Devolution (Constitution Committee Reports)
Lord Wallace of Tankerness Excerpts(7 years, 2 months ago)
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The Parliamentary Under-Secretary of State, Scotland Office (Lord Duncan of Springbank) (Con) (Maiden Speech)
My Lords, this is the first time I speak in your Lordships’ House. The phrase “baptism of fire” probably springs to mind. This is indeed one of the most challenging issues that we will face as a country and as constituent parts of that country. But before I go on to that, if I may, this is also my maiden speech so I hope noble Lords will indulge me for a moment before I return to the business in hand.
I come to the House from another place, not along the Corridor, as many have done—not for want of effort on my part, I hasten to add—but from over the channel, from Brussels and the European Parliament. I represented Scotland, the largest and many would say the best constituency in the European Union. I learned a great deal from watching how that chamber works. Some things worked well and some things did not. I suspect we will be able to look again at how things are developing there with some interest as the Brexit process goes on.
Just as Charles de Gaulle lamented the challenge of governing a land of 246 cheeses, the challenge is all the greater trying to represent a land of 118 distilleries, as Scotland has. However, the tour is slightly more invigorating than the tour of cheese production in France. I had hoped to bring to this House some experience of events in Brussels and Edinburgh, but given the extraordinary collection of talent on the Benches on both sides, from former Commissioners and ambassadors to distinguished former MEPs, frankly, I just hope to keep up. I recognise that there is a wealth of experience in the debate today, and I hope to try to respond to some of that.
When the Garter Principal King of Arms asked me to consider which place name I would take as my title, I asked, somewhat tongue in cheek, whether I could take Brussels. He smiled benignly, as is his wont, and explained only if I could claim to have achieved a great military victory there. I fear my success on the non-road mobile machinery directive was perhaps not quite qualification enough. Instead, I chose Springbank in the county of Perth. My grandparents moved to the newly constructed council scheme of Springbank Road in the town of Alyth in 1934. They came from a mill cottage with an earthen floor. My mother was born there in 1936 on the kitchen table, as she would often tell me, and thank goodness for Formica. Upon marriage, my father moved into the same house and it was there that my brother and sister were born. Indeed, for the first few years of their marriage that is where they lived, alongside my grandparents and their other son. My parents’ first home of their own was also in the same council scheme. My grandparents lived their whole life in Springbank Road, as did my mother, who passed away only a few years ago. I am the third generation to hail from Springbank and I believe that it is appropriate to take that as my title. I also again commend the notion of council housing, which I believe we are once again looking to improve. It is significant and important and I commend it.
Before I move on to the substantive elements of the debate, I should give my thanks to my noble friends Lord McInnes of Kilwinning and Lady Goldie for guiding me so expertly through my introduction here only a few weeks ago. I have to admit that it was the most nerve-racking experience of my parliamentary career and I would not want to go through it again. None the less, it was an extraordinary thing to find myself here among noble Lords. I also thank the doorkeepers who have guided me more than once up different corridors and helped me to locate toilets, which are not well publicised, in different parts of the building. I thank again the clerks who have guided me through various other elements of my work and my ministerial colleagues who have guided me in so many of the elements of what I am about to speak of today. They have all shown me great kindness and I appreciate that a great deal. It is a privilege to be here.
Perhaps I may turn to today’s business. Let me begin by commending the approach of my noble friend Lord Selkirk: the union is precious and there is no question about that. Throughout the debate we have heard many noble Lords speaking of that very precious union. Indeed, as my noble friend Lord Lang of Monkton began the debate, he recognised that we must not take this union for granted. We had a close shave not so many years ago, and again the noble Lord, Lord McAvoy, was very kind to point out how we worked together to try to move forward and recognise the challenges faced at that difficult time.
I shall start by addressing head-on the point made by my noble friend Lord Lang. There was a delay in the response to this paper; that is not appropriate and it will not happen again. We must make sure that we address these challenges in good time and we cannot take for granted that time will be given to us to make sure that that happens. It is also important to stress the attitude of this Government, which is to ensure that both the Brexit process and the devolution process work together. A number of noble Lords pointed out the challenge of the piecemeal approach we have adopted to our constitutional evolution, and indeed some of those changes have not always been in the best interests of the entire union. Some have been made in haste and some, I suspect, we regret and would revisit were we to have an opportunity to do so. The challenge with devolution as we understand it is that it is a ratchet that moves in only one direction. The problem is that if we do not get it right the first time, it unfortunately moves on too fast to change it around.
The joint ministerial committees were mentioned a number of times by several noble Lords, including my noble friends Lord Lang and Lord Dunlop, and the noble and learned Lord, Lord Wallace of Tankerness. I was a clerk in the Scottish Parliament in the early days of the joint ministerial committees and I can assure noble Lords that they were not working well then—long before we had the situation of Brexit and long before we had embraced many aspects of devolution. There were a number of reasons for that. I think that to some degree everyone expected different things from those committees and everyone was slightly disappointed by not getting what they wanted out of them. Let me answer some of the other questions which have been raised. How often have the joint ministerial committees met this year? Not enough—they must meet more often. The times we face now are a challenge and we must embrace that by doing so together, using these committees to help us take the steps forward; of that I am in no doubt whatever. But I should also stress that although these committees have not met as often as perhaps all would have wished, to some degree there were extenuating circumstances such as the election and other elements. None the less, we need to do better.
However, I would also say that the bilateral discussions have been significant and important at all stages of the process. The noble Lord, Lord McAvoy, was right to point out that we are well served by a Civil Service that is able to continue to collaborate even when politicians cannot always quite find themselves at the same table facing each other in the same direction. For example, in rural affairs, over the past few months of the summer period there have been more than 50 face-to-face meetings to discuss each of the aspects of Brexit as they impact on the rural affairs agenda, and that is not without significance. Again, it is important that we are as open as we can be. The UK Government are committed to being as open as they can and have been so throughout the process. Part of the challenge, however, is that we have not always been able to secure from the others participating the same level of openness, and that in itself can be a challenge. The consent aspect has to work both ways. There needs to be collaboration from both sides; it cannot just be all give on one side and all take on the other. It is important that we recognise that.
Perhaps I may go into a little more of the detail. Again, I am fearful that I will not be able to do justice to the sheer range and depth of knowledge and expertise that noble Lords have displayed today. Perhaps I may take a moment to say that, as someone who sat in the European Parliament for a number of years, I have probably experienced more serious debate and insight in the past few hours here than was often the case in some of the debates I witnessed there. First, I turn to the reports themselves. There are elements that we must look at in trying to address how we consider the devolution settlement. It is easy to look on it as unfinished business, but the question is: what would finish that business? How shall we bring together each of the constituent parts to create what needs to be a functioning constitution? We cannot simply keep feeding the crocodile and hope that it will eat us last. There needs to be a recognition of what we are for. What is our country and what shall be our constitutional settlement? We need also to recognise that each constituent part must play its role in that. We do that against the backdrop of Brexit, which makes the whole process considerably more difficult in terms of trying to achieve progress. However, I am well aware that we have to achieve that progress because without it we will be in a terrible situation.
The noble Lord, Lord Jay, made a significant contribution to the discussion today. I am under no illusion about some of the challenges the noble Lord has presented to the Government. What I would say as a former Member of the European Parliament is that there is a challenge in how the acquis communautaire functions, how the frameworks within which we exist today have been constructed and how the devolution settlement itself embraced those frameworks. It is true to say that when we witnessed the changes in Brussels, as we have done over the years, they have been negotiated by the United Kingdom with the involvement of the home nations; none the less, the devolution frameworks were established within an established European framework. That was the glue, as the noble Lord rightly put it, but none the less it was there. That is why the Government have no ambition to change in any fashion the powers currently exercised by the devolved Administrations. What we have to do is work out where the frameworks need to be functional. At the moment there are 111 areas in the Scottish legal world and 64 in the Welsh where again, we hope to collaborate to establish exactly where we can find a common framework, a common approach and the right outcome.
We have no ambition to retain powers that we do not need and do not deserve to hold. We must recognise that the devolution settlement is fixed; we will do so, but we must also recognise that on day 1 after Brexit, each element of our procedures must be legally sound. We can take no risk of there being an upset, stumble or breakdown, and we should take time to echo the points made by so many of my colleagues on these Benches. We must take time to ensure that we get the frameworks settled and sorted and workable. If we get them wrong, we will live to regret it. One problem we face now is that that day is fast approaching, so we need to make sure that on day 1 we have a legally sound system, but that we work out how, as a common people of different nations, we will come together and pull in that direction.
The noble Lord, Lord Desai, is quite right. England can often be overlooked and it is one of the great challenges that we sit in what many people consider to be one of the Chambers of the English Parliament—and yet, the very nation of England itself can often be overlooked in the wider sense of the word. That is a great pity, and we need to recognise that as each of the other home nations pushes for particular changes to the wider constitutional settlement. I served as a clerk on the committee when my noble and learned friend Lord Wallace of Tankerness was in the Scottish Parliament—not that long ago, it seems, but here we have arrived, apparently for greater things.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(8 years, 7 months ago)
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Lord Wallace of Tankerness (LD)
My Lords, I support the Motion which has just been so eloquently moved by the noble Lord, Lord Grantchester. I do not intend to rehearse all the arguments that we have been through, but I will make some points which have arisen in our lengthy debates and again this evening. The Minister seeks to raise the red herring of this Bill being totally threatened and of the threat to the oil and gas industry. There is no division across your Lordships’ House on the importance of setting up the Oil and Gas Authority. We want to see it as much as he does and, as the noble Lord, Lord Foulkes of Cumnock, said, the simple way for the Government to do that would be to accept the amendment which your Lordships’ House passed last week.
We have also heard another red herring about the manifesto commitment. I will not go into all the details again about how ambiguous, or not, it was. Let us take it at its best from the Government’s point of view and accept that it was a manifesto commitment. They are actually going to get that commitment because a substantive clause which brings forward an even earlier closure of the renewables obligation for onshore wind is already passed: it is there. What this amendment is about, what we are currently debating and what we have been ping-ponging about is a very limited point about the kind of grace period given to developers who have spent millions of pounds—not to mention time, energy and effort—to try and bring their projects to fruition but who have been thwarted by a very arbitrary cut-off date. It was probably a date which had to be fitted in with other announcements in the No. 10 grid, yet these people are being frustrated in taking forward their developments.
This begs the question of what is the scrutiny role of your Lordships’ House. We have accepted the principal manifesto position, but if your Lordships’ House means anything it must go into detail and try to ensure fairness. There has been no movement whatever from the Government on these points since, very late in the day, they brought forward their amendments immediately before Report in this House. The Opposition have put forward a number of improvements to the grace period which we have whittled down and down until we now have one which applies to only about four developments, all of them in Scotland.
The Minister has been very generous with his time; he has wanted to engage with us and I have huge respect for him, as he knows. But I must ask myself: what was the point of it all? What was the point of all these cups of tea and discussions in the tea room if the Government never intended to give anything? I think I know where the noble Lord is: I think that he does recognise the strength of the arguments. No doubt—well, I am not going to speculate but will stop there. Your Lordships’ House would hope that there might be some give and take, but we have not seen any of that.
This is a very limited amendment. It will affect the confidence of investors who will no longer trust what the outcome will be when they have made investments. The Minister referred to public subsidy. On the four developments we are talking about, the amount of public subsidy will be infinitesimally minimal compared to the amount that Hinkley Point will be getting over 35 years. So the public subsidy argument does not ring true.
I will finish by talking about the constitutional role of your Lordships’ House. Having conceded that the manifesto commitment will be substantially delivered, we are just looking at the detail. It is important that there is one House of Parliament that will stand up and look after the interests of developers and private individuals who invest their money and yet find that their rights and reasonable expectations are thwarted by an arbitrary decision of government. I repeat that when Andrea Leadsom was asked the purpose of the grace period by the Energy and Climate Change Committee in the other place, she said that it was to ensure fairness, and,
“that those who have spent money in a significant investment and achieved everything technically to meet the cut-off date, but through reasons beyond their control have not actually made it, are not penalised for reasons beyond their control”.
I do not think that it could be put any more succinctly or eloquently. That is what this amendment tries to do for a very limited number of cases and that is why it is worthy of support.
Lord Foulkes of Cumnock
My Lords, I also speak in favour of my noble friend’s Motion. Unfortunately, the noble and learned Lord, Lord Wallace, has stolen just about every point that I wanted to make, so I shall be mercifully brief. I remind the Minister of what I said earlier. As the noble and learned Lord said, we are all in favour of the Oil and Gas Authority. The Government could have had this Bill weeks ago if they had accepted the arguments that we have been putting forward. It is the Government’s recalcitrance which has delayed the Bill.
I will make just two points. In the House of Commons yesterday, Andrea Leadsom said:
“The other place has seen fit yet again to try to overturn that manifesto commitment”.—[Official Report, Commons, 9/5/16; col. 446.]
That is not the case. We are not trying to do that. I do not know how many times we need to repeat that and argue the case before noble Lords and honourable Members understand it.
Whether we like it or not, the subsidy date has been brought forward. All that we are talking about now are the grace periods. Three of these have been accepted: we are down to the last one. I cannot say it any better than my honourable friend Alan Whitehead, who said in the other place yesterday:
“The amendment from their Lordships’ House does not seek to alter the premise of grace periods. It does not seek to overturn the early closing date for onshore renewables, sad though that is. It does not seek to alter in any way the vast bulk of this well-crafted Bill, with all its important provisions concerning the North Sea oil industry. It simply seeks to put right one of the great anomalies in the grace period sections of the Bill, and, in that way, strengthen the proper application of those periods. As the Minister may have noted, it now does so in a way that it did not do in a previous amended incarnation. It places a specific time limit after the cut-off date of three months, reflecting the view that grace periods should be just that. This is now a very brief grace period window in which to put right the most difficult cases frozen out for doing the right thing”.—[Official Report, Commons, 9/5/16; col. 449.]
As I said on a previous occasion, one example of doing the right thing is in Sorbie. This family farm has, unfortunately, not been running so profitably in past years. Under advice, guidance and suggestion from the Government, they diversified into onshore wind and are now suddenly being told that they cannot get the subsidies that they were promised. As a result, they are in danger of going into liquidation. These are the kinds of small employers who are going to suffer if the Government press ahead with their policy.
I will make one last plea. I know that the Minister in this place has some sympathies. We have had the tea and we have had some sympathy: we have not had the result. We have not had anything because people down at the other end are so blind that they cannot see. I hope that Members of this House will understand it and that we will send it back and ask them, once more, to think again.
Lord Bourne of Aberystwyth
My Lords, I am grateful to noble Lords who have participated in this debate. They are three of the most fluent and persuasive Peers on the other side and I quite understand their intent and the passion that drives them. I will come to the points in the order in which they were raised. First, the noble Lord, Lord Grantchester, very generously acknowledged that it was in the manifesto and that we have moved on grace periods to address radar/grid delays. In his words, he “applauded” the concessions we have made. We have also made some on the investment freeze. But he seemed to suggest that we were engaged in some kind of ideological and belligerent—I think those were his words—warfare against renewables in general and wind in particular.
The United Kingdom has a proven track record of growth in renewable electricity, which goes on. We will be spending more this year than we did last year, and in every year of this Parliament we will be spending more on renewables. Nearly £52 billion has been invested in renewables since 2010. More than half the total investment in the EU in 2015 occurred in the United Kingdom, and that was just another record year based on several earlier record years. So I hope the noble Lord will accept that that is not the case. We recognise the vast importance of renewables.
One reason for the action and for it being in the manifesto was that we were deploying at a far speedier rate than had been anticipated. It was not anticipated by the coalition Government that we would be well above the top range of what could be expected. We are not taking action for any ideological reason. We have massive deployment and that deployment goes on. But we are reaching the end of subsidies for solar and for onshore wind because they can be deployed without the subsidy. It is widely recognised, including by the general secretary of GMB Scotland, whom I quoted, that we do not need these subsidies any longer and that often we are subsidising people who do not need the subsidy. That is another reason for the action.
The noble and learned Lord, Lord Wallace, put the case very eloquently, as he always does. I think he accepted that we had moved on grace periods. He suggested, as did the noble Lord, Lord Grantchester, that the date we set was arbitrary. Well, it was—only in the sense that any date is arbitrary. The noble and learned Lord will know very well that dates are set and they are very often arbitrary and somebody will fall the other side of them; even if you move the date, somebody else will fall the other side of it. I do not accept that it was arbitrary in the sense that he seemed to be suggesting—that it was somehow capricious. That was not the case and it was not a question of it fitting in with the grid. It was the date that the Government chose to announce the policy that had been signalled in the manifesto. I hope he will accept that the case is borne out: we accepted many amendments on the Oil and Gas Authority as the legislation went through; and we have amended the position on onshore wind to take account of grace periods, appeals and radar grid delays. All these things we have done.
The noble Lord, Lord Foulkes, was very generous and spoke with great passion and very eloquently, as he always does. Yes, I accept that the intentions are benign but the will of the other place has been expressed now three times. Surely now is the time to recognise that this House should not keep overriding the will of the other place on an issue where it has expressed its position very clearly.
Lord Wallace of Tankerness
Can the Minister indicate any amendment to the grace period provisions, which have been there since they were first tabled when the Bill was recommitted to the Grand Committee?
Lord Bourne of Aberystwyth
As the noble and learned Lord knows, those provisions were not there when the Bill was introduced. They were introduced subsequently, after consultation with industry. I accept that they were not subsequently altered but there was consultation, as he will recall, about what was fair on the grace periods. I think many people recognise that these amendments from the original position were fairer and more just. That is the position. They were not amended subsequently—he is quite right on that.
We have been round the circuit on this so many times that I will not delay the House any further. The view of the other place is clear. We do not want to hold up this legislation with its vital Oil and Gas Authority provisions. I beg to move the original Motion.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(8 years, 7 months ago)
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Lord Wallace of Tankerness
Leave out from “House” to end and insert “do insist on its Amendment 7T”.
Lord Wallace of Tankerness (LD)
My Lords, we have gone over this ground many times. I therefore do not intend to delay the House very much. I just want to pick up on one or two of the Minister’s remarks.
It does not really become the Government to pray in aid time. This Bill left your Lordships’ House well before Christmas last year and it was some weeks into the new year before it was brought to the House of Commons for Second Reading. Any delay in the Bill is entirely it the hands of the Government because of the exceptional delay between the Bill completing its passage through your Lordships’ House and being introduced into the House of Commons. These kinds of arguments at this late stage really do not cut any ice.
The Minister will also be aware that some doubt has been expressed as to how clear the manifesto commitment was. While for some the election result may have been a surprise, what really was a surprise was that no one in the industry interpreted the manifesto pledge as being one which would ensure that the ending of the subsidy for onshore renewables, already due in March 2017, would be accelerated by a year. People I have spoken to throughout the industry say that that came as a great surprise to them. But that is the position we are in. The Government are going to get their policy, but we are trying to ensure that there is some justice attached to the way in which they get it. That is the whole point of having grace periods, and these are the specific points that are raised in the amendments.
When the noble Lord’s ministerial colleague Andrea Leadsom appeared before the Select Committee on Energy and Climate Change in the other place, my right honourable friend the Member of Parliament for Orkney and Shetland asked her:
“So what is the purpose of the grace period then?”.
The Minister replied:
“As I say, to ensure fairness. To ensure that those who have spent money—significant investment—and achieved everything technically to meet the cut-off date but, through reasons beyond their control, haven’t actually made it, are not penalised for reasons beyond their control”.
That is a very fair submission and definition of what fairness should be in such circumstances. With these amendments, we are trying to ensure that the definition of fairness which the Minister expressed in the other place is given some reality and substance.
Viscount Ridley (Con)
I apologise for interrupting and am grateful to the noble and learned Lord for allowing me to do so. Given that he is not moved by the arguments made by the Front Bench on our side, perhaps I could try an argument on him that might appeal particularly to a Scottish Liberal Democrat. News came in recently, in the last month or so, of a study that has found that the density of breeding golden plover goes down by 80% when a wind farm is built on a particular piece of moorland.
Lord Wallace of Tankerness
The noble Viscount is rehearsing Second Reading arguments. We are dealing with some very small—but very important to the developers—changes to try to ensure justice. As I indicated, the Government will get their policy and will be able to close down the onshore wind industry subsidies, as they wish to do. What we are trying to do is to ensure that this very small and limited number of cases where substantial amounts of money have already been laid out by developers in trying to take the development to planning consent—and where in some cases the council had indicated that it was minded to consent after much local discussion and engagement—should be allowed to proceed.
To us it is a question of simple justice. I read somewhere the other day that the Scottish author William McIlvanney had said that Scotland’s motto was not,
“Wha daur meddle wi’ me?”,
but was really, “It’s no’ fair”. In this case, it isnae fair. The Minister himself said, when dealing with the end of the renewables obligation for solar of 5 megawatts and below, that,
“we have aimed to strike the right balance between protecting bill payers and protecting developers who have made significant investments, while being conscious of the need to decarbonise our energy infrastructure. That is why the order makes provision for a number of grace periods, which mirror those offered last year as part of the large-scale closure. Stakeholders have welcomed this consistency”.
Well, they do not welcome the inconsistency in dealing with onshore wind. He went on to say:
“One of the grace periods was designed to protect developers who could show that a significant financial commitment had been made on or before the date on which the proposals were announced. This required evidence that a planning application had been made, among other things, as a proxy for the financial commitment”.—[Official Report, 16/3/16; col. 1915.]
It seems to me that that is entirely in line with what we are proposing in these amendments. It is a question of simple justice, and even at this late stage I ask the Minister to think hard and seriously about these matters and to respond favourably. I beg to move.
The Lord Speaker (Baroness D'Souza)
My Lords, I should inform the House that if this amendment is agreed, I cannot call Amendments A2 to A4 by reason of pre-emption.
Lord Bourne of Aberystwyth
My Lords, I thank noble Lords for participating in this debate and making their points as fluently and forcefully as they have in the past. I shall deal with the points in the order they were made during the debate, and will therefore refer first to the noble and learned Lord, Lord Wallace, who spoke about the grace periods and the timeliness of what we are doing, saying that this is the Government’s fault. The point I was seeking to make was not so much about the delay as the constant ping-pong, given that the other place has given a very clear view. This measure was passed there by a substantial majority—far larger than the Government’s overall majority; it was not just Conservative Members who voted for it.
So these points are relevant, and I hope that the noble and learned Lord will accept that the Liberal Democrats have no monopoly in determining what justice is. We have sought to be just in setting grace periods and allowing for an investment freeze, so although we differ on where we think justice lies, I will take no lessons from the Liberal Democrats—that this is the definition of justice that has been handed down from on high.
The difference between us is this. We feel—
Lord Wallace of Tankerness
I was not seeking to give the Minister a Liberal Democrat definition of fairness and justice: I quoted his honourable friend Andrea Leadsom on what fairness was, and himself when he defended the Government’s ending the renewables obligation for photovoltaics. It was a Conservative Minister’s definition of fairness, which the Government are not rising to in this case.
Lord Bourne of Aberystwyth
We Conservatives have put forward our own definition of justice, rather than seeking to put a gloss on it in a way that is helpful to the noble and learned Lord’s argument.
The essential difference is one of deployment. Every proposal put forward by the noble and learned Lord would increase deployment. We feel that we are doing the right thing in balancing the interests of investors with the wider interest, what was in the manifesto and votes in the other place.
The noble and learned Lord raised the issue of steel, suggesting that this measure would make a massive difference and therefore we have to adopt it. As is widely recognised, the Government are committed to doing everything they can on steel, and indeed are delivering—on procurement, on relief on energy costs, on action against dumping. I hope that we will have his support in those matters.
I turn to the noble Lord, Lord Foulkes, who, with his customary passion and fervour, put forward arguments in relation to an area that he knows well. I respect where he is coming from—of course, I understand that—but I do not think that there is any ambiguity in relation to Sorbie. I have checked this and do not want to give a running commentary on planning issues—I should not seek to do that and it would be unwise to do so—but it seems to us that it is very clear that Sorbie falls the other side of the line. I do not think that there is any ambiguity there but, as I said, I cannot really give a running commentary on it.
Lord Bourne of Aberystwyth
My Lords, I understand the point that the noble Baroness is making, and I thank her for her general support for what the Government are doing. Clearly, we need legal certainty. We feel that we have delivered on a grace period to take account of some of the difficulties that there are and the investment freeze position. We have made movement on grid delays and radar delays as well. I say to the noble Baroness that the line has to be drawn somewhere; as soon as you start to unpick it and make exceptions for one or two categories then one or two others come into play. I understand that there is great difficulty in drawing the line anywhere, but unless you draw that line, every case could be an exception. That is the point I am making.
I thank my noble friend the Duke of Wellington for some interesting insight on the situation. As for the noble Lord, Lord Foulkes, who said that my noble friend would not get his vote, I do not think any of us got his vote, so that was probably fair to all of us.
I turn to the points made by the noble Lord, Lord Grantchester. He talked rather uncharacteristically—I am not sure whether he really meant it—about vindictive and aggressive attitudes and the adoption of a UKIP stance. I hope he has evidence that that is what we have been doing because it does not cut the mustard with us. As the noble Lord well knows, we do not listen to UKIP on anything, thank goodness. There can be no suggestion that this is vindictive or aggressive. It was in the manifesto, which people voted for; it has been debated in the other place numerous times; and we were responding to views heard up and down the country. He might not like the policy but I do not think that he can characterise it as vindictive or aggressive.
We have the date of 18 June and I repeat to the noble Lord that that is not arbitrary: it is the date that the announcement was made. We believe that this is an unnecessary subsidy and that we have got justice by balancing issues such as the investment freeze and the grace period with the cut-off point. There is a very clear policy, which has been endorsed several times by the other place. I urge noble Lords to oppose any amendments and vote for the main Motion.
Lord Wallace of Tankerness
My Lords, the Minister has given us a fairly predictable but disappointing reply. He will be aware that when we first dealt with grace periods, back in October, there was a considerable number of possible areas in which justice could be done—and I am talking about justice as defined by his ministerial colleagues and himself. We have whittled those down. Indeed, I am prepared to indicate that the “insist” Motion, which is whittled down even further by the Motion in the name of the noble Lord, Lord Grantchester, is one that we would be prepared to support. However, we are getting absolutely no response.
Scottish colleagues present will understand the phrase, “It is like arguing with Ailsa Craig”. I am afraid that that is the position we are in. I do not think that this is good governance. What we are doing is freezing potential developers in other areas, not just in onshore wind, who no longer can have the certainty that the developments they make and investments they put in will not one day be swept aside at the whim of government. However, I beg leave to withdraw Motion A1.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(8 years, 8 months ago)
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Lord Hain (Lab)
My Lords, I tabled Amendment 7T and took the liberty of giving the Minister a copy of my draft speech in advance, in the hope of his co-operation and acceptance of the amendment. The Bill as it stands puts at risk a multimillion pound investment in Wales in and around my home area of Neath Port Talbot, which is already facing massive economic haemorrhage resulting from the threat to Tata Steel. The issue at stake relates to an already consented project, Gamesa’s Llynfi Afan renewable energy project, which has had its planning condition varied through a Section 73 consent to allow for a different road access route. The project is ready to start construction, and some of the major work is going to local businesses, with obvious positive implications for jobs, which in that area is welcome.
On 27 August 2013, the Llynfi Afan renewable energy project was granted consent by Neath Port Talbot County Borough Council. Previous consent had already been granted by two other local authorities, Bridgend County Borough Council on 18 July 2013 and Rhondda Cynon Taff on 13 October 2011. However, due to a change in the proposed site access route, the developer, Gamesa, successfully applied for variation of two conditions of the Neath Port Talbot permission by way of Section 73 consent. I stress that the variations dealt solely with the access route for turbine component deliveries to the site of the consented generating station itself, and its capacity will remain unaltered. As such, the impact on the DECC budget is neutral.
The variations were approved on 24 February 2016 by Neath Port Talbot County Borough Council. As I understand it, where an application under Section 73 is granted, the effect of the Planning Act 1990 is the issue of a new planning permission, with a new decision date, sitting alongside the original permission, which remains intact and unamended. The consent and conditions of the original consent are preserved, as is the implementation date by which the construction of the generating station should have been started. On Report in the House of Lords, the noble Lord, Lord Bourne, said:
“Where consent is granted for development on or before 18 June and is subsequently varied”,—[Official Report, 21/10/15; col. 668.]
in this way, it will continue to fall within the approved development condition.
While that is very welcome and positive for this project, regrettably, his statement by itself has proved insufficient to achieve adequate investor confidence. That is because the renewable obligation certificate is awarded after the wind farm has been built and has proven to be exporting electricity to the grid. Investors therefore need certainty before construction, otherwise there is a risk that the project could be built but not receive the required support. As a result, investors wish for certainty reflected in the legislation, and without the amendment the project will be put at risk. The amendment therefore aims to resolve the issue and ensure that the project can go ahead, matching government intent and delivering investment in the local community. My understanding is that without the amendment, such variation permissions as Section 73 would not qualify under the Government’s grace period condition.
The investors’ legal advisers have said that, as the Energy Bill currently stands, it fails to reflect the position that variation consents are fresh planning permissions as a matter of law, as used to be the case. They assert that without an amendment, such variation permissions would not qualify under the Government’s grace period condition. Amending the Bill would make it absolutely clear and avoid any additional funding being added other than what the Government have already allowed for.
In the particular case of Llynfi Afan Renewable Energy Park, tens of millions of pounds will be invested in the construction and operational phases. The communities have widely supported Gamesa’s Section 73 application, as they support the project and wish to see it happen. The local community stands to gain substantially in community benefits, and in terms of business rates and direct and indirect local employment opportunities. Gamesa is in the final stages of appointing a contractor who will be responsible for building the wind farm and, as such, will require employment and services from the locality. It has been Gamesa’s aim to work wherever possible with local companies, involving local jobs, and will continue to do so during the construction and operational phases.
I appeal to the Minister to agree to the amendment. If he finds some technical fault with it—although it is not obvious to me what that might be—will he agree to write a letter to the developers explaining why the Bill as it stands, without the amendment, meets their objectives and that they will be able to proceed, notwithstanding the fact that this amendment may not be accepted by the House?
Lord Wallace of Tankerness (LD)
My Lords, the Minister has moved Amendment 6 and spoken to Amendment 7, and I want to speak principally to my amendments to Amendment 7. My noble friend Lady Featherstone may say something about the wider issue of the early closure of the renewables obligation in respect of onshore wind generating stations. The Minister has repeated the Conservative Party manifesto commitment that there will be no new subsidies for onshore wind, but I well recall the comment from the noble Baroness, Lady Worthington, that it is difficult to think that a new subsidy is actually the early closure of a long-existing subsidy. The Minister repeats that again and again, but no one is seeking to overturn the early closure. However, the grounds he has stated— that it is a manifesto commitment—are somewhat doubtful.
I have yet to find many people in the industry who think this is a very wise move at all. It is not simply about what is being done with onshore wind; as we have already heard in this debate, a large amount of the investment made in developments over a long period will be cut off at a fairly arbitrary date. The Government’s capriciously cutting off developments in the way proposed affects the confidence of those who want to invest not only in onshore wind renewables but in the entire renewables industry and, indeed, in other infrastructure developments.
Turning to the amendments, I begin by thanking the Minister for his willingness to engage through exchanges of letters and in meetings. One reason why we on these Benches were very happy to support the move to take out the principal clause in the original Bill was not that we did not expect the Government to try to bring back the clause, but that we felt that it would give them an opportunity to reflect on and try to improve the grace periods. Although they were welcome as far as they went, they certainly fell far short of what many people in the industry—I would say almost universally—thought was required.
What has been disappointing, and perhaps not in keeping with the way this House operates when we ask the Government to think again, is that we have absolutely no sense that they are willing to compromise in any way whatever. They have said that there is no compromise, and that is why the amendments that I have tabled—particularly Amendment 7X—embody quite a number of the changes which the industry wants to see and on which we have had representations. I invite your Lordships to support that amendment. I hope that if that measure is brought back in—after all, the Bill has to go back to the Commons because the Government have brought forward amendments to their own amendments—there will be a further opportunity for the kind of engagement that is part and parcel of the way this House operates. Certainly, when I had the privilege of sitting on the Front Bench and dealing with amendments, I tried to find some means of compromise when there were Lords defeats.
Lord Bourne of Aberystwyth
The noble Lord is wrong on the issue because, with the grace period and with the investment-freeze conditions, we have allowed for movement on these issues. I take the point that he is making but I do not agree with it.
I am just double-checking, but I hope that I have now done full justice to the comments that have been made.
Lord Wallace of Tankerness
My Lords, I do not think that the Minister has addressed two points, one of which is the investment-freeze conditions and green organisations such as Triodos, which do not appear to qualify. Even at this late stage, would he be prepared to look at this again? I also refer to the points made by the noble Earl, Lord Lindsay, and myself with regard to community investments. I do not think that the Minister has specifically addressed that issue as regards the Dalquhandy and West Douglas development.
Lord Bourne of Aberystwyth
Taking the latter point first, I think that I did so in response to the comments made by the noble Lord, Lord Bruce. We do not see any reason for distinguishing between community projects and others. That would only give rise to difficulties.
On the investment-freeze conditions, I think that the noble and learned Lord is pursuing the lenders point. There is no intention to alter the list. It is something that I think could be done in the future without primary legislation, but there is no proposal to change that. I apologise for not covering it earlier.
I think that I have covered all the main points, and with that, I ask noble Lords to withdraw their amendments.
Amendments 6A and 6B (as amendments to Commons Amendment 6)
“(d) evidence that—
(i) an application for 1990 Act permission or 1997 Act permission was made before 18 June 2015 for the station or for additional capacity,
(ii) the relevant planning authority resolved to grant 1990 Act permission or 1997 Act permission on or before 18 June 2015, and
(iii) planning permission was granted after 18 June 2015, and
(iv) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached, or
(e) evidence that—
(i) an application for 1990 Act permission or 1997 Act permission was made on or before 18 June 2015 for the station or additional capacity,
(ii) the period allowed under section 78(2) of the 1990 Act (or as the case may be) section 47(2) of the 1997 Act ended on or before 18 June 2015 without any of the things mentioned in section 78(2)(a) to (b) of the 1990 Act or section 47(2)(a) to (c) of the 1997 Act being done in respect of the application, except than an extended period has been agreed in writing between the applicant and planning authority for the purposes of section 78(2) of the 1990 Act or section 47(2) of the 1997 Act,
(iii) the application was not referred to the Secretary of State, Welsh Ministers or Scottish Ministers in accordance with directions given under section 77 of the 1990 Act or section 46 of the 1997 Act,
(iv) planning permission was granted after 18 June 2015, and
(v) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached, or
(f) evidence that—
(i) an application for consent for the station or additional capacity was made under section 36 and the consultation period prescribed by regulations made under paragraph 2(3) of Schedule 8 had expired prior to 18 June 2015,
(ii) during the consultation period, the relevant planning authority had notified the Secretary of State that they had objected to the application and their objection had not been withdrawn,
(iii) the Secretary of State caused a public inquiry to be held,
(iv) following consideration of the objection and the report of the person who held the inquiry, the Secretary of State granted consent and deemed planning permission after 18 June 2015, and
(v) any conditions as to the time period within which the development relates must be begun have not been breached, or
(g) evidence that—
(i) an application for 1990 Act permission or 1997 Act permission was made on or before 18 June 2014 for the station or additional capacity,
(ii) planning permission was granted after 18 June 2015, and
(iii) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached, or
(h) evidence that on or before 18 June 2015 the relevant planning authority made a decision to grant planning permission for the station or additional capacity, or made a decision to grant or to intend to grant planning permission for the station or additional capacity, subject to an agreement under section 106 of the 1990 Act (planning obligations) or section 75 of the 1997 Act (agreements regulating development or use of land); and such an agreement is concluded before the onshore wind closure date, or
(i) a declaration by the operator of the station that, to the best of the operator’s knowledge and belief, planning permission is not required for the station or additional capacity.
(5) The documents specified in this subsection are—
(a) a copy of an offer from a licensed network operator made on or before 18 June 2015 to carry out grid works in relation to the station or additional capacity, and evidence that the offer was accepted on or before that date (whether or not the acceptance was subject to any conditions or other terms);
(b) a copy of—
(i) an application for an offer to carry out grid works in relation to the station or additional capacity submitted to a licensed network operator on or before 18 June 2015; and
(ii) an offer from a licenced network operator made after 18 June 2015 to carry out grid works in relation to the station or additional capacity and evidence that the offer was accepted after 18 June 2015 (whether or not the acceptance was subject to any conditions or other terms); or
(c) evidence that planning permission for the station or additional capacity was refused on or before 18 June 2015 and an appeal was determined as at 18 June 2015;
(d) a copy of an application for an offer to carry out grid works in relation to the station or additional capacity submitted to a licensed network operator on or after 18 June 2015; and
(e) an offer from a licensed network operator made after 18 June 2015 to carry out grid works in relation to the station or additional capacity and evidence that the offer was accepted before 31 December 2015 (whether or not the acceptance was subject to any conditions or other terms),”
Lord Wallace of Tankerness
My Lords, in view of the fact that the Minister has given no concession whatever, I beg to move and then test the opinion of the House.
The Deputy Speaker
I should inform the House that if Amendment 7X is agreed to, I will be unable to call Amendments 7Y, 7AA and 7AB by reason of pre-emption.
“(e) evidence that—
(i) the requirements of section 61W of the 1990 Act or section 35B(2) to (6) of the 1997 Act were met on or before 18 June 2015 for the station or the additional capacity and planning permission for the station or the additional capacity was subsequently granted before this section came into force,
(ii) any conditions as to the time period within which the development to which the permission relates must be begun have not been breached, and
(iii) the station or additional capacity was being developed by a community organisation or an equity shareholding in the station or the additional capacity had been committed to a community organisation(s) on or before 18 June 2015.”
Renewables Obligation Closure Etc. (Amendment) Order 2016
Lord Wallace of Tankerness Excerpts(8 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, the draft instrument closes the renewables obligation 12 months early to solar PV generating stations at 5 megawatts and below from 1 April 2016. It would apply both to new generating stations and to existing stations that wish to add additional capacity up to the 5 megawatts threshold.
Solar PV is an important part of the low-carbon energy portfolio. It has seen very strong growth in recent years, due in no small part to support from the renewables obligation and the feed-in tariff schemes. Almost 40% of the UK’s solar PV capacity over 3 gigawatts was installed during 2015 alone. Hand in hand, the costs of installing solar PV have reduced dramatically. According to data from Bloomberg, the capital cost of a ground-mounted PV system fell by about 60% between 2010 and 2015.
In many ways, this progress is good news, making a valuable contribution to our renewable electricity generation, but the amount of deployment has also raised concerns about its impact on the levy control framework—the budget which caps the amount of support paid for through consumers’ energy bills. I am sure that noble Lords will agree that there is a need for government to act responsibly when there is a risk of exceeding such a budget. That is why we have introduced a number of measures to deal with the projected over-allocation of renewable energy subsidies. In these measures, we have aimed to strike the right balance between the interests of consumers and those of developers.
This time last year, under the coalition Government, we were considering a similar order relating to the early closure of the renewables obligation scheme to large solar farms—those over 5 megawatts. Solar farms at this large scale were deploying much faster than previously expected, and we were rightly concerned about the impact this speed of deployment could have on the levy control framework. At the time, it was decided not to extend the closure to projects at 5 megawatts or below because the evidence suggested that these smaller schemes posed less of a risk to the costs of the levy control framework.
Noble Lords will recall, however, that in the debate last year—under the coalition Government—it was made clear that the deployment of smaller-scale projects would be closely monitored. If deployment was shown to be growing more rapidly than could be afforded, measures would be considered to protect the integrity of the levy control framework. That monitoring revealed that, if we did not act, up to four times more new solar capacity would be eligible for support this year and next under the renewables obligation than we previously estimated—within a range of 2.4 to 3.8 gigawatts, compared to the 600 megawatts to 1 gigawatt that had been estimated. I am sure that noble Lords will agree that in such circumstances, the need for further action is essential.
In taking this action to complete the early closure of the renewables obligation to solar, we have aimed to strike the right balance between protecting bill payers and protecting developers who have made significant investments, while being conscious of the need to decarbonise our energy infrastructure. That is why the order makes provision for a number of grace periods, which mirror those offered last year as part of the large-scale closure. Stakeholders have welcomed this consistency. One respondent to our consultation said:
“Technologies must be treated equally as far as possible and the requirements outlined are in line with those proposed for early closure of the RO to solar above 5 megawatts”.
One of the grace periods was designed to protect developers who could show that a significant financial commitment had been made on or before the date on which the proposals were announced. This required evidence that a planning application had been made, among other things, as a proxy for the financial commitment.
Following the consultation, we are changing the criteria to clarify that we intended to protect projects that had made a valid planning application, in line with planning legislation across Great Britain. This is because we received evidence during the consultation from many planning authorities that some developers were submitting incomplete planning applications just to meet the cut-off for eligibility for the grace period.
Lord Wallace of Tankerness (LD)
I am interested in what the noble Lord is saying. He seems to be saying that if there is clear evidence of a significant financial investment being made before a planning decision was made, developers will qualify for the grace period. Why is he not currently doing the same for onshore wind, where the cut-off seems to be far more arbitrary?
Lord Bourne of Aberystwyth
The parallel here is with the schemes above 5 megawatts and the undertakings then given to look at this in the same way in the light of increased deployment, which has certainly happened. I appreciate the point—it is different, there is no doubting that—but this is a continuation of what happened with schemes above 5 megawatts. That is the reason for the treatment we are going for.
When we closed the renewables obligation early to large-scale solar farms last year, we saw a rush of projects accrediting to beat the closure date. More than 1.5 gigawatts of solar were accredited in March 2015 alone. That is equivalent to around 5,000 football pitches. This time round, we had evidence to suggest that costs of solar PV had fallen further and faster than previously anticipated. I have already mentioned the steep fall that there has been. We have therefore proposed excluding new solar projects at 5 megawatts and below from our grandfathering policy if they do not meet the significant financial commitment criteria. This has been necessary to avoid locking in possible overcompensation in the event of a similar rush of projects accrediting before 31 March 2016. This change in policy would mean that projects which are not grandfathered would not maintain their support level if a banding review determined a lower level of support. This proposal was necessary as a cost control measure. We confirmed this change in policy last December, and at the same time started to consult on the results of the banding review. We are currently considering the consultation responses; the consultation finished at the end of January. Subject to the outcome of that process, changes would be implemented through a separate amendment to the renewables obligation order 2015 later this year.
On the impact of the order, our analysis indicates that the early closure proposed in it will save between £60 million and £100 million per year from consumer bills: over the 20-year period of the obligation, that is £1.2 billion to £2 billion in real terms over the lifetime of the projects. Over 8 gigawatts of solar is already deployed and we estimate total solar deployment under the levy control framework subsidy regimes will reach 12.8 gigawatts by 2020, following this closure, taking account of what we are doing today and the action taken in the recent feed-in tariff review. Without this intervention, we estimate that it would be very close to 20 gigawatts, or some 8 gigawatts above what we projected. The electricity market reform delivery plan is our best estimate of what we need to hit the renewables 2020 target, which set out an intention to deploy between 10 and 12 gigawatts at the upper end. In fact, even with these changes, we are on track to exceed that range. This further underlines the need to take action now to prevent further solar deployment under this scheme.
Before I close, I should mention that we have taken the opportunity in this order to remove an inconsistency between the renewables obligation closure order 2014 and Article 91 of the renewables obligation order 2015. This had been drawn to our attention by stakeholders. This technical amendment makes it clear that an operator of an offshore wind station benefiting from a closure grace period can apply to Ofgem for registration of offshore wind turbines until 31 March 2018. I do not think that that is controversial.
This Government are committed to combating climate change, but in the most cost-effective way for bill payers. In tackling climate change at home, British families and businesses are better off inside the European Union. It provides a more stable and long-term framework to attract investment in UK clean energy projects, helping to keep bills down, create new jobs and boosting our energy security. Accordingly, the costs of solar are continuing to fall, and we expect solar to be delivered without subsidy over the coming years. However, since solar PV has been such a success in the United Kingdom, by summer 2015 the costs imposed on bill payers associated with support for renewable and low carbon electricity generation were forecast to reach £9.1 billion in 2020-21, significantly above the target of £7.6 billion. These costs, if they reached that level, would lead to increases in consumer bills. It is therefore only right that we have looked at ways to protect value for money and affordability under the levy control framework.
I hope that noble Lords will agree with me that on balance, the approach we have taken is the right one, closing a demand-led scheme and taking action on overcompensation while still allowing solar to deploy under the revised feed-in tariff scheme. This will ensure that solar PV is supported in a way that offers better value for money for consumers. I commend this draft instrument to the House.
Amendment to the Motion
Lord Wallace of Tankerness
My noble friend Lady Featherstone mentioned investor confidence. My noble friend Lord Teverson and the noble Lord, Lord Grantchester, referred to the Energy and Climate Change Committee in the other place and its deep concerns about the cumulative effect of government policy on investor confidence, not just in solar or onshore wind but generally. Will the Minister please address the points that were very effectively made about investor confidence?
Lord Bourne of Aberystwyth
My Lords, of course investor confidence is an issue. In the department we meet the industry on a frequent basis—I met representatives of the solar industry just this week. Some of the concerns that are being expressed tonight were not expressed to me on that occasion. Of course there is a healthy dialogue, but I do not recognise some of the wilder statements being made about the lack of investor confidence. Industry will always take a particular view, and there will be some in industry who will not want to see an end to subsidies—I understand that; why would they? However, as a Government, we have to see how money can be well spent.
It has been a good debate, but I urge noble Lords to reject the amendment and support the order, which is a necessary part of ensuring that we get value for money, do not overdeploy in this area and end subsidies that are not needed.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(9 years, 1 month ago)
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The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, before I address the government amendments, I thank the Bill team, my Whip, my noble friend Lord Younger, and the ministerial team in the department for their help and support. I also thank all those who have scrutinised the Bill. I am extremely grateful to noble Lords for their participation in our proceedings in discussions in the Chamber and indeed outside the Chamber, which have been very helpful.
Although I know that there are points on which some of us do not agree, the debate on the content of this Bill has greatly benefited from the wisdom, experience and insight that a number of noble Lords, sitting on all Benches, have brought to deliberations. I also thank specifically the noble Baroness, Lady Worthington, for her contribution to the debate and wish her well in her future endeavours as she steps down from the Opposition Front Bench. She has shown incredible commitment and great brio and has made many very valid points, and I am sure that she will continue to do so from the opposition Benches.
This is an important Bill and although, as I say, we have not agreed on key elements—particularly the early closure of the renewables obligation for onshore wind—we have agreed on many issues, including the need to tackle the threat that climate change constitutes to the environment, our security and our economic prosperity. The Government will decarbonise the economy and will do so cost-effectively.
We have had a substantial measure of agreement on carbon capture and storage. If nothing else, I think I can take great credit for bringing together my noble friends Lord Ridley and Lord Deben and Members of all sides of the House on the importance of carbon capture and storage. I am most grateful in particular to the noble Lord, Lord Oxburgh, for agreeing to head a parliamentary advisory group on carbon capture and storage. This will provide advice to my right honourable friend the Secretary of State for Energy and Climate Change, Amber Rudd, within 12 months of the Act coming into force. I would feel less guilty if I did not know that if I am taking him away from anything, it is from orienteering with his family in his spare time. I know just how busy and able he is, so I am most grateful for that.
Government Amendment 1 is a minor and technical amendment to Clause 7, which reflects an error that has occurred as a result of other government amendments made on Report. The purpose of Clause 7 is to ensure that where functions are contracted out to the Oil and Gas Authority by relying on Section 69 of the Deregulation and Contracting Out Act 1994, they may be contracted out for a period exceeding 10 years. Clause 7 also provides that Welsh Ministers may enter into a contract with the Oil and Gas Authority, authorising that body to exercise the functions of Welsh Ministers.
Clause 7(1) limits the effect of the rest of the clause to circumstances where the Deregulation and Contracting Out Act 1994 has conferred functions on the Oil and Gas Authority. However, the subsections inserted by our amendments on Report are intended to deal with a set of circumstances where that Act does not apply—that is, a power for Welsh Ministers to enter into an agreement with the Oil and Gas Authority authorising that body to exercise the functions of Welsh Ministers. With that in mind, subsection (1) should apply only to subsection (2) rather than to the whole of the clause. This amendment corrects that error.
Government Amendment 2 is a minor and technical amendment to ensure that the levy to fund the Oil and Gas Authority is not payable in respect of functions that it carries out under agreement with Welsh Ministers. This is achieved by inserting wording into the list of matters in Clause 14 that the Secretary of State must ensure are not covered when making regulations on the levy. This provides consistency with the current provision which excludes the levy from being charged in respect of functions carried out under Section 69 of the Deregulation and Contracting Out Act 1994, for example on behalf of Scottish Ministers. It is also consistent with the approach taken towards fees under Clause 13, where the Oil and Gas Authority will not be able to charge fees for the exercise of functions that it is authorised to exercise either on behalf of the Scottish Government or by virtue of an agreement with Welsh Ministers.
Government Amendment 4 updates the Bill’s Long Title to ensure that it complies with the parliamentary convention that Bills should leave this House and move to the other place in a proper state. I beg to move.
Lord Wallace of Tankerness (LD)
My Lords, I do not wish to detain the House other than to respond to the opening remarks of the noble Lord, Lord Bourne, and to express gratitude and appreciation for his willingness to engage during the passage of the Bill. On many occasions he was left in an unfortunate position which was not of his own doing—for example, amendments coming in late and assessments not being available—but he has engaged, certainly with my party, in a most courteous manner. Although we were not able to agree on the earlier closure of the onshore wind renewables obligation, our discussions were nevertheless very useful and have no doubt paved the way for further discussions when the Bill reaches another place and comes back to your Lordships’ House.
The amendments the Minister has just moved are technical and sensible updating measures, but very much appreciated. The first Part of the Bill implements the proposals of the review by Sir Ian Wood, which we were committed to doing when in coalition government. I welcome the fact that this is now taking shape in statutory form, and thank the Minister for his engagement with the Bill.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(9 years, 2 months ago)
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Lord Wallace of Tankerness (LD)
My Lords, I think that the noble Baroness, Lady Worthington, will say something about Scotland when she comes to speak to her amendments. As I said in Committee, the onshore wind industry in Scotland directly employs 5,400 people and contributes £9 million per annum in community benefit. I think that the work which I would like to claim my noble friend Lord Stephen and I started when we were in the coalition Government in Edinburgh and which has been carried on by the present Scottish Administration, and the work done by previous Secretaries of State at DECC, has resulted in onshore wind power being an increasingly cheaper source of power. However, the position as I set out in Committee on the Scottish dimension was that if the Scottish Government choose to extend the period, as was first envisaged when it was agreed with them that the renewables obligation would end, that is something that they should be able to do.
On the grace periods, which were the substance of the Minister’s amendments, I first and foremost acknowledge his engagement both before last week’s recommittal and subsequently, in terms both of meetings and phone calls. It might also be fair to acknowledge his private office, because I received an email from it timed at 00:54 on Saturday morning, which is quite remarkable. I know from experience just how hard private offices work.
While I welcome some of the changes which the Minister has referred to, with regard to the investment freezing condition and to making it clear that it was grid or radar and not cumulative, that is as far as the Government have gone, and the rest of the government response has been more than a little disappointing.
Lord Foulkes of Cumnock (Lab)
Is the fact that the Minister, who is well respected in this House, has had to work so hard—his private office has to work past midnight—not illustrative of the chaotic way in which the Government as a whole have dealt with this Bill?
Lord Wallace of Tankerness
My Lords, I think that everyone who has dealt with this Bill would agree that it has not been a satisfactory process. We have had late tabling of amendments; even the amendments before us were tabled only on Monday, meaning that if we wished to table amendments to amendments we were under considerable pressure to do so.
Perhaps I may put in context what we are discussing by drawing to the House’s attention what was said yesterday in the Select Committee on Energy and Climate Change in the other place. My right honourable friend the Member of Parliament for Orkney and Shetland asked the noble Lord’s ministerial colleague, Andrea Leadsom, “So what is the purpose of the grace period, then?” To which she replied, “As I say, to ensure fairness—to ensure that those who have spent money in a significant investment and achieved everything technically to meet the cut-off date, but through reasons beyond their control have not actually made it, are not penalised for reasons beyond their control”. It is with these words in mind that we must examine the Government’s position and the amendments that have been put forward. As the noble Baroness, Lady Worthington, said, an estimated £350 million has been put in to take forward projects which may not now proceed.
Our amendments relate in one respect to all applications which were in train at the time of the somewhat arbitrary date of 18 June—that was the date that the Secretary of State made a Statement; it has no more magic than that—and which had received planning committee approval. The reason for emphasising committee approval was that, in an earlier clause in the Bill, the Government set great store by the fact of local determination. A local determination means that, after considerable discussion, debate and consultation, the local planning committee has approved a particular proposal. It may just be that it is due to the cycle of planning meetings that the application has not yet gone to the full council for endorsement. I refer back to what the Minister, Ms Leadsom, said about applicants achieving everything technically to meet the cut-off date, but through reasons beyond their control, not actually making it. A lot of developers do not have control over the cycle of meetings of a local authority and it seems very unfair that, if they have passed muster after scrutiny by a planning committee, they fall foul because the full council has not ratified that decision.
Our Amendment 78RA contains a provision that it should refer to planning applications that were in place and had been accepted 16 or more weeks before 18 June. The reason for that is that after 16 weeks it is possible, if the local authority has not made a determination, for the developer to say that there has been a non-determination, so it is a deemed refusal and to appeal to Ministers on that basis. But the noble Lord and others who were at the Committee debate last week will remember that I gave an example from, I think, Tayside where extensive work had been done in terms of discussions between the developers, local communities and the planning authority to try to ensure that concerns had been meet and the opportunities to work with other environmental projects going on in the area were maximised. I believe, along with I am sure most Members of your Lordships’ House, that it is good practice for developers to work alongside the planning authority and try to get an agreement and outcome that is satisfactory to all. And yet, if the developer did that and missed the 18 June cut-off date, it will be penalised for it, whereas those about whom it might be said that they are not using best practice—I would not necessarily say that it was bad practice—might take a slightly legalistic view and say, “Well, it has been 16 weeks, so that is it. We are going to appeal because there has been a deemed refusal”. If that is subsequently granted on appeal, their applications will be satisfied. That does not appear to be a fair way of proceeding. If we are looking for an element of fairness in this, where is the fairness in penalising those who have demonstrated good practice?
Also with regard to Section 75 and Section 106, the Minister said in his letter to me that, where the planning committee could have been minded to approve on or before 18 June subject to Section 75 or Section 106 agreements but no formal consent was granted on or before 18 June, unfortunately, there is no legal consent given that they are minded to approve and we understand that the negotiations can be lengthy and not always successful. People from the industry who have been talking to me find that an unduly legalistic approach. The industry has been working with planning authorities for some 10 years on the Section 75 or Section 106 agreements that emerge in these situations. By and large they are already negotiated, but it may take time to put in place some of the detailed provisions. For example, if it is part of the development that there has to be a new habitat on neighbouring land—not the land on which the development is to take place—it has to be shown that the developer has the right to undertake the building of the habitat on that land. That is part and parcel of what happens and it is both practical and common sense that it should be recognised. Again, reminding us of what the Minister’s colleague said, it is to ensure fairness so that people are not penalised for reasons that are beyond their control.
Perhaps I may also take up what the Minister said on the question of variations. He helpfully stated in his letter to me and then repeated it in the House just a moment ago that, where consent is granted for a development on or before 18 June and is subsequently varied in this way, it will continue to fall within the approved building condition in proposed new Section 32LJ. I raise this because it is helpful that the Minister has now put this on the record, but I have also had representations from those who have taken legal advice that they do not necessarily believe that it does what the Minister says. I would ask him to look at it again. The fact that we have something that could be referred to in a Pepper v Hart way is helpful, but some would find greater reassurance, and it would be clearer to me, if there is something on the face of the Bill.
I refer to Amendments 78RA and 78RB with regard to Section 36 of the Electricity Act 1989. The purpose and effect of these amendments is to address what we believe is an anomaly by applying the principle of proposed new Section 32LJ(4)(b) to an analogous position under the Section 36 regime. Under Section 36 of the 1989 Act, the relevant planning authority is not the decision taker, but it can object to the proposal, after which there must be a public inquiry and then a decision by the Secretary of State. That is closely analogous to refusal under local planning followed by an appeal, and indeed for around half of the affected projects DECC’s renewable energy planning database describes the projects as being at appeal. Indeed, the last time that the people briefing me looked at the DECC website they were described as being at appeal. However, the proposed provisions cover the local planning version of this process but not the Section 36 version. This means that small extensions of larger sites, which have to follow the Section 36 route, are going to be treated less favourably under these grace period provisions than some sub-50 megawatt, stand-alone developments which go ahead under the local planning process. Reverting back to the question of fairness, there should be consistency in the Government’s approach. This amendment seeks to ensure that, and I hope the Minister will think again on it.
I also draw the Minister’s attention to the fact that, because of the Planning Act 2008, which has superseded Section 36 in England and Wales, that section mainly affects plants in Scotland. The functions of the Secretary of State under Section 36 and Schedule 8 are transferred to Scottish Ministers under Article 2 of the Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999, so far as they are exercisable in or as regards Scotland. Accordingly, the amendment does not explicitly refer to devolved Ministers. Would the Minister look and see if it is the case that they are not covered? I am sure he would not wish to put Scottish developers in any less favourable position than those in England and Wales.
We have proposed a relatively simple amendment regarding grid works, with a different cut-off date for grid works agreements. In Committee and subsequently, I raised with the Minister a case involving a joint venture between an energy company and a private individual. The energy company carried on the transmission entry capacity for a substation but the joint venture finished and the private individual carried on himself. Transmission entry capacity has therefore been lost and has to be reapplied for. It has had that connection for five years in the past but, crucially, did not have it on 18 June. It seems very unfair that they should lose out in a very bureaucratic process. We tried to find a way to capture that in an amendment and we thought we would do this by putting in a different end date, because you cannot just conjure up a grid connection agreement. It would not have taken any more capacity than was already the case, but this might give some clarity.
In another circumstance which has been drawn to my attention, changes were made. Grid capacity that was for one developer was then to be shared and this required a new agreement to be made. There was a clerical error and the developer sent the agreement back to get this sorted. Unfortunately, it was sent just before 18 June and did not come back until after that date. It would be reassuring to know whether that counts as a variation or whether it could be addressed by extending the period for grid connection.
In the recommittal, I made a point about radar and the problem developers are finding with the length of time it is taking the Ministry of Defence to process applications. The grace period that has been given may, therefore, not be effective because of the time it takes to get agreements reached. One developer who has made representations has said, about a particular mitigation which the MoD is looking for: “There are no guarantees that the work programme will deliver mitigation at this stage. In any event, the current MoD position is that the first part of the variation condition allowing development to commence cannot be discharged before 2018. There are some ongoing discussions between onshore developers and the MoD, seeking to find ways of earlier condition discharge but this is proving problematic. Overall, the costs and timescales of this ATC radar mitigation programme do not fit with any of the onshore projects”. It would be perverse if delay on the part of the Ministry of Defence meant that the grace period which the Government have sought to give does not actually cover these circumstances. This is why we have put in a particular date, though it may be that March 2018 is too early. I hope the Minister will take that serious point about trying to get agreements out of the Ministry of Defence if he wishes to give substance to what he sought to do with the radar works part of his amendment.
I am sorry to take up time but I had a lot of important points. I hope that the Government will move. I do not believe that they have met the letter or the spirit of what Andrea Leadsom said yesterday to the Select Committee in the other place.
Lord Bourne of Aberystwyth
My Lords, I do not know the proportion, but I know that the upper end of the limit is £270 million over the period. That might seem like a small amount, but it is not a small amount to me and I am not sure it would be to anyone else. We have this basic difference, and with that I oppose these amendments.
Lord Wallace of Tankerness
First, I did not raise the issue of the definition of the recognised lenders because the noble Lord did not deal with it when he moved his own amendment. Did he give a commitment to go away and come back with a better definition that included, for example, organisations such as the Green Investment Bank? My second point, although there are many others that I could make, is this: does he accept that with regard to radar issues, what the Government give the Government might also take away? Will he undertake to talk to the Ministry of Defence to see if it can ensure that whatever provision is made by this grace period for radar is not actually defeated by the tardiness of the MoD?
Lord Bourne of Aberystwyth
My Lords, on his last point first, I am very happy to speak to the MoD in the way that the noble and learned Lord suggests. On the former of the two points that he raised relating to the recognised lenders, I have indicated that we will look at this issue. I have not made any commitment about what the result of looking at it will be but I recognise, based on information given by the noble and learned Lord and others, that there is a case to look at it. I hope that is helpful.
Lord O’Neill of Clackmannan
I am sorry. I realise that we are moving towards a vote and I do not wish to take much more of the House’s time. All I want to say is this. It is very dangerous for people, first, to reinterpret manifestos once they have been the substance of electoral victory; and, secondly, to use that as an excuse to undermine elected representatives and local government who have a sensible and fair means of determining the priorities of the planning requirements for all of the communities they represent.
Lord Wallace of Tankerness
My Lords, I do not wish to detain the House for long. When we engaged after the debate on recommital late last week, we hoped that the Government might have moved a lot further than they did. I acknowledge the amendments that have been made, but they do not go to the heart of many of the concerns of the industry. In fact, there is still a blatant unfairness for those who have observed good practice and have tried to work with local planning authorities.
On the point made by the noble Lord, Lord Cormack, that local democracy matters, developers have worked alongside communities and planning authorities, but because they did not take the route of having a deemed refusal, they are falling foul of this.
Lord Cormack
One of the things we have to bear in mind is that a number of wind farms were granted permission not by local authorities, but by being overruled from the top. Indeed, Lincolnshire County Council was against a number of wind farms that have been thrust upon the county.
Lord Wallace of Tankerness
I think that the noble Lord almost makes my point because, as far as I understand what is being proposed by the Government, local authorities which have refused an application before 18 June, but which was subsequently appealed successfully on a decision taken by Ministers, will actually qualify. But an agreement reached by locally elected people and a locally elected planning committee after debate, consideration and engagement with the local community, but where the subsequent consent as part of that route due to the cycle of meetings was not given until after 18 June will not qualify. Perhaps he has done so inadvertently, but the noble Lord, Lord Cormack, profoundly makes the point that we are making. There is an inconsistency and an unfairness in what the Government are proposing. There is inconsistency between Section 36 applications for smaller developments added on to existing developments and those which do not need Section 36 applications. I do not believe that the Government have made out the case for fairness of treatment, given the test which their own Minister articulated yesterday.
I am sure that we will debate the Salisbury convention at some stage, and I hope that we will take note of the report of the House of Lords and House of Commons Joint Committee on Conventions, which sat around 10 years ago. My noble friend Lord Wallace of Saltaire, who was then the deputy leader of my party in your Lordships’ House, emphasised the Liberal Democrats’ view that,
“‘the Salisbury-Addison Convention was an historical negotiation between the Labour Party in the Commons and the Conservative Party in the Lords’ and therefore not relevant to current circumstances”.
We articulated that position almost 10 years ago, and I think that the report itself accepted that things had moved on.
The noble Baroness, Lady Worthington, said that it was an opportunity for the Government to think again. We certainly want to engage with them in thinking again, because I do not believe that what we have at the moment is fair to developers who had a reasonable expectation that a system which was due to close in March 2017 has been brought forward by a year. In the end, as the Government’s own impact assessment states, the central estimate is around 30p on the electricity bill of the average household. Given the potential damage to the industry and the damage that this is doing to investor confidence in other areas of the renewable industry, it is important that the Government should think again. They have not been able to come up with satisfactory ways of addressing some of the many legitimate complaints that the industry has expressed.
Lord Hardie
My Lords, I also want to draw attention to the fact that this legislation is unfair. Contrary to the statement of the Minister in the other place referred to by the noble and learned Lord, Lord Wallace of Tankerness, I would point out that the noble Lord, Lord Foulkes, mentioned an example on the Isle of Skye. Perhaps I may give the House some more detail about it. There is a development on Skye called the Glen Ullinish wind farm which was granted planning consent in March 2015. That was before the general election and may even have been before the manifesto, and it was certainly well within the current deadline. The local community, with one exception, supported this proposal. The developers, Kilmac Construction, have had a grid connection contract in place since 2011 and have been making annual contributions to the grid to secure their position. They would otherwise have constructed the site and made connection to the grid before the deadline of December 2018, but they are not able to do so through no fault of their own. The connection date has been given as 2021 and the reason for the delay is that, to secure the supply in the west of Scotland, it is necessary to reinforce and upgrade 124 kilometres of line in the Highlands, which this project will facilitate. If the infrastructure had existed, the wind farm would have been constructed and connected in time.
These developers have invested over £1 million and a considerable amount of time and effort in securing the necessary planning permission, grid connection contract and land ownership permissions to ensure that they can comply with government deadlines. They have only been prevented from doing so by the grid infrastructure problem. The Secretary of State for Energy and Climate Change has been aware of this case since 1 September 2015, when the developers wrote to her explaining the circumstances in full. Will the Minister tell the House that the Government will extend the period of grace in this very exceptional case, where the developer is unable to comply with the timescale through no fault of its own? If he is unable to give assurance on this, the appropriate course would be, in the interests of fairness, to remove Clause 66 at this stage, to allow the Government time to reflect on this anomaly and introduce an amendment in the House of Commons, if they wish. This would not, as has been suggested, wreck the Bill. It passes it on to the Commons, where proper consideration can be given to this matter which is so important for the people of Skye.
Lord Wallace of Tankerness
My Lords, we have already debated this. I think that Amendment 78RA would improve Amendment 78R, so I would wish to test the opinion of the House, but perhaps the Minister would clarify. Is he still insisting on his Amendment 78R, or is our amendment otiose?
Lord Bourne of Aberystwyth
Perhaps the noble and learned Lord can tell me what it is about.
Lord Wallace of Tankerness
My understanding is that Amendment 78R contains the new clause to embrace the grace periods. As Clause 66 has fallen, I am not sure whether he wants to insist on it. If he does, I will want to press our Amendment 78RA, but I want clarification, because there is no point dividing the House if he does not insist on his new clause, which incorporates the grace periods.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(9 years, 2 months ago)
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Lord Wallace of Tankerness (LD)
My Lords, I thank the Minister for having this session, which is very helpful. I agree that it should be in Grand Committee because as the session unfolds there might be quite a lot of detail and I suspect that it may be easier to tease out some of that detail in this venue.
In these amendments, the Government have addressed a number of the issues that were raised by the industry about the grace period with regard to planning, lack of investor confidence leading to some projects being frozen, the grid and radar and aviation. In speaking to the amendments in my name and those of my noble friends, I shall probe some of them because although when these amendments were announced last Thursday the industry felt that a number of concerns had been addressed, as days have passed more and more anomalies seem to be coming to light. I wish to identify some of these anomalies and get the Government’s response to them. The purpose of the amendments we have tabled is to allow an opportunity to tease out some of these anomalies. I am not saying they are all covered but I hope the Minister will be able to respond. I do not think we have covered everything comprehensively with our amendments, but there will be an opportunity to come back on Report in the light of what the Minister says.
As the Minister rightly indicated, the three conditions required for a project to fulfil approved development conditions are planning permission, grid connection agreement and land rights. Proposed new Section 32LJ(4) relates to the date on which planning permission was granted. The date chosen is the date when the Secretary of State made her announcement of the early closure of the renewables obligation for onshore wind projects. To some extent, it is an arbitrary date. No doubt the Downing Street grid said it would be done on that date and not the day before, the day after or the week after. So there is a degree of arbitrariness in all this and, in many cases, that has led to considerable unfairness.
Our first amendment probes whether there is any need for this planning permission rule, given that grid connection agreements and land agreements would already be in place. If the Government insist on having a cut-off date, there is a possibility that that date should be later. We have suggested that it should be the date of the publication of the Government’s grace period amendments or that all projects that were already in the planning system should be considered for eligibility. Those in the industry will tell you that submitting a planning application is not something you do on a whim when you wake up one morning. Considerable work goes into the application before then and considerable money has been invested in making it in the first place. In many cases, that investment will be for naught if what is proposed is so rigid.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(9 years, 3 months ago)
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Lord Foulkes of Cumnock
My Lords, I first say a word of thanks to the noble Lord, Lord Bourne, because I sounded a bit intemperate when I intervened earlier during his speech. I have known him for a while, both for his work in Wales and as a Back-Bencher before he received his well-deserved promotion. He has been one of the most diligent Ministers in keeping Members of all sides in touch with progress. I have had more letters faxed from his office than from anyone previously. It is really helpful and I am grateful to him for it.
My noble friend Lady Worthington has tabled one of the most significant political amendments to this Bill. I know that the noble Lord, Lord Bourne, will listen carefully, but I hope that he will consider all the implications of this measure. I know because I have worked with him that he understands devolution, because of his Welsh connection having been a Member of the Welsh Assembly, and he will know that there are political implications as far as Scotland is concerned.
As my noble friend said, these powers were repatriated to Westminster under the previous Energy Act on the clear understanding and promise from the Government that there would be no policy implications. It was said that it was just a technical change and that it would not affect any policy decisions. It was accepted by all sides, here and in Holyrood, because of that assurance. The Minister will know—and the noble and learned Lord, Lord Wallace, knows a lot about this—that it is an exceptional thing to repatriate powers. Normally, they are going in the other direction: from here to Holyrood, month in and month out. So it was exceptional and, as I understand it, done without acrimony. But the Government have now used that for an entirely political purpose—a policy purpose—in contradiction and contravention of the promise they made, without any consultation whatever with the Governments of Wales and Scotland. That is why Fergus Ewing MSP, the Energy Minister in Scotland, was understandably very upset. He continues to be annoyed about it.
This action has been taken in bad faith. I see the noble Viscount, Lord Younger, who knows Scotland very well. I remember his father extremely well as a very diligent Secretary of State for Scotland. He would have understood the issue. I hope that the Minister and the Government will consider restoring the powers to the Scottish Parliament and Scottish Government up to 2017 so that decisions within Scotland about onshore wind and ROCs in Scotland should go back to the Scottish Government. That is not a lot to ask and I think the Government are honour bound to consider that in light of the promises they gave when this power was repatriated.
I understand the problems of giving assurances off the cuff and on the spur of the moment, but I hope that the Minister will agree to take this away and consult his colleagues in the department and either accept this amendment or bring forward an appropriate amendment to deal with what is an action taken in very bad faith.
Lord Wallace of Tankerness (LD)
My Lords, I welcome the amendments tabled. I thank the noble Lord, Lord Bourne, for indicating that he would be willing to recommit these relevant clauses of the Bill when we have an opportunity to consider the grace period provision that the Government intend to bring forward. That shows a constructive response to the concerns that have been raised.
This is not really an interest to declare but, when I was Minister for Enterprise and Lifelong Learning in the Scottish Executive, as we then called it, I had some responsibility for the renewables obligation. The Labour and Liberal Democrat coalition in Scotland did much to take forward the case for the development of renewable resources in Scotland. To give the figures for Scottish renewables, around three-quarters of United Kingdom’s onshore wind developments are in Scotland. Therefore, that is where the impact of this measure will be most heavily felt. My noble friend Lord Teverson just handed me the Conservative manifesto and there is nothing in the wording on local decision-making to indicate that the period would be brought forward from April 2017 to April 2016, so I do not consider that this provision of Clause 60 is a manifesto commitment.
Given that the Scottish onshore sector directly employs more than 5,400 people and contributes £9 million to local people in community benefit each year, and that some 70% of people in Scotland support further development in wind and the benefits that it brings, it would be helpful if the Government recognised that there is a particular Scottish dimension to this. Obviously, planning matters are devolved to the Scottish Parliament. Clause 59, which we have just debated, does not apply to Scotland so, to that extent, a distinction has already been made. In terms of this proposal, it would be in the spirit of devolution and constructive working with the Scottish Parliament and the Scottish Government if Scottish Ministers were able to determine that the current situation—as we understood it—will continue to 2017. That would allow the position to be tailor-made for the part of the United Kingdom where there is the greatest concentration of onshore wind power.
My understanding is that the particular provision was devolved to Scottish Ministers by executive order under the Scotland Act 1998 and thus it was executive devolution. That is why, when it came to the 2013 legislation, it was possible legislatively for the renewables obligation to be withdrawn. However, as the noble Lord, Lord Foulkes, said, the understanding was reached on a timetable which has suddenly now been changed. I know that the industry in Scotland is extremely concerned about it and I would therefore encourage the Minister to look at what is being proposed to see if there can be a particularly Scottish carve-out for this. If he does not feel he can go that far—I hope he would be able to—when we come to debate what might be done in terms of grace periods, perhaps provision could be made to enable Scottish Ministers to devise their own grace period provisions, given that there are some very particular issues with regard to the development of onshore wind in Scotland.
Viscount Ridley (Con)
My Lords, before coming to the substance of the amendment, perhaps I may express my gratitude to the noble Lord, Lord Teverson, for his surprise that I am in my place and remind him that one should never believe everything one reads in the newspapers. I am only too glad to do my best to provide some grit for his oyster.
Before I go on, I should declare my energy interests as listed in the register, mostly in coal, although the wind industry has not in fact been a particular threat to coal. It has been more of a threat to the gas industry, which in some ways would have been a threat to coal. I urge my noble friend the Minister to stick to the Conservative manifesto commitment on this and not to visit upon Scotland a ruination of its landscape that would not be acceptable in England. I would say to the noble Baroness, Lady Worthington, and the noble Lord, Lord Foulkes, that, yes, there is a difference between the policy of the coalition Government at the start of the year and the manifesto commitment of the Conservative Party, but that is because we had a change of government at the election.
The Government should not be taken in by the wind industry’s assertion that most people do not object to onshore wind. The commonly quoted research on this is often out of date and simplistic. For example, a MORI survey which is used to show that people do not mind or are supportive of wind farms was conducted in 2003, when a 15-turbine wind farm was considered large. Nowadays in Scotland they often comprise more than 30 and sometimes as many as 70 turbines. The land area of Scotland from which turbines are visible has dramatically increased over a short period. According to data from Scottish Natural Heritage, 20% of Scotland was theoretically visually impacted by turbines in 2008, whereas by 2013 it was almost 46%.
Baroness Worthington
In moving Amendment 34B, I shall also speak to Amendments 34C, 34D and 35D in this group on the detail associated with the closure of the renewables obligation as we see it in the Bill. We have tabled a number of detailed amendments because we have been promised that the Government will bring forward detailed amendments to help to create some level of understanding and detail of how this provision of the early closure will work in practice. It is one thing to write a sentence in a manifesto, but something else to implement it in a way that does not cause great uncertainty or see people who have invested in good faith lose money because of what is essentially a political decision taken by a party that has been given the opportunity to form a Government. Being in government is very different from writing a manifesto, as I have said previously and will no doubt say again.
The amendments are designed to put some detail into this part of the Bill. They relate to the grace period, meaning how we will strictly define in law which projects are deemed to be sufficiently advanced to be allowed to continue under the RO, and the dates by which that will be judged. Amendment 34D would extend the renewables obligation accreditation period to 31 March 2017 for those schemes that submitted a planning application by 18 June 2015—the date on which all this was made public by the Government in their announcement.
Amendment 35D relates to the RO closure and grace period. Proposed new Section 32LD requires the Government to set out the grace period in regulations. This is just a placeholder while we await the Government’s promised amendments, which I hope we will be able to debate after the recess when we have the recommital to Grand Committee. We have gone into detail about what should happen in the event of variations of planning permissions and set out circumstances by which planning permission will be deemed to have been granted where there has not been a clear resolution. Proposed new Section 32LH sets out a means by which the grace period would start only once the clause has commenced.
These opposition amendments are rather detailed due to the absence of detail as yet from the Government. I have further comments to make about the clause which I think we will be given an opportunity to discuss when we discuss whether Clause 60 stand part. Therefore, I will keep my comments on the generality of the clause until then and move Amendment 34B on the grace period. As I say, I do so in the absence of the Government’s own amendments, which we look forward to seeing.
Lord Wallace of Tankerness
My Lords, I am very grateful to the noble Baroness, Lady Worthington, for speaking to these amendments regarding the grace period. We will come on to the principle of what is happening but I think it is recognised that there are important reasons why there should be a grace period, not least because of reasonable expectations that have been raised within the industry. If those are ditched, a stream of litigation could follow in its wake. Obviously, it would have been far preferable for the Government to bring forward their own amendments, although we recognise that that will happen. The Minister has indicated that he will seek a recommittal of some clauses. Can he give us any indication of a timescale of when the amendments might be tabled? It would be very unfortunate if we got them only some 48 hours or less before we had to consider them in detail.
We know from the impact assessment that has been made available that there has been an engagement exercise with hundreds of industry representatives, developers, investors and supply chain representatives right across Scotland, Wales and England, which concluded on 31 July. I am sure that the issues around the grace period must have featured prominently in those discussions. If the Minister can give us a flavour of the representations the Government have received, that would be very useful.
The comments of the noble Baroness, Lady Worthington, on the opposition amendments were helpful as they indicated some of the things that we can reasonably expect to see in the Government’s amendments when they are brought forward—for example, that the grace period should be extended by an equivalent period of time as between 18 June and Royal Assent where projects have not been able to make a credit commitment prior to Royal Assent in cases where otherwise the project would have been capable of generation by 31 March 2017.
One of the things that the industry finds very difficult to grasp is why the requirement appears to be that planning permission has to be granted rather than sought. I think I am right in saying that in some of the solar cases the requirement was that an application was pending. There is a whole range of reasons why consent may not have been given, many of which are beyond the power of a developer to do anything about. Therefore, it could be somewhat arbitrary to say that a planning application had to have been consented to as delays could be beyond the developer’s control—for example, a rather tardy planning authority could be involved. What is the position if there is an appeal? Clearly, planning permission will not have been granted but an appeal may well be made on very solid grounds and could subsequently be granted.
One of the other issues that has been raised concerns delays to grid connections. Delays are sometimes caused due to aviation concerns coming into play. From my previous incarnation as a Scottish Minister, I know that these were often pertinent reasons that could delay an application. Even where planning permission and a grid connection contract are in place, there may well be delays due to the timing of the connection—for example, where there is a long wait for a significant line reinforcement and upgrade. I have had specific representations on that. I do not think that it would be helpful or proper to air those and name companies on the Floor of the Chamber but I will write to the Minister and I would be grateful if he would respond to the points made in that regard. That is the flavour of issues that we look to the Government to respond to when they bring forward their amendments. In the mean time, we are grateful to the noble Baroness, Lady Worthington, for flagging up these issues.
Baroness Byford (Con)
My Lords, perhaps I may make a small contribution. I apologise to other noble Lords that I was not able to be in the Chamber when the first amendment was moved, which is why I did not take part then. We come to an area on which I spoke at Second Reading: my slight concerns about the grace period and not having enough information on it. It would be remiss of me not to follow up on that. I have listened to the whole of the discussions on this issue.
I remind noble Lords that we are not talking about a few pennies here. In fact, at Second Reading the Minister rightly reminded the House of the costs. He said that:
“In 2014, operational onshore wind farms in Great Britain received in the region of £800 million”,
which is a lot of money,
“under the renewables obligation”,
and that the Government,
“would expect this to increase to £1.1 billion per year if, as expected, a total of around 11.6 gigawatts of onshore comes forward”.—[Official Report, 22/7/15; cols. 1120-1.]
Because of that, and having listened to the various contributions on uncertainty, I would press the Minister to tell us as much as he can about where we are and how we are to proceed. That is the nub of the question. I do not think there was disagreement; perhaps some would like it to continue and be honoured for ever and ever. However, as I said at Second Reading, when new industries are being started, to me, government money is needed to pump-prime them. It is to start things and get them off the ground and once they are up and running, they should be able to come in at a cheaper rate. Looking to long subsidies was therefore not something I favoured.
I certainly hope that the Minister will be able to tell us a little this afternoon about the Government’s plans for the grace periods. The noble and learned Lord, Lord Wallace of Tankerness, said that litigation might follow. I do not know whether the Minister has information on that, because it would be quite worrying. Maybe the noble and learned Lord can help me a little.
Lord Wallace of Tankerness
The point I was making was that if the Government had not done anything about grace periods, litigation might have followed. That is doubtless what has driven the Government to accept that there has to be a grace period.
Baroness Byford
I fully understood what the noble and learned Lord said and I took it on board, because clearly one wants to avoid that if we can. Nobody wants to end up there—not only because of the litigation but because of the delays it incurs, which other noble Lords have spoken to.
At the moment, I have slightly mixed feelings on this. In principle, I am quite supportive of what the Government are trying to do. In considering whether the approach should be different, in that a Scottish Minister should be able to decide, we should note that three out of four of these onshore wind farms are based in Scotland, so three-quarters of that money would be coming from England to support what Scottish Ministers might or might not decide to do. That is another debate we could have, but I hope the Minister can tell us more about the grace periods and when we are to receive more information.
I suspect that, like me, other noble Lords—and the Minister and his department—have found it difficult dealing with the Bill after the Recess in what is not the formal, long period for debate. We deserve greater clarification and, if the Minister cannot give it to us tonight, I hope it will be provided quickly in another of his wonderful letters that have kept us up to date with government thinking.
Lord Wallace of Tankerness
My Lords, we gave notice that we would seek to oppose that Clause 60 stand part of the Bill as an opportunity—one already foreshadowed—for a general debate on the merits of the proposal that no renewable obligation certificate should be issued under a renewable obligation order in respect of electricity after 31 March 2016 by an onshore wind generating station accredited after that date, in other words a year earlier than the established timetable that coalition Ministers signed up to.
I take the point made by the noble Lord, Lord Howell, although my noble friend Lord Teverson effectively rebutted it. Of course one does not wish to pour money in to help profiteering or have dead weight. However, it is very clear that the coalition agreed that the renewable obligations for onshore wind and others would cease on 31 March 2017. It is bringing that forward by a year that gives rise to such consternation in the industry. It is an understatement that the announcement, made just over 10 months before it takes effect, has caused widespread dismay in an industry in which, by its very nature, there will always be very long lead times. One developer who wrote to me said,
“Unilateral changes to policy have impacted upon investor confidence and the sector will without doubt see retrenchment that will result in a loss of jobs and growth in Scotland and around the UK. The loss of clean, affordable and secure energy is coupled together with a loss of investor confidence in the UK Government’s willingness to remain as a reliable, long term partner for infrastructure developments, that often take upwards of five years merely to bring to a planning application stage.”
That reflects what the noble Lord, Lord Cameron of Dillington, said on the last amendment. It is not just with specific regard to wind power that this change at relatively short notice can have an impact. All the sources of renewable generation of electricity have long lead times. There will now be a question mark over each of them as to whether the Government, if they are capable of changing policy at very short notice in respect of onshore wind, will also change it in other developments. Inevitably, that could have a chilling effect on these developments.
It is interesting that the Renewable Energy Country Attractiveness Index published by Ernst & Young in June indicated that in terms of onshore wind the rankings for the United Kingdom had gone down from eighth to 11th. I think that was in the course of just one year. It noted that onshore wind was quickly becoming one of the country’s cheapest sources of energy. The Government’s intention to withdraw support for onshore wind therefore contradicts their pledge to reduce emissions at least cost; energy prices could be pushed up as more expensive sources such as offshore wind are used to fill the capacity gap as onshore wind projects fall away. Of the many sources of renewable generation of electricity, possibly with the exception of hydropower, onshore wind might be said to be the most mature.
I indicated in an earlier debate that 75% of these developments are in Scotland, which directly employs more than 5,400 people. They generated more than a third of Scotland’s electricity needs in 2013 and are driving billions of pounds of investment to allow the United Kingdom to meet its renewables and climate targets. What concerns us about this clause is the threat to business confidence, to jobs and to the prospect of the United Kingdom meeting its climate targets.
With regard to business confidence, I have already indicated that what can happen in one sector can happen in others. The conclusion of the Ernst & Young survey of lender attitudes to the early closure of renewable obligations support mechanism and a survey undertaken for Scottish Renewables published over the weekend states:
“Raising project finance for UK onshore wind RO projects has become more complex, more expensive and increasingly more difficult since the early closure of the RO and supporting grace period. As a result there are fewer banks willing to lend to UK onshore RO projects. Those that are considering lending are seeking better terms and some form of mitigation against the situation with no ROC revenue; and as we move closer to the RO accreditation end date, the ongoing uncertainty makes it harder for projects and sponsors to raise senior finance”.
So there would appear to be an issue of business confidence. The Minister said in an earlier debate that the Secretary of State had met the developers and assured them that wind power would continue. He mentioned in another context that there would continue to be community developments. The sense I am getting is that this is not the cast-iron guarantee that he indicated the Secretary of State’s approach seemed to be. There is also the question of the position on onshore wind power with regard to future CFDs and, in particular, when the next CFD will be. If business confidence is damaged there is inevitable damage to jobs and the industry as a whole. RenewableUK said the changes to financial support for onshore wind threatens survival of the industry in the UK and 19,000 jobs supplied to the sector.
One cannot readily understand why a Conservative Government, who purport to be business-friendly, are threatening what has become a very important business in the United Kingdom over recent years. The purpose of this debate is to try to flush out the Government’s expectations. What reasonable expectation can the industry have that onshore wind will be included in a future CFD round? Can the Minister give an indication when that will be? We are always told that one of the reasons for doing this is to drive lower consumer bills. I cannot fathom why you would prejudice the renewable technology sector, which is likely to deliver most and is becoming steadily cheaper? If you take out onshore wind, solar and hydro, then you are looking to the more expensive options such as offshore wind, tidal power and wave power—developments that I would very much support, but which I readily acknowledge would be far more expensive. Nuclear power is often the Government’s other option, but we hear that Hinkley Point is probably looking as far ahead as 2027 before that is actually commissioned and, again, it is more expensive than onshore wind. I believe that there is a threat to our climate targets.
The fourth carbon budget, published in December 2013, set out the requirements on decarbonisation including projections on how to decarbonise electricity by 2030, which the climate change committee says is necessary to maintain the most cost-effective path to the low-carbon economy. It set out four scenarios and it looked at the high and low scenarios in favour of nuclear and wind. If one takes out onshore wind, which is not going to reach its expected level because of the lack of developments from this measure, and if we believe that the contribution of nuclear is going to be very delayed, how do the Government think they will meet these decarbonisation targets? Uncertainty impacts on a whole range of renewable technologies and it would be useful in this debate if the Government gave the House a clear indication as to how they see the road to a lower carbon economy, given that they are taking away support for the cheapest option and will have to rely on the more expensive options.
The Government talk a good game—they talk about going to the Paris climate change talks and wanting to give leadership. But it is difficult to see how leadership can be given when the practice is to undermine some of the very measures that would allow us to move forward and meet our renewables targets. Therefore, if the Government are to give any leadership at all in Paris, and have any credibility there, they must set out very clearly how they see the components of their renewables strategy as we move forward. On the back of this particular clause I do not think that any of us have much confidence that they will do so.
Lord Wallace of Tankerness
The Minister has indicated that a justification for the position is to reduce domestic consumer bills. That is not an unreasonable thing to try to do. However, I just want to make sure that I understand the impact assessment. On the second page, it says:
“Reduced risk to LCF from over-allocation of renewable energy subsidies, and benefit to consumers from reductions in consumer energy bills (in 2016/17 average household electricity bills could be up to £3.40 (0.6%) lower, with a central estimate of around £0.30 (0.05%), compared to the Do Nothing option) (2014 prices)”.
I am more than ready to stand corrected, but am I right in thinking that the central estimate of the Government in this is that this measure will save 30p in an annual domestic electricity bill?
Lord Bourne of Aberystwyth
The noble and learned Lord has correctly identified the part of the impact assessment that deals with this. It could be a saving of up to £3.40. I accept that that is not a massive amount, but it has to be taken account of in the context of the fact that we are seeking to keep within the deployment estimates that we put forward. I do not think it should be sniffed at: this does not appear, on the face of it, to be a massive amount, but it makes quite a considerable difference to some consumers that we are reducing bills by that amount. That is what we are seeking to do and I make no apology for it. However, that is only part of the consideration.
Lord Bourne of Aberystwyth
I accept that obviously there is a question about what is used instead. However, I remind the noble Baroness and the House that, even with this action, we are well above the deployment estimates that were made in relation to onshore wind.
Lord Wallace of Tankerness
My Lords, I am very grateful to all noble Lords who took part in this debate and, indeed, to the Minister for his response. He has set out the position that the Government are coming from.
It is important that we look at this clause in detail. Like the noble Baroness, Lady Worthington, when I saw that there would be no new public subsidy, I took it to mean that there would be no “new” subsidy, as opposed to an old one—ROCs are certainly quite old. However, I hear the interpretation that the Minister and his Conservative colleagues place on it. One can only speculate as to whether they ever thought they would have to deliver this policy.
The noble Lord, Lord Howell, with wonderful understatement, thanked the Minister because he thought that we were hearing an evolution in government thinking. The noble Baroness, Lady Worthington, said that it was like building an aeroplane as it was taking off along the runway. Some might say that it is making it up as you go along. The lack of clarity in some areas of the impact assessment and the fact that we do not yet know what will happen with the grace periods gives some indication that perhaps this was a policy that had not quite been fully thought through, if I can just leave it at that. However, some concerns continue.
I can understand why the Minister said at the outset of his remarks that, on the one hand, people say it is just a year but, on the other hand, people say it is the end of civilisation as we know it. I take the political point that the Government won an election, but to change an important policy less than a year—just over 10 months—from when it will come into effect is causing considerable concern in the industry and calls into question whether such a change could take place in other spheres of renewable policy.
I have always supported the idea that there should be a balance; a mix of different renewable sources. If one source is seriously challenged because there is a sudden change of policy, it begs the question as to whether others will follow.
I cannot quite yet get my head round the cost. I do not quibble with the fact that, for some people, 30p a year, or just over half a penny a week, might make all the difference—although I find it difficult to buy that. However, the other part of the equation that I cannot quite follow is this: if renewable onshore electricity generation is not going to qualify and therefore its future is more under question, and the others, including nuclear, are going to be more expensive, how can that lead to benefits in the longer term for the domestic consumer? The noble Baroness made that point in her final intervention. That has not yet been explained to us, and perhaps a reworking of part of the impact assessment might highlight some of these issues.
The noble Viscount, Lord Ridley, asked whether any use of onshore wind had led to carbon emissions. I just look at the Government’s impact assessment—I may have been slightly critical of it but I will now use it. Paragraph 4.26, on environmental issues, says that option 2, which is the proposal,
“will lead to lower levels of onshore wind deployment and hence increased carbon emissions within the UK power sector relative to the Do Nothing option”.
So the Government themselves believe that it will lead to increased carbon emissions by having lower levels. The impact assessment goes on to say that,
“these will be offset by decreases in emissions elsewhere in the EU within the capped EU-ETS traded emissions sector”.
We must polish up this sentence. Here, the Government say that what they are doing will actually increase carbon emissions but that Europe is going to come to their aid. It is not very often we see a Conservative document saying that the European Union is going to come to our aid. It is probably worth it just for that.
I will share with the noble Viscount, Lord Ridley, figures that come, I think, from a briefing by the RSPB and which make reference to this. I saw this only this afternoon and have not had a chance to check out the reference, but it suggests that a modern wind turbine has a capacity of 2 megawatts and is expected to avoid emissions of over 1,880 tonnes of carbon dioxide in an average year. I will share that reference with him and, as with all these things, we will trade statistics. However, that and the Government’s own impact assessment suggest that there will be a reduction.
I am not going to press this, but it has been useful to flush out some of the Government’s thinking on this. No doubt we will return to some of these issues when we come to look at periods of grace.
Energy Bill [HL]
Lord Wallace of Tankerness Excerpts(9 years, 3 months ago)
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Lord Wallace of Tankerness (LD)
My Lords, when we return on Monday for the third day of Committee, we know that we will be dealing with some of the more controversial parts of the Bill, not least on Clause 60. The Government have announced that a grace period will be incorporated into the legislation, and have been seeking views on the draft proposals. Can the Minister indicate to the Committee that, before the next Motion that the House do resolve itself into a Committee upon the Bill, we will have an opportunity to see the amendments? They are important, of course, not only to the industry but to your Lordships’ House if we are to carry out our proper job of scrutiny.
Lord Bourne of Aberystwyth
I am grateful for prior notice of this question from the noble and learned Lord, Lord Wallace. I can update the Committee on this. I have been chasing the impact assessments over the last period. As things stand, and I think I probably indicated this in passing in the debate on Monday, we are carefully reviewing the feedback and evidence provided during the engagement exercise to ensure that the final policy strikes the right balance between public interest and the interests of developers and the wider industry. I am sure noble Lords appreciate the importance of that. I will aim to bring forward any government amendments in relation to this policy as soon as possible. If I have any more information on the dates when that will happen, I will share it with noble Lords, but I do not think that that will be ahead of the debate on Monday.