Energy Bill

Lord Greaves Excerpts

Tuesday 9th July 2013 Grand Committee

[Lord Greaves]

My Lords, I thank the noble Lord, Lord Judd, for tabling these amendments, which are important and relevant at this stage of the Bill and I was pleased to add my name to them. I approach this part of the Bill with memories of the discussions that we have had in various planning Bills in recent times, particularly the Planning Act 2008. This Bill is clearly mainly about the promotion and regulation of energy, whereas from the planning perspective it was about the relationship of the town and country planning system to energy production. It is right, particularly when we are talking about high-level policy statements, that we should come to how the two systems interact, and I am grateful to the noble Lord for introducing these amendments that allow us to do so.

The strategy and policy statement proposed in this part of the Bill is about the strategic priorities in UK energy policy, the intended policy outcomes and the roles and responsibilities of the people involved in implementing them. There has been a lot of discussion already on the Bill about environmental objectives, and the Bill is crucial, but the main debate is about the high-level environmental objectives of tackling climate change. Indeed, some noble Lords have suggested that the Government’s policy on this is unnecessary, wrong or over the top. The question that the noble Lord’s amendments raise is an important one: how far these high-level climate change environmental objectives should be at the expense of the local environment. This is a tension, it is a clash, and there is no point in running away from it. There will have to be balance and compromise, as there always has been, and it is right to discuss it now.

It is surely nonsense to sacrifice a considerable amount of local ecology and biodiversity in the interests of the global environment, but the further question that the noble Lord raised is how far we have to sacrifice the amenity aspects of the environment, as they might be called, which are far more subjective but, as I think the noble Lord said at the beginning of his speech, vital for people’s well-being—their spiritual health, I think he called it.

We are talking about landscape quality in particular and the value of that quality for scenery, recreation, ecosystems and biodiversity. We are talking specifically, though not entirely, about wild places—what might be called “wilderness”. The degree to which we have any wilderness in this country that compares with other parts of Europe or continents such as North America or Africa is arguable, but we still have places that, when you are there, certainly feel very wild indeed.

I remind the Committee of my registered interests in the British Mountaineering Council, the Friends of the Lake District, the Open Spaces Society and as a member of the John Muir Trust, to which the noble Lord referred.

These amendments raise important questions, including how far these issues of policy on what might be called the local environment—although “local” might encompass large areas—should be entrenched at the highest levels of policy-making, particularly in the strategy and policy statement, the SPS. The noble Lord went through his amendments in detail and I will not repeat what he said. However, I want specifically to refer to Amendment 49, which states that in addition to the statement and the report on the responses to consultation, which the Bill already states must be laid before Parliament, the Government must lay before Parliament,

“a statement setting out how the strategy and policy statement relates to other statements of government policy on energy, such as national policy statements and other strategic national policies including, for example, on transport and communications”.

I refer specifically to national policy statements under the Planning Act 2008, as amended by the Localism Act 2011. Six statements on energy have been approved by both Houses of Parliament. The first, EN-1, is the Overarching National Policy Statement for Energy. That alone is 115 pages long. The five further documents are on fossil fuel electricity generation, renewable energy infrastructure, gas supply infrastructure, including gas and oil pipelines, electricity networks infrastructure and a two-volume, hefty document on nuclear power. My question is: what is the relationship between these national policy statements and the new strategy and policy statement, which will all be agreed by Parliament?

The SPS is clearly intended to bring regulation of the gas and electricity market by Ofgem more closely into line with government energy policy. In November last year, we were provided by the Government with an excellent and extremely useful background note, the Energy Bill Provisions for Ofgem Strategy and Policy Statement. It states that,

“the SPS must contain: the strategic priorities and other main considerations of Government in formulating energy policy; policy outcomes to be achieved … a description of the respective roles and responsibilities of the Authority and the Government (and potentially others)”.

However, the Bill, at Clause 126(1), repeals the existing provisions concerning social and environmental guidance to which Ofgem must have regard when carrying out regulatory functions. The Ofgem review found that this provision was ineffective and we are told that it will be superseded by the SPS. The November 2012 paper states:

“The Statement replaces the previous Social and Environmental Guidance”.

That is okay, as far as it goes. The priorities and outcomes to be included in the SPS, according to the paper on the Energy Bill’s provisions, are to be,

“security of supply, affordability and low carbon”.

No one is arguing with that. It is fairly obvious that they are the basic three. The paper continues:

“As part of this, the Government will need to consider the guidance in the Social and Environmental Guidance that will be repealed by this legislation”.

I do not understand what that means. It is pretty vacuous and confusing. At the very least, a clear statement of what the Government intend as regards social and environmental guidance in the SPS is required before we allow the Bill to leave this House.

On a slightly peripheral issue, I am interested in whether the SPS might be a material consideration in planning applications, alongside all the planning guidance that is issued: the National Planning Policy Framework and the national planning statements on energy. Is it intended that the SPS will have any purchase at all on any other part of policy-making or decision-making apart from the regulatory system through Ofgem? If the answer is no, I would have to take that with a pinch of salt. If documents exist, people will use them and over a period of time they may well come to be found by a planning inquiry, for example, to have some value.

Does it also have any importance as far as licensing procedures and decisions are concerned for the approval of, for example, oil and gas exploration? Will the SPS be of any importance at all in, for example, licences for fracking for shale gas or anything else? I am trying to get at whether it is a very narrow document that is only about regulation through Ofgem, or will the Government accept that it will almost certainly be used in other areas?

Finally, I want to comment briefly on the role of the Secretary of State. I have huge admiration for the present Secretary of State for Energy, who seems to be a man of great competence and energy—if I can use that word—and is somebody I might follow into the jungle. But, the powers to be given to the Secretary of State—whoever that is—under the new system seem rather large. He will be responsible for compiling the statement of policy and strategy. He is already responsible for compiling the planning policy statements. Okay, those come through Parliament but he is still responsible for them. He is responsible for determining applications for development consent for all but the smallest energy-related planning proposals. It seems that he is the legislator, prosecutor, judge and jury, and no doubt when proposals are agreed he will be there urging them on as, I assume, not quite a clerk of works—but who knows?—and chief cook and bottle-washer. That really seems, in planning terms at least, an astonishing concentration of decision-making within one department and one Secretary of State. The checks and balances of good planning, and of good investment decisions, may be there if it all goes okay. If it does not go okay, then there may be problems to come.

Local environmental considerations are already firmly embedded in the national policy statements in the planning system. We may or may not agree with the details but they are firmly embedded there. Surely producers will make decisions—short and longer- term ones—based on regulatory regimes that they are subject to, themselves based on the SPS. Surely these environmental considerations should be embedded in the SPS as well.

[Baroness Worthington]

My Lords, I thank my noble friend Lord Judd and the noble Lord, Lord Greaves, for tabling these amendments. In terms of their underlying principle and the issues that have been raised, I have a great deal of sympathy with them. I was involved in the campaign to secure the Countryside and Rights of Way Act. I am a strong believer in the need to preserve our biodiversity and natural environment and the amenity of our unique landscapes. Both noble Lords were very eloquent in defending those unique and priceless assets, as they have been described, and raised interesting questions. I look forward to hearing the response from the Minister.

The noble Lord, Lord Greaves, highlighted the fact that we have considerable amounts of information in the public domain which guide where energy projects are located. Those are the national policy statements on planning, which are, as the noble Lord mentioned, considerable in their breadth and depth.

--- Later in debate ---

[Lord Gardiner of Kimble]

My Lords, from the outset I acknowledge the long-standing interest that the noble Lord, Lord Judd, has in the countryside and the impact of energy infrastructure on the landscape. The noble Lord referred to this matter at Second Reading. I know that my noble friend Lord Greaves also has a lasting interest in wild places.

As a countryman who cares about all these things very strongly, I understand where noble Lords are coming from. This is an important issue, and one that the Government recognise, which is why we have already put in place various safeguards within the planning and regulatory system to ensure that visual amenity and other sustainability issues are taken into account before decisions on infrastructure are made. Ofgem has a clear duty to contribute to the achievement of sustainable development; it must have regard to the effect on the environment of activities connected with the conveyance of gas through pipes and the generation, transmission, distribution and supply of electricity. It is also required to carry out impact assessments for important decisions, which would include consideration of sustainability implications, including local environmental impacts.

Amendments 41 and 46 would require the Government to undertake sustainability assessments of the policy set out in the strategy and policy statement before it is either designated or amended. Of course, it is important that the impact of regulatory decisions is assessed, but the intention of the strategy and policy statement is to reflect existing policy; it will not be a vehicle for the introduction of new policy or duties, nor will it contain any regulatory or planning decisions. The more appropriate time for consideration of the potential environmental impact of energy policy proposals is when they are being considered by the planning authorities—and I entirely understand what my noble friend Lord Greaves says about balance. Existing legislation, including in relation to the energy national policy statements, already provides the framework to ensure that this is done.

Amendments 42 and 50 would require Ofgem to show how it has complied with its general environmental duties to some extent in its forward programme work. Of course, I understand the noble Lord’s concern that Ofgem should take full and proper account of all its duties in drawing up its work plans.

The strategy and policy statement does not override Ofgem’s existing duties to contribute to sustainable development and, because of the requirement for Ofgem to set out its strategy for implementing the strategy and policy statement in its forward work programme, we believe that it will increase the accountability of the regulator. That is also reflected in the requirement to report annually on its contribution to meeting the strategy and policy statement’s policy outcomes. Indeed, the noble Lord, Lord Judd, referred to the question of the requirement to demonstrate compliance with Ofgem’s environmental duties. Ofgem will be required to report on how it contributes to meeting the policy outcomes in the statement. Existing duties will still apply and we would expect Ofgem’s report to take account of those and how they impact on relevant regulatory actions. I would also expect both the work plan and the annual report to cover the relationship between the strategy and policy statement, as well as Ofgem’s remit.

Amendment 42A would require Ofgem to have regard to the effect on the environment of activities connected with the conveyance of gas through pipes and with the generation, transmission, distribution and supply of electricity. Under the existing regulatory framework, Ofgem already has duties that require it to have such regard. Again, I refer to the point that the noble Lord, Lord Judd, made. That duty is imposed by the Gas Act and the Electricity Act and will still apply even if the guidance were to be repealed. As I have pointed out, nothing in the strategy and policy statement overrides those duties, which would continue to apply. Indeed, it is a reasonable expectation that the SPS will pick up on important parts of the guidance. In my view, Amendment 42A would therefore not be necessary.

The noble Lord, Lord Greaves, asked whether the statement covers oil and gas exploration. No, it would not. It applies only to Ofgem’s existing regulatory duties. Ofgem does not regulate oil and gas exploration and no changes to that are proposed.

Amendments 43, 44, 45, 47 and 48 would introduce formal requirements for the Government to consult specified interest groups in relation to the SPS. As has been referred to, the Bill already makes provision for wide public consultation as we develop the contents of the SPS. I reassure the noble Lord that we intend to engage fully with all relevant stakeholders, including, where relevant, those who represent an environmental perspective. Furthermore, Ofgem will consult on its forward work plan, which will include its strategy for meeting the SPS policy outcomes. That will provide another opportunity for stakeholders to express their views. In the light of that, we do not consider it necessary to name particular interest groups in the legislation.

Amendment 49 would require that, when the strategy and policy statement is laid before Parliament, it is accompanied by a statement explaining how it relates to other government statements on energy policy. The legislation already requires that the strategy and policy statement sets out the Government’s strategic priorities and other main considerations of its energy policy. It will therefore have to reflect existing policy and explain the context in which it is made.

To refer to a point that my noble friend Lord Greaves made about how the strategy and policy statement relates to national policy statements for energy, the SPS will set out the Government’s strategic priorities and policy statements in relation to issues where the Government consider that Ofgem regulation has a significant role, whereas the national policy statements deal with the development of nationally significant infrastructure in particular sectors—for example, energy and transport. They are the framework for decisions by the Secretary of State on applications for development consent orders for nationally significant infrastructure projects and may be a material consideration for local planning authorities when determining other infrastructure proposals. It is for these reasons that this amendment is unnecessary.

I hope that the reasons I have outlined have reassured noble Lords about why the Government do not think that this amendment, the intention of which is entirely laudable, is necessary. I hope that I have been sufficiently reassuring for the noble Lord to feel able to withdraw his amendment.

[Lord Greaves]

The noble Lord, Lord Judd, other noble Lords and I will read the Minister’s speech very carefully. There was some helpful stuff in it. I have two questions. First, given that we will have the whole summer before we return for Report, might it be possible to firm up the kind of thing that might be in the SPS referring specifically to social and environmental issues as the replacement, which it says that it is going to be, for the stuff repealed by Clause 126? Secondly, does the Minister accept that, despite the fact that the NPS and SPS have different roles and therefore different purposes, if they were in conflict in any way, even in quite detailed ways, that might cause problems because people would pick up one and quote it against the other? If the SPS is to reflect existing policy, in those areas where it covers the same areas as the NPS on energy—and it clearly will in some areas—does it mean that it will follow the NPS, that the NPS will be the superior document and that the SPS will simply reflect the NPS or is it more complex than that? If it is more complex than that, we might want to come back on this.

[Lord Judd]

First, I thank the Minister for his very courteous reply. It is very characteristic of him. Secondly, I thank the noble Lord, Lord Greaves, for his support, and I thank my Front Bench for the general good will in this respect. I hope this is not regarded as a point that is to be dismissed because it is seen as partisan. I was formed in the war and immediately afterwards, and I have always been very glad that the post-war Labour Government, whom I hold in high esteem, were pioneers in fighting for a lot of what I have been talking about today: the importance of countryside to people and the well-being of the nation. That flag was immediately and without controversy picked up and warmly endorsed by many in all parts of British politics, and that is Britain at its best. We must be very careful that we do not inadvertently let it erode to the point that what we leave to our grandchildren is not what it could have been.

I listened carefully to the Minister. As is always said, the devil is in the detail, but my concern is the whole thrust. I take second place to nobody in advocating the vital importance of taking on board the issues of climate change. They should be central to all parts of government. From that standpoint, if from no other, I am tired of aspirational politics about doing things and I want to see effective arrangements for achieving results. That is why I strongly associate myself with what was argued from this side of the Committee earlier about the need for targets and all the rest because we need to make effective progress. If we are successful in that, there will be tremendous drive from industry and others to get in on the act and play their part, and all credit to them for that as it is essential. That is terrific.

The Minister said that these things are more appropriately handled at the inquiry stage and at local level. I want to see the evidence that these other balancing factors are strategic to the Government’s position and thinking, and that nobody is in any doubt about where the Government stand on the vital wider issues that I have raised. That is where I have anxieties. This is not a partisan view because I had the same anxieties under the previous Administration. I want to see this issue become a driving force alongside the rest. People in specialist organisations take these issues seriously. I mentioned the John Muir Trust. I hope that noble Lords will get hold of its briefing, which I have used extensively, read it for themselves and meet people such as the personnel and staff of the John Muir Trust and others who argue their case well. Genuine officials and deeply committed public servants are putting their point of view from one angle and highly qualified deeply committed people in other parts of national life are as concerned about this issue as anybody else. I do not think that we take their concerns seriously enough when formulating policy. As an older politician in the House of Lords, I see it as my responsibility to make sure that those concerns are put in front of committees and legislators.

I will think very carefully indeed about what the Minister has said and will, of course—

[Lord Greaves]

Before the noble Lord withdraws the amendment, will the Minister comment briefly on the two supplementary questions I asked him?

[Lord Gardiner of Kimble]

My Lords, if the guidance is repealed, an environmental duty in the electricity Acts and the SPS will cover the same ground as is currently the case. However, I will reflect on what the noble Lord has said and will write to him if there is anything more constructive on which I can report.