Electricity and Gas etc. (Amendment) (EU Exit) Regulations 2020

Lord Oates Excerpts

Thursday 3rd September 2020 Grand Committee

[Lord Oates (LD)]

My Lords, I am grateful to the Minister for introducing the regulations with his customary clarity, on what is a series of technical amendments. In truth, two things are going on in the regulations. On one hand, they perform the fairly benign process of tidying up existing statutory instruments, so that they make sense in terms of the withdrawal agreement and implementation period. On the other hand, they expose some profound issues about what our effective exit from the EU will mean for the UK and, in particular, for Northern Ireland.

Before I turn to those issues, I ask the Minister to provide some clarity on a number of issues of detail. First, how were the devolved Administrations consulted and what responses were received from them? The Explanatory Memorandum states that SIs made under the withdrawal agreement “do not require consultation”, but I assume that there is some mechanism for consulting the devolved Governments and I would be grateful if the Minister could explain how that takes place. We have an indication from the Explanatory Memorandum that the Northern Ireland Minister for the Economy made representations requesting changes, but can the Minister tell us if the views of the Welsh and Scottish Governments were sought and whether they made any comments?

The Explanatory Memorandum tells us that the Northern Ireland Minister requested that changes with respect to Northern Ireland were included as part of this instrument. Can the Minister confirm that these changes have been made? It was a little ambiguous to me in the Explanatory Memorandum. Specifically, in addition to the changes relating to the implementation period and the Northern Ireland protocol in the withdrawal agreement, the Northern Ireland Minister for the Economy requested changes to the gas legislation as a consequence of the gas directive. Could the Minister explain what those changes were and what impact they will have?

Underlying this is how GB and Northern Ireland energy markets will work in conjunction with EU energy markets after the actual exit from the EU at the end of the implementation period. Paragraph 2.13 of the Explanatory Memorandum states that without the amendments contained in this SI there would be

“uncertainty and inefficiency in the operation of GB and NI’s market regulation, the role and functions of UK and EU bodies in the markets, and requirements on market participants.”

I notice particularly that the plural of “market” was used:

“the role and function of EU bodies in the markets”.

Does this refer not just to the NI market but to the GB market as well? If so, can the Minister clarify what the role and function of EU bodies would be in respect of the GB market after the end of the implementation period? The Explanatory Memorandum goes on to state that without these changes the uncertainty caused

“could result in increased wholesale prices”.

Can the Minister explain how this would occur?

The heart of the matter relates to the impact on Northern Ireland. It is spelled out in paragraph 2.11 of the Explanatory Memorandum, which explains that EU law will continue to apply directly in Northern Ireland in so far as it applies to the electricity market. However, as we know, EU law will apply directly in respect of many other things beyond the electricity market, but that is not a matter for this regulation.

It is worth reminding ourselves that as a result of the withdrawal agreement, for the first time in our history an overseas entity in which the United Kingdom has neither representation nor legislative authority will be applying law upon the territory of the United Kingdom. We need to remind ourselves of that astonishing fact at every opportunity because it underscores the extent to which the people of Northern Ireland were let down by this Government in the Brexit negotiations.

We also need to remind ourselves of it because it underlines how integrally involved we have been, we are and we will continue to be with the European Union, whether in energy markets—as we are discussing today—or across the whole economic landscape. The real difference is that we will be doing so as bystanders rather than contributors. Even now, the Government seem to be indulging in a fantasy that we can be part of a European electricity trading market without being willing to sign up to its rules. As Michel Barnier noted in an address to the Institute of International and European Affairs in Dublin yesterday:

“In the area of energy, the UK is asking to facilitate electricity trade without committing its producers to equivalent carbon pricing and state aid controls.”


I would be grateful if the Minister could confirm whether this is actually our negotiating position and, if it is, why we have adopted such a patently ludicrous and unrealistic position.

The tragedy is that, today, we face an unparalleled threat as a result of the climate emergency, and at that very point we are removing ourselves from a position of influence in an energy market on our doorstep with hundreds of millions of people. British influence could have operated in that market to continue to drive action on the climate emergency and to clean up energy production, not just in the UK but across the European continent. Instead, we spend our effort and our energy in preparing to mitigate the impact of leaving the European Union, and doing so while surrendering the sovereignty of one part of our United Kingdom and imperilling the economic well-being of the others.

Behind these rather arcane regulations—and indeed all the EU exit regulations that come before us—lies a much bigger issue and a much bigger tragedy. It is a failure of ambition and a loss of confidence in our country’s ability to play a leading role for good within an international organisation such as the European Union, and, sadly, as a result, means a diminished role for Britain in the world.