Scotland Bill — House of Lords, 2016-01-19
Topic: Energy
James Wallace (Liberal Democrats, Centre to centre-left): My Lords, this group comprises a number of amendments relating to renewable energy. The background is not only proposals for devolution but obviously must be seen against what the Government have done with regard to the Energy Bill, or least what they had done until this House took out the provision relating to the acceleration of the closure of the renewable obligation for onshore wind The first set of amendments, Amendments 65, 66, 68, 70, 71 and 72, are concerned with renewable heat incentive schemes. The Smith commission, which of course is holy writ, states at paragraph 41: "There will be a formal consultative role for the Scottish Government and the Scottish Parliament in designing renewables incentives and the strategic priorities set out in the Energy Strategy and Policy Statement to which OFGEM must have due regard. OFGEM will also lay its annual report and accounts before the Scottish Parliament and submit reports to, and appear before, committees of the Scottish Parliament" The initial amendments were intended to incorporate references to the renewable heat incentive schemes, whereas the clause as it stands relates only to renewable electricity incentive schemes. I was grateful to the Minister for writing to me on 1 December last to say that he did not think that this set of amendments was necessary. He indicated that heat was, "not covered by any of the reservations in the Scotland Act 1998, and so should be treated as already devolved" He went on to say that, with specific regard to the renewable heat incentive, "the Scottish Government already has a formal consultative role on both the domestic and non-domestic RHI schemes. Section 100 of the Energy Act 2008 states that for regulatory changes to RHI schemes, the Secretary of State for Energy and Climate Change", had certain obligations relating to the, "competence of the Scottish Parliament", and the "consent of Scottish Ministers" but, where there was not a competence within the Scottish Parliament, he had a consultation requirement on Scottish Ministers. Having received the Minister’s letter, I decided that it was still better to leave these amendments in so that we could have on the record why renewable heat incentives were not included. I know that their omission has caused some concerns in the industry, but this makes it clear that there is nothing to stop the Smith commission recommendation being given full effect in that regard There is, however, an important issue with regard to Amendment 68B. On how many occasions in the course of our debates have we heard the Minister pray in aid, "This is what the Smith commission says and this is what we are delivering"? I am sure that the Smith commission was never intended to be a straitjacket, but that is sometimes how it appears. I shall repeat: "There is to be a formal consultative role for the Scottish Government and the Scottish Parliament in designing renewables incentives and the strategic priorities set out in the Energy Strategy and Policy Statement to which OFGEM must have due regard" But look at what is in the Bill. It states in Clause 58: "(1) The Secretary of State must consult the Scottish Ministers before— (a) establishing a renewable electricity incentive scheme that applies in Scotland, or (b) amending such a scheme as it relates to Scotland" Let us turn to the next two new subsections: "(2) Subsection (1) does not apply to amendments that appear to the Secretary of State to be minor or made only for technical or administrative reasons" I am actually prepared to live with that. It is probably perfectly reasonable provided that not too wide an interpretation is made of "technical or administrative reasons". But new subsection (3) goes on to say: "(3) Subsection (1) does not require the Secretary of State to consult the Scottish Ministers about any levy in connection with a renewable electricity incentive scheme" Where in the Smith commission is that exception made? We have heard how important it is that we should stick rigidly to the commission, yet it does not make the exception that the Government seek to import into this provision. Moreover, the Command Paper which was published almost exactly a year ago stated specifically that, in implementing paragraph 41 of the Smith commission agreement, a clause would be included in the Scotland Bill to, "establish a broad duty on the Secretary of State to consult the Scottish Government on the design of new incentives to support renewable electricity generation, or the re-design of the existing incentive schemes … The duty will arise where the new incentive would apply in Scotland, or any re-design would affect the way an incentive operates in Scotland. It will apply to incentives that are both statutory and non-statutory in nature" If that had been translated into the legislation, it probably would have been fine. The paper was clear that the reference to existing incentive schemes included the renewables obligation and contracts for difference. There were no exemptions, yet exemptions have been added. The Government have to explain to the House why they are departing in a very material way from the recommendations of the Smith commission. Quite clearly, any levy in connection with the renewable electricity incentive scheme could put a coach and horses through what is given by new Section 90C(1), to be inserted into the Scotland Act 1998 under Clause 58. The Government may have a guilty conscience because they sought to bring about the early closure of the renewable obligation in relation to onshore wind and solar panels with precious little, if any, prior consultation with Scottish Ministers. Therefore, they are trying to cover their tracks by this rather niggardly exclusion that they have sought to put in. The Minister owes it to the House to explain why he has driven a coach and horses through that new subsection Again, I wrote to the Minister and asked about the consultation with Scottish Ministers. On 21 December, he helpfully responded saying that, "similarly to the position on the Renewables Heat Incentive, we have not included a requirement to consult Scottish Ministers on the Strategy and Policy Statement … as the Energy Act 2013 already gives Scottish Ministers a clear formal consultative role in the development of the SPS. The process of designing the SPS requires two rounds of consultations where Scottish Ministers can provide their views on the draft document before it is designated. As legislation already exists to address paragraph 41 of the Smith Commission Agreement, no additional provisions have been included in the Scotland Bill" It provides us with a rather unusual situation. The Government are saying that something that was already in existence pre the Smith commission is being used to fulfil the recommendation of the Smith commission We must assume that the Smith commission was fully aware of what the pre-commission legislative position was because of things such as the British Transport Police. We have been assured that it knew all the implications of what was being proposed. We must assume that it knew the position under the Energy Act 2013.