Climate Change: Behaviour Change
Lord Deben Excerpts(1 year, 6 months ago)
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Lord Callanan (Con)
The noble Lord makes a good point: providing the skills necessary for all the future green jobs is extremely important, and we are taking action on that. We have launched a number of different training competitions and, through BEIS alone, provided about £20 million for two sets of training competitions that have provided tens of thousands of new training places. The DfE has a large skills programme as well, and we work closely with it to ensure that we provide the workforce with the skills that they require.
Lord Deben (Con)
I declare an interest as chairman of the Climate Change Committee. Why do the Government find it so difficult to help people to eat not 20% less meat but better meat, particularly when that meat is British and produced on pasture with the lowest carbon footprint in the world? Why can they not provide better information for ordinary people to decide how they can insulate their houses? Frankly, it is difficult enough if you are chairman of the Climate Change Committee to find out how to put a heat pump in your house, which I have done. That took me a long time because it is complicated, and there is no indication from the Government as to how best to make those decisions.
Lord Callanan (Con)
I think my noble friend is wrong. If he looked at the pages on GOV.UK, he would find tailored advice for his property linked to its EPC, if one exists. Perhaps he needs to spruce up his computer usage.
Climate Change: Trade Policy
Lord Deben Excerpts(2 years, 6 months ago)
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Lord Grimstone of Boscobel (Con)
My Lords, the shipping industry is of course very important to the United Kingdom. I am sure noble Lords have noted that my right honourable friend the Chancellor of Exchequer gave some relief to the shipping industry yesterday in terms of tonnage tax. If I may, I will follow up in a letter the particular points the noble Lord has raised this morning.
Lord Deben (Con)
The Australian Government specifically exclude farmers from any climate change responsibilities and the New Zealand Government have a different system for them, but we are going to ask our farmers to meet very considerable responsibilities on climate change. How on earth can the Government allow goods to come into this country to compete with our farmers and expect our farmers to meet the high standards that we are going to demand?
Lord Grimstone of Boscobel (Con)
My Lords, I am happy to repeat again from this Dispatch Box our commitment to maintaining very high standards of animal welfare, and of course food safety, in relation to free trade agreements. I do not fully agree with the points the noble Lord makes. We do seek to secure these points in free trade agreements, as I said earlier, and we are absolutely committed to upholding the UK’s high environmental standards when we negotiate our free trade agreements.
Climate Change Act 2008 (2050 Target Amendment) Order 2019
Lord Deben Excerpts(4 years, 10 months ago)
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Lord Henley
The order addresses setting a new target. Obviously, we will have to address the questions about how we achieve it. As I understood my noble friend’s question—I may have misunderstood him—he was concerned about our production of carbon as a country. He was addressing consumption and what one could therefore say was displaced production: consumption by means of importing things that might otherwise have been produced in this country. That is what I was trying to address, and I hope that the noble Lord will accept that. On his other point about the means by which we do that—whether we can also reduce levels of carbon by planting trees, carbon capture and storage, or whatever—I imagine that all these matters will come up, but that is another issue and not for the order.
I turn to the amendment in the name of the noble Lord, Lord Grantchester, because it might help if I say a few words now in advance of him, presumably, moving his amendment and then making a decision on what he wants to do with it. I believe that his amendment is unnecessary and that a bipartisan approach to the order is very important. As I put it earlier, this is something on which the bipartisan approach and the need to take people with us is important. Perhaps I can deal with the three points that he makes in his amendment.
On the first, I direct the noble Lord to the detailed and analytically rigorous report we have had from the Committee on Climate Change and assure him that it is just the start. We will build on the frameworks set out in our clean growth strategy and industrial strategy to deliver that target. As the climate change committee has acknowledged, those provide the right framework for action. In addition, our forthcoming White Paper will outline the Government’s vision for the energy system to 2050. On his second point, we are using the powers set out in the 2008 Act—an Act introduced by the Government of whom he was a supporter, and which again had cross-party support. The climate change committee’s report has also shown that that target is now feasible and deliverable, and can be met within the same cost envelope as the 80% target. I have also announced that the Treasury will publish a review on that point. On his final point, although emissions from international aviation and shipping are not formally included within the legislative target, we have made clear the need for action across the whole economy, including international aviation and shipping. As he knows, emissions from domestic flights and shipping are already covered by our existing domestic legislation—
Lord Henley
If I may finish this sentence, I will give way. They are already covered by our existing domestic legislation and the Committee on Climate Change accounts for international flights in its advice to us on setting interim carbon budgets. That will continue to be the case for our more ambitious target.
Lord Deben
Does my noble friend wish to emphasise the fact that, under the arrangements here, shipping and aircraft emissions are included in our estimates and budgets so that, although how we will do it internationally may still be a matter for argument, the Government have committed that the net zero will cover emissions from aeroplanes and shipping?
Lord Henley
My noble friend is correct. I was trying to distinguish between domestic and international in the legislation that we already have. As I and my noble friend have made clear, both of them will continue to be covered in our interim budgets.
Today is just the start. We have laid a strong foundation in the clean growth strategy and the industrial strategy—a point borne out in the independent advice from my noble friend Lord Deben as chairman of the Committee on Climate Change. As I think all noble Lords will accept, achieving net-zero emissions will require hard choices and leadership. It will require us to agree on the ends and strive for consensus on the means, which is why I stress how important it is to take people with us. It will require us to continue to transform our economy, our homes, our transport, our businesses and how we generate and use energy.
Our forthcoming energy White Paper, which noble Lords must wait for, will outline the Government’s vision for the energy system in 2050 and a series of actions to enable that system to evolve during the next decade to achieve our 2050 aims. We will lay out plans across other sectors in the months and years ahead. With continued cross-party support and collaboration across all sectors in society, we can deliver this. I commend the draft order to the House.
Amendment to the Motion
Lord Deben
My Lords, the issue before us has been debated often before, but I think it would be helpful if I were to describe how the process works. First, I want to go back to the Climate Change Act and remind the House that it was entirely a cross-party decision. It was proposed by all the Opposition parties. It was prepared by the Conservatives with Friends of the Earth, and it was supported by the Liberal Democrats, the nationalist parties and the independents—yet it was not pushed in that way. It was pressed upon the Government that the Government should introduce it in order that it would be a totally cross-party decision. My predecessor, the first chairman of the climate change committee—I declare my interest as chairman—was manifestly independent and able to mirror that cross-party agreement. There were a few who voted against it. My noble friend Lord Lilley has been opposed to it ever since then. I venture to say that he was wrong then and he is wrong now, but that it not the point. He is in a minority now, as he was then.
The reason we passed that Act was that we saw that climate change was the biggest material threat to us that existed. Now fast forward to Paris. It is worth reminding the House that the agreement in Paris is, of course, not perfect, and many countries will not do what they promised to do. Indeed, if they all do what they promised to do, it is still not enough; they will have to do more. However, the fact is that it was a unique moment in the sense that every country in the world agreed to do something together. That has never happened before and is illustrative of the fact that the world understands just how serious the issue is. Those who seek to hold Britain back must remember that this is a decision which the world has made and is continuing to make a reality. I will come in a moment to the question of the distinction between production and consumption emissions, but it is worth starting by saying that we agreed on measuring production emissions because those are the emissions that we can control; they are the things that we can make sure we reduce and, if we concentrate on them, we will not double count.
We had to put Paris into operation. In the cross-party balance that I shall seek to have, I must start by congratulating the Government on being the first Government who asked for the means whereby we could meet our Paris obligations. It was that request which the climate change committee sought to answer in its recent report. I was unhappy to hear those who said that the report was uncosted and unprepared. It has been recognised universally as the most seriously presented, costed effort to show the answer to the three main questions we were asked. The first was: was it necessary to do this and, if it were necessary, should it cover carbon and greenhouse gases as a whole or just carbon? The second big question was: was it possible? The third big question was: by when was it possible? The committee approached these questions by using all the information that was available, by seeking to fill in gaps where there were gaps and by seeking the best information and the best scientific base in order to fill those gaps.
Those who do not accept what we are doing today have a responsibility to argue the case, the details and the facts, and to show the science which they claim argues a case different from this one. I put it to your Lordships that this is by far the best document that has been produced, making the best attempt to look at how to face this real international emergency, and that so far no one has made any basic statement, backed by facts and science, that gainsays the argument that we can do it, that we have to do it and that we can do it by 2050.
Therefore, I thank the Government for asking the question. I remind the House of what I said in another debate: if you ask the question and you get the answer, you cannot ignore it. The problem with knowing is that it brings with it responsibility. It is the story of Genesis: once you know, you cannot avoid responsibility. Mr Trump does not want to know because, if you know, you have to act.
I put it to the House that those who deny the way in which we propose to act, feeling that it is impossible, have to explain to the House why this issue is not as serious as we think it is. It is no good just saying, “Well, it’s going to be expensive and difficult, and really we don’t much like it”. They have to explain why they believe that climate change is not the threat that it is and that ignoring it will not risk what most of us believe we risk.
I remember a comment made by my noble friend Lord Garel-Jones. He said to a climate change sceptic, “If we do what the climate change committee says and it turns out not to be right, we will have cleaned up the world in a remarkable way. It might have cost us a lot of money but, on the other hand, if we do what the sceptics say and they turn out to be wrong, we will have buggered up the planet”. That is the fundamental choice that we are making. The Government have accepted that that means that we have to set this zero target, and it is of course a target for all greenhouse gases and not just carbon. Those of us on the committee came to the decision that that was so, and we have argued that case on some very—if I dare use the word—conservative lines.
First, we have assumed, and argued on the basis, that we have only the technology that we have; we have not taken a sort of Bush-ite attitude that something will turn up. Secondly, we have not taken into account the extra advantages that one could argue would come in other areas, such as health. We have not done that because we felt that we should put the most conservative —in other words, the most expensive—facts before the nation, as that was the right way to do it. We have also made sure that we have not included any major estimate of the reduction in costs, even though the costs of what we are doing have fallen dramatically in the past. We did all those things because we believed that that was the way to make the nation accept that this was possible, necessary and affordable, even if we put the highest price tag on it, as we should.
We are disappointed, I have to say, that those who appear not to have done the mathematics have produced new figures, some entirely out of the blue and some based on absolute nonsense. The Global Warming Policy Foundation talked about a figure reached by suggesting that to retrofit every house in Britain would cost £150,000 per house. Of course, you can produce any old figure you like if you start with rubbish figures in the first place.
I am sorry to see that a letter was sent to your Lordships by the president, I think, of the Global Warming Policy Foundation, which says, first, that we are presenting a new Bill. There is no new Bill here. We are saying that the amount of money, of between 0.5% and 2% of GNP—which Parliament had already voted for to cover the 60% reduction in emissions that we first thought we had to achieve, then voted for again to cover the 80% reduction—is the same amount that will be necessary to reach net zero. The reason for this is that we have been able to meet the 80% reduction at a much lower price than we expected, not least because of a reduction in the cost of offshore wind and the like. I remind the Government, to whom I have one or two things to say, that offshore wind became as cheap as it did because the Government intervened, providing the possibility of the money to create a market, which meant that offshore wind dropped in price. This is not just a matter of leaving the market to act, but of creating the circumstances in which the market can act.
I point out to the House that the figures in this document—this letter written to everyone—are just not true. The true figures are those that have been worked on for months by the best brains we could put together. Those are the figures on which we should base our future, not figures that have always been wrong. The Global Warming Policy Foundation has been wrong on every single figure it has put forward; there is no reason now to accept what it says. I say to my noble friend that when you agree to a net zero target, agree that it will be statutorily enforceable, and agree that you will commit to it, it is necessary to provide the means of doing so. The Government have not done that. As we said in our last annual report, the Government, although on course to meet the third carbon budget, are not on course to meet the fourth or fifth carbon budgets. Unless they do so, they cannot meet the net zero target we are today putting into law.
The whole idea of having budgets was that nobody would put off until tomorrow that which they should do today; that is why we have budgets. If we did not, as we perfectly well know, every Government—Labour, Liberal Democrat, Conservative or any party you like—would always find a good reason for not doing today what they ought. The targets in those budgets set a mechanism by which we have to do what is needed now. If we do not meet those targets, we are laying on the shoulders of future generations that which we should carry. We have to carry it. The words of these young children remind us that it is their future we have in our hands. Many of us in this House will not be here in 2050, but what happens in 2050 will affect all those we love most. The idea that we should betray them by not doing what we know we should is unacceptable.
The Government have to recognise that they are behindhand on their decisions about transport. The year 2040 is far too late; we cannot do it on that basis. It must be at least 2035 and, in my view, 2030 ought to be our target because I do not see how otherwise we give ourselves enough elbow room to reach it. The Government have not faced up to the problems of heating, which is a real issue.
The area where the Government are most to blame is of course their refusal to improve the regulations for housebuilding, which means that every year we are building more than 200,000 houses that do not meet the requirements and will have to be changed in future. I am afraid I have used an improper word about this before but we are building crap houses and putting the cost on the shoulders of the people who buy them. That is unacceptable and the Government could change it tomorrow. If they do, though, let us make sure that means that it starts immediately and we do not excuse people who have planning permission so the building goes on for five or six years.
Frankly, I am ashamed of the housebuilders who, given that nine of them make 80% of the houses built, could have done this together. Instead they have blamed the Government and said, “The Government have to do it: we’re not prepared to do it ourselves”. If you applied the amount of money given to the chief executive of Persimmon to the houses he built, he could have built them all to the sort of standards we necessarily have. I look to the Government to make significant changes as far as that is concerned.
The Countess of Mar (CB)
My Lords, I hate to interrupt the noble Lord, but is he aware that the Companion suggests that speeches should be limited to 15 minutes, otherwise they engender boredom?
Lord Deben
I beg the noble Countess’s pardon but this seems to me rather an unusual situation and, if she will let me, I should like to finish. I hope the House will accept that.
I must make a comment about measuring consumption. We will provide those figures regularly from the Committee on Climate Change, but you have to control the things that you can control and not deal with those that you cannot. In that sense, it seems right that we should keep to the internationally agreed production figures.
I end—I was going to end at this point in any case—with a simple fact. The Government have done the right thing. I have to say that I am sorry about the inevitable misunderstanding of an amendment expressing regret because cross-party agreement is vital to win this battle but, when we pass this historic, remarkable and wonderful statutory instrument, the Government must understand that three simple words go with it: “Now do it”. It is no good simply saying it, taking credit for it or saying, “We’re all in it together”. In the end you have to do it—not tomorrow but today.
Lord Donoughue (Lab)
My Lords, before the noble Lord sits down, he referred to the Global Warming Policy Foundation, of which I am chairman. The noble Lord—apparently wildly but, I am sure, sincerely—claimed that every figure printed by the foundation was wrong. I congratulate him on having read every one of the millions of figures we have published; I certainly have not done so. He said that all other forecasts of the costs of this programme were wrong, and perhaps implied various motivations. Is he suggesting that the BEIS forecast of the costs, quoted in the Chancellor’s letter to the Prime Minister and 40% above his, is wrong?
Lord Deben
I did not say what the noble Lord said; I said that on each occasion we have had a target—of 60%, 80% and now 100%—the estimates of the Global Warming Policy Foundation have been wrong. I have looked very carefully at the foundation’s website; we have checked everything it says, and in each case it is not right about the figures.
As for the BEIS figures or the Chancellor’s figures, I merely say that we have spent many months producing the best figure that can be produced. I have still to understand the basis, in science or economics, of any other figure produced. I have discovered that those Global Warming Policy Foundation figures that I have been able to discern are much less accurate than those we were asked for, spent months producing and have given to the Government. I suggest that we stick to the proven figures rather than those which fit other people’s views.
Lord Lilley (Con)
Before my noble friend sits down, has he read the document in my hand? It states that the cumulative cost of the Climate Change Act up to 2030 would be £3 billion. The document was produced and published by the Global Warming Policy Foundation, written by me and drawn entirely from the Government’s published figures, which my noble friend’s committee has never refuted, rebutted or criticised.
Lord Deben
I would hate to refute, rebut and criticise my friend at so late a point in my speech, but he has only just returned from asking a question that included all those points while admitting that he had not actually read the Committee on Climate Change report.
Lord Deben
He may have read it now, but he asked prejudiced questions about it when he had not even read the documents. As far as I can discover, no member of the Global Warming Policy Foundation has ever been to any of the presentations we have made of these documents. I really wish they would have an argument with us on the facts.
Lord Lilley
Yes. That is not a point I have made, but I acknowledge that the noble Baroness is right to rebuke whoever did make it. I am not opposing this measure; I am demanding an impact assessment, one that covers the aggregate. The Minister’s response is that we will get a cost-benefit analysis of individual measures, as the noble Baroness referred to. I just think we ought to know what the rough total is, as assessed by the Treasury. I am not alone in this; I call in aid my noble friend Lord Deben. He rightly said that I should have read the CCC report in its entirety, rather than just the summary, before I asked my question. Now that I have read it in its entirety—I did so without losing the will to live at any point—I know that it calls for a full impact assessment by Her Majesty’s Treasury. I am endorsing that call.
Lord Deben
As it was me who was asked the question, I remind my noble friend that what we said was that the Treasury should look at the distribution of the cost to make sure it was fairly spread. That is a different thing from what my noble friend is asking for.
Lord Lilley
My recollection is the words, “look at the cost, and in particular the distribution”, which seems sensible. I endorse both aspects of my noble friend’s appeal to the Treasury.
Reducing Greenhouse Gas Emissions
Lord Deben Excerpts(5 years ago)
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Lord Deben (Con)
My Lords, I declare an interest as chairman of the Climate Change Committee. I have come directly from the launch of the net zero report, asked for by the Government—the first Government in the world to ask for the mechanisms to meet what we agreed to in the Paris Agreement. I feel passionately that all-party agreement is the most important part of our system. I am also concerned lest all-party agreement becomes an excuse for a degree of unwillingness to move fast enough; a complacency sometimes comes from all-party agreement.
I have constantly objected to people who try to make party politics out of this, which is why I objected to my noble friend’s Daily Telegraph article talking about climate change and the Conservative Party, and why I think that last speech did not contribute to the debate at all. I do not care who has done it; I care about what is being done and what will be done. That is why the Climate Change Committee answered the Government’s request today. They now have to answer the facts, which are that we can reach net zero, not merely in carbon but in greenhouse gases, and that we can do so by 2050. We have made that clear and the mechanism is there. If the Government do not accept that, they will be saying that they accept neither the science nor, indeed, the best mechanism for doing so that has ever been produced. This is 600 pages of ground-breaking work that has already been recognised as a total game-changer—as important as the Stern report, if not more so—because it sets us all a real challenge.
But it means action now; it does not mean hanging about. There is a series of things that we have to do. I am pleased about the protesters, students and so on because they are saying to us, “You have a responsibility not to destroy our future”. I declare another interest, in the form of three grandchildren and two more on the way. I want their future to be guaranteed and it is we who can do that. It means that we must stop building crap houses which do not provide their owners with proper energy efficiency. It means having the kind of heating that does not need fossil fuels. It means doing something about the appalling condition of our soil. The fertility of our soil must be recovered because we need it not only for farming, but even more in order to sequestrate the carbon that itself is part of the soil fertility circle.
We need to bring aviation and shipping into the figures—and indeed, that is what we have insisted upon. There can be no sensible policy if we do not cover all those things. What we do must be market driven because otherwise there will not be strength enough to achieve what we need. But the market itself has to be driven by the terms under which it operates. The Government have to make sure that the occupancy advantages do not stop the change we need. That is a role of government. Regulation is not about the nanny state; it is about ensuring that the needs of the next generation are taken fully into account now, when we can make the necessary changes, which we have adumbrated in detail in this report.
Curiously, the new generation is threatened in a way that is utterly different from the threat we faced when I was growing up. Then, we were threatened by nuclear war, but it did not happen. Climate change will happen: it does happen. It is not a threat in the sense of being possible; it is happening now and unless we intervene, it will overwhelm us.
As I go around the country, I am fascinated to note that people no longer ask whether climate change is happening. The deniers have lost the battle because the science is so fundamentally clear. The new battle is not to make people believe in climate change; it is to take the steps that are necessary. We can take them and we can do so within the financial envelope Parliament set aside when our aim was 60%, let alone 80%. We can do it within the costs that we have allowed for today because government action has brought down the price of what we need to do, and further government action will continue to do that.
I finish by saying to my noble friend that we do not want fine words. We do not want comments about what we did, or why the Liberals or the Labour Party did not do what they could have done. What we want is a very direct statement. You asked for this report. You have got it. You put it into action.
Patents (Amendment) (EU Exit) Regulations 2018
Lord Deben Excerpts(5 years, 4 months ago)
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Lord Warner
I totally agree with the noble Lord and will set out my reasons for doing so in relation to this particular set of regulations. The concerns that the BIA has about this set of regulations relate to paragraph 55, which is all about the number and date of the earliest of any EEA authorisations which lead to the granting of a UK authorisation. The effect of that setting of the date on the supplementary patents certificates, which are the extensions for patents of medicines that provide additional patient life, is to compensate for the period of market exclusivity lost during the essential regulatory approval process. So the market authorisation sets the date for the five-year market exclusivity arrangements that apply to medicines.
This starts to get a bit complicated so I will keep to the wording of my brief. The SPCs can provide up to five years of extra protection, and the precise period of the additional protection is determined using the first regulatory marketing authorisation date currently within the EEA. The amendment to which I have drawn attention, which is set out on page nine of the regulations, would maintain this EEA-wide stipulation for UK supplementary patent certificates despite the medicine covered by the SPC being subject only to a UK market authorisation—that is, it could not be marketed in the UK until approval by the UK-based MHRA. This would have the SPC’s duration aligned with those granted elsewhere in Europe on the basis of first authorisation in the EEA even if the UK authorisation was much later.
In so far as one understands why the Government are doing it this way, it appears that they are seeking to encourage life sciences companies to launch medicines in the UK at the same time as they launch them in the EU/EEA. The BIA fully understands what the intention is; it just does not agree that it will have the effect that the Government think it will. The BIA says that in reality many of its member companies are saying that the regulation is more likely to delay further the launch of a medicine in the UK and is adversely affecting the global reputation of the UK as a location for the life sciences industry.
Lord Deben (Con)
Is not the point that the noble Lord is making rather wider than that? He seems to be saying that if either the Government or the body to which he refers are right, this regulation changes the position in which we are. In other words, we do not need to argue whether it would have this effect in one direction or the other; all that we need to argue, to make the point that I think we are all trying to make, is that it is just not good enough to say, “This regulation doesn’t change the situation”. It manifestly changes the situation whether the Government are right or the BIA is right.
Lord Warner
The noble Lord is spot on. That is exactly the point that I am making. I want to develop the argument a bit more and relate it to the problems around consultation, or the lack of adequate consultation. I have a lot of respect for the BIA, particularly following my time as a health Minister when I had a lot of contact with it. It is not an excitable group of people who write and complain to the Government at the drop of a hat but a responsible trade body that any Government of any complexion would do well to take notice of. Moreover, the BIA is concerned about the lack of process and consultation on a regulation that will have a huge impact on its sector and on NHS patients:
“A strong intellectual property framework is essential if the UK wishes to have long-term sustained investment in R&D, remain a globally-attractive location for international investment and grow UK companies in the UK”.
I think we are all agreed that those are desirable things. However:
“Due to other regulatory requirements in the event of ‘no deal’, the exclusivity term for a medicine in the UK would be reduced as a result of the Article 3 amendment”,
in these sets of regulations compared to the rest of the EU. The threat of,
“a shortened data exclusivity period has adversely impacted global companies’ views of the UK”.
Companies have told the BIA—here I will quote what they have actually told the BIA—that a product will,
“never be launched in the UK before the EU”.
The UK,
“has moved further down the priority launch market”—
one company has told the BIA that the UK has moved from the first tier to the third-tier launch market for upcoming new products—and that the international reputation of the UK as a place for global pharmaceutical companies to undertake business has been damaged at the very time Brexit is already having an adverse impact on the UK’s global reputation. These are the points that a very responsible trade body is making about this specific set of regulations.
Lord Warner
I am grateful to the noble Lord for his support. I have never been much of a one for taking notice of my own party’s Whips let alone the Government Whips.
The Minister should pause these regulations and conduct a proper consultation before taking them forward. The Government should delay the process until they have heard what the industry has to say about the impact of these regulations on the UK life sciences sector.
Lord Deben
My Lords, I am concerned about the consultation element. I am interested in the difference between the wording in this SI and the one that we are going to discuss later. This one says that,
“the Intellectual Property Office held informal discussions with a small group of selected individuals”.
The one that we are going to discuss later says that,
“the Intellectual Property Office held informal discussions with a small group of trusted individuals”.
Does this mean that the selected individuals are not trusted or that the trusted individuals are not selected? This seems like careless drafting, which reveals the fact that there was no proper consultation of any kind.
I say to my noble friend that it is not acceptable to talk about consultation if one of the major bodies concerned was not consulted. It is also not acceptable to talk about consultation when it is informal with selected groups. I run a business and one thing it does is give advice to people. If I said that my advice was based upon a series of people whom I had selected informally, that advice would not be well thought of. I have to say: “These are the people that I have chosen, in order that they should be a broad range, covering all the issues we are dealing with”. I do not select them on any other basis. If my noble friend does not explain on what basis these people were selected, he has to accept that all sides of the House will be other than certain whether it was on the basis of coverage rather than support.
Baroness Kingsmill
I take the noble Lord’s point entirely. However, having pointed out the inadequacy of the consultation programme, it also throws into complete disrepute the idea that there was no, or no significant, impact on business or the public sector and they have therefore not bothered to make an impact assessment. When the consultation process has been so manifestly inadequate, it is impossible to say that there has been no impact.
Lord Deben
The noble Baroness makes an important point. I want to follow this line because if the consultation itself does not cover the industry, and those others whom you would expect to be covered, it is not likely that the Grand Committee can reasonably expect to accept the concept that there is no effect or problem. We can only do that if we are sure that the consultation has been widespread, properly chosen and the rest. Will my noble friend explain who was consulted with, why some people who are obviously necessary consultees were not consulted, on what basis that choice was made and why these were informal discussions? This is surely a very important SI and there should have been formal discussions.
Secondly, there is a problem in all these SIs which we have to remind the Minister of each time. It is suggested that we can allow these SIs to go through because they are very unlikely actually to be used, because they are based on the principle of a no-deal exit from the European Union. That may be true, but it does not excuse us from ensuring that the SIs are as good as they could be. They might be used, unless the Minister is going to say that they are not going to be. At the moment, they could be used and we have to apply the same intellectual rigour to these as we would to any other SIs.
Lord Adonis
The noble Lord is making a powerful point. Did he note the remark made by the Minister in the debate on the last regulation: that the reason why there had not been full and proper consultation on the regulations was because the department was so preoccupied with consulting on and framing arrangements for the Prime Minister’s deal? We are being told that the regulations which we are debating to make provision for no deal, and which the House is expected to approve, are being inadequately consulted on and—as is clear from the remarks of the noble Lord, Lord Warner—inadequately prepared precisely because the Government are so overloaded with making arrangements for the deal. If the Government’s priority is the deal, rather than a no deal, is it not right for them to withdraw these regulations, and the option of no deal? The Minister made the frank admission to the Grand Committee earlier this afternoon that the Government have not had the resources and capacity to conduct proper preparations and consultation for no deal.
Lord Deben
I do not think that I ought to follow the noble Lord down that road because otherwise there will be a complaint that one is somehow not keeping to the fact, but of course what he says is entirely true and I agree with him. However, the point is that we as a Grand Committee must not take any less notice of these SIs on the basis that they might not have to be implemented or indeed even that they probably will not have to be implemented. There are two reasons for that. One is that they could be implemented because that is what we are doing; we are making law. The second reason is the point made by the noble Lord, Lord Warner. In future, even if they were not implemented, in other contexts the fact that we had agreed to them would be used as a mechanism for suggesting that whatever is then being presented is perfectly all right because the Grand Committee of the House of Lords had been through them and they are only repeating them. That is the same kind of argument which says, “We are not actually changing anything”.
That leads me to my third point, which is simply this. If we are unhappy about the nature of the people who were consulted and if we also feel that we ought to know who they were and the circumstances in which the consultation took place, it is also true that we need to question the outcome. It is clear that those who know about it think that this particular SI changes the situation very significantly, but the suggestion is that there are no new obligations or burdens on private, public or third sector bodies and it does not require refamiliarisation—a word which I am fascinated to discover and would ask the Minister to explain what it means in order that I get a measure of it. However, if you get the consultation wrong you then get the outcome wrong and therefore you cannot say that there is no need for an impact assessment. The section on impact assessment is thus also very serious.
I direct the Grand Committee to paragraph 12.2:
“There is no, or no significant, impact on the public sector”.
The fact is that if there is no deal and this has to be implemented, there would be a huge impact on the public sector and that impact would be very expensive.
This is another point that I want to raise with my noble friend. There are no costs in this document. We are not told how much it is going to cost. The way to get around that is to say that it is not going to cost very much so, “we do not have to tell you”. However, one of the falsehoods of the whole Brexit argument is the suggestion that we are somehow going to make money out of it, whereas every time you look at any of these things, you see that the United Kingdom is setting up a system to do what historically has been done effectively on a Europe-wide basis. That all costs money and I want to know, as a Member of this House, how much it will cost. It is not acceptable that because we may not have to do it, we do not have to be told how much it will cost.
Baroness Kingsmill
Perhaps I may further the point that the noble Lord is making. We have now established pretty well that the consultation process was at best flawed but much more likely so limited as not to be taken seriously. From that has come the idea that there is no significant impact, which in turn has led to it being said that no specific action is being proposed to minimise regulatory burdens on small businesses. The weakness of the consultation process at the very beginning has worked its way through to saying, “Bad luck for small businesses”, and indeed, I might say, large businesses.
Lord Deben
That is absolutely true. It all adds up to my last point, which I feel is the most important point of all. The Government keep on talking about no impact, but of course in this SI they cover up the fundamental impact, which is that the benefit that used to be enjoyed by those to whom this applies because we were part of the European Union will be removed. That is a huge impact. When the Government talk about no impact, they are really saying that, as long as you confine your activities to the United Kingdom, there will be a little arrangement which will, roughly speaking, be the same as the arrangement that we had in the United Kingdom when we were part of the European Union. That is what we are saying.
That is an entirely different situation, because it means that we do not have the advantages which we had before. I know that that is an integral part of Brexit, and it is one of the reasons why I oppose Brexit so strongly. It is unacceptable not to measure those impacts. It is unacceptable to produce an SI which suggests that there are no impacts when you are saying that if we exclude the biggest impact of all, there are no impacts. That is, at the very best, misleading.
I say to my noble friend that anyone in this country who reads this impenetrable stuff as carefully as we have all tried to will realise that there are two hidden falsehoods in the whole activity. The first is: let us pass it because it will never be used. The second is: when we talk about impacts, we will refuse to talk about the impacts which really matter, which are the impacts which disadvantage British people and make us less able to handle competitive situations, deal with our patients and work in the way in which we can at the moment. We, the Government, are not prepared to measure that because then the public might say, “My goodness, this does not sound a very good idea”. So they do not tell them the figures, the costs or the disadvantages, because it would undermine their position.
Lord Warner
I am grateful to the noble Lord and agree with every word he said. Rather more elegantly than I, he made the point I was making about the high impact that these changes, if implemented, would have on British people, jobs, access to medicines and so forth.
In this debate, we are making some fairly serious accusations about the Government and their failure to hold a proper consultation. I hope that the noble Lord will join with me in not allowing that debate to include blaming the Civil Service and the IPO, because they are as much victims as everyone else. They are operating in a system which has not properly allowed them to carry out the consultation that they might have made in normal circumstances. I should not like them, reading Hansard, to think that we are accusing them of dereliction of duty. I hope that he will agree.
Lord Deben
I entirely agree, but I add to that list the Minister because, like every other Minister, he has to defend all this nonsense. He has to defend a decision which the Government made. The Minister responsible has resigned because he saw what it meant. This Minister has to defend that. I do not think that is fair on Ministers. I do not think it is fair to say to a Minister: “You have to explain why there was no proper consultation; why when it says impact it means ‘impact (none of the important impacts but just those we have chosen)’ and when it says ‘costs’ it gives none because it excludes all the big costs which really matter. So no one can make any decisions about this, but it is all right because it may never be implemented”. I know it is very unpopular with the Whips and with Ministers but frankly, this Grand Committee has got to draw the attention of the public to the fact that these SIs are based on a wholly improper, wholly wrong concept. They are not just a transition operation. They fundamentally change the way in which many industries are going to operate. They fail to list the real costs, they have not consulted those who know and they have done a cosy little arrangement which this House and this Committee should not accept.
Lord Adonis
Before the noble Lord sits down, in the concluding remarks of his extremely powerful speech he referred to part 2 of the Explanatory Memorandum, which is where the Minister makes the appropriateness statement in respect of the scope of the regulations. He noted that the Minister, Sam Gyimah, who made all three statements in respect of the Equality Act 2010, in respect of the regulations being appropriate and in respect of whether they are in order with regard to the legislative powers conferred on the Government by the European Union (Notification of Withdrawal) Act 2017, has since resigned, and because of Brexit, the very policy enshrined in the regulations for which the Minister was giving these authorisation statements.
Further, in his resignation letters and subsequent statements, the Minister has expressed his extremely deep concern about Brexit in principle, and in particular the no-deal Brexit, the very subject of the regulations about which he was making the appropriateness statements which are before the Committee. Would the noble Lord agree that not only is this unprecedented—in my experience and maybe in his—but that it raises a huge concern: should we be proceeding with these regulations at all without either a statement signed by the current Minister and/or Sam Gyimah giving evidence to us on whether the concerns he has expressed about a no-deal Brexit might lead him to review the statements he has made on behalf of the Crown in part 2 of this Explanatory Memorandum?
Lord Deben
I do not want to embarrass any Ministers, including the noble Lord who is here. I want to exclude Ministers, both past and present, for a kind of corporate nonsense which the Government have presented and which is supported by a surprising number of people across the Benches. I think this Committee has a responsibility to say to the Minister, “One could not imagine this in any other circumstances. You could not make it up, as you can see when you read the detail”.
I end by coming back to the words I put before the Committee at the beginning. In one case it was “trusted people” and in the other it was “selected people”. It was not just a joke. It was to point out that whoever had to write this stuff knew perfectly well that it did not add up, and that there was no basis for presenting it except that somehow or other, the Government had to find a way of talking about these issues without telling the public the truth about impact, about cost and about the deprivation which this measure would bring to the British people if it were ever implemented.
Lord Adonis
My Lords, in my now quite long experience of the House I have found that on most occasions when policies are being tested and explained, amendments are being considered and so on, the difference narrows as debate advances. That difference can be eliminated entirely, sometimes because the explanations given by the Government turn out to meet the concerns, sometimes because the Government themselves move to meet the concerns and sometimes because the concerns are misunderstood. That is the general course. Because our job is to scrutinise there may still be resulting differences, but those differences are narrowed, not expanded.
However, a pattern is now emerging in the consideration by the Grand Committee of these no-deal regulations. In almost every case now, as the debate continues the difference widens, for three reasons. The first is precisely the point that the noble Lord, Lord Deben, has made so eloquently, which is that you are expected to believe, in the words of the White Queen in Alice in Wonderland, six impossible things before breakfast before you even consider these regulations. The first suspension of total disbelief that we are expected to entertain is that, all other things being equal in no deal, these regulations will simply make technical changes to govern the fact that we have left the EU with no deal. The problem is that all other things are not equal. The whole ground has shifted underneath the very activities, and the national interest and the companies, that are at stake.
That could not have been clearer than in the remarks of my noble friend—as I continue to call him; I know he now sits on the Cross Benches but he and I were Ministers together for many years so he will always be my noble friend—Lord Warner. I dare say that my noble friend, whom I hold in extremely high regard, knows this sector better than anyone in the House except possibly my noble friend Lord Darzi. He has huge, detailed knowledge from a long period of time as a Health Minister. My noble friend has reported to the House two issues of extraordinary import. The first is that the impact of the actual changes in these regulations will be profound for the industries concerned and for those who need to use their services. The second is that most of those directly concerned were not consulted at all.
That leads to the second big issue that has now arisen time and again in the Grand Committee: the consultation has been exiguous or non-existent despite the fact that the issues concerned are hugely important. The noble Lord, Lord Deben, who is one of the most forensic debaters in the House, noted to brilliant effect the use of the weasel words in respect of consultation in the Explanatory Memorandum regarding the,
“selected individuals with expertise in the relevant areas”,
who the Intellectual Property Office chose to consult.
Lord Adonis
I think that the Grand Committee will be extremely concerned to have information on this point. If what my noble friend has said is the case, it would be a situation without precedent in my experience: that on matters of significant impact on a major industrial sector, precisely one person in one company has been consulted and the relevant trade bodies were not even given the opportunity to express their views.
Lord Henley
I was going to leave this to the end and I suspect that any intervention I make will just prolong these proceedings, but for the sake of assisting the noble Lord at this stage, I can assure him that consultation participants on the technical view of the draft instrument included the BIA, the ABPI, the IP Federation, the Chartered Institute of Patent Attorneys, the British Generic Manufacturers Association and the agrochemicals industry.
Lord Adonis
A difference of fact, as my noble friend has just said, between the Minister and my noble friend Lord Warner, who has just pointed out to me that paragraphs 1 and 2 of Regulation 55 specifically concern exclusivity. This is the precise issue which he said should have been consulted on and on which the companies and trade associations concerned say they were not consulted. I simply note that, but this issue needs to be explored more fully before these regulations go to the House itself, as the situation at the moment is clearly unsatisfactory. The Minister, who is deeply honourable in these matters, would not wish this dispute of facts to be unresolved.
Lord Deben
Is the noble Lord not being a bit unfair to the Minister? Is the real problem here not the word “informal”? The Minister’s problem is that, if you have a formal consultation, you know precisely who was consulted and on what points. As I said in my own speech, if you have this curious thing called “informal” consultation, no Minister is able to answer these questions because you do not know what was said in any of the discussions. That is what is wrong with this consultation mechanism. The noble Lord is being unfair to the Minister, who can only say what is passed on to him, because this was not formal. There was no formal report, so we have no idea and nor does he.
Lord Adonis
The noble Lord makes a very good point. The Minister himself played no part in this process. All he can do is read out messages passed to him by officials. I do not hold him responsible in any way. Nobody was suggesting for a moment that he was personally responsible for engaging in this consultation and has therefore given misleading information to the Grand Committee. The point is that the House needs to know the truth.
I will make one remark on what the noble Lord, Lord Deben, said. He said it is hard to be precise about what happened if conversations took place during informal, as opposed to formal, consultation. However, there is a difference between informal consultation and no consultation whatsoever. The point made by my noble friend Lord Warner is that it appears not that there was informal as opposed to formal consultation, but none whatsoever. No conversations took place between the relevant trade bodies and companies, and the authorities responsible for drawing up these regulations. That is what he said, and it is of huge moment to the House. Using the word “informal” does not excuse these consultations being non-existent, which is the issue before the Grand Committee.
I return to the third thread of concern we have about the whole way in which these statutory instruments are being conducted. First, they depend on us believing the impossible proposition that no deal is not itself going to make a fundamental difference. The second issue we are constantly wrestling with is the inadequate or non-existent consultation. The third is the inability of Ministers to answer the points raised in the debate. That has been a running theme in these discussions. What happens—I dare say this will happen again when the noble Lord, Lord Henley, responds to this debate—is that the Minister restates the case for the statutory instrument that he made at the beginning. He selectively answers one or two points—to give him his due, he has just given a list of organisations that he said were informally consulted; it may or may not be accurate, but we need to establish that—but most of the points raised in the debate are not answered at all by the Minister. To be fair to him, the Minister himself played no part in this consultation and is simply having to read notes given to him by officials, who may themselves have been at some distance from the consultations that took place.
We are then expected to approve these regulations. Because of the inadequate arrangements for the scrutiny of statutory instruments—a point made very eloquently by the noble Lord, Lord Tyler, in earlier debates—we then have no further recourse. We cannot do what happens with primary legislation in this House, which is that we have a Committee stage, we can move amendments and probe the Government further, and the Government are under an obligation to come back to the House with further information. None of that happens. The only recourse we have is to seek to repeat this debate by referring the statutory instrument to the House and hoping—we then have no ability to amend it or to move amendments—that when the Minister comes to make the next speech in the House, he will respond to the points raised in the Grand Committee.
That leads me to an important point about how we handle these statutory instruments when they go to the House. On each of these statutory instruments that we have been debating and doing our best as Members of the Grand Committee to scrutinise, a lot of concerns have been raised but not met by the Government. I see that my noble friend Lord Foulkes is a member of the Liaison Committee and the Procedure Committee. He is a real power in the land in this House. Most of us are never admitted to the inner sanctum of these bodies, but he is. It is extremely important that Ministers write to Members of the House setting out their response to all the issues raised in the Grand Committee before the House comes to debate these regulations, so that we can then properly consider the adequacy of the Government’s further response. Let us consider the vital issue of consultation, which has been raised by my noble friend Lord Warner and on which I do not think the Minister is going to be in much of a position to comment, because he is dependent on notes passed to him by officials who are one stage removed from the consultation anyway. The House would expect a full statement to Members on what happened in the consultation—who was consulted, on what basis, what they said and what the Government’s response was—before this statutory instrument is debated in the House.
We need some mechanism—perhaps it is the Liaison Committee. Perhaps my noble friend Lord Foulkes, who takes on many public responsibilities, should take it upon himself to see that this process is conducted in a timely and adequate fashion before the House debates statutory instruments. I do not know whether my noble friend would be willing to take on that responsibility, but I am volunteering him. Otherwise, he may have a suggestion that we as a Grand Committee can then make for who should undertake this responsibility.
Retail Trade: Online Suppliers
Lord Deben Excerpts(6 years, 2 months ago)
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Lord Henley
We recognise this. As the noble Lord will be aware, we have made changes to the rates system to provide some help to the high street and will continue to do so. We have also established the Future High Streets Forum, which is chaired by my honourable friend the Minister for the Northern Powerhouse and Local Growth, Jake Berry. That will look at what we can do with retailers, but it is obviously up to retailers, as I said, to adapt to a marketplace changing as a result of consumer demand.
Lord Deben (Con)
Is my noble friend aware that this is a dangerous situation and requires urgent action? I refer noble Lords to my entry in the register of interests. Retailers have to pay business rates, which means that they start off at a significant disadvantage. They have to contribute to the producer responsibility levies—another disadvantage. They have to pay the proper apprenticeship levy—another disadvantage. We cannot wait for a general statement; we must act now. The latest proposition is that retail trading may decline by 22% in the next year. It is time for the Government to move urgently.
Lord Henley
I made it clear that we have made changes in the Autumn Budget, with measures worth £2.3 billion by cutting business rates and trying to bring a degree of fairness to the system. There are limits to how far one can go and one must accept that a lot of what is happening is a result of what consumers want. It is obviously up to the retail sector itself to adapt and change in the face of changing consumer and social trends. The Government are doing what we can. That is why I mentioned the Future High Streets Forum, chaired by my honourable friend and why we have announced changes to rates. Thereafter, it must be for the retail sector itself to see what it can do to change.
European Structural and Investment Funds
Lord Deben Excerpts(6 years, 5 months ago)
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Lord Henley
My Lords, the noble Baroness should listen very carefully to my answers. The guarantees I was giving were about the future of the shared prosperity fund. I can give categorical guarantees about European structural funds for 2014-20. Those guarantees will continue to stand, as has been made clear by my right honourable friends in another place. They will stand in a no-deal scenario, and all projects that were signed up to before the Autumn Statement of 2016 will be guaranteed by the Government after the United Kingdom leaves the EU.
Lord Deben (Con)
My Lords, my noble friend has said that in the future these decisions will be made by Britain, not the European Union. Can he explain precisely the difference in criteria between those used by the European Union at the moment, and those that he will use, and how, if he uses different criteria, he will also meet the promise that all those places that now receive money will continue to do so?
Lord Henley
My Lords, I did not say there would necessarily be different criteria. I said—and I am sure my noble friend would agree with this—that the decisions would be made by us and not by the EU.
Electricity Supplier Payments (Amendment) Regulations 2017
Lord Deben Excerpts(7 years, 2 months ago)
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Lord Deben (Con)
I shall intervene for just a short moment. Whenever we talk about these things there is always a kind of reticence—a fear somehow or other that the customer will be charged in an unsatisfactory way for Britain to move to the low-carbon economy that we all seek. I remind the Committee of my interest as chairman of the Climate Change Committee.
I will say three quick things. First, this is inevitably a complex matter. Inevitably, anyone listening to the Minister describing what was changing might have some difficulty in following, were they not absolutely up to date with what it was changing from. That is one of our problems: when we deal with these matters it is difficult to get them right and to get them simple. The Committee must accept that the Minister did a great job in explaining what is to happen. The regulations’ purpose is to do what I imagine we will go on doing almost every year to make sure that we learn from the lessons of the past and discover mechanisms whereby we can make the system work as cost effectively as possible. I emphasise that all of us wish to support that process. Whereas we want some stability in the overall system, we will be concerned if the basics are changed more than is absolutely necessary. We are perfectly happy if on each occasion we seek to tighten some things and loosen others to make the system manifestly more effective.
Secondly, however, I hope the Minister, in all the times that he speaks on these matters, will refer people to the work recently done by the Climate Change Committee, which shows that the overall effect of our low-carbon policy has been to reduce bills, not increase them. Roughly speaking it costs us about £9 a month more to pay for the costs of moving towards a low- carbon economy, but the bills are £20 a month less than they would have been because of the effects of those policies. As people exchange old white goods and other electrical goods for new ones, because of our policies, the latter are much more efficient. We have pressed the technology.
I remember going to buy a freezer at the beginning of the European Union process of warning people about the amount of energy used by new products—when the little notices came in for the first time. The freezers on offer ranged from those with an A rating to those with a G rating. As a matter of fact, I did not buy a freezer in that sale. I waited a year for the next January sales. I went around again and discovered that all the freezers were now between an A++ rating and a B rating. In one year we had changed: people were told about the value of low-carbon, low-emission products at a time when they could do something about it. They were not just generally told about it, but told at the moment when they could save so much a year by making that choice. Manufacturers discovered that they would not sell their products unless they made those technological changes.
I raise these issues because the constant talk in the press is very trying—not just for those of us who are concerned with them daily but for the Government and Opposition too—as if all this has made bills heavier, when it has not. Had we not done this, bills would be £20 a month more. That is not an imaginary figure, but shows how the reduction in domestic use of electricity affects the bills of the majority of people—some 85% of the population—who use both gas and electricity. In those circumstances, we have to go on talking about this, otherwise we lead people astray into thinking they are paying £9 a month extra, instead of saving some £11 a month in total. If they take a personal decision to improve their energy efficiency, they can make even more savings, but we never take that into account, of course, because it is a personal decision. However, the other two factors are a result of government policy playing back into how people pay their bills.
I want the Government constantly to quote this fact, because we have spent a lot of time on it, and it is very objective indeed. I know how objective it is, because our opponents have attacked it and said that it is outrageous, but have been unable to find a single item that they can show to be outrageous, being unable to find a single fact with which they can argue. It is outrageous to them, of course, because it undermines their whole attitude and the campaigning they have done—I am afraid—through a number of our popular newspapers. I hope that the Government will in future speeches include this simple matter to remind people, so that they always know.
My third point is that we hear from the press that the Government are very keen on keeping down energy bills and will make significant investigations and possibly take draconian measures to do so. I point out to the Minister that the report we have just produced shows that business electricity bills in this country are significantly higher than in the rest of Europe. It is not true of domestic bills, as a matter of fact; we sometimes forget that. It is more or less the same position with gas—the cost is somewhere in the middle of bills in the whole of Europe, which suggests that we may find there is not much we can do about it.
I have already spoken about the fact that bills are not greater, but less, because of our green measures, but I want to point to something in the report that is of considerable relevance to our discussion today: that electricity bills to business are higher in this country than in the rest of Europe. It is quite clear why: partly because we charge a higher distribution cost, whether or not it is a real cost, but also because our wholesale market is higher than in the rest of Europe. There is a real problem here. When as a committee we sought to find out why that was, nobody could tell us. Of course, the industry was unwilling to explain it—and one could understand why—and the Government admit that they do not have a ready answer. The Minister has said that the amendments address the cost of the necessary adjustment in how the market works and operating, as far as possible, a free market as we move towards a zero-carbon electricity supply. In that context, I hope he will spend a good deal of time concentrating on the two factors that are independently assessed as the reason for higher prices in the business sector. Otherwise, I am afraid that he may be led down the line that it is all about green taxes, when the opposite is true.
Lord Prior of Brampton
My Lords, I begin by echoing the comments of the noble Baroness, Lady Maddock, about Lord Jenkin. I was reminded of the Schleswig-Holstein question, to which the Duke of Wellington said that only three people knew the answer—and one was dead, one had gone insane and the other one had forgotten it. Fortunately, my noble friend Lord Deben has not forgotten it and spoke very eloquently about broader issues than those raised by the statutory instrument before us.
It was interesting to hear my noble friend’s story about how shopping for a freezer had changed in the space of a year—from being able to buy one rated from A to G, to one now rated A++ to B. That is just one small illustration of how technology has helped hugely in reducing the use of electricity. He is absolutely right that technology has significantly reduced bills.
Lord Deben
I am sorry but it is not just that the technology has changed; we have now shown people that it is not worth selling bad products. You have to use the technology and it is we politicians who have made that technology actually go into the marketplace, because it has been worth while. The Government should take credit for what they have done.
Lord Prior of Brampton
That is true. The incentives need to be there, but the fact is that technology is remarkable. Technology is going to do it. If we are going to solve the problem of carbon emissions, technology and incentives to use new technology—which is what the CFD programme is all about, as I understand it —are crucial.
My noble friend also spoke about the cost of electricity for business. It is an issue I take a particular interest in, given that it affects very energy-intensive industries, such as the steel industry, the glass and ceramics industries and other industries, including the potteries in places such as Stoke. It is difficult to know why our costs are higher. It is partly because of distribution and transmission, we are told, and partly because of the wholesale market, but I do not think we have a full answer to that. I have not read my noble friend’s report on this. It may suggest an answer. I will read it with interest. It is certainly a question that we need to answer. It is always very easy to blame the green lobby for the extra costs falling on high-energy consumers. My noble friend raises a question that needs to be answered.
I thank the noble Lord, Lord Grantchester, for supporting these regulations. He asked three questions. I shall write to him on them. I have been given the answer, but I cannot absorb it and give it to the noble Lord at the same time without just reading it out without thinking about it. He raised the more general issue of the impact of Brexit on the internal energy market and what tariffs there might be. I will have to give him the rather dull and predictable but honest answer that we will have to wait to see how the negotiations turn out.
The regulations the Government are seeking to amend through this instrument affect the CFD scheme through making some fairly minor technical amendments to improve the efficiency of the CFD supplier obligation and to amend the operational costs levies of the Low Carbon Contracts Company and the Electricity Settlements Company. As I read this, I do realise that this is quite complex, arcane stuff. These companies play a crucial role in delivering the CFD scheme and the capacity market scheme, and they must be sufficiently funded to perform their roles effectively. I have been struck by how the cost of offshore wind has come down in the last auction and how the capacity auction has driven prices down. The market is very powerful. I thank the noble Lord for his support for this measure?
Motion agreed.
Carbon Budget Order 2016
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Baroness Worthington (Lab)
My Lords, I add my congratulations to the Minister on taking up her new role, which combines energy with her previous role of business. I declare an interest: as a civil servant I took part in the drafting of the Climate Change Act. I am delighted to see that these orders are tabled today.
The Climate Change Act is, I believe, a world leader. Its depoliticised structure gives it flexibility and strength; it can bend, so it does not need to break. The level of the fifth carbon budget was announced on 30 June, one of the most extraordinary days in one of the most extraordinary weeks in British politics. The reason is that the Climate Change Act creates a legal metronome, providing a long-time structure that rises above such short-term perturbations, even when they are so all-consuming.
In this context, the Government are to be praised for agreeing to the targets proposed by the Committee on Climate Change and on setting a budget that is on average 57% below 1990 for the period around 2030. However, there are many unresolved issues surrounding the carbon budgets and how they are accounted for.
During the recent Energy Bill, we had a long debate about the fact that, after 2020, there will no longer be any specific targets that require us to continue investing in low-carbon energy infrastructure. This is because the EU targets dictating the build-out of renewables will cease to apply. The noble Viscount, Lord Ridley, alluded to this in his speech, and indicated that we might be overcomplying with our renewable electricity target. I point out to the Minister that we are underdelivering on the two other portions of that target, so it is not right to say that we are going to be overcomplying with the EU legislation.
That aside, the fact that there are no renewables targets may not be a bad thing, but we need targets that will help to ensure that we see investment in low-carbon technology across the spectrum, including nuclear and carbon capture and storage, where I know there is more common ground between both sides of the House in supporting those technologies.
The noble Lord, Lord Teverson, also alluded to that issue and mentioned the EU emissions trading scheme, which will of course carry on. As things stand today, we will continue to use that trading mechanism to count towards our budgets—that is to say, we will use the overall allocation of EU emissions allowances as a measure of whether we have stayed within our budgets, rather than the actual emissions occurring here in the UK. We propose to fix that loophole by making clear that for the fifth carbon budget actual emissions will be counted, not offset emissions using EU allowances. A vote on this issue was won twice in this House but overturned in the Commons. I continue to believe that this is a necessary change of policy, and ask the Minister to seriously consider starting an immediate review of the current accounting rules so that early guidance can be given about how the fourth and fifth carbon budgets will be accounted for. That is even more critical, given the uncertainty that has been triggered by the recent referendum.
As things stand, we will not find out precisely how budgets can be met until a statutory instrument is passed after the start of the budget, so in 2029. This provides no clear guidance for those wishing to invest in UK infrastructure and is suboptimal, to say the least. I believe it will prevent actual investment in physical UK infrastructure from coming forward. The noble Viscount, Lord Ridley, has constantly referred to the cost of tackling climate change, but it is also true that one person’s cost is another person’s investment.
Although the Energy Bill sounds technical, and to a degree it is, I stress that this issue is not secondary to the search for a return to true economic growth; it is of central importance. If we find ourselves in a situation where future trade rules are set by the WTO, we will still be constrained in what we are able to do to stimulate economic growth. However, addressing environmental threats justifies government intervention under the WTO. Reinvesting in our energy systems and infrastructure provides one compelling WTO-proof way to rebalance the economy and stimulate real-world growth.
It is not just good economics to take action on climate change; it is also good politics. People care about climate change. Irrespective of what we have heard here today, they care, and it is not just the politicians who—the Minister referred to herself in this context—almost unanimously voted in favour of passing the law in 2008, it is not just the NGOs and it is not just progressive business voices; it is also the general voting public. We especially care when our homes and businesses are flooded or damaged by storms. We care when we cannot escape the stifling heat or unusually cold temperatures.
However, we also care on a deeper level. We want the next generation to have access to opportunities we did not have. We want to believe that we worked hard for a reason. If people believe their lives are going to be worse, their worries greater and their chances more limited by a world destabilised by an unstable climate, that will be a source of anger and frustration. The impacts of unchecked climate change will be felt widely by children alive today, with impacts growing, potentially exponentially, over time. It is our moral duty to act now, in full knowledge of the risks we are storing up, to reduce those risks as fast as possible.
I will briefly echo the words of the noble Baroness, Lady Featherstone, on the Paris agreement. The fifth carbon budget is our own version of the Paris agreement. It covers the same period and is in sync with the levels we would expect to take under that target. The noble Viscount, Lord Ridley, is looking at me quizzically, but his statements were full of errors, because it is not true to say that all EU member states were expected to take a 40% target. There is such a thing as redistribution of the effort across the member states. Therefore, it is not true to say that everyone would be on 40% and that we are necessarily going further than that.
I end with a question about the Paris ratification. Recent analysis has shown that we are tantalisingly close to seeing Paris become law this year, and the UK could make all the difference. Can the Minister say when her Government plan to initiate the legal process of ratification, and if it will not happen immediately, why not?
Lord Deben (Con)
My Lords, I declare an interest as chairman of the Committee on Climate Change. I remind your Lordships that the committee has a statutory requirement to provide the most cost-effective way of reaching the statutory commitment of cutting our emissions by 80% by the year 2050. I also remind your Lordships that that is not as ambitious an end as the Paris climate change agreement demands. Therefore, far from being ahead of other people, we have a sensible programme to reach somewhat less than will have to be reached under the climate agreement.
My noble friends Lord Lawson and Lord Ridley do themselves a disservice when they suggest that, because Britain has so small an amount of emissions, we do not count. Yet in their arguments for Brexit, their whole point was that Britain counts on its own. I merely suggest that if we say, “Well, other people can get on with it, but we won’t”, we let down future generations in a way which I hope my noble friends will sometimes be concerned about. They are seeking to stop this generation protecting the next generation, which is why the Climate Change Act has been, and remains, supported by all parties. That is why it is so important to have a system of budgets, as we have, so that everyone understands where we are going and the speed with which we hope to go there.
I have no idea whether the new arrangements will be better than the last as regards Ministers, but I warn my noble friend Lord Lawson that he has underestimated the commitment of Greg Clark as Secretary of State. I do not think he has read what Greg Clark said about his commitment to climate change, or the commitment to oppose climate change which is clearly on the record from our new Prime Minister. As the independent chairman of the Committee on Climate Change, I shall keep both of them down to their words. However, I merely remark that there is no way of dealing with these situations unless business is part of it—so I am not instinctively opposed, particularly as infrastructure, too, has to deal with these issues. I am pleased to see that the chairman of the infrastructure commission has made it clear that he will seek to deal with infrastructure within the context of the carbon budget.
I remind the House that we have reduced our emissions significantly, largely in the power sector. These are not exported jobs going somewhere else; we have done it. Sometimes I wish that my noble friends would appear at the presentations from the Committee on Climate Change. They would find that many of the things they have said are just not true. We have shown that there is no offshoring and that the poor are much more damaged by climate change than any other section of the community.
When my noble friend Lord Lawson refers to the poor, I remind him—I have looked carefully at his Budgets—that the poor did not feature large in those Budgets. But those who care about the poor, and the people who talk about the poor because they work for the poor—all those international organisations, from Save the Children right the way through to CAFOD and Oxfam—are quite clear that climate change is the biggest danger to poor people that exists, and therefore we have to deal with it in a cost-effective way.
Of course there is some argument about whether we should have this little bit of flexibility. However, it is flexibility based on the principle that some of the forecasts may not be accurate, because it is a long way ahead, and in those terms the Committee on Climate Change has accepted that that should be so.
I could of course answer each of the points that my noble friend Lord Ridley has made, but I do not want to cut out my other noble friend who sits next to me, so I will finish by saying this. Brexit is important but not central. This is our Climate Change Act—the Act which leads the world and which makes Britain the sort of leader that my noble friends thought we ought to be when they talked in the Brexit debates. I think that Brexit is a terrible mistake, but I know that the Climate Change Act puts us in a position genuinely to make a proper contribution for the next generation, and it is there that the jobs will be.
I end with a very simple point. Economic self-harm would be not having the Climate Change Act. That is what you would do if you did not want new jobs and green jobs, if you did not want to sell abroad because you have green products and if you did not want to be the kind of country that leads the world. Self-harm is denying the Climate Change Act. I am proud that all-party support has today enabled the Government to implement the fifth carbon budget as proposed by the Committee on Climate Change.