Energy Bill

Debate between Lord Davies of Stamford and Lord Roper

Thursday 18th July 2013 Grand Committee

[Lord Davies of Stamford]

My Lords, I agree with the second part of the amendment proposed by the noble Lord, Lord Teverson, and the noble Baroness, Lady Parminter. It would be rather strange if nothing at all were said on the face of the Bill about the importance of energy efficiency, as it is quite clearly one of the criteria the Secretary of State must always have regard to in conducting a sensible energy policy.

However, I have a problem with the first half of this amendment, which reads:

“to give priority to demand side management and demand reduction measures in preference to increased generating capacity whenever and wherever this is economically appropriate”.

In improving this Bill we are drafting the law. The law has to be unambiguous. The law places obligations on the citizen; the citizen needs to know precisely what those obligations are if the law is going to be effective, dignified and respected. This provision could not possibly from part of a law in that sense. The phrase “economically appropriate” is so vague that it is almost impossible to know what it might mean and where one would need to decide, using this principle, between an energy-saving investment and an energy-generating investment. I notice that the noble Lord, in introducing this amendment, did not actually refer to “economically appropriate”: he used the term “economically sensible”, which he perhaps feels is a synonym. However, the use of a different word only adds to the vagueness and uncertainty, which should not come to rest in the corpus of the law of the land.

I suppose that what the noble Lord might have had in mind with the phrase “economically appropriate”, or even “economically sensible”, is the solution that has the highest economic return, but even that would be a very vague phrase to place in a Bill in the corpus of law. After all, in choosing between one particular project with a relatively high capital cost and a relatively high return and another with a lower capital cost and a lower return, or between a project with a high capital cost and a long payout period and another with the same capital cost and a different payout period, which one to be chosen would depend on the cost of capital, on which one was discounting the projected cash flows. If you wanted to make this a precise obligation, you would have to specify what the cost of capital would be. It would be and should be, of course, different according to the different risks for different types of energy projects, because they would have different risks. Therefore, I do not see any prospect here of reducing the unambiguous guidance that is necessary in law so that the citizen or, indeed, the Secretary of State would know precisely whether he was observing the law or not.

[Lord Roper]

My Lords, Amendment 55ZA in this group is in my name and that of the right reverend Prelate the Bishop of London. As has already been mentioned, when the draft Bill was published in May last year, there was a great deal of criticism that there was nothing in it on electricity demand reduction. Indeed, those of us who sat on the informal group with the noble Lord, Lord Oxburgh, drew attention to this in the document that we produced and suggested that it ought to be included. When this Bill was published last November, there was still no reference. Fortunately, at the same time, the department started a consultation into demand reduction, and on 21 May it published its response to that consultation. At the same time, it tabled an amendment, which was then proposed new Clause 12 and is now Clause 37 in this Bill, the clause that I wish to amend.

The interesting point in the response to the consultation is that the department suggested that its preferred route to delivering reductions in electricity demand is via a capacity market—I am talking here not of a demand-supply response but of permanent reductions in electricity demand. I have always had some difficulty in seeing how that could fit in to a capacity market. I therefore grabbed the delivery plan last night to read the section on the capacity market in order to discover how it should occur. I am extremely sorry to have to tell your Lordships that, having read that whole section overnight, I found no reference at all to electricity demand reduction, not even to demand-side response. I sometimes wonder whether there are two DECCs, one writing one thing and one writing another. I hope that I am not misleading the Committee in that view. The important thing is that Clause 37, which was introduced in the other place, suggests that a pilot scheme should be developed to look at it.

In our amendment, the right reverend Prelate and I suggest that we should aim it rather more widely. There ought to be a number of different pilot schemes and, if it is possible to envisage how it could be done, they ought to be included within the capacity market. Alternatively, we could look along other lines, including those discussed in Committee in another place, of finding some sort of premium for this. There are quite a number of problems with the use of the capacity market in dealing with the permanent reduction of electricity demand. There is of course uncertainty as to how big a capacity auction will be. Therefore, people who invest in permanent reductions are unclear from time to time as to what sort of return they will get for that reduction.

Inter-parliamentary Scrutiny: EUC Report

Debate between Lord Davies of Stamford and Lord Roper

Thursday 31st March 2011 Lords Chamber

[Lord Roper]

My Lords, this Motion endorses the seventh report of your Lordships’ European Union Committee, which I chair. The proposal sets out the arrangements which we would like to put in place for the inter-parliamentary scrutiny of the common foreign, security and defence policy of the European Union, following the winding up of the Western European Union, and therefore its Assembly.

The proposal is in the same terms as one approved by the other place, on the basis of a report from its Foreign Affairs Select Committee, on 10 March. I am grateful to that committee and its chairman, and to the House of Commons European Scrutiny and Defence Committees for their informal co-operation, which has allowed the committees of both Houses to come to a common position on the matter.

It might be of assistance to the House if I briefly set out the context for the Motion before the House today. As many noble Lords will know, the member states of the Western European Union decided this time last year that the organisation should be dissolved with effect from the middle of 2011. I need not tell this House that the Western European Union and its Assembly has played a valuable and unique role giving international parliamentary oversight of European security and defence matters. About 30 years ago, in the 1970s, I myself served in the Assembly and was a chairman of its defence committee, so I know its work in that period very well.

More recently, as the first head of the Western European Union Institute for Security Studies, which was co-located in the Assembly building, I have seen how many noble Lords have contributed actively to the work of the Assembly over the years, and I pay full tribute to the important work which they have done.

The question now before us is: what should be done to replace it? The inter-governmental nature of decision-making in the common foreign and security policy and the common security and defence policy of the European Union means that parliamentary scrutiny of those policies should not be left to the European Parliament. The significance of the CFSP and the CSDP activities is that those are decisions made by the European Council, which is of course made up of Foreign Ministers from the member states, who are held to account by their national Parliaments. It is therefore important that national Parliaments should be aware of and share in considering those matters at a European level.

As we state in our report, the European Union Committee is of the view that it is vital that some forum for inter-parliamentary debate on these matters is maintained in the post-WEU period, with national Parliaments taking the lead. The issue of how the forum should be structured is the principal subject for discussion at next week's conference of European Union Speakers’ in Brussels. As is indicated in the Motion, we ask for the House’s endorsement of the committee’s approach today, so that when, next Monday, I will be representing the Lord Speaker, I will have a mandate to agree to new arrangements.

The proposals are set out in full in our report, but I shall refer only to the principal points. We propose that the successor body should be a European Union inter-parliamentary conference on foreign affairs, defence and security, with the acronym of COFADS. It should,

“secure continued inter-parliamentary scrutiny of this area of EU activity”,

and,

“would not be an additional or autonomous institution”.

In fact, it would replace the current biennial meetings of the chairs of the foreign affairs and defence committees of national Parliaments. Therefore, it,

“would minimise costs, while adding value to the work that each national parliament does on its own in this field”.

Under our proposal, all the European Union national Parliaments and the European Parliament, but only those Parliaments, would have full membership of the COFADS body. Parliaments of official European Union candidate members would be automatically invited as observers—that is, Croatia, Macedonia, Iceland and, importantly, Turkey. We make it clear in our proposal that it would be possible for other countries to be invited on the decision of the presidency. In speaking to the matter next week, I shall of course refer particularly to the case of the other European members of NATO, especially Norway, which has made strong representations to us on this subject. Delegations from each country would consist of a maximum of six delegates per Parliament, including the European Parliament. That would be three per Chamber in the case of a bicameral Parliament such as our own.

The proposal is that the new body, COFADS, would meet once in every presidency; that is, twice a year. We propose that the meetings should as a general rule be held in Brussels or in the presidency country; but we feel that there would be some advantage in it not necessarily meeting in the European Parliament, to make quite clear that it is a distinct body of national Parliaments rather than something else. Organisational responsibility would be borne by the Parliaments of the troika countries—the country holding the presidency, the country about to hold the presidency and the country that had just held the presidency. They would be responsible for providing the secretariat function with support from the secretariat that already exists in Brussels and services COSAC, the conference of the national European committees of the Parliaments of the European Union.

This is the position of the European Union Committee and it has already been endorsed by the other place; and, as I said, next week I will go to Brussels for the Speakers’ conference, and if the House agrees to the Motion on the Order Paper, it will be the position of both Houses of the UK Parliament. The Speakers’ conference makes its decisions on the basis of consensus. Finding a consensus in advance of the conference has so far not been totally straightforward. However, I am pleased that a significant majority of other European Union national Parliaments broadly support the position outlined in your Lordships’ committee’s report.

On 24 February, the Belgian Parliament, as host of the forthcoming Speakers’ conference, circulated a draft proposal for the future of the CFSP and the CSDP scrutiny—noble Lords may have seen it in the very useful debate pack which the Library prepared for today’s debate. The proposal was a significant way away from the position that I have outlined today. It envisaged, in particular, a significantly greater role for the European Parliament than we would be prepared to accept, notably with the European Parliament holding a permanent co-presidency of the conference and providing up to a third of the delegates but not providing the secretariat.

In response to the proposal, I wrote jointly with Richard Ottaway, the chair of the House of Commons Foreign Affairs Committee, to the Speakers of the two Belgian Houses. We set out in our letter the positions of the two committees, and I am very pleased to say that many other national Parliaments have made similar representations. The Belgian presidency reflected on those responses and issued a revised proposal last Friday, which is also in the Library’s debate pack. It has obviously taken serious account of the representations made by the national parliaments and the revised proposal is heading in the right direction. We should be grateful for that. Thanks to its efforts, an agreement on a proposal next week, which will only be possible on the basis of consensus, now looks a more likely prospect.

However, there remain in the Belgian proposal some areas of concern. Most seriously, the Belgians suggest that the national parliamentary delegations should be limited to four members. In order to allow proper party political balance and Select Committee representation, we remain firmly of the view that delegations should be allowed up to six members per Parliament. Secondly, in our view, the European Parliament is still given too great a proportion of the delegates. In the revised proposal, the proportion has been reduced from a third of the total membership to a quarter of the total size of the national parliamentary delegations. Although there are other matters in the Belgian revised compromise proposal—such as the location of meetings—which also diverge somewhat from the intended UK position, it is these two issues on which we have the strongest views and on which we have been supported most strongly by most other national Parliaments. If the House agrees to our report today, I will argue strongly for the position in the report, and I will feel unable to agree to a proposal that does not come significantly closer to the UK Parliament's position than the revised Belgian proposal on these two points of substance.

As is clear from the report before the House, the European Union Committee's clear view is that the continuation of an inter-parliamentary forum is necessary to ensure that the demise of the WEU does not leave a serious gap in scrutiny. Should we have needed reminding, recent events in north Africa and the Middle East have demonstrated the fundamental importance of discussing and perhaps sometimes reaching agreement on common foreign, security and defence policies. The WEU Assembly will meet for the last time in June. It is therefore wholly desirable that the European Union Speakers’ Conference next week can reach a decision so that the new forum can become operational later this year. I am optimistic that, with further compromise, such a decision can be reached, and I will do everything I can to secure it.

The committee's position is clearly set out in the report. I believe that it is a sensible and appropriate response to the winding up of the WEU Assembly and, if agreed to, will make a good framework for inter-parliamentary scrutiny for years to come. I therefore commend it to the House. I beg to move.

[Lord Davies of Stamford]

My Lords, I am very happy with this proposal and delighted to hear of the progress which the noble Lord, Lord Roper, has made in negotiating it. I congratulate him first on having seen off Mr Lidington’s completely inappropriate and ill thought through proposal that countries other than members of the European Union, or even candidate members, should be members of this body. Part of this body’s function is to hold the Council of Ministers, the European Council and the high representative to account, so the idea of a body that is composed of states that are not even members of the European Union holding the European Council to account or sending instructions to the high representative is utterly absurd. It would be rather like us trying to intervene in the activities of the African Union or sending instructions to its director-general, if that is what he is called. I am therefore very glad indeed that the noble Lord’s judgment and that of his colleagues has prevailed over the Government’s initial proposal.

As the noble Lord said, one or two matters have been left open, but they are obviously secondary or tertiary matters and I hope that he will feel able to display whatever flexibility is required. Those on all sides of the House who know him—I have known him for many years: indeed, long before I got into this place—will have the highest respect for his judgment, and it is important that he feels that he can go back to the meeting with a degree of negotiating flexibility. Some of the outstanding issues, such as whether meetings can be held in the premises of the European Parliament, seem a little theological and indeed rather petty, so giving way on such a matter in order to get an agreement sooner and to establish quite clearly what the regime will be would be very much in the interests of this House and indeed of the country and the future functioning of this committee.

I conclude with one thought. Perhaps noble Lords will think I am slightly self-interested in saying this, and perhaps I am, but I do not necessarily apologise for that. The proposed arrangement is very good, but the noble Lord will appreciate that it leaves entirely in the hands of three Members of this House and three Members of the House of the Commons the important role of co-ordinating with parliaments of other member states on the vital issue of the future of the common and foreign security policy and possibly defence policy of the European Union. Is there some scope for having from time to time—certainly not as frequently as the meetings of the proposed new committee but at most once a year or maybe less—a slightly wider conference enabling those of us in both Houses who take a close interest in these matters to meet colleagues in the other European Union member states to discuss those matters and to see what the views are and how they are evolving, and where consensus might be possible and where it might not be possible? In other words, is there some scope for getting a flavour of the debate directly, as one could in the old days when there was the WEU Assembly? In much older days, long before I became involved in public life and before direct elections to the European Parliament, Members of both Houses attended meetings at which they could discuss matters of common interest with other members of national parliaments and the European Community.

Of course, as the noble Lord, Lord Roper, knows, I do not suggest for one moment going back on the decision to have direct elections to the European Parliament—far from it. That is an obvious and a great improvement. But I should be grateful if he could give some thought, and possibly discuss it with his British and other EU colleagues, as to whether there might be some opportunity from time to time to widen the circle a little bit in order that these important matters, which are sometimes extremely complex, are not left exclusively in the arcane hands of a small number of experts—great as the expertise will certainly be, at least from the, I think, six representatives which the British side will send to the committee.

--- Later in debate ---

[Lord Roper]

My Lords, I am grateful to the noble Lords who have taken part in this short debate and have made helpful contributions to our consideration of this topic. As the Minister said in his closing remarks, Norway has already played a very active part in a number of the missions of the CSDP so, whether this should be automatic or whether it should be the norm, by convention it would always be invited. We have kept the model as it is in the report because that is the practice in COSAC; that body has a framework in the protocol to the treaty. To make that a right could lead to problems. However, we believe that Norway should be invited on every occasion, and I will certainly make that point clear when we have the discussions next week.

It was quite interesting that the noble Lords, Lord Davies and Lord Jopling, had different ideas as to whether the body should be larger or smaller. At the moment, given the pressures on budgets, it is going to be a case of keeping the size down. If we eventually move into a situation where more resources are available for inter-parliamentary co-operation, the possibility of having larger meetings from time to time of the kind that the noble Lord, Lord Davies, referred to should be considered.

[Lord Davies of Stamford]

The figure of six is probably right but I would be perfectly happy with four; I do not feel strongly about that. My suggestion was that in addition to that there could be a rather more informal occasion where a rather larger number of people could take part for the sake of informing a wider range of people in all national parliaments, including our own, about the current agenda of these important discussions.

[Lord Roper]

I noticed that. However, I think that the issue at the moment is the impact of the present period of austerity on the budgets of national parliaments, as we discussed at the Speakers’ conference last year. The impact is such that one has some difficulty in making proposals for too much of that at the moment. Nevertheless, the idea should be retained and brought forward when there are more possibilities.

I am grateful for the support of the noble Lord, Lord Dykes. I also very much appreciate the helpful advice—based on his great experience of inter-parliamentary co-operation in very many of these bodies—of the noble Lord, Lord Jopling. As for the issue of four rather than six, we say “a maximum of six”. Some of the unicameral parliaments—Malta, for example—never send more than two or three members to COSAC even though they are entitled to send six. One will not have six from everywhere. We have had informal discussions with our colleagues from the House of Commons, where there is a wish to send someone from the Foreign Affairs Committee, the Defence Committee and the European Scrutiny Committee. It would not necessarily be the case, as the noble Lord said, that this House would need to have three. However, if we were to restrict the number to four, there would be a feeling not only in the House of Commons but in some of the other parliaments that it was too restrained. We will obviously have to consider this matter with care next week.

I hope that we will be able to achieve the suggestion from the noble Lord, Lord Jopling, for 12 members from the European Parliament. It is certainly a matter to be considered. As for his point on the secretariat, the COSAC secretariat has always had someone from the European Parliament as one of the members. It would only happen in that way and as part of the general secretariat, rather than as the European Parliament coming in and providing it, as was at one time suggested.

As the noble Lord, Lord Jopling, will see, we have in the report a “no committees” point, at point 15 on page 9. At point 18, on page 10, we take up the point that he made about the need for technical and military advice from time to time. We will certainly examine how that can be done.

I was grateful for the support from the two Front Benches. The noble Lord, Lord Liddle, was—alas—only too briefly a member of the committee. Interestingly enough, however, in that short time, he was with us when we agreed this report.

Part of the problem with the European Parliament is that although we talk about the Lisbon treaty, there are in fact two treaties. Most of the stuff concerning the CFSP, the CSDP and the treaty which is purely inter-governmental is in the Treaty on European Union. That is of course what this is dealing with. On the other hand, if you turn to Part 5 of the Treaty on the Functioning of the European Union, you will see a great wodge of other external activities of the European Union for which the European Parliament has responsibility and on which its external affairs committee legitimately takes the lead. That is appropriate as those activities are dealt with on a Community basis. However, the European Parliament would like to try to blur the distinctions, as it were, between the two treaties. The point we will be making next week is that that distinction must be maintained as it is made clear in one of the declarations that the relevant treaty will give the European Parliament no more power in the field of common foreign and security policy.

I agree with the noble Lords, Lord Liddle and Lord Howell, that it is highly desirable to have the meeting in Brussels. We have left a certain amount of discretion in this regard as a presidency should have some power but we trust that Brussels will be seen as the norm for all the reasons that were given. I was very grateful to the noble Lord, Lord Howell, for his remarks. I have nothing further to say in that regard except that we were extremely grateful for the help we received from his right honourable friend the Minister for Europe, Mr Lidington, in the informal conversations which went on between committees of this House and of the other place in preparing the two parallel reports on this subject. We are very conscious of the point he made about the need to obtain value for money. That very much goes back to the point made by the noble Lord, Lord Jopling.

As I say, I am very grateful for the comments that have been made and I shall certainly take them with me when I go to Brussels next week.