Energy Bill [HL]

Lord Bourne of Aberystwyth Excerpts

Tuesday 26th April 2016 Lords Chamber

Moved by

[Lord Bourne of Aberystwyth]

That this House do not insist on its Amendment 7T to Commons Amendment 7, to which the Commons have disagreed for their Reason 7TA.

Commons Reason

The Commons agree with the Lords in their Amendments 7A to 7S and 7U to 7W, and disagree to Lords Amendment 7T for the following reason—

7TA: Because it is not appropriate for renewables obligation certificates to be issued in respect of electricity generated after the date on which the Energy Bill is passed by onshore wind generating stations for which planning permission was granted in the circumstances described in the Lords Amendment.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, the elected Members in the other place have sent a very clear message regarding the amendment made in this House on 12 April. The continued toing and froing on this issue is preventing the Bill proceeding to Royal Assent in a timely manner. Until that happens, we are unable to implement the much-needed measures relating to the Oil and Gas Authority. In the other place, there was much discussion of the importance of ensuring that the Bill now comes to a swift conclusion. The honourable Member for Aberdeen South, Callum McCaig, said, in relation to the Oil and Gas Authority functions:

“I urge the Government to put their eyes back on the ball and allow the Energy Bill to proceed. If we go back and forth with ping-pong we risk delaying that further”.—[Official Report, Commons, 20/4/16; col. 945.]

Indeed, previous representations from industry bodies such as Energy UK, RenewableUK and Scottish Power have also recognised the need for the,

“swift passage of the Energy Bill, with clear, fair and consistent RO grace period provisions”,

as those bodies have jointly said. We must move forward with the Bill to provide certainty in this sector and to allow projects to benefit from the investment freezing condition, which has been broadly welcomed by the industry.

Once again I find myself reminding your Lordships why the onshore wind measures were introduced in the Bill. The Government have a mandate to deliver on their manifesto commitment to end new subsidies for onshore wind. The Government remain intent on delivering this commitment and bringing forward the closure of the renewables obligation to new onshore wind in Great Britain. Noble Lords will recognise that the manifesto proposals were put before the country at the general election last year, which resulted in the present Government taking power. The Government have a mandate to act on this manifesto commitment, which was based on plans signalled well before the election. I know that the noble Lord, Lord Grantchester, was surprised by the result of the election but noble Lords should not be surprised that this action is being taken. It was very clearly stated in the manifesto and well signalled. Nobody should have been taken by surprise.

Back in March 2015, the right honourable Member for West Suffolk, Matthew Hancock, then Minister for Energy and Climate Change, stated in the other place:

“We have made it absolutely clear that we will remove onshore wind subsidies in the future”.—[Official Report, Commons, 6/3/15; cols. 1227-28.]

Prior to that, in December 2014, the Prime Minister said of wind farms in a House of Commons Liaison Committee:

“We don’t need to have more of these subsidised onshore, so let’s get rid of the subsidy”.

The Government, the Prime Minister and Members of the elected Chamber have continued to make their position clear.

Members in the other place have removed Amendment 7T, inserted after our previous debate on the Bill. Amendment 7T would have allowed certain projects, which did not have planning permission as of 18 June last year, into the renewables obligation beyond the early closure date. I say again: these projects did not have planning permission as of 18 June last year and therefore do not meet the grace period criteria proposed by the Government. Amendments such as the one removed in the other place would lead to an increase in deployment under the renewables obligation, which would come at a cost to consumers. As my honourable friend the Minister of State for Energy and Climate Change, Andrea Leadsom, noted in the other place:

“Opposition Members suggest that just because there is local agreement, it is fine to add to the bills of all consumers across Great Britain, but that is simply not the case. It is our duty as consumer champions—at least on the Government Benches—to keep down the cost to consumers, and this is what we will do”.—[Official Report, Commons, 20/4/16; col. 952.]

The policy set out by the Government strikes a fair balance between protecting consumers and addressing the concerns of industry. Noble Lords should take careful note of what Members in the other place have said and should not seek to undo the position by amending the Bill again. I beg to move.

[Lord Foulkes of Cumnock (Lab)]

My Lords—

Motion A1 (as an amendment to Motion A)

--- Later in debate ---

We on this side of the House want to be as inclusive as we can insist on being to the Government, in being reasonable to all justifiable cases against arbitrary disruptive proposals. I call on your Lordships’ House to support this amendment and ask the Government and the Commons to think again.

[Lord Bourne of Aberystwyth]

My Lords, I thank noble Lords for participating in this debate and making their points as fluently and forcefully as they have in the past. I shall deal with the points in the order they were made during the debate, and will therefore refer first to the noble and learned Lord, Lord Wallace, who spoke about the grace periods and the timeliness of what we are doing, saying that this is the Government’s fault. The point I was seeking to make was not so much about the delay as the constant ping-pong, given that the other place has given a very clear view. This measure was passed there by a substantial majority—far larger than the Government’s overall majority; it was not just Conservative Members who voted for it.

So these points are relevant, and I hope that the noble and learned Lord will accept that the Liberal Democrats have no monopoly in determining what justice is. We have sought to be just in setting grace periods and allowing for an investment freeze, so although we differ on where we think justice lies, I will take no lessons from the Liberal Democrats—that this is the definition of justice that has been handed down from on high.

The difference between us is this. We feel—

[Lord Wallace of Tankerness]

I was not seeking to give the Minister a Liberal Democrat definition of fairness and justice: I quoted his honourable friend Andrea Leadsom on what fairness was, and himself when he defended the Government’s ending the renewables obligation for photovoltaics. It was a Conservative Minister’s definition of fairness, which the Government are not rising to in this case.

[Lord Bourne of Aberystwyth]

We Conservatives have put forward our own definition of justice, rather than seeking to put a gloss on it in a way that is helpful to the noble and learned Lord’s argument.

The essential difference is one of deployment. Every proposal put forward by the noble and learned Lord would increase deployment. We feel that we are doing the right thing in balancing the interests of investors with the wider interest, what was in the manifesto and votes in the other place.

The noble and learned Lord raised the issue of steel, suggesting that this measure would make a massive difference and therefore we have to adopt it. As is widely recognised, the Government are committed to doing everything they can on steel, and indeed are delivering—on procurement, on relief on energy costs, on action against dumping. I hope that we will have his support in those matters.

I turn to the noble Lord, Lord Foulkes, who, with his customary passion and fervour, put forward arguments in relation to an area that he knows well. I respect where he is coming from—of course, I understand that—but I do not think that there is any ambiguity in relation to Sorbie. I have checked this and do not want to give a running commentary on planning issues—I should not seek to do that and it would be unwise to do so—but it seems to us that it is very clear that Sorbie falls the other side of the line. I do not think that there is any ambiguity there but, as I said, I cannot really give a running commentary on it.

[Lord Foulkes of Cumnock]

I do not seek a running commentary; I just seek a specific answer to a specific question. Sorbie was approved well in advance. It was delayed because of the aviation objection, which was subsequently withdrawn. Therefore, it is reasonable to assume that it was approved prior to the relevant date, and that is an interpretation that could be put on it by the department or by Ofgem. I am seeking an indication that at the very least the Minister will have this examined to see whether that is a possible interpretation of the current position.

[Lord Bourne of Aberystwyth]

The noble Lord is being very creative. I do not think that there was any legal doubt about it. He has referred to it previously as a technicality in a broader sense. I will write to him if I am wrong on that. We will double check but I do not think that there is any uncertainty in relation to that matter.

I move on to what was said by the noble Baroness, Lady Worthington, in relation to CFDs. That of course goes wider than the current debate, which is focused on wind deployment, but I take on board what she said. We have made statements about new technologies within CFDs. The CFD system is designed with this in mind. As I think the noble Baroness knows, CFD auctions for less-established technologies will be taking place later this year in relation to pot 2, and further details will be issued in relation to that.

[Baroness Worthington]

Would the Minister care to comment on the fact that, because we have not yet met our deployment targets under our legally binding European targets, any onshore wind project that goes through that is cheaper than projects less close to CFD auctions that we are about to grant saves the bill payer money rather than costing the bill payer more?

[Lord Bourne of Aberystwyth]

To me, unnecessary subsidies—and I think we are entering into that area—are undesirable. Solar, for example, is being deployed without subsidy, as we know, and that will no doubt happen with onshore wind. All the evidence I see is that those technologies where we do not need a subsidy, we should not be subsidising, and that is the international message that is coming across. Al Gore and others who are not necessarily supportive of the Conservative view say that we should not be subsidising unnecessarily, and we are very much of that view.

I turn to the noble Baroness, Lady Liddell, who sought to characterise the House of Commons as a big boy with a stick or a bully. That may happen on occasion but it is perhaps an incomplete picture of what, after all, is the elected Chamber, and this measure was passed by a significant majority in the House of Commons.

[Baroness Liddell of Coatdyke]

Given that I spent 11 years in the Chamber of the House of Commons, I think that I have a passing knowledge of what it is like. “A big boy did it and ran away” means somebody dreaming up an excuse for something that they did but do not want to admit to.

[Lord Bourne of Aberystwyth]

The noble Baroness did indeed give exemplary service there. Of course, she has experience of the other place and she will therefore know that it is the elected Chamber and that we should not ignore what is said there. However, I come back to the principle of this issue. We have to draw a line somewhere. It is said that that line is arbitrary, but it is arbitrary only in the sense that that was the date—

[Baroness Quin (Lab)]

I am grateful to the Minister for giving way. As he knows, I have a lot of sympathy with government policy because I have seen very heavily subsidised schemes inflicted on communities in Northumberland where over 90% of the people have opposed them. At the same time, it seems to me that the Government should look at all possible ways of having flexibility in the cases quoted by my noble friends Lord Foulkes and Lady Liddell. If there is some flexibility in schemes that undoubtedly have the support of local people and, at the same time, through no fault of their own they seem to have fallen foul of the grace periods, I think that the Government ought to be prepared to look at that.

[Lord Bourne of Aberystwyth]

My Lords, I understand the point that the noble Baroness is making, and I thank her for her general support for what the Government are doing. Clearly, we need legal certainty. We feel that we have delivered on a grace period to take account of some of the difficulties that there are and the investment freeze position. We have made movement on grid delays and radar delays as well. I say to the noble Baroness that the line has to be drawn somewhere; as soon as you start to unpick it and make exceptions for one or two categories then one or two others come into play. I understand that there is great difficulty in drawing the line anywhere, but unless you draw that line, every case could be an exception. That is the point I am making.

I thank my noble friend the Duke of Wellington for some interesting insight on the situation. As for the noble Lord, Lord Foulkes, who said that my noble friend would not get his vote, I do not think any of us got his vote, so that was probably fair to all of us.

I turn to the points made by the noble Lord, Lord Grantchester. He talked rather uncharacteristically—I am not sure whether he really meant it—about vindictive and aggressive attitudes and the adoption of a UKIP stance. I hope he has evidence that that is what we have been doing because it does not cut the mustard with us. As the noble Lord well knows, we do not listen to UKIP on anything, thank goodness. There can be no suggestion that this is vindictive or aggressive. It was in the manifesto, which people voted for; it has been debated in the other place numerous times; and we were responding to views heard up and down the country. He might not like the policy but I do not think that he can characterise it as vindictive or aggressive.

We have the date of 18 June and I repeat to the noble Lord that that is not arbitrary: it is the date that the announcement was made. We believe that this is an unnecessary subsidy and that we have got justice by balancing issues such as the investment freeze and the grace period with the cut-off point. There is a very clear policy, which has been endorsed several times by the other place. I urge noble Lords to oppose any amendments and vote for the main Motion.

[Lord Wallace of Tankerness]

My Lords, the Minister has given us a fairly predictable but disappointing reply. He will be aware that when we first dealt with grace periods, back in October, there was a considerable number of possible areas in which justice could be done—and I am talking about justice as defined by his ministerial colleagues and himself. We have whittled those down. Indeed, I am prepared to indicate that the “insist” Motion, which is whittled down even further by the Motion in the name of the noble Lord, Lord Grantchester, is one that we would be prepared to support. However, we are getting absolutely no response.

Scottish colleagues present will understand the phrase, “It is like arguing with Ailsa Craig”. I am afraid that that is the position we are in. I do not think that this is good governance. What we are doing is freezing potential developers in other areas, not just in onshore wind, who no longer can have the certainty that the developments they make and investments they put in will not one day be swept aside at the whim of government. However, I beg leave to withdraw Motion A1.