Energy Bill
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan
Lord O'Neill of Clackmannan
My Lords, I am at a wee bit of a loss here. My understanding was that markets operate on the basis that if there is a shortage and there is a demand, the price rises, and that plant which is presently idle will be brought into play.
The noble Lord, Lord Jenkin, made no reference to those plants which are either under construction or for which planning permission has been granted, and which may well be up and available, if not running, in the period between 2014 and 2018-19. I think that he is taking the long overdue siren noises from Ofgem of June a bit too seriously. Most people just said, “It’s typical of Ofgem”. It has taken so much longer to wake up to the fact that all this capacity is going out because of European directives and the like that there is going to be a problem. So his new-found urgency here I find somewhat unconvincing, because of his dependence on Ofgem's latest edict. I am not sure whether we need to wait four years, but I do not think that six months is necessary. It would be helpful if the Minister could give us some idea; it would be nice if we could get what was going to be in the SIs in the autumn, but not necessarily that. Perhaps she could give us some idea of the estimates and what the nuancing is of the information. As far as I can see, there is idle plant which, if the price was to rise, would become attractive to operate. Furthermore, there are a number of schemes which are either in the course of construction or would be accelerated once the process started. You do not build a power station in six months; you build it in about three and a half years. I suspect that that is the reason for the four-year timeline. So I am not sure that we need the amendment at all, but it would be helpful if the Minister could give us a clearer idea of the forecasts from DECC and others on the availability of plant, which would allay some of the anxieties.
Lord Jenkin of Roding
I remind the noble Lord of some of the figures that I gave at Second Reading. I have been provided by some figures by one of the companies that have mothballed plant; its national estimate is that there would be mothball capacity that could be brought back into production within three to six months of 2.6 gigawatts; between six to 12 months, a further 1.4 gigawatts; and 12 to 18 months, 2.6 gigawatts. That is not in the least bit inconsequential; these are important figures. If nobody is going to get any payment until 2018-19, that is how they will stay—mothballed—because they will not see what their payment is going to be.
Lord O'Neill of Clackmannan
If this plant were to become necessary, the price would rise—but the “if” involved in the “were” of this plant becoming necessary is still open to doubt. The noble Lord has taken the worst possible scenario and tried to build the case on it for something that will be extremely attractive and very convenient for the companies that have been lobbying him. It might suit their purposes but it might not suit everybody else’s—and it may not even be necessary in the first place. That is why I have doubts about this sort of stuff, which is almost built on the back of Daily Express scaremongering. We know that there is going to be a terrible winter next year, as there is going to be every year—and, we are told, there are going to be blackouts. Well, we have had terrible winters and, so far, we have not had any blackouts. It is getting worse because the generating capacity is diminishing, but it is not yet diminishing at the rate that would necessarily require us to do what the noble Lord asks us to do.
Energy Bill
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan
Lord Jenkin of Roding
My Lords, I am extremely grateful to those who have contributed to this very important debate. As I listened to the noble Lord, Lord O’Neill, voicing his warnings about this, my mind went back to when I instituted the privatisation of British Telecom in 1982. The chairman of BT was Sir George Jefferson, who sadly died earlier this year. He was constantly in and out of my office, very much supporting the privatisation. However, when I had to say very firmly that BT was not going to be allowed to take a majority position in any of the new mobile telephone networks that were coming up, Sir George was extremely angry. He felt that it was a very unfair restriction on BT. I said to him that he had a virtual monopoly of land telephony and perhaps he ought to concentrate on that, and that in the mean time the new mobile telephone industry should develop without BT having a monopoly position in it.
Years later, when I attended a farewell reception for Sir Christopher Gent, the retiring chairman of Vodafone, which by then was worth some £82 billion, somebody asked him, “To what do you attribute the huge success not only of the mobile telephone network but of your company in particular?”. He said, “That is very easy. It was one thing: the decision of the Secretary of State at the time that BT would not be allowed to compete”. I went up to him afterwards and said, “I don’t know if you are aware that it was me who took that decision”. He said, “Oh, that’s very interesting”. I said, “Where’s my dividend?”. Of course, no such dividend was forthcoming.
I do not think I need lectures from the noble Lord, Lord O’Neill, or anybody else about the importance of—
Lord Jenkin of Roding
Perhaps I might finish my sentence before I give way. I wish more people on the “Today” programme would say that to the interviewers. I find it absolutely intolerable that they start asking a second question in the middle of the interviewee’s answer to the first question.
Lord O'Neill of Clackmannan
The point that the noble Lord makes is a good one, but he has chosen the easy one, where there was a technological change that worked in favour of Vodafone and others. If he were to look at the behaviour of BT in relation to the spread of broadband, he would find a very different story. BT’s monopolistic bullying of the broadband industry by one means or another has meant that we have some of the slowest speeds in the industrialised world, and it is all down to the inadequacy of the regulatory system that the noble Lord allowed to be created.
Lord Jenkin of Roding
If I may say so, my regulatory system was RPI minus X. I had an interview with a very senior American economist who was one of the world’s experts on regulation. He said that RPI minus X was the best and simplest regulatory instrument that anybody had ever seen. I took some comfort from that. I have not been responsible for competition in the telecommunications industry since then, so I am not in a position to comment on what the noble Lord has said.
Coming back to this amendment, my noble friend Lord Deben is absolutely right: every capitalist wants to have a monopoly. It is the job of the competition authorities to ensure that competition exists, and in this country we have very well established competition laws through the Office of Fair Trading and so on. I will read my noble friend’s reply to the debate very carefully and consult those who have been advising me on this. What I want to see is a very clear duty on the Secretary of State to promote competition.
My noble friend said, “It is in the Bill already and we do not want to duplicate it”. I can tell her that those who have studied this Bill perhaps even more carefully than I have say that actually it is not. We are going to need to look again. I will look very carefully at what the noble Baroness has said and see whether we can come to some understanding on this between now and Report.
I am quite convinced that Ministers—I will not repeat the quotations; indeed, I have given most of them to Hansard already—want to see a more competitive industry. Ofgem wants to see a more competitive industry. At Second Reading, I quoted from its June press release entitled, Opening Up Electricity Market To Effective Competition. Those with whom I, Ministers and officials have been talking feel that there needs to be a duty on the Secretary of State very clearly to promote competition. That is what we are attempting to achieve. I will study my noble friend’s speech and see whether we need to come back to this on Report. In the mean time, I beg leave to withdraw the amendment.
Energy Bill
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan
Lord Jenkin of Roding
Perhaps I can help the noble Lord, Lord O’Neill. The point that has been put to me on behalf of the national grid is that it does not yet see what the change in the target would mean for their investment programme. I endorse very much my noble friend Lord Deben’s point that there is now an element of uncertainty. It is that which needs now to be resolved as quickly as possible. I am sure that they will respond firmly to the invitation which has been issued for discussions to take place. Certainly, I do not know and have not been told whether this means investment in different places for different communities. They do not yet know enough about it to be able to make that sort of decision.
Energy Bill
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan
Lord Jenkin of Roding
My Lords, I congratulate the noble Lord, Lord Whitty, on the comprehensiveness of his amendments. When we approached this Bill, I was rather under the impression that there had been so much thinking about the creation of the new independent body, the ONR, and so much discussion about it that allotting most of today’s session to considering it was perhaps a bit excessive. However, having studied his amendments—and no doubt there will be others who will wish to make points—I think that the discussion may well take us until 6 pm, although I hope not.
I approach this from a number of different standpoints. First, I think that I am the only Member of the Committee who took part in the debates on the Nuclear Installations Act 1965. That was a few months after I had been elected to the other place, but I have since reminded myself of the provisions of that Act, which are very comprehensive. They have been amended down the years since then—through the lovely system of LexisNexis, one can get a very good summary of what the Bill originally was and how it has changed with time. Therefore, to take issue with the noble Lord, Lord Whitty, I think that the main licensing provisions of the 1965 Act are still going to be in force and are not repeated in this Bill. It is assumed that the authority, the ONR, will have those licensing provisions. There is a substantial area where people will need to look back. That is the first thing.
Secondly, before I entered Parliament I was an employee of a large chemical company and one of the things that we did was to supply CO2 to the Magnox nuclear power stations to be used as a cooling material— I will refer to that later. I have also been one of those who over recent years have been pressing very hard for this change to the ONR to take place. The case that had been very firmly made to me was that remaining part of the Health and Safety Executive meant that inevitably inspectors on the nuclear regulation side were civil servants and thus bound by Civil Service terms and conditions. In fact, experienced inspectors are very valuable people, much sought after around the world. They have been though a long period of training and have a lot of experience. Sometimes people will say an inspector is not really fully qualified unless he has been doing the job for about 20 years—and that has been said to me by more than one person. Therefore, there was considerable pressure from this part of the HSE, the nuclear regulatory part, to separate. I heard those arguments and paid considerable attention to them. The noble Lord, Lord Oxburgh, may remember that when the Select Committee interviewed Dr Mike Weightman, I raised this point and he was very kind to acknowledge that some of us had indeed been pushing this case fairly hard.
That is how I approach the amendments tabled by the noble Lord, Lord Whitty. He makes some good points but I hope that he will forgive me if I point out that some of his amendments may indeed perhaps not quite be what he intended or envisaged. However, as I make these criticisms, no doubt he will have good answers. To take the amendments in the order in which they appear on the Marshalled List, the first with which I take issue is Amendment 38D. The noble Lord made quite a point about associated sites and of course he is quite right to refer to the issue—it is in Clause 57(1)(a)—but, as he readily acknowledged, his amendment may go deeper and wider than he perhaps intended.
Let me return to my previous point. The distillers company for which I worked produced CO2, originally as part of the process of fermentation but eventually as a chemical process, and supplied it to a large number of different industries, not least, of course, the drinks industry. It would be absurd to regard those distilleries and factories as anything to do with the nuclear industry. Of course, when the material is delivered to the nuclear power station it has to be of nuclear quality, which is, quite rightly, properly regulated—but it is not the site where it is made that is regulated but the material that is delivered. No doubt there are many other examples.
I have recently ceased to be honorary president of the Energy Industries Council, which represents something like 600 firms in the energy supply chain businesses, of which nuclear is clearly one. On the rare occasion I was asked to talk to them, I always made the point that they had to make sure that they were producing materials and products to nuclear standards. This was something that quite a number of the firms found quite difficult to do. Those standards are higher than most other engineering standards, particularly for pieces of equipment, but that does not mean to say that the sites where they are made become nuclear sites. I hope that my noble friend the Minister will feel that it would be quite wrong to expect the ONR to go around inspecting sites where no kind of nuclear hazard could conceivably exist.
On Amendment 38F, I agree with the noble Lord. I do not see why this should not be extended to air transport. There must be occasions when nuclear materials are transported by air, although probably not very many, and clearly that should be within the remit of the ONR. That seems to be a reasonable change, but I have criticisms of some of the other amendments.
Amendment 38N refers to,
“other relevant agencies with responsibilities in the nuclear field”.
It is my impression that the nuclear regulator has always been able to consult and go much further than just consulting, having very detailed arrangements for regulating the interaction between the various bodies. There are long and substantial memoranda of understanding that cover that sort of field. I have made it my business to get a copy of the current memorandum of understanding between the HSE, which was the body that was running what is to be the ONR under this Bill, and the Environment Agency. When I came to print it out, it was 14 pages and contained a number of very important statements. I will not begin to read them all, but the objectives of the memorandum are to,
“facilitate effective and consistent regulation by ensuring that … activities of EA and HSE in relation to nuclear licensed sites are consistent, coordinated and comprehensive … the possibility of conflicting requirements being placed on licensees, or others operating on nuclear sites (collectively referred to as ‘operators’ in this memorandum), is avoided … synergies are exploited and the appropriate balance of precautions is attained”,
and,
“duplication of activity is minimised”,
which is of course very important if you are trying to keep the costs down. Perhaps most important of all is that,
“public confidence in the regulatory system is maintained”.
I shall not read more than that, but the annexe to the memorandum goes into very considerable detail as to how it is to be done. Presumably these will all remain in force. They may have to be signed by different people because the organisations will be different. The one that I have in my hand was signed by the noble Baroness, Lady Young of Old Scone, when she was chairman of the Environment Agency, and by Timothy Walker, the then director-general of the Health and Safety Executive. If there are to be modifications in the memorandum, they will need to be signed by the current people. I hope that my noble friend may be able to address that.
Amendment 40N would not be right. It would risk all sorts of difficulties, duplication and so on. In particular, it would risk classifying a site as licensed before a nuclear site licence is granted. I heard what the noble Lord said about that, but of course there is the elaborate process of the generic design assessment. He referred to Hinkley Point C. That has been absolutely combed over by the existing nuclear regulator. It was a hugely important step forward when it finally gave approval of the design, but the noble Lord is right that there is not a site licence yet. That will be the last stage. To argue that all this should be taken into account without taking account of the whole GDA process seems a little unreal. Therefore, I say yes as regards air transport but I suspect that the other elements may not be quite what the noble Lord, Lord Whitty, intends. I hope that my noble friend may be able to take account of these representations.
Lord O'Neill of Clackmannan
I congratulate my colleague and noble friend on the rigour with which he has approached this area. It is the nature of probing amendments to make sure that what it says on the tin is what the Government are going to do. If we can get it right, we can avoid the kind of problems which I encountered many years ago as a constituency Member. I picked up the local newspaper to be told that the local authority rubbish tip near one of my villages was a nuclear dump. I then had a terrible job trying to find out who was responsible for the nuclear element within it. It transpired that it concerned a lecturer at Stirling University and that all we were really talking about was the lowest of low-level waste coming out of the radiology departments of the local hospitals. For about 20 minutes, it afforded one of the local hysterics an opportunity to parade his anxiety about all things nuclear. However, it also indicated that there is an awful lot of loose talk. Therefore, if at this stage we can make the issue of associated sites clear and explicit, and even if it is a somewhat tortuous process, as I think my noble friend has indicated, that will be important.
We should not lose sight of the fact that, at some stage or another, a lot of low-level waste is gathered together and taken to Drigg, where it is treated. As we say in Scotland, “Many a mickle maks a muckle”. You end up with a whole lot of little bits of radiological and nuclear waste being brought together on a site and being treated. Therefore, it is important that we differentiate between that which is a nuclear site and that which is not.
It is clear that throughout, for example, the generic design assessment process, which looked at the two new forms of reactors that we may well see in the UK, the Environment Agency walked step-by-step with the nuclear agency at the same time. As Lord Jenkins just said, it is important that we make sure that—
Lord Jenkin of Roding
Perhaps I may make one thing clear at the beginning. I have no ‘s’ on the end of my name. There is correspondence in the archive at Cambridge University between my great-grandfather and the great Lord Kelvin. My great-grandfather said to Lord Kelvin, “Mind you, when you take out the patent, you must not spell my name with an ‘s’”.
Energy Bill [HL]
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan(13 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Jenkin of Roding
I have words of comfort for the noble Baroness. I have on previous occasions said that I totally share her dismay at the complexity of the legislation, and I have arranged a meeting next week with the chairman and the chief parliamentary counsel of the Law Commission to discuss the whole process of consolidation, how the Law Commission approaches it, where the initiative lies and whether it considers that the Electricity Act and the Gas Act would be a case for consolidation. I am not just talking the talk; I am, I hope, walking the walk. I hope that Ministers and officials in the department will recognise that some of us are not going to let that matter rest.
I am very glad that the noble Baroness said that this is a probing amendment, because the issue is extremely simple. Section 48 of the 2008 Act gives the Government power to impose changes on a funded decommissioning programme after it has been done. It has, no doubt, been represented by the nuclear industry that it contains a considerable element of uncertainty about additional charges possibly being made after the original programme had been agreed or about changes being made to the timing of the payments. At the moment, the payments are intended to be spread over the life of a plant so that by the end of that time there will be a sufficient fund available to cover the decommissioning and waste treatment. It is absolutely right that that should not now fall on the taxpayer but is part of the cost of producing the electricity. Under that section, the Government have the power to impose a change. All this clause is doing, as I understand it, is requiring the Government to agree a change with the developer. It may well be possible for the Government to suggest there should be changes, but the developer has to agree. Given what we have been saying in earlier debates about the need to try to create certainty, I think this clause is entirely right. I am glad the noble Baroness decided to table merely a probing amendment because I think the clause should be allowed to stand in the interests of certainty for the nuclear industry.
Lord O'Neill of Clackmannan
My Lords, one thing that has struck me about this House is that although we often talk about scrutiny we rarely use the probing amendment, which is one of the regular tools of the discredited Standing Committee process in the House of Commons. It is often used there for time-wasting purposes as well. However, in today’s case it is useful when there is a certain degree—in fact, a large degree—of opacity in the wording of the Bill, for quite understandable reasons. You have to work your way through the network to try and get to the point.
On the substance of the issue, speaking as the chairman of the Nuclear Industry Association, we are quite relaxed about this. We think that there will always be something which we have not anticipated—God forbid that, in terms of nuclear power generation or waste management, it was of the order of any terribly serious or dreadful prospect. My real point is that we recognise that there can be unforeseen circumstances. The Government have, on occasion, to change step for whatever reason but should do so, as far as is reasonably possible, with the agreement and understanding of those who are going to be affected by that. At the moment, with the agreement which has been reached on waste management—in terms of both the funding of the Nuclear Decommissioning Authority and the costing programme for its long-term cost—the industry is, within reasonable bounds, happy on that issue. On that point, I hope that my noble friend is only probing and will withdraw.
Energy Bill [HL]
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan(13 years, 5 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord O'Neill of Clackmannan
I support this amendment, which I realise is probing. One of the major reasons why we have an inadequate housing stock in the United Kingdom is that the incoming Government of 1951, charged with the ambition of building 300,000 houses, sought to achieve that by reducing housing standards. That was the way in which Harold Macmillan, as Housing Minister, achieved his obligation. It is as a result of that we have so many substandard houses in comparison with our European counterparts. In that fantastic period in the 1950s and early 1960s, when hundreds of thousands of houses were built every year, properties were more often than not built to standards which were less than desirable in terms of what could have been achieved. They were not bad but they could have been a lot better, and if they had been we probably would not have half of the problems we have today. It is useful, however, to give the Government an opportunity to make quite clear that they are signed up and prepared to take the appropriate steps to achieve the 2016 target.
The kind of pragmatic and flexible approach suggested by the noble Lord, Lord Teverson, in respect of different forms of heating and the combination of different forms of accommodation, is an appropriate way in. We do not want to be overprescriptive, but there are areas where we have to be prescriptive—not only prescriptive but prescriptive in a fairly tight, legalistic way. These regulations tend to be a mixture of the consultative processes which are implicit in secondary legislation. They can afford that degree of flexibility.
As in this decade we address the challenges of climate change and the environment, in some respects we are parallel to the post-war reconstruction challenges which were being addressed in the 1950s. I would like to think that this Conservative-led Government will not make the kind of mistakes made by the Churchill Administration, under the responsibility of Harold Macmillan as Housing Minister, in the early 1950s. I would like to think the Government could clearly and explicitly embrace the desirable environmental objectives set out by the previous Government and which appear to be supported by the Liberal part of this coalition.
Lord Jenkin of Roding
I have listened to this debate with some sense of nostalgia. From 1961 to 1963 I was chairman of the housing committee for Hornsey Borough Council, later to become the London Borough of Haringey. This was a period even later than that referred to by the noble Lord, Lord O’Neill, and my clear recollection is of the overwhelming pressure to build more houses and flats. To digress for a second, we had the problem of a large number of tenants who were sitting in houses which were badly needed for social housing. I think I was the first housing chairman to propose we should offer them a sum and a mortgage to move elsewhere, within 10 miles of the borough, to get some vacancies, clear some slums and build more houses. To imagine that at that stage we should have been building more energy-efficient—and therefore fewer—houses is unrealistic. It is easy to be wise after the event. Others may have longer memories than I do, but having been a housing chairman at that time, I know that was the overwhelming pressure.
I turn to the amendment. Of course one must broadly support the intention but, even with the caveats that my noble friend Lord Teverson has included in his amendment, it verges on the unrealistic. Indeed, recent research by one of our leading professional bodies, Knight Frank, has said that to make sure that all the new houses being built by 2016 are carbon neutral is, in its words, “looking increasingly unrealistic”. I have some hesitation about writing this into legislation when extremely well informed people are saying from the outset that, however good the intention, it looks increasingly unrealistic.
Next, there is the question of cost. I am told that to build a carbon-neutral domestic dwelling now—it may well be that the differential will narrow in the years ahead—will add £30,000 to £40,000 on to every unit produced. If housing budgets are constrained, as they inevitably are in our situation at the moment, that means that there will be fewer houses, because with any sum of money fewer houses will be able to be built. In those circumstances, that too might be an undesirable consequence of trying to pursue and put into the Bill an unrealistic environmental objective.
My third anxiety about my noble friend’s new clause lies in subsection (5). He has said that it is an advantage that he is not being prescriptive but leaving the determination of what is a carbon-neutral construction to the Secretary of State, following consultation. I am told that the question of what is a zero-carbon house is highly technical and that there is as yet no agreement between the various bodies involved. I suspect that this includes the Minister’s department and CLG, the other housing department. A conclusion has not yet been reached on this. The question of indoor air quality is also poorly understood, and it is essential on all these issues that time is allowed to ensure that we have sensible definitions if we are going to pursue these objectives.
To have an undeliverable target and a completely uncertain definition of what you are trying to achieve is not appropriate for inclusion in legislation. As my noble friend indicated, what he is trying to get is in the Bill, but it is not very sensible to put it in a Bill when there is such a high degree of uncertainty about it. It may be possible, perhaps at a later stage of the Bill, to frame something that really is an aspiration and something to be aimed for, but without putting in firm dates or such firm details as saying that it has to be zero carbon.
I understand that this is desirable and that over the years ahead more and more carbon-neutral buildings will have to be built; that is part of the process of fighting climate change, to which we are all firmly committed. I say to my noble friend on the Front Bench, though, that I hesitate to accept my noble friend’s suggestion that this new clause should be included in the Bill.
Lord O'Neill of Clackmannan
May I ask the noble Lord about a simple point? Britain is not the only country that is building houses, or has been building houses since the 1950s. One of the great sadnesses and shames of being British is that when one travels, particularly in northern Europe, one sees houses of a far higher standard that were built in the days when Haringey Council could not afford to build decent houses, because of the scale of the challenge. It seems that in these other countries, such work was done without undue economic penalty. It seems even now that those countries are meeting that challenge with a great deal more alacrity and success than we are. In Finnish and Scandinavian houses generally, where conditions are more extreme, the quality of housing is vastly superior.
Lord Jenkin of Roding
I yield to the noble Lord and any others, such as my noble friend Lord Deben. I am not as familiar as they are with the quality of the houses in Scandinavia. All I would point out is that winters in the Scandinavian countries and in many parts of northern Europe tend to be very much harsher than they have been over the decades and centuries in the United Kingdom. We get the benefit of the Gulf Stream, and so on. Last winter and the winter before were widely seen as exceptions to the trend. If you are not facing the same pressures from the climate as those faced by other countries which regularly have much harsher winters, I can well understand that perhaps we have been a bit slower in adopting the same standards as they have. All I am saying is that I do not think it is a realistic target that all new houses built after 2016 should be carbon neutral. It is certainly not realistic when no one seems able to agree—although they have been trying for quite a long time—what is actually a carbon-neutral house. I sound these notes not because I have any doubt about the bona fides and intention of my noble friend Lord Teverson, but because of the practicality.
Energy Bill [HL]
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan(13 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord O'Neill of Clackmannan
My Lords, will the noble Lord bear in mind that these same electricity and gas companies have the postal codes of their consumers, and that it does not take a computer genius to link the postal districts with areas of great disadvantage and social vulnerability? It is quite clear that there are a number of people in second homes who find it very convenient for understandable reasons to have prepayment meters. However, the argument advanced by the energy companies that they do not really know who the poorest people are, is self-serving, because they make a lot of money out of charging a higher rate for these meters. It has been one of the great sources of antagonism for many of us against the power companies, that they have disadvantaged people who are already vulnerable. The ones who have second homes we can understand; but the correlation between the postal codes of poor neighbourhoods and the fact they are on prepayment meters is simple to establish, but they never want to do that because they hide behind so-called Freedom of Information provisions, which I do not think stand up to close scrutiny when they are set against the disadvantage of the people exploited by this form of charging, in many instances.
Lord Jenkin of Roding
The noble Lord is perfectly entitled to make his point, but it does not refer to the point I was making. My point was that, yes, prepayment meters are used by many poor households and of course the gas and electricity companies have a very clear idea of who they are. Under the previous arrangements, they had to get 40 per cent of their carbon dioxide savings from people in that priority group, so they had to find out who they were, however difficult it was. That is not the point that I was making; my only point was that the presence of a prepayment meter in a dwelling is not of itself a good surrogate for who is fuel-poor. As the noble Lord himself has recognised, there may be many people with second homes; there may be people doing short-term lets who prefer to put in a prepayment meter, but whose tenants, the bill payer, may be miles from fuel-poor, but that is one of the ways that a landlord can make sure he is not landed with a bill at the end of the day. It is just not accurate to say that all prepayment meter households are inevitably fuel-poor or poor. They are not, and I think it is very important to recognise that fact and not take refuge in abusing the companies, which the noble Lord is so fond of doing.
Energy Bill [HL]
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan(13 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord O'Neill of Clackmannan
I followed the noble Baroness in the Second Reading debate and was somewhat surprised to agree with her on a number of issues. I have one question for her. As a consequence of this amendment—were it to be accepted—we would have not 52 but 53 statutory instruments flowing from the Bill. Paradoxically, one of the great critics of the ill defined character of this legislation will also add to it. Frankly, on this occasion, it is justified and I am happy to support the noble Baroness. As a general rule, however, I do not think that either of us—or many of us in this Committee—want to see any more orders being left to the rather inadequate, consultative and therefore scrutinising, approach that both Houses have. I hope that it will be a negative resolution in both Houses.
Lord Jenkin of Roding
Is the noble Lord imagining that these will all be separate orders? Is it not open to the Government to link a whole lot of these together in a single set of regulations or a single order?
Lord O'Neill of Clackmannan
The noble Lord is putting ideas in the Whips’ and party managers’ heads. We would like to see each of these being given proper weight and being discussed and debated as appropriate. If it takes 53 one-and-a-half hour sessions, so be it. That is the price that we have to pay for the proper scrutiny of legislation that could have been better drafted in the first instance.
Revised Draft National Policy Statement for Nuclear Power Generation, volumes I and II (EN-6)
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan(13 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Lord Jenkin of Roding
My Lords, I shall try to be bit shorter than I was on Tuesday, so as not to incur the wrath of the government Whip. I have checked the rules since then; yes, there is guidance, but those who took part in the debates last year will remember that I was rather longer, entirely without protest from anybody. However, in order to be shorter, I want to make only one substantive point to my noble friend on the Front Bench: it is on the question of sites, which other speakers have already addressed.
I return to the point, hinted at by the noble Lord, Lord Teverson, as to what happens after 2025. These two things are very much related. Of course, I entirely understand—and this has been said very clearly, both in the papers and by the Minister in another place in the debate in December—that the eight designated sites, which are listed in EN-6, volume 1, are intended to be enough for up to 2025. I understand why Braystones and Kirksanton have been excluded from this first tranche. Although I think there were going to be some representations on that from one of the potential developers, they have not materialised. But I have to say that I remain very disappointed about the exclusion of Dungeness. This raises two separate but related issues—the case for approving Dungeness in the first place and, if it is not approved, what the implications are for the post-2025 investment. I am very pleased to see the noble Lord, Lord O’Neill, in his place. As the chairman of the Nuclear Industry Association, he will know that that is one question that it has asked. Additional sites may need to be found for development beyond 2025 in order to meet the target to reduce UK carbon emissions by 80 per cent by 2050. Those are two aspects of the question.
I shall not argue the case extensively for Dungeness, as it was argued at considerable length in Committee and on the Floor of the House on 11 and 25 March last year. Without trying the patience of the Committee, I should like to rehearse briefly the arguments in favour and against. In favour is the argument that you have an existing nuclear site there, with Dungeness B still operating. It has excellent connections to the grid, when some of the other sites, particularly Sellafield, may need to have considerable investment. It is very strongly backed by the local community, by Shepway council and the other local authorities in the area. The noble Lord, Lord Teverson, acknowledged that point. There is a need for more baseload generating capacity in the southern half of the country to reduce the amount of transmission from the north. If it were to be included in the list, and applications could be made, it would be one of the first to be up and running. Those are quite powerful cases. Against this, one has the environmental argument. It is a unique coastal system with intrinsically important shingle sites. There are several internationally designated sites, including a special area of conservation and a special protection area. They are both part of the Natura 2000 network. It is also a proposed Ramsar site. I do not for one moment deny that those are powerful cases.
The case for Dungeness has been argued several times in another place in the context of these national policy statements by my honourable friend Damian Collins, the Member of Parliament for Folkestone and Hythe. His latest intervention was in the debates on the statements on 1 December, in which he stressed the role of Natural England and referred to its belief that the development would somehow be an unavoidable and irreversible interference in the vegetated shingle. In that debate, my honourable friend the Minister, Charles Hendry, said—and this is the important point:
“The consultation is continuing, and, if additional evidence that changes that conclusion”—
the conclusion that Dungeness should not be in the list—
“emerges in the course of the meeting that I will have with my hon. Friend and his local authority's representatives, or in written submissions, we will take it into account”.—[Official Report, Commons, 1/12/10; col. 927.]
I read that as saying that to some extent this is an ongoing issue and cannot at this stage be definitively put to rest. I asked my honourable friend Damian Collins where the discussions had got to. His answer was that he had had a meeting with Mr Hendry, with officials and others present. He sent me a note, stating:
“Charles Hendry has agreed to contact Natural England to ask them for guidance on what evidence they would need to see to help alleviate their concerns about the damage to the shingle habitats at Dungeness. So rather than them just saying no, we are asking for their help in establishing an agenda that might help us take Dungeness forward. This would be the basis for us commissioning some further environmental research”.
That is clearly ongoing business.
The other night, I had a word with the noble Lord, Lord Smith of Finsbury, formerly involved with the Environment Agency. He advised me to get in touch with it, which I have done over the last couple of days. Only this morning, it sent me a really useful report that describes the history of the management of those shingle beaches at Dungeness. It goes back over decades; this is a long-standing problem, which of course did not prevent the building of the first and second nuclear power stations there. Because of the constant movement as a result of the tides, shingle has regularly been borrowed from the eastern end of the beach and placed on beach locations to the west where the erosion losses are most acute. That has been a regular process involving, obviously, thousands of tons of shingle, shifted from one end of the beach to the other. That work has had to be paid for by the nuclear power station—initially by British Energy, and now by Électricité de France, EDF, which runs Dungeness B. It is obligatory under the terms of the operating lease.
We then come to the point where the special area of conservation was designated, and it turned out that what one might call the “borrow pit”—the part of the beach from which the shingle came, which represents only about 1 per cent of the SAC area—was protected. The conclusion was drawn that the existing system had to cease. I quote from the report that I had only this morning:
“Last year, with our agreement, EDF commissioned Halcrow (consultants) to undertake detailed mapping and data gathering on shingle movement in the locality. The aim was to establish whether and where shingle could be extracted without detrimental impact on designated habitats. Halcrow identified two options and have since worked with NE”—
Natural England—
“to address their concerns with a view to developing a proposal that can form the basis of a viable planning application.
This is work-in-progress but we”—
the Environment Agency—
“are hopeful that such a proposal, and with it a viable planning application to KCC”—
Kent County Council—
“may be in place this spring. Following appropriate scrutiny by the planning authority, planning consent could be granted by summer, when we would start recycling shingle again”.
By definition, that would clearly have the approval of Natural England; that is the context in which the whole negotiation is continuing.
That is further evidence that this is all work in progress, which is what my honourable friend Damian Collins suggested in another place in December. Therefore, I contend that it is premature to rule out Dungeness as one of the designated sites for a new nuclear power station. I hope that my noble friend will be able to comment on what, for me, is new evidence about what is going on there in an attempt to deal with this very important shingle site, with the erosion of the coastline and with safeguarding the habitats.
That leads to the second issue about the period beyond 2025. I have referred to this report—
Lord O'Neill of Clackmannan
Before the noble Lord goes any further, I was not clear about what he said. Was he saying that the shingle arrangements which are now being examined by the Environment Agency in relation to a possible planning application relate to a planning application for the operation of the existing power station or a subsequent one? He did not make it clear whether it was simply the existing power station or one that might come along if this document were changed.
Lord Jenkin of Roding
I am afraid that I cannot answer the noble Lord’s question for the very simple reason that, when I tried to ring the telephone number given to me by the Environment Agency, it turned out to be a wrong number. The question was perfectly clear. They knew exactly what my inquiry was about because I had made it very clear that it was in the context of a potential new power station at Dungeness. This whole issue is being examined. First, there were my honourable friend’s discussions with Charles Hendry concerning whether Natural England was going to be approached to see what could be done, and here we have the Environment Agency, which is responsible for the management of the beaches, saying that this work was going on. That is the position and in these circumstances it seems premature to rule out this site.
I can deal with the second issue more briefly—that is, the period beyond 2025. On most of the illustrated pathways, the implication of the 2050 pathways studies is that there will be more nuclear power after 2025. Indeed, the chart on page 43 of the paper shows that the option with the lowest nuclear investment is the one with the highest cost—that is, it is the most expensive option. This ties up with what my honourable friend Charles Hendry said in reply to another honourable Member in another place who had referred to the 16-gigawatt of new nuclear by 2025. Mr Hendry went on to say:
“That is not necessarily the end of the ambition, but it looks like what is achievable and realisable over those 15 years. There is no doubt about the Government’s ambition in terms of new nuclear”.—[Official Report, Commons, 1/12/10; col. 900.]
In other words, the eight designated nuclear sites—mentioned by my noble friend this afternoon—are seen to be enough for development until 2025. However, what happens after that? Of course, as is indicated, there may be more than one power station at some of the designated sites. Indeed, as we already know because it has been announced, EDF, which is developing both Hinkley Point and Sizewell, is envisaging two reactors at each of those locations. Yet, at paragraph A.4.3 of volume 2 of document EN-6 there is a very stark statement:
“The Government does not believe that there are any alternative sites”.
If that means up to 2025, it would be consistent with the rest of the document, but if the 2050 pathways study is any guide, will there not have to be more sites after 2025? Is that not a necessary implication of Mr Hendry’s statement that I quoted a few moments ago?
There will be an increasing need for nuclear power if we are to achieve our environmental objectives by 2050. Will that not inevitably require more nuclear sites and, if so, how are they to be designated? My noble friend said quite clearly that it is open to any developer who wishes to develop another site to make an application to the IPC or its successor, and the decision would be made then by the Secretary of State—as will happen of course under the new Localism Bill. There is therefore a path ahead, but the reality is that if the department has said from the beginning that a site is not suitable for development, I doubt that any company would risk its resources on embarking on what is a very expensive process. I am told that it requires 20,000 sheets of paper to put in an application under the planning laws and the guidance issued by the IPC. It is an expensive operation. It seems to me in these circumstances that one has to have regard to the fact that there will be more nuclear sites and that it may therefore be unwise to rule out Dungeness at this early stage. I think that I have made quite a strong case. I hope that my noble friend the Minister may be able to offer some hope to the inhabitants of Shepway, who are desperate to see this nuclear industry continue in their area, of getting the further station that they look for.
Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010
Debate between Lord Jenkin of Roding and Lord O'Neill of Clackmannan(13 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text
Lord O'Neill of Clackmannan
I start by declaring an interest as chairman of the Nuclear Industry Association. I do so for a number of reasons, not least because the NIA undertook the drafting of the justification report on which these statutory instruments are based. It was a lengthy process. Indeed, some of us thought that we would never see the end of it—first, in getting the reports right and, secondly, in terms of ministerial overview and the preparation of the SIs which we are debating today. It is fair to say that this is of critical importance to the realisation of the new nuclear build programme.
There are various elements. One could say that the building blocks, or the foundations, involve more than just the justification process in respect of the Areva and Westinghouse reactors. These reactors will also be subject to the rigorous generic design assessment programme being undertaken by the health and safety regulator and the Environment Agency. But these are of a different order, being almost exclusively technical in character and they do not concern us today. We have to satisfy ourselves and the country that the kit we are going to use is of a quality that can allay the fears of people in the UK. We have to recognise that there is not unanimity on the issue of nuclear power. There is certainly now, I think, what could be called a working majority and the consensus is probably a wee bit more robust than some of the elements within the coalition, but in order to reinforce and develop this consensus, we have to deal with the broad issue of the environmental concerns of the EU.
We have ceded to Brussels—probably correctly—a number of responsibilities in relation to environmental matters. I may be wrong, but I think that, apart from the reactor at one of London’s universities, the nearest one to London is in France, so it is only appropriate that we are subject to rather broad environmental legislation which covers the continent and not just this island.
In considering the process of preparing the report it would be wrong of me not to pay tribute to the work of Peter Haslam on behalf of the Nuclear Industry Association and its members. He had the responsibility of herding the cats into the bag and it was not always easy getting the various players around the table, but consensus was established, agreement was reached, the document was prepared and it is in no small way due to the efforts of Peter Haslam.
We have to be careful, not only about the issue of building a consensus of tolerance of and support for nuclear power, but about taking account of the fact that there are those who are quite happy—with other people’s money, usually—to seek access to the courts to have judicial review and things like that. It may well be that this will be the subject of a judicial review. I hope not and, indeed, I think that one way to ensure public confidence is that when those who are against nuclear power—they are perfectly entitled to be so— take the advice of their learned friends, they get the message that this document stands up to close scrutiny. The Minister and many of us across the House feel that to have got to this stage and to have these statutory instruments being discussed is evidence of our confidence in the robustness of the documents and, as time will go on, of the robustness of the case for nuclear power.
It is fair to say that issues relating to waste and decommissioning are worries. There is sometimes a wilful ignorance of the fact that other countries have accommodated waste, are treating it and dealing with it in a way which has, by and large, allayed public anxieties within those countries. We can look to Finland and Sweden. In Sweden, there has always been an anxiety about nuclear power, but there has not been the concern about storage, because Sweden has got on with the job. The funding of decommissioning and the treatment of waste and its storage are paramount and people have to be reassured that that part of it that has been created by private industry will be paid for by private industry. I make that distinction at this point because a lot of the waste that we have was created by nationalised industries and therefore is the responsibility of government. That part of the deal is not a subsidy but is the public purse meeting its historical responsibilities.
My second point is that not all of the waste is civil in character. It is waste that has come about as a result of the various forms of nuclear deterrent we have had. That again is a responsibility of the state. That is not a subsidy. It may well be that in putting together the three elements—the privatised waste, if I can call it that, the nationalised waste and the military waste—we create economies of scale that make the job that bit easier because the volumes will be such that critical mass will be created and we will be able to do it more cheaply, but that is not to suggest that we are talking about subsidies of one against the other.
It is important that these statutory instruments are dealt with today and that they get the support of the House. The industry can stand up to the challenge, “Well, they would say that, wouldn’t they?”. It does not want to be an unsafe industry. That is one argument, but the other argument, which is far more compelling, is that if these private companies do not get it right, it will perhaps cost people their lives, but it will certainly cost their shareholders a hell of a lot of money. Therefore, we realise the significance of the investments, the dangers of the materials that are being used and the problems that could be created if the reactors are not satisfactory. All these issues are being considered. Once we have this element out of the way, get the generic design assessment process completed and eventually get the planning applications going to the IPC in whatever form it finally emerges, we will be in a position to start building the nuclear power stations.
At the end of the day, even if we build no more nuclear power stations in this country, we will still have to decommission the existing facilities and handle the waste, so the three statutory instruments are relevant this evening. It is important that they are given the best support that the House can give them. I do not anticipate there being a vote as that is not our custom.
I have a commitment this evening so I have to leave the House and will not be here for the wind-ups. No discourtesy is intended. I was going to send the Minister a letter, but I thought that since there are not many people here I could just say it entre nous, as it were. It is important for the industry that we get this cleared out of the way. It is one of the important building blocks. It has been not tiresome, but time-consuming, and it is a necessity that no one would shirk from recognising has been central to the development of the nuclear industry and its regeneration in this country.
Lord Jenkin of Roding
My Lords, I add my voice in support of these regulations. The noble Lord, Lord O’Neill of Clackmannan, and I were fortunate to attend a briefing this morning by one of the potential investors that would be building these nuclear power stations. One word came out of that. The noble Lord used it; it is “confidence”. He was talking about the billions of pounds that will be invested in the next generation of nuclear power stations. The investors will have to have confidence at every stage that this is going to go ahead and be successful.
We are discussing these regulations and the order. The whole process of justification has been very elaborate. I have here the justification report on one of the two designs of reactor. This has been a formidable step. The fact that the Secretary of State has now accepted that the justification process has been properly completed and that we now have these statutory instruments is one further step in the confidence of the industry.
This is not the last word: the industries have to continue to get further consents, not least the licensing of the designs through the generic design assessment process. We heard high praise this morning of the work of the Nuclear Installations Inspectorate in getting to this stage. There seems to be confidence that this will happen by the due date of July next year. That has to happen, but I say nothing about planning—we are not talking about planning tonight, and that is another stage to be got through.
The industry has been looking for a number of steps to generate confidence. The Secretary of State’s statement last month was a major step along the way. There was no question about that: it made an extremely favourable impression on the industry and its potential investors and the supply chain as well.
Last week I asked a Question about the future of the Nuclear Installations Inspectorate and I raised with the Minister who was representing the Department for Work and Pensions—he is responsible for the Health and Safety Executive, and the NII comes under the HSE—that we are still waiting for the decision about the reorganisation and, I hope, the setting up, through a legislative reform order, of a new statutory corporation to take over the functions of the NII. I do not know whether my noble friend can say anything more about that. It is something to which great importance is being attached by the industry, particularly because of the need for the NII to be able to recruit the people with the very scarce experience and skills against a background of a global nuclear renaissance. These people are much in demand and this process, which has been under discussion for some time, is seen by the industry as another important step which, if and when it is achieved, will continue to generate confidence. I hope my noble friend will be able to say something about that, although the actual process—I entirely accept this—is not for his department but for the Department for Work and Pensions. If he can say something that would help this process of confidence, to which I have referred, I would be extremely grateful.
Like the noble Lord, Lord O’Neill, I too have an engagement. I hope I can stay until the end, but I offer my apologies to the House if I cannot.