Energy Bill [H.L.]

HL Deb 04 February 2004 vol 656 cc792-408GC

(Sixth Day)

Wednesday, 4 February 2004.

The Committee met at half past three of the clock.

[The Deputy Chairman of Committees (Lord Hogg of Cumbernauld) in the Chair.]

Clause 77: [Prosecutions]:

Baroness Byford moved Amendment No. 106E: Page 60, line 39, at end insert "; or (c) in Scotland, except by or with the consent of the Crown Office.

The noble Baroness said: Clause 76(7) lays down that, if an offence under this section is committed by a Scottish firm with the consent of a partner, that person is guilty of the offence and liable to prosecution. Will the Minister explain why, according to the Bill, that person will not be dealt with in the same manner and with the same safeguards as an offender in another part of Great Britain? I beg to move.

Lord Davies of Oldham

I congratulate the noble Baroness, Lady Byford, on her acuity in spotting this issue, but I reassure her that it is not an oversight on our part that there is no specific mention of Scotland in Clause 77(3). There is no need to provide for proceedings in Scotland here. The Lord Advocate ensures the same result; namely, prosecutions can be instituted only by central government agencies without specific enactment. The amendment, therefore, is unnecessary, and I ask the noble Baroness to withdraw it.

Baroness Byford

I thank the Minister for that response. We try to look through Bills fairly carefully, as the noble Lord knows well. If he assures me that the amendment is not necessary, I must obviously beg leave to withdraw it.

Amendment, by leave, withdrawn.

Clause 77 agreed to.

Clause 78 [Application of civil law to renewable energy instalknions etc.]:

Lord Davies of Oldham moved Amendment No. 106EA: Page 61, line 22, leave out subsections (4) and (5).

The noble Lord said: In moving Amendment No. 106EC, I shall speak also to the other government amendments in the group. It may be—

Baroness Miller of Hendon

I think that we are perhaps dealing with the group before the group to which the noble Lord wants to speak. Amendments Nos. 106EA and 106EB have already been debated.

Lord Davies of Oldham

I am so sorry.

Lord Higgins

Would my noble friend like to give to the Government the coloured version so admirably produced by our Chief Whip?

Lord Davies of Oldham

I beg to move.

On Question, amendment agreed to.

Lord Davies of Oldham moved Amendment No. 106EB: After Clause 78, insert the following new clause— ORDERS IN COUNCIL UNDER SECTIONS 76 AND 78

1. (1) An Order in Council under section 76 or 78 that makes provision falling within subsection (3) is subject to annulment in pursuance of a resolution of the Scottish Parliament (but may by virtue of subsection (2) be subject also to the negative resolution procedure).
2. (2) An Order in Council under section 76 or 78 that makes provision not falling within subsection (3) is subject to the negative resolution procedure.
3. (3) Provision falls within this subsection so far as it is provision that would be within the legislative competence of the Scottish Parliament if it were included in an Act of that Parliament."

On Question, amendment agreed to.

Clause 78, as amended, agreed to.

Clause 79 agreed to.

Lord Davies of Oldham moved Amendment No. 106EC:

After Clause 79, insert the following new clause—

"MODIFICATION OF LICENCE CONDITIONS FOR OFFSHORE TRANSMISSION AND DISTRIBUTION

1. (1) If the Secretary of State considers it appropriate to do so for purposes connected with offshore transmission or offshore distribution, he may—
1. (a) modify the standard conditions of transmission licences or distribution licences;
2. (b) modify, for purposes that in relation to modifications made under paragraph (a) are incidental, consequential or transitional purposes, the conditions of a particular transmission licence or a particular distribution licence;
3. (c) modify a code maintained in accordance with the conditions of a transmission licence or a distribution licence; and
4. (d) modify an agreement that gives effect to a code so maintained.
2. (2) Before making a modification under this section, the Secretary of State must consult—
1. (a) the holder of any licence being modified; and
2. (b) such other persons as he considers appropriate.
3. (3) Subsection (2) may be satisfied by consultation that took place wholly or partly before the commencement of this section.
4. (4) The Secretary of State must publish every modification made by him under this section.
5. (5) The publication must be in such manner as the Secretary of State considers appropriate.
GC 343
6. (6) Where the Secretary of State makes modifications under subsection (1)(a) of the standard conditions of licences of any type, GEMA must—
1. (a) make (as nearly as may be) the same modifications of those standard conditions for the purposes of their incorporation in licences of that type granted after that time; and
2. (b) publish the modifications in such manner as it considers appropriate.
7. (7) A modification under subsection (1)(b) of part of a standard condition of a licence does not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of Part 1 of the 1989 Act.
8. (8) The Secretary of State's powers under this section are exercisable only during the eighteen months beginning with the commencement of this section.
9. (9) In this section—
• "offshore distribution" means distribution within an area of offshore waters of electricity generated by a generating station in such an area;
• "offshore transmission" means transmission within an area of offshore waters of electricity generated by a generating station in such an area; and
• "offshore waters" means—
1. (a) waters in or adjacent to Great Britain which are between the mean low water mark and the seaward limits of the territorial sea; and
2. (b) waters within an area designated under section 1(7) of the Continental Shelf Act 1964 (c. 29).
10. (10) Expressions used in this section and in Part 1 of the 1989 Act have the same meanings in this section as in that Part."

The noble Lord said: I shall attempt a second time to move Amendment No. 106EC. I anticipated this debate with great fervour. That is why I was so enthusiastic to move on to this group of amendments. There are 11 government amendments in total, and I shall speak to those. It may be for the convenience of the Committee if I do not address myself to the other amendments in the group tabled until Opposition spokespersons have had the chance to speak to their amendments. Then I shall seek to reply to them.

Let me make the obvious point that the Government tabled the 11 amendments to supplement the existing clauses in the Bill providing the basic framework for the regulation of offshore electric lines. The first four amendments each introduce a new clause, while the remaining seven make consequential changes to existing clauses.

My noble friend Lord Whitty indicated at Second Reading that the Government would table amendments. Clause 79 provides for the extension of the four prohibitions in the Electricity Act 1989 to offshore areas as far as the outer limits of the renewable energy zones. That also has the effect of extending the licensing and exemption regime to those areas. The need for the regulation stems from the moves to much bigger-scale offshore renewable energy generation, most of which is focused on wind energy.

The first generation of offshore wind farms was relatively small and widely dispersed around our coasts. However, the Crown Estate has recently announced site lease awards for a second generation of offshore wind farms, which will be much larger and concentrated in three strategic areas. While the process of obtaining the relevant construction consents for the 15 sites involved has yet to be gone through, we expect these wind farms ultimately to generate between 5.4 and 7.2 gigawatts of electricity, the higher figure being enough to meet the needs of around 4 million homes.

Given the upsurge in offshore generation, the Government are clear that there needs to be appropriate regulation of the generation and of the connections to the main grid system. Regulation will help ensure that the cabling infrastructure required is provided efficiently and that a proliferation of relatively thin cables from individual wind farms is avoided. We are looking to allow a number of wind farm connections to be marshalled at transmission hub points offshore through thicker cables. We also want to ensure that the connections put in place allow fair and open access to the grid for offshore generation.

Amendment No. 106ECg empowers the Secretary of State to modify the standard conditions of offshore transmission and distribution licences and make consequential and incidental changes to particular transmission or distribution licences. Such a power is necessary because we foresee that the different offshore environment may, as a matter of practicality, necessitate some change to standard conditions. For example, the differences in engineering involved when putting cables into the sea rather than on land may require some changes to licence conditions.

We considered whether it would be sufficient to take account of the particularities of offshore circumstances by applying special conditions to each individual licence. However, we believe it will provide greater clarity and transparency for the industry if we specifically set out the modifications within the standard conditions that will apply in relation to offshore areas. The exact scope of the modifications remains to be established, and any proposals for modifications will be the subject of formal consultation. We anticipate that offshore and onshore licence conditions should remain the same unless there are good reasons to make changes.

We are also conscious of the need to avoid uncertainty among licence holders, and we do not intend to take an ongoing power to make modifications. The power is exercisable only within 18 months of commencement of the section. We have notified the Select Committee on Delegated Powers and Regulatory Reform of our intention to take this power.

The new clause inserted by Amendment No. 106EDg enables the Secretary of State to extend the system operator licence to apply to offshore. Chapter 1 of Part 3 sets out the British Electricity Trading and Transmission Arrangements provision. They are designed to create a single trading market in wholesale electricity in Britain, with all the resulting benefits. Broadly speaking, the activity of transmission will be divided into two parts—system operation and the provision of transmission assets.

I hope noble Lords will forgive me for using the acronym BETTA from now on, as it is a mouthful to spell out in full each time. I take it that, in this part of the Bill, we will all have to take care to ensure that Hansard reporters and others know that we are referring to BETTA, not using the word "better".

The essential part of BETTA is that there is a single system operator for the whole of the British transmission system. Although licensing of the GB system operator cannot take place until certain provisions in the Bill have received Royal Assent, the Secretary of State for Trade and Industry has already indicated that she is minded to agree that National Grid Company plc's application for this role should be accepted. However, current transmission licences extend only to the British shoreline, and the changes to be made under BETTA will not alter that. That means that we need a power to extend the system operator licence to cover offshore areas. In addition, the changes to the system operator licence may have a consequential effect on other electricity licences, so the clause includes the power to make any changes necessary to those licences to take account of the extension of the system operator licence.

Exercise of the power will again be subject to prior consultation and must happen within 18 months of commencement of this section. The Delegated Powers and Regulatory Reform Committee has been made aware of our intention to take this power.

Government Amendment No. 106EE enables the Gas and Electricity Markets Authority to make regulations setting out the process to be followed by it in awarding offshore transmission licences by competitive tender. As I mentioned, BETTA will result in the activity of transmission being divided in two: system operation and provision of transmission assets. There are no offshore transmission licences, and it will be necessary to grant such licences to allow the necessary transmission infrastructure to be established and operated offshore.

In awarding licences, GEMA will have to act in accordance with its statutory duties. The regulations will require the approval of the Secretary of State but will not be subject to a parliamentary procedure. Once more, we have notified the Delegated Powers and Regulatory Reform Committee accordingly.

The new clause inserted by Amendment No. 132ZAg amends Section 64 of the Electricity Act 1989 to define high-voltage lines for offshore areas. The Electricity Act did not originally contemplate offshore transmission, so the definition of "high voltage" applies only in England, Wales and Scotland. Currently, 132-kilovolt lines are defined as high voltage lines in Scotland but not in England and Wales. That is because, in Scotland, 132-kilovolt lines are generally used for the bulk transfer of electricity, whereas in England and Wales such lines are mainly used to distribute electricity.

The definition of "high voltage" is important, as it feeds into what constitutes a transmission system. A transmission system must be wholly or mainly made up of high-voltage lines. The amendment makes it clear that offshore lines of 132 kilovolts and above will be high-voltage lines, if such a line conveys electricity from an offshore generating station. That is because such offshore lines will be used for the purpose of bulk conveyance of electricity and so are more appropriately classified as high-voltage lines.

Government Amendments Nos. 141Ag to 1411Fg and 149 will make minor changes, which are a consequence of the first four amendments, the nub of our present debate. They each make adjustments to cross-references in the Bill to take account of the new clauses if they are approved. I beg to move.

3.45 p.m.

Baroness Miller of Hendon moved, as an amendment to Amendment No. 106EC, Amendment No. 106ECA: Line 22, leave out "in such manner as the Secretary of State considers appropriate" and insert—

1. "(a) in writing to all holders or applicants for licences who may be affected by such modifications, and
2. (b) in the case of the licences referred to in subsection (1)(b), by publishing the same in at least two national daily newspapers and any appropriate trade journal or journals"

The noble Baroness said: Before I move my amendment, perhaps I may say to the Minister that the way in which the amendments are numbered, with ZAAs and so forth, is a nightmare and makes it difficult for us to find our place. What makes it even more difficult is that on the groupings list the letter "g" has been included. However, that is not part of the amendment number, as the Minister will see from the Marshalled List. He referred to the amendments as including the letter "g", but that is not necessary. I say that only because it is confusing enough, and when we start looking for the letter "g", we do not find it. I might even suggest to those in the Whips' Office who prepared the Marshalled List that including the letter "g" is less than helpful.

In moving Amendment No. 106ECA, as an amendment to government Amendment No. 106EC, I shall speak also to my Amendment No. 106EDA, which is an amendment to government Amendment No. 106ED. Both of those amendments introduce a new clause to the Bill. With the leave of the Committee, I would also like to speak to Amendments Nos. 115, 117, 120, 124 and 130. They make exactly the same point that I am making in those two amendments. It will be easier for the Committee if I speak to them now, rather than come back and repeat myself later. If I may, I will also speak later to Amendment No. 106EF, which is an amendment to the government Amendment No. 106EE, which the Minister has also spoken to in this group. The further five amendments are to Clauses 106, 109, 118, 122 and 140. Those are the amendments that I just said that I would group with them, with the leave of the Committee. All have the same effect as the amendment to the two proposed new clauses.

Each of the clauses relates to the modification of energy trading and transmission licence conditions, or creating new standard transmission licence conditions, or licences for electricity and gas interconnectors and standard licences for energy administration. Each of the clauses gives the Secretary of State power to make and to vary the terms of general or specific licences.

There is no real, major objection—although there may be some around the edges—to what is a necessary administrative process, as the noble Lord outlined. However, the Government seem to have a penchant for trying to give Secretaries of State carte blanche to take major administrative steps in any way they choose by passing the normal democratic processes of publicity. That will not do. If there are things that we are generally going to accept, but we leave it to the Government, we cannot give them carte blanche to deal with them in any way they like.

I remind the Committee—with some pride, because I won—of a battle that I had with the Government over provisions in the Employment Act 2002, which enabled the Secretary of State to amend that Act, either by primary or secondary legislation, or otherwise. That is fine—primary or secondary legislation—but the word "otherwise" is extremely worrying. It took an attempted amendment at each stage, and finally the interventions of two noble and learned Law Lords, before the Minister at the end gave in and thought it was not correct. They are sort of at it again.

Noble Lords might remember that only yesterday when we were discussing Clause 75(7), we discussed first exploitation and then exploration. The rest of that sentence says: 'exploration' includes the doing of anything (whether by way of investigations, trials or feasibility studies or otherwise)".

We all stopped reading at the word "anything". That little word "otherwise" crept in. and I did not notice it yesterday. That is exactly how it is here; the Government are at it again. They want to publicise matters that ought to be fully in the public domain in such a manner as the Secretary of State "considers appropriate"—not even, the Committee will note, in such a manner as should be "reasonable". The words used are "as the Secretary of State considers appropriate".

As drafted, the clauses could mean that the Secretary of State could publicise the terms or variations of licences by a classified advertisement in the Beano, or putting it on a lamp-post in the Outer Hebrides. The Committee may think that that is extremely fanciful, but it might be interested to know of a recent case where the courts held that notice of a planning application for a radio mast was validly given, even though it was posted far too far from the road for it to be read by any passer-by. It was impossible for anyone to read it, but it was considered to be OK. I only wish that I could give the Committee the name of the case; I have searched but I have not yet found it. However, I hope that by the end of the passage of this Energy Bill, which seems to be going on forever, I will have found that name. I notice that the Minister raised his eyebrows; perhaps he does not feel quite so concerned about the matter as we do.

The absurdity is that, in the terms of the clauses as drafted, the Secretary of State need not even specifically or directly tell the licensee about the variation of the licence. Instead, he could leave it to him to find out for himself that the licence had been varied and the terms of the variation. The licences referred to in the clauses are not merely valuable commercial rights; they impose duties on the licensee and probably create rights for the consumers of gas and electricity. Details of those must be in the public domain and, one hopes, in the sight of vigilant members of both Houses of Parliament and the local and national media.

The terms of my amendments are identical. They remove from the Secretary of State the power to publish licence details merely in any way that he considers appropriate, including in any obscure or secretive way he thinks appropriate. Perhaps the Secretary of State is taking to heart the Latin root of the word "secretary"—secretarius, meaning "secret".

In place of the potential obscurity that the Secretary of State wants to impose on the licensing process, I propose two very simple changes. First, the Secretary of State must notify all licensees in writing of the terms of their licences and any changes in those terms. Secondly, he must publish details of the conditions, in at least two national daily newspapers and any appropriate trade journal"— or "journals", if there are more than one. There is a slight variation in the case of the amendment to Clause 106, which includes a reference to particular licences as distinct from general licences.

The amendments would not in any way detract from the licensing powers of the Secretary of State; they do not impose in any way an administrative burden on the Secretary of State. There are several agencies which, for a modest fee and in response to a simple letter, would see to everything, if there is no in-house agency in the department—although I suspect that there probably is. The amendments would not add to the cost for the taxpayer, as the expense would be met by the licensee. The amendment would support what the party opposite claims as one of its objectives—which is why I think it will like the amendments. It supports open government, which is a very important thing.

Amendment No. 106EF would amend Amendment No. 106EE, to which the Minister spoke. As he explained, the Government propose to introduce a whole new clause providing for competitive tendering for what, we may assume, would be lucrative off-shore transmission licences. There is clearly no objection to an obviously necessary concept, although I have to ask why the Government have only just thought about that two months after the publication of the Bill and long after the Bill was first mooted. However, there is one area in which the tendering process is deficient: it does not stipulate the most important feature of the tendering process, namely its publication to prospective interested parties. Despite the details of the tendering procedure set out in subsection (2), that essential ingredient is omitted.

Over the past few years, the Chamber and Committees have rung with government pledges about openness and with the buzzword, "transparency". Let me say at once that I do not for one moment suggest that the authority now or in future would act in any way other than with the utmost integrity. I am also prepared to assume, as it is nearly always so, that it will act with utmost good faith. In fact, I would say that that was always so. However, circumstances could arise in which, for some reason of expediency or others, it could be necessary—because the authority did not have the necessary time or ability, or whatever—to grant a licence without the fullest implementation of normal commercial tendering procedure, which means advertising the offer to the widest possible audience. Furthermore, circumstances could arise in which, in what might be called an executive decision, the authority decided that the competitive process called for under subsection (1), and the procedure needed to be curtailed without, of course, breaching the procedure laid down in subsection (2).

I say at once, in anticipation of what I believe the Minister will say, that I acknowledge, as I have already done, that it is quite likely—even probable or, if the Minister insists, certain—that the tendering process will be carried out with absolute probity. I am also aware that the licences may be subject to rules laid down in Brussels. Nevertheless, there is a legal maxim that, if justice is to be done, it definitely—certainly—needs to be seen to be done. By analogy, if tendering is a form of open competition, it must be seen to be open. That means that it should be seen to be open not only by potential rival bidders and the financial and trade press but by that hypothetical man who is always riding up and down on the top of the Clapham omnibus. I beg to move.

Lord Dixon-Smith

I am glad to see the noble Lord, Lord Whitty, in his place. I have warned him of what is to come, albeit at a much later stage in the Bill. However, the trouble is that we have hit the point now. have been trying to get to the root of the peculiar planning procedures which exist for electricity generation and transmission. The Committee should know this, so I shall not give all the background information. Suffice it to say that thus far I have got back to the Town and Country Planning Act 1962, where I find a clause which states, more or less, that any relevant Minister can grant permission for the development of relevant land so long as he does it under any enactment—that is, an enactment prior to 1962. As I now have to explore the whole gamut of legislation relating to public utilities, I suspect that I shall stop and invite the Government to have a look at the whole problem.

The matter becomes relevant here because, under Clause 150, special provisions are made for additional planning inspectors in relation to major generation applications and, indeed, major transmission applications. In fact, the clause is precisely in line with what has been said about local government in the Planning and Compulsory Purchase Bill, which is going through on the Floor of the House. It seems to me that, at least as a question of principle, we need to explore whether it is appropriate to have special planning provisions for particular utilities.

I do not want to get into that now, but it becomes relevant because, while the generation is offshore, it is absolutely appropriate and proper that it is dealt with under this Bill. Indeed, while the transmission—I see that it is to be 132 kilovolts, which is the Scottish figure—is offshore, there is absolutely no problem, but what will happen when it comes ashore? I am not certain whether it comes ashore at the low-tide or the high-tide mark, and that may be important. We are talking about the really high-powered transmission lines. There is a distinction on the mainland because, as the Minister pointed out, 132 kilovolts is the Scottish high-power level and the English high-power level is 230 kilovolts. So there is a distinction there that we perhaps need to think about. But once that line is ashore, it needs planning permission. The current high-power transmission lines by and large do not go to the shore; they stop somewhere short of it. Of course, a lot of low-power transmission lines will run right out to the shoreline, but I believe it is rare to find a high-power transmission line that does so.

How is that to be dealt with? It appears from the Bill that it is to be dealt with by the Minister by order. However, it seems to me that that is in breach of all the planning principles that we have. I raise the matter because we need to think carefully about it. I refer to the high-power transmission lines that we already have and the high-power transmission line that stops at the shoreline. How will that matter be decided? It seems to me that it certainly cannot be decided just by ministerial order. The construction of such a line would have to go through a planning process of some sort.

I do not want to bring the whole system to a halt, but we need an answer to that question. I suspect the Minister will say that he will need to think about it. There is a serious problem here that will result in communities the length of our shores jumping up and down, if we do not find a satisfactory answer to it.

4 p.m.

Lord Higgins

We may eventually reach Amendment No. 107, which deals with the effect of the Bill on various shipping interests both with regard to freedom of navigation and safety at sea. On listening to the Minister, I thought that there were some issues involved in the matter that we are discussing that might also affect shipping. I am not clear from what he said whether these high-power transmission lines are to be above the sea on pylons or below the sea or perhaps a combination of both. If they are above the sea, they may interfere considerably with shipping, not least with pleasure boats, yachts and so on. If they are below the sea, they may also create problems. Either way, it seems likely that they may have effects on radios used by shipping and on navigational instruments. Underwater cables may have an effect on depth sounders.

I presume that those factors have been taken carefully into account by the Government in considering the various sites at which wind farms might be located. If that is the case, no doubt the Minister can tell us what conclusions the Government have reached regarding how serious these issues may be. They ought to be considered carefully. Above-sea transmission cables could increase the area in which shipping is impeded, even though those routes may have existed for a long time. I should be grateful if the Minister could tell us what the situation is, give us reassurance and in particular, given the overall context of the Bill mentioned by my noble friend Lady Miller of Hendon, tell us what the situation is regarding planning permission. Foreign ships may not be immediately aware of the potential dangers posed to their freedom of navigation by the granting of planning permission by an authority in the United Kingdom.

Lord Greenway

Following on from what the noble Lord, Lord Higgins, has just said, even if the transmission cables were to be buried—as is the case with telegraph cables—there might still be a problem with fishing craft using bottom trawling gear. That is a matter that the Government must look into.

Viscount Ullswater

In his opening remarks, the Minister mentioned that the Secretary of State's power under this amendment and Amendment No. 106ED was exercisable only during the 18 months beginning with the commencement of the section. Although that may be a worthy intention, does the Minister perhaps not agree that as licences are gradually granted for the generation of power by wind farms, modifications may be required in licence conditions after 18 months, when the experience is gained? Should the Government so restrict themselves when glaring modifications may be required after that time? In particular, new subsection (1)(c) would modify a code maintained in accordance with the conditions. What would the process be to make a sensible modification to the licence conditions after that period?

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)

I apologise first of all to the Committee and, in particular, to my noble friend Lord Davies for not being here at the beginning of the debate on the amendment. I had assumed that, as the first amendment was a Scottish amendment, it might last some considerable time.

A range of issues has been raised. The noble Lord, Lord Dixon-Smith, is touching on something which comes much later in the Bill but which is relevant here and at various points. The planning system for this and for existing electricity power plant generation and transmission is different from that relating to planning permission in general. It is not particularly unique; it has been in place for decades and relates also to roads, railways and other large installations.

It is true that in this case the link between onshore and offshore lines will be through the existing onshore regime, which is not the local planning regime but comes under Section 37 of the Electricity Act 1989. It will need to upgrade the onshore system to cope with the arrival of new offshore legislation, but essentially, it will be the system that currently exists rather than the local planning system.

Lord Dixon-Smith

The Minister is, as always, perfectly correct, but if my memory is correct on Section 37 of the Electricity Act, there has to be consultation over such developments. If a planning authority chooses to object, unless the Minister actually responds to its objections so that they are in effect answered, there has to be an inquiry. We need to work our way through the system. I did not wish to imply that there is not a planning system for these things, because clearly there is. There are separate issues which I will deal with on Clause 150.

I would not have raised the matter here, except that it becomes relevant as soon as these lines are onshore. There may have to be planning inquiries about the routing of these lines, be they overhead or underground, once they are above the shoreline. We need to he aware of that and to know exactly how it will be done. From reading the Bill, one could have the impression that it could almost be done by ministerial order, and I do not think that is the intention.

Lord Whitty

The ministerial order would have to be in the context of this legislation and the existing Acts that will affect the connection offshore to onshore. I hesitate to suggest it, but we may need a more wide-ranging debate when we come to the planning part of the Bill. Clearly, there is no implication in these provisions that anything can just be done by fiat.

The noble Viscount, Lord Ullswater, asked why we were talking about only the 18 months after the Bill comes into effect. It is because we need one-off modifications to establish the offshore licence conditions themselves. The licence conditions could be modified thereafter, as they can now, by agreement between the regulator—Ofgem/GEMA—and the licence-holders. That will continue to be the case, so the modifications could still take place.

As for the potential danger of the transmission lines to shipping and to others, those lines would be trenched under the seabed or would lie on the seabed, as cables do now. Indeed, that is how we supply electricity to our islands and get a certain proportion of our electricity from time to time from France. It is not a new thing for shipping or for the way in which those cables are laid. They would need a licence, and that licensing system would he subject to regulations relating to cabling under the Food and Environment Protection Act 1985. Therefore, this is not a new situation for shipping or for those who regulate.

Lord Higgins

Is the Minister giving us an absolute assurance that there will be no question of the cables being above the sea on pylons? Secondly, while it is true as he says that there are existing cables, there will be far more cables now. Has the department carried out a careful study of the effect on instruments used to determine depth by small sailing ships, for example, which would normally not go anywhere near one of the major cables? There will he a great proliferation of cables, and the effect on depth instruments and on radar may be considerable.

Lord Whitty

In terms of the total number of cables that could potentially, in some circumstances, have the effect that the noble Lord mentions, it is not a huge proliferation. They are high-tension and high-voltage cables, and they will be required to be protected in line with the voltage that they carry. That is not a new system, either here or in the rest of the world. High-voltage cables exist between islands and countries throughout the world, without any general disruption of signals, of shipping or of depth assessments. Therefore, it is not as big a problem as the noble Lord suggests. Clearly, when considering a site, we shall have to consider the route of the cables, and shipping companies and others with an interest in where the cables are laid will need to be notified. However, it is not a new situation for the users of the sea to contemplate.

Lord Higgins

I have not had an assurance about the first point that I made, about pylons. Of course, what the Minister says about deep-laid cables is true, but we are presumably talking here about very shallow waters.

Lord Whitty

Yes, but all cables come to shore, including high-voltage cables, so in terms of the inshore area at relatively low depth, that is not a new problem or issue.

As for the first proposition made by the noble Lord, the presumption is that all the cables will either be laid on the seabed in certain areas or trenched. It is possible that a proposer might come up with another way in which to transmit the electricity through an above-the-surface system. I find that somewhat difficult to envisage, but I cannot give an absolute assurance that no such proposition would come forward. The Government and the authorities would need to consider that question extremely seriously, particularly with the implications for shipping.

Technology will develop in that area, and the Bill does not strictly speaking prohibit it from happening—but I should be extremely surprised were there to be any such proposition in the first few decades of this operation. My technical advisers may tell me that there is a possibility, so I shall leave that door slightly open but, as near as I can be, I believe that that will not happen.

Lord Higgins

It would certainly foul up the radar.

4.15 p.m.

Lord Whitty

If it happens. The cables below the surface would not foul up the radar.

I turn to the amendments to our amendments proposed by the noble Baroness, Lady Miller. Effectively, she is saying that the powers of the Secretary of State in the first two amendments and the powers of Ofgem GEMA in the third need to be explicit. In the first two cases, they need to communicate this issue in relation to modifications to licences. The noble Baroness does not think that, in such manner as the Secretary of State considers appropriate", is a sufficient prescription; albeit that that form of words is used in many pieces of legislation, most recently and relevantly in Sections 33, 68 and 81 of the Utilities Act, which was, as I recall, not necessarily objected to in this House.

It is one thing to argue that the clause as it stands is open-ended, it is another to be as prescriptive as the noble Baroness proposes. I recall that we have had this argument on many pieces of legislation. I am not inclined to accept stipulation on means of communication because technology moves on; for example, when noble Lords want me to put in a Bill "put on the website" or "use the first-class post". I hope that this legislation will last for some considerable time. However, the means of communication will have changed during the currency of the Act. Indeed, if we had been debating the Bill 20 years ago, some of the areas that we are now being pressed to stipulate would not have been appropriate.

The noble Baroness is slightly time-warped herself—if I may say so—in that she refers only to national newspapers and any appropriate trade journals. She is not even saying that it should be advertised on the Clapham omnibus, despite her concern for the man on the top deck. Other means of communication, electronic and otherwise, are more appropriate now, but that will change in five and 10 years' time. So it is not in my view particularly helpful to specify the means of publication. Therefore, there should be some flexibility. The noble Baroness may consider that the current flexibility is too wide, but I consider her prescriptions too narrow.

The same is true in relation to the third amendment, which relates to the procedure for promulgating the modification for licences and setting out the tender processes for the issue of transmission licences under GEMA. Again, that is being prescriptive in relation to ordinary pre-paid post.

There are a huge number of administrative details about how the tendering process should take place. The habit has been to leave to the regulator how precisely that is done. That would include the way in which it communicates the process. GEMA will need to have the power to make subsequent regulations establishing exactly how the tendering process should be carried out. Noble Lords will find that in most areas where a regulator operates, we leave it to the regulator to decide within statutory powers how administratively it will deal with the tender process. That also seems sensible in this context. I, therefore, would not be prepared to accept that amendment either.

Lord Dixon-Smith

Before the Minister sits down, he may well have satisfied me. Indeed, I hope that he has. I shall read what he said with great care. The one point he did not pick up—or perhaps his team do not have the answer to it—is whether transmission lines will come ashore at the high tide mark or the low tide mark. There may be occasions when that is significant.

Lord Whitty

I recognise it may be significant, but I cannot give an answer to that. We shall have to judge the proposition when it occurs. Existing transmission lines often come to the surface slightly inland, so high tide or low tide is not necessarily the only option.

Lord Dixon-Smith

Whether the lines come ashore on the surface or below it is neither here nor there. What I am asking is where is the boundary at which the planning regulations start to apply? There will be a definition on that somewhere. It may be that it is three miles. I am not sure.

Lord Whitty

I am informed—and noble Lords more conversant with marine law will know this—that it is the low water mark where the planning conditions start.

Lord Dixon-Smith

I am very grateful.

Lord Ezra

Before we leave this important issue, may I raise a matter that is probably rather tangential, dealing with the financial implications of the arrangements? From what the noble Lord, Lord Davies of Oldham, told us in his introductory remarks, a substantial amount of electricity will be generated from offshore wind farms, and a substantial network of high voltage lines will be laid to transmit that electricity to shore. Obviously, that will add substantially to the cost of electricity generation generally. Are the Government satisfied, within the terms of the renewables obligation, that all that will add up? Will it be an additional cost, on top of the costs created by the renewables obligation?

Lord Whitty

The estimates of the cost include the cost of making the electricity usable and, therefore, the cost of connecting to the National Grid. Those are the costs that have been assumed for the contribution by offshore wind power to the achievement of the renewables objective. There is no new cost implied by the fact that, for various obvious reasons, we must have transmission lines from the offshore site to the grid. That is included in the capital cost of the installation.

Baroness Byford

Following what the noble Lord, Lord Ezra, said, I should like the Minister to indicate to the Committee what the cost actually is. That would be helpful to us all. It would be interesting to know what proportion of the whole it is. If that is not possible at this stage, the Minister might write to us and let us know. That would be appropriate.

Lord Dixon-Smith

I am sorry if I am becoming rather a pain, but, if I have understood matters correctly, the main transmission lines under the ocean will, in effect, become part of the National Grid. Presumably, they are part of the construction cost of the wind-generating farm that feeds the electricity to them. Although subsequent transmission costs will include the cost of that cable, National Grid Transco or whoever will not bear the cost of constructing the high-voltage lines under the sea to the wind farm station. It will a liability of the person with the concession for the wind-powered station.

Lord Whitty

The question of what the cost is is rather different from the question of who bears it. My answer to the noble Lord, Lord Ezra, is that all the calculations of the relative carbon saving and the relative amount of power that could be generated by offshore wind power include the cost of bringing it onshore and joining it up to the grid. It is general electricity policy to separate generation from transmission. Hence, the transmission will be owned by someone operating under the grid system, not by the generator.

The question of who bears the cost in the first instance will be a matter for different propositions. It is clear who will bear the cost of operating it. The totality must be taken into account by those making the case for a particular wind farm or range of windmills offshore. That is the extra cost of providing the facility.

Lord Dixon-Smith

The question is vital. It is one thing for National Grid Transco to have responsibility for laying the deep-sea high-voltage line at its expense; it is another if the costs are, as they should be, part of the cost of constructing the wind farm and getting the electricity to shore. We need an answer before the Bill completes its passage through the House. Without an answer to that question, we shall not know what we are talking about.

Lord Whitty

The total cost of the installation will include the cost of the transmission belt, but the generator will pay the cost of the farms, and the transmission company will pay the cost of the transmission. They will then claim back from the generator by the systems charges, in the same way the grid does from onshore generators, which will eventually make up that cost. It is not a question of the generator paying for the cost upfront.

Lord Dixon-Smith

I think that I am satisfied.

Lord Tombs

I do not think that the noble Lord, Lord Ezra, has received an answer to his question. Does the Minister agree that the provision of offshore wind generation will be more expensive than onshore wind generation? Obviously, the foundation, distribution, and construction costs and the cost of transmission to land will also add to the cost. The second part of the noble Lord's question was who will pay for it, and the answer is the same person who pays for the premium cost of wind power at present; that is, the consumer.

Lord Whitty

As to whether onshore or offshore would be more expensive in practice, clearly one windmill operating offshore and requiring a transmission line will be significantly more than one similar-sized wind farm onshore connecting to a national grid only a few hundred yards away. However, economies of scale are involved. With much larger multiple applications offshore, the relative cost begins to change.

Baroness Miller of Hendon

It is interesting, because when I started I said that we did not have any major concerns about this group of amendments, in that we understand that administration must go forward, and that powers are needed in order to do that. However, I also said that we had some minor concerns. I listened to those concerns, and afterwards did not think that they were so minor. Whilst we still have some minor concerns, we do not believe that this particular power, that the Secretary of State can do anything that he considers appropriate, is correct.

I take the Minister to task. I am not sure that I have ever been told that I am in a time warp.

Lord Whitty

We all are.

Baroness Miller of Hendon

The noble Lord may very well he, but I am not in a time warp just because I did not mention things other than national newspapers. My noble friend drew my attention to the fact that the amendment I tabled referred to such further manner as the authority shall deem appropriate. So, apology accepted.

That is an important point, to which we shall return. I shall withdraw the amendment now, but there is no question in my mind about this. It is all very well the Minister saying that this has become usual, that it was done in the Utilities Act 2000, and no one seemed to notice. Yesterday, I did not notice the "or otherwise". It was only when I looked into it in more depth that I noticed it. It has become a habit of this Government to take unto themselves wide powers that look okay, but are not. It is important that we try to restrict that. I beg leave to withdraw the amendment.

Amendment No. 106ECA, as an amendment to Amendment No. 106EC, by leave, withdrawn.

On Question, Amendment No. 106EC agreed to.

Lord Whitty moved Amendment No. 106ED: After Clause 79, insert the following new clause— EXTENSION OF TRANSMISSION LICENCES OFFSHORE

1. (1) This section applies where, at the commencement of this section, a transmission licence is in force that authorises a person to co-ordinate and direct the flow of electricity onto and over a transmission system by means of which electricity is transmitted within Great Britain, or within an area of Great Britain (the "co-ordination licence").
2. (2) The Secretary of State may make such modifications of the co-ordination licence as he considers appropriate for the purpose of applying the authorisation and conditions of the licence in relation to the transmission of electricity within one or both of the following
   1. (a) an area of the territorial sea adjacent to Great Britain; and
   2. (b) an area designated under section 1(7) of the Continental Shelf Act 1964 (c. 29).
3. (3) The modifications that may be made by the Secretary of State under subsection (2) include such modifications of the co-ordination licence (including modifications of the conditions included in it) as the Secretary of State considers appropriate for incidental, consequential or transitional purposes.
GC 358
4. (4) Where the Secretary of State considers it appropriate to do so for purposes that in relation to modifications made under subsection (2) are incidental or consequential purposes, he may make—
   1. (a) modifications of the conditions of a particular licence (other than the co-ordination licence);
   2. (b) modifications of the standard conditions of licences of any type.
5. (5) Before making a modification under this section, the Secretary of State must consult—
   1. (a) the holder of any licence being modified; and
   2. (b) such other persons as he considers appropriate.
6. (6) Subsection (5) may be satisfied by consultation that took place wholly or partly before the commencement of this section.
7. (7) The Secretary of State must publish every modification made by him under this section.
8. (8) The publication must be in such manner as the Secretary of State considers appropriate.
9. (9) A modification under subsection (2) or (4)(a) of part of a standard condition of a licence does not prevent any of her part of the condition from continuing to be regarded as a standard condition for the purposes of Part 1 of the 1989 Act.
10. (10) Where the Secretary of State makes modifications under subsection (4)(b) of the standard conditions of licences of any type, GEMA must—
    1. (a) make (as nearly as may be) the same modifications of those standard conditions for the purposes of their incorporation in licences of that type granted after that time; and
    2. (b) publish the modifications in such manner as it considers appropriate.
11. (11) The Secretary of State's powers under this section are exercisable only during the eighteen months beginning with the commencement of this section.
12. (12) Expressions used in this section and in Part I of the 1989 Act have the same meanings in this section as in that Part."

[Amendment No. 106EDA, as an amendment to Amendment No. 106ED, not moved.]

On Question, Amendment No. 106ED agreed to.

4.30 p.m.

Lord Whitty moved Amendment No. 106EE: After Clause 79, insert the following new clause— COMPETITIVE TENDERS FOR OFFSHORE TRANSMISSION LICENCES After section 6B of the 1989 Act (applications for transmission licences) insert— 6C COMPETITIVE TENDERS FOR OFFSHORE TRANSMISSION LICENCES

1. (1) The Authority may by regulations make such provision as appears to it to be appropriate for facilitating the making, in prescribed cases, of a determination on a competitive basis of the person to whom an offshore transmission licence is to be granted.
2. (2) That provision may include—
   1. (a) provision, in prescribed cases, for the publication of a proposal to grant an offshore transmission licence;
   2. (b) provision for the inclusion in such a proposal of an invitation to apply for such a licence;
   3. (c) provision restricting the making of applications for offshore transmission licences and imposing requirements as to the period within which hey must be made;
   4. (d) provision for regulating the manner in which applications are considered and determined.
GC 359
3. (3) Regulations under this section—
   1. (a) may make provision by reference to a determination by the Authority or to the opinion of the Authority as to any matter; and
   2. (b) may dispense with or supplement provision made in relation to applications for transmission licences by or under section 6A or 6B above.
4. (4) The approval of the Secretary of State is required for the making of regulations under this section.
5. (5) In this section—
   • 'offshore transmission licence' means a transmission licence authorising anything that forms part of a transmission system to be used for purposes connected with offshore transmission; and
   • 'prescribed' means prescribed in or determined under regulations made by the Authority.
6. (6) In subsection (5) 'offshore transmission' means the transmission within an area of offshore waters of electricity generated by a generating station in such an area.
7. (7) In subsection (6) 'offshore waters' means—
   1. (a) waters in or adjacent to Great Britain which are between the mean low water mark and the seaward limits of the territorial sea; and
   2. (b) waters within an area designated under section 1(7) of the Continental Shelf Act 1964.""

[Amendment No. 106EF, as an amendment to Amendment No. 106EE, not moved.]

Amendment No. I 06EE agreed to.

Clause 80 [Consents for generating stations in Zones]:

Baroness Byford moved Amendment No. 106F: Page 63, leave out lines 47 to 50.

The noble Baroness said: I shall be much briefer than was the case with the previous amendment. This is a probing amendment. An objection is received from the planning authority and studied by the Secretary of State. Upon reflection, he finds himself in agreement with it. He notifies the applicant that in order to receive the desired permission the application will have to be altered to meet the objection. Can the Minister explain why at that point the objection should be expunged from the record? All over the country people are doing things without permission. For example, the police were in action again in East Anglia in January to remove Travellers who were in open defiance of the planning law. If the objection to the original scheme is expunged, will it not be harder to ensure that things which are developed, built and commissioned are in line with local requirements and therefore comply with the law? I beg to move.

Lord Triesman

I thank noble Lords for probing the matter. I hope that I can explain to the noble Baroness, Lady Byford, why we cannot accept the amendment. It has the potential to lead to planning inquiries that could be of a far wider and greater remit than is necessary. Probably the best way to proceed is to try to explain what Clause 80 seeks to achieve, and how it seeks to achieve that.

Noble Lords who are familiar with Schedule 8 of the Electricity Act 1989 will know that applications for consent to construct, extend or operate a generating station under Section 36 of that Act must be served on the relevant local planning authority. Where that local planning authority maintains an objection to the application, the Secretary of State must hold a planning inquiry. However, where the Secretary of State can meet the local planning authority's objection by making modifications to the Section 36 consent or attaching conditions to it, no public inquiry needs to be held. The provision provides useful flexibility in avoiding unnecessary public inquiries.

The main purpose of Clause 80(2) is to clarify the role of local planning authorities where the application of consent relates to a generating station offshore; that is, not in a local planning authority's jurisdiction. We are proposing that local planning authorities should not have the right to force a public inquiry in regard to those parts of the generating station that are outside its jurisdiction. However, the local planning authority retains the right to require the Secretary of State to hold a public inquiry in respect of those parts of the generating stations that are within its jurisdiction. Subparagraphs (7) and (10) of new paragraph 7A deal with the circumstances in which two or more planning authorities have jurisdiction over the same generating station because it straddles both their areas. Both authorities have the right to make an objection. Paragraph 7A(10) deals with the situation where the Secretary of State accepts the objection of one planning authority and not the other. In such a case, an inquiry is still required, but only in relation to the area of the planning authority whose objection has not been met rather than the one whose objection has been met. Paragraph 7A(10) is intended to make it clear that if the objection of one of the authorities is accepted, the inquiry will continue only in relation to the objection of the other authority. It limits and focuses it.

The consequence of removing the subparagraph would be that the Secretary of State would have to hold a public inquiry covering the areas of both authorities when she could otherwise hold an inquiry in relation to the area of the authority whose objection had not been met. I hope that noble Lords will feel that this is the kind of efficiency that is often sought in these matters without compromising planning safeguards. It provides the right balance between proper planning processes and what might be an irrelevant and bureaucratic process.

Baroness Byford

I am grateful to the Minister for that clarification. I had not read it in the way that he explained and I shall obviously look carefully at Hansard tomorrow. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 80 agreed to.

Clause 81 agreed to.

[Amendment No. 106G not moved.]

Clause 82 [Safety zones around renewable energy installations]:

Lord Greenway moved Amendment No. 107: Page 64, line 31, at end insert "and provided the establishment of the aforementioned installation or its safety zone in the territorial sea adjacent to Great Britain will not interfere with a ship's use of a designated sea lane or a prescribed traffic separation scheme or the use in a Renewable Energy Zone of a recognised sea lane essential to international navigation.

The noble Lord said: Amendment No. 107 stands in my name and that of the noble Lord, Lord Higgins, and refers to the siting of offshore wind farms. I feel that I have been becalmed for several days and many hours waiting for this amendment to come forward, and I cannot believe that we have reached it at last.

Subsection (1) of Clause 82 gives the Secretary of State a discretionary power to issue notices declaring safety zones around offshore renewable energy installations. On the face of it, that sounds a perfectly sensible thing to do. However, there are concerns in the leisure-boating industry, where the authorities feel that those zones must not unreasonably restrict or exclude recreational craft.

Looking al. the issue on a more general basis, there is widespread concern in the shipping industry, the ports industry and at Trinity House—the general lighthouse authority—that such installations and their safety zones should not impinge upon designated sea lanes or prescribed traffic separation schemes. The amendment is designed to ensure that recognised navigation rights are upheld.

The sense of unease in the industry was heightened by the announcement last December of the proposed wind farm sites under round two of the consenting phase. On looking at some of the charts, one can see that some effort has been made to position these sites in areas where there is less shipping activity. But some of them—notably in areas of dense shipping traffic, such as the Humber approaches, the Thames estuary and Liverpool Bayare very close to or, indeed, encroach upon regularly used shipping lanes and, in one or two instances, completely straddle them.

Moreover, these problems are likely to extend to other sea areas in future as a result of increasing demand for other renewable energy sources, such as wave and possibly tidal power. I understand that there are already plans for a full-scale trial of wave power generation off the Scottish Isles and that the Celtic Sea is earmarked for operational sites in future rounds.

What is needed and, to my understanding, what seems to have been conspicuously absent in this case is proper prior consultation between the Government, the shipping interests, the Crown Estate and would-be developers of offshore energy sites. Perhaps I may give an example of what has already happened under round 1.

There is currently under construction off Cromer a 30-turbine wind site, which cuts obliquely into two recognised shipping routes, narrowing the one closest to the shore, which is used by many ships in inclement weather, and forcing the one further out to be re-routed by means of what, at sea, we call a "dog leg", which not only narrows it but also pushes it closer to a third sea lane a little further to seaward. Squeezing ships closer together or forcing them closer to the shore would heighten the risk of collision or stranding, with the added probability of environmental pollution.

On looking at the chart of the site—I have it here—my immediate reaction was to ask why they were not placed on sandbanks, where they would be free from shipping activity. I understand that there is. perhaps, a difficulty in that the sands shift from time to time; yet, on looking at the chart for the Thames Estuary, I see that there are two proposed sites running along two sandbars, at the Galloper and Gabbard.

To avoid having such things happen in future rounds, the shipping interests believe that three things should be done. First, the impact of wind farms and the like on navigation should he assessed through proper risk modelling—something that has already been undertaken by the Dutch and Danish Governments, who, in recognition of their responsibility, have commissioned consultants to examine the potential risks.

Secondly, we should employ management tools. such as routing measures, to enable offshore energy farms to co-exist with shipping and other users of the sea without conflicts arising. That idea is not new. I understand that, during the early days of North Sea oil and gas exploration, a system of maritime clearways—agreed navigation routes within which there would be no other activity—were employed to good effect.

The third thing is something that the noble Lord. Lord Higgins, touched on. We badly need further evaluation of the adverse effect that offshore wind farms have on marine radar and VHF communications. That problem came to light after the strategic planning under round one. It needs resolving, possibly by specifying a minimum separation distance between shipping and wind farms.

It is a fairly safe bet, when one places a fixed object in the sea, that sooner or later a ship will run into it. Ships are good at running into one another, but they also hit fixed objects. I need only quote two recent incidents. One involved the Nab tower, which is a fairly substantial structure sitting at the eastern approaches to Southampton. It was clouted by a ship, even though it has been there for many years. The other incident involved Hythe pier. closer to Southampton, which was cut in two by a ship the other day. If things are there, ships will hit them.

There was also the "Tricolor" incident in the North Sea, just over a year ago. A sunken car carrier, lying on its side more or less level with the surface, was struck by several ships soon after it capsized. Some even got stuck on the wreck. Even when the wreck had been properly marked by buoys and was being controlled by warning craft, an average of one ship a week steamed within the warning buoys. That fact alone speaks volumes about the standard of navigation on some ships at sea today. It should cause huge concern with regard to offshore wind farms. I am tempted to draw an analogy with ten-pin bowling; it is a tempting target for ships.

The overall responsibility for safe navigation around our coast lies with the Government due to their obligations under the United Nations Convention on the Law of the Sea, not with those who wish to develop offshore wind farms. We certainly do not want—God forbid—a major accident, involving the collision of two oil tankers, with fire, loss of life and widespread pollution, because of the alteration of long-established navigation channels due to the ill thought-out positioning of an offshore wind farm. If one of those tankers were then to drift, it might even score a passable and wipe out an entire wind farm.

I do not whether it is a question of a lack of consultation, a lack of joined-up government or a combination of both. It is a serious matter, and I hope that, even if the amendment does not find favour with the Government in its present form, the Minister will consider the implications carefully and that his department will have further consultations with all interested parties in the hope of finding a satisfactory resolution. I beg to move.

4.45 p.m.

Lord Higgins

I rise to support the noble Lord and speak in support of his amendment. I make two initial points. First, my interest in shipping goes back a very long way indeed. Indeed, I am rather surprised to find that I qualified as a member of the Institute of Chartered Shipbrokers more than half a century ago. That may suggest that I am slightly out of date in terms of speaking to this amendment but between then and now I was shadow Secretary of State for some considerable time. During that period there was a collision of ships in the Channel on almost a weekly basis and the Government were obliged to make a Statement on the matter. Subsequently, the situation improved considerably, partly due to improvements in technology and partly due to the better management of shipping lanes, notably in the English Channel.

I turn to my second personal point. I suspect that I am slightly less against wind farms than some of my colleagues. Your Lordships will recall that the matter came up at Question Time yesterday. I spend virtually every weekend in Holland. I am surrounded by wind farms. Apart from very low level wind noise, I do not find that if you stand under them they are all that noisy. Although it was said yesterday that wind farms wiped out birds in Spain, that does not seem to happen in Holland. I am not clear why Dutch birds should be better at avoiding wind farms but there are remarkably few bird corpses lying underneath the wind farms in Holland.

I understand that the Royal Air Force has objected to wind farms, claiming that they interfere with low flying aircraft. I am not so much concerned about low flying aircraft but I am concerned about low flying ships. In that context, the point that the noble Lord made with regard to the effect of wind farms on radar—I am not speaking here of the electricity side of it but rather the rotation of the blades and so on—seems to be causing considerable worry. That is something which needs to be taken into account regarding the location of wind farms. However, as the noble Lord said, the Chamber of Shipping, Trinity House, the British Ports Association and the UK major ports groups have all expressed considerable concern about the proposals that are now being put forward. There is a general feeling that the approval of wind farm sites has not taken account of the risks to seafarers or the environment, or fully recognised the UK obligations under the United Nations Convention on the Law of the Sea.

The amendment proposed by the noble Lord would give the Secretary of State discretionary power to ensure that installations or their safety zones cannot be established where they would interfere with designated sea lanes or prescribed traffic separation schemes, which is one of the major reasons why collisions occur less frequently in the Channel than used to be the case.

In addition to that, we seem to find ourselves, at this late stage of the Bill, in a rather extraordinary situation. It appears that the Crown Estate takes a decision on various applications and their sites and then proposes, if necessary, diversions of shipping around those sites instead of doing what one would have thought was painfully obvious: namely, seeing where the main shipping lanes are and then deciding where to put the wind farms. That is quite extraordinary. The lack of consultation on the matter and, indeed, the lack of appreciation of the rather simple point that I have just mentioned seems rather strange. It is a matter of serious concern for the reasons that the noble Lord mentioned. If we are not careful we shall end up with an environmental disaster on a massive scale because the rather simple point that I mentioned and consultation have not been taken into account.

It is also important to recognise that, in diverting ships in the way that I have described, one also has to take account of environmental damage to the marine environment that may result from the ships having to divert from their usual course, the increased risk of collision arising from that and, not least, increased costs of transportation. All those factors are very important.

However, the amendment would also ask for consideration of designated lanes and prescribed separation schemes to be used. That would be in conformity with the United Nations Convention on the Law of the Sea, which includes such a provision. Unless the Government are prepared to take action with regard to these lanes they would seem to be in conflict with the provisions of the convention. Not only are we a party to it, we have been one of its leading supporters before it was agreed and subsequently. So that is a very important reason. We need the Government to ensure that the proposals in the Bill take into account the provisions of the convention and also are not actually in conflict with it.

One must ask to what extent the proposals are set in concrete. As I understand the issue, there has been a first round of wind farm sites and, rather curiously, looking at the maps provided by the Crown Estate, at least one of these appears to be within the DTI exclusion zone. What is more worrying as one looks at the various charts is the extent to which the proposed wind farm—certainly in round two—will interfere with navigation, with all the consequences to which the noble Lord and I have already drawn the attention of the Committee. The effect is not simply, for example, in the Channel where there is a massive one off Southend-on-Sea and another one off Margate/Ramsgate, but equally outside Liverpool, the Humber estuary and the Wash. It almost looks as though they have been deliberately planted to be in the main shipping lines, rather than elsewhere on the coast where they would not run the risk of interfering with shipping.

I am sure we shall wish to return to the matter at Report. But I think it is very important that the proposals made by the industry—for example, resurrecting the UK shipping clearways charts—to help deal with this problem are made between now and Report.

The noble Lord talked about the degree of consultation and assurance that the Government have so far given to the shipping industry. I speak here of our shipping industry, but of course it has enormous international implications. The Government seem to be underestimating the very real dangers that are being caused by the way they appear to have gone ahead with these proposals, without taking into account the very important interests of the freedom of navigation on the one hand and of safety for the wider community. I am very happy to support my noble friend. I hope that the noble Lord can give us assurances along the lines I have suggested and in particular with regard to more extended consultation, before final decisions are made.

Baroness Miller of Hendon

Listening to my noble friend Lord Higgins and the noble Lord, Lord Greenway, no one can be in any doubt about the seriousness of the matter. Perhaps the most important thing that struck me in listening was the lack of consultation that has brought us to this position of the Government apparently not thinking that the matter is too serious. But, as my noble friend has recently pointed out, it is a very serious matter. I hope that that particular matter can be addressed in the Minister's reply.

Lord Whitty

Clearly, this is a serious matter. We think that the legislation already covers it. Safety at sea is a main concern of the Government. Therefore, we must bear that very much in mind in regulating marine renewable energy installations. Some of your Lordships will be aware that the developers of any such installations must already have obtained consent under the Coast Protection Act 1949. That is designed to ensure that the structures are not placed in locations that would be detrimental to the safety of navigation. Consideration of various consents would also have to take into account the effect on marine radar and communications.

The Department for Transport, which is responsible for overseeing this part of the regulations, considers applications for consent and consults the Maritime and Coastguard Agency and other organisations, including shipping organisations, with an interest in marine safety. The Coast Protection Act 1949 applies to developments in territorial waters and also to areas that have been designated under Section 1(7) of the Continental Shelf Act. It covers the renewable energy zones that are being established by the Energy Bill.

It is true that there are complications in that the developer can choose to seek development approval from a project in England and Wales, or in English and Welsh territorial waters, using the Transport and Works Act 1992, which has a way of disapply ing: the Coast Protection Act 1949. However, even if they take that route, the controls over such developments are equally stringent and ensure that marine safety is not compromised.

The language of the amendment proposed by the noble Lord, Lord Greenway, relates to the United Nations Convention on the Law of the Sea. By implication, he is saying that the Government are ignoring their obligations. That is not the case—we take those obligations very seriously, and the provisions of this Bill are entirely compatible with our international obligations. They do not require an amendment to the Bill.

Article 22 enables a coastal state to require foreign vessels to use designated sea lanes or traffic separation schemes. That is a right, rather than an obligation. We do not need further powers to exercise that right. We have an obligation under Article 60 of UNCLOS to make sure that installations and the safety zones around them in, for example, the renewable energy zone, are not established where they would cause interference to recognised sea lanes essential to international navigation. We will fulfil that obligation. We already have the legislative tools to regulate the location of developments. We do not need any further change to the Bill.

It might be helpful if I say a few words about our general approach to the siting of offshore farms—

Lord Higgins

Perhaps the noble Lord will give way. It is my understanding that the various proposed items would require the diversion of ships away from the recognised routes, and that would be inconsistent with the articles of the convention. I may be mistaken, but that is my understanding.

Lord Whitty

Some of the sites may well involve diversions, but they would involve diversions that would be available to shipping in those routes. We are not interfering with essential routes where there is no alternative. That relates to the obligations under both UNCLOS and the existing UK legislation.

More generally, the impact of proposed developments on the safety of navigation was an important factor in deciding which sites would be offered a lease in the first instance by the Crown Estates. A high level of screening of proposed sites was undertaken in relation to the 15 sites in the greater Wash area, Thames estuary and the waters of northwest England, which covers the area to which the noble Lord, Lord Greenway, referred. That was based on traffic density data.

We believed that the projects would be acceptable without major interference. Those projects which were seeking an application which would have been prejudicial to marine safety have been eliminated through that process. It is difficult at that point in the process to engage in a consultation with the marine interests because such applications are in effect a proposal to the Crown Estate on a commercially confidential basis.

However, all elements of the Government are very open to a dialogue with the shipping industry about the impact of the proposed sites on navigation and navigational safety. The Department of Transport will shortly be undertaking a consultation of the industry to elicit views, including the cumulative impact of the various sites.

I hope, therefore, that I have said enough to ensure that noble Lords recognise that we are taking the safety of navigation very seriously in these decisions. I do not say that there will be no impact on the shipping industry. As I say, there may well be deviations from what has hitherto been the preferred route. However, we shall attempt to minimise that and to ensure that navigational safety is not thereby endangered.

I turn to safety zones, which is the main subject of this clause, rather than the siting of the wind farms. The safety zone scheme provided for in the Bill comes into play only when a renewable energy installation has all the suite of development consents in place. So the location of the development from a marine safety point of view will have been considered by that point. The purpose of the safety zone will be to protect shipping navigation in the area of the renewable energy installation to avoid collisions and to keep vessels a safe distance from the installation. The extent of the safety zone will be tailored very much to an assessment of the risk of collision at the particular location of the development. They will be no larger than they have to be to achieve that aim. The primary aim in these considerations is to ensure that there is no danger to navigational safety.

I believe, therefore, that both the UK's international obligations and existing UK procedures and legislation cover the objective of the amendment tabled by the noble Lord, Lord Greenway.

5 p.m.

Lord Higgins

Perhaps I may come back on one or two points. The general view of the industry is that the Government are underestimating the amount of traffic which is likely to pass near the wind farms. They underestimate the extent to which the diversions may increase the risks of collision either with other ships or other objects or, indeed, the wind farms. Alas, we do not have a blackboard in the Moses Room, but if one looks at the charts showing the way in which the proposed round two applications are located, it would seem that that is a valid view which is held by the outside interests. None of us wants an environmental disaster. Therefore, further consultation is necessary to establish exactly how important that particular aspect of the matter would be.

The other point on which I am unclear, now that the Minister has resumed his seat, is whether he accepts the amendment. If, indeed, it is compatible with the United Nations Convention on the Law of the Sea, as I believe it to be, and would ensure that there is compatibility with the convention, at least the Minister should say that he accepts the amendment and we can take it from there. Other than that, certainly we shall need to return to the matter on Report. I continue to remain extremely worried that through adopting an approach which seems to be more concerned about locating wind farms and diverting shipping rather than having the lanes in place and putting the wind farms out of their way, this may, indeed, become a matter which in years to come we shall regret.

Lord Greenway

I have listened to the Minister's comments and agree with what the noble Lord, Lord Higgins, just said. I do not think it can be right necessarily for diversions to be imposed on shipping. especially where there is high-density shipping, around these proposed sites. Many of those ships are ferries on regular routes, so ships are going backwards and forwards, day in, day out, all year round. Those ships will use more fuel in order to go round the sites. As the noble Lord, Lord Higgins, said earlier, that would mean more pollution from their exhausts, and could result in increased costs of transportation.

To my recollection, the Minister did not comment on risk management, which is one of the points I made. Have the Government considered anything along the lines undertaken by other governments? As regards recreational craft, it was my understanding that possibly there would be a kind of inshore zone that would be sacrosanct. I do not know anything about the Coast Protection Act, but can the Minister confirm that that is the case? There is a worry that where some of the round 1 sites are located, there will be a leap-frog effect with other sites being added to the existing ones, and so on and so forth, further out to sea. I should be interested to hear the Minister's comments.

Lord Whitty

I have tried to explain that the assessment of the applications at various stages has to take into account the density of traffic, the effects of deviation and the potential increase in marine safety. If the noble Lord wants to refer to that as "marine management", it does not establish a body which then directs marine routes as the way one would into a harbour but ensures that shipping takes safe routes.

I am not entirely sure that I understand the noble Lord's point about inshore recreational shipping. Clearly, there are exclusion zones which may be provided for in the impact assessment. However, I am not sure that anyone has ever promised an exclusion zone covering the whole of the inshore areas for recreational craft. I do not completely understand the noble Lord's point.

The main point of the provisions, and the main reason why we do not accept the amendment—there is also the fact that it is attached to a clause which deals with safety zones rather than the siting of installations—is that our current legislation effectively covers this application in a way in which it is normal for the shipping industry to be consulted. The international obligations are not normally repeated in legislation in the way suggested by the noble Lord.

I am not prepared to accept the amendment. I believe that the dangers have been exaggerated and would in any case have to be taken seriously into account on any particular site designation or development application. The risk assessment would have to include those issues of dangers at sea to which both noble Lords have referred.

Lord Higgins

I still have difficulty in understanding why the noble Lord will not accept the amendment, which is entirely in line with the requirements under the treaty. There is a case in many treaties for incorporating the particular proposals in domestic law. At all events, we shall need to return to this on Report. As the industry is deeply concerned about this issue, can he give an assurance that there will be further consultation before Report?

Lord Whitty

I am perfectly happy to have further consultation with noble Lords before Report. The timing of Report stage is not in my hands. I do not think that any further consultation with the shipping industry necessarily would affect my attitude to the amendment. I think that we have built in sufficient safeguards through the whole of the process and in any case are obliged to do so under existing UK law, which it would not be necessary to repeat here. I regard this as not a particularly strong objection to the approach which we adopt in the Bill to facilitate the construction of offshore wind farms. I find some of these objections unacceptable.

Lord Higgins

After the last three sittings, the timing of the Report stage remains a matter of conjecture. However, at all events, there is no reason why the consultations need to be delayed. I am sure that those in the industry who are deeply concerned would readily make themselves available for further consultation. However. it seems to me unreasonable for the Minister to say that he is sure he is right that the risk has been overstated.

Lord Greenway

Naturally I am disappointed at the Government's response. I have only one thing to say. If an incident which, admittedly, I described as a worst-case scenario were to take place, the blame would lie firmly with the Government. It would not lie with anyone else. I believe that the Government must recognise that.

Obviously, I hope that more consultations will take place before the next stage of the Bill and I reserve the right to return then with another amendment. I realise that this one may be defective. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford moved Amendment No. 107A: Page 65, line 6, leave out "consult" and insert "obtain the agreement of

The noble Baroness said: Amendment No. 107A is another probing amendment. On reading the Bill, I find that devolution makes all-country legislation less than satisfactory. That will not come as a surprise to the Minister. He will no doubt tell me that my understanding is wrong. However, I believe that, in essence, this part of the Bill means that Scottish Ministers have no choice. In effect, if the Secretary of State is advised or is minded to declare a safety zone around a particular installation, he may do so provided he has consulted Scottish Ministers, but they do not necessarily have to agree. That is my first point.

One can consider the plight of fishermen or shellfish collectors who may be prohibited from using a particular area of sea or from fishing a particular shoal. We have just been talking about normal routes. Can the Minister assure us that no safety zone would deflect the normal route of, say, a North Sea or west coast ferry? At present, some ferry routes follow laid-down lines. The Minister's response to the previous amendment makes me even more concerned and leads me to believe that an answer needs to be given to this amendment.

Should not Scottish Ministers have as much power over the siting of safety zones as they do over deciding which activities in the territorial sea will be classed as criminal? Should they not have to give their approval rather than simply be consulted? I beg to move.

Lord Gray of Contin

I rise to support my noble friend in this amendment. It follows on from a previous contribution that I made when I tried to elicit from the Minister who had the final say in various issues which concern the Secretary of State for Trade, the Secretary of' State for Scotland—albeit, the part-time Secretary of State for Scotland—the First Minister and Scottish Ministers. I did not obtain a very satisfactory answer to my question, and this seems to provide a suitable opportunity to discover whether the Government have given this matter any more thought. Perhaps they can tell us a little more accurately what might happen.

It seems to me that my noble friend is making a very good point by seeking in the amendment to leave out the word "consult" and insert "obtain the agreement of". That highlights the whole problem. The Secretary of State for Trade comes forward with a suggestion and puts it to the Scottish Parliament. Does he "consult" or, ultimately, does he "obtain the agreement of"? When I received an answer on the previous occasion, I was told that this need not bother us too much because all these matters can be dealt with through consultation.

The relationship between the Secretary of State for Trade and Scottish Ministers would work perfectly well so long as one had the same government in Scotland as in the United Kingdom. However, let us suppose, for example, that a different party was in power in Scotland. It might not be very easy for the Secretary of State for Trade to obtain agreement, and what would happen then? Whose word would prevail? Perhaps the Minister can enlighten us a little more.

5.15 p.m.

Lord Whitty

If it is a UK power, the will of the UK Minister will prevail. If it is a devolved power, the will of the Minister from the devolved Parliament will prevail. It does not matter which party they belong to. The powers are either reserved to the UK or devolved. In this particular instance, it is a UK power. The Secretary of State has the power to deal with safety zones. It is sensible, and the legislation will prescribe, that the Secretary of State will consult with Scottish Ministers. One would hope that the Scottish Minister and the UK Minister would reach agreement, no matter which party they belonged to. However, were there not to be agreement, in the exercise of a UK power it must be the UK Government who prevail.

It would be the other way round in provisions where there was a devolved responsibility or an assumption that the Ministers from the devolved Parliament would consult because it would fit in with an overall UK strategy. But if the UK Minister disagrees with the Scottish Minister in the exercise of a devolved power, ultimately the Scottish Minister can act. Therefore, I do not believe that the issue is complicated.

In so far as there is a UK power involved in this clause, it is clear that the view of the UK Minister would prevail. We have not had any great problems with our Scottish colleagues, and this particular wording has been agreed to be the most sensible presentation of the way in which we would endeavour to carry out the duties under this clause.

Baroness Byford

I thank the Minister for clarifying my question. I asked why there was a difference on two occasions in the Bill. I suppose he will say that in criminal law the Scots have different rules and regulations and that is why they have overall jurisdiction as opposed to this occasion, where they do not. However, I find this odd. Did the Minister refer to the fact that this particular part had been referred to the Scottish Parliament and they are content with it, or does he just assume that?

Lord Whitty

The Scottish Executive has agreed to it.

Baroness Byford

In that case, there is nothing much more that I can say. I asked for clarification because it seems unusual to have one system in one place in the Bill and a different system in another. However, the Minister having explained that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Byford moved Amendment No. 107AA: Page 65, line 11, leave out paragraph (b).

The noble Baroness said: This is a probing amendment as I wonder what is the need for this particular subsection. The Bill confers powers to declare safety zones in our waters and theoretically it sets out provisions allowing proper control and management of those zones. But this subsection appears to suggest that there should be no limit to the area of sea that could be designated—indeed, we touched on that earlier—and that some of the waters concerned might not be subjected to the regulatory regime in the rest of the Bill.

I may have misunderstood but it would appear to be the case that, once a zone has been declared and approved on, say, Scroby Sands off Great Yarmouth, as is suggested, the zone might be extended indefinitely by this subsection to include the whole of the North Sea within our territorial jurisdiction. I query whether that is what is meant. Can the Minister assure me that that is not the effect of this subsection and perhaps explain the reason for this provision? I beg to move.

Baroness Miller of Chilthorne Domer

I am grateful to the noble Baroness for tabling this probing amendment. It returns us to the discussion that we had yesterday, when I was trying to discover what sort of limits there were to renewable energy zones. The noble Baroness has spotted another place in the Bill where they are undefined. Indeed, the Bill goes further in enabling them to be fairly unlimited in scope. I will listen to the Minister's reply with interest.

Lord Triesman

I will set out the intention of this provision. The central theme of the provision is to ensure and maintain safety. In a recent debate with the noble Lord, Lord Greenway, on the issue of light dues, all of us decided that whatever the complexities in that area, the fundamental issue that we should be concerned with was safety, which is obviously enormously important. There should be no compromise in any effort made to ensure that all mariners have confidence in a system of protection for them.

Safety zones around renewable installations—I emphasise that I use the phrase safety zones in the plural, because I want to come back to the question of the noble Baroness, Lady Miller of Chilthorne Domer about renewable energy zones—will be considered only where there is a sound case for declaring them. It follows that where there is a sudden haste to impose a safety zone, the Secretary of State should have sufficient powers to impose one.

The proposed amendment would lead to such a right, or power, being weakened in cases where the renewable installation was sited so close to the boundary of the renewable energy zone that it was not possible to impose the full safety zone—justified on safety grounds—within the zone. The installation could be left with, for example. a 500-metre exclusion zone in one direction, but only 100 metres in the opposite direction. Under the United Nations Convention on the Law of the Sea, a safety zone can only be 500 metres maximum. We can see that this offers a degree of flexibility, but that is available to us only within a rather limited system. We would not expect a situation to arise very often where there would be a great deal of asymmetry between the different ends of the zone, but we need to provide for the eventuality where that is the case.

The renewable energy zone is a singular concept, and anyone who reads the Bill will find that it is never expressed in the plural. I was trying to make this point yesterday, and for the purposes of clarity I will repeat it. While it is a singular concept, the wind installations might be in a number of places within that zone, and it is those that are in the plural.

Baroness Byford

I thank the Minister for that response. I am not absolutely sure that my amendment would detract from doing what I was trying to achieve, which was to make sure that we were limiting the amount of extension that could take place. Am I wrong in that?

The Minister explained that safety zones can only be a total of 500 metres maximum, whichever way it is done. Obviously, if new planning permission is given for more installations extending further out into other navigation lanes, I was concerned that this is an open-ended phrase that comes into this section of the Bill.

I thank the noble Baroness, Lady Miller of Chilthorne Domer, for her comments. I will take it away to give it further thought. The Minister is virtually saying that I should have no grounds for misunderstanding, but his answer was not entirely satisfactory. Does he have anything to add to it?

Lord Triesman

Let me try to do my best, for the purposes of the greatest clarity that I can achieve. The United Nations Convention on the Law of the Sea gives us the right to establish safety zones around renewable energy installations in the renewable energy zone. The provision enables us to establish a safety zone around an installation that is located on the boundary of the renewable energy zone, so that the safety zone extends outside the zone. Similar powers exist, incidentally, in relation to oil and gas installations on the Continental Shelf. There is no difference in that sense.

The effect of the amendment is that the Secretary of State would be unable to apply safety zones beyond the defined limits of the renewable energy zone even where there was a demonstrable case for having such a safety zone in the interests of achieving all of the safety objectives which are shared on all sides of the Committee. That is why we think that the amendment would be unhelpful.

Baroness Byford

I thank the Minister. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 107B not moved.]

Baroness Byford moved Amendment No. 107BA: Page 65, line 36, after "it" insert "including specifically fishermen or shellfishermen whom he has reason to believe traditionally work over the grounds to be included in the zone

The noble Baroness said: In moving Amendment No. 107BA, I wish to speak also to Amendment No. 107DA. These amendments are intended to provide specific protection to a much respected, but too often forgotten, group of people; namely, fishermen and shell fishermen around our coasts.

In many places the areas to be covered by these provisions or in the vicinity of shoals or banks where installations may be built are the very areas which are worked by inshore fishermen of all kinds. They may not be grand industrial fishermen but they are people and families who depend for their livelihood on working coastal waters. They are the very people who, with the decline of so many of our great fishing ports, still give life, colour and definition to so many of our coastal towns.

No one would think of not consulting the inhabitants of a region on major planning changes likely to affect their way of life, but it is easy for the planners and the civil servants in far distant departmental offices not concerned with the business of those who go down to deep waters to see the sea as so much empty space. Amendment No. 107BA would ensure that would never happen and would give fishermen a statutory right to be consulted on these matters.

Given the fact that even in local fisheries there are cases where boats travel a long distance to carry out their work, Amendment No. 107DA ensures that representatives of fishermen in ports up to 50 miles from any proposed safety zone should be informed and consulted and given the opportunity specifically to make their case to any inquiry set up into the proposed zone.

In order to aid the Committee I should say that the last words of the amendment should read, must be consulted on the size and effects on fishing of a safely zone". I hope that the Minister can consider very positively the points underlying these amendments for there is no doubt that the livelihoods of many families could be affected by any disruption caused to fishing. If he is not able to accept my amendments, I invite him to explain to the Committee the procedures by which he will ensure that fishermen are informed and consulted and can put their case to an inquiry. I beg to move.

Baroness Miller of Chilthorne Domer

The amendment of the noble Baroness, Lady Byford, highlights the difficulty of operating in the absence of any kind of marine spatial planning framework. People who will be affected by such an application will not understand how to make their representations and what sort of representations they can make. That would not be the case with a planning application on land. The amendment is extremely worthwhile as it explores those issues.

5.30 p.m.

Lord Dixon-Smith

In principle, one has every sympathy with the fishermen over this issue. Indeed, it is essential that their voice is heard. However, I do not think it would be particularly wise or safe to permit fishermen to enter these zones. The sea is a pretty hazardous place, and if the weather was inclement, I hate to think what might happen if a fishing vessel were to try trawling up between wind generators. It would be appallingly dangerous for everybody. Much as I sympathise with their position, I do not think that that sort of freedom is possible, although it is essential that they are properly consulted so that. if at all possible, these wind farms are not sited in traditional fishing areas. That would be the only sensible way to deal with the matter.

Lord Whitty

We must be clear that we are dealing with the safety zones in this part of the Bill. The application of a safety zone is basically on the grounds of safety. It is clear that we recognise that on many occasions there will be possible implications for fishermen. It is important that we act in a reasonable and justifiable way in relation to all interests. The decision is essentially made on safety grounds, and as the noble Lord, Lord Dixon-Smith, has implied, there could be an issue of safety relating to fishermen.

So far as taking views into account is concerned, Clause 82(7) requires that where the Secretary of State issues a notice about a safety zone or where a determination is made in relation to that notice, he must take appropriate action to bring it, to the attention of persons likely to be affected by it". Clearly, where there is established fishing activity, it falls under that requirement.

Similar requirements fall on any other person issuing a notice—the applicants themselves, for example. It is therefore important that we adopt a very inclusive approach so that everybody who is likely to be affected by it will know of its existence. It is pretty inconceivable that fishermen who could be affected by the safety zone would not be covered by that requirement. However, there may be other people equally likely to be affected—for example, those involved in recreational shipping, commercial shipping and other recreational activities in the area. They are also covered by the general phrase, persons likely to be affected by it". Amendment No. 107DA would require that where the Secretary of State has deemed that a public inquiry is necessary in respect of a safety zone, representatives of the fishing industry and ports within 50 miles of the proposed safety zone, from where boats are traditionally fished in the area, should be notified of that decision. Fishermen who used that area for their fishing would be well aware of such a proposition. If we start specifying everybody who might be involved, we would, as normally happens in debates on legislation, be guilty of the implication that others who might have such an interest are excluded by mentioning only fishermen.

Paragraph 6(3) of the schedule provides for the publication of a notice to inform, persons likely to be affected by the proposal than an inquiry would be held. I cannot conceive in the situation described by the noble Baroness and the noble Lord, Lord Dixon-Smith, that fishermen could be excluded from such a category. If we were to specify them, we would have to specify many other categories of people or potential sites in various parts of the sea. I therefore do not think that it is necessary to specify fishermen here.

Baroness Byford

I have obviously listened carefully to the Minister. I referred to fishermen in the amendment because they use the sea the most, apart from business shipping which is, one hopes, further out. I want to ensure that fishermen are consulted before the zone is designated. Will the noble Lord point me to where it says that in the Bill? I cannot see it, but I may have misread the Bill.

Lord Whitty

Clause 82(7) requires that where there is a notice about a safety zone or, later, when there is a determination on that notice, people who are likely to be affected must be informed.

Baroness Byford

That is after the decision is made, is it not?

Lord Whitty

No. It is when a notice is issued, which is the point where, as with most such propositions, it would be required to be drawn to people's attention. They could therefore object at that point. I assume that I am correct.

Baroness Byford

I thank the Minister for his comments. I named fishermen because, as I say, I think they will be the most directly affected. I hope the noble Lord thinks that we will still have a fishing industry, because it is very much under threat at present. It is very important that we protect fishermen as much as we can. At this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 82 agreed to.

Schedule 16 [Applications and proposals for notices under section 82]:

Baroness Byford moved Amendment No. 107C: Page 202, line 6, at end insert "reference

The noble Baroness said: In moving Amendment No. 107C, I shall also speak to Amendment No. 107D.

Amendment No. 107C is a probing amendment. As it stands, the wording implies that the location might be given in the form of a map of, for example, the Goodwin Sands, with a shaded area to the north-east. If this is the case, will the drawing be to scale and, if so, to what scale? Perhaps it is already laid down and I have missed it.

I understand that in matters relating to navigation at sea, it is customary to work in degrees, minutes and seconds of latitude and longitude. Indeed, in the papers relating to the common fisheries policy, I have come across areas or zones defined in those terms. When a zone starts on dry land, one may find a definition that reads, for example, "due east of Peterhead to a point", and the point is defined by such a reference. Will the Minister explain what the current wording means and why that form has been chosen?

With regard to Amendment No. 107D, the notice may require objections to be sent to someone—let us call him Person X. If Person X receives any objections, he must copy them to the Secretary of State. Yet subsection (3) states that the Secretary of State is required, whenever he or she receives objections or copies of objections, to use them in deciding whether to hold a public inquiry.

Will the Minister give me an idea of the checking system that can be put in place to ensure that all objections received by a third party are indeed copied to the Secretary of State; of the system that will ensure that those copies reach the Secretary of State; and of the system that will ensure that the Secretary of State is made aware of their arrival? Will the Minister explain why it was considered necessary to write this provision into the Bill? It may be that it is the same as provisions in other Bills.

Finally, will the Minister explain why, in paragraph 4(3), there is no specific statement about sending objections to a third party but there is a requirement on the Secretary of State? It states: Where objections, or copies of objections, to an application have been sent to the Secretary of State in compliance with the regulations", the Secretary of State must take appropriate action. I wonder whether we are creating yet more layers of bureaucracy, and I seek ministerial reassurance. I beg to move.

Lord Triesman

Let me deal with the amendments in the same order that the noble Baroness introduced them. It is obviously of the utmost importance to those organisations and people who are likely to be affected by a proposed safety zone that they should be made aware of its location as quickly and as accurately as possible. Part of the burden of the noble Baroness's remarks is what is the most accurate way of doing that and what would therefore be most helpful.

Limiting the description of the site to reference points would disadvantage potentially affected parties, particularly yachtsmen and other recreational users of the sea who might not be able to locate the positions of the installations in question quickly. Some would, of course, because they might have great experience of using reference points on charts. Others, I fear, might have less facility in doing so.

We believe that a map is much more user-friendly to all concerned. My understanding is that charts will be to scale and that there should be no great difficulty in making sure that they can be used with precision.

Let me turn to Amendment No. 107D. Having talked yesterday about what one could see over very long distances, I fear that today I must say that this amendment may turn out to be short-sighted. It seems logical to me that where the Secretary of State has asked for objections to an application to a safety zone to be sent to someone other than himself or herself, that person must also send a copy to the Secretary of State. That completes the circle; it makes sure that the Secretary of State is fully in the loop and is aware of all the communications about the matter.

We are not placing a copying burden on the objector, incidentally, but on the person whom the Secretary of State nominates to do the job. This seems reasonable. The system that ensures that the loop is complete will obviously need to be specified in a way that ensures everybody knows what they have to do, in greater detail than would probably be appropriate in the Bill. None the less, it is intended that everyone should see a copy of everything, again on the grounds that safety is the preoccupation here. We do not want to find that anyone has missed out on a major safety requirement by a miscommunication.

Lord Greenway

Most recreational craft these days employ some sort of GPS satellite navigation system which gives the latitude and longitude read-out, so there is no problem for yachtsmen in reading such figures. They do not necessarily need a chart showing the site.

What is confusing me about objections is that we have already had round one; round two was notified at about Christmas time, and we are only now discussing the Bill. There was no method by which anyone could object under round one, which seems a strange way of going about things.

Lord Triesman

All I can say is that it is essential that these provisions are right and that all future arrangements ensure that there is the fullest possible communication of the areas on maps. I take the point about the new pieces of machinery that find your latitude and longitude; I believe you can even do it in central London, let alone at sea. Many taxi drivers seem to employ that method for getting around.

I take the point that we must make sure that the objections system is thorough and robust and that everybody knows what the position is. The Bill must establish that.

Baroness Byford

I am grateful to the noble Lord, Lord Greenway, for his comments. I certainly had not realised that this system was not in being in the first instance, which is pretty bad.

I thank the Minister for his explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 107D to 107DA not moved.]

Schedule 16 agreed to.

Clause 83 [Prohibited activities in safety zones]:

5.45 p.m.

Baroness Byford moved Amendment No. 107DB: Page 66, line 13, at end insert— unless it is a United Kingdom registered fishing vessel which has entered the zone for the purpose of plying its trade on local fishing grounds or a vessel carrying shellfishermen to a bank, shoal or reef within the zone on or over which there is an established fishery of shellfish.

The noble Baroness said: The Government are constantly paying lip service to the need to avoid regulation, but Clause 82 contains provisions to establish a new regulatory system requiring fishing boats to apply for permits to go to fishing grounds that they have traditionally worked. I wonder whether fishermen have not already had enough to put up with, given the restrictions we have discussed in the common fisheries policy, without new regulatory burdens.

Fishermen are no threat to the security of these installations. On the contrary, if anything, a threat to the way they work will be posed by the new installations. My noble friend Lord Dixon-Smith said earlier that he feels sure that the fishermen will not want to go anywhere near them. The works in progress to build them will affect the fishing industry.

However, the very nature of the sea and the areas of shoaling water where renewable energy installations might be installed means that in some places certain species will be in abundance. The Government must recognise the specific interests of fisheries and the shellfish industry.

The amendment would give an automatic exemption to fishermen and shellfishermen to enter a safety zone. It appears—at least, I hope this is the case—that some type of exemption may underlie subsection 4(b). I hope the Minister will clarify that and assure the fishing industry that there will be no new regulatory system for local fisheries and no onerous permit system and that there will be a general exemption to allow fishermen to continue conducting their business.

We all accept that there may be occasional emergencies or times of danger when an area should be closed to all navigation. There is provision for that elsewhere in the Bill and in law. However, a general prohibition on fishing in a safety zone unless permission is given is, I believe, putting the extra regulatory burden the wrong way round. Surely there should be a presumption on the right to fish without a need for such a permit unless good reason can be shown why navigation should temporarily be stopped.

Does the Minister accept that fishermen are deserving of this kind of trust and support? Does he seriously envisage that a permit will have to be required every time someone wants to check their lobster pots, for example, or will they not be allowed to fish in the zones anyway? Will the Minister take this opportunity to spell out in detail the specific regulations and regulatory system proposed? Can he guarantee specifically that there will be no permit charge to fish in safety zones—in other words, that this is not another stealth tax? I seek clarification with the amendment. I beg to move.

Baroness Miller of Chilthorne Domer

I can see that, during the construction period of any installation, a safety zone would be very necessary because many unknown things would be going on. However, unless the Minister tells me otherwise, I can imagine that, once some installations were in place, they might well be a perfectly good fishing ground.

The fishermen will know where the installations are; they are well able to avoid difficulties, as they have been doing for hundreds of years when it comes to rocks around our island. The safety zones may actually become richer fishing grounds, for one reason or another. We cannot know that yet and nor can the Government as they have not done an environmental assessment. Certain species might proliferate in the zones.

There are many interesting issues in this respect. However, I cannot see why, just because energy is being gathered above the surface of the ocean, fishermen should necessarily be prohibited from operating beneath the wind turbines. It is not as though they are operating sailing vessels, for example.

I can see that it will be necessary to hold considerable discussions with fishermen about safety issues and so on, but it seems excessive to expect that they would not be able to fish those areas, unless there was a very rigid regime. I should have thought that the zones would pose no more risk to fishermen than the natural hazards they meet every day.

Lord Greenway

I should like to pick up on the point made by the noble Baroness. In my experience, any fixed structure placed in the sea picks up, over the course of time, a certain amount of accretions and crustacea. If there were suddenly to be a growth of mussels or whatever on these structures, I cannot help thinking that any fisherman worth his salt would creep in at the dead of night to harvest this unexpected bounty.

Baroness Carnegy of Lour

I have been longing to ask one question—I do not know whether the Minister can give me the answer—about the type of cable lying under the sea, which may presumably, if there are a series of farms, be fairly high voltage cable. I do not know how high the voltage would be. Will that cable have any effect on instruments in the ships on the surface? Also, will it have any effect on the fish? These are things we should know. I do not know about electromagnetic fields that flow from high-tension cables, but I know that it is advisable not to live underneath one. Perhaps it is the same for fish and ships!

Lord Dixon-Smith

I echo what I said before. I hope that an exclusion zone is an exclusion zone. I have immense confidence in our fishermen and in their ability as sailors. However, if an exclusion zone is not an exclusion zone; it is all very well to say that they will not go out there in a force 10 gale, but you can bet your bottom dollar that someone will be caught out there in a force 10 gale and he will not be in total control. If we are putting these fixed installations in the sea, even with a reasonable separation, they will be a hazard to anyone who enters that zone.

Much as I sympathise with the good intentions of my noble friend, I hope the Minister's response will be that an exclusion zone is just that: an exclusion zone.

Lord Whitty

In principle, the noble Lord, Lord Dixon-Smith, is correct: safety zones are safety zones. They are imposed for safety reasons and safety applies to fishermen as much as it does to any other people navigating in that area. Clause 83—the prohibited activities clause—provides for permissions to enter that zone under certain circumstances when there are individual installations and access to vessels which can, because of their size, manoeuvrability or location of the site, proceed safely. But those permissions have to be granted specifically under subsections (4)(5) and (6) of the clause.

In general, there would be an exclusion for fishermen as there would be for other bodies. If one is imposing a restriction on safety grounds with some flexibility, that applies to fishermen as much as it does to anyone else. The attempt by the amendment of the noble Baroness to have a blanket override for fishermen of what is imposed for a safety reason does not seem to be sensible. There is a little flexibility here, but it would be slightly perverse to allow fishermen in general to override something imposed for safety reasons.

The question of the noble Baroness, Lady Carnegy, takes us beyond the safety zones into the whole issue of the cable. Clearly, the possibility of interfering with instruments was discussed when dealing with an earlier clause. The possibility of giving fish migraines has not been raised before. I do not think we have any evidence that high-tension, high-voltage cables, of which there are plenty around the world, have any detrimental effect on fish themselves.

However. the issue of interference with communications radar or ships' instruments has to be taken into account when granting permission in the first instance. There are international precedents for that.

Baroness Carnegy of Lour

I am sorry, I did not hear the answer about when the cable is under water.

Lord Whitty

When the cable is under water, it is unlikely that there will be any serious interference. it may not be nil and, therefore, that has to be taken into account in granting the application in the first instance.

Baroness Byford

I thank all noble Lords who have contributed. There is obviously a difference of opinion about whether safety zones are or are not safe to fish in. That is not really my dividing point. I wanted to establish what is meant by the Bill, and I believe that the Minister has answered that point—that is, people are definitely not allowed to enter safety zones unless there are exceptional circumstances. The Minister is nodding.

I now ask the Minister to turn his attention hack to Second Reading, when my noble friend Lady Miller of Hendon raised the question of human rights. The Bill is supposed to be compatible with human rights. However, is the Minister confident that he will not be taking away anyone's human rights if safety zones are to be established and fishermen are not allowed to fish in areas where they have traditionally fished? I should be grateful for a response to that point.

Lord Whitty

I cannot see that a human rights issue is involved here. We are not taking anyone's possessions; we are simply imposing a restriction on the grounds of safety. I do not believe that that would qualify as a deprivation under the Human Rights Act.

Baroness Byford

Does the Minister not consider that it would he taking away part of people's livelihoods—a matter which I thought came under Human Rights Act? There is time to consider the matter between now and Report, but that was the reason that I particularly wanted to bring forward this amendment, which has prompted diverse views to be aired. I should have thought that, if people were precluded from an area and their livelihoods were affected, difficulties may well arise. I urge the Government to consider the matter between now and the next stage hut, for the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 83 agreed to.

Clause 84 [Offences relating to safety zones]

Baroness Byford moved Amendment No. 107DC: Page 66, line 44, at end insert "unless it is a United Kingdom registered fishing vessel which has entered the zone for the purpose of plying its trade on local fishing grounds or a vessel carrying shellfishermen to a bank, shoal or reef within the zone on or over which there is an established fishery of shellfish

The noble Baroness said: We have nearly reached the end of my group of amendments. In moving Amendment No. 107DC, I shall speak also to Amendment No. 107DD. The amendments move on from the amendment that we have just considered, but I submit that they are of equal importance, as they deal not only with the question of prohibition and the regulation of fishing in safety zones but with the potential criminalisation of fishermen if they attempt to carry out their traditional trade. We touched on that point during debate on the previous amendment.

Can the Minister explain why he believes that fishermen are such a threat to wind farms that he must propose these draconian powers? It is interesting that in a previous debate the noble Baroness, Lady Miller of Chilthorne Domer, obviously did not consider that to be a reason to ban people from fishing in those areas, but that was not the view taken by my noble friend Lord Dixon-Smith. Therefore, I find myself moving another amendment on which I am not sure that agreement will be reached around the Committee.

Under this section, if a man's tackle, nets or pots drift into a safety zone which he does not hold a permit to enter and he enters the zone to retrieve them, he could he arrested and sent to prison for up to two years. I wonder whether that is right. Subsection (9) gives no defence against a conviction on such grounds. What happens if a fishing boat is hove to and drifts on the wind or the tide into a safety zone of which the fisherman was aware but whose boundaries he had not noticed he had passed? Is he guilty of a criminal offence? Where is the defence against conviction under subsections (7), (8) or (9)? It is all very well to say that common sense should apply but, if we take motorists in Great Britain as an example, it rarely seems that that happens in real life.

Therefore, I seek clarification on the position of the fishermen. What would happen if, for example, under subsection (2), a condition was put on a permit to fish in a zone and the person caught a type of fish which was not specified or was prohibited in a permit? Would that be a criminal offence? Again, surely it would be better to turn the Bill round the other way so that fishermen plying their traditional trade were automatically exempted and could not be criminalised in the circumstances that I described. I beg to move.

6 p.m.

Baroness Miller of Chilthorne Domer

I am very grateful to the noble Baroness for tabling the amendment. The longer these debates go on, the more it seems to me that banning fishermen from the safety zone is over the top. I realise that the noble Lord, Lord Dixon-Smith, has a different viewpoint. I cannot understand why fishermen are not deemed to be the best judges of whether it is safe to fish in a place. If safety were a measure of things, we would not allow anyone to be on roads at all, given how many people are killed on roads every year.

I recognise that during the construction period there will certainly be issues, but I do not believe that the Minister has explained at any point the reasoning behind the process—and certainly not to the point at which fishermen should be sent to prison for entering a safety zone. Members of the fishing community, when consulted, asked whether they were not capable of judging when things were safe and when they were not, given the hazards that they face every day around our extremely rocky and hazardous coast, which are likely to be much greater than in a known safety zone, so-called.

Lord Whitty

I really do not accept that argument. These are safety zones, imposed for safety reasons. The issue is not what harm the fishermen can do to the installation but what harm the installation can do to fishermen, or anyone else approaching it in a dangerous situation. I do not see that there is an argument for exempting fishermen from the provision; in these circumstances, as so often, we are saving fishermen from themselves. Under any other safety provision, we do not say that there is a whole class of people to which it shall not apply. If safety provisions are provided by the state, or required of someone to provide, we do not distinguish as to whom they should apply.

As the noble Baroness said, exemptions are made and those exemptions are bound to have conditions; breach of those conditions; then becomes a criminal offence. But that applies to anyone—it is not directed specifically at fishermen, who are entitled to protection as much as anyone else.

Baroness Byford

I thank the Minister for that response, although I do not agree with all that he has said. He has not actually answered my question as to what happens if fishermen happen to drift into that area, in rough weather or in whatever circumstance. Would they just be guilty—would that be it?

Lord Whitty

That would be a matter for the courts, which would consider the mitigating circumstances. I suspect that prosecution would hardly arise in those cases, but it would be either for the prosecuting authority or for the courts to make a common-sense judgment—although the noble Baroness just now rejected the operation of common sense. The clause provides for safety for fishermen and other sea users in the vicinity of these installations. It is safety that has to be protected—their own as well as anyone else's.

Baroness Byford

The Minister rightly said that it was for the courts to decide, but it is for us as parliamentarians to lay down the law, which the courts then interpret. That is a very different matter.

Lord Whitty

I draw the noble Baroness's attention to something that may meet her points partly. Subsection (8) of Clause 84 refers to the person taking all reasonable precautions, to prevent the contravention in question". That would probably cover most of the drifting inadvertently, unless it was a case of total negligence.

Baroness Byford

That is a wonderful phrase that nearly covers everything that could possibly happen. At this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 107DD not moved.]

Clause 84 agreed to.

Clause 85 [Supplementary provisions relating to offences under s.84]:

[Amendment No. 107E not moved.]

Clause 86 [Extinguishment etc. of public rights of navigation]:

Baroness Byford moved Amendment No. 107F: Page 68, line 38, leave out from first "through" to end of line 39 and insert "some or all of those places

The noble Baroness said: Again, we seek clarification. The amendment is designed to elicit whether the Government have a specific purpose in mind in using the phraseology of the Bill. Will the Minister explain the importance of the distinction between the rights of navigation, so far as they pass through those places", and the rights of navigation, so far as they pass through some or all"? Will he give an example of a situation in which the legal position would be unclear if both phrases were not combined in the same sentence? I beg to move.

Lord Davies of Oldham

I am not going to answer either of the noble Baroness's questions, because we think that she has got it right, and we accept the amendment.

Baroness Byford

Wow! You have made my day. I hope Members of Committee do not take offence, but I shall be leaving in five minutes. My step will be even lighter when I go. Maybe I should have moved the other amendment as well—but perhaps we shall return to it at another stage. I thank the Minister.

On Question, amendment agreed to.

Clause 86, as amended, agreed to.

Clause 87 agreed to.

Baroness Miller of Hendon moved Amendment No. 108: After Clause 87, insert the following new clause— COMPENSATION UNDER SECTION 86 OR 87

1. (1) If the Secretary of State shall grant any consent or make any declaration under section 86 or 87 which shall interfere with the private or commercial interests of any person or corporation, he or it shall be entitled to compensation.
2. (2) Such compensation shall not be limited to the financial or other benefit received by the person in whose favour the consent or declaration is made."

The noble Baroness said: In presenting the Bill to your Lordships—indeed, to Parliament—the noble Lord, Lord Whitty, made the following statement under Section 19(1)(a) of the Human Rights Act 1998. He said: In my view the provisions of the Energy Bill are compatible with the Convention rights". The views of the noble Lord on matters of fact are not something with which one should lightly disagree. However, in the case of the provisions of Clauses 86 and 87, it is clear that there are massive encroachments on the proprietary rights of both individuals and businesses. Between them, Clauses 86 and 87 cover some two and a half pages, but I need not trouble the Committee with the text. The gist is fully explained in the marginal notes.

Clause 86 provides for the extinguishment of certain public rights of compensation, while Clause 87 provides for, further provision relating to public rights of navigation". Subject to anything that my honourable friends in the other place may yet have to say about the details in those two long and complicated clauses, I am not going to argue about the principles involved in them. For example, erections of wind farms offshore may very well interfere with rights of navigation, of access to parts of the shore or with fishing rights. Indeed, the noble Lord, Lord Greenway, and my noble friend Lord Higgins, made that point very strongly earlier. However, there are those who at present enjoy those rights, and possibly other rights. The two clauses empower someone to take them away—presumably for the public good, but additionally for the commercial advantage of some company or other. That termination of rights, which may have existed for hundreds of years, is in fact nothing less than an act of confiscation.

The Minister invoked the European Convention on Human Rights. Allow me to remind Members of the Committee of the first protocol to the convention, which states: Every natural or legal person is entitled to the peaceful possession of his possessions". Savour that primary and overriding principle. The protocol does, however, go on to make exceptions in favour of the public interest, subject to the conditions provided by law, and, the right of a State to control the use of property in accordance with the general interest". Those exceptions, governed by the public interest, are undoubtedly the justification for the Minister's claim that the Bill, and, in particular, Clauses 86 and 87, are compatible with the convention on human rights.

Let me assume for the sake of argument today that building monstrous windmills out at sea, at enormous expense, and of dubious effectiveness in generating electricity at reasonable cost at times of the day when it will be of any use, is in fact necessarily in the public interest. Let me further assume, for the sake of the same argument, that these machines, which will interfere with navigation rights, the ability of fishermen to fish, and of the fish to breed, are in fact in the public interest, even though they will he operated, not by the state, in whose favour the exception is made by the convention, but by some commercial firm to whom the state has granted the right to construct and operate these machines. In other words, let me assume for the sake of argument at this time, but subject to what my honourable friends may have to say on the principles involved, that every argument of the Government in support of the power by which they seek to extinguish long-held and valuable private and commercial rights is valid.

The fact is that under the laws and customs of this country, rights of property, whether tangible in the form of land or intangible, such as navigation or fishing rights, are not expropriated by the state under the pretext that it is for the public good. Every person whose land is compulsorily acquired, whether, as in the old days, for the purposes of building a railway, or currently for road building, receives compensation. Even the refusal of planning permission or the existence of a planning scheme affecting a property may attract a claim for compensation. Whether the compensation is adequate or not is of course a matter of opinion.

The rights covered by the clauses are no less valuable, no less important, and certainly not by any means intangible or ephemeral. My proposed new clause gives anyone adversely affected by the operation of the two clauses a right to compensation. I have not specified how that compensation should be calculated. That is a matter for the courts to decide under Section 8 of the Human Rights Act if the Secretary of State does not set a satisfactory figure when exercising his powers under the two clauses. I am content that the legislation should not be too prescriptive in this regard.

The only constraint that I propose on the level of compensation is that contained in subsection (2) of the new clause. Compensation should relate to the loss suffered by the person whose rights have been terminated or curtailed. That may be far greater than the commercial advantage conferred on the person enjoying the benefit of the clauses. Compensation should therefore cover that loss. I hope that the Minister will agree that this new clause does not interfere with the operation of Clauses 86 and 87. It merely provides for justice for those adversely affected by them. I beg to move.

Baroness Miller of Chilthorne Domer

I agree with the noble Baroness, Lady Miller of Hendon, that human rights are extremely important. I am sure that the Minister agrees that we must pay extreme regard to them.

With respect, I believe that the noble Baroness slightly spoiled her case by using such emotive language, in referring to offshore wind farms as "monstrous windmills" of dubious efficacy. It is irrelevant whether she believes them to be a good or bad form of power. I would say to those people who object to the proposed excellent wind farms, which will undoubtedly contribute to the National Grid—and is another way of looking at the matter—that I still believe people are more likely to prefer that option, and indeed onshore wind power, to having new nuclear build in their back yard, especially at the stage when we have not solved the issue of nuclear power. I make that point only to say that mixing up whether we agree with the form of power with the issue of human rights creates a difficult argument.

I see that shipping can take a different route. Recreational sailing and boating is public use of what could be said to be the marine equivalent of common land or open access land. There is plenty of other ocean over which people could sail or boat as a recreation. However, I return to the point made by the noble Baroness, Lady Byford, to the fishing rights. That is what concerns me in this regard.

6.15 p.m.

Lord Greenway

I totally agree with that. I have a modicum of sympathy with the amendment tabled by the noble Baroness. However, compensation for altering public rights of navigation is almost impossible to quantify for shipping. We should bear in mind that we are dealing with international shipping, not only with British ships. However, I very much go along with what the noble Baroness, Lady Miller of Chilthorne Domer, said about compensation for fishing rights. That is a much more important problem, which we shall discuss under the next amendment.

Baroness Carnegy of Lour

I agree with what the noble Lord says. It is difficult to imagine the effect of offshore wind farms on the public. However, I say to Members of the Committee who do not live near the coast where there are a lot of oil rigs that people come to our part of the world on pleasure trips, to look out to sea and see the oil rigs. They get very excited about it. Indeed, buses stop on the road when they get to that point, and the people all get out—rather like the opening of Parliament—and are told about the oil rigs. Therefore, one could say that it is a huge asset to the tourist industry. Equally, in another place, it might be a terrible nuisance.

The effect is very difficult to quantify, but with regard to offshore windmills I do not believe that people are horrified. When there is one right beside where one lives, that is different, as it alters everything about one's landscape. I believe that if wind farms are set up off the coast where I live, people will get quite excited about it.

The fishing industry is different. It is terribly important that people who regularly go and catch prawns and shellfish of different sorts will make the most frightful fuss, and I cannot see a windfarm being set up in those places because there would be such a row. I find it very difficult to anticipate, although I appreciate the point that the noble Baroness is making. She is quite right to raise it.

Lord Kingsland

Section 86(1) gives the Secretary of State power to make a declaration extinguishing public rights of navigation, in so far as they exist, in respect of a site of a renewable energy installation. Does the power offend Article 1 of the first protocol of the European Convention on Human Rights?

The first paragraph of Article 1 of the convention states: Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law by the general principles of international law". The Strasbourg jurisprudence affords the concept of "possession" a wide meaning. In a case called Beyeler v Italy, the court held that, the concept of 'possessions' in the first part of Article I has an autonomous meaning which is not limited to ownership of physical goods and is independent from the formal classification in domestic law: certain other rights and interests constituting assets can also be regarded as property rights and thus as 'possessions' for the purposes of the provision". The fact that domestic law does not acknowledge a particular interest to be a legal right or recognise it as something other than a property right is not determinative under Article 1 of the first protocol. The concept of possessions is not the same as the concept of ownership. It may be sufficient for the purposes of Article 1 that the applicant demonstrates an established interest with economic value. Of course, there must be an entitlement to some real economic benefit, even if its value is not yet ascertained. Possessions have been held, for example, to include the good will of a business.

In the case of Pine Valley Developments v Ireland, the court found that Article 1 was able to protect a legitimate expectation that a certain state of affairs would apply. The loss in that case was in the form of a reduction of value and loss of commercial potential. In the case of Tre Traktorer Aktiebolag v Sweden, the applicant took over a restaurant and subsequently the licence previously granted to serve alcohol was withdrawn. The court held that a licence to serve alcohol could constitute a possession, given that economic interests connected with the running of the restaurant were possessions for the purposes of Article 1.

I incline to the view that a PRN can constitute a possession. First, a recurring theme in case law for determining possession is the concept of an established interest with economic value. I would expect that those exercising a PRN, especially if they were doing so as part of a commercial enterprise, could rely on the decisions of Pine Valley Developments v Ireland and Tre Traktorer Aktiebolag v Sweden.

In my opinion, the broad interpretation of a "possession" is likely to encompass a PRN and, ultimately, it may turn on the particular facts: namely, the number of individuals that would be affected; whether there were other convenient navigation alternatives; and the scale of detriment to any commercial enterprise. Of course, states are allowed to deprive an individual of possessions where it is in the public interest, but that is subject to the conditions provided by law and the general principles of international law that compensation should be paid. The amount of compensation must be reasonable in the circumstances of the case.

Therefore, I believe that it is reasonable to conclude that the right to exercise one's public rights of navigation, at least in some cases, is a possession for the purposes of Article 1. In those circumstances, the Government are obliged to provide a provision for compensation in the Bill.

There is one other issue of relevance; that is, whether or not the provisions in Schedule 8 to the Electricity Act 1989 meet the Article 6 test in the convention. In my view, there is a potential flaw in the 1989 approach—that is, there are circumstances in which the Government are not obliged to hold a public inquiry. While I accept that if they do hold a public inquiry the possibility for the courts to judicially review on appeal the decisions of that inquiry would bring the Bill within the terms of the European Convention on Human Rights, that would not be the case where the Government decided not to hold a public inquiry. Therefore, in my view, the Bill raises a second potential issue over the European convention.

Lord Whitty

Some helpful and interesting points were made earlier. Perhaps I may make it clear that we are dealing with navigation rights. Fisheries will be the next item.

I am afraid that I disagree entirely with the noble Lord, Lord Kingsland. If we are dealing with Article 1 of the European Convention on Human Rights, which obviously the Government take extremely seriously, then we must consider what is regarded as property or possessions and we must examine the way in which domestic law deals with property and possessions.

Throughout, the Bill attempts to strike a fair balance between the rights of the wider community and environmental benefits, and so on, and the rights of the individual in regard to navigation. Therefore, we are operating on a balanced and justifiable basis. However, there is a basic objection to what the noble Lord, Lord Kingsland, suggests—that is, whether there is a deprivation of a possession in the first place. The public right—it is a public right; it is not an individual right to navigation is not, of itself, a possession. It is simply a right to navigate and it may be used for business or pleasure.

Even if it were a possession in the normal parlance of English or Scottish law, the European Convention on Human Rights does not lead to any kind of inescapable conclusion such as the one that the noble Lord draws—for example, that compensation should be paid. Legally speaking, in domestic law the situation in England and Wales is that the public right of navigation is not a property right. Therefore, Article 1 does not apply in this situation.

In Scotland, the situation is somewhat different. However, I believe that it is even more damaging to the case put by the noble Lord, Lord Kingsland, in that the right is treated as one of a number of rights held by the Crown in trust on behalf of the public and forms part of the regalia majora. In Scotland, that right is a right of property, but it is property held by the Crown on behalf of the public. Therefore, no individual member of the public has the right to claim that that is his possession and that he is entitled to compensation for the extinguishing of that right.

Therefore, I do not believe that in any normal reading of either English law or the European convention would the extinguishing of public rights and navigation in either English or Scottish courts be allowable and I do not believe that it would pass the first hurdle. Therefore, I reject the amendment.

The noble Lord, Lord Kingsland, also referred to Article 6. The procedure under the Electricity Act which is being followed here is a sufficiently fair and balanced judicial or quasi-judicial procedure. I believe that the implication of the noble Lord's comments was that that would probably be the case where a public inquiry operated, but were there not to be a public inquiry because, in his view, there was no resort to a judicial review, doubt would arise.

I am not sure that the noble Lord is correct to say that there would not be a right to a judicial review of that decision. I suspect that there would be. It would be a different kind of judicial review from the review of the outcome of a public inquiry, but it would be a review of the reasonableness of the action of the Secretary of State in refusing a public inquiry. I undertake to consider that point to see whether any amendment is necessary in that respect. However, I am clear that nothing proposed in the Bill is in any way contradictory to Article 1 of the convention.

Lord Kingsland

I thank the Minister for his reply. I have two brief observations to make on what he said. First, his certainty about Article 1 is not reflected in the Government's Explanatory Notes to the Bill, which express some doubt about whether or not Article 1 applies. Secondly, I believe that I made it clear in my opening remarks—this is well reflected in the jurisprudence of the European Court of Human Rights—that the domestic classification of property rights is irrelevant as to whether a particular thing is a possession under the first protocol of the convention. The fact that PRN is not a property right in English or Scottish law is neither here nor there so far as concerns the European Convention on Human Rights.

Perhaps I may add something about judicial review. I was lax in my language when I turned to the question of Article 6. There would, of course, be a right to a statutory review after the public inquiry system set down in the Electricity Act. The nature of the investigation would be very similar to the judicial review but the investigation would, indeed, be set out in statute.

6.30 p.m.

Baroness Miller of Hendon

I thank all noble Lords who have taken part in this debate. I thank particularly my noble friend Lord Kingsland for his clear exposition of what he considers to be the legal position in which we find ourselves. I note what my noble friend Lady Carnegy said. I do not live near enough to the coast to be able to look out and say whether or not these wind farms look good. Sometimes, I wish that I did. The noble Baroness made the point that she thought it would be difficult to quantify what kind of compensation could be awarded. My noble friend Lord Kingsland answered that point in a sense when he said that it would have to be reasonable.

I am sorry that my language offended my namesake, the noble Baroness, Lady Miller of Chilthorne Domer. She was 100 per cent correct. I wish that I had not expressed my feelings quite so strongly. I noted what the noble Baroness said. I also noted what the noble Lord, Lord Greenway, said. I thank the Minister for his reply. We hold different views on the matter, but the bottom line is whether we believe that the people affected are entitled to compensation. That will turn on a legal interpretation.

I heard what the Minister and my noble friend Lord Kingsland said. I very much hope that the Minister was not offended by my remarks. I am not a lawyer and therefore I did not mention all the cases that my noble friend mentioned. I am inclined to go along with the advice of my noble friend Lord Kingsland, particularly as he has been a Member of the European Parliament and is very conversant with all kinds of laws. Therefore, I have confidence in his advice. I hope that I do not embarrass him by saying that, especially if he finds out subsequently in the highest court of the land that he was wrong. Having said that, of course I shall withdraw the amendment, but it is a matter to which we shall certainly return as this is a very serious issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 88 agreed to.

Baroness Miller of Hendon moved Amendment No. 108A: After Clause 88, insert the following new clause—

"COMPENSATION FOR FISHING INDUSTRY

( ) Where the creation of a safety zone under this Part, or where the operation of a renewable energy installation within a safety zone causes or has caused financial loss to United Kingdom fishermen or shell fishermen who traditionally work on or over grounds within that safety zone—

1. (a) by interruption of business;
2. (b) by causing harm or pollution damage to fish or shellfish;
3. (c) by altering the temperature or current flow or other characteristic of the local waters or of any bank, shoal or reef such as to deter fish or shellfish from the area;
4. (d) as a result of concerns over the effects on public health of the consuming of fish or shellfish caught within a safety zone; or
5. (e) by other means,

the Secretary of State must establish a scheme of compensation to offer compensation to those fishermen who show that they have traditionally fished on or over those grounds for any loss attributable to the creation of a safety zone."

The noble Baroness said: This amendment deals with the important issue of potential compensation for fishermen and shell fishermen whose livelihoods may be damaged by the creation of a safety zone or the erection of energy installations within it.

It is important that the Minister should explain to the Committee and to the industry what kind of compensation arrangements the Government envisage. The amendment requires the Minister to set up a compensation scheme for fishermen who can show that they have traditionally always fished over those grounds.

This is an extension of the law. The Bill envisages the creation of zones at sea where fishermen will, in future, at very best only be allowed to go with a permit or by permission. My noble friend Lady Byford mentioned that in an earlier amendment.

Unlike deep sea oil and gas installations, where there are already controls, these installations will in many cases be in inshore fishing grounds and may, in some cases, be on sandbanks or flats that are worked by landing from boats as well as by fishing. What consideration has the Minister given to the effect of installations and safety zones on fishing activity? Will he give an assurance that if fishing is not allowed during the building of an energy installation, there will be a scheme of compensation financed by the government department that has agreed to the creation of the zone?

It is not enough to say that the fishermen can go elsewhere. It might well be that he has agreed to the installation of a wind farm right in the middle of the best fishing ground off a particular coast. Will fishermen be able to take comparative catches and revenue into account in any claims of compensation? Technology is evolving in this area all of the time. For example, what if it is found at some future date that there are scientific consequences of the installation of wind farms, as is often claimed is the fact with mobile telephone masts?

I have no reason to think that might be the case, but what if at any time in the future there were public health concerns arising from the operation of installations and there was either an effect on sales of fish or the Government closed an area to fishing? Can the Minister assure the Committee that a scheme of compensation would apply in those circumstances?

It is also the case that erecting or operating a major structure out at sea can have effects on the temperature of the surrounding waters or may affect the flow of water or tide so as to alter the configuration of the seabed or of a sandbank. The effects may well be marginal but they could happen and could have a direct and serious impact on the appearance of fish and shellfish.

Can the Minister assure the Committee that compensation would be available for fishermen in such a case? It may be that there are other instances that other Members of the Committee might bring to mind. However, I believe that the issue is one of great importance and I hope that the Minister can explain in this debate what plans he may have in mind.

I did not say at the beginning, although I suppose it is unnecessary in Committee, that this is a probing amendment as, indeed, all amendments are. I did not say either that although the amendment is tabled in my name also, I am moving it on behalf of my noble friend Lady Byford, who, regrettably, was not able to stay any longer. I beg to move.

Lord Greenwav

As I said on a previous amendment, I support the thrust behind this. I believe there is a case in point as regards fishermen, not necessarily just in relation to offshore wind farms but in relation to the oncoming alternative energy sources, which I mentioned earlier. I refer, for instance, to wave power installations which I understand might cover quite large areas of the Celtic Sea; a very well-fished area. I believe there is a case for considering this subject more closely and would be interested to hear what the Government have to say.

Lord Whitty

The amendment tabled by the noble Baroness sets up a whole framework for compensation. It covers a number of direct and potentially indirect effects on fisheries as the result of the creation of an offshore installation and safety zone. Again, the issue of whether the amendment is entirely appropriate in this part of the Bill is in issue. This part deals with safety zones. Once there is an installation, a safety zone is required. It is the initial installation which may be the issue.

However, the issue of establishing a fairly wide-ranging form of compensation in the scheme proposed by the noble Baroness does not seem to be appropriate anywhere in the Bill. In most cases when we deal with diversion of fishing away from a relatively small part of what is likely to be a fishing area, the fishermen are able to fish a few miles away, or even a few hundred yards away in terms of fishing banks as a whole. Therefore, there is unlikely to be a demonstrable loss of income and loss of access to fish. Contributions at earlier stages suggested that more fish might be attracted to those zones, and they would create a potential fishing site that may or may not be accessible. depending on the safety considerations. We would hardly be depriving them of a previous income. We may be creating a different eco-climate.

No question of compensation would arise in either of those cases. There may be an issue, in some limited cases, where the installation and the safety zone around it really hit, rather than simply diverted, and caused the loss of a major source of fish income to the fishermen. In those cases, the effect would need to be discussed prior to the installation, and it would need to be determined whether compensation should be payable. Compensation would therefore depend on the particular circumstances and whether there had been an informed and reasonable discussion between the developers and all parties prior to those proposals.

That is one factor that would have to be taken into account in the decision on whether consent would be given in the first place. I am not ruling out, in all circumstances, compensation to fishermen for loss of access and, therefore, income. A broad-based scheme. with all its direct and indirect effects on fishery income, would not be appropriate. It would be dealt with in the normal way, either by negotiation or litigation in order to establish compensation. I accept that fishermen may be in a different situation to the general issues of public rights of navigation, but it would be a limited subset of fisheries rights that would be affected, and they would have to be dealt with case by case.

Viscount Ullswater

Before my noble friend decides what she will do with the amendment, is the Minister suggesting that no compensation is payable by government, but if fishing rights were extinguished by an operator, even for a certain amount of time, the operator might have to bear the compensation for those who had been fishing up until then?

Lord Whitty

There are two issues: first, whether the developers, in their proposition, have reached an agreement with people likely to be affected that recognises the need for compensation; and secondly, whether, if they fail to do so, that is unreasonable behaviour on the part of the developers. In most analogous situations, on-land developments will involve a degree of compensation for loss of access to adjacent businesses. There is an element of compensation in the original proposition.

If that has not been faced up to, the Secretary of State would have to bear that in mind in the decision whether to give consent in the first place. If consent has been given without compensation in the first place, there may still be a right to compensation, should it subsequently be established that a serious and irreplaceable source of income had been destroyed as a result of the decision to go ahead. In most cases, the developer would pay the compensation, but there could be one-off cases where compensation from the Government might be appropriate.

Baroness Miller of Hendon

I thank the Minister for his reply. I thank my noble friend Lord Ullswater for elucidating where this compensation might come from and that it certainly would not come from the Government. That was a useful intervention.

I will withdraw the amendment. I am sure that my noble friend Lady Byford will want to look carefully at what was said. Fishermen are under threat in all sorts of ways. If this happens to be where they traditionally fish, and it causes them financial loss, we need to take that seriously. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.45 p.m.

Baroness Miller of Hendon moved Amendment No. 109: Before Clause 89, insert the following new clause— POWERS OF GEMA TO SECURE INFORMATION FROM OFFSHORE GENERATORS OF ELECTRICITY Regulations may provide that GEMA shall have such powers as the Secretary of State shall consider necessary or expedient to secure information from offshore generators of electricity including generators fróm wind, tides or waves.

The noble Baroness said: This amendment originated with my noble friend Lord Jenkin of Roding. He is unavoidably absent this evening and will be for a couple of weeks. At the same time, I would like to speak to his identical Amendment No. 109A. Both amendments are to the same effect. They give GEMA power to secure information, first from generators of offshore electricity and, secondly, in Amendment No. 109A, from offshore producers of gas. But the principles are the same in both cases.

Industrial and commercial gas consumers have long complained that they do not have the same access to information about gas production offshore as the companies which produce the gas. They are, therefore, at an unfair disadvantage when trading with these producers in the wholesale British gas market. Ofgem shares this concern with them. They would like to extend the information available both to Transco as operator of the British gas network and to consumers. We think that this could be helpful for security of supply.

Ofgem's responsibility for regulation broadly extends only to the onshore gas market in Britain. The DTI is responsible for regulating the offshore oil and gas sector. This issue of information is, therefore, relevant to both Ofgem and the DTI as regulators, because what happens offshore may very well be—indeed, it is likely—material to movements onshore of the wholesale gas market.

Let me summarise Ofgem's publicly stated views about information disclosure regarding offshore gas. They come from a paper with the far from succinct title of The gas trading arrangements. Reform of the gas balancing regime. Next Steps. It was published in April 2003. They are as follows. On operational efficiency, Transco faces difficulties when determining whether to take action to balance gas inputs and offtakes. These difficulties are exacerbated by the unpredictability of offshore daily production.

When, due to lack of information. Transco takes unnecessary action to balance input and offtakes, this imposes additional cost on the market which inevitably in the long term is passed on to the consumer.

On market efficiency, the lack of information available to all market participants about offshore production reduces their ability to react to, and to address, supply shortfalls. Unexpected supply shortfalls could increase the volatility of gas prices. thus increasing the cost of operating the system. Security of supply is also adversely affected by the absence of timely offshore information to Transco and other participants. That is because there may be insufficient time for parties to react to supply shortfall, such as an outage, which may increase the likelihood of a gas emergency.

There are what Ofgem pretentiously called "information asymmetries". In plain and simple English that means that participants who had access to information about offshore production via their offshore affiliates would be better able to predict price movements, and therefore would have an unfair advantage over those without offshore affiliates.

Last autumn, the DTI and Ofgem made a joint approach to the offshore gas producers to secure greater release of information to Transco and to consumers on a voluntary basis. The approach was in three phases. The first has already been agreed. The second, involving the release of information to Transco as network operator, is making progress. But the third, which is about the release of consolidated information to consumers much closer to "real time" in a manner designed to accommodate legitimate confidentiality concerns of individual producers, has not yet advanced very much. Ofgem regards reaching a solution on all three phases as important.

The remarks that I paraphrased from Ofgem's published concerns about the gas industry apply in equal measure to electricity, hence the same amendment is tabled by my noble friend—Amendment No. 109A.

These amendments are not designed to inhibit competition between suppliers in either the gas or the electricity industry. They are designed, however, to inhibit unfair competition. They are also designed to protect the market and ultimately the consumer—you and me—from fluctuations in supply, and hence the risk of sudden shortages. Fluctuations in wholesale and market prices of fuel inevitably get passed on to the consumer. Inefficient fluctuations in supply inevitably lead to waste of valuable resources.

I do not believe that any form of voluntary arrangement between producers can be relied on to resolve the problem. In saying this I do not impugn the good faith of members of the industry, or even of the DTI, who would have to sanction any scheme.

I have not considered, even assuming it is a factor, whether a voluntary exchange of information between market participants may be a breach of the Competition Act and goodness knows how many EU directives. I know not whether that is the case, but it could be. I have not managed to look into that matter which occurred to me when reading a speech of my noble friend Lord Jenkin. I hope that I shall be given a reply to that point.

Having said that, if a voluntary scheme does not prove successful after a reasonable period, we would expect the Secretary of State to have the power to require the release of this information. I ought to mention that just before I entered the Chamber today I was sent—I shall not say from whom—yet another briefing on this issue. The authors of that briefing said they considered that giving away too much information might be very bad for competition. I just mention that as it is appropriate to give the whole picture, as undoubtedly the Government will do when replying to this amendment.

I believe that this is a matter which has to be resolved by the DTI. The wide discretionary statutory powers that these two amendments propose would enable that to be done without further recourse to primary legislation. I beg to move.

Lord Davies of Oldham

I shall give rather short shrift to Amendment No. 109 but respond fully to Amendment No. 109A which raises the really fundamental issues here. I can be reasonably brief on Amendment No. 109. GEMA already has powers through standard licence condition 13 of the Electricity Generation Licence to require licensees to provide the information the authority needs to carry out its functions. Clause 79 of the Bill extends the requirement for a generation licence offshore and standard licence condition 13 will apply to offshore electricity generators. I hope that I have reassured the noble Baroness on Amendment No. 109.

However, she raises a whole raft of interesting questions and sensitive matters on Amendment No. 109A. I address most of my remarks to that amendment in the hope of persuading her that it is not necessary although we recognise the anxieties that have given rise to it. Ofgem is not the offshore gas regulator and so the situation is very different from that pertaining to electricity.

First, I reconfirm the Government's commitment to consumers of gas through a robust secure gas supply system and a well functioning gas market. The Government recognise that these may need to be underpinned by further access to information—that was the main burden of the noble Baroness's remarks—about the supply capability of the offshore industry. In general the Government prefer to avoid legislative provision if we can meet our objectives with a lighter touch. We believe that we can do so in this instance.

We are already working with the upstream gas industry towards this end on the basis of voluntary agreement. I believe that the noble Baroness recognised that fact. We do not believe that the sweeping powers proposed in the amendment are the best way forward. They could lead to an inflexible outcome and would lead to unnecessary bureaucracy, which I know the noble Baroness detests as much as we do on this side of the Committee.

The noble Baroness was very honest in her presentation of the issues and recognised that this is a sensitive and technically complex area where the commercial concerns of individual players must be finely balanced with the need for the market to have access to the requisite information.

"Information- is a blanket term. It can be easy or costly to provide; it can be hard data or depend very much on judgment. As the noble Baroness indicated, it may be commercially sensitive and its disclosure may harm a commercial player even though—perhaps because—it gives commercial advantage to another player in the market.

Our great preference in this difficult area is for voluntary arrangements rather than compulsion. Our reasons for that are that we want to work with industry, not against it; we are not in the business of placing avoidable burdens on industry; and we are conscious that the North Sea is just one production province competing for the resources of petroleum companies in what is a global market. To increase the burden on this industry could impact on the attractiveness of the province to both existing, participants and potential new entrants with the inevitable risk of accelerating the decline of economic UK energy production. The Committee will be aware that one major company has already significantly reduced its commitment to the North Sea.

Perhaps at this stage I may declare a tangential interest. My eldest son works for BP, but he is safely located in Tokyo and therefore not directly involved in BP's endeavours in this part of the world.

We consider that a well-focused voluntary arrangement is likely to be more successful, effective and ultimately more responsive to market needs than a statutory requirement, which the amendment proposes. Therefore, it would not be sensible at this time to confer such wide powers while the prospect of effective voluntary information provision exists.

I recognise the strength of the argument presented by the noble Baroness in terms of the difficulties surrounding these issues. We know that we need to get the balance right. We have been working on these issues for some time. I cannot pretend that at this stage we have completed all the discussions and are in a position to say that everyone is satisfied. I am sure that if we were, the amendment would not have been proposed.

However, we are doing considerable work in this regard and have made significant progress. In the past few months, agreements have been reached, which have moved things further forward. Our main. proposition is that this is the way we should go rather than to enclose the concept in statute, which would produce a rigidified structure and place burdens upon industry. We do not think that that is the way forward. It is on that basis that I ask the noble Baroness perhaps to consider withdrawing her amendment.

Baroness Carnegy of Lour

I am very relieved to hear the Government's reply. The gas industry in the North Sea is enormously important. Vast amounts of gas are harvested. We are desperately trying to persuade the companies to stay there and not to pack up when it becomes more difficult to harvest the gas.

Does this Bill make a difference to the offshore gas industry? I wonder how the amendment arose. Does the Bill have anything to do with North Sea gas?

Lord Davies of Oldham

Obviously, there is an opportunity to explore contingent issues that affect North Sea gas at present. There are outstanding issues that need to be resolved relating to players in the industry. We are conducting discussions that have been going on for several years.

The noble Baroness has brought in a potential solution to some of the difficulties by proposing an amendment that would write a structure into the Bill. I say merely that, although the opportunity to discuss gas issues is welcome, we do not think that, in this context, putting something into the Bill would advance the cause of the industry.

7 p.m.

Baroness Carnegy of Lour

I am sorry. I think that I misunderstood. I thank the noble Lord.

Baroness Miller of Hendon

I thank the noble Lord for his reply. I notice that he said that, in the past few months, there had been some improvement. I mentioned the fact that the approach was to be in three phases. Parts one and two had already been achieved, so we are nearly there.

I said that I thought that a voluntary system probably would not work. That was how I put it. If, no matter how hard one tries to influence people, time passes and the voluntary system does not work, will the Government consider having an alternative system?

Lord Davies of Oldham

The noble Baroness has raised some significant issues. They will have to be resolved. We must get the balance right. If we reach the point of failure with the present process, the Government must, ultimately, act in the interests of the nation. The supply of gas at a reasonable price is an important factor for the nation. We might have to take some legislative opportunity. I hope to get her to agree at this stage that now is not the time for that.

Baroness Miller of Hendon

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 109A not moved.]

Clause 89 [Amendments of 1989 Act consequential on Chapter 1 of Part 2]:

Baroness Miller of Chilthorne Domer moved Amendment No. 109AA: Page 71, line 41, at end insert— ( ) In section 3A (principal objective and general duties of the Secretary of State and the Authority)—

1. (a) after subsection (2) insert—
   • "(2A) Subject to subsections (1) and (2) above, the Secretary of State or the Authority shall carry out their respective functions under this Part in a manner which he or it considers best calculated to contribute to the achievement of sustainable development.";
2. (b) after subsection (3) insert—
   • "(3A) Subject to subsections (1), (2) and (3) above, it shall be the duty of the Secretary of State or the Authority, in formulating or considering any proposals relating to his or its functions under this Part, to have regard to environmental matters.";
3. (c) in subsection (8) at the end insert—
   • ""environmental matters" means—
   1. (i) the conservation of natural beauty or amenity (including geological or physiographical features);
   2. (ii) any features of archaeological or historic interest; and
   3. (iii) any flora or fauna which are dependent on, or associated with, such features" "

The noble Baroness said: The point of the amendment is to extend the principal objective of the Secretary of State and Ofgem under the Electricity Act 1989 to include sustainable development and environmental conditions.

Section 3A(1) of the 1989 Act defines the principal objective of the Secretary of State and Ofgem as the protection of the interests of consumers of electricity supply by promoting effective competition between generators and suppliers. That is still extremely important, but it does not reflect the way in which government policy has moved, especially in the past few years, nor does it reflect the importance put on sustainable development and environmental matters—the reason that the Bill has come into being.

Energy policy has a significant impact on the environment, as, I am sure, the Government recognise, through the technologies developed and how and where they are sited. The Government's Energy White Paper states that energy policy should ensure that significant damage resulting from climate change should not occur. It recognises that the supply of electricity is fundamental to the achievement of sustainable development.

The amendment would give Ofgem and the Secretary of State the latitude to expand their view of their duties. Clause 89 is an amendment to the Electricity Act, so it is right that we should amend the Act to reflect the different weight and greater importance now given to sustainability. I tabled the amendment to try to do that.

I remember that in discussions on the Water Bill the Government agreed that Ofwat should have a very similar duty; it was felt that was very important with regard to water. So there is a precedent for this. I hope, therefore, that the Government will feel, in the same way as we have come to regard water sustainability as very important, that energy policy and its delivery should also be thus regarded. I beg to move.

Lord Davies of Oldham

I am not proposing to accept the amendment, but I am grateful for this opportunity to set out how we are already tackling sustainable development and environmental concerns, which is what the amendment addresses and the noble Baroness has articulated.

There is already a clear and express duty on the Secretary of State and on the authority to have regard to environmental matters when carrying out their respective functions under Part 1 of the Electricity Act 1989. This duty is very similar to the one contained in the amendment. There is also a duty on the authority to have regard to guidance issues by the Secretary of State on social and environmental matters. In light of these existing duties on the Secretary of State and the authority, we obviously consider that the amendment would merely duplicate those duties and is therefore not necessary.

The draft social and environmental guidelines, currently laid in Parliament, which the Secretary of State from time to time issues, seek to support the implementation of the longer term strategies set out in the Energy White Paper. The guidance includes a request that the authority report annually on the way it has regard to the guidance each year.

The Sustainable Energy Act 2003 placed a statutory requirement on the authority to produce regulatory impact assessments for all important decisions. These must include environmental impact assessments.

Helping protect the environment is one of the seven themes in the authority's draft corporate strategy 2004-07. The authority reports to Parliament, therefore there is already the opportunity for Parliament to address the authority should there be concern that this area of work is not being addressed or meeting the standards required.

It should also be noted that early in 2003, Dr Robin Bidwell was appointed as a member to the authority. He has substantial environmental experience.

The overall duties of the energy regulator were debated in some detail during the passage of the Utilities Act 2000 and also when the Energy White Paper was published. The current drafting of the principal objective and the general duties strikes a fair balance between protecting the interests of consumers and safeguarding the environment.

There was general agreement, through the Energy White Paper consultation, that the principal objective and general duties did not need addressing. This ensures regulatory certainty, which is a must if our energy markets are to work. Piecemeal rearranging of the regulator's general duties does not provide for regulatory certainty, which is an important objective.

We consider that the authority already has the clear duty, which the noble Baroness is seeking to impose through this amendment, to have regard to environmental, social and economic considerations. Through the social and environmental guidance, we have the ability, from time to time, to give guidance to the authority on these matters. We therefore do not see the need to amend the authority's duties.

Because we understand and sympathise with every objective outlined by the noble Baroness and because we think we have the structure in place to guarantee that we meet those objectives, we hope she will consider that her amendment is not necessary.

Baroness Miller of Chilthorne Domer

I thank the Minister for his reply. I shall read carefully what he said. I think that there is a difference between the spirit of his reply—and that of course that was an important objective and so on—and the actual wording of my amendment which wanted to ensure that having regard to sustainability was part of the principal objective. Perhaps he can explain whether the duty laid on Ofwat is greater than we propose to lay on Ofgem. If there is a difference, why does the DTI think that difference is necessary?

Lord Davies of Oldham

Ofwat is a different structure from Ofgem. Ofwat has clear environmental and sustainable factors built into its remit and its role. The broad objectives fit into the overall pattern of the principles which affect a range of these utilities.

Baroness Miller of Chilthorne Domer

I would suggest respectfully to the Minister that the factors are built into the role much more firmly and much better because we gave Ofwat that particular duty during the passage of the Water Bill. So I think I shall have regard to what the Minister has said. I shall attempt to return to this issue at a later date. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Miller of Chilthorne Domer moved Amendment No. 109AAA: Page 71, line 41, at end insert— ( ) In Schedule 8 (consents under sections 36 and 37), for paragraph 2(l) substitute— (1) Where an application is made to the Secretary of State for his consent under section 36 or 37 of this Act, the applicant shall notify—

1. (a) where applicable, the relevant planning authority;
2. (b) so far as reasonably practicable, each competent authority who is not the relevant planning authority., which exercises functions in relation to the area; and
3. (c) any other person who the applicant is directed by the Secretary of State to notify.""

The noble Baroness said: In moving Amendment No. 109AAA, I shall speak also to Amendments Nos. 109AAB, 109AAC and 109AB. Amendments Nos. 109AAA, 109AAB and 109AAC seek to impose a duty on the applicant to consult all relevant competent authorities concerning applications made under Sections 36 or 37 of the Electricity Act and to hold a public inquiry where objections cannot be resolved.

Amendment No. 109AAA is a probing amendment. It extends the current requirement to notify local planning authorities of applications to develop an electricity generating installation under Sections 36 or 37 of the Electricity Act and to include—as far as possible—any competent authorities of relevance to that application. The requirement to notify local planning authorities of these applications may not be widely applicable in the marine environment, where they do not have jurisdiction. So the amendment is necessary to ensure that the relevant competent authorities—such as English Nature, the Countryside Council for Wales or the Joint Nature Conservancy Council—are given adequate notice of such applications.

The amendment also ensures that, where there are outstanding objections from any authority consulted, the Secretary of State will he required to hold a public inquiry; for example, if English Nature were giving contrary advice. Public inquiries provide a tried and tested way in which all the pros and cons of development proposals can be examined in detail. I move the amendment partly because—as I said before—we do not have a Marine Act to protect marine areas or a strategic environmental assessment; and, as the Minister told me yesterday, there is no intention to bring forward such a provision within the next few years. Therefore, I feel that we should consider these amendments.

Amendment 109AB seeks to impose a duty on the Secretary of State to ensure that regulations exist that set out how all interested parties can comment on applications made under Sections 36 or 37 of the Electricity Act. The Secretary of State currently has a permissive power to produce regulations that set out how applications to develop an electricity generating installation should be advertised and dealt with. The amendment would change that power to a duty.

In addition, there are questions about whether the current regulations will apply in the marine environment. The existing regulations are The Electricity (Applications for Consent) Regulations 1990 (SI 455). They are comprehensive but need to be replaced to reflect the changes to the Electricity Act in relation to offshore wind farms for the simple reason that they are drafted to deal with terrestrial applications. We are now considering applications that would fall within the marine environment and I should like to know if those changes are adequately covered by existing regulations. I beg to move.

7.15 p.m.

Lord Whitty

The effect of the amendments taken together would be to expand considerably the list of organisations which have the power to force the Secretary of State to hold a public inquiry if they object to an application for a Section 36 consent for a generating station or a Section 37 consent for an overhead line. At present, under Schedule 8 of the Electricity Act only the planning authority has the special power to force the Secretary of State to hold a public inquiry. That is because the planning authority represents a democratically-elected body representing people who live in the area, and has the responsibility for planning. It is right and proper that it should have that ability.

However, in my view it would be wrong to go further. Expanding the number of organisations which could require the Secretary of State to hold a public inquiry would almost certainly lead to more public inquiries based probably on the views of special interest groups. The whole planning system could he re-prioritised in a way that would thwart the Government's renewable energy objectives.

Under Schedule 8 the Secretary of State already has the power to consider objections from anyone and to decide whether to hold a public inquiry. She is therefore bound to see any proposal in the round and to take a balanced view of it.

The list of competent authorities could be interpreted to include some strange entries. It seems a nonsense to give a power to a government Minister to force a public inquiry on another Minister when the Government take their decisions collectively. While Scottish Ministers have devolved responsibility for consents under Sections 36 and 37 in Scotland and Scottish territorial waters, it would be odd to give them a power to force a public inquiry into a wind farm in southern England, which I believe would be the effect of the amendments.

The amendments also go over ground which is already covered in the Electricity (Applications for Consent) Regulations 1990. Among other things, those regulations set out that a notice of application for consent must be published in a number of relevant newspapers. They provide for the Secretary of State to direct that a notice should be served on a specified person or persons and set out minimum timescales within which objections to any applications for consent should be sent to the Secretary of State.

The regulations apply to onshore and offshore consents and have been used satisfactorily as the basis for applications received, for example, in relation to the sites in round one of offshore wind farm leasing. The regulations will be amended or replaced after the Bill has been enacted to take account of changes introduced in the Bill. However, it would be more appropriate for the objectives in Amendment No. 109AAB to be covered by those regulations; in effect they are already covered by them. Therefore, I do not think that it would be sensible to accept the amendments, the last of which is already provided for in secondary legislation.

Baroness Miller of Chilthorne Domer

I thank the Minister for his explanation, which clarifies matters. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 109AAB to 109AB not moved.]

Clause 89 agreed to.

Clause 90 [Other amendments consequential on Chapter 1 of Part 2]:

The Duke of Montrose moved Amendment No. 109B: Page 73, leave out lines 16 to 19.

The noble Duke said: This is a probing amendment. New Section 47A(1) of the Bill states: The matters to which the Secretary of State may have regard, in exercising or performing the powers and duties conferred or imposed on him by or under this Act, include, in particular— (a) activities in relevant waters". The Secretary of State has enormous powers and responsibilities in the exercise of his office. Many of his decisions will affect individuals, companies, employees, families and other classes of people. Is it right that he should take into consideration not only the matters brought before him but others that it appears to him, may be made in the future"? Is it proper that he should allow the "likelihood" of similar activities occurring sometime in the future to sway his judgment in the present? Will the Minister give examples of the kind of situations that might justify paragraphs (c) and (d) of the new section? I beg to move.

Lord Davies of Oldham

This is an important issue. I am grateful to the noble Duke for giving me the opportunity to show how we shall approach these important issues in the future.

The noble Duke will recognise that the Petroleum Act 1998 is concerned with the licensing and control of oil and gas activities. Clause 90 of the Energy Bill amends the 1998 Act in a way intended to allow the Secretary of State, in exercising the Act's powers, to take into account existing and possible future offshore electricity generation activities. That is wholly sensible. We need to control the use of our energy resources that lie offshore on a strategic basis, looking at the different ways they can best be utilised, both now and in the future. Clause 90 enables the Secretary of State to consider actual and possible future electricity generation activities when exercising oil and gas responsibilities. It really does no more than that.

The effect of Amendment No. 109B would be to leave the Secretary of State able to take into account existing and currently proposed electricity generation activities in exercising 1998 Act powers, but unable to take into account anticipated future proposals or the likelihood of current or future proposals becoming reality. That would be too short-term an approach. It is essential that we are able to look ahead and plan properly. That means looking ahead at the scenarios for oil and gas and for offshore renewable energy generation in the context of the UK's overall energy needs.

It is essential that the two sectors are able to co-exist in a sensible way. There are already examples of the relationship being very productive—for example, wind energy generation capacity being developed on oil and gas infrastructure. The Government are also doing their bit. Licensing and consents responsibilities for oil and gas and electricity are combined in a single unit at the Department of Trade and Industry. That unit is responsible for the programme of offshore strategic environmental assessments, SEAs being an essential tool in determining where energy activity will be directed. The SEA programme has now been redirected and involves integrated assessments of oil and gas and renewables.

For those reasons, we consider that the 1998 Act needs amendment. Clause 90 needs to remain as drafted so that we can continue to move towards a fully joined-up approach to oil, gas and electricity. That is the substance of Clause 90.

The Duke of Montrose

I thank the Minister for that full explanation. Obviously the simple man's approach will not do in this case. I am grateful that the Minister explained the matter in such detail. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Baroness Fookes)

We now come to Amendment No. 109C. These two amendments are quite long and complicated, and I am aware that the Committee does not want to overrun. I wonder whether, rather than breaking off in the middle, it would be for the convenience of the Committee if we were to move them when we reconvene.

Lord Whitty

I would rather give my answer to the noble Baroness's amendments, and then she can judge whether she wishes to return to them. Broadly speaking, there are some things in the amendments that would require the Secretary of State to make regulations under the Food and Environment Protection Act 1985. I was going to say that we were drafting regulations that meet many of the points covered in the amendments. They will come forward for consultation in the next few months. There will be more comprehensive regulations under the Food and Environment Protection Act that bring up to date a number of its provisions.

I was going effectively to accept the spirit of what the noble Baroness said because of what we were already doing. It would not require an amendment to this legislation; it would be tidier simply to do it under the Food and Environment Protection Act. If, however, the noble Baroness nevertheless wishes to move the amendment, I suggest that she does so next week.

The Deputy Chairman of Committees

I need to know whether the noble Baroness is or is not moving the amendment now.

Baroness Miller of Chilthorne Domer

I would move the amendment now, but I think it would be for the convenience of the Committee if we were able to have a substantial debate, especially given the Minister's helpful reply, next Tuesday, rather than overrun yet again.

The Deputy Chairman of Committees

In other words, "No".

Earl Attlee

Does the noble Lord want to suggest adjourning the Committee?

Lord Triesman

It may be a convenient moment to adjourn until next Tuesday at 3.30 p.m.

The Deputy Chairman of Committees

The Grand Committee stands adjourned until next Tuesday at 3.30 p.m.

The Committee adjourned at twenty-seven minutes past seven o'clock.