Energy Bill

Lord Jenkin of Roding Excerpts

Tuesday 9th July 2013 Grand Committee

[Lord Jenkin of Roding]

My Lords, I would like to add a few words to what my noble friend Lord Howell has said. I congratulate the noble Viscount, Lord Hanworth, on his imagination which allowed him to stray into paths that upset even so stalwart a Labour supporter as his noble friend. The privatisation programme was hugely successful. I was responsible for launching the first one—the privatisation of British Telecom. If you talk to the people who use that company and work for it, they will tell you that the whole picture has been utterly transformed. There have been a number of others, so I do not agree with his general strictures on privatisation.

The other important thing that it is necessary to bear in mind is that a great many industries and bodies have been transferred from the public to the private sector. I cannot think of a single transfer that was at the time supported by the Labour Party or a single one that has been reversed by the Labour Party when in government—not one. Having opposed those transfers, Labour accepted every single one. I suspect that this will not be any different.

There is an interesting note in the House of Lords briefing pack. Incidentally, it is interesting that it still uses the previous numbers of the clauses and has not caught up with the Bill as published in this House. Its report on reactions to the proposed sale, which may well have influenced the wider remarks of the noble Lord, Lord O’Neill, noted that Scotland on Sunday,

“did not perceive this to be especially controversial”.

The pack describes, as the noble Viscount did, what the GPSS originally was; it continues:

“The GPSS has been expanded and restructured over several decades and today includes some 2,500km of cross-country pipelines, storage depots, pumping stations and other facilities”.

It then quotes an energy specialist, Murdo MacLean at Pinsent Masons:

“These measures will be of particular interest to utilities or other investors”.

I agree very strongly with the noble Lord, Lord O’Neill. Of course, it would have to be properly regulated. I have no doubt that Ofgem would be the appropriate regulator, but we are not at that stage yet. If we accept this clause, we simply give the Government the power to go down that path.

In another report—and this may be what stimulated the noble Viscount—the RMT union opposed the sale, saying:

“Bob Crow of the RMT said that plans to increase the capacity of oil storage at Portishead were a ‘classic fattening up exercise’ in advance”.

I do not accuse the noble Viscount of having had a brief from Bob Crow but he certainly reflected what Bob Crow might have said about this clause. We need to take that all with a considerable pinch of salt.

My view is that this is a sensible clause. There is no particular reason why the Government should own this network if it can be sold, if the capital can be raised, and if it is properly regulated. I repeat that I totally agree with the noble Lord, Lord O’Neill, on that. It seems an entirely proper and appropriate thing for the Government to do, and I hope that the clause will stand part of the Bill.

[Lord Grantchester]

I am grateful to my noble friend Lord Hanworth for probing the case for Clause 113 and the supplementary thoughts of my noble friend Lord O’Neill. The Bill’s Explanatory Notes are not helpful in this regard, merely pointing out that the Secretary of State is being provided with the power to sell, lease or transfer the GPSS,

“or any part of it and transfer any right or liability relating to the system or any part of it, subject to such conditions, if any, as he considers appropriate”.

What more could he ask for? This brings to mind the film “The Firm”, which noble Lords may remember concerned a young lawyer—Tom Cruise—discovering the dark side of providing legal services to clients. At one point, the firm’s team is considering whether there is something suspicious going on. The firm’s adviser replies,

“I get paid to be suspicious when I’ve got nothing to be suspicious about”.

The Opposition are not paid to be suspicious but we are tasked with trying to unlock what there is to worry about when the Government decide to take, upfront, all sorts of powers to transfer assets and to be able to do so however they wish.

This clause was also brought up in Committee in another place, yet the Government have not thought it appropriate to bring forward any constraining amendments to relieve any suspicions, clarify any conditionality on any transfer or explain under what possible scenarios they might wish to undertake any change to the status quo. Furthermore, the Government are not providing any further information, other than that further work is under way.

--- Later in debate ---

[The Lord Bishop of Chester]

My Lords, if I may make a brief contribution here, I get electricity to my home, which is also in Scotland but in the southern part, from a Scottish company. I have tracked the way in which the bills have developed over the years, and it is a sad fact of the modern age that the more information you can provide, the less informative the document often is. This is partly a feature of the digital age in which we live; the more e-mails we get, the less we understand about the world around us, and so on.

There is one particular matter on which I would like the Minister to offer some reassurance: the various government obligations that arise out of climate change policies. We may have different views about the importance of those policies, but there really should be clarity in bills about just what the government obligation element is. There is the 5% VAT but there is also another percentage that is going up quite steadily and rapidly, and I think that should be listed.

The company I have mentioned, which I shall not name, used to do that. The bills were shorter but they said, quite simply, “Government obligations”, and gave an amount. Now, for some reason and I do not understand why, the company has hidden that information. You can find it if you dig around, but I hope that these bills, in addition to the unit cost—the actual cost of the energy—and the VAT, list as a discrete amount what we consumers are asked to pay to subsidise wind farms or whatever, in the interests of transparency. As I say, I have seen a particular company, for whatever reason, perhaps inadvertently, move backwards on this issue. I hope that this can be taken on board in the interests of clarity and transparency.

[Lord Jenkin of Roding]

Is the right reverend Prelate asking that this should be a separate figure in pounds and pence on each consumer’s bill? At the moment, on my bills those figures are all given as percentages of the whole bill. Government environmental obligations come out at 11% of whatever the amount is, and one is able to work out what that is in relation to the bill. I would like to know what he is actually asking for.

[The Lord Bishop of Chester]

I am all in favour of both. You should be able to put the percentage and say what that percentage is. That is just two parts of one line, isn’t it? The noble Lord has mentioned 11% but the figure that I had in my mind was 7% or 8%. However, I think it will be going up to 15% before long on the track that we have. If we are worried about fuel poverty, and we all are, I would be quite interested to know how many people are put into fuel poverty by these precepts on the energy bills. That is a factor that we have not considered. Still, that is by the by. I just think we need clarity and transparency in an easily understandable way.

[Baroness Maddock]

On the point about percentages, we need to be careful. Surveys have been done, and the noble Lord, Lord Whitty, probably knows this, which show that the understanding of percentages in the vast majority of the population is not very good. They would probably understand better how much of their bill they were paying rather than a percentage.

[Lord Jenkin of Roding]

When I first went to the Treasury in 1970, one of the things they said was, “You’ve got to realise that 50% of the population does not understand what 50% means”.

[Lord Teverson]

Do we know which 50%? That is the question.

My noble friend Lady Maddock is being too modest. When we went through the Green Energy Bill we encountered some really strange language. We asked why it was written in that way, and it turned out it was supposed to be written in plain English—in a way that people would understand. Actually, this amendment is perfect for what it should be. The draftsman has written it in a clear and easily understood format. That is exactly what it should say, and I hope that the Secretary of State, the Minister and the Government will see a way to bring it in.