My Lords, I, too, thank the noble Lord, Lord Oxburgh, and all noble Lords who have spoken to the amendment, which proposes the establishment of an energy investment advisory board within DECC. We already have a number of advisory boards and I would like to go through my speaking notes and lay out why we think that, at this moment in time, this could add another layer, as my noble friend Lord Teverson said. I will also respond to some of the questions and points raised.
First and foremost, we attach great importance to ensuring that we consider the long-term views of the UK’s energy needs. DECC therefore has many forums for industry and energy experts to contribute and scrutinise policy on energy and climate change. I will highlight some of these to noble Lords. The main forum that DECC has with industry is the energy leaders forum. This is a quarterly event that brings the DECC Secretary of State, Ministers and senior officials, including the Permanent Secretary, together with the CEOs of vertically integrated and independent generators and suppliers. It is jointly organised by DECC and Energy UK, whose members make up the industry attendance. The high-level and wide-ranging discussions help government and industry to anticipate and respond to existing and future issues in energy policy. Importantly, the forum also discusses how industry and government can attract investment to the UK to ensure that we have secure low-carbon and affordable sources of energy now and tomorrow.
We have a flexible structure of academic and industry experts who are also able to advise the department on a much wider range of topics, including our major programmes from the Green Deal to the electricity market reform. For example, there are EMR expert groups for each policy area and we have set up an independent panel of technical experts to provide the Secretary of State with specific technical advice on the national system operator’s analysis. The Infrastructure UK unit within the Treasury exists to develop the UK’s long-term infrastructure priorities and secure private sector investment. Other important forums include the Science Advisory Group, which is a group of external academic and industry experts who challenge and support the Chief Scientific Adviser and DECC. It also helps to guide the department’s scientific priorities and strategy.
I welcome the noble Lord’s point about skills in the department. We are actively strengthening our systems for prioritisation of resources. We are developing key
specialist skills, including ensuring that the department has sufficient corporate memory and leveraging the capability of our delivery partners. As set out in DECC’s annual report, we consider delivery skills essential as the department moves to implementation and delivery as well as policy development.
In addition, we have an internal governance structure. We have a departmental board whose role is to monitor performance and delivery of DECC’s work and to provide strategic and operational leadership for the department. The board has non-executive members who provide advice, support and challenge to the department. The board is supported by sub-committees, most notably the executive committee that closely monitors departmental strategy and delivery of objectives. In light of the existing structures that have proven successful, I do not believe that it is necessary or desirable to set up a new advisory panel.
I am also concerned that the introduction of a board with explicit responsibility for long-term energy strategy could reduce ministerial accountability. The department regularly reports to Parliament on the progress that it is making on energy and climate change. As we have discussed previously, the coalition agreement states that we will give an annual energy statement to Parliament to set strategic energy policy and guide investment. This must be laid before Parliament by 31 December each year. The statement provides a clear, succinct description of the Government’s energy policy within the context of DECC’s overall strategy. We also report to Parliament specifically on security with the statutory security of supply report and, on Report in the other place, we introduced a statutory annual update on EMR.
We report on climate change via the government response to the Committee on Climate Change’s annual report. The Committee on Climate Change consists of independent experts and is a statutory body established under the Climate Change Act 2008. Its purpose is to advise the Government on emissions targets and to report to Parliament on progress made in reducing greenhouse gas emissions and preparing for climate change. I therefore reassure noble Lords that we already have in place forums and structures to deliver the significant changes that we need in the energy system.
A couple of points were raised during the debate. My noble friend Lord Jenkin asked whether we had enough capacity to keep the lights on over the next few years. My noble friend also asked about investment. I can reassure him and other noble Lords that through this Bill we are seeing the biggest reform of the electricity market in recent years and greater confidence from investors than ever before. Even with Ofgem’s new estimates, the risk of the lights going out is low and steps are being taken to ensure that sufficient reserves are in place in the short and medium term. Essentially the short-term measures are an extension of tools that National Grid and Ofgem have already used to contract additional short-term capacity in order to balance supply and demand.
My noble friend Lord Crickhowell said that these days Ministers take advice from officials rather than making up their own minds about policy issues and are not often able to say no to officials.
4.45 pm