Energy Bill
Debate between Lord Oxburgh and Viscount Hanworth
Lord Oxburgh
My Lords, I will make two quick points. First, I point out that many Governments would salivate at the thought of having six roughly equipotent competitors or participants in a regulated industry in competition with each other. For my information, I am not clear how you decide when you have enough competition, because six participants is quite a lot. It is popular to bash the big six, probably because they do not handle their consumers very well and they have all been associated with unpopular price rises. However, I would like to hear this aspect explored a little more.
My second point is quite separate, which is to draw attention to the second subsection of the amendment of the noble Lord, Lord Berkeley. Regardless of whether the amendment is accepted by the Government, it is very important that the Government take note of that second subsection. It covers a lot of small businesses—I declare an interest as a director of 2OC, which does this—that use renewable energy on a particular site and deliver it to a particular business or a very small range of customers locally. They generally combine generation and transmission to one or a limited number of customers. The Government should make sure that that is protected in the Bill, whatever the final outcome.
Viscount Hanworth
Perhaps I may make a few more comments, some of them addressed to things that have just been said. A great deal of negative propaganda accompanied the privatisation of the electricity industry in the UK, but many studies indicate that the industry was far more efficient than another national industry with which we should compare it, the American industry. There is no question about that. Yet many people tendentiously denied these realities.
If we are to have a nuclear industry, it will be in the hands of a state-owned foreign monopoly. That is a reality that sits very ill beside the fantasy of perfect competition. If we are to have a competitive environment or, indeed, any competition in this environment, perhaps the competition should come from a British state-owned nuclear industry. We have to think somewhat outside the box and not revert to the paradigms of perfect competition versus state industry, which seems still to dominate people’s thinking in this respect. The only countervailing force that I can imagine that could really survive in the British electricity industry to induce competition is if a fraction of it lay in the hands of the state.
Energy Bill
Debate between Lord Oxburgh and Viscount Hanworth
Lord Oxburgh
My Lords, I shall speak also to Amendments 3, 4, 6, 9 and 14. I begin by declaring my interests as listed in the register, but with a small renewable energy company and a small energy efficiency company. It would also be appropriate to start by thanking the Minister and her team for the way in which they have made themselves available to brief any Member of the Committee who has approached them on the complexities of the Bill. It certainly is a complex Bill and, indeed, that is part of the problem. The complexity of the Bill arises from the multiplicity of its objectives, which are to achieve decarbonisation, to achieve energy security and to do both of those at the lowest possible cost.
Some of us had the opportunity yesterday, courtesy of the noble Viscount, Lord Ridley, to attend a briefing given by an investment manager on his view of the costs and complexity of the Bill. Although I think that not everyone agreed with everything that the briefer said, the talk was extremely informative in the sense that it emphasised the enormous capital that will have to be raised if the aspirations of the Government, as seen through the climate change committee, are to be achieved over the next 40 or so years. It also emphasised the relative unattractiveness of the UK utilities market compared with those in competitor countries and therefore the difficulty in persuading investors to put money into these proposals.
Of course, one of the problems is that the proposed way forward cannot be regarded as the cheapest way forward. In fact, it is relatively expensive by comparison with ways forward that do not decarbonise and which pay much less attention to security of supply. Given that investments in generation are long-term investments, for 30, 40 or even 50 years, investors have to be absolutely clear that the Government are of firm intent.
It was around 50 years ago that the late Lord Franks, in describing the inability of Oxford University to reform itself internally, introduced the expression “infirmity of purpose”, which occurred frequently throughout his reports. Fundamentally, the concerns of the investment community are that there may be a degree of infirmity of purpose between this Government and their successor Governments. Given the overall difficulty of investing in UK utilities, for the reasons that I have just outlined, the least we can do is to do everything possible to indicate that not only the present Government but, as far as possible, across parties, that subsequent Governments will support this approach.
That is the reason for putting forward this group of amendments. Because of the drafting of the Bill, they may appear a little complicated, but there are really only a couple of words that are important: the substitution of “must” for “may” in terms of the obligations of Ministers to declare a target range; and the insertion of the dates 2030 and 2014.
The obvious cause for inserting 2030 is that, although in one sense it is arbitrary, it is an extremely important date in the Government’s decarbonisation plans: if the 2050 target is to be achieved, there has to be really very substantial decarbonisation of electricity generation by 2030 because the second phase of achieving the 2050 target is pervasive electrification of the rest of the energy economy. Unless you have decarbonised your electricity generation before that, the second phase makes no sense. This is part of the reason for 2030 but it is also a matter of emphasising the Government’s firmity of purpose.
The reason for inserting 2014 relates, at least in part, to a second objective, which comes from Brussels and has to do with the proportion of renewables that we need to have in our generation by 2020. To digress for a moment, last week I spent several days reverting to my roots at an energy professionals’ conference in Edinburgh. Although shale gas was a very important topic of conversation there—probably the most important—a secondary topic of conversation was the failure of Governments to understand how long things take, to understand the timescales of change. One constructor said to me, “It’s fine. We can build a power station in three years, or put up wind turbines very quickly, provided we have all the components ready”. He said that the Government seemed not to understand the importance of the supply chain. An important development that may appear quick to implement may be delayed for several years if key components such as bearings are not available in the necessary timescale. The message was that if the 2020 target is to be achieved, it is extremely important that that should be made clear now, as soon as possible, so that those who will be involved in achieving it can start placing orders and can take their place in the queue for components to get the thing going. Two years’ delay would be extremely important. My second point is that if one leaves this to the last few years of the decade, there simply will not be enough civil engineering capacity to build the requisite generating capacity, whatever its character, in time.
Clearly there are broader questions of industrial competitiveness, which certainly have bothered me a lot. However, I will not touch on them now because amendments that we will debate later will provide a better opportunity to discuss them. So in conclusion, the only important point is that we cannot take investment in our energy sector for granted. It will be difficult, and we have to do everything we can to strengthen investor confidence. The amendments in this group do nothing other than strengthen that confidence, and there is no significant downside, given that the information that will be necessary for the Government to meet these commitments will be available to them by December this year. I beg to move.
Viscount Hanworth
My Lords, I strongly support the amendments tabled by the noble Lord, Lord Oxburgh. Amendments 2 and 6 are of prime importance. The Bill prevents the Secretary of State setting a carbon intensity target for the electricity industry before 2016, which is when the UK’s fifth carbon budget is due to be set. It states that the Secretary of State may set a target but does not compel him to do so. If he were to set a target, the earliest date from which the target range would be effective would be 2030. The amendments tabled by the noble Lord, Lord Oxburgh, would compel the Secretary of State to set a target by 1 April 2014. Here, we are revisiting territory that has already been fought over on Report in the House of Commons. An amendment with the same intentions and similar wording to the one we are considering was proposed by a cross-party alliance consisting of a Conservative ex-Minister, Tim Yeo, and the Labour MP Barry Gardiner. The outcome, after a long debate, was that the amendment was disagreed by 290 votes to 267. However, for the coalition it was a whipped vote, and it is clear that numerous Liberal Democrats, and quite a few Conservatives, defied the whip by voting in favour of the amendment. We may surmise, therefore, that a majority was in favour of the amendment, but that the expression of their opinions was limited by the imposition of the whip. One might wonder why the leaders of the Liberal Democrats agreed to the imposition of the whip. We must assume that it was a matter of political expediency, and that a quid pro quo was on offer.
Protection of Freedoms Bill
Debate between Lord Oxburgh and Viscount Hanworth(12 years, 10 months ago)
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Lord Oxburgh
My Lords, I support the intention, if not the precise wording, of Amendments 55A and 56. I feel that, if the legislation goes forward as is proposed at the moment, a series of what I hope are unintended consequences will ensue, which will be seriously damaging to the research community in this country.
One of the points that has not yet been made or emphasised is that the ability to demand information under the Freedom of Information Act is international, so it may be demanded by any person, anywhere in the world, without any specific purpose whatever. We may say that there is copyright, or that the information is released under certain conditions, but probably the places that we would have most concern about making demands of this kind would not respect these conditions, and we would have no means of enforcement.
A serious point, which was made by the noble Lord, Lord Lucas—although I do not support the purpose with which he made it—is that it is not clear from the legislation, as it now stands, what constitutes a data set. My days at the bench are a little behind me, but if I spend a couple of days carrying out a series of experiments and arrive at a series of data points, are they instantly a data set which may be requested by the competition, in North America or elsewhere, and incorporated, published and what have you? The results may or may not have significant commercial significance, but it would certainly undermine the career of an individual who was making them if they were pre-published by someone else.
I wonder whether we should not think of some reasonable amount of time—this concept has been used by research councils from time to time—during which the results of any particular piece of research should be accessible only to those who have carried it out, after which they could be available subject to the Freedom of Information Act: a year, maybe, or two years, or something like that. Certainly the results should be in the public domain; but equally, the person or group that has put in the time, building the apparatus and making painstaking observations, should be the person or group with first access to them.
Another point worth making is that the costs of redaction of some of the information which would be freed under the legislation at the moment are really significant. As I understand it, they would be able to be passed on to the individual or group requesting the information. However, a good example would be data which were acquired from a health study—perhaps clinical trials, or something of that kind—where all the information that would have made it possible to identify the individuals concerned has to be removed: this is a long and expensive business and it is the kind of cost against which someone requiring the data might seek to complain. Provided all of these things are genuinely covered, it seems to me that this is not a serious point, but it has to be recognised.
Overall, what the Government have to recognise is that the net effect of the legislation going ahead as it is now would be to make the UK a relatively unattractive place to do research. It seems to me that this goes counter to the trend of all other government thinking.
Viscount Hanworth
I shall speak briefly in support of Amendment 56. It is clear that this amendment is seeking to address a substantial problem with the Freedom of Information Act 2000. We have seen some remarkable evidence of how the provisions of the Act can be used maliciously to frustrate research programmes by those who dislike the conclusions that the research is supporting. Is it not the freedom to conduct research without hindrance that we ought to be protecting? It is clear that the existing regulations within the Act that relate to vexatious requests have proved to be inefficient in warding off the nuisance. The amendment seems to fulfil that purpose perfectly.