Infrastructure Bill [HL]

Debate between Lord Teverson and Lord Forsyth of Drumlean

Monday 10th November 2014 Lords Chamber

[Lord Teverson]

My Lords, I welcome this amendment and I was pleased to add my name to it both in Committee and now on Report. The important point to make is that my noble friend Lord Hodgson is absolutely right: if we do not put this on to the statute book as something that can happen, the temptation will pass and it will be as if it never happened. That is why I am keen that it should be done now.

I should say just as an observer, if you like, that it is very easy to expand government expenditure and very difficult to pull it back. It is easy to find uses for income if it is there, but perhaps those uses are not always the best for our long-term future. It is easy when there are financial and fiscal constraints of the kind the country is confronting at the moment, but that is not always the case. It is hoped that we will get over the current deficit at some point in the not too distant future. That is why it is important to prepare for a sovereign wealth fund so that we can build it up in an intergenerational way, as has been advocated already.

The other aspect is completely different and not at all the most important. In the last parliamentary Session this House set up a Select Committee to investigate the nature of soft power. I was not a member of the committee, but it seems to me that countries with sovereign wealth funds exercise considerably more soft power in global affairs. That is not surprising because money talks—not just within the family or in business, but across nations as well. Why does Norway enjoy its stature? It is in part because of its sovereign wealth fund. The same can be said for a number of Gulf states and for China. In terms of Britain’s status in the future, we would gain quite considerably if we were seen to be a country that is able to save, invest and exert influence financially beyond our borders in this way rather than one that just keeps its current account going through non-renewable resources that cannot be brought back. That is why I feel strongly that we should at least take the step of this enabling legislation and then let future Governments decide how it should be used.

[Lord Forsyth of Drumlean]

My Lords, I did serve on the soft power committee and I have to say that the countries with sovereign wealth funds are not exercising soft power; they are exercising hard power because they are lending us money to keep going. Every year we are spending roughly £100 billion more than we have income. The leader of the Opposition forgot about the deficit in his speech at his party’s conference. I have to say that I have very considerable respect for my noble friend, but he seems to have forgotten about it too. He did mention at the end of his speech that there is the issue of debt, which might be a reason why people would oppose this policy. It is certainly why I would oppose it.

The national debt will have doubled during this Parliament. The coalition Government are absolutely determined to reduce it, but it is still growing. We are not meeting our targets in terms of bringing the deficit under control. The idea that we should pre-empt resources that may or may not come from shale gas is like going along to the bank manager and saying, “I would like to borrow £1.4 trillion and, by the way, I would also like to open a savings account into which I shall put the proceeds from shale gas”. This is a noble thought. It would be great to have a sovereign wealth fund, but it would perhaps be a first step to live within our means and pay back the debt that we have accumulated.

Energy Bill

Debate between Lord Teverson and Lord Forsyth of Drumlean

Wednesday 11th December 2013 Lords Chamber

[Lord Forsyth of Drumlean]

Before I sit down, I say to the noble Baroness that I would be more persuaded by her if she and her party were to be more open-minded about the prospects for fracking, for example, in her advocating the future generation of electricity by gas. As always, though, the noble Baroness wants it both ways, and I hope very much that the House will support my noble friend and reject this amendment.

[Lord Teverson]

My Lords, I will comment on the amendment of the noble Lord, Lord Oxburgh. I agree and sympathise with my noble friend Lord Jenkin’s point that the Bill needs to proceed and that we must get it on to the statute book. The only reason I have pursued this is that, as the noble Lord, Lord Turner, suggested, the issue of the continued generation of electricity by coal is fundamental to the policies of both this and the previous Government, and therefore needs to be clarified. These two amendments are attempts to increase as far as possible certainty for investors and clarify the way forward. As the noble Lord, Lord Forsyth, said, that is not completely possible, but at least we can start to close down the risks and probabilities, which is one of the main purposes of the Bill. That is why the amendment has been pursued. I have been happy—although reluctant—not to pursue my own amendment but to try to reach a compromise.

Pricing is not a problem here. Would coal being removed from electricity generation lead to the threat of price increases? In the past few years, when coal has come on, we have not seen prices fall; in fact, the more coal has come on the system, the more they have gone up. That is the correlation; I would not say it is directly causal, but that is the history of how this has worked.

On security of supply, the vast majority of that coal comes from Russia and Colombia, with a little bit from the United States as well. The security of supply arguments do not, therefore, all run in one direction. On the question of how the coal generating industry is treated under any of these amendments, it will be free to operate at peak times for a long time. That, along with contributing into the capacity market, will be greatly to the financial benefit of the power station operators.

That is why these amendments are important. I know that this is not important to everybody, but it is estimated that our carbon emissions went up by 4.5% last year, at a time when we were hoping to bring them down. That was because of the increase in coal generation of electricity, according to the Department of Energy and Climate Change.

This is a good Bill. I congratulate my noble friend the Minister on all that she has succeeded in doing during the passage of the Bill. This is the only contentious Lords amendment, and I seriously regret that the Government have not been able to find a compromise or to help us through this important, core issue.

Energy Bill

Debate between Lord Teverson and Lord Forsyth of Drumlean

Wednesday 6th November 2013 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, I am very disappointed that my noble friend Lord Stephen is not here tonight. This issue first came to my attention because of some very unfortunate publicity in the Daily Telegraph, where he was accused of promoting his business interests through this amendment. Quite rightly, he withdrew his name and made it clear that his name had been added to the amendment in error.

[Lord Teverson]

My Lords, perhaps my noble friend will allow me to intervene. I absolutely endorse that and make it clear that the name of my noble friend Lord Stephen was added to this amendment completely by error and without his permission at the time.

[Lord Forsyth of Drumlean]

Whatever one’s views on wind farms—I confess I am not an enthusiast for them—it is absolutely essential that the process by which permissions are given and projects are undertaken are seen to be fair and take account of all objections and environmental and other interests. This example is about a particular wind farm development in some respects, but it is also about the rule of law and our attitudes to the rule of law.

The fact of the matter is that this whole saga arose because of the Viking project in Shetland, with over 100 turbines, where there was considerable local opposition. The project is being promoted by the Shetland Islands trust, which has got the oil money—and a large number of the trustees are councillors in Shetland—together with Scottish and Southern Energy. They are the people who are promoting this project. There was very considerable local opposition to this project, but the council decided that it was not conflicted, even though the Shetland trust was a party to the development. As a result, there was no public inquiry. The Scottish Ministers in the Scottish Government gave the project the go-ahead. Some local opposition sought judicial review of that decision, which went to the Court of Session, which is the equivalent of the High Court in England.

Former law officer, Lynda Clark, after three months of deliberation and a well argued and clearly very considered opinion, which I have read and is freely available, concluded that this proposal was unlawful because it did not meet, as my noble friend has said, the requirements of Schedule 9 to the Electricity Act 1989, which makes it clear that anyone who is planning on producing a power plant which includes a wind farm should have a licence from Ofgem before planning approval can be granted. When the judge asked the parties to the development who had the necessary consent, none of them had, and the project had to go back to square one.

When I was a Secretary of State—and for as long as I have known—the principle has been that when a judge reaches a conclusion as to the state of the law, that is the law until such time as it is subject to an appeal. What happened next is an absolute scandal. The Scottish Government then decided that they disagreed with the judge in her opinion and that they would go ahead anyway. In a letter signed by Catherine Cacace to John Campbell QC, the Energy Consents and Deployment Unit said:

“Scottish Ministers note that the Court has found that an application for consent under section 36 of the Electricity Act 1989 can only be made (and so granted) where the applicant at the time of making the application either holds a licence to generate electricity or is exempt from that requirement”.

It goes on—wait for it:

“Scottish Ministers’ position is that they disagree with, and have appealed, the decision … The decision on the legislative interpretation runs contrary to the established practice relating to the handling of applications for consent which has been in place both north and south of the border for many years … Our intention is therefore to continue to operate in accordance with the practice … and to deal with current applications on that basis”.

In other words, “We will ignore the law”. It goes on to say:

“Scottish Ministers consider that the balance of public and national interest is in favour of continuing with the current approach until the appeal has been determined, in particular because of the need to continue to support the economy and our renewable energy ambitions”.

So their renewable energy ambitions trounce the law of the land. That is very undesirable and unprecedented —as far as I know; I see a noble Lord sitting on the Front Bench who is familiar with both the law and Shetland. I can think of no other case. The normal practice would be to stay any development until such time as an appeal had been considered. What I very strongly object to about the amendment is that it would take away the legal position that has been established for many years, and which has been confirmed by the court, in a retrospective manner. It would create a situation in which any Tom, Dick or Harry could apply for permission to establish a wind farm—or, I guess, any other form of generation. Those tests about their ability to meet environmental and other requirements under the legislation would then be applied to them.

This is an undesirable development, by both the Scottish Government and my noble friends. The proper procedure here would be to at least wait for the appeal. It is certainly quite wrong for the Scottish Government to continue in this way. If you look at it from the point of view of the objectors, they have gone to a judicial review, won their case—and everyone knows how difficult it is to win a case on judicial review—and the Scottish Government are just saying that they are going to ignore that. Should this House to seek to overturn the effect of that judgment, when people are talking in terms of the need to support “our renewable energy ambitions”? Our renewable energy ambitions must carry public consent. This is no way in which to proceed. I have strong objections to the amendment, and I hope that my noble friend will reject it.

Energy Bill

Debate between Lord Teverson and Lord Forsyth of Drumlean

Wednesday 6th November 2013 Lords Chamber

[Lord Teverson]

Normally when we have bills, either from supermarkets or other places, we do not actually have a breakdown of those costs but in an industry that is regulated as much as energy has become, I think this is a really excellent idea. It is something that would become a myth-buster. My noble friend Lord Forsyth is right that there has been an embarrassment in terms of trying to shield some of these costs or sweep them under a carpet. That has backfired because they have been used as an excuse by energy companies to justify major increases when clearly they are not the major cause of the increases. One way of breaking that myth about the extent to which green taxes—or however they are described—have contributed to the rise of energy bills would be to have this level of transparency.

Which?, as noble Lords will know, is one of the major consumer campaign organisations and puts the green tax at 5% of total electricity bills. If you add in all the other government initiatives it comes to about 9% of the total. I think that is the most trustworthy of organisations because it is consumer-focused. I would also like to see on regulated industries’ bills how much UK corporation tax they pay in relation to their total turnover and profit. I am not saying the electricity industry is particularly bad in that way, but such a scheme would be particularly interesting in an industry which, through its bills, receives a fair degree of public subsidy towards the generation it undertakes.

In principle, I think that this amendment is excellent. I am not saying I would vote for it if it came to a Division but more transparency would break the myths and anti-green propaganda that we have seen, particularly over the last couple of years.

[Lord Forsyth of Drumlean]

Before the noble Lord sits down can he just explain—I am very puzzled—why he would not vote for an amendment that he believes is right?

[Lord Teverson]

That is because I feel there are some proposals that are even more important. If the noble Lord wanted to test me, I suppose it would be interesting to see what I would do. Perhaps he can put me on the spot. It would be interesting in terms of gas bills but of course the figure would actually be zero.