Northern Ireland Protocol Bill

Debate between Lord Kerr of Kinlochard and Lord Deben

Committee stage
Wednesday 2nd November 2022 Lords Chamber

[Lord Kerr of Kinlochard (CB)]

I have no expertise to match that of the noble Baroness. But I do think we need to remember that, in the last Northern Ireland election, the voting for the DUP was about one in five of those who voted—and, since the turnout was about 60%, it was a pretty low proportion of the electorate. It is worrying, or at least curious, that the DUP, which constitutes, on its voting last time around, 0.4% of the UK electorate, should be able, it seems, to wag the dog. It is a very small tail that is wagging the dog—and, if we all end up in a trade war with the European Union, it will be the tail that gets the most pain.

[Lord Deben (Con)]

Will my noble friend accept this, just to get the two noble Lords together—if I may put it like that? The fact is that nobody in Northern Ireland is going to accept measures that turn the lights off. Most people in Northern Ireland actually want to do something about climate change; the polls are absolutely clear about that. This Bill will mean that we will not be able to fight climate change properly, and the lights are certainly in danger—and, if the lights went off, I do not think that people would thank the DUP for that.

European Union (Referendum) Bill

Debate between Lord Kerr of Kinlochard and Lord Deben

Friday 24th January 2014 Lords Chamber

[Lord Kerr of Kinlochard]

I hate to deprive the noble Lord, Lord Cormack, of my wisdom, and he has been far too polite in the past.

The second stage of the process of amending the treaty is the calling of a convention. The last and only convention so far lasted for just over 18 months. The convention has to end up with consensus. The next stage is an intergovernmental conference in which one needs the unanimous agreement of every other member state to one’s propositions. Nothing is agreed until everything is agreed. The final stage would be ratification of the outcome. If it involved treaty amendment, the changed treaties would require new national ratification in every member state’s capital. I assume that before we have the referendum, we would want to know, and be able to tell the country, whether the renegotiation deal had stuck and had been accepted in other member states. A very awkward and complex situation would arise if you had a referendum on the assumption that the renegotiation deal would be ratified everywhere, and that turned out not to be the case.

We do not begin those four stages until after an election in 2015. It does not add up. The first stage, the bilateral diplomacy, we do not appear to be doing. We do not appear to be collecting the 14 friends to get past the first hurdle. As to the second stage, the convention, I do not know how long it would take. It might take much less than the 18 months taken last time, but it is a finite hurdle to get over and it will take time. As to the third stage, the intergovernmental conference, Maastricht took a year. This one might take less but, on the other hand, it sounds as if the propositions that the Conservative Party envisages bringing forward are rather fundamental. Finally, as to ratification in 2017, one would be asking the French and the Germans in their election years to agree with the British on, say, restraining free movement of persons, taking human rights out of the treaty, exempting the British from social law or giving them a veto on financial law. You would be seeking agreement on that in the year in which a French Socialist President was seeking re-election, and a German Government who strongly believe in human rights would be facing the polls.

[Lord Deben (Con)]

The noble Lord has not mentioned the danger that ratification would not have taken place. If the British had a referendum and wished to remain in the EU, but ratification did not take place after that decision was made, that would put us in a constitutional position of great severity.

EU: Energy Infrastructure (EUC Report)

Debate between Lord Kerr of Kinlochard and Lord Deben

Monday 29th July 2013 Grand Committee

[Lord Kerr of Kinlochard]

I entirely agree with the noble Lord. An exchange of ideas of the kind that the noble Lord, Lord Maclennan, was talking about, would be highly desirable and moderately helpful. However, the committee’s report talks about the application of the state aid rules. We are moving on from something like the European semester on economic policy to something like the entity talked about in the French-German paper at the end of May, which would have fiscal rules enforceable with sanction powers. That is not likely to happen in the short term, but I do not think that full application of the rigour of state aid rules is either necessary or desirable at the present stage of the development of EU energy policy.

Paragraph 98 deals with nuclear power. The Commission is trenchantly urged by the committee to address outstanding issues, particularly liability, waste and, again, state aid. Why? Is it plausible that the Commission could find a solution that would satisfy the nuclear French and the now anti-nuclear Germans? What are we supposed to do? I do not understand the purpose. Do we need a single common answer? Provided that safety rules and high safety standards are enforced across the whole of the Union so that safety is assured—remember that the closure of their Chernobyl-style plants was a precondition for accession countries joining the European Union—subsidiarity should apply. I do not see why there need be an EU regime for waste or a particular EU level of liability rules, let alone state aid rules. I note that the Government’s response passes over this recommendation in silence. I find that silence sensible and eloquent.

On the subject of border taxes, I know that what we are talking about are global border taxes, but that seems like the argument that a financial transaction tax would be fine if it was global, when we know that it is not going to be. Paragraph 133 talks about the idea that imports from countries with low energy costs and environmental policies that we deem inadequate should be subject to an import tax in order to reduce carbon leakage. The Commission opposed this, citing huge administrative complexity. I agree, and I would also cite higher costs for our businesses and consumers, the certainty of retaliation against our exports and the probability that the precedent would prove interesting to those on the French left, for example, who regularly call for restrictions on imports from countries where labour costs are low.

[Lord Deben]

Does the noble Lord not also agree that this particular recommendation is often used by those who do not want to improve what we have but who always seek something that in their mind would be perfection, which we do not have; and that this is a dangerous route to go down because it normally means that we do not do either?

[Lord Kerr of Kinlochard]

The noble Lord is a great expert on such things. I will only say that I agree that it is a mirage. If we were to do it not as part of a global agreement, we would damage ourselves very seriously. If we believe in free trade, open borders and low tariffs, we need to be very careful of well intentioned exceptions.

My fourth point is that I am uneasy—I am getting into deep theological territory—about the call in paragraph 126 of the report for binding EU-level 2030 targets on energy consumption. What growth assumptions would underpin that target? If a member state of the European Union managed, by the skill of its economic policies and the energy of its population, to achieve an astonishingly high growth rate and therefore higher energy use, what would we do about the binding target? Would it mean that the state would have to be fined? If so, we would need to amend the treaty to give ourselves the power to do that. Let us not go there. Again, the Government’s response seems to be wisely silent on this recommendation.

Lastly—and here I am probably taking a step too far and pushing my luck too hard—I am not sure that I buy even paragraph 103, which has a marvellous ex cathedra ring to it when it states:

“Member States must be under no illusion: failure to agree a 2030 framework will restrict investment”.

I am in favour of a 2030 emissions target, but I am not 100% convinced that whether there is one will have much effect on the quantum of investment. Such targets undoubtedly have an indirect effect on the energy mix in member states. The mechanism is peer pressure from colleagues in the Council.

In fact, energy mix decisions probably owe more to what national electorates want or are prepared to wear, but there is no doubt that targets have some effect on energy mix. However, I doubt whether they affect the quantum of investment because companies do not base investment decisions on such targets. They are moved to invest or not invest by the clarity, consistency and credibility over time of the policy regimes in force in member states, and by whether profits will be permitted. Companies like profits. If they are going to invest, they want some kind of assurance about profits.

What deters investment is uncertainty, not targetry. What deters investment in this country is in part the hypocrisy of doubling the social and environmental costs paid by the energy consumer through his utility bills—the carbon taxes, installation costs, smart-metering costs and other energy-efficiency costs that have doubled in the past 12 months—while at the same time supporting and encouraging populist criticism of the industry for putting up prices. Of course it will put up prices if it has to charge all the levies in its bills. I find it objectionable to make the consumer rather than the taxpayer foot the bill for environmental policy. That seems to me to be socially regressive. But if you do not allow profit, you will not get investment. For the investor, long-term targets are neither here nor there. That may sound cynical but it is true.

I will turn to where the noble Lord, Lord Giddens, took us and talk about gas. The report sees it as a transition fuel and the committee worries that investment in gas could be at the expense of investment in renewables. I prefer to go with Energy Commissioner Oettinger who argues:

“Without gas, renewables have no chance”.

I do not mean just the intermittency problem. The fact is that when the EU economy takes off again, if emissions are to stay down, we need to replace coal with gas. That would cut emissions by 50%, which is the biggest single thing that we could do.

Poland today is 90% dependent on coal burn for its electricity generation. No wonder Poland leads the way in shale gas, with more than 130 concessions already granted. Coal-burn generation is increasing across the EU and in this country. Seaborne Appalachian coal is back on the market here, driven out of the US power market by shale gas. The speed of the shale gas revolution is striking. I think that the committee may have slightly underestimated its scale and effects. I am not talking principally about indigenous UK reserves or even EU reserves, although that story is quite dramatic.

At paragraph 74, the report quotes the British Geological Survey estimate of UK reserves of 150 billion cubic metres. However, last month the British Geological Survey raised its estimate from 150 billion to 37 trillion cubic metres, which is more than 500 times our current annual gas consumption. I do not expect us to exploit the Bowland shale nearly as quickly or efficiently as the Americans are exploiting Eagle Ford and the Bakken, or as quickly as the Chinese are already starting to, and will, exploit theirs.

I am talking about—as was, I think, the noble Lord, Lord Giddens—the effect on global markets and the new ability to access tight gas, coal-bed methane and shale gas. In the US, gas prices for industrial users fell between 2005 and the end of last year by 66% in real terms. In Europe, there was a 35% increase. That is because the US has shale and we do not yet. US emissions went sharply down. It is a delightful irony that just as the US Administration were angrily rejecting the Kyoto targets, the USA’s emissions were peaking. The US has easily met the targets that it rejected—because it has got shale. Therefore, it is burning less coal.

The US will export. I predict that the US chemical industries’ efforts to prevent exports will not succeed. The LNG price at European ports will therefore fall. Already, the Nigerian, Angolan and Qatari LNG intended for the United States is coming here because our price is three times the US price, or heading for Japan, Korea and China, where it is six times the US price. Clearly, these disparities will not last. World prices will fall.

Already, the Nigerians and the Dutch have had to give up pipeline gas prices linked to the oil price. The Russians are being forced to follow.

Energy Bill

Debate between Lord Kerr of Kinlochard and Lord Deben

Tuesday 16th July 2013 Grand Committee

[Lord Deben]

The Committee on Climate Change has made it clear that CCS is an essential part of the matters that we have to address if we are to meet our statutory responsibilities. I doubt if anyone on any side of the House would not agree with that, and I thought it generous of the noble Baroness, Lady Worthington, to say what she said about the past history of CCS.

That has been a pretty universal thing; we have not got it right. It is very difficult to get right, and I would not blame the Government for the difficulties. However, we have to solve those difficulties, and this amendment is a most useful way of making it that much more certain for the industry. If we want to use the resources that may be at our disposal—fracked gas, for example—we have to have CCS to meet our 2050 demands.

In a sense, that is less important to the British picture than to the world picture. The biggest contribution that we could make to the world picture is in the development of CCS because that would break through in a series of countries—the mechanism by which we can have the energy we need as well as protecting ourselves against dangerous climate change.

I hope my noble friend the Minister will understand that for us this is a central area, and if the Government are not able to agree to this perhaps they will come forward with some alternative mechanism to make sure that the ends put forward here will be met. I am sure that she will want to know that this issue has been widely tweeted, because it is seen as so important by so many different people across the field. It is very important that we give a proper response to the noble Baroness’s request.

[Lord Kerr of Kinlochard]

It is comforting to know that the tweets are flowing. The trouble is that CCS has not yet been made to work. I support this amendment. I supported the efforts of the previous Government and the present Government, in partnership with the private sector, to make CCS work. I supported the £1 billion that was on offer from both Governments. I supported the EU competition, which added yet more prizes that no one has managed to win. I was involved with two companies that tried very hard. No one anywhere in the world has yet made CCS work economically.

I understand the point made by the noble Lord, Lord Deben, but I think it is important not to make this a central part of the answer when we do not yet know if we can make it work. We have to find other ways of achieving the objectives that the noble Lord, Lord Deben, has concerns about. Let us hope that this is made to work, and if these amendments increase the chances that it does, then fine. I am certainly not against the amendments and I think it is the answer. In fact, it has been the answer that people have seen coming for a long time, at least 10 to 15 years. I fear that it is still 10 to 15 years away, but by all means let us go on trying.

Scotland Bill

Debate between Lord Kerr of Kinlochard and Lord Deben

Wednesday 28th March 2012 Lords Chamber

[Lord Kerr of Kinlochard]

My Lords, I disagree with the noble Lord, “Lord Barnett of Formula”. I have never disagreed with him before. I used to write briefs for him and he never paid the slightest attention to them. He was a brilliant Chief Secretary who did not bother about the arguments but simply explained that there was no money, which was a much better argument than any of the ones that I produced.

I disagree with putting this new clause in the Bill for the reasons that have just been given. I disagree with looking at it in a Scottish-only context. I confess that I had forgotten the report of the committee of the noble Lord, Lord Richard, but I disagree with the kind of criteria that the noble Lord, Lord Lang, was reminding us of. That on its own is not enough. Periphery and distance matter. I do not know of any state that I have lived in—France, America—where distance is not a factor. The purity of the position taken by the noble Lord, Lord Deben, does not really work. If you have an extremely sparse population on highlands and islands, the cost of communications and that sort of thing is much higher. That sort of need may well be built in to the formula that the noble Lord, Lord Richard, is talking about, but it is not just criteria such as poverty: it is the problem of dealing with poverty, which is more difficult if people are on a distant island. I do not know who to give way to first.

[Lord Deben]

As my purity has been called into question, I would like to say that it is a purity that demands that we do something that recognises sparsity and the difficulty of reaching people. The trouble is that this new clause recognises it in Scotland but not in Wales; that is what is wrong with it.

[Baroness Rawlings]

My Lords, I remind your Lordships that on Report a Member may speak only once, excepting for a short question of elucidation to the Minister, as I have said.