Energy Bill

Debate between Lord Grantchester and Lord Astor of Hever

Tuesday 9th July 2013 Grand Committee

[Lord Grantchester]

The Government are not providing any further information other than that further work is under way to update the initial value-for-money analysis undertaken last year and that Defence Ministers will be asked to decide whether to invite bids for the GPSS on the basis of that work. I welcome the presence of the Defence Minister to provide clarity to the Committee.

Given that this Bill will have completed its passage through Parliament by that stage, will the Minister tell the Committee today by what means Parliament will be able to assess the analysis and ask for certainties beyond the bland assurances already provided by the Minister of State in the other place, Mr Greg Barker, to my honourable friend Luciana Berger? It is recognised that a sale contract would be a private matter and not wholly for Parliament. No doubt the Public Accounts Committee may also scrutinise any sale. However, nothing in the clause deals with the contractual nature or goes beyond any theoretical possibility. Will the Government explain why they want to sell and whether they may limit the sale or lease to the use of the pipeline and retain the fabric or even vice versa? Any transfer would want to pass over as many liabilities as possible while retaining as many benefits. Is there any comfort in Clause 113 providing that it must be for valuable consideration? I presume that the Minister can qualify this as positive valuable consideration and will exclude negative valuable consideration—that is, someone is paid to take it away or it is part of a larger transaction as an uncosted supplement. Will the Minister also clarify what conditions the Government consider appropriate when asking this Committee to acquiesce to this power?

Finally, the Minister might be tempted to say that the Government do not yet know all the appropriate conditionality pertaining to any transfer. Will the noble Lord look at the suggestion by my noble friend Lord O’Neill and come forward with an amendment to bring regulation to the situation or to introduce any sale or transfer to Parliament when there is clarity around the circumstances which the Minister is happy to explain and promote when the time comes?

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, to date the clauses that are included within this Bill to enable the sale of the Government pipeline and storage system have received relatively little attention. Indeed, they were barely mentioned on Second Reading. This is why I welcome the clause stand part debate tabled by the noble Viscount, Lord Hanworth, as it provides an opportunity for us properly to scrutinise the proposals.

Clause 113 is crucial because it allows for the sale or lease of the GPSS or a part of it. At the current time, the rights to operate and maintain the GPSS and to access land for this purpose are personal to the Secretary of State for Defence. This clause allows the Secretary of State for Defence to transfer these rights, thereby enabling the system to be sold or leased. A decision on sale or lease will be made once further analysis has been undertaken and we have engaged with the market. The clause also allows the transfer of liabilities.

Having explained the intent of this clause, I would like to address a number of concerns that were raised in the other place relating to the sale of the GPSS so that I may demonstrate what progress has been made in these matters.

First, the strategic importance of the GPSS was raised, including the need for it to provide assured fuel supply to certain sites. Through the work conducted to date, we are confident that we will be able to put a contract in place to meet the continuing requirements of the Ministry of Defence and the United States visiting forces, which will offer the appropriate level of protection, including priority access when necessary. Similarly, the potential impact of sale on commercial customers has been raised. The Department of Energy and Climate Change and the Department for Transport have jointly reviewed the implications of a sale of the GPSS on the market, including access and charging, and concluded that while it transports a significant proportion of fuel to the major airports, existing regulatory provisions, particularly the Pipe-Lines Act 1962, are sufficient and no further regulation is required.

On physical security, I reassure noble Lords that we do not believe that the sale will make the GPSS any more vulnerable to terrorist attack than other equivalent infrastructure operated by the private sector, such as the electricity and gas distribution networks, particularly since the pipeline and storage tanks are predominantly built underground to make the system less vulnerable. Officials at the Oil and Pipelines Agency regularly discuss, with appropriate external organisations, measures to best protect the GPSS, including from the risk of cyberattack. We would expect a purchaser to continue these measures post-sale.

Questions were also raised regarding the impact on safety and the environment following the sale of the GPSS. Any owner has an inherent interest in running the system in a safe manner and would need to comply with the same legislation and regulations as the Oil and Pipelines Agency does at present, such as the regulations under the Environmental Protection Act 1990 and the Pipelines Safety Regulations 1996. Therefore, it is not believed that a sale would have any adverse impact in these areas.

Lastly, and quite rightly, the value for money of a sale has been raised. A final decision on sale is dependent on being able to strike the right deal with the private sector, and value for money is a key consideration. Work is ongoing to update the initial value-for-money analysis that was undertaken in 2011 and which underpinned the impact assessment published alongside these clauses. To refine these financial figures, we have appointed external advisers to undertake a forensic examination of the GPSS costs and revenues, including any potential liabilities associated with the ongoing operation of the system. This work will inform a final decision on sale, which we aim to make by the end of this year.

I shall do my best to answer any concerns or questions that were asked. The noble Viscount, Lord Hanworth, and the noble Lord, Lord O’Neill, were concerned that the GPSS would be seen as a monopoly. The GPSS does not supply Heathrow, Gatwick and Manchester directly—this is done via third-party pipelines. The GPSS provides direct to Stansted, and the DECC and DfT have looked at regulation and concluded that none is required. The GPSS has to compete with other privately owned pipelines.

The noble Viscount was concerned at the foreign ownership issue. Any buyer would need to be deemed competent to operate the GPSS in a safe manner and to be a UK-registered company. We are considering what other criteria any purchaser would need to meet, including restrictions on foreign ownership, and the options for posing these restrictions before any onward sale.

The noble Viscount and the noble Lord, Lord O’Neill, asked whether there would be any regulation of the GPSS post-sale to protect customers. The DECC and DfT have reviewed the implications of the GPSS sale on the market, including access and charging, and concluded that, while it transports a significant proportion of fuel to major airports, existing regulatory provisions, particular under the Pipe-Lines Act 1962, are sufficient and no further regulation is required.

The noble Lord, Lord O’Neill, was concerned that the sale might adversely impact on safety and the environment. Any owner has an inherent interest in running the system safely and there is no reason to believe that the sale will adversely impact on safety. Indeed, the OPA already has to comply with a number of safety regimes such as the Health and Safety at Work Act 1974, the Control of Major Accident Hazards Regulations 1999, regulations under the Environmental Protection Act 1990 and the Pipelines Safety Regulations 1996, which are overseen by the Health and Safety Executive and the Environment Agency. This will not change.

Pensions Appeal Tribunals Act 1943 (Time Limit for Appeals) (Amendment) Regulations 2011

Debate between Lord Grantchester and Lord Astor of Hever

Wednesday 27th April 2011 Grand Committee

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, I start by paying tribute to the brave men and women of our Armed Forces. They deserve our admiration but, more than that, they deserve to be treated with respect, and they rightly expect the nation to honour their commitment. We have a duty to those injured due to service to provide a just and fair compensation scheme for them.

The Armed Forces Compensation Scheme came into force on 6 April 2005 to pay compensation for injury, illness or death caused by service. This provides lump-sum payments and, for the more seriously injured, a guaranteed income for life. It replaced the previous compensation arrangements provided by the War Pensions Scheme and the attributable elements of the Armed Forces Pension Scheme.

The new scheme is a significant improvement on the previous arrangements. Injured service men and women are now able to claim compensation while they are still in service. The previous Government should be commended for introducing the scheme in 2005, as well as for initiating a review of the Armed Forces Compensation Scheme in 2009 to ensure that it continues to support the needs of the Armed Forces.

On 10 February 2010, the then Secretary of State announced the outcome of the review conducted under the independent chairmanship of the noble and gallant Lord, Lord Boyce. I am very grateful to him for the thorough way in which he conducted the review and for producing such a meticulous report. The Ministry of Defence committed to implementing all his recommendations within a year. The more straightforward changes were put in revised legislation in July 2010. The more detailed recommendations were laid in new legislation on 28 February 2011. The two affirmative instruments for debate today complete the legislative changes required to implement the full package of changes.

The first statutory instrument relates to time limits for appeals if an individual is not happy with the decision made on a compensation claim. The intent is to extend the time limit for appealing decisions made under the AFCS from six to 12 months. This recognises that the nature of service life may prevent claimants picking up their mail and making an appeal within the current time limit of six months. For appeals heard in Scotland and Northern Ireland, this requires Section 8 of the Pensions Appeal Tribunal Act 1943 to be amended. The first affirmative statutory instrument that we are discussing today makes the required amendments to this Act. The time limits governing appeals about AFCS awards heard in England and Wales are provided in the Tribunal Procedure Rules. These rules have been amended to increase the time limit for appealing to 12 months, with the changes coming into force from 9 May. To ensure consistency and fairness, this affirmative instrument also increases the time limit for bringing appeals in respect of all other types of decisions capable of appeal under the Pensions Appeal Tribunal Act 1943, including decisions made in relation to the War Pensions Scheme.

The second statutory instrument is on the subject of rights of appeal. The intent is to make it clear that two types of new decision under the scheme do not carry appeal rights. The first relates to claims for a fast payment. This is a new provision introduced to enable those who have a serious injury due to service to receive an early payment before going through the full compensation claim process. This helps to provide them and their families with some early financial support and reassurance during what can be a very difficult time. If the final award is less than the value of the fast payment, no money will be recovered. Where additional money is payable, the balance is transferred to the claimant. The decision on the final award carries appeal rights. As the fast payment decision is not a final decision, the instrument being debated today excludes fast payment decisions from the list of decisions capable of being appealed. Not to make this change would result in a rather confusing system for claimants.

The second new type of payment is for medical expenses incurred abroad by seriously injured personnel who decide to live permanently outside the UK within a year of leaving the Armed Forces. This power broadens the scope of the scheme. As the noble and gallant Lord, Lord Boyce, recognised in his report, this new power is discretionary, so it would not be appropriate for it to have external appeal rights but rather an individual would be able to request the MoD to reconsider its decision. This remains open to individuals if they are not content with the decision made on their behalf.

These two statutory instruments are the next step in ensuring that the AFCS remains fit for purpose for our service personnel. I beg to move.

[Lord Grantchester]

I join the Minister in paying tribute to all the brave men and women who serve in our Armed Forces. They deserve our respect and admiration and rightly expect society, through government, to honour commitments to them, especially to those injured in service.

I thank the Minister for his explanation of these regulations. These Benches endorse his remarks and support enactment. We agree that the new scheme is a significant improvement on previous arrangements. As the Minister explained, the two instruments complete the legislative changes required to implement the full package following the review undertaken by the noble and gallant Lord, Lord Boyce. I understand that the review team spoke to and received comments from over 200 individuals and groups, including serving members of the Armed Forces, their families, reservists, veterans and the general public. The noble and gallant Lord, Lord Boyce, and his team visited serving Royal Navy, Army and RAF personnel in their bases as well as at Headley Court. The noble and gallant Lord also spoke to Ministers, the Chief of the Defence Staff, the heads of the three services and the judiciary. The review concluded that the basic principles of the Armed Forces Compensation Scheme were correct. However, it found areas where further improvements needed to be made. The review findings have been well received. Ministers have agreed to implement all the recommendations. The Minister has today outlined the key areas regarding compensation and appeals.

However, there are other key recommendations that were also agreed to be taken forward, and I shall ask the Minister about two of them. First, there was a recommendation to set up a new expert medical body to advise on compensation for particular illnesses and injuries, such as hearing loss and mental illness. Will the Minister update us on the latest position regarding this new body? How many people will sit on it? Who will lead it? How will it operate and how extensive will its role be?

Secondly, the review recommended that there should be improvements in communication to service personnel and their families to promote a better understanding of how the scheme works, including entitlements, and how the calculations behind those entitlements are made. This should not only increase awareness but raise confidence among our armed service personnel that their welfare is important. I ask the noble Lord to assure us that this matter is also being attended to.