Energy Bill [Lords]

Public Bill Committee, 8 June 2004.

Standing Committee B

Energy Bill [Lords]

Jonathan Sayeed (Conservative, Mid Bedfordshire)

I would like to make a brief statement on the scope of the debate. We have already had a broad debate on promoting renewable energy. This morning's debate concerns regulatory objectives for the purposes of part 1 of the Electricity Act 1989. Hon. Members should not repeat general arguments from the previous debate. In addition, those sitting at the back of the Room who wish to make points should speak up. Otherwise, the Hansard writer will be unable to hear them over the noise of the air conditioning.Clause 84 Gas and Electricity Markets Authority sustainability duty

Clause 84 - Gas and Electricity Markets Authority sustainability duty

Desmond Turner (Labour, Brighton, Kemptown)

I beg to move amendment No. 189, in

clause 84, page 64, line 31, leave out from 'Authority)' to end of line 35 and add 'for subsections (1) and (2) substitute—

''(1) The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as 'the Authority') in carrying out their respective functions under this Part is the promotion of renewable energy, having due regard to—

(a) the duties set out in subsection (2), and

(b) the achievement of sustainable development.

(2) The duties set out in this subsection are—

(a) to protect the interests of consumers in relation to electricity conveyed by distribution systems, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the generation, transmission, distribution or supply of electricity or the provision or use of electricity interconnectors; and

(b) to carry out their respective functions under this Part in the manner which he or it considers is best calculated to further the principal objective and the duty set out in paragraph (a), having regard to—

(i) the need to secure that all reasonable demands for electricity are met, and

(ii) the need to secure that licence holders are able to finance the activities which are the subject of obligations imposed by or under this Part, the Utilities Act 2000 or Part 3 or 4 of the Energy Act 2004.'','.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

With this it will be convenient to discuss the following: Clause 84 stand part.

Amendment No. 190, in

clause 144, page 109, line 31, leave out paragraph (a).

Amendment No. 191, in

clause 186, page 144, line 10, leave out subsection (3).

Desmond Turner (Labour, Brighton, Kemptown)

Good morning, Mr. Sayeed. If one has to spend a beautiful summer morning indoors, at least it is a pleasure to do so under your chairmanship. I shall endeavour to keep within the bounds of debate

that you have set, although I am sure that you will appreciate that we have reached a point during consideration of the Bill at which fundamental principles come into play. I shall try to limit my remarks as much as I can, but I trust that you will allow me a little gracious latitude should I stray.

Those of us who listened to my right hon. Friend the Prime Minister recently will have heard him enunciate the importance of climate change and the fact that Britain will make its contribution through renewable energy by achieving its 10 per cent. target by 2010 and so on. The amendment is designed to provide part of the legislative means to turn those objectives into reality. We can have the most marvellous objectives in the world, but if we do not will the means to achieve them we shall not do so. There is little evidence to suggest that we will achieve these aims unless we do something extra, and we are now talking about the something extra.

The regulator is one of the key players, if not the key player, in the scenario. We know from the brief history of the regulator's existence what can go wrong if the regulator does things that are unfavourable to renewable energy. That is why the brief to which the regulator is working is so important. The terms of reference and statutory obligations of the regulator are set down in the Electricity Act. A document issued only last month by the regulator sets out the statutory framework as seen by the regulator. It refers to

''the need to secure that all reasonable demands for electricity are met'',

which relates to security of supply. I can assure people that that factor is uppermost in the regulator's mind. The document also refers to

''the need to secure that licence holders are able to finance their licensable activities''

''the interests of the disabled, chronically sick, those of pensionable age, those with low incomes and those residing in rural areas''

as well as protecting consumers. That is fine.

The document continues:

''Subject to the above, the Authority is also required to carry out its functions in a manner which is best calculated to . . . promote efficiency and economy on the part of persons authorised by licences or exemptions to carry out licensable activities . . . protect the public from dangers arising from licensable activities, and secure a diverse and viable long-term energy supply''.

As an afterthought, it states:

''The Authority is also required to have regard to the effect on the environment of licensable activities and to any social and environmental guidance issued by the Secretary of State.''

It is my contention, which is wholeheartedly backed by those I have spoken to who are involved in any way with the renewables business, that, although the terms of reference may have been appropriate 15 years ago, they no longer are.

The amendment does not disregard the need to maintain security of supply or to retain a fair, competitive market, but sets those needs in the context of achieving environmental objectives through the deployment of renewable energy. Therefore, we would no longer have a situation such as when new electricity trading arrangements were introduced, and renewable generators were greatly disadvantaged because of their

stochastic nature and were liable for penalties. Market conditions that were extremely unfavourable for combined heat and power were set. Since the introduction of NETA, the growth of CHP has stopped dead. That is an example of how important an effect the regulator can have.

Brian White (Labour, North East Milton Keynes)

I was a member of the Committee that considered the Utilities Bill. Similar assurances were sought at that time and similar amendments were tabled, but we were told that they were unnecessary. Does my hon. Friend agree that they were necessary?

Desmond Turner (Labour, Brighton, Kemptown)

Well, the proof of the pudding is in the eating. Those assurances were necessary; they should have been not only given, but backed up. There has been a setback in the growth of renewable energy as a result of NETA; it has only slightly improved. Now we are proposing to extend the benefits of NETA to the whole UK through the British electricity trading and transmission arrangements. It is perfectly logical and sensible to have one electricity market, run according to the same rules and covering the whole of England, Wales and Scotland, but only if the rules are right. I have no confidence that the rules will necessarily be right.

Lest anybody should think that I am trying to pillory the regulator, I assure the Committee that I am not. However, the regulator is acting against his statutory responsibilities, and everything that he does follows from that. To illustrate the point, I cite the proposals for changes in the transmission charge regime that would accompany BETTA. In England and Wales, the National Grid Company charges according to location: the further the generator is from the point of consumption, the higher the transmission charge. However, Scotland operates on the basis of a standard charge, so, irrespective of a generator's distance from a notional site of consumption, the transmission charge is the same. The change will mean that a Scottish generator paying about 0.5p per kWh will pay 2p per kWh.

Think about the impact on renewable generation. Our renewable energy resources that are waiting to be tapped are primarily located off the west coast of Scotland. A renewable generator setting up off the coast of Scotland therefore has not only to face the considerable current problems, but under this system will carry a penalty of 1.5p per kWh, which could kill it stone dead commercially.

Robert Key (Conservative, Salisbury)

Does the hon. Gentleman recall that a couple of years ago the then Energy Minister proposed the construction of the west coast interconnector from the outer islands? The estimated cost was about £700 million. Research showed that it would be closer to £2 billion, which really knocked on the head any hopes of introducing wind farming on a grand scale that could supply the market in Glasgow and round to Liverpool.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

Before Dr. Turner responds to that intervention, may I remind him that this debate is about regulatory objectives?

Desmond Turner (Labour, Brighton, Kemptown)

Thank you, Mr. Sayeed. I have been trying to keep on track. The hon. Gentleman is quite right. That plan was unfortunately a no-hoper because the cost of submarine cable is so high. The carrying capacity of the proposed cable was not going to be that great, so it would not have been good value, which is sad as it was a nice idea.

These proposals, which come from the regulator and are made against the statutory background to which the regulator works, would have an extremely damaging effect on renewable energy. The Government are aware of that. Clauses 180 to 184 set out a protective mechanism to prevent that from happening to renewable generators, but there are two points here. This will apply only to renewable generators. No one will build a gas-fired power station in Stornoway, but there might well be wave and tidal machines just off the coast. The only generation that will be affected by these proposals is renewable generation.

Having looked at the best efforts of the parliamentary counsel in clauses 180 onwards, I am not convinced that they are drafted in a way that would give anyone confidence. As we are trying to promote renewable energy against the background of a liberalised energy market, a regime that enables investors to invest with confidence in the long-term future of the enterprise is vital. At present, there is no investor confidence in renewable energy. It does not exist even for it to be frightened away. One of the prime reasons why there is no confidence is the current terms of reference—the legal framework to which the regulator works—and the implications for what follows in the structure of the market.

To put it bluntly, we have to be able not necessarily to distort but to angle the market in such a way that renewable energy is favoured. Otherwise, it cannot happen in a liberalised market economy. As it is, the Ofgem proposals for transmission charges carry a perverse incentive to non-renewable energy. If someone was simply looking to make money by generating electricity, they would set up a fossil fuel station in the midlands—somewhere just north of Birmingham, where the notional centre point of consumption is and where they would probably pay negative transmission charges. That perverse incentive also exists in the proposed system.

My hon. Friend the Minister also has responsibility for the Post Office, and we all know that it makes standard charges wherever a letter is posted from or to in the United Kingdom. A letter posted in Stornoway costs exactly the same to deliver to Westminster as one posted in Golders Green. I am sure that if, perish the thought, we were in a Committee debating a proposition to change the postal charging system from standard to locational, he would produce robust arguments to rebut it. He would be absolutely right to do so.

What is the difference with electricity? A letter posted in Stornoway is still identifiable as having been posted in Stornoway when it arrives in Westminster. However, a kilowatt-hour of electricity supplied to the system at Stornoway is not recognisable at all. It is just a stream of electrons. Energy is a national commodity and something that we need to consume on a national basis.

Laurence Robertson (Conservative, Tewkesbury)

I am listening to the hon. Gentleman's arguments closely, and I am minded to offer him some support. However, he drew an analogy with the Post Office. The Post Office loses money and perhaps might not be considered as efficient as, for example, the telephone network, which does not work on the same principle. I am not attempting to trip him up, but I would like him to consider that.

Desmond Turner (Labour, Brighton, Kemptown)

I thank the hon. Gentleman for that intervention, but I must point out that the Post Office is now making a profit. There may be comments on its efficiency, but they are outside the debate's remit as set by you, Mr. Sayeed, so I will not go into them. However, I believe that internet charges are standard, so there are plenty of good examples.

We need to promote renewable energy and fight climate change. Over breakfast this morning, I was reading that the Association of British Insurers estimates that its bill resulting from storm damage last year was £6.2 billion, most of which is attributable to severe weather events associated with climate change. We have just seen about 1,000 people killed in Haiti and the Dominican Republic as a result of a severe weather event, which again was almost certainly related to climate change. Severe weather events are already escalating considerably, and the process of climate change is only just starting. We have to intervene by making CO2 reductions as drastically and as early as possible.

In that process, we cannot afford to have a measure on the statute book that sets a log barrier in the path of achieving that aim, which is what the regulator's duty does. I am moving the amendment so that when making proposals to the market, the regulator bears in mind at all times the need to protect the interests of deploying renewable energy. I cannot predict those proposals, as this is a complicated business. However, that is our only way forward, and there is no time to waste. There will probably not be another legislative opportunity to change the framework for years to come. If we are going to do that, this morning's sitting is our only chance.

The hon. Member for South-West Hertfordshire (Mr. Page) has a great fondness for his traditional probing amendment. However, this is much more than a probing amendment; it is a real one. The Government should have put this measure in the Bill from the beginning. I know that there is enormous support in the industry for changing the regulator's terms of reference so that he acts for the good of climate change as a primary responsibility. I would advocate, for instance, that the location charge

proposals for transmission charging be dropped, and that we have a standard system. It could be done and we could still arrange all the other processes of financing new grid investment.

It works in Scotland; since devolution, we have learnt that several things work better in Scotland than in England and Wales. I am not trying to encourage the hon. Member for Angus (Mr. Weir), but it does happen, and this may be such a case. I propose the amendment in great seriousness and commend it to the Minister. I do not think that he can ignore it, or that the Government should ignore it, because it is much too important.

Laurence Robertson (Conservative, Tewkesbury)

I agree with the hon. Gentleman's opening remark that if we have to be here on such a sunny day, it is a delight, Mr. Sayeed, to do so under your chairmanship.

During the week that we have just enjoyed in our constituencies, I was considering how to resolve the issue that the hon. Gentleman addressed. I wondered if the right time to do so was later in the Bill, but on reading this amendment, I can understand why it has been tabled here. It is important, if he will forgive me for saying so, to look beyond his natural eloquence and consider whether the amendment addresses what we are trying to achieve. Having wrestled with the issue myself, I think, by and large, that it does. It addresses not only the industry's concerns, but those of consumers across the country.

We are extending NETA to Scotland, which raises the issue of the important relationship between where electricity is generated and where it is consumed. There is the argument, with which I teased the hon. Gentleman, that if one phones a longer distance on the telephone network, one pays a greater price for the privilege. However, as he also pointed out, there are analogies that suggest the opposite might be the best way forward. I am not sure which is the right system; perhaps a mixture of the two.

We must consider the generation of electricity throughout the Kingdom, or at least Great Britain, in that context, rather than in a piecemeal way, especially given the challenge of global warming. I am sure that you, Mr. Sayeed, will call me out of order if I stray too far down that road, but what bothers me about global warming is that as well as doing our bit—I use the word advisedly—we must address the problems that global warming will cause throughout the developing world. We must not think that we can solve them. I want to make that point because it is important that we do not handicap ourselves with systems that will not have a global impact. That said, I shall move swiftly on. However, that is not an excuse for doing nothing, although we should bear it in mind.

Desmond Turner (Labour, Brighton, Kemptown)

On the international effect, does the hon. Gentleman agree that a regulatory system established in Britain that encouraged the rapid development of wave and tide technologies, for example, would be highly exportable and would thus have an international impact?

Laurence Robertson (Conservative, Tewkesbury)

The hon. Gentleman is absolutely right. I spoke earlier about my visit to Finland. I have already made it clear that I believe that its advances in the nuclear industry should be exported to this country. I accept that anything we can develop would be beneficial. My concern is about advances in places such as India and China, which have massive populations, and the enormous demand that they will create. It is important that those countries, too, address the issue of global warming. This country contributes only 2 per cent. of the world's carbon emissions, which is a very small amount. Wiping out all our carbon emissions would have virtually no impact in global terms; we may contribute more by exporting our technologies.

I will not repeat the hon. Gentleman's arguments as I want to listen to the rest of the debate and hear what the Minister has to say. My hon. Friends and I are minded to support the amendment.

Brian White (Labour, North East Milton Keynes)

There is a sense of deja vu about the debate, which we had on the Utilities Bill, the Communications Bill and on my own Sustainable Energy Bill. We keep coming back to the same points; the fundamental issue is how to achieve Government policy when there is a system of independent regulation. I recall that the Utilities Bill included a passage from the Labour manifesto, which the Government later removed. But that is ancient history.

In the Utilities Bill—to which amendments were tabled that were similar to those tabled by my hon. Friend the Member for Brighton, Kemptown, to this Bill—the Minister assured the Committee many times that problems would not arise. I am sure that his assurances were genuine, but advice from officials was that I was going over the top—I probably was—and making assumptions about CHP that would not stand the test of time. The advice was that the Minister was right to resist the amendments, but they should be Government policy.

My hon. Friend has already outlined some of the consequences. We know what has happened to CHP, but when NETA was introduced there were many problems for small businesses. The problem with an independent regulatory system like Ofgem is that it favours large companies, which have the back-up of expensive lawyers and economists who work to different models. We should pass over the history of the economic energy forecasts of the Department of Trade and Industry.

The problems in the renewables industry are caused not because the companies are not viable or because they do not do good work, but because the regulatory hurdles that are put in place are relatively easy for a large, global company to jump over but not for a small or start-up company.

Ministerial, or even prime ministerial, statements will not achieve the objectives if companies hit problems at the first hurdle of dealing with the regulator. It is clear that the regulator does not intend to cause damage, so why is there a problem? I do not apologise for repeating what the first Oftel regulator, Sir Bryan Carsberg, said when giving evidence about the Communications Bill; if it is not in the statute, it

does not exist. Regulators look at the statute; that is all. There may be wishful thinking and policy may be made, but if it is not in the legislation, it does not exist. It may exist further down the food chain, but the primary aim of the regulator is to examine what is in the Bill for his terms of reference.

My hon. Friend set out a good case for making climate change part of the terms of reference. It may be that we do not want that to be part of the regulator's terms of reference; that is a fair point, although I disagree with it. That is what the Conservatives wanted when they originally proposed a regulator. They believed in a full-blown free market and other considerations were not in their Bill. The free market dictated what happened; that was their policy, which was set in statute.

I refer the Minister to the debate on my Sustainable Energy Act 2003. I tabled an amendment relating to the terms of the regulator, which was similar to the proposal tabled by my hon. Friend to this Bill. In my Bill, we compromised and agreed that the regulator would consider environmental impact assessments. The jury is out on whether that has achieved everything we hoped for, but it has improved the situation. I commend the regulator, because Ofgem has responded and is making good steps. However, having an environmental impact assessment is not sufficient because the regulator will say that what matters are the terms of reference, which my hon. Friend read out.

There was an agreement in the Energy Council in 2002, and a new directive requiring independent regulation, which we have, transparency—we are getting there—and non-discriminatory access to infrastructure. I contend that leaving the regulatory framework as it is discriminates against small companies, against renewables and against several other activities.

Desmond Turner (Labour, Brighton, Kemptown)

On the point about discrimination, it seems impossible under the present or proposed regulatory framework for an independent renewable generator to set up generating plant off the coast of Scotland, for example. I have discussed that viewpoint personally with the regulator.

Brian White (Labour, North East Milton Keynes)

My hon. Friend makes his point very clearly. The real question is how to change the regulator's terms of reference. The only way to do so is in statute. It has been 15 years since the Electricity Act was passed, and four years since the Utilities Act 2000 and our experience is that, on the whole, they have worked well. I would not dispute that we need an independent regulator in a competitive framework and I concede to the Minister that it has worked reasonably well. However, I do not concede that it has addressed the problems that we have highlighted or that it is capable of dealing with them.

We must consider how to change the terms of reference and we have the opportunity to do so in the Bill. The Minister may say that now is not the time to

do that. If, after 15 years of experience, now is not the time to look at it, when will we do so? Perhaps it will be The Day After Tomorrow.

The other issue that concerns me is the difference between primary and subsidiary goals. The regulatory framework is set up in such a way that there is a primary goal. That is fair enough, except that the subsidiary goals that are outlined—including the environmental and social policies to which the regulator must have regard—are subsidiary to the primary objectives. Let us compare that with Ofcom, whose role is to balance competing goals and objectives and to come to the best conclusion in the interests of customers and citizens. That is a clear indication that matters are far more complex than simply the bottom line in the market. But Ofgem has a primary goal. The other considerations are subsidiary.

My hon. Friend's amendment seeks to make sustainable development an overarching primary aim. Given the importance of climate change if sustainable development is not a primary aim, how will it be considered when the regulator's duty is to carry out the primary aims and only then to look at subsidiary actions? There is another point about the way in which regulatory impacts work. There is a lot of disillusion and cynicism about voting in this country. We shall be voting on Thursday. People ask why they should bother to vote as they feel it makes no difference. If we are unable to effect Government policy because the regulator is statutorily independent and the only way is the nuclear option of introducing a new Bill, there is little wonder that people are cynical about politicians' ability to effect change.

There is a fundamental philosophical issue that is far wider than just Ofgem. Today is not the day to have that debate, but there is real issue about the relationship between achieving Government policy—in this case on renewables—and the ability of a regulator to effect that. One need only look at Ofgem's response to the transmission charge to which my hon. Friend referred and the way that the National Consumer Council is up in arms, despite the fact that looking at social conditions and disconnections is a key objective of the regulator.

One of my other concerns is that by not accepting the amendment we are subject to the whims of the individual regulator. We should not be reliant on the individual characteristics of Stephen Littlechild, Clare Spottiswoode or Callum McCarthy or a board like Ofgem, which has its own culture.

Joan Walley (Labour, Stoke-on-Trent North)

During various inquiries, the Environmental Audit Committee had exactly the same debate about how to influence previous regulators, particularly Clare Spottiswoode. Such was our frustration that we felt that the only way to get sustainable development into legislation was to put it on the statute book.

Brian White (Labour, North East Milton Keynes)

The Environmental Audit Committee has had far more experience than I have on this and has looked at it in greater detail. My experience is limited to serving on Committees as a Government foot soldier. We have a fundamental choice with the clause.

Either we follow the route of Thatcherism, which undoubtedly means that the Conservative Members will support the Minister in resisting the amendment, or we support my hon. Friend the Member for Brighton, Kemptown by following a third way and trying to input regulation and competition into an overall policy framework. I appreciate that my hon. Friend the Member for Southampton, Test (Dr. Whitehead) and I have different views on whether policy has a role in the work of the regulator.

Alan Whitehead (Labour, Southampton, Test)

My hon. Friend has read my speech.

Brian White (Labour, North East Milton Keynes)

We have had this discussion before. However, the issue is whether there is a simple goal or a more complex world. With Ofcom, we recognised that there is a complex world in which differing pressures have to be reconciled in the interests of citizens and consumers. Ofgem has not recognised those competing demands and has only a simple goal. The fundamental choice between those two is what the clause and amendment bring us to today.

If the Minister does not accept the drafting of the amendment, there may be a better way of looking at it. However, not to accept the amendment would be a change, as our decision on it will send a strong signal to the market, a signal that will determine the success or otherwise of the renewables industry. Not accepting the amendment would be a clear statement that the problems that we have had in the past will continue.

I am afraid that the Minister will come up with all sorts of good arguments for why everything is wonderful, and I am sure that he will be convincing. However, at the end of the day, the regulator will still return to the statute book for guidance. If the Minister rejects the amendment and does not consider introducing something on Report, his successors will be wondering why we are not achieving our renewable objectives and will be asking their officials why. We will have created a systemic problem for ourselves in how the regulator works and the terms of references that we have given him.

Norman Baker (Liberal Democrat, Lewes)

It is always a pleasure to follow the hon. Gentleman, who, as always, has made a powerful case on an issue that he understands well. Like me, he is a veteran of the Committee on the Utilities Act 2000—

Brian White (Labour, North East Milton Keynes)

Refugee.

Norman Baker (Liberal Democrat, Lewes)

Is that the word? The hon. Gentleman is right to say that we have visited the issues on many occasions. He referred to one amendment, which was actually mine. It attempted to insert Labour party policy into that Act by taking targets from the Labour manifesto. The Whip on that occasion was commendably asleep—I hope that we can expect a repetition today—and the amendment was passed. We had the ludicrous situation of a Lib Dem moving an amendment to introduce a Labour manifesto commitment that was then taken up by the Labour party on the Floor of the House.

My point is that we are in a strange situation. I do not want to flatter Labour Members unduly, but they understand the issues, are genuinely committed to them and have had pledges included in their party's manifesto. They have also tabled the right amendments, but when the Minister comes along with a golden share from goodness knows where, the amendments are suddenly lost. I wonder how we can have that situation.

All three parties support the concept. Clause 84 was inserted in the House of Lords, having been tabled by the Liberal Democrats and supported by the Conservatives. Its concept is not dissimilar to the amendment moved by the hon. Member for Brighton, Kemptown, so all three parties seem to agree that there should be a requirement on the authority to ensure a contribution to achieving sustainable development. However, we are not certain that it will be in the Bill, because the Minister is following a briefing that was not written by his party colleagues or special advisers but by civil servants, who perhaps have a different view. If I can make one plea, it would be for Ministers to listen more to their Back Benchers and less to their civil servants.

The hon. Member for Milton Keynes, North-East (Brian White) rightly referred to the Sustainable Energy Bill, which he introduced and which I am glad is now an Act. That Bill contained a clause to place a duty on Ofgem to have regard to sustainable energy policy and to produce regulatory impact assessments that included environmental impact assessments as a matter of course, so we have been round this way before. We have had many promises.

The hon. Gentleman was persuaded on that occasion to omit the sustainability duty by this Minister, who argued that it was an unnecessary addition because the key elements for sustainability were already set out in guidance. However, we have heard, rightly, that guidance is no substitute for words in statute. Guidance is fluff; it is peripheral. It is there if someone wants to call on it, but it is not central and can be judiciously ignored. If a regulator is keen to perform its duty properly but is busy and does not have time to consider all the guidance, it considers what is on the statute book.

Brian White (Labour, North East Milton Keynes)

To be fair to Ofgem, does the hon. Gentleman recognise that, since the introduction of that Act, it has been doing impact assessments and there have been significant changes in how it works?

Norman Baker (Liberal Democrat, Lewes)

Yes, that is a fair point that the hon. Gentleman made earlier. But guidance is no substitute, as I think he would accept, for clause 84 of this Bill or for the amendment moved by the hon. Member for Brighton, Kemptown, which I am happy to support. He was right to talk about the market distortions caused by NETA and, in particular, the catastrophe with CHP. Not only will the Government target not be met; we are going backwards on CHP generation. That

is solely down to the guidance and how it has been operated by Ofgem, NETA and so on. That failure should be corrected.

The Prime Minister and others say that the Government are committed to trying to deal with climate change, and I believe them. They introduce policies that, in one form or another, are designed to help to tackle climate change, which are welcomed. We are now discussing a clear example of something that is necessary to tackle climate change and to ensure that the regulator is on the right track and following Government policy, which it should be, but the Minister seems to want to reject it.

I do not know what the Minister's argument will be. He may say that the Government should not interfere in the role of the regulator and that it is for the regulator to do its job, but the Government must interfere. They set the framework, whether or not the Minister likes that. He and his predecessors have set a framework for the regulator that says, rightly, that it must take care of consumer issues, for example. Given that the Government have accepted the principle that they can dictate the direction of the regulator in that way, what is wrong with setting down the principle that they should set the direction of the regulator on a different issue, sustainable development? I do not understand why the Minister wants to resist that. He clearly does, because he seeks to delete clause 84.

The hon. Member for Milton Keynes, North-East was right to say that Ofgem had improved—I put it in those terms—from an environmental perspective. However, it has a history of accepting little more than the narrowest short-term market philosophy for its operations and regulatory regime. That is how it has interpreted its role. I suspect that, 15 years ago, as the hon. Member for Brighton, Kemptown said, that was what the Government of the day wanted. There was not the understanding of climate change and the environmental imperative that there is now, so it was not thought about in the legislation. However, we know about it now. We are 15 years further on and we are older and wiser. We have a bigger problem with climate change, which we all know about. The science is accepted by everyone except possibly President Bush. We must try to deal with the problem, and this proposal is an example of a way in which we could do so. The hon. Member for Milton Keynes, North-East is right; if we do not deal with the problem now, when will we?

I hope that, having heard the arguments advanced in the House of Lords by the Liberal Democrats and the Conservatives, and the arguments advanced by his own wise Back Benchers, who understand these issues, the Minister will tell us what he is going to do. One option is to accept the amendment. His second option is not to move the amendment to delete clause 84. The third option, which is just about acceptable, is to say that he accepts the principle of the amendment or of clause 84 and to return on Report with something that is satisfactory but retains the kernel of the argument that has been put by hon. Members for a duty of sustainability. It would not be satisfactory for the Minister to say that it is not necessary because it is

covered elsewhere in the Bill, that there is guidance and that Ofgem is hunky-dory. That would not be good enough.

If the Minister does not come forward with one of those three options, I hope that Labour Members will force the issue. I understand that they do not want to rock the boat unnecessarily; if they can negotiate behind the scenes with the Minister, so much the better. However, now that the Minister has led the Committee up the hill, there comes a time when we must vote for what we believe in. There have been lots of opportunities to do that, for example through the Utilities Bill and the Sustainable Energy Bill, but the Government have ducked them all. They should be made to follow through their manifesto.

Alan Whitehead (Labour, Southampton, Test)

It may be observed that some members of the Committee have a ruddy glow to their complexion after the recess. I have no such ruddy glow because I have been sitting in a darkened room practising for the idyll that is your chairmanship, Mr. Sayeed.

The amendment before us is tempting because it addresses a number of problems with the development of renewable energy and the aims of reaching particular targets. As my hon. Friend the Member for Brighton, Kemptown mentioned, it appears to address the issue of how to create mechanisms to progress towards those targets. I share his concern, and those expressed by other hon. Members, about the problems that have arisen with CHP. However, we must look further than the mechanisms suggested in the amendment and consider what we do when we establish a regulator.

The point of a regulator is to regulate the market that arises post-policy. Therefore, it is important that the regulator is a rower, not a steerer. Policy is determined and, as hon. Members have said, is placed in statute. The regulator then regulates the market after it has been bound and guided.

Desmond Turner (Labour, Brighton, Kemptown)

I have sympathy with my hon. Friend's argument, but he is making an argument in favour of the amendment. The previous Ofgem regulator did precisely what he is worried about; he made policy. He focused on one aspect of his mandate—the competitive market—to the exclusion of all else. That practically put British Energy out of business and totally inhibited investment in any new plant, whether it was fossil fuel burning or renewable.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

Order. Is this an intervention or a speech?

Desmond Turner (Labour, Brighton, Kemptown)

It is an intervention so I will be brief. The regulator prejudiced security of supply. He made policy, which he could not have made had he had a clear policy directive from statute such as is proposed in my amendment.

Alan Whitehead (Labour, Southampton, Test)

My hon. Friend makes an important point, with the exception of the last phrase that he used in his intervention; ''such as is proposed in my amendment.''

Regulators have occasionally attempted to push the boundaries of their powers and could have been described as making, if not policy, then certainly quasi policy. However, that is not the central point in terms of what we here do as legislators. When we add a statutory duty of a regulator to do certain things, we must be clear about what it does.

The amendment would place a policy imperative within the regulator's remit, which would not be for policy guidance. That imperative would not include the measures within the Bill that guide the regulator and define how the market is undertaken, but would be within the regulator's remit. My hon. Friend the Member for Milton Keynes, North-East mentioned that such measures should be in the Bill. The Sustainable Energy Act, which passed through the House a short while ago, will change the way in which the regulator looks at how he or she regulates the market, and this Bill, in its totality, will do that too.

Subsection (1) of the amendment includes the words:

''The principal objective of the . . . Authority . . . in carrying out the respective functions under this Part is the promotion of renewable energy''.

That is a policy directive within the regulator's power and remit. Hon. Members have described concerns that they have had with the regulator making policy or quasi policy, and the problem with that is that the regulator could not only make policy under such circumstances—

Brian White (Labour, North East Milton Keynes)

My hon. Friend is making a strong case, but does he accept that there are issues where the policy direction has conflicts? Should not the Bill give the regulator the means by which they can resolve such conflicts?

Alan Whitehead (Labour, Southampton, Test)

My hon. Friend is absolutely right, but my argument is that we should not do that in this way, because of the point that I shall emphasise and with which I shall conclude—

Desmond Turner (Labour, Brighton, Kemptown)

If my hon. Friend does not think that it should be done in this way, which would change the statute to which the regulator has to refer, what alternative mechanism would he propose?

Alan Whitehead (Labour, Southampton, Test)

I would suggest, first, that there is the method of introducing statutes that cause the boundaries within which the regulator regulates the market to operate in a certain way. Secondly—this is a wider issue that has not been debated to the extent that it should have been—there is the notion of what it is to be a regulator, which must be considered. However, it is perhaps not doing a service to the notion of regulation to have that debate within the context of one amendment to one Bill. I do not think that the amendment—worthy though it is in many respects—does that, because under subsection (1), the regulator would have the policy objective of promoting renewable energy. I am firmly committed to that objective which, to the extent that I can influence the legislative process in this House, I have attempted to advance.

We might have cause to regret a power that enables a regulator to say, ''Whatever Ministers and subsequent legislators say does not matter, because I am pursuing my policy objective of renewable energy.'' Hon. Members have talked about regulators who excessively defer to the market without regard to the concerns that bind that particular regulation of the market. If a regulator had that particular power under his or her belt, he or she could decide to take out of the hands of Members of this House and of legislators the authority to decide what promoted renewable energy. We in this House cannot stand by such a principle.

Brian White (Labour, North East Milton Keynes)

Surely current regulation places us in that position, to the detriment of renewables?

Alan Whitehead (Labour, Southampton, Test)

Substantially, I agree. In the past, the regulators have excessively emphasised the market per se and not the market as bound by things that cause it to go in a certain direction. The amendment would do precisely the opposite, so that before the regulator started his or her job of regulating the market, he or she would have the additional policy responsibility of deciding how to achieve the goals of renewable energy. That is over and above the sort of responsibility that we have given any regulator before. With respect, it is the role of the Members of this House and of Government to decide such matters and to legislate accordingly.

Norman Baker (Liberal Democrat, Lewes)

The hon. Gentleman wants to play on particular words of the amendment, which he is entitled to do. However, I believe that he accepts that, so far, regulators have not operated in the interests of the environment. Is he therefore attracted to the retention of the clause, which is another way of dealing with the issue, as it requires the regulator

''to ensure the contribution to the achievement of sustainable development''?

Alan Whitehead (Labour, Southampton, Test)

It is absolutely right that we review, not in Committee, but more widely, the way in which the regulator has worked in the past and might work in the future. I have in mind not only this regulator, but regulators of the machinery of government. I emphasise that several of the regulatory regimes set up by the previous Government gave enormous latitude to the idea that the regulator simply removes impediments to the market. The regulator does not act in a way that enhances the effect of the market on what has bound the market in the first place.

The responsibility is twofold and relates, first, to government and legislation and ensuring that the regulator operates according to the statute and, secondly, to the way in which the statute is written. It is a tempting idea that one writes a policy imperative into an element of the statute relating to the machinery of government; that is, to the working of the regulator. That would, however, undermine the idea of how good legislation should work as far as the regulator is concerned.

Norman Baker (Liberal Democrat, Lewes)

I am surprised by that idea. I would not use the word ''Thatcherite'', but it is certainly moving in that direction. There are already duties on the regulator. There is, for example, the duty to protect the consumer, a policy that the Government have set.

Alan Whitehead (Labour, Southampton, Test)

That is not a policy.

Norman Baker (Liberal Democrat, Lewes)

It is. It is a policy to ensure that the interests of the consumer are protected. What about protecting the interests of the environment? Why should not that have equal weight?

Alan Whitehead (Labour, Southampton, Test)

I am afraid to say that the hon. Gentleman is confused. To elucidate, I refer to the current Leader of the Opposition when he was Home Secretary. He announced that his policy was that prisoners should not escape. It was an administrative fact that prisoners did escape, so he was not responsible for the fact that prisoners had escaped. I am sure that all Opposition Members well remember the episode with the director general of the Prison Service, Mr. Derek Lewis.

The important lesson to draw is that, risible as that defence was, the mechanism of the regulator has to be post-policy, whether we like it or not. If we wish to change that, so far as the Government are concerned, we will not change it on the Floor of a Committee considering an energy Bill. We will change it through the machinery of government and the way in which the regulator works.

Hon. Members have said that, in many ways, the regulator has worked well. One might say that other regulators in other sectors have not worked well. I have already alluded to why I think that others have not worked well. To some extent, it is the responsibility of the Government and legislators to ensure that the regulators work well.

Brian White (Labour, North East Milton Keynes)

Will my hon. Friend give way?

Jonathan Sayeed (Conservative, Mid Bedfordshire)

Order. Before the hon. Member for Southampton, Test (Dr. Whitehead) takes the intervention, may I remind him that we are talking about the regulatory objectives under this amendment? Arguments are being repeated.

Brian White (Labour, North East Milton Keynes)

My hon. Friend is making a strong case for regulators. However, is not the consequence of his argument that regulators do not withdraw from regulation even when it is appropriate to do so?

Alan Whitehead (Labour, Southampton, Test)

I would find it difficult to respond to that intervention without tripping over your clear guidance that I should not repeat what I have said before, Mr. Sayeed. The regulators are bound by what they are required to regulate. However, in terms of their daily job, they work in a somewhat uncertain environment and have to respond to the way in which the market moves and to the way that the legislation develops the manner in which they regulate the way in which the market moves subsequently. It is therefore a difficult point to develop adequately.

Joan Walley (Labour, Stoke-on-Trent North)

I am having difficulty following my hon. Friend's argument about the regulatory objectives. If the objectives are not set and defined by statute in this Committee and in the scope of the Bill that we are now considering, where would the precise terms of reference of a regulator be met?

Alan Whitehead (Labour, Southampton, Test)

I fear that I have not made my points very clearly. Of course, the objective of the regulator should be defined by statute. In my view, what should not be defined is a policy objective for the regulator that is separate from the statute, which defines how the regulator works in terms of the mechanics of government. Without repeating myself, I am not sure that I can make myself much clearer than that.

I ask my hon. Friend the Member for Brighton, Kemptown to regard this as a probing amendment rather than as one to put to a vote. The principle of considering how we bind the regulator has a great deal of merit, and I have sympathy with many of his arguments. However, I do not think that we should use this vehicle, so I ask him to withdraw his amendment or to indicate that we can discuss the matter further. As hon. Members have mentioned, we should look at further methods of ensuring that the role of the regulator as a rower is properly bound by statute.

Michael Weir (Scottish National Party, Angus)

I also found great difficulty in following the hon. Gentleman's argument. It seems to me that the amendment as phrased promotes policy, as it gives the regulator the overriding objective of promoting renewable energy. This would be the only place in the Bill that would place a duty for the promotion of renewable energy.

The object of this part of the Bill, as I understand it, is to increase the use of renewable energy to tackle the Kyoto targets on CO2 emissions and the like. With the advent of BETTA, the role of regulators will become more and more important in the UK electricity industry. If there is nothing in the Bill to promote renewable energy, the regulator will have no specific duty to take account of it. As the hon. Member for Milton Keynes, North-East forcefully pointed out, it does not matter what we or the Minister say in Committee. The regulator will not be bound by what we say if such a provision is not in the Bill. It is time for us to take a stand and say, ''We want renewable energy to become an important part of our energy mix and, to do so, we are putting duties on the regulator to take that into account.''

The Government have, to some extent, accepted that the regulator may not take account of renewable energy if it is not in the Bill. I draw the Committee's attention to what the proposed subsection (2) in amendment No. 189 says about distribution systems and their cost. For many years, we in the north of Scotland have had a hydro benefit, which takes into account the increased cost of distribution there, particularly in remote areas. If I recall correctly, the regulator decided that that could not continue under European law and wanted to scrap the hydro benefit. There were discussions and, to be fair to them, the Government intervened. An amendment to the Bill was introduced in another place to allow the hydro

benefit to continue, albeit in a slightly different form. Had their lordships not accepted that something needed to be put in the Bill to avoid the regulator going down that route, the hydro benefit would have disappeared, with potentially disastrous effects for the many people in the north of Scotland who rely on electricity.

In discussions, the Scottish and Southern Energy Group, of which Scottish Hydro Electric is now a part, told me that without some benefit to distribution in the north of Scotland, distribution charges in the Western isles, for example, would be astronomical. This issue is important: even the Government have accepted that something needs to be put in the Bill to protect consumers. The same principle applies to renewable energy, and I shall support it if the hon. Member for Brighton, Kemptown wants to press the amendment to a Division. An important principle is at stake.

Richard Page (Conservative, South West Hertfordshire)

I congratulate the hon. Member for Brighton, Kemptown on the excellent amendment that he has proposed. I only regret that he did not ask me to add my name to it when he tabled it, so that it could have gone forward with a true concordat from both sides of the House. I hope that that has not damned it in the Minister's eyes, and that he will consider it on its merits rather than on party political aspects. However, I expect that he will firmly reject it for other reasons.

The hon. Member for Brighton, Kemptown said that we have an opportunity to get this issue right and to set our energy policy in legislation. Having pointed out huge gaps in the Bill, the Conservatives agree. When he spoke today, I was reminded of the Patents Bill that was before the House yesterday. I remember debating previous patent legislation in the 1990s. That legislation was not perfect when it went through the system or when it emerged, and it is still being amended now, which means that we have had 12 years of legislation that was not as good as it could have been.

I can only endorse what the hon. Gentleman has said, and I hope that Ministers will focus not on their immediate political position but on the future, which leads us to the issue of renewable energy. However, you have given us a strict direction, Mr. Sayeed, not to talk about the value of renewable energy, so I shall resist the temptation to talk about it, but I will say that I do not think that any member of the Committee is against the principle of a sustainable renewable energy policy; I hope that nobody will jump up and disagree with that statement. It is absolutely vital to insert in the Bill the regulator's responsibilities, targets and duties.

What have we at present? I shall not read out clause 84, as it is there for everybody to see. However, I am taken by the last few words, which say:

''The principal objective and general duties of the Secretary of State and the Authority''

''to ensure the contribution to the achievement of sustainable development.''

I contribute to flag days by buying a flag for various charities, but I hardly think that my contribution will be absolutely vital to achieving their aims. We want to

achieve the objective in the clause, and we do not want the Minister to have a relaxed attitude towards it. He can contribute, and we may or may not achieve our aim.

Brian White (Labour, North East Milton Keynes)

Is the hon. Gentleman surprised at that wording, given that it was a Liberal Democrat amendment in the House of Lords?

Richard Page (Conservative, South West Hertfordshire)

I know that the hon. Gentleman has political ambitions, but it is a little cheap to have a go at the Liberals. He must choose tougher targets and move up the scale if he is to make his mark in the political world in which we live and work. I should be more than prepared to debate Liberal policy but again, Mr. Sayeed, you would be right to drag me back to order.

I shall not go through amendment No. 189 in great detail, because the hon. Member for Brighton, Kemptown has spelled it out to the Committee in reasonable detail. However, there are some tough, hard-hitting targets, duties and objectives, including

''the achievement of sustainable development''

—not a contribution to sustainable development, but its achievement. That means that we shall get somewhere. The duties are

''to protect the interests of consumers''.

I shall not read the rest. Subsection (2)(b)(i) talks of

''the need to secure that all reasonable demands for electricity are met'',

but the Committee will remember that when we debated clauses 1, 2 and 3, the Minister wiped out all those targets and responsibilities and the case for a CO2 target, despite the delicate words of the hon. Member for Milton Keynes, North-East, who presented the case in a honeyed and soft fashion. The Minister gave him the brush-off, about which I was most upset. It is not a good sign for the hon. Gentleman for the future, but he must persevere and stand by his guns on such matters.

The exchanges that have taken place in the last half hour have spelled out the importance of inserting measures in the Bill, because the regulator must be guided by statute. Showing my great age, I served on the Committee that considered the Telecommunications Act 1984, which established Ofcom, of which Sir Brian Carswell was the first regulator. We were flying blind, because we were setting up for the first time a regulator to undertake duties required to regulate the telecom market. With hindsight, I wish that we had given more guidance, but we did not have the experience. However, we have such experience now, so why is a similar provision not in the Bill now? I do not think that I shall be breaking any official secrets by saying that when Mrs. Spottiswoode, the former gas regulator, used to come into the Department, the politicians naturally made one or two suggestions that perhaps things could be done in this or that way, but she said, ''No. My duties are clearly defined. They are there in regulation.'' So we could not do a thing, and rightly so.

Perhaps with hindsight, we were working, heaven forbid, for short-term political gain. However, we need clear future direction, as we have all agreed, except for the hon. Member for Southampton, Test.

I never like upsetting people. If I meet them afterwards, they get uptight because I may have been unwittingly rude. The hon. Gentleman is looking seriously at me, but he is muddling up political objectives and regulation. He can leap in to reply after I have completed what I am going to say. He mentioned that the leader of the Conservative party, who is doing a fantastic job, said that his policy was that prisoners would not escape. Obviously prisoners will escape. Our Prime Minister has said that there are weapons of mass destruction, but that does not mean that there are. If there had been a weapons of mass destruction Bill, he might have been in a degree of difficulty.

Alan Whitehead (Labour, Southampton, Test)

The hon. Gentleman has got things precisely the wrong way round. It is important to separate legislation and post-legislation functions. The leader of the Opposition actually stated that his policy was that prisoners do not escape, and the regulator or head of the agency was therefore responsible for all policy that followed. That is an absurd argument. The point about the nature in which the agency contract was set up should have been put forward. The hon. Gentleman mentioned the problems he had with setting the regulator up under his no doubt wise stewardship of the Ministry.

Richard Page (Conservative, South West Hertfordshire)

On hearing what the hon. Gentleman says, I think that there is not much difference between us. If there is regulation on the face of the Bill, the regulator will have clear guidance on what to do. The hon. Member for Brighton, Kemptown has already made the point that the regulator has had a one-club policy—consumer prices. That policy has been effectively pursued, but at an unsatisfactory cost down the distribution chain. That was fine for the distribution companies that also had a generator, because they could duck shove costs between the two. They could ensure that they made money at the distribution end while screwing prices down at the production end to the huge detriment of British Energy, which did not have a distribution chain. The wheel turned in a cycle and the Government had to provide a lot of money to bail out British Energy, which was put in a position that it would not have been in if the regulator had had proper policies. The hon. Member for Milton Keynes, North-East is nodding, which means that he is getting into serious trouble, but I am glad to have his support because he has enormous technical knowledge on the subject.

I congratulate the hon. Member for Brighton, Kemptown. I would like his amendment to be accepted, but it would bring responsibilities and liabilities for the Secretary of State, and the Minister would not wish to accept any responsibilities, liabilities or duties from which he could not escape. I would be delighted to be wrong. I would apologise to the Minister, for whom the Post Office is another

successful part of his portfolio, for making uncomplimentary remarks. I would be as humble as possible, but I fear that that will not be the case.

Anne McIntosh (Conservative, Vale of York)

I am delighted to see you in the Chair, Mr. Sayeed. Unlike the hon. Member for Southampton, Test, I did not spend most of last week in a darkened room. I was out and about, communicating with the electors for a certain event that will take place this Thursday.

I shall confine most of my remarks to the clause stand part debate, but I congratulate the hon. Member for Brighton, Kemptown on the eloquence with which he moved the amendment. Uncommonly, I find myself agreeing with it in large part. I also agree with the hon. Member for Milton Keynes, North-East. He and I had the pleasure and privilege of serving on the Committee that considered the Office of Communications Act 2002, which introduced Ofcom. We considered the role of the regulator. In hindsight, we can see the importance of what was not included in that legislation, which, like this Bill, gave the Secretary of State undue latitude to proceed through regulations and order in council.

The regulatory impact assessment, which was signed off by the Under-Secretary of State on 19 May, says that chapter 1 of part 3 is needed to provide the regulatory framework for the creation of the renewable energy zones under later clauses. What will the regime be in Scotland? The purpose of the clause is to provide a legal framework, but we are told in a footnote in the regulatory impact assessment that the zone extends beyond the territorial seas of Scotland, Wales and Northern Ireland and is excluded from the devolution arrangements set out in the Scotland Act 1998, the Government of Wales Act 1998 and the Northern Ireland Act 1998.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

Order. I think that the hon. Lady is addressing her remarks to the wrong clause. I believe that her comments have much more to do with clause 85 than clause 84. If she could make her remarks germane, I would be grateful.

Anne McIntosh (Conservative, Vale of York)

Thank you, Mr. Sayeed. I am mindful of your strictures and I shall return to my previous point when we discuss clause 85.

Clause 84 refers to sustainable development. The regulatory impact assessment says that the developers of wind farms will incur the main cost under the clause, but will not other users incur costs? By definition, the term ''sustainable development'', which we will discuss in other clauses, relates to other users of the seas, not just wind farm developers. What consultation has the Minister conducted with the other users in preparing the clause? Did his Department conduct such consultation or was it deferred to other Departments, such as the Department for Transport?

The clause amends section 3A of the Electricity Act 1989. The fee is set at a particular level. Will the Minister confirm that the clause will apply in exactly the same way in England, Scotland, Wales and Northern Ireland? Which Department will be responsible for administering the clause in the whole of the United Kingdom?

Will his Department be responsible for administering it only in England or for applying it in each of the devolved Administrations? We are told in the regulatory impact assessment that the matter is excluded from the competence of the devolved Administrations, which implies that the Department, and the Minister in particular, will be responsible for interpreting the clause. Against that background, it would be helpful to have clarification.

Joan Walley (Labour, Stoke-on-Trent North)

I want briefly to speak because I believe that in considering the issue, it is important for the Minister to tell the Committee exactly how the Government are making progress on sustainable development in relation to the Bill and their wider objectives. I have listened carefully to the debate, and I want assurances from the Minister of where we will be on ensuring sustainable development if clause 84 is deleted.

I have looked again at the regulatory impact assessment and its summary, which has just been drawn to my attention by my hon. Friend the Member for Brighton, Kemptown. On page 30, reference is made to sustainable development, and it is clear that it is a Government objective. As such, I fail to see why that should not be included in the Bill in the duties of the regulator. If we do not do it now, I do not know when we can do it.

Stephen Timms (Labour, East Ham)

I also welcome you to the Chair, Mr. Sayeed.

We have had an interesting debate on the amendments. My hon. Friend the Member for Brighton, Kemptown argued for his amendment on the grounds of challenging Thatcherism and promoting renewable energy, while the hon. Member for Tewkesbury (Mr. Robertson) argued for it on the grounds of advancing Thatcherism and promoting nuclear energy. That illustrates the fundamental problem that there would be in following the amendment's route.

I begin by reminding the Committee, and my hon. Friend in particular, of the background to Ofgem's current principal objective. It has been said a number of times that it goes back 15 years, but it does not, and that is an important misunderstanding. The objective goes back to this Government's Utilities Act 2000. Labour has always taken the view, certainly since the early 1990s, that competition is a good thing. It was clear in our 1997 election manifesto that we wanted to sharpen competition powers and have more effective tools to protect consumers and tackle rip-offs because there have been too many examples of people being ripped off by big companies. We have made it a priority to take steps to deal with that, and we have done that.

The hon. Member for Lewes (Norman Baker) talked about Labour party policies. I remember my right hon. Friend the Chancellor speaking to the Labour party conference in 2002. He made the point that, 10 years previously, he had spoken for the first time as shadow Chancellor and had called on our party

''to adopt a new long term policy for stability and prudence, to be a party of competition and enterprise as well as fairness''.

That was the background to our approach, and it was quickly reflected after the 1997 election in the utilities Green Paper. It reflected the importance of safeguarding the interests of consumers and promoting competition. We invited consultation on that Green Paper and then responded as a Government in 1998 to the proposal that the regulators should have a specific duty by saying:

''The Government confirms that it intends to introduce legislation placing a new single primary duty on the regulators requiring them to protect the interests of consumers, along the lines proposed.''

There was also a reference to competition. That is where the wording that currently applies to Ofgem originates—it did not originate 15 years ago. The same principal objective is included in the legislation that governs Ofcom and Ofwat.

Brian White (Labour, North East Milton Keynes)

The whole debate about utilities revolved around whether sustainability should have been a primary or a subsidiary objective, or whether it should have been in the guidance. Has the guidance that was supposed to guide the regulators actually worked? My contention, which is at the root of the amendment, is that it does not appear to have done so effectively.

Stephen Timms (Labour, East Ham)

I would argue that it has played an important part, although I agree with my hon. Friend the Member for Southampton, Test that we must keep such matters under review and make changes where they are needed, although not on the basis of an amendment in Committee.

Jonathan Sayeed (Conservative, Mid Bedfordshire)

Order. I cannot hear what the Minister is saying, because he is addressing the back of the Room.

Stephen Timms (Labour, East Ham)

I apologise, Mr. Sayeed. I slipped into that habit at our previous sitting, and I shall try to make sure that I do not do so again.

Although there is an interesting discussion to be had about the interaction between regulators and the development of policy, the arrangements are now working well. As part of the process that led up to the White Paper, we concluded that undermining the independence of the regulator by politicising the regulatory process would have serious disadvantages, including, not least, introducing unacceptable levels of uncertainty. My hon. Friend the Member for Southampton, Test made an important point about the danger of handing over to the regulator policy responsibilities that are properly fulfilled by the Government.

Norman Baker (Liberal Democrat, Lewes)

I understand the purist view of the separation of powers between the Government and the regulator, but what is the Minister's answer when that separation does not actually deliver the policies to which the Government are committed?

Stephen Timms (Labour, East Ham)

My answer is that the policies are being delivered. For example, Ofgem administers very well the renewables obligation that the Government put on the statute book. It is the Government's role to make the policy framework, and it is then the regulator's responsibility to deliver it.

My hon. Friend the Member for Brighton, Kemptown said that there was no confidence in investment in renewables. That would have been a fair comment two or three years ago, but it is not the case today. Substantial sums are now being raised in the City. RWE Energy raised about £400 million in finance for its renewables portfolio, and Centrica is also looking at substantial sums. Momentum is building behind investment in renewable energy, which we all agree is essential for the future.

My hon. Friend spoke eloquently in favour of the amendment, but the biggest problem with it is that it would introduce substantial regulatory uncertainty. That would substantially delay precisely the investment that we all want to see.

Laurence Robertson (Conservative, Tewkesbury)

The Minister speaks about the investment that is going into the renewables industry, but when I discussed the issue with Dr. Paul Golby of Powergen, he made it clear that there would be no investment without an incentive to invest. As a free-marketeer, I do not like to say this, but matters cannot just be left to the free market. The Minister is rather making the point of the hon. Member for Brighton, Kemptown.

Stephen Timms (Labour, East Ham)

I am sure that Paul Golby will see the hon. Gentleman's account of that discussion. I should say that I was with Paul Golby just a couple of weeks ago visiting the Scroby sands wind farm in which Powergen has invested. It is just off shore from the constituency of my hon. Friend the Member for Waveney (Mr. Blizzard). Indeed, the turbines were made in his constituency. The investment that we need is now building up. We must at all costs avoid putting at risk the gathering momentum behind investment in renewable energy that we are starting to see at Scroby sands and elsewhere.

Laurence Robertson (Conservative, Tewkesbury)

I do not deny that the investment is taking place. It is, but it is taking place because of the incentives to make it, which are not simply coming from the free market.

Stephen Timms (Labour, East Ham)

The hon. Gentleman makes a fair point. We put the renewables obligation in place so that there is a framework to attract that investment. My point is that that is working. I was delighted with the editorial in the Financial Times last week to coincide with the conference in Bonn on renewable energy, which highlighted the attractions of the environment in the UK because of the renewable obligations compared with the mechanisms that are put in place elsewhere. That confidence for investment needs to be secured and maintained and the amendment would do serious damage to it.

Bob Blizzard (Labour, Waveney)

May I underline what my hon. Friend has just said? It is not just Powergen in one isolated instance that is investing in the Scroby sands wind farm. Lowestoft in my constituency is receiving a number of inquiries from other wind energy generation companies that want to invest in offshore wind. That is why we in Lowestoft are calling ourselves Britain's leading edge.

Stephen Timms (Labour, East Ham)

My hon. Friend makes a telling point on behalf of his constituents. I completely agree. We are starting to see exactly the momentum that we need.

Paddy Tipping (Labour, Sherwood)

The hon. Member for Tewkesbury prays in aid Powergen and, I suspect, other generating companies. But the message that I hear, and I am sure the Minister hears it too, is that they want a secure long-term regulatory framework that they can trust. That is what the debate is all about.

Stephen Timms (Labour, East Ham)

My hon. Friend is absolutely right. Everyone I speak to about this wants stability in the environment without a sudden shift of the goalposts, which the amendment would bring about. There was an exchange between the hon. Member for Salisbury (Mr. Key) and my hon. Friend the Member for Brighton, Kemptown about the western isles. I have certainly not given up the hope that there will be the potential to secure a substantial renewable energy contribution from the western isles. We should not give the impression that that hope has gone. It certainly has not in my mind. I believe that the arrangements that we have in place will be able to do that.

Colin Challen (Labour, Morley and Rothwell)

I have heard the assertion made several times this morning that this amendment would reduce the industry's confidence in investing in renewables. Would the Minister flesh out that assertion with some examples of how this would occur? We have already seen how, allegedly, the industry involved in insulation is in a state of turmoil because the Government's targets have meandered all over the place around the 5 megaton target. That is an example of the lack of confidence because of moving targets. The amendment seems to establish a firmer framework for renewables, so would he provide the examples and the details to substantiate his assertion?

Stephen Timms (Labour, East Ham)

The evidence is in what all those to whom I have spoken are saying about the need for stability in the regulatory and investment environment for energy and renewable energy specifically. That is what we must bring about. As I have explained, the current wording—the principal objective for the regulator—was set out in the Utilities Act 2000 and is reflected in the duties given to other regulators as well. The arrangement is now well understood. In the wake of that, momentum is beginning to build up behind the investment that we need.

If the regulator's principal duty were to change so that it was not to protect customers and promote competition but to promote renewable energy according to the amendment, I am not sure what that would mean for the 80 per cent. or so of electricity

generators' business that can be expected, until 2020, to be in non-renewables. It would be a serious instance of moving the goalposts, and would severely undermine investor confidence just when it is building in the way we all want.

Colin Challen (Labour, Morley and Rothwell)

Does my hon. Friend agree that perhaps that moving of the goalposts would increase investors' confidence that the market would be led in a certain way? Markets are pretty unstable things, and they need Governments to place goalposts and ensure a proper level playing field for the desired kind of investment. I have not heard how this will destabilise the market.

Stephen Timms (Labour, East Ham)

It would not. The arrangement that has been in place since the Utilities Act 2000 came into force is now well understood. The investment that we need is beginning to be established. It was absent a while ago, but I have given examples of such investment being put in place now. There is one message that I get from every potential investor I talk to, and I spend a fair amount of time talking to potential investors in renewable energy. It also comes out, as my hon. Friend the Member for Sherwood pointed out, in discussions with electricity generating companies. It is that they need stability in the arrangements, to go ahead with the investments that they are planning.

If we were to sweep away at this point the principal objective that has applied to the regulator since 2000 and replace it with something completely different, it would take some years for people to work out what that meant in practice. There would certainly not be investment in the meantime. I strongly urge the Committee not to take that road.

Brian White (Labour, North East Milton Keynes)

The Minister will be aware that some small companies have been severely affected by the regulatory hurdles. How will those start-up companies be able to develop in the stable environment that he describes, which has worked against them?

Stephen Timms (Labour, East Ham)

My hon. Friend makes a fair point. There were difficulties for smaller generators because of what happened initially with NETA. As he knows, we have tackled those difficulties and the generators are now showing confidence, too. I was at an exhibition yesterday at the Building Research Establishment where several suppliers were presenting very small-scale solar, wind and other approaches to very small-scale generation. We have changed the renewables obligation by lengthening the period in which supply can be accumulated; that is precisely to make the renewables obligation more accessible to smaller generators than it was at the outset. Such changes present a confident prospect for smaller as well as large generators.

Other issues may also give rise to the need for alterations, but to tear up the principal duty of the regulator and start again would be damaging to smaller generators as well as large ones. We have a strong and compelling framework for the development of renewable energy, including taking powers in relation to transmission charging. My hon. Friend the

Member for Brighton, Kemptown spent some time discussing the transmission charging arrangements, and those are dealt with later in the Bill, which provides for us to take on powers to deal with them.

The momentum that we need is being built, and this is certainly not the point at which to change course. The Committee must consider what Ofgem has said and done lately. Hon. Members who have expressed concerns, which I agree with, about the direction of energy policy will be encouraged by a number of developments on the part of Ofgem. Protecting the environment and sustainable development are not, as one hon. Member suggested, an afterthought. I agree that there has been the perception of a problem in that regard, but it is important that the Committee considers what the regulator is actually doing today.

We can look for examples in the corporate strategy, which was published recently. It was consulted on in a document last year and recently concluded. The chapter on helping to protect the environment states that Ofgem's

''statutory responsibilities include having regard to the social and environmental guidance from the Secretary of State, and to the broader environmental and social policy context in carrying out our work.''

That context includes, in particular, the climate change programme designed to implement the UK's Kyoto commitments and the sustainable development strategy. Ofgem today is clear that those are among its statutory responsibilities in exactly the way that members of the Committee have been calling for.

Norman Baker (Liberal Democrat, Lewes)

The two things are not quite the same. There is a statutory duty to protect the interests of consumers and there is a duty to have regard to the environment. That is a secondary matter; it is not on the same level as the duty to protect consumers. It is, to use the Minister's word, an afterthought.

Stephen Timms (Labour, East Ham)

The duty certainly is not an afterthought. It is built into the corporate plan for the organisation over the coming three-year period. It is important that Ofgem is clear that that duty is among its statutory responsibilities, as the Committee would wish.

On a number of occasions, we have been able to pay tribute to the work of my hon. Friend the Member for Milton Keynes, North-East that led to the Sustainable Energy Act 2003. He made the point that that requires Ofgem to undertake regulatory impact assessments, which I agree has been a welcome and important step. In particular, Ofgem must assess the impact of proposals on the environment. Clause 174 of this Bill places a statutory duty on Ofgem to follow the principles of ''best regulatory practice'' when carrying out its functions. It is clear that Ofgem is seized of the importance of dealing with the concerns expressed in the Committee about the environment and sustainable development in a way that is consistent with Government policy. That is the way to take these issues forward.

My hon. Friend the Member for Brighton, Kemptown suggested that Ofgem was not doing much to help renewables. That is not the problem at the moment. The real problem with hitting our targets, which I believe we will hit, is investor confidence, which the amendment would severely damage. However, I can point to many things that Ofgem is doing to assist. I have mentioned that it is administering the renewables obligation and doing so well. In the coming year, it will publish a scheme to incentivise the connection of renewables. It will also publish the distributed generation co-ordinating group's annual report and is working with us to incentivise efficient connection of offshore energy sources to the onshore network. All that is essential to achieving the aims that we all share.

I want to propose deleting clause 84. Our commitment to sustainable development is, as I have been setting out, built into existing legislation.

Brian White (Labour, North East Milton Keynes)

Is my hon. Friend aware that deleting the clause gives rise to the perception that the Government are not serious about the environment? That plays into the hands of our political enemies, who will use it against us.

Stephen Timms (Labour, East Ham)

I do not think that it does that. The initiative came from Liberal Democrat Members of the other place, and was criticised by the hon. Member for South-West Hertfordshire, although I think that his noble. Friends supported it. We have taken a consistent approach; we have clear commitments and objectives with regard to sustainable development and reducing CO2 emissions, using the existing regulatory foundation for energy policy. I do not agree that we would appear to deviate from our cause if we were to go back to the arrangements that we put in place at the outset. Sustainable development integrates economic, environmental and social policy. The roles of the Secretary of State and Ofgem in relation to social and economic policy are well understood and derive from their primary objective to protect the long-term interests of consumers. That was set out clearly in the debate on the utilities Green Paper.

Let me remind the Committee how the environmental and social domains are embedded in existing legislation, and the extent to which the regulator has acted on them. Both the Secretary of State and the regulatory authority must have regard to environmental matters when carrying out their functions under part 1 of the Electricity Act 1989, a responsibility that extends to both current and future consumers. There was an exchange about the problems that might attach to a particular regulator. That is why we now have a regulatory authority; it has been an important step forward. The duties of the regulatory authority include producing regulatory impact assessments to assess the impact on the environment of the proposals, a duty to promote energy efficiency, and a duty to secure viable and diverse long-term energy supplies.

We have been able, over a substantial period, to set in place an easily understood and effective framework within which we can achieve the objectives for

sustainable development and for renewable energy that everybody on the Committee has supported in the debate. The last thing that we should contemplate doing is ripping out the cornerstone of the arrangements and saying that we want to do something completely different. Rather, in the months ahead, we should ensure that, if we need to make alterations, we could do so in the confidence that the foundations that we have put in place are effective.

Desmond Turner (Labour, Brighton, Kemptown)

I am deeply disappointed by my hon. Friend's response. We have common objectives; our disagreement is about whether we have the right legislative framework to achieve them. Let me make it clear that this is not an anti-Ofgem amendment. I would not dare introduce such a thing—the chairman of Ofgem is my near neighbour and I have to live with him. However, I remind the Committee that Ofgem is still somewhat myopic about having security of supply as its primary objective. I do not seek to remove any of the duties of Ofgem. The amendment simply says that Ofgem should carry out its duties in such a way as to facilitate renewable energy.

As to the separation between statute and policy and allowing the regulator to make policy, I must disagree with my hon. Friend the Member for Southampton, Test. He completely misunderstands the situation; the amendment would change the statute from which the authority draws its remit. It is as basic as that.

My hon. Friend the Minister is quite reasonably concerned with stability when it comes to people actively wanting to invest in renewable energy. I totally agree, but I reinforce what I have said about the present lack of investor confidence. The Minister told us about the investment of several hundred million pounds in offshore wind power, but that is happening only because he is helping it along with the leverage of £117 million of capital grants. It means that the renewables obligation is only just effective enough to make an onshore wind farm commercially viable; it is not enough on its own to make offshore wind commercially viable. It is certainly nowhere near enough to bring any of the new technologies into initial deployment. We shall need those technologies if we are to achieve the overall policy objectives, on which there is complete agreement in the House, and certainly within this Room.

I am extremely disappointed that my hon. Friend the Minister wants to delete clause 84. The DTI's regulatory impact assessment on the clause states:

''The Government is committed to sustainable development. While economic, social and environmental duties are already in the Electricity Act 1989, this Clause ensures that sustainable development is given its own profile in energy legislation.''

The Department has published a document saying that the clause is good, but the Minister wants to delete it. I am sorry, but the logic of that completely escapes me.

As to the future security of the market, the Minister is worried about moving the goalposts. My assertion is that the goalposts are not in the ideal position. I want them to be placed in the optimum position and kept there. In my submission, the amendment will not weaken existing confidence; it will give confidence where there is none. It will be a powerful signal to the

whole industry that the Government mean business on renewable energy. I apologise to my hon. Friend the Member for Staffordshire, Moorlands (Charlotte Atkins), but given the Minister's response, I am unable to withdraw the amendment. It is too fundamental a point. With great regret, I shall press it to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 10, Noes 6.

Clause 85 - Exploitation of areas outside the territorial sea for energy production

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 173, in page 64, line 38, at beginning insert—

'( ) It shall be the paramount concern of the Secretary of State to ensure that all possible measures are taken to preserve the marine environment.'.

The Minister will be pleased to know that this is a probing amendment, so he need not worry about any untoward activities. I am sure that he will not accept the proposal, and I shall not press it to a Division. Apart from anything else, he will object to the word ''paramount''.

It is opportune to raise the issue of the marine environment early on in consideration of this part of the Bill. The Minister will know that hon. Members on both sides of the House are worried about the protection of the marine environment, and many were disappointed at the failure of the Bill introduced by the hon. Member for Uxbridge (Mr. Randall), which was lost in the House of Lords. The Government recognise that it is necessary to ensure adequate protection for the marine environment, although in general terms none exists at present.

The development of renewable energy sources in the marine environment will obviously have an impact on it. That environment is very important as it covers 71 per cent. of the globe, and 80 per cent. of all life on earth—creatures large and small—is found under the ocean's surface. The marine environment is particularly susceptible to pollution and to disturbance, which affects not just plants but mammals and other animals, many of which are found in British waters.

The amendment's purpose is to find out how the Minister views the interaction of the development of renewable resources with the marine environment. What balances is he putting in place? What steps has he taken to ensure that the marine environment is properly protected? What guidance will be issued by his Department or the regulator? What will he do to ensure that problems do not arise from the development of renewable resources offshore? Many of us want that development to happen, but we also want to ensure that the marine environment is properly protected.

Anne McIntosh (Conservative, Vale of York)

I shall reserve my comments on the UN convention on the law of the sea to the clause stand part debate. I congratulate my hon. Friend the Member for Uxbridge on his attempt, to which I hope he returns, to introduce a Bill on the marine environment. My initial reaction to the amendment is that the issue is so important that it should be covered by separate legislation. In the clause 84 stand part debate, I mentioned that little regard is paid by the Department to other interests and referred specifically to ship owners. Sustainable development of the marine environment is important, so it will be interesting to see what regard the Department pays to it.

The amendment draws attention to the fact that, although the Department of Trade and Industry is the lead Department on energy, other interests germane to the Departments for Environment, Food and Rural Affairs and for Transport, such as shipping, have not been paid sufficient regard to. The marine environment is so important that I hope my hon. Friend the Member for Uxbridge succeeds in introducing a Bill to deal with it in detail.

Michael Weir (Scottish National Party, Angus)

I shall also pose a few questions and reiterate points made by the hon. Member for Vale of York. Although I support the general thrust of the amendment, I am slightly concerned about the use of the word ''paramount''. There are many other interests

in the seas as well as the marine environment. I am thinking particularly of fishing, which may be affected by the generation of wind offshore. We might come to that later. What is the Minister's overall strategy for the marine environment in relation to other industries carried out offshore?

There has been an increasing tide of opposition to onshore wind for various reasons. Many of us feel that offshore wind provides an opportunity for renewable energy without the problems involved with onshore wind. However, I would hate the same tide of opposition to rise against offshore wind because a system is not in place to deal with concerns over the marine environment and over other interests that operate in the North sea, such as fishermen, the oil and gas industries, and shipping.

Richard Page (Conservative, South West Hertfordshire)

I am glad that the hon. Member for Lewes has said that this is a probing amendment, because he would run into troubles with the use of the word ''paramount'', as the hon. Member for Angus says. That word hit the political lists in the context of the invasion of the Falklands, when the wishes of the Falkland islanders were said to be paramount, according to the Prime Minister, Baroness Thatcher. That helped to pave the way for the invasion, but that is another matter and I know that you would rule me out of order if I developed it, Mr. Sayeed. However, everyone reached for the ''Oxford English Dictionary'' to find out exactly what ''paramount'' meant, and it means that everything else is secondary.

If the amendment had been not probing but one of the wreckers that the hon. Member for Lewes periodically produces, it may have caused some excitement. However, it gives the Minister a golden opportunity to put on record what the Government hope to achieve in improving the marine environment.

I consider offshore energy generation not a disadvantage, but something to protect and improve the marine environment. The way that North sea oil rigs have operated, with their exclusion zones and the heating of the oil coming through, has provided growth and a breeding stock. A complete environment has been created in the Caribbean by toppling various rigs to form artificial reefs. They have developed the opportunity for fish to breed and grow in safety, which has helped to supply fish to the fishing industry.

Played sensibly, offshore development can be a boon to the marine environment, and I look forward to the Minister spending the next 13 minutes telling us exactly how we will ensure that it helps the environment in the North sea.

Robert Key (Conservative, Salisbury)

I mean to ensure that the Minister does not have 13 minutes to reply.

I am glad that the hon. Member for Lewes tabled the amendment, because it allows us to probe important aspects of the marine environment that will be affected by energy extraction and development in coming years. For some years now, I have been a member of the Royal Society's pairing scheme with university science departments, and this year I have been paired with the chemistry department at the university of Southampton, which is my local university.

The year before, I was with the institute of oceanography at the university of Southampton, where I learned a great deal about the damage that has been done to the sea bed as a result of oil and gas extraction over the years and about the damage that we might do in future. Few people know that there has been a disruption to the coral colonies in parts of the north Atlantic, which has seriously damaged the marine environment. Now that we know about it, we can do something to stop it.

Looking to the future, particularly with regard to wind farms, there will undoubtedly be an impact on the marine environment, which we may not take account of if we do not bother to find out what we are doing before we do it. If we are fortunate enough to achieve the technical innovation to generate wave power, I daresay that we will again be disrupting the marine environment—there has been severe disruption wherever tidal electricity schemes have been constructed.

Only last Saturday, I was on the barrage de la Rance at St. Malo, looking at how Electricite de France has reworked its public exhibition area so that people can understand the importance of tidal flow energy and the contribution that it can make to the economy. That scheme came on stream in 1967 or 1968, but it has had a new lease of life, while we are told that discussions are still going on about a Severn barrage.

There is no doubt that such developments have a substantial impact on the marine environment.

Desmond Turner (Labour, Brighton, Kemptown)

The hon. Gentleman is talking about tidal barrages, which clearly have an enormous effect on the marine environment, but to the best of my knowledge, no one is talking about developing tidal barrages for marine tidal stream power. We are talking about underwater machines that will have a minimal effect on the marine environment, and I hope he recognises that.

Robert Key (Conservative, Salisbury)

Of course, although, as I have just pointed out, the Severn barrage is still on the cards. It has by no means been written off. However, it is also true that underwater generation facilities cause a disturbance of the tidal flow. That can lead to changes in the sea bed, which must lead to changes in the marine life on the sea bed. We have seen that in terms of mineral development and extraction around our coast. The Crown estates have put an enormous amount of work into that and have produced some excellent publications, which are available and, I believe, were sent to hon. Members. They were certainly sent to me. The Crown estates are conscious of the damage done by the exploitation of sea bed developments.

Also, in my constituency is the headquarters of the Trust for Wessex Archaeology, the biggest commercial archaeologists fulfilling contracts where there is marine archaeology interest—notably in the Solent. The disturbance of the marine environment has archaeological as well as biological consequences. I am glad that the hon. Member for Lewes has tabled the amendment, and I hope that the Minister can reply briefly to all the points I have made.

Stephen Timms (Labour, East Ham)

I am grateful to the hon. Member for Lewes for tabling this probing amendment, and I am sympathetic to the concerns raised by him and other members of the Committee. As he intimated, the amendment's precise form could cause us problems.

Clause 85 will establish the renewable energy zone beyond territorial waters and put in place a framework to enable development of the renewable energy zone. However, it goes no further. It does not pre-empt any decisions on the scale or location of any energy development that may be considered. Such matters will be dealt with separately as part of the strategic planning framework, which is in place to ensure that the development of our offshore renewable energy resources is managed properly and with due respect for the marine environment.

The framework incorporates safeguards for consideration of the impact of proposed renewable development on the marine environment. I agree with what all hon. Members have said about the importance of that consideration. We have put the safeguards in place to ensure that those concerns are properly addressed. I will now outline the safeguards that are in place.

First, we are about to implement the EC directive on strategic environmental assessments. Before the directive came into force, reflecting the Government's commitment to safeguarding the environment, the DTI carried out a strategic environmental assessment of the three areas of the sea—the greater Wash, the outer Thames estuary and the north-west of England—earmarked for round 2, which is the second phase of offshore wind farm development.

As a result of the assessment, a coastal buffer zone with a minimum width of 8 km, but extending to 13 km in areas of particular sensitivity, has been excluded from development in all three areas. It was anticipated that the development proposals coming forward, due to their scale, could have disturbed birds and had an impact on inshore fishing—the hon. Member for Angus has rightly drawn attention to fishing interests—and on recreational activities. The potential visual impact was also recognised. The same process of strategic environmental assessment would apply to any new areas identified within the renewable energy zone for future development. Only after that would developers be invited to apply for a site lease.

Secondly, developers awarded site leases would still be required to conduct a comprehensive environmental impact assessment for their particular site and apply for development consent, as is the case for the developers who have already been offered site leases by the Crown estates. The developers need to conduct the environmental impact assessment before seeking consent from three Departments: Trade and Industry; Environment, Food and Rural Affairs; and Transport. As part of that process, we expect developers to engage in a dialogue with environmental NGOs and other groups, such as those representing fishing and other marine interests, which are likely to have an interest in the development.

Thirdly, before any project can go ahead, DEFRA must issue a licence under the Food and Environment Protection Act 1985, and will scrutinise licence applications very carefully. If necessary, it will attach conditions to any licence granted, such as to monitor the impact of any development on its surroundings. In addition, where there are nature conservation interests of European importance involved, there must be an assessment of all plans or projects likely to have a significant effect on the conservation interests of those species or habitats.

In accordance with requirements under the EC wild birds and habitats directive, no plan or project, including wind farm developments, can proceed where it will have an adverse effect on the conservation status of the species or habitat concerned, unless no alternatives exist and an overriding public interest case can be made. Even where such a case can be made, compensatory measures would be required to redress any damage.

Norman Baker (Liberal Democrat, Lewes)

May I ask the Minister about the mechanics of government? He mentioned a number of Departments that are involved, including the DTI, the Department for Transport and DEFRA. He might also mention the Office of the Deputy Prime Minister, which I imagine has a planning role in the wider sense. Can he satisfy the Committee, first, that the synergy between the different Departments is such that the environmental objectives can be delivered and, secondly, that for those wishing to develop, the plethora of Departments does not represent an unnecessary hurdle?

Stephen Timms (Labour, East Ham)

The hon. Gentleman asks me to respond to criticism from both sides. That is quite fair, but it is clear from his question that there is a balance to be struck, which we think we have got right. Each Department that I described has a specific part to play, and it is important that all the interests, of which account will be taken by such scrutiny, are represented.

Equally, all the Departments that I mentioned are party to the sustainable energy policy network and are part of the reality of achieving the commitments set out in the energy White Paper. I think that the balance has been set at the right level. I take the hon. Gentleman's point that there are risks of impeding development or of letting things go through that ought not to. However, it will be necessary for each specific project to have all three consents to progress.

There is a robust process in place with a number of stages of consultation, so that decision making can properly ensure that the environmental impact of offshore renewable energy development is minimised. I welcome what members of the Committee have said about the importance of that. Of course, there is no such thing as totally impact-free development, not only in relation to the marine environment or to other users of the sea. We cannot guarantee to ''preserve the marine environment'', in the words of the amendment, because clearly there will be an impact.

The hon. Gentleman drew attention to the difficulties involved with the word ''paramount''. There certainly are for Britain very considerable natural resources offshore—reference has rightly been made to wind, waves, tidal currents—to produce electricity in a sustainable way and without pumping carbon into the atmosphere, thereby helping to meet our goal of cutting CO2 emissions by 60 per cent. by 2050. Offshore renewable technologies have a big part to play, and these measures will make a big contribution to the UK effort to tackle global warming. Global warming itself poses a serious threat, specifically to the marine environment, as members of the Committee know all too well.

Norman Baker (Liberal Democrat, Lewes)

I am grateful to the Minister for his response. It is useful to set the scene as we go into consideration of this part of the Bill, and we have had some useful exchanges. Having heard that response, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee B

Clause 85 - Exploitation of areas outside the territorial sea for energy production

Michael Weir (Scottish National Party, Angus)

I beg to move amendment No. 28, in

clause 85, page 65, line 13, leave out from 'State' to end of line 15 and insert

'shall by order designate that those parts of a Renewable Energy Zone which would fall within an area to which the law of Scotland would pertain as an area in which the Scottish Ministers are to have functions.'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to discuss the following amendments: No. 159, in

clause 85, page 65, line 15, at end insert

'after consultation with Scottish Ministers'.

No. 29, in

clause 88, page 67, line 16, at end insert

'but the said Order shall specify that any area to which Scottish law would normally pertain shall be subject to the law of Scotland, Scottish waters being defined by the co-ordinates set out for the boundary in the Continental Shelf Jurisdiction Order (S.I./1968, 891).'.

No. 30, in

clause 88, page 67, line 17, leave out from 'section' to end of line 19 and insert

'shall ensure that the Courts of Scotland shall have jurisdiction in respect of areas in which Scottish law would normally pertain.'.

No. 31, in

clause 96, page 74, line 19, leave out from 'must' to end and insert

'secure the consent of the Scottish Ministers'.

Michael Weir (Scottish National Party, Angus)

The amendments relate to the three clauses setting up the renewable energy zones and the civil and criminal law that will apply to them. There is some confusion in these matters. Clause 85(5) states:

''The Secretary of State may by order designate the whole or a part of a Renewable Energy Zone as an area in relation to which the Scottish Ministers are to have functions.''

Subsequent clauses deal with the application of civil and criminal law within the zone and the Scottish Ministers may have a function determined by Order in Council. The Library research paper on the Bill gives a background to the clause with reference to article 2 of the United Nations convention on the law of the sea, which recognises that coastal states have jurisdiction and sovereignty over territorial waters, and part VI of the convention gives coastal states certain rights in relation to the sea bed of their continental shelf. In the UK, that is given effect by the Continental Shelf Act 1964. Part V gives coastal states the right to establish economic zones.

I understand that a renewable energy zone is to be designated by Order in Council. The Bill states that Scottish Ministers are to be consulted. So far so good, but earlier the Minister seemed to indicate that the size and extent of the zone have not been finalised. It is not clear how much of it will be off Scotland's shores and to what extent Ministers and Parliament will be involved in the issue.

In response to a query on the matter in the other place, Lord Whitty replied:

''An Order in Council could potentially cover civil or criminal law matters that are wholly reserved under the Scotland Act 1998, wholly devolved or a mix of both . . . In the case of wholly reserved matters the Order in Council would be subject to the negative resolution procedure in the Westminster Parliament . . . Where the Order in Council deals with wholly devolved matters it would be subject to annulment of a resolution of the Scottish Parliament. Where the content of the Order in Council includes both reserved and devolved matters it would need to be subject to the procedures of both the Scottish and Westminster Parliaments.—[Official Report, House of Lords, 3 February 2004; Vol. 657, c. GC335.]

Again, so far so good, but it is not clear exactly which part of the area will be subject to Scottish law.

As the hon. Member for Vale of York (Miss McIntosh) said earlier, a footnote to the regulatory impact assessment states that the renewable energy zone extends beyond the territorial seas of Scotland, Wales and Northern Ireland and is excluded from the devolutionary arrangements set out in the Scotland Act 1998, the Wales Act 1998 and the Northern Ireland Act 1998. The legislative proposals in regard to territorial waters recognise where appropriate the competence of a devolved Administration. That suggests that there is no Scottish involvement outwith the immediate territorial waters, but that is wrong in principle and in practice.

The United Kingdom is different from most coastal states in that it has two completely different legal traditions—Scots law and English law. It is not correct to say that the Scottish Parliament's jurisdiction, and therefore Scots law, extends only to territorial waters. I refer hon. Members to section 126 of the Scotland Act 1998—

Bill O'Brien (Labour, Normanton)

Order. I appeal to the hon. Gentleman to give a little more voice. The air conditioning is noisy and the Hansard reporter would like hon. Members to speak a little louder.

Michael Weir (Scottish National Party, Angus)

Thank you, Mr. O'Brien. I shall try to speak up.

As I was saying, to suggest that there is no Scottish involvement outwith the immediate territorial waters is wrong in principle and in practice. The UK is different in that it has two differing legal traditions. I was referring to section 126 of the Scotland Act 1998, which defines various terms in the Act. It defines Scotland as including

''so much of the internal waters and territorial sea of the United Kingdom as are adjacent to Scotland''.

Section 126 goes on to define the Scottish zone, which is important for fisheries matters, as

''the sea within British fishery limits''—

the limit under section 1 of the Fishery Limits Act 1976—

''which is adjacent to Scotland''.

The effect is that Scots law applies to that area of fishing jurisdiction, adjacent to Scotland, which is much greater than the territorial waters.

The situation is further compounded by the Continental Shelf (Jurisdiction) Order 1968, which defines the boundaries of Scottish waters. The area is much greater than simply the territorial waters. That is important because the authority of the renewable energy zone, as I understand it, is based on the Continental Shelf Act 1964. The 1968 order defined the English area, the Scottish area and the Northern Irish area within UK territorial waters. I shall not bore the Committee by going through the various latitudes and longitudes of that.

Anne McIntosh (Conservative, Vale of York)

Oh!

Michael Weir (Scottish National Party, Angus)

I will if the hon. Lady insists, but I think that we shall have a quiet meander down the road of constitutional law this afternoon.

The order states that

'''the Scottish area' means the areas included in the sixth designated area, those parts of the first, second and fifth designated areas which lie north of the Scottish border and that part of the seventh designated area which lies north of the Scottish and east of the Northern Irish border''.

That means that the areas of sea within UK waters that lie adjacent to Scotland—north of the border between Scotland and England—are the areas to which Scots law applies as regards fishery and oil installations.

The order refers to which law will apply in each area. It states that

''the law in force in Scotland shall apply for the determination of such questions arising out of acts or omissions taking place in the Scottish area'',

so Scots law applies in those areas. The Scottish sector of the UK sector—if I can put it that way without tying myself in knots—is much greater than simply the territorial waters. Scots law governs fisheries as well as offshore oil and gas exploration. Should a crime be committed on an oil rig off the Scottish coast, a Scottish police force would deal with the matter and a Scottish court would hear the case.

As the Bill stands, that might not necessarily be the case in respect of an offshore wind or wave facility, especially as we do not know the exact extent of any future zone or Order in Council that would define the extent to which the Scottish Parliament, and therefore Scots law, would have jurisdiction. It would be possible for the UK Minister to decree that English law applied to the whole of any renewable energy zone outside strict territorial waters, and the consultation with Scottish Ministers would be a case of, ''Well, there you go. That's it.''

That may seem a minor point, but there is a recent precedent in that, in 1999, there was a change in territorial waters for fisheries jurisdiction, which resulted in a large part of southern Scottish territorial waters for fishery being transferred to English jurisdiction. As a result, if I look out at the sea from the southern part of my constituency, I gaze upon English territorial waters in respect of fishing, though not in respect of other matters. That is disgraceful.

Amendment No. 28 would ensure that in any area where Scots law currently applied for other purposes, it would also apply to the renewable energy zone, so that where Scots law applied for oil exploration, fishing and other matters, it would also apply to offshore energy. Amendment No. 29 would define that area with reference to the 1968 order, which defines the extent of Scots waters for these purposes. Amendments Nos. 30 and 31 would make the appropriate changes to the clauses relating to civil and criminal law.

This is an attempt to include certainty, clarity and consistency in the application of law to our seas. I hope that the Minister accepts the absolute sincerity of that and the need for certainty, and that he accepts the amendments without further ado.

Anne McIntosh (Conservative, Vale of York)

I pay tribute to the hon. Gentleman for tabling his amendments and for the knowledge of Scots law that he has demonstrated. The Committee will recall that I am a Scottish advocate, albeit a non-practising one, and I studied the international law of the sea as part of public international law. Sadly, that was before the UN convention on the law of the sea was adopted in 1982. I had the privilege of being taught by the Government adviser, Patricia Byrnie, who was deemed to be a leading expert on the international law of the sea. I shall speak to amendment No. 159 to resolve the conundrum that I tried to address under clause 84. I was quickly and rightly brought to book, as this is the relevant clause.

The Bill is silent on where the renewable energy zones will be. We are simply trying to establish the principle of extending the UN convention on the law of the sea beyond the territorial waters. Not only do we not know where the zones will be, but we do not know how large they will be.

The zones will have implications for Scotland. Will the Minister explain how they will be interpreted and tell us which law will be applicable to them? Will they, for the purposes of the UN convention on the law of the sea, have the same legal status as offshore oil rigs? As the hon. Member for Angus (Mr. Weir) will be only too well aware, Shetland made a claim that some oil wells were in Shetland's territorial waters and so did not pertain to Scotland. That happened when I was studying the international law of the sea, admittedly some time ago, and it is another dimension in this regard.

Can the Minister confirm that the renewable energy zones will have the same legal status, be that under English or Scottish law, as offshore oil rigs? That has consequences for the rest of this chapter. Clearly, a renewable energy zone is going to be on a much greater scale and it will not be limited to a small area such as that occupied by an oil rig. We should consider this matter from the point of view of causing navigational hazards and the ability of lifeboats to go out in the event of an emergency, as well as of other fishing interests, as the hon. Gentleman mentioned, and recreational craft.

There was a lengthy debate in the House of Lords on this. As the Library note states and the hon. Gentleman quoted, Lord Whitty replied specifically about the status of an Order in Council applying criminal or civil law. My particular concern is that there will be circumstances in which article 85 will apply to Scots law, with a renewable energy zone being positioned in waters that are beyond UK territorial waters but deemed to be part of Scotland. The Bill is silent on that point. I do not know whether the Minister would see that as a West Lothian question, an extension of that question or the opposite of it.

I should perhaps not read out page 31 of the regulatory impact assessment again, as I referred to it this morning and the hon. Gentleman has just read it out. However, a footnote states:

''The legislative proposals in regard to territorial waters recognise, where appropriate, the competence of the devolved administrations.''

Michael Weir (Scottish National Party, Angus)

There is another problem. If Scots law does not apply all the way out to the site of a renewable energy zone, we could have a situation in which different laws apply to the installations and the pipes bringing energy ashore, many of which will land in Scotland.

Anne McIntosh (Conservative, Vale of York)

Indeed. There is another difficulty of not knowing where and what size the zones will be. The pipes bringing back the generated electricity will be longer the further out the zones are.

I am a member of the Transport Committee, and we have seen that the proposed second round of consents for wind farm developers is currently looking only at English waters and channels. The wind is strongest near the land, where the farms are also more economically viable from the point of view of bringing the electricity back to land. They are therefore generally situated in shipping channels with heavy traffic. That is why this debate is important. Will the Minister explain why subsection (5) says simply:

''The Secretary of State may . . . designate the whole or a part of a Renewable Energy Zone as an area in relation to which the Scottish Ministers are to have functions''?

To sum up, we are asking the Minister to confirm the status of the waters, bearing in mind the fact that the Electricity Act 1989 sets out the law in one way while the Scotland Act 1998, to which the hon. Gentleman referred, says that all matters of regulation except water are reserved matters outside the competence of the Scottish Parliament. The Minister needs to give us clear direction on what matters are devolved and what are reserved. The source for my information is a book that I have not brought with me but whose title Hansard noted in one of our first sittings. It says specifically that all matters except water are reserved, so by implication water is devolved to the Scottish Parliament.

We are speaking to amendment No. 159 in the most helpful way possible, because we believe that it is incumbent on the Minister to have the earliest possible consultation with the Scottish Ministers, not just for the benefit of those who are fortunate enough to serve

under your chairmanship, Mr. O'Brien, but to help resolve those conflicting and competing uses of the water, which is the subject of the clause.

Stephen Timms (Labour, East Ham)

I warmly welcome you back to the Committee, Mr. O'Brien—warm is the appropriate term this afternoon. I have listened with interest to the speeches made. I am hesitant about stepping into such a debate, given the expertise in particular aspects of the law shown by both hon. Members that have spoken, but I will have a bash.

I shall deal first with amendment No. 28. The purpose of clause 85 is twofold. The first is to vest the rights that are exercisable by the UK in respect of renewable energy under part V of the United Nations convention on the law of the sea, so that they can be exercised by the Crown Estate. The second is to give a power to establish the renewable energy zone around the UK within which those rights are exercisable.

Subsection (5) gives a power to the Secretary of State to designate the area within the UK renewable energy zone over which Scottish Ministers will exercise functions. I have an open mind about the waters that the area will cover. We will have to think carefully and consider the precedents that have been established for other activities, some of which were mentioned by the hon. Member for Angus. Once we have come to a conclusion about the area over which Scottish Ministers will have functions, criminal and civil law can be applied to renewable energy installations within it using the powers under clauses 86 and 88.

The hon. Gentleman proposes reversing that by using the area over which Scottish law currently applies in respect of oil and gas activities under the 1968 statutory instrument. However, renewable energy is a new activity and we want to consider all options for designating the area rather than automatically adopting that one. We will certainly consider it, but we want to consider them all.

Michael Weir (Scottish National Party, Angus)

I appreciate what the Minister is saying, but my concern is that if we designate a different area, oil platforms and offshore wind platforms in the same area could operate under two different laws. Surely that is not an acceptable way to operate. They should operate under the same law.

Stephen Timms (Labour, East Ham)

That could arise wherever the boundary is drawn; there could be installations close to each other on different sides of the boundary and we must live with that. That issue could be taken into account when deciding exactly where the demarcation will be drawn.

Michael Weir (Scottish National Party, Angus)

I am sorry to be pedantic, but it is not just a case of where the boundary is drawn. If the whole renewable energy zone, or a large part of it, was determined to be under English law, where oil areas are currently under Scottish law, different laws could apply to two different installations in areas far into Scottish waters. Does the Minister accept that?

Stephen Timms (Labour, East Ham)

The hon. Gentleman makes a reasonable point and that would have to be taken into account when coming to a decision. However, I would not want to close down the range of available options.

On amendment No. 159, I agree with the hon. Member for Vale of York that the Secretary of State should have discussions with her Scottish counterpart before designating the part of the renewable energy zone over which Scottish Ministers will have functions. Scottish Ministers would not normally have devolved competence in the renewable energy zone, which lies beyond territorial waters, but they can exercise devolved functions beyond territorial waters occasionally. However, Scottish Ministers cannot decide over which parts of the zone—which will extend around the whole UK—they will exercise functions under the Bill. I would not want to write a formal requirement, as suggested in the amendment, into the Bill.

Anne McIntosh (Conservative, Vale of York)

I am not in practice, so I do not have a vested interest, but I do not think that the Committee would wish to be a hostage to fortune at this stage. Both the hon. Member for Angus and I have identified a potential loophole whereby one rule would apply to renewable energy zones in Scottish waters and a totally different one to English waters. I cannot believe that that is what the Government intend. A potential way forward would be for the Government to reconsider the matter and explain their findings on Report. If there were such a loophole or potential difference of interpretation, it would be highly unfortunate. I cannot believe that that would be the Government's intention.

Stephen Timms (Labour, East Ham)

I do not think that there is a loophole, although it is true that there certainly will be a difference. That applies to wherever the boundary is drawn. What is important is that should be clarity about that, and there will be. There is certainly no fundamental difficulty with operating two different arrangements in two different offshore areas.

Turning to amendment No. 30, the same point about not binding Scottish Ministers applies. I agree also with the principle that Scottish courts should have jurisdiction to take proceedings in respect of civil law questions relating to renewable energy installations and related lines in Scottish internal and territorial waters, as well as waters designated in clause 85(5). Having given an undertaking that the Order in Council under subsection (2) will follow that principle, I hope that the hon. Gentleman will feel able to withdraw his amendment, the drafting of which is defective in that it provides only for Scotland.

On amendment no. 31, clause 96(4) says:

''Before issuing a notice under this section, which relates, wholly or partly, to—

(a) an area of Scottish waters, or

(b) an area of waters in a Scottish part of a Renewable Energy Zone,

the Secretary of State must consult the Scottish Ministers.''

That reflects an agreement that we have reached with Scottish Ministers. The Secretary of State will, of course, listen carefully to Scottish Ministers' views, and will do everything that she can to accommodate

them. It is certainly reasonable to assume that the Secretary of State and the Scottish Ministers will reach an agreement; I do not think that there will be any difficulty with that, because we strongly share with Scottish Ministers a commonly held objective to encourage renewable energy. We already work closely with colleagues at the Department for Trade and Industry and the Scottish Executive to ensure that there is a common, UK-wide approach to marine safety policy and regulation. When agreement is not possible—although one can envisage that in the future it will be—the Secretary of State must be able to take the action that she thinks is proper, taking account of the consultation with Ministers and the public that will be required for a safety zone. If there were a requirement to obtain the agreement of Scottish Ministers, the danger would be that she would be unable to act if such an agreement were not forthcoming, and such an impasse would not be in the interests of marine safety.

I should like to respond to a couple of points made earlier in the debate. The hon. Member for Angus referred on a number of occasions to the continental shelf. However, the renewable energy zone is not based on that. It derives from article 56 of part V of the UN convention law of the sea, which deals with the exclusive economic zone. The continental shelf derives from part VI of the convention. There is that difference, and the continental shelf part of the convention relates to oil and gas development, not to renewable energy, which is raised in part V.

Anne McIntosh (Conservative, Vale of York)

Will the Minister give way?

Stephen Timms (Labour, East Ham)

I should like to respond to a point that the hon. Lady made earlier, which may be helpful. The Bill allows for the Secretary of State to make an order applying civil and criminal law—Scots or English—to an installation and to a safety zone. It does not apply to the renewable energy zone by itself, but to the installations within it. When the order has been made, the position will be clear.

Anne McIntosh (Conservative, Vale of York)

The clarification I was seeking is compounded by the Minister's reference to the part VI of the United Nations convention on the law of the sea, which, as he said, refers to the continental shelf, and to oil and gas exploration. Is he saying that the renewable energy zone has a different legal base? It will set more alarm bells ringing if there is no protection for shipping, which currently enjoys the public right of navigation around oil rigs. Will it enjoy the same rights to navigate around a zone?

Stephen Timms (Labour, East Ham)

It is the same convention, but part V rather than part VI applies. In part V, article 56 refers to

''activities for the economic exploitation and exploration of a zone such as the production of energy from the water, currents and winds.''

That is the basis of the Bill's renewable energy zone provisions, rather than part VI, which sets out the arrangements relating to the continental shelf.

Michael Weir (Scottish National Party, Angus)

I mentioned the difference between parts V and VI when I spoke earlier. However, I am not satisfied with what the Minister said because it seems to be a recipe for complete confusion. I cannot understand the Minister's reluctance to include in the Bill that Scots law will apply in respect of renewable energy installations, as it does in respect of oil installations. There are wind farms off the English coast and several projects in the pipeline for wind farms off the Scottish coast. Many will be in areas where there is oil and gas exploration, although some of that is coming to an end.

Earlier, the problem of pipelines or cables bringing energy ashore from wind farms was mentioned. Many of the pipelines from those installations will pass through Scottish waters and end up in Scotland, however they are defined. It appears that we are to have different laws in respect of oil and gas and renewable energy and possibly fishing. That is a recipe for disaster, as there will be uncertainty about which law applies in a given situation.

The Minister said that he would consider the matter but he is unwilling to give a clear commitment. I therefore wish to press the amendment to a Division.

Anne McIntosh (Conservative, Vale of York)

The Minister is even more familiar with the United Nations convention on the law of the sea than I am. I will not press our amendment but I put down a marker that we may wish to return to the subject. The hon. Gentleman seems to have confirmed that there will be a separate legal basis for zones under part V of the UN convention, as opposed to oil and gas exploration under part VI. That will have consequences when we discuss later clauses.

Question put, That the amendment be made:—

The Committee divided: Ayes 6, Noes 10.

Anne McIntosh (Conservative, Vale of York)

I welcome the opportunity to have a short debate on the clause and in particular the implications for both the clause and the Bill generally of the UN convention on the law of the sea. We had a short debate this morning on an amendment moved by the hon. Member for Lewes (Norman Baker), who sought to discuss some of the marine environmental issues. Quite properly those issues come under this part of the Bill.

As the Minister said, article 2 of the convention sets out the

''Legal status of the territorial sea, of the air space over the territorial sea and of its bed and subsoil''.

Part V sets out the exclusive economic zone. There are some quite wide ranging measures, which I am sure the Committee, particularly the hon. Member for Lewes, would wish to support. Article 57 states:

''The exclusive economic zone shall not extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured.''

I presume that the Minister can confirm that the zones will be within that scale.

Mention is made of the conservation of living resources, and article 61 calls on the coastal state to determine the allowable catch of the living resources in the exclusive economic zone. One surprising feature of this part of the Bill, bearing in mind that Lord Whitty from the Department for Environment, Food and Rural Affairs steered it through the House of Lords, is that the Government pay little regard to how they will meet their obligations under article 61. What steps has the Department taken on this?

The utilisation of living resources in the exclusive economic zone is set out further in article 62. It talks about highly migratory species. I am sure that the hon. Member for Angus accepts that fishing policy is one of the most contentious policies at the moment because, in my humble submission, fish do not swim around with a Union jack on their backs.

Michael Weir (Scottish National Party, Angus)

Or a saltire.

Anne McIntosh (Conservative, Vale of York)

Indeed. It is difficult to say in whose waters these fish belong. The coastal state Government also has a duty under article 64 towards the highly migratory species listed in annex 1. Specific obligations are set out in respect of marine animals, anadromous stocks and so on. I cannot pronounce some of the terms, so I will not go through them article by article. However, part V of the UN convention, which we heard from the Minister is the legal basis for what we are discussing, sets out rights and responsibilities on the part of the Government. Coastal states are enabled to establish the zone and given back

''sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources''

and the production of energy from the water, both currents and tides, and wind. I do not disagree with the measure; I simply wait to hear from the Minister how it will be pushed through.

The Library note is a little confusing in that regard. The Minister seemed to indicate with a nod from a sedentary position his agreement that the safety zone would not be more than 200 miles from the baselines from which the breadth of the territorial sea is measured. The note says that the UN law of the sea convention specifies that the safety zone is not to exceed a distance of 500 m from the installation unless the International Maritime Organisation agrees that it can be larger. We shall come on to discuss in some detail some of the issues relating to navigation, so I shall not raise them now. I wonder at what stage the Minister, either through his Department or, more likely, the Department for Transport, will enter into

discussions with the IMO with regard to the distance of 500 m from the installation that will be based in the exclusive zone.

I welcome clause 85. International law has long recognised that each coastal state has jurisdiction and sovereignty over its territorial waters, but no comprehensive legal framework is in place for offshore renewable energy developments beyond the territorial waters. We therefore need the legal basis set out in the clause.

My concern, to which I have alluded, relates to the Government trying to create a zone through the Bill. Within that, we shall see whether consents can be applied for installations in what happen to be some of the busiest shipping lanes. At a time when the Government and the European Commission seek to boost not only international shipping but coastal shipping and short sea shipping routes, the Minister will be aware that there will be a direct confrontation between the two policies of developing renewable energy zones and allowing commercial shipping to develop, as we hope it will. I seek elucidation from the Minister.

Norman Baker (Liberal Democrat, Lewes)

On a rather different tack, may I raise a couple of obtuse constitutional and procedural points relating to the clause and ask the Minister for an explanation?

Laurence Robertson (Conservative, Tewkesbury)

You usually do.

Norman Baker (Liberal Democrat, Lewes)

No, this is unusual. Under clause 85(4), it is proposed that the powers will reside with ''Her Majesty'', who

''may by Order in Council designate'',

yet subsection (5) has a different formulation. It states:

''The Secretary of State may . . . designate''.

It is not clear to me what the difference is. Perhaps I should know more about constitutional law than I do, but what is the difference between the effects of the wording in subsection (4) and that in subsection (5), both of which appear to be subject to the negative resolution procedure under subsection (6)?

On another obtuse point—it is nevertheless worth raising, given the number of times that the words ''Her Majesty'' appear in the Bill—there is a difference between the personal possessions of the monarch and the Crown in Parliament, which is the formula that we use for many of our activities. The wording in subsection (1) is ambiguous in that regard, and I wonder whether the Minister has taken advice on it.

Stephen Timms (Labour, East Ham)

As the hon. Member for Vale of York rightly said, a legislative framework is already in place to govern the development of renewable energy resources—wind as well as tide and wave power—around our coast to a 12-nautical-mile limit of territorial waters. Beyond that, international law governs our rights and obligations, and it is the UN convention—UNCLOS—that gives coastal states the

right to explore and develop wind, tide and wave resources to produce energy in a 200-nautical-mile offshore zone, which we are calling the renewable energy zone.

The hon. Lady asked about the distance, and it is 200 nautical miles from the baselines from which the breadth of the territorial sea is measured. In practice, the zone will not extend for anything like 200 nautical miles around much of the UK coast because it would run into other countries. In those cases, the zone boundary will extend to the median line.

The hon. Lady asked about the significance of vesting powers in Her Majesty, which is the form used. Subsection (1) vests in Her Majesty the rights set out in part V of UNCLOS to explore and exploit the water and wind resources of the renewable energy zone. The practical effect is that the Crown Estate will have similar powers to those that it exercises already as owner of the sea bed in territorial waters to negotiate site licences with developers who want to build projects in the renewable energy zone beyond territorial waters.

Wind power is the most advanced renewable technology at the moment, but we are looking further ahead than that and putting in place a framework to enable wave and tide projects to proceed when they become feasible on a significant scale. The constitutional basis is to ensure that the responsibilities will be exercised by the Crown Estate for the renewable energy zone in the same way that they are in territorial waters.

The hon. Lady asked about other aspects of part V of the UN convention. I should make it clear that we are not constructing an exclusive economic zone; we are exercising only the rights that the convention gives us on renewable energy to establish a renewable energy zone. This part of the Bill puts in place the arrangements to do that.

The fishing provisions in part V, to which the hon. Lady referred, do not apply. As she said, several of the issues will come up under later parts of the Bill, but I do not think that there are problems in restricting ourselves to the renewable energy powers that the convention gives us.

I hope that I have covered the points raised by hon. Members and that the Committee is content to agree to the clause.

Question put and agreed to.

Clause 85 ordered to stand part of the Bill.

Clause 86 - Application of criminal law to renewable energy installations

Anne McIntosh (Conservative, Vale of York)

I have a brief query for the Minister, and it is similar to a point raised earlier. The Order in Council may provide that a constable is allowed to extend and apply criminal law to the renewable energy installation. Subsection (7) says that

'''subordinate legislation' includes an instrument made under an Act of the Scottish Parliament.''

My question is simple. If such an instrument made under an Act of the Scottish Parliament conflicted with an Order in Council, who would have the last word? Would it be the Secretary of State for Trade and Industry, the Secretary of State for Scotland or the Scottish Parliament?

There is a separate system of criminal law under Scots law. Will that remain devolved under the provisions of part VI? We are told in the explanatory note—

Bill O'Brien (Labour, Normanton)

Order. May I ask the hon. Lady to speak up please?

Anne McIntosh (Conservative, Vale of York)

We are told:

''This clause provides a power to establish, by Order in Council, criminal jurisdiction over any 'renewable energy installation'''.

Although one would not want to plant the thought in anyone's mind, presumably that also covers any terrorist activity in relation to installations based in the renewable energy zone. Presumably, it is covered by an Act of Parliament passed by Westminster as opposed to Scotland.

How will the Bill apply? I repeat that there is a distinct application of criminal law in Scotland, and subsections (7) and (3) are not as clear as they might be.

Michael Weir (Scottish National Party, Angus)

This small matter follows on from what the hon. Lady has said. Subsection (6) refers to:

''Proceedings for anything that is an offence by virtue only of an Order in Council''.

What does the Minister think might be imposed by an Order in Council that might be a criminal offence under Scots law? Scots law is a wholly devolved matter and this House would legislate for criminal law in Scotland only if a Sewel motion was passed in the Scottish Parliament, as has been done many times. It is difficult to see how an Order in Council, promulgated by Ministers in Westminster, could impose a criminal penalty under the jurisdiction of Scots law. Can he clarify that point?

Stephen Timms (Labour, East Ham)

The Government need to have the ability to apply criminal law to installations in the renewable energy zone created by virtue of clause 85. To ensure uniformity of criminal jurisdiction for all offshore renewable energy installations, the clause extends not only to installations in the renewable energy zone, but to those located further inshore, in tidal waters adjacent to Great Britain up to the seaward limits of the territorial sea.

We legislate with the agreement of the Scottish Executive in respect of the aspects of clause 86 that are within their competence. Clause 89, which we shall come to shortly, provides a parliamentary procedure for the Orders in Council that cover matters that are either wholly devolved to the Scottish Executive or of mixed competence.

In response to the points raised by the hon. Member for Vale of York, there does not need to be a difficulty on this issue. Scottish Ministers make Orders in Council on devolved matters and the Secretary of States makes them on reserved matters. I do not think

that there is a danger of conflict; the relevant provision is clause 89. The hon. Member for Angus asked me for specific examples. I am afraid that I do not have any to hand, but perhaps I may send him a communication that will satisfy his curiosity on that point.

Michael Weir (Scottish National Party, Angus)

I am still not clear about the procedure for an Order in Council as laid down in clause 86; it is not clear how that fits with Scottish criminal law. As the Minister said a moment ago, there should be clarity in the criminal law, but Scottish law is different in some respects—not so much in the nature of the offence, but the procedure. I am still not clear how an Order in Council will be able to impose on Scottish jurisdiction. That reinforces my earlier point about the certainty of jurisdiction. The Minister is wandering into possibly dangerous waters—no pun intended—regarding the jurisdiction over installations in the Scottish sector and those in the English sector, with no clarity as to which law applies.

Stephen Timms (Labour, East Ham)

I do not think that the problem the hon. Gentleman fears we might be in danger of raising here exists. Westminster will not deal with Orders in Council on devolved matters. The Secretary of State at Westminster will do what needs to be done on reserved matters, but Scottish Ministers will make an Order in Council under procedures of the Scottish Parliament on devolved matters. If that leaves a gap, I am happy for the hon. Gentleman to draw my attention to it, or he can write to me and I shall give him the benefit of specialist advice on such matters in providing him with the answer he seeks.

Michael Weir (Scottish National Party, Angus)

I am sorry to be pedantic, and I promise that I shall not intervene again, but subsection (6) says that

''the offence may for all incidental purposes be treated as having been committed, in any place in the United Kingdom.''

I do not understand. If Scottish Ministers are making an Order in Council to apply in Scotland, and the UK Government in Westminster are making one to apply in the rest of the UK, how can either of those Orders in Council create an offence that can be

''treated as having been committed, in any place in the United Kingdom''?

Is not the Minister suggesting that the Scottish Parliament could make an Order in Council that might create an offence that could be tried in the English courts?

Stephen Timms (Labour, East Ham)

I am afraid that I have not fully grasped the difficulty that the hon. Gentleman raises. If he gives me more insight to it, I will be happy to provide him with as full an answer as I can.

Michael Weir (Scottish National Party, Angus)

Rather than pursue the matter, I shall write to the Minister, as we could debate the point all afternoon.

Question put and agreed to.

Clause 86 ordered to stand part of the Bill.

Column Number: 295

Prosecutions

Anne McIntosh (Conservative, Vale of York)

This is not a dissimilar point, which may be of some assistance to the Minister and to the hon. Member for Angus. I cannot understand why, having ordered that clause 86 stand part of the Bill, Scotland will have jurisdiction over those devolved powers. Why is there no reference in clause 87 to prosecutions in the Scottish courts? There are no references to the roles of the procurator fiscal, the Advocate-General or the Lord Advocate.

Does the Minister accept that, despite what he said about earlier clauses in part 3, chapter 1 of the Bill, no infringements that apply under Scottish jurisdiction will be prosecuted? Presumably, the Bill should outline the correct procedures of Scots law. The hon. Member for Angus said that this matter has more to do with processes under Scottish criminal law as opposed to English, but from my hazy recollection of Scots law—I practised only briefly, as I moved to practise European Community law, as it was then was, in Brussels—the offences, as well as the processes, are different.

That is a staggering omission. Either the Minister will say that the Scotland Act applies by default or he will have to explain why his Department does not envisage a problem. Obviously, those living in Scotland are very law-abiding, although I represent a seat, Vale of York, that is equidistant from Edinburgh and London. Either the Minister accepts that the Scots are so law-abiding that there will be no prosecutions or he has failed to set out any reference to the relevant procedures and personalities for dealing with such prosecutions under Scots law. Either way, the Committee needs to know this afternoon.

Michael Weir (Scottish National Party, Angus)

I shall be very brief. The hon. Lady's argument is valid up to a point. She is quite right that there are different offences in Scots law, but as the majority of offences under the clause might be committed offshore it is difficult to see a huge difference. However, this issue illustrates the need to be clear as to which jurisdiction applies in each case.

The answer to the question may be rather more simple. Subsection (3) refers to obtaining the consent of the Director of Public Prosecutions in England and Wales and the Director of Public Prosecutions for Northern Ireland. My recollection is that that particular wording is an attempt to avoid private prosecution, which is much more difficult in Scotland. The Lord Advocate or the procurator fiscal would normally institute proceedings for any breach. However, the question illustrates the lack of clarity in jurisdiction. I urge the Minister to consider that and to come back on Report with a much clearer definition of the jurisdiction question, and therefore the prosecution question, under these various clauses.

Stephen Timms (Labour, East Ham)

There is a need for clarity and there will be clarity. I do not think that that will be a problem at all. I had hoped that the hon. Gentleman would answer the question asked by the hon. Member for Vale of York. He almost did, but, if I understand the position correctly, not quite.

The general rule is that the consent of the Director of Public Prosecutions is required before proceedings can be instituted in England and Wales. Similarly, the consent of the Director of Public Prosecutions for Northern Ireland is needed before any proceedings can begin there. However, there is no provision for proceedings in Scotland because the consent of the Lord Advocate is needed in all cases without enactment here being necessary. The point is already covered as a matter of Scottish common law.

Question put and agreed to.

Clause 87 ordered to stand part of the Bill.

Clause 88 - Application of civil law to renewable energy installations etc.

Anne McIntosh (Conservative, Vale of York)

I beg to move amendment No. 160, in

clause 88, page 67, line 43, at end add—

'(8) Enforcement of civil law on offshore renewable energy installations and in Renewable Energy Zones will be the responsibility of the Maritime and Coastguard Agency.'.

Clearly, one of the Bill's oversights—as picked up in the evidence taken and conclusions drawn by the Transport Committee in its report, ''Navigational Hazards and the Energy Bill''—is the failure of the Department of Trade and Industry to consult properly with the Department for Transport and the Maritime and Coastguard Agency. The amendment is a helpful suggestion to the Minister that there should be proper consultation at the earliest possible stage. It seems that the Maritime and Coastguard Agency is the correct body for these purposes.

Will the Minister tell the Committee what stage consultations with the Department for Transport and the Maritime and Coastguard Agency have reached? When were they consulted on the clause and other relevant parts of the Bill? The Transport Committee was critical, although one hesitates to use unparliamentary language and say ''damning''. Conclusion 4 of its report states that it is obvious that just as the Department for Transport and the Maritime and Coastguard Agency were not properly involved in the strategic environmental assessments, their advice was not heeded at the tender stage.

I urge the Minister to regard this little amendment sympathetically. Through which organisation does he propose to apply civil law if not through the Maritime and Coastguard Agency?

Richard Page (Conservative, South West Hertfordshire)

I hesitate to make any contribution to this debate, but if I were writing to the letters pages of some tabloids about the Bill, I would sign my letter, ''Confused from South-West Hertfordshire''. A lot of

my colleagues say that I am permanently confused, which does not add much to the debate, but I really do not know where we are on these clauses. I do not know where the responsibility lies if something goes wrong.

My hon. Friend the Member for Vale of York, who trained as a Scottish advocate and has knowledge of the law of the sea, asked several questions about previous clauses that to my mind have not been adequately answered. I am no legal expert, and I am not too certain where I would be leading the Committee if I debated any of these points at length, but the position seems to be that nobody knows where the ultimate responsibility lies.

In responding on the last clause, the Minister said that in the event of a prosecution, this would be a matter for the Director of Public Prosecutions in England or for the Director of Public Prosecutions for Northern Ireland, but for the procurator fiscal in Scotland. Clause 88 carries these words:

''Her Majesty may by Order in Council provide''.

They run through the piece. Does that mean that in localised areas in which activities take place, the DPP and the procurator fiscal can handle these matters, but if it all goes wrong, the Government, through an overriding Order in Council, can sort the matter out and put things straight?

Norman Baker (Liberal Democrat, Lewes)

Will the hon. Gentleman give way?

Richard Page (Conservative, South West Hertfordshire)

I have almost finished my remarks. It is obvious that I am completely unclear about what the clause does. I am sorry to say that we have not had an adequate explanation, and if someone could tell me exactly what this all means as regards a clean line of law and authority I would be grateful.

The people who will build those installations want a clear line of authority and want to know where they stand in law. They do not want to break new ground in creating case law. They want to know where they are from day one, not expensive legal fees.

Michael Weir (Scottish National Party, Angus)

I will not attempt to answer the hon. Gentleman's question, as there is much confusion over jurisdiction. I do not fully understand what the hon. Member for Vale of York is getting at in amendment No. 160, which states:

''Enforcement of civil law on offshore renewable energy installations . . . will be the responsibility of the Maritime and Coastguard Agency.''

The civil law, according to my recollection, covers a vast area, including contractual obligations and other disputes that could well arise in respect of the installations in a renewable energy zone. It is not clear to me where the Maritime and Coastguard Agency comes into the matter in respect of civil law. Many of the matters in question would have to be decided, I think, by courts of law on land—either in Scotland, England or wherever the relevant court was sitting—which brings us back to the lack of certainty on that aspect of the matter.

Perhaps the hon. Lady will sum up and explain the role of the Maritime and Coastguard Agency in civil law, as opposed to the enforcement of criminal

sanction. I can perceive a role in criminal law, but I am less sure where a civil law role would arise for that agency in relation to offshore installations.

Stephen Timms (Labour, East Ham)

I think the hon. Gentleman is right. There is a bit of a misunderstanding about the amendment.

Clause 88 is intended to apply civil law to renewable energy installations and related cables. That means that questions arising out of acts or omissions in relation to installations and cables can be determined by the courts. Such matters arise usually out of relationships between parties, such as contractual relationships. The Maritime and Coastguard Agency does not have a role in that context. The agency has a role in enforcing aspects of the criminal law, under, for example, the Merchant Shipping Act 1995, which is mentioned in clause 87(2), but not in civil law. The amendment is not appropriate for that reason.

However, the hon. Lady used the amendment to raise wider issues. She referred to the report published last week by the Transport Committee. The Government will respond to that fully in due course. However, there was wide consultation on the establishment of the renewable energy zone in our consultation document, ''Future Offshore'', issued in November 2002. That publication was of course agreed by all Departments, including the Department for Transport, before it was issued. There was strong support from respondents for the concept of the renewable energy zone. The Department for Transport is party to the sustainable energy policy network, which is taking forward the whole gamut of the commitments in the energy White Paper.

Anne McIntosh (Conservative, Vale of York)

Is the Minister aware of the submissions in evidence to the Transport Committee? The consultation to which he refers was an exercise purely in dealing with those bodies that are normally consulted by the Department of Trade and Industry. Not one shipping interest had seen or been consulted about the document. That is where some of the problems—we shall come to them later—derive from.

Stephen Timms (Labour, East Ham)

Perhaps, with the benefit of hindsight, it would have been helpful if some of those who did not respond to the consultation had done so—they certainly could have done. I am pleased that good communication has now been established, and I hope that the same difficulties will not arise again.

In response to the points made by the hon. Member for South-West Hertfordshire (Mr. Page), the Orders in Council apply the law to the renewable energy zone—otherwise it would not apply. Thereafter, however, prosecutions of the offences are to be dealt with—I described this earlier and, indeed, he referred to it—with the consent of the Director of Public Prosecutions in England and Wales, and in Scotland separately through the Lord Advocate. The Order in Council is needed to apply the law, but beyond that there are separate arrangements for pursuing prosecutions in England and Wales and in Scotland.

Norman Baker (Liberal Democrat, Lewes)

I hope the Minister will respond to my point, which arose from what the hon. Member for South-West Hertfordshire said, about Orders in Council. I should like clarification about the procedure. Clause 85 provides for Orders in Council, which are, under subsection (6), subject to negative resolution procedure. However, in clauses 86 and 88, the Orders in Council do not appear to be so subject, except in the narrow terms of clause 89(3). Can the Minister explain the rationale behind the inconsistent application of the negative resolution procedure?

Stephen Timms (Labour, East Ham)

I am absolutely confident that we are being wholly consistent and I look forward to sending a letter to the hon. Gentleman explaining precisely why those clauses are as they are.

Anne McIntosh (Conservative, Vale of York)

We have had an interesting debate. Let me return to the confusion that I created in the mind of the hon. Member for Angus. The Minister must know that if an individual, or Parliament as a body, is to respond to a consultation, the consultation document has to be addressed to that individual or body so that they are aware that it exists. It is clear that the document was not directly addressed to any of the shipping interests that are deeply concerned by the clauses—identified by my hon. Friends in the other place—that the Government now seek to remove.

The Government are compounding their mistake by failing to consult the Maritime and Coastguard Agency, the British fishing and marine industries, the major ports group and others who might have an interest. Those might not be among the contracting organisations to which the Minister referred, but they could have interests that run counter to those covered by the clause. My suggestion was intended to be helpful. I hear what the Minister says, and hope that he will be willing to be corrected when we come to discuss why the shipping interests were not consulted. We would be hard pressed to find any section of the fishing industry that was formally consulted and invited to respond to the consultation. Having made those points, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 88 ordered to stand part of the Bill.

Clauses 89 and 90 ordered to stand part of the Bill.

Clause 91 - Modification of licence conditions for offshore transmission and distribution

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 174, in

clause 91, page 69, line 13, at end insert

'for bringing it, as soon as is reasonably practicable, to the attention of persons likely to be affected by it.'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to discuss the following:

Amendment No. 175, in

clause 91, page 69, line 19, at end insert

'for bringing it, as soon as is reasonably practicable, to the attention of persons likely to be affected by it.'.

Amendment No. 176, in

clause 92, page 70, line 27, at end insert

'for bringing it, as soon as is reasonably practicable, to the attention of persons likely to be affected by it.'.

Amendment No. 177, in

clause 92, page 70, line 36, at end insert

'for bringing it, as soon as is reasonably practicable, to the attention of persons likely to be affected by it.'.

Norman Baker (Liberal Democrat, Lewes)

First, a word for the Minister. He is going to write to me about the negative resolution procedure. I am sure that that will be one of the most riveting letters I have received for some time, and I look forward to receiving it.

I am always struck by the Government's wise choice of words in the framing of legislation. I am struck in particular by the wisdom of that choice in clause 96(7). Referring to the publication of notices, it says that they should be brought

''to the attention of persons likely to be affected''

by them. That seems an entirely sensible procedure, and it is very wise of the Government to have included those words in that clause. Here, we have a similar situation in relation to the modification of licence conditions, but those words do not appear. Indeed, it says only that the publication must be

''in such manner as the Secretary of State—''

or GEMA—

''considers appropriate'',

without using the wise words of qualification used in clause 96(7). I seek, as always, to help the Government by inserting the words that they wisely use elsewhere but, by some curious omission, fail to include here.

Stephen Timms (Labour, East Ham)

I appreciate the intentions and kind thoughts behind the amendments to which the hon. Gentleman referred. I am sure that we would all want to minimise any uncertainty for those likely to be affected by the licence modification. However, I am not convinced that the amendments are necessary. The changes to the licence conditions will be published in a way that will make them available to those affected. Administrative law already requires that. The formulation has been used in the past—in the Utilities Act 2000—and I am not aware of any problems that have arisen from those precedents.

Of course, the Secretary of State and GEMA, the regulatory authority, will want to undertake the publication activities under clauses 91 and 92 as quickly as possible, but writing into the Bill the requirement that they should be performed as soon as is reasonably practicable would not add any great rigour to the processes. Rather, it would lengthen the Bill by inserting something that is not a very stiff test. I do not want to encourage the hon. Gentleman to make the test stiffer. Nevertheless, I do not believe that the amendments achieve a great deal.

Norman Baker (Liberal Democrat, Lewes)

The amendments would not add to the Bill unduly; in which case, presumably the Minister will argue that the words in clause 96(7) are unnecessary and should be deleted. Would he welcome an amendment to that effect?

Stephen Timms (Labour, East Ham)

No. Clause 96(7) uses different language, because a safety zone notice needs to be publicised to all users of the sea. Licensed conditions are relevant to licensees, so the wording is not necessary.

Norman Baker (Liberal Democrat, Lewes)

I shall leave students of legislation to examine that exchange and to see what they make of it in due course. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Anne McIntosh (Conservative, Vale of York)

I beg to move amendment No. 161, in

clause 91, page 69, line 24, leave out 'eighteen' and insert 'twenty four'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to discuss the following amendment: No. 162, in

clause 92, page 70, line 38, leave out 'eighteen' and insert 'twenty four'.

Anne McIntosh (Conservative, Vale of York)

These two little amendments are intended to be helpful and in the interests of my hon. Friend the Member for South-West Hertfordshire. One could describe them as probing amendments, providing an opportunity to ask the Minister why the Department has allowed the Secretary of State only 18 months to apply to vary the activities required under the licences. It would seem in the two cases that it would be more helpful to allow the Department and the industry to modify the licences of those who have been awarded them by granting them a marginally longer period—24 months, or two years—rather than a year and a half.

There will be some very complicated issues, as offshore wind installations are being set up and operated for the first time, and this is a very complicated area of the law. It is incumbent on the Government and the Department to allow a longer period to elapse. The time limit of 18 months is too short. The amendments give us the opportunity to hear from the Minister why the particularly short time frame identified by the Government in clauses 91 and 92 has been limited to 18 months. We believe that 24 months might prevent recourse to the courts or to the law.

Richard Page (Conservative, South West Hertfordshire)

I will be commendably brief. Having had some responsibility for granting offshore licences, I can say that there is a significant difference between laying cables on land and laying cables at sea. In some seasons, the North sea can be remarkably rough. It can cause an immense amount of trouble, and it takes time for the swell to settle after a storm.

Is the Minister absolutely satisfied that 18 months will be long enough for the work to be carried out? The only reason for the amendment is that I want to ensure that whoever gets the licences has the opportunity to operate within a sensible time frame, and need not take

risks at times of inclement weather and danger. It is a simple probing amendment. I look forward to the Minister's response.

Stephen Timms (Labour, East Ham)

This is about modifying the standard conditions of transmission and distribution licences and associated codes. I hope that the weather will not have too much impact on the time that it takes to do the work. I think that 18 months is about right. We need sufficient time to make the necessary modifications to the transmission and distribution licences under clause 91, and to the transmission co-ordination or system operator licence under clause 92, in order to set up the regulatory framework offshore. However, we want to minimise the period of uncertainty for those likely to be affected by the changes. I think that the Committee will agree that, in principle, the shorter that time the better. Nevertheless, we need to ensure that there is enough time for the job to be done properly. On that basis, we reached the view that 18 months is about right.

The 18 months runs from the date of commencement of the power in both cases; we can delay the bringing into force of the relevant provisions until such time as we are ready to begin the process of licence modifications. Time need not be wasted at the beginning of the work.

The BETTA clauses, which the Committee will come to later, make similar provision for an 18-month window. We would not wish to have a different time period for making the modifications provided for in clauses 91 and 92. Consistency is a further point in favour of the 18-month period.

Anne McIntosh (Conservative, Vale of York)

I am mindful of the excellent and helpful contribution made by my hon. Friend the Member for South-West Hertfordshire, and of the Minister's clarification. Were the Minister to accept the amendment, one could amend the BETTA clauses, or the worse clauses. However, I am grateful for his comments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 91 ordered to stand part of the Bill.

Clause 92 - Extension of transmission licences offshore

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 127, in

clause 92, page 70, line 4, leave out 'one or both of'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to discuss the following:

Amendment No. 128, in

clause 92, page 70, line 4, at end insert 'areas'.

Amendment No. 129, in

clause 92, page 70, line 5, leave out 'an area of'.

Amendment No. 130, in

clause 92, page 70, line 6, leave out 'an' and insert 'the'.

Norman Baker (Liberal Democrat, Lewes)

It could be argued that the amendments that I tabled with my hon. Friend the Member for Hazel Grove (Mr. Stunell) are not significantly different from the Bill. Modestly, however, we think that our wording is better.

The amendments give us the opportunity to raise an important issue. When powers are exercised by the Secretary of State, that should be done with consistency and in a manner in which those affected would reasonably expect them to be exercised. It seems to us that our amendments to clause 92(2) would give the message that there would be such consistency of treatment. In responding, I hope that the Minister will say how the power is likely to be exercised and what steps will be taken to ensure consistency in decision making.

Stephen Timms (Labour, East Ham)

The clause enables the Secretary of State to modify the co-ordination licence so that the authorisation and conditions of the licence apply to the transmission of electricity within an area of the territorial sea or an area of the UK continental shelf, or both. Taken together, the amendments would mean that all the territorial sea and the continental shelf would have to be treated in the same way.

We may not need the flexibility that we built into the provision, but we are not certain that we do not. Until we have done more detailed work on the extension of the co-ordination licence offshore and carried out the consultation provided for under clause 92(5), I hope that the hon. Gentleman will agree that it would be sensible to retain the flexibility that is built into the drafting.

Norman Baker (Liberal Democrat, Lewes)

That was an interesting response. The Minister therefore concedes that there is inconsistency in the wording as drafted, but he believes that it may be necessary, depending on the consultation. If consultation is to be meaningful, we have to listen to what it says. Equally, my point is valid. If we have inconsistency of treatment for different areas, it may affect individuals or areas of the United Kingdom differently.

I will not press the amendment, but I am glad to have had the opportunity to flag up the issue. I hope that the Minister will not lose sight of that. There is a need to understand the individual applications that may or may not affect the modifications required, but there is also a need to ensure fairness throughout. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 92 ordered to stand part of the Bill.

Clause 93 - Competitive tenders for offshore transmission licences

Anne McIntosh (Conservative, Vale of York)

I beg to move amendment No. 169, in

clause 93, page 71, line 7, at end insert

'having regard to navigational, maritime and shipping interests and in consultation with the Department for Transport and the Chief Executive of the Maritime and Coastguard Agency.'.

The clause inserts a new section 6C into the 1989 Act to enable GEMA to make regulations setting out the process to be followed when it awards offshore transmission licences by competitive tender. The important point that has been identified by my hon. Friend the Member for South-West Hertfordshire is that we are chartering—

Richard Page (Conservative, South West Hertfordshire)

Entering uncharted waters.

Anne McIntosh (Conservative, Vale of York)

I am grateful to my hon. Friend.

According to the explanatory notes, there are currently no offshore transmission licences and I believe that there is only one offshore installation. These are completely new waters. Why does the Bill make no direct reference to negotiations or discussions with the Department for Transport or with navigational, maritime and shipping interests? Clearly the whole process of establishing an offshore transmission licence will be much more complicated than applying for an onshore transmission licence. There are so many other interests that should be consulted and they are not referred to in the Bill.

This appears to be another instance in which the Government are mindful of the interests of the developers of the offshore installation without paying even lip service to the other users. There might be a good reason why the Government have not seen fit to consult the parties referred to in the amendment, and we stand to be corrected here. However, we felt that it was appropriate to include in clause 93 a requirement that, at the earliest possible stage when the licences are submitted to competitive tender, all the users of a particular zone are consulted and their interests addressed.

Norman Baker (Liberal Democrat, Lewes)

I have some sympathy with the amendment. In particular, I want to ask the Minister about the reliance on competitive tenders, which, according to my reading, appear to be the only determining factor for handing out the licences. The Government have generally moved away from pure competitive tendering to a process of best value, which has been broadly welcomed. It does not just consider price, as other factors are taken into account.

Those factors include some of those referred to by the hon. Member for Vale of York, although she could have referred to the environmental intentions or methods of a particular licence applicant. She might also have referred to whether a particular individual or company has form, to use a colloquialism, that might be germane to the activity in question. Considering that we have all talked about the need to ensure, for example, that the navigation and marine environment is properly protected, I am reluctant for the process simply to be one of competitive tendering. Can the Minister assure us that my reading is wrong and that there is a process beyond the competitive tendering that will pick up the other issues?

Stephen Timms (Labour, East Ham)

I understand the strength of the hon. Lady's concerns, as reflected in the Transport Committee's report. I make the point to her again that the Department for Transport has been party to all discussions leading up to the Bill, including those on the White Paper and, specifically, the responses to the ''Future Offshore'' consultation. We received more than 100 responses to that document, including many from the shipping industry, so I do not accept her characterisation of the exercise.

The amendment is difficult to tie to the concern that the hon. Lady expressed. It would require Ofgem to have regard to navigational, maritime and shipping interests when drawing up the regulations needed to run the competitive tender for an offshore transmission licence. Subsection (2) of new section 6C, which is inserted by the clause, sets out the kinds of things that the regulations may cover, including

''provision for the inclusion in such a proposal of an invitation to apply for such a licence''

''provision restricting the making of applications for offshore transmission licences and imposing requirements as to the period within which they must be made''.

Those are narrow procedural matters, and it would be difficult to imagine the circumstances in which the navigational, maritime and shipping interests would come into play in drawing up the regulations.

Subsection (4) of new section 6C states:

''The approval of the Secretary of State is required for the making of regulations'',

so there is a safeguard so that matters within the competence of the Department for Transport, including the Maritime and Coastguard Agency, can be addressed in the regulations. A further point is that any transmission licence holder must obtain a consent under the Coast Protection Act 1949 before any cabling may be placed in the water to make sure that it is not likely to be an obstruction or danger to navigation. That aspect of the exercise is covered separately in that way.

I say simply to the hon. Member for Lewes that a competitive process will not solely be about price. It will mean that the tender will be open to everybody, and it is in all our interests that there is a good range of offers and proposals from different organisations and that it is competitive in that sense. However, the decision will take into account all the considerations that should apply.

Anne McIntosh (Conservative, Vale of York)

I am grateful to the hon. Member for Lewes for his support for the concept. The additional factors that he rightly addressed relate to the UN convention on the law of the sea. I am sure that the Minister will argue that the environmental concerns expressed, particularly by those on this side of the Committee, permeate the Bill. I am grateful for his explanation, and I will not further labour the point about consultation at this stage. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Michael Weir (Scottish National Party, Angus)

I have a small point to make about clause 93, which follows on from something that the hon. Member for Lewes raised in connection with the previous amendment. My point relates to the regulations for the competitive tender. I appreciate that the clause covers only competitive tender, but has any thought been given to an overall plan for offshore installations? It has been pointed out by those interested in tendering for offshore installations that without a procedure for ensuring a link-up between installations, a multitude of installations could be given licences and each could lay their own cables to shore. It could be that, when the first or subsequent licences are granted, no thought is given to ensuring that cables will allow a link-up to installations in the immediate vicinity.

There are proposals in Scottish waters to utilise redundant oil rigs and oilfields that are coming to the end of their use. We should have an overall plan so that if an installation were in such a situation, any cable bringing power would be of sufficient strength to allow link-up with installations nearby.

Bill O'Brien (Labour, Normanton)

Order. I draw the hon. Gentleman's attention to the clause, which covers competitive tendering. He must realise that he is straying from the debate on the clause, which is entitled ''Competitive tenders for offshore transmission licences''.

Michael Weir (Scottish National Party, Angus)

My point is that, without a link-up between the various tenders made under competitive tendering, the situation that I outlined might arise. Will the regulations ensure that a competitive tender must take into account the possibility of subsequent tenders in that area to allow link-up to existing cabling?

Stephen Timms (Labour, East Ham)

The hon. Gentleman raises a fair point. The round two wind farm developers are gathering the necessary information to apply for consents for construction. We are expecting generation to come on stream by 2007-08 and be completed over seven or eight years. I agree with him that the programme of activity must be carefully matched with the programme to provide the connections infrastructure. One benefit of identifying three specific areas around the coast is that the need for connections will be tightly concentrated. We are working closely with Ofgem to ensure that that programme is in place so that developers can connect up. I agree with him that that must be built in to the way that we move forward.

Question put and agreed to.

Clause 93 ordered to stand part of the Bill.

Clause 94 - Consents for generating stations offshore

Norman Baker (Liberal Democrat, Lewes)

I beg to move amendment No. 180, in

clause 94, page 72, line 14, at end insert—

'(1A) Where this paragraph applies, paragraph 2(2) of Schedule 8 shall apply to the relevant conservation body.'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to discuss the following amendments: No. 181, in

clause 94, page 72, line 22, leave out 'does not apply' and insert

'shall be amended to apply to the relevant conservation body'.

No. 182, in

clause 94, page 72, line 44, at end insert 'or conservation body'.

No. 183, in

clause 94, page 72, line 47, after 'authority', insert 'or conservation body'.

Bob Blizzard (Labour, Waveney)

On a point of order, I seek your guidance, Mr. O'Brien. Will you be allowing a stand part debate on clause 94 after we have debated the amendments and stand part debates on clauses 100 and 101?

Bill O'Brien (Labour, Normanton)

We will follow the procedure. If someone wants to raise a question on clause 94 in a stand part debate, that will be permitted.

Norman Baker (Liberal Democrat, Lewes)

This is a significant and serious amendment, to which I hope the Minister will respond accordingly. It would require the Secretary of State to hold a public inquiry into proposed offshore renewable energy installation development, if the relevant statutory nature conservation organisation requested such an inquiry. The reason for tabling the amendment is that under the Bill as drafted, if the development of an offshore renewable energy installation is proposed outside an area in which a local authority has jurisdiction, the ability of a objecting body to request a public inquiry into that proposal is weakened or lost. Whether a public inquiry is held becomes a matter for the discretion of the Secretary of State.

Normally with planning matters, we assume that there is a role for local authorities, which are democratically elected and reflect their local area. In some respects that is a safeguard in planning towns. There is no such safeguard in the Bill because it gives the Secretary of State much more discretion to decide whether public inquiries into proposed developments are held than would be the case on land. Therefore, it seems sensible, right and wise to build in a counterbalancing mechanism.

The Secretary of State will, to some extent, be judge and jury in these matters. He will, rightly, be promoting offshore energy electricity generation and he or she may not wish to listen carefully to objections, no matter how well founded they are. A counterbalance between the powers of one part of the constitution and those that are exercised elsewhere is needed. That balance, by and large, exists at local level in respect of planning matters, but not in the Bill because local authorities are excluded, as matters are outside their jurisdiction.

The amendments would require a public inquiry or hearing to be held into any proposed offshore renewable energy installation if the statutory nature conservation agencies requested such an inquiry. As presently constructed, those agencies are English Nature, the Countryside Council for Wales, Scottish Natural Heritage and the Environment and Heritage

Service in Northern Ireland, if the proposed installation is within territorial waters, or the Joint Nature Conservation Committee if it is beyond those territorial waters. If that provision were included, it would encourage developers to think carefully about nature conservation interests when deciding where to establish installations. It would also encourage Ministers to scrutinise applications carefully and to ensure that the marine environment was properly considered, something to which all members of the Committee are sympathetic. The amendments go no further than similar amendments to the Harbours Bill.

The Minister may argue that the amendments are unnecessary because if the relevant statutory nature conservation agencies had serious objections to a proposed application, it is inconceivable that the application would not be subject to a public inquiry or a hearing. But that rather depends on the good will of the Secretary of State at the time. If he argues that it is inconceivable that such representations will be ignored, nothing will be lost by including the provision in the Bill. It will save the Secretary of State from having to take an embarrassing decision on whether to heed the objections.

Equally, I am sure that if a public inquiry or hearing were triggered by the objection of a statutory body, such bodies would be more careful about what they objected to. They will not use that power lightly. If, however, they cannot trigger a public inquiry or a hearing automatically, but simply use it as a pressure point on the Secretary of State of the day, they may be inclined to call for a public inquiry more often, knowing that they cannot require it. They will use it as a weapon with which to beat the Secretary of State over the head and to state that he has not listened to their views. It would make sense to include the amendment, or a similar provision, in the Bill.

Bob Blizzard (Labour, Waveney)

I accept that the proposal would limit the ability to call for a public inquiry to certain bodies, but if such a public inquiry were held, would it then be open to all and sundry to present evidence? Would that not risk having public inquiries that went on and on, as has been the case with various energy developments in this country for many years?

Norman Baker (Liberal Democrat, Lewes)

I would argue that the public inquiry system should be the same—as much as we can make it, given that local authorities are not involved—as for public inquiries triggered on land. There is a separate issue about how public inquiries are handled, and whether they go on too long; that is a matter for all public inquiries. Perhaps the Government think that the system should be streamlined as they are currently trying to do through the Planning and Compulsory Purchase Bill.

Brian White (Labour, North East Milton Keynes)

The hon. Gentleman may know that the Public Administration Committee is currently considering that matter. There are proposals about how planning inquiries are different from public inquiries, and how they are dealt with.

Norman Baker (Liberal Democrat, Lewes)

I am always grateful for an intervention from the hon. Member for Milton Keynes, North-East, who is usually helpful to the points that I make, although not invariably so. This is a safeguard that is good for the environment and an important balance in the constitutional arrangements. I think that it is good for the Government and for the Minister, who I hope will look favourably on the idea.

Anne McIntosh (Conservative, Vale of York)

I listened with some sympathy to the hon. Member for Lewes moving his amendments, and was mindful of the fact that probably the single most unpopular policy decision made by the present Government in the Vale of York was to give permission to construct a line of pylons from Stockton to the southern flanks of the vale, passing through some of the most hitherto unspoilt parts of the countryside. Are the Government minded to have a public inquiry about offshore installations, bearing in mind that their commitment to renewable energy is almost totally obsessive, with the concentration on wind farms? Most of those currently tend to be located in the south-east of England or parts of Scotland, but increasingly they are offshore.

If the Minister were to agree to such a round of public inquiries, the Government would overcome some of the difficulties that they have encountered with the shipping industry, such as the round 1 consultations. The Transport Committee heard that none of the expert witnesses from the shipping industry had been consulted at that stage. There was a singular lack of consultation, which is highly regrettable. If the Government consented to a public inquiry into offshore oil installations, that would help. It need not necessarily be long and protracted but there are, as my hon. Friend the Member for South-West Hertfordshire mentioned earlier, much greater technical problems. The elements are certainly a much bigger factor offshore in connection with installations in renewable energy zones than I would argue is the case onshore.

I am not sure that the hon. Member for Lewes referred to the Royal Society for the Protection of Birds, but I imagine that the Department would not necessarily think of consulting it on each application. I certainly hope that it will. There are avid twitchers among us, including my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), and my hon. Friend the Member for Uxbridge (Mr. Randall), who are members of the RSPB.

The Minister will be all too aware that offshore wind farms have as devastating consequences for the bird population as onshore wind farms. We have not seen that so much in this country at this stage, but the vulture population in Spain was decimated. Vultures are perhaps not the most popular birds and I agree with the Minister. I do not want to argue the case for vultures, least of all those in Spain, but there are elections on Thursday and we would like to persuade a number of people who live there to support our view. The vulture plays an important role in the food chain in Spain, maintaining the balance of wildlife, but the

population has been decimated as a result of putting a wind farm on a mountain, in a flight path. The consequences have been devastating.

If the Minister is not minded to support the amendment that the hon. Member for Lewes moved, I hope that he will put our minds at rest about the bird population. As the Minister will be aware, the RSPB has more than 1 million members. The four parties in the Committee would be hard pressed to claim that, between them, they represented as many members. I make that point humbly to the Minister. If he is not minded to have a public inquiry, how will such interests be represented when each applications is made? I repeat; offshore installations will cover much bigger areas than offshore oil rigs. The potential environmental consequences will be that much greater.

Bob Blizzard (Labour, Waveney)

It was said this morning—by the hon. Member for South-West Hertfordshire, I think—that everyone on the Committee was committed to renewable energy. I hope that we are. The technology for wind energy is ready to run, which is why the Government are rightly putting so much emphasis on wind energy in delivering the renewable energy target. However, it has been difficult to make sufficient progress onshore because of the various objections of people who live quite close to the sites.

I thought that we were going to have a much clearer run in going offshore with wind energy. It is difficult to stand up in a democratic society and say that there should not be public inquiries, but we hold so many public inquiries that the country runs the risk of grinding to a halt under their weight. As I said in my intervention on the hon. Member for Lewes, I am worried that provisions for public inquiries into offshore wind energy will cause us to get bogged down and prevent us from making progress. I should have thought that if the statutory conservation bodies had a valid point that they made openly and powerfully to the Government, the Government would find that evidence-based point difficult to ignore. I am worried that if we open up the possibility of such public inquiries, we will end up with Uncle Tom Cobley going along.

Robert Key (Conservative, Salisbury)

I agree with everything that the hon. Gentleman has said, so can he explain why his Government dropped the provisions from the Planning and Compulsory Purchase Bill that would have allowed what he wants?

Bill O'Brien (Labour, Normanton)

Order. We should not be discussing what took place in consideration of the Planning and Compulsory Purchase Bill. Can we please keep to the amendment?

Bob Blizzard (Labour, Waveney)

I gratefully take your advice, Mr. O'Brien.

The Bill contains a lot of measures for protection—we have talked about marine protection, and environmental impact assessments are required. As the Minister said earlier, the people applying for such license have to gather all kinds of information. There are many opportunities in the process for the various

interests to make their points. Statutory conservation bodies are powerful and Governments cannot ignore them; if such a body has to call for public inquiry to make its point, it is probably not working very well.

Stephen Timms (Labour, East Ham)

A consent under section 36 of the Electricity Act 1989 is needed from the Secretary of State for generating stations onshore of more than 50 MW capacity and generating stations offshore of more than 1 MW in capacity. Schedule 8 to the 1989 Act means that if a local planning authority with jurisdiction over a site objects to a generating station, the Secretary of State is required to hold a public inquiry, as the hon. Member for Lewes said.

The main purpose of clause 94(2) is to clarify the role of the local planning authority if the application for consent relates to a generating station offshore; in other words, not in the authority's jurisdiction. We propose that an authority should not have the right to force a public inquiry with regard to the parts of a generating station that are outside its jurisdiction. Therefore, it could not force an inquiry into a development that was wholly offshore.

The amendment tabled by the hon. Member for Lewes would give the relevant conservation body the same powers to force a public inquiry in respect of offshore generating stations as a local planning authority has onshore. That would not be right, because the powers given to an authority in respect of onshore stations recognise its unique position. They reflect the fact that a proposed station, if the Secretary of State consented to it, would be built within the authority's jurisdiction. There is not a good analogy between the role of a local planning authority in relation to its area and the role of a relevant conservation body in respect of offshore stations. The views and expertise of relevant conservation bodies are certainly important, but such bodies are not in a comparable situation to a local planning authority with regard to onshore stations.

Of course, many other organisations would have an interest in an offshore generating station. The hon. Member for Vale of York has repeatedly reminded us of the interests of the shipping and ports industries. It would not be right for conservation bodies to have a power to the exclusion of other bodies with a perfectly legitimate interest. What we should have, which the provisions secure, is the ability for any individual or organisation with a concern to object to the Secretary of State about any development, as my hon. Friend the Member for Waveney (Mr. Blizzard) said. The Secretary of State then decides whether to hold a public inquiry. It would not be right to give a special power to any specific interest groups, given the broad range of issues that need to be considered in reaching a decision.

That said, the Government and developers will, from the earliest possible point in the development of proposals, work closely with the conservation bodies to which the hon. Member for Lewes referred. We

need their input to the environmental assessment work; that is essential. We will not be able to do that job properly without them.

The hon. Member for Vale of York rightly referred to the RSPB, which has taken a great deal of interest in this subject. A great deal has been made of what happened with the wind farm in Spain. Anyone who looked at it would say that it was badly sited. If we look at wind farms more generally, we see that the incidence of bird hits is very low. In that particular case, it was very high. It certainly highlights the need for us to consider carefully the siting of installations in relation to bird populations, including those offshore, and we will do so through the consents process. I would expect the RSPB to raise concerns with us, as it has done so far, if it felt that a bird population would be put at risk by a development.

It is important to underline the fact that significant numbers of bird species are at risk from the threat of climate change, so from the point of view of what the hon. Lady referred to as twitchers, there is every reason to want to see much more renewable energy in future, precisely because that will safeguard bird populations.

Anne McIntosh (Conservative, Vale of York)

I consider myself a twitcher. In fact, this August I shall visit the sea bird centre that was established in North Berwick two or three years ago. I do not know if that was done by the RSPB. I thank the Minister for his comments. I am delighted that he has reflected that the RSPB and other interested parties will be consulted at the time of the consent application.

The hon. Member for Lewes has done the Committee a great service in tabling the amendments. He has identified a question; at what stage of the consent application will such consultations take place? Will the Minister confirm that bad siting—such as was evident at the wind farm in Valencia, I think—would not happen offshore or onshore in this country?

Stephen Timms (Labour, East Ham)

That is the objective of the various assessments, described earlier, that will be undertaken. We will certainly want to engage interested parties at as early a stage as possible, as we have on a number of offshore projects already, to make sure that we do not get the decisions wrong. That is as much in the developers' interests as anybody else's.

Norman Baker (Liberal Democrat, Lewes)

I listened with interest to the comments made by the hon. Member for Waveney and by the Minister. I intend no disrespect to the hon. Member for Vale of York; I agree with a lot of what she said, so I do not have to respond to it.

The hon. Member for Waveney said that there were too many public inquiries, that we were all in favour of renewable energy and wanted to see it developed. He said that public inquiries were an impediment that might get in the way of development, so we should not have them for offshore installations.

It is dangerous to espouse the view that democracy should be circumvented to achieve an end that we want. As it happens, I want the same end as he does; a massive expansion of renewable energy offshore and

onshore, whether that involves wind power or other sources such as photovoltaics or tidal power. There are a whole lot of potential sources.

However, the idea that, because there might be legitimate objections, we should not go through a public inquiry process seems dangerous. The rigour of the case for climate change—to which the Minister referred—and other arguments will, in most cases, more than outweigh objections at any public inquiry.

However, we have to be very careful before we sideline not only democracy but the Government's own statutory conservation bodies. The hon. Member for Waveney said that the Government could not ignore the statutory conservation bodies. My amendment would ensure that the Government could not ignore them, because such bodies could require a public inquiry. On the other hand, not having my amendment would mean that the Government could ignore them; that is what the Bill sets out at the moment.

The Minister rightly referred to the position on land—where local authorities have jurisdiction—and to the position offshore. He said that he did not like the comparison that I made between the power that a local authority ought to have onshore and the power that I would suggest a statutory conservation body ought to have offshore. He did not like that because—I do not think that he said this, but if he had I would have had some sympathy—a local authority is elected and therefore democratically accountable, whereas a statutory conservation body is not. He could have made that point and I would have gone along with it to some degree.

Equally, I hope that he would agree that there is validity in the argument that it is wrong to have a trigger for land-based installations through local authorities—that is a counterbalance to the Secretary of State of the day; we have checks and balances, as we must in a democracy—but to have no such counterbalance offshore.

The Minister did not like the idea that we should pick up what he called ''interest groups.'' That was the phrase; I wrote it down. I do not think it appropriate to call statutory conservation bodies interest groups. They are set up by Parliament through legislation to perform particular functions for the public; they are accountable to Ministers and to Parliament. They are rather different from, say, shipping companies, which certainly have an interest in what happens on the high seas, but which are not statutory bodies.

Although the Minister may not like the comparison between local authorities and statutory conservation bodies—one is elected and one is not—I do not like the unbalanced nature of the arrangement whereby a public inquiry can be triggered on land, but not offshore. Apart from the circumvention of democracy or accountability, my objection is that the Minister is keen to promote renewable energy. He and the Government recognise the need to get a big increase in renewable generation capacity over quite a short period. He is trying to find a way of doing that through the Bill and the energy White Paper.

The objectives that he has set out are shared by my party. Although we may disagree on occasion with the tactics adopted, we want to get to the same end point. If the concerns of the hon. Member for Waveney turn out to be justified and the public inquiries on land applications are snowed under with objections to wind farms or any other renewable energy proposals, the Government will be tempted to say that there is an easier option. They will go offshore where there is no public inquiry process, even though the effects on the environment may be significant or even worse than they might be onshore.

That is already happening. The Government are pushing offshore renewable energy. It runs through the Bill to the exclusion of many other renewable energy sources. They are doing so because there is some opposition on land to wind farms, for example, and there may be opposition to other renewable energy technologies. The Government see going offshore as an easy way of getting something started. I do not disagree with that in a sense. It is a sensible tactic to get wind farms up and running. It may well be that once they are up and running, some of the fears that are articulated will prove to be unfounded and some of the opposition will go away.

The Bill compounds the problem. Not only have we identified the offshore option as the easier option, but the Bill ensures that there is less opportunity to object to it. It is left to the Secretary of State. Yes, English Nature and the RSBP can object to the Secretary of State but at the end of the day it is down to him to decide. He cannot be forced to do anything that he does not want to do.

If the Government are not meeting their renewable targets, partly because they have been slow on the uptake and partly because opposition has slowed things down on land, they will go for a big explosion offshore. That may not be the right policy. It may not be the right policy environmentally and the Government may take a gamble with the environment offshore because it is the quickest way of getting the renewable capacity up. If they do so there should at least be a holding block, rather than a veto. Something is needed that requires a test to be applied, such as a public inquiry and that is best left with the statutory conservation bodies.

Bob Blizzard (Labour, Waveney)

Does the hon. Gentleman think that every application for an offshore oil and gas installation should have been subject to a public inquiry?

Norman Baker (Liberal Democrat, Lewes)

The same planning procedures and safeguards should apply to offshore developments, whatever they are, as to onshore developments. If there is a requirement for a particular process to kick in for an installation onshore, that process should equally apply offshore. I have made my point. I am not convinced by the Minister's argument. I hope that he does not mind me saying that. No disrespect is intended. I will seek to return to this, probably on Report. In the meantime, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Anne McIntosh (Conservative, Vale of York)

I beg to move amendment No. 170, in

clause 94, page 73, line 12, at end insert—

'(11) Consents shall not be granted until such time as the applicant can demonstrate that there will be no threat posed to the navigational, maritime and shipping interests also using these waters.

(12) Any proposal for an Offshore Wind Installation shall include details about the procedures to be followed in the event of a collision between a vessel and the wind farm.

(13) In the event of a change to an existing site being proposed, bodies representing the navigational, maritime and shipping interests also using these waters shall be consulted.'.

Bill O'Brien (Labour, Normanton)

With this it will be convenient to discuss the following:

Amendment No. 186, in

clause 100, page 77, line 36, leave out 'may' and insert 'is likely to'.

Clause 100 stand part.

Amendment No. 164, in

clause 101, page 77, line 41, at end add

'in consultation with the Secretary of State for Transport and the Chief Executive of the Maritime and Coastguard Agency.'.

Clause 101 stand part.

New clause 17—Collision within a renewable energy installation—

'The Secretary of State for Transport shall set out procedures to be followed to prevent a collision taking place within a renewable energy installation, and procedures to be followed in the event of a collision within a renewable energy installation.'.

The rest of the debate is in Hansard.