PARLIAMENTARY DEBATES HOUSE OF COMMONS OFFICIAL REPORT GENERAL COMMITTEES

Public Bill Committee

ENERGY BILL [LORDS]

Ninth Sitting Tuesday 21 June 2011 (Morning)

CONTENTS Written evidence reported to the House. CLAUSE 101 agreed to. CLAUSE 102 disagreed to. CLAUSES 103 to 105 agreed to, one with amendments. SCHEDULE 3 agreed to. CLAUSES 106 to 108 agreed to, some with amendments. New clauses under consideration when the Committee adjourned till this day at Four o’clock.

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© Parliamentary Copyright House of Commons 2011 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 355 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 356

The Committee consisted of the following Members:

Chairs: MR DAVID CRAUSBY,†MR EDWARD LEIGH

† Anderson, Mr David (Blaydon) (Lab) † Jones, Graham (Hyndburn) (Lab) † Barker, Gregory (Minister of State, Department of † Lavery, Ian (Wansbeck) (Lab) Energy and Climate Change) † Lucas, Caroline (Brighton, Pavilion) (Green) † Berger, Luciana (Liverpool, Wavertree) (Lab/Co-op) † Munt, Tessa (Wells) (LD) † Brine, Mr Steve (Winchester) (Con) † Perry, Claire (Devizes) (Con) † Freeman, George (Mid Norfolk) (Con) † Vara, Mr Shailesh (North West Cambridgeshire) † Goldsmith, Zac (Richmond Park) (Con) (Con) (Southampton, Test) † Greatrex, Tom (Rutherglen and Hamilton West) † Whitehead, Dr Alan (Lab) † Wright, Simon (Norwich South) (LD) (Lab/Co-op) † Zahawi, Nadhim (Stratford-on-Avon) (Con) † Hendry, Charles (Minister of State, Department of Energy and Climate Change) Alison Groves, Committee Clerk † Irranca-Davies, Huw (Ogmore) (Lab) † James, Margot (Stourbridge) (Con) † attended the Committee 357 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 358

The Minister of State, Department of Energy and Public Bill Committee Climate Change (Charles Hendry): It is a pleasure to serve under your chairmanship again, Mr Leigh. We are Tuesday 21 June 2011 well seized of the concerns expressed about the oil and gas clause in respect of the Crown Estates’ renewable leases and the impact that they could have on the (Morning) financing of renewable projects. My Department has been working with the two representative bodies, Renewables UK and Oil & Gas UK, over the past few [MR EDWARD LEIGH in the Chair] weeks, and progress is being made. I should say something about the broader context of Energy Bill [Lords] the framework within which the two industries, which both have important contributions to make to achieving Written evidence to be reported to the our policy aims, can co-exist successfully. Our expectation House is that suitable consultation, planning and phasing of the respective operations will, in most cases, allow both EN 28 Energy Services and Technology Association developments to achieve their objectives in full, or with EN 29 Association of Controls Manufacturers only minor compromise. At the stage of formal consent, EN 30 Ombudsman Services an application from either industry to develop the natural EN 31 Energy Action Scotland resources of our marine environment will be considered as part of the standard procedures of the relevant EN 32 Danfoss authority, and consulted on with interested stakeholders. EN 33 PhotonStar LED Group Plc Any user of the sea, including oil and gas and offshore EN 34 CALEBRE renewable industry players, can make representations at EN 35 Trading Standards Institute a number of stages, including the formal consent process and the environment impact assessment, and we recommend EN 36 Charlie Morris-Marsham that interested parties do that so that their views can be taken into account in decision making. Clause 101 Circumstances could arise in which an oil and gas company might wish to proceed with a development OFFSHORE TRANSMISSION AND DISTRIBUTION OF that required the lease area of a renewables development ELECTRICITY: EXTENSION OF TIME FOR LICENCE to be reduced. The leases provide that such action can MODIFICATIONS AND PROPERTY SCHEME APPLICATIONS be taken if the Secretary of State so requests, but, as was made clear when the matter was debated in the 10.30 am other place, we do not envisage such powers being Question proposed, That the clause stand part of the exercised except where there had been effective commercial Bill. negotiations between the companies involved and where a reasonable commercial solution had been proposed to the wind farm owner. I say categorically that, if the oil Huw Irranca-Davies (Ogmore) (Lab): It is good to or gas company were not prepared to offer appropriate have you here, Mr Leigh, for this penultimate sitting of compensation, the Secretary of State would not intervene the Committee. I support the clause, which extends the and the lease would not be affected. Secretary of State’s powers under the Energy Act 2004 and the Ofgem powers under the Electricity Act 1989 to As I said, we are working with the two industries to enable implementation of the enduring offshore electricity formalise the assurances that I have just given and to transmission regime with the generator build option clarify the many detailed points that have arisen, but I beyond 2010. The clause is eminently sensible, and I do not consider that hard-wiring them into primary applaud the Minister for bringing it forward, but I want legislation at this stage would be the right way forward. reassurance from him on a matter on which I understand I hope that I have given the hon. Gentleman the assurances he has been engaged with the offshore wind sector of that he seeks. renewables, as well as the oil, gas and Crown Estate Question put and agreed to. sectors. Clause 101 accordingly ordered to stand part of the My query is short and simple. I would have raised it Bill. last week had there been time, but this is the last opportunity for us to ask the Minister to put his thoughts Clause 102 on the record. What progress has he made with the sectors on resolving the outstanding issue of compensation AGREEMENT ABOUT MODIFYING DECOMMISSIONING to offshore renewables operators in the event of the PROGRAMME termination of a lease or a lease agreement? Will such compensation include future profits, frustration costs and decommissioning costs where appropriate? Will he The Chair: We now come to amendment 173 to confirm that, as the offshore sector expects, an oral clause 102, with which it will be convenient to debate statement will be made to Parliament on the matter? If amendments 174 and 175. he does not have the details to hand, I am happy for him to write to me and other members of the Committee, Charles Hendry: On a point of order, Mr Leigh. Over but I hope that I have afforded him the opportunity to the past week or so, I have had discussions with Members put his assurances on the record. on both sides of the Committee, and there is clearly 359 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 360 concern that the clause as drafted does not deal with the Dr Whitehead: I make it clear from the outset that the unforeseen circumstances that might arise in the course amendment is about nuclear decommissioning and the of a long-standing—perhaps for decades— agreement. process under which that is undertaken, not about Having reflected, I have decided that it would be sensible whether we should have nuclear power in the first place. not to have clause 102 stand part of the Bill, but instead It relates to what should be decided, when a licence to work further on the assurances needed to deal with agreement is made, about the decommissioning programme, unforeseen circumstances in a spirit of co-operation particularly concerning the subsequent 60 or 100 years, with Opposition Front Benchers, and to table a new or perhaps more. clause dealing with that issue on Report. Some amendments The amendment would return us to the position, with to the clause have been tabled, but I thought that it some modifications, in the Energy Act 2008 in relation would be helpful to clarify the Government’s intentions to the Secretary of State’s power to intervene. That Act before the debate proceeded. essentially provided for nuclear site licence holders to submit a funded decommissioning programme, for that Huw Irranca-Davies: Further to that point of order, to be approved and modified by the Secretary of State Mr Leigh. In the same spirit, it is clear that the Minister and for future modifications to be accommodated should and Opposition Front Benchers are trying to do the newcircumstancesarise.Undersection48,if newcircumstances right thing with the clause. The amendments, which arise, proposals to modify the decommissioning agreement were tabled in the names of my hon. Friends, myself and programme may be made by either the Secretary of and others, seek to find the right balance between the State or the operator, but the Secretary of State has a need to protect the interests of the taxpayer and the power not only to make the final decision on approving energy bill payer, the need to give certainty to potential a modified programme, but to act unilaterally should nuclear investors that a future Secretary of State could unforeseen circumstances arise. not act unreasonably in loading disproportionate and My understanding is that the clause conflates that unexpected costs on top of already agreed contracts, process. The Secretary of State would decide whether and the need to protect against unknown future he may subsequently modify a programme, whether he eventualities. We recognise the tripartite consensus existing may give notice that someone can modify it, or whether around the potential contribution of nuclear energy to he may take no action at all to modify it at the time the a low-carbon, energy-secure future. If, as the Minister programme is agreed and the licence issued. In pursuit has described, his intention is to adjust and improve the of attempting to modify the Secretary of State’s ability measure and to bring back a new clause on Report, we to act unilaterally should unforeseen circumstances arise, support him in that aim and we hope to support the the clause effectively appears to give him no ability to improved clause when it appears. I simply ask the act in such circumstances, or to act only should there be Minister to give us as early a sight as possible of any agreement on both sides that something different needs changes. to be done. The process might stretch over many decades. Many The Chair: Dr Whitehead, do you wish to move your hon. Members share my view that it would be a considerable amendment? feat of clairvoyance if, at the point at which a licence was issued, the Secretary of State could imagine all the circumstances relating to a possible modification. He Dr Alan Whitehead (Southampton, Test) (Lab): Even must operate at that level of clairvoyance, however; knowing what we now know about the Government’s otherwise his options to act properly on behalf of the position on the clause, Mr Leigh, I wish to say a few taxpayer and in the country’s interests might be fettered words about my amendments. I therefore beg to move as a result of the clause. They might also be fettered in amendment 173, in clause 102, page 80, line 7, leave out the unusual situation of a nuclear operator acting ‘, or not to exercise’. unreasonably in unforeseen circumstances in a decommissioning programme. The Chair: With this it will be convenient to discuss Although the 2008 Act sets out a number of the following: circumstances in which a decommissioning programme can change by agreement, and those are implicit in the Amendment 174, in clause 102, page 80, line 11, leave clause, or additional programme expenses can be built out into a modified programme as it goes forward, unforeseen ‘and the other party to agreement.’. circumstances and balance of reason in making decisions Amendment 175, in clause 102, page 80, line 18, at do not appear to be taken into account in the clause. I end add— therefore very much welcome the Minister’s statement ‘(4) The powers given to the Secretary of State in this section about withdrawing it. I hope that he will introduce a may not be exercised— new clause that, while providing as much certainty for (a) in order to modify a programme in such a way that a both sides as is possible about decommissioning decommissioning programme becomes less effective programmes, takes unforeseen circumstances into account than would previously have been the case; and gives the Secretary of State power to deal with (b) in order to provide subsidy for a decommissioning them, provided that such a power is used reasonably. programme from public funds. (5) Section 48 of the Energy Act 2008 (approval of decommissioning programme) is amended as follows. 10.45 am (6) In subsection (3) leave out “, in particular,” and insert Caroline Lucas (Brighton, Pavilion) (Green): I rise to “only”. add my voice to the pleasure expressed by the hon. (7) Leave out subsection (3)(b).’. Member for Southampton, Test about the Government’s 361 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 362

[Caroline Lucas] He asked me to explain some of the things that could be unforeseen circumstances. That would be slightly intention to withdraw the clause. The number of signatures Rumsfeldian, talking about foreseeable unforeseen events on the amendment signal the strong feeling on both or unforeseeable unforeseen events. The challenge we sides of the Committee and the real concern about the have is that, because we are looking so many years into wording in the clause. I back the original purpose of the the future, it is hard to be comprehensive or to give amendments, because I want the Secretary of State to some sense of the range of issues that might apply and retain his powers to modify a decommissioning agreement require this comfort to be provided. We also understand on his own, without requiring the agreement of the why hon. Members want these amendments to be made. plant operator. I want to ensure that any decommissioning As the hon. Member for Southampton, Test said in agreement can be modified such that obligations are his opening comments, the clause is about decommissioning. added and not removed. It is not about waste, which is separate; it is not about I am glad that the clause will not stand part, but can subsidy, which is separate. We made it clear that there the Minister assure us that we will be involved in the will be no public subsidy. The reason for the change was drawing up of the new provision, so that we know what that it became clear to us that the power introduced in will be brought back and that it will not suddenly be the 2008 Act was very strong. It gave the Secretary of presented to us? Some letter or process whereby, early State an absolute power, to use at will, to change what on in the process, we can see what is being proposed the nuclear companies would have seen as a legal contract. would be helpful. We are beginning to run out of time, They were concerned that they were being asked to and all of us would appreciate not simply being presented invest billions and billions of pounds when at any point with a solution on Report, on a take it or leave it basis. in the future a Secretary of State could change the There is scope for us to find something that could get ground rules. Understandably, they said that they felt wider agreement. that they had to have a greater sense of equity. The proposal within the agreement that goes with the Ian Lavery (Wansbeck) (Lab): There are a lot of funded decommissioning programme would specify where problems with nuclear energy and not a lot of confidence the Secretary of State would continue to have that that the decommissioning costs will not be borne by the absolute power. In addition, that power would be reduced taxpayer. When the provision is brought back, will the in other areas, so that there was a greater sense of Minister ensure that there is clear and concise information certainty for investors. However, given that we cannot on who will bear any financial costs arising from unforeseen be certain what might arise in 10, 20, 30 or 40 years’ events? There is a great fear that the Bills being pushed time, we have decided that it is appropriate. We understand through Parliament and the view being taken of future the worries that have been expressed, and we will work energy requirements are hugely weighted in favour of on such matters before discussing them again on Report. nuclear power, in terms of the carbon floor price, the To answer the hon. Member for Brighton, Pavilion, EU emissions trading scheme and the emissions we will work with the official Opposition to reach performance standards. There are huge concerns among agreement. It might be challenging on some nuclear the general public about the direction we are taking. issues to reach agreement with the hon. Lady as we Will the new clause tabled on Report set out in detail approach them from a slightly different direction, but what will be or could be classified as unforeseen events? we will try to find a form of words that has as much What about the finances? We cannot turn around to the support throughout the House as possible and to share taxpayer even in five, 10, or 15 years’ time and say, it with members of the Committee well ahead of the “This is an unforeseen circumstance. We, as a Government, Bill being discussed on Report. I am grateful for the will now pay the decommissioning costs.” That would comments that we have heard during our discussion show a huge bias towards nuclear that people, rightly or and I hope that, given my assurances, we can go forward wrongly, believe currently prevails. as I have suggested.

The Chair: We have had a very wide debate, far wider Dr Whitehead: Clearly, since the clause will be withdrawn, than the amendments, so I will rule that we have had an it is appropriate that the amendment should also be adequate debate when we come to clause stand part. If withdrawn, which I am happy to do. I beg to ask leave anyone else wants to speak about the clause, this is your to withdraw the amendment. chance to do so. No? I call the Minister. Amendment, by leave, withdrawn. Clause 102 disagreed to. Charles Hendry: I am grateful for the contributions that we have had. I will start by responding to the points made by the hon. Member for Wansbeck. The issues he Clause 103 mentioned are already covered in legislation. The nature of the funded decommissioning programme is that there ADDITIONAL POWERS OF THE COAL AUTHORITY: is a regular assessment every few years of how much ENGLAND AND WALES money the programme will cost and how much is being Question proposed, That the clause stand part of the set aside for that. If any more is needed, because costs Bill. are increasing faster than expected, there is an automatic obligation on nuclear companies to provide that extra funding. The issue that the hon. Gentleman mentioned, Huw Irranca-Davies: I rise to give the Minister a of potential taxpayer subsidy for the decommissioning proper opportunity to introduce the clause. I welcome costs, cannot apply. That is already enshrined in the it, because it recognises the expertise that has resided in process. the Coal Authority over many years in respect of subsidence, 363 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 364 and the potential for that expertise to be applied more Charles Hendry: We do not expect the work or the widely than purely in respect of coal mining. How does income to be substantial; it will be a niche area, but it is the hon. Gentleman see the new powers being utilised nevertheless one where the authority’s skills are relevant, by the Coal Authority? Can he give us an assurance that and in which it should be allowed to develop. An its core functions in coal subsidence will not be affected important point is that we have to find the right balance by extending its remit beyond that? How has he dealt between allowing that expertise—it is not being used as with the danger or the perils of the Coal Authority, with broadly as it could be—to be brought to bear and to its special status and renowned expertise, driving out help in other areas, and making sure that where good competition unfairly when it wants to competes in a private sector operators can provide such services they wider market for its services? The same questions stand are not squeezed out of the process. At the moment, for clause 104 in respect of Scotland. Rather than this is a permissive change to legislation, to allow the repeat my comments, perhaps both I and the Minister Coal Authority to extend its work. As Ministers who can deal with both clauses in one go. strongly believe in the role of competition and the private sector, we will watch very carefully to ensure that the authority’s powers are not abused. Charles Hendry: The purpose of the clause is to extend the powers of the Coal Authority in England Question put and agreed to. and Wales to allow it to make use of and charge for its Clause 103 accordingly ordered to stand part of the expertise in remediating coal-related environmental and Bill. safety liabilities in non-coal-related contexts. The extension Clause 104 ordered to stand part of the Bill. will not take precedence over the authority’s existing statutory duties, and I hope that that has answered the hon. Gentleman’s question about coal subsidence. It Clause 105 will allow the Coal Authority to assist other public bodies and private landowners in dealing with mine-water REPEAL OF MEASURES RELATING TO HOME ENERGY treatment, subsidence or surface-hazard remediation EFFICIENCY outside the coal-mining sphere. The change will not lead to an additional call on the The Minister of State, Department of Energy and public purse, as the authority will be able to charge for Climate Change (Gregory Barker): I beg to move the additional non-coal work. Clause 104 mirrors the amendment 66, in clause 105, page 81, line 20, leave out clause to extend the powers to Scotland. The Coal subsections (1) and (2) and insert— Authority’s status has been reviewed as part of the ‘(1) The Home Energy Conservation Act 1995— public bodies review and the internal Department of (a) ceases to have effect in Scotland; Energy and Climate Change delivery review. Its inclusion (b) ceases to apply in relation to energy conservation in the Public Bodies Bill will allow the Government to authorities in Wales. undertake any changes in the future, should the outcomes (2) In section 1 of that Act (interpretation) in the definition of of the DECC review or any future circumstances require “energy conservation measures” after “promotion,” insert “any us to do so. The change is small and sensible. available financial assistance,”. (3) In section 1 of the Sustainable Energy Act 2003 (annual report on the progress towards sustainable energy aims)— Ian Lavery: This is not an attempt to part-privatise and substitute private work within the Coal Authority (a) subsection (1)(e) and the “and” immediately preceding to receive finance so that in the near future the Government it cease to have effect, and can reduce the money that they pay the Coal Authority (b) subsection (1AA) ceases to have effect. to act on their behalf, is it? (4) In section 4 of that Act (energy efficiency of residential accommodation: energy conservation authorities) subsection (13)(b) ceases to have effect.’. Charles Hendry: I hope that I can give the hon. Gentleman complete assurance. There is tremendous The Chair: With this it will be convenient to discuss expertise within the Coal Authority. It is quite restrained the following: in what it can do at the moment, and can use such Government amendment 67. expertise in other areas for different mining and related activities. That should properly be remunerated so it That schedule 3 be the Third schedule to the Bill. will charge for such services, but we recognise that it has Government amendment 81. untapped skills at the moment, of which it should be allowed to make use. The clause is not an attempt to Gregory Barker: Good morning, Mr Leigh. It is a privatise. pleasure to be serving under you on the last day of the Committee. With your permission, before turning to Huw Irranca-Davies: What idea does the Minister the Home Energy Conservation Act 1995, I will report have of the size of the sector competing within the to the Committee on matters arising from the last market beyond the pure coal-mining area of subsidence sitting. and the expertise within the UK? In light of his words, I agreed to write to members of the Committee to set how can we guard against the Coal Authority driving out the role of the energy company obligation in promoting out smaller competitors who do not have its prestigious innovation, and I have done so. I offered the hon. name or weight of expertise? We do not want this Member for Southampton, Test, the opportunity to well-intentioned and apposite clause driving out existing engage, outside the Committee, with our work on the competition that is struggling to compete with the huge ECO brokerage concept, and I have instructed my weight of the Coal Authority. officials to contact his office to arrange a mutually 365 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 366

[Gregory Barker] and never lived up to the promise of its original sponsors because it was typical of the sort of Bill that legislates convenient date for that to begin. Following on from my for a certain outcome and makes no provision for the original letter, the hon. Member for Brighton, Pavilion, means to achieve it. With this Bill we are changing that raised another question about service charges in the and creating, with the green deal and the ECO, the private rented sector, and I have written to her with means, the framework and the ability to drive that further information on that topic. Finally, by the end of agenda on a scale that is commensurate with the challenge the week, I will write to her again, copying in members of retrofitting up to 14 million homes by 2020, with of the Committee, about our current thinking on a more in the following decade. strategy for a more ambitious approach to distributed To help with that drive, HECA recognises the role of energy. local authorities and requires local authorities to report Government amendments 66, 67, 75 and 81 relate to accordingly. We propose a small amendment to the the Home Energy Conservation Act 1995. When I first definition of an “energy conservation measure” in HECA turned my attention to HECA some time ago, I discovered to take account of the additional green deal proposition. that it was pretty moribund—dormant—with very little The inclusion of the words “any available financial sign of a pulse: if not actually dead, it was doing a good assistance” will encompass the types of green deal impression of being so. There was certainly a logic in financial assistance that will be on offer, along with the deleting it from the statute book as legislation that had potential financial assistance that the ECO might offer never lived up to the hopes of its original proposers, local residents. and as such it seemed to be no longer needed. However, We will work closely with the Local Government the more that we have considered it—certainly following Association and a range of organisations to consider the debate in the other place—and the more that I have how we can best frame future guidance, which we will listened to the views of colleagues and stakeholders, issue under HECA to local authorities, spelling out in both inside and outside Parliament, which have been greater detail what, in the early stages of the green deal, expressed during the passage of the Bill, the more I have we expect of them, and how we propose to work with been convinced that HECA can be resuscitated and them to drive the programme forward at local level. revived. It can have an important, continuing role in the There will be, as with other parts of the Bill, further future, if it is handled in the right way and if there is a detail in secondary legislation. We will come through commitment from the Government to use it. with those details in due course. In the coming decades, however, HECA will have a positive role to play. It will 11 am finally be a vital tool in encouraging the engagement of I will explain why. I am sure that hon. Members will all authorities—not just the usual suspects that we are agree that it is important that all local authorities play a familiar with—without imposing undue, unfunded burdens. role in addressing climate change. On energy efficiency, they play a role in delivering the green deal and the Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): energy company obligations in their local communities. It is a pleasure to serve under your chairmanship, I am greatly encouraged by the enthusiasm that already Mr Leigh, in the Committee’s penultimate sitting. exists among a great many local authorities. Some are actively looking to become early green deal providers In his contribution, the Minister said that there was themselves. Others are looking at how they can form little sign of a pulse in HECA, which had become partnerships to deliver programmes in their areas. moribund. It is true that the HECA review of 2007 concluded that authorities had been reluctant to allocate That enthusiasm is embodied in the memorandum of funding for monitoring HECA progress. In fact, 62% of understanding between my Department and the Local local authorities had not allocated any financial budgets Government Group. Yesterday, I addressed a conference to HECA officers for their annual reports. at the Royal Society entitled “The green deal and the big society”. There were more than 300 people there, Limited financial resources has resulted in limited largely drawn from local government and local community monitoring methods. I am keen to know what the action groups. That was very encouraging. Minister foresees in secondary legislation that will ensure some budget for HECA officers, which is necessary to We listened to the concerns expressed during the ensure that they fulfil their commitments to do produce passage of the Bill on the importance of ensuring that HECA reports. Local authorities up and down the not only the keenest, but all local authorities take country are finding it very difficult, because their budgets action. In particular, I recognise the contribution made have been considerably squeezed. Will they be able to to the debate by the Association for the Conservation of fulfil the responsibilities in the amendment and under Energy. Having reflected on its contributions and other HECA? contributions more widely, the Government are persuaded that an appropriate provision should exist to explicitly Under the amendment, HECA will cease to have encourage local authority action. HECA requires all effect in Scotland and Wales. Why is there a different authorities to report on practicable and cost-effective approach to Scotland and Wales? What are the implications energy conservation measures that are likely to result in of that change? a significant improvement in the energy efficiency of residential accommodation in their areas. We have therefore Gregory Barker: After we consulted the Scottish and decided to retain the Act in England. Welsh Administrations, they asked that we continue The green deal will provide a cost-effective vehicle, with the repeal of HECA on their behalf, so it will not enabling local authorities and other to make the apply in Scotland and Wales. The devolved Administrations improvements in housing stock that HECA was originally will, however, continue to work with their local authorities intended to drive. HECA never fulfilled its potential to progress the national energy saving initiatives that 367 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 368 they already have in place. They will continue to ensure housing providers are entertaining ambitious plans to that they fully participate in the green deal and all it has enter the green deal market by providing green deal to offer. Basically, they have alternative arrangements measures not only to their own tenants, but the wider that come under the competence of the Welsh and housing area. The beauty of the green deal is that it Scottish Executives, which, they judge, make HECA gives rise to all sorts of possibilities. I am sure that superfluous. I guess that because HECA was not seen different local authorities and community groups will as being effective over the past decade, the Welsh and respond in different ways. Our job is to provide an Scottish Executives introduced their own arrangements, overarching framework to enable them to flourish and which they will boost to drive forward the green deal. It to maximise the entrepreneurial potential of the programme. is not that they reject the agenda, but that they have It is not a case of getting local authorities or local another means of delivering it. government out of the way, but seeing that they can be On finance for local authorities to deliver on HECA, a real partner in the agenda. it is clear that many local authorities are already supporting Amendment 66 agreed to. activities on that agenda on a voluntary basis, because Amendment made: 67, in clause 105, page 81, line 27, leave we have provided voluntary guidance on it. I would go out subsection (4).—(Gregory Barker.) further, however, and suggest that the measure is not Clause 105, as amended, ordered to stand part of the only an opportunity for local authorities to save money Bill. by utilising officer time that they already devote to the issue; it is an opportunity for them to make money. Schedule 3 agreed to. They could go for the green deal localist max position; they could enter into arrangements with private sector Clause 106 partners to create energy service companies, and into partnerships with local businesses and enterprises; or EXTENT they could create national partnerships. If they use the power of their brands as trusted organisations, they will Amendments made: 27, in clause 106, page 82, line 2, after play a very important role in working in partnership to ‘Wales),’ insert— offer programmes on a large scale in their areas with the ‘(ea) section [Energy efficiency aim],’. private sector. Amendment 19, in clause 106, page 82, line 11, at end Whether Marks and Spencer or a local plumber, insert— those in the private sector will make profits from such ‘(ca) section33(5A) (green deal appeals: revocation or action. They will be gaining a market share and making amendment of delegated legislation by Scottish a sensible return. The opportunity to work in partnership Ministers),’.—(Gregory Barker.) with local authorities is an attractive, commercial proposition. It bypasses the need to engage in lots of 11.15 am advertising and above and below the line marketing that Gregory Barker: I beg to move amendment 68, in would otherwise be required to gain customers. Clearly, clause 106, page 82, line 15, at end insert— we cannot spell out such matters in legislation, as it ‘( ) Section [Renewable heat incentives in Northern Ireland] would be at the discretion of each local authority, but (renewable heat incentives in Northern Ireland) extends to by being partners in the roll-out of local programmes, Northern Ireland only. enterprising local authorities will have the opportunity ( ) Section [Power for Gas and Electricity Markets Authority to to capture back their costs as well as the potential to act on behalf of Northern Ireland authority in connection with raise more money to reinvest in the agenda. scheme under section [Renewable heat incentives in Northern Ireland]] (power for Gas and Electricity Markets Authority to Mr Steve Brine (Winchester) (Con): Given the act on behalf of Northern Ireland authority in connection with scheme under section [Renewable heat incentives in Northern consequences that the Minister describes, there is no Ireland]) extends to England and Wales, Scotland and Northern reason for local authorities, either directly or indirectly Ireland.’. through organisations with which they go into partnership, to provide green deal assessor services. They would be The Chair: With this it will be convenient to discuss trusted, and residents could then buy the GDA services the following: Government amendment 71. from their local authority or subset organisation and take them into the private marketplace. Government new clause 15—Renewable heat incentives in Northern Ireland. Gregory Barker: I am not absolutely clear about the Government new clause 16—Power for Gas and point that my hon. Friend is making. Few local authorities Electricity Markets Authority to act on behalf of Northern would go into business by themselves, but they would as Ireland authority in connection with scheme under section part of a co-operative, partnership or social enterprise, [Renewable heat incentives in Northern Ireland]. or even at the most basic level endorse the product of a Government amendment 79. chosen partner that best fitted their scope and criteria in offering the best to their residents. As such, that will Gregory Barker: The coalition Government intend have a value to the commercial partners with which shortly to introduce to Parliament regulations to establish they choose to align themselves, and it is not unreasonable the long-awaited renewable heat incentive scheme, which that they should be compensated for that. will be the first scheme of its kind in the world to I do not anticipate that many local authorities will incentivise and drive forward renewable heat. The RHI want to become exclusive green deal providers directly, primary powers currently extend only to Great Britain—in but that is by no means impossible. However, all sorts of other words, England, Scotland and Wales, but not innovative ideas are springing up, and several social Northern Ireland. The intention was to have a UK-wide 369 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 370

[Gregory Barker] Finally, Northern Ireland’s geography is obviously different from Britain’s. It is more rural and has fewer scheme, but timing issues meant that the Northern larger cities, so it has a different heat intensity. All those Ireland Assembly could not pass a legislative consent factors have meant that it has been appropriate for a motion during the passage of the then Energy Bill 2008 separate consideration to be given to a specific scheme to allow us to legislate on its behalf, which is important for the Northern Ireland context. Nevertheless, we believe, because heat is a devolved issue. as I am sure the hon. Member for Ogmore understands, The powers contained in the amendments and new that there are almost more arguments for the particular clauses will grant the Northern Ireland Executive primary economic benefits. I will write to him to give him powers for renewable heat, which will allow Northern greater detail. Ireland to introduce its own specific support scheme to facilitate and incentivise renewable heat generation there Huw Irranca-Davies: When the Minister writes to through secondary legislation. The scheme is expected me—and I am happy if he writes to other Committee to be administered by the Gas and Electricity Markets members—will he update us on the progress in the Authority on behalf of the Northern Ireland Authority year’s hiatus before the full introduction of the RHI on for Utility Regulation. I hope that, given the widespread a domestic basis? That will affect England, Wales and support for RHI across the Committee, hon. Members Scotland, I understand. Part of the justification for that will therefore support the amendments and new clauses. was to trial the efficacy of various types of RHI, whether air source thermal, ground source thermal or whatever. Perhaps the Minister will tell us in writing Huw Irranca-Davies: I am pleased to support the about the uptake of RHIs and his ambitions for that. amendments and new clauses, which are right and Before we fully introduce the RHI for domestic appliances proper. As a former Wales Office Minister, I am familiar we must be confident that we will have a scale of with how timetabling in devolved Governments and take-up, over the next year, that will allow him to make Assemblies can sometimes be out of kilter with UK some well-informed decisions before the full launch. Parliament time scales, so I understand the need for the change. Gregory Barker: I shall not divert the Committee for Does the Minister have any idea of the extent of the too long, because I do not want to ski off-piste too far. existing and the potential RHI sector in Northern Ireland? We hope to launch the renewable heat premium payment Certainly, renewable heat could be a major boost to the within the next couple of months. The scale of the Northern Ireland economy in the form of green jobs scheme in the UK will be large in the first year of its life. and green economic growth. However, recognising what We anticipate that it will cover as many individual he said in his opening remarks, what does he mean by customers as would have been likely to have taken it up “shortly”in relation to the introduction of RHI regulations? had we started with the RHI in full. However, in the Does it mean in a few days, in a few weeks, before the first year we will require a greater level of feedback and summer, when we come back in October or in the monitoring of the appliances, particularly those involving autumn? I am sure he can clarify that broad term. the more innovative technology, such as ground source and air source heat pumps, and so on. There has been Some of our debates in Committee are fascinating. less consumer-facing take-up of such technologies in One of the memorable phrases that I will take away, and the past. It is very important that we trial the scheme which reminds me of my time as a Wales Office Minister, effectively to ensure that there is neither mis-selling nor is the Minister’s phrase, “heat is a devolved issue”. For misunderstanding. many of our constituents, that will be complete double Dutch, but I understand what he means and it is right Invariably, many of the trials have found that it is not and proper that such devolved competencies are respected that the technology is faulty or that it is not there, but and recognised. What does the Minister mean by “shortly”, that it is sometimes misapplied. That is why interaction and what is the potential of the RHI for the Northern between the technology and the consumers, in their Ireland economy? homes, is really important. We want to ensure that we have learned the lessons before we go to a full market roll-out. Gregory Barker: I am happy to provide clarification. As a former Minister, the hon. Gentleman will know Huw Irranca-Davies: I asked the question because I that when I say shortly, I mean very soon. Actually, the am probing whether the lessons that will be learned regulations are to be laid in Parliament this week. over the next 12 months will be shared with all the devolved Governments, including, in relation to the amendments, the Northern Ireland Assembly, so that Huw Irranca-Davies: Fantastic. they, too, can adapt and modify their way ahead.

Gregory Barker: Of course, we have an excellent Gregory Barker: On the hon. Gentleman’s point about relationship with all the Administrations and we work Northern Ireland, I am happy to write to him with closely on this shared agenda. I anticipate that we will detailed economic analysis about the potential impact be fully engaged with them all on those issues. there of the RHI. As he will be aware, the Northern Amendment 68 agreed to. Ireland heat market is very different from that of Great Britain. Northern Ireland is largely dependent on oil, Amendment made: 20, in clause 106, page 82, line 18, leave with a developing natural gas market. There are also out ‘28’ and insert differences in fuel prices between Great Britain and ‘[Early repayment of green deal finance]’.—(Gregory Barker.) Northern Ireland, and in the amount of people’s income Clause 106, as amended, ordered to stand part of the that goes towards heating their homes. Bill. 371 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 372

Clause 107 Friends in the other place the opportunity to discuss the issue of security at nuclear sites. We have sought and COMMENCEMENT received reassurance from both him and his officials. Amendments made: 21, in clause 107, page 82, line 25, First, can the Minister give us an update on how this leave out ‘made by statutory instrument’. may feed into the wider governmental review of critical Amendment 22, in clause 107, page 82, line 31, at end infrastructure and how security generally at nuclear insert— sites is figuring within these discussions? Secondly, can we seek his assurance that in any discussions that take ‘(ca) section 33(5A) (green deal appeals: revocation or amendment of delegated legislation by Scottish place, while the No. 1 priority must be the enduring Ministers);’.—(Gregory Barker.) robustness of the security of our nuclear sites, the views of the existing work force and organisations are taken into account? Finally, what are his thoughts on how he Charles Hendry: I beg to move amendment 69, in will report to Parliament in future on nuclear security, clause 107, page 82, line 46, at end insert— either in response to the outcome of specific cross- ‘(ha) section [Regulation of security of nuclear Government initiatives, such as those on critical construction sites] (regulation of security of nuclear infrastructure, or simply on a periodic basis, recognising construction sites);’. the limitations on the Minister for disclosing full details of security arrangements? I ask the Minister for his The Chair: With this it will be convenient to discuss thoughts on that. the following: Government new clause 12—Regulation of security of nuclear construction sites. 11.30 am Government amendment 77. Charles Hendry: I am grateful to the Opposition spokesman for his support for the principles behind the Charles Hendry: Ensuring security in the civil nuclear amendments. As he rightly said, there is an ongoing industry is one of the Government’s highest priorities. review of the security of critical infrastructure. Work We keep security arrangements in the industry under with nuclear sites is clearly part of that critical nuclear constant review. This extension of the powers will enable infrastructure, but separate work is related to the unique the Government to make regulations to require owners nature of nuclear sites. of civil nuclear sites, including new nuclear power stations, The amendment recognises that, as the Bill is framed, to put in place security measures while those sites are it is not sufficiently comprehensive. It had originally under construction. That change is needed, because a been drafted when nuclear new build was not especially new generation of nuclear power stations is now a on the agenda. Now that it is, it is appropriate from the realistic prospect in the United Kingdom. Energy companies earliest time in the construction process for security have announced plans to build up to 16 GW of new issues to be formally addressed. Yes, of course, if there nuclear capacity by 2025. The draft nuclear national is evidence from the work force about issues of concern, policy statement, which the Government consulted on we are also keen to look into them. We have said that if in October, contained eight sites that had been identified people consider that they will be criticised for as being potentially suitable for nuclear new builds. All whistleblowing, protection will be afforded to those those sites are adjacent to existing civil nuclear facilities. who draw attention to security and safety issues, and These amendments and the new clause will permit the that applies throughout the energy infrastructure, oil regulation of security at civil nuclear construction sites and gas, nuclear and other parts of the critical national from the start of construction. That will ensure that any infrastructure. potential security implications for existing facilities, as a result of this construction activity taking place in a vicinity, are addressed. Ian Lavery: Will the measure be seen by the energy Current regulation is only permitted once nuclear companies as an extra financial burden? material or other radioactive material is brought on site, which is approximately five years into the construction Charles Hendry: The energy companies are liable for timeline of a new nuclear power station. Bringing in the costs of security. They understand that, as part of this change will ensure that the United Kingdom continues the process of building new nuclear plants, they have to to have a robust regulatory regime in place to ensure take account of the security costs involved in that effective and proportionate security in the civil nuclear process. There are no taxpayer implications in the proposals. industry. There will be a comprehensive regulation of As for how the measure will be reported to Parliament, security at nuclear new build construction sites. On that we respond to parliamentary questions but, as members matter, as on other matters relating more generally to of the Committee will be aware, by definition sometimes security in the civil nuclear industry, the Government our answers cannot be as comprehensive as we would have been closely advised by the Office for Nuclear wish. The very nature of security issues means that they Regulation, the security regulator for the civil nuclear have to be carefully protected, and we have to be cautious industry. about the way in which we discuss them in public. As far as we are able, under the freedom of information Huw Irranca-Davies: I welcome the amendments, which request information system, we share information with enhance the security of our nuclear sites by bringing the Whip and other authorities. forward the security arrangements to include the period when construction works commence. I want to ask the Caroline Lucas: Will the Minister clarify whether the Minister some questions on the clause. In advance of provision will make any material difference to the protests that, I thank him for affording both me and noble that I imagine we will be seeing throughout the country 373 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 374

[Caroline Lucas] the industry that it is likely that owners of oil and gas facilities would choose to decommission them in such as the start of nuclear construction gets under way? The circumstances, rather than to allow them to be reused hon. Gentleman will know that it is a controversial for carbon dioxide storage, which would involve uncertainty subject. I am sure that many legitimate peaceful protests about the timing and cost of decommissioning. The new will take place at construction sites, and I wish to know clause will remove that perverse incentive. Amendment 70 whether anything will be different as a result of the makes provision for the new clause’s commencement. provision in how protesters might be treated. New clause 14 replicates existing powers for new pipelines in the Pipe-Lines Act 1962 to allow the compulsory Charles Hendry: The hon. Lady raises an important acquisition of rights to transport carbon dioxide through issue. She refers to security and terrorism. We completely a pipeline previously used for another purpose. It provides respect the right to peaceful protests and for people to that, where an existing pipeline is intended to be converted express their worries about developments that they do to the transport of carbon dioxide, the owner of the not like. The provision will not give the police extra pipeline may be authorised to acquire the rights over powers in dealing with such issues. Those protests can land that are necessary for the conversion and subsequent go ahead, as would have been the case beforehand. It is use of the pipeline. The procedures and rules applicable purely about counter-terrorism and security in that to this compulsory acquisition order will be the same as respect, and I hope that I have provided the hon. Lady those provided by the 1962 Act for the construction of a with the assurance that she seeks. new pipeline. Amendment 69 agreed to. Without the new clause those seeking to reuse an existing pipeline to transport carbon dioxide would Charles Hendry: I beg to move amendment 70, in have to reach a voluntary agreement with each of the clause 107, page 83, line 2, at end insert— owners through whose land the pipeline passes. That ‘( ) section [Abandonment: infrastructure converted for might require many hundreds of agreements and failure CCS demonstration projects] (abandonment: to reach voluntary agreement with one of them could infrastructure converted for CCS demonstration derail a project that would otherwise be in the public projects).’. interest. As the demonstration and deployment of CCS The Chair: With this it will be convenient to discuss progresses, it is likely that developers will look for the following: Government new clause 13—Abandonment: opportunities to convert existing pipelines where they infrastructure converted for CCS demonstration projects. are suitable and no longer required for their original Government new clause 14—Carbon dioxide pipelines: purpose. The new clause is intended to facilitate that powers of compulsory acquisition. process, but it does not alter the basis on which the change of use would be authorised by the appropriate Government amendment 78. independent regulator to ensure the highest possible standards of safety and environmental protection. It Charles Hendry: The new clauses and associated will apply throughout Great Britain and the intention is amendments are intended to facilitate carbon capture to transfer the powers and functions in relation to and storage projects by removing obstacles to the reuse pipelines that begin and end in Scotland to Scottish of existing capital intensive infrastructure. While they Ministers as soon as possible, in line with the compulsory are relatively minor measures in legislative terms, they acquisition functions that they already have. are nevertheless important to the demonstration of key Amendment 78 is consequential. It modifies the title carbon abatement technology as they will make it of the Bill to include new clause 13 and 14. considerably more straightforward to reuse suitable existing infrastructure for CCS where it is suitable and no longer required for its original purpose. Dr Whitehead: Is the Minister able to add to what he New clause 13 would change the regime for has said about the new clauses and amendments, first, decommissioning offshore pipelines and installations as in relation to the effect that they will have on the set out in the Petroleum Act 1998 and would give the approach of the Crown Estate to the decommissioning Secretary of State a discretionary power to designate and recommissioning of existing pipelines? The existing offshore pipelines and installations that are intended to practice, which I understand will continue, is for there be used as part of a CCS demonstration project. The to be a licence break: after decommissioning, a new effect of designation would be to remove the possibility licence is required for recommissioning, even if the that the owners, operators and licensees of facilities for circumstances are exactly the same except that something oil and gas purposes could be made liable for their else is flowing through the pipeline. Giving continuous decommissioning. The new clause would not change existence to facilities that can be reused for other purposes the obligations of the storage site operator to decommission will presumably affect the approach in relation to licences. the facilities once they are no longer required, nor Secondly, what effect does the Minister consider the would it change the guarantees the Government can compulsory purchase arrangements mentioned in new require from the storage site operator to ensure that clause 14 will have on the existence of static national those obligations are fulfilled in a timely way. planning considerations in national planning documents Without the new clause, it would remain possible for as opposed to linear planning arrangements that do not a body that was responsible for decommissioning facilities, exist in similar form in those documents? Linear compulsory when used for oil and gas purposes, to be required to purchase arrangements will affect the overall guidance decommission them if they were subsequently used for given in relation to a linear planning arrangement that carbon dioxide storage. We know from discussions with might otherwise concern many small individual planning 375 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 376 applications and not be within national planning now that the levy has been scrapped, will the Minister arrangements, notwithstanding compulsory purchase assure us that we will not be left behind in the race to arrangements as they are currently constituted. Can the develop a leading edge in this new technology? Such Minister shed any light on those matters? technology will bring with it green jobs at home and economic potential in the worldwide export market. I Huw Irranca-Davies: The amendments are to be politely and helpfully suggest to the Minister that we do welcomed. They give the Secretary of State powers, by a not want a world that burns fossil fuels while the compulsory rights order, to acquire rights over land to emperor—I mean the Chancellor—continues to play on enable former oil and gas pipelines to be used for our his fiddle. anticipated growth in CCS. Without such powers, the expansion of CCS may be stymied and we might have Ian Lavery: I echo my hon. Friend’s sentiments. We to come back in future with primary legislation when an urgently need to progress CCS. Some months ago, we inevitable logjam holds up a CCS scheme. The Minister welcomed the Government’s agreement to fund £1 billion and his team are to be congratulated on spotting this for the first demonstration plant in Longannet. I believe opportunity and introducing the amendments. that those contracts will be signed, sealed and delivered, The Minister would expect me to say, however, that and the plant will begin in December, unless that situation although the amendments are welcome, they are as has changed again. nothing until we know the Government’s firm proposals We should never underestimate the role of CCS in around CCS. The amendments lay the ground work, relation not only to coal, but to gas, although the but we do not have the full programme of CCS to regulations are very different. We might disagree on deliver it. There is no point in taking those powers if we minor aspects of the matter, but we would all agree that have not made the investment in CCS, which has been in the very near future there will be a heavier reliance on regularly promised from the Dispatch Box, not only by gas in any event. What happens to coal, whether it is the Minister, but by the Secretary of State, the Chancellor, produced in the UK or abroad, is a different matter. We old Uncle Tom Cobleigh and all. I can use that phrase, will increase the amount of electricity that is produced because Uncle Tom Cobleigh is not a sitting Member. from gas, so it is important that CCS is developed. I am sure, however, that the Minister will understand my The Chair: He is here in spirit, though. concern, which is that if we do not get a move on with CCS, we will not have a British deep mine coal industry left. Huw Irranca-Davies: Smiling down on us. We know that the Government have decided to scrap 11.45 am the CCS levy, arguing that the burden was unfair. We note, however, that they seem to think it fair to spread The British deep mine coal industry, which produces the load across taxpayers generally by asking them to coal for Drax and other major power stations within the fund the scheme directly from the Exchequer. The promise UK, is at a critical level, and there needs to be some to fund the CCS programme was made almost a year investment in CCS in the UK. In Europe, about four or ago; it was made in the comprehensive spending review five years ago, it was suggested that each European last autumn; and it was made again in the Budget. nation should look at CCS demonstration plants. In the But—and it is a big but—we are still waiting. apportioning out, it was said that the UK should take 13 or 14 such plants. We did not do that; some years In the light of the amendments, can the Minister ago, under the previous Government, it was agreed that reveal his progress with the Treasury team? Can he there should be four demonstration plants. The money reveal the Chancellor’s full commitment to this vital has been focused on the plant at Longannet, but what programme? I am genuinely trying to help the Minister, has happened to the other three? Has any progress been because I know he intends to see the programme roll made? If not, we need to make progress on CCS, or we out, which is why the amendments were tabled in a will suffer the consequences. timely way. Opposition Members and I are determined to give any support that we can to the Minister to say, If the country is to meet its emissions targets, it is “Mr Chancellor, please get on with it.” extremely important that carbon capture and storage is part of the solution. That may take some financing, as I know that the Minister is committed to the CCS will the nuclear industry, which we have already discussed roll-out, and we applauded him and the Secretary of this morning, but it is a matter of urgency, and the State for making good on Labour’s commitment to Minister should treat it as such. CCS is being delayed, fund the first CCS project with £1 billion. However, one and it might be kicked into the long grass. swallow does not a summer make; neither does one CCS project—yet to be signed off—a coherent CCS programme make. We wait for announcements on the Charles Hendry: I am grateful for that short debate funding; we wait for the time scale for future projects; on the issues. In response to the question of the hon. and we wait for the sign-off on the first project, which, Member for Southampton, Test, the Crown Estate has we understand, may be this autumn. no rolling commissioning or decommissioning of offshore Meanwhile, in China, an expansion of energy generation structures. The provisions have no impact in relation to the size of the UK’s total energy capacity takes place the Crown Estate, nor do they an impact on national every year, a sizeable part of which is in unabated coal planning arrangements. I hope that that clarifies those generation. At the same time, United States-China points. partnerships forge ahead to develop CCS at a pace. The The hon. Member for Ogmore, who leads for the CCS levy was intended to fund a CCS programme, not Opposition on these matters, was uncharacteristically just one CCS project. We welcome the measures, but churlish this morning. He congratulates us in most of 377 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 378

[Charles Hendry] Charles Hendry: We have committed to an emissions performance standard and we will discuss that later. his speeches, which we always like, but I was surprised New gas plant could only achieve the level of ambition by the extent to which he questioned the Government’s that the hon. Lady sets out for an emissions performance ambition for CCS. As the hon. Member for Wansbeck standard by having a significant amount of biogas or said, CCS is an integral part of this country’s energy CCS or greater heat capture than is sometimes possible. future, and the Government have taken forward that One reason we are looking to extend CCS in the UK work. Although the ambition is high, we are also focused to include gas is the long-term role we think gas may on exactly what is necessary to deliver on it. At a time need to play over the coming decades. An EPS is part of when other countries, such as Norway, Holland and the that process, but here is a technology on which we are in United States, are slipping back, Britain has continued a uniquely strong position to lead globally, and for with its ambitious programme. which we also have a need in the UK. That is not just for The hon. Member for Ogmore talked about taking retrofitting of some of our old plant, but for new plant forward Labour’s £1 billion programme; Labour had a that may come forward. programme, but it was not a £1 billion programme. No We recognise the need to move the programme forward. money was allocated to it at all. There was an aspiration, We are finalising terms and conditions now with the but there was no money. We have come up with £1 billion, operators of the £1 billion Longannet project and I which is more money than any Government anywhere hope we will get financial closure in the next few months. else in the world have allocated to a single project, so we A tremendous amount of financial detail needs to be have turned the previous Government’s ambition into resolved, as well as legal technical details about liabilities. reality. We intend in the remainder of this year to bring forward the competition for the remaining three projects, to be Huw Irranca-Davies: In my opening remarks, I welcomed on stream by 2020, sooner if possible. We have in the fact that the Minister had turned our ambition and programme a realistic way of delivering the ambition, aspiration into reality. Well done—we would have done which we share, of the previous Government. the same—but will he flesh out his ambitions for the remaining three projects, and can he put a figure on Huw Irranca-Davies: I thank the Minister for filling those? us in a little bit wider than the precise issue of pipelines. Are we likely to see any of the detail—either the time Charles Hendry: If the hon. Gentleman had not scale or the overarching plan—before the summer recess? interrupted me, I would have been doing exactly that already. As he will be aware, there is more interest in Charles Hendry: I would not expect to see the formal developing this technology in the United Kingdom competition launched before the summer. July will be a than anywhere else in Europe. The new entrants’ reserve big energy month with quite enough issues, such as 300 scheme, run by the European Union, has had seven market reform, for the hon. Gentleman to get his teeth projects submitted from Britain, which amounts to into. The market reform process itself and the structure almost half the projects across the EU. That reflects the of the contracts for difference in the proposals we have technological, scientific and academic leadership that made are all to be integral for bringing forward investment this country has, and the real scope for us to be a game in low-carbon technologies. That is all part of the changer in such matters. bigger picture gradually being put into place. We made a decision that the programme should not be funded by a levy, but through direct Government funding, because one condition of the levy was that it Ian Lavery: There is a competition for the three was paid per unit of output. There was no funding remaining demonstration plants. Could that be three available for the plants until they were operational, so coal, three gas or a mixture of both? Is it up to the the companies would take on board all of the risk—every people who want to participate in the demonstration single aspect of it. If it did not work and they did not plants? get any output, they would get no funding towards it whatever, which would clearly be a huge barrier to Charles Hendry: We have said we would like at least investment. Through direct Government funding, and one to be gas. The rest will be whatever makes the best through the NER where appropriate, we are looking at technology mix. We were critical of the original competition, bringing forward funding support so that it can happen which was purely on retrofitted post-combustion. We at an earlier stage. We think that will stimulate a more felt it was a mistake to rule out pre-combustion technologies realistic prospect of developing the technology. and new build. Nevertheless, we have recognised they have a role to play in the wider competition. Looking at Caroline Lucas: Does the Minister not agree that, the projects that have been submitted through the NER300, rather than the use of public money, a more ambitious we have a good mix of pre and post-combustion, retrofit emissions performance standard would in itself act as a and new build. We have a good potential range of spur to innovation for these companies? I am deeply projects on which to draw. concerned about public money, whether from levies or The hon. Gentleman also talked about the importance direct taxation, going into CCS in Britain. I do not to the deep mining industry. It is encouraging to note think we need CCS in Britain; I am happy to have a that last year we saw a drop in the volume of imported debate about whether it is needed in China. Right now coal. That was partly due to de-stocking, which had we do not need to get more coal out of the earth, and been increased in the previous year. We see this as a we certainly do not need to put more taxpayers’ money chance to bring new opportunities to the British coal into doing so. industry, which we think has a distinctly important 379 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 380 viable future as part of the UK energy mix, but it can The Chair: With this it will be convenient to discuss only do so as we take the CCS project forward. I hope the following: the Committee will agree to the amendments. Government new clause 42—Electricity from renewable sources: National Park authorities and Broads Authority. Dr Whitehead: In my previous comments, I sought Government amendment 172. clarification on the fact that an abandonment project, which is in new clause 13, appears to change to a Charles Hendry: Early in 2010, we gave local authorities continuous occupation of a pipe, and therefore the the power to sell electricity from renewable sources and abandonment of an abandonment project. An we have been delighted with the response. We made the abandonment project is part of a licensing arrangement change for local authorities through secondary legislation, with the Crown Estate. If an abandonment project is which amended the existing powers. National park abandoned and the occupation of the pipeline becomes authorities, including the Broads Authority, did not continuous, a different form of licensing would logically have the same existing powers, so it was not feasible to take place, possibly at a considerable advantage—which cover the national park authorities or the Broads Authority I understand is among the purposes of the new clause—to at that time. whoever is operating that pipeline as part of a CCS The national park authorities have some scope under operation. Previously, they might have contemplated their general powers, as we made clear at an early stage the prospect of an abandonment programme being of the Bill, but we have been in discussion with them on completed and the pipeline being shut down and rendered whether the existing position is adequate. We concluded unusable and then having to recreate it for the purpose that there was uncertainty on whether the current power of a CCS submarine operation. would allow everything that they would reasonably I strongly support what the clause does, but I am want to do in this area. We have therefore proposed concerned about what it does to the overall licensing amendment 171 to clarify the position. The amendment arrangements at either end of the operation. It is true unambiguously states that national park authorities that the Crown Estate does not have anything central to may generate electricity within specified constraints do with commissioning and decommissioning, but it and sell it. It also allows them to enter into joint does have a lot to do with the licensing of both processes, ventures to do so and to grant-aid others to do so. as I have described. Huw Irranca-Davies: I have great pleasure in supporting Charles Hendry: I hope that I can give the hon. the amendments, not least because of my former role as Gentleman the assurance that he seeks. This is about Minister with responsibility for national parks. I am the decommissioning responsibility and the CCS happy to see the Government building on the extensive demonstration projects; it not about more general CCS work done on sustainable development, over the last projects. At this stage we do not know how long that decade and more, in national parks in the north, south, will last for. It may be that, after a few years, it is east and west, including those in Wales—and especially decided that we have learned as much as we can from my nearest and dearest, the Brecon Beacons national that project and that it would not be continued. There park. There are fantastic examples of park authorities, will be a change of use, but we do not know how long housing associations in national parks and private-sector for. transport initiatives in national parks and so on doing great work on sustainable development. This clause, The new clause determines who will hold the ultimate which deals with energy renewables and energy generation, decommissioning responsibility. We are not necessarily builds on that excellent work. looking at pipes that will be in continuous use for decades to come as part of a CO2 disposal programme; we are looking at ones that will be used for the duration 12 noon of the trial projects, so they are likely to be finite. There I once said of sustainable development and renewable is a distinct decommissioning liability that will be imposed energy that the national parks were like laboratories for on the new operators. I hope that that provides the the whole United Kingdom. In the most sympathetic clarification and comfort that the hon. Gentleman seeks. way, given their special natural environment, we could Amendment 70 agreed to. trial some of the very best experiments in our national parks, particularly in respect of community generated Amendment made: 71, in clause 107, page 83, line 2, at and community owned investment in energy generation. end insert— The amendments are to be welcomed. I hope that the ‘( ) sections [Renewable heat incentives in Northern Ireland] and [Power for Gas and Electricity Markets Minister, in discussions with colleagues from DEFRA, Authority to act on behalf of Northern Ireland will use the amendments and other provisions already authority in connection with scheme under section in place to continue to encourage communities in national [Renewable heat incentives in Northern Ireland]] parks and the Broads Authority to do more to become (renewable heat incentives in Northern Ireland).’.— living laboratories—not only for energy and renewables, (Charles Hendry.) but for wider sustainable development.

Charles Hendry: I beg to move amendment 171, in Charles Hendry: I shall respond briefly.Any development clause 107, page 83, line 2, at end insert ‘; that takes place in a national park needs to be appropriate ( ) section [Electricity from renewable sources: National to that park. The national parks are already under a Park authorities and Broads Authority] (electricity strong obligation to ensure that that is the case, and from renewable sources: National Park authorities nothing changes in that respect. However, I agree with and Broads Authority)’. the hon. Gentleman that we want greater community 381 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 382

[Charles Hendry] The original scheme, as envisaged by the previous Government, made no distinction whatever in terms of involvement. The changes that we have made on our ownership. We have said that as part of the more website to encourage community schemes and the changes general review of the feed-in tariff, we will also consider that we are making to encourage the community ownership ownership issues. We are, of course, keen to encourage of new renewable energy projects are an important part community projects, because of the community buy-in of the process. The statutory authorities, be they local and the acceptance that that brings—the way in which it authorities or parks authorities, should be encouraged helps to change people’s attitudes more generally towards to be part of that process. Liberating them to generate energy issues. We are examining those matters to put and sell their own electricity is important, and I am right the imperfections in the scheme that we inherited. pleased to be able to make the change. Amendment 171 agreed to. Amendments made: 23, in clause 107, page 83, line 4, Huw Irranca-Davies: The Minister may have this at end insert— knowledge to hand; if not, I would be happy for him to ‘(a) section [Preparatory expenditure: framework regulations] write to me. Does he know of any energy projects, (preparatory expenditure: framework regulations);’. particularly in solar renewables, that have been cancelled Amendment 72, in clause 107, page 83, line 11, leave as a result of the readjustment of feed-in tariffs announced out ‘to 4, 6’ and insert ‘, 3, 4’.—(Charles Hendry.) by the Minister, the hon. Member for Bexhill and Battle Clause 107, as amended, ordered to stand part of the (Gregory Barker)? I have received reports that at least Bill. two projects in national parks are above 50kW, but that goes against the spirit of what is a very good amendment. Is the Minister aware of the cancellation of community Clause 108 and national park-inspired projects as a result of that announcement? SHORT TITLE

Charles Hendry: I do not have information on specific Gregory Barker: I beg to move amendment 24, in projects, but I can write to the hon. Gentleman. He clause 108, page 83, line 23, leave out subsection (2). brings together two separate issues, however. One is This purely technical amendment removes a provision about encouraging the national park authorities and in the Bill that was inserted in the other place to ensure the Broads Authority to take part in renewable energy that this House’s privilege over financial matters is generation. The other is about funding decisions and respected. I hope that hon. Members will support this the feed-in tariffs. We had to decide whether it was right technical amendment and uphold 400 years of for an above-average return to be made available to constitutional precedent. predominantly wealthy investors and paid for by less wealthy people in their electricity bills; that threatened Huw Irranca-Davies: I was expecting to be fascinated to squeeze out smaller-scale projects. by the Minister’s comments on this provision, but they My hon. Friend the Member for Bexhill and Battle, have been rather brief and to the point, so may I ask the Minister, has worked with tremendous attention to him to expand on how the provision is a danger to our detail to ensure that we support the smaller projects—that constitutional settlement? As a “small c” conservative, I was always the intention with the feed-in tariff and the might just agree with him on the overall settlement, but microgeneration programme—and to put right the could he expand on the points that he has just touched miscalculation made by the previous Government, who on? assumed that there would be no schemes of more than 50kW before 2013. It is now clear that megawatts were Gregory Barker: I was simply alluding to the fact that coming through planning, but although that miscalculation the provision deals with matters that relate to finance, was made for understandable reasons, we had to put it which are within the privilege of this House, rather than right. the other place. Amendment 24 agreed to. Huw Irranca-Davies: Does the Minister agree that far Clause 108, as amended, ordered to stand part of the from large, multi-megawatt schemes, if it comes to light Bill. that any community-owned, community-invested schemes of modest size—perhaps between 50 kW and 250 kW, New Clause 3 with 50 kW being, as the Secretary of State described, two tennis courts—have been cancelled, that would be a terrible shame and run contrary to the stated ambitions EARLY REPAYMENT OF GREEN DEAL FINANCE of the Government to support community initiatives of ‘(1) The Consumer Credit Act 1974 is amended as follows. that type? It would run contrary to the whole idea of (2) After section 95A (compensatory amount to creditor in localism as well. relation to early repayment) insert— “95B Compensatory amount: green deal finance (1) This section applies where— Charles Hendry: Let me give the shadow Minister (a) a regulated consumer credit agreement provides for the some reassurance. The original system made no allowance rate of interest on the credit to be fixed for a period whatever for any scheme, of whatever type, of between of time (“the fixed rate period”), 100 kW and 5 MW. We have now introduced a number (b) the agreement is a green deal plan (within the meaning of subsidiary levels, which gives greater support to the of section1 of the Energy Act 2011) which is of a smaller schemes and therefore the ones that are more duration specified for the purposes of this section in likely to be community led. regulations, and 383 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 384

(c) under section 94 the debtor discharges all or part of his New Clause 6 indebtedness during the fixed rate period. (2) The creditor may claim an amount equal to the cost which CONTRIBUTION TO CARBON BUDGETING UNDER THE the creditor has incurred as a result only of the debtor’s CLIMATE CHANGE ACT 2008 indebtedness being discharged during the fixed rate period if— ‘(1) The Secretary of State must prepare and publish an (a) the amount of the payment under section 94 is not annual report on the extent to which— paid from the proceeds of a contract of payment protection insurance, and (a) green deal plans under Chapter 1 of Part 1, and (b) such other conditions as may be specified for the (b) the energy company obligations provisions, purposes of this section in regulations are satisfied. have contributed to the Secretary of State fulfilling the duty (3) The amount in subsection (2)— under section 4(1)(b) of the Climate Change Act 2008 (carbon budgeting). (a) must be fair, (2) The “energy company obligations provisions” means— (b) must be objectively justified, (a) sections 33BC and 33BD of the Gas Act 1986 and (c) must be calculated by the creditor in accordance with sections 41A and 41B of the Electricity Act 1989 provision made for the purposes of this section in (promotion of reductions in carbon emissions and regulations, and home-heating costs), (d) must not exceed the total amount of interest that would (b) sections 103 and 103A of the Utilities Act 2000 have been paid by the debtor under the agreement in (overall carbon emissions and home-heating cost the period from the date on which the debtor makes reduction targets), and the payment under section 94 to the date fixed by the agreement for the discharge of the indebtedness of (c) section 103B of the Utilities Act 2000 (Secretary of the debtor. State’s power to require information about carbon emissions and home-heating cost reduction targets). (4) If a creditor could claim under either section 95A or this section, the creditor may choose under which section to claim.” (3) The first report under this section must be published before the end of 2014. (3) In section 94 (right to complete payments ahead of time)— (4) The Secretary of State must lay before Parliament a copy (a) in subsection (1) after “section 95A(2)” insert “or of each report under this section.’.—(Gregory Barker.) section 95B(2)”; Brought up, read the First and Second time, and added (b) in subsection (5) after “section 95A(2)” insert “or section 95B(2)”. to the Bill. (4) In subsection (2)(c) of section 97A (duty to give information on partial repayment) after “section 95A(2)” insert New Clause 7 “or section 95B(2)”.’.—(Gregory Barker.) Brought up, read the First and Second time, and added ENERGY EFFICIENCY AIM to the Bill. ‘(1) The Secretary of State must take such action as he considers appropriate to improve the energy efficiency of residential accommodation in England so as to contribute to the New Clause 4 Secretary of State fulfilling the duty under section 1(1) of the Climate Change Act 2008 (reduction of net UK carbon account EXERCISE OF SCHEME FUNCTIONS ON BEHALF OF THE by 2050). SECRETARY OF STATE OR A PUBLIC BODY (2) In subsection (1) “residential accommodation” has the meaning given by section 1 of the Home Energy Conservation ‘(1) This section applies to any function exercisable in Act 1995. connection with the scheme established by the framework regulations. (3) Section 2 of the Sustainable Energy Act 2003 (energy efficiency of residential accommodation) ceases to have effect. (2) The Secretary of State may arrange for such a function to be exercised by any body or person on behalf of the Secretary of (4) In section 9 of the Sustainable Energy Act 2003 (citation, State. extent and commencement), in subsections (3) and (5) leave out “2,”.’. (3) A public body specified in relation to such a function in an order made by virtue of section 30(1)(a) may arrange for the This amendment will require the Government to achieve a 29 per cent. function to be exercised by any other body or person on its decrease in emissions of carbon dioxide from residential behalf. accommodation by 2022 (based on 2008 levels), through energy efficiency measures. See amendment (a) to NC7.—(Gregory Barker.) (4) Arrangements under this section— Brought up, read the First and Second time, and added (a) do not affect the responsibility for the exercise of the function; to the Bill. (b) may include provision for payments to be made to the body or person exercising the function under the New Clause 11 arrangements.’.—(Gregory Barker.) Brought up, read the First and Second time, and added ACQUISITION OF RIGHTS TO USE GAS PROCESSING to the Bill. FACILITIES FOR DOWNSTREAM PURPOSES ‘(1) Section 12 of the Gas Act 1995 (acquisition of rights to use gas processing facilities) is amended as follows. New Clause 5 (2) In the heading at the end insert “for downstream purposes”. PREPARATORY EXPENDITURE: FRAMEWORK (3) For “the Secretary of State” (in each place those words REGULATIONS occur) substitute “the Authority”. ‘The Secretary of State may, before the framework regulations (4) In subsection (1)— are made, incur expenditure for the purpose of, or in connection (a) in the words before paragraph (a), after “gas with, preparing for a scheme of the kind provided for by processing facility” insert “which processes gas for a section 3.’—(Gregory Barker.) downstream purpose”; Brought up, read the First and Second time, and added (b) in that paragraph for “on that person’s behalf” to the Bill. substitute “for such a purpose”. 385 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 386

(5) After subsection (1) insert— (b) the storage of liquid gas which, if regasified, “(1ZA) At least two months before publishing those would be suitable for conveyance through conditions or any changes to them under subsection (1), the pipes to premises in accordance with a licence owner of the facility must— under section 7 of the 1986 Act; (a) publish a draft of the proposed conditions or changes; but the reference in paragraph (b) to the storage of and liquid gas does not include such temporary (b) inform any person who has a right to have gas storage as is mentioned in the definition of “LNG processed by the facility that the draft has been import or export facility”;”; published. ““LNG import or export facility” means a facility in (1ZB) The owner of the facility must take into account any Great Britain (including the territorial sea representations received about the proposed conditions or adjacent to Great Britain and the sea in any area changes before publishing them, or a modified version of them, designated under section 1(7) of the Continental as final conditions or changes under subsection (1).” Shelf Act 1964) for— (6) In subsection (1B) for “on his behalf” substitute “for a (a) the importation into Great Britain and downstream purpose”. regasification of liquid gas prior to its conveyance to a pipeline system operated by (7) In subsection (1D)— the holder of a licence under section 7 or (a) omit the “and” immediately preceding paragraph (c); section 7ZA of the 1986 Act, or the (b) after paragraph (c) insert “; and liquefaction of gas for the purpose of its (d) that the gas is to be processed for a downstream export from Great Britain; and purpose”. (b) any activity, including temporary storage of gas (8) In subsection (1G) for “he” substitute “it”. or liquid gas, which is necessary for that importation, regasification or liquefaction;”; (9) In subsection (2)(b) for “his” substitute “its”. ““storage”, in relation to liquid gas in a gas storage (10) For subsections (5) and (5A) substitute— facility, includes any liquefaction of gas or “(5) Sections 28 to 30F of the 1986 Act (enforcement of regasification of liquid gas ancillary to the storage relevant requirements etc) apply in relation to the owner of a gas of liquid gas, and “stored”, in relation to liquid processing facility as if— gas in a gas storage facility, shall be construed (a) references to “a licence holder” were references to the accordingly;”. owner of the facility; and (12) For subsection (7) substitute— (b) references to a “relevant requirement” were references “(7) Section 89 of the Energy Act 2011 (meaning of to a requirement imposed on the owner under this “associate”) applies for the purposes of subsection (3) of this section. section as it applies for the purposes of section 80(6)(d) and (5A) For the purposes of this section, gas is processed for “a (8)(a) of that Act.”’.—(Gregory Barker.) downstream purpose” if it is processed with a view to its being Brought up, read the First and Second time, and added put into a gas storage facility, an LNG import or export facility, to the Bill. a gas interconnector or a distribution system pipeline.” (11) In subsection (6)— New Clause 12 (a) in the definition of “gas processing facility” for the words from “carries” to the end substitute “— REGULATION OF SECURITY OF NUCLEAR CONSTRUCTION (a) carries out gas processing operations; SITES (b) is operated otherwise than by a gas transporter; ‘(1) Section 77 of the Anti-terrorism, Crime and Security and Act 2001 (regulation of security of civil nuclear industry) is (c) is not an LNG import or export facility;”; amended as follows. (b) insert, in the appropriate place, the following (2) In subsection (1) (list of matters that may be regulated) definitions— after paragraph (c) insert— ““authorised transporter” has the same meaning as in “(cza) nuclear construction sites and equipment used or Part 1 of the 1986 Act;”; stored on such sites;”. (3) In subsection (7) after the definition of “equipment” ““the Authority” means the Gas and Electricity insert— Markets Authority;”; ““nuclear construction site” means a site— ““distribution system operator” has the meaning given by Article 2(6) of Directive 2009/73/EC of the (a) on which works are being carried out with a European Parliament and of the Council of view to its becoming a nuclear site used 13 July 2009 concerning common rules for the wholly or mainly for purposes other than internal market in natural gas and repealing defence purposes; and Directive 2003/55/EC;”; (b) which is situated within 5 kilometres of an ““distribution system pipeline” means a pipeline existing nuclear site.”’.—(Gregory Barker.) operated by an authorised transporter who is a Brought up, read the First and Second time, and added distribution system operator;”; to the Bill. ““gas interconnector” has the same meaning as in Part 1 of the 1986 Act;”; New Clause 13 ““gas storage facility” means a facility in Great Britain (including the territorial sea adjacent to Great ABANDONMENT: INFRASTRUCTURE CONVERTED FOR Britain and the sea in any area designated under CCS DEMONSTRATION PROJECTS section 1(7) of the Continental Shelf Act 1964) for either or both of the following— ‘(1) The Energy Act 2008 is amended as follows. (2) After section 30 insert— (a) the storage in porous strata, or in cavities in strata, of gas which has been, or will be, “30A Installations converted for CCS demonstration conveyed in a pipeline system operated by the projects holder of a licence under section 7 or 7ZA of (1) The Secretary of State may by order designate an the 1986 Act; installation as an eligible CCS installation. 387 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 388

(2) But an order may not be made under subsection (1) in (b) before the trigger event occurred in relation to the relation to— installation. (a) a carbon storage installation established or maintained (11) The power conferred by subsection (1) does not include a under a licence granted by the Scottish Ministers, or power to revoke an order made under that subsection. (b) any other installation established or maintained wholly (12) In this section— or partly in Scotland. “abandonment liability”, in relation to an installation, (3) An order under subsection (1) ceases to have effect if the means a duty to secure that an abandonment installation in relation to which it is made becomes an programme for the installation is carried out; installation within subsection (2)(a). “abandonment programme”, in relation to an (4) An eligible CCS installation qualifies for change of use installation, means a programme in respect of the relief if— installation approved, or having effect as if (a) the installation is or has been used as part of a CCS approved, by the Secretary of State under section demonstration project, and 32 of the 1998 Act; (b) the trigger event has occurred in relation to the “abandonment programme notice” means a notice installation at a time when the installation was so served under section 29(1) of the 1998 Act; used (whether before or after it was designated under “captured carbon dioxide” means carbon dioxide that this section). has been produced by, or in connection with, (5) The trigger event occurs— commercial electricity generation and captured with a view to its disposal by way of permanent (a) in relation to an installation used for the injection of storage; captured carbon dioxide into a carbon storage facility as part of a CCS demonstration project, “carbon dioxide”, “CCS demonstration project” and when captured carbon dioxide is first present at the “commercial electricity generation” have the same installation, and meanings as in Part 1 of the Energy Act 2010 (see section 7 of that Act); (b) in relation to an installation used as part of a CCS demonstration project for any other purpose, when “carbon storage facility” has the same meaning as in captured carbon dioxide is first present at another section 20; installation used as mentioned in paragraph (a) as “Scotland” has the same meaning as in the Scotland part of the same project. Act 1998 (see section 126(1) of that Act). (6) Where an eligible CCS installation qualifies for change of (13) Section 30(8) to (9) of the 1998 Act (when one body use relief— corporate is associated with another) apply for the purposes of this section. (a) an abandonment programme notice must not be served on a person who is within section 30(1) of the 30B Submarine pipelines converted for CCS 1998 Act only because one or more of subsections (7) demonstration projects to (9) applies in relation to the person (but this does ‘(1) The Secretary of State may by order designate a not affect the validity of a notice served on any such submarine pipeline as an eligible CCS pipeline. person before the installation qualified for change of (2) An eligible CCS pipeline qualifies for change of use relief use relief), and if— (b) a proposal must not be made under section 34(1)(b) of (a) the pipeline is or has been used as part of a CCS the 1998 Act if the effect of the proposal (if demonstration project for a purpose other than the implemented) would be to impose an abandonment transport of petroleum, and liability on a person who is within section 34(2)(a) of (b) the trigger event has occurred in relation to the the 1998 Act only because one or more of pipeline at a time when the pipeline was so used subsections (7) to (10) applies in relation to the (whether before or after it was designated under this person. section). (7) This subsection applies in relation to a person if— (3) The trigger event— (a) the person is within paragraph (b) of section 30(1) of (a) in relation to a pipeline used to transport captured the 1998 Act in relation to the installation only by carbon dioxide as part of a CCS demonstration virtue of the fact that the person had a right project, occurs when captured carbon dioxide is first mentioned in section 30(5)(a) of that Act when an present in the pipeline, and activity mentioned in section 30(6) of that Act was (b) in relation to a pipeline used as part of a CCS last carried on from, by means of or on the demonstration project for any other purpose, installation, and occurs— (b) any such activity was last so carried on before the (i) when captured carbon dioxide is first present in trigger event occurred in relation to the installation. another pipeline used as part of the same project, (8) This subsection applies in relation to a person if— or (a) the person is within paragraph (ba) of section 30(1) of (ii) if earlier, when captured carbon dioxide is first the 1998 Act in relation to the installation, and present at an installation used as part of the same (b) the transfer mentioned in sub-paragraph (i) of that project for the injection of captured carbon paragraph took place before the trigger event dioxide into a carbon storage facility. occurred in relation to the installation. (4) Where an eligible CCS pipeline qualifies for change of use (9) This subsection applies in relation to a person if the person relief, a proposal must not be made under section 34(1)(b) of the is within paragraph (e) of section 30(1) of the 1998 Act only by 1998 Act if the effect of the proposal (if implemented) would be virtue of being associated with a body corporate which is within to impose an abandonment liability on a person who is within subsection (7) or (8). section 34(2)(b) of the 1998 Act only because subsection (5) (10) This subsection applies in relation to a person if the applies in relation to the person. person has been within any of paragraphs (a), (b), (c), (d) or (e) (5) This subsection applies in relation to a person if the person of section 30(1) of the 1998 Act in relation to the installation, but has been within any of paragraphs (a) to (c) of section 30(2) of only at a time— the 1998 Act in relation to the pipeline, but only at a time— (a) when the installation was an offshore installation (a) when the pipeline was used solely for activities other (within the meaning given by section 44 of the than activities connected with any mentioned in 1998 Act), and section 17(2)(a), (b) or (c), and 389 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 390

(b) before the trigger event occurred in relation to the (3) After section 12 insert— pipeline. “Pipe-lines for Conveying Carbon Dioxide: Compulsory (6) The power conferred by subsection (1) does not include a Acquisition of Rights over Land power to revoke an order made under that subsection. 12A Orders for compulsory acquisition of rights over (7) In this section— land: pipe-lines for conveying carbon dioxide “abandonment liability”, in relation to a submarine pipeline, is a duty to secure that an abandonment ‘(1) This section applies in relation to a pipe-line (or a length programme for the pipeline is carried out; of a pipe-line) that is intended to be converted into a pipe-line (or length) used for conveying carbon dioxide. “abandonment programme”, in relation to a submarine pipeline, means a programme in (2) The owner of the pipe-line may apply to the Secretary of respect of the pipeline approved, or having effect State for an order under subsection (3) in relation to land in as if approved, by the Secretary of State under which the pipe-line (or a length of the pipe-line) is situated. section 32 of the 1998 Act; (3) An order under this subsection is an order authorising the “captured carbon dioxide” and “CCS demonstration owner of the pipe-line to do one or more of the following— project” have the same meanings as in (a) to use the pipe-line (or length of the pipe-line) in the section 30A; land described in the order to convey carbon dioxide; “carbon storage facility” has the same meaning as in (b) to execute pipe-line works in the land which are section 20; necessary in consequence of the presence of the “petroleum” has the same meaning as in Part 1 of the pipe-line (or length) in the land; 1998 Act (see section 1 of that Act) and includes (c) to execute pipe-line works in the land to enable the petroleum that has undergone any processing; pipe-line (or length) to be used to convey carbon “submarine pipeline” has the same meaning as in dioxide or in consequence of its use to convey carbon Part 4 of the Petroleum Act 1998 (see section 45 dioxide; of that Act).” (d) to exercise, in relation to the pipe-line (or length), such (3) In the cross heading before section 30, for “installations” of the rights mentioned in Schedule 4 as may be substitute “infrastructure”. specified in the order. (4) In section 30 (abandonment of installations)— An order under this subsection is referred to in this Act as a (a) in subsection (1) (application of Part 4 of Petroleum “compulsory rights order”. Act 1998 in relation to abandonment of carbon (4) A compulsory rights order under this section may be made storage installations)— subject to conditions (see section 13). (i) for ““the 1998 Act”” substitute “referred to in this (5) On receiving an application under subsection (2), the section and sections 30A and 30B as “the Secretary of State may grant or refuse the application. 1998 Act””, and (ii) at the end insert “and section 30A”, (6) Part 1 of Schedule 2, as modified by Part 2 of that Schedule, has effect in relation to applications for compulsory (b) after subsection (4) (power to make regulations rights orders under this section. modifying Part 4 of the 1998 Act in its application to carbon storage installations) insert— (7) A compulsory rights order under this section enures for the benefit of the owner for the time being of the pipe-line. “(4A) The power in subsection (4) is subject to section 30A.”, and (8) The Secretary of State may by order revoke a compulsory rights order under this section, in whole or in part, if— (c) in subsection (5) (meaning of “carbon storage installation”) after “this section” insert “and (a) the pipe-line (or length of the pipe-line) is diverted section 30A”. from the land described in the order, (5) In section 105(2) (parliamentary control of subordinate (b) the pipe-line (or length) is abandoned, legislation), after paragraph (a) insert— (c) the pipe-line (or length) ceases to be used to convey “(aa) an order which contains provision made under carbon dioxide, or section 30A or 30B only (powers to designate installations and submarine pipelines as eligible CCS (d) the owner of the pipe-line makes an application for the installations and eligible CCS pipelines);”.’.— revocation of the order. (Gregory Barker.) (9) A compulsory rights order under this section does not Brought up, read the First and Second time, and added affect any right over the land described in the order that would not have been affected had the land been compulsorily purchased to the Bill. by virtue of a compulsory purchase order. (10) A compulsory rights order under this section does not authorise the disregard of any enactment or of any instrument New Clause 14 having effect by virtue of any enactment. (11) A compulsory rights order under this section is not to be CARBON DIOXIDE PIPELINES: POWERS OF COMPULSORY taken to confer a right of support for the pipeline (or length of ACQUISITION pipeline). ‘(1) The Pipe-lines Act 1962 is amended as follows. (12) A compulsory rights order under this section is to be subject to special parliamentary procedure. (2) In section 12 (orders for compulsory acquisition of rights over land for pipe-line construction)— (13) For the purposes of this section, “carbon dioxide” includes any substance consisting primarily of carbon dioxide. (a) in subsection (1), for “the next following section” substitute “section 13”; Compulsory Rights Orders under Sections 12 and 12A: (b) in subsections (2), (4), (5)(a) and (b), (5A) (in both Supplementary Provisions”. places), (6) and (7), after “a compulsory rights order” (4) In section 66 (general interpretation provisions), in insert “under this section”; subsection (1), in the definition of “compulsory rights order”, for (c) in subsection (3), after “compulsory rights orders” “subsection (1) of section twelve” substitute “sections 12(1) and insert “under this section”. 12A(2)”. 391 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 392

(5) In Schedule 2— (d) crude liquid petroleum; (a) in the shoulder reference, after “12,” insert “12A,”; (e) petroleum products (within the meaning of that (b) in paragraph 10(1), for “subsection (3) of section Act); twelve of this Act” substitute “sections 12(3) and (f) any substance produced directly or indirectly 12A(4)”. from a substance mentioned in (6) In Schedule 4, in the shoulder reference, for “Section 12” paragraphs (a)) to (e)); substitute “Sections 12 and 12A”.’.—(Gregory Barker.) “fossil fuel supplier” means a person who supplies Brought up, read the First and Second time, and added fossil fuel to consumers for the purpose of to the Bill. generating heat; “functions” includes powers and duties; “modify” includes amend, add to or repeal; New Clause 15 “NIAUR” means the Northern Ireland Authority for Utility Regulation; RENEWABLE HEAT INCENTIVES IN NORTHERN IRELAND “owner”, in relation to any plant which the subject of a ‘(1) The Department of Enterprise, Trade and Investment may hire purchase agreement, a conditional sale make regulations— agreement or any agreement of a similar nature, (a) establishing a scheme to facilitate and encourage means the person in possession of the plant under renewable generation of heat in Northern Ireland, that agreement; and “plant” includes any equipment, apparatus or (b) about the administration and financing of the scheme. appliance; (2) Regulations under this section may, in particular— “renewable generation of heat” means the generation (a) make provision for the Department or NIAUR to of heat by means of a source of energy or make payments, or to require designated fossil fuel technology mentioned in subsection (4). suppliers to make payments, in specified (4) The sources of energy and technologies are— circumstances, to— (a) biomass; (i) the owner of plant used or intended to be used for (b) biofuels; the renewable generation of heat, whether or not the owner is also operating or intending to (c) fuel cells; operate the plant; (d) water (including waves and tides); (ii) a producer of biogas or biomethane; (e) solar power; (iii) a producer of biofuel for generating heat; (f) geothermal sources; (b) make provision about the calculation of such (g) heat from air, water or the ground; payments; (h) combined heat and power systems (but only if the (c) make provision about the circumstances in which such system’s source of energy is a renewable source payments may be recovered; within the meaning given by Article 55F of the (d) require designated fossil fuel suppliers to provide Energy (Northern Ireland) Order 2003 (S.I. 2003/419 specified information to the Department or NIAUR; (N.I. 6))); (e) make provision for payments to fossil fuel suppliers in (i) biogas. specified circumstances; (5) The Department may by regulations— (f) make provision about the enforcement of obligations (a) modify the list of sources of energy and technologies in imposed by or by virtue of the regulations (which subsection (4); may include a power for the Department or NIAUR to impose financial penalties); (b) modify the definition of “biofuel”, “biogas” or “biomass” in subsection (3). (g) confer functions on the Department or NIAUR, or both. (6) The Department may by regulations make provision, for the purposes of subsection (2)(a)(iii) and the definition of “fossil (3) In this section— fuel supplier”, specifying that particular activities do or do not “biofuel” means liquid or gaseous fuel which is constitute generating heat. produced wholly from biomass; (7) Any power to make regulations under this section is to be “biogas” means gas produced by the anaerobic or exercisable by statutory rule for the purposes of the Statutory thermal conversion of biomass; Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)). “biomass” means material, other than fossil fuel or (8) Regulations under this section may not be made unless a peat, which is, or is derived directly or indirectly draft of the regulations has been laid before, and approved by a from, plant matter, animal matter, fungi or algae; resolution of, the Northern Ireland Assembly. “biomethane” means biogas which is suitable for conveyance through pipes to premises in (9) Regulations under this section may— accordance with a licence under Article 8(1)(a) of (a) provide for a person to exercise a discretion in dealing the Gas (Northern Ireland) Order 1996 (S.I. 1996/ with any matter; 275 (N.I. 2)) (licences to convey gas); (b) include incidental, supplementary and consequential “the Department” means the Department of provision; Enterprise, Trade and Investment; (c) make transitory or transitional provisions or savings; “designated fossil fuel suppliers” means— (d) make provision generally, only in relation to specified (a) if the regulations so provide, a specified class of cases or subject to exceptions (including provision for fossil fuel suppliers, and a case to be excepted only so long as conditions (b) in any other case, all fossil fuel suppliers; specified in the regulations are satisfied); “fossil fuel” means— (e) make different provision for different cases or (a) coal; circumstances or for different purposes.’.—(Gregory (b) lignite; Barker.) (c) natural gas (within the meaning of the Energy Brought up, read the First and Second time, and added Act 1976); to the Bill. 393 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 394

New Clause 16 “relevant energy efficiency improvements” means improvements which— POWER FOR GAS AND ELECTRICITY MARKETS (a) are of such description as the regulations AUTHORITY TO ACT ON BEHALF OF NORTHERN provide, and IRELAND AUTHORITY IN CONNECTION WITH SCHEME (b) can be— UNDER SECTION [RENEWABLE HEAT INCENTIVES IN (5) The Secretary of State may by order amend the definition NORTHERN IRELAND] of “energy performance certificate” in subsection (4). ‘(1) GEMA and a Northern Ireland authority may enter into (6) The first domestic energy efficiency regulations must come arrangements for GEMA to act on behalf of the Northern into force no later than 1 April 2018.’.—(Gregory Barker.) Ireland authority for, or in connection with, the carrying out of Brought up, read the First and Second time, and added any functions that may be conferred on the Northern Ireland to the Bill. authority under, or for the purposes of, any scheme that may be established, under section [Renewable heat incentives in Northern Ireland]. New Clause 33 (2) In this section— “GEMA” means the Gas and Electricity Markets Authority; FURTHER PROVISION ABOUT DOMESTIC ENERGY “Northern Ireland authority” means— EFFICIENCY REGULATIONS (a) the Department of Enterprise, Trade and ‘(1) Domestic energy efficiency regulations may, in particular, Investment, or include provision about— (b) the Northern Ireland Authority for Utility (a) the period within which improvements required by the Regulation.’.—(Gregory Barker.) regulations must be started or completed; Brought up, read the First and Second time, and added (b) exemptions from any requirement imposed by or under to the Bill. the regulations; (c) evidence relating to any requirement imposed by or under the regulations. New Clause 17 (2) Provision falling within subsection (1)(b) includes, in particular, provision about exemptions— AMENDMENT OF SECTION 137 OF THE ENERGY ACT 2004 (a) relating to any necessary permissions or consents; ‘In section 137(3) of the Energy Act 2004 (standard conditions (b) relating to the likely negative impact on the value of a of transmission licences under Part 1 of the Electricity property of complying with a requirement imposed Act 1989)— by or under the regulations. (a) in paragraph (a) omit “or”, and (3) Provision falling within subsection (1)(c) includes, in (b) after paragraph (b) insert— particular, provision about evidence for the purpose of demonstrating— “(c) under the Energy Act 2008, (a) an exemption from a requirement imposed by or under (d) under the Energy Act 2010, or the regulations; (e) under the Energy Act 2011,”.’.—(Gregory Barker.) (b) that a property is not one in relation to which the Brought up, read the First and Second time, and added regulations have effect; to the Bill. (c) that the improvements required by or under the regulations are not relevant energy efficiency New Clause 32 improvements within the meaning given by the regulations.’.—(Gregory Barker.) DOMESTIC ENERGY EFFICIENCY REGULATIONS: Brought up, read the First and Second time, and added ENGLAND AND WALES to the Bill. ‘(1) The Secretary of State must make regulations for the purpose of securing that a landlord of a domestic PR property— (a) which is of such description of domestic PR property New Clause 34 as is provided for by the regulations,

(b) in relation to which there is an energy performance DOMESTIC ENERGY EFFICIENCY REGULATIONS: certificate, and SCOTLAND (c) which falls below such level of energy efficiency (as demonstrated by the energy performance certificate) ‘(1) The Scottish Ministers may make regulations for the as is provided for by the regulations, purpose of securing that a landlord of a Scottish domestic PR property— may not let the property until the landlord has complied with the obligation mentioned in subsection (2). (a) which is of such description of Scottish domestic PR property as is provided for by the regulations, (2) The obligation is to make to the property such relevant energy efficiency improvements as are provided for by the (b) in relation to which there is an energy performance regulations. certificate, and (3) Regulations under this section are referred to in this (c) which falls below such level of energy efficiency (as Chapter as “domestic energy efficiency regulations”. demonstrated by the energy performance certificate) (4) For the purposes of domestic energy efficiency as is provided for by the regulations, regulations— may not let the property until the landlord has complied with “energy performance certificate” has the meaning the obligation mentioned in subsection (2). given by the Energy Performance Regulations; (2) The obligation is to make to the property such relevant “landlord” and “let the property” have the meaning energy efficiency improvements as are provided for by the given by the regulations (and “let the property” regulations. may be defined to include “continue to let the (3) Regulations under this section are referred to in this property”); and Chapter as “Scottish domestic energy efficiency regulations”. 395 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 396

(4) For the purposes of Scottish domestic energy efficiency (c) make grants or loans to enable other persons to do regulations— anything which the body may do by virtue of “energy performance certificate” has the meaning paragraph (a) or (b); given by the Energy Performance (Scotland) (d) use, sell or otherwise dispose of electricity produced by Regulations; virtue of the powers conferred by this section. “landlord” and “let the property” have the meaning (3) A “renewable source” is— given by the regulations (and “let the property” (a) in England and Wales, a source listed in regulation 2 of may be defined to include “continue to let the the Sale of Electricity by Local Authorities (England property”); and and Wales) Regulations 2010 (S.I. 2010/1910); “relevant energy efficiency improvements” means (b) in Scotland, a source listed in regulation 2 of the Sale improvements which— of Electricity by Local Authorities (Scotland) (a) are of such description as the regulations Regulations 2010 (S.I. 2010/1908). provide, and (4) Any regulations which— (b) can be— (a) are made in exercise of the power conferred by section (5) The Scottish Ministers may by order amend the definition 11(3) of the Local Government (Miscellaneous of “energy performance certificate” in subsection (4). Provisions) Act 1976 (power to prescribe the (6) Scottish domestic energy efficiency regulations may come circumstances in which local authorities may sell into force no earlier than 1 April 2015 .’.—(Gregory Barker.) electricity), and Brought up, read the First and Second time, and added (b) amend, revoke or re-enact regulation 2 of the Sale of Electricity by Local Authorities (England and Wales) to the Bill. Regulations 2010, may amend subsection (3)(a) for the purpose of providing New Clause 35 what is a “renewable source” in England and Wales. (5) Any regulations which— FURTHER PROVISION ABOUT SCOTTISH DOMESTIC (a) are made in exercise of the power conferred by section ENERGY EFFICIENCY REGULATIONS 170A(3) of the Local Government (Scotland) ‘(1) Scottish domestic energy efficiency regulations may, in Act 1973 (power to prescribe the circumstances in particular, include provision about— which local authorities may sell electricity), and (a) the period within which improvements required by the (b) amend, revoke or re-enact regulation 2 of the Sale of regulations must be started or completed; Electricity by Local Authorities (Scotland) Regulations 2010, (b) exemptions from any requirement imposed by or under the regulations; may amend subsection (3)(b) for the purpose of providing what is a “renewable source” in Scotland. (c) evidence relating to any requirement imposed by or under the regulations. (6) Nothing in this section— (2) Provision falling within subsection (1)(b) includes, in (a) exempts a body from the requirements of Part 1 of the particular, provision about exemptions— Electricity Act 1989, or (a) relating to any necessary permissions or consents; (b) affects what a body has power to do apart from this section.’.—(Gregory Barker.) (b) relating to the likely negative impact on the value of a property of complying with a requirement imposed Brought up, read the First and Second time, and added by or under the regulations. to the Bill. (3) Provision falling within subsection (1)(c) includes, in particular, provision about evidence for the purpose of demonstrating— New Clause 1 (a) an exemption from a requirement imposed by or under the regulations; (b) that a property is not one in relation to which the CARBON EMISSIONS IN LOCAL AUTHORITY AREAS regulations have effect; ‘(1) The Committee on Climate Change shall advise the (c) that the improvements required by or under the Secretary of State about the contribution to emissions reduction regulations are not relevant energy efficiency needed in local authority areas to meet each national carbon improvements within the meaning given by the budget. regulations.’.—(Gregory Barker.) (2) The advice given under subsection (1) should include but Brought up, read the First and Second time, and added not be limited to— to the Bill. (a) carbon emissions from a local authority’s own buildings and operations; 12.15 pm (b) carbon emissions from the local area; (c) local renewable energy generation; (d) national carbon reduction initiatives delivered at the New Clause 42 local level. (3) The Committee on Climate Change may advise the ELECTRICITY FROM RENEWABLE SOURCES:NATIONAL Secretary of State on local level adaptation to climate change. PARK AUTHORITIES AND BROADS AUTHORITY (4) The Secretary of State must lay before Parliament a ‘(1) This section applies to a body which is a National Park response to the advice given by the Committee on Climate authority or the Broads Authority. Change under subsection (1) or (2), within six months of (2) The body may— receiving the advice. (a) produce electricity from a renewable source; (5) For the purposes of this section— (b) establish and operate generating stations and other (a) “budgetary period”, “carbon budget” and “national installations for the purpose of producing electricity authorities” have the same meaning as in Part 1 of from a renewable source; the Climate Change Act 2008; 397 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 398

(b) “local authority” means a county council or district (a) either adopt and implement, or take the necessary Council in England, or a London Borough Council, steps to commence the process of implementation, or the Council of the Isles of Scilly.’.—(Gregory (b) or reject Barker.) the request or recommendation and in either case shall give Brought up, and read the First time. reasons for his decision. (6) Where any functions are conferred or transferred pursuant to this section, the Secretary of State shall ensure that the monies Gregory Barker: I beg to move, That the clause be necessary for the discharge of those functions are provided or read a Second time. transferred. (7) Any principal council on which functions are conferred or to which functions are transferred under this section must The Chair: With this it will be convenient to discuss determine how the functions are then performed. the following: new clause 2—Climate change strategy (8) Where the Secretary of State is spending money in an area for local authority areas— covered by a plan in order to achieve any of the objectives ‘(1) Local authorities must develop and promote a climate specified in section (1), and in this opinion— change strategy for their local area. (a) any measure contained in a plan is a more efficient way (2) In preparing the strategy, local authorities must take into of achieving his objectives; and account any advice given by the Committee on Climate Change (b) offers better value, on local action to meet carbon budgets. then he shall provide resources for the principal council to (3) In preparing the strategy, local authorities must consult implement those measures in its plan. with local residents, businesses, social enterprises and (9) Where any person submits to his local authority a proposal co-operatives and other institutions. that would in the opinion of the authority be a cost effective (4) Local authorities must publish and promote their local method of assisting with— climate change strategy, publish an annual report on progress (a) the reduction of greenhouse gases, or towards carrying out the strategy and engage with local citizens (b) the achievement of energy security, or and community groups. (c) the mitigation of fuel poverty, (5) The Secretary of State must work with local authorities and the Local Government Association (LGA) to assist them in the authority must include that proposal in any plan prepared producing and implementing their climate change strategies, pursuant to this section or, if it has not prepared such a plan, taking into account any relevant advice from the Committee on implement the proposal.’. Climate Change.’. New clause 29—Communal schemes— New clause 28—Sustainable energy plans— ‘(1) Local housing authorities shall be empowered to arrange, ‘(1) A local authority must consider whether the drawing up with green deal providers, energy saving schemes that cover the and publishing of a sustainable energy plan would have either of whole or a part of housing estates, roads, districts or other local the following effects, namely to— communities. They will negotiate on behalf of improvers so as to obtain savings that arise from economies of scale, which will be (a) increase its efficiency regarding; or passed on to individual improvers.’. (b) in any other way assist with New clause 46—Local carbon budgets— the discharge of its functions. ‘(1) The Secretary of State shall— (2) If in the opinion of a local authority the drawing up and (a) within 12 months of this Bill receiving Royal Assent, publishing of a sustainable energy plan would— report to Parliament with proposals for the (a) have either of the effects specified in subsection (1); introduction of a system of local carbon budgets and consistent with meeting national Climate Change (b) assist with the purposes of this Act Act 2008 carbon budgets; then it must draw up, publish and implement a sustainable (b) introduce the local carbon budget system to begin at energy plan. the start of the second national carbon budget (3) Without prejudice to the generality a plan must specify the period; steps that the local authority proposes to take to promote— (c) report to Parliament annually about the contribution of local strategies to meeting UK Climate Change (a) energy efficiency; Act carbon budgets; (b) microgeneration; (d) determine circumstances in which two or more (c) renewable energy; councils may develop a joint strategy for cutting (d) combined heat and power; and greenhouse gas emissions in their areas. (e) cost effective action with or by residents, local (2) The Secretary of State shall request advice from the organisations or businesses that would assist with the Committee on Climate Change about— reduction of greenhouse gases, the achievement of (a) the scale of action need in local authority areas to help energy security or the mitigation of fuel poverty. meet UK Climate Change Act carbon budgets; (4) A plan prepared by a local authority may— (b) climate mitigation and adaptation policies that are (a) request such new functions as in the opinion of the effective when locally coordinated by councils; council would enable it to make a greater (c) ensuring that individual local carbon budgets are both contribution to achieving the objectives specified in appropriate for the circumstances of different local subsection (2); and areas and that the totality of all local carbon budgets (b) make a recommendation to the Secretary of State for a is consistent with the requirements of subsection transfer of functions from another body to itself (1)(a). provided that no such recommendation may be made (3) The proposals to be reported under subsection (1) shall unless the council has consulted the person to whose include a duty on local authorities to— functions it relates. (a) develop a strategy, through consultation with those (5) Within 6 months of receiving any request pursuant to groups and individuals listed in subsection (3)(b), for subsection (4)(a) or recommendation pursuant to cutting greenhouse gas emissions across their local subsection (4)(b) the Secretary of State must— area in line with meeting their local carbon budget; 399 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 400

(b) work in partnership with local residents, businesses The Chair: I apologise. I think that it is my fault; I and stakeholders, including social enterprises and should have called other members of the Committee co-operatives, community groups, schools and first, but everyone will have a chance to speak. The hospitals, and other institutions in drawing up and Minister will say his piece now, and then I will call the implementing the strategy detailed in (3)(a); Opposition and the Minister can reply, but everyone (c) wherever possible, develop proposals consistent with a will have their chance. reduction in greenhouse gas emissions in their local authority area of 90 per cent. by 2030, compared to 1990 emissions levels; Gregory Barker: I assure the hon. Member for Ogmore (d) publish and promote an annual report on progress that I am acting only at the direction of the Chair. I am towards meeting their local carbon budget; and happy to respond again, as I have on previous occasions (e) request additional powers or financial support from in this rather free-wheeling Committee. the Secretary of State as they consider necessary to The principle of the Committee on Climate Change meet the duty set in section (2), which shall not be providing advice on local emissions to assist local authorities unreasonably withheld. in setting their ambitions, as set out in new clause 1, (4) Any regulations or order made under section (1) shall not could be explored further. I am pleased to say that, as I be made unless a draft has been laid before, and approved by, resolution of each House of Parliament.’. alluded to earlier in our proceedings, in the past few days I have written to Lord Turner, the Chair of the Committee on Climate Change, to explore his initial Gregory Barker: Thank you, Mr Leigh. After that views on the role that his Committee might play in energetic burst of legislating, this group of new clauses providing such advice. In light of his reply, I will be deals with the role of local authorities in addressing happy to say more on Report, if not before. climate change and delivering the green deal. I cannot On the formalities of obtaining such advice, section agree more that local authorities have a vital role to play 38 of the Climate Change Act 2008 establishes a duty if we are to meet our national carbon reduction targets on the Committee on Climate Change to provide advice, and maximise the benefits of the green deal. I will analysis, information or other assistance when asked by therefore inform the Committee of what we are doing Ministers or Ministers of the devolved Administrations. to ensure that all local authorities step up to the plate. Under section 14, the Secretary of State must report to I note that there is already considerable enthusiasm Parliament on carbon budgets and on proposals and among many local authorities to engage with the climate policies for meeting them. Statutory provision to that change agenda, which is embodied in the memorandum effect is therefore unnecessary. of understanding between my Department and the The spirit of the new clause is in tune with existing Local Government Group. Many councils are already powers and the coalition’s policies. Those existing powers making great strides on the agenda, and I am delighted and our proposals to retain and reinvigorate HECA can that under the memorandum of understanding the achieve what, in principle, new clauses 1, 28 and 46 Nottingham declaration partnership plans to make a seek. Ultimately, we are on the same page on this new declaration on climate change in the autumn. important issue. The original declaration covered more than 90% of Turning to new clause 28, I note that a similar councils, and I understand that the new declaration will amendment was moved in another place. As I have enable local authorities to set self-imposed carbon reduction noted, the action already under way and the proposal to ambitions and demonstrate that councils can take the retain HECA can deliver a great deal of what that new lead without central Government intervention. That clause seeks. I would add, however, that the Secretary of should give us considerable confidence on the role that State for Communities and Local Government introduced councils will play, but we have reflected on the issues the Localism Bill to provide councils and local residents raised in earlier discussions on the Bill. with greater freedom to deliver local priorities, without I am mindful of the potential need to have some Whitehall directing them on what they must and must mechanism at our disposal to encourage all councils to not do and how. play a full part. That is why I have decided to retain the Home Energy Conservation Act 1995, as we discussed Huw Irranca-Davies: Will the Minister clarify whether under amendments 66, 67, 75 and 81. Much of the part of his objection to this group of well-intentioned effectiveness of HECA will lie in the guidance that new clauses is the fear of over-regulation placing burdens DECC provides. That will give us the opportunity to further down the line? work with the grain of the voluntary activity already under way but also, where appropriate, to focus with Gregory Barker: Yes, that informs our general approach. greater discipline on councils through the guidance on the specific areas set out in our new proposals. Huw Irranca-Davies: What is the Minister’s response The principle of the Committee on Climate Change— to the Secretary of State for Communities and Local Government, to whom he just referred, who has been Huw Irranca-Davies: On a point of order, Mr Leigh. I reported in the papers yesterday and today as describing do not want to be a pain in the neck—I know that I am opponents of environmental regulation as “zealots”? sometimes—but the new clauses were tabled in the Surely, he is not referring to members of his own names of Back Benchers and Opposition Front Benchers Front-Bench team. in the expectation that the Minister would respond to their points. We are hearing a peroration in anticipation Gregory Barker: No, I do not think that he is. Once of points that may be raised subsequently. Is that correct? again, the hon. Gentleman is correct; the answer is If it is, I am fine with that. contained in his question, and I thank him for that. 401 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 402

Huw Irranca-Davies: Perhaps I can extend my extended them until 2030, following the recommendations Aristotelian logic to ask what the problem is with the of the Committee on Climate Change. Setting national group of new clauses. If they do not significantly increase targets, however, is relatively easy. The real challenge is burdens and if they simply put in place what the Minister to ensure that the targets are met in a way that is is trying to do, clearly they are sensible. If environmental realistic and fair. That is what these new clauses are legislation is sometimes necessary—the Secretary of about—fairness. Without local plans, it will fall to State thinks that such legislation is often necessary—why national Government to determine how emission reductions are the new clauses unnecessary? will be divided across the country. We could therefore easily end up with arbitrary targets imposed from the Gregory Barker: If I was asked to define a zealot, I centre, with little regard for local communities, would probably look across the Committee aisle, because circumstances or economies. Local carbon plans, by that is where I would see the zealot for new legislation comparison, would offer a reasonable and flexible approach and unnecessary additions to the statute book. to reducing emissions. Rather than bureaucratic As I hope that I have explained to the Committee, the Government telling local authorities, “You must do broad thrust of the new clauses is contained in existing this,” this is about local communities saying, “We can legislation, and it would be zealotry, to coin a phrase, to do this.” try to gold-plate that by introducing a further layer of The idea is not new. In January 2010, the previous unnecessary statutory complexity. We will not shrink Labour Government introduced a pilot programme from legislating where necessary and will do so, but we involving nine councils, and campaign groups such as take a far more sensible approach to the burdens that Friends of the Earth have been long-standing supporters legislation can impose and therefore will not legislate of the idea. For many councils the plans would build on where it is not needed or called for. Although we are on the work that they are already doing. From pledging to the same page in relation to what we are trying to cut carbon emissions by 40% by 2020, to rolling out achieve, we think that, in this instance, the hon. Gentleman grant-funded renewable installation schemes, councils and his colleagues are in danger of being over-zealous of all political colours—from Liverpool, Manchester, in their attempts to write this into the statute book. Birmingham, Brighton, Islington, West Sussex and On new clause 29, I thank the hon. Member for Bristol—are leading the way. Norwich South for highlighting the benefits that can be In Manchester, “A Certain Future” is a fantastic gained from rolling out energy efficiency programmes action plan for the entire city. Everyone has their part to across whole communities. Many examples of the benefits play and its successful delivery will rely on the entire of doing that can be found across the country, because city working together, whether home owners, community local authorities and housing authorities already have groups, businesses or public agencies. The plan was powers to do so. I fully expect to see many more such written by more than 100 organisations and outlines measures under the green deal, and I can assure the how the city can reduce its emissions by 41% by 2020. hon. Gentleman that nothing in the Bill or, so far as I am aware, in any legislation prevents that. In Birmingham, the energy savers scheme is a city-wide energy efficiency and renewable energy scheme led by I appreciate the sentiment behind the amendments the city council, so it has a different colour from that of and understand the concerns that members of the Manchester. The scheme will eventually be extended to Committee will no doubt express. I share their ambition, up to 100,000 home owners and 100 businesses. Residents but we believe that, on balance, nothing further needs and businesses are offered loans to improve the energy to go on to the statute book, because good provision is efficiency of their property—similar to the green deal— already available on the issues. together with free solar panels, and they therefore benefit Luciana Berger: I am delighted to be able to speak to from cheaper energy bills. The loans are repaid as new clauses 1 and 2, which are designed to work together energy bills come down, and the council and its partners to ensure that local authorities draw up local carbon collect the feed-in tariffs for the solar panels, so the plans. I will explain later why the Home Energy scheme is self-financing. Conservation Act 1995 and the current legislation do not do exactly that. The plans under new clauses 1 and 12.30 pm 2 would be based on data from the Committee on Although some councils, such as Manchester and Climate Change and would, in effect, be a road map for Birmingham, are making good progress, considering how a locality would reduce its carbon emissions. that around 80% of our emissions come from local In a letter to my hon. Friend the Member for Stoke- activity, it is clear that other councils across the country on-Trent Central (Tristram Hunt), Lord Turner, the need to do more. We need every council to do its bit. Chair of the Committee on Climate Change, estimates Indeed, the Minister said only about an hour ago that that drawing up that advice would take it about three all councils must take action, “not just the keenest.” months. Nationally, the Government would work with councils to ensure that the net scale of the local emissions reduction was sufficient to meet the UK’s carbon reduction Zac Goldsmith (Richmond Park) (Con): Does the targets. The proposals are not intended to place unnecessary hon. Lady know how much of that 80% is in the power burdens on local councils or to create meaningless of the local authority, as opposed to simply happening targets; they are simply a logical extension of our in a local area? national emission reduction policies to ensure that they are delivered locally. Luciana Berger: I will provide further detail later The UK has ambitious emissions reduction targets, about what proportion of that figure comes from business thanks to the Climate Change Act 2008. In the fourth and small businesses—it is estimated to be 20% to 30%. carbon budget a few weeks ago, the current Government If we consider Manchester, it produced a carbon plan in 403 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 404 concert with businesses, and everyone signed up to it. If if all UK businesses and public sector organisations hon. Members look at how the scheme is working, it is a undertook energy efficiency measures, at least £3.6 billion fantastic example of how local authorities, businesses, could be saved every year. communities and housing associations are working together As well as helping business to cut energy usage and to deliver energy efficiency targets and emission reductions. reduce costs, estimates of the potential for low-carbon I am hopeful that the amendments will receive wide job creation are significant. According to DECC, the support from the rest of the Committee. The hon. global market for low-carbon goods and services stands Member for Norwich South is a long-standing supporter at an estimated £3 trillion, and is estimated to grow to of local carbon plans. Indeed, just last week, I was more than £4.3 trillion by 2015. This growing market reading an article in the Eastern Daily Press that details represents huge opportunities for every part of the UK. how the hon. Gentleman signed a Friends of the Earth The LGA estimates that meeting the 15% renewables pledge during the general election campaign calling for target could generate between 122,000 and 133,000 jobs the introduction of local carbon budgets. He is in very in the manufacturing, construction and operation of good company. The hon. Member for Richmond Park the new technology. More significantly, research by signed the very same pledge before the election. I remind Carbon Descent estimates that 70,000 jobs could be those Members that they pledged to support: created throughout local government areas in domestic energy efficiency and renewable energy if all local authorities “A local carbon budget for every local authority: that caps CO2 in the local area in line with the scientific demands for emissions set about reducing emissions in their local areas by at cuts and local circumstances.” least 40% by 2020, which is what the councils involved in the pilot are already doing. Given that potential, and In April last year, the Energy Secretary also declared his as the idea of local carbon budgets is not new, I am support for the pledge. He said that he pledged to surprised that the Government did not propose them in support: the Bill, especially as the proposals could complement

“A local carbon budget for every local authority: that caps CO2 the green deal. in the local area in line with the scientific demands for emissions We will hear more from other hon. Members about cuts and local circumstances.” their proposed new clauses in a moment, but I will refer Just last November, the Minister of State, Department to them. First, new clause 28 includes a more prescriptive of Energy and Climate Change, the hon. Member for plan than ours, but it does not mandate all local authorities Bexhill and Battle said: to produce local carbon plans, leaving the same problem of councils being able to opt out. I refer to the Minister’s “We need local people, local authorities, local communities to be empowered. In order to be really empowered they need the comments again: we are not looking only for “the right information, they need to understand how that locks into keenest” to take part but for all councils throughout the national picture and local carbon budgets are going to be a the country to do so. Nor does new clause 28 ask the key part of that.” Committee on Climate Change to provide information As well as cross-party support in Westminster, these on how councils would go about drawing up their plans, proposals have a broad range of support across local as the Government have scrapped the national indicator government. In March, 40 council leaders from all set for local government, which recorded such information. parties called for the introduction of local carbon plans. We agree with the aims of the new clause, but its proposals would not be as effective as ours, because It is not just political support. The Federation of without the data from the Committee on Climate Change, Small Businesses, which is not normally a supporter of they would not be workable in practice. environmental measures, backs proposals for local carbon We would like to support the plans in new clause 29 budgets. It argues that SMEs understand that action to tabled by the hon. Member for Norwich South, but we cut energy can save them money, but that they need a are keen to hear what he has to say and will need some framework to help galvanise action. It says: reassurance that the approach would not be so prescriptive “Small businesses are keen to go green but are not getting the as to override the rights of home owners and tenants. help or incentives they need to do so”. We are keen to know how his new clause would work. It says that they need Would it be along the same lines as a compulsory purchase order, when councils can override the wishes “a framework that is flexible and supportive to encourage of local residents? Might that approach lead to houses small business rather than penalise them.” being renovated when the owners or tenants did not Local carbon budgets provide such a framework. They want that to happen? Has the Minister considered such provide certainty about the scale of carbon reductions an approach, and what discussions have taken place? locally, while retaining flexibility for the local authority New clause 46 was tabled by the hon. Member for in how they go about leading those cuts. As well as Brighton, Pavilion. It is largely similar to our new Friends of the Earth, which I mentioned earlier, the clause, with more detail about how the plans would be FSB, the TUC , Good Energy, B&Q and the Stop drawn up. We have left more flexibility to ensure that Climate Chaos Coalition all support councils taking the the plans are based on advice from the Committee on lead in driving action to tackle climate change and Climate Change, but we support her new clause. create low-carbon jobs. In conclusion, a change in local action is needed if we It is vital that businesses play a key part in tackling are to meet our national emissions targets. The vast climate change. According to the FSB, as I said in majority of UK emissions—around 80%—result from response to the hon. Member for Richmond Park, at local activity: how we heat and power homes and least one third of the UK’s emissions are from business, workplaces and how we get around. As well as getting and the Carbon Trust estimates that 20% of the UK’s the big national decisions right, reducing local energy emissions are from SMEs. The FSB also calculates that, use is critical. Local action to cut carbon is cost-effective. 405 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 406

[Luciana Berger] today about retaining the Home Energy Conservation Act 1995 and about the guidance to local authorities Just as importantly, local people, businesses and institutions that will be issued. Further detail will appear in secondary such as schools and hospitals will be able to shape their legislation. It is important to remember that one reason own low-carbon futures. Local government should be why local authorities are so important is that they are at the heart of our low-carbon drive. We must not allow trusted by their communities. They can play a fundamental some councils to be left behind. We need everyone role in strengthening consumer confidence in the green pulling in the right—and the same—direction. We want deal from day one. My concern before our debate was all councils to take action and, again, not only “the that a handful of pioneering local councils would take keenest”. The challenge of climate change is too grave the lead but that the majority would not. I have been and urgent to be left to those councils that choose to reassured by much of what I have heard today. prioritise action. The nationwide system will support councils, ensure Huw Irranca-Davies: I agree with much of what the our emissions come down in every locality and boost hon. Gentleman has said and the spirit in which his new the take-up of the green deal. We have heard the Minister’s clause was tabled. Will he address directly the issue of response but, for reasons I have given, I urge him to whether he supports the other new clauses, which are in reconsider and to support our proposals. I also hope line with the Friends of the Earth commitment that he that those Members who signed the pre-election Friends made before the election? of the Earth pledge in support of local carbon budgets will support our new clauses. Simon Wright: I will not support the other new clauses if they are pressed to a vote. I certainly supported Tessa Munt (Wells) (LD): The aim of new clause 28 is Friends of the Earth in its efforts to ensure that local to give local citizens and their councils a key role in authorities play a fundamental role and I have been drawing up sustainable energy plans for their areas. The encouraged by some of the comments that I have heard. Government support localism and recognise the importance I have also been encouraged by the fact that the Minister of community initiatives. However, the Bill does not is in discussions with the Committee on Climate Change. establish a clear role of that kind for councils. I hope I am content with what I have heard today. I look that the Minister’s words will give a clear indication that forward to seeing the thousands or tens of thousands of DECC is minded to consider the matter. In the House households in Norwich benefiting from the green deal. I of Lords, Lord Marland certainly gave a positive account will work with the local council in my area to ensure of the new clause: that those plans are taken forward locally within the “Having heard the arguments…we are going to consider communities so that estates across Norwich benefit inserting…a new clause under which local authorities will be from this plan. I thank the Minister for his comments required to produce a sustainable energy plan to help in rolling today and I look forward to the conclusions of these out the Green Deal.”—[Official Report, House of Lords, 26 January debates. 2011; Vol. 724, c. GC231.] The provision is meant as a friendly proposal that enables local authorities to draw up sustainable energy Caroline Lucas: Let me start by saying that although plans if they think that is a cost-effective way of dealing I tabled new clause 46, I fully support new clauses 1 with climate change if, for example, there is a cash and 2, and my clause complements them. New clause 46 saving. The measure also enables them to come up with focuses slightly more on a mandatory target and gives ideas, which is localism in its purest form, which can be some more detail. That is because if we are to measure implemented if they are cost-effective. I draw on the progress, build on best practice and deliver real results, fact that the Secretary of State for Communities and we need targets, not just strategies. Local Government said when introducing the Localism Bill: 12.45 pm “This long-awaited new power will mean that rather than The Minister spoke earlier of the success of voluntary needing to rely on specific powers, councils will have the legal initiatives and said that there was no need for any reassurance and confidence to innovate and drive down costs to further statutory duties. I argue that the urgency around deliver more efficient services.”—[Official Report, 13 December climate change means that we must meet targets even 2010; Vol. 520, c. 64WS.] more quickly, even more ambitiously and even more That is the spirit in which the new clause was tabled. certainly than is now the case. That is why I believe that we need further measures. Simon Wright (Norwich South) (LD): I will speak There are many examples of councils already delivering very briefly. New clause 29 is effectively a probing inspiring projects to cut emissions. At the end of 2009, a measure in recognition of the fact that our strongest report highlighted some of the best examples of that potential partners in delivering the green deal across work. In Kirklees, for example, the local authority communities are local councils. They know their areas delivered an energy efficiency scheme called the warm better than anyone else, from the estates within their zone. That programme offered free loft and cavity wall districts down to the individual roads. They know better insulation to every household in the area. It created at than the utilities or other providers where to focus their least 80 local jobs and brought an estimated £50 million efforts, which is why it is important to involve them and of economic benefit to the local area by retrofitting to expect them to be drivers of change within communities. more than 60,000 homes. The scheme received £11 million I was encouraged by the Minister’s comments today of support from Scottish Power. That funding was and in previous sittings about local authorities’ enthusiasm centrally mandated by the Government’s CERT scheme, for playing a role in delivering the green deal and acting but Kirklees actively shaped it to boost both local as providers. I am encouraged by the announcement energy saving and regeneration. 407 Public Bill Committee21 JUNE 2011 Energy Bill [Lords] 408

That kind of example shows the possible win-win Caroline Lucas: The hon. Gentleman is exactly right. situations: it is good for emissions reduction, for jobs Of course, people at a local level are best placed to and for tackling fuel poverty. However, in order to have know where they can make those win-win decisions. that kind of programme rolled out with the necessary The new clauses would build on that. ambition, the new clauses are needed. It is clear that many local authorities have the will to make important Zac Goldsmith: What should happen to those local contributions, but new clause 46 seeks to take that best authorities that fail to meet the budgets imposed on practice and roll it out across the country. them or set? What would be the sanction?

Mr David Anderson (Blaydon) (Lab): Does the hon. Caroline Lucas: We have not set out specific sanctions; Lady agree that it is not the many who want to do this I do not think it the right place to put them. Debate and that is the real worry; it is the few who may not? We are discussion between local councils and national Government aware that the debate in this country has been polarised, would be needed to work out why local authorities have and there are people in this country who do not believe failed to meet targets. There are plenty of examples and that climate change is a reality. Another issue facing there is a range of legislation that could be looked at for councils is that if they are not mandated, it will be suitable sanctions. I seek to set the principle rather than another thing that they must deal with at a time when get to that level of detail. It is important for the hon. they are facing huge economic pressures. They might Gentleman to make the point. Unless there is a degree prioritise other things. of sanction, the bite that I seek to achieve in proposed new clause 46 would not be there. I envisage sanctions, but the discussion about what they should be is for Caroline Lucas: I agree with the hon. Gentleman. another time. One advantage of the approach that I am setting out is precisely that it demonstrates that there are good economic, Mr Brine: I have listened carefully to the hon. Lady, as well as environmental, reasons for such work. Those as always. To follow on from the point made by my hon. two things come together beautifully, but to ensure that Friend the Member for Richmond Park, could that all local councils realise that and take the proposal up, sanction be financial on a local council that did not we need more of a boost behind it, which is exactly comply with the top-down targets? what the new clauses seek to do. If the UK is to play its part in preventing mean Caroline Lucas: I am reluctant to go down the road of global surface temperatures from rising by more than deciding what kind of sanctions there should be. I 2° C, all councils will need to act with more ambition. imagine that for some local councils, one reason why The latest science suggests that we should be staying they might not have reached their target is resource below a 1.5° C increase, which is a fearsomely ambitious constraint. In that case, it might be counter-productive target. If we are to meet that, we need greater urgency to levy a further fine, so I am not suggesting that. I urge than is presumed by the current legislation. hon. Members not to get down to that nitty-gritty, but Local councils have a particular responsibility for to stay at the level of principle. some of the sectors where they can deliver the quickest and easiest wins, such as local transport, where the Huw Irranca-Davies: I agree entirely: these new clauses changes are relatively low cost and pain free. If they are go to the point of principle. In the spirit of much of the not given the powers and support necessary to do that, Bill, we can deal with those issues in secondary legislation the Government will have more work to do at a national after consultation. That includes how we would deal level, which is often harder and more expensive. with local authorities that have been very progressive— The Minister will no doubt see my new clause as a including my own of Bridgend and Neath Port Talbot, top-down imposition on local authorities, but I stress where they have invested extensively, not only in energy that that simply is not the case. Local carbon budgets, generation but energy efficiency, demand reduction and which are supported by council leaders of the three so on. We could discuss when we consider secondary largest parties, may require local authorities to have a legislation how to recognise appropriately what has tough target, but they leave the means of delivering it to been done within the past few years, and whether that local decision makers. What is more, new clause 46 can be done, but not here when discussing the Bill. explicitly states that the Secretary of State cannot unreasonably refuse a request for Caroline Lucas: The hon. Gentleman is right. There “additional powers or financial support” is an irony, considering the vagueness from the Government from a local authority seeking to meet its target. about so much of the legislation, that now there is a sudden desire to drill down to a level of detail that we have frankly not reached in any other debate so far. Huw Irranca-Davies: The hon. Lady raises a good I return to my key point: the urgency of the need to point in her peroration. New clauses 1, 2 and 46 are not cut emissions means that we are beyond the point, I seeking to prescribe how the proposal would be delivered hope, of debating whether there should be strong targets locally. How best to act is left up to local determination, for cutting emissions locally. Instead, we should be including where the optimum generation of jobs and discussing who is best placed to ensure that those greenhouse economic opportunities would be. If that were in transport, gas savings are delivered most equitably and efficiently. energy generation or any other area, it would be locally That is where I agree again with the hon. Member for determined. It is localism in action. It is simply a logical Ogmore. Local authorities are best placed to ensure extension of what we have just done with signing off the that local climate change strategies are tailored to the fourth carbon budget. needs of local communities. 409 Public Bill CommitteeHOUSE OF COMMONS Energy Bill [Lords] 410

[Caroline Lucas] encouragement, we want to bring together many parties with an interest in our direction of travel, and we want Many others support that view. The hon. Member for to move away from setting targets for everything. Liverpool, Wavertree cited a number of eminent people from across the political spectrum who support the Luciana Berger rose— principle of carbon budgets. I would add Louise Goldsmith, the Conservative leader of West Sussex county council, Claire Perry (Devizes) (Con) rose— who makes it clear that Margot James: I shall give way to the hon. Member “Local carbon budgets would not be another top-down directive. They would provide an essential framework to help councils for Liverpool, Wavertree, because I saw her first. respond to a global challenge with locally tailored solutions.” Luciana Berger: What, does the hon. Lady believe, Indeed, in 2007, the Local Government Association’s are the incentives in the Government’s provisions on climate change commission stated that HECA? How does HECA deal adequately with local “Our unanimous view at present is that a statutory duty should carbon budgets and the proposals in our new clauses? be imposed on those councils that, within the next two years, do not respond to climate change.” Margot James: There are incentives in HECA, and at That was passed four years ago. In all, around 40 least we are retaining it. However, the essence of the council leaders have come out in favour of local carbon green deal initiative is that local authorities can deliver budgets. some of their other business and employment objectives by becoming a partner. As the Minister said, there is Luciana Berger: Is the hon. Lady aware that the nothing to stop local authorities from becoming a partner council in the Prime Minister’s constituency supports in the green deal, so a number of incentives to stimulate local carbon budgets? the right action are inherent in the Bill. Caroline Lucas: I was not aware of that, but I am Claire Perry: Does my hon. Friend agree that another happy to be alerted to that fact. That being the case, it important aspect that supports our agenda, about which will focus the minds of Ministers. we all agree, is transparency? If someone sits in a I will draw my comments to a conclusion because I council meeting it will be clear that Wiltshire council is think we are all driving in the same direction. It is paying attention to what the council in Oxfordshire is interesting that council leaders from all the main parties, doing—it is talking to other councils and understanding, the Federation of Small Businesses, unions, business, for the first time, what they are doing. That is a very the Secretary of State—quoted by the hon. Member for powerful motivating tool. Liverpool, Wavertree—are all saying that this is a good Margot James: I thank my hon. Friend for her intervention. idea. Now that we have the opportunity to translate all I agree that much more information is generally available these fine words into action and into legislation, it and it is the Government’sduty to encourage that transparency, would be immensely irresponsible, if not hypocritical, which will bring up the outliers to the standards of those not to do so. I hope that the Minister takes the proposals councils that are in front. very seriously. To conclude, although I shall not formally support Margot James (Stourbridge) (Con): I shall make a the proposals, I endorse the spirit behind them—particularly few remarks on new clauses 1 and 2. I agree with many that behind new clause 1. I am told that the Chairman of the Opposition’s comments about the importance of of the Committee on Climate Change has said that it local carbon reduction plans. My own area, Dudley, is would cost only £100,000 to provide the advice necessary not cited in any of the examples of councils that are to guide councils. I hope that the Minister will encourage commonly regarded as way out ahead. I speak up for the Chairman of that Committee down that direction the area, however, because it is a strong follower. In ’08 of travel. it established the Dudley climate change group, which Zac Goldsmith: I also support the sentiment behind hopes to have reduced emissions by 3% by the end of some of the amendments. My hon. Friend the Member the year, and it is becoming more ambitious. for Stourbridge mentioned new clause 1, which raises Opposition Members have discussed the importance important issues. I have mixed views, however, on the of getting business on board, the employment imperative amendments as a package. I would be reluctant to impose and the business sense that that all makes. The incentives more reviews, strategies and so on, on local authorities, offered by the green deal itself add to the momentum because it would be so easy for that to become yet that will get behind the mission. On the business side, a another expensive, box-ticking exercise. We have seen company in my constituency, Overton Recycling Ltd, that over and over again in so many different areas. has contracts with various authorities for plastics recycling, among other things. I have been working with the Luciana Berger: Those councils that have already company to try to get more local authorities in the been doing that are saying, “It is working.” surrounding areas to use it to recycle plastics, but some The Chair: May I say that it has been a great pleasure of them are still sending plastics to Africa. It cannot be to chair the Committee? It has allowed me to burnish right, but I detect some movement. my green credentials without saying anything of any In his usual persuasive style, the hon. Member for substance. Ogmore very nearly sweet-talked me into supporting new clause 1. I had to resist, however, because although 1pm we are almost in a bubble in this enjoyable Committee, The Chairman adjourned the Committee without Question the Government have a wider strategy, of which I am a put (Standing Order No. 88). wholehearted supporter. We want to use incentives and Adjourned till this day at Four o’clock.