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At the time of the passing of the Act, it was the intention that the definition of microgeneration included ground-source heat pumps. The Government wish to put the issue beyond doubt. “Geothermal” generally refers to heat from geothermal heat. While that can be found near the surface, for example in Iceland, in the UK it would require deep boreholes, such as the one in Southampton which is 1,800 metres deep. Ground-source heat pumps that do not use boreholes draw on solar energy stored in the ground. Although solar energy is in the current list, that generally refers to photovoltaic panels that absorb energy directly from the sun’s light, rather than to solar heat energy stored in the ground.
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Consultations on this proposed amendment have taken place with Defra, Ofgem and the microgeneration industry. They fully support the inclusion of the proposed amendment to the list. I commend this draft order to the Committee and I beg to move.
Moved, That the Grand Committee do report to the House that it has considered the Climate Change and Sustainable Energy Act 2006 (Sources of Energy and Technologies) Order 2008. 21st report from the Joint Committee on Statutory Instruments.—(Baroness Vadera.)
Baroness Wilcox: I thank the noble Baroness, Lady Vadera, for introducing this order, which amends Section 26(2) of the Climate Change and Sustainable Energy Act 2006. My noble friend Lord Dixon-Smith welcomed that Bill in its original from. He said that it achieved a wide measure of all-party support. I see no reason to stand in the way of this order. Just as we believe in the benefits of decentralising political power and devolving decision-making to local councils, neighbourhoods and individuals, so we are committed to decentralising power in the literal sense—the generation of electricity.
Lord Redesdale: I am particularly pleased to speak to this order because its genesis was from the House of Lords and a Bill that I drafted. I am happy to welcome it back and to look at the orders. I just have a couple of questions for the Minister. She mentioned the 50 kilowatts for electricity and the 45 kilowatts for heat. In the Energy Bill, there is a question mark over the transition of technologies and whether that limit of 50 kilowatts is acceptable, especially if you are dealing with anaerobic digester technology which could lead to a great deal more generation of power. That limit was set only in the technical notes and was not in the Bill. Can it be changed easily or will it take an amendment to the Energy Bill? If that is the case, I had better start drafting a revision to the Bill before Thursday morning.
This order is most welcome. Heat from air, water or the ground was on the cusp of fruition when we looked at this during the passage of this legislation. However, I have since been to the Mitsubishi factory to look at its air heat pumps, the possibilities for which are incredibly helpful, especially at the top of a tower block where a unit could be stuck on the side. Of course, the limiting factor for ground source heat pumps is the need for an open area of grassland which will not be built on because it would stop any solar radiation coming through. Is there a provision in this order, or will we have to come back each time new technologies are to be added? Is there an assumption that it could include the advent of new technologies?
Baroness Vadera: I am very grateful to the noble Lord for his questions. Currently, there is no provision—certainly, not by secondary legislation—to change the limits of 50 kilowatts and 45 kilowatts. However, I will undertake to ask my noble friend the Minister with responsibility for energy. Given the pressures of time,
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I am very grateful to the noble Baroness, Lady Wilcox, for her support, for the cross-party support and for the drafting of the original Bill.
On Question, Motion agreed to.
Ministerial and other Salaries Order 2008
5.19 pm
Lord Davies of Oldham: rose to move, That the Grand Committee do report to the House that it has considered the Ministerial and other Salaries Order 2008.
The noble Lord said: The order gives effect to the government policy set out in the Written Ministerial Statement of 16 January this year, following the publication of the report of the Senior Salaries Review Body on parliamentary pay and allowances. The policy as expressed in that Statement is that ministerial salaries should increase at the same rate as for Members of Parliament. The order will therefore increase the annual amount of the salaries of ministerial and other office holders under the Ministerial and other Salaries Act 1975.
The increases are 0.84 per cent of the amount of salary on 31 March 2007 from 1 April 2007; and a further 1.06 per cent, again of the amount of salary on 31 March 2007, from 1 November 2007. As with MPs’ pay, increases have been staged to deliver an increase for the year of 1.9 per cent, which included the 0.66 per cent automatic increase under the uprating formula in the 1975 Act.
We have noted the conclusions of the Joint Committee on Statutory Instruments on retrospectivity. As highlighted in that Committee’s report, the Government accept that the order is retrospective. Nevertheless, the Government believe that the general presumption that powers delegated in enactments are not capable of being exercised retrospectively is outweighed by other factors in this case. In particular, some backdating of salaries is now common practice, especially in the public sector, due to the timings of negotiated pay settlements. The practice of backdating ministerial salaries to a limited extent has also been reflected in previous orders relating to ministerial salaries, such as the Ministerial and other Salaries Order 2001 and the Attorney-General’s Salary Order 2000. Both orders were approved by the House of Lords.
As the Joint Committee points out at paragraph 1.12 of its report, the order applies only to those Ministers and other office-holders who are still in post when the order comes into force. The committee recognises that, while the order could have been framed prospectively, so as to confer equivalent increases on these Ministers and other office-holders—characterised, for example, as lump-sum payments—such provision would have
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Moved, That the Grand Committee do report to the House that it has considered the Ministerial and other Salaries Order 2008. 21st report from the Joint Committee on Statutory Instruments.—(Lord Davies of Oldham.)
Lord Howard of Rising: There are no objections to the order from this side of the Committee. However, on a purely personal note, the size of the increase in no way reflects the adeptness and adroitness with which the Minister answers Questions and debates. Looking forward, I have no doubt that the Minister’s friends will be extremely pleased to see that these increases apply to the Opposition as well as to the Government.
Lord Shutt of Greetland: I cannot quite fathom this; perhaps the Minister can help me a little. The Explanatory Note talks about these somewhat modest percentages being over and above the increases payable by virtue of an uprating formula. Then, today, there is an announcement that Cabinet Ministers will give up their pay rise for this financial year, and above-inflation rises for MPs and so on have been rejected. I do not understand how these things fit together; something is “over and above”, followed by announcement about holding it down. They do not seem to match.
I am always a little unhappy when I see this sort of restraint subsequently followed by, “Ah, well, we need to catch up”. That is when you really get bother, because catching up means bigger increases later, which is often unwise and unpopular. The numbers are very small, but I would welcome further explanation.
Lord Davies of Oldham: I am grateful to the noble Lord, Lord Shutt, for asking me questions on which I am able to earn my pay. I was nearly covered with embarrassment by the noble Lord who spoke from the Conservative Front Bench. I suppose that I should have declared an interest; like other Ministers, I will benefit significantly from this increase, which has been identified as modest. The answers to the questions asked by the noble Lord, Lord Shutt, are quite straightforward.
This order relates to 2007-08. It is governed, like any order that provides for increases, by the Ministerial and other Salaries Act 1975, which contains a formula that places MPs—ministerial salaries are linked to MPs—at the midpoint of a Civil Service grade. That produced an automatic uprating for 2007-08 of 0.66 of a per cent, or two-thirds of one per cent. The other increases increase the uprating from two-third of one per cent to 1.99 per cent, which is the pay rise for that year. As the noble Lord said, we are talking about modest amounts.
The pay freeze applies to this year, 2008-09. The Cabinet agreed this morning that Ministers will not take a pay increase this year, irrespective of the decisions of Members of Parliament when they consider their position in a month or so’s time. The Government have enjoined Members of Parliament to have regard to the general expectation of settlements in the public sector of between 2 per cent and 2.5 per cent. That is what we confidently predict that Members of Parliament
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We are talking about two different years. The Joint Committee was critical of the fact that, by definition, if I am talking on this order about 2007-08, there is a retrospective quality that we do not like in legalisation and eschew on every conceivable occasion that we can. The noble Lord will appreciate that the problem with regard to salaries is that a retrospective element is often part of the discussion framework where public pay is settled and in the private sector as well. In this case, it is clear that Members of Parliament are lagging behind in the decisions to be taken, and this order is considerably behind, applying, as it does, to last year. That is the retrospective element. We will seek to avoid it, but the Committee will appreciate that there is something unique about pay negotiations and, I hate to say it, Parliament has an interesting concept of pay negotiations.
As the Committee will know, Members of Parliament have striven might and main. I can remember the Ministerial and other Salaries Act 1975 and the basis on which that has obtained for Members of Parliament ever since. I recall the desperate tribulation that occasioned the Act simply because there was no linkage to anyone prior to that. Members of Parliament decided the rate. That is a pretty hazardous thing for Members of Parliament to attempt, but it has one great virtue, critical though members of the public doubtless are of Members of Parliament deciding their own pay.
I listened to the Lloyd George serialisation of Ffion Hague’s book on the radio this morning. Lloyd George entered Parliament in 1890—the noble Lord, Lord Shutt, will probably remember him. He gave up his earning power and had no salary at all. It is inconceivable that we would ever be able to run Parliament in a democratic age on the basis of the 19th-century concept that gentlemen of leisure served in Parliament and everyone else received their wise decisions.
That is the background to all this. I have never known any debate, even this very small one, to contain anything but embarrassment for those at the Dispatch Box who are trying to reply to it. I apologise for being in that position, but I hope that I have answered the questions sufficiently satisfactorily to commend the order to the Committee.
5.30 pm
Lord Shutt of Greetland: I am grateful for the Minister’s explanation. I do not think that Lloyd George knew my father or my grandfather, but the history is useful. The main thing was the disposition between the two financial years. The Minister’s explanation was good, and I thank him for it.
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Baroness Seccombe: What effect, if any, will the order have on pension arrangements?
Lord Davies of Oldham: The pension arrangements are attached to the salary, so they follow the salary for that year. The problem that the noble Baroness might have identified is that the retrospective element applies to Ministers in office but not to those who have left office. They will be paid according to the salary that they received when they left office. Retrospective pay does not affect pensions one way or the other in the obvious sense that what are calculated are the years
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On Question, Motion agreed to.
The Deputy Chairman of Committees (Lord Colwyn): That completes the business before the Grand Committee. The Committee stands adjourned.
- The Committee adjourned at 5.33 pm.
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