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Lord Bassam of Brighton: My Lords, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
Statute Law (Repeals) Bill [HL]
Bill reported from the Joint Committee with amendments and recommitted to a Committee of the Whole House; it was ordered that the Bill be printed as amended. (HL Bill 33)
- House adjourned at thirteen minutes past ten o'clock.
Official Report of the Grand Committee on the
Energy Bill [HL]
(Tenth Day)
Monday, 1 March 2004.
The Committee met at half past three of the clock.
[The Deputy Chairman of Committees (Lord Brougham and Vaux) in the Chair.]
The Deputy Chairman of Committees: Good afternoon and welcome to the 10th and, I hope, final day of the consideration of the Energy Bill in Committee. I believe that the Minister has a statement to make. I remind the Committee that if there is a Division in the Chamber, we shall adjourn for 10 minutes and resume thereafter.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): I should like to make a brief statement about the issues initially raised by the noble Baroness, Lady Miller of Hendon, on 20 January on parliamentary privilege. The noble Baroness described her concerns about an "atmosphere of anxiety" among operators within the nuclear industry that they might face adverse consequences from a government department if they were to provide information to noble Lords opposite. The Department for Trade and Industry was mentioned in that context.
This is a serious matter so let me start by setting out the position with regard to nuclear operators, specifically UKAEA and BNFL as the owners of sites that will become the responsibility of NDA on its inception. These organisations are not staffed by civil servants. They have the right to brief members of any political party either in this House or the other place. It would be improper for a government department to prevent either organisation from briefing Members of Parliament. That, of course, applies to any organisation that has been set up on an independent basis.
Similarly, questions from any member of this Committee about the important matters under discussion in this Bill—or in any other—must be handled professionally and in accordance with the normal practices of this House.
With those principles in mind, the Secretary of State for Trade and Industry and the DTI's Permanent Secretary have considered the comments of noble Lords opposite and received reports from senior officials on the department's relationship with the nuclear operators and discussions held over the past few months more specifically about Part 1 of this Bill.
We are satisfied that there is no attempt by DTI to prevent nuclear operators or other organisations from briefing the opposition, whether that briefing takes the form of answers to specific questions, general information about policy options, or detailed amendments to the Bill. We want, of course, to promote debate rather than constrain it. It is right that there should be a network of contacts at various levels to discuss the general principles governing the Bill, to consider policy options, to test the implications of amendments and, not least, to reach sensible decisions about the way in which business should be handled.
With that in mind, so that there can be no misunderstanding on either side, the DTI is writing to the UKAEA and to BNFL. The letter will draw their attention to this statement and the principles which I have set out. My statement will also be drawn to the attention of those in DTI working not only on the Energy Bill but all other Bills in this Session. That will ensure that officials can be in no doubt about expectations of them when talking to stakeholders.
Baroness Miller of Hendon: I am grateful to the Minister for initiating the investigation and for reporting back to the Committee today in the form of the statement. Obviously, we accept what the Minister has said. I do not for one moment suggest that we do not, because we do. However, it is worth noting that four people related their concerns to us. It is right that that fact should be noted; otherwise, I would not have mentioned the matter.
Lord Whitty: I appreciate the noble Baroness's remarks and note that information. There is a further matter with which I need to deal before we turn to the amendments. At the beginning of the previous Committee Sitting, the noble Baroness, Lady Miller of Hendon, and the noble Lord, Lord Jenkin of Roding, asked whether the Government would make a statement about the chairman of Ofgem, Sir John Mogg's, public intervention on the Government's potential amendment which is designed to give some dispensation from high transmission charges for renewable generators in peripheral areas of Scotland.
I feel that I should start by agreeing with the Opposition that indeed the language used and reported appeared to be strong and that when an independent regulator criticises the Government in this way, we should think carefully about what has been said. However, it is not unhealthy for an independent regulator to criticise government. Indeed, Ofgem has a long-standing reputation for independence.
I shall explain the source of the disagreement. As my noble friend Lord Davies said on 12 February, Ofgem and DTI both agree that, in general, we should have a transmission charging methodology that is cost reflective, non-discriminatory and that promotes competition in generation and supply. This will encourage transmission assets to be built and charged for in the most efficient way. In turn, this will minimise the cost to the consumer. Ofgem believes that this sort of charging methodology should apply to all generators, including renewables.
However, the Government must, of course, take its wider energy objectives into account. While Ofgem plays a part in delivering these objectives as recognised by the breadth of its statutory duties, decisions about trade-offs between environmental and economic objectives are ultimately for government and for Parliament, as we said previously during the Committee. As part of the consultation on transmission charging issued in August, the Government raised the question of whether special dispensation was needed for those renewable generators in peripheral areas that have high renewable potential and that would otherwise be impacted by the highest transmission charges in order to ensure that the Government's renewable targets can be met.
I should mention that Ofgem made it clear at the time that it objected to the Government's consultation on this issue. After some consideration of the concerns raised by the renewables communities and, indeed, echoed in this Committee stage, we agreed to consider Amendment No. 113ZL, which sought to protect renewables from the high transmission charges. We also specified that the amendment that we are likely to table on Report would aim to take a power to give renewables in a specified area some dispensation to protect them from the impact of high transmission charges.
In conclusion, and to make matters clear, Ofgem continues to disagree with any intervention on transmission charges, including any dispensation for renewables. The Government believe that they are entitled to consider a dispensation on transmission charges for renewables if that safeguards their wider energy objectives.
Baroness Miller of Hendon: I thank the Minister for that explanation. At this stage, as we have not seen the amendment, I am prepared to say only that it is clearly not for me to say today what our policy would or would not be. We shall obviously consider the amendment on its merits when it appears before us. I very much hope that that will be in time for us to make a considered opinion and that it will not appear merely a day before the first day of the Report stage.
Lord Jenkin of Roding: Perhaps I may add to the comments of my noble friend Lady Miller by thanking the Minister for what has been a very clear statement on this issue. I did not for one moment imagine that Sir John Mogg's statement on 14 February, or whatever the date was, was the first shot in a war that had been going on for some time. The Minister has confirmed that.
Interestingly, I raised this issue at a conference held last week under the auspices of the Adam Smith Institute, where representatives of a number of interests concerned with both onshore and offshore wind power and other renewables were present. I asked for advice on whether we should believe the Secretary of State or the argument of the chairman of Ofgem. No one was particularly prepared to raise his
head above the parapet. I do not want to echo the previous statement that was made but, since then, I have received two notes from those who were present but did not take part in the discussion to say that, in the last resort, it may be a matter of indifference because the customer will pay whichever way it goes and it is simply a question of the route through which the customer will pay for the transmission charges. I am not sure that that is entirely right, but we shall clearly need to debate the subject carefully when we come to the Government's amendment on Report.My only other point is that I draw a very clear distinction between that issue, which we have yet to reach and which the noble Lord, Lord Davies of Oldham, foreshadowed in his speech on 12 February, and the issue that we shall reach this afternoon, which is not about transmission but about distribution. The noble Lord, Lord Whitty, stated in the Second Reading debate that that was to come. I have no difficulty with the proposals concerning distribution. We may need to consider them in detail, but I believe it is the transmission charges which are the issue. We shall debate that amendment on Report in the light of what the Minister has said to us this afternoon.
Clause 144 [Appeals to the Competition Commission]:
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