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My noble friend’s Amendment No. 70 simply removes the new energy article which gives the EU more powers, subject to QMV. My noble friend Lord Blackwell’s amendment simply highlights the significance of the move to QMV on aspects of energy policy. I do not, for the life of me, understand why the noble Lord, Lord Lea, should be concerned about that. I much prefer the view put by his noble friend Lord Rowlands, who warned us of the importance of security of supply and of Governments being able to protect their national interest. If energy is unable to be supplied, that has a fundamental and damaging effect on our quality of life and economy. Many wars and conflicts have been fought on those very issues.

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If the noble Lord wants to bring Alice in Wonderland into the debate, I give him one example. Not a fortnight ago I asked the noble Lord, Lord Rooker, in Question Time about the effects of the European Community’s requirement to have a proportion of biofuels included in petrol, which has resulted in the increase in the prices of food throughout the world, to which my noble friend referred. It has caused great damage—indeed, it has killed people because of starvation and their inability to afford those food prices. The noble Lord, Lord Rooker, said that the relationship between biofuels and those problems was at yet unproven and that the Government were looking at this matter and had it under review.

I turned on the radio this morning, not a matter of weeks later, to hear the Chancellor telling us that he is this very day going to Brussels to argue that we should

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be released from the requirement to have a certain percentage of biofuels included in our petrol. The fact is that there is nothing that we can do about it, unless we get agreement—and it is very damaging to the world as a whole. That is one example of a European policy that has proved foolish, although no doubt it was well intentioned; its consequences have been severe, and we have great difficulty in reversing it.

I shall give the noble Lord another example, for which perhaps the Government of whom I was a member bear some responsibility. Those people who are in favour of green taxes should look at what happened to the previous Conservative Government when they introduced VAT on fuel. It was extremely unpopular. If you read the columns of the national press, you can see lots of people pointing out that the heating allowances that they get from the state are less than the VAT that they have to pay on the fuel. A sensible policy might be to consider lifting that, but we do not have freedom to remove VAT once it has been imposed.

The noble Lord is a little cavalier in suggesting that we should risk giving up our ability to determine our policies according to our national interests. He mentioned Russia, which we know is quite capable of using energy as a political tool. We have seen that already. We also know that there is a diversity of interests within the European Community and according to the position of the various member states and their dependence on a particular energy.

Lord Dykes: This intervention is too long.

Lord Forsyth of Drumlean: It is not an intervention. I thought that the noble Lord, Lord Lea, had sat down.

Lord Lea of Crondall: I paused before I sat down, because I thought that the noble Lord was getting up. I shall just make one point—but we are all perhaps taking time which other people might think that we should not be taking.

Several speeches have contained remarks that I believe to be totally fallacious, so I want to make one point for the other side. The noble Lord, Lord Forsyth, was a very notable member of the Government who in effect more or less closed down the coal industry. Many of us at that time said that the dash for gas would result in problems of security of supply. Now he says that we are ignoring security of supply. I am sure that my noble friend Lord Rowlands and I are on exactly the same side of that argument.

Finally, on the notion of the noble Lord, Lord Forsyth, being against green taxes, his party is in favour of the targets for a 70 per cent reduction in CO2 by 2050 in the Climate Change Bill. The Conservatives voted for it. How are we going to get to that without choking off some demand in this country? They are being totally dishonest about this. I very rarely make political points—but mark my words that in due course, whether they become the Government or not, they will have to take responsibility for dealing with this green taxation question.



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Lord Forsyth of Drumlean: I apologise to the Committee; I thought that the noble Lord had sat down, and I was making my own speech. Because it is a debate, I was following on from his points and I apologise if that caused confusion.

Of course we want to reduce our dependency on fossil fuels; I am happy to come on to that issue. The answer there is to follow the French lead and to embark, as speedily as possible, on building nuclear power stations in this country, while using increasingly available technology to develop electric motor cars and other devices that will enable us to be less dependent on fossil fuels. The noble Lord and I do not differ on the need for co-operation within the European Community; what is of concern is that we should surrender our ability to decide those things for ourselves.

The noble Lord, Lord Lea, made a political point about the closure of the coal-mines. The other day, I was struck by a proposal to reopen the deep mines in Scotland, to which one leading trade union member said, in public, “Why on earth would we want to go back to sending men down to do those dirty, dangerous jobs in the deep coal-mines?”. There is not entire unanimity about the benefits of operating mines that were then inefficient and rather dangerous; the noble Lord might agree about that.

Could the Minister, then, deal specifically with this point? If there is no threat of the kind suggested by my noble friend Lord Blackwell, what is the objection to accepting his amendment?

Lord Wallace of Saltaire: I recall reading that in 1950, when the first west European institution—the old European Coal and Steel Community—was being negotiated, many in the then Labour Government thought that Britain ought to join it. They recognised that we did not have a purely national energy market, as we imported oil and had been forced to export coal to Germany between 1946 and 1948, and that there were good arguments for co-operation. However, the Foreign Secretary, Ernie Bevin, said, “I don’t care what you think. The Durham miners won’t have it”.

Lord Radice: That was Morrison.

Lord Wallace of Saltaire: Well, if it was Morrison, never mind; it was the same nationalist argument. When we joined the European Economic Community, we also joined not only the ECSC but EURATOM. We have been in international energy co-operation regionally and, since 1973, globally with the International Energy Agency. We have to be careful that our arguments on this Bill do not extend toward resistance to international regulation as such. Some of the arguments have got close to that.

This is a consolidation amendment, which talks about promoting the interconnection of energy networks. The United Kingdom electricity network has, for many years, been interconnected with that of France; we now need a number of gas connectors across the North Sea to Belgium, the Netherlands and Norway. The clause says it is to promote energy efficiency and savings; although it also comes under that context, it does not refer to the promotion of competition policy

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and an open market in EU energy. That is strongly in Britain’s interest, because the French and German markets are less open than the British. I think that I get my electricity from a French company; others get theirs, or their gas, from German ones.

This is, then, a consolidation and not a new invasion of British sovereignty. We are in a regional market for electricity and gas. We also operate within a global oil market. It makes sense to co-operate with our European neighbours and the European Union is the useful framework in which to do that.

Lord Forsyth of Drumlean: No one is arguing that we should not co-operate. The point is that in all these agreements we are able to operate as a sovereign state and decide to enter or leave them. The question here is whether we are ceding power and will not be able to act in that way. That is the point and is why, if there is a move that would enable us not to do that, it is undesirable. The noble Lord is setting up an Aunt Sally and knocking it down, but he is not addressing the concerns that have been expressed.

Lord Wallace of Saltaire: The underlying difference between us is probably how far one starts from a gut mistrust of co-operation under rules. International regulation has to imply very clear rules. The argument about the IEA versus the European Union is also about how far one lets the Americans set the rules or how far one co-operates with others to design the rules within the European market. That is an argument we had in 1973-74, as I am sure the noble Lord will remember, over the setting up of the IEA, and it is an argument that continues. I, like many of us, start from the assumption that it makes sense to co-operate most closely with our neighbours with whom we share a regional energy market. International regulation is, of course, a limitation of absolute national sovereignty. A global world economy is an invasion of national sovereignty. Foreign companies owning British energy suppliers is a limitation of national sovereignty. I recognise that, and we have to manage it.

Lord Hannay of Chiswick: I, too, some time in the past had something to do with energy policy, and at some moments this afternoon I could have shut my eyes and heard the mellifluous tones of a Secretary of State for Energy who has not yet been quoted, Mr Anthony Wedgwood Benn, because most of the speeches from the Opposition Benches would have found their place in his mouth. He was an ultra-nationalist in energy policy, and he would have subscribed to all those views.

This debate has strayed a longish way from what we are discussing, which is, effectively, making energy policy a part of the treaty in its own right and enabling decisions to be taken by qualified majority. The arguments for that are very similar to the arguments that noble Lords opposite found extremely compelling in the context of the single market and the Single European Act; that is, it was in Britain’s interest to be able to take a number of these decisions, which would make for a more single market in energy, and that having that done by qualified majority would therefore be in this country’s interest. That is a view that I share. To do that is not to surrender national sovereignty.



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Interestingly enough, all the things that the European Union does now on energy policy, which have been complained about at some length by noble Lords opposite, have been done under the existing powers. They are nothing to do with the Lisbon treaty. Reversing, let us say, the biofuels commitment would be more difficult if there was not a provision that enabled it to be done by qualified majority and it had to be done by unanimity. I do not particularly want to reverse it anyway immediately because I think the debate has got a little overheated at the moment, as illustrated by claims that virtually single-handedly the European Union has forced up food prices worldwide when in fact the biggest push factor has been the enormous increase in consumption of certain foods by the more prosperous populations of China, India and south-east Asia. But let us leave that on one side.

The question is whether it makes sense to have it in the Lisbon treaty that decisions on energy matters are to be taken by qualified majority. I believe it does. There are plenty of safeguards in the treaty. The question of Britain’s ownership of its resources and right to take decisions over their depletion is carefully excluded from any rights for the European Union. On the International Energy Agency and the sharing of stocks, the reason I asked the noble Lord, Lord Blackwell, the question I did was because he stated categorically in his amendment that we have absolute control over these matters. We do not. We signed a treaty that set up the International Energy Agency and committed us to pooling our resources in certain circumstances, so the amendment is incompatible with our international obligations, not our European ones.

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Lord Blackwell: The noble Lord has raised this again. Does he accept that there is a difference between an agreement that we enter into as a sovereign nation, which we can exit at our choice but where the UK Government still controls national interest, and a policy where we may not be able to decide because it is imposed on us by qualified majority voting, which the noble Lord recommends? One may believe that that is a good thing, but it is fundamentally different in kind.

Lord Hannay of Chiswick: It is not different in kind if we have accepted it as an international obligation. It is different in kind in the period before we accept it. In the period before we accept it as an international obligation, it is up to us. We can veto it, or not join the organisation, as the French did not join the International Energy Agency at the outset, although they have now joined it. We can do that, but once we have joined, and jointly taken a decision to share our oil stocks, I do not notice any difference whatever, except that the method of making decisions about those stocks is different. The obligation is the same. It is a binding international obligation on the British Government.

Lord Pearson of Rannoch: My Lords, I was not going to intervene but I have to put one brief and simple question to the Minister. It is inspired by the remarks of the noble Lords, Lord Lea and Lord Hannay, with which I fancy the Minister will agree.

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What makes Her Majesty’s Government confident that the European Union will be any better at running a common energy policy than it is at running our agriculture, fishing, financial services and, indeed, any area where it extends its unwanted tentacles? We may have been foolish virgins with our oil and gas reserves, but I underline the question of my noble friend Lord Forsyth, if he does not mind my describing him so. Why do we not simply establish our national independence by building enough nuclear power stations as soon as possible, and so avoid having to be dependent on energy from Russia and elsewhere, coming to us courtesy of the French, and overseen by, of all things, Brussels? You could not make it up. I look forward to the Minister’s answer.

Lord Bach: Amendment No. 70 refers to the provisions in the Lisbon treaty that would create a specific legal base for energy. I am grateful to the noble Lord, Lord Howell, for moving his amendment and pay tribute to his experience and expertise in this particular field, having been a previous Secretary of State.

The appearance of a separate energy article reflects the growing importance of energy as a political and economic issue in the European Union, and the need for more effective action at Union level to achieve our energy and climate security objectives. The Stern report states that 65 per cent of global emissions come from energy. Meanwhile, the world’s demand for energy rises inexorably. The dilemma facing us is how to meet our energy needs and, at the same time, stabilise our climate. This is very much a 21st century security and prosperity challenge.

The new article will help to ensure that policies on energy markets, energy security and energy efficiency are coherent and mutually reinforcing. This is vital if we in the UK are to achieve our own energy and climate change priorities, and to successfully drive the transition to a high-growth, low-carbon economy in Europe. The creation of a separate energy article has the advantage of providing a transparent means of enacting energy policy at the EU level. It is not new EU action on energy, but in the past we had to rely, in particular, on other, more general articles in existing treaties. Examples include Article 175 for the environment or Article 195 for internal market measures. A separate energy article provides better governance and better regulation. It brings clarity to what the EU intends to do and how it will achieve it.

EU action on energy is not a new invention. The Maastricht treaty listed energy as an activity of the Community, although the Community had acted on energy before. As the noble Lord, Lord Wallace, reminded us, European-level action on energy goes back to the inception of the coal and steel community and EURATOM more than 50 years ago.

Today, the EU has already implemented a wide range of measures on energy policy under existing legal bases of the EC treaty. Although the Lisbon treaty provides a dedicated legal base for EU action on specific areas of energy policy for the first time, the Committee should not be under any illusions that the Union has been taking action for some years to open energy markets. We support that liberalising action.



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The Lisbon treaty confirms that qualified majority voting will continue to apply to the majority of future decisions made on energy policy at the EU level. My noble friend Lord Rowlands, who I am very glad is taking part in this debate, asked some questions about QMV. I emphasise that, in the past, energy measures were taken under qualified majority voting. As I understand it, there will be nothing specific under QMV that was not there before, but, of course, it was not under the energy legal base. It was under the other provisions that I have tried to describe.

Lord Rowlands: Is my noble friend describing this chapter or article as a purely consolidation measure and not one that will extend QMV to new areas of energy policy?

Lord Bach: I am cautious in how I reply, but my understanding is that that is the position. There are no proposals to be taken under the new energy article, but the Lisbon treaty provides what I continue to describe as a legal base for future action on energy security and promoting renewable energy, as well as further action on what the Committee will want to see—energy market liberalisation.

My noble friend asked also about the Commission’s role. The treaty makes it clear that its member states will maintain the right,

I shall come back to that important point, which was raised by the noble Lords, Lord Blackwell and Lord Forsyth. The Commission will be able to propose legislation, as it has in the past. This time it will be under the energy legal basis.

Lord Forsyth of Drumlean: Perhaps I am confused and muddled; the noble Lord is, as always, making a very reasonable case for the treaty’s provisions on energy. But if they are so reasonable, why did the Government work so hard to prevent them being included? Was it not one of their objectives not to have these provisions in the treaty? He makes it sound terribly unthreatening. What were the Government worried about when they were fighting so hard, or am I missing something here?

Lord Bach: The noble Lord misses very little. The noble Lord, Lord Howell, could not resist raising that point in moving the amendment, for which I do not blame him. Perhaps I may come to that point later. I hope that I have explained the point raised by my noble friend Lord Rowlands on QMV and the significance of having a separate energy article. To repeat myself, it reflects the growing importance of energy as a major issue in the EU and the connected policy areas of climate change.

As I say, the treaty confirms that QMV will continue to apply to the majority of future decisions—not fiscal decisions; I make that clear—made on energy policy. This is in our interests as a country. We are leading the push for greater liberalisation of the gas and electricity markets across the continent which, if implemented fully, could save EU consumers tens of billions of euros a year. Frankly, without QMV we would have made very little progress in liberalising energy markets

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and we would not have any chance of securing the package of further liberalisation currently being negotiated. Indeed, without qualified majority voting, it is arguable that the Commission would not have proposed the measures in the first place. But, I repeat, the treaty retains unanimity for fiscal measures, as argued for by us.


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