Ford in Bridgend
Lord Howell of Guildford Excerpts(4 years, 10 months ago)
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Lord Bourne of Aberystwyth
My Lords, first, I acknowledge the massive role that the noble and learned Lord, Lord Morris, had in the establishment of the Bridgend plant, very close to his former constituency of Aberavon. I agree with him that the supply chain is important. I have no specific figures on that, but it is not just the supply chain; the broader economy suffers in a situation such as this. The unemployment rate in Bridgend is very close to the national average—I think it is marginally above—but this is clearly an important situation.
I have no specific knowledge of redundancy legislation in Spain and Mexico, but I will write to the noble and learned Lord, if I may. As for trade union relations with Ford, Ford’s treatment of workers in previous job situations has been fair. I do not want to talk it up too much, but it has been fair. I know that that will be very much on the mind of the task force. I am also confident that the Secretary of State will want to talk to the noble and learned Lord about his experience of Ford, and I hope that he is available, as I am sure that that would be helpful going forward.
Lord Howell of Guildford (Con)
My Lords, this is obviously a miserable affair. The Statement mentioned China. Is it not a fact that the entire worldwide motor industry is now in a state of turmoil with the rise of Asia? China has not yet even begun its impact on world car markets, but it will be massive when it comes. On top of that, there are the changes in technology, with the move to electric vehicles. The war on diesel clearly has not helped and nor, frankly, has Brexit. Otherwise, why would the motor industry have cut its output in the past month by 24%? That is a devastating impact.
One understands all that, but is not the time coming when we should have a strategic overview on all those problems? We have had Honda, JLR, the Nissan problem with Renault and the question of their future production here. Now, we have Ford. We are not just talking about motor manufacture but every conceivable component of a vast industry employing 822,000 people in all. Surely the time has come for a really strategic insight into how this kind of transport will develop here and how we fit into the world of rising China, America and Latin America, all of which will be in the motor manufacturing business and the transport business on a colossal scale. We have not seen anything yet.
Lord Bourne of Aberystwyth
My Lords, I am grateful to my noble friend for the benefit of his experience on this issue. I very much agree that we are dealing with a global situation; this is not simply about Europe or Brexit. I accept that there are Brexit issues relating to the economy, but the far more important issue here is the move away from diesel and petrol towards low-emission vehicles and the growth of markets in China and India in particular.
On strategic responses to this issue, we have the automotive sector deal and we committed £250,000 to the Faraday challenge on battery storage, which is important. A couple of weeks ago, I had the great privilege of going round Northern Industrial Battery Services Ltd in Welshpool, which is significantly attached to what BEIS is doing and provides a useful glimpse into the future. We need to move towards battery storage and low-emission vehicles, which is a large part of why the automotive sector has seen this period of turbulence. That turbulence has not been limited to this country, of course: as I indicated, this is going on pan-Europe. I take seriously what the noble Lord, Lord Howell, says, but I assure him that we are very much there.
I should add that we are investing in infrastructure in the low-emission and electric sectors. I am sure that, like me, noble Lords have noticed a greater prevalence of battery-charging in our cities now.
Social Housing: Older People
Lord Howell of Guildford Excerpts(4 years, 11 months ago)
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Lord Howell of Guildford (Con)
Is my noble friend aware that 7,000 high-quality new homes are being built per day in the Republic of India—which, admittedly, is larger than us and probably quite soon will be richer than us as well? Would he concede that new construction technology has a major part to play in adequate and swift provision of social housing for all ages?
Lord Bourne of Aberystwyth
My Lords, I was unaware of that statistic, but certainly India is developing incredibly quickly on a number of technological fronts, so I am not totally surprised. My noble friend is absolutely right about the importance of ensuring that housing delivery is carbon neutral and that modern methods of construction enable us to move very quickly. We are doing so across a range of areas. Last week, I saw modern of methods of construction providing help for the homeless. It is pleasing to see that beginning to happen across all sectors; it cannot happen too quickly.
EU: Energy Governance (EUC Report)
Lord Howell of Guildford Excerpts(7 years, 10 months ago)
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Lord Howell of Guildford (Con)
My Lords, I declare my interests as in the register on energy connections and matters, and I congratulate the noble Baroness, Lady Scott, on her very interesting report. I was not a member of the team, but I read it with the greatest of interest. I am sorry that she has been rotated off. I hope that she is rotated on to something else fairly soon by the mysterious forces that do the rotating. As my qualification, I spent the war years as a child in Suffolk. I seem to remember that we relied on old-fashioned windmills to survive at all in those days.
The report raises so many interesting questions and I have confined myself to two observations. First, this is one of the fascinating areas where we need a lot more Europe and a lot less Europe at the same time. That is a complicated thought and it does not fit in at all with the current Brexit debate, which reduces everything to polarised simplicities, but then hardly anything fits into the current Brexit debate that is of a serious and real kind. The “more”, as noble Lords have rightly perceived and as the report fully recognises, is in the area of physical interconnectors, gas and electricity and the appropriate grid systems, and the regulations, which are immensely complex, needed for the transmission of power or the travelling of gas across borders. We could then have a genuine competitive market in Europe, in which gas and electricity can be priced in a competitive way. We are very far from that. The funding and the organisation of that can only be a pan-continental system, including the UK. We do not have that yet and we have to move towards that to achieve all kinds of objectives in Europe, certainly that meet the trilemmas of reliability, affordability—which we do not have at present—and lower carbon.
The “less” part is more controversial. It is that the EU’s detailed direction in the past—which was even more detailed than now—about how each country should decarbonise and resolve the dilemma has been far too extensive and intrusive and has had very perverse consequences. The report rightly recognises this, but one could be even more frank and point for instance to the German situation. It is the worst example of excessive attempts to meet low carbon leading to higher carbon, to lignite being burnt on massive scales and more coal stations being built, which is the very reverse of what was intended. It is a classic example of good intentions paving the way to we know where. Indeed, the latest figures for CO2 show that German CO2 is actually rising again after all its efforts. That is a special situation, I know, because Mrs Merkel decided to close down nuclear power, which would have been one of the contributions to a low-carbon future for Germany.
In this country we have done somewhat better, although at a much bigger cost than some of the optimists forecast when they said that energy transformation would be quite cheap. It will not be quite cheap: it is proving and will prove colossally expensive. It has also raised the shadow of power shortages and narrow safety margins, as is mentioned by almost every paper every day, including this morning. As to the CO2 side of things, on the production front we have done rather well and there has been a significant UK reduction of CO2, but that excludes all the leakage effect of the carbon that is included in our vast import and consumption-based emissions. That is one comment I wanted to make about the more and less.
The interconnectors themselves are very important not only to the whole of Europe and the competitive market but particularly to this island. I had the opportunity when I had responsibility as Energy Secretary 40 years ago to be in office when the French connector, which was operative from the 1970s, was enlarged and strengthened. I now read that we are to go for a second, which is extremely good news and very much part of our future capacity. It will indeed help to save us from very severe challenges to the reliability of our power supplies and the danger of the lights going out, as was mentioned insistently by Ministers in their evidence to the committee.
It is not the only one. The Danish connector Viking system is under way. The link with Belgium is under way. The possibilities are there for a much longer link with Norway, which will be particularly attractive because it would not be intermittent, spare electricity. As a result of Norway’s hydropower and storage capacities, it would be electricity on demand, as needed at any time. The Danish one would be very intermittent because the Danes have a huge surplus of wind power and are anxious to transmit it whenever it would otherwise upset their entire grid balance. Then there is Iceland, where we could draw on volcanic energy, which would be extremely green and attractive but would again require a considerably long connector system and complicated switching stations either end. But all in all, for Britain alone, we can draw on a minimum of 7 gigawatts extra of electricity, which will be a blessing when one thinks of the dangers of the narrowness of the margins in our own system in the near future, which I will comment on a little more in a moment.
My second observation is that the report talks about energy and climate national plans. The noble Lord, Lord Teverson, has a mastery of these things and said that he welcomed them. My difficulty is that I cannot see that here in the UK we have an energy plan. We have an energy hope that we will muddle through to 2018-19, and that is largely thanks to the brilliance and ingenuity of National Grid, which has set out the ways in which somehow, by hook or by crook, it will manage supply by particular arrangements and incentives, all of which I should say are extremely costly, and by manipulating demand through entering into contracts where demand can be interrupted. In these ways it hopes to get through the next three years without a power crisis. That is the plan. But of course beyond 2019-20 we simply have to build new gas turbines for the simple reason that we have seen 11 major closures of coal-fired stations in line with the policy of both the previous and the present Government. If we are to cover supplies through the early 2020s and have an adequate margin instead of the very narrow one that we are heading for now, and until nuclear kicks in—we hope—in the late 2020s or early 2030s, we need enormous skill on the part of National Grid and we will need more gas turbines.
The hope, not the plan, is that this will be done by greatly increased energy efficiency—the noble Lord, Lord Teverson, rightly says that that is absolutely the key—by reduced energy intensity which is necessary to help with the low-carbon aims, and by much more local generation and a whole range of new technologies, some of which we cannot even foresee at the moment, although we will need them within the next five or six years. It is also going to be done through better capacity arrangements that we have now because so far they have not produced any of the new-build combined-cycle gas turbines we need. I hope—again it is only a hope; talking to the would-be investors it is very much a hope—that the new arrangements will encourage them to come forward and invest.
The reality is different. So far the gas turbines have not been built and instead old plants have been subsided and even diesel has been boosted. Moreover, as the noble Viscount, Lord Hanworth, rightly reminded us, the nuclear future lying at the end of the 2020s is looking extremely wobbly. I have hopes that it will survive and that we shall get through the period, but the very name Hinkley Point C produces frowns on many faces. It is hard to see how all that work is going to be completed in line with the wishes of the French and British Governments unless they take the obvious route of halving the size of it and building a single reactor as at Flamanville, and thus halve the enormous capital costs. I suspect, although it is only a guess, that that is where they will come to in the end.
What the EU should be doing in terms of governance is rather different from what it is doing now. The energy union is mentioned in the report. It was a document of immense length and I know that there were good intentions behind it. It sought partly to increase the security of the Gazprom-threatened eastern and central Europeans, which in the case of two or three countries has been very serious because they were 90% to 100% reliant on Gazprom. It was a progress policy, and in part it was to continue the anti fossil fuel policy by encouraging the move away from dependence on fossil fuels generally in Europe. Of course, as is often the case with these sorts of attempts, it did not please either side. It took up a great deal of print and to this day people are still arguing about what it really means and where it is going to lead. But that is not where the real need lies. It lies in giving maximum encouragement to new technologies and reduced renewable costs; that is, new technologies in all fields, including the cleaner burning of existing fossil fuels and of course going for physical connectors, as I have said.
European Union governance should also be giving maximum encouragement to the storage technologies already mentioned by noble Lords. There may be a breakthrough quite soon, which will be very exciting and will transform many prospects. There is the issue of CCS which we have talked about again and again: how do we get the costs down? The present situation has left one feeling that the whole technology is still too expensive to be brought into the commercial range. I urge those in charge of EU governance to do something that may surprise your Lordships, and that is to look at what the Indians are doing. They are building hundreds of new coal-fired stations, but they are not unaware of their responsibilities—the Paris commitments and what the world requires of them. They cannot afford CCS and must have cheap power for the hundreds of millions of Indians with neither electricity nor water, so it is desperately needed for development. They say that if they can work with off-the-shelf technology for ultra-supercritical boilers, they can achieve a 45% efficiency increase in their coal-burning capacity; that is, they can get 45% more electricity out of the system for every tonne of coal burned. That would have a distinct impact, perhaps not a welcome one to purists, in lowering carbon emissions.
The third area, aside from CCS, that needs much more attention is at the refinery end. We have too many refineries that are higher carbon than necessary, and of course we are importing a lot of fuel into Europe from areas where the refineries operate with substantial carbon emissions—far higher than some European refineries, which find themselves in great economic difficulty. It is a completely messed-up situation and it needs to be reorganised.
We all know in the end that Asia is the epicentre of climate disasters and that, if we are serious about combating climate change, the answer really lies in diverting India and China from cheap coal. There is a long way to go. We are making some progress and last year world carbon intensity actually fell by 2.8%, which is extremely good news. But the fact is that it needs to fall by 5.5% every year for the next 20 years to get anywhere near the Paris goals. Our contribution here in Europe is bound to be mainly by example and by what we can do by putting our shoulder to our resources and all our firepower into new technology. On those we are not doing well enough. EU governance should be supporting us with new priorities instead of pursuing overly prescriptive energy policies. That needs a new mindset in Brussels—a move into the digital age of less centralisation and standardisation to more individualisation, if you like. It is about the progressive nationalisation of energy policies which the digital age allows for but was not conceived of at the beginning of the European Coal and Steel Community, EURATOM or the foundations of the modern European Community. We need the kind of fundamental EU reform that many of us hope for and for which the United Kingdom should be pushing. We are left with the thought that we can do that, unless of course by some awful error we are not there, in which case we will not be able to do anything at all.
Nuclear Reactors
Lord Howell of Guildford Excerpts(7 years, 11 months ago)
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Lord Bourne of Aberystwyth
My Lords, nuclear security is central to the Government’s concerns. Obviously, that informs all the policy that we are putting forward in relation to small modular reactors, their siting and taking forward the dialogues that we will have with those eligible out of the 38 expressions of interest.
Lord Howell of Guildford (Con)
Will my noble friend tell us a little more about reported plans for an experimental park for the development of small modular reactors in Trawsfynydd in Snowdonia? Are those to be very small plants? Are they to be based on the marine models of Rolls-Royce or will they be larger? How will this experimental system take off the ground?
Lord Bourne of Aberystwyth
My Lords, I suspect my noble friend of an alliance with Plaid Cymru on this issue; I had thought that that question would be asked by the noble Lord opposite. It is an interest that has been raised with us by the former economy Minister in the National Assembly for Wales and we are looking at it very closely. Obviously, siting would have to be considered because it is not among those eight sites that have been identified for the orthodox siting of nuclear. However, it is certainly something that the Government take very seriously.
Hinkley Point
Lord Howell of Guildford Excerpts(7 years, 11 months ago)
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Lord Bourne of Aberystwyth
My Lords, President Hollande and Emmanuel Macron, the French Finance and Economy Minister, are both very much committed to the EDF project. The noble Lord is right to highlight the importance of NuGen in Moorside and Horizon at Wylfa Newydd on Anglesey. They are both proceeding quite independently of Hinkley Point C.
Lord Howell of Guildford (Con)
My Lords, aside from the option of postponement, which of course is the choice of the French trade unions, is my noble friend aware that the Chinese also have a plan B, which is to bypass EDF altogether and to build two smaller reactors on the Hinkley C site, and to do it rather quicker than the present Hinkley C plans?
Lord Bourne of Aberystwyth
My Lords, my noble friend will be aware that the workers are being consulted; indeed, he indicated as such. It is of course a consultation that will last 60 days, so in the view of the French Government and the UK Government it is no more than a hiccup. Yes, I am aware of the Chinese situation.
Energy Bill [HL]
Lord Howell of Guildford Excerpts(8 years ago)
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Baroness Worthington
I note that, but I would just say that we are not Canada and we are very fortunate to have the North Sea as a reserve to use, which I believe would make it more cost efficient if we could do it in a timely fashion—obviously, not wanting to gold-plate anything, but making the best of the resource that we have in this nation. As I said, we need some reassurances from the Government. I am part of the group that the noble Lord, Lord Oxburgh, has now set up, which is looking at the whole issue afresh. We do not want to push carbon capture and storage for its own sake, but only in so far as it gives us options to decarbonise at least cost. I hope that the Minister will be able to say some words of reassurance about that process and the seriousness with which the Government will take the recommendations of that group.
Lord Howell of Guildford (Con)
My Lords, I agree that carbon capture is one of the keys to the future of energy and climate policy, because, if it can be done commercially and successfully, it will allow us to continue burning fossil fuels but in ways where the carbon is extracted. This is the case for continuing with fossil fuels, and perhaps slightly undermines the case of those who want to abolish fossil fuels altogether, because the whole point is that you can carry on if you have the technology.
Through your Lordships, I ask the noble Baroness who just spoke from the Liberal Democrat Benches whether they have thought about alternative and cheaper carbon removal technologies. There is carbon capture utilisation, which is developing in all sorts of new areas. It is beginning to look as though it can undermine the vast costs of piping carbon away into the North Sea. As we heard from the Minister, that would set back the problems in the North Sea, which are enormous and one hesitates to add any burdens to them, however important one may think the technology. So if there are cheaper ways of going forward, surely we should be going those ways.
That makes sense of what I understand from my noble friend to be the Government’s strategy, which is that the experimental efforts with carbon capture and storage in its full glory, with piping, transmission, finding places in the North Sea and overcoming all the vast technical and cost problems, can be replaced by something rather more imaginative. We may be moving in the right direction. My question is whether the Liberal Democrats have thought about those alternatives before pressing something which will obviously hurt the oil and gas industry in the North Sea at a time when it is already hurt very considerably.
Baroness Featherstone
I am happy to answer the noble Lord’s question. The Liberal Democrats keep an open mind on all technologies which can advance our climate change agenda. However, in Peterhead, for example, projects were well advanced and should have been continued.
Baroness Worthington
My Lords, Amendment 9E is in my name. Our previous debate on this took place in October, before the historic climate agreement in Paris, which, for the first time, saw virtually all countries agreeing to take action together to avert the growing risk of global climate change. The significant breakthrough that made Paris a success was that countries are now individually responsible for coming forward with nationally determined targets and measures, while being guided by an overarching collective goal.
That process places the responsibility on countries to do what they can, with a view to ratcheting up ambition over time. The UK already has its own nationally determined commitments and we have been at the forefront of international leadership on climate change domestically and internationally for well over a decade. Again, I pay tribute to Secretary of State Amber Rudd, who deserves great credit for the role she and her team played in making Paris the success that it was.
Now, as we enter the final stages of this Energy Bill, which we have been considering since last July, the question we face is: how will we as the United Kingdom want to continue in that climate leadership role by demonstrating our commitment to domestic action, leading by example and forging a path that others can follow? We can and must do this, I believe, by reviewing and reforming an important aspect of our ground-breaking Climate Change Act; that is, how we measure progress.
As things stand, how we do this is complicated and unclear, made ever more complex by a decision introduced in secondary legislation and taken after the Bill was agreed that we should use European emissions allowances as the basis for accounting for our emissions in the power and industrial sectors. This is how things work currently but it cannot continue in this way for much longer. We must start counting our actual domestic emissions, guided by a common international goal set at the European and global level.
Our original amendment, agreed to in this House, sought to make this change in primary legislation, but since I have no desire to upset the timetable for setting the fifth carbon budget, which, as the Minister pointed out, we expect to be set before 30 June, and the process is now well under way, I have not retabled the amendment that was agreed in October. Instead, we have proposed what we believe is a constructive way forward and have listened carefully to the comments made by the Minister in the other place, which were constructive and talked about the timing being the main issue of opposition from the Government.
But there still is a fundamental question at stake here: do we wish to meet our carbon budgets in a way that we determine—for example, through policies and measures that we deem appropriate for our circumstances—or are we happy to have half our budgets set for us on the basis of ever-more complex rules agreed in Brussels? At the moment, as our decision to implement a carbon price support policy shows, we are taking our own path. We add an extra £18 to every tonne emitted in the UK and we are pursuing our own policies to decarbonise. Ahead of Paris, the Secretary of State made a historic commitment to phase out coal for power generation in the UK by 2025. She was rightly praised for this commitment because it sends an important signal to investors at home and to other countries struggling to reduce emissions from coal, including Germany and Holland.
Given that this is our chosen option—that we are pursuing leadership and taking our own path—it seems illogical that our carbon budgets should not reflect our own circumstances. Working on the basis of our own accounting would enable us to make sensible decisions about which sectors to move forward on more quickly and which to give more time to; for example, we could provide more of a budget to sectors that are hard to decarbonise, such as heavy goods vehicle transportation or farming, while moving faster on the power sector, where we are currently overdelivering, as the Minister said. There are 36 million tonnes of overdelivery coming from the power sector. We should be able to use that and redistribute it to other sectors, but as things stand that is not possible.
There are very good reasons why our original amendment made sense, but as I listened to the considered words of the Minister in the other place, I concluded she was right not to accept that amendment at this time, as we are only weeks away from publishing the fifth carbon budget. We hope and assume that this number will follow the advice of the CCC and we expect that to help restore some confidence in the industry. But once that is in place, we should then determine how we will meet that ambition and part of that determination should be: what counts towards compliance with that budget? The amendment in my name, in lieu of our original amendment, sets out a process by which the Government can decide how we measure our progress and how we plan to meet our targets, including a deadline of the end of 2017 by which the matter should be resolved in secondary legislation. With the budget and the rules in place, we will then be in a position to develop a long-term plan to comply with those targets and lead by example.
Unfortunately, short-term thinking is endemic in our political system. More attention is paid to fleeting headlines and passing trends on Twitter than to the important details of often complex policy areas, such as energy, which are so necessary to drive investor confidence in growing our economy. Climate change is a long-term crisis that is slowly unfolding on our watch. Record losses in sea ice, massive coral bleaching in the Great Barrier Reef, unexplained spikes in methane emissions—these are the warnings that are going off around us. We owe it to ourselves and to all future generations to do all within our ability to act and to cause others to act to mitigate this crisis.
What we in this Chamber can do, what opposition parties can do and what the Government can do is try to pass good laws that provide sensible, long-term frameworks to drive down emissions in least-cost ways. The Climate Change Act was agreed on that basis and it works, but it is now in need of review. I urge the Minister to consider this amendment carefully and if he feels it is within his power to accept it, I hope he will do so, so that we can embark on a process of proper reflection and review over a reasonable timescale, and then we can make the changes that are needed to repatriate the way we meet our most necessary climate obligations.
Lord Howell of Guildford
My Lords, I have only one question about this amendment, and it is aimed at both sides of your Lordships’ House. As my noble friend rightly said, this is an extremely complex matter. I sometimes feel that the noble Baroness, Lady Worthington, is the only living person who fully understands the complexities of it all. It seems to me that if one looks behind the thoughts and motivations, the bottom line is whether additional pressures are put on consumers, on the nation, on industry and on activities of every kind to complete the carbon budgets, what weight we give to absolute, precise completion of the established carbon budgets—or indeed the next one we decide—and what contribution that will make worldwide to combating global warming.
My question is simply to ask why the noble Lord, Lord Grantchester, has tabled this amendment, when in the Climate Change Act, with which the noble Baroness, Lady Worthington, had so much to do, there is a specific provision—Section 10(2)(h)—which warns and advises the Government and Ministers to have account of,
“circumstances at European and international level”.
The intention behind that was quite clear: to establish that if we got very badly out of line with neighbouring countries on our carbon budgets and on the provisions required to keep to them, the matter would be looked at again and, if necessary, changes would be made. My only question is: why are we not doing that now? Electricity costs between German and British steel have got out of alignment. Everyone knows that. We all know that theirs are 40% less and that we are paying £80 per megawatt-hour for steel-making in Britain, of which some £34 may be in additional green charges and levies. I accept that some of those are absolutely necessary, but some obviously take us out of line with our European neighbours, with the devastating results which we have all seen in the last few weeks. These things can be brushed aside, but everyone knows that this is one of the very powerful reasons why we are in some difficulties over the steel industry. I do not think that that can be denied.
Baroness Worthington
On that point about the steel industry, one point I was trying to convey is that if we take control of our own carbon budgets then we would decide how to allocate emissions to the steel sector, for example, rather than it being dictated by the EU ETS credits. We could then make our budgets and be more flexible to allow for those sectors that need to retain emissions for longer and push down further on the power sector, which is overdelivering by a substantial margin. We could use that to move that allocation around and protect those industries that we choose to protect for slightly longer.
Lord Howell of Guildford
The question is: why are we not using the flexibility in the Climate Change Act to amend it, to ease some of the obvious and immediate pressures that are making the problems of the steel industry—but not only the steel industry—so very difficult because we are too far out of line? Anxious as we are to create a good example, which I fully accept, we are too far out of line with our direct competitors. People are being hurt and jobs are being lost. Why are we not amending our own Climate Change Act now, as we are allowed to do, to meet the new conditions? Is this to be part of the strategy, which we clearly need and which we talked about earlier today, to recover our own commercial and viable steel industries? My simple question to the noble Lord, Lord Grantchester—it is a bit to my noble friend Lord Bourne and the Government, too—is: why are we not following the precepts and guidance of the Climate Change Act itself and meeting the obvious needs of industry at this moment in some towns and areas, where many people are being thrown out of work?
Lord Teverson (LD)
My Lords, I rise to speak to the amendment in the name of the noble Baroness, Lady Worthington. Perhaps I can reassure the noble Lord, Lord Howell, as she has, that this amendment does not specifically help the steel industry or, necessarily, the size of the budget from the Climate Change Act. I guess that an amendment back on Report would have been needed to do that. This amendment would make sure that we repatriate entirely the powers to create our own carbon budget. So in fact it is a step towards what the noble Lord, Lord Howell, would want. Ironically, when we debated the Climate Change Bill I raised this matter specifically a number of times, but unfortunately the Labour Government of the time did not want to hear about it. I do not think that they necessarily understood it themselves. However, we now need to make a change. This should not be a party- political issue at all. It is about making a budget something that we could set ourselves and measure against our national performance. That is what we are trying to do.
In a way, I regret that we are not debating the original amendment, perhaps understandably amended to exclude the fifth carbon budget, for the reasons that have been explained. When we are tackling climate change and trying to get everybody to help, it is really important to make measuring our carbon emissions transparent, straightforward and easy, so that they mean what most people would understand them to mean: that the carbon emissions we create within the boundaries of the United Kingdom from products, services and industry are what our carbon budget measures. At the moment, that is not the case: it is only so for about half of it. The rest of it just reflects the European Emissions Trading Scheme settlement.
I fully support this amendment and hope that the Government will accept it as a way forward. There is no party angle to it whatever. All it would do is ensure that our UK emissions count against our UK carbon budget under the Climate Change Act. It would make government policy on climate change simple, straight- forward and manageable.
Energy Security: Hinkley Point
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Lord Bourne of Aberystwyth
My Lords, EDF has said that it is working hard to take a final investment decision in the near future with the full support of the French Government. We believe—along with the Minister who took the initial decision, Ed Davey—that the Government negotiated a good deal; he repeated that this week.
Lord Howell of Guildford (Con)
My Lords, does my noble friend agree that, whatever happens at Hinkley—obviously, there are some serious problems there—we have a perfectly good and better-time nuclear programme in place and in the pipeline for the longer term? Will he accept that the real threat to our energy security, which is leading to humiliating talk for this great industrial nation that we should have to deal with power cuts, comes from the failure to build new gas turbines in sufficient quantities to ensure that our power supply is regular in the 2020s and early 2030s? Will my noble friend finally agree that this arises from the gross mishandling and mismanagement of our energy policy in recent times and in the past and that it must now be corrected? We should all give full support to the Government to get that correction in place.
Lord Bourne of Aberystwyth
My Lords, I am grateful to my noble friend for his support. My right honourable friend the Secretary of State, Amber Rudd, has made it clear that energy security is the number one priority for this Government. That is why the project at Hinkley is so important. It will deliver 7% of our energy needs.
Energy: Carbon Capture and Storage
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Lord Howell of Guildford (Con)
My Lords, I am sure that the noble Lord, Lord Teverson, is right in theory that, if CCS can be made to work, it will be the means of continuing to burn oil, gas and coal in a low-carbon way and thus preventing the looming power crisis that seems all too likely in the near future, but would not my noble friend agree that, in fact, it is impossibly expensive and that the technique of storing in North Sea oilfields is slightly dubious and not fully proven? Would it not be much better to divert resources, such as they are, to carbon capture and utilisation—a cheaper method of carbon capture and sequestration—and to increased energy efficiency?
Lord Bourne of Aberystwyth
My Lords, my noble friend is right to address the enormous cost of the competition. It was going to cost £1 billion. We remain very active in sharing information and data with the United States, Canada, Norway, South Korea, Japan and China, all of which are pushing forward on this, and we are sharing research and information.
Fuel Poverty
Lord Howell of Guildford Excerpts(8 years, 3 months ago)
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Lord Bourne of Aberystwyth
My Lords, I certainly associate myself with what the noble Baroness said about Lord Ezra, who is certainly much missed. Indeed, one of his great interests was fuel poverty. In relation to measures that can be taken by the Government, as I have indicated, we are now focusing the energy company obligation, which has a value of £640 million every year, on the fuel-poor. Previously it has not been the sole criterion but by 2018, with de minimis exceptions, it will be, which will make a material difference. As the noble Baroness will know, we are also awaiting the CMA report, which we certainly hope will be robust; we are very much on the side of consumers and want to get bills down.
Lord Howell of Guildford (Con)
My Lords, I join in the tribute to the late Lord Ezra, with whom I worked. Can my noble friend say how many fuel banks to help people on low incomes with fuel costs currently operate in the United Kingdom, and can he also say what is the latest DECC estimate of the total amount of green charges, levies, capacity payments, national grid emergency payments, and all the rest, which will add to the average domestic fuel bill over the next five years—as in the Question?
Lord Bourne of Aberystwyth
My Lords, I thank the noble Lord for his interest in this and his tribute to Lord Ezra. I will get a detailed breakdown of the position on fuel banks to him, because I am unaware of that. As regards the position on fuel bills, he will be aware that the last reported figures, which will be for last year, show that bills are coming down and that we are saving because of the impact of changes on policy costs; the average household will save £30 on policy costs. We are bearing down on that, but in relation to the fuel poor specifically, obviously action is needed, which we are addressing through the energy company obligation and the warm home discount scheme.
Energy Bill [HL]
Lord Howell of Guildford Excerpts(8 years, 5 months ago)
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Baroness Worthington (Lab)
My Lords, I, too, thank the Minister for the way he has conducted the debate inside and outside the Chamber. It has been a genuine pleasure to work with him.
When the Bill arrived, it appeared relatively simple but did not seem to flow from the understanding we now have of the energy trilemma: having to balance the need for reliable, resilient energy systems with affordability and decarbonisation. The Bill focused almost exclusively on extraction of fossil fuels—something we will continue to do—but contained nothing about the other elements of the trilemma, other than two short clauses on onshore wind. I hope that, following the scrutiny it has received, we now have a better balanced Bill, due in part to the contributions from all sides of the House but also to the way the Minister has engaged, so I thank him for that.
This is going to be my last official opportunity to speak as the shadow Minister, so I take this opportunity to thank all my colleagues who have worked with me not just on this Bill but on the previous one—this in fact is my second energy Bill. I particularly thank Catherine Johnson, of our research team. This has been a tricky Bill to work on, with lots of detail and condensed timescales, and she has dealt with everything we have thrown at her admirably. I also thank my Whip, the noble Lord, Lord Grantchester, all my colleagues on the Front Bench and my colleagues in the shadow DECC team in the other place.
Everyone knows that energy and climate change are passions of mine, and I have found it an absolute privilege to work on two significant pieces of legislation. We have not always agreed and we have differences, but there is a common core aim: to decarbonise our economy, as the Minister has reiterated. That, we know, is certain, and we seek to do so cost-effectively and with a reliable outcome. The challenge is in working out exactly how to achieve that, and the Bill now is testimony to the subtleties involved in that complex challenge. It has been a great privilege to be part of that remarkable process.
I shall be moving on, although not very far. I shall return to the Back Benches and follow the passage of this and subsequent Bills that will address this topic, because this is a multi-decadal challenge and no country has all the answers. We are at the forefront of trying to work through some of these difficult issues. As the Minister said yesterday:
“There is no silver bullet”.—[Official Report, 3/10/15; col. 1591.]
There is no blueprint we can simply pick up and follow. We are inventing the rules as we go. We will make mistakes and will have to revisit issues, but I hope that this House in particular will do so in the spirit of shared endeavour, as we seek to decarbonise cost effectively and to create a reliable system. I hope that we will continue to revisit this issue, improve policy and, most importantly, send clear signals to the outside world, bringing investors with us, maintaining investor confidence and moving forward as a country, united in this endeavour.
The amendments the Minister has introduced are technical—I am particularly pleased to see that the Long Title is changing to reflect the more balanced approach to the energy trilemma we are grappling with—and I am very grateful to him for tabling them.
Lord Howell of Guildford (Con)
My Lords, perhaps I may say how sorry I am to hear that the noble Baroness, Lady Worthington, is leaving the Front Bench; it is news to me. I have learnt a lot from listening to her. I do not agree with everything she says, but her grasp of climate issues is unquestioned and she has added a great deal to the debate.
I also thank my noble friend for the way he has conducted this complex debate. I hope that the Bill goes to the other place with the clear message from our debates on it, and from yesterday’s debate on electricity resilience, that the whole of our energy policy needs rebalancing. Not that one necessarily wants a lot more energy Bills to come through your Lordships’ House, but I hope that this is just the beginning of a move to a better balance than the current position, which has led to some quite serious muddles. The noble Baroness mentioned one of those last night: that, in our attempts to establish good capacity three, four and five years out, we appear to be ending up with a lot more diesel engines, which is the opposite of what was intended. That arises from the lack of balance between subsidies for wind, which we discussed, and the unwillingness of people to invest in new combined cycle gas turbines.
That is not strictly connected to the government amendments, but I thought I should register my admiration of the amazing grasp that the noble Baroness, Lady Worthington, has of this very complicated subject.
Lord Foulkes of Cumnock (Lab)
My Lords, I think I speak on behalf of all my colleagues on the Back Benches who have sat through debates on the Bill when I say that we, too, will miss the enthusiasm and inspiration of my noble friend Lady Worthington on the Front Bench, but we know that she will still be with us in different ways, and we look forward to that.
As I am on my feet, I take this opportunity to ask the Minister to explain. Perhaps I have missed it, but I am still not exactly sure that he has explained when and how the Government will respond to the decision of the House of Lords on the former Clause 66, so that the uncertainty in the industry can be lifted. I hope that he will give us some indication of when and how the Government will respond when he replies.
Baroness Maddock (LD)
My Lords, I also add my thanks to the Minister for the way in which he has dealt with us all through some tricky times, as is always the case with energy Bills in my experience. I also pass on my best wishes to the noble Baroness, Lady Worthington. We will certainly miss her knowledge and her boundless enthusiasm, whatever time of night we are here. We will certainly miss that.
I am really pleased, having heard the opening comments of the Minister, and the comments of the noble Lord, Lord Oxburgh, that the Government are taking seriously the issue of carbon capture and storage. I am not sure that we felt that that was the case when we began this Bill, so I am very pleased that the Minister has been able to move other minds as well on this. I hope that we will hear in due course very good outcomes from the proposals he has made.
Lord Howell of Guildford
My Lords, I add a final word on carbon capture and storage before the amendment is withdrawn. My noble friend Lord Oxburgh has been second to none in bringing home the huge significance of commercial CCS: this would be the way in which the fossil fuels could continue to be burnt without CO2 emissions. That would be a great reassurance. We can look forward to the affordability, reliability and decarbonisation of our energy system.
I hope I will not strike too sour a note in noting that we learned in earlier parts of the debate that the amount of taxpayers’ money being set aside by the Government for the promotion and experimentation and development of CCS was £1 billion—that is, £1,000 million. That is the most enormous sum of money. It is rather more than the entire budget of the Foreign and Commonwealth Office—and all directed, not to the generality of decarbonisation, but to one technology. It is a sobering thought, if my memory serves me right, that under the Labour Government before 2010 there was an intention to make that figure £3 billion or £4 billion. These are vast sums.
All I would add is the thought, as this Bill goes on its way, that we at least should remember not only the importance of the climate problem—the importance of achieving affordable and reliable energy and electricity resilience—but we should think about cost. We should always keep in mind that the costs are there and have got to be weighed all the time against the objectives we are trying to achieve. A billion pounds is a lot of money in anybody’s currency, in any language, and at any time—particularly at times when we are struggling in several other areas of public policy to find money desperately to help extremely worthy causes.
With that marker to this discussion of CCS, about which we have learned as much as we have given in the debates—it is a fascinating subject—I would just end by saying: please let us remember costs as well as benefits.
Lord Young of Norwood Green (Lab)
I hesitated whether to enter into this debate but, on the basis of the last remark, I think that I would like to. I am certainly not rising to my feet to oppose carbon capture and storage, only to make the comment that it has proved an elusive goal, despite significant amounts of time and effort spent on research and development. I make no more comment than that.