Farming: New Entrants

Debate between Lord Gardiner of Kimble and Lord Whitty

Monday 23rd November 2020 Lords Chamber

[Lord Gardiner of Kimble (Con)]

My Lords, we value the role that council farms play in providing opportunities for new entrants. That is why we want to incentivise councils to retain and invest in their farm estates so that they can continue to provide opportunities into the future.

[Lord Whitty (Lab) [V]]

My Lords, post-Brexit British agriculture and horticulture require a new generation of farmers and a larger and more highly skilled UK-based workforce. In response to the point made by the noble Baroness, Lady McIntosh, about county farms, will the Government urge counties to stop divesting their county tenancies and start investing in new opportunities for those who wish to farm but do not inherit and cannot buy the land? Are they proposing to produce an updated recruitment, skills training and career structure for UK land workers in agriculture and horticulture?

[Lord Gardiner of Kimble (Con)]

My Lords, one of the reasons the Government are reforming post-16 technical education to provide clearer routes into skilled employment in agriculture and other associated sectors is precisely to address the point the noble Lord has made. The other issue, as I will repeat, is that we want councils to retain and invest in their farm estates and for other landowners to take the opportunity of the new entrant scheme that we are developing because we think that this is a positive part of the future in agriculture.

Agriculture Bill

Debate between Lord Gardiner of Kimble and Lord Whitty

Consideration of Commons amendments & Ping Pong (Hansard) & Ping Pong (Hansard): House of Lords
Tuesday 20th October 2020 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Gardiner of Kimble) (Con)]

My Lords, with the leave of the House, I will speak also to Motions C, C1, F and F1. At this juncture, I should declare my farming interests, as set out in the register.

I start by once again acknowledging the work of your Lordships in the scrutiny of the Bill. These debates have provided a valuable opportunity to clarify the Government’s agenda of reform for agriculture in this country.

Turning to Amendment 1, I agree wholeheartedly with the intent behind the amendment of the noble Baroness, Lady Jones of Whitchurch. The strategic priorities of multi-annual financial assistance plans drawn up under Clause 4 will most definitely consider those objectives and those of future environmental improvement plans.

I turn to Amendment 11, and Amendment 11B proposed in lieu by the noble Lord, Lord Whitty, in Motion C1. The exacting process of scientific assessment applied to all pesticides specifically addresses the situation of those living near to where pesticides are applied. The Health and Safety Executive is the regulator covering the safety of chemicals, including pesticides. Staff working on pesticide assessments are scientists who specialise either in one part of the risk assessment, such as the fate and behaviour of pesticides in the environment, or in interpreting the specialist findings to reach conclusions on a product’s safety. No pesticide is allowed on to the market unless these scientists are satisfied that it poses no threat to the health of those living near farmland where it might be applied. This assessment process applies to all new pesticides, and the safety of existing pesticides is regularly reviewed.

Some noble Lords are concerned that the Government could face a gap in powers at the end of the transition period. I want to reassure your Lordships that that is not the case. We have the powers needed in this area. Section 16 of the Food and Environment Protection Act 1985 allows the Government to make regulations that prohibit the use of pesticides in certain specified areas. Section 17 of the same Act allows the Government to make codes of practice providing practical guidance on pesticide use. Other powers include Article 6 of Regulation 1107/2009, which allows the designation of areas where the use of plant protection products containing a particular active substance may not be authorised.

A wide range of monitoring activities takes place to ensure compliance with legal requirements, and intelligence- led enforcement action is taken where problems are identified. The Official Controls (Plant Protection Products) Regulations 2020 provide additional powers to enable the responsible bodies to operate proactive controls, targeting enforcement where it is most needed.

I turn to Amendments 17 and 17B, and Motion F1 in the name of the noble Baroness, Lady Jones of Whitchurch. The Paris Agreement was ratified by the United Kingdom in 2016 as a sign of its continued commitment to climate action and reductions of CO₂ emissions across the world. The Government are bound by it as an international environmental law treaty. The Climate Change Act 2008 set targets in domestic law, which were strengthened to include an obligation for the Government to ensure that the net UK carbon account is 100% lower than the 1990 baseline by 2050.

In previous debates, the Pensions Bill has been given as a precedent for the inclusion of a reference to climate change on the face of a Bill. I looked into this, and the duty is placed on trustees or managers of occupational pension schemes, not the Secretary of State, who is already bound by these obligations. On Thursday 15 October, the Government published their response to the Committee on Climate Change’s Reducing UK Emissions: 2020 Progress Report to Parliament.

Amendment 16B requires the Secretary of State to lay a strategy outlining policies that will be taken towards net zero. I am therefore very pleased to confirm that our response to the Committee on Climate Change includes a new commitment to publish a comprehensive net-zero strategy ahead of COP 26, which will be a wide-reaching and cross-departmental document, making the most of new growth and employment opportunities across the United Kingdom. This will raise ambition as we outline our path to hit our 2050 target. I beg to move.

[Lord Whitty (Lab) [V]]

My Lords, I oppose the Commons deletion and commend Amendment 11B, which proposes a revised version of what was Clause 38 in the Bill as it left this House.

I thank the Minister for his explanation, and for his courtesy, throughout this discussion and when meeting me yesterday, but I am afraid that he has not yet convinced me. I appreciate that many in this House do not regard this issue as important enough to be dealt with at this late stage in the Bill’s passage, but the Bill will define the future practice of agriculture in this country. We are dealing with agriculture’s relationship with nature, the environment, the food trade and so on, but it also must be about its relationship with those human beings who live and work in our countryside alongside that agriculture. Too many of those rural inhabitants have had health effects from exposure to pesticides, which have been and remain a serious threat to their physical quality of life. They deserve at least the limited and straightforward protection which my amendment provides by requiring the Government to regulate the distance between them and pesticide operations.

There have essentially been only three arguments from the Government against this principle. The first is what the Minister has just said: that the EU authorisation process nowadays ensures that even repeated exposure to the application of legally authorised pesticides cannot lead to serious health effects. I regret to say that medical reports and evidence from rural residents, some of which noble Lords will have seen, suggest substantially otherwise. Noble Lords will also recall the powerful speech on Report by the noble Baroness, Lady Finlay of Llandaff, on the medical issues that residents and others affected by pesticide poisoning have suffered.

I accept that there have been significant changes in EU pesticide authorisation, but they are not sufficient. One of the easiest and most obvious ways to prevent such exposure from causing health effects is to ensure that the exposure to crop spraying is at a prescribed minimum distance from where people are most likely to be: in their own homes, their children’s schools, and so on.

The principle of my original amendment continues to be supported by many in this House, if not all, including my original co-sponsors the noble Baroness, Lady Bakewell of Hardington Mandeville, of the Liberal Democrats, the noble Lord, Lord Randall, of the Conservatives, the noble Baroness, Lady Jones of Moulsecoomb for the Greens, and the noble Baroness, Lady Finlay of Llandaff. However, perhaps it was phrased a little loosely. The main objection in the other place by the Defra Minister, Victoria Prentis—she used slightly overstated terms—was that it would close every field to pesticide application. That was never the intention, so we have deleted the wording which gave rise to that objection and taken out what was originally subsection (1)(b). The only open spaces referred to now are those that are part of education or healthcare facilities. That should deal with the substantive objections that were made from the Government Benches in the Commons.

The other objection, repeated by the Minister just now and in the wording of the Commons reasons, is that Ministers already have these powers. I have two comments on this. There is a key word in my amendment —“must”. If Ministers did have these powers, they have not used them. This amendment would require them to produce draft regulations and to submit them to the usual consultations, and then to both Houses. At the last stage, and in correspondence, Ministers argued that they had possessed these powers since the EU directive in 2009 and the transposition of that in 2012. The Minister has just said that they have actually had these powers since the Food and Environment Protection Act 1985. There is no specific reference there to distance or to residential property—there is a brief reference to healthcare facilities—but even if Ministers are right, and they do in general terms have the right to prescribe distance, why have they not done so in the eight years since the transposition of the EU regulation, and in particular since that 1985 Act? If they are claiming that they already have those powers, they must explain to the House why they have not used them. If we do not pass my amendment indicating that they must introduce such regulations, we may have to wait another 35 years for rural residents to be protected.

I give notice—I should have done so at the beginning —that, unless I hear something different from the Minister, I intend to press this amendment to a Division at the end of this debate.

Agriculture Bill

Debate between Lord Gardiner of Kimble and Lord Whitty

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Tuesday 21st July 2020 Lords Chamber

[Lord Gardiner of Kimble]

I believe that the noble Baroness made a speech rather than asking a question but I have noted it all. I approve of gardening, community gardening and the production of food.

[Lord Whitty [V]]

My Lords, I thank the noble Lords, Lord Curry and Lord Judd, and my noble friend Lady Jones, and others, who supported the general approach of Amendment 158. I thought that I would fall out with the noble Lord, Lord Cameron, but I essentially agree with him that, if we are to have a revival of county farms, we will have to redefine the mission. What is clear from all speakers is that, in this brave new world of post-CAP agricultural policy, we will need people to come into farming who have not traditionally been there and who are unlikely to be able to buy their way into it. We need their talents, their skills, their entrepreneurship, their enthusiasm and their recognition that the provision of public goods, which this Bill is all about, is an important part of farming. Regrettably, when it comes to county farms, neither the structure of ownership of agricultural land in this country, nor, in some respects, the provisions of tenancy law, nor the withdrawal of the local state from this area—none of these things—are particularly conducive to bringing new talent, new blood and new ideas into farming; we need to make a new start.

My amendment is quite limited. It asks the counties involved to review their estates, not to sell any for the moment, and then to define a new strategy along with Defra and the farming organisations. That is an important part of the rejuvenation of agriculture. It must be recognised that this Bill should be paralleled with a means of more people coming in with new skills and new backgrounds. I understand the issue of urban agriculture and community gardens and so on as one potential way in, but the traditional way in through county farms is rapidly disappearing. We need to continue to make positive use of what is there, and to ask the counties, effectively, to look at the situation again and do so in this new strategic sense.

The schemes coming through ELMs and through the other provisions of this Bill will need the next generation to seize the opportunities that they present. That means that we need new ways in. I hope that county farms will be a significant provider of those ways in. I will not press my amendment for the moment, but I hope that the Minister will recognise that even the present level of county farms may well deserve some special recognition within this Bill in respect of government support for the public good. Meanwhile, I beg leave to withdraw the amendment.

Kew Gardens (Leases) (No. 3) Bill [HL]

Debate between Lord Gardiner of Kimble and Lord Whitty

Report stage (Hansard): House of Lords
Wednesday 5th June 2019 Lords Chamber

[Lord Whitty (Lab)]

My Lords, while moving Amendment 2, which is in my name and that of my noble friend Lady Jones, I will also speak to Amendment 3—the two are clearly interdependent.

Your Lordships may recall that I expressed my attachment to Kew, its history, scientific excellence and amenity value, and to its aspect and its contribution, as my noble friend Lord Campbell-Savours, said, to that beautiful stretch of the Thames. None of us wishes to prejudice any of that. We want to preserve all those outcomes and benefits, but I recognise that to do so costs money. I was, like the Minister, responsible for Kew for a number of years, and understand that we need to increase the private money going into it. I recognise that the 31-year restriction on the lease was an inhibition on raising some of that money.

However, as my noble friends Lord Campbell-Savours and Lady Jones said, the Bill presented to us was very open-ended and was not restricted to the seven Kew Green properties but applied to any form of asset, building or land within the Kew estate. I therefore clearly felt, as did many other contributors to that debate, that we needed to place some restriction on how leases could be extended. I recognise the need for resources and to update some of the estate, but we need to be pretty firm in ensuring that such leases as are granted by virtue of this very short and apparently innocuous Bill are preserved and that Kew can continue to provide both scientific excellence and amenity value to our people—indeed, to the planet as a whole, because Kew’s contribution to botanical science is a very important element in biodiversity and climate change strategies.

As noble Lords will recall, in Committee I produced an amendment which I thought was pretty good and nailed the restrictions necessary. It referred to any such lease having to be,

“supportive of, or be compatible with the core botanical, scientific, environmental, educational and amenity activities of”,

Kew. I thought that was pretty clear, but since then, after consultation with lawyers—both mine and the department’s—it has become clear that that is too generalised and must be anchored in existing legislation to which future generations can refer. I therefore welcome the discussion that the Minister had and allowed his officials and Kew officials to have with me so that we could come up with a form of words which I hope meets all the concerns expressed by my noble friend Lord Campbell-Savours and others. There is concern in the community around Kew, in the scientific community and in the minds of those who use Kew for recreational purposes that if we allow any open-ended leases, there will be developer interest, with the disastrous effect that we have seen on other stretches of the Thames applied to this very special piece of ground.

I therefore accept the advice of the lawyers to a large extent and have attempted in my amendments to place restrictions on future leases in terms, on the one hand, of the universal World Heritage Site provisions, which are pretty clear and, on the other, under the National Heritage Act, which includes the six principles under which the trustees of Kew are supposed to operate, to which the noble Viscount, Lord Eccles, referred at earlier stages. That pretty much covers the basis on which we must ensure that restrictions are placed on leases.

The amendments place the obligation on the Secretary of State, who would grant the leases, and therefore on the lessee, who would have to abide by the restrictions required by the Secretary of State. That may not be 100% watertight, but it is much more watertight than the original Bill and, I think, reflects many of the assurances which the Minister has tried to give us today and at earlier stages of the Bill. I think we can move forward with confidence and avoid the kind of intrusion on, and misuse of, the assets and land at Kew that some of us have feared. I beg to move.

[Lord Gardiner of Kimble]

My Lords, I think that it would be helpful to your Lordships if I confirmed that the Government support both amendments.

Kew Gardens (Leases) (No. 3) Bill [HL]

Debate between Lord Gardiner of Kimble and Lord Whitty

Committee: 1st sitting (Hansard): House of Lords
Tuesday 21st May 2019 Lords Chamber

[Lord Gardiner of Kimble]

I referred to buffer zones. This is an issue for Kew in terms of how planning proposals beyond the curtilage of Kew Gardens may, in turn, impose upon the world heritage site. I will write to the noble Baroness about the precise element of the car parks, but they are all part of Crown land, which is part of—ah, the noble Baroness is signalling that that may not be the case. May I come back to the noble Baroness on the question of that car park?

In conclusion, it is important to note that the Bill will not supersede the application of any existing legislation or policy already in place. This includes any proposals for new build or changes to the use of buildings, including on the wider estate. I mention that because Kew is a proactive scientific institution and therefore it is inevitable that, in protecting Kew and its wonderful historic site, we will have to have future state of the art scientific buildings with laboratories to help us find solutions to protect our natural ecosystem. So I deliberately raise the fact that, in protecting Kew, we will need new contemporary buildings to assist it in advancing scientific knowledge. I want to protect this great, historic site, and I am sure that it is our objective to entrench that for ever.

I repeat that I have looked at this in great detail and I cannot think of anywhere that has more protected elements, with so many varied facets, than Kew. So I say to the noble Lord, and to all noble Lords, that obviously I am in tune with what they want from this. I would like to continue discussions with the noble Lord, Lord Whitty, and other noble Lords, because I want to get this right. However, in the meantime, I ask the noble Lord to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the Minister for that, and I thank all noble Lords who have supported the intent of the amendment. The Minister clearly spelled out the number of protections that currently apply in different statutes and regulations. I concede that they make Kew probably one of the most protected acreages in the world. Nevertheless, I think I am right in saying that none of the protections existed 150 years ago—and not all of them existed 31 years ago. Therefore, we cannot be sure that they will exist in 31 years or 150 years—yet the leases will have been granted when the Bill becomes an Act.

I am grateful for the Minister’s offer to discuss this further. I understand about all the protections, but they could all change—and, even if they do not, issues could still be raised. I am mindful of another UNESCO world heritage site: the Liverpool waterfront. A building adjacent to it has raised serious questions. I think that in the end UNESCO accepted that it did not offend the status of the site. However, looking at it as a lay person, one might think that it came dangerously close. If a similar building were put on the Kew car park—although I suspect the protections would stop it—it would challenge a lot of what Kew stands for and what it looks like.

I am not suggesting that we should preserve Kew in aspic. I recognise, as the Minister has just said, that new buildings and new facilities will be needed to keep up with the scientific and educational activities of Kew—of course that will happen. But my amendment allows for supportive and compatible development, and we must make sure that the outcome of such development is compatible with and supportive of the general objectives of Kew.

I am disappointed that the Minister did not offer to draft a rather better government amendment for Report. However, I look forward to discussing this with him to see whether perhaps he could go some way down that road. In the meantime, I reserve the right to bring this back should that development not pertain. I thank all noble Lords who participated in the debate and I beg leave to withdraw the amendment.

Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019

Debate between Lord Gardiner of Kimble and Lord Whitty

Wednesday 20th March 2019 Grand Committee

[Lord Gardiner of Kimble]

Yes, and I think it has been clear from the department that, like any responsible Government or department, we would act if issues arose. The noble Lord mentioned the sheep sector; in the temporary tariff regime we brought forward, we recognised the sensitivity and potential vulnerability of that sector. He is absolutely right: we need to be alive to, and ready to act on, issues of weather or markets. That point is well made.

The noble Lord raised the issue of the euro. Defra and the DAs have agreed to retain references to the euro in retained EU legislation at the point of exit. This is because, at the point of exit, the CAP will be part-way through making payments under current schemes. To minimise disruption and avoid a difference in sums paid to farmers before and after exit, we will retain the euro until an appropriate time when we can make the change to sterling with minimal disruption. We intend to bring forward regulations to amend euro references to sterling later. These regulations will of course be subject to normal parliamentary scrutiny. In addition, we will work with the devolved Administrations on any changes.

The noble Lord, Lord Beith, asked about retention. On implications for farmers, I reiterate that the Government have guaranteed that the current level of agricultural funding under Pillar 1 will be upheld until 2020 as part of the transition to new domestic arrangements, and that all CAP Pillar 2 agreements signed before 31 December 2020 will be fully funded for their lifetimes. The exchange rate for BPS 2018 is already set for the scheme year, meaning that farmers paid either side of exit day will be subject to an identical exchange rate.

The noble Lord, Lord Beith, asked how many state aid rules there will be after exit. The state aid regime will be rolled over by this statutory instrument, as will the whole architecture through the BEIS statutory instrument. We are not making any changes to the current EU regime beyond those required to make these matters operable.

The noble Lord, Lord Grantchester, asked whether the SIs will be necessary if the Agriculture Bill gains Royal Assent before the end of the current implementation period. If the current withdrawal agreement is agreed, these SIs will still be needed to ensure that the retained EU CAP legislation is operable in a UK context at the end of the implementation period. This will be the case even once the Agriculture Bill has gained Royal Assent. This is because the horizontal framework regulations, as amended by the SIs, will be required while we continue to operate legacy CAP schemes under retained EU law. Likewise, some CMO regulations will remain after the Agriculture Bill comes into force.

The noble Lord asked about the discontinuity in state aid: will DAs have their own rules and do they take effect at exit day or at the end of the implementation period? This is a reserved policy area, but, as with all the SIs I have had to deal with, there has been a close working relationship with the devolved Administrations. BEIS is working on a memorandum of understanding with the DAs, and my noble friend Lord Henley is working on this. If there is any further information I can bring forward from that, I will let your Lordships have a copy.

In a no-deal scenario—

[Lord Whitty (Lab)]

I intervene because I have been dealing with state aid provisions more generally. The European system regards state aid for agriculture as part of a block exemption. In other words, it does not regard it as state aid.

Brexit: Environmental Enforcement Agency

Debate between Lord Gardiner of Kimble and Lord Whitty

Monday 8th January 2018 Lords Chamber

[Lord Gardiner of Kimble]

My Lords, I assure your Lordships that it will be a full and proper consultation. We want to have detailed consideration with stakeholders and your Lordships so that we get the right decision because we recognise that something needs to be done to fill what we acknowledge is a governance gap. I am not sure about the precise timings, but the whole purpose of an early consultation is so that we can move this forward.

[Lord Whitty (Lab)]

My Lords, this will be a powerful new organisation, which I understand will have the ability to fine or otherwise sanction other public bodies. In that case, is it the Government’s intention to produce primary legislation for the introduction of this body or are they still assuming that it will be dealt with in delegated legislation? My other question is: will this body have some jurisdiction in the remaining seven years of the present system of farm support in fulfilling the role of making sure that environmental standards are met by agricultural practitioners?

[Lord Gardiner of Kimble]

My Lords, the whole purpose of the detailed consideration and our consultation is to decide, and to have reflection from stakeholders, on the best way forward. That is why, at this stage, we have not made a firm decision as to the route because we think we should not pre-empt what is a serious consultation. As to the matter of agriculture, we have been very clear that we wish there to be a transitional phase. However, the arrangements in the withdrawal Bill are that existing EU law will be brought on to the UK statute book. What we are looking at is how we deal with the situation after we have left the European Union and, potentially, after an implementation period.

Brexit: Non-chemical Farming Methods

Debate between Lord Gardiner of Kimble and Lord Whitty

Monday 6th November 2017 Lords Chamber

[Lord Gardiner of Kimble]

My Lords, as the noble Lord has raised that issue I will look into it. To repeat, there is strong regulation on pesticides; that is why it is so important. The truth is that we often need to use herbicides in order to ensure that rights of way are clear for people to enjoy the countryside.

[Lord Whitty (Lab)]

My Lords, over a decade ago, when I was doing the noble Lord’s job, we had a programme of looking at non-chemical ways of doing what pesticides do and improving the method of application. Will the Minister update us? Do the Government still support that work? If so, by how much and when can we expect the results?

[Lord Gardiner of Kimble]

My Lords, it is continuing. I am sure that, with his experience, the noble Lord will know about the UK national action plan on pesticides and that it is an ongoing process. We will continue to develop and adapt as further knowledge becomes available. My whole point is that the national action plan and the pollinator strategy are designed to assist in enhancing the environment and to have pesticides used when necessary and with precision.

Air Quality

Debate between Lord Gardiner of Kimble and Lord Whitty

Thursday 3rd November 2016 Lords Chamber

[Lord Whitty (Lab)]

My Lords, does the Statement mean that the Government now accept that the national air quality strategy produced by the Minister’s department was found by the court, in what has been a bad week for the Government in court, to be flawed in its evidence and lacking in ambition to meet the targets? Although the Government endorsed the five cities that the Minister referred to, did not the Minister’s own officials recommend that clean air zones should be established in more than 20 cities? Lastly, 60 years on from the Clean Air Act—probably the only remaining positive outcome of the Eden Government—do the current Government accept that we need a new clear air Act, and possibly a clean air commission, as recommended by Clean Air Alliance UK? I declare an interest as the president of Environmental Protection UK, one of the members of that alliance.

[Lord Gardiner of Kimble]

My Lords, I would be the first to say that I think that the Clean Air Act and some of the improvements we have seen since that time have shown that Governments of all persuasions have taken this matter very seriously indeed. As I say, we got the judgment 24 hours ago and it is very important that we consider all the measures. We accept the judgment, and we now have to work speedily and constructively to ensure that we remedy a situation that we all wish to be much improved.

Water Billing

Debate between Lord Gardiner of Kimble and Lord Whitty

Thursday 3rd March 2016 Lords Chamber

[Lord Gardiner of Kimble]

My Lords, I am afraid that I am not technical at all and will need to take advice on that. Because of the technicalities of all these matters, the best thing I can do is to write to the noble Lord with some of the very technical details. But it is a very pertinent point.

[Lord Whitty (Lab)]

My Lords, genuine social tariffs would be enabled by universal smart-metering of water, but, unlike energy, we have no mandatory rollout of smart meters for water. Indeed, the smart meters for energy have some problems. Will the Minister consider having genuine smart meters—smarter than the current ones for energy—which incorporate water-metering, so that the next phase of mandatory installation would cover water as well as energy?

[Lord Gardiner of Kimble]

What the noble Lord says is probably the direction of travel. I know that at the moment the meters for water are, in many cases, not as sophisticated as those in the energy sector, but I am sure that this is going to be very important. I am particularly mindful of the non-household sector, particularly large consumers of water, where smart meters are definitely assisting in factories and commercial production a better understanding of where water is used. Of course, we all want to reduce water consumption, so it is very important.

Air Quality

Debate between Lord Gardiner of Kimble and Lord Whitty

Monday 23rd November 2015 Lords Chamber

[Lord Gardiner of Kimble]

I am certainly not aware of any diminution of our resolve to ensure that we have the correct assessment in the European Union context. It is why we have been calling for very strong, real testing, which is absolutely essential, and we will continue to do so at all levels. This will be cracked only if we deal with it at local, national, EU and international level.

[Lord Whitty (Lab)]

My Lords, I declare an interest as vice-president of Environmental Protection UK. I have two questions for the Minister. First, in view of the cuts in Defra staff in this area—and more to come, no doubt, in this week’s announcements—is he confident that he has sufficient resources not only to draw up a strategy on air quality but actually to deliver it? Secondly, in view of the previous question, does he agree with Boris Johnson that a third runway at Heathrow is “inconceivable” if the Government are to meet their EU targets on air pollution?

[Lord Gardiner of Kimble]

My Lords, the first thing to say is that the Government will consider all appropriate incentives that may be required to help secure delivery by local authorities through geographically structured measures set out in the plan. Clearly, I am not in a position, particularly this week, to say any more about the current level of spending review negotiations, but it is clear that everyone will need to work together to address this. As for the noble Lord’s second question, I have every regard and respect for the Mayor of London; indeed, his important action with regard to non-road mobile machinery—announcing on 1 September that there are going to be much greater and stronger requirements for that—is the sort of practical thing that he is doing.

Energy Bill

Debate between Lord Gardiner of Kimble and Lord Whitty

Thursday 11th July 2013 Grand Committee

[Lord Whitty]

My Lords, Amendment 51ZE deals again with the redress powers. The issue here is that the Government have rightly given Ofgem the ability to require compensation as well as to fine for breach of licence conditions or consumer law, but it is not clear whether this could apply to the cases that are currently under investigation by Ofgem, to which my noble friend Lady Liddell, who is no longer in her place, referred earlier.

Those outstanding investigations include one that started in September 2010, looking at doorstep selling for Scottish and Southern, ScottishPower and npower; a separate one into doorstep selling for E.ON; one into customer complaint systems at EDF; and one into misleading tariffs from ScottishPower. In total, there are eight or nine ongoing investigations, some of which have been going on for three years.

Ofgem has therefore already started a number of such investigations and, as I understand it, will start some more in the months between now and Royal Assent. At present it does not appear that the powers to award compensation would be allowable under that welcome provision in this Bill. However, if Ofgem finds against the companies it seems likely that a significant number of consumers will have suffered detriment and that the consideration of potential damage to the companies has outweighed the Government’s determination to ensure justice for those consumers.

When a similar point was put in the Commons by my honourable friend Tom Greatrex, the Minister replied that this would be retrospective legislation. It is not retrospective legislation. Ofgem would have to find that there had been breach of consumer law or a licence that already existed. Previously, consumers would have to go to court to get compensation but the provisions in this Bill would allow Ofgem to award that compensation. This is not inventing a law in retrospect; it is ensuring that the compensation comes through an easier channel.

It is important that those consumers whose complaints are currently being investigated by Ofgem benefit in the same way as future consumers will from what is a sensible improvement to the situation by the Government. I hope that the Minister will not resort to the retrospective legislation argument, because it is not retrospective legislation; it is simply improving delivery of the penalty and the rightful compensation that is due to these consumers. I beg to move.

[Lord Gardiner of Kimble]

My Lords, I thank the noble Lord for his amendments. Amendments 51ZEA and 51ZFA are designed to amend Schedule 14 and permit retrospective application of these powers. I am aware that these amendments were debated both in Committee and on Report in the other place. The aim of these amendments is to allow Ofgem to require redress for events that happened prior to the enactment of this Bill.

In seeking to take powers through the Energy Bill, our objective has been to put consumers first and we will consider any amendments from that perspective. It may appear that it is in consumers’ best interests to seek to put right consumer harm irrespective of when it took place, but the effect of retrospectively applying powers in the energy market will have negative impacts on all consumers.

Noble Lords will be aware of the presumption that powers should not generally be applied retrospectively. This is an important principle, but we are also concerned by the effect this will have on consumers. It is likely that the introduction of the regulatory uncertainty that these amendments will create will lead to increases in the cost of capital for energy companies, pushing up bills for everyone. We want to avoid creating investor uncertainty, particularly when we are trying to encourage the private sector investment that is required to move to a low-carbon economy. Increasing costs will hit most heavily the small energy companies that we want to come into the sector. We want new entrants to the market and do not want to accept amendments that could hinder them.

In addition, smaller energy companies would be most likely to shoulder the burden of the increased costs of insurance premiums that could arise from these amendments, as companies seek to cover their liability for events prior to the enactment of the Bill. My noble friend Lord Deben touched on some of these concerns more generally when we debated an earlier group of amendments. The combination of these factors may push up costs for energy consumers, impacting the very people we seek to protect. The potential unintended consequences of these measures mean that, while I am entirely sympathetic to the intentions behind the amendments, it could be counterproductive to accept them. For those reasons, I hope that at this stage the noble Lord will feel able to withdraw his amendment.

[Lord Whitty]

My Lords, I am afraid that I do not accept those arguments at all. New entrants will not be affected. If they are not operating in the market at the moment, they will be operating under the very process that is prescribed in the Bill. There is therefore no uncertainty for them. Furthermore, the only retrospection will be in how compensation is delivered. Any breach will have been under a contract or licence that already existed at the time that the breach occurred. Any breach of consumer law would have been a breach of the law at the time, and therefore susceptible to a court case brought by one or more consumers at that point. This is not retrospective legislation. It is simply tying up the delivery of existing legislation and existing licensing conditions.

If the Government continue to resist this, they will need better arguments. There is no retrospection in the sense that the noble Lord, Lord Deben, talked about earlier. He perhaps had a point. This simply concerns consumers who are currently under investigation. We also have to bear in mind, when talking about the detriment to consumers, that some of them might have started a court case had it not been for the fact that they knew that Ofgem was beginning to investigate the situation and that they might be precluded from bringing such a case.

The idea that resisting the amendment is in the interests of consumers, or that it should be resisted because it implies a breach of the principle—which I fully support—of not legislating retrospectively, is wrong. I hope that the Government will look at this again before Report. At this point, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Gardiner of Kimble]

My Lords, Amendments 51ZEB and 51ZEC, 51ZFB and 51ZFC are designed to amend Schedule 14 and permit unlimited liability for energy companies by seeking to ensure that the amount of compensation that can be required through a consumer redress order is not limited. I am aware that these amendments were debated both in Committee and on Report in the other place.

Our aim in drafting the powers in the Bill has been to ensure that the overall interests of the consumer are put first. With this in mind, we have sought to achieve a balance between the need for consumers to get speedy access to the redress they are due and an appeal process which is proportionate to the potential liability faced by energy companies and which does not present a barrier to entry for the small suppliers that we need to ensure a healthy competitive market.

In response to previous amendments, I mentioned that consumers can obtain redress through the courts under existing arrangements. However, the legal process is lengthy and does not offer a typically quick remedy for consumers who have lost out. This is largely because the legal process is necessarily equal to the potential sums at stake, where compensation is unlimited. Schedule 14 sets out powers which contain appeal mechanisms that are proportionate to the potential penalty. These are also limited to 10% of an energy company’s annual turnover and offer a relatively straightforward resolution of cases.

Accepting amendments to remove the cap could deny consumers timely compensation, as they would require us to make changes to the appeal mechanism, which could result in a more lengthy resolution of cases. Given how unlikely it is that consumers would lose out on a scale that went beyond the level of the 10% cap, we do not consider such a change is justifiable. As the noble Lord, Lord Whitty, has mentioned, for the very largest domestic energy suppliers to exceed a cap of 10% of annual turnover would mean penalties and compensation of over £1 billion. This contrasts with the largest penalty imposed by Ofgem to date of £15 million. We therefore believe that the proposed cap on redress is unlikely to hamper Ofgem’s ability to impose appropriate redress orders.

As I have mentioned in relation to previous amendments, removing the cap on liability could also have adverse impacts on smaller energy companies and, in turn, on consumer bills, due to the increased cost of capital and insurance premiums for energy companies. I assure your Lordships that the approach set out in the Bill does not let companies off the hook. The combined 10% cap on penalties and redress will apply to each separate regulatory breach, so that any company breaking the rules on a number of occasions will face correspondingly larger payouts. For the reasons I have set out, I hope the noble Lord feels able to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the Minister particularly for that last point, because it indicates that it would not apply to a single breach—a single act of mis-selling or whatever—that applied to a large number of people. I am grateful for his explanation but I still think there is a difference between a limit on the ability of the regulator to impose a fine and a limit on compensation. However, although I am not in favour of a limit on compensation, he is right to say it is pretty unlikely to be applied and therefore it is not an issue to which I intend to return. I beg to withdraw.