Contracts for Difference (Miscellaneous Amendments) Regulations 2022

Lord Teverson Excerpts

Tuesday 17th May 2022 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank my noble friend and congratulate him on presenting the regulations to us this afternoon. He will be aware that there were great hopes, particularly off the Yorkshire and Humber coast, that facilities had been identified which would be appropriate for exactly the type of venture that is set out in the regulations before us today. So I welcome the regulations, but is my noble friend able to confirm that he believes that the take-up on the proposals for carbon capture and storage will increase and multiply because of the content of the regulations before us this afternoon?

Separately—he might think I am going off-piste here, and I probably am—can my noble friend explain something? If I understood it correctly, one of the difficulties we have with wholesale gas prices impacting the UK as they have—though perhaps not as badly as in other European countries, which rely heavily on Russia—is that we have gas storage of only 60 days, which is about two months. That strikes me as being terribly low. I do not suppose that that would benefit from these proposals, but I would like to understand why, historically, we seem to have a lower storage capacity than other European countries. Is that something that the Government might be minded to look at that?

The only other point I wish to make, which I am sure my noble friend is very familiar with, is the point raised in the 37th report of the Secondary Legislation Scrutiny Committee, which I find myself in some sympathy with. Even though I am a lawyer by training and spent about nine months of my training going through all the scientific evidence—produced mostly by scientists rather than lawyers—on whether fluoride was a carcinogen, I find that even these small regulations before us this afternoon are full of jargon. There is a request in paragraphs 22 and 23 of the 37th report that the Explanatory Memorandum perhaps be revised to enable us humble Members of the House to understand better its contents. Can my noble friend simply confirm that that is the case? If that could happen in advance next time so that, when we see the Explanatory Memorandum we are better able to follow it, it would be very welcome indeed.

I thank my noble friend and his department for all they are doing at this particularly difficult time, and I give a warm welcome to the regulations this afternoon.

[Lord Teverson (LD)]

My Lords, in fact we should congratulate the Minister, because the officials have rewritten the Explanatory Memorandum. There are two versions of it on the website, and one of them explains all the acronyms in a footnote. Strangely enough, I knew all the ones they listed, but I was unclear about a couple in the rest of the report. It is not there—it is on the website.

First, although the Climate Change Committee and the Government are right that carbon capture and storage technology is needed, exactly as the Minister said, we also need a slightly cautionary note about it. In a way, certainly in terms of power generation, it is a far less efficient way of producing power; it takes energy to produce it, as we are all aware. An opportunity to produce power without CCS is obviously better, although I entirely understand that industrial processes are different.

The other thing I am always cautious about—I know that most of the basis is putting it back under the sea or wherever—is the element of putting pollution back under the carpet to a degree. I am not saying that it is unsafe or anything, but it is always better if we can avoid that.

On the propositions here, having read the Explanatory Memorandum, I understand that the fact that this can include retrofitted power stations is unclear. Clearly, it is much better in all sorts of ways to have retrofitted ones than have to build new ones, although I suspect whether that is economically possible or right depends on whether the particular gas facility—I presume it would be gas; I suppose it could technically be coal—has been future-proofed in terms of utilisation. That is good.

What really concerns me is that the SI says you do not have to use a pipeline. The amount of carbon dioxide coming out of a power generation station of any size will be quite substantial; the thought of trucks in urban areas moving carbon dioxide, maybe over many miles, across the surface outside a pipeline seems quite a challenge in terms of noise, congestion and carbon footprint—depending on how that transport works. I would be very interested to understand the logic behind that from the Minister. As I understand it, this will primarily be in clusters, which it seems to me will always need to be pipeline-based to get the carbon dioxide out to a storage facility, whether it is undersea or wherever. I would be very interested in the Government’s view of why this is necessary, what they expect and whether there will be any limits on how this transportation takes place. Clearly, pipelines must be absolutely right for this rather than some sort of other surface transport.

The SI also goes through the payment mechanisms. I am interested in the Explanatory Memorandum here, particularly on the availability payment. Paragraph 7.13 says that this is a payment for availability to dispatch electricity, and performance. I thought we had a thing called the capacity market to do that. Why do we need this? Does it not compete with the capacity market? I do not understand what the difference is or why we are inventing another load of systems for this. On the variable payment, again, would a strike price not work better? I understand that those options are still available, despite these amendments.

Then we come to the merit order, which says “We will compensate the price to make sure that we have non-carbon intensive gas stations producing electricity ahead of conventional ones”, which is clearly absolutely right for decarbonisation, but it has a cost. The economic analysis in the paper says there is no cost to the private sector, which I guess is right, but I would like to understand what the size of the cost to the taxpayer of all this is expected to be.

Lastly, I would be interested in the government estimate of the extra cost of producing CCS electricity through a gas station compared to conventional generation. The department must have done this to work out roughly what the public expenditure requirements might be.

Queen’s Speech

Lord Teverson Excerpts

Monday 16th May 2022 Lords Chamber

[Lord Teverson (LD)]

My Lords, I declare my interest as a director of Aldustria Ltd, which is into battery storage. We absolutely have an energy crisis at the moment, and it is multidimensional. The statistic that struck me most was that, in October, we can expect average—I repeat, average—energy household bills to approach £3,000. That level will, I suspect, affect some of the decisions that we in this House will make, let alone those who are far less well-off than we are privileged to be as Members of this House.

A bit like inflation, where the risk is that it becomes endemic, as the noble Lord, Lord Forsyth, said, an energy price increase at that level will not go down quickly. Through the aggression of Russia, the situation in Ukraine means that the chess pieces on the energy board are not going to stay put; they are going to move around and, if anything, get worse over the next few years. Our main concern has to be the effects of that on households and the broader economy. As we have seen, those with prepayment meters—their only source of energy, in many ways—have already stopped putting finance into those meters. That is a leading indicator of where we are going in this crisis.

I very much welcome that we have in the Queen’s Speech, and coming down the legislative road, the energy security Bill. I am sure there are some parts of that that are really important, not least such things as the future systems operator—it all sounds very technical—but we absolutely need a revived strategic approach to our energy networks. Already, getting access to the grid, whether it is for renewables or for batteries, is extremely difficult. I just do not see a pathway through in the short term, whereby we can bring many of those renewable resources on board, let alone energy storage as well, which makes some of those renewables work.

Back in November 2020, we had the Government’s Ten Point Plan for a Green Industrial Revolution, and just before we finished the last Session of Parliament we had the energy security strategy. To me, there was a big difference between the two, and it was at point 7 in the green industrial revolution, on the very tedious subject of energy efficiency. Energy efficiency is really boring; it is all about bringing down the demand for energy. I sometimes think that, in energy policy-making in the Government, we have gone back to the thinking of the Central Electricity Generating Board of the 1960s: there is going to be an energy crisis, so build, build, build. Of course, we have to do that, but what we need to do as well—and we are smart enough and we have the systems to do it these days—is manage demand. I was brought up as an economist, where you dealt with supply and you dealt with demand—you dealt with both. We seem to have forgotten that entirely. It is in the area of heat and buildings, where the Government have a strategy, that we need to get energy efficiency right.

The Climate Change Committee was mentioned earlier in the debate, and I shall quote its thoughts on the Heat and Buildings Strategy in its report that came out earlier this year, I think in March:

“plans are not yet comprehensive or complete—

it is talking in its usual very restrained way—

“and significant delivery risks remain”

across the strategy. My absolutely fundamental question to the Minister is whether the energy security Bill will bring back that other half of the economy—demand, as opposed to supply. I would like him to answer that key question.

The only other questions I would ask are these. When do the Government predict that we will finally manage to decouple electricity prices from gas prices? That has to be an absolute target, to get us out of these sorts of things in the long term. Finally, coming down to the micro, what are the Government going to do particularly around those consumers on prepayment meters who will, in many ways, be discriminated against in the restricted strategies that we already have to help consumers with their energy bills?

Energy Security Strategy

Lord Teverson Excerpts

Wednesday 27th April 2022 Lords Chamber

[Lord Callanan (Con)]

Ultimately, yes, but in the short term we will want to support both forms of hydrogen production to get the market started and we will look towards providing something similar to the contracts for difference scheme for hydrogen production. As the noble Viscount is aware, we announced an expansion of hydrogen production in the strategy.

[Lord Teverson (LD)]

My Lords, is it still the case that despite this plan, just one person in a local community can in effect veto an onshore wind plan for that community?

[Lord Callanan (Con)]

I do not think so—I do not think it would be that specific. We will not have one person vetoing an application. However, we would want to make sure that there was general community support for further onshore wind capacity before development proceeded.

Shale Gas Production

Lord Teverson Excerpts

Tuesday 15th March 2022 Lords Chamber

[Lord Callanan (Con)]

I am slightly nervous now if the noble Baroness is welcoming a Statement which we have made. We might have made a mistake in our energy policy—sorry, I am being facetious.

The difficulty with the Green Party’s position is that they say that everything should be done with renewables, but that does not give us solutions to the problems in the near term. This is a gradual transition. We already have some of the largest quantities of offshore wind and renewables in the world. I accept that the position of the noble Baroness is that we should go even further and faster, but we are progressing as fast as we possibly can. We have huge investments going into renewables. However, we need fossil fuels in the short term—unless the Greens are also proposing that we should stop driving our petrol and diesel fuel vehicles and disconnect our gas boilers. This is a gradual transition; there is a need for fossil fuels during the transition, and the independent Committee on Climate Change has accepted that. Even the noble Baroness might think that it was probably more sensible to gain those fuels during the transition from our own domestic production, rather than from Putin.

[Lord Teverson (LD)]

My Lords, I also welcome the Minister’s Statement. It is good to hear what the Minister said in general. Historically, I have not been that opposed to fracking done under absolutely the right conditions. However, he is absolutely right that the development period would now be far too long. History has moved on, and gas has to be cut down rather than supplied locally. For renewables developments such as offshore wind, which the Minister mentioned, the gestation period for those sort of investments is still something like 10 to 12 years from when the Crown Estates goes out and makes an offer. Does the Minister have any views about how that period can be cut down, without in any way compromising on the environmental investigation aspect? It seems to me that we should be able to do that sort of stuff quicker.

[Lord Callanan (Con)]

The noble Lord makes a good point; I think he has put his finger on the nub of the problem. Whenever there is a crisis in politics—and there is definitely a crisis at the moment—there is always a search for quick and easy solutions. Unfortunately, on energy infrastructure, there are no quick and easy solutions: these things take years, if not decades, to put into operation. We are progressing nuclear power, as indeed we should, but nothing is going to happen for a number of years—possibly not until the start of the next decade. We already have in motion the expansion that I mentioned earlier of offshore wind. We have the targets in place for 2030 and those developments are already proceeding.

The same problem occurs with the search for new licensing fields in the North Sea, if we push ahead with it: it will be a number of years before new fields can be developed. Even if we did progress shale, it would be a number of years—possibly a decade—before we would get meaningful quantities of gas out of the ground, even if we overcame all the environmental objections. I am afraid that there are no easy silver bullets to this problem. It is probably a silver buckshot: there are lots of different smaller-scale solutions that we will need to develop over a number of years.

Green Skills

Lord Teverson Excerpts

Wednesday 9th March 2022 Lords Chamber

[Lord Callanan (Con)]

It is very much not business as usual. As the noble Baroness will be aware, we have one of the most ambitious decarbonisation targets in the western world. We have decarbonised faster than most other industrialised countries. I am sorry if the noble Baroness does not like that, but it remains a fact. As I said in an earlier answer, we are responsible for 1% of worldwide emissions. Yes, we need to make progress in this country, but we also have to look at a global scale and work with partners across the world to bring down their emissions as well.

[Lord Teverson (LD)]

My Lords, can I make a plea to the Government? So often when we talk about green jobs—as has been mentioned already, in fact—it is nearly always around green energy, renewable energy and all of that side, whereas there is a huge need for those skills that are meeting the biodiversity emergency in this country and globally, as the noble Baroness, Lady Fookes, said. In particular, I mean biologists, ecologists, horticulturalists and farm advisers—there is a real shortage of these. If we want that emergency to be solved as well, we need jobs and training in that sector.

[Lord Callanan (Con)]

Yes, I am very happy to agree with the noble Lord on that point. He makes some good observations.

Nuclear Energy (Financing) Bill

Lord Teverson Excerpts

Committee stage
Tuesday 8th March 2022 Grand Committee

[Lord Wigley (PC)]

My Lords, it is an honour to be moving the first amendment in our Committee deliberations on the Nuclear Energy (Financing) Bill. It is fair to say that this is a probing amendment in the true meaning of the term. If I had received an answer on the issues relating to nuclear fusion when I raised them at Second Reading, I would not have needed to have tabled this amendment now.

Amendment 1 proposes to insert the definition that

“‘Nuclear energy generation’” includes the generation of energy by either nuclear fission or nuclear fusion.”

The Bill is clearly intended to serve as a long-term framework for the financing of nuclear projects. It could hardly be otherwise, since the cycle of agreeing a location for a new nuclear facility, securing all the necessary consents, getting a credible financial package into place and then building the facility, testing it and engaging it with public electricity networks takes over a decade, and probably two, to bring to full fruition. It is by definition a long-term project, and all the uncertainties arising from such long-term gestation periods are what make this Bill necessary.

It is in this context that I tabled Amendment 1, relating to nuclear fusion. Many people may mutter, “Nuclear fusion? But surely we’re many decades away from that becoming an economic possibility.” Yes, it is true that for most of my lifetime nuclear fusion has been the big white hope lurking just over a distant horizon. Back in the 1950s we were told about what I think was then called the Zeta project, which could harness abundant fuel made from seawater, as was quoted, in a process that was far safer than nuclear fission and whose waste product had a half-life of less than 100 years. That project stuttered on through the 1960s, seen as having the possibility of producing an inexhaustible source of energy for future generations, but with scientific and engineering challenges that seemed then to be insurmountable.

Then in 1997 there was a breakthrough, and, excitingly, only last month scientists at the Joint European Torus project, JET, at Culham near Oxford, succeeded in generating by fusion 11 megawatts for five seconds—a small amount, yes, but an indication of things to come. This came shortly after American scientists, using the world’s largest laser, achieved burning plasma, a major stride towards self-sustaining nuclear fusion energy, and in America the National Spherical Torus Experiment will be fired up in the autumn of this year. So at long last we are at a credible position where nuclear fusion may be a practical proposition for the second half of this century. As such, that possibility should be on our agenda as we map out the means of funding the production of electricity with a very low carbon footprint.

However, there is a problem as far as we in Britain are concerned. Last year EUROfusion decided to end JET’s operations at Oxford next year after 40 years, and according to reports the UKAEA intends to decommission the experiment. The focus of research is sadly moving from the UK to France, where the International Thermonuclear Experimental Reactor—abbreviated as ITER—is being built, funded by the European Union, the United States, China and Russia. When it is fired up in 2025, it will be the world’s largest fusion reactor. If it works, it will make fusion power a viable source of energy, with realistic hopes of it being in commercial operation between 2030 and 2035. It will generate usable electricity without carbon emissions and with low levels of radioactivity.

So we are falling off the bus just as it moves towards its destination. Does this not just encapsulate the botched manner in which successive UK Governments have dealt with the nuclear industry? I want to see a pledge from the Government that they have some commitment to nuclear fusion technology and that they would be prepared to put their money on the table to help make this happen.

In the context of this Bill, Amendment 1 would ensure that projects related to nuclear fusion would be fully entitled to seek funding through the avenues opened by the proposed legislation before us today. The best way of ensuring that this possibility does not fall by the wayside is to accept Amendment 1 and provide that nuclear fusion is included on the face of the Bill. I beg to move.

[Lord Teverson (LD)]

My Lords, I will make just a brief intervention. I do not disagree at all with the noble Lord’s amendment, except that clearly we should not use this form of funding for research until we know that we are building something that is going to work. It would be absolutely wrong to use this sort of funding for the research side. In defence of this Government and previous ones, in the area of fusion we have probably been more consistent in terms of our policy and research than we have with nuclear power— so that was probably slightly unfair criticism of the Government in that regard.

At this stage, without getting into heavy weather, the point I want to make is that we have an energy crisis at the moment, which makes this Bill slightly less relevant than anything else. I would be interested to have a statement—just a short sentence—from the Minister on what BEIS is doing at this moment to accelerate the alternative forms of energy that we have in the UK, particularly renewables, given the situation that we are now seeing: not just even higher energy prices but energy prices that will probably remain high for a long time, and the wish and absolute need of the West—Europe and the UK—to disinvest from supplies of Russian energy. I realise that is not great in terms of the UK, but we are as much subject to these global markets as anyone else.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, before we begin, I understand that the noble Lord, Lord McNicol, is unfortunately unwell and therefore unable to join us here today. I wish him a speedy recovery and look forward to welcoming him back to the House soon. It is a pleasure to open for the Government in response to the amendment tabled by the noble Lord, Lord Wigley. Mae’n ddrwg gen i am beidio a roi ateb i chi yn barod—I am very sorry that we have not given you an answer already. I think that somehow passed me by after Second Reading.

The Government share the noble Lord’s enthusiasm for the potential of fusion energy to play a role in our future energy system. However, I do not believe that the noble Lord’s amendment is necessary or appropriate here. First, the term “nuclear energy” is sufficiently broad that fusion projects can be regarded as already falling in scope. This makes a specific amendment on this point unnecessary.

I also want to make clear to the noble Lord that, despite recent technological advances and increases in private investment, fusion remains a comparatively early-stage technology; prototypes are not expected to be deployed until the 2030s or the 2040s. The Government are supporting the development and deployment of fusion demonstrator facilities by investing in R&D programmes and facilities and developing a proportionate regulatory framework. Indeed, there is already significant private investment in a number of fusion projects both here in the UK and in the US.

None the less, the Government intend to develop an appropriate funding model for commercial fusion energy facilities in due course, as fusion energy moves closer to commercial deployment. This funding model will reflect the nature of this means of energy generation. I hope that I have provided adequate reassurance for the noble Lord, Lord Wigley, that the Government share his goals and that this amendment is not necessary for achieving them. I therefore hope that the noble Lord will feel able to withdraw his amendment.

On our support for renewables, we have enunciated the breadth of work that we are doing in this area a number of times. We have made numerous statements in the House on this issue recently. I would be happy to write to the noble Lord with more information about the Government’s plans, but I do not think it is appropriate just to give a brief statement of our current intent.

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[Lord Teverson (LD)]

What I was trying to ask is whether BEIS is getting itself into gear—and I realise that the Government will probably look wider than renewables—and getting its act together now to really look at how we move forward in this area. Can the Minister assure noble Lords on this?

[Baroness Bloomfield of Hinton Waldrist (Con)]

I am sure that this is upmost in the minds of the Secretary of State and the Energy Minister. The Prime Minister has also made statements to this effect, and it is very much on every morning’s agenda. We have a ministerial meeting and it is the first topic at every one of them.

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[Lord Wigley (PC)]

My Lords, I am very grateful to the noble Baroness for her response and for the interventions on the points that I raised. A moment ago, the noble Lord, Lord Teverson, appeared in the uncharacteristic role of being a protector and defender of the Government on these matters, and I am sure that that will be bankable by the Government at some stage. This is not a party-political point because it is not party politics; I am speaking on my behalf, as my own party has divisions on these issues. Over the past 30 years, we have had “stop-start-stutter” with regard to nuclear; if you do not want nuclear, perhaps “stutter” and “stop” are good options. But if nuclear is going to play a role, it has to be treated in a serious and coherent manner. It needs to be transparent, and we will be coming on to questions of transparency in a number of later amendments.

Returning to the core of my amendment—

[Lord Teverson (LD)]

I hesitate to interrupt, but I was relating only to fusion, rather than fission, in my comments.

[Lord Wigley (PC)]

I accept that clarification, of course. With regard to fusion, I accept that successive Governments have been generous in helping to sponsor research but, over the last couple of years, we seem to have had some difficulty with our European partners as to the ongoing role of Oxford, which apparently is coming to an end, and the fact that the Russians, Americans and Chinese are providing finance for the location in France where the major project is going forward. I very much hoped that we would have been involved in this, because so much of the work on fusion has been done in the United Kingdom. It is something that we should be proud of.

I hope that, when this eventually comes through, it is something that is of benefit. That is why I want to see, if this Bill goes forward—and it has shortcomings, but any such Bill is bound to, because of the uncertainties that we have in this area—that we have full provision for fusion as one of the nuclear alternatives. The Minister stated quite categorically that fusion is included in this Bill, so that anyone who is considering fusion projects for the future may be able to rely—other things being equal—on this Bill as a source of finance and a framework within which to operate. That is a helpful clarification and, on that basis, I beg leave to withdraw the amendment.

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[Viscount Hanworth (Lab)]

Yes, indeed. In 2010, the Liberal Democrats in the coalition Government proposed that 10 new nuclear plants should be built. Of course, they have totally changed their opinion.

[Lord Teverson (LD)]

Perhaps the noble Viscount will explain how the Labour Party in government has made some of the biggest U-turns on nuclear power ever seen in this country.

[Viscount Hanworth (Lab)]

No, I am not in the business of explaining that. There has never been consensus in the party but, right now, I think there is consensus as never before. The party is facing up to realities. I hope I shall have the opportunity to describe what those realities may be if we were to follow the prescriptions of the Liberal Democrats. I think that we would be looking at a scenario of misery and—

[Lord Teverson (LD)]

We all agree with the principle that the polluter pays. I believe that we also have a principle in life that we should not pollute if we have no way of solving that pollution during the time for which we are planning. The issues here are complex, but I do not think they are necessarily quite so straight- forward as the noble Viscount describes.

[Lord Howell of Guildford (Con)]

My Lords, I had rather a nice time working with the Liberal Democrats in the Cameron Government, when, in an enlightened way, they were strongly in favour of nuclear power. It appears that they chop and change from time to time, but those were the days.

Before I speak further, my noble friend Lord Trenchard has reminded me that I should have made it absolutely clear that I have an indirect interest to declare, in that I advise Mitsubishi Electric, which is concerned with the power sector and indirectly therefore with nuclear construction. I suppose that I also have a sort of interest in the sense that I was Secretary of State 40 years ago and tried to build nine new reactors, of which only one, Sizewell B, was ever built. I think that I am allowed to reflect to this Committee that things would be much nicer for us if we had got the other eight built as well. They were all low-carbon and would have helped greatly in the present crisis, but that is all history.

On these amendments, it is absolutely true, as the noble Lord, Lord Oates, observed, that the radioactive waste issue requires careful handling and examination, and it must be addressed fully and with all the knowledge that we can bring to bear to establish and meet the many understandable concerns about it.

As for value for money, we will come to that in the next amendment. Of course, there are enormous difficulties in defining what value for what money, but we can debate that in more detail in a moment.

What is not true is to imply that there has been no technical solution to the absolutely safe—nothing is 100% but it is highly safe—burying of high-radioactivity nuclear waste for thousands of years. It is certainly more than 40 years since the late Walter Marshall explained to me that vitrification and burial two or three miles down in a stable geological formation was very nearly foolproof. There was a faint possibility of corrosion of the glass vitrification case around the radioactive material, but otherwise it would be safe for hundreds of thousands of years. He added, rather cynically, that if before then people wanted to dig it up and eat the glass, they may have more problems than radioactive waste. The vitrification option is there; it can be done.

In the great debate going on in America about the Yucca Mountain development as a waste disposal centre, I noticed that the statistics produced—I have the precise figure here—say that all but one in every 10,000 waste packages going into the repository, if it is built, would be secure for more than 150,000 years. So we are talking about the most minute dangers. The danger is there, but it is minute, and has to be weighed against all the other problems—we will come to value in a moment—of abandoning an area of low-carbon electricity which will be reliable, will stop a great deal of the suffering that we have today, and will be not only a stepping-stone to but a crucial adjunct and back-up of the renewable and clean energies that we all want to see dominate when conditions allow.

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[Baroness Worthington (CB)]

Which do you think is more impactful—an artillery shell, or an airliner or F14 fighter flying into the side of the reactor? They are designed for this. They have regular safety protocols and procedure which they go through in considering what should happen in a conflict situation like this. You are really not speaking from a position of information to understand this, I am afraid. I should not use pronouns; I should have said that the noble Baroness should really study this more before making proclamations such as this. It derails this essential effort.

[Lord Teverson (LD)]

My Lords, of course, the problem is actually flooding, as was shown at Fukushima—and bad maintenance, even in an organised society like Japan. The Tokyo Electric Power Company is probably seen as one of the most reliable companies in the world, but it did not do its job and caused a lot of the problem when there was the tsunami. I am not suggesting that a tsunami will hit Ukraine very soon, but there are issues.

I want to move away from the polemics. I thank Labour Members of the Committee for giving us a headline on opposing such facilities, but I admit that it is not the Liberal Democrats who have determined that they have not happened so far; it is the local communities that have rejected them. Maybe that will change. I have huge regard for the noble Baroness, Lady Worthington. I said this at Second Reading and will not go through it again: if you want nuclear, you do not do it this way. You do not build one big facility at 22 billion quid, and decide five years later to build another. You organise it in a different way, perhaps as South Korea did, with a fleet of the bloody things; sorry, I should not say that. This is the most inefficient and crass way of building nuclear power in this country.

[Baroness Worthington (CB)]

We are doing series building. The existing Hinkley Point is two reactors built in series, and these will be another two built in series. That is four, so that is not bad—and they are large reactors, double the size of the existing PWRs. You get what you pay for. You will get an enormous amount of reliable, secure and clean electricity that will be the backbone of our grid. It will flex to allow us to accommodate huge proportions of renewables, and it will be a system where we can produce hydrogen from nuclear. There is absolutely nothing for one to be concerned about in this proposal. I am a fan of alternative reactors; there are other ways of doing nuclear that are inherently safe and would not have led to the Fukushima accident, because they could have been designed differently. However, I ask the noble Lord: how many other reactors sustained themselves through that tsunami? It was unprecedented—10,000 people lost their lives—yet there was only one reactor problem, because it did not allow a release of pressurised air with water and vapour. That was what went wrong, not maintenance. There was a political call, and the reason for that was the world’s media focusing on it because of the radiophobia that has been spread, I am afraid, largely by the green movement over the last 30 years.

[Lord Teverson (LD)]

I can see the Government Benches starting to go for a refreshment break; never mind. I am trying to make a serious point. I have been to Hinkley C; I understand it all, believe me, but this is the wrong way to do it—the technology is obsolete. The question I want to ask the Minister outside the polemics is about the Nuclear Liabilities Fund, which he will be well aware of. Its current value in assets is £15 billion, largely through the Government’s sale of British Energy. We heard from my noble friend Lord Oates that the potential future liability is some £53 billion. EDF pays into the Nuclear Liabilities Fund at the moment.

My question is around the problem of there being a future liability that cannot be met. How does the Minister see that developing? Will the fund be able to meet the costs in the future? I am particularly interested in understanding whether the fund is in a bank account somewhere or is just an item on the Treasury’s balance sheet, so it is not really there and is just absorbed into public expenditure. It is a serious question. I would like to understand the previous methods that have been used to make sure that there is not a liability in the future. The figures just seem totally inadequate. Even if we do go through these types of facilities, how will we make sure that the liabilities can actually be met?

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[Viscount Hanworth (Lab)]

I quite agree with what the noble Lord, Lord Howell, has just said; indeed, I feel somewhat pre-empted. However, before I address the amendment, I shall talk about cost overruns.

The cost overruns have been substantial in Flamanville and Olkiluoto but they are mainly attributable to the fact that there was a long hiatus in the process of constructing nuclear power stations, so the skills that constructed the majority of the French and our own power stations had evaporated. It is worth looking back at the history of our original nuclear programme to recognise both how rapid and effective it was and that it was not accompanied by the kinds of problems we have witnessed on these large power stations.

Be that as it may, Amendment 4 from the Liberal Democrats is predicated on their opposition to nuclear power and the proposal that nuclear power projects should be assessed in terms, as we have heard, of their value for money. I presume that they wish the assessment to be based on commercial accountancy, and that they hope and expect that on that basis the projects will be judged to be too expensive to pursue. The proposers of the amendment should know that when a nuclear project is financed by commercial funds, the likelihood is that more than 50% of the cost of the project will be attributable to interest costs.

In other words, the costs of projects pursued in this manner will comprise a substantial transfer payment by the beneficiaries of the project, who are the consumers of electricity, in favour of the financial sector. Are the Liberal Democrats happy to see major investments in social and economic infrastructure evaluated according to the criteria of commercial accountancy? If so, they are aligning themselves with a political ideology that I would have expected them to reject.

[Lord Teverson (LD)]

That is not what the amendment says.

[Viscount Hanworth (Lab)]

Be that as it may, when we talk of value for money, we usually have in mind the amount of money we would be paying for an item that is subject to immediate use or consumption. The concept loses its meaning, as we have heard, when considering something where consumption is to be deferred and is liable to take place over an extended period. In such cases, we must attempt to envisage the circumstances likely to prevail in the future. This is surely the case for a nuclear power station, the construction of which may take a decade and which is intended to provide a carbon-free supply of electricity for many years. It is envisaged that such power stations will be able to supply the plentiful electricity needed to power a carbon-free economy and to assist in averting climate change.

The appropriate means of determining the value of a nuclear project is to consider the associated opportunity cost. Opportunity cost is a technical term in economics that denotes the opportunities that are forgone by pursuing—or not pursuing—a particular project. It requires a degree of imagination to assess the opportunity cost of a nuclear project, which far exceeds the imagination required in pursuing an exercise in commercial accountancy. I invite the Liberal Democrats to assess the opportunity cost of forgoing nuclear power. In particular, I encourage them to envisage the consequences in terms of economic and social misery that will arise if we fail to create an ample and carbon-free supply of electricity. Their policies are inviting such a failure.

[Lord Teverson (LD)]

There is a concept in economics—which I am sure the noble Viscount is aware of—of opportunity cost.

[Viscount Hanworth (Lab)]

That is exactly what I have been talking about.

[Lord Teverson (LD)]

Exactly. My point about it is that, first, it is the Government’s Bill says there will be this assessment. We are trying to find out is what it actually is, in the interests of transparency—which I am sure the noble Viscount would not disagree with. In terms of costs, there are opportunity costs of other forms and ways of meeting climate change targets. That is the point. You can reject opportunity cost, which means other ways of doing this. I do not think the noble Viscount’s enthusiasm for nuclear—which I understand—should disregard some of the other ways of achieving these objectives.

[Viscount Hanworth (Lab)]

Let me answer that. Looking at the alternatives proposed by the Liberal Democrats, I could go into a long discourse to outline what will happen to our industries if we forgo an ample supply of electricity to power them and maintain our economy. This is what the Liberal Democrats are inviting. They simply have not faced up to the realities of their proposals. The noble Lord says the Bill already asks for an assessment; I think that is a trivial point, because I am trying to tell him that such an assessment is probably not the appropriate way of proceeding—as we have heard very eloquently from the noble Lord, Lord Howell. I am not defending the proposal that a value for money assessment should be made. I am suggesting that such an assessment should be put aside because it is irrelevant and inappropriate.

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[Viscount Hanworth (Lab)]

As I was saying, large nuclear power stations are the only proven technology available today which provide a continuous and reliable source of low-carbon electricity—

[Lord Teverson (LD)]

Geothermal.

[Viscount Hanworth (Lab)]

Can I please proceed uninterrupted, then we can have a real set-to later?

Nuclear power plants have never been afflicted by significant unplanned outages, albeit that, as they have aged, their maintenance needs have increased. These have been fully accommodated by planned outages. Nevertheless, the closure of the Magnox reactors has led to an increase in load factors, which are now considerably above their historical average. The average has risen from an historical 60% to its current level in the high 70s. The recent unplanned outage at Hunterston B, which can be blamed on the age of the plant, limited its nuclear power generation for much of 2018. It was accompanied by an average load factor throughout the industry of 72.4%.

This amendment flies in the face of reality. We must turn the matter around by asking the Liberal Democrats and the Greens, who are averse to nuclear power, how they propose to accommodate the intermittence and unreliability of the renewable sources of power they are so keen to advocate. Perhaps I should not raise the temperature by declaring this, although I fear I must, but this amendment is a blind and is a transparent piece of nonsense.

[Lord Teverson (LD)]

I will not respond to that hugely, except to say that the really important amendment, which I think we will all treat seriously, is the one on the cost of energy and the fact that this will add to energy prices. The proposition that we should exempt fuel-poverty households from this is serious; we should discuss it, because it is very current and important.

I gently suggest to the noble Viscount, Lord Hanworth, with whom I have enjoyed serving on the committee for many years, and the noble Baroness, Lady Worthington, that they have somehow fallen into the wrong idea that it is renewables versus nuclear. That is how the argument has gone.

[Viscount Hanworth (Lab)]

If I could interject, we are objecting to the complete exclusion of nuclear, which is the agenda of the Liberal Democrats. It is madness.

[Lord Teverson (LD)]

The answer to intermittency comes back to opportunity cost. As I said at Second Reading, the most effective way of reducing it is energy efficiency. That should be the prime objective. Does the noble Viscount disagree about energy efficiency?

[Viscount Hanworth (Lab)]

No, I do not, but that is not the point. Continue.

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[Lord Teverson (LD)]

There are all sorts of ways of dealing with intermittency. Interconnectors have been quite effective, and I congratulate the Government on their policy of increasing those. Energy storage has been mentioned, in terms of hydro. On baseload, I agree that there are other ways of doing that in terms of geothermal starting, although I understand that is very young. There is a whole plethora of other strategies that work here.

I purely wanted to suggest that one of the most important matters here to the people outside this Room is the cost of energy and how we deal with fuel poverty in terms of this specific financial model, and to emphasise that the argument is not just around nuclear versus renewables.

[Lord Howell of Guildford (Con)]

My Lords, surely no one is suggesting that these are alternatives, or if they are then that is not what any sensible assessment would allow. Of course the aim for a decarbonised world has to be sought through many forms. All that is being said is that to leave out one of the major areas of decarbonised electricity is asking for trouble, unless one can begin to assess the enormous costs of trying to fill it in in areas where it may not even be available.

The example of Germany is one that the noble Lord should perhaps bear in mind. The rumour is that, having tried to do without nuclear power and got down to its three remaining nuclear stations, there is strong talk that if it is to move into the new world that we are facing now, which has all sorts of implications for the future, a large chunk of reliable low-carbon nuclear capacity must be either retained or developed to add to all the other highly desirable things for net zero and all the other projects, including of course energy efficiency and a far greater use of every kilowatt of electricity for output, which is the secret of considerable improvement without too much electricity. If that is what is being argued, we are all for it, but nuclear electricity is an unavoidable part and to drop it seems a bit odd and very high-cost indeed.

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[The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)]

Before I formally call this amendment, I need to inform the Committee that there is a mistake on the Marshalled List. Amendment 11 should begin:

“Page 2, line 14, at end insert—”.


In relation to Amendment 5, the amendment proposed is:

“Page 2, line 14, at end insert”


the words on the Marshalled List—and Amendment 11 would come at the end of that.

[Lord Teverson (LD)]

My Lords, I rise very briefly. In the last group, I mentioned some of the countermeasures to the variability of renewables, including interconnectors, energy efficiency, demand-side management and many more. But I also mentioned battery storage and I should have declared an interest: I was not expecting to get on to battery storage, but I am a director of a company involved in the development of battery storage. I apologise to the Committee that I did not raise that interest during the debate.

[Lord Wigley (PC)]

My Lords, I will speak very briefly indeed. I have added my name to Amendment 27 in this group alongside that of the noble Lord, Lord Foster; I did so with particular regard to my strong feelings on new paragraph (e), proposed by the amendment, which concerns

“how decommissioning costs of the project will be met”.

Of course, this issue appears in sub-paragraph (iii), proposed by new Amendment 5, which refers to

“an estimate of the costs of decommissioning the project”.

As I indicated in our earlier debates, I feel that this is a critical aspect of the Bill that needs to be covered and where assurance needs to be given, whatever the mechanism of doing so. I would have thought that the Government could recognise that and say that, whether or not these amendments meet the standards that are acceptable to them, there may be some way of giving an assurance that the questions asked by these amendments can be answered—and that the answers will be forthcoming to this Committee.

Revised Energy National Policy Statements

Lord Teverson Excerpts

Tuesday 22nd February 2022 Grand Committee

[Lord Teverson (LD)]

My Lords, I welcome this document. I remember some 10 years ago sitting here and going through all six of the previous documents. It does not seem so long ago, which is a sad fact, but there we are. It is right that a lot has changed since the statements first came out during the coalition Government.

I do not want to talk particularly about net zero; I want to talk about the other emergency that we have and ask a number of questions on it: the biodiversity emergency, and how that relates to the national policy statement. There are some specific questions that I want to ask at the end. I welcome the fact that biodiversity is mentioned quite a bit—I have mainly gone through the overarching document—but I do not understand how the Environment Act that we passed at the end of last year relates to biodiversity net gain in terms of nationally significant infrastructure projects. Paragraph 4.5.2 of the overarching document states:

“Although achieving biodiversity net gain is not an obligation for projects under the Planning Act 2008, energy NSIP proposals should seek opportunities to contribute to and enhance the natural environment by providing net gains for biodiversity.”


Yet Schedule 14 to the Environment Bill, which is about biodiversity net gain, states:

“The biodiversity gain objective is met in relation to development for which planning permission is granted if the biodiversity value”


is attributable to the percentage, which, as we know, in the Environment Act is 10%. Given that the Environment Act, primary legislation passed only at the end of last year, relates biodiversity net gain to a planning permission —and I understand that NSIP is a planning permission— does the 10% net gain apply to such projects? Is that true also of marine projects? In any case, even if the Environment Act does not apply to them, does the Secretary of State expect that marine projects will also create biodiversity net gain?

It is great to go on about biodiversity net gain, but, as we know, there is a requirement in the Environment Act that such net gain be protected for at least 30 years. That has to be done by local authorities, as I understand it from the Environment Act, but when it comes to NSIPs, who is going to make sure that net gain that is promised as part of NSIPs’ planning permissions is actually delivered through that period of at least 30 years? If that policing and enforcement do not take place, we know that it will not happen or will disappear along with everybody’s corporate memory of the original agreement. I would be very interested to understand the Minister’s idea of that. I am sure that both he and I have exactly the same objectives in that area.

On a similar environmental theme, I could find no mention within the documents of the circular economy. This is one of the other areas that government is starting to get involved in and where it is starting to see that, rather than a linear economy, we should move to a circular economy in terms of global resources. How will the Government start to look at that in terms particularly of renewable energy as well as all the other areas that there are? On renewable energy, we have got as far as looking at wind turbine blades, but that is about as far as it goes, and I do not think that the industry has been fully responsible yet in that area.

On waste disposal, the noble Lord, Lord Whitty, was absolutely right. I know that the Government are doing a study on networks of offshore wind pipelines and energy cables; it is particularly important, as development starts in the west, in the Celtic Sea, to understand what is going to happen, so that we do not have the sort of spaghetti junction that we have in the North Sea.

I also want to comment briefly on nuclear waste. I was disappointed that EN-6 was not actually updated. I think that the Minister may reply by saying that it is in process, which, if so, is fair enough. But on page 16 of the original EN-6, the footnote, which I thought was a typing error when I first read it, says:

“Geological disposal of higher activity waste from new nuclear power stations is currently programmed to be available from around”—


wait for it—“2130”. That is still 120 years away, and I wonder whether the Government would like to reconsider that and maybe bring it a little forward. The document does say at the end, to give it its due, that they—this is the coalition Government—might see

“potential to bring forward this date”.

I shall put it in my diary to check if it happens by then, but it would be great if we could bring it forward.

Lastly, I again checked “energy security” on a phrase checker, and it came up with “text not found”. The document does mention energy security, but only in relation to two things. One is the capacity market, all around the area that the noble Baroness, Lady Neville-Rolfe, mentioned—keeping the lights on—which the capacity market is very much about. The other area is cyberattacks, which as we know are very topical and important. But there is nothing on what we would understand more broadly as energy security in this overall document, and I find that quite an interesting omission.

I look forward to the Minister’s reply, particularly in the area of who is responsible for making sure that biological and biodiversity net gain actually happens over the next 30 years for this level of project.

Nuclear Energy (Financing) Bill

Lord Teverson Excerpts

2nd reading
Monday 21st February 2022 Lords Chamber

[Lord Teverson (LD)]

My Lords, first, I declare my interest as a director of Aldustria Ltd, which is an energy storage company. I thought the noble Lord, Lord Rooker—who I have huge regard for—was back into Corbynism there for just a moment. I knew someone who worked for the Central Electricity Generating Board. It was a great time in history.

The Minister mentioned both value for money and zero carbon, and I want to come back to both. One of the basic things about zero carbon is the circular economy, and one of the first questions on the decision tree of circular economy is whether you need something or not. I will go down that route in a minute. I have always been favourable to nuclear power but, over the last decade, facts have changed. That is why I am sceptical about the need for this type of nuclear development altogether. Let me say why.

First, we still have not solved the nuclear waste issue—and it is a real issue. Conversations with local authorities and communities are going on throughout the UK about finding a way forward but, even if we do, those facilities will not be ready for many decades, as we have seen from previous experience in Finland. Secondly, I come to the area of baseload because this is, if you like, a 1990s argument. One thing about nuclear power—particularly with Hinkley C, which I have visited, and Sizewell C—is that, for it to be effective, it needs to operate consistently: it does not go up and it does not go down. If we have large renewables in this country, nuclear must go up and down from hour to hour, day to day, week to week. It is not a technology suited to that. It becomes inefficient. It is inefficient not only operationally but in terms of what the Bill is trying to do, which is minimise capital costs. I know from my experience in industry that, when you have capital, you work it day and night as long as you can: you sweat the assets. With a large renewable input into our electricity system, that becomes not possible with nuclear power after a certain threshold.

Also, you come to costs, and this is where facts come in: the cost curve for nuclear has gone up while the cost curve on renewables has come down significantly, as we know. I congratulate the Government on part of their work in making sure that is the case. In terms of value for money, which was the Minister’s caveat on this nuclear project, it seems to clearly fail. The trend is going that way, but we have the largest energy cost crisis that we have had in many years at the moment, and we are told that it is not going away any time soon. Yet the Bill actually adds costs to consumers, when we have a cost-of-living crisis—fuelled by energy—that is more of a problem than it has been for some time. If I was an adviser to the Government—which I never have been or will be—and I wanted to use nuclear power, I would probably go down the Korean route: you build a fleet of 20, you get your economies of scale and you finance it through the public purse, which has minimum interest cost. What do you have? You have a much cheaper capital cost, zero carbon and greater efficiency. The Government are not going down that route, but that has been shown as probably the only way that you can make nuclear power successful in the modern world.

There is an alternative—and, strangely enough, it is not renewables. It is that boring thing called energy efficiency. The Minister shakes his head, but every government publication with comparisons says that energy efficiency shows the highest return in terms of capital investment that there is. For the £20 billion that this will cost—probably more at the end of the day—it is my rough calculation that you can retrofit 2 million to 3 million homes; those would be some of the worst ones to bring up. This is important for social fuel poverty but also means that energy costs for consumers go down—whereas the Bill makes them go up. Page 55 of the 2019 Conservative manifesto says:

“We will help lower energy bills”—


somewhat ironic—

“by investing £9.2 billion in the energy efficiency of homes, schools and hospitals.”

Fantastic, but it is not enough. Here, twice that could be put towards it. I ask the Minister: how much of that £9.2 billion has already been spent, half way through the Parliament?

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[Lord Goodlad (Con)]

My Lords, it is a great pleasure to follow the noble Lord, Lord Wigley. I remember with great pleasure visiting Trawsfynydd and Wylfa in his former constituency when I was a junior Minister of energy, almost four decades ago. I was pleased to hear from my noble friend the Minister that further investment up there is now envisaged.

I strongly support the Bill. We have no prospect of achieving a goal of net-zero carbon emissions by 2050 without new nuclear power. All but one of our current reactors are due to close and we urgently need to make up for lost time and get on with building their replacements, faced as we are with the doubling of electricity demand over the next 30 years.

We have discussed today the other sources—wind and solar power, which the Government have very successfully promoted and will continue to promote—but as we have seen, they are very much victims of the weather from time to time. Oil and gas currently provide a very large proportion of our electricity and will continue to do so, on a diminishing basis. I entirely agree that they should be sourced locally and domestically, rather than being imported, so far as is possible; I only wish more of my compatriots north of the border saw it that way. The Government are rightly supporting investment in small modular reactors—good luck to Rolls-Royce—but that is down the line, as are hydrogen and fusion, which are well down the line.

Increased energy efficiency—which we have heard about from the noble Lord, Lord Teverson—both domestic and industrial, has to my knowledge been a theme of government for at least four decades. That remains a work in progress; much low-hanging fruit has already been gathered, but there will always be room for new carrots and sticks. The Government have made commitments in that direction, which my noble friend the Minister may wish to comment on.

If we are to avoid electricity rationing as demand doubles, we do not have the luxury of time. We need the certainty of new baseload nuclear electricity very soon. That is what this Bill, through the proposed new financial arrangements, will enable, showing the project costs for consumers, investors and developers. The impact assessment has shown that the RAB model for building a large-scale plant is hugely cheaper than the alternative, and for that reason the Government are quite right to choose it.

In the debate on civil nuclear power in your Lordships’ House on 9 December, it was suggested in a most brilliant speech that alternatives to the present proposals could include the issuing of designated bonds backed by the security of the Government, or creating

“a supply of funds to enable the projects to pre-empt the necessary resources by increasing the supply of money.”—[Official Report, 9/12/21; col. 2078.]

Since the Government can borrow money more cheaply than anybody else, it is clear that there is some attraction in this. The noble Lord, Lord Teverson, referred to it as the North Korean model.

[Lord Teverson (LD)]

South Korean.

[Lord Goodlad (Con)]

South Korean! I beg his pardon. My hearing aid has been letting me down. The South Korean model. Well, that may be so, but that is not the way the Chancellor of the Exchequer sees it, faced as he is with an enormous borrowing requirement already, and that is not the proposal before us.

One of the lamentable side effects of the lack of investment in nuclear power in recent decades has been the serious reduction in this country’s relevant skills and expertise. Sizewell C, following Hinkley Point C, will be essential in keeping in existence this expertise. It is salutary to remember the role of British expertise in the construction of the pressurised water reactor at Daya Bay in China, the first nuclear reactor. How the world has changed, but we are where we are, and I hope that we can yet again lead the world in nuclear technology if we show the will to do so, as we can.

I hope that this Bill will enjoy a relatively swift passage through this House, as it did through the other place, with the encouragement of the noble Lord, Lord Rooker, who spoke as eloquently as ever in its support. I hope also that work can be carried out with the urgency that the situation requires.

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[Lord West of Spithead (Lab)]

My Lords, I strongly support the Bill and agree very much with the things that were said by my noble friend Lord Rooker. There is no doubt that an energy crisis is looming, as we move towards net zero. Indeed, it could be argued that the energy crisis is already here. The amount of electricity used in this country will at least double, as my noble friend Lord Rooker says, if not increase by even more. The noble Lord, Lord Teverson, mentioned insulation, and I agree that it is very important. However, it is not that easy and straightforward. I have just visited one of my sisters in the West Country and she has had made her house amazingly well insulated. She had to basically demolish the house, almost rebuild it and put everything back together. It is now fantastically energy efficient. If we were to think that millions of people in this country could easily do that, we would have to be in cloud-cuckoo-land. When we are all driving around in electric vehicles, there will be that additional demand and those vehicles cannot be insulated.

Why are we in this position? It is because of the failure of successive Governments—as has been mentioned. It is a national disgrace, actually. We have gone from being the world leaders in civil nuclear—we made masses of money exporting this stuff to Japan—to a position where we cannot build even one of these large reactors ourselves. That is appalling. Reliance on the Chinese, for example, as has been mentioned by a number of speakers, is extremely dangerous and not good. In terms of Sizewell C, could the Minister let us know exactly what the Chinese involvement in finance will be with the new scheme? Will they still be involved in that? I presume so. Will he let us know whether there is any thought about Bradwell going ahead? I imagine that it cannot, because it is too dangerous in terms of our security.

Some people have said that nuclear should not be used because it is not safe. Let us not kid ourselves—more people die every year in the petrochemical and other energy industries around the world than have died in all the nuclear reactor accidents put together. This is nonsense; we have very strict regulations and do this very well. As regards—

[Lord Teverson (LD)]

I hesitate to interrupt, but I do not think that anyone in this whole debate has said it is unsafe, actually.

[Lord West of Spithead (Lab)]

The noble Lord is quite right. What I am raising is: why have we got to this position? It is partly because parties such as the Greens are so anti this, and one of the things they threw around casually was how dangerous this is. I do agree that, in terms of waste and its disposal, we are currently able to do it quite safely on a temporary basis—but there is a need to resolve the long-term issue. The noble Baroness, Lady Neville-Jones, is absolutely right, and I hope the Minister will say that this will be pushed forward. From what I have seen, it seems that we are moving down that route very quickly.

Basically, we need to pull our finger out and get going on this. Sizewell C and Hinkley Point C are absolutely necessary. Looking to the future, we absolutely have to go for SMRs, AMRs and the use of hydrogen. This can all be encapsulated somehow in this. I think we would all agree with that.

I ask the Minister: will the problems at the Taishan plant, mentioned by the noble Lord, Lord Howell, have an impact on Hinkley Point C or have those problems been resolved?

Finally, when I had responsibility for more than 20 nuclear reactors two decades ago, only the Navy was training people and awarding nuclear degrees, which universities in this country had stopped doing. I know that they have restarted, but a number of noble Lords have made the point that this is an opportunity for us to get apprentices and to start training people. I am not sure about a CEGB—but I must say that we need something like it. This sort of training is needed because, at the moment, they are nicking all the people we trained in the Navy to go and do these jobs, and that is not a good way to go ahead.

Maldives: Tariffs

Lord Teverson Excerpts

Tuesday 14th December 2021 Lords Chamber

[Lord Grimstone of Boscobel (Con)]

My Lords, my noble friend makes a good point about the fishing practices used by fishermen in the Maldives, on which we must congratulate them. However, there are classifications that determine whether a country is a developing country. To go outside those classifications would have ramifications elsewhere.

[Lord Teverson (LD)]

My Lords, surely we need to be more flexible than that these days. I congratulate the Maldives Government on their sustainable practices, which the noble Baroness mentioned. The UK Government are rightly a champion of ocean conservation and biodiversity. Where there are good fishing practices, particularly for tuna, should we not give them strong trade preferences—yes or no?

Competition Act 1998 (Coronavirus) (Public Policy Exclusions) (Revocations) Order 2021

Lord Teverson Excerpts

Monday 1st November 2021 Lords Chamber

In the meantime, I understand why the Government are not pursuing this SI in the future—because they believe that the pandemic is over—but, by doing this, they have clearly avoided a solution to an issue which local politicians, and in particular local residents, are very concerned about.

[Lord Teverson (LD)]

My Lords, what a privilege it is to have the noble Lord, Lord Callanan, with us this evening. With COP 26 happening in Glasgow, the Minister for Energy Efficiency, Fuel Poverty and Clean Heat is among us. In fact, maybe I should apologise that we have detained him from saving the planet. I hope that he will be able to give us a brief insight into COP 26 and his role in it in his answer to the very good questions asked by noble Lords and my noble friend Lady Randerson.

What I thought was more of an irony about this order is that it mentions the Competition Act 1998 (Groceries) (Public Policy Exclusion) Order 2020, whose time has, I think, already expired. The irony is that the thing which the groceries order was set up for—Brexit and Covid—was not a problem at the time, but now we actually have a crisis. A number of the supermarket shelves are empty, we do not have HGV drivers and supply chains are failing, so maybe we should look at that. We have now allowed cabotage, and drivers’ hours have been extended. It is mentioned here that we have more of an emergency, particularly perhaps as we approach Christmas, than we would do otherwise.

I want to say a couple of things about the Isles of Scilly—not the Scilly Isles, as they are very different places, one fictional and one real. First, I want to thank the Government for the £48 million that has been attributed through the levelling-up fund, as mentioned by the noble Lord, Lord Berkeley, to sorting out the next generation of vessels and the port structures that support them for travel between Penzance, which I visited over the weekend, and the Isles of Scilly—and between those islands as well. That very important commitment allows a change from the current “Scillonian” and freight vessel, which are well out of date and will cause problems into the future. I do not dispute in any way the questioning of the noble Lord, Lord Berkeley. He knows far more about ferry configurations than I would, but we should note specifically and positively the Budget Statement in that area.

I am also a supporter of competition, in principle, because it is important whether you do it through procurement of a contract to run a service—perhaps on a TfL basis—or in the form it takes on the Isle of Wight, which perhaps does not work exactly correctly, where there is competition between operators. That is important, but what we have with Scilly is always the cost and uncertainty of the connection. We always looked at Scotland as having a far better approach to remote communities off our islands, while in England we find, off Cornwall, that the Scillies are discriminated against.

I looked up the cost of flying by helicopter, which is a form of competition. For those who wish to visit—and I hope you do—the price for a single adult to fly to Tresco or St Mary’s is £129 one-way. If you are lucky enough to be an infant aged between two and 11, it is only £108. That gives an indication of the cost of that second-rate transit for members of the British Isles community. They are second in a league to our friends north of the border.

I reiterate that I wish the Minister every success at COP 26. I am sure he will be there in his energy roles. This conference is the most important we have had on the planet, and I give all good wishes to the Government, and Alok Sharma, in achieving success at it. I also thank the Government for the recognition of the Scillies issue in the Budget.

[Lord Bassam of Brighton (Lab)]

My Lords, first, I thank my noble friend Lord Berkeley for securing today’s debate via his Motion of Regret, which clearly comes from a good place—designed, as it is, to protect consumers from high prices and to keep ferry routes accessible to all. The debate has generated more heat than I expected, but it is important because in our communities at the periphery, there is a strong sense that they suffer from high prices, are forgotten because they are at the end of the line, and get left out in government considerations. I join my noble friend Lord Berkeley, the noble Lord, Lord Teverson, and the noble Baroness, Lady Randerson, in thanking the Government on behalf of the Isles of Scilly for their £48 million contribution to improving the quality of the sea services to those islands, because what is there at the moment is clearly not fit for purpose and needs to be improved. It is a lifeline service and helps the tourist economy of those islands.

As we heard, in March 2020, the Government announced that ferry services to and from the Isle of Wight were at significant risk of disruption due to the pandemic, so they introduced regulations which allowed the two ferry operators to share information and staff to ensure that ferries continued to run regularly across the Solent. That was for all the reasons and purposes that noble Lords have outlined: for economic, health, education and welfare reasons.

Now, of course, the Government have decided that the Covid pandemic is at an end and seem to think it is the right time to end the suspension of competition law, believing it is no longer needed. I do not know that the pandemic is at an end: the figures tell us otherwise. People are getting Covid at the rate of about 40,000 a day, and about 1,000 people a week are dying from it, so I am not sure that we are at the end of it. People are still very cautious in their travel plans for that very reason. The absence of people travelling means that those services could be under threat in future. I do not buy the line that there is no more threat of severe disruption to the Isle of Wight ferry crossing services.

Can the Minister explain how the Government reached the conclusion that now is the right time to end the Covid provisions? Although I am not a local of the Isle of Wight, it is a place that I have visited on many occasions. I think the first time I went there was in 1970, to a pop festival. Back in those days, Sealink, a nationalised industry, ran the service. It was a very good and very cheap service, actually, by the standards of the time. As a Brightonian, I am familiar with the ferry service: it goes from just down the road in Newhaven, along the coast from the Isle of Wight. It strikes me that ferry prices there are quite expensive. Ironically, my wife recently used the service and complained to me about it. I can understand how local people who have to make multiple journeys for work, health, education and other purposes see their ferry ticket prices adding up and becoming a serious expense and, by default, an inhibition on business on the island. I must acknowledge that there is genuine concern from some that there is insufficient competition.

I think that my noble friend Lord Berkeley said that there were two monopolies, and I think that is probably a fair description of how it works, and that that has undoubtedly resulted in high fares. I suspect that the companies see those two services, in particular, as providing a regular flow of income that they can pretty much rely on. Does the Minister think that fares are too high? Clearly, local people do. That is reflected in the attitude of the local MP and local councillors. Are there too many barriers to entry to new ferry companies, I wonder?

It has been reported that an island-based consortium may well be working up a plan to run a community vehicle ferry service and has asked the local council for its help. Are the Government planning any additional support for such a move? Do they see that it has a role in stimulating some genuine local competition? If they do, I suspect there will be quite a lot of takers for that service, given the high cost of the service as it currently is.

So are the Government planning to ensure that there is real competition? Do they accept that services are expensive? What comfort can be offered to the community of the Isle of Wight in ensuring that ferry services can be provided in future at a reasonable price?