Nuclear Safeguards Bill

Lord O'Neill of Clackmannan Excerpts

Committee: 1st sitting (Hansard): House of Lords
Thursday 22nd February 2018 Lords Chamber

[Viscount Trenchard]

I am saying that I believe it is not possible by March 2019 to achieve the necessary nuclear co-operation agreements with our four key partners, principally, and that therefore we will not be in a position to operate our own nuclear safeguards regime. I believe the ONR could manage to establish recognition of its own nuclear safeguards regime in that timescale, but—because we will not have the NCAs or an agreement with the EU on nuclear in that timescale—I look forward to hearing from the Minister how the Government propose to avoid a cliff edge in the nuclear industry.

[Lord O'Neill of Clackmannan (Lab)]

Before the noble Viscount sits down, will he clarify something? He sought to give us reassurance on medical isotopes and made the point that 40% of them come from South Africa and 60% from the Netherlands and France. Can he tell us whether they are all the same, because the logistical implications of transportation from South Africa are rather different than coming from the Low Countries and north-west France? Are all isotopes the same? I do not think that they are. Which ones come from which places? Is the reassurance that he is giving us quite as robust as he would like it to be?

[Viscount Trenchard]

My Lords, I am not sufficiently aware of the detail of the proportions of different types of isotopes that come from the European Union—the Netherlands, France and Germany—but the 60% from the EU comes mainly through the Channel Tunnel, as I understand. The 40% from non-EU countries, comes through Heathrow in the main and is subject to the fast-track customs clearance procedure. That is absolutely necessary given the 66-hour half-life that applies to quite a proportion of these isotopes.

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[Lord Broers (CB)]

My Lords, I compliment the noble Lord, Lord Hutton, on making clear from the industry’s point of view the importance of this continuity.

I will make a simple and perhaps naive and impractical point in a couple of minutes. I support Amendment 1 and the other amendments because, as I said at Second Reading and again last night when the situation with Euratom arose in Committee on the EU (Withdrawal) Bill, my interests are centred on sustaining our research and development in support of nuclear power projects. The noble Lord, Lord Hutton, just pointed out the overall importance of sustaining our interest in the nuclear industry. This topic has been followed with some concern by the Science and Technology Select Committee for many years, including during the period when I chaired that committee. I have one reservation with Amendment 1, which I will get to in a minute.

We have sustained world-competitive expertise in many areas of nuclear technology, such as waste disposal, but have relied on collaboration, especially through our membership of Euratom, in keeping up with the development of new types of reactors and of course with nuclear fusion. Research and development of this type is carried out by large teams of research engineers and scientists coming from a broad range of disciplines, and advances emerge through frequent and continuous interactions that occur when researchers get together at symposia and workshops. An idea can come from anywhere in the world. These are team projects, where advances are made through the exchange of information and close collaboration.

I recall when I first took responsibility for a large group of research engineers and scientists developing the advanced electronics for IBM’s new computers in the United States in the early 1980s. A senior engineer with decades of experience pioneering the development of computers took me aside and gave me a lecture about morale. He emphasised the importance of maintaining high morale in managing large teams of researchers working on difficult projects. The fusion project is an extremely difficult project. I was discussing this with a previous Chancellor of the Exchequer just now, who said that the results with fusion were very disappointing. Of course, it is an extraordinarily difficult project. You are trying to maintain extremely high temperatures, higher than on the sun, and trying to contain plasma in a container and then have it survive severe bombardment from neutrons. Why are we doing this project? Because it offers the ultimate solution to our energy problems. We pursue much larger scientific projects—CERN spent orders of magnitude more than we are spending on the ITER project. We have played a key role in that project and we can continue to contribute to it, but we must feel part of the team.

My point is that morale is maintained by feeling part of a team. It is very much like the Olympics. I went back home last night at midnight, and the one good thing about staying up that late was that the slalom was still on the television. We have a very fine slalom skier who trained on a plastic slope—that is a bit of technology for you. He skied brilliantly and got into the top 10, but he had one disadvantage. He did not have the other three members of the team that the Austrians, the French and the Swiss had, who radioed back the moment they got to the bottom to say, “Watch turns five, seven and nine because of the rut there”. He had to do it all on his own.

We do not want to be on our own in our nuclear endeavours: we want to be part of the team but a full member of it, not an associate member. So my unrealistic suggestion is that we go for full membership of the team and not associate membership.

[Lord O'Neill of Clackmannan]

I am very pleased to follow the last two speakers, because I have had associations with both of them. In the case of my noble friend Lord Hutton, I was his predecessor as chair of the Nuclear Industry Association.

In supporting Amendments 2, 12 and 17, particularly Amendment 2, I draw attention to the fact that the Bill is about reassuring the industry and the British people that we will have safeguarding regimes of a quality and a standard that will enable there to be continuing public support for civil nuclear in the United Kingdom. This is not a matter of holding the Government’s feet to the fire—although, as an Opposition Member, I largely approve of such an approach—but to make it clear that it is essential that we get reports back. The fact is that, so far—as has been evidenced by the appearance of the word “Euratom” in the withdrawal papers—that has been a pretty low priority for the Government. Frankly, we cannot trust them without something in the Bill to require there to be a report, albeit an interim one, by Christmas. That is where both the Liberal amendment and the amendment from my colleagues come in. That is not unreasonable, because the record is pretty feeble so far. At worst, we have heard platitudinous nonsense from the Government on many of these issues. We want there to be a requirement that means that their attention is focused on a particular time and date so that, before Christmas of this year, we will have an interim report on the progress that has been made. The areas covered are quite clear.

It is also fair to say that we need a transition period. The noble Lord, Lord Broers, has been riding the horse that he usually rides in respect of research and development, on which he has become an acknowledged expert. I just make the point that there is a lot more to the nuclear industry than research and development and the generation of power. We have considerable expertise in safety matters as consultants in United Kingdom companies and internationally. Our record on the decommissioning of power stations is probably second to none because we have been at it longer than anyone else and because we started building them long before most other people. However, if we are not able to keep abreast of improvements and developments, we will not be able to continue that kind of work.

As I said, the nuclear cycle involves more than just research and the generation of power, and at the moment we enjoy a pretty good position. As my noble friend Lord Hutton said, it is a not insignificant contributor to the engineering and manufacturing side of the British economy, so it is economically important. Politically, it is also important that in this House there is a consensus that then breeds confidence in the country as a whole.

These amendments will have their deficiencies. At this stage in legislation it is the stuff of ministerial responses to say that the amendments are not quite good enough, but when the case is strong enough—I think we all believe that it is—it is the responsibility of government to accept the spirit of the amendments and to go away and consult the Front Benches and interested parties to secure wording which we consider to be appropriate for the scale of the challenge that has to be met to sustain the confidence of the nuclear industry, the confidence of this House and, ultimately, the confidence of the country as a whole in the civil nuclear project in which we are currently engaged.

I will be very disappointed if the Minister tries to duck and dive on this issue. If he does, I suspect that he will get bruised when we come to consider it at the next stage. I think that there is a strong feeling about this on pretty well all sides of the House. Even the noble Viscount was somewhat half-hearted in his backing of the Government and made the point that transitional arrangements are necessary. However, for transitional arrangements to be effective, we must have reports at every stage of the process. Frankly, nine months on is not an unreasonable point at which to ask for such a report. It is not enough for Ministers simply to say, “Yes, we will come back and address the House”. We need something more concrete than that. We also need assurances that, before any further action is taken, we are given clear indications of matters relating to finance and future developments so that we can avoid the charge that we have given the Government a blank cheque in relation to a piece of our national economy which is essential to the future energy needs of our country.

[Lord Fox (LD)]

My Lords, noble Lords have heard about the scale of the risk of not achieving the objective of the Bill. If you were doing a classic risk analysis in the private sector—the sort of thing that, under corporate governance, the Minister’s department requires every board to observe—you would say that there was a very high risk of not achieving that objective. Even if the Minister thought that there was only a very small chance of not doing so, if we were a board of directors he would be required to mitigate that risk. These amendments provide a pathway to mitigation—a pathway to a plan B. It is the sort of medicine that, quite rightly, the department supplies for all business and enterprise across the United Kingdom—that is, understanding the risks that they are undergoing and seeking a way to mitigate them. That is exactly what the Government and the Minister should be doing, and it is why, between now and Report, the Government have to embrace the messages that they have heard today.

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[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)]

My Lords, I am not sure whether I heard the noble Lord set out his own party’s policy more widely on Brexit, but perhaps that will be for another day. He can then assist the Committee, but I leave that with him. I offer my congratulations and thanks to him, to the noble Baroness, Lady Featherstone, and the noble Lord, Lord Warner, for introducing their amendments. I think that it was the noble Lord, Lord Warner, who compared the response last night by my noble friend Lord Callanan to a Geoffrey Boycott innings. For those of my age and beyond, I will go for a sort of Ken Barrington type of response, so it will be long and slow. However, it is important that I get it all in to make sure that we have a proper response to the debate so that we can consider these amendments again on Report. It is also important for noble Lords to understand in this sort of Ken Barrington response that I am going to give—

[Lord O’Neill of Clackmannan]

We want wisdom, not Wisden.

[Lord Henley]

The noble Lord knows that he always gets wisdom from me. I want also to say that I am not necessarily going to respond to all the points in the course of this debate because an awful lot of them apply to later amendments. Nevertheless I will give a fairly full response, but I shall start by making a pretty fundamental point, made by my noble friend Lady Neville-Rolfe. It is that we are where we are. My noble friend supports this Bill because, as she said, it is very important that we have plans in place for when we leave Euratom. We are going to leave Euratom at the same time as we leave the European Union in March of next year. That was dealt with in the notice of withdrawal Bill, now the European Union (Notification of Withdrawal) Act 2017. The legislation has been through both Houses of Parliament and has the support of the party opposite and others.

What I want to make clear to the Committee is that we are determined to continue to have a constructive and collaborative relationship with Euratom and with all our other international partners. The withdrawal of the United Kingdom from Euratom will in no way diminish our nuclear ambitions, and I make that clear to the noble Lord, Lord Broers, and others. Maintaining the continuity of our mutually successful civil nuclear co-operation with Euratom and international partners is going to be a key priority for us. As a member of the International Atomic Energy Agency, we are committed to have in place nuclear safeguards. I should remind the Committee that these have nothing to do with safety. Nuclear safeguards are reporting and verification processes by which states demonstrate to the international community that civil nuclear material is not being diverted into military or weapons programmes. The United Kingdom has been a member of the IAEA since its formation back in 1957.

Under the Euratom treaty, the civil nuclear material and facilities within member states are subject to nuclear safeguards measures conducted by the European Commission on behalf of Euratom. Euratom also provides reporting on member states’ safeguards to the International Atomic Energy Agency, which conducts nuclear safeguards globally. Nuclear safeguards measures include reporting on civil nuclear material holdings and development plans, inspections of nuclear facilities by international inspectors, and monitoring, including cameras in selected facilities. I repeat that nuclear safeguards are distinct from nuclear safety, which covers the prevention of nuclear accidents, and nuclear security, which covers physical protection measures. Those are the subject of independent regulatory provisions and we shall move on to them in due course.

As was made clear by my noble friend last night and I make clear again today, the European Union and Euratom are uniquely legally joined. Euratom shares a common institutional framework, making use of the same institutions; namely, the Council, the Commission, the European Parliament and the ECJ. For example, the European Commission has an active role in shaping and enforcing Euratom rules and it currently plays a central operational role on safeguards in the UK. As was further made clear by my noble friend last night, Euratom is also subject to the jurisdiction of the ECJ.

When the Prime Minister formally notified our intention to leave the European Union in June, she also commenced the process for leaving Euratom. That notification was debated and authorised by Parliament through the European Union (Notification of Withdrawal) Act 2017 which, as I have said, had the full support of both Houses of Parliament. The United Kingdom will therefore withdraw from Euratom in 2019 at the same time as withdrawing from the European Union. That is why we need the legislation before us now to be in place.

The United Kingdom’s current nuclear safeguards regime operated by Euratom will cease to function in the United Kingdom as a result of our withdrawal from Euratom. The Nuclear Safeguards Bill will ensure that we have the right regime in place for the Office for Nuclear Regulation to regulate nuclear safeguards. I reassure the Committee that the Government are meeting the challenges that clearly lie before us. We have already made great progress in the work that we are doing to secure continuity for our nuclear industry by establishing long-term arrangements to secure nuclear safeguards. The Queen’s Speech on 21 June last year included our intention to take up the powers that will set up a domestic nuclear safeguards regime, and that is what this Bill seeks to do.

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[Lord O'Neill of Clackmannan]

The Minister referred to Article 206 and the agreement that has been arrived at with Switzerland and Ukraine in respect of training and research. Does that provision afford any opportunity for other areas to be incorporated in an agreement with Euratom? Could it be the portal for enabling us to be alongside Euratom in the way that the Ukrainians and the Swiss have been able to obtain for their preoccupations with training and research?

[Lord Henley]

My understanding is that it will allow them to do that. I am not aware that Article 206 could be used further as the noble Lord suggests. If I am wrong, of course I will write to him, but it might be a matter of interpretation. I should remind him in respect of Article 206 that I stressed when I read out the Government’s response to the Select Committee that any agreement required unanimity. That is obviously quite a big “if” in these matters. If there is anything further I can add, I will write to the noble Lord.

Nuclear Safeguards Bill

Lord O'Neill of Clackmannan Excerpts

Committee: 1st sitting (Hansard - continued): House of Lords
Thursday 22nd February 2018 Lords Chamber

[Lord Warner (CB)]

My Lords, I rise to support this amendment and congratulate the noble Lord, Lord Grantchester, on his drafting skill in producing words that will not inflame the Government or, in particular, the—misnamed—European Research Group and its red lines. The amendment in no way implies that we, the UK, will go back into Euratom, however much most people in this Chamber wish we would. The noble Lord has kept clear of that dangerous territory and I congratulate him on that.

Indeed, there is nothing in the amendment that goes against government policy. The Government say that they aspire to achieving the safeguarding standards of Euratom but by another method than the current set of arrangements. That is all that the amendment tries to do. Indeed, it may help the Government in securing accreditation by the IAEA when it comes to the ONR being recognised as up to snuff in its standards. That accreditation is essential, as many people have said today, for us as a country to secure nuclear co-operation agreements. This is a helpful and well-constructed amendment, which the Government would be well advised to accept.

[Lord O’Neill of Clackmannan (Lab)]

My Lords, I support this amendment. It is not just a question of maintaining the standards that have been established but of putting us in a position where we will be able to meet and address new challenges. I happened to be in Tokyo on the day of the Fukushima disaster and tsunami. I was in the company of a group of nuclear engineers and no sooner had the messages come over the television than they were on their BlackBerrys, communicating with their international colleagues—because there is an international nuclear community—and working out the extent of the damage.

It was shortly after that, on our return, that the Nuclear Installations Inspectorate leadership was appointed to lead the international examination of the Japanese nuclear capability. We were seen to be at the forefront of that. That is a heritage that we want to maintain, and this amendment very succinctly addresses that challenge. It is important, therefore, that the ONR—the successor to the NII—is able to do that. We know that this will have implications for staffing, salaries and for the general financing—which we will come to later—but the point is that it would be desirable to have in the Bill a commitment to maintaining our current position, which is partly due to our membership of Euratom and partly due to the excellence of our inspection and monitoring capabilities.

It is incumbent on the Government, therefore, to give a commitment that they will seek to maintain the quality and standards that we currently enjoy and our capability in contributing to international nuclear safety. This is not something that should be in any way antithetical to what the Government seek to do; the amendment is no reflection on their commitment but it would enhance the Bill and I see no reason why, if not the wording, the spirit of this amendment could not be addressed. As I said in an earlier intervention, the point of Committee stage is to indicate areas of concern and, if the Government are prepared to accept the consensus around this Chamber on the matter, it is incumbent on them to return with the appropriate wording that enables us to proceed. In this instance, we have a very good blueprint from my noble friend Lord Grantchester, as my friend the noble Lord, Lord Warner, has said, for what is required. I do not think the Minister really has anywhere to hide on this issue and I would like to think he will be able to co-operate with us in enhancing the Bill to take account of the dynamic challenges that nuclear safeguards in the future will require.

[Baroness Featherstone (LD)]

I rise from these Benches to support the amendment of the noble Lord, Lord Grantchester. Given the amount of discussion across the Committee about uncertainty and concern, this well-worded amendment gives the opportunity to reassure the Committee on standards and nuclear safeguards. I hope the Minister will feel able either to use these words or to simply accept this as a drafting amendment and return on Report with new government words.

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[Lord Fox]

My Lords, this may be an opportunity for the Minister to play an uncharacteristic square drive. I support the amendment and, with the authority of the Delegated Powers Committee behind it, I should have thought this is an opportunity to send us away with a song in our heart before the next helping. I cannot speak for the noble Lord, but I guess that if the actual definition of civil nuclear needs amendment, there is plenty of conversation to be had. I hope that the Government are able to accept the amendment.

[Lord O'Neill of Clackmannan]

For someone of my age and generation, it was always fashionable to attack the Wilson Governments of 1964 and 1966. In the light of the Blair Middle Eastern excursions, which I have to say I supported at the time, history now favours Wilson on the basis that he did not send any troops to Vietnam. Equally importantly, those of us who in those days were marching against nuclear weapons often forgot that one of the great achievements of the Wilson Administrations was their sponsorship of the non-proliferation treaty. At the heart of the amendment is a degree of clarity and a redefinition of civil activities. It would be useful to have a clear and explicit definition, which is why this amendment deserves support. It is not against the Bill; it is not going to harm Brexiteers or frighten the horses. It is a straightforward amendment—and, at this late stage of the afternoon, for God’s sake give us something!

The Minister has hidden behind what are quite clearly inadequate ministerial briefs. The noble Baroness, Lady Vere, went on and on. I was reminded of the story about Lord Willie Ross, when he was shadow Secretary of State for Scotland at a time when Labour was in opposition. He dismissed the speech of the then Secretary of State for Scotland, saying that there were three things wrong with it—first, that he read it; secondly, that he read it badly; and, thirdly, it was not worth reading in the first place. I absolve the noble Baroness of the second charge, but the first and third points are still relevant. We are not on the same side as the Liberals, I have to say; it is only the Conservatives who get into bed with the Liberals. This is an amendment that we are quite happy to support, but do not let us have this obfuscatory nonsense that we have been getting. Give us something that makes today’s efforts worthwhile—if not, we will be after you at the next stage, and we will win because we have the majority in the House of Lords.

[Lord Rooker]

With the Liberals.

[Lord O'Neill of Clackmannan]

With the Liberals.

[Lord Henley]

We have had rather a lot of history lessons. I am grateful to the noble Lord, Lord O’Neill, for reminding us of the late Willie Ross. I remember his technique when in opposition of calling Divisions just for the sake of having one, so that he could go out to have a cigarette—but that was in another world and another time, and now we have to go further away to have a cigarette than is possible in the time it takes to have a Division.

The noble Lord also reminded me of the first ever committee I was on, many years ago. I remember with great pride when the Chief Whip approached me and asked me if I would go on the Joint Committee on Statutory Instruments. Many noble Lords will remember being asked to go on to such a committee, either in this place or the other place, and feeling that it was a great honour and how important it was. JCSI did a very good job and was very important, but not nearly as important—and I think we are all very grateful for it—as the Delegated Powers and Regulatory Reform Committee, which can look at the merits of the legislation. We are very grateful for its reports. We have taken note of exactly what it has said in relation to the amendment. We will look very carefully at those recommendations and I hope to be able to give a positive response in due course. I do not think that I can give that response at the moment because the words that are being queried—“civil activities”—have, as someone put it, their natural meaning, and we would accept that. But it might be that a change has to be made. I put it to the noble Lord, Lord Grantchester, that we will look very carefully at this matter and between now and Report we can have further discussions and see whether amendments are needed.

With that, I hope that the noble Lord will be prepared to withdraw his amendment. At that point, going back to the cricketing analogies that we had earlier, we might at this stage draw stumps.

Small Businesses: Retention

Lord O'Neill of Clackmannan Excerpts

Wednesday 21st February 2018 Lords Chamber

[Lord Henley]

I think the noble Lord is going somewhat beyond the Question on the Order Paper and I do not think I ought to comment on that at this stage. We are looking at the practice of retention. I have made clear where we are, and we will act when appropriate.

[Lord O’Neill of Clackmannan (Lab)]

Is the Minister aware that his consultation process started as a result of an undertaking by one of his colleagues to have a review, which started some two years ago? I declare an interest in this as set out in the register. This is far too long a period to say that we are just awaiting a further consultation. How long does this process have to take and how many businesses are going to go bankrupt? It is not just the Carillions of this world. It is small builders, 95% of which employ fewer than 10 people, who are intimidated by companies from seeking the legal redress which would be the obvious route to get the money to which they are entitled.

[Lord Henley]

The noble Lord is quite right to point out that this started during the passage of the 2016 Act as a result of promises made by my noble friend Lady Neville-Rolfe. We instituted a report into this matter to gather evidence and following that report late last year we instituted the consultation. The consultation ended in January. That is why we are now considering that consultation, and we will act when appropriate.

Nuclear Safeguards Bill

Lord O'Neill of Clackmannan Excerpts

2nd reading (Hansard): House of Lords
Wednesday 7th February 2018 Lords Chamber

[Lord O'Neill of Clackmannan (Lab)]

My Lords, the purpose of this Bill, Brexit notwithstanding, is to try to sustain the confidence of the public in the nuclear industry in the United Kingdom. It is fair to say that, since the non-proliferation treaty of 1968, there has been a growing awareness of the split between civil and military nuclear activity. Indeed, the opposition to nuclear power had begun to dip—although there have been periods of increased popularity—and, since 1968, a lot of the misgivings about nuclear power have been reduced. This is because there have been, in varying forms, regimes that would look after civil nuclear power in its various manifestations.

Prior to Euratom, that was done by the IAEA, which in those days was probably not the most rigorous of organisations. Indeed, when one looks at the record of the nuclear industry—for example, the way in which it stored and dealt with nuclear waste for many years—it was somewhat haphazard. However, this is now very rigorously addressed and it is fairly successful, although the enormity of the task at Sellafield means that it is slow and, by necessity, exceedingly fine in the manner in which it is dealt with.

When we are confronted with the departure from a regulatory organisation such as Euratom, we have to cast around to find a means to deal with it in a way that will not undermine public confidence. It is significant that we no longer refer to the Office for Nuclear Regulation as the Nuclear Installations Inspectorate, because it is now a somewhat different organisation and enjoys a degree of financial independence, which enables it to employ and retain an inspectorate. Prior to the changes, the old inspectorate had terrible leakage problems. It had some of the most capable nuclear physicists in the country, but for understandable reasons they went elsewhere to work—they were paid far more by the private nuclear companies. Without Euratom, the work of the Office for Nuclear Regulation will become that much more critical.

It would be wrong to suggest that we can just stand by and take the IAEA standards. The IAEA covers the whole of the world’s nuclear-generating capability. Not all countries that are members of the IAEA have the capability, or indeed the desire, to achieve the standards of performance that we regard as essential for the safety of our public and for the acceptance of nuclear power.

In examining the Bill, we must first look at the capability of the Office for Nuclear Regulation to replace the staff who will be lost because of the absence of Euratom’s officials. That is probably the first priority. We have to make sure that the necessary money and resources will be made available, and that it is not done at the expense of an industry undergoing a lot of difficulty one way or another.

Secondly, we have to explore how we can realistically maintain a relationship with Euratom that is capable of sustaining those high levels of safety. Euratom will have the means to explore what is required in a way that an individual country cannot do. If we are talking about an organisation that sits alongside Japan and Canada, we need to be in that kind of position. In a number of areas our withdrawal from Euratom may not be quite the national tragedy that some people suggest, but we need to work a bit harder at getting that brought across. So far, the Government have not given a convincing explanation of our future relationship with Euratom.

On the medical issues and whether they could be the subject of an additional clause, I think that would probably be difficult, given the Long Title. However, those issues need to be addressed for obvious reasons.

Lastly, one of the problems faced by the nuclear industry in the round—that is, civil and defence—is that there has been a tradition of secrecy and a desire not to let anybody know what is going on. As regards health and safety, one could argue that in the civil field people should not necessarily have to be preoccupied or concerned with what is going on within the industry. However, I am not certain about that argument. I tend towards the view that transparency can be a high-risk issue but it is one that we need to address. I am not sure whether the Clause 2 provisions, which are drifting towards the character of Henry VIII provisions, are necessarily the kinds of things that need to be hidden away or carried out by executive order. Beyond this legislation, when reporting is carried out and changes are proposed, the widest possible consultation should be available and the opportunity for this House and the House of Commons to debate any changes should be made available.

I recognise that this legislation is, unfortunately, necessary. If we were not in Brexit mode, we would probably not need to have it. However, I would like to think that it is one of those pieces of legislation that could become irrelevant because we could stay on. But until such time as we know that for sure, it is essential that we give the Bill the closest attention. I hope that we can produce something a wee bit better than what we have. It is not a terrible Bill that we will spend our nights awake over the Recess worrying about. However, there is scope for improvement, and it is incumbent upon us to improve it when we get the opportunity to do so.

Fuel Poverty

Lord O'Neill of Clackmannan Excerpts

Thursday 19th October 2017 Lords Chamber

[Lord Prior of Brampton]

My noble friend makes a good point. As she will know, we are putting an obligation on all private landlords so that if they rent out their properties in 2018, they must have at least a band E category certificate on them. That will begin to make the kind of difference to which my noble friend refers.

[Lord O’Neill of Clackmannan (Lab)]

My Lords, I draw attention to my interests as set out in the register. The Minister will be aware that some 850,000 households, or 35%, of the people in fuel poverty are in the privately rented sector. In 2011, the coalition Government introduced regulations which are to take effect next year, but as far as can be discerned, very little in the way of instructions have been given to private landlords to carry out the necessary improvements to change the dreadful conditions that prevail for so many people. They now have less than a year to do something about it. Will the Government give us a clear indication of what will be required of landlords and when that will be published, so that landlords can get on with the job, if they have the stomach and resources to do it?

[Lord Prior of Brampton]

The noble Lord raises a very important point. As he will know, from 2018 private landlords will not be able to let their property to new tenants unless the property is at least band E. The cost of getting to band E is an issue that is under negotiation at the moment with Claire Perry, the Minister responsible for green energy. I hope that we will make some serious progress in that area over the next few months.

Electricity and Gas (Energy Company Obligation) (Amendment) Order 2017

Lord O'Neill of Clackmannan Excerpts

Tuesday 21st March 2017 Grand Committee

These are important changes to the existing ECO order but they will continue to drive large-scale investment in energy efficiency across the country. Support will be targeted more at those who need it most: those living in fuel poverty or on lower incomes and struggling with bills. The order will promote measures that bring reductions to energy bills, simplify scheme delivery, and better target energy-efficiency funding to vulnerable and low-income households. I commend this draft order to the Committee.

[Lord O'Neill of Clackmannan (Lab)]

My Lords, this order is something of a curate’s egg. There are a number of aspects that one would be quite happy with were it not for the fact that one player in this whole scheme is absent: the Government. They are changing some of the regulations and arrangements but they are providing no money themselves, unlike the Administrations in Belfast, Cardiff or Edinburgh. Therefore, we have to say in the first instance, on the objective of moving the starting time by six months, from 12 to 18 months, if we are to get a better scheme, that might be very well. However, it is a delay, in fact from 2015, when the opportunity to introduce an improved scheme first arose.

It begs the question: why is there a delay? If it is because the Government are wrestling with the complexity of it, I submit that they have had plenty of time to do that. I know from the briefing I received from National Energy Action—of which I happen to be the honorary president, and therefore declare a limited, non-pecuniary interest—that this estimable charity has somewhat mixed feelings, which reflect my own. The Government seem to be doing a little bit with one hand, and then taking it away with the other. When we see the reduction in boiler replacement, it is not because the job is nearly ending—that we have completed the replacement of inefficient boilers—but simply because the Government take the view that it costs too much.

There is also the fact that if you want to make households more conscious of the benefits of energy efficiency, a dramatic change such as the replacement or introduction of a boiler is of critical significance in this change of thought process. We know that in many respects the households that are most disadvantaged are those which have so many problems that trying to be energy efficient is very much a kind of finger-in-the-dyke operation, and they need assistance. Very often, when we are able to secure the replacement boilers, we get a change of step and a greater willingness to help.

It is also fair to say that we have insufficient sums to meet even the most modest of home improvements. We are told by a number of bodies—including, for example, the Committee on Fuel Poverty, the Committee on Climate Change, and Policy Exchange—that even to meet the very modest target of getting households to EPC E level by 2020 will require £1.9 billion. To get households to EPC D level by 2025 will cost £5.6 billion. To get all households up to EPC C level by 2030 will require £12.3 billion. These are large sums. However, what the Minister is talking about seems to be nowhere near what is required to reach these households. Indeed, it has been suggested that a baby born today into inadequate housing would probably be about 75 before their home was properly heated.

A number of the changes are sensible and not unwelcome. However, the Government cannot get away with the platitudinous nonsense the Minister spoke at the beginning of his speech when he quoted the Prime Minister. If the Prime Minister really wants to help hard-working families and do something about this kind of household, the Government will have to use central taxation as a mechanism to do it. It is not enough just to express pious hopes and, on occasion, go for cheaper options. That seems to be at least part of the thinking behind a number of the changes in this measure.

Therefore, as I say, this is a curate’s egg. This Committee does not have the opportunity to overturn or amend it. I know that it has been the subject of fairly wide consultation but I do not think that all the organisations that were consulted would necessarily embrace everything in the order. Therefore, as I say, my welcome of it is highly qualified and I am somewhat disappointed. An opportunity has been missed here—and not because the Government have rushed into this. They have had since 2015 to get something done and the best that they can come up with is this rather feeble list of changes and a further six-month delay in bringing about many measures that would be regarded as improvements. We cannot take any consolation as some of the less desirable aspects of this measure will continue for some time.

As I say, I think that this is a missed opportunity for the Minister. He and I are old friends from Select Committee days in the Commons. I am trying to chastise him as gently as I can as I know that he is new to the job and I expect that his influence over the drafting of this order was probably minimal. However, I would like to think that in the months and years that he may still be in the job he will be able to come up with something better before too long.

[Baroness Maddock (LD)]

My Lords, something is better than nothing. We on these Benches, at least, welcome this measure, although there are many “buts”. There is no doubt that improving the quality of existing homes can play a very important part in increasing warmth and comfort and help to make fuel bills far more affordable, particularly for vulnerable occupants. However—I think the Minister recognises this—it is also a highly cost-effective way of reducing carbon emissions and saving energy. In addition, ambitious energy efficiency savings programmes can capture substantial macroeconomic benefits.

I remember taking through the House of Commons a Private Member’s Bill that became the Home Energy Conservation Act 1995, and saying that the job creation potential in making homes energy efficient was enormous. I regret that some 20-plus years later, we are still grappling with this issue and people are still living in fuel poverty. As the noble Lord said, people born into fuel poverty today will probably still be in fuel poverty at the end of their lives. That is very sad.

--- Later in debate ---

[Lord Prior of Brampton]

I understand that argument, but it would take five minutes to have a whole list of other parts of the population, whether it is people who have mental health problems or learning difficulties or old people who are lonely. There are lots of people we would like to do more for and from whom there will be knock-on benefits to the NHS, social services and the like. As the noble Baroness will know well, the trouble with politics is that choices have to be made. It is very easy to say that we should take more money from this group and give it to that, but if only life was so simple.

[Lord O'Neill of Clackmannan]

I am almost reluctant to make this point because it is a wee bit unkind and it is not the Minister’s fault. We know that the Government have problems with raising taxes. We have seen that in the past two weeks in the context of national insurance contributions. There was a willingness to raise taxes, but they discovered that they were raising the wrong ones as far as their supporters were concerned. Perhaps between now and next November the Minister can look afresh at what sources of revenue could be secured to help the fuel poor and to meet the Prime Minister’s pious words about helping hard-working families who are unfortunate enough to be living in hard-to-heat homes.

[Lord Prior of Brampton]

I understand where the noble Lord is coming from. I repeat, our approach is diametrically opposite to his. We do not want to raise taxes from any group of citizens in this country when the alternative is to try to improve productivity. He will know from the time when he was chairing the Trade and Industry Select Committee in the other place that productivity has been, and is still, a huge issue for this country. I do not think that he seriously thinks that we are going to improve productivity by taxing hard-working British people. That is a choice that we have to make. His party, during those long-off, rosy days when Tony Blair was Prime Minister, had in a sense got the message that there is a direct relationship between high taxes and successful economic growth. Raising taxation along the lines that he described is simply not an option for this Government at this time.