Regulations

Vehicle Technology and Aviation Bill – in a Public Bill Committee at 9:45 am on 21st March 2017.

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Photo of Richard Burden Richard Burden Shadow Minister (Transport) 9:45 am, 21st March 2017

I beg to move amendment 15, in clause 15, page 9, line 1, leave out from “consult” to end and insert—

“(a) the National Grid,

(b) large fuel retailers and service area operators as defined under section 10, and

(c) any other such persons as the Secretary of State considers appropriate.”

This amendment would require the Secretary of State to consult specifically with the National Grid, large fuel retailers and service area operators before introducing regulations.

With this it will be convenient to discuss the following:

Amendment 16, in clause 15, page 9, leave out line 14.

This amendment makes the first regulations made under section 12 subject to an affirmative resolution.

New clause 5—Review of regulations in Part 2—

“(1) Within 12 months, and once in each 12 month period thereafter, the Secretary of State must lay a report before Parliament on the regulations made using powers granted in Part 2 of this Act.

(2) The report must consider—

(a) the effectiveness of the regulations,

(b) the impact the regulations are having on public charge point operators,

(c) the impact the regulations are having on fuel retailers,

(d) the impact the regulations are having on the National Grid, and

(e) how the regulations are impacting on the uptake of electric vehicles.”

This new clause would require the Secretary of State to lay a report before Parliament each year assessing the effectiveness and impact of the regulations in Part 2.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

The theme of the amendments and the new clause is consistent with the themes of so many of the amendments we have moved, in that it requires the Government to consult widely before regulations are implemented. One significant area that our proposals would deal with is the impact that the expansion of charging points may have on the national grid, which the Bill barely addresses, although it is mentioned in the policy scoping notes that were circulated last week. It occupied a good amount of discussion in the evidence sessions last week.

There is a fear that sudden huge spikes in demand could easily damage the network and, in extremis, even lead to power outages. If this policy is going to work, it requires serious planning and consultation between the Government, the grid and charge point operators. I appreciate that the Government are trying to address some of that with smart charging, but the risk is still there, particularly if rapid charging is used at charge points during peak rush hours. Those concerns need to be carefully considered and the impact must be monitored in the roll-out of infrastructure changes. Will the Minister commit to considering the matter further, to consulting with the necessary bodies to ensure that the potential impact is limited, and to ensuring that measures including smart charging will be in place to prevent overload on the network?

Amendment 16 follows on from the comments I made on clause 12. Given the importance of that clause and the breadth of measures that could be contained within it, I am not sure why this is one of the few parts of the Bill that is subject to negative resolution, rather than affirmative resolution. As the Minister knows, the clause gives the Government broad and open-ended powers to set the standards or requirements for the charging points that will be installed.

As the policy scoping notes circulated last week underlined, the Government will have to consider a great many things that they do not know. They do not yet know what regulations they want to bring in, who they will affect or how they will be affected. It is a little bit like that Donald Rumsfeld quote. The Government may know what they do not know, but we do not yet know what the Government do not know. That underlines why it is important that the Government consult with stakeholders, as amendment 15 asks them to do.

According to the policy scoping notes, the Government accept that they need to consult with stakeholders, but it is also important that the Government consult with Parliament. That is why I return to the point I made on Second Reading and earlier in the Committee’s consideration about blank cheques. I am not opposed to the use of secondary legislation, because it will be necessary to future-proof the Bill, but it is important that the Minister comes back to Parliament with more detail and specific proposals for regulations, particularly for something that as it stands does not include much detail.

That brings me tidily on to new clause 5, which again is about the Government involving this place in the future of the proposed legislation. I am sure that the Minister will agree that regular reviews can help not only in assessing how things are working but in helping guide future action. That is particularly relevant given the Bill’s focus on future technology and developments. The new clause would require the Government to lay a report before Parliament each year to consider how the regulations are working and specifically the impact they are having on charge point operators, fuel retailers, the national grid and the overall uptake of electric vehicles.

The Government are intending the Bill to enable and encourage the uptake of electric vehicles, and I think they are right to do that. It would therefore make sense for them to review regularly whether that is actually happening and whether things needs to be changed down the line. Involving Parliament in this issue would not only be beneficial for the Government but would enable them to regularly reassess their work. I am sure the Minister would be saying that to us if our seating arrangements were reversed. I look forward to hearing his views on how we can ensure parliamentary scrutiny and proper accountability as things go forward, via the affirmative procedure and under the new clause. We must keep the matter constantly under review and be prepared to revisit it if the circumstances require it.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West 10:00 am, 21st March 2017

I rise to speak to amendment 15, particularly in respect of the National Grid. I remind the Committee of an exchange that I had with Marcus Stewart, National Grid’s head of energy insights, in our evidence session on Tuesday 14 March. His role, as he puts it,

“is looking out into the future to determine what the energy future will look like”.––[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017; c. 17, Q30.]

I had an illuminating exchange with him, which appears in column 24 in Hansard, about the amount of electricity that would be required—the electricity demand—if there were 1 million electric vehicles on the road. I stand to be corrected, but there are currently about 40 million vehicles on the road, including commercial fleets.

Mr Stewart said that having 1 million electric vehicles on the road and charging them with a 7 kW charger, which is a fairly standard charger, would require 7 GW of electricity demand. Hon. Members may know what that looks like, but, fortunately for me, he explained it:

“Total UK demand today is about 50 or 55 GW.”––[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017; c. 24, Q44.]

The demand of 7 GW that would be created by 1 million vehicles all charging at the same time is about one seventh of that—about 14%. He helpfully said that 7 GW of electricity generating capacity was roughly equivalent to

“two and a bit very large nuclear power stations.”––[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017; c. 24, Q43.]

Let us imagine that in 20 or 25 years’ time we get to the situation where half the UK vehicle fleet—20 million vehicles—are electric. If they are on 7 kW chargers and if the technologically has not markedly changed—I realise that that is a very big “if”—the electricity drawdown if they all charged at once would be 140 GW. Today we are producing only 55 GW, so that could not happen. These are back-of-an-envelope figures, but if those 20 million vehicles sought to charge evenly throughout the day, that would mean just under 1 million vehicles charging every hour—say 6 GW an hour, which is 11% of current electricity production. In round terms, that is equivalent to two large nuclear reactors—and that assumes charging evenly throughout the day, which is unlikely to happen. Conversely, if we were so foolish as to allow a system to develop that allowed everyone to charge at once, that would require 140 GW, which is equivalent to 45 very large nuclear reactors, which come in at about £20 billion each. Clearly that would be unsustainable.

We need regulation—made in consultation with the National Grid, as amendment 15 says—to spread demand more evenly through the day and in the night when there is likely to be less industrial use, and to deal with the electricity generating capacity that we are likely to need. Working with National Grid, the Government need to forecast the take-up of electric vehicles, so that we know when that additional electricity capacity is likely to be needed. I would like some assurance from the Minister—I am sure he will be able to give it to the Committee with his usual fluency and competence—that the Government are seized of that, which the amendment would enable them to be by mandating in statute that National Grid should be a consultee. To me it is a frightening prospect that either we fry because CO2 emissions carry on as we continue with carbon-powered vehicles, or we have blackouts because too many people are plugging in their electric cars which they bought as an alternative to frying the planet. Neither is a happy prospect but, to cut that Gordian knot, it would help if we had regulation to even out during day and night the demand for electricity from electric vehicle owners and operators. It would also help if the Government gave some indication of their discussions with National Grid on extra electricity generating capacity.

Photo of Chris Matheson Chris Matheson Labour, City of Chester

The nightmare scenario that my hon. Friend is talking about is entirely plausible. Does he accept that our baseload electricity requirement at the moment would be hugely increased, in particular at night when I suspect most people would charge? That would have consequences for the way in which we manage the electricity system in this country.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

My hon. Friend is right. I am not an expert but, intuitively, I recognise that solar power generation is likely to be less efficacious at night, although I appreciate that the wind blows at night and that, if we continue with nuclear reactors, they produce electricity all the time. That is why electricity is cheaper at night through Economy 7.

Photo of Thomas Tugendhat Thomas Tugendhat Conservative, Tonbridge and Malling

I think we have spoken in Committee about the fact that some charging capability will also be fed back into the grid. The hon. Gentleman is very much describing a nightmare scenario, in much the same way as in the 1800s some of those Manchester cotton workers described the spinning jennys as a nightmare scenario. The truth is that technology evolves and human practice evolves with it, so I feel that he is being a little bleak for this stage of the Bill.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

The hon. Gentleman is quite right that technology develops. I made a caveat at the beginning of my remarks about how I was projecting a scenario 20 or 25 years down the road, but we have a responsibility as legislators to look at that, including all the uncertainties of course.

I think it was Quentin Willson who talked about people in the States using their Tesla cars as repositories of electricity and feeding it out, but said that electricity had to get into the car in the first place, so we had to be a little careful about some sort of perpetual motion machine approach. It is true that if consumers used solar panels during the day to charge their car and dumped the electricity at night when other people were charging their cars, that would be a helpful process for evening out demand. However, it is precisely the sort of thing, I hope encouraged by amendment 15, that Her Majesty’s Government would be working on with National Grid. Trying to forecast human behaviour bedevils all of us as politicians, but it behoves us all to try to do so.

Photo of Greg Knight Greg Knight Conservative, East Yorkshire

Does the hon. Gentleman accept that regulation is not the only way to deal with this? It can be dealt with by incentivised pricing. In the 1970s, many households were encouraged to have night storage heaters in their properties because such units took electricity when no one else wanted it and the consumer paid less for operating one.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

I entirely agree. Amendment 15 would give the Government a statutory duty to consult on such matters with National Grid. Assuming that the amendment is accepted, the result of such consultations might indeed be a market-led mechanism. I am not prejudging the outcome, but we need to face up to some facts. I am sure that the Minister will assure us that Her Majesty’s Government are not doing this, but for them simply to sit back and say that because of CO2 emissions and so on we want lots more people to be driving electric cars—with that already public policy, incentivised in purchase prices, with rebates and so on—and to assume that there will be sufficient electricity generation without actually talking to the National Grid about it, would be very foolish.

A regulatory solution may be required, or part of the solution may be regulatory and part not, but simply hoping, as some might do, that the market will sort it out is a triumph of hope over experience, given for example, the vast cost of nuclear reactors and the very long lead time in building them. Nuclear reactors are not the only source of new electricity generation, and there will be technological developments as well, but we need to take that factor into account, and to think about it now.

Photo of John Hayes John Hayes Minister of State (Department for Transport) 10:15 am, 21st March 2017

What an interesting short debate. Amendments 15 and 16 and new clause 5 deal with consultation on and approval and assessment of new regulations made under the powers. One might say that that theme has underpinned the approach taken by the Opposition in the Committee so far. It is a theme with which I have considerable sympathy—indeed, were I in their place I think I would make the same argument. When Governments take powers that by necessity are unspecified—in this case, for the very reasons that I and the hon. Gentleman have articulated—it is important that they are checked by a commitment to consult and consider properly before, during and after their application. That, essentially, is the argument that the hon. Gentleman has made.

Amendment 15 would require the Secretary of State to consult with National Grid and large fuel retailers before making regulations. G. K. Chesterton said:

“To have a right to do a thing is not at all the same as to be right in doing it.”

The powers that are given in the Bill confer on the Government a right to do things, but we need to ensure that we are right in doing them. I entirely agree with the hon. Gentleman that it will be important to consult a wide range of stakeholders in relation to making regulations under the powers, including those we are discussing.

That gives me the opportunity to say a word or two about the contribution of the hon. Member for Wolverhampton South West which, I have to say, I anticipated. He raised these matters, as he described, in the evidence sessions—I have the Hansard report before me. There is an appropriate range of questions to be posed about the impact of charging on the grid, which is why we heard from those we did in those evidence sessions. Without wishing to exhaustively repeat what was said, it might be instructive to draw attention to Mr Marcus Stewart’s remarks:

“By applying smart charging, you can accommodate a lot of electrical vehicles without necessarily having to increase that overall total capacity at a total system level. If you have clusters of demand at a local level, you would expect there to be local reinforcement to accommodate that—fast charging, for example, can provide heavy loads at certain points on a system, but you would connect that to a slightly higher voltage tier to ensure sufficient capacity. The system has the capability to deal with it if the type of charging is smart.”

Then he said—[Interruption.] Mr Gray, I could tell you were beginning to tire of my exhaustive account of the evidence. Mr Stewart then said:

“The provisions put forward in the Bill make total sense to us.”––[Official Report, Vehicle Technology and Aviation Public Bill Committee, 14 March 2017; c. 24, Q46.]

They make total sense to me too, because it is absolutely essential that we continue to consult for the reasons offered in the evidence sessions and highlighted by my right hon. Friend the Member for East Yorkshire, who drew attention to the fact that a great deal of this will be about the co-operation leading to demand management, which will smooth demand and by so doing change assumptions about supply.

The Committee has to some extent enabled me to recall my time as a Minister in the Home Office and as the Minister for Energy. When I was the Minister for Energy I became convinced that demand management was a vital tool for ensuring that there was adequate capacity to meet changing patterns of demand. I suspect that successive Governments have put too little emphasis on energy demand management. The debate about energy has usually been about different kinds of supply, by volume and kind, but Governments should think more creatively about demand management. The hon. Member for Birmingham, Northfield mentioned the charging mechanisms that allow for that and, as I said in the evidence sessions, there is some history of using charging and tariffs creatively, but we could do a lot more in that respect. The Bill will catalyse fresh thinking. If we can change the orthodoxy about where and how people charge their vehicles, and rapid and smart charging is central to that change, as Mr Stewart described, we can look forward with confidence to the group responding in the way he suggested it would. It will require that challenge to the orthodoxy and that degree of creativity and imagination about how we can incentivise and encourage certain kinds of behavioural change.

One of the things the House of Lords Select Committee recommended when looking at automated vehicles, which could be applied to this part of the Bill as well, was a greater emphasis on behavioural change and our analysis of what people might do as a result of the new technology’s availability. We need to put more emphasis on that and my Department will do so. We are engaged in work with the academic sector and with others to test the behavioural changes that may ensue from these quite radical alterations to what people drive, how they drive and where they drive. The lesson we have learned in recent years is that economists should have spent more time thinking about behaviour and less time thinking about statistics. We will not make that mistake this time around. We will think about behavioural changes, including the way people charge their vehicles and the impact that has on the grid.

As the hon. Member for Birmingham, Northfield said, we have included in the Bill, in clause 15(3), a broad obligation to the relevant parties, which definitely includes the stakeholders he mentions in the amendment. It would therefore not be appropriate to start specifying exactly which organisation should be consulted at this stage. I said earlier that I am committed to consultation, and I will reinforce that in writing to this Committee, as well as saying it now.

Amendment 16 would require regulations made under clause 12 relating to smart charge points to be approved under the affirmative procedure. As I am sure you, Mr Gray, and the members of the Committee are aware, I am a great believer in Parliament having the opportunity to debate secondary legislation when necessary, but there is good reason for having regulations made under clause 12 using the negative procedure. I will explain why.

The electric vehicle charge point market is innovative and fast-growing, which may require the Government to intervene quickly if the market does not develop as we expect. Moreover, these provisions will be largely about the technical functionality of smart charge points, shaped by consultation and engagement with industry experts, with whom we already have strong and broad requirements to consult. In summary, I do not anticipate any further debate on the principles, so it could be regulated for as a matter of technical detail. If there were a fundamental change to the principles associated with the Bill, it would be perfectly reasonable for us to come back to the House, but I do not anticipate that happening.

New clause 5 relates to the post-regulatory review. The argument is made that we should look at these matters periodically. Part 2 of the Bill will give rise to secondary legislation, so let me assure the Committee of the value I place on reviewing the effectiveness and impact of all regulations. The essence of the argument used by the hon. Member for Birmingham, Northfield is correct: we will need to look at these matters and review them regularly, for the reason that I have given. I do not think that one can make an argument that this is a highly dynamic area of work and then claim simultaneously that we are not going to review it or consider it closely. He is right to make the case.

Section 28 of the Small Business, Enterprise and Employment Act 2015 already places a duty on a Minister of the Crown to make provision for a review when making secondary legislation—the hon. Gentleman will know that well, but I have a copy should any Member want to look at that. So yes, we should review, and that is already in law. I do not think it needs to be in the Bill. I hope hon. Members will be reassured that I will fulfil the existing duties in relation to secondary legislation, that I will consult widely and thoroughly before any regulation, and that the approach to its publishing and scrutiny set out in clause 15 is proportionate.

I am back to where I began. It is right that the Government show that the application of the regulations and powers is proportionate, necessary and fit for purpose—that it responds to the dynamism that I have described. That absolute assurance is the reason that I am asking the hon. Gentleman to withdraw his amendment.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

As the Minister identified, the amendments and new clause cover three areas. The first is consultation. Amendment 15 would try to ensure the right level of consultation on the pressure on the grid. Amendment 16 deals with the nature of the parliamentary scrutiny of any regulations that come from that, or from other consultation; that is the second area. The third is the willingness to review and to make sure, in a dynamic situation, that we have got this right as time goes forward—and to be prepared to change where that proves necessary.

We have had a particularly interesting debate on amendment 15, and I am grateful to my hon. Friend the Member for Wolverhampton South West for his contribution. If the expansion of electric vehicles takes place on the scale that we want it to, we are potentially dealing with major pressures on the grid. There is the nightmare scenario that my hon. Friend talked about, but it does not have to be that nightmare. There is also potential for demand management, which the Minister has talked about. There is the potential for using electric vehicles as repositories for power that can be fed back into the grid—a point made by Quentin Willson in our evidence session.

As yet, we do not know what the right mechanism will be to try to ensure that there is not the pressure on the grid that could lead to the nightmare scenario. It could be regulation; it could be market mechanisms; it could—and I suspect it will—be a combination of the two, but we are not yet in a position to know what is right. That is why consultation with all the relevant stakeholders is absolutely necessary. We felt it was important to put that in the Bill. I am grateful to the Minister for his assurance that the Government are seized of that, and his agreement to write to members of the Committee with more details of how he envisages that consultation taking place.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

I am following the hon. Gentleman’s argument closely. There is an additional point: the more places that people can charge for more of the time, the more intrinsic—or implicit, if we like—the smoothing of demand will be. In a sense, if we concentrate charging, we risk the kind of spikes that he described, so as part of the Bill, there is a beneficial effect on demand of the kind that I have set out.

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

What the Minister has said is right. To be absolutely clear, I think that the opportunities presented by the expansion of the use of electric vehicles and the move towards a zero-emission, low-carbon future in personal mobility far outweigh the risks, but there are risks, and it is right that we address them in our scrutiny of the Bill.

I am afraid that I am not convinced by the Minister’s argument on amendment 16. He said that the negative procedure was appropriate, not because he wants to avoid parliamentary scrutiny—indeed, he acknowledged many of our concerns about the importance of parliamentary scrutiny—but because the changes and regulations that will be introduced under the powers that the Bill will give to Ministers will be technical, and the principles will have been laid down in advance. If there is one thing we have learned in our discussion on the Bill, it is that the boundary between a matter of principle and a technicality is blurred, and that something that appears technical could have implications further down the line. If there is no change to this part of the Bill, the clause will give the Government broad, open-ended powers to set standards and requirements for the charging points that will be installed. We do not know what those powers or regulations will be, for the perfectly proper reason that this is a highly dynamic, changing situation. In that context, it is not unreasonable for us parliamentarians to say that we should be able to have a proper debate when the regulations are introduced, and that that should be done by the affirmative procedure.

The Minister said that the Government may need to react quickly, and that regulations may need to be introduced quickly. He is quite right about that. We do not yet know what the regulations are, or what issues they will address. Ultimately, if Parliament, like the National Grid and others, is to meet the challenges of the future, we have to learn to react quickly and to scrutinise legislation quickly and effectively. The answer is not for scrutiny to suffer as a result.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West 10:30 am, 21st March 2017

I sense that my hon. Friend is considering whether it would be appropriate, in the interest of democracy and accountability, to press amendment 16 to a vote. May I suggest that he might like to consider the position between now and Report, rather than dealing with the issue today?

Photo of Richard Burden Richard Burden Shadow Minister (Transport)

My hon. Friend makes a good point. Clearly, there is a great deal for us all to consider between now and Report. The Minister put forward various issues and said he would consider various issues and get back to us. My hon. Friend the Member for Wolverhampton South West may be right that the precise wording of the amendment is not as good as it should be, but the Minister has not convinced me of the merit of the argument that regulations should be introduced by means of the negative procedure. I will not press the amendment to a vote now, but I give the Minister notice that we wish to return to this issue. I hope that, as the Bill continues its progress, he will reflect on that. Perhaps by the time we get to Report, his position will have changed, and we could look at having the affirmative procedure.

New clause 5 is about review, and I am pleased by what the Minister said about it. He was absolutely clear that Ministers have to be prepared to reassess, review and change if necessary. I welcome that assurance. Again, in the same spirit in which we have approached these matters elsewhere, I do not intend to press the new clause to a vote.

I simply say to the Minister that we have shown ourselves to be very reasonable in withdrawing our amendments. He, in turn, he has shown himself to be very reasonable in the clarifications and assurances he has given to the Committee, but sometimes it is important to put things in the Bill. Some people do spend hours poring over Committee debates, but the law will be what is in the Bill, and sometimes we need to be clear in the Bill exactly what we are saying. That is why we tabled the new clause. I hope the Minister will reflect, before Report, on whether some kind of review mechanism could be put up in lights in the Bill. I certainly hope that he will consider the point about the affirmative procedure in relation to amendment 16. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

On a point of order, Mr Gray. I have listened to what has been said and, for clarity and the record, I reinforce that I will write to the Committee on a range of the matters that we have spoken about this morning. I will oblige my civil servants—I know they like me being strict with them—to produce that letter as a matter of urgency, so the Committee can consider it before our next sitting. I hope that it will be, to use the hon. Gentleman’s term, expressed in the spirit that has underpinned our scrutiny thus far.

The Minister is most courteous and considerate, and he has kept the Committee as informed as he possibly can, but he will understand that that is not, of course, a point of order, grateful though we are to him for it.

Clause 16