My Lords, the noble Lord, Lord Oxburgh, who moved his amendment with great clarity and force, has discussed this with me, and I was a member of the informal group that he chaired on the draft Energy Bill.
I, too, at Second Reading reflected the increasing anxiety in this country over the security of supply over the next four to five years. Since then, the latest Ofgem capacity assessment report has confirmed the fears that we face several years of very low margins. This has been widely interpreted as posing a distinct risk of interruption to supplies. You need only two major power stations to go out of commission for even a few hours—as happened a few years ago with Sizewell B and Longannet—to create considerable alarm as to whether we have enough. If that happened again in a year or two years’ time, we would be in very serious difficulties.
This is what lies at the heart of the noble Lord’s amendment, to which I was very pleased to add my name: how on earth have we managed to get into such a perilous position? Is it something in the current structure of the electricity industry or in the current attitudes of the departments in charge? As the noble Lord, Lord Oxburgh, suggested, is it to do with the experience and expertise of those whose job it is to advise Ministers? Which of these has led to this difficult situation—or is it all of them?
I will draw a parallel. The noble Lord, Lord Oxburgh, and I were both co-opted on to the Science and Technology Committee to look at the capacity of the nuclear industry in this country for research and development. It is not an overstatement to say that we were dismayed by the very poor level of understanding among DECC Ministers and most of the officials who gave evidence to us. Happily, they appear to have read our report but some of the solutions remain to be worked out. This is not the occasion to go into the details of that but the experience convinced me that something has to change if we are not to face similar failures in the future.
Last month, my attention was caught by an article in the Financial Times by Professor Anthony King, who is, I have to say, a good friend of mine, and for whom I have a great deal of admiration. His sub-headline was:
“British government is no Rolls-Royce. It is barely motorised”.
He went on:
“British government used to be regarded as one of the wonders of the world: intelligent, decisive and sensible, with democratically elected leaders supported by a Rolls-Royce civil service”.
A lot of people think it is still like that, but he said that the only possible response to that attitude is,
“that of John McEnroe addressing a harassed Wimbledon umpire: ‘You cannot be serious’.”.
He then analysed what has happened. The noble Lord, Lord Oxburgh, mentioned some of that. I particularly want to draw attention to what Professor King called,
“the resulting loss of institutional memory”,
which he described as “immense”. It used to be said that the Civil Service is the memory of the Government, in many cases going back not just decades but centuries. I have a horrid feeling that that is no longer so. Perhaps that is why we are where we are.
Turning to the issues before us, tributes have been paid, quite rightly, to my noble friend the Minister and the Bill team for their strenuous efforts to help us to get to grips with this very complex piece of legislation. Without them, we would have been in some difficulty. Thanks to the work of the Delegated Powers and Regulatory Reform Committee, to which my noble friend Lord Roper drew our attention at a previous sitting, we have now been given a glimpse of just how much of a policy that is supposed to be enshrined in the Bill is left to regulations, which are still being drafted or in many cases are still being worked out.
I spent part of the weekend reading the DPRRC memorandum on Part 2 of the Bill. It sets out the position in lurid detail: 60 pages of descriptive material, complex tables of content and timetables, and nine detailed annexes. It filled me with a dreadful sense of foreboding. How can anyone possibly be sure that that will all work or even that it will be ready in time?
My noble friend will no doubt, as she did at Second Reading, give a description—but I hope a fuller one on this occasion—of the plethora of consultants’ reports, advisory groups and expert panels on which the department relies for advice on developing the very complex electricity market reform that is embodied in the Bill. I will certainly listen very carefully to what she has to say but I must warn her that she faces an uphill task in persuading us that Ministers have all the advice that they need and ought to have. I ask again: how is it, after years of taking all this advice from consultants, panels and experts, that over the next two or three years we face the possibility of cuts? To put it crudely, this country is not replacing the generating capacity that is being closed down. I gave a list of the stations that have been closed since only last December when I spoke at Second Reading.
3.45 pm
The other document that I studied over the weekend, and perhaps should have looked at earlier, is the one to which the noble Lord, Lord Oxburgh, referred: Investing in Prosperity, the report prepared jointly by the LSE Growth Commission and the Institute for Government. That is indeed a very interesting and authoritative document, and a number of our colleagues in this House were part of its preparation, notably the noble Lords, Lord Browne of Madingley and Lord Stern, as were a number of other distinguished names who may eventually turn up in this House. It is a very distinguished report and it covers the whole range of infrastructure investment that this country needs if it is to secure growth. Of course, it also pays attention to energy and just one sentence on page 23 reinforces what the noble Lord, Lord Oxburgh, has said. It states:
“Successive UK governments have failed to deliver stable, credible long term policy/regulatory environments that are capable of attracting private investment in the scale and manner required to meet these challenges”.
That is exactly the situation that we appear to be facing. Very few people are investing in anything at the moment—there may be a variety of reasons for that—and I have discussed this with some of the companies involved. What the commission therefore recommends is an infrastructure strategy board, which I have to say closely resembles the EIAB that is set out in the noble Lord’s amendment.
By drawing attention to it in this way, I do not want to be thought to be endorsing every proposal of the growth commission. However, three characteristics are absolutely essential. First, the board must be a top-level, expert, highly experienced body of people, whose views and authority will be unquestioned by the great majority of people. Secondly, it has to be advisory. It cannot be executive; a body of that sort, which is in no way accountable to Ministers, cannot actually run things. It is an advisory body; it must take a long-term perspective and it should report both to Parliament and to Ministers. Finally, decisions must be taken by Ministers, who are accountable to Parliament.
Those are the characteristics that we would have to have for the sort of authoritative advisory board that the amendment calls for. I hope my noble friend, with whom I discussed this briefly, will not dismiss this proposed new clause out of hand. I envisage that the opportunity offered by the Recess would allow for a full discussion between members of this group, and perhaps others, and the department, to see how we could get ourselves out of this situation that successive Governments over several years, perhaps decades, have landed us in. What is wrong with the system that must change? Does this offer a solution? I believe that it does.
As the noble Lord, Lord Oxburgh, has suggested, we would then be able to bring back an appropriate amendment on Report in October. We have plenty of time to do that. This does not need to be rejected immediately out of hand. If that is what my noble friend on the Front Bench is going to offer, she owes it to this Committee to answer the question of how we will get ourselves out of what seems to be a very perilous situation. That is what we are looking at. This may offer a solution and I warmly support the amendment moved by the noble Lord, Lord Oxburgh.