Enterprise and Regulatory Reform Bill

Debate between Lord Teverson and Lord Marland

Monday 3rd December 2012 Grand Committee

[Lord Teverson]

My Lords, before I speak to Amendment 4, I should say that it is a great pleasure to deal with a Minister who understands the area of energy and climate change, which part of this Bill deals with. He knows the area well, so I am sure that our debates this afternoon will be extremely productive. I also welcome the fact that the Green Investment Bank comes at the beginning of the Bill, because it is an important part of making growth really happen in this country.

I also commend the list of green purposes; individually, they are excellent in terms of greenhouse gas emission reductions, natural resources and natural environment, biodiversity and environmental stability. I could not write a better list myself. However, what we are trying to do here is to get absolute clarity over whether this is a list that includes them all or whether you can pick one off for investment, and ignore the rest. I very much interpret this—and I presume that this is how the Bill was drafted by the Government—as a way of ensuring that at least one is met, but not necessarily all the others. To have the whole list as obligatory would be unrealistic.

What I and the other co-sponsors of the amendment are trying to do is to tie it into the climate change elements—the carbon and other greenhouse gas reductions—as being a necessary part of the investment programme. I refer not to individual investments, but to the investment strategy and programme of the bank as a whole. That is why the amendment places a legal duty on the board to assess the impact of the bank’s investment strategy on the Climate Change Act, which is an absolute anchor point for all this work, and a mission of this Government and the previous Government in terms of that global challenge. It is also to ensure that there is a duty on the board to have regard to the advice and reports of the Committee on Climate Change. My noble friend Lord Deben is not here today, but I am sure that he would like the fact that we wish to pay particular attention to this independent body that was set up specifically to advise government in this key area. Furthermore, it is to prevent the board from adopting or amending an investment strategy unless it is satisfied that the implementation of the proposed investment portfolio will increase the likelihood of UK carbon budgets and targets being met.

I apologise to the Minister for the fact that the proposed new clause has so many subsections and is so long, but it anchors the bank and legislation not just to the advice of the Committee on Climate Change and its work but to the real area of greenhouse gas emissions and the Climate Change Act, which has broad consensus of all parties—as it did in the last Parliament and does in this one. I hope that in that way we can ensure that this legislation is absolutely fit for purpose.

My noble friend the Minister mentioned the remarks made by the noble Lord, Lord Smith of Kelvin, at Second Reading. I have huge respect for the noble Lord, Lord Smith, and I commend and congratulate the Government on his appointment; he is exactly the right person to do this. I would just suggest that perhaps post-appointment he might be rather keener to make sure that his board is not inhibited in any way in the decisions that it would like to make. I think that one looks at this in a slightly different way post-appointment, as chair of an organisation, from pre-appointment and as a member of the legislature. It is beholden on us to look independently, from a bird’s-eye view, to make sure that we have our purpose right. I am sure that the noble Lord, Lord Smith of Kelvin, is right in the vast majority of his remarks, but I think that here there is a need for a little more future-proofing of how operations might work, as I am sure that at some point in the long and glorious career of this bank there will be chairmen other than the noble Lord.

[Lord Marland]

My Lords, I have a sense of deja vu, thinking that I am still in the Department for Energy and Climate Change—where, of course, the Green Investment Bank was largely initiated, so I am extremely keen that it gets off on the right footing for that reason alone. I believe that my noble friend Lord Teverson, who always speaks so eloquently on the subject, actually answered the question that he posed himself. We could not have written a better list if we had tried. My concern is that we would get into definition overkill as we take this Bill through the House.

My noble friend mentioned that the reduction of carbon is not relevant on the individual investments, but it is at the top line. I would respectfully—I emphasise that word for the noble Lord—point out that it is the fundamental investments that will reduce carbon emissions. It is only at the top level—I see the noble Lord, Lord Oxburgh, sagely nodding his head—that you will achieve the carbon reduction. The Government are very heavily committed to this. It is no accident that the noble Lord, Lord Stern, was on the advisory board that set up the bank and that was advising at all levels. As a result of that, the noble Lord, Lord Smith, has made it clear that the bank will have a very high regard—as it should—for the Energy and Climate Change Committee because it is fundamental for the Government and for the future of the business. However, I exercise a word of caution, because there are important activities that are clearly green but do not necessarily reduce greenhouse gas emissions—for example, recycling and improvements in water quality. We would want this bank to invest in such activities, I am sure, but that would not necessarily reduce carbon emissions.

I have not mentioned a judicial review in my line of inquiry because I think it is far more important that this Committee gets this into the right shape rather than for it to be directed by a judicial review. However, the bank’s board has agreed—across the board—that the bank will voluntarily report on greenhouse gas impacts on its investments. This is in addition to the requirement for the bank to report on the greenhouse gas emissions associated with its own activities. So it comes as no surprise to all of us, after discussions with the noble Lords, Lord Adonis and Lord Smith of Kelvin, that it is absolutely at the heart of what the bank is doing. I hope that that gives confidence to noble Lords and I therefore respectfully ask them to withdraw their amendment.

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[Lord Jenkin of Roding]

As we are in Committee, I hope that I can say a couple of words about this. The nuclear industry is, of course, building up this fund as part of the Government’s policy to make sure that the liability for decommissioning does not again fall on the taxpayer. It has recognised this, and it follows the same pattern as one has seen increasingly in the offshore oil and gas industry, where funds now have to be put aside so that when the oil rigs are decommissioned, again that does not fall on the taxpayer but is part of the cost that has to be built into the supply of the oil or gas and therefore met by the investor. I think that my noble friend Lord Teverson may be confusing two matters. I use the phrase again: this is a hypothecated fund. It is not like the pension fund. There never was a separate fund for that. It is simply that the pension contributions from, for instance, the teachers’ pension fund have been paid to the Government, and the obligations are met, of course, by the taxpayer out of the fund. There has never been any question of trying to balance the one against the other. This is quite different. This is a fund that is being set up and funded by the industry. It has to be built up while plants are operating—not just when they are commissioned—so that, at the end, when they come to be decommissioned, which may be 50 or 60 years ahead, the fund is there. They have invested in it so the cost will not fall on the taxpayers. It is a separate, hypothecated fund. It may make the green bank look bigger because it will have more money but it cannot do anything with it other than get a rate of interest. My noble friend shakes his head, but if they are going to start investing in green industrial ventures and so on, it seems to me that that would be a breach of trust to those who have built up the fund. It may be that they can hold it and, as it were, guarantee the payment, but the minute that they start investing it themselves, it seems to me that that is risking the whole purpose for which the fund has been set up.

A separate issue is whether there is an alternative method of investing in the Nuclear Liabilities Fund that might get a slightly more realistic rate of interest. That is a separate matter, but it seems to me that to make it part of the loan capital of the UK Green Investment Bank would be a breach of trust, as I suggested, against the firms that are building this up perfectly properly. They agree, they recognise it, and they know that they do not want to go back to the previous position, but they want the fund to be available to finance the decommissioning of the plants when the time comes.

[Lord Marland]

My Lords, perhaps I can deal with this quite swiftly. Both the ETS and the NLF, the Nuclear Liabilities Fund, reported to me in my previous department so I have a rough idea of what is going on. Let us deal with the EUAs and the ETSs first. I also sit on the government assets committee and we looked at selling some of our EUAs. We drew the conclusion that the price was not right, the market was not big enough and we would not be able to get a substantial figure into the market. However, as the noble Lord, Lord Teverson, rightly says, an opportunity may come along later.

Clause 4 permits financial assistance to be provided in any form,

“as the Secretary of State, with the consent of the Treasury, considers appropriate”.

If we were able to do it and if—that is a big “if”—the Treasury agrees, the Secretary of State could divert funds into it. Amendment 6 permits the Government to use a proportion of revenues from auctioning emission permits to fund the bank. There is already provision within that.

This is creative thinking and I am very grateful to my noble friend for that because he is a great creative thinker. I turn to the Nuclear Liabilities Fund. Clearly, as the noble Lord, Lord Jenkin, quite rightly said, two things are going on here. One is that this is a fund that is committed to nuclear liabilities; it is committed to the nuclear industry and, therefore, it has a range of opportunities in the nuclear industry in which it could invest. The noble Lord, Lord Wigley, referred to Wylfa and other investments in new nuclear. I had discussions with the chairman of the NLF about developing the fund into nuclear investments, including, for example, a MOX plant, which is something that we were committed to when I was in the department and, indeed, new nuclear. That is entirely for the NLF to decide for itself.

The problem I have with the NLF diverting funds here is that this is an investment bank and it is what it says. There is no such thing as a guaranteed investment. Some investments go up and some investments go down and if the NLF lost money, co-venturing with the Green Investment Bank on things that it did not understand, of course the liabilities would not be met. Despite the fact that we may consider it a very boring return on the investment at the moment, it is planned to match some of the liabilities. But I do not want the noble Lord, Lord Teverson, to go away thinking that actually the NLF is enhancing its investments, but think that it has enough on its plate with the nuclear industry.

Therefore, given the commitments that I have made on Clauses 4 and 6, I hope that, despite the fact that two very important points have been raised—and I am grateful to my noble friend Lord Jenkin of Roding, who has expertise in this field—the noble Lord will withdraw the amendment.

[Lord Teverson]

I thank my noble friend the Minister for his response. I fully accept that the EU ETS money route is not precluded by the Bill as it is, and I suppose that it would be nice to have it on the list as a nudge or a reminder to the Treasury that it was a possible flow. That was all that the amendment did, but it would tie in well with the philosophy of the carbon market and trying to recycle money into helping the greening of the European economy and the UK even more.

[Lord Teverson]

I read an estimate somewhere of about £1.3 billion a year. But it all depends on the carbon price. That is the key thing, and we do not know that.

[Lord Marland]

Perhaps I can help. It depends on the market, which is not there at the moment to buy it. We investigated and got a lot lower offer than £6.62 for the price. That is six months ago, and I cannot remember what figures were involved. I am sure that we could invite the Department of Energy and Climate Change to provide some information in the normal course. It depends on a willing buyer and the price at which they are sold.

[Baroness Worthington]

I have done some back of the envelope calculations, and at about 100 million tonnes it will be in the region of £1 billion or £1.5 billion. That is not an insubstantial amount of money, and it will rise in time, which would mean that the bank’s initial deposit was paid back by those auctions in less than three years. That is an important context for the discussion.

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[Lord Marland]

My Lords, I say to the noble Lord, Lord Mitchell, that handwritten notes such as those that we old fogies use would be useful instead of modern technology. I am grateful to noble Lords for exploring this area. Clearly, those who have been in government and those who have read the papers know that we are in very deep financial straits. This Government have decided to start a bank against all odds, investing £3 billion in it in the next period, which is a tremendous achievement. We have been told to get on with it. We have done so and it is here before you now, with a chairman and chief executive in place who are getting on with it. On that point, I would like to quote what the noble Lord, Lord Smith of Kelvin, has said about the state of affairs. I am very grateful to the noble Baroness, Lady Ford, for her very constructive and practical comments. The noble Lord said:

“We need to show government and private capital markets that we are a well run organisation with a good track record worthy of the injection of more capital or, indeed, borrowing money in capital markets”.—[Official Report, 14/11/12; col. 1529.].

That is absolutely fundamental. No one is going to lend to this bank or provide borrowing unless it can show a track record of prosperity. I can promise noble Lords that if we feel the need to borrow, we will approach the stakeholder well before 2015.

On that point, the Government have given a commitment that we will seek state aid approval from the European Commission in respect of borrowing before the end of this Parliament. The noble Lord, Lord Skidelsky, very appropriately raised this. We have only just got this thing going but already we are starting to move forward. As the noble Lord, Lord Oxburgh, rightly says, it takes a long time to achieve these things in Europe but we are playing that game; indeed, we are ahead of it.

However, I mention a word of caution, as, indeed, did the noble Lord, Lord Smith. I think that the original budget of investing the first £775 million over the next five months will be difficult to achieve. However, I am confident that we can do it. It is not as if there is a whole load of stuff piling up to be invested in at the moment. Of course, we know there are investments out there, but the budget will be difficult to achieve in the first period. That shows that these things take time; it takes time to build up a track record; it takes time to build up confidence in the markets; and it takes time to build up co-investors, which will be the initial endeavour of the bank.

The noble Lord, Lord Teverson, asked about KfW. Rules are rules and the noble Baroness, Lady Ford, mentioned that we cannot do it in this country. I thank her for that. The UK’s boundary for public finance covers the whole of the public sector, including central and local government and public corporations. That reflects the approach of this Government and that of previous Governments. It is not something that we can suddenly do and in this piece of legislation we are not going to change the rules of engagement.

[Lord Teverson]

This is covered in European accounting standard 95. I do not see why we should put ourselves at a disadvantage in that interpretation compared with other nations within the European Union who are competing for the same capital. That seems to me to be tying our hands behind our back. We could use the example of changing the rules in terms of Lloyds and RBS as regards public balance sheets and how, with those banks, we made exceptions. I accept that this is rather different, but we have a track record that says that we can change things. I do not understand why it is possible for our competitors to be unchallenged by the European Court of Justice or the Commission in terms of state aid where we risk being seen as being subservient rather than proactive. I would not accuse the Minister of this—quite the opposite—but we do ourselves down by appearing to be supine in this area.

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[Lord Marland]

We have made it very clear that it will not come to pass before the end of this Parliament. That is what prudent people do. They say, “I am going to buy something and I am going to spend this amount of money”. We have said that we will spend only that amount of money, but we have said that we will spend $3 billion on this project, which three years ago did not exist.

[Lord Teverson]

Three billion pounds.

[Lord Marland]

Pounds, dollars, whatever you like. [Laughter]

[Lord Teverson]

My Lords, I thank my noble friend for going through this. Can I just say what I am not saying? I am not for a minute saying that we should immediately rush into this. I said in my opening address that the bank needed to have a track record and credibility. It needed to prove that it was good at what it does. However, one thing that we all know, whether you have been in business or, as the noble Lord, Lord Oxburgh, said, you are involved in the EU, you have to plan well ahead and start making provisions for the longer term. There is no better time to do that than when you lay down legislation.

I was being very understanding in terms of the debt problem. I am not talking about changing policy: I am talking about testing rules. All Governments try to get around rules, whether you call it PFI, PPP or whatever to get round public sector borrowing ceilings. I accept that. That is one of the reasons that we went into the coalition and I am delighted to have done so. However, that does not mean that we then accept everything that we are told to accept, although I know that that is not in my noble friend’s nature either.

This is fundamental to making this bank work. My noble friend mentioned matched funding. Yes it is true that there is already a considerable leverage, but that is a fund; the Regional Growth Fund does exactly that. That is why this would then be a green growth fund. However, it is not that: it is a Green Investment Bank. That is why, to get to our goal, we all need to find a way around this. This will be a really important area to explore constructively between now and Report. In the mean time, I beg leave to withdraw the amendment.

Renewable Heat Incentive Scheme (Amendment) Regulations 2012

Debate between Lord Teverson and Lord Marland

Wednesday 25th July 2012 Lords Chamber

[Lord Marland]

I guess my noble friend should just table a Motion for that debate. There have been plenty of opportunities in the last Session to discuss this subject. I am always delighted to debate it, as are all of us who have been involved in the energy side of things, and I look forward to him tabling a Motion.

[Lord Teverson]

My Lords, I welcome the Minister’s Written Statement today about the ROCs. We need to get on with that. It is an excellent declaration. I congratulate him particularly on making sure that we have efficient onshore wind power but that it is still financially viable for investment.

Electricity and Gas (Smart Meters Licensable Activity) Order 2012

Debate between Lord Teverson and Lord Marland

Monday 23rd July 2012 Grand Committee

[Lord Marland]

My Lords, I thank noble Lords for their contributions. I particularly welcome the noble Lord, Lord Reay, whom we have missed from our debates of late. I am glad to see him back with, as always, his resumé of the industry from his viewpoint. He is right in many of the things that he says—5% of the country have smart meters and there is an awful long way to go—and he makes the same point that the noble Baroness has just amplified about the companies that are out there installing smart meters that may become redundant because of the smart meter that the Government eventually approve. I think that the noble Baroness answered the question for me: she said, quite rightly, that it is at the companies’ own expense. They have to behave responsibly, and Ofgem and others will ensure that they do. If they have supplied the wrong smart meter, they will have to put the right one into homes.

That links up slightly with my noble friend Lord Teverson’s point about the energy companies’ savings. Yes, this will mean big savings for the energy companies. It will save them having to send a man to check the meter every quarter, to argue over bills and to send money back and forth through the post, thus improving their cash flow, and this is a good thing because we want to ensure that this is passed on to the consumer, and indeed, it will be. We often wrongly criticise our energy companies; they are very much under the microscope; they are regularly scrutinised, they rarely get away with anything and they make a great contribution to the sector. If they make windfall profits out of this, it will be spotted early on and dealt with.

A number of noble Lords mentioned the key point about whether this was a dreaded quango, following the bonfire of the quangos that we have seen. This is not a quango. It is a private sector company that will be responsible to Ofgem. It will have no relationship with government and quite rightly will be set up, as I said in my admittedly exhaustive opening gambit, to manage data transfer and a communication system, among other things. We need a specialist in the field and such a specialist will be appointed under the terms that I referenced.

My noble friend Lord Teverson made a critical point—one of at least four that he made—about how we will get communications into some remote areas. This is a big challenge. The DCC will have to ensure that it happens; that is part of its remit. As the noble Lord rightly said, it is no small challenge if we are to get to our 100% target.

Again, I express my gratitude to the noble Baroness, Lady Worthington, for her fundamental support for the smart metering process. She rightly drew to our attention—as she had done on a few occasions previously—the issue of demand management, which should be at the heart of everything that we are trying to do. If we reduce demand we will reduce supply and therefore bills. Smart metering is at the heart of demand management.

The noble Baroness referred to the type of meter. It is being designed at the moment and will have to meet universal approval. She also referred to the protocol frequency. We are carrying out a number of trials and have not yet come to a definite answer. Clearly it will have to be a bespoke and dedicated frequency, and it will come as no surprise that those trials are being carried out. I hope that I have satisfied the thirst for answers and commend the order.

[Lord Teverson]

The noble Lord knows that he has my complete support for this measure. However, I still fail utterly to understand how the DCC adds value. It will have to be controlled by Ofgem or the department. If it is to negotiate with suppliers, it will have to have its budget controlled and its performance and value very carefully monitored. At that point the situation is like that of the former Strategic Rail Authority. In the end the government department decided not to have an intermediary because it could do things better itself.

The East India Company was a private company that ruled half the British Empire—but I suppose that is not what this organisation is supposed to do. I do not get it. I hope that the noble Lord will forgive me, but I find it difficult to understand why we have this extra level of organisation that must then be controlled further up by the department, because it involves money and at the end of the day that will be reflected in bills.

[Lord Marland]

The noble Lord is quite right to challenge this. I come from a school that does not think that the Government are the right entity to run many things, although they are very good at coming up with policies. Our department is straining at every level to manage the huge challenges that we have at the moment, and we are very happy to put up our hands and say: “We are not experts in data transfer management. We are not experts in promoting competition through the market. We are not experts in providing emergency services when things go wrong. We are not experts in the enablement of the national grid”. Those are a number of things that this entity will be set up to do. I am very happy, incidentally, to write a more expansive note.

[Lord Teverson]

The Minister has answered my question quite appropriately.

[Lord Marland]

This is friendship on a very high level; I think all those in the Room will know this. With that, I will quit while I am ahead.

Renewable Heat Incentive Scheme (Amendment) Regulations 2012

Debate between Lord Teverson and Lord Marland

Monday 23rd July 2012 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, before your Lordships is an amendment to the renewable heat incentive regulations that sets out details of a standby mechanism to ensure that the scheme stays within budget in the current financial year.

The non-domestic RHI scheme launched in November 2011. Through this scheme we are already supporting renewable heat installations in small businesses, industry, the public sector and communities. The RHI supports a number of emerging technologies and is therefore helping to support the UK renewables industry. This is vital to making the transition to a low-carbon economy.

The vast majority of the heat in this country is produced by burning fossil fuels. As a result, heat is responsible for a third of the UK’s greenhouse gas emissions. It is imperative that we start the transition to low-carbon heat immediately. We must do this to set the UK on a path to reducing carbon emissions in the long term and to contribute to our share of the global effort to combat climate change.

As set out in The Carbon Plan, we will need virtually to eliminate greenhouse gas emissions from our buildings by 2050 and we need to see deep reductions in emissions from industrial processes. By 2020, 12% of our total heat demand will have to come from renewables, increasing from 2% currently. This means that we need to find alternatives to fossil fuel for our heating. The RHI, which is the first scheme of its kind in the world, is an essential part of helping us to achieve this.

However, we have learnt lessons from FITs. The RHI must be financially sustainable and help to deliver renewable heat in the most cost-effective way and it must be able to deliver consistent support to the industry. These regulations will help us to keep within the budgetary limits set by the comprehensive spending review if uptake is greater than we expect. They will safeguard against the possibility of overspend in the current financial year and against the detrimental impact on the supply chain of a reduced budget next year that would be caused if we spent this year’s budget.

We have set out in these regulations that the standby mechanism would suspend the scheme at 97% of the budget limit, with one week’s notice. If our forecast shows that we expect to spend £67.9 million in 2012-13, we would give notice of suspension and the scheme would be suspended one week later. To ensure that investors are able to monitor progress towards the suspension trigger, we will make estimates of committed expenditure available each week. Furthermore, if we expect to suspend the scheme, we will announce informally one month before we estimate that the scheme will need to close.

This is a precautionary measure. We do not believe that rapid cost reductions are likely in renewable heat technologies in the way that has been seen with solar PV. However, there is a high degree of uncertainty about how the market will respond to the RHI. Therefore, we must be cautious and prepared for unexpected changes in application rates. If RHI spending were to exceed budgets, it would be difficult in retrospect to justify a lack of action now.

Alongside these regulations, I am pleased to inform the Committee that on Friday 20 July the Government published the consultation Renewable Heat Incentive: Providing Certainty and Improving Performance. This consultation seeks views on our proposals for a longer-term budget management mechanism, which we are expecting to implement by the beginning of the 2013-14 financial year.

These regulations will therefore ensure that we have a standby budget management mechanism in place this summer and they will provide clarity and assurance about how we will manage the budget prior to our implementation of a longer-term cost control mechanism. I therefore commend these regulations to the Committee and beg to move.

[Lord Teverson]

My Lords, I welcome the foresight that these regulations bring. We certainly do not want a repeat of the solar PV issue, where we had a lot of changes at very short notice and a lot of confidence went out of the market. I note yet again that we remind ourselves that some 12% of heating needs to become renewable to meet our 2020 target, as the Minister said. Heating is a largely unrecognised but major part of our energy consumption, in households in particular, and has to be decarbonised by 2050. The irony of this is that, as the Explanatory Memorandum states, at the moment we have, if anything, underdemand for this initiative. Given those targets, it is quite important that we move it forward quickly.

I have some questions for the Minister. First, why does he think that the scheme has been relatively slow so far? I know that there is a learning curve and it is still relatively young. Can he give us some idea of the types of scheme that have been approved so that we can understand them a little more? Do the Government have plans to stimulate these schemes if demand remains low? Lastly, will he give us a view, even at this early stage, of what lessons have been learnt for rolling out this scheme for domestic RHI, to which we all look forward very much?

Storage of Carbon Dioxide (Inspections etc.) Regulations 2012

Debate between Lord Teverson and Lord Marland

Monday 23rd January 2012 Grand Committee

[Lord Marland]

It is all in 2012. I am sorry that I did not clarify that but that is the case. As I said, a lot of people are interested in competing—which is encouraging.

On the referendum issue, regulation is in place within Scottish powers so that that is dealt with. On the whole business of inspection, clearly an inspection is annual but the inspectors have—and should have, as the noble Baroness said—the right to carry out spot checks. As the noble Baroness indicated, that is to ensure that this should not be telegraphed and they think, “Ooh, we have to get ourselves ready for the inspection”. An awful lot of people will spend a lot of time on this because it is very important that the inspection is right. The noble Baroness then moved on to ask whether the information will be publicly available. The short answer is yes. The reports of any non-compliance with the recommendations will be put on the public register so that it will be there for all to see.

She then mentioned reasonable excuse and I had to invite a comment from my officials. I will quickly go through what they said. There is an existing regime to deal with operator failures to comply with licences directions of the Secretary of State. A reasonable excuse might be that there is a good safety reason for not complying during an inspection period with inspectors’ request, for example, to switch off the equipment. If the inspector has requested that the equipment is switched off, that would be a reasonable excuse. However, there will not be many reasonable excuses. I hope that that answers the many excellent questions asked.

[Lord Teverson]

I thank the noble Lord. Perhaps I may reassure him that I have consulted with the industry since he spoke. The industry is apparently very happy that he did not consult, so I think that that is fine. I want to come back to one question, because it is important to understand it. It would seem to me that on any CCS project, demonstration or otherwise, there has to be some sort of facility for temporary storage at the power station. It might go straight off on a pipeline, but if there is a problem there has to be some capacity for storage at a power station, whether temporary or permanent. Who is responsible for that sort of inspection? Although it is not envisaged that there should be large-scale onshore carbon dioxide storage, I cannot imagine that there will not be any. As the noble Lord, Lord Marland, says, this refers only to offshore, so I would be interested to understand how that is regulated.

[Lord Marland]

The noble Lord asks an interesting question. I am grateful that he should have given me an elephant trap—which I did not fall into—and dug me out of it. As he rightly says, the current thinking for the previous competition for the demonstration project was entirely for offshore. It could be that there is an onshore project in this competition. It is not thought to be likely at the moment, but it could happen. We would then have to recognise that problem. However, the issue here is not so much about onshore and offshore; it is whether we have the skill and the quality of inspectors. This is a unique process in the large scale; in the small scale it has been proven. All the way along the piece, therefore, we have to ensure that it is being inspected, managed and contained properly. That is why we are giving the inspectorate, which has been so successful in its oil activities, the opportunity as individuals to carry this out.

Green Agenda

Debate between Lord Teverson and Lord Marland

Thursday 12th January 2012 Lords Chamber

[Lord Marland]

My Lords, I am very grateful to the noble Baroness, Lady Smith, for initiating this debate. I am sure that I speak on behalf of all noble Lords here in saying that our thoughts are with the former Archbishop and his wife at this very difficult time and I quite understand the reasons why the right reverend Prelate the Bishop of London is not in his place today.

The reason I am very grateful for this debate is that it is very important, as a number of noble Lords have said, that we keep the green agenda at the forefront of people’s minds because there are signs that people’s attitudes are changing towards it. Therefore, it is fundamental that in a debate like this we pursue the green agenda. It is very important for me because I learn a lot. We have seen today a broad canvas of ideas, views and information that I find extremely valuable, as I am sure everyone else does.

The delivery of this agenda is clearly critical. Before I get to the excellent work that the Government have done, I will deal with one or two specific points from noble Lords. The noble Baroness, Lady Smith, as a native of Essex, along with the noble Lord, Lord Dixon-Smith—I am glad to see that the natives are not revolting from Essex—asked quite reasonably about scrutiny. Here we have it before our very eyes. We have eminent Lords and Baronesses challenging us on every occasion as to government policy, and, of course, the Committee on Climate Change, which does a fantastic job, sets targets for us. Therefore, I do not believe for one moment that there is no scrutiny in this area.

The noble Baroness asked about the Green Deal. Clearly it is a very complicated project, made more complicated by the very significant and excellent input from this House in the legislation. We have a very good working dialogue, as the noble Baroness referenced. Yesterday we had another session where we sought to inform each other and move the matter along. We want to get it right, and it is very important that we get it right for consumers, that there are warranties in place to protect them and that we do not go off half-cock. We are committed to getting this off the ground in 2012 and, as the noble Baroness knows, no one is more committed to it than I am.

I will deal later on with her points on solar PV, which a number of noble Lords mentioned. As for CCS—carbon capture and storage—we did pull the plug on the first coal-powered power station. I was responsible for the negotiations. I was not prepared to commit taxpayers’ money to something that was being incorrectly priced by the only winners we had in the project. However, we are working to a very fast and hard timescale and I am convinced that by this time next year we will have established a winner for a gas carbon capture and storage project. It is quite clear that the Chancellor has committed the £1 billion of funds available. Through that, there will be leading technology, jobs and growth.

My noble friend Lord Dixon-Smith asked whether the targets for 2020 were the right ones or whether those for 2050 were right. I think that he preferred the latter. It will come as no surprise to him that we have targets for both. We look at both very carefully and have to interweave them because, as the noble Lord, Lord Prescott, said, there is no one product fits all policy for delivering energy to the country. We will have to deal with all manner of policies, get the mix right and deal with inclement weather. For example, if there is another nuclear incident in Europe it will lead to the destabilisation of our nuclear policy. We will have to deal with that. Therefore, we will have to have flexible targets. However, the noble Lord is quite right to say that we have to look to 2050.

As always, I am grateful to the noble Lord, Lord Teverson, for his support and various comments. The noble Lord, Lord Prescott, rightly referred to the Humber estuary with its wonderful deep waters. We were delighted that Siemens decided to move there. I know the area well and looked very carefully at potential sites where more infrastructure buildings could be put. The area of the Humber estuary has a very knowledgeable workforce and I believe that it can become one of the great offshore gateways. Like the noble Lord, I was disappointed that the Statement on Durban was not debated here. Of course, that was an opposition decision. I was rather relieved that I did not have to stand on my feet for another 40 minutes.

The views of the noble Lord, Lord Turnbull, are well known. I will not engage with him on the IPCC. It is not something that we can unilaterally change. It will require international agreement. Some of his points are well known, and quietly we have made our position well known to the IPCC. I am also grateful that he was right on the euro.

The noble Baroness, Lady Worthington, criticised the carbon price floor. I do not know how we will get nuclear power—or even thorium nuclear power—off the ground unless we have a carbon floor price that sets out a very clear pathway and an encouragement to the nuclear industry, as well as a negative view of those who are producing high-carbon electricity. Therefore, I think that the carbon price floor is a very positive step. Of course, we could go on for a long time on the subject of thorium; we have had some good exchanges on that.

We welcome the great knowledge about food shown by the noble Baroness, Lady Miller of Chilthorne Domer —much more knowledge than I was able to deal with. Her main point was about landfill. The Treasury has done the right thing in raising the landfill tax by £80 a tonne by 2015. Capturing methane and turning it into electricity is a positive way forward to make sure that landfill is dealt with properly. Push and shove methods are far better than very prescriptive policies.

The noble Lord, Lord Hunt of Chesterton, gave us a very good overview from his position as an eminent scientist. He complained that we do not have enough quangos. I do not complain about not having enough quangos. I am interested in delivery and do not believe that quangos in general are delivery bodies. Obviously some are, but they often get in the way of delivery, which will be so fundamental to what we must do. I was also grateful for his words about my gusto.

As always, the noble Lord, Lord Judd, made a very intelligent contribution. The work of Oxfam should not be denied; it has been very formative. We are delighted that it is subscribing to the climate change agenda. As he rightly—and often—says, we are all in this climate change thing together. There is no point pretending we are not and it is a fundamentally wise thing to say.

Listening to the noble Viscount, Lord Hanworth, I must say that I thought that I might go out and kill myself. He was so gloomy and in despair over my own great party, and I could not really agree with a single word he said. However, he is right to tell us about the economies and great benefits of the low-carbon technology. It would be interesting to know what Adam Smith himself would have made of it all.

We were grateful for the intervention of the noble Earl, Lord Lytton, with his great knowledge of councils. He quite rightly said, as did the noble Lord, Lord Turnbull, that we should not set up grants where all people end up doing is chasing them. That indeed is what the solar panel FIT became—a grant-chasing product—with disastrous consequences.

The right reverend Prelate the Bishop of Bath and Wells raised a number of items. I have worked very closely with the Church of England on “Shrinking the Footprint” and have attended a number of events. We think it is a remarkably good scheme. It is so good because it shows leadership, and that is what the green agenda is all about: showing leadership, and showing people the reasons for doing it and why they should be doing it. We are very grateful for the leadership—from all churches, actually—on this issue, but I know that he is not expecting me to make special exceptions for his churches, even though I am a great admirer of his wonderful cathedral in Wells.

The noble Lord, Lord Grantchester, asked me questions way beyond my mandate. It is bad enough having to know what is going on in your own brief, let alone other people’s. Fisheries—for heaven’s sake! He has time to withdraw—he can tell me afterwards—but if he really insists on me writing on our fisheries policies, the ecosystem, the natural environment White Paper and our policy on that, I am totally happy to write to him or get someone even cleverer than I to do so. He is quite right that it is about joined-up government.

However, I must rebuke noble Lords. I felt that, as in “Hamlet”, you doth protest too much. You should lift your eyes upwards and not down, navel-gazing. Look up and think of the achievements that you have made and that we have made. I am grateful to the noble Lord, Lord Prescott, because he was so positive in what he had to say about what is going on. He did not bring any party politics into it—which was a bit of a change, actually, I must confess. It was being recorded and may well be on YouTube. The noble Lord was positive, and because he was positive and because my Secretary of State is so positive, we are leading the world in the climate change agenda; and because noble Lords throughout this House have been positive, we have been able to keep the green agenda at the forefront.

To those who criticise this Government for not doing anything—there is only one thing that we have done that is predictably different from what the previous Government had done, and that is stop the feed-in tariffs on solar PVs. Why did we do that? Because we did not think it was fair on taxpayers to spend £8 billion to achieve 0.1 per cent of our electricity demand. There are far better ways of committing that money for heavy lifting—and there was a scam. There is still a scam going on. Last week, my phone went at my home. “Mr Marland”—shows how out of date they are, six years out of date—“I have got a government-backed scheme guaranteeing this for solar panels. Are you interested?”. I said, “I think you have got the wrong man here” and put the phone down pretty quickly. But this scam is still happening and it is not in the best interests of taxpayers. Let us get it off the agenda and let us stop moaning about it. Let us move on to the really big points of nuclear, of clean gas, of all the things that will keep the lights on in this country—and renewables. Let us not run away from renewables. Renewables will be fundamentally important, because they give us security of supply and help us with regard to our agenda.

[Lord Teverson]

My Lords, perhaps I may suggest to the Minister that he is being too modest. Although it was a difficult period and a difficult thing to do, we have a solar power industry that will survive into the future, which would not have happened. It could have been done better, but it will still be there and will, I hope, resurge as those prices come down. We are not out of solar. We can actually keep solar because of that decision.

[Lord Marland]

I am grateful. The Whip has just said that it is very rare that I am modest, so it is quite nice of the noble Lord, Lord Teverson, to say that. The fact of the matter is that the solar industry is going on. That is what my story indicates. It is still out there selling and that will go on if people want to do it. Frankly, that is what it should be about.

What have the Government done? The Opposition talk about the green investment bank. We have committed funds to the green investment bank. It is highly technical and difficult to set up a bank. We have committed funds—we set aside £3.1 billion for the investment bank—and that will happen. As I said, we have committed £1 billion of new money for carbon capture and storage. We have the world’s first incentive scheme for heat Nowhere else in the world is that happening. We have put £400 million to support low-emission vehicles. We have a mass rollout of smart meters by 2014, which will allow the consumer—merely by putting on their reading glasses—to see what they are spending on electricity. We are reforming the market to encourage investment, which is absolutely critical, as the noble Lords have said. We have had the fourth carbon budget, which requires us to cut emissions by 50 per cent. We fully subscribe to that and we are on target for it. We have cut our own government emissions by 14 per cent despite the 10 per cent target we set ourselves. We even got No. 10 to cut its emissions by 10 per cent—it was a very close-run thing. We cut our own government emission by 14 per cent last year. It will be 25 per cent by 2015—not a small target.

As I said, Durban was, largely, a triumph. As the noble Lord, Lord Prescott, says, it is rebuilding the mess that happened at Copenhagen; it is rebuilding trust among countries. There is also work towards a legally binding agreement—a fantastic achievement. Twelve per cent of our capacity now comes from renewable electricity. It will be 15 per cent by 2020. We are on target for that commitment and making very good strides. Around 40 per cent of households now recycle their own waste. This is good for the green agenda. Some 3.5 million more homes will be insulated by the end of 2012. We have spent £92 million cleaning up our rivers. We have had the big tree plant campaign, which was launched to plant 100,000 trees. The Green Deal, which we talked about earlier, will unlock about £7 billion of private sector investment. That should generate 100,000 jobs. We are, therefore, doing a lot.

Contrary to what the noble Viscount, Lord Hanworth, was saying, we have increased our grants. Seventeen grants were awarded to separate companies last year—a total of £18 million. We spent another £28 million in 2009-2010 across the Government. We continue the commitment made by the previous Government. We have six wave and tidal companies receiving grants of £22 million through our own good offices. The Opposition are, therefore, wrong to criticise us. By criticising us, the Opposition are criticising themselves—they have been fundamental to this development. We have done this together. I go back to the words of the noble Lord, Lord Judd. We all know that we are in this together—up to our eyeballs—and it is our job to make sure that the consumer is at the heart of our decision-making. We must help to educate consumers that the green agenda is part of the important decision-making that supports them. I am grateful to the noble Baroness, Lady Smith, for this excellent opportunity to respond.

Energy: Tariffs

Debate between Lord Teverson and Lord Marland

Tuesday 6th December 2011 Lords Chamber

[Lord Marland]

The Government are going to do a lot to help customers. Ofgem’s proposals to simplify bills and make them transparent are ground-breaking—particularly the proposals to have standing order charges on the bill and set by Ofgem. Make no mistake: the Government’s entire policy is based on what is to the benefit of the consumer. That is at the heart of every decision we make. In the consultation process, this Government will be talking through the proposals with Ofgem. It is not surprising that they will not be implemented until 2012 because they are under consultation. Until the consultation is over, and Ofgem has had reports from the electricity companies, we will not be able to see the final outcome.

[Lord Teverson]

My Lords, does the Minister agree that the Government’s plan to roll out smart meters over a five-year period from 2014, rather than have the current dumb ones, is the real way to give consumers control over their energy charges? Should smart meters not automatically be able to tell consumers the best tariff?

[Lord Marland]

I totally agree with my noble friend. We intend to start rolling out smart meters in 2014. Our department is spending nearly £40 million on the development of smart meters, which will be state of the art. By 2019, every home should have a smart meter that should provide this vital information for people to be able to compare the tariffs.

Energy: Carbon Capture and Storage

Debate between Lord Teverson and Lord Marland

Wednesday 2nd November 2011 Lords Chamber

[Lord Marland]

I can only talk about what the Government have spent in FEED, which is their investigative, exploratory work on this. To date, we have spent more than £60 million—quite a significant figure. As I said earlier, we have committed £1 billion to the project. We will learn even more as we go into the next project and I hope that we will be successful.

[Lord Teverson]

My Lords, I very much welcome the renewed commitment of the Government and my noble friend to carbon capture and storage in future. Will the Government look at fossil fuels other than coal? How do they see co-operation with other nations, for instance China, in developing this technology to our mutual benefit?

[Lord Marland]

I am grateful to the noble Lord, Lord Teverson, for his very good points. The reality is that if we all had our time again we would start on gas, which is going to be fundamental to the future of our energy supply. I am at one with the noble Lord, Lord Lawson, on this, for a change. I very much hope that in the next competition we will have a lot of applicants for a gas project and that we can become world leaders in its carbon capture and storage.

Energy: Feed-in Tariffs

Debate between Lord Teverson and Lord Marland

Monday 31st October 2011 Lords Chamber

[Lord Teverson]

My Lords, it is clear that one of the challenges, as mentioned by the Minister and the noble Baroness, is the sustainability of this industry. One area in which I would give sympathy to the Minister is that if we have an industry that steams ahead until next April but then there is no money and everything stops, we will be in the situation that Spain and Germany have been in in the past whereby we have built up an industry that then completely disappears. We need to make sure that that does not happen and that we have a sustainable industry. We want a sustainable environment that works over a number of years and builds up, which is why I am sympathetic to trying to achieve that in these measures.

Having said that, one of the most unfortunate things is that we are moving to the second review on FIT rates in a short period. Where we have a global investment market in energy—in the United Kingdom we have a requirement, estimated by Ofgem, which is often quoted, of £200 billion of investment over the next 10 years—how can we make sure that the investing community remains confident in government schemes and that investment in our energy systems, energy plants and energy distribution systems can be sustained? One change to FIT rates is unfortunate, two might be careless, but another one would mean that we could destroy confidence in investment in this industry. It is not perhaps so much of a problem for manufacturing industries, but the installation industry in this country is far less mobile.

Although I applaud the Government’s efforts to make sure that this business and this industry stay sustainable over a number of years, how will the Minister ensure that that confidence, not just of households but of other larger investors, remains in the UK energy market?

[Lord Marland]

As always, my noble friend Lord Teverson is well informed about these matters and I am grateful for his broadly supportive comments. I totally agree and accept that the confidence of the investor is paramount. However, put yourself in the position of the Government. We inherited a scheme of feed-in tariffs that did not consider the fact that the more solar panels that are bought, the cheaper they become, as illustrated by this argument; and that a pot of money is available to support this scheme, which becomes a scheme for which the IRR is way beyond most people’s dreams and beyond what is reasonable for consumers. At some point, a decision has to be made to say stop or pause or to take action. That is broadly the step that we have taken on this.

I wholly agree that getting future investment and the infrastructure of this country right is fundamental, but we have to get that right against the backcloth of heavy lifters in the game changes for the electricity supply. As I have already indicated, I do not believe that the 0.1 per cent, or the £3.2 billion that we will have saved the consumer, is the right change of game plan for electricity in this country.

Fuel: Electricity Supply Licences

Debate between Lord Teverson and Lord Marland

Thursday 14th July 2011 Lords Chamber

[Lord Teverson]

My Lords, as I have said on other occasions, I am pleased about the way in which DECC has managed to negotiate very positively with the Treasury over its budget, even in the areas of private taxation that are reflected in private energy Bills, and how the overall programme for renewables has started to move ahead. I also sympathise in many ways with the Government’s priority to make sure that as many people as possible are involved in the renewables industry so that households that want to fit solar PV to their houses, or SMEs solar PV to their business premises, can do that. Both those things are positive.

Having said that, the difficulties caused to the industry by this major change in policy over a short period of time have been very great. I understand and agree with my noble friend Lord Lucas on this. As many Members of the House will know, I come from Cornwall. I represent an electoral division there that as we speak is constructing a 5 megawatt facility to make sure that it can throw the switch before midnight on 31 July. I do not know whether any electricity will flow then: presumably it will, in order to come in before the tariff changes. In Cornwall, about half a dozen sites will hit the grid before the deadline arrives.

It is clear that a very large number of investors wanted to come into this field. Some were opportunists—which is not necessarily a bad thing, because we are trying to work with the market—but there was a basis to enable a number of new renewable energy companies that genuinely held the values of decarbonising our economy to start, work and gain ground in order to be part of that decentralised electricity-generating system that so many of us in the House want to see. Those business starts and the growth of micro-businesses into medium-sized businesses can no longer happen. The amount of investment, for example to secure planning permissions, was very great.

I accept that not all the schemes should have gone ahead. Planning permissions were extremely easy to obtain because people did not object to them as they do to a number of other renewable technologies. However, now the momentum has stopped in its tracks. I very much regret that. The particular practical difficulty is that even where too many of the larger schemes would have been very onerous, there were a number of community schemes, too, that have come to a halt or will not be fulfilled.

Two days ago, as well as receiving the electrical market review, we saw the UK Renewable Energy Roadmap, which I very much welcome. On the whole it is an excellent document. However, perhaps it is illustrative that chapter 3, “Actions”, names the technologies of onshore wind, offshore wind, marine energy, biomass electricity, biomass heat, ground source heat pumps and air source heat pumps—I am very pleased to see those there—and renewable energy in transport, which we sometimes forget about but which is of equal importance.

Solar PV is nowhere in that list. The document includes a case study of solar PV and states:

“The Government believes that solar PV could potentially have a role to play in larger-scale UK renewables deployment in the future”.

That is a very iffy assessment of solar PV. I am very aware, as we have seen today and during part of this week, that the UK is not the best country in the world for solar PV. However, there is no doubt that the technology is potentially useful. The costs are expected to come down very significantly in future. The initial FIT rate was too high and provided too great a return, but it has come down so much that it has acted as a veto on the industry. As a result, the green jobs that all of us want to see have been postponed or might not happen as they might have done.

The document goes on to say that the Government encourage solar PV on a large scale as part of the ROCs regime. Will the Minister say whether there is a way forward there for large-scale PV? The renewable obligations review is due in the next few weeks. The Government have cut out the higher FIT rates. Could they over a temporary period fix a higher ROC rate for solar PV so that we could again encourage investment in this industry? When the costs come down we can reduce the ROC rate, as we would do with any other technology.

Will the Minister tell us how many ROC schemes there are on solar PV at the moment? I do not know whether there are many. I would be interested to know what the scale of demand is at the minute. I think there is a good future for solar PV in this country. We want to encourage it for jobs and growth, and I would like it to be a larger part of the jigsaw of the renewable road map for the future.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, I welcome this debate. It is important that we discuss these issues and get clarity on them. I hope I am going to do that in response. I have received a very good letter from the chairman of the British Photovoltaic Association in conjunction with the director of the Combined Heat and Power Association, the chief executive of the Anaerobic Digestion and Biogas Association and the chief executive of the building council for sustainable energy. They say a number of things, including: “Those highly dependent on the previous tariff of photovoltaic levels are now few in number in comparison with the sizeable and growing industry for other parts of the feed-in tariff”. They also give a word of warning and, “urge people not to reopen the Government’s decision at this stage. It would cause lasting, and we believe irreparable, damage. This would apply not just to solar PV but also to the vibrant and growing activity of small and medium-sized wind, aerobic digestion and microchip”. Finally, they say: “We would urge you to oppose any attempts to overturn the Government’s decision implementation on 1 August”. I think that sets out the stall of the industry that we have consulted and discussed things with.

The noble Baroness said that it was a very short consultation. Of course it was a short consultation because the industry wants certainty. In government, we unfortunately have to make choices. We are in a situation of rising electricity and energy prices, and we have to make choices in order to prevent that. These are the questions we asked ourselves when getting to the point of making this decision. Do we consider that at a time of rising bills we should encourage the spending of £7 billion on solar PV? Does this represent value for money? Does it have a real impact on our demand for electricity, given that it produces under 0.1 per cent of our electricity supply? Even if everything worked as planned, by 2020 it would be only as much as 0.3 per cent of our energy supply. Like the noble Lord, Lord Teverson, who is so sound on all these subjects—even though I do not think he is in complete agreement with me, for a change, on this one—we asked ourselves whether we are best suited as a country, given that we need electricity in winter when we have narrow daylight hours, and whether this is the most effective way of creating electricity. Therefore, is this a core activity for the Government?

We also looked at some of the schemes that were being offered. I am sure this does not apply to my noble friend Lord Liverpool, but schemes were offering a 21.4 per cent return on investment guaranteed by government-backed FITs and were being sold to people as the greatest investment opportunity for a long time. There are many examples of that. The Government are concerned that people could be taken advantage of.

Similarly, did we think the support that we gave the schemes was fair? If you were putting up onshore wind you would get one ROC, if you were putting up offshore wind you would get two ROCs, and this feed-in tariff is the equivalent of over five ROCs. Is that fair and reasonable for the rest of the industry?

The noble Lord, Lord Lucas, criticised us for frivolous and unreliable decisions worthy of a third-world country. I emphasise that this is not retrospective. It does not apply to people who have installed this. I absolutely repudiate his suggestion that this is frivolous and unreliable. To suggest that we should push on with this regardless is frivolous and unreliable, which is why we have stopped it.

Environmental Permitting (England and Wales) (Amendment) Regulations 2011

Debate between Lord Teverson and Lord Marland

Tuesday 12th July 2011 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, if I were in a football team I would have been substituted a long time ago, but I am still here and I am waiting for Alex Ferguson to send on a replacement but, sadly, that will not happen.

The regulations that we are debating today amend some of the provisions relating to the regulation of radioactive substances in the Environmental Permitting (England and Wales) Regulations 2010 in order to provide a more modern, transparent and user-friendly system for the regulation of radioactive substances, while at the same time strictly applying the best standards of radiation protection. They apply to England and Wales and will considerably simplify the often complex system of regulation, which has hardly changed over the past 50 years.

This will be particularly important for those users of radioactive substances which present a very low risk to people and the environment—for example, the holders of clocks, watches and smoke detectors —while at the same time maintaining the necessary level of protection. We estimate that several thousand users will benefit from these changes. This is a good example of the coalition’s agenda to reduce the burden of regulation on business and I am pleased to say that it has received a green light from the Regulatory Policy Committee.

There has been substantial engagement with stakeholders during the development of the regulations. They believe that the need to clarify and modernise the system is long overdue. The Government have listened to the views of experts, industry, public services, regulators and other interested parties throughout this process and have received strong support for the new regime. Indeed, it has been clear throughout the stakeholder engagement process that there would be decreased confidence by users of the regulatory process if it was not modernised soon.

During the course of development, it became clear that a logical, comprehensive and modern regime could be delivered only if the definitions of radioactive material and radioactive waste were amended, and exemptions from the requirement for permits, which are contained in 18 different statutory instruments, were made more transparent and user-friendly. The main effect of the regulations is therefore to change the boundaries that define whether a particular substance or article is outside the scope of legislation—for example, and I specifically asked for this to be put in, a banana; capable of being exempt from full regulation—for instance, smoke detectors; or otherwise subject to normal permitting, such as radioactive waste from a nuclear site.

These changes, where they have been necessary, have been made for three reasons. The current boundaries are sometimes in the wrong place. The exact position of the boundary is currently vague—I knew that noble Lords were not listening, so that banana came as a bit of a surprise. There are gaps in the boundaries because the current exemption orders are up to 50 years old and technology in this field continually advances. These changes will provide a modern, simplified and proportionate—that is, risk-informed—regulatory regime which will result in efficiencies for users and regulators. The net savings for users and regulators across the UK are estimated to be in the region of £11 million over the next 10 years.

Because we have now more explicitly implemented the levels for exemption from regulation in the relevant EU directive, some exemption levels are more restrictive than in our current system and some are less so. This will not lead to any significant change to disposal practices in the nuclear industry sector, but will be of benefit to the users of radioactive substances outside the sector. For example, there are additional exemption provisions for medical establishments to manage and dispose of their aqueous radioactive waste more efficiently and without unnecessary paperwork.

Radioactive waste is a devolved matter. The necessary legislation to achieve the equivalent changes in Scotland is ready to come into force in October, and Northern Ireland is already in the process of amending its legislation with the intention that this, too, will come into force in October. Consistent regulation across the UK will therefore be maintained, which is very important for operators who work across UK borders.

I turn to another matter addressed in the regulations. My department is working to transpose the EU directive on geological storage of carbon dioxide. Two provisions that remain to be addressed are Articles 32 and 37 of the directive. Amendments to the 2010 regulations to transpose these articles are being made in these regulations. I hope that noble Lords will agree that they provide much needed modernisation and I commend them to the Committee.

[Lord Teverson]

I was hoping that one of the noble and right reverend Prelate’s colleagues who has a degree in history and physics might be here. We have already dealt with chemistry and we have some very interesting substances listed here such as cosmic nuclides or whatever. In my electoral division in Cornwall, I have a NORM depot for the china clay industry, operated by Imerys, which is about to be replaced. I got involved in some of the issues concerning the oil industry and other areas where there is a small radioactive residue that comes from processing these minerals. I am delighted to say that I have received no lobbying from the Cornish china clay industry on the regulations, and therefore assume that they are a good improvement. Therefore, I congratulate the Minister on this change.

I have never seen an Explanatory Memorandum that has been more complicated and of which I have understood less. However, I am sure that the Department of Energy and Climate Change has our interests at heart.

Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011

Debate between Lord Teverson and Lord Marland

Tuesday 12th July 2011 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, the regulations apply in Scotland as well as England and Wales, and are being made with the agreement of Scottish Ministers. I am sure that my noble friend the Duke of Montrose will be pleased with that.

The regulations transpose into UK law requirements that are part of the EU directive on geological storage of carbon dioxide. The directive requires member states to introduce arrangements that enable third parties to access pipelines and storage sites on a fair and transparent basis. Those arrangements must meet certain criteria. So, for example, we must set up independent arrangements to resolve disputes about access, should they arise. We must also ensure that if access is refused on grounds of lack of capacity or lack of connection, the operator makes the necessary enhancements when a potential customer is willing to pay for them—providing that this does not have a detrimental impact on safety or the environment. The directive also provides for access to be refused where there is incompatibility in technical specifications which cannot reasonably be overcome, or where there is insufficient current or likely future capacity.

We consulted on drafts of these regulations in December 2010. The majority of those responding to the consultation agreed that the regulations represented a sensible approach to implementing the directive’s requirements. However, there was concern about how our approach would apply to storage sites. As a result, we modified the draft regulations to recognise the constraints imposed by the natural characteristics and the environmental permitting arrangements for storage sites.

The approach in these regulations is based on the principle of negotiated access, with the ability to appeal to an independent authority if it is not possible for the parties to reach agreement voluntarily. That authority is either the Secretary of State, or Scottish Ministers where the infrastructure is located in Scotland. This approach has many advantages for carbon capture and storage, not least that it is relatively hands-off and therefore the least burdensome for what is currently an immature industry. It already applies to pipelines conveying carbon dioxide and is the basis on which the development of offshore oil and gas pipelines has taken place for many years. It is therefore familiar to many companies interested in participating in carbon dioxide transportation and storage in the future.

The regulations take as their starting point arrangements that already apply to carbon dioxide pipelines, adapt them slightly for consistency with the requirements of the directive and extend them to cover storage sites. They have effect on the construction of a new pipeline or a storage site, and where a third party seeks to secure access to existing infrastructure. Where infrastructure is being newly created, the regulations enable the authority to impose conditions when granting consents. Those conditions may, for example, require the pipeline or storage site to be constructed or permitted to a greater capacity, or in the case of a pipeline, to follow a modified route. However, those powers can be exercised only where there is evidence of demand and where the parties cannot reach agreement. The authority must be satisfied that the conditions it imposes will not compromise the safety and environmental integrity of the infrastructure or its efficient operation.

The regulations also provide for access and modification to existing transport and storage infrastructure. Again, the parties must first seek to negotiate an agreement. If they cannot do so, the party seeking access can apply to the authority for a notice granting access rights. In reaching a determination, the authority is required to consider a number of factors intended to ensure that the legitimate interests of the owner and users of the infrastructure are taken into account and to avoid a negative impact on safety or the environment. Where the authority grants access rights or requires modifications, it also has the power to determine the charges to be made. We are in the process of developing guidance, on which we will consult extensively before it is finalised, on the principles that the authority will use in coming to such a decision on this and on other powers available to the authority in regulations.

The regulations create an offence of providing false information to the authority in discharging its functions under the legislation. A determination made by the authority will be enforceable through the civil courts, in the same way as if the parties had entered into a contract that had subsequently not been honoured. The directive also requires our third-party access regime to be transparent. The regulations achieve this by requiring information about available spare capacity to be published. In determining this available capacity, the infrastructure owner is able to take account of reasonably foreseeable needs and, in the case of a storage site, against a baseline of the permitted storage capacity of the site. I hope that these regulations will find favour with noble Lords and I commend them to the Committee.

[Lord Teverson]

My Lords, again I do not know what else one could do. There seems to be an outbreak of common sense; we are implementing a European directive, which I see this as primarily, to ensure that pipeline and CCS companies do as we scold our children to do—to share, rather than keep things to themselves.

I have two questions for the Minister. First, he mentioned a long track record of facility sharing in the oil and gas industries, which there clearly already is, but I suspect that those provisions did not perhaps come in until a lot of the structures in those industries had got going. In this case, it is a new industry and I presume that we do not have any carbon dioxide pipelines going extensive distances. Clearly, they do within existing industrial plants but I wonder whether we might get into a sort of games theory where no one builds the first one because the first mover, in this instance, is the one who has to find all the finance and raise all the money, which is not inconsiderable. All the businesses coming afterwards will have to do is show that independent authority that it would make sense to share, so they miss the whole hurdle that the first people had to get over. I wonder whether that distorts the market somehow, but I am sure that the Minister will have an eloquent reply on that. Otherwise, this is good legislation.

Finally, I take this opportunity to ask the Minister where we are in terms of CCS and when we might see the network of carbon dioxide pipelines under—I was going to say across—our countryside. Where are we on the four schemes that the Government are promoting?

Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011

Debate between Lord Teverson and Lord Marland

Tuesday 12th July 2011 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, there are two sets of regulations before you. The first sets out the details of the renewable heat incentive, which will allow the scheme to start operating. The second enables an amendment to Section 100 of the Energy Act, the primary legislation which underpins the renewable heat incentive. This change relates to our treatment of bioenergy, which I will speak about in more detail later. As with similar financial support schemes the RHI is subject to state aid clearance, which we hope to receive in the next few weeks.

The RHI regulations set out our commitment to provide 20 years’ financial support to eligible renewable generators of heat. This means support for technologies such as solar thermal, biomass boilers, ground-source heat pumps and geothermal, to name a few. The full list of technologies supported and the levels of support are set out in the regulations. These are calculated to bridge the financial gap between the cost of conventional and renewable heat systems. Once in the scheme the level of support for participants will be fixed, changing each year only with inflation. Support under the RHI will be available for renewable heat installations in England, Wales and Scotland through these regulations. However, I am pleased that provisions in the Energy Bill will now allow the Northern Ireland Executive to introduce their own RHI in future.

The RHI represents a serious investment in our future. It will provide financial support to a wide range of technologies and set us on a path towards rapid change. By the end of the decade, we will see 500,000 jobs created in the renewables industry with the RHI stimulating £7.5 billion of capital investment. Once introduced, the RHI will be available to renewable heat generators in the industrial, commercial, public, not-for-profit and community sectors. We want to see a broad range of businesses and organisations take the opportunity that the RHI offers to change the way they generate heat—for example, with businesses such as restaurants or supermarkets using food waste to generate biogas.

Ofgem will deliver the RHI on behalf of DECC. It has significant experience in delivering schemes which provide financial support to renewable energy generators already delivering the renewables obligation and feed-in tariffs. Generators will need to apply to Ofgem to be accredited under the scheme, and the processes they need to undertake are set out in guidance recently published for consultation on their website.

Because Ofgem has experience in delivering similar schemes, it will build on experience and existing structures, such as IT systems, to ensure that the RHI operates as effectively as possible. I am pleased that, subject to parliamentary approval of these regulations, Ofgem will be ready to receive applications for the scheme from 30 September this year.

To receive a payment under the scheme generators will need to commit to undertake certain ongoing obligations—for example, providing meter readings in order to receive their quarterly RHI payments, maintaining equipment and, in the case of biomass installations, providing information on a number of sustainability issues. This is part of a range of measures to ensure the integrity of the scheme. In addition, for small and medium-sized plants, both installers and the equipment to be installed will need to be certified under the microgeneration certification scheme or an equivalent.

I would now like to turn to bioenergy. The second set of regulations amends Section 100 of the Energy Act 2008. This amendment does three things. First, it amends the definition of biogas so that, as well as including anaerobic digestion, it will now also include advanced conversion technologies such as gasification and pyrolysis. The second change prevents the use of peat as biomass fuel. The third corrects a previous omission by adding biogas to the list of eligible sources of energy. These are important changes, as we believe that bioenergy is critical to meeting our renewable energy targets. We expect it to contribute over half of the over sevenfold predicted increase in renewable heat by 2020.

However, we are also aware of concerns that the increasing use of biomass raises, particularly with regard to issues around sustainability and air quality. In the RHI regulations we have addressed these concerns by including sustainability reporting criteria from the outset of the RHI, and will use existing legislation to cover restrictions on air quality for large-scale biomass. For installations below 20 MWth we will introduce emission limits in our RHI legislation when phase 2 of the scheme is implemented.

Finally, I would like to set out our position on the funding of this scheme. Last October, as part of the coalition Government’s spending review, we announced £860 million of funding for the RHI scheme to 2014. We have listened to feedback that previous proposals to fund the scheme through a levy on fossil-fuel suppliers would be unworkable, so instead the scheme will be funded through general taxation.

Therefore I commend these regulations to the Committee.

[Lord Teverson]

I naturally welcome these regulations. The renewable heat initiative is pretty unique worldwide. The concept was introduced by the previous Government and has been taken on wholeheartedly by the present Government. It is an excellent example of decarbonising the economy. We think that most carbon emissions are around electricity generation, but that only constitutes around half of emissions. That means that our targets for 2020, of 15 per cent of energy being renewable, are tough to meet. That is well illustrated in the Explanatory Memorandum by the fact that the proportion of renewable heat, currently estimated at 1.5 per cent, must rise to 12 per cent by 2020. Given the fact that part of the scheme will be implemented only next year, this is a tall order—but I am sure that it can be met.

I also congratulate DECC on its negotiations with the Treasury, in which it managed to get £860 million-worth of direct taxation at a time when the public accounts are very tight and difficult. I am sure that those of us who argue on green issues would wish for even more, but it is a large and realistic figure and I am very pleased to see it.

I was slightly disappointed by the fact that a domestic RHI scheme will not come in until 2012. I understand that a pilot scheme for domestic RHI starts this year. I would be interested to understand more about how it will help the successful introduction of the full domestic scheme next year.

Finally, my one area of slight regret, inevitably, is characteristic of a market intervention such as this, great though it is. The fact that we have not been able to implement it earlier—I see all the obstacles and why it has not been possible—means that we face the irony of a number of ground heat pump businesses, for example, going out of business while people put off decisions to invest in renewable energy until the incentives come through. Regrettably, there is a generic inevitability about these schemes when people realise that there will be a subsidy but not yet. I very much welcome the RHI and hope that it will have a very successful career not just up to 2020 but well beyond.

Electricity Market Reform

Debate between Lord Teverson and Lord Marland

Tuesday 12th July 2011 Lords Chamber

[Lord Marland]

The noble Lord, Lord O’Neill of Clackmannan, is an expert in his field. He also knows that I am responsible at the moment for leading the negotiation on carbon capture and storage. I am delighted to make the Statement in your Lordships’ House because it withdrew me from the negotiation process where we are in something called lock-in at the moment. I will not venture to suggest the outcome of the negotiations. They are extremely determined and it is a very complex programme. At the moment, we have three energy providers and me in one room at different times trying to bottom out where we can get to. I have been set the task of achieving this in operation by 2016. We may or may not get there. I am not going to predict one way or the other because it is a quantum leap. We must not underestimate the extent of that.

The noble Lord is quite right that a number of our energy policies are predicated on carbon capture and storage—but by no means all of it. The fact is that the EPS provides for gas. As my noble friend Lord Lawson would ask me to say, gas is fundamental to the future. I completely support his view on that. It is much less carbon intensive, will be fundamental to our electricity generation going forward and will be a large proportion of it.

[Lord Teverson]

My Lords, I generally welcome this Statement and the reforms that are there, in two areas particularly. We have often said in the House that if we had a proper carbon price that managed, in the jargon, to internalise the externalities of the cost of carbon we could then just let the market get on with it. Unfortunately, the EU ETS has not managed to deliver on that sufficiently. I understand that we only have a carbon price floor here for electricity generators. At least that is a move in that way.

I also particularly welcome the emissions performance standard. I have argued for that for ages and could never understand why, if we have emissions standards for cars and various other implements that we buy, we do not have them for the largest energy users such as power stations as well. I am not so concerned by a short-term dash for gas as long as that supply is diverse rather than concentrated in terms of our energy security.

I want to ask the Minister two things. He is absolutely right that the real risk to pricing is fossil fuels but it is also to a degree market concentration. How will these reforms make sure that there is less concentration of market power in the energy industry and how are we going to make sure that there are new entrants that can grow substantially to challenge that existing power? In terms of the market mechanisms, is he confident that there will be enough liquidity in the markets to make sure that these contracts for difference and that whole mechanism will work, so that we are able to deliver the policy objectives as he wants?

[Lord Marland]

My noble friend Lord Teverson has always asked the apposite question. First, we want to get away from the language of a “dash for gas”. Gas will be fundamentally important. We are not dashing for it. We have to make sure that we separate the price of oil and gas. Gas is now a very competitive energy product, as we have noticed in the USA where shale gas has been discovered. We do not want to call it a dash for gas. It is long-term support for gas.

As to the market mechanism, Ofgem will be tasked with bringing liquidity into the market as the regulator. It has got to show some teeth in generating regulation. You get there by people generating their own electricity and feeding into the market on the one hand, and on the other requiring less from the electricity providers by having energy-saving products such as the Green Deal and smart meters—part of the programme that we have been pretty unified in wanting to adopt.

Energy: Wind Turbines

Debate between Lord Teverson and Lord Marland

Tuesday 14th June 2011 Lords Chamber

[Lord Marland]

My Lords, there is not much I can say to that, except that I did not really think I was digging a hole for myself. However, the noble Lord is completely right in everything he says.

[Lord Teverson]

My Lords, we now have some 5 gigawatts of wind capacity in the United Kingdom. Can my noble friend reassure us that with this benign and elegant form of power generation we will be able to meet our 15 per cent target on renewables by 2020? Are the Government still confident that we can meet that target?

[Lord Marland]

I am confident that we can meet our target. It is a very interesting point: the noble Lord, Lord Teverson, comes from Cornwall, as we all know, where they have embraced onshore wind turbines. Of course in other parts of the country they are not going to embrace them. Scotland has embraced wind power very substantially but in other parts of the country it has not been embraced. It is very important that the local communities decide whether they want to embrace this form of electricity, and if they do we will of course achieve our target and we will be able to supply electricity for years to come.

Weightman Report

Debate between Lord Teverson and Lord Marland

Wednesday 18th May 2011 Lords Chamber

[Lord Marland]

I am also aware that a few years later, in 1755, there was the horrendous Lisbon earthquake, which caused a tsunami 2 metres higher than the high tide. We are clearly aware of the implications for this area. The most encouraging thing about the ONR is that it plans on a 1 in 10,000 year event, which is probably just about enough to get me through my lifetime but, with the will of God, perhaps not enough for the right reverend Prelate—I know which direction I am going in, and I have an idea in which direction he is going. Obviously, we need to keep refreshing that and ensuring that safety and security of that nature is fundamental.

[Lord Teverson]

My Lords, I welcome very much the fact that this report has been produced so quickly on behalf of the Government, who have responded to it very well in demanding a response on the 26 recommendations. Perhaps I might concentrate on just one or two areas. Conclusion 11 states:

“With more information there is likely to be considerable scope for lessons to be learnt about human behaviour in severe accident conditions”.

Recommendation 4 states:

“Both the UK nuclear industry and ONR should consider ways of enhancing the drive to ensure more open, transparent and trusted communications”.

What concerns me most about this incident was the fact that the Tokyo Electric Power Company was not seen as being open and was not quick in responding, not only to the public but to its own Government, and that those communications and the threats that came from them were quite huge. That has done great harm, unfairly, to our own nuclear industry, which used to have a similar reputation of being closed and unwilling to share information. I hope that the Government will work with the industry in the UK to make sure that the new and increased openness, which we hope will remain, stays there. The public’s concern about the nuclear industry could be one of the greatest casualties.

The Minister also mentioned stress tests in the review and said that they would be carried out by the European Nuclear Safety Regulators Group and the European Commission. I suggest to him that together those might not be the most trusted of organisations, and perhaps we could do with some more independent scientific input into those tests. Perhaps he could reassure the House that the stress tests will be rather more comprehensive and trustworthy than those that looked at the European banking system.

[Lord Marland]

I am grateful to the noble Lord, Lord Teverson, who is a recent convert to nuclear, which is extremely encouraging. I applaud his support and am grateful for it.

Transparency must obviously be at the centre of what we do. The report has made a number of recommendations, of which, as he rightly says, transparency is one, and we will be adopting those recommendations. It is fundamental that the British public feel secure. That is why the report is so important. It has been a broad-scale report. That is why we got it out early, so that we could bring comfort to the British public, and transparency is at the heart of that.

I am convinced that the nuclear industry is committed to stress testing. It is part of the industry’s research and endeavour; indeed, it is almost a byword within the industry. As such, I feel confident that the industry will support us in this.

Energy: Fourth Carbon Report

Debate between Lord Teverson and Lord Marland

Tuesday 17th May 2011 Lords Chamber

[Lord Marland]

There is no one more experienced on this issue than the noble Lord, Lord Prescott. He adds great value on the subject in this House. Describing the past is extremely interesting because I was at neither Copenhagen nor Cancun. The reality is, as he knows, that we have to set an example—as he did himself—and an aspirational target. We have been accused of not leading the way in Europe; now we will lead the way. We cannot have it both ways. We will put our aspirations down on the table as we did in Cancun. I pay great tribute to the Secretary of State, the right honourable Chris Huhne, for the way in which he brought the climate change issues back on to the agenda at Cancun, which, as the noble Lord rightly said, fell apart. Clearly, our fallback position is 20 per cent. We are comfortably going towards that 20 per cent. We feel that we can up the ante and show Europe how to do so, and 2014 gives us the fallback if we cannot achieve it. Those are our aspirations. I think that he would, broadly speaking, applaud them given the position that he tried to lead us to.

[Lord Teverson]

My Lords, this is certainly the announcement that we wanted to hear. I congratulate the Government on agreeing this target, which is important in terms of our leadership, as the Minister has so rightly said, but also in terms of keeping faith with the Committee on Climate Change, which is such a central part of the architecture. Having said that—and as a parliamentarian—it should not be taken for granted that the Government would accept every recommendation within the Committee on Climate Change’s report. This is the headline; this is the one that is important. However, all recommendations of such reports should be applied to the democratic process and decided on by Parliament rather than by the committee itself. However, I very much welcome the broad thrust of the Government’s agreement.

One of the ways to possibly change how things work that has been discussed and is in the Statement is carbon trading. Although the noble Baroness, Lady Smith of Basildon, seemed somewhat equivocal about it, I remind her that the way that this accounting should work was written in specifically by the last Government and was strongly resisted by certain parts of this House. However, I accept that under certain circumstances it can be the right way to go, and maybe it provides the flexibility.

I also welcome the fact that the Government are still angling after a 30 per cent reduction by 2020, although even I admit that this should not be just blind adherence to that target. I would be interested to hear from the Minister how those negotiations with Europe are proceeding, certainly within the international context that the noble Lord, Lord Prescott, mentioned.

I want to return to the point about energy-intensive industries. We clearly value those industries in this country and do not want to see them be offshored because all that will do is mean that carbon emissions worldwide stay the same while ours perhaps decrease, hence some of the problems over carbon production accounting. Will the Government ensure that the trade-offs for those extra costs still leave the incentives for those industries to reduce their energy and their carbon emissions while helping them in other areas of their profit and loss account?

[Lord Marland]

The noble Lord, Lord Teverson, gives me reason not to despair, because him agreeing with so much of what we are doing shows that the coalition is alive and well.

Energy: Shale Gas

Debate between Lord Teverson and Lord Marland

Monday 28th March 2011 Lords Chamber

[Lord Marland]

That is a very topical question. We hope that fracking—I use the word, which you might think has come from “Call My Bluff”, advisedly—is about to start in Blackpool. We should have the results of that this week. It is being observed. Once we have the results, we will have further study and a greater awareness of what is potentially there.

[Lord Teverson]

My Lords, is the Minister satisfied that fracking is environmentally safe? It has been suggested in parts of the United States that it can cause water pollution. Is my noble friend happy that that is not the case, certainly for the immediate Blackpool operation?

[Lord Marland]

I have just been asked by those on my own Benches what fracking is, so I will further the “Call My Bluff” scheme, if I may. It is hydraulic fracturing—sending in water and chemicals to discover whether there is shale gas there. My noble friend’s question refers to whether the water comes out polluted. It is therefore very important that the Environment Agency is on hand to establish whether it does.

Offshore Chemicals (Amendment) Regulations 2011

Debate between Lord Teverson and Lord Marland

Wednesday 23rd March 2011 Grand Committee

[Lord Marland]

My Lords, I am grateful we can continue.

Consequently, unintentional spills or leaks cannot be subject to enforcement action. The purpose, therefore, of the main amendment is to extend the scope of the 2002 chemicals regulations by creating a new distinction between a discharge and a release. Put simply, a discharge will be an intentional emission of an offshore chemical. Such an emission will be lawful if it is made in line with the terms of a permit, which will be granted only if the planned emission does not pose an environmental threat. Any unintentional emission of an offshore chemical will be treated as a release and will be unlawful. This will ensure that unauthorised emissions can be liable to enforcement action, including prosecution. This creates a new offence.

Nevertheless, the creation of a new offence does not mean that there will be a large number of extra prosecutions. Indeed, it is expected that there will be very few as the regulations allow other enforcement actions to be taken before prosecution. Our focus remains on preventing incidents through our robust environmental assessment and inspection regime. Oil spills and leaks are already covered by the 2005 oil regulations, so I should stress that the concept of release is being introduced by the oil regulations 2011 solely to ensure conformity with the chemicals regulations 2011.

The draft regulations also make a number of other changes to the regulatory framework. For example, the 2011 oil regulations include a new definition of offshore installation that encompasses all pipelines, some of which were not previously covered. The chemicals regulations already covered pipelines but, for the sake of conformity, the 2011 chemicals regulations contain the same revised definition.

In addition, the enforcement provisions of the existing chemicals and oil regulations have been strengthened by the amending regulations to allow DECC inspectors to require preventive action to stop spills occurring in the first place. Another change is to the information-gathering powers so that information can now be obtained from a wider range of persons and in respect of a wider range of incidents that might affect the marine environment. Other minor changes are being made by the 2011 chemicals and oil regulations, which will, for example, simplify the process for renewing and varying permits or transferring them to a new permit holder. These changes create even more consistency between the two regimes making them easier to administer and for operators to comply with.

We all hope that the new prosecution powers will never have to be used. Nonetheless, I believe that extending the scope of the offences is essential to provide strengthened enforcement and pollution prevention measures to my department. These regulations will benefit the marine environment through improved enforcement powers. They also introduce more consistency to the existing regulatory regimes which will assist industry compliance. I commend these instruments to the Committee.

[Lord Teverson]

My Lords, I thank the Minister for his robust explanation of these regulations which are clearly important in terms of environmental sustainability in the north-east Atlantic area. I want to explore the Ospar agreement a little. It is very important to us and will be critical in carbon capture and storage, which I shall not go into this afternoon. I am interested to understand how we are doing this to comply with a decision by Ospar. Do decisions by contracting parties to Ospar have to be unanimous or are they by qualified majority voting? What incident brought to the attention of the Government the fact that the previous legislation was defective in some way? Listening to the Minister’s explanation, I was surprised that there has to be this difference between a discharge, and I have already forgotten what the other noun was, but never mind. Will the Minister confirm that other contracting parties to the Ospar agreement—the Explanatory Notes mention the harmonised mandatory control system—are fully complying with that decision, as we are attempting to do?

--- Later in debate ---

[Lord Teverson]

My Lords, I, too, would be interested to understand what would be the prosecuting authority. Under the Marine and Coastal Access Act, I would have thought that it would not be the Environment Agency but the Marine Management Organisation. I would be interested in that clarification.

[Lord Marland]

My Lords, I thank noble Lords for their comments. I did not realise that such an SI would have so many incisive questions associated with it. I shall do my best to plough through them in the technical scope that they require. I will not take them in any particular order, but I shall immediately turn to the Gulf of Mexico. It is not a subject for discussion under these regulations. Clearly, a lot of future consideration needs to be taken into account as a result of the event. We are not at that point yet, but in various debates we have readily established that the UK has a safety record which is second to none.

Moving on to who is responsible for overseeing these regulations, in DECC we have our offshore environmental inspectorate which reviews and assesses all spills and reports to ensure that the operators take action where appropriate to respond to any spill. It is very much within our own department and we work closely with Oil & Gas UK and the various trade associations.

The point behind these regulations is that there obviously have been discharges. They were provoked by a modest discharge in the north North Sea from a chemical pipeline where an element of leakage and spillage was found that was not technically covered by the regulations. We have acted accordingly to embrace that sort of incident to ensure that the excellent environmental safety record that we maintain continues.

Perhaps I may provide the statistics that the noble Lord, Lord Grantchester, wants in writing rather than go through them now. I think that they are a slight sideshow to the real effect here, which is to make sure that we have got all the areas of concern covered. I apologise for jumping around the questions a bit. The noble Lord also asked whether these regulations refer to carbon capture and storage, for example. I can confirm that they do. Now that I am in the middle of negotiating the demonstration project, it is very important that this is taken into account as, indeed, are gas storage and pipelines.

The noble Lord, Lord Teverson, rightly asked about Ospar’s decision. It must be unanimous. North Atlantic states are involved in that decision, and it is then transposed into UK law. He also asked whether these regulations extend previous ones. They do because we are broadening the scope. In answer to the question on the Marine Management Organisation, it is DECC inspectors, as I mentioned earlier.

This is a very technical clause—as you can imagine it is far too technical for me—but I hope we have dealt with a number of the questions, but because of the technical nature there might be one or two areas I have not covered. I am sure that the noble Lord, Lord Grantchester, is a great technician in this area. I am happy to answer in writing—actually I prefer my officials to do so because I do not have a clue what I am writing about—and I hope noble Lords will support the two sets of draft regulations. I commend these two instruments to the Committee.

Energy Bill [HL]

Debate between Lord Teverson and Lord Marland

Wednesday 2nd March 2011 Lords Chamber

[Lord Teverson]

We do not do that at national carbon level, do we? If we were to do that, we would disaggregate by industry, but the previous Government and the present Government have not gone down that route. If we took that a step further, we would come to individual personal carbon budgets. There are arguments for and against that. I do not think that you need to disaggregate everything completely as all the relevant levers are not in place and splitting it all down does not mean to say that everything would necessarily add up because all sorts of areas, including motorways and EU ETS major emitters—even proponents of carbon budgets agree on this—could not be effectively and practically included in those carbon budgets. That system of making the detail add up to the total would not work under this scheme anyway. I am not saying that the question was invalid but if we really wanted to go down that route we would have to go down the industrial sectorial route as well or separate out consumers, the manufacturing sector and the services sector. Such an approach gets too involved in the mass of detail as opposed to inventing the policy instruments that we need. We need to involve local government in the Green Deal. I would much prefer it to have a statutory obligation but I think that carbon budgets are the wrong way to do it.

As regards wind farms, in Cornwall they are fantastic. Tourists like them and the majority of people are not against them. They are beautiful objects to behold on the horizon and may there be more of them.

[Lord Marland]

My Lords, you have heard differing views on the future of carbon budgets, including those of the noble Baroness, Lady Smith of Basildon, the noble Lord, Lord Judd, and my noble friend Lady Maddock. My noble friend Lord Teverson, as usual, clearly told us his views; and we heard those of the noble Lords, Lord Dixon-Smith and Lord Reay, who would be opposed to carbon budgets. It has been an excellent debate and we have heard views from all sides—all of which are respected.

Throughout the passage of the Bill, this has been a subject on which I have taken those views on board. We should try to find a way through in a spirit of co-operation. The Localism Bill, which is about a spirit of partnership, is going through Parliament at the moment. We have imposed upon local authorities a 10 per cent carbon reduction target through the DCLG, and they will have to set their own examples.

During the passage of the Bill, we have given great consideration to these issues, and we have determined that the best way forward is co-operation. I hope that next week we will be able to sign a memorandum of understanding with the local government group, to build upon the Nottingham declaration. The memorandum will set out a timetable for progress on reducing carbon emissions that we hope all local authorities will buy into.

At this point, I offer my thanks to the right reverend Prelate the Bishop of Liverpool, who has set up a meeting with me and the chief executive of Liverpool City Council to discuss how we can get the Green Deal through to Liverpool and together reduce carbon emissions, and use Liverpool almost as a test case.

I have taken on board the valuable comments of noble Lords. I have taken on board the fact that it will not be acceptable to impose provisions on local authorities. Indeed, the Department for Energy and Climate Change cannot impose our will on local authorities, but we can impose a way forward and an understanding between us all that this has got to be right for the country, as the noble Lord, Lord Judd, said. It has to be right for future generations and it has to be right that we use less electricity and less energy than we are using now, to conserve the future.

I hope that given those comments and the impending memorandum of understanding—which I cannot reveal too much about now because, as you know, I am a very junior person—the noble Baroness, Lady Smith, will appreciate what we are doing. I hope that that finds favour with her and with the noble Baroness, Lady Maddock, and that they will not press their amendments.

--- Later in debate ---

[Lord Marland]

My Lords, I have a declaration to make. I am not an Essex person which seems to be the thing to declare before speaking in this debate.

The noble Lord, Lord Teverson, as the noble Lord, Lord Davies, suggested, was considering withdrawing his amendment. My department has been made available to him for discussing and working through this problem which we take seriously. We have made it available to my noble friend Lord Cathcart. The noble Lord, Lord Davies, is right that this is probably not the right Bill for this tariff but the department will be happy to work with the noble Lord and reach a conclusion. As he rightly says, it will take several months, but I invite my noble friend to either withdraw or do whatever he was going to do with his excellent amendment.

[Lord Teverson]

I thank the Minister. I have only two alternatives: to test the opinion of the House or withdraw the amendment. I have come across no other option in the Companion. I am happy to take the advice of both Front Benches in anticipation that we will revisit the issue in the next Energy Bill on market reform that comes to the House. I beg leave to withdraw the amendment.

Energy Bill [HL]

Debate between Lord Teverson and Lord Marland

Wednesday 2nd March 2011 Lords Chamber

[Lord Teverson]

My Lords, I do not think that the amendment is appropriate to go into the Bill. That said, everything that the noble Lord, Lord Davies, has said is right; this is a really important opportunity to upskill and to find ways to create important apprenticeships in a growing, expanding and increasingly important sector of the economy. One of the things that the Bill does is to open up a lot of employment opportunities in that sector. I agree that there is a challenge; in some ways this area could become almost a deskilled tick-box process that did not require a great deal of skill. That would be wrong in terms of both employment and the long-term viability and credibility of the scheme. I hope that it will be an area where the Government encourage apprenticeships with a good standard of learning. This programme is particularly good at stimulating such apprenticeships as it is long term. The Green Deal will last for a number of years and there will be time to train people properly. That is one of the reasons why we are not jumping up and down and saying that all this needs to start tomorrow.

We accept the Government’s timetable for implementing the programme. It has to be drawn up in the right way not just in terms of formulating codes of practice, its administration and the way it works but in order to ensure that we have a sufficient number of people with appropriate skills in the marketplace to enable the programme to be delivered effectively. Therefore, although I agree absolutely with the spirit of the amendment, I do not think that it is necessary to include it in the Bill. However, I hope that the Minister will agree that apprenticeships will be an important part of the scheme.

[Lord Marland]

I am extremely grateful that this amendment has been put forward as it goes to the very heart of how we are going to develop as a nation over a rocky period—the noble Lord, Lord Davies of Oldham, and my noble friend Lord Teverson mentioned this—when growth, enterprise and opportunity will be fundamental to restoring the country’s financial viability. That is why the Government have committed to spending £250 million on apprenticeships over the spending review period. Some 75,000 apprentices will be created between now and 2014-15, leading to more than 200,000 people starting an apprenticeship each year. This is a fundamental commitment which I am sure the whole House applauds as very good news.

I was hoping to make an announcement on apprenticeships and the Green Deal. However, as noble Lords will understand, I am a very junior Minister and more senior Ministers will want the glory of making that great announcement, which, in fairness, would be more appropriately made next week in Green Growth Week. On a serious note, I hope that that announcement is satisfactory news for all concerned, particularly those on the opposition Benches who have tabled this amendment, as it will demonstrate our commitment to Green Growth apprentices and the Green Deal. As I said, I fully concur with the two noble Lords who have spoken on this subject. On that basis, I hope that the noble Lord will withdraw the amendment.

Energy Bill [HL]

Debate between Lord Teverson and Lord Marland

Monday 31st January 2011 Grand Committee

[Lord Marland]

My Lords, I am grateful to the noble Lord, Lord Davies, for summing up so well—he has done most of my job for me, which is extremely kind. The noble Earl, Lord Cathcart, drew this matter to my attention several months ago, as did the noble Lord, Lord Teverson. I am extremely sympathetic to it, but this debate has thrown up the different and slightly schizophrenic aspect of this tariff system. On the one hand we have the inequality of it, and on the other we have to take into consideration things like the fuel poor, inefficient houses, time tariffs, colder parts of the UK and so on.

There are two fundamental things that I can suggest to the Committee. The first, as I said earlier, is that we are going to carry out a full-scale review of fuel poverty and its implications. We will be announcing that review in the very near future, and it will look into the various aspects that noble Lords have brought up here. Secondly, I recognise that this is a complicated issue, not a simple matter which the Committee can debate now and then present a conclusion on. I can therefore suggest—and we have already started work on it—that officials within the department should look very closely at this in order to determine its operability without reference to the climate change committee, and between Committee and Report stage we will have the opportunity to explore it further with noble Lords who may wish, with officials, to see whether there is merit in this amendment. That is a genuine offer. I agree with the noble Lord, Lord Davies, that this is not a matter for this Bill as it is a complicated issue that needs considerable thought. Therefore, despite the merits of the amendment, I ask the noble Lord, Lord Teverson, to withdraw it.

[Lord Teverson]

My Lords, I thank my noble friend the Minister for his reply. I suppose that I ought to feel very comforted by having both the opposition and the government spokesmen speak against me. That ought to feel like old times and add a feeling of warmth—which is obviously lacking among the fuel poor—but it does not. I thank noble Lords for their discussion of this. As I said in my opening remarks, as you try to write this sort of amendment, you find all the difficulties about applying it. The words of the noble Lord, Lord Whitty, summed it up in many ways.

Again, the quantum of fuel poverty concerns not so much the amount of energy used but the cost of that energy. That is what we have seen in the huge increase in the number of fuel poor, which has risen primarily in response to the very substantial increases in energy prices. This debate has exposed the problem that the current tariff structures are just not right They are not right in terms of a competitive market, in terms of serving consumers, or in terms of justice within our society. For that reason, I welcome the Minister’s remarks that this area is to be looked at further and that, although this might not be exactly the right solution, it is something that will be pursued. I look forward to hearing the outcome of that.

I say to the noble Lord, Lord O’Neill, that I do not see the conflict between this and the Green Deal, which is not about reducing emissions or energy consumption in a household to zero but about making energy efficiency within our stock of dwellings much better—as I know that he knows, and which I know he supports. So I do not see them in conflict at all.

With that undertaking from the Minister that this area will continue to be looked at in the Department of Energy and Climate Change, I am happy to withdraw the amendment.

Energy Bill [HL]

Debate between Lord Teverson and Lord Marland

Wednesday 26th January 2011 Grand Committee

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)]

My Lords, welcome back; it is very nice to see such a full contribution from noble Lords. I thank all noble Lords for their contributions as we move into day four. They have been incredibly valuable. I assure everybody that we are drawing up a list of comments and suggestions, which we take very seriously. We will look at them and if any noble Lords seek clarification, there will be some opportunity for that between Committee and Report. We will make sure that there is an opportunity for discussion. It would be quite nice if we could get through the Green Deal today; this will be our fourth day on it. It looks as though we are moving on quite nicely. It would also be very nice to get through the AV Bill today.

[Lord Teverson]

Can we take a vote on that, Lord Chairman?

[Lord Davies of Oldham]

I have noticed that the AV part of the Bill has long since been discussed. It is the other parts that are more difficult.

[Lord Marland]

I am obviously delaying our finishing the Green Deal Bill by adding some levity to the occasion. I will get on with it.

There are just a couple of points that need clarification after Monday’s debate. I will run through them so that they are on the record. As I said earlier, if people want clarification, let us have it now because I do not want to reopen a debate that we have already had. The definition of “private rented sector” in the Bill covers accommodation provided under an assured agricultural tenancy occupation, which was one of the points raised, or a protected occupancy for the purposes of the Rent (Agriculture) Act 1976. If they are let under an assured or regulated tenancy, this will not cover all cases. I have already agreed to consider whether the definition of “private rented sector” should be extended in the light of these amendments. That is for the subject of agriculture, which was discussed some amendments ago.

On payment holidays—another subject that my noble friend Lady Northover had to tussle with womanfully—Clause 30 enables us to allow the bill payer, who might be the landlord or the tenant, to suspend payments. However, suspension is likely to be available only in very limited circumstances. An example might be tenancy void periods. However, we do not expect tenants to be able to suspend payments, other than in the usual cases. The bill payer may also be able to enter into an arrangement with their energy supplier to reschedule their Green Deal payments.

Finally, on the purpose of the review of the private rented sector, our intention is that a key aim would be to safeguard against unnecessary and burdensome regulation. I hope this deals with the point of the noble Baroness, Lady Noakes. The Government are not set on regulation but on encouraging enterprise and activity. If we have to resort to regulation, it is, as the noble Lord, Lord Deben, said, probably a failure of government.

I hope that that clarifies the matter. We have debated this subject and I am grateful to my noble friend Lady Maddock for saying that we have discussed it already. We have given it a very good airing and I am sure we will have an opportunity to air it yet again. We are always open to discussion.

[Lord Teverson]

I thank my noble friend for that. I welcome his statement that the suspension of payments will occur in only a very restricted area, although I think that the Minister’s colleague may have taken the question the other way. However, in order for energy company providers to have faith in the scheme, they must know that they are going to be repaid. I understand that, but I like the fact that, in completely exceptional circumstances, there may be an alternative method. However, I welcome the fact that it will be a tight regime.

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[Lord Marland]

My Lords, that was a magnificent debate. I am very interested to have had a history lesson. It is a slight shame that the noble Lord, Lord O’Neill, provoked political crossfire, because both sides are completely aligned on this. I am delighted to hear about events in 1951 but I am surprised that the noble Lord is of an age where he can remember them—he looks so young. I take his lesson on board. We are all lucky to be able to look in the rearview mirror and complain and criticise, but that is not what we are here to do today; we are moving forward.

I declare my own interest, having been involved in a building project that is going before the planners today—obviously I am not involved any more—for a small carbon-neutral eco-village. I have been working with the Prince of Wales and the Prince of Wales Trust on further housing development in this area, so I am in the vanguard of everyone in this Room and completely in support of them, with perhaps the very mild exception of my noble friend Lord Jenkin, who I know supports the spirit of this measure but is more worried about the timetable. I do not need to take messages back to the Government; I am completely in the vanguard and supportive of the attitude of the previous Government and the current Government to this subject.

In the end, though, we must remind ourselves why we are here: to talk about the Green Deal, not about new housing, which is what the amendment deals with. I am delighted to take this matter back to my honourable friend the Housing Minister, who is fully committed to enabling all new homes to be zero carbon from 2016, and non-domestic buildings from 2019. In July last year, my honourable friend made clear the Government’s ambitions for a low-carbon eco-friendly economy, with substantial and cost-effective reductions in carbon emissions forming an essential part of our effort. However, we are debating how we can improve the existing housing stock, not the new housing stock. On that basis, I invite my noble friend to withdraw his amendment.

[Lord Teverson]

My Lords, I have been seriously impressed by the debate. I actually enjoyed the history. I disagree slightly with the Minister: the 1950s are relevant because we are going to have to spend some £60 billion, or whatever it is, refurbishing the whole of the housing stock from that time, but otherwise I take his point. The historical perspective on this subject is a lesson for the future, which is exactly why I have tabled my amendment. A significant amount of the Bill is not about the Green Deal but about other things. The Green Deal, as I said in my opening remarks, is the most important, radical and needed aspect of the Bill and I congratulate the Government on it.

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[Lord Teverson]

I thank the noble Baroness for that. My comment would then be that that shows how important local authorities are in this area. A number of them are probably significant as a proportion of total carbon within their regions.

[Lord Marland]

This has been yet another challenging and interesting debate. I notice that the noble Lord, Lord O’Neill, has gone for fear of being lynched by the officials behind me. Or perhaps he has gone to speak on the first amendment still being considered on the parliamentary voting systems Bill. We will miss him, of course. I thought that at one point he was probably in the wrong Chamber, but all his views are valuable.

I agree with the noble Lord, Lord Teverson, that the noble Lord, Lord Judd, made a passionate speech—as you would expect from someone who feels very passionately about this matter. I personally thank him for his kind comments. It is a great shame that the noble Lord, Lord Giddens, is not here. He has challenged me to a game of tennis, and my fear is that he is practising in order to try to beat me. That may be his excuse for not being here, but he made a very good speech at Second Reading.

The noble Lord, Lord Deben, comes to this issue with great experience of local authorities, and I am grateful for the amendment of the noble Baroness, Lady Smith of Basildon, on this subject. I should be interested to see the report to which the right reverend Prelate the Bishop of Liverpool referred. As he rightly said, the north-west is energy rich. We should be tapping into that, and I am delighted to hear that Liverpool is making strides within the local authority. Every person in this room—not everyone perhaps, but most of us—is looking to drive carbon reduction in every way. We are committed to it. We feel strongly and passionately about it. We want to see it happen, and we want to see it happen urgently. That is the strand of this debate.

Regarding the Green Deal, which is really what we are here to debate, our initial research revolved mainly around how local authorities could buy into this programme. It does two things. First, research shows that local authorities are among the most trusted when it comes to people’s homes. They have become good exponents of the Green Deal. By working closely with some of the building merchants and others, local authorities will be able to sell the Green Deal, because they will be trusted, and can advise on it. A definite incentive will be introduced for local authorities. If at some point the local authorities are not seen to be buying into the Green Deal—which I think is highly unlikely, because there will be great financial benefits for local authorities in this—we must bring in some form of regulation, where possible, within the remit of the Department of Energy and Climate Change, given that we are not the department that is responsible for local authorities. We must encourage a greater take-up. Our initial findings—I think that the right reverend Prelate said as much—are that there is a big take-up from local authorities, they are enthusiastic about the Green Deal and they want to participate vigorously.

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[Lord Teverson]

I am not going to talk about the other Chamber, but with this Committee on the Energy Bill, if there is some time left, we take the amendment and finish after that amendment. I am amazed at that intervention. It is quite unnecessary. I find it absolutely astounding. I presume that we will do as we have always done, which is to finish debating the amendment then adjourn. I shall join with the noble Lord in doing that, if that is the case.

[Lord Marland]

We started at 3.45 pm and we have been here for four hours. That is how long I was instructed that we were here for. We are running over by a minute. I do not think that that is unreasonable; no one is trying to frustrate the Committee. I did not intend to stop the noble Baroness, Lady Maddock, making her excellent speech. I naturally thought that we would finish the amendment.

Energy Bill [HL]

Debate between Lord Teverson and Lord Marland

Monday 24th January 2011 Grand Committee

[Lord Teverson]

Perhaps I could respond to that because it is exactly not what I am saying. I am surprised that we have a Bill where the Government are constraining themselves with a “best after” date as opposed to a “best before” one. I am not suggesting that things have to move forward at any time, but that we have within the Bill something that Governments normally try absolutely to avoid, which is a restriction on when they can take action if they feel that that action is necessary. We all hope that the action will not be necessary, although I note that a report of the review must be published by 1 April 2014, so there is a longstop. However, while I am the last person to argue that we should not put the quality and success of this scheme first—that is essential and why the 2012 date is right—what I find difficult to understand is not that we are forcing the Government to do this earlier, but that they could not exercise their own power to move forward if they felt it necessary to do so.

I did invite the Minister to suggest, if the scheme was seen not to be moving forward particularly well, other ways of doing it. I am sure that there are ways outside this Bill that the Government would get on with. Indeed, I know that my noble friend would do that, which may be part of making sure that landlords are aware of the benefits of the scheme, that it exists and can be successful. We have also discussed ways of utilising the local authorities, although not through enforcement because I am sure that the Government would find other ways to respond. What I find difficult is that the Government have imposed a constraint on themselves in the Bill about when the process can start.

[Lord Marland]

I am afraid that I cannot agree with my noble friend Lord Jenkin of Roding. I deeply believe that Government have lost themselves in a mire by failing to proceed quickly on things. We have a massive task ahead of us of reforming so many things in order to meet our commitments and face the challenges that lie ahead, so I am afraid I do not agree that we should elasticate time so that some people in the building sector who have been briefing noble Lords do not feel that they are perhaps being rushed into something.

We are now effectively at 1 January 2011 and we are talking about having a review in perhaps two years’ time. Every professional organisation knows about the Green Deal. People understand the possibilities that are available and a number are already making plans to take full advantage of it and put it into the housing sector. It is therefore not right that the Government should not set down tight timelines to see how this progresses.

I will follow up on the remarks of my noble friend Lord Teverson that we need to find out early on if it is working and, if it is not, what action we need to take to make it work. I will amplify what I said earlier. The start of the review will be at the end of 2013. Some people—I am one—are persuaded that it should be done then, while others think that it should be done later. We must start somewhere and get on with it. We cannot allow the land to lie fallow. We have a massive and monumental task. As my noble friend Lord Jenkin of Roding graciously admitted, this has been sitting around unresolved for a long time. The Government must get on and resolve it. Therefore, I am afraid that I do not agree with the amendment. Perhaps we will discuss the issue further. In the mean time, I ask my noble friend Lady Noakes to withdraw the amendment.

Energy Bill [HL]

Debate between Lord Teverson and Lord Marland

Monday 17th January 2011 Grand Committee

[Lord Marland]

I think that noble Lords are looking at this in a narrow sphere. I am not familiar with parts of the world where there is only one supermarket chain operating in that part of the world. I take the view of the noble Lord, Lord O’Neill. In my part of the world, there are four or five operating quite regularly. If you add to that B&Qs and the suppliers of all forms of household improvement, it multiplies. Therefore there is distinct competition. You have to add to that the energy companies, social enterprises, housing associations and all manner of retailers who can ensure that the market is competitive. I totally take on board what the noble Lord, Lord O’Neill of Clackmannan, has said, that it would be terrible if there was only one supplier in a part of the world. However, given the extent of suppliers that are available, I do not realistically think that market forces would apply.

Referring to the interesting point raised by the noble Baroness, Lady Smith, I am not entirely sure that I follow. If her point is that the double-glazing salesperson was promoting a product that was exclusively to their benefit, I am not sure that this would happen because market forces would dictate that anyone inviting someone into their home to give an assessment of the requirement and the cost of it would automatically put that out to tender. Even if these people were inappropriately selling the product, they themselves, before they are allowed to sell that product, have to be authorised under the scheme; and the scheme, as we have already debated, will have many a safeguard and recourse against unauthorised behaviour by an authorised provider or assessor.

It comes back to the central theme. We have to get these right, we have to ensure that the standards are properly maintained, and we have to ensure that competitiveness is allowed into the market.

[Lord Teverson]

How do the Government see the status of assessors? Does the Minister see them as being like independent financial advisers in the financial world? Can they be employed by B&Q or Everest? Can they actually be employees of those organisations, and can that be made quite transparent? Do they have to be self-employed? That is what I am trying to get to the depth of here. It is not in any way a criticism. It is actually trying to understand how this works in practice. I come back to the financial services industry or even—dare I say to the noble Lord?—the insurance industry. There is a whole history of mis-selling despite strong regulation, perhaps because people got commissions—I would be interested in comments in terms of whether commissions are permissible under this system. There are clearly advantages to the upfront sales force or the people who recommend because there is a temptation, under certain circumstances—which may not be illegal but might be dubious or not in the interests of the customer—not to recommend the best solution necessarily, or a particular solution. Most people will not want to get more than one assessor. They will want to get an assessor who they see as independent of mind, maybe through a proper assessment process or not—coming back to the previous debate. I am interested in how the Minister sees the status of assessors. Can they be a full-time employer, employee or an organisation that tends to specialise in certain solutions? I am just interested in how the Government see that working out in terms of a code of practice or maybe in the way that this scheme has to operate, because I believe that it is fundamentally important.

[Lord Marland]

My Lords, there is nothing to prevent an assessor working for an organisation, but the reality is that they have to be independent of that organisation in terms of their assessment. There has to be a Chinese wall. To answer my noble friend Lord Teverson’s excellent question, assessors can come from all walks of life. They could be quantity surveyors, representatives of B&Q or representatives of a supermarket, but they have to retain an independence and fulfil the standards that are required of them under the Green Deal regulatory mechanisms that we have been debating today.

I would also point out that a lot of the products that we are talking about here are not new to the market. It is not as if we are suddenly coming into the market with a wonderful new product. Double-glazing has been sold consistently through the country for a long time. Loft lagging has been consistently sold, and there are consumer protections in place under the Act which provide for proper regulation.

There is one point which I would like to reflect on and come back to my noble friend Lord Teverson on, however, and that is the role of commissions. My noble friend has raised a very important point where we need to work out the impact and how these assessors are remunerated.

[Baroness Smith of Basildon]

I have listened carefully to the Minister. I think that he is trying to reassure noble Lords on this important commission point, but I am not reassured. Clause 3(4)(a) to (g), on the code of practice, would seem to allow an installer to employ an assessor, and to allow that assessor—within this code of practice, this framework arrangement and the Green Deal—to recommend energy efficient measures that fall within the remit of one installer that is employing that assessor. I do not understand how an assessor can be employed by an installer and be independent. I am grateful that the Minister will look at this again. However, depending on what he comes back with, we may wish to return to this at a later date.

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[Lord Marland]

My Lords, this is an interesting amendment. The question raised by my noble friend Lord Teverson of what is the best deal remains unanswered, because a best deal to some people is quality; to others it is price; and, arguably, the best deal to most is a combination of quality and price.

Amendment 10 seeks to introduce a new clause addressing consumer protection mechanisms. While we accept the thrust of the amendment and what it is trying to achieve, I believe that the issue is already addressed in Clauses 3 and 4. Clause 4 is central to the Green Deal and defines the terms on which it can be offered to customers. I urge noble Lords to look at it again. Subsections (2) and (3) require that an accredited Green Deal assessor has assessed the property in accordance with the standards that we set out in the framework regulations and has recommended energy efficiency improvements on this basis. The assessor would identify the potential for energy savings using the standardised methodology as set down. The outcome of the assessment would be provided to the improver and would be used by the provider as the basis of an offer for Green Deal finance.

Subsections (4) and (5) require that an accredited Green Deal provider, the body seeking to contract the work, should give the customer an estimate of the savings on energy bills that are likely to result from the proposed energy efficiency improvements and over what time period these are likely to accrue. The Green Deal provider is required to base his estimates on a standardised methodology to be set out in regulations, thereby ensuring consistency and rigour in the process.

In addition, Clause 3 sets out requirements for the code of conduct which will make provisions as to the qualification and training of Green Deal participants. This will ensure that Green Deal participants operate to competent standards. We will look to see what, if any, further requirement should be placed on Green Deal providers to ensure robust consumer protection. We will set out these conditions in the code of conduct.

Lastly, I believe that we have the flexibility to make requirements in secondary legislation to enable us to move swiftly to close any loopholes that may become apparent once the scheme is operational. Paradoxically, agreeing this amendment for primary legislation could lessen our ability to protect customers. I believe that the Bill already contains the necessary provisions to achieve what is intended by the amendment and I would ask the noble Lord to withdraw it.

[Lord Teverson]

I thank the Minister for going through that explanation. He is right to say that there is a list of provisions within the Bill that point in the direction of the right quality of decision-making and of ensuring that all the procedures are right. However, I am not sure that there is a duty to get the right deal for the consumer at the end of the day. However, I note the Minister’s intention that that should be the case, as I am sure we would all want. Perhaps I can ask him to look at it again.

I should also like briefly to reply to my noble friend Lord Jenkin of Roding. My amendment makes it quite clear that subsection (1) is concerned with overall energy solutions and that subsection (4) is concerned just with an estimate, which I do not think would be very difficult to make. I know the Minister has exactly the same objectives here and I hope he will look at it again. I beg leave to withdraw the amendment.

Climate Change: Cancun

Debate between Lord Teverson and Lord Marland

Monday 13th December 2010 Lords Chamber

[Lord Teverson]

My Lords, I think that the contrast between this year and last year has been absolutely excellent, and I am sure most of the House would echo that, but may I press the Minister on one or two areas? I should like to have a little more detail on verification, which many of us believe is one of the most important areas that was discussed. Has China in particular now agreed that verification procedures are not just permissible but something that it will encourage, and that they will be part of any future regime and will no longer be resisted?

On REDD and deforestation in general, we are all aware of the still huge rate of deforestation. It might not be quite as great as it was in the past few years, but it is still there. Will the Minister indicate when this regime will come in and when deforestation will start to decelerate in a very major way, given that these forests will not be replaced? Once they are gone, they are gone.

Lastly, I always understood that these UN agreements had to be unanimous for them to work. Will the Minister explain why Bolivia stood against this agreement, and how that leads the agreement? The great lesson to me is to keep one’s expectations low and then maybe enlightenment will come somehow and things will be delivered. Whether this will happen for Durban next year is, of course, the next question, but I add my congratulations to the ministerial team and to the Mexican Government on the excellent outcome.

[Lord Marland]

My Lords, I agree with my noble friend. I have always kept my expectations low throughout my life; it is a very good starting point for anything. Look where I am now—noble Lords might ask where.

My noble friend quite rightly asked three very valuable questions. I will, if I may, deal with forestry and deforestation first. The agreement was to map out the extent of forestry at the moment so that we had a baseline from which to start discussions in Durban and the period running up to it. It set a formula and a place to start from.

Secondly, even though I was not there, I understand that Bolivia did not agree to the target because its commitments and targets are much more aggressive. I understand that it is looking for no more than a 1 degree-Celsius increase in emissions, and I think it felt that it had a more aggressive timetable.

Thirdly, the verification system is a commitment from all 193 countries that subscribed to verification—so China is included in this—to set a framework and a platform over the four-year period and be transparent about the standards that they are setting in their own countries. The plan is to be able to verify every four years.

Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010

Debate between Lord Teverson and Lord Marland

Wednesday 17th November 2010 Lords Chamber

[Lord Marland]

My Lords, I am very grateful to everyone who has spoken. This is a great day for the nuclear industry, and I am delighted. Unfortunately, everyone who has spoken seems to have left, which says a lot for my winding-up speech. I am very grateful to the noble Baroness for sitting there and listening to what I have to say. Perhaps she can report it accordingly. It is a great day for the nuclear industry, and I am very grateful to the noble Lord, Lord O’Neill of Clackmannan, who is a terrific exponent as chairman of the NIA, for his kind words in saying that it is a great day. I think this clearly sends confidence to the industry that we are determined to get the nuclear show on the road. We have had 13 years without the nuclear show on the road. I am grateful to the previous Government for helping to change public opinion, but we have had no activity, and we now have activity. As always, the noble Lord, Lord O’Neill, makes good points in everything he says on this issue, because he is an expert. He is a pleasure to work with on this subject. He makes good points about waste, the economic benefit perhaps of economies of scale working with government and with civil waste, and I take those messages on board. The noble Lord, Lord Jenkin, again talks about confidence. The first two statutory instruments clearly demonstrate that there is confidence and that we are going down the road for it. Both he and the noble Baroness have asked questions on the subject of the NII. I take on board her comments, asking us to get on with sending a clear route map of what we need to do. The Government have been considering two options for the reform of nuclear regulation, as was said at Question Time last week—a discrete agency within the HSE or a stand-alone, statutory corporation. This is a discussion between two departments, and I assure the noble Baroness that we are pushing very hard for a conclusion on it.

The noble Lord, Lord Teverson, made a series of excellent points, as always. He talked about spent fuel and the levels of waste not being defined. They are defined in the regulations, in the companion instrument to this order, and I should be happy to have my staff take him through those pages, because I shall not be able to do it myself.

[Lord Teverson]

I hope the noble Lord does not mind if I decline that particular offer, certainly this evening.

[Lord Marland]

It is all very well the noble Lord asking questions, but he should know the answer to them.

One question is why we should designate interim stores. Operators must provide for interim stores during the life of a station and it is essential to ensure that the money is set aside. I was asked whether the funds were secure. Yes, there is protection in the funded decommissioning programme and in the Act itself. Funds must be remote from the operation of the Government. Neither party, including the Treasury, can get its hands on it. That was the concern.

The two reactors are hybrids and based on the foundation of reactors already in use. Obviously, they are not the same, because the people who make them are continually trying to improve on them and technology is moving forward on that. The noble Lord asked whether other reactors would require approval. Of course they would—as, indeed, would a Mox plant, as it does not fit within this legislation.

I thank the noble Baroness, Lady Smith, very much for her co-operation in this particular SI. She let me know in advance about some of the matters of concern affecting her Benches, and I am grateful for that level of co-operation. We are trying to build a consensus and get the ball rolling as quickly as we can, and it is very welcome that on all sides of the House we seem to have a common theme. I thank her very much for that.

The noble Baroness asked whether we have considered whether there should have been an inquiry. Over three years we have had the three consultation processes that her own Government instigated, which I think is pretty exhaustive in the current circumstances. She asked whether we were on track; we are, and we have published the timetable on the DECC website. If she has time available, we would be happy to show her how to get on to it. We can keep her posted through that means.

--- Later in debate ---

[Lord Marland]

If I understand the noble Baroness correctly, the cost for provision for waste falls on the operator, who has to—as I have answered the noble Lord, Lord Teverson—provide funds at all stages of the decommissioning. That includes storage and the final decommissioning. They are fully aware of it. Clearly, we have not got to where we are now without consultation with all the operators. They understand the rules of engagement—I am not going to say they are happy with them, as I cannot immediately tell you that—and these rules are the way we are intending to proceed.

I hope the noble Baroness feels that I have answered the majority of her questions, if not all of them. As always, it is good to have a lot of questions as this is an important step change that we are making for the future of the nuclear industry.

[Lord Teverson]

I think my noble friend may be about to move off the questions. I did ask about these types of approvals in other European member states and how they had seen these reactors. I should have given the Minister notice of that question and I apologise that I did not. If he could write to me with any information on that I would much appreciate it.

[Lord Marland]

I felt that I had answered the noble Lord’s questions. These are obviously hybrids and there are similar types of reactors in Finland and France, which form the basis of these operations. If he feels that is not an adequate answer, however, I shall write to him later on the subject, if I may.

We face major changes in moving to a low-carbon economy. There is an urgent need for a diverse range of new energy infrastructure with a massive expansion in renewables, as well as more new nuclear, clean coal and gas. All of this will help us to reinforce our domestic security of supply. Regulatory justification is one of the facilitative actions necessary to enable new nuclear power stations to be built in the UK. It requires an assessment of whether the benefits of building these nuclear reactors in the UK outweigh the radiological health detriment that they may cause.

These instruments give effect to our decisions that the benefits, including the contribution which new nuclear power stations can make to ensuring secure, low-carbon energy supplies, outweigh the detriments. For that reason, they are very important measures. The provisions in the draft Nuclear Decommissioning and Waste Handling (Designated Technical Matters) Order 2010 are an important part of the statutory framework for the financing of nuclear waste and decommissioning, and another of the facilitative actions necessary to enable new power stations to be built in the UK. I commend these regulations to the House.

Climate Change

Debate between Lord Teverson and Lord Marland

Tuesday 6th July 2010 Lords Chamber

[Lord Marland]

I thank the noble Lord for his question but, as I said, we will look at the report in detail and respond in October. We will have a debate on that in the Lords, as we did last year. If I may say so, that debate held this House in very good shape. We had a strong debate of all the arguments from both side of the House. Obviously, I have read the report and, in fact, have it in front of me. We agree with many of the recommendations that the committee has made, particularly the main one that we must not rely on the recession to meet our targets. The report gives us a platform from which to accelerate and we clearly need to have a step change. All these things, including regulation, will be considered by us in greater detail as we take on board what the committee has said.

[Lord Teverson]

My Lords, one of the key areas for action in the report is road transport travel, which accounts for 25 per cent of emissions. How do the Government intend to fulfil the coalition agreement and set up a system of national charging networks for electric vehicles without putting undue pressure on public expenditure?

[Lord Marland]

I thank the noble Lord for that. The electric vehicle charging network is a very key and fundamental part of the coalition’s policy, but it cannot be done by magic. It needs detailed planning and a lot of work needs to be done, including assessing what it will cost the taxpayer and what incentives are needed to establish it. As I said, we shall look at that in the recess to establish what is required.

Energy: Renewables

Debate between Lord Teverson and Lord Marland

Monday 5th July 2010 Lords Chamber

[Lord Marland]

Nuclear-generated electricity is a fundamental part of our party’s coalition policy but I am not sure that it is relevant to the Question in hand.

[Lord Teverson]

My Lords, is not one of the ways in which we will meet this target much greater use of biogas? How will the UK catch up with other European countries, such as Germany, in terms of anaerobic digestion?

Energy: Belarus-Russia Gas Dispute

Debate between Lord Teverson and Lord Marland

Tuesday 29th June 2010 Lords Chamber

[Lord Teverson]

My Lords, given the continued dependence of Europe as a whole on Russian gas, what pressure are the UK Government putting on the European Commission to look at the potential for shale gas in Europe, which over just a couple of years has in many ways revolutionised the security of energy within the United States?

[Lord Marland]

My noble friend and coalition colleague raises a very good question to which not many know the answer, but I will do my best under the circumstances. The issue of shale energy, for those who are interested, is well advanced in the US. It is generating a great deal of supply, but it does not have the same planning restrictions that we do here in Europe, so only limited exploration has been carried out. As yet there has been no establishment of financial viability, but this is happening apace. The benefit from this for the UK is that as a result the US is importing far less LNG, which makes it cheaper and more available for this country.

Climate Change: UN Framework Convention

Debate between Lord Teverson and Lord Marland

Monday 28th June 2010 Lords Chamber

[Lord Marland]

I thank my noble friend Lord Lawson for his question. His views are widely known, and I compliment him, incidentally, for bringing a great wealth of knowledge to this debate. However, his views are, I am afraid, not in line with the Government’s policy. This Government are committed to a green agenda. Climate change is one of the gravest threats that we face as a nation and as a world. Urgent action at home and abroad is required to tackle it. The overwhelming weight of scientific evidence from a range of independent sources indicates that global temperatures are rising due to human activities, and temperatures are set to increase over the coming century. It is our duty as a Government to solve these problems.

[Lord Teverson]

My Lords, one of the areas in which there was almost success at Copenhagen was deforestation and the REDD programme. Even if the grand scheme is not solved in Mexico, is it my noble friend the Minister’s judgment that we will move forward in this important area and find a solution? How are the Government approaching this at the moment?

[Lord Marland]

I thank the noble Lord for his question. He brings unrivalled knowledge to this subject. As he well knows, 70 countries are working very closely to firm up some of the loose agreements that were made in Copenhagen. We are very committed to that dialogue and will continue that process in earnest.