Clause 25
Northern Ireland (Miscellaneous Provisions) Bill
5:00 pm
Laurence Robertson (Shadow Minister, Northern Ireland; Tewkesbury, Conservative)
It was my pleasure to spend two years studying the Great Britain energy market, and very detailed and complicated it was too. I must confess to having not spent a great time studying the position in Northern Ireland or, indeed, in the Republic of Ireland, but I want to make one or two remarks about it. People in Northern Ireland pay more for energy than we do in Great Britain. I want to explore why that is so and whether the Bill holds out prospects of cheaper electricity for people in Northern Ireland.
Members of the Committee will remember that it was the Conservative Government who brought about privatisation, but that it was the Labour Government who took it further and introduced NETA—the new electricity trading arrangements—which, under the Energy Act 2004, became known as BETTA—the British electricity trading and transmission arrangements. The Government were right to introduce the change because it moved the position away from the old pool system of electricity that was based on long-term contracts to a much more fluid system that operated more like the stock market than it had previously. As a result, electricity prices in Great Britain fell considerably in relative terms to the extent that it became a slight problem in that, at one point, there was a shortage of investment in electricity generation because the price was so low and there was no incentive for companies to invest in generation. During recent months, there has been an increase in the price of electricity and gas, although that is a slightly different issue. It has been due to the world market that has been affected heavily by the oil situation. As much as anything else, it is a readjustment of the prices of fuel rather than a failure of the market. The trading arrangements that the Government introduced did a good service to both producers of electricity in the long term and domestic and industrial consumers.
Changes are planned, but the benefits did not extend to Northern Ireland in the way in which they should have done, nor am I sure that they will do so under the clause. Although the clause is headed “Single wholesale electricity market”, having discussed it with the relevant authorities in Northern Ireland my understanding is that the regulation of the market is being changed rather than a market being created. I would be glad to be corrected. There is not even one overall body being created; I understand that there will be an attempt to harmonise the regulation of electricity in Northern Ireland with that in the Republic. We will not move towards the type of market that we enjoy in Great Britain, so the benefits will not flow to consumers in Northern Ireland in the way that they have to those here. Again, if I am wrong, I will be pleased to be corrected.
I am a little concerned about the creation of north-south bodies, considering what the Government said in their recent statement. I hope that the Assembly does get up and running because of the Bill that we will consider tomorrow, but I did not like the insinuation that there could be a strengthening of cross-border bodies even if the Assembly is not running. That was not what was agreed in the Belfast agreement, and I have some concern about it.
I do not want to be seen to be urging the creation of a north-south body, given the uncertainty of the situation, but there are possible benefits in the creation of a bigger electricity market across the whole of Ireland, just as there would be in one that covered both the UK and Ireland. I am as anti-EU as one could wish to find in the House, but there could even be benefits in creating a bigger electricity market across Europe. That does not necessarily mean that regulation would have to be as one, although there would have to be some harmonisation.
There are great difficulties in energy at the moment. The UK increasingly has to get its energy from further afield. Not long ago we were a great producer of gas from the North sea; we are now net importers of gas. The places from where that gas is coming are slightly worrying: Russia, Algeria and other countries that might not be considered politically stable. Russia has recently ended its supply of gas to a couple of countries, which cannot be a good thing.