Energy Powers (Wales)

– in Westminster Hall at 12:30 pm on 6th September 2011.

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Photo of Jonathan Edwards Jonathan Edwards Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Business, Innovation and Skills), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Communities and Local Government), Shadow PC Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (Wales) 12:30 pm, 6th September 2011

Prynhawn da, Mrs Main. It is a pleasure to serve under your chairmanship. I appreciate the opportunity to open this debate on the Government’s policy on devolution of energy planning powers to Wales, and I look forward to the Minister’s response.

I wished to give this speech in the report stage of the Localism Bill in May, when my new clause 11, relating to the transfer of powers to grant consent for electricity generating stations in Wales, was selected for debate. However, I was not called, as almost 50 amendments were selected for debate within two hours, and the guillotine prevented me from making a contribution. I am therefore grateful for the opportunity to make points today that I wished to make then.

That new clause related to schedule 13 of the Localism Bill, which scraps the Infrastructure Planning Commission, transferring its power to the Secretary of State. During my 2010 general election campaign—as my constituency neighbour, Simon Hart, will be aware—I stood on a specific pledge to scrap the IPC. I am therefore delighted that Ministers in London have delivered for me to a certain degree on that point. At the time of the Planning Act 2008, my party, Plaid Cymru, along with the Conservatives and Liberal Democrats, opposed the creation of the IPC by the then Labour Government, as undemocratic and taking political responsibility and scrutiny away from Ministers. We therefore welcome the Government’s decision to pull the plug on the organisation. The question, as it was in those debates in 2008, is where those powers should now reside. I fear that is where the coalition Government is undermining the second half of my election pledge, and where there is clearly some convincing work left to do.

The successful referendum in Wales earlier this year showed support and an appetite for devolution among the Welsh public, with around two-thirds voting in favour. The topics included in that referendum did not come from a wider discussion on the whole issue of the devolution settlement, but were chosen by the former Labour Government and included in the Government of Wales Act 2006. The referendum was fought within the narrow confines of the 1997 settlement regarding devolved policy fields. The key point about the referendum was that the yes campaign—which secured an overwhelming victory, far beyond anything I envisaged—used parity with Scotland as its battering ram. Equality with our Celtic cousins is a powerful message in my country, and it is a very dangerous political game for those who underplay that fact.

Photo of Mark Williams Mark Williams Liberal Democrat, Ceredigion

I congratulate the hon. Gentleman on securing the debate. He will be relieved to know that at the time of the Government of Wales Act 2006, Liberal Democrats tabled amendments to seek the devolution he seeks on energy matters.

There is another inconsistency—not just the territorial one between Scotland and Wales—which is felt by many local people. On the one hand, in TAN8, strategic areas are defined by the National Assembly, yet the ultimate planning decisions for power installations over 50 MW rest in Westminster. Many people find it difficult to grapple with that inconsistency.

Photo of Jonathan Edwards Jonathan Edwards Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Business, Innovation and Skills), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Communities and Local Government), Shadow PC Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (Wales)

I am grateful for that intervention, and I am glad that the hon. Gentleman takes a consistent position. I will address some of those concerns later and will allow him to intervene if he wishes to do so. I am glad to hear the thrust of his comments.

We believe that unfinished business with the devolution settlement remains, which will come as no surprise to colleagues. Polls in Wales agree with us that criminal justice and policing should be devolved, as should broadcasting and financial powers. Natural resources and energy are other areas that we believe should be devolved to the National Assembly and our own democratic institutions in Wales. That is not a new discussion point. Indeed, the first bids in relation to the devolution of powers in the area of energy and natural resources were made in 2003, and a not particularly successful working group from the Wales Office, the Welsh Government and the UK Government tried to resolve the situation. The issue was raised again in discussions on the 2007 White Paper which preceded the Planning Act 2008, which created the IPC.

The argument is largely one of common sense, to add to the points made by Mr Williams. Local planning authorities in Wales, under Welsh Government policy, currently have the power to consent to new or increased electricity generating stations up to 50 MW, but anything greater on land is dealt with currently by the IPC and—following the introduction of the Localism Bill—by the Minister in London. My key point is that in Scotland planning powers for all energy developments are fully devolved. The 50 MW limit was written into the Electricity Act 1989 and imposed on the National Assembly on its creation in 1999. The 50 MW appears to be an arbitrary figure with no real justification for its existence. It makes little sense that a generating station of 49 MW should be decided upon in Wales, but 51 MW by the IPC in London or by UK Ministers. The issue is one of consistency of approach and of planning.

Photo of Glyn Davies Glyn Davies Conservative, Montgomeryshire

This matter relates to discussions we had before the general election, when the Assembly seemed to be looking at changing that level from 50 MW to 100 MW. I have a fairly open mind about these issues and, as we have just had a referendum, I am reluctant to consider a change now, which is a point that the hon. Gentleman addressed earlier. Does he feel it is 100 MW—including everything, in Pembrokeshire as well—for these power stations?

Photo of Jonathan Edwards Jonathan Edwards Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Business, Innovation and Skills), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Communities and Local Government), Shadow PC Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (Wales)

That would be the difference between me and some of the London parties. I would favour full sovereignty over energy powers. I will address the specific point that the hon. Gentleman raises about the 100 MW level later and will happily allow him to intervene.

The National Assembly’s research service tells us that 39% of applications have been submitted to the IPC, the body that is about to be abolished; 26% of applications are with the UK Government’s Department of Energy and Climate Change; and 36% are decided by local planning authorities. Therefore, only a little more than a third of all decisions on applications to do with energy generating stations in Wales are based on planning policy devised in Wales. In my view, that is clearly unsatisfactory, as the purpose of devolution is to reflect Welsh feeling and attitudes. There is no denying that

Wales wants to be a greener country and wants to specialise in renewables and the green economy. Indeed, sustainable development is written into the constitution of the National Assembly. However, if two thirds of planning applications are decided outside our borders and our jurisdiction, even though they may impact on us on a day-to-day basis, that is not power devolved, but power retained. I would hope that as part of the respect agenda, the UK Government would want to address that enormity.

The Plaid-Labour one Wales Government, to whom we were proud to belong, were very much in favour of transferring further powers to Wales. They were not alone, with environmental and civic organisations such as the Campaign for the Protection of Rural Wales and Friends of the Earth indicating their support and including it in their manifestos for this year’s National Assembly elections. The issue was raised during consideration of the Planning Act 2008, when the IPC was first created. My right hon. Friend Mr Llwyd tabled an amendment in Committee, but it was not moved. The Liberal Democrats then moved a similar amendment on Report.

John Healey told the House:

“We have had detailed discussions, not just with the Department for Business, Enterprise and Regulatory Reform but with the Welsh Assembly Government and the Wales Office.” —[Hansard, 2 June 2008; Vol. 476, c. 518.]

However, there is no easily available record of what those discussions entailed or what the conclusions were. I can only assume that the Labour Government in London denied their colleagues in Wales the right to have the powers I have set out.

To return to the 2008 Act, the Liberal Democrats pushed their amendment to a vote, seeking specifically to exclude Wales from the remit of the IPC. Labour voted against the amendment, and the Conservatives abstained. The Liberal Democrats, of course, voted in favour of their amendment, as did my colleagues and I. Those who voted for it included Chris Huhne, who is now the Secretary of State for Energy and Climate Change, and Mr Clegg, who is now the Deputy Prime Minister.

Since then, the Welsh Conservatives have published their 2011 National Assembly election manifesto, which commits them to increase the present level from 50 MW to 100 MW. Likewise, Labour in Wales supports raising the bar. Even 100 MW is an arbitrary figure, but it represents a significant improvement on the current situation, specifically in relation to renewable energy-generating developments.

There therefore seems to be cross-party agreement in Wales, and there needs to be progress on the current situation. I can only hope that the London parties’ Welsh colleagues have agreed their proposals with their bosses in London, because there seems to be a divergence between the views of the parties in Wales and what is being said down here in Westminster.

My hope is that the issue can be dealt with in the Localism Bill, and my noble Friend Lord Wigley will table amendments to it in the other place. If the Bill cannot do so, however, I hope that it will be dealt with by the new commission that the UK Government have announced will look into further powers for Wales over the next few years.

I would like to highlight a point that makes a mockery of the current system in my constituency. My constituency is home to TAN 8 areas. Those are specific strategic zones, which have been designated by the Welsh Government for the location of large onshore wind projects. Where there is a concentration of such developments, there will understandably be a public backlash, and Glyn Davies has been vociferous in setting out his concerns about developments in his constituency.

To mitigate such concerns, councillors in Carmarthenshire have proposed that the local planning authority adopt an enhanced 2 km buffer zone between individual projects and inhabited areas, and the proposal has great support among local people. However, even if Carmarthenshire county council adopts the policy, it will apply only to developments below 50 MW. Clearly, many developments in TAN 8 areas will be above 50 MW. It is no wonder local people are confused; to be honest, I am confused myself. It is not only my constituents and me who want clarity. During a recent visit by the Select Committee on Welsh Affairs visit to Düsseldorf, we met renewables investors, who informed us that having different planning guidance was a disincentive to invest.

Photo of Simon Hart Simon Hart Conservative, Carmarthen West and South Pembrokeshire

On that point, the hon. Gentleman will be aware of the proposal for the Atlantic array, which will construct 417 turbines 15 miles off the south and west Wales coast and also have an impact on the north Devon coast. How would his plans take effect when two countries and a number of other parties have an interest in such a major offshore development?

Photo of Anne Main Anne Main Conservative, St Albans

Order. I ask the hon. Gentleman to continue.

Photo of Jonathan Edwards Jonathan Edwards Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Business, Innovation and Skills), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Communities and Local Government), Shadow PC Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (Wales)

Thank you, Mrs Main.

Let me return to the new clause that I proposed to the Localism Bill. It would have included generating stations not only on Welsh dry land but in Welsh territorial waters. The intention was once again to ensure consistency between the aims of the Welsh Government and actions around the Welsh coast. Under the Marine and Coastal Access Act 2009, consents for generating stations up to 100 MW are given by the Marine Management Organisation and, for levels above that, by the IPC. I see no reason why those powers should not be wholly transferred to the Welsh Government.

This is not an idle debate about devolving powers. A forward-thinking Welsh Government should look at the significant potential of our waters—the chance to generate clean, green energy and the economic potential that arises from it. The most prominent example of that would be the opportunity to develop a tidal lagoon in Swansea bay, which is usually quoted as being able to generate about 60 MW of electricity. The plan has been in the pipeline for decades, but we are still discussing how we can bring it into being. Giving the Welsh Government powers over electricity generating station consents at all levels would allow consistency of approach, add coherence to planning regulations and end the anomaly based on arbitrary figures for megawatt production.

During Third Reading of the Localism Bill, I made an intervention on the Minister of State, Department for Communities and Local Government, Greg Clark, who agreed to colleagues and me. It was a constructive session, and I thank him for the manner in which he listened to the points made by my hon. Friend Hywel Williams and by me. He has since written to me to confirm some of the points raised in that meeting on 13 June.

First, the right hon. Gentleman confirmed the disparity between energy legislation powers in Wales and Scotland. It exists because, before devolution, planning law was devolved to Scotland but not to Wales. Therefore, the energy consenting role was transferred to the Scottish Parliament on its inception, but it was not given to the National Assembly for Wales. That historical precedent suggests that with planning powers now in the hands of the Welsh Government, energy consent functions should also be transferred. Will the Government confirm that they plan to honour that precedent in the long term?

The right hon. Gentleman’s letter also confirmed that there were more recent discussions with the Welsh Government in September and October last year. At the time, the relevant Welsh Government Minister argued that renewable energy consents in Wales should be increased from 50 MW to 100 MW, a position that has since become the official Labour line and has been taken up by the new Government in Wales. It was rejected by the Secretary of State for Energy and Climate Change, who said that UK Ministers are responsible for meeting the UK’s renewable energy target and therefore best placed to take decisions on applications for larger renewable projects, and that UK Ministers are responsible for drawing up and designating national policy statements. I hope the Minister can explain why the Secretary of State has changed his mind and why he has performed a 180° turn on the position he voted for in opposition during consideration of the Planning Act 2008. I am sure the hon. Member for Ceredigion would like that clarification, as would I.

The argument seems to be that UK Ministers have decided the rules, so only they can participate in the game. That does not make for a coherent argument in a devolved United Kingdom, and it makes for even less of a coherent argument on energy, which is an international issue. On an issue where there is agreement across the board on the need for change in Wales, I would welcome an indication from the Minister that there will be proper bilateral discussion and debate, and that would probably best take place during the proposed Welsh Calman process, which will happen in the next few years.

It is clear that on energy, as on other devolved issues, communication is paramount. The hurdles can be overcome if the UK and Welsh Governments wish to overcome them. To address the point raised by Simon Hart, my colleague Lord Dafydd Elis-Thomas told the National Assembly in a similar debate on 6 July:

“There is no reason why there should not be a renewable policy that could be co-ordinated between the nations of the UK. It is not for the United Kingdom to keep responsibility for itself in taking actions on behalf of Wales and Scotland, but a matter on which we should work together.

To finish, Wales should have the same responsibility as Scotland over the utilisation of its natural resources. Diolch yn fawr.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change 12:49 pm, 6th September 2011

It is a pleasure to serve under your chairmanship today, Mrs Main. I congratulate Jonathan Edwards on securing this important debate. I think I am going to disappoint him to a certain degree in not being able to agree with him on several matters of substance, but I am glad that we were able to start on a strong degree of consensus, by agreeing that scrapping the Infrastructure Planning Commission is important—not least to help him to deliver on his own manifesto commitments. He raised important issues to do with how major energy infrastructure projects in Wales should be determined in future. I congratulate him on the cogent and articulate way in which he did so.

I have 10 minutes to reply. I will write to the hon. Gentleman to make clearer any points that I am unable to cover in detail. He raised the Localism Bill, the abolition of the IPC, the referendum in May, inconsistencies between devolution settlements in Scotland and Wales, applications for consent under section 36 of the Electricity Act 1989, and recent discussions on devolution of major energy infrastructure. He also raised cross-party agreement in the National Assembly about devolution in Wales, several issues to do with Technical Advice Note 8 strategic search areas, the impact on wind farm developments, particularly in his constituency and the wider area, and the different bodies making decisions on energy developments of different sizes in the same area; I agree that that can seem confusing, but we think that it has some strong underlying logic.

Overall, the Government’s policy on the area in question is clear: subject to the Localism Bill receiving Royal Assent, we believe that the right decision maker for major strategic energy infrastructure in England and Wales is the Secretary of State for Energy and Climate Change. We believe that a streamlined planning system that minimises delay and unpredictability and, importantly, ensures investor confidence, is best delivered through a unified strategic planning system for major energy projects in England and Wales. Some may argue that it is not appropriate for UK Ministers to make decisions on major infrastructure applications in Wales. We would strongly disagree. UK Ministers are as accountable to Welsh voters as they are to English voters and, in the absence of any compelling evidence to support a change, we vehemently believe that it is appropriate for UK Ministers to take those important decisions on major infrastructure of national significance.

A number of reasons have been set out to show why Welsh Ministers should make major energy infrastructure decisions, and I appreciate the points that the hon. Gentleman made, but the Government see no evidence for reconsidering our strongly held position. The coalition Government’s policy on the matter is exactly the same as that of the previous Labour Administration. It is important to consider the referendum on further Welsh devolution that was held on 3 March. There was a 63.5% vote in favour of the Assembly being able to legislate in a further 20 areas. I take this opportunity to wish the Assembly every success as it takes on that large tranche of new responsibilities. However, so soon after an important referendum on the scope of the Assembly’s powers, now is not the time to start to unpick things and revisit the question; it is not an appropriate moment to consider substantive changes to the devolution settlement as it affects energy consents. We need to leave the settlement as it is.

Photo of Jonathan Edwards Jonathan Edwards Shadow PC Spokesperson (Treasury), Shadow PC Spokesperson (Business, Innovation and Skills), Shadow PC Spokesperson (Transport), Shadow PC Spokesperson (Communities and Local Government), Shadow PC Spokesperson (Culture, Media and Sport), Shadow PC Spokesperson (Wales)

Does the hon. Gentleman recognise that his party fought the recent National Assembly elections, after the referendum, on the basis of increasing the threshold to 100 MW? Is he saying that those manifesto commitments were not worth the paper they were written on?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

No. What I am saying is that the overarching decisions in the area are informed by the coalition agreement of the Government. That is the basis on which we make our important decisions, and we stand by those.

In Wales, the Holtham report suggested that Wales is underfunded, and recommended borrowing powers and devolution of some taxes. The Government have said that they will consider the Holtham report with the Welsh Government and, following the commitment in the coalition agreement, will establish a commission to consider funding and finance for Wales. The Secretary of State for Wales has announced the outline of that, and there will be further announcements to follow.

The Localism Bill is currently going through Parliament. The Bill would amend the Planning Act 2008, abolishing the Infrastructure Planning Commission and returning decisions to democratically elected and accountable Ministers. The Government believe that the Planning Act regime and the changes proposed in the Localism Bill need time to bed in to ensure that important matter of investor certainty. That is another reason why we do not believe we should take the hon. Gentleman’s suggestions forward. It is important to note that the impact of the abolition of the Infrastructure Planning Commission for Wales is minimal, and no different from the impact for England. The pre-application and examination procedures will remain the same and they will be handled by the Major Infrastructure Planning Unit, the IPC’s successor. However, final decisions will be made by Ministers accountable to Parliament.

It has been pointed out by the hon. Gentleman that the current planning system is confusing, as different authorities determine different-sized energy projects. That was an important part of his argument. We acknowledge that, for example, wind farms of different sizes in the same area are given consent by different bodies in both England and Wales: so a wind farm of 50 MW or less would be given consent by a local authority, while a neighbouring wind farm with a generating capacity over the 50 MW threshold would be determined by the Infrastructure Planning Commission, or, following its abolition, by Ministers at the Department of Energy and Climate Change. We believe that thresholds must be set somewhere, and that on balance those I have outlined are the right ones for the national interest. There is still significant scope for smaller projects to be determined by the local authority. Major energy infrastructure, given its national significance, should be determined at a national level.

On whether there is already enough planned energy infrastructure capacity, it is sometimes argued that there is enough in the pipeline. However, projects under construction or with planning consent would only replace the capacity lost through closures, which is currently expected to be about 22 GW. That does not take account of the need to move to low-carbon sources of generation, or of the need to increase the amount of capacity available to take account of the switching that we will need from fossil fuel to low- carbon electricity in domestic heating and transport. There is no guarantee that any given project will receive consent, or, having received it, will be built. When projects have been registered with the IPC those are not applications for consent; the companies have registered their interest in the application process. Projects in the pre-construction phase are not guaranteed to be built. The Department’s White Paper on market reform shows that up to £110 billion of investment in electricity generation and transmission is likely to be required within the next decade.

We also acknowledge that Welsh issues should be taken into careful consideration for major energy infrastructure applications within the Principality, and, of course, they already are. Currently, IPC commissioners with expertise in Welsh issues are appointed to panels for Welsh applications. It is very important that, following the abolition of the IPC, Welsh issues should continue to be considered in major infrastructure applications.

Options are still being considered for how the new unit will work within the Planning Inspectorate. Welsh Government officials are significantly involved in that integration work. The national planning statements require decision makers to take into account where appropriate the technical advice notes in Wales, which have been mentioned at length in the debate. So Welsh policy issues have significance and will be taken into account when an important planning decision is made. We certainly regard the views of local people as important. All major applications for energy infrastructure in Wales are dealt with on a case-by-case basis, after the views of local people have been taken into account. There are two opportunities for local people to have their say: first, when applications are being prepared for the submission to the IPC, the developer must consult widely with the local community; secondly, during the IPC’s examination of an application, any member of the public can submit evidence to the IPC.

The review of TAN8 is a matter for the Welsh Government. If there is a review, we shall take due account of its progress while considering individual applications in respect of which it is a material consideration, but we would not expect to suspend our consideration of applications while any review of TAN8 is being carried out, unless requested to do so by the developers concerned.

I am sorry that, because of limited time, I have not had the opportunity to reply at length to the questions posed by the hon. Gentleman but, as I said at the outset, I shall be happy to write to him on further specific points.