Energy Bill
Debate between Lord Kerr of Kinlochard and Baroness Verma
Lord Kerr of Kinlochard
Before the noble Baroness sits down, will she explain again why she rejected Amendment 55AFB in the name of the noble Viscount, Lord Hanworth, which would have inserted in government Amendment 55AF a reference to current market prices? I find my entry in the Register of Interests extremely misleading because it should imply competence to deal with this Bill, whereas I find it extremely hard to penetrate. However, I would have thought that over time the PPA must bear some relation to market prices. It cannot be set for all time, surely. The Minister seemed to be saying that it was important to give the certainty of a fixed price. That would mean a variable degree of subsidy, depending on what was happening to the actual price in the market.
I also have some difficulty with Amendment 55AB, introduced so impressively by the noble Lord, Lord Roper. I find it difficult to get away completely from the idea of efficiency being a criterion as well as independence. All the emphasis on the ability to borrow in the markets or from the banks and thus to have the certainty of a demonstrably viable price seems to take us far away from the market and questions of efficiency, although I am all for encouraging independent generators. However, the Minister’s rejection of Amendment 55AFB really puzzles me. Surely there must be some relationship with current prices in the market.
Baroness Verma
My Lords, I will respond to the noble Lord, Lord Kerr, on Amendment 55AFB in a moment but, first, I will reply to some of the other questions that have been posed.
I reassure noble Lords that we have had a reasonably positive response to our amendment from stakeholders, including RUK, RES and the Renewable Energy Association, although I recognise that there is a lot more work to be done. We will be working very hard with the industry and other stakeholders to make sure that we have a bankable solution. The noble Baroness, Lady Liddell, asked what I would be doing during the summer, and this will be one of my tasks.
My noble friend Lord Deben was absolutely right when he said that we need to be absolutely sure that we are able to explain our intent clearly. I hope that I will be able to reassure him that I will continue to work before Report to ensure that our proposals are understandable and available to the market. Like all noble Lords, I feel that this is an incredibly complex and complicated area, so it is absolutely right that we are able to explain ourselves very clearly.
All noble Lords said that it has taken us a long time to get to where we are. However, it is a complex issue. We launched a call for evidence last July regarding the introduction of backstop powers in the Bill in November, and we have brought forward amendments. We want to work very closely with the industry to develop further proposals and we will be consulting in the autumn. However, in all this we need to make sure that the independent operators feel that they have a large stakeholding and that they are being responded to.
The noble Lord, Lord Cameron, asked why we do not keep GPAM in reserve as the NFPA already exists and has proven to work. The NFPA is not suitable for GPAM. The nature and scale of projects under GPAM are very different and would need a very different type of action, so there would not be a natural transfer across.
In response to the intervention of the noble Lord, Lord Kerr, concerning Amendment 55AFB, the PPA price would be set at a fixed discount to the market price, but the discount itself would not be set by reference to the current market. Does that make sense?
Baroness Verma
Did it not make sense? Perhaps I will get a little more inspiration while I finish reading my notes.
The noble Baroness asked whether Ofgem or some other body would keep the market under review. Yes, Ofgem will use existing powers to review it so as to make sure that it is working.
Finally, the noble Baroness, Lady Worthington, referred to the green growth figures. We are really pleased to see that they are growing, given the drop-off in the economy. I know that she and I and other noble Lords agree that we need to trumpet it at every opportunity. I hope that I do, because I think it is absolutely excellent news and one of the core strands of the department is the green growth agenda, which we are trying to build on. There are 1 million plus jobs supported by the green economy. That is on a par with financial services, and we have enormous scope to develop that. I very much agree with the noble Baroness, Lady Worthington, on that.
European Union Bill
Debate between Lord Kerr of Kinlochard and Baroness Verma(13 years, 8 months ago)
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Lord Kerr of Kinlochard
My Lords, is it an ineluctable law of coalition government that the Wallaces get all the ghastly jobs? I think we all greatly admired the tact and skill of the noble and learned Lord, Lord Wallace of Tankerness, in extremely difficult circumstances on another Bill, but as I listen to this debate—the score so far is one supporter, two convinced that it does not go far enough and 22 critics, some of them very fundamental, of the Bill—I begin to think that the noble Lord, Lord Wallace of Saltaire, has a more difficult task on his hands. I have the greatest respect for the noble Lord, Lord Wallace. I have learnt a great deal from him down the years. I know what he thinks about the European Union, and I know how difficult is the situation he finds himself in now. He has my sympathy.
Let me say straightaway that I have absolutely no quarrel with Part 2 or Schedule 2. Part 1 is a little more complicated. I find the referendum requirements absurd in conception and damaging in effect. As for Part 3, or rather Clause 18, I think it is certainly spurious and possibly sinister. The Bill is, of course, also very badly drafted. What has happened to Foreign Office drafting? Who could have drafted Clause 18? Nobody in the Foreign Office, I am quite sure. It must have come down from a great political height. The Bill is incoherent. You cannot assert parliamentary sovereignty in Part 3 and demolish it in Part 1, condemning it to a death by a thousand cuts. It does not make sense. Clause 18, which appears to be declaratory, asserts the sovereignty of Parliament. Directly applicable EU laws apply directly to us because Parliament passed the 1972 Act. I agree. If Parliament repeals the 1972 Act, they would no longer apply to us because we would leave the EU using the new procedure set out in Article 50 TEU and the noble Lord, Lord Stoddart of Swindon, could go home a happy man. I agree with that too. Parliament decides, because Parliament is sovereign. However, in Part 1 there is this enormous list of provisions where Parliament does not decide where a referendum requirement is introduced.
The noble Lord, Lord Davies of Stamford, entertained us with some parts of Schedule 1. The one that most puzzles me is:
“Article 346(2) (changes to list of military products exempt from internal market provisions)”.
It is not the substance of the list that we would go to the nation about, it is whether the procedures for deciding the list should be changed. I know what that is about. The internal market competition rules do not apply to certain categories of defence goods, because some countries with inefficient defence industries wish to preserve them, and we wish therefore to have a protectionist situation applying to the goods on the list. The list is decided by unanimity, so it is quite a long list, because everybody who has a tinpot little defence industry that makes something which it would like to buy for its own forces makes sure that the goods in question are there on the list.
We happen to have the most efficient defence industry in Europe. It would be strongly in the UK’s interest to have the procedure for deciding on that list moved to qualified majority. The Government say that they will make sure that that does not happen in this Parliament; and in the next Parliament, the Government say, it could happen, but only if there was a referendum vote in favour of it happening. I do not understand this.
Let us remember that these are mandatory referenda, not advisory referenda. However obscure the issue, however low the turnout, however keen the Government are on the measure, however strong the support for it in Parliament—because, by definition, Parliament will have approved it and the Government will have approved it; they will have signed up to it and the whole European Union will want to do it—but however much it is in our interest, if on a turnout of 20 per cent it is 11 noes and nine yeses, that is it, it does not happen. I do not understand this. It may be, as a minimum, that we need to think about the provision that this House voted for by a large majority proposed by the noble Lord, Lord Rooker, in another context, when we were dealing with another Wallace, almost as distinguished as the one we face tonight.
I am not in favour of mandatory referenda. Actually, I am not in favour of referenda—I will be honest—but I think that mandatory referenda are particularly alarming. The 1975 referendum was not a mandatory referendum, it was an advisory referendum. The then Leader of the House of Commons told the House that it would be,
“wholly consistent with parliamentary sovereignty. The Government will be bound by its result, but Parliament, of course, cannot be bound”.—[Official Report, Commons, 11/3/1975; col. 292.]
That was a Labour Government. From the opposition Front Bench, Mrs Thatcher, in my view totally correctly, said that, “If it was binding, parliamentary sovereignty would be infringed”. Exactly. So what are we doing now?
A second argument about how this Bill would reduce parliamentary sovereignty, has already been powerfully put by the noble Lords, Lord Richard and Lord Taverne. The idea of trying to bind future Parliaments—this whole exercise is irrelevant to this Parliament because the Government have said that they will not agree to anything in Brussels and, therefore, the referendums will not happen during the term of this Government—seems to me to be clean contrary to a fundamental principle of parliamentary sovereignty. So I do not much like Part 1 and Schedule 1.
I should explain why I find Part 3 and Clause 18 spurious and possibly sinister. At the beginning, I did not know why Clause 18 was there. Cui bono? Who wants it? I still do not know. Having read the debates in the House of Commons, it is clear that no one there liked it. Mr William Cash hated it. The House of Commons Scrutiny Committee shares our puzzlement. It concluded that the clause is a,
“reaffirmation of the role of a sovereign Parliament in a dualist state (that is, a state in which external agreements are not self-enacting in domestic law). This principle is neither controversial nor in danger of erosion by the courts; and ‘did not need declaring in statute’”.
I raised that point with the Minister.
So why is it in the Bill? At paragraph 115, the Explanatory Notes assert:
“This clause has been included … to address concerns that the doctrine of Parliamentary sovereignty may in the future be eroded by the courts”.
I have followed EU matters reasonably closely for 25 years. I sit on the Law and Institution Sub-Committee, which was chaired by the noble and learned Lord, Lord Mance, and is now chaired by the noble Lord, Lord Bowness, who I see in his place. They are both powerful, legal experts. Never in 25 years have I come across these concerns. On the streets of Blackburn and Burnley, are they really worrying much about the 2002 argument in the metric martyrs case—which failed in the High Court? Would putting what we all know to be the case on a statutory basis deal with the problem of the disconnect between Europe and British public opinion, about which the Minister spoke eloquently at the start of our debate? I do not honestly think so.
We know that these arguments are spurious. We know that Clause 18 is a tombstone on the grave of the sovereignty Bill, a casualty of the coalition negotiations and agreement. Presumably, Ministers told officials to go off and find something about sovereignty that they could stick somewhere else. Here we have something about sovereignty. I can see that we are required to legislate on matters on which the coalition reached agreement, but I do not see why we have to fill the statute book with tombstones over matters on which the coalition did not agree, particularly when they are nonsense.
If the courts were to find that Parliament is not sovereign, no Act of Parliament could reverse that. If Clause 18 is intended to provide reassurance to the concerned people in the country, that seems to me to be unnecessary because there is no visible concern and because the concern would be absurd. And anyone with concerns about the 2002 case would be seriously misled if he thought that this Bill could set them to rest.
The admirable report from the Constitution Committee, which has been referred to by others, reminds us at paragraph 54 that,
“the idea of such a declaratory sovereignty clause is not new. A similar proposal was in fact made during the passage of the European Communities Act 1972. The then Government opposed the idea and the proposed clause was rejected”.
The then Solicitor-General, now the noble and learned Lord, Lord Howe of Aberavon, who spoke so eloquently earlier in the debate,
“characterised such a declaration as ‘futile … and really a hollow sham ... The position is that the ultimate supremacy of Parliament will not be affected, and it will not be affected because it cannot be affected’”.
I am extremely sorry for the noble Lord, Lord Wallace of Saltaire. I support all Wallaces because I am a Scotsman. I like William Wallace the First who came to a sticky end. I hope the same fate does not await the noble Lord.
That is my argument about spuriousness, but I also think Clause 18 is potentially sinister. I am not a lawyer and perhaps I am being naive, but what other purpose could this clause have? Three elements create a suspicion in my mind. The first is the language of the clause, to which I have already referred. It is curiously convoluted and tautological. Why does it say that it is,
“only by virtue of an Act of Parliament that directly applicable or directly effective EU law”,
has force in this country? Is that “an” specific, or is it generic? It appears to refer to the 1972 Act, which is not controversial, but could it be construed as also referring to other past or possibly future Acts? Is it a dog whistle, a message saying “We want to be able to pick and choose. We want to dine a la carte”? Hoping for reassurance, I looked to the Explanatory Notes for guidance. At paragraph 113 we find the following:
“The words ‘by virtue of an Act of Parliament’ covers UK subordinate legislation made under Acts”.
I hope that the noble Lord, Lord Wallace, will be able to explain that because I cannot understand what it means. What subordinate legislation, and why “Acts” in the plural? That is the second cause of my suspicions.
Let me say why I find all this really worrying. For as long as we remain members of the European Union, we cannot pick and choose which EU laws apply to us and which do not. Nor, as the High Court found in the Factortame case, can this Parliament pass laws inconsistent with EU law. If the suggestion or the subliminal dog whistle implication of the curious language of Clause 18 is that by passing, amending or repealing subordinate legislation or passing or not passing some new Act deemed relevant, we can disapply laws we do not like, that is seriously misleading and dangerous nonsense. Where we have conferred powers on the European Union, directly applicable EU laws apply in this country, overriding any conflicting national laws. I believe that that is because of the 1972 Act and that it could not be reversed by any other Act or subordinate legislation unless that Act repealed the 1972 Act and, using the Article 50 procedure, we left the European Union. So I oppose Clause 18 very strongly. I think it is unnecessary, muddled, misleading and spurious.
The third suspicious feature is easy to describe. The Explanatory Notes say, perfectly correctly, that the clause,
“does not alter the existing relationship between EU law and UK domestic law; in particular, the principle of the primacy of EU law”.
It is declaratory of the existing legal position, but, in a point made by the noble Lord, Lord Hannay, if we agree that that is what it is, why does it not say that? Why do we have these curious, backwards-drafted four lines? We believe in transparency and in the need to reconnect with people, so we give them this curious formula which I find very hard to construe. I am not sure what the public outside would think about it. If it is really only declaratory, alters nothing and has no sinister intent, why do we not drop it? I think we should.
I wish to make one more general point about the Bill. As the noble Baroness, Lady Symons, pointed out at the outset, the referenda requirements here are not about big issues—for example, joining the euro—or major treaty changes such as the Single European Act or the Maastricht treaty. Big changes deserve heavy ratification procedures and, although I do not like referenda, we now seem to be stuck with them on the big stuff. However, as the noble Lord, Lord Davies, spelt out, the lists in the Bill are mainly about Brussels decisions on points of detail and process.
If the Bill passes unamended we shall have signalled to our friends in the other 26 member states that we are highly unlikely ever to agree to any reform, however minor, of EU procedures and processes, institutional arrangements and decision-taking procedures. This point was made by the noble Lord, Lord Williamson, and his analysis is completely correct. Our friends will spot that no British Government, even if they supported some minor proposed reform, would want to have a referendum on it, and therefore would block it. As the noble Lord, Lord Williamson, said, this is not a Bill about having referenda but about not having referenda and, in order not to have referenda, bringing about a paralysis of the institutional structures of the European Union. At least that would be the perception of our partners.
I would greatly regret that. I worked in Brussels for two British Prime Ministers and neither took that view. Mrs Thatcher deserves great credit for the Single European Act, which opened the way to the single market programme. She was extremely tough in negotiations but she was clear that the British should always be in them. As Prime Minister, Mr Major was sceptical about the euro but deserves great credit for ensuring that we were fully involved in its preparation and, although not required to join, had a ticket to do so should we ever so choose.
Being at the heart of Europe is in the British interest. The single market has been good for UK jobs and London has dominated the Euromarket. Conversely, as the noble Baroness, Lady Williams of Crosby, pointed out, the perception of a relentlessly negative approach, entrenched by a referendum requirement on any new issue or proposed reform, could lead our friends and partners to cut us out of discussions on future reform and development. It is perfectly possible for them to do that by engaging in what is called “enhanced co-operation”, for which there are provisions in the treaty, or by concluding intergovernmental agreements outside the treaty framework.
When I raised that risk last week with a Minister, he replied—with a smile—that he thought that the EU was indeed likely to go for more variable geometry in future. He may be right but surely we should at least try to be in the room where the rules get written—as, thanks to Mr Major, we were for the euro. Let us at least give ourselves the option of going on being centrally involved. If the Bill passes, that will be harder to achieve. We shall have excluded ourselves.
I oppose the Bill on grounds of international policy as well as on constitutional grounds. If it is enacted, we will have damaged the national interest as well as parliamentary sovereignty.
Baroness Verma
My Lords, forgive me for reminding noble Lords but, if they could, it would be helpful to the House were they to keep their contributions to about 15 minutes. Thank you.