Energy Bill [HL]

Baroness Northover Excerpts

Tuesday 8th February 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, I hope that noble Lords will forgive me for not standing up because I may fall over. I thank the Minister for his comments and for his good wishes to my foot, which were gratefully received. I hope that he will not mind if I do not take him up on his offer to take my wheelchair through the voting Lobby. I will rely on my noble friends to ensure that I get into the right place. On a serious note, I am grateful to him for agreeing to suspend last week’s Committee sitting so that we could sit today and I could be here. I am grateful to noble Lords for their indulgence on that.

I thank my noble friend Lord Whitty for bringing forward this amendment. It has invoked a lively discussion. I am not sure that there is as much disagreement between us as might seem apparent from some of the debates. We are all trying to seek a sensible energy mix and to ensure that there is access for all forms of energy. The Government have targets for renewable energy. If those targets are to be met there has to be some certainty for the renewable energy industry.

It is worth reminding ourselves that my noble friend’s amendment is not anti-oil or anti-gas—I did not see it in that way at all—but tries to find a way in which both can coexist sensibly on a level playing field and one does not undermine the other. Like the noble Baroness, Lady Parminter, I pay tribute to the work of RenewableUK, which has been trying to seek the kind of protocols, or guidance, required that means that problems can be addressed before they arise so that we do not have to move to the position we would have to under this amendment.

However, there may be cases where a proper disputes procedure has to be in place to ensure that we are not in the position that we are at the moment. If oil or gas is always a priority, there will be a difficulty in ensuring investment in renewables. Indeed, the amendment talks about a site that is developed or operated for renewables, or is intended to be developed or operated, or for transmitting electricity from renewables,

“in respect of which the Crown Estates that have granted a lease license, agreement to lease or agreement to license for that purpose”.

It is not just a site that has been chosen but a site that has been granted a licence already.

The proposed new clause says that the Secretary of State is not able to grant a licence for activities within an offshore renewable energy site without the agreement of the holder of the lease, licence or agreement. One problem is that, with no disputes procedure, there is no compensation for a licence-holder if their licensed renewable site is to be overridden for access to gas and oil.

I do not think that there is much disagreement. There is, and has been, a clear wish within this Committee to ensure that we maximise all our resources for all energy sources. However, I have concerns that, if some kind of dispute procedure or something along the lines suggested in the amendment is not put in place, the Government could be unable to reach their targets on many renewables. If a licence can be revoked purely on the order of a Secretary of State, that lack of certainty will lead to a lack of investment.

I understand that the Minister may have concerns about the wording and the way forward. It would extremely helpful, however, if he could take this away and give some thought to the principles behind the amendment to look for a way forward that gives certainty to licence-holders of renewable energy sites.

Baroness Northover: My Lords, the Government are committed to a rapid increase in offshore wind deployment to maintain a secure energy supply, to tackle climate change and to meet our renewable energy targets as well as to deliver green jobs for the UK, which pick up the points of both the noble Lords, Lord Whitty and Lord Judd. However, we are also committed to securing full benefit from our oil and gas resources, which remain of great potential value to our economic well-being and energy security. I hope that the noble Lord, Lord O’Neill, will be reassured by that. As the noble Baroness, Lady Smith, puts it, it is about coexistence and ensuring that this works well.

We believe that both the offshore wind industry and the oil and gas industry are needed and can successfully coexist to ensure the nation’s energy needs are met. DECC is working with both industries and their trade associations to encourage effective co-ordination and co-operation in their respective development processes. Our expectation is that suitable consultation, planning and phasing of the respective operations will in most cases allow both developments to achieve their objectives in full, or with only minor compromise. I note what the noble Lords, Lord Oxburgh and Lord Jenkin, said on this.

At the stage of formal consent, an application from either industry to exploit the natural resources of our marine environment would be considered as part of the standard procedures of the relevant authority and be consulted upon with interested stakeholders. Any user of the sea—including oil and gas and offshore renewables industry players—is able to make representations at a number of stages, including the formal consent process and the environmental impact assessment. We recommend that interested parties do so, so that their views can be taken into account in any decision-making.

It is worth noting that the Government are well aware that this issue is causing concern, particularly to the offshore wind industry. Therefore, the department is working on a solution that is acceptable to all parties. I hope that that will help to reassure the noble Lord, Lord Whitty.

Clearly, in terms of the financial compensation that has been referred to, if the oil company is not prepared to offer appropriate compensation, there is no question of the Secretary of State intervening to override what is happening there.

We understand the motivation behind what the noble Lord, Lord Whitty, is proposing, and it is extremely important that there is equal treatment. I am a great believer in equal treatment. Therefore, we understand why he has brought this forward. We do not think it appropriate at this stage to agree this amendment to primary legislation—to hardwire it in—but we understand the issue. It is being looked at currently in DECC. Obviously we do not want any situation to develop that will disadvantage what we are trying to do with the Bill as a whole. As the noble Lord, Lord Judd, pointed out, it is the vision of where we are going as a whole that is important in this Bill. That is apparent from the Bill and everybody's involvement in it. If we bear that in mind, it is important that these issues are resolved and DECC is looking at that at the moment. I hope that in the light of that explanation, the noble Lord will feel able to withdraw his amendment.

[Lord Whitty]

My Lords, I thank the Minister and everybody who took part in what was a rather wider debate than I originally envisaged. I thank particularly the noble Baroness, Lady Parminter, and my noble friend Lady Smith for their support for the amendment. My noble friend Lord O'Neill, not for the first time and I suspect not the last, provoked me into saying more than I ever intended and more than was particularly helpful to this amendment. As my noble friend Lord Lea said, the preference or otherwise is largely a matter for the fiscal system, which is already there. But if there is in addition a disadvantage to one sector as against another in the process, we should address that as well.

I am grateful to the Minister for saying that this is at least on the radar screens of the department. But it has been on the radar screens of the department and predecessor departments for at least eight years to my knowledge. We need to hurry this up.

Whatever I may have said earlier, this is not about giving a preferential position. Nor is it dealing with the whole of the ocean. It is dealing with those areas where a licence or lease has been given or is about to be given or where a project is already operating. The rest of the ocean is open to the oil and gas industry in any case. Nor is the amendment saying that in no circumstances will oil and gas be allowed to operate there. All I am requiring them to do is to negotiate to reach an agreement. I hope that the Government can help to set up a process whereby that happens and thereby to equalise the hoops that any new developer will have to go through. There are two different forms of consenting and they are not the same. Some would say that they slightly—I think they are significantly—disadvantageous to renewables as against oil and gas.

I am grateful to the department for the terms in which the Minister has responded. However, I ask her and her officials to hurry up because this is an outstanding issue. In a sense, the oil and gas industries can go to their boards—the noble Lord, Lord Oxburgh, used to sign these off himself. Yes, they have the option of going anywhere in the world, but so does the kind of City finance that, by and large, offshore, wind and certainly the newer technologies of tidal and wave will have to go for. They also have the option of going elsewhere and it is important that the element of risk is reduced and that coexistence is a reality. It must be coexistence between equal partners in the delivery of our energy mix and not one that gives an advantage to one sector as against another.

Having said that, I accept the Government’s good faith in looking at this. I would be grateful if in a month or two we could complete that process and come back with a system that addresses the problem. In the mean time, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Jenkin of Roding]

I understand from the impact statement on this that some possible competition issues will need to be addressed as to whether the Coal Authority will have, in some way, a preferred position as against other contractors that may compete for the business. I hope that my noble friend can give me some assurance that that will be taken account of.

[Baroness Northover]

My Lords, I am delighted to have been assigned this clause stand part debate, because therefore I am by proxy receiving congratulations that are not deserved, which is a great pleasure. My noble friend has raised another issue on the substance of the clause, so I shall spell out what it seeks to do.

This simple clause extends the Coal Authority’s powers in England and Wales, which would enable the Coal Authority to use, and charge for, its existing expertise in remediating coal-related environmental and safety liabilities in non-coal related contexts. For example, it could assist other public bodies and private landowners in dealing with mine-water treatment and subsidence or surface hazard remediation outside the coal-mining sphere, but that would not take precedence over the authority’s existing statutory duties.

On whether we are talking here about non-flat playing fields again, I assure my noble friend Lord Jenkin that the clause enables the Coal Authority to work in the area without cutting across its statutory duties, but it does not give it precedence in the area. It does not even place an obligation on the Coal Authority to act in this way or on others to use it; it is just an enabling power. I hope that that reassures him. We will return to the Public Bodies Bill—maybe not, depending on what happens with the AV Bill—and no doubt we will get into further discussions on what it says. In the mean time, I hope that the noble Baroness will be happy not to oppose the Question that the clause stand part.

[The Duke of Montrose]

It is nice to have an explanation given as to how the powers will affect England and Wales. It will be reassuring to the Scots on the next clause, as I am sure that the same arguments will apply there.

[Baroness Northover]

I confirm that Clause 101 mirrors the clause and extends the powers to Scotland, so I hope that it is not room 101.

[Baroness Smith of Basildon]

My Lords, I am grateful to the noble Baroness who I think has taken on board my comments about Schedule 7. I apologise if I was not more explicit when I asked the noble Baroness the question, but will there be extra funding to go with those extra responsibilities for the Coal Authority?

[Baroness Northover]

To clarify, this is not an extra responsibility. It extends the powers of the Coal Authority. This would not lead to an additional call on the public purse as the authority would be able to charge for this additional non-coal work if it wishes to undertake it. It is not appropriate even to be thinking about whether this should be a further charge to the public purse.

Clause 100 agreed.

--- Later in debate ---

[Baroness Northover]

My Lords, we come back to the heart of the Bill at its conclusion. At the very start, my noble friend Lord Marland laid out the vision of this Bill. These amendments, which are about the transparency required to ensure that we deliver what we are seeking to do, have brought us back there again. Therefore, I welcome the opportunity to be able to debate this set of issues. The Government are very committed to greater transparency, thus building on what the previous Government were committed to and we seek to take that further. It is extremely important that transparency enables the public to hold politicians and public bodies to account and we are strongly committed to that. We need to be very clear and very public about where we are heading.

On these amendments, I point out that publications by the Office for Budget Responsibility, the Treasury and the Department of Energy and Climate Change already provide information relating to revenues, tax expenditures and distributional impacts similar to those suggested in the amendment. They clearly are not especially popular in the sense that not everyone is totally familiar with them all. However, I thank the noble Lord, Lord Lea, for taking the time to go over these publications with DECC and Treasury officials and for discussing his amendments with them. His opening speech showed that a tremendous amount of material is already available and it reminded me of the discussions I hear my sons—both of whom are doing PPE—having about the economic effect of this and that and whether it will happen in this direction or that. Nevertheless, the noble Lord was able to do that, I suggest, because much of that information is available.

Obviously, we need to go further and faster, as I think we would all agree. However, a great deal of information is already available. We welcome the noble Lord’s suggestions about how to take this forward. I also point out that DECC produces an annual publication, alongside the annual energy statement, setting out the impact of energy and climate change policies on gas and electricity bills for households and businesses. People may not pay too much attention to that, but it is available.

The department is looking for opportunities to build on and refine the analysis so that it is more accessible to the public, and the noble Lord’s contribution will feed into that. For example, we expect the next publication to include an analysis looking at the impact on illustrative energy-intensive users, which was mentioned just now. It is also extremely important to remember—the previous Government deserve credit for this—that the Equality Act, which we passed just before the general election and which we are now implementing, requires an assessment of the impact in various areas, including on those who may be in deprived groups, of various policies right across government. Wearing one of my other hats, I know that this is indeed happening and that the assessment of the impact of policies is being made in a way which I think the noble Lord, Lord Lea, would welcome. This is an early stage of the development but it is very important and will be taken forward. It is already happening.

I turn to the important elements emphasised by the noble Lords, Lord Deben and Lord Whitty, which is that we need to stand back and look at what we are seeking to do here. Clearly, we need to get the case across. Transparency helps, but do not doubt that statistics will be used by both sides in different ways as they seek to bolster their own arguments. In the end, that is why it comes down to what the Government decide should be the right strategy. There is a tremendous amount of agreement in the Committee, although there are one or two dissenting voices, but generally speaking we know where we are trying to head and we certainly wish to have greater transparency so that we can take people with us. In the end, the decision will go beyond that. Either we have to tackle climate change and we have the tools in this Bill to do that, or we do not. Generally, I think we agree that we need to do that, which is why we have introduced the Bill and why we are taking these proposals forward.

As there is already a lot of information available and as we welcome the suggestions about how we improve on that, how we take that forward and how we ensure that there is as much public discussion as possible, although not necessarily on the details of hypothecation, I hope that the noble Lord will be willing to withdraw his amendment.

[Lord Lea of Crondall]

My Lords, I thank everyone who has spoken, not least the Minister, for a very positive and helpful conclusion. I will disappoint her if she thinks that I am inclined to leave the matter here. Some alterations are needed and some of this material needs to be altered by an amendment on Report. I hope my Front Bench agrees, but I have yet to find out.

I will just, if I may, say that I did not know the Equality Act had been a topic in looking at this. I know that there is horizontal equality, but I did not know that vertical equality was part of the scope of the discussion arising from the Equality Act.

[Baroness Northover]

Perhaps I can help the noble Lord by pointing out that you have to look at an impact assessment of everything you are doing to see how it might disproportionately affect different groups. Therefore, policies such as this come within that. Everything that the Government do comes within that.

[Lord Lea of Crondall]

I thank the Minister. She knows that I have the highest regard for her. But can I take it one by one, if I may put it that way? I am particularly grateful to the noble Baroness, Lady Noakes, for her broad support for the idea. She said that it was something that needed to be raised even though she stopped short of making it a mutual admiration society. That would be awkward for both of us. Many things that she said rang a bell with me. I will look at all the points that she raised.

We all know the noble Lord, Lord Deben, much better as Mr Gummer. He may remember Rio where I was a delegate, in 1991 or 1992. I am sorry that he adopted a slightly theological approach. I will rephrase that: it was an ideological approach. It was as if anybody raising the point that I was raising must be trying to destroy the policy. I have been on this wicket batting and scoring runs for as long as he has and we will hit a brick wall—to mix my metaphors, which I always do—unless we get some more buy-in in Burton upon Trent. I am very glad that Burton upon Trent has been mentioned four or five times. I will rechristen the right reverend Prelate the Bishop of Chester, the Bishop of Burton upon Trent. That will help also the scoreline.

I take issue with the noble Lord, Lord Deben, about this point. Surely it is making a mountain out of a mole hill to say that the Treasury cannot do the work. As we have just heard from the Minister, a lot of this material is around.