Grenfell Response
Lord Whitty Excerpts(5 years, 4 months ago)
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Lord Bourne of Aberystwyth
My Lords, I thank the noble Baroness for her remarks. To reassure her, there are two points to be made. First, we are having a consultation on Dame Judith Hackitt’s report and the framework changes that are necessary. I think consultation is right before one proceeds with legislation in that situation. However, that has not stopped us doing things in relation to urgent action. As the noble Baroness knows, we have also banned combustible ACM cladding on buildings. The Secretary of State has acted decisively with progressing Approved Document B, which should be ready at the end of July. Behaviour change has been highlighted and has therefore started, but I accept that there is more to be done. I, too, sometimes get frustrated and wish that we could do it more quickly, but it would be wrong and inappropriate to suggest that we have not done some very important things. Indeed, we have ensured that ACM cladding is coming off social and private-sector blocks. That has meant the commitment of some considerable amount of public money, but it is the right thing to do.
Lord Whitty (Lab)
I thank the Minister for repeating the Statement and I agree with many—all, I think—of the points that have been made, but two underlying issues do not seem to have been addressed. The first is the clear failure of the authorities in this instance—it appears also to be true of Barking—to listen to the concerns of residents. In Grenfell, there were anxieties about not only the cladding but the lack of containment between flats, which used to be a common feature of most council blocks, the removal of the piping in the ducts, the lack of a sprinkler system and the lack of an effective alarm system. All those things had been raised months and years before the tragedy happened by the people who lived there, and by and large they were ignored. From the instant reports from Barking, it sounds as though a very similar situation arose there. It is part of what is often a failure of the authorities to recognise the expertise of the people who live in these premises and understand the situation. Unless there is a more responsive attitude by the authorities, regrettably, we will see more of these tragedies. Whatever we do to change the law and the regulations, effectively the best policers of the situations in those buildings will be the residents themselves, and we need to listen to them.
The second aspect, which would reinforce that, is resources. It is not just a question of the regulations. We know that in most local authorities building regulation has become a Cinderella service, and quite frequently seriously understaffed. Unless we—from the Government through to local authorities—put more people into building regulation, planning departments and the Health and Safety Executive, the buildings we put up now will not be fit for purpose, in the same way that Grenfell eventually and tragically turned out to be not fit for purpose. Those two features also need to be addressed as part of the culture or agency for the people who live there, to whom the right reverend Prelate referred, as a comprehensive and holistic solution to these issues.
Finally, it is still not comprehensible to those who were living in Kensington and know the situation that there have been no prosecutions. Until that is remedied, this tragic episode cannot be truly finished.
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord, Lord Whitty, for that important contribution. I shall take his three points in the order he made them. The first was on the failure of the authorities. It is a very fair point, and something we are focused on. He will understand that I cannot comment on the situation in Barking; it is very early days and we have not yet analysed it sufficiently to be able to comment on it. However, I accept that something central to the messages that we are getting and to common sense is that the people who know their housing best are the people who live in it. That fundamental lesson needs to sink in and be taken forward.
I know that noble Lords and many others think the public inquiry is painfully slow, but 200,000 documents are being examined and will inform the response of the three commissioners. I very much welcome the additional two commissioners. They will be very helpful, but I agree with the point the noble Lord, Lord Whitty, is making. In relation to resources, the budget is important. Changes in regulations will no doubt feature in the spending review, but I would not disagree with that either.
In relation to prosecutions and the police situation, the noble Lord will know that the separation of powers is such that I cannot comment in any detail on what is happening. Indeed, I do not know in any detail what is happening, but interviews have been held under caution. In such a situation, one would expect there to be potential for ensuring that those who are to blame for aspects of this are brought to justice. While the matters that relate to the police are quite rightly not within the control of government on a daily basis, it seems that work is happening in that regard.
Affordable Housing
Lord Whitty Excerpts(6 years ago)
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Lord Whitty (Lab)
My Lords, I thank the noble Lord, Lord Shipley, and agree that we need an entirely new approach and strategy. I applaud him, the noble Lord, Lord Best, and my noble friend Lady Bryan for putting the centrality of council housing at the heart of the debate.
The debate has been pretty restrained but a lot of people are angry about this issue. I am angry too. Within half an hour’s walk of this House, we can see how dysfunctional the housing market is. On the other side of the river, the biggest housing development in London has housing available for seven-figure sums, much of it empty and used as an investment by foreign investors. Within spitting distance of that, parts of social housing estates are being blocked off for two or three years, awaiting a regeneration programme that will itself reduce the number of social housing units. We see run-down estates. We see rabbit hutches, uninhabitable for any length of time, in the private rented sector. We see excessive rental rates, affordable by only the top 10% or 20% of the population. That is totally dysfunctional. It is unfair and a political time bomb.
Who do we blame? I blame the Government. In fact, I blame every Government for the past 40 years. They have neglected and, at times, exacerbated the problem. Most interventions by various Governments of every political hue, whatever the intent, have exacerbated the problem in practice by either inflating demand or constraining supply. Let us hope that we are in a new era. I see little sign of it being delivered but I do not blame only the Government. Some of the blame rests on those who are supposed to be centrally delivering housing in these areas. I blame some local authorities. Admittedly, they face appalling financial constraints, but some of them have gone in too deeply with developers and forgotten what they need to deliver social housing and affordable housing to their own people. I blame some housing associations. They have also lost the central part of their ethos and have become developers and landlords as much as the private sector.
In particular, I blame the building industry, which is now dominated by an oligopoly of half a dozen companies. In that sector, profit is delivered by either building high-end expensive housing or producing in volume what I refer to as rabbit hutches, with the worst space dimensions in Europe—only about half of what the Parker Morris standards previously provided. There is a lot of blame around, including from me but particularly from under-40s who face an inability to access decent housing. When I say decent housing, the quality dimension emphasised in particular by the noble Baronesses, Lady Thomas and Lady Brinton, is important. We are building houses that are not appropriate for young families, the disabled or our elderly population. Such houses add to the numbers but do not begin to resolve the problem.
We need a new strategy, and it has to be a pretty radical one. Over the years, I have enunciated, with no great effect on any passing Government, that we need two things. First, we need a central, effective ministry of housing that subsumes not only the supply and demand for housing but the range of housing benefits; my noble friend Lord Rooker alluded to this. Secondly, 90% of the public resources that go into housing go through the benefits system; it used to be about 10%. We could redeploy that money for a new strategic housing intervention, led by central government and delivered locally, but we need leadership. We do not need a system where we change the Housing Minister every five minutes, with all due respect to the noble Lord, Lord Bourne, who has been here a bit longer than that and, largely unlike his predecessors, is delivering some very positive outcomes from his ministry.
We need a new era. We need a new central vehicle. We need local authorities to replace the capacity they have lost in their housing, planning and architects’ departments. We need to ensure that we make a new beginning.
Housing: Holiday Lets
Lord Whitty Excerpts(6 years, 8 months ago)
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Lord Bourne of Aberystwyth
I thank my noble friend for that question. As I indicated, the action that the Short Term Accommodation Association is proposing will get round the particular problem that we have with the Data Protection Act, because it will then be able to share the data. The power lies with local authorities and I would gently say to my noble friend that if Westminster has a suspicion that the law is being breached, it really should pursue the matter.
Lord Whitty (Lab)
My Lords, does the Minister recognise that in Westminster and other inner London authorities, in places that were originally social housing, Airbnb and other organisations are setting up short-term lets that in most cases are in breach of the leasehold or tenancy? Does he also recognise that local authorities should enforce the leases and tenancies they already have and should be backed by central government in doing so?
Lord Bourne of Aberystwyth
Obviously if there is an issue between landlord and tenant, it is for the landlord to enforce that. The Government have no role in ensuring that leases are enforced. We would encourage that, but that is a matter for the landlord. It happened relatively recently in relation to a case called, I think, Nemcova in the London Borough of Barnet. There is the power to do just that—but it is, as I am sure the noble Lord appreciates, a matter of contract, not a matter in relation to the law regarding landlord and tenant. I will say, in support of what Airbnb is doing, that it is within the law because it is ensuring that there is no let of more than 90 days on its watch. I do not think that we can reasonably ask it to do more. It cannot share the data under the law; it is looking at this protocol to enable it to do so.
Housebuilders
Lord Whitty Excerpts(6 years, 9 months ago)
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Lord Whitty (Lab)
My Lords, although I agree with the noble Lord, Lord Naseby, that the crisis did not start with this Government, it is nevertheless one that all parties and all elements within the housing and construction industry now recognise is enormous. On present policies, it will not be resolved within the next 10 years let alone in the next few years of the period of this Government.
We could have made a start on it. This week’s reshuffle was an opportunity to put in place the cohesion of government policies that were referred to by the noble Lord, Lord Best, along with the need for a longer-term strategy, referred to by my noble friend Lord McKenzie. Instead, we have had a marginal change in the name of the department and the removal—or promotion; good for him—of a Minister who was beginning to get an intelligent grip on the matter, but like every Housing Minister over the past 20 years, he has been rapidly moved on.
We need a positive and continuous focus by the totality of government on this central social crisis. There are at least five different areas of policy which overlap here. We have a clear problem as regards the role of local authorities. Whether it is due to an ideological opposition to council housing or Treasury insistence on absurd and illogical caps on borrowing for housing, the fact is that we have to change the role of local authorities. We will not reach the targets without a major contribution from local authority housing to build council houses. Yes, it should be done within the context of mixed tenure in wider developments, but without a big step change in council housebuilding, we will not reach the targets.
There is also a concomitant failure in regional policy. One of the reasons there is so much pressure on housing in some parts of the country, particularly in the south-east, is a failure of regional policy as a whole. There is a failure of labour market policy as well. We do not have enough skilled workers and therefore have to rely to an excessive degree on migrant labour in many areas. I have to say that many of the larger companies in the housebuilding sector have a particular responsibility for this because they have a particular duty given the structure of the industry. As a result of all this, there is also a failure in social policy. The right reverend Prelate referred to the social division which the differences in housing provision leads to. It has directly distorted social security reform in that the escalation of rents and housing costs generally has led to a huge rise in housing benefit payments which is distorting the successful achievements of universal credit reform of the social security system. There has also been a failure of competition policy because in this as in other areas, we are failing to deal with the oligopoly that is made up of a few very large, powerful and exploitative companies.
When we look at Whitehall, the policies are all over the place. Planning and housing is admittedly in the Ministry for Housing, Communities and Local Government, but housing benefit, which is by far the largest expenditure by Government, is in DWP. Construction sponsorship is in BEIS, as is anti-trust policy, and finance for housing is dealt with in minute detail by mandarins in the Treasury. If we are genuinely to tackle the housing crisis, we need to bring these elements together in one powerful Cabinet-level ministry and Minister. For example, I have long argued that the inclusion of the housing benefit element in universal credit was a mistake. It may not be possible to unravel it, but it is making the delivery of universal credit more difficult and it is compounding problems in the housing sector. Actually, we need to provide more money on the supply side and less on the demand side. Whoever the Minister is, there needs to be a new start here. I believe that we need a single ministry of housing with a high-powered Minister who is close to the Prime Minister and changes to be made in Whitehall in order to tackle all of these issues together.
In passing, I would also say that in relation to the structure of this industry, the dominance of a few major companies and the almost total exclusion of small builders in big developments across many parts of the country, we need a CMA inquiry. So far, we have failed in this area. While our competition policy on cartels and monopolies is pretty good, it has failed utterly to deal with oligopoly in sectors like this.
Housing
Lord Whitty Excerpts(8 years ago)
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Lord Whitty (Lab)
My Lords, I too thank my noble friend Lord Griffiths for initiating this debate. When 3.5 million young people are either forced to live with their parents or are sleeping rough, we have a very serious societal problem. It applies not only to the inner cities to which my noble friend referred, but to many smaller towns and in particular to rural areas. Young people in our countryside cannot afford to live and work in the villages and towns in which they were born and brought up.
The same applies in urban areas. Not far from here there used to be communities of people who did not need an excessive income to be able to buy or rent premises. Nowadays, the new generation is having to move out and its homes are being replaced by the kind of buildings referred to by my noble friend. As I say, this is a serious societal issue.
There are some great names among past government housing Ministers, from Maxton to Bevan to Macmillan and, indeed, Kingsley Wood, but the last 30 years of delivery on housing policy by successive Governments has been appalling. Young people in particular are not able to get on the housing ladder and we have a private rented situation that is, in effect, highly exploitative in areas of great housing stress and very insecure.
The noble Lord, Lord Horam, is absolutely right about completion of new-build houses. This is a supply issue. New-build houses have been running at about half the rate of household formation for nearly 20 years. Indeed, the housing that is being built is, of course, housing where developers can make money. For the most part it is not only high-end, unaffordable and out of reach for large proportions of the population, it is also, in its physical proportions, singularly inappropriate for single people, young couples with small families, or pensioners who want to move out of larger premises and thereby make way for younger families. I include in that, of course, retiring Methodist ministers. Instead, we have so-called luxury flats, which distort the housing market in our city centres, and restrictions on building in small towns and villages.
Provision of social housing has drastically fallen over recent years. Even now, with the social housing that still exists in our inner cities, we face sell-off, demolition and exile for the tenants and leaseholders in those premises. I am not making a party-political point. Councils of all persuasions have found themselves, because of the financial restrictions, forced into engaging in activities that break up communities and disadvantage the younger generation in particular.
Local authorities need to be able to play a much more positive and effective role. They need new-build programmes. Again, here I agree to a large extent with the noble Lord, Lord Horam. They need to have the cap on their building and finances removed. They need borrowing powers. We need to regard housing as a vital part of our infrastructure strategy. We need to ensure that we replace homes that are sold off by the extended right-to-buy provisions on a one-for-one and like-for-like basis, and that we produce housing that meets the needs of single people and young families.
Only a determined and new form of housing strategy will resolve the problems of the younger people and the wider housing crisis we have. This is not only a social and economic problem, as my noble friend implies, but a moral problem. There are great and growing divisions in society; generational divisions are some of the most dangerous. Compare the young people stuck at home with their parents or living in inadequate conversions, bedsits and multiple occupation with extortionate rents and poor premises, with our generation and that immediately below us, who by and large had acquired housing, were owner-occupiers, or were secure social tenants in council or housing association buildings. That is building up significant resentment on the part of the younger generation. It adds to the resentment of them having lower incomes and lower wages and the absence of potential pension provisions, as contrasted with us and the over-50s. This resentment is only part of the effects of the failure to deliver appropriate and affordable housing to our younger generation, but it creates not only immediate problems of policy but very dangerous social divisions.
Global Climate Change
Lord Whitty Excerpts(9 years ago)
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Lord Whitty (Lab)
My Lords, I join other noble Lords in thanking the noble Lord, Lord Hunt of Chesterton, for this debate and for his clear setting out of the complexities of the basic science, which so often get distorted in media commentary and occasionally even within this House. It is also a bit daunting to follow such great contributors to this area as the noble Lord, Lord Stern, and my noble friend Lord Prescott, who have done a lot to bring the whole issue of climate change up the agenda. We are now focusing on how the UK Government can contribute not only domestically but also to the geopolitics which precede the Paris conference and those at the European level.
It is of course true that none of this is easy. There are conflicts between short-term economic goals and some of the decisions on investment priorities that we need on the climate change agenda. In addition, as has already been pointed out, there are some conflicts within the environmental objectives. For example, the development of biofuels and biomass can conflict with land-use objectives and sustainable food production and, as has already been said, some of the immediate measures on air quality—particularly on diesel—can be in contradiction to those you would need to take if you were focusing only on climate change. However, in the long run, if we do not tackle the climate change agenda nationally, locally and internationally, none of these things will be able to be resolved either.
At the global level, Kyoto was a binding legal agreement and we will not exactly be replacing that at Paris. My noble friend Lord Prescott made a major contribution to a successful outcome at Kyoto. In passing, in view of some sad news last week, I pay tribute to our then colleague, Michael Meacher, who also made a big contribution in that respect.
Copenhagen was in some senses a disappointment. Although some success was retrieved at the end of the day, it meant that binding agreements were no longer on the agenda. However, as my noble friend Lord Prescott said, we are now looking at a framework of national or regional commitments from all nation states, developed and developing, and a proper system of verification and enforcement, which could ensure that those national agreements are met. That is different from Kyoto; nevertheless, it is a practical political and geopolitical outcome, and we need to ensure that it is met.
Of course, we have a central underlying problem, which is the dependence on fossil fuels by so much of the world and so much of our industrial complex. A couple of years ago, the IEA pointed out that the level of subsidies for coal and oil was substantially higher than that for renewables or nuclear. At the same time, we have had the fracking bonanza distorting the relative economics of fossil fuels against renewables and nuclear. Now, the fall in the oil price has again distorted the economics. The Modi Government in India, for example, are now making exploitation of their coal resources the major driver for economic revival. That is not helpful.
On the other hand, we have had Australia coming back into the discussion. One hopes that after last week we will have Canada coming back into it too, and we have had the Obama initiative in America. In Europe there have been a few hiccups. The 2020 European targets will largely be achieved. On the other hand, the European ETS is a failure, and in parts of Europe—in Poland, in eastern Europe and, indeed, in Germany since it abandoned the nuclear option—there is a growing dependency on coal. That needs to be reversed if Europe is to make a major contribution, which it always has done. We need to ensure that the environmental agenda which Europe is capable of delivering actually can be delivered and that it is one of the great examples of European co-operation which, one hopes, will affect people’s consideration of our future within Europe over the next year or two.
However, all around the world the burning of fossil fuels will continue over the next few decades. With a continuing dependence on fossil fuels, the only way of ensuring that the targets are met to achieve the 2050 outcome is to develop a genuine system of carbon capture and storage. I am not sure that we can achieve that, but we need to invest scientifically and with capital investment to try to bring carbon capture and storage into full effect so that the continued burning of fossil fuels does not have a proportionate effect on the carbon in the atmosphere. There will continue to be some dependence on fossil fuels in the world, including in Britain and Europe, but if we can develop carbon capture and storage—which really ought to be a much greater government and European priority—we can square the circle.
My final point concerns the urban environment, to which others have already referred. It is a slightly different issue from climate change but the two are interrelated. It is not just the visible pollution in Chinese and other Asian cities but the invisible pollution that affects people here in London, with the appalling levels of air pollution and the deaths, which others have already mentioned. Here, there is a conflict with some powerful manufacturers. German car manufacturers stalled or diluted earlier decisions in Europe on the targets and standards for pollution in diesel cars. It turns out that, even then, they were prepared to fiddle the system. It is known to almost everybody that the on-road emissions have been five times that which was predicted from the tests. We now know that there was serious corruption by at least one company, and I do not honestly believe that Volkswagen was entirely alone in this.
I was distressed to read in today’s Times that the new limits being discussed at European level have been made easier following yet more intensive lobbying, primarily by the German car manufacturers. We cannot allow these vested interests to override the health and long-term survival of this planet, neither on air quality nor on greenhouse gas emissions. I hope that the Government are taking that lesson into account in their agenda in Paris and Europe.
Lord Ashton of Hyde (Con)
My Lords, I quickly remind the House that this is a time-limited debate. It is a fascinating debate and I know that people have a lot to say, but, for the benefit of later speakers, if they could try to keep their speeches within the time limit, it will not cut into the Minister’s reply.
Energy Bill [HL]
Lord Whitty Excerpts(9 years, 1 month ago)
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Lord Whitty (Lab)
My Lords, my name is also on the amendment, but I must apologise to the Committee for not being here during its long discussions on the previous two amendments, which relate to the contribution that renewables, in particular wind power, make to the reduction of carbon emissions and the decarbonisation of electricity supply.
This clause or something like it is necessary in the Bill because of the consternation that the changes in support for and expectations of wind power, solar power and other renewables have caused within those industries. They are concerned not that, understandably, the Government wish to reduce the subsidy as those technologies become more competitive with conventional energy, but that they should change the pace at which and the terms on which they are doing it at such short notice, and with such drastic impacts on projects conceived and put to planning long before those changes were proposed. Some of that will have been covered in earlier debates, but the fact is that the renewables industry will lose confidence in this Government’s support for and wider commitment to the objectives established under the Climate Change Act, and those we hope will be established at EU and global level, if they are not prepared to continue such support.
If the Government have a better way of reporting to this House and to the country how well they are doing on their carbon reduction targets and their overall trajectory towards reduced carbon use, it would be helpful for the Committee to hear of it, but, in default of that and in reaction to what has been already announced, it is legitimate for us to put within this Bill an obligation on the Secretary of State to produce a report within six months of the passage of the Act. I hope the Minister can accept something like this amendment or indicate what alternative methods of report the Government are now proposing.
Lord Teverson
Although I agree in principle with what this amendment is trying to get at, I have a recollection—I cannot find it, so I may be wrong—that under the Energy Act 2013 the Secretary of State has to give an annual report to Parliament anyway. If that is the case, I just want an assurance from the Minister that that report would cover the sort of issues discussed in this debate. We could have endless reports, but the main thing is to have a key area of reporting where all these things come over at one time, and that Parliament can debate them.
Lord Whitty
“Decarbonisation obligation
(1) Within six months of the closure of the renewables obligation on 31 March 2016 for onshore wind generating stations, the Secretary of State must bring forward regulations for a decarbonisation obligation.
(2) A “decarbonisation obligation” means the level of carbon intensity of electricity generation in the United Kingdom that a relevant supplier may not exceed in respect of the total kilowatt hours of electricity that it supplies to customers in England and Wales during a given year.
(3) In setting a decarbonisation obligation, the Secretary of State must first obtain and take account of advice from the Committee on Climate Change.
(4) In this section, “relevant supplier” means electricity suppliers supplying electricity in England and Wales.”
Lord Whitty
In the unavoidable absence of my noble friend Lord Foulkes, I will speak to Amendment 35A. As we have just discussed, electricity decarbonisation is a key component of our carbon reduction strategy. The amendment would provide a mechanism whereby decarbonisation by supplier is built in and becomes transparent, and is therefore enforceable supplier by supplier. It would require the Secretary of State to issue regulations to place on each electricity supplier—subject to definition in the regulations—a maximum level of carbon intensity in the electricity that it supplies within England and Wales. This decarbonisation obligation would be a proportion taken over the year of the carbon content of the electricity supply to its consumers over the course of that year.
The amendment of course does not specify exactly how the obligation would be expressed nor the level, nor whether there would be a single figure or whether that would be varied supplier by supplier depending on their pre-existing achievement of reductions in carbon intensity. That is a matter for consultation prior to the regulations being promulgated. The only specification in the amendment is that the Secretary of State needs to take the advice on this issue of the Committee on Climate Change—I am glad to see that the noble Lord, Lord Deben, has joined us at an appropriate point. Therefore, that would be the benchmark against which the Secretary of State calculates the requirement. It is noticeable that the amendment would apply only in England and Wales. There would be different arrangements in Scotland and Northern Ireland.
The amendment would give a crucial mechanism to the Secretary of State for ensuring that the pace of decarbonisation in the electricity supply was maintained, transparent and understood supplier by supplier. It would be an important additional weapon in the Secretary of State’s armoury. The Minister has assured us that we are on track for 30% of renewables by 2020. We need to go much further than that to meet what will be the requirements for carbon reductions over the years beyond 2020. I beg to move.
Lord Teverson
My Lords, I was pleased to add my name to the amendment, although I do not pretend to be an expert on exactly how it would work. There was a great celebration in February this year when our Prime Minister, to whom I give full credit, made a declaration jointly with Nick Clegg, the then Deputy Prime Minister and Ed Miliband the then leader of the Official Opposition. They made pledges through the Green Alliance, one of which was to accelerate the transition to a competitive energy-efficient, low-carbon economy and to end the use of unabated coal for power generation.
That was a fantastic declaration at the beginning of a general election campaign when politics was running high and competition between political parties was starting to move into a more confrontational stage. Yet three party leaders came together and said that low carbon and taking out unabated coal would be key. I see the amendment as something that could move us towards that solution in a concrete way. That is why I support it so strongly.
The Energy Act 2013 started off being about decarbonisation. It made it clear that the Secretary of State had the ability to—and in parliamentary Bill language that presumed that the Secretary of State would—declare a decarbonisation target in 2016 when the Committee on Climate Change came forward with its recommendations for the fifth carbon budget. My question to the Minister on this key area in meeting Climate Change Act obligations is whether the Secretary of State intends next year to follow that through in the carbon budget that is recommended and the one that is subsequently agreed.
The other attractive thing about this amendment is that it tries to find a least-cost way through to decarbonisation. As previous debates have shown, in this House we are united in wanting to decarbonise our economy at least cost. We all know that that is important to consumers, for fuel poverty and to the competitiveness of our economy. This amendment finds a way to do that.
I welcome the amendment and I agree entirely with what the noble Lord, Lord Whitty, has put forward. I will be interested to learn from the Minister how the Government intend to take forward the pledge the Prime Minister made in February. Will the Government move next year to a decarbonisation target for 2030 and, as part of that, will they make sure that coal really does disappear from our system as soon as that is practically possible?
Lord Bourne of Aberystwyth
My Lords, I appreciate that point. On the clause as set out, I have made it clear that we will not come forward with this additional obligation. The manifesto is absolutely clear that there will be no power sector target. That is the position of the Government.
Lord Whitty
My Lords, if I understand that right it is very disappointing. I can understand the objection, or at least the querying by the noble Lord, Lord Deben, as to whether we need a detailed mechanism for setting carbon intensity coefficients by supply, but he argued very persuasively, and has done before, for a decarbonisation target for 2030. That is why that was written into the 2013 Act and why there was an expectation and general indication from the Minister’s predecessors that there would be a target set in 2016, but only in the context of the carbon budget, which they are obliged by the Climate Change Act to come forward with. I did not accept that argument, but I understood it in terms of the timing. There was some considerable debate about that during what became the passage of the 2013 Act.
It is very disappointing, not only to us in this House but to the various industry operators, including the supply companies, that there seems to be an abandonment of that commitment in what the Minister has interpreted from the Conservative Party manifesto. As I well know, manifestos are pretty flexible things. I hope that he can consult with his colleagues as to whether it actually meant that, or whether there was some more room—
Lord Teverson
I am not quite sure how to ask the noble Lord, Lord Whitty, this, but having read the Conservative manifesto many times and having it on my iPad on iBooks, I have not seen this obligation not to have a target anywhere in it. Has he?
Lord Whitty
My Lords, I am not quite such a conscientious and diligent reader of the manifestos of various parties—even my own—as the noble Lord, Lord Teverson. The best thing we can ask the Minister to do is to go back and talk to his colleagues—whether it was in the manifesto or not—about whether they are definitely now not going ahead with what was allowed for in the 2013 Act. If that is the case, there are ramifications. I understand why the Minister is opposed to the mechanism proposed in the amendment. I would have thought that having set the 2030 target for decarbonisation would be a useful addition to the armoury, as the Committee on Climate Change and the noble Lord, Lord Deben, advocated. If the Minister feels that that would be too much interference in the market mechanisms, I understand that. It would still be up to the supply companies how they met that obligation and what kind of technologies and contracts they entered into. The market is still operating there. I understand and accept that the Minister is not prepared to go along with that.
Lord Bourne of Aberystwyth
To be helpful, in view of the fact that there is a degree of uncertainty about what the manifesto says specifically—not least with me—I am happy to go back and have a look at it. We can come back to it on Report to ensure that I have understood the position correctly. I undertake to do that and we can pick it up on Report if that is helpful.
Lord Whitty
My Lords, that was very generous of the Minister. I thank him very much, as I think the Committee will as a whole. Before I withdraw the amendment, I will just comment on something that the Minister said on markets and nationalisation. When the then Energy Bill of 2013 first came before us, the noble Lord’s colleague, the noble Lord, Lord Lawson of Blaby, described it as “Gosplan”. There is something in that. There is nothing from any element in the Labour Party that goes as far as that. I beg to ask leave to withdraw the amendment.
Energy Bill [HL]
Lord Whitty Excerpts(9 years, 1 month ago)
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Baroness Worthington (Lab)
My Lords, thank you for returning to Committee. Amendment 12 in Clause 5 relates to the Secretary of State’s abilities to give directions to the Oil and Gas Authority. Again, I fear that we are now retreading familiar territory in our discussion of the Bill and some of the concerns that we have with it. The amendments in this group are probing and designed to give the Minister an opportunity to respond on how he considers that these powers might be used by the Secretary of State. We revisit the two issues that we talked about earlier today, which are that the Oil and Gas Authority should have explicit mention of carbon storage and transportation in its objectives and in the matters to which it has regard. For consistency’s sake, we therefore believe that the Secretary of State should also have those powers.
The purpose of these amendments, particularly Amendments 12 and 14, which are in my name, is to ask the Minister whether he could give us a little more information about the circumstances under which he envisages the Secretary of State needing to use these powers. Perhaps he could also give us an example of what kind of direction he imagines the Secretary of State might be giving the Oil and Gas Authority in relation to its functions under these powers. There is clearly not much in the public domain to help me get a handle on the thinking behind Clause 5, so it really would be an illuminating contribution from the Minister if he were able to give us some examples of the circumstances, particularly the exceptional circumstances referred to in the Bill, and the examples of direction.
We had a discussion prior to the break about the primary purposes of the OGA. I remain convinced that there is a clean and very succinct way of doing this, which is to refer to the Oil and Gas Authority’s primary objectives and to include within them explicit reference to activities that go beyond maximising economic recovery, as it is perhaps formally or informally understood. At the moment, it is interpreted as meaning that we will extract the maximum volume of hydrocarbons from our natural resources which fall within our territorial waters offshore, and indeed onshore. But it may be that that definition of MER, while it still of course has cross-party support, needs to be revisited and revised.
In the previous discussion, we saw reference to new matters to which the OGA should have regard being added to Clause 4. The Minister’s response in that debate was that there is no need to be explicit about these matters and that climate change is taken care of elsewhere, as indeed is the need to decarbonise and CCS. But if that logic were to apply, it is the case that one of the matters stated in Clause 4 is the need to have regard to a secure supply of energy, so if we are being true to ourselves and saying that we should have a narrow focus for the OGA and do not need to reiterate these things, there is no need for any reference to security of supply in that part of the Bill either. However, I do not think that is correct. Indeed it was helpful that the noble Lord, Lord Deben, who is no longer in his place, made reference to the fact that to avoid doubt it is always better to be explicit about these things, for fear that people with slight imagination —he used that phrase but perhaps it should be “lacking in imagination”—might mean that there is a narrow interpretation of what the OGA is created to do and what is within its powers and remit.
That is a very lengthy way of saying that we look forward to hearing more from the Minister on Clause 5, which is clearly an important part of the Bill. However, as I read it, I am left wondering what these exceptional circumstances are and what these directions could look like. I look forward to hearing from the Minister in his response. I beg to move.
Lord Whitty (Lab)
My Lords, I have two amendments in this group, but I also want to apologise to the Committee because, due to my attendance at my Select Committee, I was unable to be here for the previous debate, during which, as my noble friend said, the case was made for ensuring that the OGA—while it may well have principal objectives—has to operate in the context of wider energy policies. Issues of climate change, energy security and affordability are relevant to how the OGA fulfils its main functions. Indeed, if its main function is in terms of maximum economic recovery, what happens on those other dimensions of energy policy affects the actual economics in MER. Therefore, it is important that the OGA, as set out in the earlier clauses, has some regard to those broader objectives of energy policy. It is also important that the Secretary of State can intervene in those areas.
Amendment 13 would allow the Secretary of State to give directions where it would be necessary to meet the terms of the Climate Change Act and the budgets promulgated under that Act. Amendment 15 relates to the Committee’s discussion before the break about carbon capture and storage, so that directions could relate explicitly to the storage of gas and oil and the storage of carbon dioxide as part of a carbon capture and storage scheme. The amendments previously discussed relating to Clause 4 need to be complemented with the ability of the Secretary of State to intervene on those same subjects. That is what these amendments would do.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, I shall speak to the amendments in this group and I thank noble Lords who have participated in the debate for speaking to their amendments. Amendments 12 to 15 relate to Clause 5 of Part 1 of the Bill, which concerns directions the Secretary of State may give to the Oil and Gas Authority. As the noble Baroness, Lady Worthington, said at the outset of our consideration in Committee, most of what we are looking at in the non-government amendments relates to carbon capture and storage. That is certainly a point well made. As I have indicated, we have undertaken that we will look at the issues relating to carbon capture and storage prior to Report.
As has been said, Clause 5 gives the Secretary of State power to direct the Oil and Gas Authority in the exercise of its functions if the Secretary of State considers the directions in the interest of national security or otherwise in the public interest. The noble Baroness, Lady Worthington, asked for examples of that and I will try to provide a couple. First, if a licence is applied for by a person who is suspected of corruption and whose possession of a licence the Secretary of State thinks would lead to reputational embarrassment or political damage to the United Kingdom, the intention is that the Secretary of State should be able to direct the Oil and Gas Authority not to issue a licence to such a person.
Secondly, another instance may be if there are other competing uses for a particular area of the seabed in respect of which the Oil and Gas Authority may grant licences. The intention then is that the Secretary of State should be able to give a direction to the Oil and Gas Authority as to over which areas it should or should not exercise its licensing powers so as not to prejudice those other uses.
Finally, another example may be that the Secretary of State should be able to direct the Oil and Gas Authority not to grant further consents for development in the face of public concern about the scientific evidence in relation to the methods used or a change in government policy. Clearly, that is not an exclusive list but those are some situations that may be covered by it.
The amendment makes it clear that the power in Clause 5 can extend to the Oil and Gas Authority’s functions in relation to the carbon capture and storage sector. We believe that it is unnecessary to do this because the Secretary of State’s power to give directions to the Oil and Gas Authority as to the exercise of its functions already applies to the carbon capture and storage sector in so far as it is in the ambit of the Bill.
Lord Whitty
I do not believe that either my amendment or the other amendments intend to designate the OGA as a drafter or an enforcer of environmental legislation. They seek to ensure that anything the OGA does will not jeopardise—preferably, they would further—the broader objectives of the Government. This does not mean that it is a regulator; rather, that the Secretary of State would have the ability to intervene if some of the economic decisions taken by the OGA jeopardise its legal obligations under the domestic climate change Acts, or indeed jeopardise its international legal obligations under EU or any global climate change agreements. We are not arguing that the OGA should be an environmental regulator.
Lord Bourne of Aberystwyth
I am grateful to the noble Lord for that clarification. We will have another look at the position, and indeed I am probably using the term “environmental regulator” in something of a shorthand sense. We have legal concerns on this, but I undertake to take a second look and possibly we will come back to it on Report.
In the light of my comments and the undertakings that I have made previously, I respectfully ask the noble Baroness to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, in moving Amendment 24, I will speak to the others in the group. We move on to information and samples. These relatively small amendments are intended to ensure that the information and sample regime takes account of the role of carbon capture and storage: in other words, that it is reflected within this part of the Bill in the way that it should be reflected—the Minister has indicated some sympathy towards this—in the earlier clauses relating to the activities of the OGA.
Amendments 24 and 25 are very small and are intended to ensure that the definition of “petroleum-related information” is kept as broad as possible, so that it is not limited to the fulfilment of the principal objective—it is narrowly defined at present—and not time limited to activities which continue to be relevant to that objective. In other words, it could be used, either in parallel with extraction processes or after they have taken place, to provide samples and information to CO2 licence holders and storage operators. The use of “and” between the two subsections creates an ambiguity here, and if the Government’s intention is to ensure that the information could be provided to and required of CO2 storage operators, they need to make these amendments.
Similarly, on Amendment 25, which relates to the transfer of such information, there are many within the potential CCS market who regard the inability to access samples as one of the barriers to using former gas and oil facilities for carbon storage. In order to ascertain whether the facility is appropriate and can technically be operated as a storage area, information that is held by the OGA as a result of it having been provided by the extraction operators ought to be made available to the CCS operators. Amendment 25 is designed to ensure that that can happen and that the Government have the powers to transfer such data. The Government have already indicated that they hope to be able to transfer such information, and this would give a proper legal base to that and make it enforceable. In addition, Amendment 28 clarifies that the OGA could require information and samples for the purpose of carrying out any of its relevant functions, not just its principal function. Again, that would ensure that storage licensing was included in that provision.
I hope the Government can look at these amendments and, taking account of the points made earlier in Committee about CCS, consider whether these relatively minor amendments to the Bill would help to encourage and give some degree of confidence to potential operators of CCS making use of our North Sea facilities. I beg to move.
Baroness Liddell of Coatdyke
My Lords, we are all getting very excited about these amendments so we are anxious to speak. I want to add a couple of sentences. There is a history in the oil and gas sector of not sharing information, for whatever reason: sometimes it is competitiveness but sometimes, although I hate to say it, it is sheer awkwardness. Although CCS technology has been around for a long time and has been proven, there is nervousness about transmission, so it would make a great deal of sense if the OGA had the authority to require the sharing of this information, whether for safety reasons or any other reason. Those of us who have had to deal with the oil and gas industry know that it is very shy about passing on the kind of information that my noble friend Lord Whitty has spoken so eloquently about.
Lord Bourne of Aberystwyth
I know that my noble friend was not seeking to be difficult or disruptive in any way; I know her too well to think that. I am happy to write further on the issue, but if the company goes into liquidation, basically, proceedings under the Insolvency Act would apply, and the liquidator—I believe this is the case, although this is on the hoof—would then have to act in response to any request from the Oil and Gas Authority to make the samples or the information available. However, I will write to my noble friend on that issue and will ensure that other noble Lords are copied in as well.
Lord Whitty
My Lords, I am grateful to the Minister for such a detailed response to my amendments and the others in this group. Obviously, I will have a very close look at what he said in Hansard and will consult those who were concerned about these issues. Certainly there is concern that the overlap between “principal objective” and “petroleum-related” could exclude things that were not currently related to the extraction—or exploration of the extraction—of petroleum, and therefore could exclude carbon capture and storage. However, the Minister has given various reassurances on that, some of which I will require some legal advice on. I am quite happy to arrange for a meeting with him or his officials. However, I repeat that I am very grateful that he has taken these amendments seriously and I hope that we can reach some accommodation on this. I beg leave to withdraw the amendment.
Energy Bill [HL]
Lord Whitty Excerpts(9 years, 3 months ago)
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Lord Whitty (Lab)
My Lords, I declare my interest as chair of a fuel poverty charity and as a vice-president of the Local Government Association. It is quite convenient to follow the noble Viscount, Lord Ridley—at least he gives us a carte blanche to be a bit controversial. What we have just heard makes me move to one of the phrases from later in my speech: that one of the dangers here is that the Treasury has taken over DECC. But it is actually more profound than that. One of the dangers is that the climate sceptics have taken over the Treasury.
There are different perspectives, and not everything in the renewable field is lovely, aesthetically or economically. Nevertheless, I think that the recent decisions by the Government in relation to onshore wind and, indeed, solar power make a proper economic and effective contribution to renewables, to our decarbonisation programme and our security of supply of energy more difficult to attain rather than less.
It is true that this Bill is a pretty thin Bill as energy Bills go. There are only really two bits of it: one related to the OGA and one to effectively limiting the support and the ability to engage in onshore wind projects. I do not have much to say about the OGA; it is following through on decisions taken in the earlier Bill at the end of the last Parliament. I would, however, underline two questions that have already been asked. The first was from my noble friend Lady Liddell, regarding the OGA’s role in effecting the transfer of skills, infrastructure and connections from the offshore oil and gas system to offshore renewable projects. The second was asked by my noble friend Lord Grantchester: will the responsibilities of the OGA extend to the operation of carbon capture and storage, where the emptying North Sea gas and oil fields could provide ready-made storage not only for British operation of fossil fuel facilities accompanied by CCS but also for a large part of Europe as well?
The OGA at the moment is very focused on oil and gas as it is and will be for the next few years, but we need a complete transformation of the offshore system to be connected and to have a holistic arrangement with the still growing—we hope; I part company with the noble Viscount, Lord Ridley, here—contribution of offshore wind and perhaps other technologies down the line.
Most of what I will say relates to the issue of the government changes in the cross-subsidy arrangements and the planning arrangements for wind, although it is part of a wider context because the Government have also announced changes relating to the climate change levy and issues related to solar. All of these are affecting both individual investments which are in the pipeline and the general confidence in a stable, forward-looking programme for investors in energy of all sorts, but particularly in the renewable field.
Bringing the end of ROCs forward by one year, as far as onshore wind is concerned, does not sound like a lot. However, if you are already engaged in a project that was relying on ROCs being available until 2017, it pulls the carpet from under such projects. It is, of course, understood that as the costs of technologies such as onshore wind and solar come down, the need for the subsidy diminishes. However, that should not be a precipitate change which will affect decisions already taken by investors, companies and planners on the basis that rebates announced only a few months ago by the Government would remain in place. Many noble Lords will no doubt have received representations on this front. It is clear that independent generators in particular are being contacted by investors asking what the hell is going on, because they thought that they had the economics worked out, that they had done the accountancy and that they understood the degree of government support which would come in the next few years, but suddenly that has changed.
Lest the Minister, the noble Viscount, Lord Ridley, and others think that this is just a few trade associations, green lobbyists and the opposition parties making a fuss about the changes, let me quote from a couple of individual companies involved in this field. A company which is involved in solar energy but also has interests in onshore wind has written to me and spelt out that,
“recent changes to RO on onshore wind, lack of clarity over CFDs and changes to the Climate Change Levy … have created uncertainty for the entire renewable industry. This has put jobs and renewable energy targets in serious jeopardy. Government policy has meant that access to finance for renewable projects is on hold, with now only a select few of projects in the pipeline likely to go forward. The Government’s confidence that there are enough renewables projects in the pipeline to meet renewable targets is far from guaranteed”.
That is from a relatively small company involved in this area. I also quote one of the big six which has invested heavily in this area. It states that its understanding was that:
“During the introduction of Electricity Market Reform”—
only about a year ago—
“the Government signalled to investors that there would be an orderly transition to the new framework. To aid this transition it was stated … that the Renewables Obligation … would remain … until 31st March 2017. This was accepted by investors … Since then we have seen the closure of the RO for solar PV schemes on 1st April … followed by the decision to close the RO for onshore wind twelve months earlier than previously indicated”.
This has caused consternation among boards and outside investors and,
“jeopardises the reputation of the UK as a stable and attractive”,
regime for investment. We have to remember that such investors have choices. Whether the investments are being made at the board level of large multinational energy companies or whether investors are going to the market for the funds, they need to see stability. The Government, by a number of individual decisions in aggregate, have caused that confidence to disappear.
There are better ways of doing this. Different timescales would have reflected the need to reduce support as the costs of producing the technology reduced—I recognise that and so do most of the companies—but once you have lost the confidence of the investor community and the boards of major multinational companies in there being a stable, proactive regime for investment in renewables, then you have lost it for a very long time. That jeopardises some of the targets which the Government have set. It may be true, as the noble Viscount, Lord Ridley, said, that it does not jeopardise that much the 2020 target, but it will certainly jeopardise projects which would otherwise have gone ahead and been rolled out from 2020 to 2025 and therefore the targets which are in the DECC plans—or what were the DECC plans, because we do not know quite whether those have changed—in terms of a renewables contribution and the level of decarbonisation as we go forward into the 2020s.
That is a mistake of cardinal importance on the part of the Government. It is not a good start for the new Conservative Government’s intervention. I would hope that they could recover from that. As the noble Lord, Lord Oxburgh, has just said, we need to see the total context in which this is working—we have yet to see it. In the mean time, it is important that this House recognises that what has been announced in the last few days and weeks makes much more difficult, and even more difficult to deliver, all aspects of what was previously a more or less consensual view on the way in which energy policy should go following electricity market reform. I do not think that that was the intention. The intention, according to the Secretary of State—and the Minister has repeated it this morning—was to make bills lower for the consumer. In no sense can bills be made lower for the consumer if we are cutting off one relatively low-cost renewable technology but paying very large sums of money—increasingly for the consumer and, to some extent, the taxpayer—for ones that are more expensive. This is not sensible economics. It is not a rational policy. I hope the Government can do better within a very short period of time.
Electricity Supply: Decarbonisation
Lord Whitty Excerpts(9 years, 4 months ago)
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Lord Whitty
To ask Her Majesty’s Government what steps they are taking to decarbonise the electricity supply system in the United Kingdom, with which targets and over what timetable.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)
My Lords, we are committed to doing our part to tackle climate change in line with the Climate Change Act. We want to do this as cost-effectively as possible to ensure that our energy is secure and affordable as well as lower-carbon.
Lord Whitty (Lab)
My Lords, I thank the Minister for that reply. I am pleased to have my first encounter with him in his new position. However, I hope that he will ask his officials to give him slightly more detailed Answers. The Question refers to a timetable, and we need action on a number of fronts. By what date does he expect the coal-fired power stations to be phased out—that was a commitment of all three parties before the election—and when does he expect the Hinkley Point B power station to come on-stream to provide us with a new source of nuclear power?
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord for that welcome; I am sure it will be the start of a beautiful friendship, to revisit “Casablanca”. We anticipate that by 2025, unabated coal will account for only 1% of total generation. In relation to Hinkley B, which he also mentioned, the answer is 2023.