Electricity and Gas Transmission (Compensation) Bill

Liam Fox Excerpts

Committee stage
Wednesday 25th January 2023 Public Bill Committees

[The Chair]

With this it will be convenient to discuss the following:

Amendment 2, in clause 2, page 2, line 4, leave out “applies” and insert “extends”.

This is a technical amendment replacing the reference to application with a reference to extent.

Amendment 3, in clause 2, page 2, line 5, leave out “on the day on which it is passed” and insert—

“at the end of the period of two months beginning with the day on which it is passed”.

This amendment provides for commencement two months after Royal Assent.

Amendment 4, in clause 2, page 2, line 6, leave out “and Gas”.

This amendment amends the Bill’s short title to reflect its contents.

Clause 2 stand part.

New clause 1—Resolution of compensation disputes in electricity-related land acquisition cases—

“(1) The Secretary of State must draw up proposals for the use of alternative dispute resolution processes in electricity-related land acquisition cases.

(2) An ‘alternative dispute resolution process’ is any process enabling the parties to a dispute to resolve the dispute out of court.

(3) An ‘electricity-related land acquisition case’ is a case where—

(a) an order is made under section 114 of the Planning Act 2008 (orders granting development consent), and

(b) the order authorises the acquisition of land for a purpose connected with the transmission of electricity.

‘Transmission’ in paragraph (b) has the meaning given in section 4(4) of the Electricity Act 1989.

(4) The Secretary of State’s proposals must include proposals for ensuring—

(a) that alternative dispute resolution processes are available for determining the amount of compensation to be paid to landowners in electricity-related land acquisition cases,

(b) that the processes are accessible to landowners without undue difficulty or expense,

(c) that the processes are operated, and determinations reached, in a way that is independent of the parties to the dispute, and

(d) that determinations are enforceable.

(5) The Secretary of State must lay before Parliament a report containing the proposals drawn up under this section.

(6) Before laying the report the Secretary of State must consult such persons as the Secretary of State considers appropriate.”

This new clause is intended to replace clause 1. It focuses the proposals which the Secretary of State must draw up on electricity-related cases rather than gas-related cases. It also contains a number of drafting and clarity-related changes.

Amendment 5, in title, line 1, leave out from beginning to end of line 4 and insert—

“Require proposals to be drawn up for the use of alternative dispute resolution processes to determine the compensation payable to landowners in certain cases where land is acquired for the purposes of electricity transmission.”

This amendment amends the Bill’s long title to reflect its contents.

[Dr Liam Fox (North Somerset) (Con)]

It is a pleasure, Mr Hosie, to have you chair our Committee, which I intend to be brief.

On Second Reading, I set out the cases that form the basis for sponsoring the Bill, and I feel no need to go through them again, except to say that when one of my constituents approached National Grid with a problem that was unresolved and said, “I’m going to take it to my Member of Parliament”, he was told, “Don’t bother. He won’t be able to do anything.” Well, here we are today; and we will see who is able to make changes and who is not. Generally, I find that threatening Members of Parliament, whether directly or indirectly, is an unwise course of action.

Apart from the cases, there was the principle: one of the largest listed utility companies in the world cannot be judge and jury when it comes to compensation issues relating to our constituents. At the weekend, in my constituency I had a new case of potential flooding, which had been warned about by local farmers, who had said that if National Grid did not put in adequate draining for one of the access roads, it would result in flooding on a new estate. Sadly, in the heavy rains we saw in recent weeks, that is exactly what we got. Again, that shows why we need to have this sort of compensation arrangement.

I am grateful to Members on both sides of the House for the cross-party support the Bill has received, and to the Minister and his officials for the amount of work they have done to ensure that we dealt with all the points and issues arising from Second Reading. In particular, I point out a number of issues to the Committee. First, it will now be clear—through the amendments to the Bill—that it relates to all electricity-related, land acquisition cases. That includes compulsory purchase and access agreements, which might not have been clear previously.

Secondly, the tests we set to make the Bill acceptable have all been met: the process will be accessible without undue difficulty or expense; the processes will be operated in a way that is independent of the parties to the dispute, so that one party is not judge and jury, as at present; and determinations will be enforceable. There is no point in having rights in law if they are not enforceable, as we discussed in this room during the passage of what is now the Down Syndrome Act 2022. In other words, the four tests of accessibility, affordability, independence and enforceability are all met in the Bill.

I have a few brief questions to ask the Minister to ensure complete clarity. Will he give an assurance that the Bill will apply to current, ongoing disputes that are not settled at the point of commencement of the Act? We are not asking for retrospection, which is a legal principle that I generally find to be abhorrent, but for cases that are not concluded when the legislation comes into effect. Will the Minister give us an update on the intended timescale for the completion of the Government scheme after the commencement of the Act? In other words, how long will it be before our constituents will see the applicability of the points that I have raised? Finally, does the Bill apply to Scotland, and in what circumstances? Those are my last remaining unresolved—or perhaps unclear—questions.

I am extremely grateful to the Minister and his team for getting clarity, and a Bill that is widely accepted in the House as necessary and in a form that the House can accept.

--- Later in debate ---

[The Minister for Energy and Climate (Graham Stuart)]

It is a pleasure to serve under your chairmanship, Mr Hosie.

I thank my right hon. Friend the Member for North Somerset, and I am sure that Members across the Committee congratulate him. He probably snapped into it pretty easily; not only did he have the great success of the Down Syndrome Act but, as my former boss at the Department for International Trade for some time, seeking to command me was something that came naturally to him. Perhaps I have an overly built-in response, which is of course to try to do whatever he wants.

We have made tremendous progress. I am pleased that the Bill gained the support of Members of the House, passing Second Reading on 25 November last year. On Second Reading, my colleague the Minister for Industry and Investment Security, my hon. Friend the Member for Wealden (Ms Ghani), agreed that the Government would work with my right hon. Friend on the Bill.

The electricity network is fundamental to accelerate our ambitions for net zero and energy security. Since taking on my role and seeing the vast amount of technology we need to deploy, I return again and again to the same point: if we do not get the grid right, whatever we do is affected, whether that is space energy; small modular nuclear reactors; hydrogen and carbon capture, utilisation and storage; or floating offshore wind. Whatever it is, without the grid we will not have a transformation, which we have to do at a most remarkable pace.

The president of the National Grid has said there will be six-and-a-half times more investment in the grid over the next seven years than in the previous 30. That is a massive deployment, supply chain and financing challenge, but it is also a political challenge, because of unprecedented imposition of necessary infrastructure on communities up and down the land. Ensuring that we have a system that is fit for purpose and does not roll communities over—but rolls with communities and their grain—is fundamental. That is why I am so grateful for the Bill. I do not believe it will slow down that tremendously required acceleration of deployment, but it will help to build a system that is better able to listen to the communities we represent and ensure that they feel part of the solution, not just subject to it.

As I said, the network needs to be transformed at an unprecedented scale and pace, and it needs to accommodate an expected doubling in overall electricity demand by 2050, as we electrify sectors including transport, heat and industry. In order to achieve that, we committed in the British energy security strategy to accelerate the timescale for delivering new onshore transmission network infrastructure.

We recognise that in cases where land or land rights have been acquired and a settlement is not agreed between landowners and the transmission owner, challenging that via the upper tribunal can be expensive—a point made strongly by my right hon. Friend the Member for North Somerset. The Bill presents an opportunity to address the issue by ensuring access to alternative dispute resolution processes, which can play such a crucial role in offering a quicker and more affordable route to the resolution of disputes.

We believe that the Bill can support the transformation needed so that we can have clean, secure and resilient energy for the Great British people. Landowners should have access to a clear, fair, affordable and enforceable system for dispute resolution, and I am pleased to say that we have worked closely with my right hon. Friend the Member for North Somerset since Second Reading and support his amendments.

I will now touch on those amendments, which I encourage the Committee to accept. Amendment 1 will remove clause 1, which will be replaced by new clause 1. The new clause focuses the proposals on electricity-related cases rather than gas-related cases. We support that change, as the examples raised by my right hon. Friend have related only to electricity network infrastructure and we are not aware of issues for gas infrastructure. It seems too early to include gas infrastructure definitively. However, the Secretary of State has the option to expand the scope if needed. Hon. Members have raised this issue in previous stages.

The new clause moves from establishing a new mechanism to encouraging the use of alternative dispute resolution processes instead of immediately resorting to the upper tribunal. It means that we can therefore consider existing practices, whether they can be strengthened to meet the aims of the Bill, and whether new processes and mechanisms may be required. The new clause retains the key factors that the proposals must consider, which my right hon. Friend set out: ensuring that decisions are enforceable, and that the process is affordable and accessible. He also mentioned independence, which is another important aspect.

Amendment 2 simply replaces “applies” with “extends” in clause 2(1), which deals with territorial extent. It is a minor technical amendment to reflect more appropriate terminology. Amendment 3 changes commencement to two months after Royal Assent to bring the Bill in line with standard commencement procedure for primary legislation. Amendment 4 removes gas from the Bill’s short title in clause 2, in line with the focus on electricity transmission infrastructure that I have already discussed. Finally, amendment 5 edits the Bill’s long title to reflect its contents in new clause 1. New clause 1 should be added to the Bill, and clause 2, as amended, should stand part of the Bill.

My right hon. Friend raised some questions. He rightly said that retrospective law is typically abhorrent, but asked whether current disputes could be resolved through whatever proposals come forward. We would certainly want current ongoing disputes to be covered once proposals are implemented, but, of course, we do not yet know what those proposals are. Our intention is to establish an alternative dispute resolution taskforce—very grandly named—which will be responsible for putting forward proposals, and we will have to see what ideas are generated by that taskforce. If a dispute is still unresolved by the time that any proposals are implemented, such cases should be able to use any alternative dispute resolution options that result from the Bill, if they are appropriate. If the dispute, of course, is resolved before the proposals are implemented, any options resulting from the Bill will not be required.

[Dr Fox]

Will my right hon. Friend tell us give us a timescale for the setting up of the taskforce?

[Graham Stuart]

As I have said, we will establish an alternative dispute resolution taskforce to develop the proposals. We will ensure that there is independent and balanced representation among members—for example, by including landowner representatives alongside electricity network operators. As I am sure this Committee will be pleased to hear, we will also look to engage closely with my right hon. Friend to ensure that he is happy with the make-up of the taskforce. By establishing that taskforce, we can ensure that the right expertise and balance of views is available to consider carefully the processes and options that will work best for landowners and electricity network operators.

We expect to establish the taskforce in 2023. I would like to see it sooner rather than later, and have already asked—for my purposes, which I may or may not make public—for a timeline for that process. Having come so far, I hope my right hon. Friend can trust in me to ensure that we move this forward with suitable rapidity, but if he lacks that trust I think he can trust his own use of the mechanisms of this House to ensure that the Government are kept honest and move in an expedited way to set up this taskforce.

One of the first tasks of the group will be setting a scope, a work plan and a timeframe. My right hon. Friend asked whether the Bill applies to Scotland, and in which circumstances. The Bill does extend to Scotland, but as currently drafted it applies strictly to cases where a development consent order has been granted for electricity transmission infrastructure under the Planning Act 2008. The development consent order process does not apply in Scotland, except under limited circumstances that do not relate to electricity transmission. While electricity transmission is reserved, dispute resolution and other things are devolved, so in Scotland, there would be an interplay between the various responsibilities of the different Governments. It will be the role of the taskforce to develop the full scope of the proposals.

The hon. Member for North Antrim asked about the Bill’s application in Northern Ireland. As he said, energy transmission is devolved in Northern Ireland, as is energy generally, and notwithstanding the failure so far to convene the Executive in Northern Ireland, the devolution settlement stays in place. We only step in reluctantly, when there is no other choice; we have successfully done so, and I am pleased to see people in Northern Ireland receiving their energy bills support scheme payments and their alternative fuel payments this week, either directly into their bank accounts or through voucher provision.

My Department did a lot of work to ensure we could serve the people of Northern Ireland, because we could not leave them without that support this winter, but that is not an indication that I or the Government have any appetite to fulfil a function that is properly devolved in Northern Ireland. We respect that, and we want to see those institutions restored as soon as possible, because people in Northern Ireland deserve to have the people they elect delivering the things that have rightly been devolved for them to deliver for the good of people in Northern Ireland. I recognise that we would swiftly move from people welcoming the Minister stepping into a gap to them asking, “What’s your status? How are you making these rules for us?” That is why we really want to see the restitution of people in Northern Ireland determining what happens there.

--- Later in debate ---

[Graham Stuart]

I am a Minister in the Government of the United Kingdom, and we have devolution and have devolved certain bits away. I might be part of the Government of the United Kingdom, but I cannot go in and take over the function of local planning from democratically elected local authorities, because they have that function, not me. I take the hon. Gentleman’s point, but it would be for others to decide.

I am straying into Northern Irish politics, which I am told is a difficult thing to do unless one is deeply well informed, so I will stop there. I have talked enough about it already, so I will back off swiftly. The main point is that the Government support the Bill, which will ensure access to alternative dispute resolution for landowners when land is acquired by transmission owners. I therefore look forward to working with my right hon. Friend the Member for North Somerset to support the passage of the Bill.

I thank you, Mr Hosie, for your excellent chairmanship, and my civil servants for their hard work. They have not only been working with my right hon. Friend the Member for North Somerset; as we know, so much of the work is done by his office, so it is through the work of my officials and my right hon. Friend’s office, as well as the occasional appearance by the two of us, that we have been able to make such progress.

[Dr Fox]

I am grateful to my right hon. Friend the Minister for clarifying those points. We all accept the need to upgrade the electricity transmission network, and those Members who have not yet seen what the new electricity pylons look like are welcome to come down to the south-west and see for themselves. I find them incredibly visibly intrusive up close, although not un-aesthetically pleasing in themselves; how much one objects to them really depends on how close one is to them.

The point is that those pylons will be rolled out across the country. One of the roles we have in Parliament is not just to deal with issues when they reach crisis level, but to anticipate them. It is therefore important to bring in this legislation before the matter becomes an issue for most Members of Parliament, even if they do not yet understand the scale of the problem they are likely to face. It is a bizarre aspect of democratic politics that MPs get much more credit for solving a problem than for preventing one, but we try to live with that.