Common Agricultural Policy and Agriculture and Horticulture Development Board (Amendment etc.) (EU Exit) Regulations 2019

Debate between Baroness Vere of Norbiton and Lord Grantchester

Wednesday 20th March 2019 Grand Committee

[Baroness Vere of Norbiton]

Perhaps the noble Earl might speak to the Minister afterwards.

[Lord Grantchester (Lab)]

I am grateful to the Minister for his introduction to the bundle of regulations before the Committee today. I declare my interests as listed in the register and that I receive EU funds under the CAP schemes that we are discussing here.

Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2019

Debate between Baroness Vere of Norbiton and Lord Grantchester

Wednesday 27th February 2019 Grand Committee

[Lord Grantchester (Lab)]

I thank the Minister for her introduction to the order before the Committee and for undertaking prior discussions with her team. As she said, this order, while not specifically made to cover the scenario where the UK leaves the EU without a deal, nevertheless makes provision for a no-deal exit with the repatriation of authorising authorities and regulators. It also corrects a series of deficiencies in retained EU law on ozone-depleting substances under Part 2 and fluorinated greenhouse gases under Part 3. The order therefore maintains the 79% cut on a UK basis, as for example in F-gases between 2015 and 2030, as the Minister stated, by steadily reducing quotas for companies that operate in this field. The order maintains that it will continue.

Although many of the changes introduced through this order on the transfer of powers currently exercised in Europe to the UK are technical in nature, other minor noteworthy changes could be construed as shifts in policy. Labour certainly does not challenge the order and will approve it today.

Although the order was laid in December and subsequently relaid on 6 February following exchanges with the Joint Committee on Statutory Instruments, I understand that it is essentially the same document. The order has not been flagged by your Lordships’ Secondary Legislation Scrutiny Committee, but it is worth recognising that progress has been made in several areas in which there have been concerns and to which the Minister drew attention. However, there are a few questions around these outcomes, which I will highlight for the Minister.

It is good to note that the UK Government and the devolved Administrations have agreed to the repatriation on the basis of a single UK-wide quota. This quota, following dialogue with the relevant companies on how much they place in the UK market, will be set at 12%, roughly aligned with the size of the UK’s population relative to the EU. That the UK’s usage aligns in this way is certainly interesting. Under paragraph 2.8 of the draft Explanatory Memorandum, it is agreed between the Government and the devolved Administrations that, should an Administration wish to diverge from the protocol in the future, they must consult the others before doing so. Have the Government consulted the Commission on whether the EU has also agreed to the 12% and on whether, should the UK in the future wish to diverge in any way from the process agreed in the 1987 Montreal Protocol, it will consult with the EU and others before undertaking any divergence?

Paragraph 6.2 of the Explanatory Memorandum states that the Environment Act 1995 will be amended to include a charging regime under the authority of the Environment Agency on a UK-wide basis. I certainly join others in saying that good progress is being made, with this having happened, but I note that these changes are on a cost recovery basis. Can the Minister confirm, because it was in some divergence to the £60,000 figure she gave in her introductory remarks, that the total amount costed in the other place was estimated at £500,000 per annum for the administrative costs? I understand that the Government have put this out to consultation regarding cost recovery, so I have a few questions for the Minister regarding the scope of that consultation.

Paragraph 6.2 also states that the EU allocation mechanisms for quotas and the format for company reports will not be replicated in the UK, as different IT systems will be established here. I understand that this IT system has also been completed, and I congratulate the Government on that achievement as well; while not wishing to appear churlish, let us hope that it will continue to operate successfully under stress.

Returning to costs and charters, I understand that this set-up cost has been financed through the Government. The Minister in the other place, Dr Coffey, stated:

“Future charges will be for the overall regulation system”.—[Official Report, Commons, Eighth Delegated Legislation Committee, 26/2/19; col. 8.]


Will the Minister clarify what that means for cost recovery? Will there be an element of repayment of capital included in running cost recovery of fees from operating companies? That is, will companies ultimately be charged for this set-up cost?

The Government will also continue paying into the Montreal Protocol assistance fund to help developing nations across the world move to less harmful gases. Can the Minister confirm whether industry will be re-charged any of these contributions? It would be good to understand whether the Government have included either of these potential costs as possible cost recovery items out for consultation.

The final concern in this regard is about impact assessment. While the Government are satisfied that the cost is de minimis, as the Minister explained, have they assessed whether the new charges could impact on companies’ costs in a way that will affect whether they continue to operate in the UK? Several companies operate across the UK and in the EU, and their quotas will come from both in future. Are the Government satisfied that any disruption will not detrimentally impact on these companies continuing in the UK in such a way that the Government may have to use their new powers of increasing quotas to make up for a closure of any company’s shortfall to maintain the UK in a steady state? In their dialogue with companies when undertaking these regulations, can the Government confirm that companies operating across borders are generally satisfied with the outcome? One element behind this question on reciprocity—mentioned by the noble Baroness, Lady Miller—is whether UK trading certificates and authorisations will be accepted in the EU after exit in the same way, replicating the recognition of EU certificates in the UK.

I am sure that all contributors to this order will agree that these regulations are vital to the safeguarding of the environment across the world. Can the Minister confirm that, despite abiding by the increasing quota restrictions since 2015, these have been effective in reducing emissions? That is, are they working as envisaged, without loopholes appearing such as displacements on to other gases not specified in the protocols?

While these regulations appear technical, they will certainly be important to companies operating in the UK and the EU, especially given the lack of coherent data on how they may be reapportioned in individual quotas. Can the Minister confirm that, through the Government’s discussions, all the operators essentially agree with the regulations and their individual outcomes, and that any potential disputes can be reconciled via due process through the Environment Agency?

[Baroness Vere of Norbiton]

I thank all noble Lords who took part in what has turned out to be a very interesting and I hope fairly straightforward debate. I have the answers to nearly all of the questions, which is always an added bonus.

I would like to thank the noble Baroness, Lady Miller, for her congratulations on getting the system up and running. We will take congratulations where we can get them. I was very interested by her observations on the wider environment in relation to ozone depleting substances, F-gases. I have a few responses to the questions that she raised. The UK and other parties raised their serious concerns about carbon tetrachloride in China at the Montreal Protocol meeting last year. China has agreed to take enforcement action. We will continue to monitor the situation and make representations in that area.

The noble Baroness also mentioned an F-gas being 23 times more powerful than carbon dioxide. That is true: there is an F-gas—there are many different types of F-gas—that is 23 times more powerful, called SF₆. But this one is rarely used and accounts for less than 3% of F-gas emissions for the UK. It is the HFC emissions that account for 95% of UK F-gas emissions. As the noble Baroness pointed out, many other gases can now be used in various pieces of equipment to the same effect and industries are certainly moving over to those.

--- Later in debate ---

[Baroness Vere of Norbiton]

Yes it can.

[Lord Grantchester]

I was ready to jump up before the Committee was asked to agree the Motion, but I will sit down while the Minister answers the noble Baroness and I will then rise again.

[Baroness Vere of Norbiton]

I thank my noble friend for that comment—I was going to say that anyway. That would be part of the consultation process with the Environment Agency. It seems like a very good idea, but it should at least assess whether that is a viable option.

[Lord Grantchester]

I apologise for intervening perhaps a little too early on other Members. While paying great regard to the Minister, who has answered all the points most succinctly and very well, I wanted to get a feel for the impact on these regulations and the discussions Defra has had with the various companies. Has the Minister got a sense, or not, that they are going to cause disruption for companies operating in this field, albeit that they then buy and sell the quota in terms of moving in and out of different countries? I understand that happens already, but is there a sense of disruption to industry causing them some dismay, in bringing the regulations back into the UK?

[Baroness Vere of Norbiton]

I apologise to the noble Lord; he asked about that and I forgot to answer. The department has contacted every single supplier across the EU in this process, so we have a strong feeling of where the industry is coming from. We have spoken to key business, industry and environmental representatives as well. For example, the Federation of Environmental Trade Associations is an umbrella trade body representing refrigeration and air conditioning manufacturers and suppliers. We have spoken to the British Refrigeration Association, the air conditioning and refrigeration board and Mexichem, the biggest producer of F-gases in the UK. While there will certainly be some change, I have tried to highlight that the change will not be significant. If a company trades in the UK and the rest of the EU, it will have to apply for two different buckets of quota, but apart from that, much of the system will stay the same.

Ivory Bill

Debate between Baroness Vere of Norbiton and Lord Grantchester

Report stage (Hansard - continued): House of Lords
Wednesday 24th October 2018 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My Lords, this new clause tabled in the name of my noble friend the Minister and to which the noble Earl, Lord Kinnoull, has added his name means that existing insurance arrangements concerning ivory items are, for the most part, not affected by the Bill. It also ensures that owners will be able to continue to insure ivory items by exempting regulated insurance activities from the prohibition in Clause 1. Noble Lords will recall that this matter was raised by the noble Earl, Lord Kinnoull, in Committee and I am extremely grateful to him for bringing this matter to the attention of your Lordships’ House and for his ongoing assistance in this matter. I am sorry only that he has had to travel this evening and will therefore not be able to contribute to this debate.

The proposed new clause contains measures that will provide comfort to owners of items containing ivory and to insurers. It ensures that any insurance policy for, or covering, an item containing ivory that is extant at the time of commencement of this Bill is not affected by the Bill.

Secondly, the proposed new clause also exempts from the prohibition at Clause 1 a transfer of ownership from an insured person to an insurance company where the activity is regulated under the Financial Services and Markets Act 2000, as the result of the insurer paying out on a claim made against that item. Further, if that item is subsequently recovered and the original owner chooses to exercise their right to buy it back from the insurer in exchange for return of the consideration paid out, this will also be exempted from the definition of dealing in Clause 1.

However, should the original owner choose not to exercise this right, the insurance company will not be permitted to sell the item on to a third party for its pecuniary salvage value unless that item meets one of the categories of exemption and is registered or certified as such. The proposed new clause also covers transactions between insurers and reinsurers, for example when there is a takeover of an insurance business or when policies are transferred between insurers and reinsurers.

While the objective of the Bill is to prohibit the trade in items containing ivory, there is no desire to have an undue impact on the insurance industry or on consumers who own such items and wish to insure them. There will also be a desire for museums to be able to insure items containing ivory alongside other important pieces within their collections. This proposed new clause allows them to do so.

This proposed new clause will not in any way undermine the main objective of the Bill: to prevent trade in items containing ivory. It does, however, ensure a functioning insurance market for those owners of items containing ivory who wish to access it. I beg to move.

[Lord Grantchester]

I rise merely to thank the Minister for clarifying these issues around insurance, which will be helpful to many people. The noble Baroness has our support.

Ivory Bill

Debate between Baroness Vere of Norbiton and Lord Grantchester

Report stage (Hansard): House of Lords
Wednesday 24th October 2018 Lords Chamber

[Baroness Vere of Norbiton]

My Lords, the UK Government have acted in accordance with the devolution settlements and engaged throughout the process with each of the devolved Administrations on the territorial extent and implementation of the Ivory Bill across the UK. I am pleased to say that the Governments of Scotland and Wales have both clearly expressed their support for the Ivory Bill. We have also worked closely with the Northern Ireland Department of Agriculture, Environment and Rural Affairs.

The UK Government’s engagement with the devolved Administrations concluded that dealing in ivory items either within a devolved country or between a devolved country and another part of the UK is a devolved matter. For instance, a dealing conducted wholly within Scotland or between Scotland and Wales will be devolved. Dealings between any part of the UK and a third country remains a reserved matter. The UK Government have therefore come to an agreement with the devolved Administrations to ensure that these devolved interests are protected through a number of amendments tabled in the name of the Minister.

The government amendments ensure that most regulations under the Bill that apply in relation to Wales, Scotland or Northern Ireland may be made only by, or with the consent of, Welsh Ministers, Scottish Ministers or the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. If a devolved Administration does not provide consent, it can make its own regulations. The only exceptions are the powers to set fees by regulations and the publication and consultation of enforcement guidance, which remain exercisable by the Secretary of State but will require consultation with Welsh Ministers, Scottish Ministers and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. These exceptions are made simply because the power to prescribe fees and the publication of enforcement guidance are technical matters.

We have also agreed to a minor amendment to specify Scottish Ministers as the appropriate body to publish a list of accredited museums. This change was requested by the Scottish Government as a reflection of the different status of Museums Galleries Scotland and Arts Council England and does not alter in any way the effect of this provision.

I assure noble Lords that the Scottish Government and the Welsh Government have confirmed that they are content that these amendments accurately reflect their devolution settlements and their rights under those settlements. These two devolved Administrations will issue legislative consent Motions ahead of Third Reading and the appropriate official procedure will be followed with respect to Northern Ireland. I beg to move.

[Lord Grantchester (Lab)]

I thank the Minister for her introduction and explanation of these amendments concerning the devolved Administrations. I listened carefully and I have one or two queries. It would be helpful if she could clarify the source and inspiration behind the amendments, bearing in mind that they were not tabled for Committee and so their impact was not debated. Will she outline the problem that her department seems to have stumbled across and to which these amendments are the solution? They seem to point to inconsistencies in the Bill between devolved competences and Clause 37(1)(b), on regulatory provision, that I need to grasp. Has the Minister’s department run into problems during dialogue on the Bill with one or other of the devolved Administrations? She did not seem to suggest that.

The Minister’s letter dated 19 October concerning the government amendments stated that the Secretary of State will be able to make regulations with the consent of the relevant Administrations, leaving aside for this purpose the requirement merely to consult on the fees or guidance. I remain unconvinced about how the involvement implied under consent will lead to more effective implementation of the Bill. On the contrary, there is concern that these amendments could result in unwarranted duplication of legislation and bureaucracy, at best, and regulatory divergence and differences at worst. It is regrettable that this group of amendments has been tabled so late in the process and that the House has not had more time to consider the matter. Will the Minister explain why she concluded that these provisions are necessary, bearing in mind that this is a reserved matter, as she said, and that there does not seem to be any policy differences between the UK Government and the devolved Administrations? Does she share the concern that the authorities will have to duplicate the canopy of administration when they may not have the required expertise in dealing with ivory or the trade in endangered species? Can she assure the House that these amendments will not lead to a delay in implementing the Bill or in commencing regulations or to it being implemented on different dates in different parts of the UK?

[Baroness Vere of Norbiton]

I thank the noble Lord, Lord Grantchester, for his comments. I reassure him that these amendments came out of lengthy discussions over time. They were laid when they were laid—in good time for consideration by your Lordships on Report, I think—as a result of a timeline issue. It was necessary to establish whether certain issues were devolved or reserved matters. In my opening remarks I made it very clear that we have listened carefully to the devolved Administrations and that we now fully understand how we can practically make sure that the Bill works in every country of the United Kingdom. I agree with the noble Lord that there could be concerns about bureaucracy and duplication but I think that because of the conversations we have had with the devolved Administrations, that will not be the case. Many of the systems will be used by every country. The enforcement regime will be the same, although it will be conducted by different people north of the border. OPSS, the enforcer in the first instance, operates nationally. When we look at these amendments, it is important that we respect the devolution settlement that we have reached with these nations. We thank the other Governments for their support in pushing this forward. Although the noble Lord has concerns, I reassure him that I believe they will not come to pass.

Ivory Bill

Debate between Baroness Vere of Norbiton and Lord Grantchester

Committee: 1st sitting (Hansard - continued): House of Lords
Monday 10th September 2018 Lords Chamber

[Baroness Vere of Norbiton]

My Lords, the Government are in full agreement with the principle of this amendment. We acknowledge the importance of transparency and providing information to the public. That is why, once the ban is in force, we intend to share publicly information on how the ivory ban is working in practice, as this will be essential to ensuring public confidence in the ban and the supporting systems. I therefore assure the noble Lord that we already intend to publish headline data on the number of registered items and exemption certificates issued and revoked each year, as well as the appeals, in line with the Data Protection Act.

Furthermore, regarding subsection (4) in the amendment, I confirm that we will further break down headline figures as far as we are able—for instance, to cover broad categories of items such as statues, reliefs and furniture. In light of these assurances, I ask the noble Lord to withdraw his amendment.

[Lord Grantchester]

I am very happy to receive such assurances and feel that maybe I have been the lucky one to be satisfied tonight. I am grateful to the Minister. Perhaps we can examine on Report how this may be put in the Bill so that more substance can be given to her reassurances. With that, I beg leave to withdraw the amendment.

Domestic Gas and Electricity (Tariff Cap) Bill

Debate between Baroness Vere of Norbiton and Lord Grantchester

Committee: 1st sitting (Hansard): House of Lords
Monday 11th June 2018 Grand Committee

[Lord Grantchester]

I shall speak to Amendments 21 and 24, which are in my name. Under Clause 4, Ofgem must undertake various actions by way of notice of proposed modifications, including giving notice that it proposes to make modifications. Amendment 21 specifies that Ofgem must provide reasons in a narrative that explains why it is making modifications—ideally, an assessment of why modifications are being proposed.

We all recognise that energy bills soared 20% between 2007 and 2013 and that the average household pays around £300 more today than it might otherwise do in a more competitive market. However, in the interests of transparency it is imperative that Ofgem outlines its reasons for setting the price cap at any given level for the benefit of suppliers and customers alike. That would help set parameters when undertaking later reviews and assist greater scrutiny.

Amendment 24 has been proposed following the debate last week in your Lordships’ House on the European Union Committee’s report Brexit: energy security. In its report the committee portrayed how the UK and the EU are already increasingly interconnected on energy. Already, high levels of gas are being piped from Norway and over 5% of electricity demand is being met from the EU, with estimates that this source of electricity supply is likely to increase to over 25%. At present the UK is a member of the internal energy market and the committee’s report underlines the risk should the UK not remain within the IEM. From evidence received, it is universally argued that the UK could be more vulnerable to supply shortages or challenges, making supply less efficient, with the result that retail prices to consumers could rise. Amendment 24 specifies that the consequences of Brexit must become part of the review of the market and the application of the cap.

In the Government’s response to the Select Committee, they failed to address this point while being pressed to undertake an assessment of the consequences of the UK leaving the IEM. How do the Government propose that Ofgem should assess the situation in its review? The effect should be recognised for the application of the cap and, hence, included in the Bill.

[Baroness Vere of Norbiton]

My Lords, I will speak to Amendments 20, 21 and 24, which relate to the reasons for this cap and the details of its implementation.

The noble Baroness, Lady Featherstone, proposes a review of the energy market, in particular setting out the reasons for the cap, whether it could have been avoided and how a price cap can be avoided in the future. The Bill follows on from an extensive two-year investigation undertaken by the Competition and Markets Authority. This reported that there was, in effect, a two-tier market, with good value tariffs for those who engage in switching suppliers but for those who do not, the market was uncompetitive and these consumers were being charged an unjustifiably high price for their basic energy needs.

The CMA also found that the significant market share of the largest energy companies and the use of the standard variable tariffs had led to a situation where customers, including some of the most vulnerable in society, are simply paying too much, They are also paying for the inefficiencies of the larger companies to the tune of around £1.4 billion a year. The noble Baroness, Lady Featherstone, mentioned E.ON and its 41%. I was not quite sure what she was referring to and whether that was a return on capital. A profit increase of 41% would depend on its starting and end points; it is not hugely relevant, depending on the leverage of the company. Potentially, we should look at its return on capital, which is far more instructive.

It was as a result of this very detailed, two-year report that the Government and Ofgem undertook to protect those on the poorest-value tariffs on a temporary basis until the conditions for effective competition are established. In addition, Ofgem is actively considering the future of the energy retail market. This work is looking at barriers to innovation and whether the current market model needs to be reformed. Another review at this stage would simply tell us what we already know and take resources away from the vital work being carried out to support the necessary reforms of the market.

On Amendment 21 proposed by the noble Lord, Lord Grantchester, I am sure he is aware that, as part of the licence modification process, Ofgem will be required to state that it proposes to make the modifications and their effect. Subject to the will of Parliament, it is clear that this action is going to take place; indeed, suppliers and other interested parties are actively involved in the consultation being conducted by Ofgem. The amendment is therefore not necessary.

The noble Lord’s Amendment 24 relates to those matters which Ofgem should consider during its review of the level of the cap, which must take place at least once every six months. It is incredibly important that Ofgem, as the industry regulator, be allowed to consider what it feels matters the most. He may be pleased to learn that Ofgem has published a consultation paper which sets out the matters it proposes to review when considering the level of the cap. That will of course include wholesale prices and many of the factors raised in the debate of last week, which he mentioned. Hence, the amendment is unnecessary at this stage.

I hope that the noble Baroness and noble Lord are content with my explanations and will be willing to withdraw or not move their amendments.

Nuclear Safeguards Bill

Debate between Baroness Vere of Norbiton and Lord Grantchester

Report stage (Hansard): House of Lords
Tuesday 20th March 2018 Lords Chamber

[Baroness Vere of Norbiton (Con)]

My Lords, Amendments 4 and 5 seek to place a time limit, also called a sunset, on use of the power in Clause 2. I would like first to explain how Clause 2 works.

Clause 2 contains the power to amend by regulation the Nuclear Safeguards and Electricity (Finance) Act 1978, the Nuclear Safeguards Act 2000 and the Nuclear Safeguards (Notification) Regulations 2004. It can amend those three pieces of legislation only, and amendments can only be those in consequence of a “relevant safeguards agreement”, that being very specifically an agreement relating to nuclear safeguards to which the UK and the International Atomic Energy Agency are parties.

This is a narrowly drawn power to enable the amendment of references in this legislation to provisions of safeguards agreements with the International Atomic Energy Agency—which I shall refer to simply as the agency. This legislation enables the agency to carry out its activities in the UK, including by providing it with legal cover for activities of its inspectors in the UK. For the UK to have a domestic safeguards regime in future, it is essential that the legislation specified in Clause 2(1) can be amended to make correct reference to new safeguards agreements that the UK enters into with the agency.

The legislation cited in this clause is extremely unusual in that it makes detailed references to specific provisions of international agreements. As such, these references—for example, to articles—are likely to change as a result of any amendment of, or change to, those agreements. The power in the Bill is therefore necessary to make the changes to the relevant legislation to update those references when the new agreements are in place.

The UK’s safeguards agreements with the agency, and the agency’s ability to perform safeguards activities in the UK in accordance with those agreements, are absolutely fundamental to the agency’s application of safeguards in the UK. While the power is narrow, it is essential and underpins the entire regime. The unavoidable nature of negotiations means that we are tied to timing uncertainties and this power constitutes the only way we can address that uncertainty.

The Delegated Powers and Regulatory Reform Committee agreed that the power in Clause 2 is necessary and appropriately framed. It recognised that it is intended as a way of reflecting the new agreements with the agency required to establish the UK’s civil nuclear safeguards regime, and recommended preventing the use of the power after a period of two years had expired.

The Government accept the principle of the committee’s recommendation, and of Amendment 5, that we should not retain this power for an indefinite period. However, the regime is heavily reliant on wider international negotiations and it is therefore of the utmost importance that the power is not sunsetted prematurely. Prematurely sunsetting this power could result in the relevant provisions becoming ineffective, leaving the UK without an effective domestic safeguards regime and in breach of any new international safeguards agreements put in place with the agency. The potential consequences of such failures are serious. The UK’s reputation as a responsible nuclear state would be damaged.

The international negotiations relevant to this power are unprecedented in their nature. I consider it essential to retain a provision enabling the UK to adapt to any circumstances affecting the timing of the commencement of international safeguards agreements between the agency and the UK. I hope that, in the light of my explanation, noble Lords will feel able not to press their amendment, and the House will feel able to support government Amendment 4. I beg to move.

[Lord Grantchester]

I speak to our Amendment 5, which is in this group. In Committee, we proposed that the power of the Secretary of State to enter into relevant international agreements without parliamentary approval be limited to a two-year period. The Government have accepted the principle but wish to extend the power to five years, as the Minister has proposed. We accept that this power is necessary and that there is oversight in its use through the Constitutional Reform and Governance Act 2010.

However, I would like to press the Minister on why the Government think that a two-year period that coincides with any transition period could be insufficient to conclude necessary wider international agreements. We certainly do not wish to leave the UK without an effective domestic safeguards regime, in breach of any new international safeguards agreements put in place with the IAEA, but the Minister has not properly explained why she thinks it could be premature if this sunset clause were brought in at a period of two years.

The government amendments seek a further three years beyond the end of any transition period. Can the Minister clarify the kind of agreement she thinks could still be outstanding? I wonder whether included here could be the circumstances already drawn attention to in the earlier amendment of the noble Lord, Lord Broers, under proposed new subsection (3)(c), regarding international agreements with third countries, whereby the NCA agreement with, for example, the US could well take longer than any transition period. He argued for a suspension to our leaving Euratom.

[Baroness Vere of Norbiton]

I thank the noble Lord for his contribution. It is clear that the sunset provision we are discussing relates to the arrangement with the agency; it does not cover the nuclear co-operation agreements. Those are separate agreements.

We have thought very long and hard about the sunsetting of this—I think it falls into the territory of known unknowns—and we believe that two years is certainly too short and that five years is the right length. There may be circumstances that we cannot possibly foresee at this time that will make it necessary for the sunset clause to exist for slightly longer. We have now agreed—we hope, because nothing is agreed until everything is agreed—the implementation period. I think that noble Lords should take quite a lot of comfort in that implementation period in that, during that period, our safeguard arrangements will still be provided by Euratom. Indeed, it gives us an extra 21-month period for these arrangements to be put in place. Nevertheless, I think that the five-year period is appropriate. We have looked at the recommendations of the DPRRC and agree with them. A period of five years is the most appropriate time.

Nuclear Safeguards Bill

Debate between Baroness Vere of Norbiton and Lord Grantchester

Committee: 2nd sitting (Hansard): House of Lords
Thursday 1st March 2018 Lords Chamber

[Baroness Vere of Norbiton]

Of course, it is very difficult to be specific on that but, as we know, we are focusing on four NCAs in the first tranche. The noble Lord will know that there are many other countries with which we would like to have an NCA in future which perhaps do not fall within the first tranche. The second thing to recognise is that this is not just about entering into new NCAs; it is whether new obligations arise as conditions change within the international community for safeguarding. This gives us the flexibility, but it is not drawn so widely that we can do whatever we like.

While we cannot accept Amendment 8, I would like to provide reassurance of the scrutiny that will be in place to ensure that there is proper oversight in the use of this power. Pursuant to the Constitutional Reform and Governance Act 2010, we would expect any new international treaties relating to safeguards to go through the ratification processes set out in that Act. Use of the power to make regulations specifying agreements as “relevant international agreements” is itself subject to the draft affirmative procedure in all cases, and any regulations made under the power that relies on these agreements must be consulted on. I am therefore confident that an appropriate level of scrutiny and restriction of powers is already in place.

I recognise the principles which lie behind the proposed amendments, and I hope that noble Lords will accept why I cannot accept them today. I therefore hope that the noble Lord, Lord Grantchester, feels able to withdraw his amendment.

[Lord Grantchester]

I thank the Minister for that very full response and am grateful, too, to hear the whispers between her and the Minister on the Front Bench. Our expectations are always full of hope, but I am rather troubled by her response to Amendment 8, and we will need to consider her reply very carefully. I am not sure that the power should be enduring. However, she said in her response to the noble Lord, Lord Fox, that it is important that there continues to be scrutiny and oversight of these agreements. We will study her response very carefully. In the meantime, I beg leave to withdraw the amendment.

Nuclear Safeguards Bill

Debate between Baroness Vere of Norbiton and Lord Grantchester

Committee: 1st sitting (Hansard - continued): House of Lords
Thursday 22nd February 2018 Lords Chamber

[Lord Grantchester]

My Lords, we have added our names to Amendment 4 in the name of the noble Lord, Lord Warner. It is Labour policy to remain a member of Euratom or to continue equivalent arrangements with it. The Conservative Government have been reckless to reject immediately the UK’s membership of Euratom. Your Lordships’ discussion in Committee last night on the withdrawal Bill highlighted how the Euratom treaty is distinct from the EU treaty. The Government state that, because there is an overlap of membership, with the same nation states as are in the EU, it is part of the same organisation. However, the two treaties are legally distinct, which has not been contradicted by the Government.

The Minister said this morning that both organisations are uniquely and legally joined. He needs to explain how they are so legally. It is reckless to make the theoretical and technical oversight of the European Court of Justice a defining reason, when the UK is far from ready to undertake its own safeguards regimes to the standard maintained by Euratom. The ECJ has never been called on to make a ruling.

Furthermore, the Government have committed to continue as far as possible through negotiations to be in close association with Euratom. They must be exhaustive in their endeavours and report back to Parliament on the outcome. If it is no longer possible to establish an association, they must say so, with reasons.

Amendment 9, in the names of the noble Lords, Lord Teverson and Lord Fox, and the noble Baroness, Lady Featherstone, map out further agreements to be pursued before withdrawal. It requires the Secretary of State to request “a transition period” so that the UK,

“can continue to benefit from existing nuclear safeguard agreements”,

with the approval of the IAEA, that the ONR is the approved UK safeguarding authority. My noble friend Lord Hunt of Kings Heath has spoken to Amendment 12 on the transitional period. It must be recognised that approvals of nuclear co-operation agreements are sequential to the recognition by the IAEA that the UK safeguarding standards are sufficient. Although these NCAs may be progressing, their ratification will necessarily take some time and may spill over into any transition period. We endorse the sentiments behind Amendment 9 as crucial to maintaining the UK as a credible internationally recognised nuclear state operating to international standards.

Amendment 14, in the name of the noble Lord, Lord Carlile, would insert a new clause stating that before leaving Euratom the Government must publish a report detailing agreements reached with Euratom to ensure compliance with international non-proliferation agreements and lay appropriate regulations to give effect to their implementation. We understand and are in unison with the importance noble Lords on all Benches place on the highest standards, the nearest equivalence, the closest association, with any necessary transition period, to replicate the regime currently operated under Euratom. We support the amendment of the noble Lord, Lord Warner, that says the Government must keep Parliament informed regarding the ongoing UK status with Euratom. The noble Lord, Lord Teverson, has also said that it is far from clear where we will be in March 2019, when timing is such a critical issue.

[Baroness Vere of Norbiton (Con)]

My Lords, I thank noble Lords for the opportunity to address this important set of issues around the UK’s future relationship with Euratom. As my noble friend Lord Henley said, the EU and Euratom are uniquely legally joined. Noble Lords will be aware that when we formally notified our intention to leave the EU, we also commenced the process of leaving Euratom. I repeat my noble friend’s assurances, however, that the Government want to maintain the continuity of our mutually successful civil nuclear co-operation with Euratom and other international parties when we leave the EU.

The first half of the proposition of Amendment 4 —that,

“it is no longer possible to retain membership of Euratom”—

has already passed. On 29 March 2017 the Prime Minister notified President Tusk of the United Kingdom’s intention to withdraw from Euratom. We are withdrawing from Euratom but we want a close relationship with it in the future. I believe that it would be deeply irresponsible of Parliament to pass an amendment which, quite explicitly, prevents us from using the powers in this Bill until we have attempted to do exactly the opposite of what the Article 50 letter says we are doing. That leaves the second half of the proposition: that we achieve, “an association with Euratom” that means that it is Euratom rather than our own regulator, the ONR, that carries out safeguarding in the UK after we leave the EU. To reiterate the point made by my noble friend, while the Euratom treaty allows for the conclusion of association agreements that allow third parties to participate in some Euratom activities, these agreements have so far been limited primarily to research and training activities.

This amendment would require us to have explored every avenue and concluded that,

“it is no longer possible”,

before we make regulations to enable the UK’s own domestic regime. That presents enormous timing difficulties and will introduce a risk of the one thing I believe everyone agrees we must avoid—being left with nothing in place from day one of Brexit. I do not believe that the industry would support such a position. We simply cannot await the outcome of the future relationship discussions before we use the regulation-making powers in the Bill. Of course, it may all happen very quickly but, then again, it may not. It would be deeply irresponsible to put ourselves in a position where we cannot exercise the powers in the Bill.

Scotland Act 2016 (Onshore Petroleum) (Consequential Amendments) Regulations 2017

Debate between Baroness Vere of Norbiton and Lord Grantchester

Thursday 30th November 2017 Lords Chamber

[Lord Fox (LD)]

My Lords, I broadly welcome the devolutionary nature of this instrument. I think that my noble friend beside me would not forgive me if I did not say that we prefer an expansion of renewable energies rather than hydrocarbons, whether in Scotland or in the rest of the United Kingdom, and that should be put on record.

I am slightly confused and I may have misheard, so perhaps the Minister can guide me. I thought that the Minister said that consultations in drawing up these regulations had gone ahead with the Scottish Government, but the briefing says that there was no consultation. I would hope that these measures have been brought forth with the full understanding and consultation of the Scottish Government and I expect that they have. In that measure, I have nothing else to add.

[Lord Grantchester (Lab)]

I thank the Minister for introducing this measure to your Lordships’ House. As she explained, it is consequential to the Scotland Act 2016, commencing further devolution to Scotland once we undertake a similar instrument extending such powers to Wales under the Wales Act 2017. These provisions are included in the Energy Act 2016. The regulations devolve licensing power for petroleum exploration and development to Scotland. It is noted that this includes fracking.

The regulations provide for the position both before and after the commencement of the Wales Act 2017, which makes the equivalent provision for devolution of onshore oil and gas licensing to Wales. There is no material change to taxation legislation and no direct cost to business from these regulations.

These Benches entirely support and agree with the regulations. My only question arises from the lack of a commencement date. Does the Minister have any prospective date in mind that the Scottish Parliament can look forward to?

[Baroness Vere of Norbiton]

I thank noble Lords for their contributions to this short debate. The noble Lord, Lord Fox, mentioned that the Liberal Democrats would like to see more renewable energy in Scotland. I echo that. It is a matter for the Scottish Government’s process. I ask the noble Lord to forgive me if I was unclear on the consultation process. There has been full consultation with the Scottish Government. There has not been a broader public consultation because that had already happened in the Scotland Act process.

On the point raised by the noble Lord, Lord Grantchester, onshore oil and gas includes hydraulic fracturing, which has been subjected to a temporary moratorium in Scotland for a little while now. When these powers go to Scotland, it will be for Scottish Ministers to decide whether they want to change the way in which they undertake the moratorium. That is a decision for the Scottish Government. On commencement, the regulations will commence at the same time as Section 48 of the Scotland Act, as soon as the negative regulations have been laid.

Renewables Obligation (Amendment) (Energy Intensive Industries) Order 2017

Debate between Baroness Vere of Norbiton and Lord Grantchester

Thursday 30th November 2017 Lords Chamber

[Baroness Vere of Norbiton]

I thank the noble Baroness and take on board that she said “those who did not deserve it”.

She also talked about the polluter pays principle. I do not think that the department would say that we are turning our back on that. We believe that all industries should be looking at energy-efficiency measures, particularly the EIIs. Many of them operate on very small margins. They are constantly looking at ways to increase their margins and energy efficiency is one of those ways.

I turn to the many points raised by the noble Lord, Lord Grantchester. If I cannot provide full clarity, I promise that I will write to him. He mentioned the long-term economic plan. Of course we still have one and it is made up of all the measures that we are putting in place. Most recently we had what I feel was a very successful announcement in the Budget. There is also the industrial strategy and there are many more things to come, so we will be building a Britain fit for the future.

Direct competitors are a very important issue and we looked at it in great detail. Direct competitors are companies that compete with the EIIs and, if they do not get this benefit, they will be at a disadvantage. When the state aid notification was put in in 2015—noble Lords will recall that there was much comment about the steel industry at that time—we split it into two sections, the first being for the EIIs which have 20% electricity intensity. With the second, we were hoping to build a group of people of average sector electricity intensity and EU nomenclature of manufacturing products. We need two different criteria to define these groups. We have not yet had approval for the second but we are not giving up. We are considering the options available to us for these direct competitors within the scope of state aid guidelines. Resolving this issue will need a fair amount of work and further discussions with the EU Commission.

The noble Lord, Lord Grantchester, mentioned how costly this would be for consumers of these additional direct competitors. We are not in a position to say this at this time because we do not know how many of those organisations would be included in this new group of people.

The noble Lord made a number of comments about the average cost and increases to bills. I have seen no figure greater than 0.7%. However, I should like to write in detail to the noble Lord. I believe there has been some mix-up in my mind, the noble Lord’s mind or the memorandum about whether a business is a small business or a small energy user. Obviously, a large business could use a small amount of energy.

I am afraid I shall have to write to the noble Lord on other issues around the levy control framework.

The RO exemption is a key component of our programme to reduce electricity costs for EIIs. It will help avoid putting these industries at a significant competitive disadvantage.

[Lord Grantchester]

In her remarks and answers to me, for which I am grateful, the noble Baroness omitted anything on my questions about fuel poverty. If she could make sure that that is included in her reply, it would be greatly appreciated.

[Baroness Vere of Norbiton]

The noble Lord is quite right. I did omit them. I have it in my notes that I will also include it in the letter that I write to him about the other detailed calculations.