Energy Bill [HL]

Baroness Parminter Excerpts

Tuesday 8th February 2011 Grand Committee

[Lord Judd]

In the cause of cohesion on this side of the Committee, might I say that it has been very intoxicating to have the thesis and the antithesis and, like others, in all humility I would like to put myself on the side of the synthesis? It seems to me that it would be tragic if we got into a vicious either/or battle. The issue is how to bring these things together constructively. I make the observation—no doubt I could be described as an unreconstructed politician of former days—that it seems to bring home to me the hazards of a market-dominated approach in these crucial strategic issues and that we really need very effective strategic planning into which the private sector can then feed its contribution. This debate brings home the need for a strategic approach, not just targets but how they are to be delivered because that is the crucial issue all the time. It is not just to spell out the aspirations; it is actually to have the mechanisms there to ensure they happen.

I take the urgency and importance of the vigorous argument of my noble friend Lord O’Neill seriously, and if I have one anxiety it is on that point. Employment, security, economy, the real immediate needs—those are all crucial and it would be naive to overlook them. However, I am fearful because we seem to keep getting caught up in the immediacy of the management situation, but the Bill should unashamedly take a visionary approach to the long-term future. I am sure that my noble friend Lord O’Neill would be the first to agree that he is talking about what we all know to be finite resources. That is crucial at this juncture. Sooner or later, this country will have to face the issue. It is not an ephemeral kind of idea; it is absolute fundamental practicality that the economy of this has to keep going at some future point without the availability—it is taken for granted—of the finite resources. If we always get into the crude argument, the long-term thinking will always be pushed to the side. We will always hear about all the difficulties and doubts.

Objective considerations about the reality of what is proposed are important, but many of these things are challenges to be overcome and to be got right; they are not excuses for delaying and pushing to one side. I for one put firmly on record that whether or not the idea is acceptable as an amendment, my noble friend Lord Whitty is to be warmly congratulated on again having brought it home to the Committee, in his characteristically firm way, that either we are serious about alternatives or we are not. If we are, we have to start putting some consistent muscle and priority behind those alternatives and stop saying that they are an also-ran to be fitted in when there are no other objections to be raised.

[Baroness Parminter]

I support the principle of creating a level playing field, to which the noble Lord, Lord Whitty, referred. The question seems to be about whether a reasonable dispute resolution process is in place for future conflicts between renewable energy and oil and gas. That is the heart of the issue, on which the Committee ought to focus. As it stands, the law gives the Secretary of State the ability to terminate offshore wind farm leases early, which implies primacy to oil and gas developments. That is clearly not the wish of the Government or in support of the policy developments with which we seek to move.

The noble Lord, Lord Whitty, has done well to remind us that that could seriously undermine the financing of future developments. While it is fair to say that until now financing has been less controversial and difficult, it is clear that offshore wind projects are moving further offshore, are larger and are going within known oil and gas provinces. That will make the financing of those projects more complex, so we need to consider seriously any barrier to the investment for them.

We all recognise that there is an importance to the coexistence between oil and gas companies and renewable operations. I pay tribute to organisations such as RenewableUK that have put a lot of effort in, with the support of DECC, to draw up protocols and guidance so that the respective companies can work in harmony, as they have done until now, finding a way forward where there are areas of the seabed on which they both wish to operate. The issue is whether a reasonable dispute process is there for the future; we need that level playing field.

Therefore, while there might be questions about this amendment, it is right and proper that the noble Lord, Lord Whitty, has raised it. As my noble friend Lord Jenkin has mentioned, I too hope that this issue will get further consideration. If this clause is maintained, would it not be more appropriate that there should be compensation if these leases were terminated early in order that there is a degree of parity between the respective businesses in the field?

I welcome the principle of the necessity for a level playing field and I hope that ongoing discussions might look at some of the wider issues around compensation for a reasonable dispute resolution process.