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7.15 pm

Lord Hunt of Kings Heath: My Lords, this has been a very interesting debate. However, I detected a lack of consensus on this matter, which indicates why the Government are still considering this undoubtedly important matter. I do not know whether my noble friend Lord Whitty will accept the suggestion of the noble Lord, Lord Jenkin, that he should enthusiastically embrace the Planning Bill, but he will no doubt want to give that suggestion earnest consideration.

One cannot underestimate the importance of the matter and, indeed, the balance of arguments in relation to it. The Government have already introduced householder-permitted development rights for a range of microgeneration technologies such as solar thermal, ground source heat pumps and biomass. We are committed to doing so for microwind and air source heat pumps but, as the noble Lord, Lord Teverson, seemed to imply, we are still carefully considering how this ought to be introduced.

Currently, we are considering permitted development only for microwind turbines on detached properties or turbines that are free-mounted, subject, of course, to agreement on noise levels. Permitted development is not being extended to building-mounted microwind turbines on attached premises on the basis that vibration and structure-borne noise could adversely affect neighbours. Further work needs to be done in this area before progress can be made.

The principle underlying permitted development is that individual applications for planning permission are not required on the basis that the development will not adversely affect the amenity of others. This is not an easy issue to resolve, and as the noble Lord, Lord Reay, suggested, the stakes are high in terms of finding the right balance between protecting people’s lives from the interference of others on the one hand and removing barriers to the deployment of these renewable technologies on the other. I think that my noble friend mentioned giving me a nudge on this matter, but I think the measure is a bit more vigorous than that. However, I am sure he accepts that we have to strike such a balance. We have been able to resolve some of these tensions for some renewable technologies and we need to try to resolve them for the remaining renewable technologies, where practicable.

Certainly, it is recognised that permitted development for small-scale, on-site technologies can help to increase take-up. We would like to see consumers engaged in tackling climate change and helping us to meet our renewable targets. I hope that my earlier agreement to bring forward an amendment enabling the Secretary

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of State to introduce a system to feed in tariffs for small-scale electricity installations is a sign of our commitment to that.

My noble friend may be relieved to hear me say that I do not think he needs to take part in the Planning Bill as the proposed amendment is not necessary in a legislative sense. I am advised that we do not need primary legislation to introduce permitted development for microwind and air source heat pumps, as we already have the power to do this through secondary legislation; hence my noble friend seeks to give me a nudge in this area. We are aware of the need to make progress. My officials have been working very closely with key stakeholders, including industry, to try to resolve the issues. I shall take a close personal interest in that. Although we understand the importance of the matter, I cannot give a commitment in relation to time as a lot of matters need to be considered.

Lord Whitty: My Lords, the amendment met with slightly more opposition than I expected. Clearly, the stakes are high, but they are not quite as high as the noble Lord, Lord Reay, implied. We are talking about very small installations, the precise dimensions of which can be prescribed in the secondary legislation which my noble friend says is already in place.

My point is that this is an anomaly. Other microgenerating techniques are already subject to this. It does not undermine the whole planning system and nor does it cause the kind of visual intrusion to which the noble Lord, Lord Reay, referred. Personally, I rather like wind turbines. I know that a lot of people do not like them, but these are not the sort that cause a major visual problem for anyone, whatever their aesthetic judgment on the machines.

There is no problem regarding air source heat pumps. There is hardly a problem with noise. They are a major contribution to rural households, particularly those off the gas network, and others. The noble Lord, Lord Palmer, who had to leave, was going to support the amendment, because he has just installed one. He would welcome his neighbours having similar access through the permitted development certificate.

If the Minister says that he can already address the issue under statutory instruments, whether under planning law or energy law, I do not mind. I have refrained from intervening in the Planning Bill hitherto; partly it is a matter of time and partly it is because the sharp end of this is a renewable energy matter. However, if it is better to do it under planning legislation, no doubt the Minister will find scope to do it. For two years, Ministers have said that they are going to do it. It is an anomaly that needs to be addressed. Therefore, if we do not pursue it in primary legislation in the Bill, I encourage Ministers to rapidly get around to producing the appropriate secondary legislation, the terms of which will allay most of the doubts that have been expressed tonight.

Lord Jenkin of Roding: My Lords, the noble Lord has not answered my question, which may well be for the Minister. Have the local authority associations been consulted on this? When we have been dealing with the Planning Bill—I well understand that the

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noble Lord, Lord Whitty, may have been reluctant to do it this week, as we have Planning, Energy, Planning, which makes life quite difficult for those who do not have large numbers of staff to prepare things for us—there has been a great deal about consultation with local authorities. If they know all about this and are perfectly happy, I am probably content. I would have hoped that there would be a thorough consultation with the local planning authorities, because they are the ones whose discretion is being overridden.

Lord Whitty: My Lords, I cannot directly answer the noble Lord’s question on whether there has been formal consultation. The original decision to allow permitted development status to microtechnology was brought forward by those Ministers appropriate for planning, the CLG Ministers, who will have consulted the local authorities in some form or another. I am reasonably confident that local authorities are aware of that and may have raised issues that led the Government to delay the extension to all forms of microgeneration technology. Clearly, a statutory instrument brought forward by the Government, as I encourage the Minister to do, would be subject to objection by local authorities and others, and therefore we would go through that process. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 45 [Modification of approved programme]:

Lord Jenkin of Roding moved Amendment No. 7:

7: Clause 45, page 41, line 12, at end insert—

“( ) Modifications of a funded decommissioning programme may be made by a person mentioned in subsection (2) only—

(a) if there are significant operational or technical changes which have a material impact on waste or decommissioning costs, and

(b) after taking advice from the Nuclear Liabilities Financing Assurance Board.”

The noble Lord said: My Lords, we now move to the opposite end of the scale. As noble Lords will have recognised, the amendment relates to the decommissioning of nuclear power stations. I shall pause for a moment, so that everyone can adjust to the fact that we are now talking about very large power stations indeed. In a couple of sentences, the Government are establishing in the Bill a process whereby we avoid what we have found with all the existing power stations; that where there was only relatively limited money set aside for decommissioning and waste, very large sums of money fall on the taxpayer. They are trying to avoid that by having funded decommissioning schemes for nuclear power stations whereby, hopefully, the whole cost will be borne over the lifetime of the power station, so that when it comes to be decommissioned and the waste has to be dealt with, funds are there to do that.

A consultation on that was published in February last year, to which there was a large number of responses. It was followed last month by the Government’s response to the consultation on funded decommissioning programmes. The amendment is directed only to one aspect of that. Clause 45, which comes right in the middle of the part of the Bill that deals with this, is headed, “Modification of approved programme”. The

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funding programme must be approved by the Secretary of State, and there is quite an elaborate process for that. Clause 45 gives the Secretary of State power to modify the funding programme in certain circumstances. It is left entirely to subordinate legislation as to how that will be handled.

The Government have made clear in their response what they envisage. They are not looking to be able to modify a funded plan on relatively minor matters, but they said in their response that they are looking for where there have been,

It goes on:

“The Government will lay regulations on this material amount in 2009 and this will be preceded by a consultation on the draft regulations”.

There is some anxiety that that will give the Government power to make what would be quite expensive changes imposed on those who have invested in nuclear power for what may be relatively minor changes. With very large infrastructure projects, there are bound to be changes from time to time, both during the construction period and the operational period. It seems to me that it would be desirable to have clearly in the statute, and not just in regulations, that there should be what the Government have said their intention is, for,

Those are the words that I have put in Amendment No. 7.

The Government said in paragraph 3.18 that they would take the advice of the Nuclear Liabilities Financing Assurance Board. That, too, is in my amendment. It translates into legislative power for the purposes of the Bill exactly what the Government have set out as their intention in paragraphs 3.17 and 3.18 of their response. I would rather see that in the Bill than have it left to consultation and regulations. It is what they have said they want, and it is what the industry would understand and welcome. Let us put it in the Bill. I beg to move.

Baroness Wilcox: My Lords, I very much hope that the Minister will respond constructively to my noble friend’s sensible amendment. As my noble friend said, in Committee the Government specified the Nuclear Liabilities Financing Assurance Board as the appropriate body to pronounce on the accuracy and necessity of modifications on a technical level, and the legislation should reflect that.

7.30 pm

Lord Davies of Oldham: My Lords, the noble Lord, Lord Jenkin, presented his amendment in his usual persuasive way, but I shall not meet him very constructively on this amendment. Against that background, however, and after dinner—but not because of it—I will be much more positive on his subsequent amendments, in which I see merit. I shall indicate to him how we intend to respond constructively on them; however I must resist this amendment, despite the noble Lord’s persuasive powers.

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It is critical that the Secretary of State’s power to make modifications or impose obligations is not fettered by a materiality threshold. This is because his power to propose a modification is integral to the enforcement and sanction regime and for ensuring that operators pay for the full costs of decommissioning and their full share of waste management and disposal costs. The noble Lord will appreciate how central that is to the whole concept of the Bill, in so far as it affects nuclear energy.

In the event of a breach of the programme, the Secretary of State might choose to modify the programme prior to, or instead of, taking formal enforcement action. For example, rather than prosecute, he might decide to impose an obligation on the operator to put in place a procedure to ensure that the breach did not occur again. If the Secretary of State could only propose a modification where it met the conditions proposed by the amendment, the integrity of his sanction and enforcement regime might be undermined. We regard that as a serious problem with regard to the amendment.

For instance, it might preclude persons with responsibility for managing the fund to propose an increase in the level of the operator’s contributions to the fund. This is because the proposal might not have a material impact on the amount of waste and decommissioning costs, but would instead affect the ability of the fund to accrue the necessary money to meet those costs. Clearly, we would want those managing the fund to have the option to propose a modification to the programme.

I accept, as the noble Lord indicated, that we are talking about an industry decades ahead. These programmes will run over a considerable period. While the changes of the kind that I have described might not impact on the actual costs of the decommissioning and waste liabilities, the power to modify the programme in these circumstances will be critical in ensuring that the right level of security is in place to ensure that those costs are met. The amendment would not allow these modifications to be proposed, which would undermine the robustness of the regime.

I am concerned about one or two other points. The amendment brings into question the role of the Nuclear Liabilities Financing Assurance Board, which I will refer to as NLFAB. It is important that we strike the balance between ensuring that the operators of new nuclear power stations notify and seek prior approval from the Secretary of State for those modifications that have a significant impact on the waste and decommissioning liability, without imposing too great an administrative burden on operators. It was said in the other place that the operator would be expected to propose modifications and seek approval where a change to the programme had a significant impact on decommissioning or waste cost estimates. That remains our policy.

I am sure that the noble Lord will see the strength of the point that I wish to make about NLFAB. The amendment would make it a requirement for the relevant persons to take the advice of NLFAB prior to proposing a modification. However, the role of this body is to advise the Secretary of State on any proposal to make a modification. In particular, its role is to provide

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assurance that appropriate financial arrangements will be put in place by operators to meet the costs of decommissioning and waste management arising from the stations. That is central to the Bill. NLFAB will provide independent advice to Ministers as it considers proposals from operators who wish to build new nuclear power stations. It is not NLFAB's job to provide advice to the site operator or any body corporate associated with the operator. It will be for the operator and persons responsible for managing the fund to have the relevant information within their programme verified before it is submitted to the Secretary of State. If NLFAB were to provide advice to any person who could submit a proposal, as the amendment indicates, the impartiality and independence of the very advice that NLFAB is expected to give to the Secretary of State would be compromised.

I am trying to meet the noble Lord on the obvious point that we do not want to place unnecessary administrative burdens on the operator, against a background in which we all recognise that when one is making provision for an industry over decades, one must have clear principles, but must take on board the necessity for modifications. I hope that I have indicated that the Government believe that there are sufficient negative aspects to the noble Lord’s amendment which render it unacceptable. I hope that, having pressed the Government with it, he will feel that he can safely withdraw it.

Lord Jenkin of Roding: My Lords, I feel as if I have had a very large book thrown at me. The noble Lord produced a battery of arguments with which I could not possibly argue. He has given a very helpful explanation. NLFAB’s function has not previously been made clear; it is not a statutory body, but the Government are recruiting for it—I have seen the invitations for people to put forward their names to be recommended. However, the Minister has made it clear that NLFAB’s role will be to advise the Secretary of State, not anyone else. If any purpose has been served by the amendment, it has been helpful to have that on the record. In the mean time, I am cheered up by what the Minister said he will do about my later amendments, and I am sure that I will enjoy my dinner. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Davies of Oldham: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, I suggest that the Report stage begin again not before 8.38 pm.

Moved accordingly, and, on Question, Motion agreed to.


7.38 pm

Lord Bradshaw asked Her Majesty’s Government what proposals they have to ensure that the New Approach to Appraisal for major highway projects is in line with other aspects of government policy.

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The noble Lord said: My Lords, I welcome the noble Lord, Lord Adonis, to, I think, his first transport debate in your Lordships’ House and I hope that the great successes that he enjoyed in education will now be deployed in this field.

The new approach to transport appraisal and the proposed refresh are based on an uncertain process, which is barely understood by professionals, let alone the public at large. It is almost academic arrogance that allows taxpayers’ money to be spent through a process that few in public life, let alone the general public, understand.

On Monday, in a Statement to Parliament, the Prime Minister said:

“Faced with historically high and volatile oil prices, it is more essential than ever before that we act to end our dependency on oil”.—[Official Report, Commons, 20/10/08; col. 23.]

My first question to the Minister is: why do we not give a high priority to transport measures which reduce the emissions of greenhouse gases? Can any scheme which includes any net increases in carbon emissions pass any test? Should it not fall at that hurdle, particularly in light of the Prime Minister’s reiteration of the message of the Stern report, which showed that weak or delayed action will cost us all more in the years to come, financially and economically? I have read what is said in the refresh and other documents about the new approach to traffic appraisal, particularly about the shadow price of carbon. It seems to underestimate the urgency of the situation.

Is it possible to evaluate in monetary terms issues such as landscape, noise, habitat, severance or road accidents, particularly using convoluted processes, such as revealed preference techniques which involve people answering hypothetical questions about the values that they ascribe to such qualities? The Leitch committee, which inquired into the appraisal of trunk road schemes in the 1970s, came to the conclusion that it was very difficult to make judgments about such qualities, as I have mentioned, and that they were better assessed subjectively and evaluated with common sense, using a decision matrix.

Of course, there are perversities in the present appraisal system, such as counting the savings in fuel used in any scheme as a disbenefit because the Treasury loses tax revenues and VAT as a result of fuel economy. Those perversities need to be eliminated as they discriminate against public transport improvements or even such things as car sharing. Can the Minister promise a change in that ridiculous state of affairs? Does he realise that if a road scheme causes extra fuel to be burnt because of higher speeds, for each extra litre burnt, the scheme is credited with 55p? It gets money when more fuel is burnt.

How robust is time used in the appraisal as a measure of value? I suggest that small time savings are of no value unless they are predictable. Getting home three minutes earlier or reaching the office three minutes earlier is of much less importance than achieving a reliable journey. Even more questionable is the aggregation of small time savings to form a large number which can be advanced as a justification for spending money. If 100,000 motorists a day save 30 seconds—which

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they can neither predict nor rely on—is it reasonable to give that a high-money value and does such a practice drive out of consideration important strategic links such as the A1 in Northumberland, about which my noble friend Lady Maddock will speak?

Next, there is the question of suppressed demand. For example, you add a fourth lane to a motorway at great expense on the basis of masses of small time savings and find that the space you have created fills up within two or three years and then the financial justification which has been used for the scheme no longer exists. That is made even more acute in a situation where the market—the road space—has no pricing signals which could be used to regulate demand.

I am also interested in why the same methods of appraisal when applied to railways can, after all the money that has been spent on econometric analysis, be so wrong. My noble friend Lord Mar and Kellie will raise some recent examples where forecasts of the business cases for extension of the railway have been very wrong indeed. They use the same econometric methods as those applied to road schemes.

As well as seeking fuel economy from investment—it is difficult to see how that can be achieved without trunk-road pricing—to what extent does the evaluation of transport schemes cater for rising energy costs and possible energy shortages? We might see railway electrification, tramway schemes and facilities to recharge electric cars at major car parks and interchanges as being strategically desirable or even vital at an uncertain future date. That is not likely to be demonstrated by an econometric analysis and huge and very expensive models of trip matrices, which, by their very nature, are obsessed with fine detail but ignore the big strategic issues; for example, whether we need a trunk road along the east coast between England and Scotland. Of course, we will not get hundreds of thousands of people using that, so it scores very low in any assessment.

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