Contracts for Difference (Electricity Supplier Obligations) (Amendment) (Coronavirus) Regulations 2020

Lord Kirkhope of Harrogate Excerpts

Thursday 2nd July 2020 Lords Chamber

[Lord Kirkhope of Harrogate (Con) [V]]

My Lords, the title of this statutory instrument is long and complex, but the issues are, I think, relatively simple. In order to encourage alternative or green suppliers of electricity, the levy on energy suppliers provides resources to support Contracts for Difference—or CfD—generators. So far so good. However, a combination of seasonal or weather-related issues plus Covid-19 issues has resulted in overall demand for electricity dipping substantially, creating a serious financial position for suppliers. Effectively, therefore, what is proposed is a loan of up to £100 million for the Low Carbon Contracts Company—the LCCC—so that the CfD generators can continue to receive the sums due under their respective contracts.

I therefore have several questions for my noble friend. First, I understand these government moneys are just loans that will be clawed back within a year. How are these loans to be secured and enforced, especially if the suppliers continue to have financial pressures? Secondly, to what extent should general energy prices have any effect in the next year? Are the contracts from the so-called difference auctions flexible in this regard? Does my noble friend understand that low energy prices give rise to the concern that the prices paid for the alternative suppliers are fixed at a much higher rate, especially if these low prices in the market continue, with a depressed economy, the Covid aftermath and resultant low demand?

Thirdly, the reference to “similar exceptional circumstances”, allowing these measures to continue without any further parliamentary scrutiny by even secondary legislation, concerns me. Definitions such as this are imprecise; we need to be sure that they are not used in respect of only slight changes in energy prices, usage or climate variations. Can my noble friend describe what “exceptional circumstances” means? As this measure postpones the levy payments only for a year, and as the costs are ultimately borne by the consumer, can he advise us of the likelihood of a fresh price cap following a new Ofgem determination?

As noble Lords know, as the dispenser of the levy, the LCCC is established as an independent body. I hope, therefore, that this intervention by the Treasury with these loan moneys—for no doubt very merit-worthy reasons—will not affect that longer-term independence which I believe is so vital in these overall energy relationships.

Climate Change: COP 26 Arrangements

Lord Kirkhope of Harrogate Excerpts

Thursday 12th March 2020 Lords Chamber

[Lord Callanan]

Of course we have to have extensive discussions with the Scottish Government. Those are taking place; we are discussing budgets with them at the moment. An exchange of letters has just taken place between my right honourable friend the Secretary of State and the First Minister of Scotland. Discussions are well advanced. Both sides are committed to delivering a successful COP.

[Lord Kirkhope of Harrogate (Con)]

Does my noble friend agree that an important part of the agenda for COP 26 is the migration of environmentally displaced persons as a result of climate change? Can he acknowledge that that will be an important part of the agenda that this country will host?

[Lord Callanan]

Of course my noble friend is quite right to point out that this is an important consequence of climate change. It is one of many different subjects that will need to be discussed both before and during the COP.

British Steel

Lord Kirkhope of Harrogate Excerpts

Wednesday 22nd May 2019 Lords Chamber

[Lord Henley]

My Lords, one ought to make it clear that British Steel is not the only manufacturer of steel in the country; there are other steel producers. However, as the noble Lord quite rightly puts it, it is a major producer of track for railway lines and that is why Network Rail has been using it. Whether the builders of HS2 will have that opportunity will depend on whether this company survives, which we very much hope it does.

[Lord Kirkhope of Harrogate (Con)]

My Lords, perhaps I may ask my noble friend about the comprehensive nature of our steel industry. As he rightly alluded to earlier, some of these factories are turning out a finished product rather than just the basic steel. Is he satisfied that, in these circumstances, this country will continue to have comprehensive steel production across all the different categories, which we will need if it is necessary for us to be independent?

[Lord Henley]

My noble friend is right to draw attention to the fact that this is just one company among a number producing steel and steel products. I would hope that we could produce steel in a sufficiently wide number of areas to deal with the point that my noble friend makes. However, I think he would also have to accept that it is a very varied business, as he made clear in his question. Steel producers manufacture a whole raft of products, but whether we have the right blend is a wider question.

Industrial Strategy Consultation

Lord Kirkhope of Harrogate Excerpts

Monday 23rd January 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, the current jargon is to use “place” instead of “regional policy”, and place plays a large part in this industrial strategy. The issue was raised by the noble Lord opposite about the objectives. It is a very good point, and one I should have addressed earlier on. What are the objectives of the industrial strategy? I have in mind a decent working man in a place like Hartlepool, who ought to be commanding a decent wage of £30,000 to £35,000 a year, who is currently working for £7.50 an hour picking stock in a warehouse. That will be the true measure of whether this industrial strategy is a success—whether we can bring back decent, well-paid, skilled jobs to all parts of the country.

[Lord Kirkhope of Harrogate (Con)]

My Lords, I thank my noble friend very much for that presentation. I welcome this Green Paper, and I bear witness as someone from the north-east of England originally, and now from Yorkshire, to how the north of England has had to adapt to technology and to the changes in de-industrialisation and engineering over many years. I ask my noble friend about the support of the Government, not only in financial terms, which is suggested by their contribution to technology institutes of £170 million, as he has mentioned, but also in their enthusiasm, which has often been lacking in many Governments, towards those who pursue careers in engineering, innovation and new technology. That is what we need—more encouragement and acceptance, as other European countries do to a lot of their own subjects. Let us be more enthusiastic while we work on this Green Paper in the consultation process. That would be most helpful. Does my noble friend agree?

[Lord Prior of Brampton]

I agree 110% with that. For generations we have downgraded people who do technology, engineering, and the like; whereas we have paraded people who do PPE at Oxford, and the like. We have got it slightly wrong. We should do anything we can to encourage young people to go into technology, engineering, natural sciences and the like. Of course, the changes in technology that we are witnessing now, and will continue to witness over the next 10 years, will fundamentally change our society, whether in artificial intelligence, in robotics, in cell and gene therapy, or in battery technology—this is the future. The more we can encourage people to go into these technological areas and also encourage them to be entrepreneurial at the same time, that will be good not just for them but for our economy as a whole.