COP 26

Lord Lilley Excerpts

Wednesday 18th November 2020 Lords Chamber

[Lord Callanan (Con)]

The noble Baroness makes some valid points, but, as I am sure she is aware, all campaign spend will be released in line with the usual Cabinet Office spend data publications. The idea of the campaign is to work through partnerships where possible, but further support may be needed working with other groups, and we will endeavour to take the campaign forward in as many different areas as possible.

[Lord Lilley (Con)]

My Lords, I refer to my interests in the register. Before your Lordships’ House is submerged in a tsunami of uncosted virtue signalling, can the Minister confirm that zero carbon will cost trillions of pounds? In the privacy of this Chamber, may I raise the politics of this? The further north you go, the cooler it is and the higher people’s heating bills are. People’s incomes are lower, so more is absorbed by energy costs and more jobs depend on energy. If they are less receptive to campaigns telling them to become vegetarians, ride bikes and forgo foreign holidays while being unable to sell their cars in 10 years’ time, will this help retain the blue-wall seats?

[Lord Callanan (Con)]

I thank my noble friend for his question; I know he takes a close interest in these matters. The important thing to do is to convince people across the country that there are an awful lot of jobs riding on this as well, and that pursuing green initiatives, as we are doing with the 10-point plan that was announced today, will enable thousands of jobs to be created in many of the communities that he is talking about.

United Kingdom Internal Market Bill

Lord Lilley Excerpts

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Monday 9th November 2020 Lords Chamber

As I close, I appeal to noble Lords to take into account previous commitments, pledges, promises and agreements, from the EU itself and Her Majesty’s Government, made before and after the Northern Ireland protocol was introduced. Let us please have balance with regard to the need to ensure that unionists as well as nationalists and those of no political affiliation are comfortable with the arrangements that come into force after the transition period ends.

[Lord Lilley (Con)]

My Lords, we have listened to many moving and powerful speeches from right reverend Prelates and noble and learned Lords about the abstract principles raised by this Bill and, particularly, by Part 5. They are very important principles. It is a particular privilege to follow the speech of the noble Lord, Lordusb Dodds, which has been the first to spell out the practical implications for people’s livelihoods if the withdrawal agreement is not applied in the spirit of the promises made by both sides—the United Kingdom as well as the European Union—to all the people of Northern Ireland. There are practical and constitutional consequences, which somehow have escaped the notice of every single noble Lord who has spoken up to this moment.

At Second Reading, I asked a question which I make no apology for repeating: what should a state do if it finds that its obligations under one treaty conflict with those under another treaty or with its own fundamental constitutional laws? No one in your Lordships’ House has explicitly addressed that question. Maybe that reflects how difficult our hybrid procedures make the proper and effective interchange of ideas and debate in this House, but maybe it was also because most noble Lords have framed their positions in absolutist terms: we must obey international law, full stop.

By implication, there can be no circumstances in which legal obligations under one treaty can clash with those under another or with a country’s fundamental domestic laws. However, as I pointed out before, that is not the view that other countries take. The European Court of Justice itself spelled out that, although the European Union seeks to comply with its international legal obligations,

“it would be wrong to conclude that, once the Community is bound by a rule of international law, the Community Courts must bow to that rule with complete acquiescence and apply it unconditionally”.

It also says that,

“although the Court takes great care to respect the obligations that are incumbent on the Community by virtue of international law, it seeks, first and foremost, to preserve the constitutional framework created by the Treaty.”

I do not think it is wrong to say that. If I wanted to carry forward the European Union, I would have that order of priorities, but I want to carry forward the United Kingdom, so my priorities are put first and foremost—the fundamental constitutional laws of this country, when and if they clash with an international treaty.

The German Constitutional Court has ruled that if treaties—even European Union treaties—conflict with basic German constitutional law, the latter prevails. The strange thing is that, when the EU or Germany set aside any aspect of international law that clashes with their fundamental internal laws, no one suggests that they are putting at risk the entire international framework of law or rendering themselves international legal pariahs. Why is it so contentious when we suggest that we might need to do likewise when it is not contentious for them?

Although no noble Lord in the debate explicitly answered my questions or addressed these issues, the noble and learned Lord, Lord Judge, who opened both this debate and the debate on his amendment to the Second Reading Motion expressing regret, implicitly addressed the issue in his summing up of the debate. He acknowledged:

“‘We may need these powers at some stage.’ Maybe we will; I hope not. If we do, it is perfectly open to the Government to come back to us, to Parliament, to put before us emergency legislation and … proposals, and, if they are satisfactory, to endorse them.”—[Official Report, 20/10/20; col. 1431.]


But surely, once we accept that powers regarding overall aspects of the withdrawal treaty may be necessary in future, the enabling measures in Part 5 cannot be wrong in principle. Whether we take the power now or reserve doing so for a later date in a separate Bill becomes a procedural and tactical issue, not one of principle. My own view is that having the enabling power on the statute book makes it less likely that the European Union will refuse to negotiate “in good faith” and with respect for the other party’s “legal order”—wording used in our agreement with the EU—on the issues in Part 5 and the planned finance Bill.

I have the greatest respect for the noble and learned Lord, Lord Judge, and not just for his mastery of the law but for the objective and non-partisan way in which he approaches these issues and every other. He has been kind enough to correspond with me about these issues. Like him, I hope we never need to invoke the powers in Part 5 to override the withdrawal Act, be they the powers in this Bill or in the emergency legislation that he envisages. But like him, I recognise we may need to if the EU refuses to resolve these issues by negotiating in good faith and out of respect for our internal legal order—particularly, the Act of Union, which guaranteed free and unfettered trade between Great Britain and Ireland, and the Belfast agreement, which promised no change in the status of Northern Ireland without the acceptance of both communities.

Like the noble and learned Lord, Lord Judge, I accept that if such a problem does emerge, we should try to resolve it by the procedures within the withdrawal treaty. If we cannot agree in the Joint Committee, those would most obviously include activating Article 16. As the noble and learned Lord, Lord Keen, said, these powers in this Bill will be necessary even if we invoke Article 16 of the treaty. That would not enable the Government to act without legislative authority, so it is important to have that legislative authority on the statute book—indeed, it is essential. Again, like the noble and learned Lord, Lord Judge, I hope it will not be necessary.

There ought not to be any conflict between the withdrawal treaty and our fundamental laws, as long as both sides negotiate, as they have promised to do, the remaining internal contradictions in the withdrawal Act in good faith and with respect for each other’s constitutional orders. I was not alone in mentioning the potential clash between the withdrawal treaty and our fundamental laws. So did my noble friend Lord True in his brilliant closing speech at the end of the Second Reading debate, when he referred notably to the need to uphold the Act of Union, which ensures unfettered trade between parts of the United Kingdom, and the Belfast agreement.

I hope noble Lords will ponder these things and, most of all, the summing up by the noble and learned Lord, Lord Judge, that it may be necessary—though let us hope it is not—for us to resolve a conflict between the withdrawal treaty and the Act of Union and Belfast agreement. It is sensible to have that legislation on the statute book. But we are not, by doing so, rendering ourselves international pariahs or doing anything that any other country would not do in similar circumstances.

[Lord Clarke of Nottingham (Con)]

My Lords, it is a rather remarkable experience, as quite a new Member of this place, to find myself taking part in such an extraordinary and unusual debate, loaded with such significance and ethical and legal issues. It was a pleasure at Second Reading to follow a debate in which the eloquence of the noble and learned Lord, Lord Judge, the noble Lord, Lord Howard, and many others was extremely persuasive. I followed their speeches, which came to a dramatic conclusion when I found I was taking part in Divisions in which the Government suffered their biggest defeat in this House for over 20 years on a resounding and distinguished cross-party basis.

My first reaction was to think that, before we got to this stage, the Government would react in some constructive, positive way. I may be new here, but I have been a few years in government, and in the past, the problem would have been regarded as a fairly extraordinary one. Efforts would have been made to give the unfortunate Minister, who had drawn the short straw of defending the Government in this House, some material and opportunity to persuade, reach a compromise and perhaps move to the more pragmatic approach of the noble Lord, Lord Lilley, because this should all be resolved in a common-sense way.

--- Later in debate ---

The second group of those who defend what is happening are those who say, “Actually, there is no law-breaking.” The noble Lords, Lord Naseby and Lord Howard of Rising, who is, sadly, not in his place, and the noble Baroness, Lady Couttie, made plucky efforts to say there is no law-breaking. Your Lordships will recall the much missed noble and learned Lord, Lord Keen: he suggested there was no law-breaking, and he got a pretty bloody nose from the Government for that. He was told that was wrong, because Brandon Lewis was sent out to assert yet again that there was law-breaking, as he proudly said. I will accept the word of the Government themselves that there is law-breaking, and not those of their defenders who say that there is not.

[Lord Lilley (Con)]

Would the noble and learned Lord accept—

[Noble Lords]

Order!

Clean Growth Fund

Lord Lilley Excerpts

Wednesday 28th October 2020 Lords Chamber

[Lord Lilley (Con)]

My Lords, I draw attention to my interests in the register. I sincerely hope that the fund will succeed in investing in companies that grow without subsidy, but does my noble friend recall that, in the Government’s Cost of Energy Review, Professor Dieter Helm concluded that the best part of £100 billion spent so far on renewables has been wasted because, as he warned, Governments are not very good at picking winners, but

“losers are very good at picking governments”?

[Lord Callanan (Con)]

That is indeed a good quote and I agree to a certain extent with my noble friend, but this is a commercial investment, run by a commercial fund manager. My noble friend will be pleased to know that the Government are playing no role in the selection of the investments. There are private sector investors alongside us and the fund manager is running the fund on a commercial basis.

United Kingdom Internal Market Bill

Lord Lilley Excerpts

2nd reading & 2nd reading (Hansard): House of Lords
Monday 19th October 2020 Lords Chamber

[Lord Lilley (Con)]

My Lords, I congratulate the noble Baroness on her excellent maiden speech and look forward to hearing both her spoken and her musical words in future. As a non-lawyer, I enter this arena like a Christian facing a pride of angry legal lions. This is made worse by the fact that they have already captured my own archbishop. I am armed only with a simple question: what should a state do if it finds that its obligations under one treaty conflict with those under another treaty or its own constitutional law? The only reply I have received so far is: “You shouldn’t have signed the withdrawal treaty”.

That might work in a student debate, but it fails to address my question, so let me answer it myself, not in my own words but in those of the European Court of Justice. In the Kadi case, the court affirmed that, although the EU seeks to comply with its international legal obligations,

“it would be wrong to conclude that, once the Community is bound by a rule of international law, the Community Courts must bow to that rule with complete acquiescence and apply it unconditionally”.

Likewise, the German constitutional court has ruled that if treaties, even EU treaties, conflict with German constitutional law, the latter prevails. Of course, British Governments have disapplied aspects of international law, the most famous example being the United Nations Convention on the Law of the Sea, 15 days after it came into effect, when the future Lord Diplock ruled that

“the Crown has a sovereign right, which the court cannot question”,

to do so. Moreover, in Section 38 of the withdrawal Act, Parliament explicitly foresaw that it might need to set aside the direct application of the withdrawal treaty, as this Bill permits.

However, no one ever suggested when they disapplied parts of the conflicting laws that the European Court of Justice, the German court or previous UK Governments had broken the law—until Brandon Lewis uttered those fatal words. These have been seized on as a weapon by some, and proved a stumbling block for some of my closest friends, but I believe they should be disavowed. This raises the question: are there potential conflicts between obligations under the withdrawal treaty and our fundamental constitutional laws? There are certainly many internal contradictions within the withdrawal Act, but we ratified it because it contains a mechanism—the joint committee—in which both sides are committed to resolve outstanding issues in good faith and respecting each other’s legal order. So, given good faith and mutual respect, there should be no conflict with our legal order, the pillar of which is the Act of Union between Great Britain and Ireland, which pledges that “all prohibitions and bounties”—that is, tariffs—

“on the export of articles … of either country to the other shall cease.”

This is buttressed by the Belfast agreement, which promises no change in that union without the consent of both communities.

However, the EU has been showing little evidence of good faith, insisting on applying the entire EU customs code, which would mean that no goods could move from Northern Ireland to Great Britain without an EU export declaration—something my noble and learned friend Lord Clarke used to say was one of the disadvantages we would face in all our trade once we left the customs union. That is contrary to both the Act of Union and Article 6 of the protocol, which says:

“Nothing in this protocol shall prevent the United Kingdom from ensuring unfettered market access for goods moving from Northern Ireland to other parts of the United Kingdom’s internal market.”


In the other direction, the withdrawal treaty commits both sides to agree before the end of the transition period the definition of goods which are at risk of crossing into the Republic. The EU has implied that, if it declines to agree, the UK will have to levy EU tariffs on all goods going from Great Britain to Northern Ireland. Both these results would conflict with the Act of Union and the Belfast agreement. Happily, because of this Bill, the EU seems to be pulling back from both these positions. I hope that good faith will prevail and we will not need to implement the clauses in this Bill, but it would be irresponsible to leave this country unprepared by rejecting them.

Health Protection (Coronavirus, Restrictions) (Obligations of Hospitality Undertakings) (England) Regulations 2020

Lord Lilley Excerpts

Friday 9th October 2020 Lords Chamber

[Lord Lilley (Con)]

My Lords, these regulations relate to, among other things, masks. Common sense has always suggested that, since Covid is transmitted by droplets, wearing masks will to some degree reduce its transmission. However, we have not been led by common sense but by the science. Your Lordships will recall that for the first two or three months of the crisis, we were told that there was no scientific evidence suggesting we should wear masks; indeed, they would be unhelpful because they encourage people to be overconfident and to touch their eyes and face. In May, we were told that they would do no harm and might be useful. In June, we were advised but not required to wear them. In July, wearing them in shops was made compulsory. In August, that was extended to other places. In September, regulations made it a punishable offence to prevent people wearing face masks. The latest regulation imposes a fine of up to £10,000 for anyone who even fails to tell their customers to wear a mask.

Throughout this journey, from discouraging the wearing of masks to hefty punishments for not encouraging their use, we have been told that we are being led by the science. My aim is not to discredit science—I studied it at Cambridge and revere the scientific method. Nor do I mind having to wear a mask over my face; but I do mind having the wool pulled over my eyes. The simple truth is that the reason we were initially told we should not wear masks was that there was a shortage of masks and the scientists, civil servants and politicians felt they should be reserved for medical staff. I hope we will learn from this extraordinary saga that when the common sense conflicts with “the science”, we should subject that scientific advice to rigorous scrutiny, and when we are told there is no evidence for something, we should not conclude that there is evidence against it.

Trade Bill

Lord Lilley Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 8th September 2020 Lords Chamber

[Lord Lilley (Con) [V]]

My Lords, I congratulate my noble friend and the right reverend Prelate on their excellent maiden speeches, and I welcome the Bill; it is necessary and workmanlike. But neither critics nor supporters should exaggerate its importance. Critics claim that it would lead to privatising the NHS, undermine environmental standards and threaten animal welfare. They have nothing to fear. Those things are outside the scope of the Bill. The Government certainly have no such intentions, and Parliament would not let them happen. But there is a tendency on all sides of the debate to exaggerate the importance of trade deals. They are useful and desirable, but their impact is much smaller than generally thought.

This was brought home to me when I was Trade Secretary. I had to implement the single market programme, held as the deepest ever free trade arrangement. I also had to negotiate the Uruguay round, which halved tariffs and set up the WTO. I made bullish speeches about both, and how they boosted our exports, but neither had the impact I anticipated. Indeed, UK exports to the 14 original members of the single market have stagnated since then, having grown at less than 0.5% per annum—barely 10% over the past 20 years. By contrast, our exports to the 14 largest countries with which we trade just on WTO terms have risen by 88% and now account for 37% of our goods exports worldwide. Our exports to countries with which the EU had negotiated trade deals—the subject of this Bill—have risen considerably faster than our exports to the EU itself, but by less than our exports to countries with which we have no trade deals, and therefore trade on WTO terms.

I have sympathy with noble Lords who call for a greater role for Parliament during trade negotiations. I felt uneasy about the lack of accountability to Parliament when negotiating the Uruguay round. Accountability can strengthen a negotiator’s hands, not just in dealing with the other side but in galvanising his own. Civil servants work their socks off when they know a Minister will have to defend their actions in Parliament, but if that synergy does not exist—how should I put this to the Minister who was an official when I was a Minister?—officials feel freer to pursue their own agendas. But I reluctantly concluded then, as I do now, that though we should consult and report to Parliament, since nothing is agreed until everything is, so negotiation is inevitably a matter for ministerial prerogative and Parliament can only accept or reject.

I urge noble Lords to support this Bill, which will carry forward the modest benefits that existing trade agreements provide. But let us recognise that what really drives trade is producing goods and services that people want to buy and getting out and selling them.

Committee on Climate Change: Progress Report

Lord Lilley Excerpts

Wednesday 1st July 2020 Lords Chamber

[Lord Callanan]

The noble Baroness makes an important point and, as I said to the noble Lord, Lord Oates, we will be setting out our plans, publishing a heat and building strategy in due course. We will take these important points on board.

[Lord Lilley (Con) [V]]

My Lords, I refer to my interests in the register. Does my noble friend agree that this recession is caused by suppressing supply, not by insufficient demand, so we need to rebuild the supply of goods and services as rapidly as possible across the board? If we limit growth, as the CCC advises, to activities complying with green criteria, we will recover less rapidly than otherwise. If we invest in activities which absorb more resources than they produce—that is, those needing subsidy—we will not increase net supply. Will he treat with a pinch of salt demands by the CCC and others, which use the Covid crisis as an excuse to turn the hose of subsidies in their direction?

[Lord Callanan]

As we recover from Covid-19, we certainly want to deliver a UK economy which is cleaner, stronger, more sustainable and more resilient. Covid-19 has been a powerful reminder of the UK’s vulnerability to systemic risks. Fortunately, job creation and a clean, resilient recovery can be mutually reinforcing, and meeting net zero and our other environmental goals can create employment and economic opportunities.

Climate Change Act 2008 (2050 Target Amendment) Order 2019

Lord Lilley Excerpts

Wednesday 26th June 2019 Lords Chamber

[Lord Deben]

I did not say what the noble Lord said; I said that on each occasion we have had a target—of 60%, 80% and now 100%—the estimates of the Global Warming Policy Foundation have been wrong. I have looked very carefully at the foundation’s website; we have checked everything it says, and in each case it is not right about the figures.

As for the BEIS figures or the Chancellor’s figures, I merely say that we have spent many months producing the best figure that can be produced. I have still to understand the basis, in science or economics, of any other figure produced. I have discovered that those Global Warming Policy Foundation figures that I have been able to discern are much less accurate than those we were asked for, spent months producing and have given to the Government. I suggest that we stick to the proven figures rather than those which fit other people’s views.

[Lord Lilley (Con)]

Before my noble friend sits down, has he read the document in my hand? It states that the cumulative cost of the Climate Change Act up to 2030 would be £3 billion. The document was produced and published by the Global Warming Policy Foundation, written by me and drawn entirely from the Government’s published figures, which my noble friend’s committee has never refuted, rebutted or criticised.

[Lord Deben]

I would hate to refute, rebut and criticise my friend at so late a point in my speech, but he has only just returned from asking a question that included all those points while admitting that he had not actually read the Committee on Climate Change report.

[Lord Lilley]

I have.

[Lord Deben]

He may have read it now, but he asked prejudiced questions about it when he had not even read the documents. As far as I can discover, no member of the Global Warming Policy Foundation has ever been to any of the presentations we have made of these documents. I really wish they would have an argument with us on the facts.

--- Later in debate ---

[Baroness Brown of Cambridge (CB)]

My Lords, I offer the Minister my strongest support for the order.

I remind the House that we are being asked to sign up to a new target, not a new cost. I want to dispel a few misconceptions. The Committee on Climate Change identified the range of costs needed to meet the net zero target as between 1% and 2% of GDP. Those costs are not costs to the Exchequer. Yes, there will be a role for public funding in some areas, such as to avoid a competitiveness impact on the UK manufacturing industry, but the vast majority of the changes will, and should, be delivered through private investment.

I declare an interest as vice-chair of the Committee on Climate Change. In our report, we compare resource cost estimates to GDP to give a sense of scale. It does not follow that the estimates have an impact on GDP. The impact on GDP could easily be positive, as we shift away from using imported fossil fuels, for example, or as we develop newer industries that will boost our productivity and growth as an early supplier of new, low-carbon technologies globally. We need to be very careful in how we think about the numbers.

However, as many noble Lords have indicated, and as the CCC said in its net zero report, changing the target is just the first step and, in many ways, is the easy part. The real challenge will be the swift ramp-up in policy that needs to follow. I have had the honour of being the sector champion for the offshore wind sector deal as part of the Government’s industrial strategy. As the Minister is aware, a major renewable energy conference is under way in London; I believe that he spoke at it today. The conference is exciting; for example, it shows the impact of our investment in offshore wind on UK jobs and companies.

Will the Minister consider a swift and simple indication of the Government’s policy intent to deliver this new net zero target? A simple indication of intent would be removing the six-gigawatt cap for the next round of CfD auctions while offering no additional funding. The offshore wind industry is ready to respond to such an indication. This would be a win-win. It would show the Government’s intention to act swiftly; it would help to create more jobs; and it would deliver more zero-carbon electricity at no additional cost to the Exchequer or the consumer.

[Lord Lilley]

My Lords, I declare a non-pecuniary interest as a director of the Global Warming Policy Foundation.

We are debating the consequences of a departing pledge by the outgoing Prime Minister; it is probably the most expensive leaving present in history. Harold Macmillan said that when both Front Benches are united, they are almost invariably wrong. It is in that context that I rise, with some trepidation, to show that at least some scrutiny is going on. Macmillan’s point was that, where both sides agree, you do not get proper scrutiny and the normal adversarial approach of our Houses of Parliament does not apply—that is, we do not look with enough rigour at what is going on. That is particularly true if, as was the case in the House of Commons, this House eschews any serious consideration of cost on the grounds that the higher the cost, the better—almost—because it shows how virtuous we will be. That was certainly the attitude during the passage of the original Act in 2008.

My principal plea is for a proper impact assessment of the order. I say that with some feeling: I came to this issue because in 2008, when the then Climate Change Bill was before the House, I went to get a copy of the impact assessment and was told by the Vote Office that I was the only person who did. I was the only person who read it and raised the issue of cost throughout the Bill’s proceedings. That is why impact assessments are important. I read the impact assessment and discovered that, at that stage—when the target in the draft Bill was a 60% reduction in emissions—it showed that the potential costs were twice the maximum benefits. If the costs of something exceed the benefits, you do not do it. That does not mean that the target was wrong; it means that you look for more cost-effective ways of achieving that target. But we did not; we ignored it. We ploughed ahead anyway—and went further: we raised the target from 60% to 80%. One would normally expect that to increase the cost disproportionately, because the things you have not done would be costlier than the things you would do to meet the lower target, and the benefits would rise less than proportionately, because you would get the greatest benefits from the early reductions in global warming and fewer benefits from any incremental reductions.

After we passed the Act, the Government did produce an impact assessment—under much goading from me. Sure enough, it showed that the cost of meeting the target was going to double, but it also found that the benefits were going to increase tenfold. They found £1 trillion of benefits previously overlooked and ignored by the people who had produced the original impact assessment. That must surely raise a feeling of unreality in the minds of people considering this. If you can conjure £1 trillion of benefits out of nowhere, we really are dealing in extraordinary detachment from reality and normal accounting.

I want to see a proper impact assessment this time, even if we did not get one originally and the one we eventually got lacked credibility.

[Lord Rooker]

In this rewriting of history we are listening to, we need to remember that when the noble Lord talks about receiving the Bill, he was in the Commons. The Bill had undergone four to five months of scrutiny in this place, where it started life. I moved the Second Reading in November 2007. Therefore, all the scrutiny that took place here and all the questions that I and other Ministers were subject to were continually worked on by our officials. We could not answer all the questions to start with, and it was inevitable that changes would be made after it reached the Commons and went on the statute book. I reject entirely the rewriting of history; it is as though the noble Lord suddenly discovered something when the Commons was scrutinising the Bill. It was this place that did the scrutiny on the Bill before it even got to the Commons. I think we spent twice as long on it as the House of Commons.

[Lord Lilley]

I am sorry; I obviously have not made my point clear. An impact assessment was produced before the Bill went through either House, and a second was produced after it had been enacted by both Houses. Those two things differed in the dramatic way I have described. I asked my research assistant to go through the entire proceedings of both Houses; he could find no serious scrutiny of the cost either way, but if the noble Lord recalls otherwise, naturally I will change my assessment and realise that he missed something.

My opposition has always been based on the economics of what we previously committed ourselves to, and my concerns today relate to the economics. I recall that when the Third Reading of the 2008 Act finally took place, I and the four others who had decided to vote against it—just as a matter of principle on the economics —retired to the Smoking Room to drown our sorrows and noticed as we did that it was then, in October, snowing outside. I went back to remind the House that we were passing a measure in the belief that the world was getting warmer when it was snowing in London in October for the first time in 74 years.

[Baroness Worthington]

My Lords—

[Lord Lilley]

I was immediately interrupted by people saying, “But surely you realise that extreme cold is a symptom of global warming”. Is that what the noble Baroness was going to say?

[Baroness Worthington]

I have two points. There is a great difference between weather and climate change, which the noble Lord would, I hope, have understood if he has read any of the reports on this topic. Secondly, the Act commits us to no costs, because it merely has a target and enabling powers. Each individual policy then enacted to reach those targets will have an impact assessment that has a full cost-benefit analysis. The noble Lord was absolutely wrong to oppose this Act on the basis of cost, because it is a target-setting measure with enabling powers. Is the noble Lord aware of that? Could he also comment on the fact that people have repeatedly said that the Act commits us to following EU targets on renewable energy? This is another falsehood; the Act says nothing about the need to do anything through any particular technology. Does he acknowledge that?

[Lord Lilley]

Yes. That is not a point I have made, but I acknowledge that the noble Baroness is right to rebuke whoever did make it. I am not opposing this measure; I am demanding an impact assessment, one that covers the aggregate. The Minister’s response is that we will get a cost-benefit analysis of individual measures, as the noble Baroness referred to. I just think we ought to know what the rough total is, as assessed by the Treasury. I am not alone in this; I call in aid my noble friend Lord Deben. He rightly said that I should have read the CCC report in its entirety, rather than just the summary, before I asked my question. Now that I have read it in its entirety—I did so without losing the will to live at any point—I know that it calls for a full impact assessment by Her Majesty’s Treasury. I am endorsing that call.

[Lord Deben]

As it was me who was asked the question, I remind my noble friend that what we said was that the Treasury should look at the distribution of the cost to make sure it was fairly spread. That is a different thing from what my noble friend is asking for.

[Lord Lilley]

My recollection is the words, “look at the cost, and in particular the distribution”, which seems sensible. I endorse both aspects of my noble friend’s appeal to the Treasury.

[Viscount Ridley]

Does my noble friend agree that the Secondary Legislation Scrutiny Committee report on this order says:

“It would have been helpful for the Department to provide a summary of the work that is underway to assess the significant costs and wider impacts of the transition, to inform Parliament’s scrutiny of the instrument”?

[Lord Lilley]

Absolutely. That is what we ought to do in this House: look closely at these things. That does not mean to say we reject them. Unless we know the cost of this measure, which is potentially enormously costly, we are really buying a pig in a poke. I hope the House will focus on that point: should we go ahead and pass this without an impact assessment, or should we at least demand that the Treasury comes forward with such an impact assessment and a distributional assessment as soon as possible?

That distributional assessment is important, because these measures tend to fall disproportionately on low-income households. We have seen that in any country where the cost of climate change measures has come into political contention, those on modest incomes have tended to vote against them. We saw it in Australia and Canada; we have seen the gilets jaunes in France. We should beware and be aware that we are imposing large costs on ordinary households, and we should not go ahead and do that lightly and without knowledge of the figures.

[Lord Ravensdale (CB)]

My Lords, I declare my interests as an engineer working in the energy industry.

I welcome the Government’s commitment to net zero carbon emissions by 2050. However, as noble Lords have already said, this target will involve significant technical challenges. I want to introduce a different slant to the debate today by talking about some of the technical challenges that will be need to be met, the key areas of uncertainty and the options for mitigating them. A comprehensive review of how this target will be met is critical and I hope to see more detail of this in the forthcoming energy White Paper.

The key risk areas we need to consider within the scope of the amendment are on-demand power generation and hydrogen. It is widely accepted that a 100% renewables power generation system is impracticable barring any unforeseen technical advances. This is partly due to the technological limitations of energy storage and the implications of grid stability with a variable power supply. A large amount of on-demand power will be required to counter the variability of renewables and there are two options for that at a high level—gas turbines with carbon capture and storage, or nuclear.

Gas turbines with carbon capture and storage are an attractive option to meet our commitments, but there are several uncertainties with large-scale carbon capture and storage. One uncertainty is the capture rates that are feasible with the technology—whether it can capture the amount of carbon that we need it to—and another is that the economic viability of the technology is still unknown. If capture rates are lower or the technology is more expensive than anticipated, alternatives will have to be sought to large-scale use of carbon capture and storage. It is critical that there is a pilot project from the Government to consider scaling up this technology and the viability of it in more detail.

The concerns are well known about the economic viability of nuclear compared with renewables. It is worth noting that the costs of large nuclear are currently less than the existing offshore wind capacity that has been built. However, the future offshore wind capacity will be cheaper than current large nuclear. It is difficult to make the comparison between nuclear and renewables because of the different characteristics of these technologies in terms of costs.

It is critical that the industry responds to the cost challenge set out in the nuclear sector deal and brings down the costs of nuclear from the £90 per megawatt hour we have seen with Hinkley to around £60 per megawatt hour. Given the doubts over whether large nuclear can deliver, we need to focus on several things to meet that cost challenge: first, small modular reactors, as a fallback and to complement large nuclear, are critical; and, secondly, advanced nuclear technology.

How will these technologies solve the cost issue with nuclear? The first way is through modularisation, which is inherent in small modular reactor design and is already used in other high safety integrity industries such as shipping and air transport. We need to look at moving the production of reactor modules to factories off-site to reduce the cost of reactor technology and to bring down the capital costs of nuclear plants. Secondly, with advanced nuclear, there are several designs out there which are passively safe, simpler and of a much higher thermal efficiency than existing plants and will help in that regard.

Government investment is required to see these promising designs through to fruition and to get them off the ground. On the point made by the noble Lord, Lord Deben, on what happened with offshore wind, we can replicate that with nuclear and use it to bring down the cost of the technology and help us meet our 2050 targets.

Hydrogen also has a key role to play in a net zero economy, whether through heating buildings, energy storage or fuel for heavy vehicles. However, there are many uncertainties about the best means of producing, distributing and storing hydrogen. For example, as has been pointed out by other noble Lords, the preferred means of production—steam methane reforming—will involve large-scale carbon capture and storage and the issues with that that I have pointed out.

Can the Minister say how the Government intend to de-risk these key areas of uncertainty—hydrogen, carbon capture and storage and nuclear—to ensure that the UK can meet the 2050 target as planned? The timing for large investments could not be more fortuitous in many ways, with the Government able to borrow for 50 years at less than 1.5%.

UK Net Zero Emissions Target

Lord Lilley Excerpts

Wednesday 12th June 2019 Lords Chamber

[Lord Henley]

My Lords, an impact assessment is made by the climate change committee. At this stage, departments—this will involve a whole array of them—have not produced individual ones. As each suggestion is made about where we have to go in each area, appropriate impact assessments will be made.

[Lord Lilley (Con)]

My Lords, I draw your attention to my interest as a trustee of the Global Warming Policy Foundation. The Government have embarked on a policy that will result in one of the most expensive programmes since the introduction of the welfare state, without first carrying out a cost-benefit analysis. Is that not extraordinary given that when the previous target was raised from 60% to 80%, in the Government’s estimates the cost more than doubled? Going from 80% to 100% will certainly more than double it again. The Chancellor believes that it will cost a trillion pounds, which could otherwise be spent on welfare programmes, health and education; the UN climate committee believes it will cost at least twice what the Treasury estimates; and the New Zealand Government have estimated that it will cost five times as much relative to their economy, as has been suggested. Given that, is it not irrational to enter this, as any, policy programme without first estimating the costs and calculating the benefits? Why are we doing it?

[Lord Henley]

My Lords, the Committee on Climate Change, as I made clear, has given us its vision of the likely cost of delivering a net zero target; that is within the same range as the original 80% target set out in 2008. It is equivalent to 1% to 2% of GDP by 2050, and our own assessment of costs is broadly within that range. One has to add that the impact of this could be partly offset by the many benefits, such as economic growth, green-collar jobs, reduced air pollution and reducing the risks and potential costs of catastrophic climate change. We will continue with that and, as was made clear in the Statement, the Treasury will also make its own further assessments of the costs. It is quite right that we should take those into account. As I said in response to the noble Lord, Lord Cunningham, it is very important that as we pursue this policy, which we believe is entirely necessary and agreed on most sides of the House, we take everybody else with us.

Climate

Lord Lilley Excerpts

Tuesday 2nd April 2019 Grand Committee

[Lord Lilley (Con)]

I congratulate the noble Baroness on securing this debate and on her introduction to it.

Since the Industrial Revolution, the average temperature of the Earth has warmed by an average of nearly one degree centigrade, and it is all the better for that. From the physics I studied at Cambridge, I am convinced that a part of that at least is attributable to carbon dioxide and other greenhouse gases being emitted into the atmosphere, and that if we continue to burn fossil fuels, the temperature of the world—other things being equal—will continue to rise. We have to decide at what point the benefits of warming are exceeded by the costs, and whether those costs constitute an emergency.

According to the BBC website—we know we can trust the BBC, because it is so unconfident of its position that it will not allow anyone else to broadcast it—the principal danger threatening us as a result of rising temperatures is a rise in the sea levels as a result of melting ice caps. Certainly, if the ice caps melt it would raise sea levels by over 30 metres, which would, as the BBC adds, submerge many low-lying cities. However, the report of the Intergovernmental Panel on Climate Change says that it will take millennia for the ice caps to melt even if we continue using fossil fuels at a high and unabated rate. I cannot help feeling that, at least in the next centuries, we may harness fusion and have limitless energy, enabling us to cope with these problems or find other ways of solving them. They certainly do not constitute an emergency.

The BBC goes on to list other disasters which could be more imminent, such as flooding, droughts, storms and declining crop yields. All these things happen already. They may or may not be becoming more frequent but what is undoubtedly true is that fatalities from any of these events have been declining rapidly decade by decade. In developed countries such as ours, the risk of dying from any such natural event has declined dramatically and is extremely unlikely. It is most unlikely that any of us will suffer loss of life or even major damage to our property as a result of these things.

If we lived in developing countries it would be different; they are at far greater risk. People in poor countries are vulnerable to climate disasters because they are poor—and they are poor because they have not yet harnessed energy in the same way as we have to improve their living standards, their infrastructure and their environment. If we prevent them using cheap fossil fuels to develop, they will remain poor longer and exposed to these emergencies, these threats, these risks. That is what we threaten to do.

What we do in this country is negligible. If we stopped using fossil fuels and stopped eating meat tomorrow, that would reduce the total emissions in the world by 2%, less than one year’s growth in China. If we are to treat this as an emergency, we are talking about keeping poor people poor by stopping them using cheap energy. That is not worthwhile because it exposes them to emergencies. The real emergency, the real crisis, would be in developing countries if we were to follow the logic of the noble Baroness’s position and keep them in the undeveloped state in which not using fossil fuels and not making emissions would leave them.