Energy Bill [HL]

Lord Hardie Excerpts

Wednesday 21st October 2015 Lords Chamber

[Lord Bourne of Aberystwyth]

With respect to the noble Baroness, this is not about those projects that fall just the other side of the line; this is about those projects that can satisfy the conditions being given additional time. This does not bring any more deployment in. That is a quite separate point, if I may say so.

[Lord Hardie (CB)]

I would like to ask the Minister about the extension of time. I fully understand and think it is fair that there has been an extension of time where planning permission is granted on appeal. However, did I understand the Minister to say that, where permission was refused on appeal, and if there were a judicial review that ultimately granted permission, that would be respected and it would be deemed to have been an appropriate permission? What concerns me is the timescale, if my understanding is correct. How many years down the line are we talking about beyond June 2015? Once we go down that line, for perhaps two years, that might have an impact on meeting the 2019 deadline.

[Lord Bourne of Aberystwyth]

My Lords, I am very happy to respond to that point, but it is a quite separate point from the investment freezing condition, relating, as it does, to the appeals process. The point of the amendments that we are putting forward is to say that if a project should have been given planning permission on or before the cut-off date of 18 June, and the appeals process demonstrates that, whether by an appeal or judicial review, it is reasonable, rational and right that they should be allowed to accredit under these proposals, and that is what would happen. That was done in response to the engagement exercise that we have been through. We have tried to do what is right, in considering very reasonable points. I do not accept that this would drag on indefinitely: I do not think that the legal process is in a Jarndyce v Jarndyce situation. There will, of course, necessarily be some sort of delay, but that is how the judicial process will operate. It is absolutely right to have that provision in relation to the appeals procedure.

To return to the investment freezing condition, the extension available in the circumstances that I have outlined will be approximately nine months—broadly equivalent to the period between the date of the Secretary of State’s announcement and Royal Assent. To be eligible for this extra time, projects must be able to provide evidence that they have been impacted by a lack of investment during the period to Royal Assent.

This “investment freezing condition” has been designed specifically to protect the projects that were intended to be able to access the grace period as proposed on 18 June. It is not an extension of deployment, but an extension of the period for those that are able to deploy within the grace period. This condition is not about increasing the pipeline of onshore wind projects that are able to accredit under the renewables obligation.

Furthermore, as a result of the helpful discussion at recommittal, a drafting change has been made to the amendment. Your Lordships will have seen that in new Section 32LK(4)(a)—some of you may have picked this up—the phrase “as at May 2016” has been replaced by the phrase,

“as at the Royal Assent date”,

following representations made by the noble and learned Lord, Lord Wallace—representations that I think were entirely valid, and which have been echoed by the noble Baroness, Lady Worthington. Similarly, in consequence, new Section 32LK(4)(b) now refers to,

“the date which is 28 days after the Royal Assent date”.

In addition, those provisions have been amended—again, following representations at recommittal—to make it clear that either uncertainty about whether the Bill will receive Royal Assent or uncertainty about the final wording of the Bill will be sufficient for the purposes of meeting the “investment freezing condition”. We have made it absolutely clear in the Bill that it is not necessary to show both. I am grateful to noble Lords for the helpful debate that we have had on these points. I believe that this revised drafting now makes our intent perfectly clear, and has improved the Bill.

In order to provide a consistent approach to all onshore wind projects eligible to accredit under the renewables obligation, we also ensure through these amendments that a pre-existing grid and radar delay grace period will apply here. This condition entitles projects affected by unforeseen grid and/or radar delays to an additional 12-month period in which to accredit. This amendment, too, has been redrafted to provide clarity about when a project may benefit from a grace period for grid and/or radar works delays. The provision is now clear that either grid delays or radar delays, or both, will be sufficient for these purposes. Again, I thank noble Lords for the useful discussion that led to this amendment.

I am confident in the amendments, and in the proposed grace period. I have listened to noble Lords, and I believe that I have responded positively on various issues. Again I thank them for their helpful suggestions which have been incorporated to improve the clarity of the clauses. We have listened actively to stakeholders and worked to ensure that the final policy strikes the right balance between the interests of onshore wind developers and those of the wider public. I hope that your Lordships will agree that these amendments should stand. I beg to move.

--- Later in debate ---

[Lord Wallace of Tankerness]

I think that the noble Lord almost makes my point because, as far as I understand what is being proposed by the Government, local authorities which have refused an application before 18 June, but which was subsequently appealed successfully on a decision taken by Ministers, will actually qualify. But an agreement reached by locally elected people and a locally elected planning committee after debate, consideration and engagement with the local community, but where the subsequent consent as part of that route due to the cycle of meetings was not given until after 18 June will not qualify. Perhaps he has done so inadvertently, but the noble Lord, Lord Cormack, profoundly makes the point that we are making. There is an inconsistency and an unfairness in what the Government are proposing. There is inconsistency between Section 36 applications for smaller developments added on to existing developments and those which do not need Section 36 applications. I do not believe that the Government have made out the case for fairness of treatment, given the test which their own Minister articulated yesterday.

I am sure that we will debate the Salisbury convention at some stage, and I hope that we will take note of the report of the House of Lords and House of Commons Joint Committee on Conventions, which sat around 10 years ago. My noble friend Lord Wallace of Saltaire, who was then the deputy leader of my party in your Lordships’ House, emphasised the Liberal Democrats’ view that,

“‘the Salisbury-Addison Convention was an historical negotiation between the Labour Party in the Commons and the Conservative Party in the Lords’ and therefore not relevant to current circumstances”.

We articulated that position almost 10 years ago, and I think that the report itself accepted that things had moved on.

The noble Baroness, Lady Worthington, said that it was an opportunity for the Government to think again. We certainly want to engage with them in thinking again, because I do not believe that what we have at the moment is fair to developers who had a reasonable expectation that a system which was due to close in March 2017 has been brought forward by a year. In the end, as the Government’s own impact assessment states, the central estimate is around 30p on the electricity bill of the average household. Given the potential damage to the industry and the damage that this is doing to investor confidence in other areas of the renewable industry, it is important that the Government should think again. They have not been able to come up with satisfactory ways of addressing some of the many legitimate complaints that the industry has expressed.

[Lord Hardie]

My Lords, I also want to draw attention to the fact that this legislation is unfair. Contrary to the statement of the Minister in the other place referred to by the noble and learned Lord, Lord Wallace of Tankerness, I would point out that the noble Lord, Lord Foulkes, mentioned an example on the Isle of Skye. Perhaps I may give the House some more detail about it. There is a development on Skye called the Glen Ullinish wind farm which was granted planning consent in March 2015. That was before the general election and may even have been before the manifesto, and it was certainly well within the current deadline. The local community, with one exception, supported this proposal. The developers, Kilmac Construction, have had a grid connection contract in place since 2011 and have been making annual contributions to the grid to secure their position. They would otherwise have constructed the site and made connection to the grid before the deadline of December 2018, but they are not able to do so through no fault of their own. The connection date has been given as 2021 and the reason for the delay is that, to secure the supply in the west of Scotland, it is necessary to reinforce and upgrade 124 kilometres of line in the Highlands, which this project will facilitate. If the infrastructure had existed, the wind farm would have been constructed and connected in time.

These developers have invested over £1 million and a considerable amount of time and effort in securing the necessary planning permission, grid connection contract and land ownership permissions to ensure that they can comply with government deadlines. They have only been prevented from doing so by the grid infrastructure problem. The Secretary of State for Energy and Climate Change has been aware of this case since 1 September 2015, when the developers wrote to her explaining the circumstances in full. Will the Minister tell the House that the Government will extend the period of grace in this very exceptional case, where the developer is unable to comply with the timescale through no fault of its own? If he is unable to give assurance on this, the appropriate course would be, in the interests of fairness, to remove Clause 66 at this stage, to allow the Government time to reflect on this anomaly and introduce an amendment in the House of Commons, if they wish. This would not, as has been suggested, wreck the Bill. It passes it on to the Commons, where proper consideration can be given to this matter which is so important for the people of Skye.

[The Lord Bishop of Chester]

My Lords, as I listened to this debate, I had one of those “Doctor Who” moments. You go into the TARDIS and it looks like a describable area, but it becomes bigger and bigger—each time someone speaks, you go into another room. There is a narrower issue about Clause 66 and that is fairness. I am one of those who regret that the level of subsidy for wind turbines has been as big as it has, and I am keen to get it closed as soon as possible. I am with the Government on that, but they have moved the deadline from March 2017 to March 2016 and then only given way to some extent. The noble and learned Lord, Lord Wallace, said that those who had expended significant amounts of money when the deadline was March 2017 had a reasonable or legitimate expectation. If the legislation goes through as it is now, will there be the possibility of judicial review for those who have spent considerable amounts of money but whose legitimate expectations were not fulfilled because the Government changed their mind? I would like reassurance that there is no legal problem in moving the goal posts when people have expended money under the old drawing-out of the pitch.