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We also have the biofuels errors, which the government scientist described as insane policies, and the consequent rise in food prices and the starving of the poor which are caused by those energy-related programmes. I cannot understand why some EU leaders or our own Foreign Secretary seem to be in denial about the relationship between the biofuels commitment element in European energy policy and the enormous increase in food prices in the past two or three years, which has led to unrest and riots in 33 countries. The Washington Institute of Food Research, which is very authoritative and respected, calculated that crop switching accounts for between one-quarter and one-third of the food price rise worldwide.

4.30 pm

Lord Wallace of Saltaire: I followed the biofuels point from a distance, but I understood that it was American subsidies for biofuels that were really distorting the market and that the European production had played only an extremely small part in it. Is the noble Lord saying that the distortion of the global food market is Europe’s fault, rather than the immense subsidies which the Americans have had on biofuels?

Lord Howell of Guildford: I am talking about worldwide, so I am talking about the American switch, and certainly the European emphasis on switching to biofuels. It is the EU, America and other places as well. The institute I quoted was looking at the worldwide situation, not America alone.



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Lord Forsyth of Drumlean: Is there not an EU requirement that up to 5 per cent of the content of the petrol that people put in their cars has to be generated from biofuels? Is not the European Community therefore adding to the situation?

Lord Howell of Guildford: There is, of course, the renewable fuels obligation, which we ourselves have in place. Beyond that there is a declared objective of 20 per cent renewables in our energy by 2020 in which it is implicit that there has to be a massive switch from mineral oil to plant-based oil. That is why European farmers, as well as American farmers, have been moving towards these oil-based crops. That is happening, and unless the policy is changed it will continue and cause more misery and starvation. That is absolutely so.

I have already mentioned the question of renewables—20 per cent by 2020—and whether they are profitable or being subsidised in the right way. We need to watch those matters very carefully. As we all know, the insatiable demand for oil from China and India is driving up prices. Nationalism all around the world is driving out the international oil companies and asserting a degree of nationalism in access to oil. There is the lack of investment in oil and gas resources; and there are all sorts of scams and oddities around, like the carbon offset rackets and possibly the wrongly phased subsidies to wind farms which newspapers such as the Financial Times have very bravely exposed, although nothing much seems to have been done about them. I am simply saying that there is a whole string of energy problems which we urgently need to face. But how will more EU powers, as in this treaty, really help? Is it that they are concerned about security of supply? Frankly, that is bound to be a matter primarily for national Governments, as every Government in Europe knows perfectly well.

Here on this island we would do much better to rely on our friend Norway, which has plenty of gas and oil for years to come, and on importing liquid natural gas—as we are planning to do to some extent—rather than on the continental grid supplied by Russian gas, which has proved to be quite a tricky system to rely on, particularly in the coldest hours of the coldest days of the coldest years.

We all want to reduce dependence on oil. The United States has probably done better than others in this regard, although Europe has done pretty well also, as has the UK within Europe. But, again, do we need new laws to do that? We all want to get our policy on the support of renewables right and support the ones that are really going to make a contribution, but is the EU guidance towards biofuels, which has helped cause the global food price rise, the right way forward? I am not sure. If we are concerned with carbon reduction, which is related to energy policy, is the European Union Emissions Trading Scheme the right system? Many people say that it has made zero impact in reducing carbon but has plenty of bad side-effects. And so on.

As for sharing stocks, the International Energy Agency, which I chaired many years ago, has a very elaborate scheme for sharing stocks in an emergency. It is quite ready to implement it. That is not always popular, but we have to do it. As for revival of nuclear

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power, that really is a global issue. It has very little to do with Europe alone. Once we get our programmes going, we will probably rely on French industry, maybe South African expertise and maybe USA expertise. Even the Chinese might help us because we have been so slow in getting back into nuclear power. But, again, what have these things to do with new powers in Europe?

The truth is that EU policies of the kind proposed, namely more centralisation and more involvement, are not only unnecessary but in many instances wrong for our country, leading to bad strategic stances and decisions. The Government were right first time to resist them. They should have resisted them much harder. Mr Hain was right in his initial stance and we should have stuck to common sense rather than to the common energy dreams and dangers. That is why I beg to move this amendment.

Lord Rowlands: I am prompted to intervene by a column I read a while ago in Time magazine by the noble Lord, Lord Lawson. It was entitled “Darkness Looms”. He reminded readers that he had been energy Secretary 25 years before when there was a Department of Energy. I think that the noble Lord who has just spoken from the Front Bench also was an energy Minister in one capacity or another a considerable time ago. It prompted me to remember that I was the shadow spokesman 25 years ago, and a very enjoyable experience it was, too, to mark the noble Lord, Lord Lawson, who was great fun to debate with among other things. The experience prompted him, and it prompts me, to reflect on the changes that have taken place in the last 25 years.

Our energy debates 25 years ago were primarily domestic. They centred around whether we should privatise and how we should allocate the enormous energy resources we had. We had an abundance of coal, we had oil, we had gas and we had nuclear power—a diverse range. In 25 years that scene has been transformed. I recall debating the importance of gas as the “premium fuel” and not burning it in power stations. The speed with which we have depleted our gas reserves has led to a problem of energy security. It is therefore not surprising that energy security has now come to the fore. I am not surprised that for the first time in a European treaty there is an energy chapter, though like the noble Lord I shall have some questions about it. We will also have an Energy Bill in the next week or two. Energy security has come to the centre stage.

I should like to know the answers to the following questions, which in some ways the noble Lord, Lord Howell, also posed. What exactly will this energy chapter do? What is it all about? What is in it that was not in previous treaties or arrangements? For example, does it increase areas of qualified majority voting on energy? It appears that it does, but to what extent?

I turn to what, for me, is the most authoritative assessment that we have—the European Union Select Committee’s report, which I found extremely useful. However, I found the paragraphs relating to energy rather less than full and the committee’s conclusion at paragraph 9.33 rather enigmatic:



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When my noble friend replies to this debate, I hope that he will be able to spell out rather more clearly how far qualified majority voting will be extended in the field of energy. What illustrative examples can he give us to show the impact of this new energy chapter in terms of an extension of QMV? Unfortunately, in this case, and in this case only, the EU Committee did not provide us with that invaluable information.

Secondly, I want to find out what the Commission’s involvement will be in issues of energy security. If one reads the debates in the other place, one can see that there were a lot of hares running with regard to how the Commission would be able to take over our supplies and reallocate them in an emergency or crisis. I should be grateful if my noble friend could clarify whether this chapter in any way adds to or develops the Commission’s or Council’s powers and whether it allows them, through the ordinary procedure, to extend and expand their role in the issue of emergency energy supplies.

I agree with the noble Lord, Lord Howell, that we have a very fine track record of dealing with crises in international energy, and it does not seem to me that there is any need for the Commission or anyone else to cut across the basic and fundamental responsibility and obligation placed on all of us under the terms of the energy agency. Again, I should be grateful if my noble friend could confirm the character and nature of the Commission’s responsibilities, if it has any in this regard, and say whether this treaty is in some cases promoting these areas. There was a debate in the other place about whether the Commission would have the power to propose, under ordinary procedure, a statutory increase in oil reserve stocks. Apparently, that was a hard-won concession. However, my recollection is that qualified majority voting in that area may have been introduced in the treaty of Nice. Again, I should be very grateful if my noble friend could clarify that.

Finally, like the noble Lord, Lord Howell, I should like to know what the new role of the Commission and Council will be, through ordinary procedure, in attaining security of energy supplies. I thought that he was disingenuous in the case that he made—but it is a case that I shall make too. National Governments are ultimately responsible for the security of their energy supplies. However, despite our connections with Norway, if something relating to the security of energy supplies happened in Europe, no one could believe that that would not reverberate throughout our country as well. There is no longer a drawbridge in such issues, and therefore we have a profound interest in revising the complex relationships that exist between European countries and those in the East. After all the unbundling that might occur and all the competition that there might be in the European energy market, there is one inescapable fact—at least in relation to gas, for a very long period Europe will be dependent for its supplies on the East.



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4.45 pm

I hope that the noble Lord, Lord Howell, occasionally reads Select Committee reports. He chaired the Select Committee on Foreign Affairs with distinction while I also had the privilege of serving on it. It recently produced a report entitled Global Security: Russia which spells out the incredibly complex, difficult and dangerous diplomatic moves that are interlocked with gas pipeline diplomacy. This diplomacy could have a considerable effect on Russian-Turkish and Russian-Turkish-EU relationships, let alone relationships between Russia and its neighbouring states. I therefore also wonder what further role the European Commission will play in this capacity.

We had the G8 meeting in St Petersburg and the establishment of an energy charter treaty. We have a UK-Russian forum. We also have an EU-Russian energy forum. It seems that lots of processes are in place. The problem is not the processes, it is people’s definition of what their national interests are. In the case of the Russians, they apparently do not want to ratify that treaty or agree to a transit protocol of the kind that we and our European partners would like. All of these are profoundly serious matters. I am not sure what additional power and role the Commission will have in energy security, despite its reference in the chapter.

Like the noble Lord, Lord Howell, I will end on this note. I agree that there should be a European dimension to our energy policy—unlike some of the amendments, which would make it impossible to have any kind of a European Union energy policy. Everybody knows, in every nation state, that the citizens of the nation state hold their national Governments responsible for heat and light. I can recall at least two Governments of the past 30 years, in my parliamentary lifetime, where that lesson was learnt. In February 1974, the Government of the day learnt a very painful lesson—that if they could not keep the lights on then there would be considerable political as well as social and economic consequences. Ten years later, in 1984, we found a Government who had learnt that lesson and were prepared to avoid such a situation. In the last resort, however much we should endeavour to develop the desirable idea of a common European energy policy, it will always remain the national Government’s responsibility to ensure that our nation is warm and lit.

Lord Blackwell: I should like to add to the already formidable list of issues raised by my noble friend Lord Howell and the noble Lord, Lord Rowlands. I shall also speak to Amendment No. 119, which is in my name, and which I hope may provide some resolution to these issues.

For the reasons that the noble Lord, Lord Rowlands, has just enunciated, few things are more important to a nation than the security of its energy supply. The problem that many of us have with this treaty is that it is completely unclear about what role exactly the European Union will play—where the limits of its role lie and what role that leaves for the nation state to pursue its obligations on security to its citizens. Article 2C of the Lisbon treaty moves energy into this new category of shared competences, where

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it is then defined as subject to legislation by qualified majority voting. Article 176A then spells out in detail that the European Union shall establish whatever measures are necessary to do a number of things, including ensuring the functioning of the energy market and ensuring security of energy supply. It goes on to say that,

But what does it mean to say that the European Union shall take whatever measures are necessary to ensure security of energy supply? What role does that give the European Union in taking control of our energy resources? What control does it give the European Union in directing the way in which our energy priorities are set?

This uncertainty is added to by Article 84 in the Lisbon treaty, which says:

I know that much of that statement was in the previous treaty, but energy has notably been added to it. What measures may the Commission and the Council, without prejudice to any other procedures in the treaties, decide to impose in a spirit of solidarity to deal with issues of energy shortage? Exactly what powers are we handing over to the European Union? Will the Commission and Council be able to control our reserves if they so wish? Will they be able to direct the way in which energy resources move within the Community?

These provisions in the treaty are completely unclear. In a measure that is so important, for the reasons that the noble Lord, Lord Rowlands, has spelt out, we need to be very clear about the exact delineation. My amendment is clear. It would not affect the words of the treaty. It would simply add to the Bill the following clarification:

Lord Hannay of Chiswick: I am sure that the noble Lord has done a lot of research into his amendment, but will he answer one small, factual question? Is his amendment compatible with our obligations under the International Energy Agency, which is of course nothing to do with the European Union? I believe that it is not.

Lord Blackwell: I am talking about what this Bill or the treaty of Lisbon does; I am not talking about other obligations that we may have.

Lord Hannay of Chiswick: My question is whether the amendment is compatible with our international obligations under the International Energy Agency.

Lord Blackwell: Nothing in my amendment changes any obligations that we may or may not have. It simply refers to changes introduced by the Bill and the treaty of Lisbon. I assume that, if we are already compatible, we will continue to be so. This debate is solely concerned with the treaty of Lisbon.



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I hope that the Government can assure us that nothing in the Bill or the treaty of Lisbon will change the right of the United Kingdom to take these decisions. I am sure that they will be happy to allay all the concerns that have been expressed by agreeing to the amendment so that it is included in the Bill. If they cannot agree to it, they are obliged to spell out exactly what in the Bill and the treaty of Lisbon prevents them from giving such an assurance to the Committee and to the British public.

Lord Lea of Crondall: This short debate has illustrated the huge gap between the ideas behind some of the criticisms of the Lisbon treaty and the reality of the rapidly changing world in which we live. The fact that national energy policy is a mirage is illustrated every day in the Financial Times. Is $200 a barrel a figure that we as a country have decided on? Of course not.

The European Union Committee report on Russia and the European Union—it is an excellent report, if I may so—states that Russia can play the major countries of Europe one off against the other because they have not got their act together on energy policy. Those noble Lords who make these criticisms seem to want it both ways. They do not want Europe to do anything, yet they criticise the weakness of the European Union in enabling Russia, OPEC or anyone else to play countries off against one another.

Take the question of emissions trading. In effect, we are moving inexorably towards a carbon-taxing Europe. I welcome that, but other people want to walk backwards towards Christmas, as far as I can see. They want to deny that it is happening and still keep on walking. They know very well that we are moving towards an agreed $50 or $80 per tonne of carbon dioxide. They know that we will have to have a carbon tax in this country. We know that that carbon tax will have to be the same carbon tax per tonne as in every other European country, otherwise how are we going to avoid the contradictions which other noble Lords have drawn attention to?

If I had to make a criticism of the Lisbon treaty on this question, it is that it does not go far enough. We might all agree that it is not explicit enough, but how can you be explicit about what is going to happen in the accelerating pace of change in the modern world? There has been criticism that the Emissions Trading Scheme and the degree to which we have to fiscalise in this country, or pay out through private enterprise into purchase of units in Africa and elsewhere, is not a matter for the European Union. Yet about a month ago, the European Union announced that it is making provision that by 2020 Europe will be handing over to developing countries €50 billion per year. Of that amount, we would pay €7 billion or €8 billion which we would have to fiscalise within Britain as well as put into our overseas trading account in some way. That will have to be agreed in Europe, if for no reason other than the fact that we have arguments about competitive advantage within Europe unless we do it on a common European basis.

People cannot get up and make speeches saying that Europe is a waste of time in so far as emissions

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trading is concerned and not draw the conclusion that Europe must get it right rather than that Europe should not do it in the first place.

There is certainly a question of the man and woman in the street in Burton upon Trent paying what they might be encouraged to believe by the Conservative Party are stealth taxes putting up petrol and home oil prices. Choking off demand has to be done somehow. It can be done through either prices or taxation in some other way. Logically, from a fiscal point of view, there is no reason why we cannot have fiscal neutrality as well as a degree of hypothecation, putting up the tax for some people and putting it down for others. But all this will have to be done on a European basis.

One could go on, in terms of the rules about power stations et cetera. But it is absolutely Alice in Wonderland to hear people in this debate saying that the problem with the Lisbon treaty is that it does too much. It does not do enough. That is the question that has to be raised against some of the statements made by noble Lords.

Lord Forsyth of Drumlean: I find it quite extraordinary listening to the noble Lord talk about Alice in Wonderland. The two amendments tabled by my noble friends Lord Howell and Lord Blackwell, which I support, are eminently sensible. They do not preclude co-operation within the European Community on energy matters; they ensure that we are able to determine issues independently where our national interest is at stake.


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