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House of Lords

Wednesday, 23 April 2008.

The House met at three o'clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Newcastle): the LORD SPEAKER on the Woolsack.

Energy: Imported Gas

Lord Ezra asked Her Majesty’s Government:

The Parliamentary Under-Secretary of State, Department for Business, Enterprise and Regulatory Reform (Baroness Vadera): My Lords, the Government have established an appropriate regulatory and commercial framework to encourage diversity of the energy mix, including renewables, nuclear and coal. Meanwhile, the market is bringing forward a substantial increase in our gas storage capacity to offset the decline in flexible gas production from indigenous sources. Our energy efficiency measures will also help to reduce the need for gas imports.

Lord Ezra: My Lords, I thank the noble Baroness for that Answer. Does she accept that on present trends, the UK’s imports of gas could rise to 80 per cent by 2020 and that this would present an entirely unacceptable security risk, bearing in mind that at our present much lower levels of imports, there have been reports of diversions of supplies destined for this country? In those circumstances, should there not be an intensification of the efforts to which she referred, notably to increase the amount of gas storage capacity, greater efforts to save energy and the development of alternative energy sources?

Baroness Vadera: My Lords, 80 per cent is at the higher end of the estimate. As the energy White Paper set out, we are looking at a range of between 60 per cent and 80 per cent. If we implement these measures with the intensity rightly pointed to by the noble Lord, we will be able to reduce our dependence on gas imports to around 60 per cent. Gas storage capacity is indeed the key. A further 1.2 million cubic metres is under construction with another 8 million cubic metres being planned, and we have improved our import infrastructure to three and a half times the 2005 level.

Lord Jenkin of Roding: My Lords—

Lord Lawson of Blaby: My Lords—

Lord Jenkin of Roding: Oh, come on. Has the noble Baroness’s department been given the same message as I have received that unless some of the potential investors in new nuclear build get the consents and

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permissions they need in time, they are going to have to invest in more gas-fired power stations in order to help to keep the lights on? Is that what the Government want?

Baroness Vadera: My Lords, we are engaged in intense discussions with all of the nuclear developers about the consents that they need and we believe that the processes with health and safety regulators and planning bodies are on track. However, we are being vigilant on this count.

Lord Hylton: My Lords, what is the Government’s attitude towards the Nabucco pipeline project to bring natural gas into Europe via Turkey? Would this not be a useful alternative to supplies from Russia?

Baroness Vadera: My Lords, I should make it clear that at present we do not have any direct sources of supply from Russia. We have diverse sources of supply from Norway, other parts of Europe and Algeria. Indeed, we now have a direct pipeline from Norway and liquefied natural gas is coming into the new LNG terminal.

Lord Redesdale: My Lords, does the Minister have confidence in the contracts for importing LNG given the decline in natural gas resources in America and the fact that two years ago LNG tankers en route to Britain were diverted to America to meet its demand?

Baroness Vadera: My Lords, I obviously cannot comment on individual cases but the diversion of tankers is a matter of contract rather than a matter of the tankers. The LNG market has been growing rapidly and is becoming the swing factor in the market in terms of supply and demand.

Lord Lawson of Blaby: My Lords, the noble Baroness has—

Noble Lords: Hear, hear.

Lord Lawson of Blaby: My Lords, I am grateful to noble Lords. It is seldom that I find myself so popular. The Minister has rightly said that we need to have a substantially increased gas storage capacity in this country and she mentioned the large increase which is planned. When does she envisage that will be introduced and operational?

Baroness Vadera: My Lords, facilities, with a capacity of 1.2 million cubic metres, are currently under construction and are due shortly. The rest are dependent on planning and development. I therefore suggest it will be as soon as we get the Planning Bill through.

Lord Tanlaw: My Lords, is the noble Baroness aware of the statistic from the National Grid that if daylight saving had been incorporated in the Climate Change Bill it would have saved the equivalent of one nuclear power station. If daylight saving were implemented, how many gas-fired power stations would

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not have to be built? If she disagrees, can she produce, with the parties opposite, coherent statistics to show that not having daylight saving actually saves energy?

Baroness Vadera: My Lords, the only reliable statistic that we have for energy efficiency is that it could lead to a 2 or 3 per cent reduction in the dependence on gas. But, given that electricity needs gas and gas is also needed for heating, it is not a pound-for-pound saving.

Lord Peston: My Lords, is my noble friend aware—I am sure she is—that people have been prophesying doom and gloom about running out of energy supplies in this country for the past 150 years? This has been led by economists, I regret to say. Is she not aware that, on the whole, world energy markets work very well indeed and there is not the slightest doubt that we will be able to obtain the energy supplies we need? That is not to say that we should not build a new nuclear station, but it is not fundamental. What is fundamental is that we should appreciate that in this area the market works.

Baroness Vadera: My Lords, I shall not comment on economists. The energy markets have been working reasonably well, although we remain concerned about the lack of a functioning market in the EU which led to some of the interconnector problems that we had two years ago. That is why we continue to press the EU for a liberalisation of the markets so that they can work effectively.

Lord Howell of Guildford: My Lords, I am glad the Minister raised that last point because, although it is nice to think that markets work, is not the problem that while we are trying to operate a liberal, free market system for gas and other energy products in this country, in the continental part of Europe gas is not operated and distributed on that basis but on a monopoly basis by monopoly methods? Is not the danger that when we get to the coldest hours, the coldest days and the coldest winters ahead—some will certainly come despite global warning—once again we will find that the gas does not get through to us because the monopoly distributors in France and Germany will take it? What are we going to do about that?

Baroness Vadera: My Lords, we fully agree with the view expressed by the noble Lord about the EU market. That is why we have continued to press on liberalisation and supported the Commission, whose inquiry came to the very same finding on the third package on energy. We hope that will come to resolution at the June council. Nevertheless, it is fair to say that, despite that, we have significantly improved the security of supply through the import storage infrastructure that I have mentioned already. So we should not be as dependent, for example, on the interconnector with which we had a problem two years ago. We have another interconnector, we have a pipeline, we have LNG terminals and we have storage capacity.



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House of Lords: Appointments Commission

3.09 pm

Lord Howarth of Newport asked Her Majesty’s Government:

The Lord President of the Council (Baroness Ashton of Upholland): My Lords, the current terms of the chairman and members of the House of Lords Appointments Commission end on 30 June. A recruitment exercise is under way to find a new chairman and independent members. To ensure continuity, the chairman will continue until the autumn. The status and terms of reference of the commission will remain unchanged.

Lord Howarth of Newport: My Lords, can my noble friend confirm that although the Government have repeatedly, since at least 2000, declared their view that the House of Lords Appointments Commission should be placed on a statutory basis, they have all the same on three occasions so far—in 2003, 2006 and 2007—reappointed it as a non-statutory quango? My noble friend now tells the House that they are going to do that for a fourth time. Why will the Government not take this opportunity to legislate at long last to reconstitute the Appointments Commission and to give it democratic legitimacy? Is it because the cross-party working group is ignoring the widespread consensus that, without prejudice to further eventual reform, this would now be the proper thing to do?

Baroness Ashton of Upholland: My Lords, I wondered how long it would be before the cross-party group was mentioned. My noble friend raises an important point about the future of the commission. Certainly, in looking to appoint a new membership we have been minded to ensure that, should we decide to put it on a statutory footing, it would be a very simple process. The difference fundamentally is that we would turn it, by statutory provision, into a more independent body; but I hope that noble Lords will accept that the functioning of the commission, to which I pay tribute, as I do to all those who have participated in it, has indeed been independent. My noble friend is wrong to suggest that the cross-party group has not thought about these issues. Indeed, it has.

Lord Strathclyde: My Lords, this week the Appointments Commission announced that three more Cross-Bench Peers would be created. You had to look quite hard to find the announcement—but one was made, none the less. Who decides on the timing of these creations? Does not the Prime Minister have a very important role to play in issuing guidelines on the disposition of the numbers of independent Cross-Benchers and Members from other parties? What are these guidelines and does the Prime Minister take his role seriously?



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Baroness Ashton of Upholland: My Lords, my right honourable friend the Prime Minister takes his role very seriously. There are three new appointees, whom I am sure we will look forward to welcoming to your Lordships' House. In discussing the future role of the commission, we will have to think about how best this has worked up to now, and to congratulate the commission on the quality of the people who have joined us on the Cross Benches, which we have benefited from enormously. In the broader context of the working group and the future of the House of Lords, we will need to consider further with the commission how best to take forward the numbers and timing of such appointments.

Lord McNally: My Lords, is not the noble Lord, Lord Strathclyde, quite right? Although some of my best friends sit on the Cross Benches, they are rather like the mops and buckets in Walt Disney’s “Fantasia”—they just keep on coming. That means that Benches such as the Liberal Democrat Benches continue to be grossly under-represented. Have the Government any idea of the proportion of this House that should be Cross Bench, and how will the Minister manage to massage their numbers down now that they are so formidable?

Baroness Ashton of Upholland: My Lords, I do not think of them as mops and buckets, although I notice that the sorcerer’s apprentice is on his feet once again. The numbers on the Cross Benches have actually increased by only eight in the past few years. People have died and been replaced, so the actual growth over the past eight or nine years has been by only eight Members. None the less, we all pay tribute to the quality of those who have joined the Cross Benches and the quality of their contributions to our debates—and I know that the noble Lord, Lord McNally, was not suggesting anything other than that. In future we will have to consider all those issues. I know that noble Lords are awaiting with great interest the further deliberations of the cross-party group, but we shall also have to consider how best to take this forward.

Baroness Oppenheim-Barnes: My Lords, what are the precise qualifications of the people appointed to the commission?

Baroness Ashton of Upholland: My Lords, we are just about to appoint to the commission. We have talked with a headhunting firm, and we have looked at the issues.

Noble Lords: Oh!

Baroness Ashton of Upholland: My Lords, noble Lords may smile, but we will do this by advertising on the website and in the Sunday Times public appointments section next weekend and by talking to appropriate recruitment agencies. Noble Lords who have experience of business or public appointments know perfectly well that one uses a variety of means to find the best and the right people. There will be a variety of views about the qualifications of those who

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sit on the commission. My views, which have been taken into account, are that they should have an understanding of the work of the House of Lords and of legislation, and that there should be a desire to ensure breadth from those who contribute to what are often incredibly important debates.

Baroness Symons of Vernham Dean: My Lords, the last time we discussed this issue in your Lordships’ House there was considerable concern that the Appointments Commission would be responsible for deciding the composition of the House. Your Lordships expressed a good deal of anxiety about that. In answering the Question, the Minister from the Ministry of Justice said that perhaps it would not be like that. Has further thought been given to this issue, and can my noble friend reassure the House that the unelected commission will not be responsible for deciding the composition of your Lordships House?

Baroness Ashton of Upholland: My Lords, as far as I am concerned the unelected commission will not be responsible for deciding the composition of your Lordships’ House.

The Earl of Onslow: My Lords, I speak as an elected Peer who would like the principle to be increased. Should not the Appointments Commission act with much more transparency so that we can see how and why it arrives at its decisions? Sometimes people’s Peers have been announced and the mind has gone into overtime boggling over it.

Baroness Ashton of Upholland: My Lords, my mind has never gone into overtime boggling; I have always been extremely pleased with the quality of the people who have been put forward. Transparency is important. However, we are dealing with people coming forward to be made Peers and as the noble Earl will realise, it is also important to respect confidentiality.

Middle East: Nuclear-free Zone

3.17 pm

Lord Lea of Crondall asked Her Majesty’s Government:

The Minister of State, Foreign and Commonwealth Office (Lord Malloch-Brown): My Lords, the United Kingdom strongly supports a Middle East zone free from nuclear weapons. We co-sponsored the resolution on the Middle East adopted at the 1995 NPT Review Conference. The UK looks forward to discussions at the NPT preparatory committee that is just ahead. We are also working intensively for the success of the Middle East peace process and Iran’s compliance with its obligation under successive UN Security Council resolutions.



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Lord Lea of Crondall: My Lords, I thank my noble friend for that reply and welcome the Government’s reaffirmed commitment to the goal of a nuclear-free Middle East. Will the Government explain in simple terms to the British people the precise nature of the Iranian threat and its timescale? How do they intend to engage the key countries in the Middle East in reaching an outcome that we can all live with? In that context, does my noble friend agree with the analysis of Dr Rebecca Johnson, who spoke recently to the All-Party Parliamentary Group on Global Security and Non-Proliferation, that Israel’s interests may now be best served by it co-operating in achieving that goal?

Lord Malloch-Brown: My Lords, my noble friend has asked for the Iranian threat in simple Queen’s English. It comes from our deep distrust of Iran’s nuclear intentions. This is a result of the fact that it has kept the most sensitive parts of its nuclear programme hidden from the IAEA for the last 18 years. Even now it makes no effort to restore this trust by taking the steps the international community requires of it. Furthermore, there are serious concerns about the nature of Iran’s programme. In its most recent report, on 22 February, the IAEA raised numerous questions about that work and its possible nuclear weapons application.


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