Energy Bill [HL]

Lord Davies of Oldham Excerpts

Tuesday 8th February 2011 Grand Committee

[Lord Judd]

My Lords, I must say how grateful I am for the cross-party support and indeed the support of my own Front Bench. It is good to have that for an amendment. I should make plain that I am not a member of a park authority, but I take a close interest in their affairs both as vice-president of the Campaign for National Parks and as president of Friends of the Lake District.

The amendment would put national park authorities on an equal footing with the rest of local government in terms of the ability to generate and sell renewable energy. The current position for other local authorities is that they can sell electricity from renewable energy resources. Existing legislation—Section 11 of the Local Government (Miscellaneous Provisions) Act 1976—already allowed them to generate electricity and heat. Following the change made by the Government last summer through the sale of electricity by local authority regulations, they were given these additional powers.

This change makes it much easier from a financial point of view for local authorities to install renewable technologies and so play their part in the transition to a low-carbon society because they can benefit in full from the Government’s feed-in tariff. For their part, the national park authorities are tackling climate change on a number of fronts, including providing leadership on low-carbon innovation and national park communities, while also reducing the greenhouse gas emissions from their own activities. An important aspect of this can be the installation of small-scale renewable energy measures that are suitable for a protected landscape. Since the park authorities are not included in the relevant piece of legislation—Section 11 of the Local Government (Miscellaneous Provisions) Act 1976—it would appear that they do not currently have the power to generate or sell renewable energy. Through amending the relevant provisions of the 1976 Act to include the Broads Authority and the national park authorities as set out in this amendment, it would be possible to put this right. The prescriptions on the sale of electricity as set out in the 2010 regulations would then also apply to the Broads Authority and the national park authorities.

There might be other means of achieving the same outcome which the Government prefer. However, what is important is to put the national parks on an equal footing with other local authorities in terms of the generation of the electricity and heat from renewable energy and the potential to sell any surplus electricity from this renewable generation. I hope that the Minister will be able to respond positively. The national park authorities are keen to set an example of what can be done in an environmentally and aesthetically acceptable way. It is surely important for us all to give them every possible support.

[Lord Davies of Oldham]

My Lords, first, I am surprised that my noble friend is surprised that the Front Bench has signed the amendment. It would be somewhat remiss on our part if we did not see merits in it. He made an excellent case. What he kindly—for the Government—left out of his analysis of the situation is an actual feature of the national parks and the Broads Authority themselves: their powers in relation to the Public Bodies Bill that is before the House at present. Perhaps the Minister will offer some reassurance on that front. Suffice it to say that one can already see the national parks adjusting to a changed future in terms of the pressures upon them. We all know the particular circumstances of the Broads Authority, which was considered by this House only 18 months ago.

I emphasise the obvious fact that it is a good move to associate the national parks with the same capacity as local authorities. In fact, it seems somewhat surprising that this issue has not been pressed somewhat earlier than this Bill. I congratulate my noble friend on that point. I emphasise to him that we are in full support. I hope that on this constructive amendment the Minister is able to give a rather more positive response than has been the case on the most constructive amendments thus far. I look forward to his reply.

[Lord Marland]

I am not sure that I quite caught the end of that last sentence. Perhaps it is best that I did not. Suffice it to say that I welcome the amendment tabled by the noble Lord, Lord Judd. I am grateful that it should have the support of his Front Bench, which is excellent news. It is not the first time that his amendments have found favour with government. We are obviously extremely disposed to look at this amendment. Unfortunately, the timing was too tight for us to consult as widely as we wanted with the national park authorities before introducing this Bill, so we have to do that. Of course, like the noble Lord, I welcome their ambition to generate electricity on their own land and support that commendable ambition. With that in mind, and knowing that we will give this amendment consideration in coming days and months, I—

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[Lord Davies of Oldham]

It is not often that I express thanks for the result of the last general election, but I do on this occasion. I am really glad I am not in the position of having to respond to this amendment because it raises areas of such profound complexity and objectives to which we all ought to subscribe. This is a very difficult debate to respond to and my sympathy goes out to the Minister as she prepares herself for that response.

The first and obvious fact I want to emphasise is that we owe a considerable debt of gratitude to my noble friend Lord Lea of Crondall. It is important that we address the total perspective of energy pricing which, after all, lies at the heart of everything that we are trying to do with regard to the green deal and the green revolution. It affects the whole way in which our society adjusts to the levels of consumption of energy and how we generate cheaper forms of energy. If we are not successful with the new strategies, the pressure on energy sources will be such that the increases energy prices over the past 50 years, to which the noble Lord, Lord Dixon, referred, may look absolutely marginal compared with what might obtain over the next 50 years.

However, the noble Lord, Lord Dixon-Smith, did fulfil an adage which I often use in general discussion, which is that men may not know too many prices but there is always one price that they know and that is the price of petrol or diesel for their car. That is not just because stations are obliged to put it up in lights but because men have one great consumption factor which is their cars. That does not mean to say that rational behaviour takes place. We all know those who would go the extra 15 miles to save something like 40p on filling the car up but they consume that amount and perhaps more getting there and back. One should not underestimate the issue of irrationality even when a price is transferred.

My noble friend must have taken some sustenance from the fact that the noble Baroness, Lady Noakes, offered some support for his position: she emphasised the fact that this is a plea for transparency, and we need transparency. Our present factors of production, our present modes of consumption are such as to make it extremely difficult for people to respond accurately and effectively to energy prices or to know the factors that produce the price. This is particularly the case with the householder in terms of the supply of electricity and gas. My noble friend has made a most valiant effort to try to see the way in which the Treasury might throw some light on some very dark and murky quarters in circumstances where we all appreciate that we will not get the community response to the energy transformation of the future unless people have confidence that what our society is doing, what our Government are doing on behalf of our society and what individual productive units in our society are doing is fair and reasonable and clear in terms of policy.

I listened very closely to the noble Lord, Lord Deben, who has a great deal of authority on these matters, particularly in this area to which he contributed a great deal as a Minister. He says that it is all about price signals, that we have to ensure that people recognise that the costs will increase and that people will have to knuckle under and respond to it, but we do not say the same thing about food. The Government do not put VAT on food and yet there is a world crisis in food. Many of us believe that there is considerable overconsumption of food and consumption of the wrong cheap foods in our society. Which Government would dare to talk about sending out a price signal to make food more expensive by imposing VAT? I cannot recall either side of the House or even the third part of the House—I have difficulties adjusting to the coalition even now although I do not include the noble Lord, Lord Teverson, in that—the Liberal Democrats, during the freedom they had before they joined the coalition, talking about sending out price signals for food.

We operate within a situation where the Government seek to give support to certain essential goods, of which food is obviously one, and, clearly, we have to do that for energy. We do it with fuel payments. In this Committee, we have discussed whether the tariff should change so that consumption on the early parts of the tariff should be reduced, rather than the present position where it is the most expensive. These are very real issues that my noble friend has raised.

However, all Members of the Committee have raised some reservations about it. They have seen difficulties with these proposals. I am not sure whether it is a matter of the Treasury being overworked if it takes on this objective, although it looks like a massive agenda to me. The point is whether the Treasury could hit the objectives that my noble friend identifies, particularly as it is quite clear that he would also like to see the revenues received from energy prices put into a bundle— he was very gentle about his use of the word “hypothecation”—in which they could be directed to counter the most regressive elements in the present price inquisition.

That is a pretty challenging agenda. I have spent a small amount of time on Treasury matters over the past few years in your Lordships' House and taking that on seems to be quite a challenge for policy makers. I do not have the slightest doubt that the Minister is likely to say the same thing. I emphasise to my noble friend that he has done us a service with the introduction of these two very challenging amendments and I hope that the Minister, in reply, will indicate that she thinks that from these discussions there may be strategies which we can pursue and which will be effective.