Carbon Emission Reduction Targets
Lord Teverson Excerpts(7 years, 2 months ago)
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Lord Henley
My Lords, I do not agree with my noble friend. I believe that there is a very strong case for encouraging shale gas extraction not only in terms of energy security but also in terms of reducing our carbon emissions. It will lead to less use of other, more harmful sources of energy. It can play a role in both reducing carbon and increasing our energy security.
Lord Teverson (LD)
My Lords, I was delighted to learn that the Government have carbon targets for their whole estate under their Greening Government Commitments. Does the Minister agree that, given his welcome for this scheme, Secretaries of State should have their pay varied according to their performance against those greening commitments?
Lord Henley
I do not have absolutely at my fingertips how well each department across the government estate is doing in terms of the Greening Government Commitments, but I can assure the noble Lord that this has been going on through Governments for many years; I remember it happening as long ago as in the 1990s. The Government are moving in that direction. Whether the pay of Secretaries of State should be involved in this is a matter beyond my pay grade.
Smart Meters
Lord Teverson Excerpts(7 years, 2 months ago)
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Lord Henley
My Lords, I am aware of that report but, as I made clear in my original Answer, we are installing more than 400,000 meters every month and that figure is increasing. We are still confident that we will be able to ensure that by the end of 2020 every household in the country will have been offered a meter. That is the aim that we have set out. We are also still confident that we expect to see a net benefit of around £5.7 billion for the entire rollout—benefits for individual consumers as they get greater choice and the advantage of being able to monitor their electricity and therefore keep their bills down, and advantages to the companies themselves.
Lord Teverson (LD)
My Lords, perhaps it is worth reminding the House that this programme of smart meter implementation will cost the country £11 billion. Sure, we need the customer benefits in savings from that but we also need to use them to create a properly distributed energy system in this country. Can the Minister explain to me how SMETS meters will achieve that?
Lord Henley
SMETS meters will allow the consumers greater benefits in that it will be easier for them to switch supplier and to monitor their use. Therefore it will be easier for them to cut their consumption of electricity and we will see a reduction in energy use, with benefits to the consumer in the cost, and benefits to the country in lower carbon use. As I said, there will be a net benefit overall after that cost of some £5.7 billion.
Electricity and Gas (Powers to Make Subordinate Legislation (Amendment) (EU Exit) Regulations 2018
Lord Teverson Excerpts(7 years, 3 months ago)
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The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, the regulations were laid before the House on 5 September. As we approach EU exit, my department is working to ensure that our energy legislation continues to function effectively after exit day. In recent years the EU has introduced through the third energy package a suite of legislation governing the energy systems of member states. Much of this is technical legislation, known as European network codes and guidelines which apply to energy operators and regulators.
To maximise continuity, the European Union (Withdrawal) Act 2018 will incorporate the majority of this legislation into domestic law when we leave the EU. This instrument is the first of a package of energy-focused regulations amending this retained EU law to ensure that the UK’s energy legislation and markets work effectively after exit. This instrument does so in two ways: first, by ensuring that directly applicable EU law concerning electricity and gas will be effectively incorporated into domestic law; secondly, by enabling the UK Government and the Northern Ireland Executive to amend elements of this retained EU law in a simple and proportionate way, ensuring that our energy legislation can keep up with the rapid pace of technological advances and market developments. To do so, this instrument will transfer legislative functions conferred by four EU regulations from the European Commission to the UK Government and Northern Ireland Executive under the powers of Section 8 of the withdrawal Act.
The first power being transferred by this instrument is a limited ability to create European network codes. The withdrawal Act will incorporate all direct EU legislation so far as is operative immediately before exit day. This means that provisions in force on exit day but applying from a later date will not be incorporated. This is the case for several European network codes. Without government action, this could create gaps in the energy regulatory framework, leading to uncertainty and detriment to industry, which has adapted rules and practices to comply with the network codes. It is therefore important that the UK can incorporate these missing provisions promptly through legislation. This is accomplished by Part 2 of the instrument, which will revoke the European Commission’s power to make new codes and instead substitute limited powers for the Secretary of State and the Northern Ireland Department for the Economy to make regulations bringing into domestic law provisions corresponding to the codes or parts of codes not captured by the withdrawal Act. These statutory instruments will themselves be subject to the affirmative procedure to ensure effective parliamentary scrutiny.
Secondly, this instrument will enable amendments to network codes by transferring powers currently held by the European Commission to the Secretary of State and the Northern Ireland Department for the Economy. These powers would be exercised using subsequent affirmative statutory instruments.
Thirdly, as well as powers relating to network codes, this instrument will transfer to the Secretary of State and the Northern Ireland Department for the Economy powers to amend definitions and reporting requirements under the EU regulation on wholesale energy market integrity and transparency, known as REMIT. REMIT prohibits insider trading and market manipulation in wholesale energy markets and provides energy regulators with valuable tools to fight these crimes. The power to amend definitions is limited and may be used only to ensure coherence with other relevant financial services and energy legislation, or to take into account developments in wholesale energy markets.
The fourth power under this instrument concerns the security of gas supply regulation, which creates common standards and indicators to measure threats to gas security and defines how much gas is needed to maintain security of supply. The regulation contains templates for risk assessments, preventive action plans and emergency plans to be carried out by the Government. Further, the regulation contains powers for the European Commission to amend these templates using delegated acts. This instrument transfers these to the Secretary of State. Powers to amend the security of gas supply regulation and REMIT would be exercised through subsequent negative statutory instruments. This is appropriate as these powers permit only narrow amendments to very limited provisions of these regulations.
This instrument extends to Northern Ireland. As energy is a devolved matter, this instrument transfers powers variously to the Secretary of State and to the Department for the Economy in Northern Ireland, respecting the devolution settlement. In addition, my department has consulted with the Northern Ireland Department for the Economy throughout. While this instrument permits the Secretary of State to exercise its powers in respect of Northern Ireland, this would occur only in respect of a reserved area such as international relations, or when the Department for the Economy determines that it is unable to act in the absence of Northern Ireland Ministers. Each time this occurs, it would be accompanied by a ministerial Statement explaining why it was necessary.
In conclusion, the regulations are a sensible and necessary use of the powers of the withdrawal Act that will maximise continuity in our energy regulations as we leave the EU. I commend the regulations to the House.
Lord Teverson (LD)
It is left to me to start this rather technical discussion. On this occasion, I will stick to a rather strategic level, if the Minister does not mind. First, it has been the Government’s intention in our EU negotiations to remain in the single energy market, which I hugely welcome. I would be interested to understand from the Minister whether there has been any progress on that; whether that might appear in the political declaration of our future relationship in the withdrawal agreement; whether the Government are still keen to do that; and, if we are successful despite our red lines and the Government’s general intention to come out of the single market, whether the instruments would be necessary if we remain in the EU internal energy market.
Moving on from that, we have interconnectors. On codes and other technical matters, once we leave, if we are not part of the internal energy market, we will no longer have access to discussions on or information around codes used by that market. I would be interested to understand what effect that will have on interconnectors between us and the European Union at that time. Certainly the Select Committee that I chair was very concerned about the inefficiencies in trading—not so much around interruption of supply but around increases in energy prices due to inefficiencies because of the relationship not being as smooth as it was before—that might come about from that.
I want to ask a fundamental question. As the Minister mentioned, the secondary legislation concerns Northern Ireland as well. As he knows, the island of Ireland has a completely integrated energy market—a so-called single energy market. What preparations have the Government made, particularly in the case of no deal, so that this energy market for electricity and gas can continue to function, with powers coming back to the UK and such disintegration—that is, no longer being completely under the purview of the internal energy market? Will that single energy market in Ireland still work despite the fact that the network codes will change? This system seems fundamental to Northern Ireland’s energy needs, let alone those of the Republic.
Lord Grantchester (Lab)
My Lords, I thank the Minister for his introduction to the regulations—the first of many to come concerning the UK’s exit from the EU. The Committee will consider many technical energy matters. It will not be entirely simple to identify the crucial elements and their implications. However, I will echo the remarks of the noble Lord, Lord Teverson, on the more challenging aspects of the regulations on wider-ranging topics, such as the internal energy market and the position of the island of Ireland.
On the face of it, the instrument seems simple enough. It moves powers held by the European Commission to a domestic authority, giving the Secretary of State power to alter them—in this case, referring to European network codes and guidelines—and adopt the amendments overall as “retained direct EU legislation”. Later amendments that will not come into force by 29 March 2019 will not be regarded as retained direct EU legislation. They will be resolved, perhaps even revoked, by exit day under separate secondary legislation, along with elements of retained EU law where the Secretary of State considers that the EU instruments retained in law will not be capable of operating in isolation from the rest of the EU instrument. Powers are also taken in the SI to amend the provisions of REMIT, an EU regulation concerning wholesale market integration and transparency, to apply internally to the UK and not to have to report to EU authorities.
Some amendments will be made by affirmative procedure and some negative. As your Lordships’ Secondary Legislation Scrutiny Committee concluded, all is so clear, so far. Perhaps the Minister can confirm first whether all these amending instruments will be amending only: that is, not enabling new powers through secondary legislation. That does not seem to have been commented on.
More importantly, this question brings up the whole issue of the internal energy market. Unlike Euratom and other bodies established by treaty, the IEM is merely a collection of agreements among member states on how the European energy market is to be conducted. It has been stated many times that it would be advantageous for membership of the IEM to be retained, or a close association with it. How far could any statement go when it is not really a distinct entity? This order would be regarded as a contingent action, to be effected and commenced if no suitable alternative arrangement for energy trading through interconnectors can be put into place—rather like the contingent nature of the Nuclear Safeguards Bill, now an Act, as the Minister will remember. Can the Minister clarify whether this is the Government’s intention or whether, as the memorandum seems to suggest, the order will apply regardless of any deal and be part of a signal to break with the IEM under all scenarios? Will he also clarify the Government’s general intention toward the internal energy market?
Very pertinent in this respect is the position regarding Northern Ireland. Ireland, north and south of the border, already operates under an all-Ireland grid. Given the possibility that Northern Ireland will not operate its own grid requirements at Brexit, is it intended to break up the Ireland grid? While paragraphs 7.12 and 7.13 of the Explanatory Memorandum deal with the position as now, when there is not a functioning Executive, is it intended that Northern Ireland will function on different codes from the rest of Ireland at Brexit? Can the Minister explain what is intended and how it will work on a United Kingdom basis with Northern Ireland and the Irish grid?
While an effective system must be in place upon Brexit, does this order—while enabling continuity for UK authorities—close the door on options for a better working of the energy system after Brexit through close association with the internal energy market? Can the Minister provide the Committee with any further clarity? If any of his remarks can assure the Committee on this point, I can confirm the order today.
Electricity and Gas (Energy Company Obligation) Order 2018
Lord Teverson Excerpts(7 years, 3 months ago)
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Lord Teverson (LD)
My Lords, I thank the Minister for his very detailed explanation of what this secondary legislation does, although I have a few questions. This is an example of where we pretend we are not taxing consumers. As this is not public expenditure, we have to put it through energy companies, which are in the private sector. They decide and spend a lot of time working out who should get these things when it could all be done a lot more simply if we did not go through this public expenditure pretence. When I go through ECO, it always seems to me that it would be so much better if it was administered by local authorities. They know households with problems and have all sorts of obligations towards private renters, who are a real problem in terms of energy efficiency and getting landlords to implement these sorts of schemes. It would be so much easier if we were honest with ourselves. This is a form of taxation, it is public expenditure, and we should just sort it out, rather than go through all the bureaucratic inefficiency that we have.
Having said that, I welcome the scheme very much in terms of moving this agenda forward. The present scheme, as I understand it, ran out at the end of September. We now have this instrument in front of us. I do not know how long it will take to get the thing started. I understand that there are some roll-over functions, and I welcome that, but so often with this sort of funding—even more so with European funding—there is always a risk that the companies and installers involved in this have a cash-flow crisis because we stop and start these programmes. I may be worrying unnecessarily, but I would be interested to understand how that gap is coped with and when the scheme is expected to really take off.
I noted with some amusement paragraph 7.20 of the Explanatory Memorandum, which said:
“There is a high level of interest in the scheme from energy suppliers who deliver the scheme, fuel poverty groups and installers, and some interest in the scheme from the public”.
That is extremely honest of the instrument, but I am sure we would all agree that it would be good if the public, who are affected by this, were motivated to push to get the scheme going. From that evidence, there may be a real need for some sort of public information scheme. I would be interested to hear from the Minister how that will be solved.
I find some of this order a little bit difficult to follow. Clearly there is an emphasis on social housing, which I welcome. Given the budget of the ECO—it is not insubstantial but it is limited—I also welcome that it is going on areas of fuel poverty rather than just carbon savings. No one is more committed to climate change issues than me but it is right to concentrate expenditure on fuel poverty.
What do we do about the rest of the housing stock that is not covered by this? The Minister mentioned that there is still a real gap in the Clean Growth Strategy in dealing with household efficiency in the rest of the market. I notice that the strategy states that it will:
“Support around £3.6 billion of investment to upgrade around a million homes”.
The programme covers 900,000 homes with an average spend of £640 million per calendar year. That works out at only about £2 billion for the time that is left until the end of March 2022. I would be interested to see what happened to the other £1.6 billion between the strategy and this paper.
On the private sector side, how do we check that landlords are meeting their legal obligations? How do we check that the measures work? I am sure that there is already a process for this but the instrument mentions the “monitored measure” option. I do not want to go into great detail but that option gives bonuses to suppliers or accounts in additional savings or help.
From the evidence, we all know that fuel poverty families getting better insulation does not tend to reduce their energy spend. Quite understandably, it just makes sure that the family is warmer than it was before, so I do not understand how we measure the effect of this given that people will probably use more energy to keep warmer instead of being cold. Are the Government confident about how these schemes are audited?
I welcome the fact that the scheme will continue beyond this until 2028, as in the Clean Growth Strategy, and I welcome the concentration on fuel poverty. Again, following the unfortunate relative failure of the Green Deal during the coalition Government, we absolutely need a national scheme to find a way to upgrade the rest of the UK’s housing stock.
Baroness McIntosh of Pickering (Con)
My Lords, I bow to the superior knowledge of the noble Lord, Lord Teverson. I have a couple of questions. I want to press my noble friend, if I may.
At the outset, I declare my interest in the register as a vice-president of National Energy Action. I have long taken a close interest in the Warm Front programme. Like the noble Lord, Lord Teverson, I welcome the continuation of the scheme. Obviously, it is a matter of record and ongoing regret that around 4 million households are still in fuel poverty. Any scheme that can be seen to reduce that is very welcome. How does the scheme compliment what is already happening? What more could potentially happen through building regulations? A more joined-up approach to warm homes would be very welcome indeed.
Being half Danish, I am particularly interested that we currently export residual household waste from the city of York and north Yorkshire to Holland at a cost to the local taxpayer. However, at the end of the day, the benefit is to Dutch residents, because the waste is burned and energy from waste is recovered in the form of district heating. My aunt in Denmark gets the benefit of that—although not from our residual waste in north Yorkshire—through cheaper electricity, hot water and heating. I am very interested to know the potential number of new district housing connections that could be made through the continued scheme before us this afternoon. Does my noble friend have a projection of that? What plans do the Government have to retrofit? There is a firm in Denmark that has changed its name to Ørsted, but I prefer the old name of DONG—the Danish Oil and Natural Gas company—which is easy to remember. It claims it could retrofit properties here in London. Is that something that the department has considered?
My last question is about the figure in the order before us today for potential savings. Is the overall home-heating cost reduction target of £8.2 billion realistic? How do the Government plan to achieve that?
Lord Henley
My Lords, I welcome the generally positive tone of the noble Lord and my noble friend Lady McIntosh, both of whom recognised that this order is a genuine reform of the ECO system. As I made clear in my opening remarks, it is designed to target it far better at those who are less well off and those who find it harder to adapt their houses to make them more energy efficient. It has achieved a great deal in the past and will continue to achieve a great deal.
I am sorry that the noble Lord, Lord Grantchester, takes a less positive approach to this and accused us of a lack of ambition, given that I talked about increasing very dramatically the number of people that we intend to try to reach, and recommended generally spending more taxpayers’ money in a rather haphazard manner. I point out to him and to the noble Lord, Lord Teverson, that technology will encourage those who can afford it to make changes that will lead to a reduction in the use of energy. One only has to look at, for example, the reduction in the cost of things such as LED lights over the past few years, which has made it far easier for people to change to those lights and therefore decrease their use of energy. Similarly, it is right that those who can afford it should pay for appropriate insulation as is necessary, as they will see the benefit in a reduction in their fuel bills and the country and society as a whole will see a benefit in the reduction in carbon use. These measures are designed to encourage those who find it less easy to afford to make those changes.
Lord Teverson
As the Minister knows, in the UK, particularly in commercial buildings and increasingly in private buildings, we have a problem that landlords and tenants have very different goals in this area, so unfortunately it does not always work out that way. However, I do not want to interrupt him further.
Lord Henley
I totally agree that landlords and tenants have different views on this. Landlords can benefit from these measures. If the noble Lord would like, I will write to him in greater detail on that point. We would also like to see landlords with old houses make the investment that is right in those houses where they can do so.
I shall deal with some of the more detailed questions that were put to me, particularly by the noble Lord, Lord Teverson, and my noble friend Lady McIntosh. I hope that in the process I will also deal with some of the queries of the noble Lord, Lord Grantchester.
My noble friend talked about energy from waste and the possible advantages that the Danes are getting from us exporting some waste. My noble friend will remember that when I served in Defra I had an interest in waste. She will also know that there are sometimes difficulties in getting planning consent for energy from waste plants. I will write to her in greater detail on that, as it goes slightly beyond my brief at the moment. I also note that she mentioned the firm DONG in Denmark—I think it has now changed its name to something else that I cannot pronounce: Ørsted. I have recently seen some of its windmills off Barrow, which is now the largest wind farm in Europe, providing, I think, a very large increase in renewables from that source.
I agree with what my noble friend said about more homes being retrofitted. The new innovation routes could allow multiple measures to be installed in homes. That approach would need to be sponsored by us to demonstrate that it could be cost-effective. That information would need to be provided to Ofgem, the scheme administrator, to ensure that it met the relevant standards. If I can give her some further detail on that and on potential figures for those new district heating connections, I will write to her in due course.
The noble Lord, Lord Teverson, was concerned about the end of the old scheme and the start of the new. I assure him that early delivery means that the measures which meet the new scheme’s rules, and which are delivered before Parliament agrees these regulations, will count towards the supplier’s obligations. We will have a seamless transformation of these matters. I also assure the noble Lord that there will be the appropriate audit he seeks. Ofgem requires measures to be installed to specific standards and 5% of the measures are checked by Ofgem under the scheme’s technical monitoring checks. I hope that 5% will be sufficient for the noble Lord to consider that it provides the appropriate audit and checks.
The noble Lord asked about the housing stock that is not covered by the ECO scheme. We are reviewing the fuel poverty strategy and will make an assessment of how best to meet the fuel poverty targets. As I made clear, the clean growth strategy has set aspirations to decarbonise all sectors of the UK economy. The buildings mission aims to at least halve the energy use of new buildings by 2030, as well as halving the cost of renovating existing buildings to a standard similar to new buildings. I repeat that new buildings are covered by current building regulations, and therefore any new buildings will be appropriately insulated. However, we want to get old buildings up to the same standard as new buildings while increasing quality and safety.
The noble Lord had other queries. He quoted from paragraph 7.20 that there was some interest from the public and said that he wished to see more. We would all like to see more interest from the public—that is true of a great many schemes throughout government, way beyond this one. I assure the noble Lord that a number of members of the public responded to the consultation. They obviously had an interest in energy issues, energy efficiency and fuel poverty. The majority of the responses were supportive of consultation, as I set out in my opening remarks. I hope that as a result of this debate—should people be taking much interest in it—and other measures, others throughout the country will take an interest in this, and that those firms involved in the scheme will do their bit to contact the public and let them know what is available, particularly for those with low-cost housing.
As I said, I welcome the generally positive tone taken by the noble Lord, Lord Teverson, and my noble friend. I hope that in due course the noble Lord, Lord Grantchester, will come round to that view and accept that this will go a long way towards meeting the problems of fuel poverty, will help to decarbonise and will help to meet the targets that we hope to—and will—meet by 2030 and beyond. I commend the regulations to the Committee.
Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018
Lord Teverson Excerpts(7 years, 3 months ago)
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Lord Teverson (LD)
My Lords, I thank the Minister for going through the detail of this instrument. It is Green Week and I suppose we ought to welcome that. To put this in perspective, the thing I would really like to do during Green Week is go through actual hard legislation that will determine how we meet our fifth carbon budget, rather than something that is very worthy in many ways but concerns the details of medium-sized companies or non-listed companies doing some carbon reporting mandatorily. But there we are; we are where we are and I welcome the fact that we are extending carbon reporting. As the Minister said, we were in the lead as a nation in 2013 by having carbon reporting for listed companies in the UK, which is good. Where we have led, others have followed.
We have to remember, as the Explanatory Memorandum says so well, that this is part of a broader package announced in the 2016 Budget where the death knell of the carbon reduction commitment as I know it—I know that it got a different name latterly—was announced. I was always very sad about that scheme, because when it originally came about it was to look at that tier of commercial business that was not captured by the EU ETS. It was brilliantly designed before it was launched so that it was taxation-neutral and rewarded those companies at the top of the league table that had done best in carbon and energy savings while penalising those at the bottom. There were incentives and, like all good energy taxation, it was neutral overall. Unfortunately, by the time it was introduced it was taken over by the Treasury and became a tax-raising regime that had all the complications that the Explanatory Memorandum goes through. I can see that that scheme became a burden for industry when it was effectively just a method of taxation rather than a proper method of incentivising through league tables and having good performance.
There is something I would be interested in understanding from the Minister. I know it is in the figures, but I found them quite difficult to go through—although I see the figures very clearly on the financial savings of the sector, which I agree are important. What is the net estimated carbon saving or deficit with this overall package of raising the climate change levy taxation rate and getting rid of the CRC and bringing in this management information system? I think that it is in the figures, but there was a whole range of figures and I found them very difficult to understand. I hope that the carbon savings are still positive because of that. I would be disappointed if they were not.
I am interested in the term “streamlined”, because going through the detail I was unclear whether it meant “rough estimate” or “back of the envelope” rather than the proper way that these things are calculated. I presume it is the latter but I am interested in the term “streamlined”.
The Minister mentioned global reach on these figures. As we know, the long supply chains in industry these days are one of the problems for carbon reporting. It can be relatively straightforward for corporates and large companies to estimate and publish their emissions, but one of the major ways in which any corporation can reduce its emissions is through offshoring or subcontracting more of its supply chain to suppliers. I would like to understand whether these figures include supply chain emissions and how the Government see themselves coping with that issue in future. I understand that it is not an easy question, and I am not suggesting that it has an easy answer. I would be interested to know how the Government see that area working as part of their broader green growth strategy.
Lastly, the Minister mentioned ESOS, a European scheme which is very useful in this area. Perhaps he can assure us that the scheme will continue post Brexit.
Lord Grantchester (Lab)
I, too, thank the Minister for his introduction to the regulations. Although limited in scope and somewhat technical, they are crucial to highlighting and building energy efficiency into everyday activities. We greatly welcome that.
As the Minister said, the regulations introduce mandatory requirements on emissions, energy consumption and energy efficiency action for large, unquoted companies. They also extend the reporting requirements for quoted companies to bring both, along with large limited liability partnerships, in line with common reporting requirements. Such organisations must set out their activities and performance in each year’s annual report. The intention of the changes is to compensate for and extend the reporting requirements previously obligated by the carbon reduction commitment, which is to end in April 2019. The new reporting requirements are to be in place after that date.
I have always thought that an organisation’s annual report is a very important document that sets out its strategic direction and how it has performed against its objectives. It should be a good promotional tool for its activities. Last week, the Intergovernmental Panel on Climate Change brought out a special report to warn again of the dangers of climate change without serious corrective action being taken on emissions, decarbonisation and energy efficiency. Previously, Labour supported and advocated companies reporting their activities in a coherent regime.
Regrettably, although the new measures are welcome they do not exactly replicate all that was in place under the carbon reduction commitment. Primarily, there was a league table of companies’ performances alongside the report. In the regulations, there is no measure of comparative performance and no means of producing such comparisons other than by a time-consuming and expensive trawl through all company reports, which may—or, more likely, may not—be reported in strictly comparable terms. While the regulations are prescriptive regarding what should be reported and how, there appears to be some leeway in the regulations whereby reports could mislead or be non-comparable in their meaning, particularly in terms of the possible distribution of reporting among subsidiaries of the main company. Does the Minister recognise the deficiency that there will be a lack of full comparability of reports because of the absence of a mechanism to allow performance to be compared and graded?
As what gets measured gets attention, how are companies to understand how they compare to their peers? Surely the full impact of these energy use indicators in annual reports is not being utilised as a competitive challenge for improvement. As the clean growth strategy states, businesses need measures,
“to improve their energy productivity, by at least 20% by 2030”.
The CRC was due to run until 2043. Here I echo the questions asked by the noble Lord, Lord Teverson, in his analysis of the CRC and its workings. The impact assessment outlines that the policy will be reviewed in 2024. That is some time away, especially given the timeframe in which the intergovernmental panel stresses mitigating measures need to be taken. How will any comparative analysis take place under these regulations? Indeed, will the Government undertake any analysis of the results of this reporting prior to 2024, and how will they measure success? Will government incentives be brought to bear on poor performance, not merely on reporting?
While we are in favour of these regulations today, there are nevertheless serious issues to address in which these regulations have perhaps not been as constructive as they might have been. Climate change is one of the most pressing issues of our age. The intergovernmental panel issued a special report last week between its fifth and sixth reports to underline its most recent assessment that there could be a very limited number of years, may be as few as 12—that is, until 2030—in which the world’s increase in temperature could be limited to less than 1.5 degrees above 1990 levels. I thought it was strange that the Conservative Government came out with a Ministerial Statement on Monday extolling all the achievements that have been secured when we all know that greater progress was made under previous Labour Governments and even under coalitions. Indeed, under the Conservative Government from 2015 progress has slowed, with a litany of cuts and policy reversals that I need not list at length today. Suffice to say that the UK is possibly no longer on track to meet the fourth, but more definitely the fifth, carbon budget.
I have one question for the Minister on the Government’s Statement on Monday. Labour has a policy of net zero emissions above 1990 levels by 2050, subject to the advice of the climate change committee. On the back of the report last week the Government have asked the CCC to advise on when and how we could achieve a net zero target. Whether they have precluded the CCC assessing and issuing immediate advice, it must advise on actions to secure net zero emissions to start at the end of the fifth carbon budget. That carbon budget is set to conclude in 2032. So the CCC cannot issue guidance or recommendations to begin until two years after the IPCC estimates that the world will be in a dangerous condition, recording in excess of its maximum 1.5 degrees above 1990 levels. The CCC advice will need to work hard and fast to secure a net zero target by 2050. I ask the Minister to answer on this feature of Monday’s announcement. Do the Government have some strategic assessment by which they have decided to limit the CCC’s advice until after 2032? The Government’s self-congratulatory words must be met by coherent and comprehensible policies. Winning slowly on climate change is the same as losing.
Lord Teverson
I do not want to prolong this, but will part of that be on supply chains and how the Government see they should be incorporated into carbon reporting?
Lord Henley
I notice exactly what the noble Lord says. It would be very difficult for these regulations to include supply chains, but it obviously is a relevant matter. If we close down one business and shift the thing overseas we do not achieve anything for the world as a whole. Obviously it needs to be considered how it could be done, but that is another matter. I will write in greater detail to the noble Lord.
I believe that what we are offering offers simpler, better energy and carbon reporting and will encourage compliance by companies and LLPs to support the transition to the low-carbon economy that we wish. It will deliver long-term benefits across the UK and throughout the world. I commend these regulations to the Committee.
Draft National Policy Statement for Geological Disposal Infrastructure
Lord Teverson Excerpts(7 years, 5 months ago)
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Lord Teverson (LD)
I must apologise to the Grand Committee for not putting my name down in time and therefore speaking briefly in the gap. I was very interested in the comment of the noble Lord, Lord Liddle, about London. I was trying to tie up in my mind whether it was anything to do with the nine-month postponement of the Elizabeth line and the tunnelling equipment under London. Maybe that is not the connection.
I was going to start by congratulating the Government because, going back to 2011, the National Policy Statement for Nuclear Power Generation (EN-6), which I am sure the Minister is well aware of, stated:
“Geological disposal of higher activity waste from new nuclear power stations is currently programmed to be available from around 2130”,
so at the moment we have 112 years to solve this problem. I expect it will probably be solved at the same time as the smart meter programme, but we will see.
I question whether the technology and the science in this area are moving on to such an extent that we need to invest in this type of facility, or certainly on the scale that is talked about. A Canadian company is looking at using high-level nuclear waste in small modular reactors for further energy generation. There is also the science of transmutation, where a particle accelerator is used to bombard with neutrons some of this higher-activity waste and break it down into other elements that have much shorter radioactive lives. This science is bound to move on at some pace. Nuclear fusion can also use some of these by-products, which we hope will come on stream with the ITER project in 10, 20 or perhaps 30 years. That is really important.
Paragraph 3.2.15, on page 25 of the document, referring to the spent fuel and radioactive waste directive, states:
“To the extent that these obligations under the Spent Fuel and Radioactive Waste Directive cease to be legally binding on the UK following its departure from the EU”.
Surely that is a mistake. Surely the withdrawal Act means the legality of that will remain in place. It is important to have the assurance, despite the other international obligations, that those Euratom obligations under the directive will remain in place. That clarification would be extremely useful.
The other area, from a macro point of view, that I want to understand is the Government’s estimate of what the facility will cost and, perhaps more importantly, who will pay for it. What will ensure that, as with other decommissioning in the past, the public purse does not pay for what will be an extremely expensive facility?
Lastly, in our new position as “Global Britain”, will we be inviting other countries to export their nuclear waste to this facility, which will become far easier if Brexit happens next year?
Domestic Gas and Electricity (Tariff Cap) Bill
Lord Teverson ExcerptsWednesday 27th June 2018
(7 years, 7 months ago)
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Lord Hunt of Wirral (Con)
My Lords, I listened with great care to the noble Lord, Lord Grantchester, but I have to tell him that I do not think that this amendment makes sense. I very much agree with the noble Lord, Lord Redesdale.
The noble Lord, Lord Grantchester, stressed the importance of getting this right. It takes me back to our earlier debates on the Bill. Noble Lords will be aware that I have broad concern that the Government, in partnership with Ofgem, are facilitating a major regulatory intervention into the energy market without proportionate oversight. I have on several occasions during the proceedings of the Bill drawn attention to the absence of any mechanism whereby the CMA can adjudicate on whether, in the words of the noble Lord, Lord Grantchester, a cap is placed in the right place. I remind noble Lords that the CMA is there for a clear purpose. The Government set this out in the consumer markets Green Paper, saying:
“We have an independent expert competition body, the Competition and Markets Authority … to promote competition in the interests of consumers and business across the economy”.
We all agree with that, but where is the role of the CMA in adjudicating on this cap, however long it lasts? There are huge dangers in setting off in the wrong direction. Noble Lords may say that Ofgem does get it right. However, we have already seen examples whereby the CMA has had to roll back poor regulation around the retail market review; it had to deliver £105 million back to consumers through their scrutiny of network pricing. That is just one example of why we need the CMA.
Once again, my noble and learned friend Lord Mackay of Clashfern—I put my name to the amendment to which he spoke earlier—had it absolutely right about how important it is for technical experts to scrutinise this cap. I have reservations about having a cap in the first place, but what I am sure about is that it has to be right. I am much more concerned about the start of this process than about looking forward, as the noble Lord, Lord Grantchester, is doing, to what will happen further down the line. It will be a huge tragedy for consumers if the cap is put in the wrong place. The situation is fraught with extensive difficulties and dangers.
Although I can understand why the noble Lord has proposed the amendment and why the noble Baroness, Lady Kennedy, said what she did, it does not make sense, particularly if the whole technical process has not been managed properly, with adequate control mechanisms and oversight scrutiny. Therefore, I will vote against the amendment.
Lord Teverson (LD)
My Lords, it seems to me that the noble Lord, Lord Hunt of Wirral, should have voted against the Bill at Second Reading because he clearly does not believe in it. I have my own reservations about how this absolute price cap will work, but the relative price cap proposed in the amendment is a much better way of doing things. Ofgem will not have to set a cap under that regime; the companies themselves will set the cap by their entry rate. That is why this system works.
The only reason I disagree with the amendment, although I support it because it would make the Bill much better than it would be otherwise, is because we should have a relative cap immediately and not worry so much about the absolute cap. In fact, we could have both at the same time. At least the amendment would introduce a relative cap. As the noble Baroness, Lady Kennedy, has said, it would remove the “tease and squeeze” factor, which is one of the worst aspects of the energy market and price comparison sites. We would achieve our long-term aim of having rates that reflect market conditions, leading to competition on an even playing field that people can understand. It seems to me that the relative price cap is hugely superior to the absolute price cap that Ofgem is being asked to implement.
I support this amendment. I just wish that the relative price cap could be brought forward to now rather than after the present price cap ends, but this is a way for the future and the right approach. All Ofgem has to decide is what the maximum differential should be, and then the energy companies would decide their own cap. What could be better? I cannot understand any argument against a relative price cap. It just makes so much sense.
Lord Henley
My Lords, the noble Lord, Lord Grantchester, has put forward his amendment and it is quite obvious that he is in favour of it. I have to warn him that if he is intending to press this amendment to a vote, it would possibly create further delay and uncertainty and, whatever anyone’s views on the Bill, we on these Benches and noble Lords opposite feel that it is important to get it on the statute book as quickly as possible so that those whose duty is to do so can get on with finding the appropriate cap and get it in place before the cold weather arrives. It might be that in this wonderful spell the noble Lord has forgotten what cold weather is, and I will remind him of that come November. We want Ofgem and others to be able to get on with their work, and any delay which this amendment might create would be unfortunate.
I am grateful to hear from various elements on the Liberal Democrat Back Benches. I do not know what the official view of the Liberal Party is, but I am grateful to the noble Lord, Lord Redesdale, who gave very concise and encouraging reasons why this amendment ought to be opposed and emphasised that the situation is changing and we are facing a time when wholesale prices might rise. We also had an intervention from the noble Lord, Lord Teverson. I normally find the noble Lord a breath of clarity, but if I wrote his remarks down correctly, I think he said that he disagrees with the amendment but supports it and went on to say that he agrees with it—anyway, I was confused by his lines.
Hinkley Point C
Lord Teverson Excerpts(7 years, 7 months ago)
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Lord Henley
My noble friend, with his local knowledge as the former Member for that area, knows exactly what his former constituents are going through, and he is right to address those points. All sites of this sort go through a rigorous planning process. In that process, it is possible for the planning authorities to grant planning permission through a Section 106 agreement, looking to get benefits from the developers in that area. That has been dealt with by the local authority in that process.
On top of that, as I made clear in earlier answers, there are also the advantages to the area through spend in the area—I mentioned the spend directly on the site, on the roads and on other things, the contribution that EDF is making, as well as the spend on the supply chain in the entire south-west region.
Lord Teverson (LD)
My Lords, we are often told that one Parliament cannot bind the actions of the next, and we are in another Parliament now. Clearly, as the noble Lord, Lord King, said, the disruption to the local community is now. So why do the Government not think that it would be better to bring these payments forward? The district authority, Sedgemoor, has proposed that ridding the district of fuel poverty would be an excellent way to use some of the money—appropriate and something that could start now. Surely the Government could do that.
Lord Henley
My Lords, we have a process, we announced what that process was and that process is to bring in benefit to the area when the plant becomes operational. Meanwhile, there are other ways in which EDF can help, which I have gone through—the Section 106 agreement and other things, and the spend it is making in the area which, again, is of benefit to the area. I could go on listing—
Energy Policy
Lord Teverson Excerpts(7 years, 7 months ago)
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Lord Stevenson of Balmacara (Lab)
My Lords, the Hendry report comes out with headline figures that it is important to bear in mind as we think about and discuss what was said in the Statement. The report states:
“Across the National Audit Office’s three Value for Money tests, Tidal Lagoon Swansea Bay can match or outperform the Contract for Difference awarded to new nuclear power station Hinkley Point C with relevant support from Welsh Government …Tidal lagoon capacity can reduce UK system carbon emissions by 36% in 2035 … Lifetime CfD subsidy cost of £302-£390m achieves net positive social NPV benefits of £787-875m”.
That is a factor of more than 2:1, which is a lot better than the return HS2 and some other projects that I can think of will get.
Of course, that is not the whole story. Although the Statement was very strong on direct costs and the problems that the Government would have in justifying them, there are other benefits that would come from a project such as this. This is a first in its class—a first attempt to do something new in alternative energy production—so there is a difference there that cannot be measured in terms of the direct costs of well-tested wind or solar arrangements. There is an amenity, because clearing up Swansea Bay and costing a very small amount to provide something that is visually attractive and also rather beautiful cannot be costed. In order to give confidence to the overall task that we as a country have to make sure we have a diversity of supply, starting things that are new and different would add something that is not easily costable.
In the past two years, the Government have repeatedly kicked a decision about Swansea into the long grass, and the handling of this must surely be agreed by everyone to have been absolutely atrocious. Not only have the Government taken an inordinate amount of time to come to the House today, they have kept Tidal Lagoon Power, the Welsh Government, the trade unions and other stakeholders completely in the dark about what was happening. Indeed, they had to learn about it through leaks in the press. Indeed, it emerged in a Select Committee hearing last month that the Minister had not spoken to Tidal Lagoon Power in more than 16 months. In the last few days there have been conflicting reports indicating that a Statement was coming last week, then that it was coming this week, and then that there would not be a Statement—and now here we are. This is no way for the Government to conduct themselves on an issue that is so important for Swansea, the UK economy, the climate and therefore the world.
The key point here is that tidal lagoon power is a new, world-first technology, and yet it has been judged as if it were just one of a number of things that could be done in order to get us on the path to a carbon-reduced energy supply. The Government’s decision on Swansea tidal lagoon is of public policy importance not only because of its impact but because of the potential it offers the UK economy to meet our global climate change targets.
The project is estimated to generate and support more than 2,000 high-skilled construction and manufacturing jobs. It could engage more than 1,000 businesses in its supply chain—from figures in the Hendry report we know that the supply chain reaches right across the UK—and it could power directly more than 150,000 homes once it is constructed.
I go back to the point about being a pathfinder. The technology that is tried out successfully in Swansea could be rolled around the UK. It is not surprising that we might have problems exporting it since it is a very geography-specific solution. However, given our tides, our climate and our particular style of landscape, it seems to be something that would work in the UK.
Finally, tidal technology could make a valuable contribution to the UK’s transition to renewable energy, which is becoming ever more urgent. The UK is currently on track to miss its globally agreed climate change targets, so the Government’s plans in relation to Swansea Bay and renewable energy generation as a whole are of greater significance than they would otherwise be.
If we are going to have a diverse energy mix, tidal lagoon technology has an important part to play in our transition. The Government say that the costs are too high, but that seems to be a very narrow description of the costs involved. I understand that, even though that is the main reason why they are not going forward, they have not even met Tidal Lagoon Power to work out what additional funding could be supplied by the market. Perhaps when he responds the Minister could tell us what the acceptable cost is that would allow the project to go ahead.
Lord Teverson (LD)
My Lords, we on these Benches believe very much that this is the wrong decision. I will very quickly give the reasons why. First, in order to meet our climate targets, we need all technologies to contribute. We believe very strongly—as was shown in a number of studies—that there would be a reducing price in terms of scale as the technology rolled out. We have seen this very strongly with other renewable technologies.
There are other elements to the project. It is also partly an energy-storage project—an area that is particularly needed in terms of the variability of other renewables. And of course, perhaps not in Swansea but in other lagoons where something similar could have happened if this had gone ahead, there is the whole area of flood management that would also save considerable costs in terms of a holistic management approach to the coast.
Of course, the irony is that 2018, the year we are in at the moment, is 10 years after the Climate Change Act, yet between 2016 and 2017 we saw a 56% reduction in renewables investment. So the curve the Minister talked about in terms of our improved performance will go down because of lack of investment. In fact, renewables investment last year was at its lowest since 2008, when the Climate Change Act came in. We are not heading to meet our fourth or fifth carbon budget and we need to reduce our carbon emissions by 3% per annum to get to our target in 2050. So we have an investment crisis at the moment.
The noble Lord, Lord Stevenson, mentioned the time taken over this. The Hendry report came out 18 months ago. I remember that the original discussions were during the coalition Government period. What message is this to investors in renewable technologies? The way that it has been dealt with, the timescales and the opaqueness of the decision taking are difficult to understand, particularly when it was obvious that the Government were going to say no several months ago and have only just got round to giving that reaction and decision.
I come back for a moment to costs and refer to the Hendry review. Charles Hendry was a Conservative politician and Minister of State. He was highly respected across the whole of Parliament when he was an MP. He said about the project:
“I believe that the evidence is clear that tidal lagoons can play a cost effective role in the UK’s energy mix and there is considerable value in a small … pathfinder project … Most importantly, it is clear that tidal lagoons at scale could deliver low carbon power in a way that is very competitive with other low carbon sources”.
That is something that cannot be written off in the way the Minister did.
I have the following questions. Why has it taken so long to take the decision, which was clearly going to be taken some time ago? How are we going to meet the fourth and fifth carbon budgets? Given the regular quote in that Statement about the costs of technologies, when are the Government going to bring back onshore wind, which is the cheapest of those technologies and the one that would help to bring down energy bills tomorrow and in the years to come?
Lord Henley
My Lords, I thank both noble Lords for their contributions and for their questions. I hope that I can deal with the points they made.
I will start with the point made by both noble Lords about the delay in getting the decision right. I have to say that the noble Lord, Lord Stevenson, in a sense answered that point. The important thing was that we wanted to get the decision right and wanted to look at it as a whole, not just in relation to the cost of energy but also taking into account all the other factors that the noble Lord mentioned, including, for example, the amenity advantages and—this was raised in another place—the use of steel and the effect that that might have on the Port Talbot steelworks. Of course we did. We looked at those issues, which made the sums much more complicated. At the same time, we were also seeing quite a reduction in the cost of offshore wind, as the Statement made clear. I quoted those figures; the reduction complicates matters further. It also makes clearer the case put forward by my right honourable friend about making this decision. That is why—at the right point, I would say—my right honourable friend came to another place and made decisions. It is my privilege to repeat them today.
The noble Lord, Lord Stevenson, asked about other potential benefits. There are some, which we looked at. In the end, one has to come back to them, whether they are amenity advantages or jobs in the construction phase, as mentioned by the noble Lord, Lord Teverson —or perhaps it was the noble Lord, Lord Stevenson. The benefits are necessarily limited and the jobs are limited to the construction phase. Though great, the amenity benefits are not enough to deal with the fact that, over the period of this project’s existence, we will still pay three times as much for electricity as for electricity that could be obtained from offshore wind, because the cost of that wind has reduced so much.
The noble Lord, Lord Stevenson, also talked about the need for diversity of supply. Again, I have discussed that at some length in this House a number of times. Occasionally, I put to noble Lords on the Liberal Benches the need to look at the advantages that might come from the extraction of shale gas. I know that the noble Lord, Lord Teverson, does not like to comment on that, but his noble friend Lord Bruce offered praise for shale gas, whereas his noble friend Lady Featherstone is not so keen. The noble Lord, Lord Teverson, looked as though he did not want to comment on this when we discussed it last week. We want diversity of supply because, as made clear by the noble Lord, Lord Stevenson, it brings us security. We want security, but not at excessive cost. I will not rehearse the figures in the Statement about the potential cost, but it is too great on this occasion.
The noble Lord, Lord Stevenson, also talked about new technology and the possibility of costs coming down. On this occasion, I do not think that the technology is particularly new. We are talking about boring earth, concrete and other things with steel into the ground or the sea to make barriers. That is the major cost. I do not think there is the scope for cost reduction that came with the development of offshore wind, where we saw installations getting bigger and blades getting more efficient. As a result, we saw the great advantages of technology moving forward. Here, we are dealing with what one might call relatively old technology that will not come down in cost.
The noble Lord, Lord Stevenson, asked what the acceptable cost was. As my right honourable friend the Secretary of State made clear in another place, he was not prepared to put a figure on the cost because other factors would be taken into account for each project, which we would look at in the context of other possible benefits and the cost of the electricity. We are not ruling out the prospect of tidal lagoons in the future but this particular one looked expensive. Other tidal lagoons might be cheaper if they are bigger. There are economies of scale in electricity costs. Each project would have to be looked at individually.
Both noble Lords talked about the reduction of carbon emissions. We accept that there would be such a reduction in this case. We want to go on doing what we can to reduce our emissions as much as possible. But again, as I want to make clear, we can do that only when taking costs into account.
I want to comment briefly on the alleged reduction in investment. There has been a reduction but a great deal of investment was made. We have seen rapid growth in renewables since 2010. We have seen the use of renewables go up from 6.9% in 2010, at the beginning of the coalition, to around 30% today.
I think I have dealt with most of the points made by noble Lords. I hope they will accept that, in the end, the case is pretty clear. The scheme was imaginative and good, and it was right that we looked at it in some detail, but the cost of the electricity is just too great.
Offshore Environmental Civil Sanctions Regulations 2018
Lord Teverson Excerpts(7 years, 7 months ago)
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Lord Bruce of Bennachie (LD)
My Lords, I thank the Minister for that explanatory introduction, and I have just a couple of points to raise with him. I welcome the purpose behind this change in the law, which I assume is to reduce the number of incidents. Has the regulator made an assessment of the impact it will have? The figures the Minister gave are for the number of breaches, most of which were not serious. However, those that were serious cause a little concern, and obviously the point that prosecutions are not effective under the present law has to make it a consideration as to whether civil sanctions will make a significant difference.
My second point is whether the criminal burden of proof will have a difficult impact in the sense that it is quite a high standard of proof, although that is right and proper given that these are new regulations. Nevertheless, is the regulator satisfied that it will be able not only to prosecute effectively but, more importantly, that it will be able to create a climate in which there will be a significant reduction in the number of incidents? That is really what I am seeking. Has there been any assessment by the regulator of that?
Lord Teverson (LD)
My Lords, when I first read the regulations, I had a vision of a motorboat chugging up to an offshore oil rig and sticking a parking ticket on it with a fixed penalty fine, but obviously that will not be the situation.
One of the questions I was going to ask is about numbers. I thank the Minister for going through them. It is certainly very stark that we have two prosecutions for environmental offences out of 4,000. I guess that is one of the reasons that this measure is needed.
Paragraph 7.2 of the Explanatory Memorandum states:
“The need for the instrument has arisen due to a number of contraventions of environmental Regulations”—
the Minister has gone through those very well—
“going unpunished as a result of OPRED’s lack of a proportionate enforcement response”.
What resources does OPRED have? Is it an organisation with capacity? Is it underfunded at the moment? Is that part of the problem? Can it do enforcement in a quicker and cheaper way?
I want to expand on my noble friend Lord Bruce’s point. It rather surprised me that we were moving from criminal law to civil law but the burden of proof did not move to balance of probability; it stayed at the level of criminal proof—that is, beyond reasonable doubt.
Regulation 9(1) states:
“A person on whom a final notice is served may appeal to the Tribunal in relation to the decision to impose the fixed monetary penalty”.
That is fair enough. However, Regulation 9(2) states:
“In any appeal where the commission of an offence is an issue requiring determination, the relevant enforcement authority must prove that offence according to the same burden and standard of proof as in a criminal prosecution”.
If I were faced with a £48,000 fine, what would I do? I would just say, “Take me to court. Go through this criminal proof”. If that is getting in the way of prosecutions at the moment, the barrier is still there. There is a quick and easy way for justice to be avoided once again.
Going through the regulations, I looked at the fixed penalties. Although I realise that they are rather more draconian than going through a Cornish village at more than 30 mph, I wonder whether £500, £1,000—as for most of them—or the top limit of £2,500 would even be in the petty cash of the sort of organisations that we are talking about, which I assume are the potential offenders. Although I realise that the fines can go up to £50,000, I wonder whether organisations would even notice these fixed penalties, which are the cutting edge of these regulations. It seems that it will be part of the P&L line where you just pay your money to avoid environmental regulations.
I have a final question for the Minister. I assume that the answer will be no. I like the idea of immediate penalties in low-impact environmental impacts, so that the system is sped up and more enforcement takes place. Might this apply to any marine-based activities other than the hydrocarbons industry?
Lord Grantchester (Lab)
I thank the Minister for his introduction to the regulations before the House. They are relatively straightforward, which the memorandum explains very well.
The instrument will allow the offshore petroleum regulator for environment and decommissioning—OPRED—to impose civil sanctions under the Regulatory Enforcement and Sanctions Act 2008 for RESA offences and the European Communities Act 1972 for ECA offences. The memorandum explains that these regulations are due to the number of contraventions going unpunished, as the noble Lord, Lord Teverson, explained. However, I am a little more relaxed than he is on them. I will explain why. The regulations are a sufficient and proportionate deterrence against non-compliance. They will tackle poor behaviour and stop it becoming persistent. They are consistent with measures available to onshore environmental regulators.
Lord Teverson
My Lords, before the Minister gets up, I declare an interest as a board member of the Marine Management Organisation, which has certain responsibilities relating to marine pollution in the English seas.
Lord Henley
My Lords, I note the declaration of interest from the noble Lord, Lord Teverson. I am more than happy to share the table that the noble Lord, Lord Grantchester, referred to, which my right honourable friend Claire Perry shared with colleagues in another place. I will write to the noble Lord and the other noble Lords who took part in the debate.
In response to the noble Lord, Lord Teverson, let me make it absolutely clear that the regulations apply only to breaches of legislation by offshore oil and gas companies in this field and that they do not cover other marine activities. Obviously they are, as the noble Lord, Lord Bruce, put it, designed to reduce the number of incidents. I quoted figures of a little over 4,000 since 2016. That figure sounds rather alarming, but it includes, as far as we know, spillages of the most minor sort, just as any petrol station will report even very minor spillages if it is operating properly. We want to make sure that we can deal with the more serious matters. By extending this to civil sanctions, we are trying to offer OPRED a more proportionate response in how it deals with these matters. I can assure the noble Lord, Lord Teverson, that OPRED is perfectly content with the resources that it has—it has some 20 offshore inspectors, no doubt speeding around in their boats waiting to put their parking tickets on the various rigs, as the noble Lord put it.
However, as we said, we want to make sure that we can make an appropriate response in the right case. The noble Lord, Lord Teverson, said, “But, hold on, you’ve got exactly the same standard of proof, and since they can appeal against this, wouldn’t it be just as easy to use the criminal sanctions, as they are already available?” The point of being able to use civil sanctions is that one can operate much more speedily, whereas with criminal sanctions, OPRED, not being a prosecuting authority, would have to hand this over to other bodies. Not understanding much about criminal law in Scotland—I am sure that the noble Lord, Lord Bruce, will correct me if I am wrong—I imagine that would be to the procurator fiscal, whereas by using civil sanctions, one can be more nimble-footed.
The imposition of civil penalties will be published. Although, as the noble Lord, Lord Teverson, put it, we are talking about small change for some of the big boys, it is our considered view that, because we can publish this information, offshore operating companies would be very keen to avoid the negative publicity. In addition, criminal prosecutions have to be retained in the relevant regulations for the most serious breaches. The noble Lord, Lord Bruce, suggested reducing the burden of proof for the civil prosecutions. I do not think that is possible under the parent legislation in terms of the powers we have to make this regulation—if I am wrong, I will certainly write to the noble Lord to correct it. Therefore, we will be looking at the same standard of proof.
I am grateful for the words of support from the noble Lord, Lord Grantchester. I commend the Motion.