Energy Bill [Lords]

Debate between Alan Whitehead and James Cartlidge

Ping Pong: House of Commons
Monday 9th May 2016 Commons Chamber

[Dr Whitehead]

I believe we referred to the manifesto commitments the Minister mentioned during the passage of the Bill as something of a flexible friend. The Minister is quoting a manifesto commitment that was not actually in the Conservative party 2015 general election manifesto. The manifesto commitment was for no new subsidies for onshore wind. The Bill puts that in place, but provides for a number of grace periods for the consequence of that process. What we are therefore talking about in this debate is not that commitment but the grace periods that follow it. That, essentially, is what the Lords amendment is about. It therefore does not breach manifesto commitments in any way. To do that, the Minister would have to say that the grace periods themselves breach the manifesto commitment. Plainly, the Minister put those grace periods into the Bill. She must therefore accept that the grace periods are a part of the process and not the process itself.

Under the grace periods, if there is a delay in grid connection or a delay in clearance for Radar, then the schemes come into the fold. That is set out in the grace periods in the Bill. If you have been turned down by a planning committee, have appealed and the appeal comes through after the cut-off date, then you come into the fold. If investment facilities have been frozen because of uncertainty about what was going to happen to the Energy Bill and investment documentation could not be shown in time, that comes into the fold of the grace periods.

As matters stand, however, one cannot come into the fold if one has gone down the route of seeking local approval for the scheme, gaining that approval, getting the consent of the local planning committee and negotiating section 106 or section 75 agreements, as would happen once agreement is reached. If the final certificate, which is obtained after agreement has been reached, happens to fall after 18 June 2015, then one does not come into the fold. That is especially galling for the people going down this route, which they did not have to go down. A central part of the Energy Bill is that onshore generating schemes should proceed in future only if they have the support of the local communities in which they are to be sited, which might be determined by the grant of locally based planning permission. Clause 78 expressly removes the requirement for consent by the Secretary of State. If one has gone down that route and done everything by the rules that the Energy Bill wants to put in place, one is outside the fold if everything is not in place, even after permission has been granted, by 18 June 2015.

Let us imagine the scene when the managers of the Bill sat down to draft what was always clearly supposed to be a sequence of exceptions to the clear bright line as described by the Minister: the cut-off date and circumstances of the cut-off for new onshore windfarms. The instruction to the team drafting the Bill—I commend the Bill team on a superb job in pulling together the multiple facets of the Bill into a coherent whole—would have been to work towards an overall instruction that the renewables obligation would be closed to all new applicants a year before its original closure date, a date to which developers, local authorities and those seeking to invest in wind farms had all been working. The Bill team was required to place that into a satisfactory legislative context. In doing so, there would have to be cut-off dates before the final date of closure of the scheme overall. It was always recognised, however, that there would have to be exceptions, which is why extensive passages of grace periods have been drafted into the Bill, allowing for exceptions where not to do so for various reasons would have looked particularly unjust, would have led to legal complications or even legal challenge from those affected.

I would have thought that projects about to be completely swept away by the imposition of the cut-off date—when they had done exactly what the Bill provides for, having previously thought the original cut-off date was March 2017—would have been first on the list for possible grace periods. Who knows, perhaps something might have been drafted early on to accommodate such a position? What we know, regardless of any speculation, is that someone decided—it looks to me that they may have done so on grounds of dogma, rather than on a fair analysis of what should go into an already agreed grace period—that those schemes would have the door firmly closed in their faces. That is a manifestly perverse outcome for projects whose approach to planning and investment was exactly by the book. On the other hand, others going through an appeal process—having perhaps been turned down by those very local concerns the Bill emphasises—will find they are on the guest list after all and can come in through the door.

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.

We all want the Bill to pass now and it can do so today. We want the Bill on the statute book because of what we agree on. Overall, we want it to be on the statute book as a just Bill, even when Opposition Members consider the principle behind it—effectively retrospectively pulling an early plug on the renewables obligation specifically for onshore wind—is profoundly mistaken. It is mistaken because it will potentially replace onshore supply with more expensive offshore wind. As I am sure the Minister is aware, a study by the Royal Academy of Engineers estimated a while ago that if just one onshore turbine was replaced by more expensive offshore turbines, it could eventually cost taxpayers £300,000 per annum.

The amendment saves money, therefore, as well as placing equity back into the grace periods. It is of course down to the Government to get their legislation on to the statute books. We have supported most of the Bill, which can be passed today, throughout its passage. I trust that they will have the sense not to stand dogmatically in the way of its passage and allow us to sign it off and get going with the vast bulk of the provisions on which we all agree.

[James Cartlidge (South Suffolk) (Con)]

I will speak briefly given that we have been here before in this ping- pong process.

This was my first Bill Committee and Reasons Committee—I believe I am already coming up for my second, which is interesting—and we are now down to one key point: there is wide acceptance of the broader need for the Bill, but we are told that if it is so important, we need only accept one more wafer-thin amendment and then it can go through. Conservative Members take the view that a Government could not govern if they did that every time. There are, unfortunately, cut-off points in lots of Bills, and many are unpopular, and although I can understand why people who will lose out are aggrieved, we take the view that the wider principles are incredibly important.

Others have spoken about the Oil and Gas Authority. Every time I have spoken, I have referred to the oil price, which I think is now up to about $49. There is still no sign of stability returning to the sector. Who knows where it will be in weeks if not days, given all that is happening in the world? The measures in relation to the OGA are not a magic wand for the oil sector but will bring an extra level of stability and demonstrate Government support at an incredibly sensitive and important time for what remains one of the UK’s largest industries and one of Scotland’s key industries. We should dispense with this process, move forward and pass the Bill, for the simple reason that it is about the fundamental strength of the UK economy.

Energy Bill [Lords]

Debate between Alan Whitehead and James Cartlidge

Wednesday 20th April 2016 Commons Chamber

[James Cartlidge]

It was a great pleasure to serve on the Bill Committee. I hope that the House will not mind if I return briefly to the point made by the hon. Member for Aberdeen South (Callum McCaig), because it is important to set the record straight. Before I give my reasons for supporting the Government, let me say that my recollection—I am happy for this to be clarified—is that in the Bill Committee, SNP Members tabled amendments to give them the power to keep the projects open but, when asked, they did not confirm that they would put up the money to support those projects. The justification that they gave related to the nuclear industry. As I recall, they said that it was quite fair for them not to have to pay for the projects because they have to pay for the nuclear industry, which they do not agree with. Thereafter, I asked them whether they would want to be cut off from the electricity supply that comes from the nuclear sector in this country, and the answer was no. As always, they want to have their cake and eat it—rather like the Mayor of London, although they do not make their arguments with as much grace as he does. The hon. Member for Aberdeen South has tried his best today, and I see that he has got some extra support to back him up.

My two reasons for supporting the Government are clear and along the lines of the points made by my right hon. Friend the Member for Wokingham (John Redwood). The first relates to the simple principle of democracy and the position of my constituents, whom I have been sent here to represent. Overwhelmingly, my constituents support our policy on onshore wind, and they want it to be enacted in good time. Since I attended the Bill Committee, I have been out and about in the constituency, and the matter continues to come up. I recently addressed a meeting of the Stour and Orwell Society, a fine and upstanding group of ladies and gentlemen who are committed to preserving and protecting the natural beauty and heritage of the countryside in South Suffolk, particularly in the peninsula where the River Stour meets the Orwell. For anybody who wishes to come and visit, it is a fine place and it is not particularly blighted by large constructions that will be affected by these changes. Overwhelmingly, the position of the constituency is that it supports the changes.

My second point relates to the Oil and Gas Authority, and it has been alluded to by my right hon. Friend and others. I simply want to say that we should not delay a Bill—[Interruption.] Does the hon. Member for Southampton, Test (Dr Whitehead) wish to intervene?

[Dr Whitehead]

I simply want to make the point that we could finish proceedings today if the Government agreed to the amendment, and the Oil and Gas Authority could go forward with all speed, as everybody wants it to.

[James Cartlidge]

Absolutely. If the hon. Gentleman is willing personally to provide £10 million so that the taxpayer and electricity customers do not have to be so encumbered, I am sure that we can find a way.

We have a clear position. The Bill has not changed in respect of the fundamental decision to establish the Oil and Gas Authority. At one point on the day of Second Reading, the price of a barrel of oil was $27.70. It is now around the $40 to $44 mark, so there has been some stabilisation, but that word has to be used carefully in view of what is happening around the world. Ambrose Evans-Pritchard had an excellent piece this week on continuing stability in Kuwait, and we see today in the FT that Saudi Arabia is starting to borrow from the markets. The price may go up, or it may go down again. The key point is that the outlook is uncertain. Enacting the Bill, with this new and respected regulator, will add stability and credibility to the sector at an important time. It is not a magic wand, and it will not immediately heal the problems that undoubtedly exist in this industry, which is vital for the United Kingdom, but it is a key part of our energy policy and proposition. That is why the Bill should become law as soon as possible.

This is basically about our national interest, which has, for many decades, been tied to North sea oil and to the energy sector. That is true not only of Scotland; in the East Anglian economy, a significant amount of output and a significant number of jobs come from the oil sector. I encourage all hon. Members to support the Government on this matter. Our reasons are clear. This is about supporting the energy sector and respecting the democratic will of the people of the United Kingdom.