House of Lords
Monday, 14 September 2015.
2.30 pm
Prayers—read by the Lord Bishop of Portsmouth.
Retirement of a Member: Lord Parkinson
Announcement
2.36 pm
The Lord Speaker (Baroness D’Souza): My Lords, I should like to notify the House of the retirement, with effect from today, of the noble Lord, Lord Parkinson, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I should like to thank the noble Lord for his much valued service to the House.
Food Supply: Sustainability
Question
2.37 pm
Asked by The Lord Bishop of St Albans
To ask Her Majesty’s Government what plans they have to ensure the sustainability of the United Kingdom’s food supply.
Lord Gardiner of Kimble (Con): My Lords, I declare my farming interests as set out in the register. Our world-leading food and farming industry is worth £100 billion per year. The Government are developing a long-term plan which will boost productivity, enhancing business resilience across the food chain. Food security depends on access to diverse global markets and, of course, domestic production. Public procurement export plans which lead the way for Great British food producers, clearer labelling and investment in agricultural technologies will all contribute to a sustainable food supply.
The Lord Bishop of St Albans: I thank the Minister for his reply. Despite the flexibility given us by last week’s emergency EU summit, which related to early payments under the basic payment scheme, there is a real concern that the Rural Payments Agency will not be able to undertake the necessary checks in time to take advantage of that scheme. Bearing in mind that late autumn and early winter is always a drastic time for farmers’ cash flow, there is likely to be a huge problem in the coming year with the collapse in prices, particularly of milk but also of lamb and beef. Will the Minister tell your Lordships’ House what Her Majesty’s Government are doing to ensure that farmers have access to financial assistance and relief, given that they will not get through the winter otherwise?
Lord Gardiner of Kimble: My Lords, I was at the emergency Agriculture Council last week and spoke on behalf of the United Kingdom. One of the things that we pressed was for the Commission to ensure that some of the checks required on CAP subsidy payments should be removed or changed for this year to enable
prompt payment to be made so that there are immediate effects, but, of course, we have a longer-term plan as well.
Lord Dholakia (LD): My Lords, building a sustainable food chain requires thought at every stage of the process. Will the Minister explain what is being done in Defra to improve the transportation of the UK’s food supply? The Minister will be aware that 70% of our food chain is chilled at one stage or another, so it would be helpful to know whether we have sustainable cold chains which can be monitored for their impact on pollution.
Lord Gardiner of Kimble: My Lords, of course the department is looking at a range of ways of ensuring that we have a stable supply of food and we want to ensure that the environmental impact of our food supply is also addressed. That is why we have a 25-year plan for food and farming and, alongside that, and complementary to it, a 25-year environment plan.
Lord West of Spithead (Lab): My Lords, this century, our nation was almost starved to death. Today, the largest proportion of our food comes by sea. Seventy-three years ago today, half a convoy full of foodstuffs was decimated, and at that stage we had 800 escorts. When I joined the Navy we had over 100 escorts; today we have 19. Does the Minister not agree that all parties should agree that this nation needs more escorts for the Navy?
Lord Gardiner of Kimble: The noble Lord should be congratulated on weaving in his very strong support for the Navy and all that goes with it. It is important to know that 76% of indigenous-type foods come from the UK, as do 62% of all foods. Interestingly, that is by no means low in the context of the last 150 years, and in fact between the wars, the proportions were much lower. However, I am of course very keen on British production.
The Countess of Mar (CB): Does the noble Lord agree that if we are to have sustainable food production, we must ensure that our soils are in good heart? Can he say what he is doing to protect the soil and to improve its condition?
Lord Gardiner of Kimble: My Lords, new national standards for agricultural soils under cross-compliance were introduced only on 1 January this year. Clearly, it is essential, if we are to be even more productive, to ensure that our soil is in good heart and that we improve it wherever we can.
Baroness Jenkin of Kennington (Con): My Lords, my noble friend may be aware that, globally, up to one-third of all food produced is wasted. Here in the UK, the equivalent of £60 a month is wasted by individual households. Will my noble friend tell the House what the Government are doing to bring down these figures, both across the supply chain and among retailers and individual householders?
Lord Gardiner of Kimble: My Lords, this is a very serious issue, and the Government have been working successfully with industry under the Courtauld commitment to reduce food and packaging waste in the supply chain. It has been reduced by 7.4% since 2010, and clearly this is a continuing process. The amount of food we all waste is disgraceful.
Lord Howarth of Newport (Lab): My Lords—
Lord Grantchester (Lab): I declare my interest as a farmer receiving EU funds. Sustainability could well be enhanced through local procurement along shorter supply chains. Does the Minister agree that this could increase the supply of fresh, healthy food, reduce farming’s carbon footprint, support UK agriculture and more closely connect the consumer to the producer? If this is the case, what are Her Majesty’s Government doing to enhance the supply of local food?
Lord Gardiner of Kimble: My Lords, this very much goes to the heart of public procurement. Only last Monday, the Secretary of State announced that Defra is reviewing buying habits across the public sector and working across Whitehall to improve transparency when government catering contracts are due for renewal. Following the launch of Dr Peter Bonfield’s plan for public procurement, there is much more to be done on this.
Lord Howarth of Newport: My Lords—
Lord Hannay of Chiswick (CB): My Lords—
The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, it is the turn of the Conservative Benches.
Lord Elton: My Lords, will my noble friend tell us what has actually gone wrong with the Rural Payments Agency system and what is being done to put it right?
Lord Gardiner of Kimble: My Lords, I know that my ministerial colleagues are working with the RPA on this. We are seeking to ensure that all payments are made promptly and we are working to that effect.
Lord Howarth of Newport: My Lords—
Lord Hannay of Chiswick: My Lords—
Baroness Stowell of Beeston: My Lords, I am so sorry to interrupt but if we are doing it in turns, it is the turn of the Cross Benches.
Lord Hannay of Chiswick: My Lords, I wonder whether the Minister has done any studies of the effect on the strategies he describes of withdrawal from the
European Union. If his department has done any, could he share them with the House? It is surely necessary that we should be in full possession of these facts.
Lord Gardiner of Kimble: My Lords, I have not been a party to those discussions but regarding the UK food supply, it is clearly essential that we are able to have diverse global markets. We are increasing our exports around the world, both in Europe and outside.
Soma Oil & Gas: SFO Investigation
Question
2.45 pm
To ask Her Majesty’s Government what measures they intend to propose to the United Nations Security Council in the light of the Serious Fraud Office’s criminal investigation into Soma Oil and Gas Holdings, Soma Oil and Gas Exploration, Soma Management and others in relation to allegations of corruption in Somalia.
The Minister of State, Foreign and Commonwealth Office (Baroness Anelay of St Johns) (Con): My Lords, the Serious Fraud Office’s investigation into Soma Oil & Gas is an ongoing, independent investigation. It would not be appropriate to comment at this stage, nor to take any action on the basis of it. We are advising the federal Government of Somalia of the importance of establishing an effective legal and regulatory framework before signing oil or gas contracts, due to the high risks of corruption and conflict associated with the sector.
Lord Avebury (LD): My Lords, Soma has contracts with the Government of Somalia giving it rights over 60,000 square kilometres of the continental shelf and creaming off up to 90% of the state’s oil revenues. Are the Government concerned that Soma paid civil servants advising on the deal a total of $360,000 andthe so-called independent legal adviser another $500,000? When is the relevant Security Council committee due to consider the report on these payments, submitted to it on 3 August by the Somalia and Eritrea monitoring group?
Baroness Anelay of St Johns: My Lords, on the first question, I perhaps did not make it clear enough in my first Answer that this matter is being investigated by the SFO, and investigated as the result of a leaked confidential document. In light of both those circumstances, it is not the practice of any Government to comment on such matters. On the noble Lord’s second question, I understand that the United Nations will discuss these matters again shortly.
Lord Leigh of Hurley (Con): My Lords, does my noble friend agree that we should note that all the companies concerned have strenuously denied any
allegations of wrongdoing, and that the Question perhaps denies the central tenet of English justice—which is that a person is innocent until proved guilty?
Baroness Anelay of St Johns: My Lords, it is not for me to comment on what others have said. The Government will await the outcome of an investigation before commenting.
Lord Watson of Invergowrie (Lab): My Lords, following his recent visit to the Cayman Islands, Grant Shapps, the Minister of State at the Foreign and Commonwealth Office, suggested that the Government may be weakening their position on corporate transparency in the overseas territories. Can the noble Baroness state that the Government will firmly encourage the overseas territories to ensure that central registers of beneficial ownership are produced for the companies based in those territories?
Baroness Anelay of St Johns: My Lords, I am not exactly an aficionado of cricket but even I can recognise a wide. In the spirit of co-operation, I will say that what we are doing with regard to Somalia, which is not an overseas territory, is to encourage responsible investment. We are strongly urging the Somali Government to ensure that any resulting investment and benefit from it is shared by the whole country. The benefit is clearly needed to reduce poverty there.
Lord Collins of Highbury (Lab): My Lords, I welcome the Minister back to her place and wish her a speedy recovery. She is looking extremely well. I accept what she says about not commenting on this specific issue, but will she assure the House that at the end of this process, any lessons to be learned are shared with the Department for International Development?
Baroness Anelay of St Johns: The noble Lord makes a perfect point. In practice, the person who briefed me today was previously with DfID and has given me the assurance that these matters are discussed. We need to learn the lessons from any such circumstance; clearly, we share that around Whitehall. However, the next time I go on a military helicopter, I will get out of it a little better than I did this last time.
Lord Chidgey (LD): While Somalia is struggling with the prospect of new-found oil wealth, al-Shabaab terrorists are murdering citizens and may massacre AU peacekeepers with impunity and almost at will. What is the Government’s response to the grave concerns over AMISOM and Somalia’s forces’ operational capabilities, with a lack of effective co-ordination and shared command structures and, crucially, a lack of air power? What steps are the Government taking within the UN Security Council to support Somali President Hassan Sheikh Mohamud’s declared ambition to reform financial governance of the national security sector, building a more integrated, accountable and transparent sector, subject to rigorous oversight?
Baroness Anelay of St Johns: The noble Lord raises the serious matter of how al-Shabaab may be defeated in the area and the role of AMISOM. We support the
counter-al-Shabaab effort by funding, advice and support to AMISOM command, the United Nations Assistance Mission in Somalia, UNSOM, and the EU training mission. It is essential that we continue to do all we can with regard to skilling and supporting those military efforts. Somalia can have a successful future, but first it needs to overcome its security problems and encourage proper investment.
Lord Alton of Liverpool (CB): My Lords, setting aside the activities of individual oil exploration companies, can the Minister comment on the weight that the Foreign and Commonwealth Office attaches to the call by the United Nations last year for a moratorium to be imposed on any further exploration by any oil companies in Somalia because of the risks which it poses to a fragile state, with competing groups vying for gains to be made from any such exploration?
Baroness Anelay of St Johns: The noble Lord rightly draws attention to the fragility of states in those circumstances. We have strongly encouraged the federal Government and the emerging federal states to reach agreement on resource control and revenue sharing, and indeed to develop a legal framework which both supports that agreement and reflects best practice, before signing oil and gas deals. When it comes to the crunch, it is up to the sovereign country whether it signs those deals.
Lord Howarth of Newport (Lab): My Lords, with regard to the problem of corruption in Somalia and the associated problem of poverty, would not better progress be made towards the alleviation of poverty in Somalia—and, indeed, in other countries in the region, providing the better future for those countries that she and all of us wish for—if there were more rapid development of genetically modified crops? Is a more positive approach to GM crops in the European Union one of the reforms that Her Majesty’s Government are seeking?
Baroness Anelay of St Johns: My goodness, I think I am going even beyond my initial cricketing analogy. However, the noble Lord comes to a key issue, which is that the role of this country overseas has been to ensure stability and security in other states. The way that we work together and with our European colleagues is important. The Prime Minister’s golden thread is the way to go.
Tax Credits: Impact of Cuts
Question
2.52pm
To ask Her Majesty’s Government what assessment they have made of the impact of cuts in tax credits on middle- and lower-income working people.
Lord Ashton of Hyde (Con): My Lords, the Government are placing more emphasis on support to families on low incomes by increasing the personal allowance and introducing the new national living wage, rather than on topping up low wages through
tax credits. Taking the welfare changes in the Budget together, with the record increases in the income tax personal allowance and the introduction of the national living wage, eight out of 10 working households will be better off in 2017-18.
Lord Dubs (Lab): My Lords, will the Minister confirm that 3 million of the poorest families will be £1,000 worse off and that the increase in the minimum wage will simply not offset the cut in tax credits? To put it another way, is it not true that 5 million of Britain’s poorest children will lose an average of £750 each?
Lord Ashton of Hyde: My Lords, the trouble with this subject is that we could sit swapping statistics all day long. The evidence for children in poverty is clear that work is the best way for families to stay out of poverty. Children in workless families are nearly three times as likely to be in poverty. So we are increasing pay and raising the personal allowance so that families keep more of what they earn. Work and education are what matters, so we are extending free entitlement to childcare to 30 hours for working parents of three and four year-olds.
Baroness Wheatcroft (Con): My Lords, research by the Centre for Policy Studies showed that, by 2012, more than half the families in this country were net takers from, rather than contributors to, the state. Would my noble friend agree that that situation is both unhealthy and unsustainable, and that changes in tax credits are just a step towards redressing the balance?
Lord Ashton of Hyde: My Lords, this is a strategic change in how we deal with welfare in this country. It is worth bearing in mind the problem: we produce 4% of the world’s GDP and 7% of the welfare payments, and nine out of 10 families were on tax credits. I completely agree with my noble friend that we want to increase people’s pay and lower the amount of tax they pay so that all families benefit in this country.
Baroness Kramer (LD): My Lords, despite the Minister’s disdain for statistics, he will be aware of the Institute for Fiscal Studies report last week that demonstrated that, among the 8.4 million working-age households currently eligible for benefits and tax credits but containing someone in work, the average loss from the cuts to benefits and tax credits is £750 per year. Among this same group, the average gain from the new minimum wage is estimated at only £200 per year. Does he accept that statistic?
Lord Ashton of Hyde: My Lords, I assure the House that I do not have any disdain for statistics. In fact, I have an enormous pack full of statistics that I have tried to learn. The problem with the IFS study is that the £12.5 billion of net cuts to benefits and tax credits and the estimated £4 billion increase in wages do not compare like with like for working families, because the reduction in benefits includes cuts to those families out of work.
Lord Flight (Con): My Lords, would the Minister agree with the fact that wages have risen faster in the past six months than since before 2007? Has that anything to do with the tax credit reforms?
Lord Ashton of Hyde: My Lords, I did not know that they had risen that fast. The former Chancellor, Alistair Darling, said that tax credits were never intended to subsidise lower wages. However, the current Chancellor has been very careful not to claim that tax credits have depressed wages. The fact is that we want to increase people’s wages. We introduced the national living wage and we want people to keep more of what they earn, rather than subsidising people through the benefits system.
Baroness Hollis of Heigham (Lab): My Lords, is the Minister aware that, despite his statistics, the majority of children in poverty have parents in work? It is therefore not true to say that work is the best route out of poverty unless that pay is topped up by tax credits. Otherwise, a single person and a family get the same wage. Tax credits lift children out of poverty. Can we therefore hope that the Minister will take that information back to the Treasury so that, when we face the battle over welfare reform cuts, alleviating child poverty is at the heart of this House’s attack on poverty?
Lord Ashton of Hyde: The noble Baroness is well respected for her mastery of the detail in this reform. We will address child poverty comprehensively in the Welfare Reform and Work Bill. I am sure that the noble Baroness will be involved in that. We still think that work is the best route out of poverty. The number of children growing up in workless families is at a record low, down by 390,000 in the last Parliament. We are particularly trying to help those on the lowest incomes. Families will still be able to earn up to £3,850 before the awards are taken away.
The Lord Bishop of Portsmouth: My Lords, bearing in mind that two-thirds of children who live in poverty are in in-work families, how will the Government monitor the impact of the proposed changes? In particular, will they review the exclusion of income-based measures from the suite of life chances indicators being brought in?
Lord Ashton of Hyde: The right reverend Prelate is correct to focus on these statistics and forecasting child poverty is very difficult. The IFS, for example, forecast in 2011 that there would be 2.8 million children in relative poverty and the actual figure was more than half a million less. We have considered the impact of the policy changes on children in poverty carefully in the summer Budget and we will continue to do so.
Baroness Sherlock (Lab): My Lords, just saying something over and over again does not, sadly, make it true. If the Minister is mostly concerned about children in working families, will he look please at the independent academic research for the Resolution Foundation, which found that, as a result of the Budget changes, most working families would be net losers? They may gain
some income, but they are going to be worse off as a result of cuts in tax credits. How does that help tackle child poverty?
Lord Ashton of Hyde: My Lords, I do not agree with that. Eight out of 10 working families with children will be better off when you take into account the tax credit changes, the national living wage and the increase in the personal allowance.
Care: Costs Cap
Question
3 pm
To ask Her Majesty’s Government what assessment they have made of the impact on patients, residents of care homes and their families and carers, of the decision to postpone the introduction of the cap on care costs from April 2016 until April 2020.
Baroness Chisholm of Owlpen (Con): My Lords, the decision to delay implementation of the cap on care costs followed careful consideration of feedback from stakeholders, and it was felt that April 2016 was not the right time to implement these significant and expensive reforms. I stress that we remain committed to these important reforms, which offer financial protection and peace of mind. We have had to make hard choices, balancing the benefits of the cap against the need to focus on supporting the system that supports our most vulnerable.
Baroness Wheeler (Lab): I thank the Minister for that response. The Government’s election manifesto said that capping the amount patients can be charged for residential care from 2016 would give,
“everyone the peace of mind that they will get the care they need and that they will be protected from unlimited costs if they develop very serious care needs—such as dementia”.
The assessment of one of the key stakeholders, the Alzheimer’s Society, is that the delay until 2020 will cause unacceptable costs to continue to be borne by people with dementia in their families. These are people particularly affected by the cost divide between social care and NHS continuing care. What actions will the Government be taking in the lifetime of this Parliament to meet their commitment to this key group?
Baroness Chisholm of Owlpen: This is a very important group at a most vulnerable time in their lives. The Government remain fully committed to introducing the cap on social care costs and helping people to cope with the potentially high costs of social care. It is not cancelled and will be brought in by 2020, but until then means-tested financial support remains available to those who cannot afford to pay for care to meet their eligible needs. Where a person can afford to pay for their care, we are clear they should not be forced to sell their home during their lifetime to do so. Since April this year, deferred payments have been available across England for people with less than £23,250 in
liquid assets who might otherwise face that risk. By entering into a deferred payment agreement, a person can defer or delay paying the costs of their care and support until later, including out of their estate if they choose.
Baroness Pitkeathley (Lab): My Lords, is the Minister aware that for many families, the postponement of the cap on care costs is seen as a betrayal that is adding to their disillusionment about the persistent underfunding of social care? Surely the Government must understand that families who look after people—for example, someone with Alzheimer’s—cannot go on taking these responsibilities if promises are broken and if the support they need is either non-existent or too expensive. Will this problem not exacerbate the Government’s existing problem with delayed discharges if families are in future less willing to take on caring, and is the Minister concerned about the delayed discharges issue?
Baroness Chisholm of Owlpen: This is indeed a concern, but I must emphasise that this delay is not a decision that has been taken lightly. A letter from the Local Government Association dated 1 July was clear that we need to think carefully about all the options, including postponing new initiatives. Therefore, we will make further announcements and they will follow in due course. Furthermore, we will continue with other efforts to support social care, in particular through the better care fund, which will drive the integration of social care and the NHS.
Baroness Greengross (CB): My Lords, when the care cap was postponed, the duty on local authorities to assess and meet the eligible care needs of self-funders was also postponed. There are about 460,000 of them. Last April, the department sent a letter to local authorities advising them on how to prepare for assessing self-funders. They have been given £146 million to carry out early assessments starting this October, which will cover about 50% of those self-funders. As the postponement is now planned, will the Minister tell us whether this money has been handed over and what will happen to self-funders who will now remain outside local care eligibility assessment and the advice system for another five years?
Baroness Chisholm of Owlpen: Indeed, £146 million was allocated to support local authorities to prepare for implementation of the cap in April next year. It is likely that money spent to date on preparing for the reforms will have wider benefits in terms of improving local authorities’ systems and their understanding of their self-funding population. This is important because local authorities have a number of population-wide duties under the Care Act 2014, for example, the duty to provide information and advice services to facilitate a vibrant and diverse—
Baroness Chisholm of Owlpen: It is not too long. It is difficult to answer the question properly without saying something and this is very important. We are going to support high-quality care for the benefit of the whole local population.
Lord Campbell-Savours (Lab): My Lords—
Lord Foulkes of Cumnock (Lab): My Lords,—
Baroness Brinton (LD): My Lords—
The Lord Privy Seal (Baroness Stowell of Beeston): My Lords, we have not heard from the Liberal Democrats. It is their turn.
Baroness Brinton: My Lords, as questioners have illustrated to your Lordships’ House, we face a perfect storm with health and social care. There was cross-party agreement in advance of the 2010 election that the cap was vital. We have delayed discharges and local authorities facing a real crisis. Will the Government take action in the next few weeks to remedy this problem, of which the cap is an important part?
Baroness Chisholm of Owlpen: As I said, means-tested financial support remains available for those who cannot afford to pay for care to meet their eligible needs, but the introduction of the cap on care costs system will be the biggest reform to how care is paid for since 1948 and we must ensure that the new system works from day one. Local authorities and partners have consistently warned us of the risks of implementing this too quickly. We will therefore not be complacent and will work hard to make sure that there is additional time to ensure that everyone is ready to introduce the new system and that people can understand what it will mean for them.
Business of the House
Motion on Standing Orders
3.08 pm
Moved by Baroness Stowell of Beeston
That Standing Order 40(1) (Arrangement of the Order Paper) be dispensed with on Tuesday 13 October to enable the second reading of the European Union Referendum Bill to be taken before oral questions.
Intelligence and Security Committee of Parliament
Membership Motion
3.08 pm
Moved by Baroness Stowell of Beeston
That this House approves the nomination of Lord Janvrin and the Marquess of Lothian as members of the Intelligence and Security Committee of Parliament.
The Lord Privy Seal (Baroness Stowell of Beeston) (Con): I beg to move the Motion standing in my name on the Order Paper.
Lord Harris of Haringey (Lab): My Lords, the Intelligence and Security Committee is an extremely important committee and is made up of Members of both Houses of Parliament. Perhaps the Lord Privy Seal can correct me if I am wrong, but my understanding is that it is funded by both Houses of Parliament, yet this House, which I think contributes a very significant proportion of the funding—it would be helpful if the Lord Privy Seal told us what proportion it funds—has only two of the committee’s members. Will the noble Baroness explain the rationale for that? Will she tell us what recommendations or representations she made to the Prime Minister about the Lords representation on this important committee?
Lord Campbell-Savours (Lab): My Lords, I should like to clarify the position a little more. I understand that the Government intended that the costs should be shared between the two Houses but, because the Government could not find accommodation in the Commons or the Lords for the ISC to sit, it was decided not to go ahead with that arrangement, and now the Government themselves fund the committee’s expenditure. Following upon the original recommendation, though, we were told that serious discussions were going on about the need to increase the Lords representation, perhaps to four members but at least to three. What has happened to those discussions? If they have been derailed, could they now be put back on the agenda?
Lord Foulkes of Cumnock (Lab): My Lords, we have had very little notice of this Motion. We should take some time to discuss it because, particularly now, this is a matter of great importance. Until 2010 the House of Lords had only one representative on the Intelligence and Security Committee, and in the four years until 2010 I was that Member. Some of us felt that that one Member was not enough. We lobbied hard to ensure that the number of Members from the Lords should be increased, at least to two, to ensure that there was an opposition Member as well as a government Member on the committee, and that was agreed. That is why we were very surprised in 2010 when the then Leader of the House moved that the representatives should be the noble Marquess, Lord Lothian, and the noble Lord, Lord Butler—with no disrespect to either of them. We accepted that and did not create a fuss on that occasion because we expected that account would be taken of the need to have an opposition representative the next time this matter was considered.
That is why I am very surprised that the noble Baroness the Leader of the House, on behalf of the Government, has come forward again not with an opposition Member but with another Cross-Bencher. With no disrespect to either the noble Marquess, whom I have known for many years, or the noble Lord, Lord Janvrin, who served with distinction as secretary to Her Majesty the Queen for a number of years, neither of them could be said to be the most radical, probing person on this issue. Given recent events, the Intelligence and Security Committee is now under intense public, political and media scrutiny, and that is not going to decrease. That is why I think—with
no disrespect, as I say, to either the noble Lord or the noble Marquess—that this matter should be taken away and considered again.
As I understand it, there has been no proper consideration with either of the opposition parties— the Liberal Democrats or ourselves—and now the Government have come forward with two names. With respect to the noble Baroness the Leader of the House, she—and indeed the Government, the Chief Whip, whom I know very well, and the whole Conservative Party—would gain a great deal if they accepted that this was a genuine and sincere matter and had another look at it. I hope she will agree to take it away and look at it again.
Lord Hamilton of Epsom (Con): Following the intervention by the noble Lord, Lord Foulkes, surely it is very important that these appointments be hurried through as quickly as possible, because if there is any delay the new leader of the Labour Party will have a great input into who stands on that committee.
Lord Harris of Haringey: My Lords, it is because we on these Benches take the security of the nation so seriously that these points have been raised by Labour Members today.
Baroness Stowell of Beeston: My Lords, the noble Lord, Lord Foulkes, is right to say that until the beginning of the previous Parliament in 2010 there was only one Member of your Lordships’ House on the Intelligence and Security Committee. It was David Cameron, as Prime Minister, who thought at the start of the previous Parliament that it was right to extend that to two Members of your Lordships’ House.
When it comes to the breakdown of the ISC’s membership, it is worth me making two points to noble Lords. The first is that the ISC is not a Joint Committee of both Houses in the conventional sense; it is established by statute. It has nine places on it. As is customary, the Prime Minister consulted the Leader of the Opposition in the summer and—again, as is customary—it was the Leader of Her Majesty’s Opposition who decided how she, as acting leader, wished to allocate the three places that had been provided for the main opposition party.
Lord Foulkes of Cumnock: I wonder whether the noble Baroness—
Baroness Stowell of Beeston: Perhaps the noble Lord will allow me to finish. The Leader of the Opposition has decided who will fill the three places that will represent the Labour Party on the committee, and they will be Members of the other place.
We feel it is right to follow the custom that has been in place for a long time, whereby one Member from the governing party in this House and one Member from the independent Cross Benches are on the committee. I am very pleased that the noble Lord, Lord Janvrin, responded to the Prime Minister’s invitation and accepted his nomination, and I believe that the noble Lord, along with my noble friend Lord Lothian, will do an exceptional job representing this House on the very important Intelligence and Security Committee.
In response to the points raised about funding and accommodation, I do not have to hand information on the respective contribution that the two Houses make to funding, but I will be very happy to provide a letter in reply to that question and place it in the Library. However, I assure all noble Lords that no matter, whether it is about funding or about accommodation, has played any part whatever in the important nominations that the Prime Minister has made. I know full well that the noble Lord, Lord Janvrin, and my noble friend Lord Lothian will do an exceptional job and that they will take very seriously the responsibilities of sitting on this important committee.
Charities (Protection and Social Investment) Bill [HL]
Third Reading
3.17 pm
1: After Clause 14, insert the following new Clause—
“Conduct of charities: regulation of fundraising
(1) All charities raising funds of over £1 million per year must be members of the Fundraising Standards Board and abide by the Code of Fundraising Practice.
(2) In section 64A of the Charities Act 1992, as inserted by section 69 of the Charities Act 2006 (reserve power to control fund-raising by charitable institutions)—
(a) in the title omit “Reserve”;
(b) in subsection (1) for “may” substitute “must”.”
Baroness Hayter of Kentish Town (Lab): My Lords, we come to the Third Reading of the charities Bill. I will also speak effectively to Amendment 2, which is clearly related to Amendment 1. Amendment 1 stands in my name and that of my noble friend Lord Watson, and it deals with an issue which is as yet unresolved—namely, the appropriate way of regulating fundraising by charities from individual donors.
By way of background, although chugging and cold calling have long been issues of frequent complaint, it was the very sad case of the death of Olive Cooke, herself a lifelong donor and a volunteer poppy seller, which brought to light the unacceptable behaviour of a number of the big fundraising charities and the inadequacy of the current scheme of self-regulation. Although it was we who first raised the issue here, since then there has been widespread acceptance by the Government, the charities and even the so-called regulatory bodies—the code-setting institute and the Fundraising Standards Board—as well as by the Commons Public Administration and Constitutional Affairs Committee, which is carrying out its own inquiry, that the self-regulatory system failed. It failed to maintain appropriate standards, it let down donors and let down the wider public—which brings us to today.
When similar, indeed identical, amendments were tabled on Report, following Committee in the Commons, the Government accepted the need for change and tabled amendments of their own. However, at that time, they were not fully convinced of our two proposals—first, that membership of the current voluntary membership body, the FRSB, and adherence to the appropriate code should be mandatory; and, secondly, that the Charity Commission’s reserve powers on fundraising should be activated.
However, given that the Government accepted that we had not reached a final position on this and that further amendments might be required, the Government asked Sir Stuart Etherington, chief executive of the NCVO, to chair a group, which includes the noble Lord, Lord Wallace of Saltaire. I believe that Salts Mills in Saltaire was the venue for some of the wonderful photography in the BBC’s “An Inspector Calls”, broadcast last night. The committee also comprises the noble Lord, Lord Leigh of Hurley, and my noble friend Lady Pitkeathley, and was set up to consider whether further change might be needed and to report back to the Government. Regrettably, we find ourselves in the slightly odd position of having Third Reading this afternoon, just days before that committee is to report. This is, therefore, very much work in progress, and we will be sending the Bill to the other place a bit unfinished.
I know that the Minister is not behind this timetabling. I think, like me, that he would like to have this issue properly debated and decided upon here, because I know that he is genuine in wanting a robust system in place. If I was suspicious—and I never am—I would think that the Government were wanting to seize the initiative themselves, make a good announcement from the platform at the Tory party conference and take the credit. If so, I will cheer them on, given that we are not seeking change in order to get the credit but to make sure that we have the right solution.
However, it is clear that we do not yet know the best way forward, although I think that everyone accepts, including the big charities and the new chair of the Fundraising Standards Board, who appeared before Bernard Jenkin’s committee, that membership of the board must become compulsory and that the board, which should be independent of the charities it regulates, must in some way have more power than naming and shaming, which is open to it now. There is also general agreement that the weak and unsatisfactory fundraisers’ code must be beefed up. Furthermore, it seems obvious that such powers are bound to entail some role for the Charity Commission, either via a portal, whereby the standards board can report misbehaviour to the commission for subsequent investigation and statutory action, or via such a board being commissioned, licensed or authorised by the Charity Commission, such that there is a degree of statutory oversight to ensure independence and the board would have to satisfy the commission that the code and its procedures were robust and fit for purpose, and will work independently of its regulated community.
There is no doubt that the key players accept the thrust of this, although we regret that some of the charities and perhaps the Institute of Fundraising itself have not quite accepted the independence that a new system
requires. Their letter to the
Sunday Times
was outwith any discussion with the Charity Commission or ourselves, which suggests that they want to hold on to a self-regulatory model, which has failed the public.
We are not wedded to any particular model, provided that it is independent and effective in order to enable complaints to be heard, and drives up standards. We are clear that such changes need to happen. We are happy to await the recommendation of the Etherington committee, albeit we wish that the timetable was different. The amendment therefore is to make it clear that the Bill as its stands, and as it will go to the Commons, is not yet adequate. The amendment is to allow the House also to hear from the Government how far their thinking has progressed over the summer. I beg to move.
Lord Wallace of Saltaire (LD): My Lords, I should admit that I spent the weekend in Yorkshire, where, to my surprise, my neighbours do not hate people outside Yorkshire and nor do they in fact hate each other. We had a very pleasant weekend. I should also admit that, some months ago, I enjoyed watching the filming of that part of “An Inspector Calls” in our very beautiful village.
We are concerned here with the future of charities. I have found it very constructive to be involved in the thorough Committee and Report stages that we have had on this important Bill. I think we all recognise that as government spending shrinks in the next three or four years, charities will have to play a more important part in looking after a range of good causes and disadvantaged people across our country. That means that the importance we attach to the regulation of charities—the subject of this amendment—is something that requires continuing attention. It also requires active support for philanthropy, and I trust that the Government will pay active attention to encouraging visible philanthropy. I was glad to see the Financial Timeshighlighting this last week.
Having been involved in the committee to which the noble Baroness referred, which will present its report to the Government shortly, I am slightly more sceptical about standards across the whole universe of charities than I was before. Clearly, there is need for tighter and more visible regulation. A number of charitable trustees have not understood how active and responsible their role should be, and these matters need to be addressed.
There is a continuing role for this House in providing oversight to the charitable sector. Perhaps we should consider, in future years, whether a sessional committee of this House might look at some aspects of the charitable sector. As we saw in Committee and on Report, there is some very valuable expertise in this House.
I think that all of us here accept that charities are not comparable to commercial enterprises, as I and others have heard it suggested on one or two occasions. Charities have a privileged status both in legal and taxation terms. The standards of behaviour that we rightly expect of them reflect that privileged status. These high standards should apply to the whole diverse field of charities: to the development charities, as well as to private schools; to libertarian think tanks, as well as to medical charities. We are entitled to expect that their trustees enforce that.
As a backstop, we need to consider what level of regulation is enforced and implemented and how that regulation is organised. We will indeed be reporting on that. I have some sympathy with the noble Baroness when she says that the role of the Charity Commission also needs to be re-examined as a backstop to whatever formal regulation the sector itself provides.
Having said that, I trust that when our report is presented there will be an opportunity to debate it, and certainly, when the Bill comes back from the Commons, there will be another opportunity to make sure that we have moved matters forward. I merely emphasise again that the charity sector is extremely important to our society and to aspects of our economy. It deserves, therefore, to be fully regulated and as transparent as possible.
Lord Leigh of Hurley (Con): My Lords, I declare my interests in charities as listed in the register of interests. I was going to declare my interest in the fundraising regulation review panel, but I am grateful to the noble Baroness, Lady Hayter, for doing it for me.
As she says, we are not yet in a position to present our report. On 10 July, Minister Rob Wilson rang me to ask us to start this report. That was an interesting call because, on 9 July, the Prime Minister had thanked me for accepting. But it shows that it is being taken seriously at a very high level. We will have an appropriate moment to thank Sir Stuart Etherington and Elizabeth Chamberlain of NCVO and Susann Hering from the Cabinet Office for the report, which we hope will be published extremely soon. If it is to be published at the Conservative Party conference—I do not think that is the plan—I will personally welcome the noble Baroness, Lady Hayter, and invite her to sit with me and listen to every word. I hope there will opportunity for further debate in this House when amendments come back here.
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We met during August—it was a most interesting August—a large number of people, not just the IoF and FRSB but pretty much all the chief executives of the top 20 charities and chief executives of much smaller or medium-sized charities. The comment that has been made is correct: there is an element of denial, which is disappointing. The charity sector is quite rightly under massive review. It is astonishing to discover that the charity sector as a whole—within the wider definition of charities— raises some £68 billion a year, and the voluntary donation of the organisations that we recognise as charities, perhaps excluding organisations such as the Arts Council, is some £8 billion a year. I do not think that any of the chief executives in the top 20 earns a salary of less than £100,000, and more than 30 of them earn a salary of £200,000 or more. They therefore have great responsibility to a wider community. As the noble Lord, Lord Wallace of Saltaire, said, they have two inherent, enormous advantages. The first is the favourable tax treatment they receive and the second is the public’s good will and trust. As one of the people we met in our review said to us, charities defy every rule of economics. No economist can understand it, because people are giving money for nothing in return; the rules break down. This special position of trust needs to be protected.
So we have specific ideas which do not involve the compulsion that the amendment suggests. The thrust of our comments is to try to instil in some of the charities the idea that they are no more than a conduit through which donors can make donations to the good cause, and they have to understand that donors are the source. Some of them seem to think that donors are cows that can be milked, but the reverse is true: it is the donors’ money that enables them to do what they want to do, and they should perhaps regard donors a little more as shareholders than as people to be attacked.
It is most appropriate that the Bill talks a lot about the roles and obligations of trustees, but that is not the subject of this amendment, which focuses on the fundraising review and regulations, so I shall restrict my remarks to that. Before I sit down, I congratulate the noble Lord, Lord Bridges of Headley, on taking through his first Bill. His maiden speech was at Second Reading and we are grateful to him for seeing this Bill through.
Baroness Pitkeathley (Lab): My Lords, mindful of the rules at Third Reading, I will say that I have great sympathy with my noble friend’s amendment but share her concern about the sad accident of timing that has befallen us as far as this Bill is concerned. Like her, I would have felt a lot better if the report of which I have been privileged to be part could have been received, with its recommendations understood, so that the Bill could have been sent to the Commons complete and with the work done. Be that as it may, I hope that when the report comes out Members will be satisfied with its recommendations.
In her introduction, my noble friend said that she was looking forward to seeing how the Government’s thinking had changed over the summer. What has been very striking is how the thinking of charities, and perhaps particularly of some charities’ trustees, has been influenced over the summer by focus on the negative aspects of fundraising. If they did not get it before, many of them get it now—and not before time. I hope that the report will be influential and welcomed and will make not only charity staff and chief executives but trustees much more mindful of their responsibilities in regulating their fundraising activities. Too many trustees have been content to take the money without being too fussy about how that fundraising has been achieved.
Wearing another hat, I chair the Professional Standards Authority for Health and Social Care. We have a concept of right-touch—not light-touch—regulation. We say that, amongst other things, right-touch regulation should be proportionate, consistent, transparent and accountable. I hope we can achieve that with charitable fundraising and, most of all, that in the future it will be far more effective.
Lord Moynihan (Con): My Lords, in the context of the regulation of funding and the regulatory framework for charities, I have a brief question for my noble friend of which I have given him notice. On Report, my noble friend gave a number of commitments to the noble Lord, Lord Wallace of Saltaire, myself and
the whole House on the question of public benefit. A lot of work has been done on this during the summer. He said that the Charity Commission would issue new guidance on public benefit and running a charity, that it would do further work on public benefit reporting guidance, that the ISC was going to provide guidance, that the Charity Commission would undertake a 12-month research programme and the ISC would launch a website this autumn. All of that would then be subject to a debate a year on, when the House could see how much progress was being made.
It is appropriate to mention to the House that a lot of work has been done. I could not be more grateful personally, and all those interested in the subject will also be grateful to the ISC and the Charity Commission for a very good start. We hope that, as the Opposition Front Benchers made clear during the latter stages of the debate, the website will be proactive regarding the facilities and engagement with local communities and be a point of contact—an effective method of linking with their local communities schools with charitable status and outstanding facilities.
I am certain that noble Lords in all parts of the House will continue to push for change not just in the sports world but in the arts world, and for engagement between schools that are endowed with superb facilities, excellent teachers and coaches, and the wider community. I would therefore be grateful if the Minister took this opportunity to update the House on the work undertaken during the summer and join me in offering congratulations on the good start, although there is clearly a long road to travel before we achieve the sort of developments that are essential to meet the mood expressed in the House in a number of previous debates. We must ensure that we have the material necessary to have a full debate in a year’s time.
Baroness Barker (LD): My Lords, it has been a pretty miserable summer for the charitable sector and it has not been a great summer for the Charity Commission either. It is in the nature of being a charity to go through periods of being tested, and good charities come out the other side a lot stronger. One can but hope that that will happen as a result of what has transpired over the past few months.
I am not a member of this august committee—I never made it to the shortlist—but I had the great privilege of attending one of its sessions. It was really interesting—one of the most interesting breakfast discussions that I have had for a very long time. While it was absolutely true, as the noble Lord, Lord Leigh of Hurley, said—he was also present on that occasion—that some people still did not quite get it, as the noble Baroness, Lady Pitkeathley, said, a lot of people in the charitable world now absolutely understand that they cannot continue as before and that things must change.
I applaud the amendment moved by the noble Baroness, Lady Hayter, as it is keeping the pressure up on the issue, but I think that it is premature in terms of process. What was most interesting over the summer was the number of people who wanted to chat to me about the ongoing issues. Time and again, people within the charitable sector talked not just about the
severe economic pressures but their wish that that sector could be better than the commercial sector and better regulated than the private sector.
I hope that the report from Sir Stuart Etherington’s committee is hard hitting, not ambiguous in any way and issues a real challenge to charities. I am mindful that charities have to continue to raise funds and that people want to continue to donate to them. Although the reputation of individual charities has taken a battering over the summer, they are still among the most efficient and effective organisations tackling some of the biggest problems in our society.
The Charity Commission has not covered itself in glory this summer either, and I want to think long and hard about what responsibilities were given to it and the reserve powers to oversee fundraising. Charities know about the lives of vulnerable people much better than anybody else, and I want to give them the chance to come forward with a regulatory system that is better than the private sector’s.
I, too, add my congratulations to the Minister, who has conducted himself throughout our proceedings in the most exemplary way. He has been extremely good to work with and I thank him very much. In saying that, I do not want him to accept the amendment moved by the noble Baroness, Lady Hayter, and I ask him to ensure that, when the Bill returns from the Commons, we are given sufficient time, through the usual channels, to pay detailed attention to these matters.
Lord Low of Dalston (CB): My Lords, I refer to my interests, which are declared in the register: I am vice-president of the RNIB and have had a long-standing involvement in the charity sector; and, most recently, I have been asked to chair a commission by ACEVO— the Association of Chief Executives of Voluntary Organisations—on better charity regulation.
I have not taken a large part in the proceedings on this Bill because I felt that its provisions were pretty uncontroversial. Indeed, that has emerged from the debates as the Bill has gone through its various stages. It has been discussed in matters of detail but the proposals have been broadly—indeed, widely—welcomed. I, too, pay tribute to the Minister for how he has conducted the debates on the Bill. He was kind enough to consult me at an early stage to take my views about the Bill. I appreciated that very much, and I appreciate how he has conducted the Bill from the point of view of the Government.
I was not planning to speak today at Third Reading but, listening to the debate, as I have been, I am prompted to make just one remark. It is perfectly true that charities have not had a very good summer, particularly on fundraising, but we have to be careful of tarring all charities with the same brush. I am sure that noble Lords have not intended to do that, but we need to be aware of it—I am sure that Sir Stuart Etherington’s committee will be. The charities sector reflects a good deal of diversity. It is important that we register the point that, as well as the bad practice that has been exposed, there is still quite a lot of good practice among charities. It is important that we retain a sense of perspective in that light.
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Baroness Young of Old Scone (Lab): My Lords, I am very grateful that the noble Lord, Lord Low, said what he did. I declare my interest as a former charity chief executive and having had a connection with the charity sector for many years; and as a regulator on four separate occasions, though not in the charity sector, I can speak on regulation with some insight.
There has been a bit of a witch-hunt this summer. I am not saying that charities are getting it absolutely right, but there has been a huge focus on those charities that, from time to time, were getting it wrong, and on the admitted gross inadequacies of the Fundraising Standards Board. I do not quibble that we need an independent and effective regulator, but I hope that we are not going to be dragooned by the witch-hunt that the Daily Mail has led in quite an extreme fashion, to the point where charity fundraisers are now being followed around in the streets, in public places and in meetings of charitable donors and beneficiaries, just in case something can be picked up that can be used by the newspaper.
We have also had a bit of a knee-jerk reaction from some of the other players. The Information Commissioner is steadily redefining his position on data protection issues in charities, to the point where a charity now cannot phone a volunteer, who may have volunteered for that charity for many years, unless there is express permission in place that the charity may phone them. If they have signed up to the telephone preference scheme that would also prevent the charity from phoning.
We are in the position where some of the interpretation of the existing regulation is becoming incredibly counterproductive, to the point where my concern is that charities that are trying hard, that had good codes of practice, that have trustees who are interested and that enforce their rules with the agencies that work with them, are now being penalised. That makes their business not just of raising money, but of talking to their donors, who in many cases are also beneficiaries, more difficult.
I cannot support the amendments in the name of my noble friend Lady Hayter. The Fundraising Standards Board is so unfit for purpose that when the Government or the charitable sector make a decision following the Etherington review, I very seriously advise that they do not call it the Fundraising Standards Board, but that whatever new regulatory function comes forward is called some entirely new name. I would also be extremely nervous about enhancing the role of the Charity Commission in this area. I do not think, in the 45 years that I have been connected with charities, that I have ever seen a Charity Commission that feels more hostile to the sector that it undoubtedly is regulating, but which it is also there to promote and enhance. I believe that the Charity Commission needs to examine its soul on how it is currently behaving and how it has done for the last year.
I am sure that the Etherington review will talk a huge amount of sense. The noble Lord, Lord Wallace, and the noble Baroness, Lady Pitkeathley, both have in-depth knowledge of what they are talking about and are people of huge stature. I hope that whatever emerges from the Etherington review can go forward
on a voluntary rather than a statutory basis. I believe that charities are very willing to look at how the public can be reassured. However, we need to make sure that all these changes, and all the anxiety that has been evinced over the summer, do not result in our lurching to a position where charities incur considerable costs in ensuring compliance with a statutory regulatory regime. Right regulation may not be light regulation, and therefore may involve considerable compliance costs. The one thing we do want to make sure is that charities are able to carry out the huge amount of work that they do for the public good in the best, most effective and publicly acceptable way, and in a way that has least dead-weight regulatory cost, because that is in the interests of the beneficiaries we all serve.
Lord Lexden (Con): My Lords, as a former general secretary of the Independent Schools Council, I wish to add to the comments of my noble friend Lord Moynihan to underline the seriousness with which the council takes the obligations and undertakings that it has given during our debates, and to make clear that it looks forward to remaining in touch with those Members who take an interest in its affairs as it seeks to build up the not inconsiderable partnerships that it already has with state schools and local communities to the benefit of all three participating parties.
Baroness Chalker of Wallasey (Con): My Lords, I have read the proceedings on the Bill in earlier sittings of your Lordships’ House. I was not able to be present because, as many noble Lords will know, I have responsibilities in Africa connected with many of the charities which fall into the categories we are discussing. I support what the noble Baroness, Lady Young of Old Scone, has just said. The interactions between certain charities and the Charity Commission of late reflect a sad situation. I believe that Sir Stuart Etherington’s committee will give us very valuable advice. I realise that it cannot report before we finish our discussion on the Bill. However, it must be very clear that future regulation has to be very transparent because there have been too many occasions when certainly I have wondered at the meaning behind the work of certain charities. Therefore, we need to have clear guidance determining charities’ declarations of the management of their organisations. Many of them are now so large that they require much more financial supervision than they have at present. I am certain that the committee will respond on that basis.
I will say no more at present but I, too, emphasise that it is important to have a further debate in the months ahead when the Bill comes back from another place. I very much hope that I can arrange to be here rather than in Africa when that happens.
The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con): My Lords, I thank all those who have just spoken and those who said some very kind words about me. I would like to put on record my thanks, and those of the Government, for the significant contribution to the fundraising review that my noble friend Lord Leigh of Hurley, the noble Baroness, Lady Pitkeathley, and the noble Lord, Lord Wallace
of Saltaire, have made, as well as our thanks to Sir Stuart Etherington himself. They have given up their time and expertise over the summer to help develop a new approach to tackling the problems of fundraising that have been exposed in the media in recent months.
I fully accept that, as a number of noble Lords have said, the timing of the debate today is somewhat unfortunate, given that Sir Stuart is not due to report until later this month. However, as I am sure your Lordships understand, this was agreed through the usual channels and needs to fit in with the competing demands of other parliamentary business.
My honourable friend in the other place, the Minister for Civil Society, Rob Wilson, has engaged over the summer with the noble Baroness, Baroness Hayter, and other noble Lords who have been supporting Sir Stuart Etherington’s review. He has committed to continue that engagement when he pilots the Bill through the other place. I am very keen that your Lordships continue to debate and discuss these issues while the Bill is in the other place. My door is open to anyone who has been unable to express views as the Bill progressed up to this point or who has thoughts on the Etherington review’s findings when they are published. We will also, of course, have an opportunity for further debate in this House on any amendments that may be made to the Bill. I would entirely support such measures, as I know that this House has an immense amount of expertise on the matters that we are discussing.
Before responding to the points raised in this afternoon’s debate, and looking at the specifics of the amendment, it is worth reminding ourselves, as a number of speakers have, that the vast majority of charity fundraising is undertaken responsibly. The noble Baronesses, Lady Barker and Lady Young, made that point, and I entirely agree. It is the actions of a minority of charities, albeit high-profile ones, and in relation to particular fundraising methods, that have damaged public trust and confidence. Furthermore, charities need to ask the public for donations in order to carry out their vital work. In addressing the poor fundraising practices of the few, it is important to keep those points in mind and not to overburden the majority of charities, particularly small charities, whose fundraising activities are not at fault. As I said before while debating other points relevant to the Bill, it is absolutely critical that we get this balance right and keep a sense of proportion in what we may do.
One point on which I think there is now broad agreement is that the current system is too complex and has failed to deliver the standards that the public and Parliament expect. I owe a nod to my noble friend Lord Hodgson of Astley Abbotts, who got this spot on in his 2012 charity law review when he said:
“Potential donors are currently faced with a confused landscape, with unnecessary duplication or division of functions … To date the sector has tended to dance around these issues”.
It would appear that we are only now catching up with him. The current system has to change if we are to meet one of the overriding objectives of the Bill: to maintain and strengthen public trust and confidence
in charities. The exam question posed to Sir Stuart Etherington and his review earlier this summer was: what should those changes be?
We have acted with the amendments to the Bill on Report, which will require charity trustees to take proper responsibility for their charity’s fundraising and, in larger charities, to be more transparent and accountable about their fundraising activities in their annual reports. These changes will help, but Sir Stuart’s review will provide the blueprint for the future of self-regulation.
I am sorry to disappoint noble Lords, but I do not want to pre-empt the outcome of Sir Stuart’s fundraising review—and if the noble Baroness thinks that it is going to be published at the Conservative Party conference, I will make sure that I accompany her there. I know that several of the largest charities have already committed to making changes and supporting the recommendations of the fundraising review. As the noble Baroness, Lady Pitkeathley, said, this change of heart is about time, too. It is to be welcomed, as the whole charity fundraising sector will need to get behind the recommendations of the review and swiftly implement the necessary changes. As I said on Report, the response of sector leaders to Sir Stuart’s recommendations will in part answer the question of whether fundraisers and the charity trustees who oversee them accept the need for and fully embrace change.
We take the view that charities should have the opportunity to redeem themselves and that they are capable of putting their own house in order and making self-regulation work so as to restore and protect the public trust and confidence on which they depend, as well as to show, as the noble Lord, Lord Wallace, said, that they are fulfilling the responsibilities that charitable status confers.
Some have suggested that we should legislate to make charities submit to self-regulation. That would effectively be statutory regulation, not self-regulation. We will need to see what Sir Stuart recommends, but we do not want to legislate for a new bureaucracy. In particular, we do not want to entangle with red tape the vast majority of small charities which have not had anything to do with the unacceptable practices reported in the media. Our preference therefore remains self-regulation, not a government-regulated solution.
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This brings me to Amendment 1, about which let me say this in the spirit, I hope, of constructive criticism. The first part of the amendment would mandate membership of the FRSB for charities raising over £1 million per year and would require fundraising charities to comply with standards set by the code of practice of the Institute of Fundraising—a body other than Parliament or the Minister. There would, therefore, be a real risk that we would have a delegation of power without proper accountability. The second part of the amendment would require the Minister to exercise the power to make regulations in connection with regulating charity fundraising. These would regulate standards that fundraisers would have to meet. It is unclear how this would work alongside the sector- owned Code of Fundraising Practice. If these powers
were exercised they would basically mean statutory regulation, which as I have said is not the Government’s preference.
As I said earlier, my honourable friend the Minister for Civil Society has committed to engage with noble Lords once we have seen Sir Stuart Etherington’s review and as the Bill proceeds through the other place. I, too, welcome the recent letter from the 17 charity executives to the Sunday Times. It is a good sign of progress, but we will need charities’ actions to live up to their words in the months ahead, as they strengthen self-regulation in a way that the public and Parliament expect. I hope that in light of the debate this afternoon and the commitment for continued engagement, the noble Baroness will feel able to withdraw her amendment.
Before I sit down, I turn briefly to the point raised by my noble friend Lord Moynihan about the issues raised on Report regarding the charitable status of independent schools. I, too, thank the Charity Commission and the independent schools which have spent a lot of time working together during the summer to take forward the commitments from Report. I met them both last week and I know that they have been engaging with noble Lords on the work they are doing to promote sports, music and arts partnerships between the independent and state sectors, as my noble friend Lord Lexden said, and that they are committed to continuing that engagement.
I can tell the House that next month the Charity Commission will publish revised guidance which sets out illustrative examples of the ways in which an independent charitable school can carry out its purposes for the public benefit and a revised sample trustees’ annual report for a fee-charging charitable independent school. The Independent Schools Council has committed to raising awareness among its members of this new guidance and examples. I repeat that I hope that noble Lords with an interest will continue to engage with the Charity Commission and the ISC as they continue this work over the coming months and years, especially on the other two items that we also agreed on Report, which I know are proceeding to be dealt with.
Baroness Hayter of Kentish Town: My Lords, that turned out to be a more educative and perhaps more interesting debate than I had hoped. I join the Minister in thanking everyone who has contributed. I apologise to the House that I forgot at the beginning to declare that I, too, am a trustee of a couple of charitable trusts.
I start with the same emphasis made by the noble Lord, Lord Low, my noble friend Lady Young and others on not tarring all charities with the same brush, and on the incredible importance of charitable work. I think that I have spent more of my professional life running charities than anything else, so I am absolutely aware of that. I will make a couple of comments because the follow-on is that, when I was able to raise funds, it was very much because of the public’s good will and trust, in the words of the noble Lord, Lord Leigh of Hurley. They trusted not only that we would use their money effectively but that we had the expertise and specialism to look after the sort of clients that we had. We, as the charitable sector, must never lose that.
My noble friend Lady Pitkeathley said that she thought that charities’ thinking had changed over the summer, and if ever your Lordships’ House helped in that, it should take some credit for it. I am perhaps not thinking that they have all got there completely. The noble Baroness, Lady Barker, said that she wanted the Etherington report to be hard-hitting. I do not really know the noble Lord, Lord Leigh, so well but I know the other two Peers and I certainly know Sir Stuart, and I think that I could trust those four not to pull their punches.
I hope that what the Government said is not pre-empting that by appearing to rule out any statutory response. The noble Lord, Lord Wallace of Saltaire, used the word “backstop”, which is close to what I was suggesting. My judgment is that a pure self-regulating system will no longer be acceptable. I absolutely concur with my noble friend Lady Young that the letters FRSB should not be used: it will not be a fundraising standards board, whatever it is. I also doubt whether it will continue as voluntary. When he gave evidence in front of Bernard Jenkin, its new chair, Andrew Hind, seemed to rule out the possibility of it remaining completely voluntary. If we can find something that is a backstop rather than a red-tape regulation, that may be the right way forward. As I said in introducing the amendment, it was to give us the opportunity for this debate; we have an open mind on what is the correct way forward.
I make only one other point, which the noble Lord, Lord Wallace of Saltaire, mentioned, which concerns the role of trustees. The Independent Schools Council seems to have grasped it. I hope that the trustees—if they are called that—of the various schools take that message on board as well and look proactively at what might be done with the state system. When I met the Charity Commission recently, it said that in its research it was going to ask to what extent fee-paying schools ask the local community, “What would be best for you?”, so that it is not just paternalistic giving but real response to needs.
Having said that, before I beg leave to withdraw the amendment and we send this slightly unfinished Bill down the corridor, I take this opportunity to thank the noble Lord, Lord Bridges, who as everyone said, has really played a blinder over all this. It has been a real pleasure to work with him on the Bill. We must also thank the Minister at the other end, who has also met us and been very responsive. I also thank the Bill team, who, as ever, we have worked rather hard, and my noble friend Lord Watson, who joined me on the Front Bench for the first time, I think, and has done an awful lot of the heavy lifting on the Bill. With those thanks, I beg leave to withdraw the amendment.
A privilege amendment was made.
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Bill passed and sent to the Commons.
Energy Bill [HL]
Committee (3rd Day)
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Relevant document: 6th and 7th Reports from the Delegated Powers Committee, 4th Report from the Constitution Committee
Clause 9: Interpretation of Part 2
Debate on whether Clause 59 should stand part of the Bill.
Lord Teverson (LD): My Lords, I have also put my name to this proposal, therefore I will speak on it on behalf of the noble Lord, Lord Whitty, as well as myself.
We come to one of the most important parts of the Bill, which concerns wind power. Although I fully accept there were strong arguments against onshore wind in the Conservative manifesto, that is very regrettable and it is important to have consistency in government policy. One element of that manifesto was that climate change measures and renewables should be at least cost. As I pointed out to the House before, onshore wind costs some £65 per tonne of CO2 saved whereas with offshore—still one of the Government’s favourites; I have no criticism of that—the cost per tonne of CO2 displaced is almost double that at £121. In terms of financial support, onshore wind cost on a ROC basis is about £40 per megawatt hour and offshore is more than double that at some £85. That puts into context this part of the Bill and the two clauses that we start to consider here.
The irony is that in many ways I would welcome this clause because it repatriates planning decisions around certain energy generators—onshore wind above 50 megawatts—back to what many of us see as the democratic base of decision-making, which is local planning. In some ways, that is quite a positive thing. However, the inconsistency and the agenda behind it concern me. It seems that the Government are in favour of this reallocation or repatriation because they want to put greater obstacles in the way of this far more cost-effective and efficient form of energy: onshore wind. Yet in other areas of energy policy, not least fracking—I am not against fracking in principle—the Government try to move things in exactly the opposite direction. Due to the frustrations felt with Lancashire County Council, we have the irony of the Government trying to move decision-making up to the Secretary of State whereas onshore wind, which seems bad in terms of Tory ideology, is moving the other way and back to local authorities. That inconsistency concerns me.
My noble and learned friend Lord Wallace of Tankerness will doubtless come to this on the next clause, but it also means that the outside world, whether that is financial institutions within the UK or worldwide, starts to look at British Government decision-making as being very inconsistent and changeable, in a way that is not necessarily financially correct but comes from a bounce and ricochet of policies. It seems that we have a confusion and inconsistencies in UK energy policy that will deter investment. I know that that will be a continuing theme this afternoon.
I have questions to ask the Minister. First, paragraph 130 on page 18 of the Explanatory Notes says:
“The Government currently expects that applications which have already been made under section 36 of the Electricity Act 1989 but not yet decided when the Bill provision commences, will continue to be considered under that Act”.
However, I understand that we have no detail of how that will be done. Again, we have uncertainty in this area. I would be grateful to hear from the Minister on where we are in that.
Again on detail, the other thing I find difficult about this clause is that even if we accept that this level of planning should come down to local authorities, despite that inconsistency, I understand that it is also the Government’s intention that approvals for onshore wind should be given by primary planning authorities only if they are also in line with agreements on neighbourhood plan areas. Now, no one is a greater fan than I am of the neighbourhood planning brought into being by the coalition Government. That is a great move forward and has been successful in housing and other areas so far.
Perhaps I may have some clarity from the Minister. I know that large areas of England do not yet have neighbourhood plans; in fact, many planning authorities do not have local plans. I should like to understand the detail of how onshore wind farm developers, who can surmount all these other hurdles, deal with this area. Neighbourhood plans must not be in conflict with local plans, so what happens in areas that do not yet have neighbourhood plans? I know it is obviously a DCLG issue, but I would be very pleased if the Minister could write to me and tell me how many neighbourhood plans have been passed and what proportion of the English landscape that covers. Indeed, I would like to know the same for local plans, a number of which are waiting to be agreed by the Secretary of State.
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Here we have a great deal of uncertainty and I would be very grateful if the Minister could give some clarity as to how these approvals can take place and when we will know that will be the case. Having said that, I am very grateful that the Minister has agreed to have a fourth Committee day about a number of these issues, which we will come to particularly in the next clause, which is a major step forward. But the industry is desperate to understand these issues now. I would not want that change to mean that these proposals in detail, under this clause and under Clause 60, should be delayed any longer than is necessary.
The only other thing that struck me today was this. I was, unusually, travelling from Bristol this morning and I read a sentence in the Times that put great disappointment into me as I travelled through Swindon. It said, “Matt Ridley is away”. I thought it was a sad occasion for a Committee day on the Energy Bill because that spice—that grit in the oyster—would not be there. I am pleased to say that, yet again, the Murdoch press has been proved wrong. I look forward to hearing the noble Viscount’s views on this matter as well.
Baroness Young of Old Scone (Lab): My Lords, I support the noble Lord, Lord Teverson, on whether keeping this clause in the Bill is sensible. I share his views entirely about the vagaries of the local planning system. It is true to say—it would be good if the Minister could confirm it at some stage—that not only are there not many neighbourhood plans in existence, but some local authorities have not yet published local plans, far less had them accepted. This provision might be okay in places where they have thought about it, but so many have not and show no signs of doing so.
The National Planning Policy Framework only encourages local planning authorities to consider identifying suitable areas for renewable energy sources and as a result the links in the chain that could fail are rather long. A local authority might not have got to the stage where it had a local plan and therefore there cannot be neighbourhood plans, because they have got to be in a consistent process with the local plan, and there is only a vague nudge in the direction of considering whether suitable areas have been identified for renewable energy. It does not feel like a well-honed local set of circumstances for fostering that vital and, as the noble Lord, Lord Teverson, pointed out, cost-effective way of meeting some very stringent climate change targets and budgets. I have concerns about the removal of the Secretary of State’s consent in this respect.
It is rather strange that we are moving in one direction for fracking consents and in another for onshore wind consents. I simply make that remark without having any belief that there should be one without the other. I must confess that I need to meet my noble friend Lady Worthington to talk about some impacts of fracking other than simply energy generation, carbon reduction and cost.
There is one other issue in respect of the localisation of decision-making in terms of onshore wind, which is how we get some strategic perspective. It is going to be abominably difficult to meet our carbon targets, and we will need every tool in the toolkit to do so. In this clause, there is no mechanism for that happening on a scale larger than a neighbourhood or local plan, yet many of these decisions involving technologies other than onshore wind need to be part of the mix on a local and national basis for these decisions to be looked at on a more strategic basis at a higher level than the local planning authority.
I hope that the Minister will come back to us with answers to some of the questions we are raising about the advisability of removing the Secretary of State’s permission.
Lord Howell of Guildford (Con): My Lords, I, too, am waiting for my noble friend Lord Ridley to give his limpid views on the future of onshore wind and, indeed, on the role of onshore and offshore wind power in the tasks of reducing emissions worldwide and producing a balanced energy policy for the British people. No doubt he will enter into later debates on the next clause which will cover very much the same ground.
I admire the noble Lord, Lord Teverson, for his frank admission of the dilemma he faces. On the one hand, localism is the flavour of the month, the year and the time, and there is a great desire to move from
central administration in every area of policy, certainly including energy, into a greater role for local people, local planning and local authorities, yet he is also worried about inconsistency and fears that in some way the onshore wind cause is being abandoned. I do not see that. If you look at the proposals and the argument in the impact assessments behind the Bill, it is perfectly clear that, first, onshore wind has had a fantastic run over recent years. Some would say it was possibly too big a run given the very considerable economic advantages it brought to many wealthy individuals, gigantic corporations and energy companies and to those who are benefitting in all sorts of other ways from the proceeds and the subsidies, which are, of course, paid for by the consumer. In many cases, we know it is the poor consumer, and it is certainly the competitive consumer in industry. It is clear that subsidies have created this great growth. There must be a limit, as has been set quite clearly by government, and it is going to be exceeded unless the brakes are put on. There is a limit in two senses: first, the sheer weight of subsidy required to maintain the industry until it can get its costs down. I will come to that in a moment because there are real problems in getting costs down.
Secondly, there is managing a balanced grid system which can absorb the intermittency of wind. Every country that has gone into this business in a big way—Denmark is a good example—has found enormous difficulties. That is one reason why Denmark wants to have an interconnector with Britain for electricity. Intermittently there will be no charge at all for the electricity it supplies to us because it is a danger to it and an advantage to us. Spain has found enormous difficulties in going too fast and beyond the limits of engineering and electronic management in organising its grid when the wind blows too hard or too regularly.
Thirdly, there is the intermittency problem, which we all face. One day we will get over it because the storage will come at lower costs and intermittency problems will be much reduced. In the mean time, though, intermittency requires back-up, and back-up requires gas. There are other devices but gas-generated electricity is the area where most people in Europe, certainly in this country, think the gap can be filled. Far from being inconsistent, then, it seems to me utterly consistent that at this point the contribution of onshore wind should be restrained in the ways that are proposed.
As for the emissions angle, we know that we are driven by the European requirements for renewable energy, the formidable target of 15% of our energy from renewable sources by, I think, 2020, and Europe’s target of 40% by 2030. It is quite clear from the present pattern that we are not going to meet that target, and that even if we were to double the onshore wind power we still would not get near it, even if we took into account merely the emissions that emerge from the production of energy. In fact, the emissions that emerge from our capital consumption of energy per head, and from all the vast imports that we suck into this country from countries with much lower standards with very high emission content, have not fallen very much at all; indeed, many would argue that they have increased greatly since 1990.
So the real problem is that the present policy is not actually working. Those of us who are concerned about climate change look at what is happening throughout Europe, notice the contrary tendencies in delivering emission reduction—much more coal burning and a failure of the heavy concentration of wind around the islands, like the one that we are living on—and ask whether we should not begin to think about an entirely new and different policy. I see no inconsistency at all. No doubt we will debate this a little further on in the afternoon in more depth and detail.
I worked very closely with my friends in the Liberal Democrats in the last Government and enjoyed doing so, but I find their stance on this almost impossible to understand. They seem to be favouring a system that does not do much for emissions, distributes money in massive ways from the poor to the rich and apparently produces all kinds of tax advantages that are going to be exploited. This is one irony of the situation: even with this restraint, it looks to me as though we are going to have continuous investment in onshore wind, even without the subsidies, because of the big tax advantages that are built into the system. Should we not be looking at those before we take a position on the question of local powers and so on?
It is a puzzle to me that we do not look in a more balanced way at what is being done. It seems utterly consistent. I do not think that I want to be a supporter of anything that promotes further a system that is unfair to the poorest people and consumers, and which delivers considerable tax advantages to clever people and yet does not do very much at all for emission reduction. It seems to me to be a sad mixture, and it is about time that it was changed.
Baroness Worthington (Lab): My Lords, I am grateful to the noble Lord, Lord Teverson, for introducing this clause stand part debate, and to noble Lords who have contributed to it. I shall make a few comments. As we enter the third day of Committee, I am grateful to the Minister for having agreed to extend the Committee for an extra day. I think that this has arisen because we felt—I have probably made myself fairly clear on this—that the handling of the Bill has been slightly suboptimal, and we are expecting more amendments to come to us before Report. We are very grateful that we now have an opportunity to discuss those in Committee before then.
Today we move on to Part 4, which it is fair to say is the more controversial aspect. People on both sides of the Committee may have different views about the benefits or disbenefits of particular technologies, but we must strive to ensure that we have a good policy and governance regime that will help investors not to waste their money. One of our concerns is that any manifesto, no matter how good the drafters, is prepared relatively hastily and usually without a great deal of thought for the detail. Yet here we are, just months after that manifesto was put into print, hastily enacting some of the statements in it and I think that we are still lacking some of the detail.
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One statement in the Conservative manifesto was that local people should have the final say, it seems, on onshore wind. Within that sentence are hidden quite a
lot of important things. By and large, we have always felt that there needs to be a role for central government—for Westminster—in the setting of energy policy, and that is because it is of national importance. How much we pay for our energy, the sources of our energy and the security of supply of our energy are matters for which the Secretary of State, and indeed the Cabinet and the Prime Minister, should have due regard. However, Clause 59 says that onshore wind is no longer of any national strategic importance and that it should simply be decided at a local level. As the noble Lord, Lord Teverson, very eloquently pointed out, if you compare that with what is happening with fracking and the extraction of gas using unconventional methods, you see that there is a huge gulf in how different technologies are now being treated by this Government. That is regrettable.
Personally, I do not think that any Government should have an a priori view about any technology. There will be good and bad examples of the deployment of those technologies, and of course we always need to keep an eye on how we treat them and subsidise them to try to ensure that there is fair competition. However, it seems that this part of the Bill is becoming something of a crusade to stop one particular aspect of energy policy in its tracks. That is regrettable because it is an industry that is showing growth, it has attracted inward investment, it has generated jobs, it has helped to create benefits for communities, and it has reduced emissions and air quality impacts. Some people say that it is doing quite a lot for the money that we pay for it.
Therefore, we are very sympathetic to the opposition to this clause. It is incumbent on the Government to make it absolutely clear why they feel that a very successful aspect of our energy policy over the last few years is no longer considered to be of national importance. Of course, national means the United Kingdom, not merely England and Wales. This clause concerns England and Wales but we are going to come on to amendments where we discuss this matter in the context of Scotland, and that will raise a whole set of other questions. However, we are looking forward to hearing the Minister’s response on this particular point, and I am grateful to the noble Lords who have contributed to the debate.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change and Wales Office (Lord Bourne of Aberystwyth) (Con): My Lords, perhaps I may deal first with the so-called extra day in Committee and, for the first time, I thank the noble Baroness for getting back to me. I hope she accepts that twice over the weekend I tried to contact her and left a message. It would have been good to hear from her that the situation is fine—only now am I am hearing for the first time that it is.
Baroness Worthington: I communicated through our Whips this morning that it was acceptable. They are in communication with the noble Lord’s Whips. Therefore, I have gone through the normal channels.
Lord Bourne of Aberystwyth: We had corresponded directly earlier but I accept that the situation is fine. Technically it is not another day in Committee, which
I believe is causing the clerks consternation; it is a day for recommital in the Moses Room, and I think that that is understood. I hope that noble Lords will accept that we have endeavoured to accommodate people’s wishes in relation to the subsidies that we will be looking at.
It is very good to see the noble Baroness still in her place. I suspect that she and I will be agreeing much more than she will be agreeing with her leader, and we will perhaps come to that later. We will come on to decarbonisation in relation to nuclear policy. It is important that we have a responsible Opposition because they are an alternative Government, so we will come on to that and it is absolutely right that we do.
Lord Foulkes of Cumnock (Lab): I wonder whether the Minister can tell us how that relates to Clause 59.
Lord Bourne of Aberystwyth: The noble Lord has made a fair point but I am coming on to Clause 59 and will happily do so. Of course it has an effect on energy policy across the board.
I thank noble Lords who have participated in this debate and I will seek to answer their points, which have properly been raised. The issue obviously affects the energy mix that helps us to reach our decarbonisation targets. I should say that there is no way that we will reach them if we do not have new nuclear, so my point certainly is relevant.
Clause 59 seeks to amend Section 36 of the Electricity Act 1989 by removing the obligation to obtain consent from the Secretary of State for Energy and Climate Change to construct, extend or operate an onshore wind farm in England or Wales. To be clear, this requirement relates to new wind farms with a capacity greater than 50 megawatts. Smaller wind farms, including those owned by the community, are already consented by the relevant local planning authority.
The change, alongside further proposals to make secondary legislation amending the Planning Act 2008 and the Electricity Act 1989, will have the combined effect of removing the requirement for planning consent to be obtained from the Secretary of State for the construction of new onshore wind farms. Instead, developers will need to apply for planning permission under the Town and Country Planning Act 1990, where the primary decision-maker is the local planning authority.
The Government were elected with a clear commitment to give local people the final say on whether to have a wind farm in their area. This should not have taken anyone by surprise. These changes help deliver just that, as was stated in our manifesto. This is important. The majority of the population do not live in the vicinity of a wind farm. For those who do, we have seen many examples of local community groups vigorously opposing wind farm developments because of local impacts relating to noise, amenity and visual changes. It is against that background that the proposal appeared in the manifesto. By transferring decisions to the local level, we are putting local communities in the driving seat. Onshore wind farms should get the go-ahead only when local people have said they want them, and where. That said, onshore wind will continue to be
important to help us deliver our renewables targets. It will certainly not disappear and we anticipate that there will be new onshore wind farms—community wind farms and so on.
I turn to some of the specific points raised. The noble Lord, Lord Teverson, mentioned paragraph 130 of the memorandum. It remains the case that all electricity applications are caught by the policy. I believe that all existing Electricity Act 1989 applications have been decided, and the issue should therefore not arise. If I am wrong, I will write to the noble Lord, Lord Teverson, and to the other noble Lords opposite. We will consider this issue soon when the Electricity Act order comes before us.
The noble Lord, Lord Teverson, and the noble Baroness, Lady Young, also raised the issue of planning authority and neighbourhood plans. There is a transitional arrangement for when a valid planning application for a wind energy development has already been submitted to a local planning authority and the development plan does not identify suitable sites. In such instances, local planning authorities can find the proposal acceptable if, following consultation, they are satisfied that it has addressed the planning impacts identified by local communities and therefore has their backing. This is set out in the ministerial Statement made by my right honourable friend the Secretary of State for Communities and Local Government in another place, and I will make sure that it is circulated to noble Lords so that they are aware of it. That should cover the point.
My noble friend Lord Howell made some powerful arguments on onshore wind, the ongoing situation and the potential—or almost certain—overdeployment of onshore wind, even following this action, in terms of both the budget and the plans for onshore wind. Onshore wind is becoming cheaper. My right honourable friend the Secretary of State for Energy and Climate Change has met with some developers who are happy to carry on deploying without the subsidies. I appreciate that we are not being specific about this at the moment, but we anticipate the continuing importance of onshore wind. However, it is important to look at the whole range of renewables, not just onshore wind.
It would be interesting to know the Opposition’s position on fracking. It is legitimate to ask that because the issue has been raised. We are obviously trying to encourage new energy sources in order to reduce costs and increase energy security. However, local communities, across the range, must be fully involved in planning decisions—be it shale or onshore wind—and we proceed on that basis. There should and will be a full public consultation for both. On that basis, I believe that Clause 59 should stand part of the Bill.
Lord Teverson: My Lords, I thank the Minister and everybody else who has taken part in this debate.
First of all, I absolutely agree with the noble Lord, Lord Howell, that where subsidy—whether it be through tax breaks, ROCs or whatever—starts to be excessive, we must cut that back. Indeed, when he was Secretary of State, Ed Davey took a number of very tough decisions around solar and wind energy that did exactly that. None of us, certainly on these Benches, want profiteering from this area. That is not really what we
are getting at in this debate. Clearly, value for money is important; the more that we can make it competitive, the better.
I press the Minister to tell us the challenge there still is to get neighbourhood plans across England, so we can understand; perhaps he will not be able to come back on it now. Whether this mechanism decided on by the Government works or not, I would still be very interested to hear where we are on it. Only by that being effective can even this system, as revised by the Government, really work. I would be pleased to get further feedback on that.
Clearly it is not appropriate to have a vote here, but I am very concerned that we have government policy going in one direction on one form of energy and in completely the opposite direction on another. That means inconsistency and a lack of confidence nationally and internationally in terms of finance. However, based on the Minister’s reply, I withdraw my opposition to the clause.
Clause 60: Onshore wind power: closure of renewables obligation on 31 March 2016
34AA: Clause 60, page 31, line 36, at end insert—
“( ) In section 32LA (1) after “order” insert “subject to subsection (2A)”.
( ) After section 32LA (2) insert—
“(2A) The power to make a renewables obligation closure order applying to Scotland may only be exercised by Scottish Ministers.””
Baroness Worthington: We now pass to the second relatively controversial aspect of this Bill: the decision to close the renewables obligation a year earlier than had been originally legislated for in the Energy Act 2013.
Many of the people involved in the Energy Act 2013 will be aware of discussions that were had at the time when we debated the rights or wrongs of closing the RO. This amendment would return powers to control how the RO was dealt with in its final years to Scottish Ministers. We tabled this amendment to give ourselves an opportunity to state, for the record, that when we were debating the RO closures in the House of Lords—the power to close the RO was introduced by amendment in the House of Lords—it was under quite an unusual set of circumstances. The Minister was not present, so I hope it will be helpful if I give him some context.
Before the Energy Act 2013, Scottish Ministers had full control over the renewables obligation in line with the Scotland Act 1998, which devolved powers to the Scottish Government in respect of supplying electricity from renewable sources. The Energy Act 2013 took back this control through a government amendment tabled in this House, giving the Secretary of State the power to close the RO, including in Scotland. The justification for this change in the law was that it would facilitate a coherent and transparent closure across the UK and a move towards the new contract for a different system. However, that was not without
concerns, and concerns were certainly raised in the other place. Fergus Ewing MSP was particularly vocal in his concern that the way this had been chosen to be dealt with was the stripping of Scottish Ministers’ powers in this area of discretion.
Since then, we were all working on the assumption that it would be an orderly transition from the RO to a new system of support. As recently as January this year, we had a statement from Ministers that there was no intention to review the RO and that it would continue as was planned. Then we saw the manifesto from the Conservative Party. I know that it is stating the obvious, but manifestos are not a document of government; they are a document of a political party. While you can claim that you can use the Salisbury convention, this is a rapid change in policy with significant implications not just for investors in the private sector—and the knock-on effect for all investors who are looking to bring their technologies and their investment to the UK—but particularly for Scotland, where there has been a real need for inward investment and a greater role for the private sector in creating jobs. For that to be so significantly affected by this manifesto commitment is truly regrettable, and I know that the Scottish aspect will be talked about in great detail when the Bill leaves this place and enters the other place.
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The most important thing to remember is that, prior to the Energy Act 2013, the RO was devolved and devolved for good reason: because it was believed that it fitted with our devolution commitments to Scotland. We also have the Smith commission, which needs to be honoured in terms of how we continue to devolve power to Scotland where it is appropriate so that it can by and large make its own decisions about its economic development. We have tabled the amendment because we think that the repatriation of powers to Whitehall would be a controversial move and have a big impact on investor confidence. We look forward to the Minister explaining why he believes that the measure is justifiable. As I have said, this is a probing amendment at this stage, but I think that it is an issue that we will return to at later stages in the Bill. I beg to move.
Lord Foulkes of Cumnock: My Lords, I first say a word of thanks to the noble Lord, Lord Bourne, because I sounded a bit intemperate when I intervened earlier during his speech. I have known him for a while, both for his work in Wales and as a Back-Bencher before he received his well-deserved promotion. He has been one of the most diligent Ministers in keeping Members of all sides in touch with progress. I have had more letters faxed from his office than from anyone previously. It is really helpful and I am grateful to him for it.
My noble friend Lady Worthington has tabled one of the most significant political amendments to this Bill. I know that the noble Lord, Lord Bourne, will listen carefully, but I hope that he will consider all the implications of this measure. I know because I have worked with him that he understands devolution, because
of his Welsh connection having been a Member of the Welsh Assembly, and he will know that there are political implications as far as Scotland is concerned.
As my noble friend said, these powers were repatriated to Westminster under the previous Energy Act on the clear understanding and promise from the Government that there would be no policy implications. It was said that it was just a technical change and that it would not affect any policy decisions. It was accepted by all sides, here and in Holyrood, because of that assurance. The Minister will know—and the noble and learned Lord, Lord Wallace, knows a lot about this—that it is an exceptional thing to repatriate powers. Normally, they are going in the other direction: from here to Holyrood, month in and month out. So it was exceptional and, as I understand it, done without acrimony. But the Government have now used that for an entirely political purpose—a policy purpose—in contradiction and contravention of the promise they made, without any consultation whatever with the Governments of Wales and Scotland. That is why Fergus Ewing MSP, the Energy Minister in Scotland, was understandably very upset. He continues to be annoyed about it.
This action has been taken in bad faith. I see the noble Viscount, Lord Younger, who knows Scotland very well. I remember his father extremely well as a very diligent Secretary of State for Scotland. He would have understood the issue. I hope that the Minister and the Government will consider restoring the powers to the Scottish Parliament and Scottish Government up to 2017 so that decisions within Scotland about onshore wind and ROCs in Scotland should go back to the Scottish Government. That is not a lot to ask and I think the Government are honour bound to consider that in light of the promises they gave when this power was repatriated.
I understand the problems of giving assurances off the cuff and on the spur of the moment, but I hope that the Minister will agree to take this away and consult his colleagues in the department and either accept this amendment or bring forward an appropriate amendment to deal with what is an action taken in very bad faith.
Lord Wallace of Tankerness (LD): My Lords, I welcome the amendments tabled. I thank the noble Lord, Lord Bourne, for indicating that he would be willing to recommit these relevant clauses of the Bill when we have an opportunity to consider the grace period provision that the Government intend to bring forward. That shows a constructive response to the concerns that have been raised.
This is not really an interest to declare but, when I was Minister for Enterprise and Lifelong Learning in the Scottish Executive, as we then called it, I had some responsibility for the renewables obligation. The Labour and Liberal Democrat coalition in Scotland did much to take forward the case for the development of renewable resources in Scotland. To give the figures for Scottish renewables, around three-quarters of United Kingdom’s onshore wind developments are in Scotland. Therefore, that is where the impact of this measure will be most heavily felt. My noble friend Lord Teverson just handed me the Conservative manifesto and there is nothing in the wording on local decision-making to
indicate that the period would be brought forward from April 2017 to April 2016, so I do not consider that this provision of Clause 60 is a manifesto commitment.
Given that the Scottish onshore sector directly employs more than 5,400 people and contributes £9 million to local people in community benefit each year, and that some 70% of people in Scotland support further development in wind and the benefits that it brings, it would be helpful if the Government recognised that there is a particular Scottish dimension to this. Obviously, planning matters are devolved to the Scottish Parliament. Clause 59, which we have just debated, does not apply to Scotland so, to that extent, a distinction has already been made. In terms of this proposal, it would be in the spirit of devolution and constructive working with the Scottish Parliament and the Scottish Government if Scottish Ministers were able to determine that the current situation—as we understood it—will continue to 2017. That would allow the position to be tailor-made for the part of the United Kingdom where there is the greatest concentration of onshore wind power.
My understanding is that the particular provision was devolved to Scottish Ministers by executive order under the Scotland Act 1998 and thus it was executive devolution. That is why, when it came to the 2013 legislation, it was possible legislatively for the renewables obligation to be withdrawn. However, as the noble Lord, Lord Foulkes, said, the understanding was reached on a timetable which has suddenly now been changed. I know that the industry in Scotland is extremely concerned about it and I would therefore encourage the Minister to look at what is being proposed to see if there can be a particularly Scottish carve-out for this. If he does not feel he can go that far—I hope he would be able to—when we come to debate what might be done in terms of grace periods, perhaps provision could be made to enable Scottish Ministers to devise their own grace period provisions, given that there are some very particular issues with regard to the development of onshore wind in Scotland.
Viscount Ridley (Con): My Lords, before coming to the substance of the amendment, perhaps I may express my gratitude to the noble Lord, Lord Teverson, for his surprise that I am in my place and remind him that one should never believe everything one reads in the newspapers. I am only too glad to do my best to provide some grit for his oyster.
Before I go on, I should declare my energy interests as listed in the register, mostly in coal, although the wind industry has not in fact been a particular threat to coal. It has been more of a threat to the gas industry, which in some ways would have been a threat to coal. I urge my noble friend the Minister to stick to the Conservative manifesto commitment on this and not to visit upon Scotland a ruination of its landscape that would not be acceptable in England. I would say to the noble Baroness, Lady Worthington, and the noble Lord, Lord Foulkes, that, yes, there is a difference between the policy of the coalition Government at the start of the year and the manifesto commitment of the Conservative Party, but that is because we had a change of government at the election.
The Government should not be taken in by the wind industry’s assertion that most people do not object to onshore wind. The commonly quoted research on this is often out of date and simplistic. For example, a MORI survey which is used to show that people do not mind or are supportive of wind farms was conducted in 2003, when a 15-turbine wind farm was considered large. Nowadays in Scotland they often comprise more than 30 and sometimes as many as 70 turbines. The land area of Scotland from which turbines are visible has dramatically increased over a short period. According to data from Scottish Natural Heritage, 20% of Scotland was theoretically visually impacted by turbines in 2008, whereas by 2013 it was almost 46%.
Lord Foulkes of Cumnock: The noble Viscount is making a powerful and coherent argument, but does he not agree that all we are suggesting is that this debate, in which he is taking part, would be better conducted in the Scottish Parliament where these matters are being considered? Indeed, it is now looking at energy in its overall, global sense. Would that not be much more appropriate? That is all the amendment is suggesting?
Viscount Ridley: Yes, but the point is that a lot of the subsidy that would go to Scottish wind farms comes from English taxpayers, so English taxpayers do have a role in this. Moreover, we are looking at this as a United Kingdom; I think most of us in this Chamber feel very strongly about that.
The noble and learned Lord, Lord Wallace of Tankerness, mentioned community benefit. It is worth pointing out that community benefit from wind farms is small when compared with other benefits. Supporters of onshore wind argue that community benefits can be substantial, but such claims need to be put into context and their worth assessed against wider factors that are important to communities. The Scottish Borders draft development strategy for 2014-20, which came out in July, compared the value of tourism with the value of current wind farms to the Scottish Borders economy. It found that in 2012 the gross value added of serviced, non-serviced and self-catering accommodation and day visitors was £182 million. In comparison, onshore wind energy contributed around £10.8 million gross value added.
Again, I urge my noble friend not only to stick to his guns on the renewables obligation, but to resist pressure to include the contracts for difference in a different way for Scotland. That would probably affect Scotland and Wales differently from England because of the planning constraints in England. That would beg the ethical question of whether it is acceptable to protect England from further intrusion but allow Scotland’s landscapes to be ruined.
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Lord Bourne of Aberystwyth: My Lords, I thank the noble Baroness, Lady Worthington, for moving the amendment and noble Lords who have participated in the debate.
First, I shall set out the Government’s position and then deal with the points raised by noble Lords. The purpose of the amendment is to enable Scottish Ministers,
rather than the United Kingdom Government, to close the renewables obligation in Scotland in relation to onshore wind.
For background, the legal powers for the Government to close this, as has been rightly said, were included in the Energy Act 2013. The reason for that was to ensure that consumers and the industry had clarity on the closure arrangements associated with the renewables obligation as part of the transition to the contracts for difference regime, and the confidence that closure would take place consistently across Great Britain during this process of transition—a point made by my noble friend Lord Ridley. The energy situation is on a GB basis and it is best that we move on that basis. These reasons still hold firm today.
Furthermore, energy policy across Great Britain is reserved to the United Kingdom Government. We are committed to implementing the recommendations of the Smith agreement, which are forthcoming in the Scotland Bill, and we are doing that throughout that Bill. We are doing it based on the Smith agreement and the agreement within that process of the five political parties of Scotland—the Conservative Party, the Labour Party, the Scottish National Party, the Liberal Democrats and the Greens. However, transferring legal authority to close the renewables obligation in Scotland to Scottish Ministers goes considerably further than this. My department has engaged and will continue to engage with Scottish Ministers and officials, as I do, throughout the development of this policy, in line with the spirit of the Smith agreement.
Finally, this proposed change could prevent the United Kingdom delivering on its ambition to end new subsidies for onshore wind. I appreciate that this is not popular throughout the House but it is, after all, based on a change of Government and on policy enshrined in the manifesto at the other side of a general election. It could also have wider impacts on the management of low carbon spend with possible increases to consumer energy bills.
To deal with the points made on the history of this, I appreciate that they were made absolutely correctly by the noble Baroness, Lady Worthington. I thank the noble Lord, Lord Foulkes, of whom I am a considerable disciple on devolution issues, as he knows. The noble Lord was at his disarming best, which is considerable, and I appreciate what he was saying about the need to keep Scottish Ministers involved. I also thank the noble and learned Lord, Lord Wallace of Tankerness, for his kind words on consultation and what he said about the need to keep the Scottish Government involved. It is common ground between the Scottish Government and the United Kingdom Government that the currently integrated GB-wide energy arrangements are in the interests of everybody, with Scotland being a net beneficiary of that. That is very much at the forefront of our thinking on this issue and it influences our thinking.
I take seriously the points made absolutely correctly by my noble friend Lord Ridley—I am very pleased that he is here today—on the importance of acting on a United Kingdom basis. That is what is behind this amendment. It is certainly not to do down Scotland—far from it. As noble Lords appreciate, this party—as are others here—is very much committed to ensuring that
Scotland gets more than a fair deal within the United Kingdom. That is clearly important. With that, I respectfully ask the noble Baroness if she will withdraw her amendment.
Baroness Worthington: My Lords, I am grateful to the Minister for his response, and for the contributions from other noble Lords in this debate.
This is an issue that will not go away; it will come back and be debated with different amendments. As I said, this is a probing amendment, which is designed to enable us to have this debate. It is a very important debate. I know that the noble Viscount, Lord Ridley, has well-known views on this, but surely it is a matter of some subjectivity whether one considers the landscape to be ruined. Perhaps we should be weighing that against the economy being ruined by destabilising a very important, growing industry in a country that desperately needs inward investment and jobs. Comments were made, but it is the job of government to run the country in a way that tries to enable a good and sound policy environment that people can understand and act on in good faith.
We will spend the rest of the afternoon discussing these clauses—there is plenty to get at—so I will not make some of the points that I will make later, but I will flag in particular that the Minister has talked about a transition. I have sufficient concern that we are transitioning to something very uncertain. We do not know when the next round of CFD auctions will be held. We have seen a departure from the expected schedule already, very soon into the new Government. That will cause considerable concern and we will come to it.
The justification is that this is about an orderly transition. That masks the political nature of these clauses. As my noble friend Lord Foulkes said, this is quite a political amendment and quite a political part of the Bill. I do not think the Government will be able simply to brush this off and say that it is all for the good of the UK. Clearly, we have the Scottish Parliament for a reason. When it comes to these matters, where it has had powers in the past, it seems to go completely against the trend that there should be no concession from the Government on the Scottish Parliament having some say in this, particularly in this case, where the Government have taken the Salisbury convention and stretched it to its maximum. It is true that there is nothing specific in the Government’s manifesto about the sudden alteration of a policy that was discussed at length following a great deal of consultation not that long ago.
On the basis that we will return to this, I am happy to withdraw the amendment at this stage.
Baroness Worthington: In moving Amendment 34B, I shall also speak to Amendments 34C, 34D and 35D in this group on the detail associated with the closure
of the renewables obligation as we see it in the Bill. We have tabled a number of detailed amendments because we have been promised that the Government will bring forward detailed amendments to help to create some level of understanding and detail of how this provision of the early closure will work in practice. It is one thing to write a sentence in a manifesto, but something else to implement it in a way that does not cause great uncertainty or see people who have invested in good faith lose money because of what is essentially a political decision taken by a party that has been given the opportunity to form a Government. Being in government is very different from writing a manifesto, as I have said previously and will no doubt say again.
The amendments are designed to put some detail into this part of the Bill. They relate to the grace period, meaning how we will strictly define in law which projects are deemed to be sufficiently advanced to be allowed to continue under the RO, and the dates by which that will be judged. Amendment 34D would extend the renewables obligation accreditation period to 31 March 2017 for those schemes that submitted a planning application by 18 June 2015—the date on which all this was made public by the Government in their announcement.
Amendment 35D relates to the RO closure and grace period. Proposed new Section 32LD requires the Government to set out the grace period in regulations. This is just a placeholder while we await the Government’s promised amendments, which I hope we will be able to debate after the recess when we have the recommital to Grand Committee. We have gone into detail about what should happen in the event of variations of planning permissions and set out circumstances by which planning permission will be deemed to have been granted where there has not been a clear resolution. Proposed new Section 32LH sets out a means by which the grace period would start only once the clause has commenced.
These opposition amendments are rather detailed due to the absence of detail as yet from the Government. I have further comments to make about the clause which I think we will be given an opportunity to discuss when we discuss whether Clause 60 stand part. Therefore, I will keep my comments on the generality of the clause until then and move Amendment 34B on the grace period. As I say, I do so in the absence of the Government’s own amendments, which we look forward to seeing.
Lord Wallace of Tankerness: My Lords, I am very grateful to the noble Baroness, Lady Worthington, for speaking to these amendments regarding the grace period. We will come on to the principle of what is happening but I think it is recognised that there are important reasons why there should be a grace period, not least because of reasonable expectations that have been raised within the industry. If those are ditched, a stream of litigation could follow in its wake. Obviously, it would have been far preferable for the Government to bring forward their own amendments, although we recognise that that will happen. The Minister has indicated that he will seek a recommittal of some clauses. Can he give us any indication of a timescale of
when the amendments might be tabled? It would be very unfortunate if we got them only some 48 hours or less before we had to consider them in detail.
We know from the impact assessment that has been made available that there has been an engagement exercise with hundreds of industry representatives, developers, investors and supply chain representatives right across Scotland, Wales and England, which concluded on 31 July. I am sure that the issues around the grace period must have featured prominently in those discussions. If the Minister can give us a flavour of the representations the Government have received, that would be very useful.
The comments of the noble Baroness, Lady Worthington, on the opposition amendments were helpful as they indicated some of the things that we can reasonably expect to see in the Government’s amendments when they are brought forward—for example, that the grace period should be extended by an equivalent period of time as between 18 June and Royal Assent where projects have not been able to make a credit commitment prior to Royal Assent in cases where otherwise the project would have been capable of generation by 31 March 2017.
One of the things that the industry finds very difficult to grasp is why the requirement appears to be that planning permission has to be granted rather than sought. I think I am right in saying that in some of the solar cases the requirement was that an application was pending. There is a whole range of reasons why consent may not have been given, many of which are beyond the power of a developer to do anything about. Therefore, it could be somewhat arbitrary to say that a planning application had to have been consented to as delays could be beyond the developer’s control—for example, a rather tardy planning authority could be involved. What is the position if there is an appeal? Clearly, planning permission will not have been granted but an appeal may well be made on very solid grounds and could subsequently be granted.
One of the other issues that has been raised concerns delays to grid connections. Delays are sometimes caused due to aviation concerns coming into play. From my previous incarnation as a Scottish Minister, I know that these were often pertinent reasons that could delay an application. Even where planning permission and a grid connection contract are in place, there may well be delays due to the timing of the connection—for example, where there is a long wait for a significant line reinforcement and upgrade. I have had specific representations on that. I do not think that it would be helpful or proper to air those and name companies on the Floor of the Chamber but I will write to the Minister and I would be grateful if he would respond to the points made in that regard. That is the flavour of issues that we look to the Government to respond to when they bring forward their amendments. In the mean time, we are grateful to the noble Baroness, Lady Worthington, for flagging up these issues.
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Lord Cameron of Dillington (CB): My Lords, I support this group of amendments. I was not sure whether I would speak to this group or in support of the clause
stand part Motion in the next group. I want to make a small but vital point and endorse the point touched on by others about the need for government consistency and clarity as soon as possible.
First, I declare an interest as a farmer and landowner, and also as a trustee of a trust in Scotland that has renewable investments, although no wind farms are involved. I also declare myself someone who would like to see the proper and ordered development of our renewable capabilities in this country.
It seems to me that it does not matter whether you are for or against wind farms, onshore or offshore—like the Government, you may prefer the more expensive and, to my mind, much more risky offshore wind. The point is that if a Conservative Minister can say in January that your investments are safe and that no changes in the rules are proposed, but then six months later the rules have changed, that undermines not only energy investment in this country but all investment. It makes banks run a mile. Say the Treasury had made promises to a car manufacturer to invest in northern England, and the investor spent millions preparing for the project on marketing exercises, planning and costings—I know from my own experience that preparing a project can often account for as much as a quarter of the total cost of a project. What if then the Treasury went and pulled the rug out and changed the rules? There would be a universal outcry—similar to that if a referee changed the rules in the middle of a game of football. To some extent, this is a game—an international game of investment. If we are going to compete economically, we must continue to be seen as a reliable country in which long-term investments are safe.
I admit that the Government’s manifesto commitment on land-based wind farms introduces a mitigating factor, but as the noble and learned Lord, Lord Wallace, pointed out earlier, it is only a peripheral factor to this clause, which is why I am speaking in favour of this group of amendments rather than in the stand part debate. But we must get a firm investment background sooner rather than later, and these amendments bring a degree of consistency back to the table. None the less, it would have been better if the Government had produced their own paper on grace periods, as they promised to do before Committee.
Even if we agree the government proposals on grace periods next month, that may be too late for some projects even if they are eligible at that stage. The trouble is that they are dependent on banks and credit, and banks are naturally cautious and, in my experience, inordinately slow about getting their processes and procedures in place, and even about producing the money. It could be months before these eligible projects get the go-ahead to proceed or to reproceed with their investment.
I will not say any more, but we really must get the rules fixed as soon as possible and then stick to them. That also applies to the basic ground rules for CFDs in the future. Bearing in mind that it takes at least five years to prepare for these projects, bankers and other investors must know with certainty where they stand as opposed to the state of limbo the Government have left them in at the moment. I hope that the Government will be able to respond positively to these amendments and give us some hint of exactly when we are going to hear what their views are.
Lord Foulkes of Cumnock: My Lords, I have just remembered that I should have declared an interest earlier, as I did at Second Reading, in that I am a trustee of the Climate Parliament, a grouping of Members of Parliament from around the world concerned with climate change. While we were discussing this earlier, I got an email inviting me to the annual Scottish Renewables reception on 27 October in Dover House, which David Mundell, the Secretary of State for Scotland, is hosting. That should be a very interesting occasion given our debates today and previously, as well as those we will have subsequently. I am certainly looking forward to it, although I do not know whether David Mundell will be.
There is very little to add, noble Lords will be pleased to hear, to what has been said by my noble friend Lady Worthington, by the noble and learned Lord, Lord Wallace, and, particularly, by the noble Lord, Lord Cameron. I thought his arguments about investment and uncertainty were very powerful indeed. I have had a number of letters—I have no doubt other Members have too—of concern from people who have invested money in this area in good faith and really think that the Government have let them down. The noble Lord, Lord Cameron, put that very well.
I find it peculiar and worrying that the Government have taken so long to come up with any indication about what grace period or arrangements might be agreed. As I think the noble and learned Lord, Lord Wallace, said, I hope that the Minister will give us some indication that we will be told as quickly as possible, preferably well in advance of our sitting in October. I was disappointed to hear that it will be in the Moses Room. I hope that that can be looked at again and that it could take place on the Floor of the House, so that there is proper consideration of it. But wherever it is, I hope that we will know well in advance the proposals that the Government are putting forward and, even more importantly, that the industry and all those involved know of them well in advance. I know that my noble friend Lady Worthington and, I am sure, the Liberal Democrats will make it clear to the industry that we will go along with the Government if we agree with their proposals. That will give some degree of certainty to the industry. As I say, since so many good arguments have been made by the previous speakers, there is no need for me to repeat them.
Baroness Byford (Con): My Lords, perhaps I may make a small contribution. I apologise to other noble Lords that I was not able to be in the Chamber when the first amendment was moved, which is why I did not take part then. We come to an area on which I spoke at Second Reading: my slight concerns about the grace period and not having enough information on it. It would be remiss of me not to follow up on that. I have listened to the whole of the discussions on this issue.
I remind noble Lords that we are not talking about a few pennies here. In fact, at Second Reading the Minister rightly reminded the House of the costs. He said that:
“In 2014, operational onshore wind farms in Great Britain received in the region of £800 million”,
“under the renewables obligation”,
“would expect this to increase to £1.1 billion per year if, as expected, a total of around 11.6 gigawatts of onshore comes forward”.—[
Official Report
, 22/7/15; cols. 1120-1.]
Because of that, and having listened to the various contributions on uncertainty, I would press the Minister to tell us as much as he can about where we are and how we are to proceed. That is the nub of the question. I do not think there was disagreement; perhaps some would like it to continue and be honoured for ever and ever. However, as I said at Second Reading, when new industries are being started, to me, government money is needed to pump-prime them. It is to start things and get them off the ground and once they are up and running, they should be able to come in at a cheaper rate. Looking to long subsidies was therefore not something I favoured.
I certainly hope that the Minister will be able to tell us a little this afternoon about the Government’s plans for the grace periods. The noble and learned Lord, Lord Wallace of Tankerness, said that litigation might follow. I do not know whether the Minister has information on that, because it would be quite worrying. Maybe the noble and learned Lord can help me a little.
Lord Wallace of Tankerness: The point I was making was that if the Government had not done anything about grace periods, litigation might have followed. That is doubtless what has driven the Government to accept that there has to be a grace period.
Baroness Byford: I fully understood what the noble and learned Lord said and I took it on board, because clearly one wants to avoid that if we can. Nobody wants to end up there—not only because of the litigation but because of the delays it incurs, which other noble Lords have spoken to.
At the moment, I have slightly mixed feelings on this. In principle, I am quite supportive of what the Government are trying to do. In considering whether the approach should be different, in that a Scottish Minister should be able to decide, we should note that three out of four of these onshore wind farms are based in Scotland, so three-quarters of that money would be coming from England to support what Scottish Ministers might or might not decide to do. That is another debate we could have, but I hope the Minister can tell us more about the grace periods and when we are to receive more information.
I suspect that, like me, other noble Lords—and the Minister and his department—have found it difficult dealing with the Bill after the Recess in what is not the formal, long period for debate. We deserve greater clarification and, if the Minister cannot give it to us tonight, I hope it will be provided quickly in another of his wonderful letters that have kept us up to date with government thinking.
Lord Bourne of Aberystwyth: My Lords, I thank the noble Baroness, Lady Worthington, for moving the amendment. I hope to explain a bit about the Government’s thinking on this area and then to address the points reasonably raised by noble Lords.
Clause 60 introduces a provision to close the renewables obligation to new onshore wind farms in Great Britain from 1 April 2016—a year earlier than originally planned. There are two key reasons why I believe that that is the right approach. First and foremost, I and the department are committed to delivering the Government’s ambition to end any new subsidies for onshore wind while continuing to combat climate change. I appreciate that that is not something that all political parties or all noble Lords want, but I return to the point that there has been an election. I accept that things were said under the previous Government, but they were a different Government. It may be that the transition is more difficult because they were a coalition Government, but it should not have taken noble Lords entirely by surprise that this Government sought to make a change in this area. Secondly, the Government are committed to keeping domestic energy bills as low as possible.
With that context in mind, let me turn to the amendments. Their purpose is to clarify the terms of the grace period applying to the closure of the renewables obligation to onshore wind, specifically allowing those projects which had applied for planning permission as at 18 June—the date of the policy announcement—to continue to be able to accredit until the original renewables obligation closure date of 31 March 2017. In addition, the amendments would provide further detail about how the grace period would operate in certain planning scenarios and propose extra time for projects that have encountered difficulties in securing financing.