Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Jenkin of Roding: My Lords, I very much support the remarks made by my noble friend Lady Miller of Hendon. I do not want to duplicate what she said. I, too, watched the television programme last week and found it a compelling piece of television. As the producers rightly said at the beginning and emphasised again at the end, it was a work of fiction because the situations envisaged in the programme have not yet happened. I am not alone in regarding it as very plausible fiction.

There is indeed growing concern in the country about the future of our energy supplies. We are witnessing the approaching end of the North Sea oil and gas industry on which we have been relying for the past quarter of a century or more. Coal and nuclear power stations are reaching the end of their lives. As regards coal where stations are not reaching the end of their lives, the European Union large plants directive may well make them wholly uneconomic.

There was no fiction about the fact of our increasing dependence in the television programme on gas from unstable regimes coming through very long pipelines. We shall be at the end and other countries will be drawing off the gas before it reaches us. There is a widespread view that this creates new energy dangers for the United Kingdom. I could quote a very large number of authoritative reports, but I shall only quote from one, and that is from an adviser whom Ministers in the DTI know well. He is Professor M A Laughton, Fellow of the Royal Academy of Engineering and Emeritus Professor of Electrical Engineering at the University of London. He has also been an adviser to the Select Committee in another place. In his report, which has a somewhat hackneyed title—Power to the People—he says at pages eight and nine:


As my noble friend has said, there is a widespread view that no one is actually in charge of this. It is not the regulator, which has been stated often, and not the industry. The industry will certainly invest if it sees

18 Mar 2004 : Column 386

the stable prospect of profitably operating, a point properly made by the representative of the industry in the television programme. Who else, apart from the Government?

It may be said that our amendment states the obvious. The fact is that the Government have to be responsible. In the discussion between the politicians at the end Jeremy Paxman asked where the buck would stop. They all looked at each other and said that it will stop with the Government. They will be blamed, but it is far from clear that they accept that it is their responsibility.

My mind goes back to the debates which the noble Lord, Lord Ezra, will remember as regards the Utilities Bill in 2000. We were seeking to amend Clauses 9 and 13 of the Bill which set out the objectives of Ofgem. In Committee we sought to add the words that Ofgem,


    "should have a duty to secure a diverse and viable long-term energy supply".

That was fiercely resisted by the Government. The matter was debated briefly at Report. There is quite an interesting quotation. The noble Lord, Lord McIntosh of Haringey, was handling the Bill. He was concerned to say in his speech that it was not a matter for Ofgem in the Bill. He said,


    "amendments such as this are a distraction and would serve to confuse rather than enhance the framework of obligations and duties under the legislation".—[Official Report, 5/7/00; col.1497.]

That was the Government's line. But in the course of the debate the noble Lord, Lord McIntosh, said one very interesting sentence, at col. 1497. He said:


    "However, security of supply is indeed the responsibility of government as a whole".

One wonders why that has not been trumpeted from the rooftops by the Government. Every time the security of supply is raised as an issue of concern, one would have thought that the words of the noble Lord, Lord McIntosh, speaking from the Government Front Bench, would have been strongly relied on. In fact, we went on at Third Reading to insist that we included the words,


    "to secure a diverse and viable long-term energy supply".—[Official Report, 11/7/00; col. 137.]

We divided on the amendment and it was carried by three votes in this House. However, the Government decided, as they were nearing the end of the summer term, not to return to the matter. Therefore, those words are in the Utilities Act 2000. New Section 5, which deals with electricity, states:


    "The Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which he or it considers is best calculated


    (a) to promote efficiency


    (b) to protect the public from dangers"—

and (c) is our amendment—


    (c) to secure a diverse and viable long-term energy supply".

As we heard, successive chairmen of Ofgem have made it perfectly clear that they do not accept that duty. They cannot tell any industrialist to invest in enough plant and machinery. Their job is to protect the consumer. Indeed, the previous chairman, Callum McCarthy, told me that, because the Government had

18 Mar 2004 : Column 387

not wanted that amendment, he did not feel that he had to pay too much attention to it, notwithstanding the fact that it is in the Act.

Must not the Government accept the responsibility for, in the phrase used by my noble friend, "keeping the lights on"? The amendment says that that is exactly what should happen. How will it be done? Perhaps this is not the moment to be going into such matters in detail, but last week, the Trade and Industry Select Committee in another place produced an interesting report, Resilience of the National Electricity Network. The committee argued that the,


    "Regulator's concern to reduce costs to consumers should now be tempered by a greater emphasis on ensuring that electricity network owners have the financial resources necessary to secure a viable long-term electricity supply".

The committee was looking at the question of transmission and distribution, but exactly the same argument applies to the generators of electricity. If the workings of the regulator do not enable the prospect of profitable operation to be seen by industry, industry will not invest.

If the Government are going to carry the can for major disruptions, as seems to be widely recognised in political circles, they should have that firm responsibility placed on them, not necessarily to do it themselves—I totally accept that the other players on the field may actually have to act—but the Government should have the responsibility for creating the conditions. They should, as suggested by Paul Golby, who was speaking on behalf of the generating industry, create the framework in which the things that are needed may happen.

I can see that my noble friend Lord Tombs is pitching to his feet to give us the benefit of his skilled advice, so I will not quote from his powerful speech in this House on 7 January. I believe that the Government should now stand up and say quite clearly, like the noble Lord, Lord McIntosh, "We accept this responsibility". That is all this amendment requires, and I cannot see why on earth the Government should want to resist it.

Lord Ezra: My Lords, I support the amendment moved by the noble Baroness, Lady Miller of Hendon, which has received such powerful support from the noble Lord, Lord Jenkin of Roding. The noble Baroness made it clear that we face a serious and uncertain situation in our energy supplies. For the first time in our industrial history, we shall move from the self-sufficiency in energy previously provided by coal—that noble industry—and subsequently by gas and oil from the North Sea. We are now moving towards a situation in which, inevitably, we shall be subject to more and more imports and therefore uncertainties. In that situation, it is obviously essential that we are clear about where responsibility lies with regard to security of supplies, especially of gas and electricity. The Energy Bill provides the opportunity for making that clear.

I have been among those noble Lords who have asked questions about where the ultimate responsibility for ensuring the security of supply lay. My impression from the various questions that I and other noble Lords have asked is that responsibility is divided in an uncertain manner between the Secretary State, the regulator, the

18 Mar 2004 : Column 388

network operators and the companies, all of whom have some responsibility. However, the meshing together of that and the ultimate responsibility have not so far been made indubitably clear. This simple amendment does that.

This is an Energy Bill. We are unlikely to have an opportunity for making the matter clear for a long time ahead. Therefore, I very much hope that the Government will accept the proposition that we should seize this opportunity and make the matter clear beyond any doubt whatever, in view of the uncertain energy supply position that we face in the years ahead.

Lord Maclennan of Rogart: My Lords, I rise to support the amendment, which is necessary. There has not been a statutory statement of the position since the Government produced their White Paper, which did more to confuse the lines of accountability and responsibility than I would have thought possible. The White Paper, in examining the question of responsibility, clearly sought to fudge the issue by including in the ascription of responsibility for energy reliability the role of Ofgem. They have subsequently not been prepared to indicate where the line of demarcation of responsibility lies between Ofgem and the Government. That is wholly unsatisfactory and has been compounded by answers in this House given by Ministers who have, when asked to make predictions, given such vague answers as, "That is a matter for industry or the regulator to decide". It is always a matter for others than the Government. It is up to us to make it entirely plain—and if the lights go out it will be made plain by the public—that the buck stops with the Secretary of State. This is a simple amendment and it fully deserves our support.


Next Section Back to Table of Contents Lords Hansard Home Page