Energy Charter Treaty

Debate between Nia Griffith and Chris Skidmore

Tuesday 21st March 2023 Westminster Hall

[Chris Skidmore]

The hon. Lady is absolutely right. Far more impressive legal minds than mine—who have been working at ClientEarth, Global Justice Now and Green Alliance—have demonstrated that there is a way for us out of this treaty and that we can, potentially, work with our European partners to create an exemption regime for some of the historic investment cases in relation to which we might be under treaty obligations.

[Dame Nia Griffith (Llanelli) (Lab)]

I heartily congratulate the right hon. Gentleman on securing this important debate. Does he agree that, given that there could be a 20-year timeframe in which we would still be liable for action and penalties, the sooner we get out of this treaty the better? Moreover, what indications has he had that it may be possible to negotiate and mitigate down those 20 years, especially given the huge interest from other European countries?

[Chris Skidmore]

The hon. Lady is absolutely right: the sooner we get out, the sooner we are not under the cosh. However, when it comes to looking at the mitigation circumstances for the 20-year rule, France, Germany, Italy and the Netherlands have all signalled their intention to withdraw from the energy charter treaty. As I will explain later, the EU as a bloc will now potentially decide to withdraw from the energy charter treaty, although it will obviously take time to gather agreement and the UK can therefore lead on making a concerted effort to get all the countries to withdraw. If they do, that potentially creates a mechanism by which some of the disputes are unable to be taken forward in certain areas, such as the wider European area; there could be an opportunity to demonstrate how the overall potential liability can be cut by over 60%.

As the hon. Member for Llanelli (Dame Nia Griffith) has made clear, the risks of the status quo could hold the UK open to future challenge. The status quo cannot continue, because continued membership of the energy charter treaty risks having a chilling effect if Governments back away from new policies in order to avoid being sued—a danger that UN climate experts specifically warned about in the IPCC report. The UK Government have already recognised the problem, with the then Energy Minister, my right hon. Friend the Member for Chelsea and Fulham, saying:

“The UK cannot support an outdated treaty which holds back investment in clean energy and puts British taxpayers at increased risk from costly legal challenges.”

I hope to see the same clarity from the new Department for Energy Security and Net Zero, as well as from the new, beefed-up Department for Business and Trade.