancock said in March 2015 that subsidies would not stop until 10% was reached. That promise has been broken. Now we have the announcement about solar today—and, presumably, we will have amendments to the Bill to deal with that, too. I hope that the Minister will let us know how we are going to deal with that when he replies.

This Bill is harmful. Already £350 million has been spent on projects that may now not be financially viable. That is a terrible waste of resources. On top of that, the July Budget scrapped the climate change levy exemption, which results in a double blow to renewable energy production in the United Kingdom, and a loss of investor confidence, which puts investment decisions in renewable energy in doubt. Renewable energy may also now become more expensive as we move away from wind to other more costly forms, such as tidal energy, in order to try to meet the Government’s 2020 target. DECC claims it has enough subsidised projects in the pipeline to meet the renewable energy commitment. Perhaps the Minister could spell these out. Can he name these projects that are in the pipeline? It is no good just saying that they are there without indicating what they are.

Finally on this point on a Scottish aspect, since 75% of independent renewable energy onshore wind production is in Scotland I found it disgraceful that Holyrood was not even consulted, let alone involved in this decision. I hope the Minister will apologise for that lack and make it clear that in any future energy decisions that affect Scotland the Scottish Government will be consulted and, indeed, involved. We have this wave of nationalism at the moment, which I am totally opposed to, and it is fuelled by the lack of consultation and involvement by this Conservative Government and their predecessors.

I now come to the entirely different matter of environmental degradation in Scotland. I sent a message to the Minister saying that I was going raise this. In 2013 Scottish Coal and Aardvark TMC—two east Ayrshire mining companies in my former constituency—went into administration. There is now massive environmental devastation in east Ayrshire as a result, with an estimated 2,000 hectares of disturbed land and 22 voids filling up with water and with unstable cliff faces. Restoration liabilities are estimated to be over £160 million. One operator with some foresight and sense, Hargreaves, has submitted a proposal to the Government for carbon price support tax exemption which is similar to the scheme for coal slurry. That would support opencast coal restoration projects. It also has the support of the wider coal producers’ organisation, Coalpro. The reason why this should appeal to the Government, and the Treasury in particular, is that it is largely self-funding since stimulating activity would generate significant tax revenues. Since the March Budget the Chancellor has signalled his intention to work with the Scottish Coal Taskforce. As I say, I have given the Minister prior notice so I hope that he can say today whether the Treasury will support the Hargreaves proposal to deal with this dereliction facing the mining communities in east Ayrshire.

I will now say a word about nuclear power. I started off many years ago as a nuclear sceptic but I became convinced of the value of nuclear power, not just because of the greater safety and the fact that there is not as much waste now as there was in the old reactors, but because it can contribute towards our climate change targets. However, I have a specific question, of which I have again given the Minister prior notice. With Hinkley Point poised to proceed to construction, we are now increasingly aware of the massive costs involved in nuclear power construction and the fact that the companies doing this will need a huge amount of insurance. I have some concerns about this, and others have expressed concerns directly to me. Can the Minister tell us whether there is sufficient capacity in the United Kingdom and the European Union insurance market to meet the requirements of operators and contractors for planned UK nuclear plants? Can he also say whether the UK and EU insurance markets are competitive, ensuring not just the best price for customers who operate and plan to operate nuclear power stations in the United Kingdom but the interests of consumers as well? I hope that he will indicate whether the capacity and the competition are there.

Finally, I will say a few words about the Climate Parliament of which I am a trustee. There are two other trustees in this House. One is the noble Lord, Lord Bell, the Conservative publicist and philanthropist; the other is the noble Lord, Lord Alderdice, former Speaker of the Northern Ireland Parliament, now a Liberal Democrat Member. It is about the only thing we have in common, incidentally, but it is a good cause for us to be working together on. The Climate Parliament works with parliamentarians around the world to encourage development of renewable energy and we are planning to develop a group within this Parliament in both Houses. This Bill and the July Budget sadly lead to a greater reliance on carbon-intensive fossil fuels rather than renewable energy and that is why the role of the Climate Parliament is very important.

One of the things that the Climate Parliament has been looking at recently—I attended a meeting in Lucerne that it arranged in which we discussed this—is a global green grid. That is difficult enough to say but easier if you are Scottish because you can get your Rs—sorry, the letter R is better pronounced. It is a bold and imaginative proposal and it is supported by the Climate Parliament. Renewable energy has problems of transmission costs and the variability of the nature of sun and wind. The global green grid is one solution to this. It would use smart grids to connect different sources of renewable energy into a reliable supply linking together renewable energy production both within countries and internationally. That would ensure permanent reliable access to energy where wind is blowing in one place and the sun is shining elsewhere, linking them up together. Europe is already developing its own green grid but now China, the world’s leading renewable energy producer, has made a proposal for a global green grid to help the world to produce 80% of its energy from renewables by 2050.

As technology is improved, renewable energy becomes cheaper and more reliable while fossil fuels become limited and more expensive in the long term. I hope that we will support this kind of thing because British energy policy should avoid short-sightedness and look to encourage investment in renewables technology to help us meet the 2020 target, to fight climate change, and to secure a clean, cheap and sustainable energy supply for the future.

--- Later in debate ---

[Lord Bourne of Aberystwyth]

Noble Lords will understand that I am approaching this constructively. I am not going for the party knockabout, so let us leave that for another occasion. I am trying to be constructive and explain how we can take this forward.

The noble Lord quite rightly raised a point on public interest and national security grounds; perhaps I may get back to him on that with examples. The two go together. The national security point will be fairly evident, the public interest one perhaps less so. Thinking on my feet, it could involve something like piracy, but that word has connotations of the old type of pirate. However, it could mean someone taking over one of these installations, which, while it might not represent a threat to national security, may demand urgent action in the public interest by the Secretary of State. It could be something like that, and I will certainly write to the noble Lord with more precise information.

As I understand it, coming back to the announcements on solar made this morning, we do not need primary legislation for any action that is taken consequent on that consultation, and therefore I do not think that we will need to amend this legislation. If I am wrong about that, I will write to noble Lords, but I think it can be achieved through secondary legislation.

I shall move on to the miscellaneous points, although that is not to say in any way that the issues are not important. A regular theme of the debate was energy efficiency. It was raised by the noble Baroness, Lady Maddock, and the noble Lords, Lord Oxburgh, Lord Teverson, Lord Judd and Lord Foulkes, among others. It is a vital issue and a lot is already happening that does not demand legislation from us now. I refer to the smart meter programme, the delivery of which in 2020 will make a massive difference. Since April 2010, we have delivered the installation of more than 1.5 million measures such as boilers, insulation and so on which have made a material difference. That links to another area of responsibility, namely fuel poverty. We are currently looking at how to ensure that our fuel poverty measures are more closely allied to improvements in energy efficiency than perhaps they have been in the past. That is something we are looking at and it is certainly important.

On nuclear, a matter raised by my noble friend Lord Howell and touched on by the noble Lord, Lord O’Neill, and others, we are expecting the contract to be concluded at the end of the year. I think my right honourable friend the Secretary of State mentioned this yesterday to the Select Committee in the House of Commons. We are certainly looking at small nuclear, as I think I have indicated previously; it is important. Progress is being made on Wylfa and I discussed it again yesterday with the devolved Administration in Wales. Those matters are progressing. I think I have dealt with carbon storage.

[Lord Foulkes of Cumnock]

Could the Minister deal with the question of whether insurance will be available?

[Lord Bourne of Aberystwyth]

I am coming to that; I had not forgotten. I think the noble Lord has also tabled a Question for Written Answer on this and I hope he has had a response because I have it here, although I will not read it out. I think he will be reassured that we believe there is sufficient cover at the moment. The Government will continue to monitor the insurance market for capacity in this area and to encourage insurers to enter the nuclear insurance market. I offer the noble Lord my apologies if the response has not yet arrived, but it is certainly on its way to him.

On contracts for difference, raised by the noble Viscount, Lord Ridley, the noble Lords, Lord Whitty, Lord Oxburgh, and others, I have indicated that we will be announcing our approach. Of course it is important that we look at the totality of the position on renewables; I totally agree with that.

The noble Lord, Lord Teverson, raised issues around the automotive industry. He is absolutely right to say that there is a massive opportunity for the United Kingdom in this area. We are working across government on this with the Department for Transport and there is a certain urgency. It is an important issue and it would be great to see British industry have an edge in the area.

The security of the national grid was raised by noble Lords. That was one of the first visits I made, and obviously there are connections with other countries such as Norway and France. I think security of supply is in place.

The Competition and Markets Authority was touched on by the noble Lord, Lord Foulkes, in relation to switching. He will be aware that we are currently studying, and will soon be responding to, the preliminary findings of the Competition and Markets Authority, which had a default mechanism in those preliminary findings for those people who do not switch and are on an expensive tariff. They are put into a default mechanism tariff, which will be better for them. I hope he is reassured by that. The noble Lord also raised the issue of smart grids, which are very important. We are looking at them as part of the smart energy programme.

Finally, I turn to the East Ayrshire coalfield. We are aware of the issues, as the noble Lord indicated, and at the moment the Treasury is looking at the Hargreaves and Banks proposals he mentioned. We will come back to him on that; it certainly has not been forgotten.