Scotland Bill

Lord Steel of Aikwood Excerpts

Tuesday 19th January 2016 Lords Chamber

I was the Enterprise and Lifelong Learning Minister in Scotland, and my noble friend Lord Stephen also had a big part to play in getting the offshore wind industry moving in Scotland. Many years of investment in that industry have brought about considerable advancements that have led to the generation of electricity by onshore wind being one of the cheaper forms of renewable energy. There is much scepticism in the industry as to whether the Government will do anything to support the onshore wind industry, but to give Scotland the opportunity to devise its own programme of contracts for difference and to develop the indigenous industries, skills and employment that go with that in a way that would help to reduce the cost to the United Kingdom taxpayer seems to be, by any stretch of the imagination, a win-win situation. I accept that this goes beyond the Smith commission but, as I have said, were the Smith commission deliberating today—in the light of what we have seen since the Government took office in May and brought forward their changes in the initial Energy Bill—one might expect this to be a sensible proposal to come from it. It is one that can suit the Government’s agenda, as well as giving meaningful and worthwhile powers to the Scottish Parliament. I hope that it will commend itself to the Minister and that he will see that there is merit in this somewhat different but ambitious and innovative proposal. I beg to move.

[Lord Steel of Aikwood (LD)]

My Lords, I shall speak to Amendments 68A and 69 in this grouping. They are quite different. Amendment 68A simply seeks to put into the Bill a reference to hydro-electricity. I mention this because it is the poor relation of the renewable energy sources. Solar and wind power are mentioned a lot; hydropower is hardly ever mentioned. I am talking about not the big hydro-electric schemes in Scotland, which have made a big contribution to our energy needs, but small hydro-electric schemes. For example, in none of the three big reservoirs that feed Edinburgh, from the old ones, Talla and Fruid, to the new one, Megget, which was built during my time as the local MP—I never thought to raise this at the time, so I plead as guilty as everybody else for overlooking this—was a turbine added to the dam outfall so that energy could be produced.

The argument is that these small schemes produce only enough energy for local consumption, but added together they can be very significant. I recently visited two quite new ones on the River Ettrick and the River Yarrow in my old constituency. I was very impressed by the contribution that they can make to local communities. It is true that, when the wind does not blow there is no energy produced from wind power and that when the sun does not shine solar power does not work, but the water is flowing all the time—rather excessively, as we have seen in recent days, but it is there all the time. Added together, small hydro-electric schemes can make a major contribution to the energy needs of the country. That is why I would like to see it in the Bill in the way I suggest in Amendment 68A. It is a modest amendment but one that I hope might find favour with the Government.

Amendment 69 is the same as the rather more sweeping one that my noble and learned friend has just put forward. Amendment 69 seeks to take out the extraordinary new subsection (3), which says that the Secretary of State does not need to consult Scottish Ministers about introducing any levies for renewable electricity incentive schemes. I simply do not understand why that provision is there. In my view, the more consultation we write into this Bill and the more we make it essential for the Scottish Government and the Secretary of State to consult, the better. I am surprised that this provision appears in the Bill at all and I support my noble and learned friend in seeking its removal.

[Lord Dunlop]

The noble and learned Lord, Lord Wallace of Tankerness, is very interested in these energy schemes and very knowledgeable about them, and has spoken on other pieces of legislation in this connection. He raised a number of specific points in the debate. I am, of course, very happy to meet him to discuss those further.

Clause 58 creates a formal consultative role for the Scottish Ministers in the design of renewable electricity incentive schemes that will apply in Scotland. Our aim is to ensure the Scottish Ministers are able to comment on the design of new incentives to support renewable electricity generation that will apply in Scotland, or the redesign of existing schemes as they relate to Scotland. The new arrangement provides for a general duty to consult the Scottish Ministers on the design of incentive schemes for renewable electricity which will apply with respect to the existing schemes as they relate to Scotland, and any new schemes that will apply in Scotland.

The noble and learned Lord has tabled amendments that would extend the scope of Clause 58 to heat incentive schemes. We have exchanged correspondence and discussed it further. He has put on the record the response that I gave in my letter, so I will not repeat what he has already said. However, we believe that these amendments would duplicate existing regulations and are therefore unnecessary.

Amendment 67 seeks to amend Clause 58 to require the Secretary of State to consult the Scottish Parliament, in addition to consulting the Scottish Ministers, on renewable electricity incentive schemes, treating the Scottish Parliament as a conventional stakeholder rather than a legislative body. The amendment requires the Secretary of State for Energy and Climate Change to statutorily consult all 129 Members of the Scottish Parliament when making changes to renewable electricity incentive schemes. In our view, this would lead to overly complex and time-consuming consultations that would affect the smooth operation of renewables schemes. For example, were the Scottish Parliament in recess, this could delay the conclusion of a consultation, delaying the implementation of UK government policy. The Government consider the inclusion of consultation with the Scottish Ministers is appropriate. However, Members of the Scottish Parliament are already able to make their views known during public consultations.

Amendment 68B seeks to amend Clause 58 to require the Secretary of State for Energy and Climate Change to consult the Scottish Ministers on amendments to renewable electricity support schemes which are of a minor nature or are made only for technical or administrative reasons and to consult the Scottish Ministers about any levy in connection with a renewable electricity incentive scheme. The noble and learned Lord took on board the de minimis aspect of the first part of that. As drafted, Clause 58 excludes the requirement to consult the Scottish Ministers on minor, technical or administrative issues. In general, this exclusion will apply to changes unlikely to have a significant impact on generators or potential generators, such as making changes to references to technical documents, or making changes to an application procedure. This amendment would, therefore, lead to overly complex and time-consuming consultations that would affect the smooth operation of the schemes.

Amendment 69 also seeks to amend Clause 58 to require the Secretary of State for Energy and Climate Change to consult the Scottish Ministers about any levy in connection with a renewable electricity incentive scheme. I note what the noble and learned Lord said about that and I am very happy to discuss this further with him. Levies on particular companies—for example, electricity suppliers—are sometimes created to sit alongside renewable energy incentive schemes as a way of funding them. An example is the supplier obligation which requires electricity suppliers to pay for the contracts for difference scheme. Levies to fund renewable support schemes are considered to be a form of taxation and taxation is generally a reserved matter. Devolution of specific tax powers is dealt with elsewhere in the Smith commission agreement