Great British Energy Bill
Thursday 5th September 2024
(5 months, 2 weeks ago)
Commons ChamberGreat British Energy Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
16:59 - The House having divided: - Ayes: 94 / Noes: 348 - Question accordingly negatived.
17:15 - The House divided: - Ayes: 348 / Noes: 95 - Question accordingly agreed to.
Madam Deputy Speaker
The reasoned amendment in the name of Claire Coutinho has been selected.
The Secretary of State for Energy Security and Net Zero (Ed Miliband)
I beg to move, That the Bill be now read a Second time.
May I congratulate you on your elevation to your new role, Madam Deputy Speaker?
At the general election, the British people voted for change, and they voted for our party’s promise of the first new national, publicly owned energy generation company in our country for more than 75 years: Great British Energy. Today, with this Bill, we deliver. British public ownership is back at the heart of our energy system. To every right hon. and hon. Member behind me, I say that it is thanks to each and every one of their victories in their constituencies that today we can start to create a lasting legacy for the country, which breaks from 14 years of failure—14 years of leaving Britain exposed to fossil fuel markets, which led directly to the worst cost of living crisis and energy bills crisis in generations.
Graham Stuart (Beverley and Holderness) (Con)
Will the Secretary of State give way?
Ed Miliband
Not at the moment. [Interruption.] The right hon. Gentleman needs to calm down a little bit; I know he gets very angry.
We have had 14 years of blind faith in free markets and a refusal to have an industrial policy, which offshored clean energy jobs, and 14 years of a Government who were perfectly happy with state ownership of our energy system, but with one crucial overriding condition: that it would be state ownership by any country except Britain. That is the reality of what we inherited.
We already have widespread state ownership of Britain’s energy assets by other countries—Denmark, Sweden, Norway and France—through their state-owned companies. Indeed, the city of Munich owns more of our offshore wind capacity than the British Government. Following the auction results I announced on Tuesday, the largest two offshore wind projects to win a contract will be built by Ørsted, a Danish state-owned company. I strongly welcome its investment, but the question before the House today—the question at the heart of this Bill—is simple: do we think there should be a British equivalent of state-owned energy generation companies such as Ørsted, Vattenfall, Statkraft and EDF investing in our infrastructure?
We have a simple proposition: if it is right for the Danes, the French, the Norwegians and the Swedes to own British energy assets, it is right for the British people to do so as well. That is why we fought the election on the crucial principle that the British people should have a right to own and benefit from our natural resources. To every Member of the House who is considering their vote on this Bill this afternoon, I urge them to vote for that principle. To those thinking about voting against the Bill, I ask them how they will defend to their constituents the idea that other countries should own our national energy infrastructure, but Britain should not.
Graham Stuart
I am grateful to the right hon. Gentleman for giving way. He is normally a fair man, but what he did not mention was the risible state of renewable energy when we took power in 2010. It accounted for less than 7% of electricity, and we increased the figure to nearly 50%. We are a country that has led the world in this area. It was the Conservatives who transformed our energy system to remove coal from the system. I am sure I am just setting up the Secretary of State, which I am happy to do, but what will state ownership do? Our system is arguably one of the most effective in the whole world at delivering green capacity, and has been the most successful in cutting emissions. What will state ownership do, other than simply put the state and its complicated mechanisms into programmes that need to be speeded up, not slowed down?
Ed Miliband
The right hon. Gentleman surprises me; he is a brilliant set-up man, and he is welcome any time. I will now explain to him what state ownership will do. Here is why it is the right idea for our time. It is the right idea for energy security, because Great British Energy will invest in home-grown, clean energy that we control, and speed up its delivery. It is the right idea for jobs—this is the learning from all those other countries I mentioned—because Great British Energy will partner with the private sector to create jobs and make sure that we build the supply chains and jobs that the British people deserve.
It is the right idea for creating wealth for Britain. This is what I do not understand about the Conservative party, because state-owned companies from other countries are not investing in these assets as a charitable endeavour; they are doing so to generate wealth for their countries—wealth that flows back to their taxpayers. State ownership is the right idea for creating wealth for Britain, because Great British Energy, through its investments, will help generate return for the taxpayer. To answer the right hon. Gentleman directly, it is right for energy security, it is right for jobs, and it is right for creating wealth for our country.
Sammy Wilson (East Antrim) (DUP)
I will not support this Bill tonight. The Secretary of State claims that it will put the British people in ownership of the renewable electricity supply market, but that market is estimated is £50 billion a year. He is proposing to invest £1.6 billion a year. Can he not see the difference that £1.6 billion will make to the overall investment? The infrastructure will still not be owned by the British people.
Ed Miliband
The right hon. Gentleman and I have a long history on these issues, which makes me rather old. Indeed, we used to spar about them 15 years ago. He is wrong about £1.6 billion; it is £8.3 billion of investment over the Parliament—a significant sum. Great British Energy will not become EDF overnight—of course not —but the point is that this Government believe in creating a lasting, long-term legacy for Britain, which is what GB Energy will do.
Several hon. Members rose—
Ed Miliband
I am going to make some more progress.
Let me go through what Great British Energy will do. First, it will invest in and own clean energy projects, particularly leading-edge technologies such as floating offshore wind, by working with the private sector and taking stakes in the projects it supports. The truth is that we need to accelerate the deployment of wind, solar, tidal, hydrogen, carbon capture and nuclear, and we need to face the reality that frontier technologies carry risk. That is why there is a particular role for the Government in helping to de-risk projects by investing in them in partnership with the private sector, and in doing so capturing value for Britain.
GB Energy will invest across a range of clean energy technologies, using its £8.3 billion capitalisation. The chair has been appointed by the Government, but the company will be able to move at pace with operational independence. I am delighted that Jürgen Maier, who has a great record of achievement and is a champion of UK manufacturing and good jobs, has been appointed as start-up chair.
Grahame Morris (Easington) (Lab)
I completely agree with the basis of my right hon. Friend’s argument for ending the offshoring of jobs, energy assets and employment opportunities. Almost all solar panels are currently sourced from China. Power Roll, a company in my constituency, has developed a lightweight, flexible and cost-effective solar module and is eager to establish its first gigafactory. Does he agree that, to secure our energy future, Great British Energy should be supporting and investing in innovative start-ups such as Power Roll in east Durham?
Ed Miliband
My hon. Friend is a brilliant champion of his constituency and these issues, and he is absolutely right that part of the challenge we face is to expand our supply chains in Britain. I am very interested in the example he gives.
Matt Rodda (Reading Central) (Lab)
The Secretary of State talks eloquently and powerfully about the physical investment coming from this new measure. Will he elaborate on some of the benefits to our workforce, particularly the training and development opportunities for younger people through a wider range of apprenticeships, and the amazing multiplier effect that will have for our economy?
Ed Miliband
My hon. Friend anticipates my point about how we build the supply chains, and about the lessons we have learned from what state-owned companies in other countries have done to help catalyse a supply chain of jobs and to work with the private sector.
Ed Miliband
I will give way one more time before making some more progress.
Mr Perkins
I am very grateful to my right hon. Friend. We heard the right hon. Member for Beverley and Holderness (Graham Stuart) suggest a few moments ago that things were going wonderfully under the Conservative Government, but does my right hon. Friend agree that the Climate Change Committee warned a few weeks ago that only a third of the emissions reductions that we need to achieve the 2030 target are currently backed by a credible plan? Is the reality not that we need a step change? Thank God we have a Labour Government to deliver it.
Ed Miliband
My hon. Friend is absolutely right, and it is part of what this Government have done. In less than two months, we have overturned the onshore wind ban, consented large amounts of solar power and, on Tuesday, had the most successful renewables auction in British history.
Ed Miliband
I will not give way to the right hon. Gentleman again. We have heard quite enough from him.
Secondly—I know this is a concern of the Liberal Democrats and of other Members on both sides of the House—Great British Energy will deliver our local power plan, working with local authorities, combined authorities and communities to deliver the biggest expansion of support for community-owned energy in history.
Clean energy is not just about large-scale infrastructure. If we look around the world, so many countries have a lot to teach us. In Denmark, around half of wind capacity is citizen-owned; and in Germany, almost half of solar capacity is citizen-owned. Our local power plan will learn from other countries.
Generating clean power, and embracing it as a way to generate a return for local people, to help tackle fuel poverty, to unleash the dynamism and resources of local communities and to win the consent of local people, thousands of projects across Britain are tapping into that energy and enthusiasm.
Ed Miliband
I will make a bit more progress.
I had the chance to visit the Lawrence Weston turbine in Bristol, which Members may know about. It is England’s tallest onshore wind turbine, and it is 100% owned by the local community, powering at least 3,000 local homes and reinvesting revenues into local projects.
Ed Miliband
I have caught the eye of an infrequent contributor to this House, so I will give way.
Jim Shannon
I thank the Secretary of State for what he is putting forward. It seems logical for the UK to manufacture this process, rather than others doing it for us. The question for my constituents, I say respectfully to the Secretary of State, is, what will the price of energy be at the end? A LucidTalk poll for National Energy Action evaluated the impact of rising energy prices on households in Northern Ireland. It found that 41% of households were spending more than 10% of their income on their home energy costs. How can we make sure that my constituents, and indeed all our constituents, can have energy they can pay for?
Ed Miliband
The hon. Member is absolutely right. This is a massive concern for all our constituents, and Great British Energy is a crucial tool to bring down prices for our constituents. The truth is that every Member in this House has to make a judgment on this. Do they believe that business as usual, staying on fossil fuels, will give us the energy security we need? We discussed this in the House on Tuesday. The truth is that we had the worst cost of living crisis in generations because of our exposure to fossil fuels. We are seeing prices rise again on 1 October, not because of Government decisions but because of our dependence on international gas markets. The argument for clean energy 15 years ago was a climate argument; it is now as much an energy security argument as a climate argument.
Several hon. Members rose—
Ed Miliband
I am going to make a bit more progress.
Thirdly, Great British Energy will work with industry to develop supply chains across the UK to boost energy independence and create good jobs. The reality is that the last Government spectacularly underdelivered on the promise of creating jobs in clean energy. It is true that British waters are home to one of the largest floating offshore wind farms in the world: Kincardine, just 15 km off the coast of Aberdeen—[Interruption.] The right hon. Member for East Surrey (Claire Coutinho) nods, but where was it made? Its foundations were made in Spain and its turbines were installed in the Netherlands, and it was then simply towed into British waters. How can that be right?
This Government are not neutral about where things are made. We want the future made in Britain. Clean energy is the economic and industrial opportunity of the 21st century, and the truth is that other countries are seizing this opportunity. Britain is being left behind. The facts are extraordinary: Germany has almost twice as many renewable jobs per capita as Britain; Sweden almost three times as many; and Denmark almost four times as many. That is the previous Government’s legacy.
What our friends and neighbours have realised is that a domestic national champion is a crucial tool to help deliver economic success. The success of the Danes, for example, cannot be divorced from the role of Ørsted in helping to make it happen. That is why Great British Energy will work alongside our national wealth fund and the British jobs bonus, partnering with industry, to build supply chains in every corner of the UK, delivering the next generation of good jobs, with strong trade unions, and reindustrialising Britain.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I congratulate the Secretary of State on his appointment. May I draw attention to the letter he wrote to Fintan Slye, the chair of National Grid ESO, in August, and the response he has given in his open letter to the industry, alongside a question about the cancellation of the offshore co-ordination support scheme, which was coming up with viable alternatives for better delivery of the Norwich to Tilbury project? Mr Slye says that the plan the ESO will develop will be
“a whole systems spatial view of what is required to deliver a clean, secure, operable electricity system by 2030.”
Does that include all the work that ESO has already done in its review of the Norwich to Tilbury project, which includes many viable options that could speed up the process and make it more viable for the long term?
Ed Miliband
I looked carefully at that issue before we made that decision. I have great respect for the hon. Gentleman, but we cannot justify spending public money on a scheme that will not work and will not deliver for the British people, which is why we did not go ahead with the second phase. All the advice and all the evidence was that it just would not be value for money.
I am glad that the hon. Gentleman draws attention to 2030. For the first time in this country since the last Labour Government were in power, we are going to have a proper plan. We did not inherit a proper plan, and we need a proper plan to give certainty to industry.
Fourthly, Great British Energy will support project development, leading projects through their early stages to speed up delivery, while capturing more value for the British people, in particular through our partnership with the Crown Estate, announced just two weeks into our period in Government. The partnership will co-ordinate planning, grid and leasing for the seabed and, importantly, help speed up the roll-out of offshore wind and other technologies. It has the potential to help leverage up to £60 billion of private investment and deliver up to 30 GW of offshore wind leases.
The truth is we have huge potential as a country: the chance for offshore wind to drive investment in coastal areas from Cornwall to Grimsby, opportunities for ports from west Wales to north of Scotland to lead the world in the industries of the future, and opportunities for supply chain companies all over the world. That is what this Bill is about.
Ian Lavery (Blyth and Ashington) (Lab)
I am terribly excited about the ambition of the Labour Government for GB Energy. In my constituency, Blyth port is thriving. We have Energy Central on the Blyth estuary, Catapult UK, the offshore energy research centre, and Lynemouth power, a biomass power station. May I invite the Secretary of State to see the issues in my constituency for himself, and show businesses and residents how they can participate in the fantastic opportunity Government are offering?
Ed Miliband
My hon. Friend is a great champion for his area and he is right. I am sure he reflects the feelings of every right hon. and hon. Member, whatever side of the House they are on, that there are huge opportunities in this sector. We intend to exploit them. I look forward to seeing his constituency.
Ed Miliband
I will make a bit more progress. I have set out our case—a case that the British people overwhelmingly support. According to post-election polling by More in Common, Great British Energy was supported by an overwhelming 73% of voters and opposed by just 8%. It appears from the Conservative’s reasoned amendment—so-called—that Conservative Members will vote against the Bill today. If they do that, they will do something remarkable: they will go one step further than refusing to listen to the people who did not vote for them by refusing to listen to the people who did vote for them—quite a remarkable feat by an Opposition—because Great British Energy was supported not just by Labour voters, but by Conservative voters by a majority of four to one—56% to 14%.
Ed Miliband
I will make a bit more progress. [Interruption.] Conservative Members are still in the “the show was great but the audience was poor” stage of Opposition. Let me give them some advice—they will get out of that over time, but they are in the early stages now.
Because I get my kicks in strange ways, for a bit of light entertainment, I have been reading what the Conservative party leadership candidates have been saying. It is really interesting, honestly; it is quite fun reading. [Interruption.] Yes, somebody has got to do it. The right hon. Member for Tonbridge (Tom Tugendhat) said that people
“will never vote for a party that they have stopped taking seriously.”
Well, that is true. He said they should be
“given credit for seeing the errors that we may make and correcting them.”
Correct. The right hon. Member for North West Essex (Mrs Badenoch)—I believe the shadow Minister, the right hon. Member for East Surrey (Claire Coutinho), is the mastermind for her campaign—said it was no good
“having the same policy arguments from the last Parliament.”
The shadow Minister should take those words to heart.
I agree with those candidates that the Conservative party needs to move on. I am in a generous mood, Madam Deputy Speaker. I have been involved in leadership campaigns, so I have some advice. I have a free idea for the not very famous five still left in the Tory leadership competition: back an idea that the public support. Back an idea that Conservative voters support; back an idea that Labour voters support; back an idea that Reform voters support—Reform Members are not here. Back an idea that Liberal Democrat voters support. They should move on from the arguments of the last Parliament, show a bit of bravery—even break the Whip and stand out from the crowd. They should break from the past and back our Bill today.
Wera Hobhouse
The Secretary of State knows I share his passion and ambition to get to net zero. One big concern about GB Energy is that it will crowd out, rather than crowd in investment. Will he enlarge on how he intends to crowd in investment into green energy?
Ed Miliband
I am very surprised by the Liberal Democrats saying that. It is slightly “orange book” Liberal Democrats, if I may put it that way, for those old enough to remember. I say respectfully to the hon. Lady and all Members of the House: look around the world at what is happening before our eyes. There is catalytic public investment—public investment levering in private investment. The whole old fashioned, free market 1980s argument about crowding out turns out to be wrong. Just look at what is happening in America. Why is the money flowing to the United States? In part, because of the catalytic public investment. [Interruption.] I can see Opposition Members are going to be slow learners.
Great British Energy is at the heart of our long-term plan to accelerate the transition to clean energy and ensure we are never at the mercy of volatile fossil fuel markets again. It will speed up delivery, create good jobs and protect family finances, and we will reap the benefits for generations to come. I commend the Bill to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
Before I call the shadow Minister to the Dispatch Box, I remind hon. Members that questions to the Minister are taken through the Chair, so they must make eye contact with the Chair and not the Minister.
Claire Coutinho (East Surrey) (Con)
I beg to move an amendment to leave out from “That” to the end of the Question, and insert:
“this House, while recognising the need to cut household energy bills for families, accelerate private investment in energy infrastructure, and protect and create jobs in the energy industry across the UK, declines to give a Second Reading to the Great British Energy Bill because Great British Energy will not produce any energy, will not reduce household energy bills by £300, does not compensate for the amount of investment in energy projects that will be deterred by the Government’s plans to prematurely shut down the UK’s oil and gas sector, and involves an unjustified use of taxpayers’ money at a time when the Government is withdrawing the Winter Fuel Payment from 10 million pensioners as energy bills rise.”
I welcome you to your place, Madam Deputy Speaker. It is a pleasure to be back. I know the Secretary of State will have had a busy summer settling into Government, having the eagle-eyed civil service now screen all his comments and a hungry press pack on his tail about every promise he has made. He even slotted in a trip to Brazil, a place very dear to my heart, but perhaps he should have spent a bit more time on the Bill. If the Bill does everything he and his team have promised, I will be impressed. Let me remind the House what is on the record. If it saves £300 off bills by 2030, if every project it invests in is guaranteed to turn a profit by 2030, if it can get new innovative energy prototypes off the ground and create 650,000 jobs, even I will be impressed. But here is the rub: the Bill is four pages long—there is barely anything in it.
I do not want to oppose the Bill just for opposition’s sake, but the Secretary of State has provided no detail on how the Bill will deliver any of his promises, let alone all of them. It is a four-page Bill in which he is asking for £8 billion of taxpayers’ money, while setting out no investment plan, no figures for the energy that will be produced, no numbers for energy bill savings or carbon emission reductions, and not even a timeline. I doubt it can deliver any of the things he has promised. He is asking for £8 billion of taxpayers’ money—a completely blank cheque—for an energy company that will not cut bills or turn a profit by 2030. I will come back to those promises.
Several hon. Members rose—
Claire Coutinho
I will give way in a second.
The Secretary of State is setting up a new body when our energy sector is not short of state-run bodies. We have Ofgem, the National Energy System Operator, the Climate Change Committee, Great British Nuclear and, of course, the UK Infrastructure Bank, with £22 billion to provide debt, equity and guarantees for infrastructure finance to tackle climate change, set up by the former Prime Minister.
At this point, the taxpayer might well ask why they are coughing up twice for programmes that do the same thing. Here is why. When I read the Bill, tiny as it is, it rang a bell and, lo and behold, it is a carbon copy of the Infrastructure Bank legislation, so why do the same thing again? Well, there are a few important omissions and tweaks. First, while the Infrastructure Bank legislation sets out directions for governance by directors and non-executive directors, the Bill does no such thing. While the Infrastructure Bank legislation appoints an independent person to carry out a review of the effectiveness of the bank in delivering its objectives, the Bill does no such thing.
Lastly, while the Infrastructure Bank legislation gives special powers to direct investments to the Treasury—to independent civil servants—the Bill gives powers to the Secretary of State, who, as far as I am aware, has no investment background and no financial training and whose only period in the private sector, if I have this right, was as a researcher at Channel 4.
Graham Stuart
My right hon. Friend is absolutely right. The Bill sets out huge powers for the Secretary of State—he will be like the slim controller of the energy system, as he tries to interfere. But he has a track record in such cluelessness—the 2030 decarbonisation target. “We need more ambition,” he said. We had therefore hoped that the self-confessed nerd would know how to do it, but we had the letter in August to Fintan Slye of the Electricity System Operator, which set out the fact that the Secretary of State did not have a clue about how to deliver 2030 decarbonisation. The answer from Fintan Slye, if he were not in such an impossible position, would have been short: “It can’t be done. You need to do your homework.”
Claire Coutinho
I thank my right hon. Friend for his intervention. It is always a pleasure to see him in the Chamber making excellent points.
The question that I have is this: why has the Secretary of State set up a duplicate programme with no instructions for governance, independent review, investment plans or consumer savings that he can be judged by? Why should taxpayers’ money fund a similar entity when the only difference that I can discern is that it gives the Secretary of State unchecked power? What is it about the £8 billion of taxpayer money that he can direct without checks or balances that first attracted him to the idea of GB Energy? These are fair and reasonable questions for us as the Opposition to ask, and he must look to improve the governance in this Bill.
Let me turn to the promises that he made. The Prime Minister, the Chancellor, the Secretary of State and at least 50 Labour MPs promised their constituents in the July election that GB Energy would save them £300 a year on their energy bills. They said it on their election literature, on social media and in hustings. They said it because they were told to do so by the Secretary of State, but I listened very closely to his speech today and I did not hear him make a promise that GB Energy will save them £300 on their energy bills.
In a debate just before the summer recess, the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), would not repeat the promise either. That is because they all know that it is not true. In fact, one of Labour’s first acts in government has been to take away up to £300 from 10 million pensioners this winter, including two thirds of pensioners in poverty. It takes some nerve for the Labour party to say that it never wanted to do this, because the winter fuel payment was in the manifesto of the Secretary of State’s party when he wrote it in 2010. It was in there when he was leader in 2015, it was in there in 2017 and in 2019, but in 2024 it was omitted. There was no mention at all for the first time in 14 years.
I will give credit to the right hon. Gentleman—something that I do not always do. When he was leader in 2015, he put it in his manifesto that he would take the payment away from the top 5% of pensioners. He will remember that. He had the courtesy of telling the public his plans, but, professional politician that he is, I suggest that he would have clocked that it was not included this time round. He has been in politics for 30 years and would have known what that meant, so I hope that he can confirm today whether he had any conversations with the Prime Minister, the Chancellor or Morgan McSweeney before the manifesto came out. If so, he sent out those Labour candidates—all the people on the Benches behind him—with this false promise of the £300 energy savings when someone clearly knew that they were going to take that amount away from millions of pensioners this winter.
Sir Bernard Jenkin
My right hon. Friend referred to the letter that was sent by the Secretary of State to Fintan Slye, the head of National Grid ESO and, curiously, there is nothing in the Secretary of State’s letter that refers to the need to lower electricity prices. The term “electricity prices” does not appear in the letter and neither does the term “security of supply”. Does she agree that those are the two great concerns about rushing the 2030 decarbonisation target?
Claire Coutinho
I absolutely agree with my hon. Friend, and I will come on to that point.
There will be a vote next week on the winter fuel payment—I think the Government have confirmed that. Everybody heard the Secretary of State speak today, so I say to those on the Opposition Benches that, if they want to break the Whip, if they want to stand out from the crowd, I am sure that they will have his encouragement.
Let us come back to those savings. The Secretary of State has promised bill savings by 2030 through GB Energy —I believe that is correct. The question is how. Does he have any serious energy expert who thinks that that is possible with an investment of £8 billion over five years? That is a drop in the ocean when it comes to energy investment. It is a fraction of the amount of investment that he is deterring from the private sector into clean energy with his plans to shut down the North sea. He talked about offshore wind, nuclear and hydrogen in his founding statement, but none of those things get built in five years. Let us be honest, the likelihood of his plans bringing any power online by 2030 is tiny. The idea that it will be enough to lower bills across households is, frankly, for the birds. When we asked his Department how much energy he wanted to enable through the Bill, his Department said that it would be looked at in due course. That is just not good enough.
The second promise is clean power by 2030. GB Energy was supposed to be the silver bullet to reach the Secretary of State’s target of a decarbonised grid by 2030. We will come on to whether that is a good idea a bit later. To do that, he said that he needed £28 billion a year. His Chief Secretary to the Treasury talked about hundreds of billions of pounds, and he has in fact secured from his Chancellor £1.6 billion a year. He talked about national ownership. This is not enough money to do that, and he knows it. He himself thought that his plans would cost vastly more, yet he is promising to do it all now with 6% of the funds. That is just not credible.
Then we come to promise No. 3. The Government say that
“in every single project”
that GB Energy invests in
“there will be a return for the British taxpayer”.—[Official Report, 26 July 2024; Vol. 752, c. 937.]
That is what the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen said on 26 July—it is in Hansard if Members want to check. It says “in every single project”.
What Labour is telling industry is very different. It says that it will use that money—£8 billion of taxpayers’ money—to de-risk its projects. I believe that the Secretary of State said that in his speech today. What does that mean? That means that it will be investing in the parts of those projects that the energy companies do not expect to be profitable. May I ask this: what is it about the Secretary of State’s vast private sector experience, which he gained as a researcher at Channel 4, that makes him think he can turn a profit, when experienced, multimillion-pound energy companies cannot? He has not set out an expected financial rate of return, any risk profile or a timeframe for these returns. Those are the minimum things that anyone seeking investment should set out, and I say that as someone who is financially trained. I know that the right hon. Gentleman is not, but this is basic stuff.
Here is the problem. If the Secretary of State’s goal is to give taxpayers a good deal, he should be investing on commercial rates, which would just displace private sector capital and would not speed up his decarbonisation targets, produce more energy or lower bills. But if his goal is to de-risk more speculative projects—that is the line that he is giving industry and the thing that he said today—then by definition he will be throwing taxpayers’ money into the least attractive parts of investments, by which I mean the parts that multimillion-pound companies do not want. The risk is that GB Energy, far from generating any profit for taxpayers, will become a skip for all and everyone to put their problems and their failures inside. This is crucial, because we cannot let the Government repeat at a national scale what Labour councils have done at a local level. [Interruption.] Labour Members groan, but they should think about what local taxpayers have had to face.
Robin Hood Energy in Nottingham, which collapsed, left residents with debts of £38 million. Bristol Energy, which failed, cost residents £43 million. Warrington’s stake in Together Energy left residents with a potential liability of £37 million. These were small-time projects with budgets in the tens of millions.
Sir Bernard Jenkin
On a point of order, Madam Deputy Speaker. I cannot hear what the shadow Secretary of State is saying because there is so much noise coming from those on the Government Front Bench. They do not want to hear what she is saying, because it might be true.
Madam Deputy Speaker (Caroline Nokes)
I thank the hon. Member for that comment. He will know that that is not a point of order. Would the shadow Secretary of State please proceed?
Claire Coutinho
This is really important, because we are talking about taxpayers’ money. Those were small-time projects with budgets in the tens of millions, but the Secretary of State is asking for a budget of billions of pounds with no plans. He mentioned a couple of companies in his speech, including EDF, which made a loss of €17 billion in 2022, and Ørsted, which made a loss of €2.7 billion in 2023, so I think it is right that we ask some of these questions.
Ms Polly Billington (East Thanet) (Lab)
The right hon. Lady mentions Robin Hood Energy and other local energy companies that were in fact supply companies. We are talking about a Great British Energy company that will be generating energy. She simply does not understand that. She is making a mistake about our plans, and failing to understand what is actually going on. She is suggesting that something is going to happen that is not going to happen.
Claire Coutinho
If the hon. Lady would bravely like to say that the company will generate energy, I am sure that she would like to tell us how much, because no one else seems able to.
Claire Coutinho
I am sorry, but I will make some progress.
Finally—this is really important—the Secretary of State pays lip service to nuclear, but we know that when Labour was last in power it did not start a single nuclear power plant in all its 14 years. All summer, there has been an eerie silence. On the capital raise for Sizewell C, which should be out by now—nothing. On the small modular reactor competition, which should be deciding its final projects now—nothing. We committed to a third large-scale nuclear power plant at Wylfa—again, nothing. We wrote to the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen, but once again he has refused to confirm any detail or, with regard to Wylfa, whether those plans are even in place. Can the Secretary of State say whether the creation of GB Energy is slowing down those projects and causing the timetable of these programmes, which will provide clean, cheap energy, to slip?
Claire Coutinho
I will not; I will continue.
Once again, we simply have no answers. I find all this very strange, because at our last encounter in this House, the Secretary of State was keen to confess that he was a “super-nerd”. As someone who has been a lifelong mathlete, I am the first person to want to champion a fellow super-nerd, but when I meet super-nerds they normally like evidence, facts and numbers. Whenever we look at what the Secretary of State has set out, there are no numbers attached. He talks about decarbonising the grid by 2030, but he has not set out the full system costs of that. He promises profits and bill savings from GB Energy, but he cannot tell us by when or how much.
When it comes to the Bill and its 2030 target, it is clear that the Secretary of State does not have the numbers, because two weeks ago he wrote a letter to the director of the Electricity System Operator. I have it here. Do you know what he said, Madam Deputy Speaker? He asked the director to please
“provide practical advice on achieving clean power by 2030”,
including a
“High-level assessment of costs”.
Given that we are talking about people’s energy bills, I think the public would like a detailed look at what this is going to cost them. To top it off, he asked the director to advise what actions his Government should take
“to enable delivery…clearly setting out where further work is required.”
The evidence could not be clearer. He went into a general election with a pledge and no idea how to achieve it, what it will cost or whether it is achievable at all.
Dame Caroline Dinenage
That is the exact point that I wanted to make; I was very keen for the Secretary of State to take my intervention on that point. The key practical, tangible thing that my constituents want to know is when they will see the £300 saving that he promised them during the general election. That is what really impacts families and households up and down this country. When a Minister comes to sum up the debate, will they restate that commitment to households about a £300 saving?
Claire Coutinho
That is a very fair question. I hope that the energy Minister, who I assume will wrap up the debate, will be able to provide some detail.
Far from being a super-nerd, the truth is that the Secretary of State is the ultimate career politician. He comes up with big titles and makes big promises to the public, but he has no idea how to deliver. My big fear—[Interruption.] He should listen, because it is an important point. My big fear is that he is losing focus on all the amazing technologies that will come online after 2030, whether it is fusion energy, the next generation of nuclear reactors or carbon capture. These are the innovative new technologies that will not just deal with the 1% of emissions in the UK but the 99% produced overseas. In Government, I focused a lot of my time on speeding up the development of those technologies. We launched the £1 billion green industries growth accelerator specifically to reduce any supply chain constraints, for example on cables. We provided almost £200 million to help the UK become the first commercial producer of advanced nuclear fuel outside Russia. We were making Britain one of the most exciting places in the world for fusion energy development, with £600 million of funding.
Wera Hobhouse
I thank the right hon. Member for giving way—finally. She is criticising the Government for the rushed target of decarbonising the grid by 2030. Can she enlighten the House on when the Conservative party would do it?
Claire Coutinho
I will. This is a critical point, which I have made in recent weeks. The point about having longer to decarbonise is that it gives time to develop British supply chains. That is exactly what I was doing. The green industries growth accelerator and some of the other things that I have talked about gave us time to set up British companies. Those things cannot be done in five years. There is a need to get project finance, to hire workers and train them, and to get planning permission. There is a huge amount that needs to be done. The fact that the Secretary of State wants to rush the transition and make it happen at breakneck speed is risking British jobs and livelihoods, and making us dependent on Chinese supply chains.
The Secretary of State has promised many things with the Bill, but he simply cannot set out any detail about the things that he wants to deliver. It would be a blank cheque for £8 billion of taxpayers’ money, with no plan, no evidence, and no numbers for the bill savings or profits that he has been promising the British public. That is why we cannot support the Bill as it stands.
Madam Deputy Speaker (Caroline Nokes)
I call Becky Gittins to make her maiden speech.
Becky Gittins (Clwyd East) (Lab)
Much like one of Clwyd East’s famous sons, John Prescott, who hails from Prestatyn, I do hope my maiden speech packs a punch. Given that the custom in a maiden speech is for the new Member to talk about some of the best bits of their constituency, coming back from a summer of attending carnivals, fêtes, agricultural shows, a classic car festival, a duck race, fun days and dog shows has made my job today a little easier.
Today, I am going to take the House on a whistle-stop tour of Clwyd East, a place that it is my great privilege to represent. It is apt that I give my maiden speech in a debate about Great British Energy, as Clwyd East boasts on its coastline the port of Mostyn, with Gwynt y Môr wind farm, a UK leader in offshore wind power, and North Hoyle offshore wind farm, off the coast of Prestatyn. Both demonstrate the transformative nature of offshore wind for our country, through the energy that they generate and the local employment that they provide. Great British Energy will see that go even further, tackling the climate crisis and creating good-quality, long-term, sustainable skilled jobs in north Wales and across the UK.
Prestatyn’s beautiful stretch of coastline is not just useful for producing clean energy; it is also a hub of tourism, with its blue flag beaches, beautifully kept station and public gardens, and high street with lots of brilliant local businesses. Though I am proud to be the first MP for the new constituency of Clwyd East, I pay tribute to my predecessor in this part of the seat, Dr James Davies, the former MP for the Vale of Clwyd constituency. From Prestatyn, James used his time in Parliament to be a dementia champion, and served his country in Government.
Holywell is the next major town along the coast. St Winefride’s well, the Lourdes of Wales, brings in thousands of visitors a year. There is the old water mill at Basingwerk Abbey, based at Greenfield valley, famed for its cotton and textile mills in the 19th century, and latterly for its brilliant heritage trails, wonderful dog walks and very challenging parkrun. Holywell High Street is also home to Holywell Area Community Museum, which features my great-grandfather’s St John Ambulance uniform and my great-uncle’s mining helmet from the Point of Ayr colliery. Clwyd East has a proud mining heritage, with most families near the coast having links to the Point of Ayr or Bettisfield collieries. That heritage also formed an important part of my upbringing, and is the reason I am so proud of Labour’s commitment to end the injustice of the mineworkers’ pension scheme.
As the 684th woman to be elected to Parliament, I would like to pay tribute to Eirene White, a trail-blazer and—like yourself, Madam Deputy Speaker—a Deputy Speaker who was integral to Labour’s commitment to equal pay, as the 58th woman elected to Parliament.
Clwyd East has a vast and diverse geography, containing coastal towns, the Clwydian mountain range and the many unique villages at its base. These villages provide much in terms of innovation and activity, through the brilliant initiatives they champion and fantastic events that they hold—from community-owned pubs and shops to agricultural shows and music festivals. Hailing from the small village of Bagillt, I am immensely proud to have such a wealth of impressive, small and mighty villages in my constituency.
Farming is central to the economy and culture of Clwyd East, with 68% of the constituency serving as agricultural land. In May, I headed to Clawdd Offa farm, near Northop, to meet National Farmers Union county chairman David Williams and his family on their dairy farm. After a brief chat, we headed out into an enclosed field full of cows. In one of the more surreal moments of being a parliamentary candidate, I looked out in front of me and could not help but observe aloud, “Why would anyone want to spend their days in an enclosed space with hordes of rowdy, lowing mammals?”, to which David replied, “I quite agree Becky—you must be mad!”
Moving south, Clwyd East’s smallest town is Caerwys, which played host to the very first Eisteddfod, and is also the home of Dr Tim Erasmus, chair of the Caerwys Historical Society and my very much admired former politics teacher.
Next is the historic market town of Mold, a town very close to my heart as it is where I spent many summers performing with my dance school at Theatr Clwyd and where I went to sixth form at the Alun school. The Alun school worked to give its students the best opportunities to succeed—something that I am firmly committed to.
Maximising opportunities for young people is a passion that I know I share with one former predecessor from the Delyn constituency, David Hanson—after all, I first came to Parliament on work experience with David 13 years ago. So committed is David to providing opportunities for young people that he is continuing to monitor and support my development by joining the other place as Lord Hanson. I am so proud and excited to work alongside a political hero of mine under a new Labour Government, whose resolve to do the very same thing 32 years ago paved the way for me and a generation of young people to access opportunities and succeed.
Between 2019 and 2024, Delyn was served by Rob Roberts. I am heartened by Rob’s local roots and close ties with the community that brought him up, as well as his keenness to work with community councils and his proud use of the Welsh language, having gone to the Welsh-medium school Maes Garmon. Fel mae nhw dweud, “Cenedl heb iaith, cenedl heb galon.”
As well as having educated two MPs, Mold is also the home of Daniel Owen square; Bailey Hill, or Mold castle; and a thriving number of independent shops and businesses. With a summer recess of sampling cakes at local fêtes having taken its toll on my waistline, I am grateful to the brilliant independent clothes shops that have saved the day, including Simmi, where I found the perfect outfit to make my maiden speech in. [Hon. Members: “Hear, hear!”] Thank you; that is very kind! As is the case throughout the constituency, people in Mold take great pride in their town and contribute to the rolling series of events and festivals throughout the year.
I am also privileged to represent the beautiful town of Ruthin, with its rich history and enduring architecture. As well as Ruthin castle and its resident peacocks, the local community has worked to make sure that Ruthin’s old courthouse, jail and market hall are restored and open to the public. Ruthin also hosts the incredibly popular Ruthin festival, a fantastic annual event run by local volunteers and proudly conducted yn Gymraeg.
Heading over the horseshoe pass, the final large town of the constituency is Llangollen. As the host of the annual Llangollen International Musical Eisteddfod, Llan is proud to be the place where “Wales welcomes the world”. I did have tickets to the Eisteddfod this year—a night of west end musical numbers on 4 July—but clearly the right hon. Member for Richmond and Northallerton (Rishi Sunak) had other ideas.
With Llangollen in my constituency, I must hold the title for the constituency with the best and most varied days out. Where else could you expect to ride on a heritage steam train in the morning and head just 10 minutes down the road to kayak across an aqueduct with UNESCO world heritage status in the afternoon? Llangollen railway and the Froncysyllte aqueduct are only part of what Clwyd East has to offer. If you are feeling a bit dizzy at this point, Madam Deputy Speaker, that is because you have just travelled about 40 miles in—hopefully—around eight minutes.
Whether it is supporting local businesses to thrive, improving public transport, keeping our communities safe, improving people’s rights at work or helping young people to fulfil their potential, I will do all I can for the people of Clwyd East, and I will work tirelessly to repay the trust that they have placed in me.
Wera Hobhouse (Bath) (LD)
I congratulate the new hon. Member for Clwyd East (Becky Gittins) on a wonderful whistle-stop tour of her constituency, from wonderful dog walks to rowdy cows in fields and fascinating museums that testify to the history of her constituency. We lived in Liverpool for 10 years, many years ago, and we visited her constituency many times and had wonderful days there. I know how beautiful it is.
Championing renewable energy is in our DNA as Liberal Democrats. Renewables are clean, cheap and popular. We welcome the fact that the new Government are turning around the damaging attitude taken by the Conservative Government and are attempting to make the UK once more a global leader in getting to net zero. We are absolutely on the side of the Government when it comes to the ambitious targets that are being set to get to net zero. We are pleased that through the Bill new steps are being taken to restore British investment in the green economy. The Bill must ensure that renewable energy and home insulation can be rolled out at speed so that we meet our climate targets, bring down energy bills and provide green, well-paid jobs in the future.
The previous Conservative Government’s obsession with oil and gas left us in a mess. The dithering, delaying and even denying of the Tory Government held us back. I have often said that net zero is not like a bus that we can miss and say, “Whoops! We’ll get the next one.” This is a target that we cannot miss, and delaying is just as bad as denying that climate change is happening at all.
Wera Hobhouse
I am happy to give way; the right hon. Gentleman and I have had many discussions on this issue.
Graham Stuart
I wonder whether the hon. Lady knows of a single major economy on the planet that went faster than the previous Conservative Government in cutting emissions.
Wera Hobhouse
I am happy to respond to that, because I do believe that the UK was a global leader. There was cross-party agreement about net zero, but the last Government broke that agreement. That is our problem. Each year and each month matters when it comes to setting the pace to get to net zero. Instead of producing our own renewable energy, we were left reliant on fossil fuels—the energy of the past—and on dictators such as Vladimir Putin. In this unstable geopolitical environment, that was a death sentence and led to the catastrophe of the recent energy crisis.
Families are once again worried about another dramatic energy bill increase—we say that honestly to this Government and want to work with them on this issue—this time of £140 on a typical family’s annual energy bill. Pensioners are also rightly concerned about the Government’s plan to cut the winter fuel allowance for millions of the poorest and most vulnerable people. I raised the matter in business questions earlier and said what is important to us. We of course recognise that through the pension increase next April there will be relief for pensioners, but this winter, when things have become really difficult for pensioners, the Government should not make cuts before we have seen the benefits. We have been making that point and hope to work constructively. It is a political choice and, in our view, it is the wrong one, but it is pretty rich of the Conservative party to complain.
It is clear that if we are to hit our net zero targets, we must drive up investment in renewable energy. The Climate Change Committee’s 2024 progress report found that policy reversals and delays, together with inconsistent messaging, hindered progress just when acceleration was needed. Only around one third of the emission reductions required to meet the 2030 target are covered by our current plans. I challenged the shadow Secretary of State on what the Conservatives’ plans for decarbonising actually are, but we have had no answers. We must, for example, at least triple the operational capacity of offshore wind installations to meet our 2030 targets—and we Liberal Democrats absolutely believe in the 2030 targets.
New first-in-class renewable energy technologies are coming on the scene thick and fast, and the Government must find better mechanisms for funding them than we currently have in place. One example, if I may bring it up, is DRIFT Energy, which is based in my Bath constituency. I hope the Secretary of State is listening. DRIFT uses sailing ships to travel to the deep sea to harvest deep ocean wind and generate green hydrogen. Interesting technology is coming on board, but these new technologies still face many investment problems. The green hydrogen is then delivered to ports around the world—they are essentially fishing ships for energy. Truly novel technology like this does not fit neatly under a Department, so it becomes exceptionally hard to win grants, let alone multimillion-pound grant support. It is important that we are aware of that.
Max Wilkinson (Cheltenham) (LD)
Does my hon. Friend agree that we need the Bill to look at and include schemes like the Cheltenham green deal, run by Cheltenham borough council, through which local organisations that could not otherwise fund green schemes are able to access funding borrowed by the local council? Such schemes will then make money and provide a return for the taxpayer so that local areas can start producing more renewable energy for themselves—for example, through the investment in solar panels on the roof of Cheltenham Town football club.
Wera Hobhouse
As I progress with my speech, my hon. Friend will hear that our focus on local authorities, local decision making and local involvement is crucial. Let us ensure that our emerging technologies, which have the potential to be hugely valuable, are not overlooked or forced to seek support from abroad.
Mr Gideon Amos (Taunton and Wellington) (LD)
Does my hon. Friend agree that the Secretary of State should take on board one of the emerging technologies that could deliver the most for Great British Energy: the potential for tidal range energy? In a previous life, I was responsible for the consenting of the Swansea tidal lagoon, which unfortunately the previous Government failed to fund. It is the second biggest tidal range in the world and could be a massive success story for Great British Energy and the UK. Does she agree that the Secretary of State should take that on board as a key objective of Great British Energy?
Wera Hobhouse
I totally agree, and I am sure that the Government will agree too. A lot of these decisions are ultimately about value for money; as these tidal range technologies come on board, they can become cheaper. I hear the Government are saying that this is exactly the plan: that, where it is currently expensive, Great British Energy can come in and provide support. We understand and support that principle.
This new Government must ensure that they have clear and consistent messages. Delays to the phase-out dates of fossil-fuel vehicles and boilers, as we saw under the last Government, have sent mixed signals to investors, businesses and consumers. We hope that GB Energy will go some way in providing confidence to other investment bodies and the wider industry that Britain’s green economy is open for business.
We Liberal Democrats realise the importance of community buy-in. The new Government must put local voices at the centre of the journey to deliver net zero. We need to win hearts and minds to persuade people that net zero projects are good for their communities, for their pockets and for our future national economy.
Sarah Dyke (Glastonbury and Somerton) (LD)
The Government have said that they believe communities that host renewable energy infrastructure should benefit from it, but there are currently no ways to force developers of on-ground mounted solar panel farms to provide community benefits. Does my hon. Friend agree that the Government should use this Bill to make provisions for guaranteed community benefits in these circumstances?
Wera Hobhouse
We have already had some detailed discussions about what we are doing with communities that have to host vital infrastructure, and it is important that the Government assure local communities and the Liberal Democrats that this will happen. As the Bill progresses, we need to discuss how we can get legal assurances and whether the Bill is the right place for this.
As I have said, we need to win hearts and minds to persuade people. Only with local consent can we successfully deliver the path to net zero, which is why we have called for communities living near large-scale infrastructure projects to receive community benefits—for example, through reducing energy costs and funding local initiatives. We are keen to work collaboratively to ensure that these benefits are in place in legislation.
We Liberal Democrats welcome the inclusion of clause 3, which lists specifically all the objects of GB Energy. Although those aims all have their merits, the Government have failed to include anything on community energy. That is especially disappointing—[Interruption.] May I continue? I will lay this out as I understand it—I worked on the all-party parliamentary group for community energy, and I will get to my point. It is especially disappointing that the new Government have failed to include anything on community energy, given their welcome words in the House about how important it is to enable community energy—I hear it again and again. It is no longer about words; we now have a Bill before us in which we can make this happen.
I will lay out what I think is necessary. Without the inclusion of community energy, the Bill will be a major missed opportunity. In the past, the now Secretary of State and his Ministers have been vocal champions of community energy. In a previous debate on making Britain a clean energy superpower, the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), stated:
“One of the missions of GB Energy will be around the idea of community-owned power.”
He has also advocated for local communities to have
“some sense of ownership of the assets”—[Official Report, 26 July 2024; Vol. 752, c. 942.]
that they generate. Last year, the Secretary of State himself tabled two enabling amendments on community energy to the then Energy Bill; his new clause 53 specifically would have required large-scale energy suppliers to offer a special agreement to small-scale energy companies. He has spoken at length about Labour’s local power plan, much of which we are in agreement with, but where is the commitment to community energy in this Bill?
The biggest issue we identify is that energy supply licensing conditions hinder small community energy projects from selling directly to consumers. In turn, this makes it difficult to retain advantages for local communities—discounts on their energy bills, for example, or raising new money to invest in new projects. The high burdens and costs currently involved in being a licensed energy supplier mean that not a single community energy project in all the UK can sell its power directly to local people. Locally sourced energy does not travel further across the nationwide grid, and therefore reduces that constraint on it, but the cost-benefits of selling locally produced energy to local consumers are not going to community projects and nor do they benefit the consumer. That must change. Regulatory changes are required; the Government must put them in place or stop talking about their support for community energy.
Community energy schemes need to receive a guaranteed, discounted price for the clean electricity that they contribute to the energy system. If the costs of selling their power to local households and businesses were proportionate, many more community energy schemes would become financially viable and we would get many more than we have; I urge the Government to really look at our concerns and what we can include in the Bill to make these regulatory changes. Clause 3 is the ideal place to add community energy and ensure that it is one of Great British Energy’s objects.
To conclude, we Liberal Democrats welcome the steps being taken to restore British investment in renewable energy after the mess left by the previous Government. These steps will help us to bring down energy bills, create high-quality jobs, increase our energy security and, of course, reach net zero. However, there is a clear gap in this Bill for community energy, despite Labour’s manifesto committing to it, and we urge the Government to listen to our concerns.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
I call Mike Reader to make his maiden speech.
Mike Reader (Northampton South) (Lab)
I have had the opportunity to hear some amazing maiden speeches in this House. Following such fantastic speeches, I must admit that I feel a bit nervous standing here, but I am also deeply honoured to be in the House. I thank my hon. Friend the Member for Clwyd East (Becky Gittins) for her fantastic maiden speech and for graciously meeting my family when they visited last year; they are her constituents. It is clear to me that the talent, enthusiasm and fresh thinking that the new cohort of MPs are bringing into this House will help to restore our country’s fortunes and deliver the change that the country voted for.
I am delighted to make my first speech in the debate on GB Energy. For many years, it has not sat right with me that our neighbours and trading partners around the world have benefited from the investment of UK plc in clean energy. Whether it is wind farms built in Scandinavia, or investment in nuclear by our French Government partners, the UK public has been sold short on clean energy investment. It is right that the Labour Government are taking forward plans for sovereign, safe and secure energy in the UK—that is very welcome in my constituency.
I will use this speech to introduce myself and my constituency to the House, recognise the careers of my predecessors, and to set out my vision for the future of Northampton. Despite coming from a family of teachers and educators, and despite the best efforts of my dad, who joins me today from the Public Gallery, and my mum, who is watching from home, school and exams definitely did not come naturally to me. After a difficult results day, I managed to get to university via a foundation degree, and I found my passion in civil engineering.
I have been fortunate since then to have progressed through the industry—from engineering to commercial and project management—and then into senior leadership roles. I am really proud to have been recognised as a global leader in my field by my peers in the profession, despite a less-than-ideal start in life—one of my own making—and to have had my career shaped by amazing experiences, projects and people around the world. I thank in particular my friend and mentor, Jon Williams, who has helped me the whole way through my journey, and my very good friend and former podcast co-host, Jeremy Brim, for all their guidance. I also thank my former bosses, Jason Millett and Davendra Dabasia, and my amazing former work-winning team, for giving me the space and support that I needed to pursue my political passions alongside a demanding day job.
I come to this place as an advocate for the built environment. To be honest, I could not be in a better place now, with a Government focused on growth and on transforming and future-proofing our energy, housing and transportation infrastructure. Many of my friends and industry colleagues asked why on earth I would want to stand for Parliament, but my journey into the world of politics has been shaped by my time in industry. I first saw the impact of austerity on my public sector clients, with school programmes cancelled, infrastructure investment stalled and hospitals left crying out for funding. That drove me to join the Labour party and find my political voice, determined to ensure that our public sector gets from Government the support and funding that it desperately needs.
When the opportunity came to stand and make a difference, I chose to stand where I live: Northampton. I met my wife Katie, who also joins us from the Public Gallery, just down the road in Wellingborough, and Northamptonshire has been my home for nearly 20 years now. I still have a place in my heart for my home town of Romsey, which is well represented by you, Madam Deputy Speaker. [Hon. Members: “Hear, hear!”] But I am proud to call myself a Northamptonian and to represent the town that I live in and love.
Northampton South is a vibrant constituency. From Duston and Upton in the west, the Hunsburys and Shelfleys, Wootton, Collingtree, Hardingstone and Great Houghton in the south, and areas such as Weston Favell, Billing and Rectory Farm in the eastern district, each area of my beautiful constituency has its own individual identity. In the centre of my constituency remains the legacy of the shoe-and-boot trade that was once the main employer in my town. The Church’s shoe factory remains in St James, and the surrounding terraces in Far Cotton and Delapre are still standing strong nearly 200 years after they were built. As my hon. Friend the Member for Northampton North (Lucy Rigby) noted yesterday, Church’s holds the honour of being the chosen cordwainer of a renowned former Member for Sedgefield.
Great institutions such as our university, our general hospital, our football club and our Premiership-winning rugby club sit in Northampton South. [Interruption.] I was expecting a “Shoe army!” then, but that’s fine. My constituency includes Brackmills, one of the most successful business improvement districts in the UK. Thousands of people are employed at Brackmills, which plays host to over 330 brilliant businesses, spanning food production, logistics and fulfilment, manufacturing, healthcare, and research and development. I look forward to working with the BID team to ensure that it continues to be a major employment hub in Northampton South for years to come. Anyone who has visited my constituency or grew up there will know that we are the home of the national lift tower, which stands at over 400 feet high—taller than the Statue of Liberty.
The formation of the newly shaped Northampton South constituency means that I have had the opportunity to take over from two former Members of Parliament who had had very different experiences and careers in this House, and I would like to pay tribute to them both. Andrew Lewer, the previous MP for the former Northampton South constituency, was focused on parliamentary business and tackled the challenges that he saw as the most important to the UK. He championed the Motor Neurone Disease Association, which is headquartered in Northampton, as well as independent schools and house building. Locally, he will continue to be recognised through the annual Spencer Percival debate that he helped to set up in the town. He is also the only person to have held the positions of leader of a council, Member of the European Parliament and Member of this House—a testament to his public service.
I also take over in part from Dame Andrea Leadsom, the former Member of Parliament for South Northamptonshire. Many of the southern villages that have now joined Northampton South were in her constituency. Dame Andrea served as a Secretary of State under the previous Government, and had a formidable record of championing parents and children, including by establishing the Northamptonshire Parent Infant Partnership in my county. Many of the people who have written to me since my election have praised her advocacy for them as their constituency MP. It is clear that she made a massive difference not only in this House but in our county.
Northampton may hold the accolade of being the largest town in the UK—I will take that up with hon. Members for Reading after the debate—but our town has had a continual lack of investment, and a lack of vision and drive to make it better. Unfortunately, we have had no shortage of Conservative scandals: public loans to our football club went missing, our county council was made bankrupt, the former police, fire and crime commissioner stood down over misogyny complaints, and alleged domestic abuse meant that that the leader of the council resigned and now stands as an independent. Trust in politicians in Northampton is at an all-time low, but there is hope for Northampton, and it comes with a Labour Government.
This Labour Government will make Northampton a place to be proud of. We will tackle our chronic air quality challenges; fix our roads; improve our bus network; ensure that housing is affordable, of good quality and highly sustainable; make work pay and a route out of poverty; grow the co-operative, social enterprise and mutual sector in our town; bring NHS dentists back to Northampton; end the 8 am scramble for GP appointments; face head-on the funding gap left in our public services; and address the special educational needs and disabilities crisis that is rocking our county.
It is clear that there is a lot of work to do, but as I said in my acceptance speech at the count, the hard work starts here, and I really mean it. I cannot wait to get started.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
Let me be the first to congratulate the hon. Member for Northampton South (Mike Reader) on his maiden speech. He has demonstrated in two ways that he is quite a rare beast. Being an engineer is not a widely held profession in this House, and he will no doubt bring great value with that expertise and experience, but his business experience is also extremely valuable. I am afraid that if he looks around him on the Labour Benches, he will see precious few people with any business experience—as the Secretary of State has shown with his Bill.
The Bill is about setting up a shell company. That is it. The idea that that constitutes an energy policy is a complete myth. In fact, the Government have not even produced an energy policy. There has not been a White Paper on UK energy policy under this Government. There are no pages full of data and numbers to give us any confidence that the Government know what they are trying to achieve, how they will achieve it, or what the risks are.
In fact, that was given away in an astonishing letter that the Secretary of State wrote to the director of the electricity system operator, asking for all the information that one would expect the Government to have given that this was a major platform in their manifesto. [Interruption.] The Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), shakes his head—I will give way to him if he wants to intervene—but where are the numbers? Where is the data backing up this wild assertion that just going all out for renewables will provide security of supply and lower energy costs? It is a mantra that Labour Members keep repeating to themselves with increasing enthusiasm and vehemence to make up for the fact that they have no numbers to back up their assertions.
Let me be clear about one thing: I am an advocate of achieving net zero. I believe in the target of net zero by 2050—indeed, I am a member of the net zero all-party parliamentary group. When Members hear me speak, they are not listening to some luddite or climate change denier. I want this policy to work, but there are very considerable risks, which are evidenced by reading between the lines for what is not in the Secretary of State’s letter and what is clearly flagged in Fintan Slye’s response to it.
Wera Hobhouse
Does the hon. Member not recognise that under the previous Government, the UK was falling badly behind on investment, when other countries— particularly the US—had transformed the investment that they were drawing in by making very big Government commitments to some projects, particularly nascent ones? Does he not recognise that that sort of Government support makes a big difference to business confidence?
Sir Bernard Jenkin
I do not agree with that, simply because we have seen massive investment in renewables over the past 14 years, as the former Minister, my right hon. Friend the Member for Beverley and Holderness (Graham Stuart), and the shadow Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), set out. We have been making fantastic progress with bringing renewables on stream, but there are considerable questions to ask. I wish it were as simple as setting up a shell company and saying, “We are going to get the state to do everything”, but I am afraid it is not. As the shadow Secretary of State pointed out, Ørsted and EDF make massive losses, and either the taxpayer has to pay for those losses or those costs go on to electricity bills.
The Secretary of State announced on Tuesday that we have got all this renewable capacity coming on stream—enough to power 11 million homes. That is if we match the maximum capacity of the renewables with the average annual demand of those homes, but of course renewables are intermittent. It seems such an obvious thing to say, but we have to say it: sometimes the sun is shining, sometimes the wind is blowing, and sometimes we have enough water for hydroelectric power, but sometimes not. In the winter months, solar makes very little contribution—it makes no contribution in the dark, at night. [Interruption.] It may seem obvious, and the hon. Member for Stroud (Dr Opher) may laugh, but we need to point these things out, because when the Secretary of State says that renewables are cheaper than fossil fuels, he is comparing the strike price with the cost of buying marginal supply capacity when we need that extra marginal supply.
The strike price will not be reflected in our electricity bills, because we have to add in other things, such as system balancing costs. We have to add in grid infrastructure costs, because renewables require massive investment in grid infrastructure. We have to add in the costs of importing through interconnectors when we do not have enough domestic supply. We have not begun to factor in storage costs—the storage capacity of our electricity system is still miniscule. Members should read the Royal Society paper on creating electricity storage in this country: it is going to be astronomically expensive, and will probably still not be enough. Then there are constraint payments—oh, yes, the constraint payments. This year, we are paying £500 million to renewable producers under the contracts for difference scheme not to produce electricity when they can produce it, because that is how the system works. That is how we have attracted so much investment, but those payments are going to be about £1.5 billion next year.
I would like the Government to produce some forecasts. How much will the balancing costs be in each year over the next 10 or 15 years? How much grid infrastructure investment will need to be funded? That appears on our electricity bills—it is the standing charge, and boy, that charge is going to go up with all the infrastructure investment that we will require. How much will we have to spend on importing electricity? The two interconnectors coming into East Anglia as part of the Norwich to Tilbury programme will be importing electricity. They are not for exporting, because the only security of supply we will have if we have shut down all our combined cycle gas power stations by 2030 is from other places.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
indicated dissent.
Sir Bernard Jenkin
The Minister shakes his head, but if we have shut down all that capacity—if we cannot generate the electricity ourselves—we will have to get it from other places. There are phenomena called wind droughts, which can go on for very long periods. What are we going to do when the wind turbines are not turning and the sun is not shining during a very cold spell in the middle of winter? We had one or two close scares this winter. The generating margin that we used to enjoy has gone. The great risk of accelerating the decarbonisation of the electricity system is that there will be more appeals for voluntary or compulsory restraint from industry, because industry is the hidden customer that is shut off when we are short of electricity, or we risk more brownouts or even blackouts. That not impossible, so where is the data that the Minister is placing so much confidence in that shows these forecasts to be wrong? I am not making them off my own bat—there are plenty of people out there making them.
That brings me to the final brief point I want to make. I understand the logic that the Minister explained in his letter to me.
Mr Amos
I am sure that a Member with the experience of the hon. Gentleman will know that Britain returned to being a net exporter of electricity last year, so assuming that there will be additional costs from importing electricity due to the transition to renewables simply does not stack up. Does he also recognise that when the sun does not shine and the wind does not blow, the tide still rises and falls twice a day, 365 days a year? A future resting on renewable energy is possible, and we need to have that ambition for the United Kingdom.
Sir Bernard Jenkin
I absolutely share that ambition, but the question is how quickly we can get there. At the moment, tidal power produces almost nothing as a proportion of our electricity requirement. It is also intermittent, by the way: four times a day, there is a period during which it does not generate anything and we need to replace that supply with other things. The real challenge is how we get to the objective that the hon. Gentleman and I share in a rational way that carries the British public with us. It is noticeable that what people are complaining about most is the price on their electricity bills. Today, the constraint costs, balancing costs, infrastructure costs and import costs that I mentioned make up perhaps 50% of domestic electricity bills. If that figure is wrong, let the Minister produce some figures of his own that explain what proportion of consumers’ bills arises from all those factors, because it is not explained. There is no transparency on our electricity bills.
On the hon. Gentleman’s point about the objective of decarbonisation, we are not going to get there at all if we lose the public—if the lights start browning out or going out, and we find that we cannot meet demand. To some extent, we are piling up that demand by decarbonising transport and other parts of the system, including decarbonising building heating through heat pumps. The demand for electricity will rise, but our capacity to produce it reliably at all hours and in all conditions is being reduced.
On the question of imports and exports, we might become a net exporter of electricity, but perhaps the hon. Gentleman can explain how the price at which we are exporting compares with the price at which we are importing. The difficulty is that we will be importing when the wind is not blowing or the sun is not shining, and it is likely that the wind will not be blowing across the entirety of the North sea, so we will be importing fossil fuel-generated power at a very high cost to compensate for the fact that we have got rid of our own gas production and gas-fired power stations. I am not sure that situation will be very good.
If the hon. Gentleman would look at the Arup report on the Tarchon interconnector, which will come into my constituency under the present plans, he will see that that interconnector will not actually contribute very much to security of supply, but will be used almost entirely to export when there is too much wind. It will export at below the strike price because there is too much wind and it will export at a loss, and the cost will finish up on the bills of the British consumer. So the British consumer is paying for all the investment, paying for the strike prices, paying for the infrastructure and then paying to subsidise the exports to the Germans, who will be the beneficiaries of all this investment.
I appeal to the Minister to just read the Arup report and look at this. That is why I asked about the offshore co-ordination support scheme work that has been done. I am not going to ask for the impossible and ask him to revive the OCSS, but I would like from him an assurance that the work ESO has done will not simply be thrown away and wasted. Please can he assure the House that that work will be incorporated into the spatial plan that ESO says it wants to produce? Some very interesting innovations came out of that work, but there was also a lot of work discrediting the long-term viability of Norwich to Tilbury and, looking on a different timeframe—in the longer term—that could produce a much more viable alternative than is currently on the table. There is still work to be done on that, but I have no doubt that Fintan Slye will want to do that work as part of his project for the Government.
I would like to know that the Minister is going to support the holistic approach to which the Secretary of State referred, because Norwich to Tilbury is certainly not the product of a strategic approach to electricity grid upgrading. We need a much more strategic approach, and I am looking for that from this Government, but it certainly will not come from this Bill.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. You will all be able to see—and you can all sit down while I am speaking—that a huge number of Members are seeking to catch my eye. For those not making their maiden speech, I intend to introduce a six-minute time limit. That should give those preparing their speeches plenty of time to chop out the extraneous words.
I call Chris Hinchliff to make his maiden speech.
Chris Hinchliff (North East Hertfordshire) (Lab)
Thank you, Madam Deputy Speaker, for the opportunity to give my maiden speech in this important debate. The ongoing transition of our energy system is having a profound and, sadly, often harmful impact on many of the communities in my constituency, so I am very hopeful that the provisions in the Bill will begin at last to put the future of renewable energy in the service of those I represent. I warmly commend to my hon. Friends on the Front Bench the proposals, of which I am sure they will be aware, for Great British Energy to be given a duty to deliver nature recovery alongside its other objectives.
I begin this speech by paying tribute to my predecessor, who served our constituency and this House faithfully for many years. The clear proof of the diligence with which he carried out his duties and the respect he earned from his constituents was plainly obvious from the feedback on the doorstep throughout the general election. I especially want to thank my predecessor for the work he did to support the campaign for Hugh’s law to secure better financial support for parents caring for seriously ill children, and also for his work fighting for the restoration of the several internationally significant chalk schemes that flow through North East Hertfordshire. I look forward to doing what I can to further both of those important projects during my time in this place.
Although the many years of my predecessor’s incumbency have all but erased it from our memory, I am not in fact the first Member of my party to represent communities in North East Hertfordshire. The late, great, trailblazing Shirley Williams, when she was first elected as a Labour MP, represented many of the areas that make up my constituency. Despite the intervening 60 years, I found reading her maiden speech from 1964 very helpful in preparing for this moment, for, as she said then, the constituency I represent is in “many ways…a microcosm” of much of our country.
North East Hertfordshire from Hinxworth to Bayford contains many small rural communities full of important history and culture—from the home of George Orwell in Wallington to the stained-glass windows designed by William Morris and pre-Raphaelite artists in Waterford. In Baldock, Buntingford and Royston, we have quintessentially English market towns, home to fantastic independent businesses as well as nationally significant companies such as Johnson Matthey. In Letchworth, we have the world’s first garden city, built on the principles of the common ownership of land, which to this day offers a radical example of how to better design and build the communities of the future. Surrounding it all, we have some of the best agricultural land in the country, with local farmers such as those near Groundswell in Weston and Finches farm in Benington spearheading the ecological innovation we need to grow fantastic food in harmony with nature.
Yet in my experience of speaking to residents right across North East Hertfordshire, the recurring theme is of communities dispirited and frustrated at having their needs put aside in the interests of what others have called progress, so I will close by mentioning one debt of honour that I want to bring to hon. Members’ attention at this time. I have been asked to keep the following story anonymous by the family in question, but I believe it illustrates powerfully how the communities outside our urban centres are too often treated.
During the general election, as I reached the last road canvassing in a particularly idyllic village in my constituency, I came to knock on the final door in a quiet row of terraces. After initially waiting without answer, I was about to leave when I was called over by a voice from the passenger seat of a nearby car. The gentleman sat there was not old and was keen to speak, but was clearly very ill. Between painful coughing and laboured breathing, he explained to me how in the construction of new housing in the meadow beyond his street, agricultural sheds containing asbestos were demolished with almost incomprehensible recklessness in a single afternoon by workers who were themselves equipped with virtually none of the necessary protective equipment. Rather than the asbestos being carefully removed, it was smashed up on site, creating large clouds of hazardous dust right next to the existing homes.
The gentleman I was speaking to had, tragically, subsequently contracted asbestosis, which had ruined his health and left him barely able to travel from his front door to his car. Despite the concerns he raised at the time, no one was ever held to account for these actions, and he urged me passionately to raise the dangers associated with the rushed and unsafe demolition of agricultural buildings containing asbestos at the earliest opportunity if I was elected as his MP. I am sorry to inform the House that when I returned a few weeks later to speak to him about honouring his request and including this story in my maiden speech, I was told by his widow that he had recently passed away. The chance for any meaningful justice for this family has now gone with him. Meanwhile, developers have no doubt pocketed a return on investment that much fatter for having fatally cut corners at the expense of local residents.
Whether it is profit-led developments, the cancellation of bus routes, or the closure of banks and village schools, the fundamental experience of towns and villages like those in North East Hertfordshire has too often been one of being done to and expected to endure, rather than one of being looked after, worked with and empowered to contribute. It is this, above all, that I hope to chip away at in my contributions in this place. I thank the House for listening patiently to my first attempt, and my constituents for giving me the opportunity to do so.
Liz Jarvis (Eastleigh) (LD)
Thank you, Madam Deputy Speaker, for giving me the opportunity to make my maiden speech during the debate on this important Bill. I welcome efforts to provide renewable energy, bring down heating bills and support the growth of our green manufacturing industry. I hope the Bill will make clear provisions for GB Energy to engage with local communities such as mine in Eastleigh. I would also like to congratulate the hon. Member for North East Hertfordshire (Chris Hinchliff) on his excellent speech.
I am incredibly humbled and honoured to be the Liberal Democrat Member of Parliament for Eastleigh, and grateful to all those who put their trust in me to represent them. I am also grateful to everyone who encouraged me on my journey to Westminster, but particularly Baroness Floella Benjamin, the former MP for Eastleigh Mike Thornton and the family of David Chidgey. Lord Chidgey was committed to fighting to keep our precious chalk stream, the River Itchen, free from sewage and pollution. As my constituents know, I am continuing his legacy. I also thank my predecessor and his team for their prompt response to hand over casework.
My constituency is a vibrant community of towns and villages. The town of Eastleigh grew up around the railway line between Southampton and Winchester, and was named by local author Charlotte Yonge. Eastleigh became a local point of aerial efforts during the first and second world wars, with Spitfires taking off from the airfield, which is now Southampton airport. We have beautiful green spaces including Stoke Park wood in Bishopstoke, Flexford nature reserve in Valley Park, and Hiltingbury lakes in Chandler’s Ford. West End is home to the Utilita Bowl cricket ground, where the late great Shane Warne captained Hampshire, a proud part of our sporting tradition. We are also incredibly proud of our Spitfires, Eastleigh football club, who play in the national league.
We have all been inspired by our extraordinary athletes competing at the Olympics and Paralympics this summer. I hope the House will join me in congratulating Eastleigh-born three-time Paralympic champion David Smith on his recent bronze medal win in Paris, and on his tireless championing of boccia. Eastleigh’s Olympic heritage stretches back to 1932, when local hero Tommy Green, who was unable to walk until the age of five due to rickets, went on to win a gold medal in the men’s 50 km walk.
My constituency is also home to the fantastic Point theatre, with its brilliant programme of cultural events all year round, including the always popular Unwrapped festival, and we are lucky to have many fine pubs and craft breweries, including Steam Town in Eastleigh town, and Steel Tank Alehouse in Chandler’s Ford. I also recommend the luscious Victoria sponge at Fountain café in Fair Oak.
Eastleigh has a proud history of helping to support refugees and evacuees. In May 1937, children and adults fleeing the Spanish civil war were housed at a refugee camp in North Stoneham. Eight-five years ago this week, Eastleigh communities welcomed evacuees from Gosport, and in 1940, refugees from Southampton. More recently, our local council was one of the first authorities in England to house refugees fleeing the Taliban during the 2021 Afghanistan evacuation, and people across the constituency threw open their doors to families fleeing the war in Ukraine. Earlier this summer, Eastleigh hosted the always popular annual Mela, organised by our Asian Welfare and Cultural Association, and in a few weeks, it will be Eastleigh Pride. We have a warm, inclusive community in Eastleigh, which is very important to me, as is fighting to ensure that everyone in our community can access the NHS services they need, including GP and dentist appointments, and mental health care when they need it.
My mum died in March after a seven-year struggle with Alzheimer’s, and as anyone who has experience of caring for a loved one with dementia will know, with that awful disease you lose the person twice. Mum was the daughter of Irish migrants, a member of the women’s liberation movement who took me on my first march when I was a toddler, and a member of the Labour party who knew MPs Joan Lestor and Tom Cox well. She would go on to become a senior social worker. My dad was from Hampshire and a former officer in the British Army who served his country for 16 years. Although my mum and dad were diametrically opposed politically, they shared a strong sense of compassion, and they raised my sister and me with those same values.
Unfortunately, my parents were never in a position to own their own home, so I grew up in rented accommodation with all the insecurity and uncertainty that goes with it. When my dad died suddenly before my 21st birthday, my mum found herself in the position that far too many people are facing today, with spiralling rents and the prospect of eviction looming over them. Since becoming the MP for Eastleigh, I have received letters from residents facing eviction through no fault of their own on an almost daily basis. I am proud that my party has been pushing for higher standards for renters so that everyone has a safe and secure home.
As a comprehensive-educated single mum who skipped meals to feed my son and keep a roof over his head during the so-called great recession, I know all too well how easy it can be to fall through the gaps. After 14 years of the previous Government, far too many families in Eastleigh simply do not have any kind of safety net and are living hand to mouth. It is incredibly important that we do everything we can to support those who continue to struggle with the cost of living and to lift children out of poverty, including by scrapping the two-child benefit cap, as well ensuring that all children have access to the education they deserve, including those with special educational needs.
I am passionate about ensuring that all children and young people in Eastleigh and across the UK are given the support, resources and opportunities to thrive and fulfil their full potential. I will conclude by acknowledging the vital role that our local charities play in supporting families in Eastleigh, including Citizen’s Advice Eastleigh, Pavilions in the Park, Youth Options, and many more. I promise I will do everything I can to support everyone in our community during my time in Westminster, and to be the strong voice in Parliament that the people of Eastleigh deserve.
Sarah Champion (Rotherham) (Lab)
Thank you Madam Deputy Speaker, and may I congratulate you on being in the Chair? It is pleasing to me and a benefit to the House to have three strong women in that position. I also congratulate the hon. Member for Eastleigh (Liz Jarvis), who used her personal experience to speak of her pleasure and pride in her constituency. Her personal, lived experiences will make her a much stronger MP in this House; I welcome her to her place.
Rotherham is a hub of innovative green energy research and production, which is integral to the UK’s energy transition. Our Advanced Manufacturing Research Centre—AMRC—boasts expertise in nuclear, fusion, hydrogen and the construction of offshore wind turbine blades. That creates good, skilled jobs for Rotherham and contributes more than £55 million to the South Yorkshire economy every year. The AMRC is also home to the UK’s first sustainable aviation fuel facility, and therefore I welcome the SAF Bill which is coming soon.
Rotherham’s renewable production does not stop there. Our fusion technology facility works with industry and science, to pioneer fusion energy as a major source of low-carbon electricity. Templeborough power station, a biomass plant, sustainably converts waste wood into energy. It uses recycled sawdust, wood chippings and scrap that would go into landfill, and is used in my constituency by Esken Renewables to fuel the power station. In doing so it saves 150,000 tonnes of carbon dioxide every year. The research and innovation taking place every day in Rotherham gives it a unique role to play in this Government’s ambitious energy plans, and there is an open invitation to the Secretary of State and Ministers to visit the opportunities in my constituency. I ask the Minister to include community energy as one of the specific objectives in clause 3 of the Bill.
An inquiry by the Environmental Audit Committee outlined the enormous contribution that community energy schemes can bring, while reducing dependency on international energy imports. I express my gratitude to Ministers for not pursuing the legal challenge on the closure of the Rosebank oilfield. When the Conservatives were in power they granted new oil and gas licences to sites such as Rosebank, but over a third of licences granted overlapped with marine protected areas and failed to consider the impact on biodiversity and marine health. MPAs are intended to protect rare, threatened and important species from damage caused by human activities. Instead, innumerable careless decisions by the last Government led to 215 spills over the previous 12 years, resulting in 308 tonnes of oil being spilled and a devastating biodiversity decline in the very areas we should be protecting the most.
Like many in the Chamber I believe that solar energy has a key role to play in our transition to a low-carbon economy. However, I am concerned that without incorporating human rights mechanisms in the Bill, the transition will not be clean or just. It is well documented that solar photovoltaic supply chains have a sinister dependency on forced labour programmes in the Xinjiang autonomous region of China, where the Chinese Government are systematically persecuting millions of Uyghur, Turkic and Muslim- majority people on the basis of their religion and ethnicity. The People’s Republic of China’s global market share across the solar PV supply chain exceeds 80%. The Uyghur region has become the dominant global sourcing location for critical inputs for the solar industry. An estimated 35% of global polysilicon—used in almost all solar panels worldwide—is produced in Xinjiang. China’s rapid success in the industry has been achieved with low-cost, subsidised, dirty coal, completely undermining the green credentials it boasts.
As early as 2021, the US enacted the Uyghur Forced Labour Prevention Act, which placed a ban on the importation of products from the Uyghur region, including shipments of solar panels with connections to Xinjiang. The legislation has been highly effective, with the market responding with new, ethical supply chains. Canada, the EU and Mexico have followed suit with similar regulations, but we have fallen behind. I urge the Minister to address that failing, now that evidence has emerged of global supply chains bifurcating, with tainted solar goods being redirected to countries with weaker regulation, such as the UK. Our nation has become a dumping ground for dodgy solar. With this Bill, it is vital that we make a U-turn on the mistakes of our predecessors.
I welcomed the Secretary of State for Business and Trade saying this morning that he expects and demands
“no modern slavery in any part”
of our solar supply chain. He expressed a willingness to extend legislation to help tackle the problem. We must raise standards with this Bill by committing to the production and supply of clean energy that is free from slavery and state-imposed forced labour at any stage of the supply chain, and I will be tabling amendments to that effect. In tandem, we must seriously consider implementing an import ban. Like the US prevention Act, it would need to ban renewable energy products made in whole or in part with state-imposed Uyghur forced labour. I hope the Minister will meet me to discuss that further.
Harriet Cross (Gordon and Buchan) (Con)
It is hard to overstate the importance of the energy sector to my constituents and, indeed, to the whole of north-east Scotland, so I am grateful to be called today. First, I must address the reports that Great British Energy might be headquartered in Aberdeen. The Government are still yet to confirm that, saying that it is speculation, but the manner in which they have managed this announcement speaks volumes. The ambiguity and the joking about when an announcement might be made, and then just saying that the headquarters will be in Scotland, do absolutely nothing to help the speculation and delayed decisions or give the industry any confidence. These layers of uncertainty are driving away investment and creating a less secure job environment in north-east Scotland. Aberdeen has always been the energy capital of Europe. It has been that way for half a century, so it is the most logical choice for the headquarters.
I have significant reservations and concerns, which I will outline today. The North sea oil and gas industry is not just part of the economy in Aberdeenshire, but the bedrock on which our communities and my constituents in Gordon and Buchan have built their livelihoods for generations. It is not just about the direct jobs in the industry and the associated services in the hospitality sector, for example. An overall economic ecosystem has developed, and that is why it is critical that we manage the energy transition properly, so that the north-east of Scotland does not become the next region to suffer industrial decline as the mining areas did. I am sure that the Secretary of State, the Minister and the Labour party do not want that on their record.
The Government’s plan for Great British Energy, coupled with the energy profits levy, puts the industry at risk at this vital time. The proposed increases and the removal of the investment allowances could be a death knell for investment in our area. Let me be clear: this is not about protecting the profits of large companies just for profits’ sake; it is about protecting the jobs and skills and futures of our communities. Offshore Energies UK has warned that the tax increase could see investments in the UK cut, and that they might fall from £14.1 billion to £2.3 billion between now and 2029. That is not scaremongering; it is what the industry is facing.
We can take today’s figure of £14.1 billion of private investment and compare that with what the Government are suggesting: £8.3 billion of public investment into GB Energy just to create an investment vehicle. We already have an investment stream in the north-east of Scotland. It is not Government money that is needed, but a stable, fair, globally competitive market for our national and multinational companies. They will do the business. Public money to create GB Energy while simultaneously introducing these punitive taxation and other measures that are projected to drive away investment just does not make sense, because the same investment in capital, skills and personnel that we need for our energy security today are also vital for an effective and efficient transition to clean energy.
I have a number of questions for the Government about Great British Energy, and I will start with job security and creation. How will Great British Energy protect existing jobs in Aberdeenshire’s energy sector? We have already seen a significant loss of jobs due to the oil price downturn and market uncertainty. The Government boast that Great British Energy will create 650,000 new jobs, 69,000 of which are projected to be in Scotland, but we need specifics. Figures have been provided at a regional level across England, but we have only one figure for the whole of Scotland.
The distribution of jobs in Scotland is currently heavily weighted towards Aberdeen, Aberdeenshire and the north-east, so no matter how many jobs might or might not be generated by GB Energy in Scotland, my constituents want and need to know where those jobs will be. Can the Minister confirm when he sums up how many of the jobs will be in Aberdeenshire and the north-east, what types of roles they will be and when they will be created? Already, oil and gas workers are losing their jobs and moving abroad to maintain or progress their careers. They are the workers we need for the transition.
Secondly, we must consider the economic impact on our local communities. For example, how will the wealth that flows into our local infrastructure and economy and community projects be replicated in the future under Great British Energy? Looking at the national picture, the Oil and Gas Authority estimates that the total revenue from oil and gas production in the five years to 2024 was £5.3 billion. Are the Secretary of State and the Chancellor willing to sacrifice that in the pursuit of an accelerated transition? That would be a significant dent in the £8.3 billion of public investment.
We need a balanced approach. We are not against the energy transition, and we recognise that the transition will take time, but rushing it could have severe consequences for communities such as mine in Gordon and Buchan. We are after net zero, not absolute zero. They are different things, and we do not need to banish oil and gas from our energy mix immediately in order prematurely to be on the road to net zero.
The people of Gordon and Buchan and indeed all of north-east Scotland are not against change. We have been at the forefront of energy innovation for decades, but we need the transition to work for our communities and to build their strength, rather than dismantle them. We must protect jobs. I call on the Government to provide clear answers, not just high-level projections, on how we expect Great British Energy to benefit, not harm, the existing industry in Gordon and Buchan. Our communities have so much to lose if we get this wrong, and they deserve our help with a comprehensive plan, not ideology.
Madam Deputy Speaker (Caroline Nokes)
I call Uma Kumaran to make her maiden speech.
Uma Kumaran (Stratford and Bow) (Lab)
I am grateful for the opportunity to make my maiden speech with my parents and husband in the Gallery today. I congratulate the hon. Member for Eastleigh (Liz Jarvis), who gave an impassioned speech showing how deeply she cares for her community, its heritage and in particular the history of caring for refugees. She spoke so lovingly of her late parents.
It is the honour of my life to be elected as the first ever MP for Stratford and Bow. I was born in east London, and I have lived in Stratford and in Bow. I studied at one of our brilliant local universities, Queen Mary. To go from local student to local MP in 20 years has been quite the homecoming. Not getting our declaration result until nearly 6 am really did bring back memories of stumbling home from uni.
I pay tribute to the force of nature Lyn Brown, who served her home West Ham as the Member of Parliament for 19 years, and for a total of 36 years of selfless service to communities in Newham. A true east London girl, her guidance and support have been invaluable. I have no doubt that her contribution to the east end and public life will continue. I also inherit Bow from my hon. Friend the Member for Bethnal Green and Stepney (Rushanara Ali). She is another trail-blazer, as the first Bangladeshi-origin woman elected to Parliament. She has inspired a generation with the promise of what is possible.
Although Stratford and Bow is a new parliamentary constituency, its history is old and rich. The Woman’s Hall at Old Ford Road in Bow was home to Sylvia Pankhurst and Norah Smyth and the headquarters of the East London Federation of Suffragettes from 1914 until 1924. It was the beating heart of the east end suffrage movement, and the home of the matchgirls’ strike and the largest union of women and girls in the country. Every corner is filled with the history of the struggle for women’s rights and for our voices to be heard; a history that I will work every day to honour. As a proud grand- daughter of a trade unionist and a member of the GMB union, I go forward in their memory and will continue to fight for working people.
Parts of my constituency have been represented by illustrious political figures including Charles Key, Keir Hardie, Lansbury and Clement Attlee, who led the Labour Government that created our beloved NHS—so no pressure on this new Member. Our stunning Victoria park with its breathtaking canals opened to the public in 1845 and became the people’s park: a centre for political meetings and rallies with speakers such as William Morris and Annie Besant.
It is not just political history that we are blessed with in Stratford and Bow. I am sure that many hon. Members in the Chamber love nothing more than going home after a long day sitting in the Chamber and putting on their favourite grime playlist. They can thank Bow for playing an integral part in the origins of grime music, with Roman Road and its once-beloved record shop producing artists and crews such as Roll Deep and Skepta to name just two. Over in Newham, we have our top boy Kano.
I can see that I have completely baffled some hon. Members—[Laughter.] For those whose tastes are a bit more retro, we are also home to ABBA Voyage. My constituency is a place where people can come and spend their money, money, money in some of our brilliant local and international businesses. Of course—it cannot be missed—sitting at the heart of my constituency is the London stadium: a place of joy and wonder from the 2012 Olympics and some of our most wonderful sporting achievements. As this generation of Team GB Paralympians competes in Paris, I send my wishes to them.
The ability to bring people together that sport possesses is like nothing else, so it is a privilege and honour to be the Member of Parliament for the greatest club in world football—sorry, Keir—West Ham. As a Hammer since 5 July—[Laughter]—I am proud to be forever blowing bubbles. I know that there are several Hammers fans on the Government Benches and throughout the parliamentary estate—probably more of us than Members on the Opposition Benches.
Stratford and Bow is a wonderful, vibrant and diverse constituency, and our current heritage lives up to that history. Forest Gate is the home of independent cafes and shops and Forest Gayte Pride, overlooking the nature and beauty of Wanstead Flats. There are the bustling shops of Green Street serving communities throughout east London, alongside mosques, temples, synagogues, gurdwaras and churches. It is a place that is truly representative of the rich tapestry of cultures and people that make up our great capital city, London.
People from all over the world have come to Stratford and Bow to make the UK their home. My constituency is a prime example of Britain at its best, with pearly kings and queens, and white, European, Indian, Bengali, Pakistani, Chinese, African, Asian, middle eastern, Caribbean communities and more living side by side and working together to make a better society for everyone. Wherever someone is from, they are welcome in Stratford and Bow.
I am proud, too, to have origins as an east London girl born in Homerton hospital, but I was born here but by fate. I am the daughter of Tamil refugees and the child of a community that knows what it is like to endure prejudice and persecution. My parents, proud and patriotic British citizens, came to Britain over 40 years ago, but they did not simply come here; they fled for their lives, forced to leave behind everything and everyone they knew and loved, torn from a good and prosperous life in their prime to start from scratch in an unfamiliar country, working multiple jobs day and night to give me the chances that were taken from them.
Britain welcomed my parents with open arms so that they could rebuild their lives and flourish, and it was the east end that they first chose to call their home. This is the London that I know and love, and it is the story of Britain and British values at its best: outward looking and compassionate; a country where people can work hard and triumph. Mum and dad, thank you for everything: your endurance and your will to succeed—[Hon. Members: “Hear, hear!”] You are part of the success story of Britain, and that is a story that can be found in every corner of Stratford and Bow and in every part of Britain, with the hope and aspiration for a better tomorrow that all parents have for their children and the dreams of a safe and secure life.
It is that hope and determination to fight for a better future that this Labour Government will work hard every day to deliver. Whether the people of Stratford and Bow were born here, came here in search of a better life or just moved to the best bit of London—whatever their start in life—I will ensure that their voices are heard and valued. I pledge to work day in, day out to tackle the root causes of poverty, to fight for more police on our streets so that women and girls feel safe to walk home at night, parents do not have to worry about knife crime and young men are not having to look over their shoulders when they walk home after dark, and to fight for an NHS that is here for us in our time of need, where patients can be seen in wards, not corridors.
Delivering my maiden speech during the GB energy debate is apt. Climate change remains one of the greatest challenges of our time, and we must redouble our efforts. Before I came to this place, I worked internationally on climate action with cities around the world, the United Nations and civil society to help stop our world going past the point of no return and ensure that generations who come after us have a world that has not been destroyed because of our failure to act or our fear of being bold.
I feel deeply the responsibility that I have to repay the faith that the people of Stratford and Bow have placed in me and the duty that I have to be their voice here in Westminster. I will work every day for that and for the values and pledges that I was elected on. Thank you.
Madam Deputy Speaker (Caroline Nokes)
I call Tom Morrison to make his maiden speech.
Mr Tom Morrison (Cheadle) (LD)
Thank you very much, Madam Deputy Speaker. I congratulate the hon. Member for Stratford and Bow (Uma Kumaran) on that incredible maiden speech. Her pride in her community really shone through and was incredibly infectious.
I am truly honoured to be given the opportunity to deliver my maiden speech in this House. I begin by paying tribute to my predecessor, Mary Robinson. Despite our political differences, I had a good working relationship with her and was fortunate to work with her as part of the Cheadle towns fund board, where we helped to deliver much-needed investment into the constituency, including developing plans for Cheadle train station. I know that Mary took great interest in local business, and her work on the board was testament to that. I wish both her and her husband Stephen all the best in their next chapter.
I will also take this moment to pay tribute to my Liberal Democrat predecessors for Cheadle. The incredible Patsy Calton is very much missed and was held in a great deal of respect across both sides of the House. Mark Hunter served Cheadle for 10 years as its MP and served in government as an assistant Whip. I have huge shoes to fill following both Mark and Patsy, who are legends in the constituency. I hope that I can build on their legacy.
I will also take a quick moment to thank my incredible team for leading such a brilliant and hard-fought election campaign, and my family for their support. Most of all, I thank my incredible partner Louise for all her love and backing over the years. It is here, however, where I must confess to breaking my first election pledge. Not long before the general election was called, Lou and I found out that we were to be expecting our first child. While we were, of course, over the moon, that news came off the back of a very hard local election campaign and amid Lou experiencing extreme morning sickness. So, being the supportive partner that I am, I assured Lou that this would be a first trimester of absolute peace, tranquillity and calm as there was absolutely no way that the Prime Minister would call a general election in the summer. We all know how that turned out. I put on record my apologies to Lou for breaking that promise. I will endeavour to ensure that is the first and last time I break my word to a constituent.
Cheadle is truly a brilliant place. We have wonderful green spaces, brilliant schools and some fantastic high streets, but what makes the constituency so special is the people. The area is built on the foundations of so many community groups and organisations, all campaigning and working to make our community a better place for everyone. There are allotment groups such as Billy’s Lane who invite local schools to learn about growing food and healthy eating. There is Cheadle Civic Society, led by the inspirational Phillip Gould-Bourn, who protects Cheadle’s heritage and historic character. There are many faith groups including Cheadle Masjid, Grove Lane Baptists and Yeshurun Hebrew Congregation who provide support for our most vulnerable residents, and there are hundreds of community organisations and friends’ groups such as the Friends of Carr Wood who are the guardians of some of our most precious green spaces and rightly challenge those who would do them harm. Those are the people who make Cheadle so special, and I thank them for putting their faith in me as Cheadle’s Member of Parliament. I have always said that I would be their voice in Westminster, not Westminster’s voice in Cheadle. That will always be my goal.
There is much to do. Our local hospital, Stepping Hill, is in dire need of investment. For too long, staff and patients have had to make do with a hospital that is literally falling apart. The out-patients building was condemned and is now demolished, and in March the intensive care unit, which looks after some of the most critical patients, was temporarily closed because the ceiling was coming in. Nurses have even told me about bucket squads—for the uninitiated, this is a term they have coined for an extra duty they now have on shift, where they each have a bucket to place down when it rains to catch the water coming through the roof. This is a disgrace.
No hospital, let alone one as busy as Stepping Hill, should operate in those conditions. That is why my first act as the Member of Parliament for Cheadle was to write to the Secretary of State for Health and Social Care, asking for the funds that Stepping Hill desperately needs for repairs. I am pleased that the Government have since said that funding will be made available, but until we get the detail and the money, I will keep fighting to ensure that Stepping Hill, its staff and its patients get the funding they deserve.
I will also keep fighting to get my residents the support they need during the cost of living crisis. This is an issue of huge importance to me. When I was 13, my mum, brother and I were threatened with homelessness because mum, who worked several jobs to make ends meet, could not afford the private rents. We faced relying on friends who could offer couches or spare rooms to help us. The idea was sold as a fun holiday to me and my brother, but I can remember how anxious and worried my mum looked and how conversations between adults would suddenly stop as I walked into the room. Life felt unsettled, and I could tell that my mum was scared and needed help.
It was a Lib Dem councillor called David Bruce who that helped us, by fighting and getting us a council house. Because of him, we had a home, giving us the security and stability to get on in life. Home was no longer an anxious place. Mum was happier, and my brother and I could focus on our schoolwork. That experience inspired me to get into politics, because I saw at first hand the positive impact that it can have on people’s day to day lives. Without that councillor, I can honestly say I would not be standing here today. But that was not the end of our story. We still struggled. Faced with rising bills, mum would sometimes have to decide whether to put money into the electric meter or food into the cupboards. If I think about it, I can still hear the clunk of the pay meter going off and plunging the house into darkness. Mum would often joke that that was the cue for us to go to bed.
Sadly, I know from speaking to my constituents that this story is still being lived out all too frequently. The choices that many families have to make are horribly familiar. The choice to heat their home or feed their children should never be forced on anyone, yet thousands of families across Stockport face that choice every day. I was proud that the Liberal Democrats on Stockport council led the way by establishing a warm spaces programme, supporting community organisations with the funds to help shelter vulnerable residents who could not afford to heat their homes during the winter months. Many authorities are now doing that across the country, but as wonderful as that is, we cannot sit back and accept this situation.
Great British Energy is a step in the right direction. I welcome the move to restore British investment in clean energy, and if Great British Energy actually brings down costs for my constituents, that will be nothing but a good thing. I will do all I can to help my residents in Cheadle. When it comes to the cost of living, I will hold this Government to account when I believe they are not doing enough to support those who need it. Better health services, support for the cost of living crisis and championing my amazing community—those are some of the things that I will do as Cheadle’s Member of Parliament. It is truly the honour of my life to be standing here working for the place I call home—the place I am now raising my family. I hope I will do Cheadle proud here.
Madam Deputy Speaker (Caroline Nokes)
I call Jayne Kirkham to make her maiden speech.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Thank you, Madam Deputy Speaker. I pay tribute to the hon. Member for Cheadle (Mr Morrison), whose experience and passion will be of great benefit to both his constituents and his local hospital, and to my hon. Friend the Member for Stratford and Bow (Uma Kumaran), who will be a very worthy successor to those suffragettes.
It is a real honour and a privilege to be standing here as the MP for Truro and Falmouth. I arrived in Cornwall quite by accident nearly 20 years ago, having been swept off my feet by a naval pilot who tempted me away from life as a London trade union lawyer, with images of beaches and sunsets. He flew search and rescue helicopters at Culdrose naval station. Unfortunately, as is often the case, our military marriage was short, and I was left as a single mum with a small son. But I chose to stay and bring him up in Cornwall, and it is very much our home. Becoming a single parent was sudden and difficult, but I was fortunate. I benefited from the opportunities offered by the last Labour Government and was able to get back on my feet. I retrained and took a job as a teaching assistant working in a local secondary school for seven years, first in special educational needs and later as an unqualified teacher, which shows the journey that education has been on.
I pay tribute to my predecessor, Cherilyn Mackrory. She served in a number of roles in this place; she showed her passion for the environment in her work on the Environmental Audit Committee and as chair of the ocean conservation all-party parliamentary group. She also drew on her own personal experience to help others. She did a huge amount to shape the women’s health strategy and maternity safety awareness, and was integral in introducing the new pregnancy loss certificate. Both Cherilyn and her predecessor, Sarah Newton, worked to secure a new women and children’s unit at Treliske hospital in Truro, one of the previous Government’s 40 new hospitals or units. It is desperately needed and a long time coming. I had my son in the existing unit nearly 19 years ago, and the building was not fit for purpose then. I really want to ensure its speedy completion.
Truro and Falmouth has existed as a constituency only since 2010. It sits in the middle of the Duchy of Cornwall, spreading from Falmouth on the south coast to Crantock on the north coast. Falmouth is my home, and where I have sat as a councillor for the past six years. It is a vibrant and welcoming town enveloped by the ocean. Falmouth has played its part in the history of Great Britain. In the late 1600s, the town was appointed the Royal Mail packet station, receiving and sending mail and messages all around the globe, making Falmouth —for 150 years at least—the information superhighway of the British empire.
However, Falmouth is more than its seafaring past. We still have two splendid castles, Pendennis and St Mawes, protecting the entrance to the Carrick Roads, but the constituency is also the site of Falmouth University, built on the legacy of the famous art school that is still found on Woodlane, but now anchored across the border in the state-of-the-art Tremough campus in Penryn, which it shares with the University of Exeter. The area brims with creatives, scientists and engineers—whom Dawn French, the university’s chancellor, described as “enterprising dreamers”.
If we follow the River Fal upwards, we reach Truro, Cornwall’s capital and only city, with its impressive cathedral and award-winning theatre Hall for Cornwall. It has Lys Kernow, the home of Cornwall Council, as well as Treliske, the acute hospital. The constituency also has a large rural element, with an array of beautiful villages and areas such as the Roseland peninsula, where farming and fishing are still vital industries.
When researching for this speech, I was struck by the words in the maiden speech of one of Cornwall’s most well known and loved Members of Parliament, David Penhaligon. Exactly 50 years ago in this House, he referred to an economy that relies on tourism, traffic conditions in the summer months that strangle much of the industry that keeps the place going for the rest of the year, tremendous pressure on hospital services, sewage problems, pressure on housing, the problem of summer lets and the lowest average wage in Britain. I am pleased that the measures in this Government’s programme—a real living wage, the water Bill, devolution and renters rights—will help to address some of those issues, but it is shocking that many of the issues that he mentioned then are, sadly, still very much in evidence today, half a century on. For a place on the edge of the map, Cornwall is too often at the edge of our thoughts in this place. Like Penhaligon, I believe that Cornwall, with its proud and independent heritage, deserves better.
Turning to the topic of this debate, there is so much to be excited by. As well as Cornwall’s potential for onshore wind, we have 20% of Europe’s requirement for critical minerals and geothermal energy beneath our feet, buried in our granite. We only have to look at a horizon dotted with the ruins of engine houses to know that the people of Cornwall are more than happy to dig for their treasure. Falmouth is a town with its face turned to the sea. The port still has a very busy harbour and docks, which have businesses servicing both military and commercial ships, as well as hosting cruise and leisure vessels. But there is potential for so much more, and the port of Falmouth is poised to take advantages of a new generation of offshore wind production in the Celtic sea. With the support of the new energy company GB Energy, the £1.8 billion ports fund and investment in the skills training we so desperately need, our young people will be able to grasp with both hands the well-paid jobs of the future, while securing our own home-grown energy and facing down the challenge of climate change—a challenge that is so important to a place like Cornwall, which stares the impacts of the changing climate in the face every day. We were the first large rural authority to declare a climate emergency and the 2030 net zero target. Now, we will play our part in getting the country to meet a similarly ambitious target. Falmouth’s time truly has come again as part of the Government’s mission to become a clean energy superpower.
Truro and Falmouth is the most magical place to live. It well and truly hooked me and my small family, and has become part of me. My journey, despite its ups and downs, has been a charmed and happy one. Truro and Falmouth has given so much to me, and it is overflowing with promise and brilliant, independent-minded enterprising dreamers. I am determined to serve my home as well as it has served me. A bright future lies ahead for it.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I congratulate the hon. Member for Truro and Falmouth (Jayne Kirkham) on a really wonderful maiden speech. It is heartening to see how much love and passion she has for her adopted home in Cornwall—and who does not like Cornwall? I am sure her constituents will be tremendously well served by the passion we saw just now.
The Government must accept that the messaging around GB Energy was muddled at the very least during the election. It was almost as though it was rushed through as a manifesto headline, rather than resulting from the strategic development of careful, thought-out, optimised planning, but there we are. We understand that there will be limited co-production from the company, no retail arm and no public sector comparator role. It will be a provider that does not do much provision and a decider that does not make any decisions. Talk about net zero—there is zero detail in the Bill to give us an indication of what will actually happen on the ground. It was going to sell energy to the public, and then it was not. It was going to generate energy. Then it was not, and now it will again. I think we are still in that space.
I heard in the Secretary of State’s opening remarks that there has now been a modification to the brand: it is now GB Energy generating company. The “generating” bit has been shoehorned in there at the last minute to try to make it a little bit more believable. It that will not own any assets outright, but will make a return on the sale of energy from the wholesale market by the principal operator of the energy schemes it latches itself on to. Well, I can see why the Labour part never put that on a leaflet—goodness me. Why is it not considered a Government trading fund? It is not a company; it is a Government trading fund that they are branding as a company. It absolutely meets all the criteria of the Government Trading Funds Act 1973, so it would be interesting to know why that is.
I do not doubt the Secretary of State’s commitment in this area. I have seen it over the past five years. I am sorry that his initial, much more ambitious plans for £28 billion have been torpedoed by the Treasury and his right hon. Friend the Chancellor. If he is feeling sorry for himself, he can speak to the millions of pensioners around these islands whose ambitions for the future have also been torpedoed by the Chancellor and the Treasury.
On a substantive note about the lack of detail in the Bill, it is a great pity that the Government want us to believe that clean energy means energy produced from sources other than fossil fuels. It is hard to imagine a more one-dimensional analysis and qualification than that. It is narrow and incoherent, and out of step with the science and the public. It does not really matter where or what carbon is locked into. If you burn it to release carbon dioxide in the process of making energy, then you are a carbon emitter contributing to the climate crisis. It is as simple as that. We should not be hostage to a technology where hundreds of millions of pounds in Government subsidies are used to create millions of tonnes of CO2 a year.
We know that subsidies for large-scale biomass generators in England will end in 2027—I know the Minister is up to speed on that—and the Government claim they are reviewing evidence on potential support beyond this. Will the Minister, in summing up, be clear with Parliament today? Does he believe that chopping down millions of trees on the other side of the world and shipping them to England, to then burn them to make electricity, is acceptable? If not, will he commit to ending public subsidies for large-scale biomass in 2027?
Sammy Wilson
I am glad to hear the hon. Gentleman is concerned about the chopping down of trees. Does he accept that in Scotland 13 million trees were chopped down to put up windmills?
Dave Doogan
I hesitate to thank the right hon. Member for his intervention—[Laughter.] I will need to fact check his 13 million figure—I will get back to him on that. But let us be really clear—I will touch on onshore wind in a minute—that once those trees are burned in a former coal-fired power station, the only products are CO2 and electricity, but where trees have been cleared to create onshore wind in Scotland, there is a lifetime of renewable, clean cheap energy coming out the other side, so it is a false comparator if ever I saw one. Do the Government believe that waste to energy is also clean energy? That does not seem to be what GB Energy should pursue, and I am not certain there is much support for that in the country.
Maybe the right hon. Gentleman should have made his intervention in a minute, because I remain unclear on this point. The Bill sets out that it applies to Scotland, Wales, Northern Ireland and England. However, constitutionally and administratively, in policy terms I do not see how it can apply to Northern Ireland. If the Minister could update us on what possible role GB Energy has in the entirely different energy market that exists in Northern Ireland, that would be helpful.
Community energy is essential to how we make our journey to net zero, but like much else there is scant detail on that. If the Government had properly consulted the community energy sector—they can probably still do that—they would know that access to consumers is one of the principal drawbacks to developing these schemes. It is disappointing that no lateral thinking is being applied on how to connect the will to create community energy with the market. Ofgem has created an environment where one can deliver an extraordinary example of community electricity generation, but trying to connect with consumers is almost impossible. GB Energy, if it is nothing else—and it does appear to be not much else—could have been part of the gig economy. It could have been the Uber of retail energy. We could have bought community energy and passed it on to the consumer base, but that is not going to happen.
The Government want to mirror the ambition of Vattenfall or EDF, but those companies, which are actually companies, sell to the retail market. Will the Government update us on the paltry amount that the previous Government allocated to community energy? It was £10 million just for England. What will GB Energy deliver?
Pushing ahead, zonal energy is one of the most important transformations that can come into the energy market on GB. The Government advised that electricity market reform is key—
Madam Deputy Speaker (Caroline Nokes)
Order. We now come to a maiden speech. I call Perran Moon.
Madam Deputy Speaker (Caroline Nokes)
I call Perran Moon to make his maiden speech.
Perran Moon (Camborne and Redruth) (Lab)
Thank you, Madam Deputy Speaker, for the opportunity to make my maiden speech during a debate that is so relevant to my own wonderful constituency of Camborne, Redruth and Hayle, in the heart of Cornwall. I come to this place—and I am disappointed that the hon. Member for Harwich and North Essex (Sir Bernard Jenkin) is not present to hear me say this—with 30 years of business experience in the automotive sector and, latterly, in the renewable electricity sector. I thank all those who have given their maiden speeches today; they were all truly heartfelt, wonderful speeches. My own inspiration for being here comes from my three children, my daughter and my two sons, who join us in the Public Gallery today.
I want first to pay tribute to my predecessor George Eustice for his work on animal welfare as Secretary of State for Environment, Food and Rural Affairs, as well as his support for local projects in Cornwall such as Kresen Kernow, the Cornish archive, and—despite our profound differences on our relationship with the EU—the honourable way in which he was prepared to criticise trade arrangements made by the Conservative party.
It is an unparalleled privilege to represent one’s home constituency, and the ties that bind Cornish men and women to our homeland are woven into every sinew of our being. The constituency of Camborne, Redruth and Hayle is a truly remarkable place: the place where I was born and grew up and where I live. To understand Camborne, Redruth and Hayle, I respectfully ask you, Madam Deputy Speaker, to transport yourself in your mind to the summit of a single rocky hill, smack bang in the middle of the constituency. This rocky hill is called Carn Brea, which is, in fact, Cornish for “rocky hill”. At the summit of Carn Brea sits the Basset monument, looking down from 750 feet across the constituency. The monument was funded by public subscription in 1836 after Basset himself petitioned the other place against slavery in 1828.
To the north of Carn Brea, just 4 miles away, the Celtic sea sparkles in the sunlight and laps the beautiful beaches of Gwithian, Portreath, Porthtowan, St Agnes and Perranporth—the Celtic sea, which offers the prospect of vast quantities of electricity generated from offshore wind, an opportunity that I dearly hope this Government will grasp. Looking to the west from Carn Brea we see the town of Camborne, pronounced “Kammbronn” in Cornish, meaning “crooked hill”. It is a town that, along with its near neighbour Redruth, is synonymous with our tin mining heritage. The two towns were once among the wealthiest in Britain, helping to drive the economy for more than four centuries. Nestled in front of Camborne, a large flag of St Piran flutters in the breeze. This flag sits at the top of the South Crofty tin mine. There can be no finer physical symbol of the potential for the return of the Cornish economic powerhouse than South Crofty—the last tin mine to close, in 1998.
The economic winds have dramatically changed since then, and tin, which is used in the production of virtually every electrical device, is now also being used in the production of solar panels and, along with lithium, forms the cornerstone of our critical mineral industry. We import tin from as far afield as China and Australia, with all the damaging environmental impacts that come with such imports, yet in Camborne and Redruth we sit on the third highest-grade tin deposits in the world, and there is plenty of it. Our sense of pride in our mining heritage, which was mentioned by my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham), and the possibility of our tin mining renaissance are a constant source of hope and optimism for an area that has been damned by industrial decline for decades.
But back to the summit of Carn Brea and Basset’s monument. Further over to the west, on the horizon behind Camborne, is Hayle, the third largest town in the constituency. Although the official title of my constituency is Camborne and Redruth, woe betide me if I do not mention Hayle in the same breath. Hayle is a vital natural seaport, ready to serve the new opportunities in the Celtic sea, and it includes a very large estuary. Indeed, the Cornish word for estuary is hayl. I have strong familial ties with the town, where my great-uncles, the Slade family, once ran a steel engineering business on South Quay.
Let us look directly south from Carn Brea now, to the gentle rolling hills leading down through the beautiful Cornish granite villages of Stithians, Mawnan Smith and Constantine, and then on to the two stunning subtropical gardens of Glendurgan and Trebah, which, in turn, lead down to the Helford river, from where thousands of American troops set off on D-day to free Europe from fascism.
To the east of Carn Brea lies Redruth, the Cornish meaning of which is “red ford”, the Cornish word for “red” being “ruth” and the word for “ford” being “red”—obviously! Redruth is rapidly becoming a cultural hub, and I strongly recommend visits to Krowji creative hub, Kresen Kernow—the aforementioned archive centre—the Buttermarket, and the Ladder arts and culture hub. Our former prosperity is evident throughout the centre of Redruth, with imposing granite buildings that are awakening with new life after a deep slumber.
Further to the east, beyond Redruth, can be found the villages of Carharrack and St Day, which served as a hub for the one of the world’s wealthiest copper mining districts from the 16th century to the 1830s. Just beyond them is United Downs, where Cornish Lithium, Geothermal Engineering and ground source heat pump companies are based. These businesses have the potential to play key roles in Britain’s economic transformation. We have tin, lithium, geothermal and ground source heat, but we are also blessed with the opportunities of offshore wind in the Celtic sea, onshore wind, solar and tidal. There are very few places in the UK in which renewable energy and critical mineral opportunities are so abundant.
The renewable energy opportunities are not the only factors that make this land so distinct. Let me quickly give three other examples. First, 10 years ago Cornwall was granted national minority status under the European framework convention for the protection of national minorities. Our language, our culture and our heritage, as well as our economic potential, mark us out on this island. Secondly, the positive reaction received by all six Cornish MPs on both sides of the House for taking our oaths in Cornish is telling. Almost half our children and young people consider themselves first and foremost Cornish. Finally, on Saturday my brother Dickon will be made a bard of the Gorsedh, the highest honour that can be bestowed on a Cornish man or woman. This is an honour awarded to people who have given exceptional service to Cornwall by a manifestation of the Celtic spirit or by service to Cornwall.
It is these cultural differences that mark us out. It has been clear on the doorstep over the past two years that there is a strong desire for a non-mayoral model of governance arrangement with Westminster. My hope and my focus in coming weeks and months will be to persuade the Government that the most appropriate devolution arrangement for Cornwall is an Assembly similar to that of our Celtic cousins in Wales.
In terms of economic development, culture and governance, the time has come to throw open the cage door and unleash the Cornish Celtic tiger. For my part, I will put all my energies into representing the people of Camborne, Redruth and Hayle to the best of my abilities. To do so will be the honour of my life. Meur ras—thank you.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Because so many Members wish to contribute, I ask those making maiden speeches to keep them shorter than five minutes if they can manage it. The time limit for Members with a bit more experience, who are not making their maiden speech, is now reduced to five minutes.
Adrian Ramsay (Waveney Valley) (Green)
I have been enjoying the maiden speeches today, particularly those of the hon. Members for Truro and Falmouth (Jayne Kirkham) and for Camborne and Redruth (Perran Moon). Having enjoyed a week’s holiday in Cornwall last week, I have enjoyed hearing even more about Cornwall today.
I am pleased to speak in this debate and to have the opportunity to welcome the Bill, particularly the commitment that it shows to achieving net zero emissions from the electricity grid by 2030. An exciting revolution in the way we produce and use energy is taking place. It is vital that there be new support and incentives to directly accelerate renewable development, giving the sector the confidence to invest and innovate that comes from the long-term predictability that we need.
The Bill is an important step in the right direction. I hope that as it progresses through Parliament, we can have a constructive debate about being even more ambitious, in line with the climate science, and, crucially, about how we take the public with us. I am sure that we will return to that subject in future discussions, but today I will highlight three particular gaps that I hope the Minister will address in his winding-up speech.
The first gap, which has already been referred to, is the opportunity to reflect that the climate and nature crises go hand in hand. I know that the Secretary of State recognises that point and recognises that renewable energy development can go hand in hand with protecting carbon-rich habitats and delivering more nature-based solutions on land and at sea, so it is disappointing that the Bill does not give Great British Energy a remit to contribute to nature’s recovery alongside accelerating the scale and pace of renewable energy delivery. A nature recovery duty would mean meeting climate targets and contributing to biodiversity targets set under the Environment Act 2021. It would mean automatically baking wildlife-friendly design into renewable energy project development from the outset. I also highlight the need to bake farming-friendly design into renewable energy developments.
The second area on which I invite the Secretary of State or the Minister to respond is the glaring and gaping hole in the proposed legislation—namely, the failure to use the opportunity to more explicitly and definitively rule out the drilling and burning of new fossil fuel projects. A net zero carbon plan has to involve ceasing to use fossil fuels, not just increasing renewables. Put simply, fossil fuels increase carbon emissions. We have heard from the UN Secretary-General that fossil fuels are literally cooking our planet, and far more needs to be done to remove their use. Although we have recently seen some encouraging developments from the Government in making it clear that they will not defend the legal challenges to, for example, the Rosebank oilfield, they could go far further, so why not use this Bill to further reduce the UK’s exposure to price volatility and households’ exposure to energy price shocks by making it crystal clear that Great British Energy will not be allowed to facilitate, encourage or participate in any projects based on fossil fuels?
The third area I want to highlight is community energy, to which other Members have drawn attention today. Like other Members, I have a community project in my constituency; it is in the village of Palgrave, where there is a community-owned wind turbine on the playing fields. I heard the Secretary of State talk about community energy earlier, so perhaps we just need clarification of the Government’s intention, but the legislation does not appear to explicitly mention community energy, despite its huge potential. I hope that this is an unintended omission, and that the Minister or the Secretary of State can confirm that there will be community energy representation on the governance structures of Great British Energy, notably from the co-operatives that are such a big part of the sector.
I put on record my support for the excellent Local Electricity Bill, which won significant support in the last Parliament. I very much hope that the proposals in it are taken forward, including by enabling renewable energy generation schemes to sell directly to local people and making sure that that is acted on without delay.
In conclusion, I welcome this Bill and commend the Government for bringing it forward. Great British Energy has the potential to make a game-changing difference, but I would welcome clarification on the level of ambition needed in the areas that I have highlighted.
Madam Deputy Speaker
Thank you for respecting the time limit. I call Dr Simon Opher to make his maiden speech.
Dr Simon Opher (Stroud) (Lab)
Thank you, Madam Deputy Speaker. I thank the hon. Member for Waveney Valley (Adrian Ramsay) for his support for this really exciting piece of legislation—one of the most exciting in our manifesto. I am delighted to be making my maiden speech during a debate on renewable energy. Stroud has been a centre for sustainability and the environment for many years.
I thank my constituents for supporting me. I have been a GP in Dursley, which is part of Stroud, for 30 years. I have looked after my patients there through thick and thin, through the most heart-rending moments and through the most joyous moments, and it has been an absolute privilege. To be honest, I slightly miss them in this place.
I would like to pay tribute to my predecessor, Siobhan Baillie. Siobhan was always so cheerful and positive, and I really admired her for that. She also squeezed the last Government into introducing what was probably their best bit of legislation, which was about childcare. This Government are continuing that and making sure that we deliver it. People who knew Siobhan will know that she also had a lot better hair than I do. [Interruption.] Thank you very much—I will move on hastily.
I would also like to pay tribute to my Labour predecessor, David Drew, who was probably the best constituency MP I ever met. He is still very well loved in the area, and is still involved in local politics. He has given me lots of pieces of advice. One of them is to be yourself, which is good advice for all of us. I thank him for that.
My father actually said that there are quite a lot of similarities between being an MP and being a GP. He said, “First of all, both of you have surgeries, don’t you?” I thought about this more, and I thought about what I tell the doctors I train: “As a GP, you have to know the first three things about everything, which is true for MPs as well. You do not have to be an expert on anything, but you have to know a little bit about everything.” I have certainly learned a lot about that. Both GPs and MPs also need to be embedded in their community. But probably the most important thing to being a good doctor and a good MP is listening, not talking. The best doctors and the best MPs are the best listeners.
Stroud is the most beautiful area, and its hills and valleys were made famous by Laurie Lee in “Cider with Rosie”, which Members may have read. A previous GP in the area, about 200 years ago, was Dr Edward Jenner. He was in Berkeley in my constituency, and he discovered vaccination. He saved the most lives in history, so we must honour him. Vaccination is transformative for health. One of the big benefits of the pandemic is that we developed mRNA vaccines, which in the future will be used to treat cancer. This new therapy is really exciting.
Stroud is also home to cutting-edge companies, including Renishaw in the engineering industry. Ecotricity, owned by Dale Vince, has been at the cutting edge of sustainable energy for many years.
We also have the fantastic Forest Green Rovers, the world’s only carbon-neutral football club. They are also vegan. Sadly, they were relegated from the football league this year, but I promise they will be back. I hope they will be, anyway.
Dale Vince built the first wind turbine on Tinkley Lane in 1996, and there is a lesson there, because there was incredible local opposition to it for years. People did not like it, but now it has come to be accepted. This is the future. Many of us have spoken about community energy, which we have been developing in Stroud. We now have six projects. Waitrose will have solar panels on its roof, and we are going to cover the hospital with solar panels. There is a scheme to put solar panels on every public building, which will save having to put them on farmland. I recommend such schemes.
A number of my constituents are currently in prison for climate activism. Although I do not condone their protests in any way, I ask the Home Secretary to review their really excessive sentences, and I ask organisations such as Just Stop Oil to get behind us. We are the greenest Government this country has ever seen, so will they stop protesting and start building with us?
Community is really important in Stroud. We have community hubs throughout the constituency. One of the best is GL11 in Cam, run by Indigo Redfern. Its volunteers look after vulnerable people. We have the country’s oldest community agriculture scheme, and we have a big scheme that buys community shops. When pubs close in little villages, we buy them, too. We are also looking at buying land to protect it for people to use.
I worked in May Lane surgery for so long, and I praise the doctors, the nurses and all the reception staff for continuing to deliver extraordinary care to patients. General practice is delivering extraordinary care throughout the country, but we are in a certain amount of crisis. We have very low morale, and everyone is complaining about not being able to get a GP appointment, so I am proud that this Government will fix general practice by investing, innovating and making sure that patients receive the service they received in 2010.
Another thing I would like to say on innovation is that, about 25 years ago, I introduced an artist in residence at my surgery to treat patients with mental ill health, and I managed to prove that it was incredibly effective. We then expanded into green prescribing, getting people to take walks. We have poets in nursing homes, and we started prescribing allotments. These non-medical prescriptions are crucial, and they save the NHS money, because people realise they do not need medicine to make them better. The arts are crucial. We must support this country’s world-class arts sector, and we must use it to make ourselves better.
I will come to a conclusion. When I first arrived in the House, I was talking to some of the wonderful parliamentary staff who looked after new MPs so well. One of them said, “It is strange, because it is like there has been a generational change in the Commons. A wind has blown through the Commons and replaced what we had before with much younger Members”—not me, by the way—“and many more women. It is really ethnically diverse and there are LGBT people as well. It is like a fresh wind has come in.” I feel that offers a real opportunity for us to deliver real change in this country.
My father is 90. He was going to be here today, but he could not make it, which is really sad. He has been a lifelong socialist and Labour party member. He said in 2019, “I will probably never see another Labour Government,” but he has got to see one. Let us make this work and work hard to deliver renewable energy, so we can bring down the cost of power and change the whole environment of the country.
Madam Deputy Speaker (Ms Nusrat Ghani)
I think I was stuck on the vegan football club!
Sammy Wilson (East Antrim) (DUP)
The first two months of this Labour Government have not been good news for electricity consumers. First, the promise to save £300 per year on bills was demoted in the King’s Speech to, “We will do it in due course.” Then, during the recess, there was the announcement that the £300 for pensioners to help with winter fuel costs would be removed because the Government placed the importance of rewarding their trade union paymasters above the needs of vulnerable pensioners.
Just this week, the Government announced they would help the big energy companies and fill their pockets with extra money, guaranteeing those energy companies prices that are currently above the market rates for electricity. The companies will be guaranteed those prices for x number of years, but if the rates change to their benefit in the future, they can change the contracts and they will be guaranteed a market for their dear electricity. Who will pay for that generosity? The consumer.
Today we are debating a Bill that sets up a quango. Despite the fact there is a £20 billion black hole in the budget, the Government can find enough money to finance a new quango. All of this will be paid for by the electricity consumer. In his impassioned speech, the Secretary of State told us that it would be impossible to envisage anybody voting against the Bill and that, in fact, the country is clamouring for it. I have to say I have not had any constituents hammering on my door telling me, “Be there on Thursday, Sammy, and vote for this Bill.” In fact, I suspect if many members of the public were asked about GB Energy, they would probably think it is a new drink rather than some important Government Bill.
The Government have promised that they will create 17,000 new jobs in Northern Ireland, even though, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) pointed out, the constitutional jurisdiction of the Bill does not even cover Northern Ireland. If one considers the Windsor framework and the fact that Northern Ireland is still under single market rules, many of the provisions in the Bill and the subsidies the Government are claiming could not be applied in Northern Ireland. Will the Minister confirm what role the Bill will have in Northern Ireland?
The Government’s main point is that the creation of Great British Energy will bring down prices for electricity consumers. The fact is that this Bill is all about having to spend money on new infrastructure to generate power well away from the centres of population, as well as putting in infrastructure to take that power to the consumer. That will require billions of pounds of investment. The Government say it will be done by the private sector, as if that solves it all. Of course, if the private sector puts in that investment, it will require a return. Where will that return come from? It will come from the consumer.
We already know, as it has been pointed out, that, according to Ofgem, two thirds of people’s electricity costs in the first quarter of this year were as a result of non-fuel costs. They included the cost of the infrastructure, the environmental policies, and the administration and the operating costs of the grid. Extending the grid, which we will have to do, will incur further costs and put up the price of electricity. That is why the Minister could not guarantee that the £300 saving will be delivered. He knows that the massive costs of changing our system will be borne by the electricity consumer. Whether we regard net zero as good or bad, let us not hide from the fact that it will cost people right across society. It will lead to industry facing higher costs, and consumers facing higher costs and greater fuel poverty.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Michelle Scrogham to make her maiden speech.
Michelle Scrogham (Barrow and Furness) (Lab)
I am grateful to be making my maiden speech in this debate on the Great British Energy Bill. Given my constituency’s links to energy production at the Morecambe Bay gasfields, it is in a unique position to be a leader in clean green energy with offshore wind and tidal power. Spirit Energy has ambitious plans to convert our depleted gasfields and onshore terminal into a world-class carbon storage cluster. This project will support our net zero ambitions, along with providing thousands of highly skilled green jobs in Cumbria, supporting the transition from oil and gas. The plan will bring a multi-billion-pound investment locally, promoting growth and further regional investment that will assist us in making our local economy more sustainable.
I congratulate all those who have made their maiden speeches today, including my hon. Friend the Member for Stroud (Dr Opher). It has been inspiring to witness so many incredible maiden speeches over the past few months. It has been fascinating to hear those gems of information about people and places, as Members speak about their constituencies with such passion, and the many varied paths and often moving stories that have brought them to this House.
I pay tribute to my predecessor, Simon Fell. We disagreed on many matters over the years, but his commitment to BAE Systems and the nuclear deterrent was clear and something on which we could both very much agree. His kind and generous advice during the election campaign was gratefully received and I would encourage everyone in this House to behave in a similar manner.
I wish my grandma could be here to see me today, as she would, like the rest of my family, be bursting with pride. She would no doubt remind me of the time that she took me to the cinema when I was a toddler. I had decided to make myself comfortable, so I kicked off my shoes to watch the film. Part way through, I climbed off my seat and, with instant regret, found that I had stepped on an ice cream lid. The cold and sticky ice cream quickly seeped through my socks. So angry was four-year-old me that I turned to face the whole audience, and, with hands on hips, loudly demanded to know who was responsible, declaring that whoever it was should come and pick it up. My grandma was understandably mortified by my outburst during the film, and it was 20 years before she confessed that it was her ice cream lid.
I could not be prouder to be not only the first local to be elected as MP for Barrow and Furness, but the first ever female to hold this very privileged position. I started my career in banking way back in the ’80s, but found very quickly that my passion would take me elsewhere. With an insuppressible drive to call out injustice, my mouth soon ensured that I was elected as our union rep, and within a couple of years I was asked to take on that role for the north-west region. I will never forget how I felt when my manager took me aside to tell me that, if I accepted that responsibility, I could kiss goodbye to my career in banking. I did not need time to think about it; I took the job. There is nothing in this world more likely to make me dig my heels in than a bully.
My constituency is well known for many things. We have been world leaders in ironworks, with the founders of Barrow exporting railways to the world. They understood that, for a secure economy, we needed more than one industry and created the jute manufacturing business that became a world leader in its own right. The ironworks eventually became a shipyard where we now build our nuclear deterrent, the most complex piece of engineering on the planet, and we are the only place in the UK that is capable of doing that. We protect our nation—a source of great pride to us locally—with the industry that is the backbone of the economy in Barrow and Furness, and many other towns across the UK, in a supply chain of tens of thousands of jobs.
Our coastline is home to many areas of natural beauty and protected habitats—from Ravenglass, where people can explore on a mini steam train, visit Muncaster Castle with its rich history and birds of prey, or enjoy the truly unspoiled area that is the western Lake district; all the way down to Walney Island nature reserve, with its adorable grey seals and stunning views, not least of which is its view of the island of Piel, which hosts its own king no less. Tradition holds that the landlord of the sole pub, while sitting in an ancient chair, carrying a sword and wearing a helmet, is crowned by the pouring of alcohol over their head. Shout out to John Murphy, our local historian and former Mayor of Burrow, for his fantastic walking tours to Piel.
Morecambe bay and the Duddon estuaries are our playgrounds, and my hometown of Ulverston, which earlier this year was reported to be one of the most vibrant towns in the UK, is known as the festival town, and has well and truly earned its title. There are festivals for everything from walking, Walkfest, to printing, Printfest; comedy and music, with a tenuous link to Laurel and Hardy’s “Another Fine Mess”, Finefest; and my favourite, the one I help to organise each year, Dickensian. The hashtag for that one made headline news in Japan, and I will leave Members to work it out for themselves. [Laughter.]
I have been incredibly lucky that I was able to take time out when my children were little and build a business on the high street with my sister. Those 20 years, through recessions, online shopping, out-of-town retail and covid, were a steep learning curve, but one that I would not change for the world. Our high streets are one of my passions. They are the very heart of our communities and Britain’s biggest employer—worthy of nurturing, protecting and revitalising. I very much welcome our plans and the opportunity to support them in this Government.
We have many famous sons and daughters from Barrow and Furness. Stan Laurel, comedy giant and half of the duo Laurel and Hardy, was born in Ulverston. My apologies to my hon. Friend the Member for Bishop Auckland (Sam Rushworth); his town has been trying to claim Stan Laurel for years, but he was definitely an Ulverston lad. Dalton, the ancient capital of Furness, was birthplace and early home of famous painter George Romney, and Tommy Johnson, the third-highest goal scorer for Man City, who made five appearances for England and scored in every single match. That might be a bit too far back for most to remember, because he was born in 1901, but other Barrow-born football heroes are Emlyn Hughes, whose statue now graces Abbey Road in Barrow, and Georgia Stanway, who I believe is now overdue her own statue for her achievements in the England squad. While we are on football, I have to say good luck to the Barrow Bluebirds in their upcoming match against Chelsea—you have great football genes on your side, so let’s have it!
Sir John Barrow, famous son of Ulverston, became the second secretary to the admiralty—to you and me, that is in charge of the Navy. He wrote the report that became the basis for what we now know as the mutiny on the Bounty. He was the last man to shake Lord Nelson’s hand as he departed on HMS Victory for Trafalgar, and was a great promotor of Arctic voyages of discovery, with many places around the globe now named after him, including Barrow strait, Cape Barrow and Point Barrow in Alaska, but oddly not Barrow-in-Furness.
I have fought long and hard to give a voice to our residents as their councillor and mayor, and I have often been angered by decisions that cost our communities dearly. Next week, our Lib Dem council will decide the fate of one of the busiest libraries in Cumbria—the last remaining community space that is free to use, where many community groups ensure that a vital safety net is provided, and where no matter what someone’s background or financial position is, they have a safe place to learn and achieve. I hope that the council will listen to the 3,000-plus people who have signed a petition to save it, and decide to work with me and local businesses to secure its future.
Our local community groups and third sector organisations have proved vital in recent years, and I am a strong believer that most problems have a solution at grassroots level, through community groups such as the Roxy Collective, Drop Zone, Women’s Community Matters, the Ulverston Resilience Group, Community Solutions, and Furness Refugee Support to name just a few—or Love Barrow Families, whose work is so life changing for some that they return as volunteers to give that same gift to others. In my role as MP for Barrow and Furness, I want to give their voice more power. I want to bring community groups together with residents and businesses, big and small, as that is how community works at its best, for the betterment of everyone in it.
Many MPs make unique claims in their maiden speeches. If I was a gambling woman, I would bet that I am the only MP to be married to a lighthouse keeper—I am hoping the weather is okay back home, because he is sat in the Gallery now. [Laughter.] My better half is the senior lighthouse keeper in charge of the Sir John Barrow monument, a copy of the Eddystone lighthouse that stands on top of Hoad hill and welcomes the people of Furness home.
Finally, I encourage all hon. Members to come and visit Barrow and Furness—but with a fair warning that several of them will, of course, feel obliged to return to this Chamber and correct the record on which is the best constituency.
Richard Tice (Boston and Skegness) (Reform)
I congratulate the hon. Member for Barrow and Furness (Michelle Scrogham) on that excellent speech. The vision of a landlord with a sword serving alcohol is an interesting one. I also congratulate the others who have made maiden speeches, and in particular the hon. Member for Northampton South (Mike Reader). Northampton South is where I grew up and first went to school, and I am still a passionate supporter of the Northampton Saints.
I have long been a critic of the excessive levels of overseas ownership of our key public utilities thanks to the failures of the previous Conservative regimes. Some 80% of our offshore wind industry is overseas-owned, so I have some sympathy, the House may be surprised to hear, with some of the aims and ambitions of GB Energy. Indeed, it may be that the Secretary of State was listening to me a couple of years ago when I talked about this issue.
In the spirit of being constructive and helpful to the Minister and the Secretary of State, I wish to put forward a couple of suggestions. My model of joint-venture partial public ownership of monopoly, critical public utilities is a 50:50 model. In opening the debate, the Secretary of State referred to the Danish company Ørsted, which is 50% owned by the state and 50% owned primarily by pension funds with private sector management. That is a win-win joint venture. I urge the Secretary of State and the Minister, when they make investments through GB Energy, to focus almost exclusively on 50:50 joint ventures in which the other 50% should be private sector investment, preferably from British pension funds on behalf of British pensioners. That way we will get the best of all worlds, with the quality of private sector management, because the truth is that Governments can be good at funding things but are generally very bad at managing things. I therefore urge the Secretary of State and the Minister, when they consider the investments to be made through GB Energy, to adopt the model of investing only up to 50% and always ensuring that there is private sector investment alongside.
Of course, the Secretary of State passionately believes that renewable energy will be cheaper, so he should have no problem at all with inserting into the conditions for investment a requirement for confirmation that within the business plan for investments there is a clear goal for the investment to result in cheaper energy for British consumers and taxpayers. I urge the Secretary of State and the Minister to adopt that 50% restriction and consider the need for private sector investment.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Noah Law to make his maiden speech.
Noah Law (St Austell and Newquay) (Lab)
Thank you, Madam Deputy Speaker, for allowing me to make this, my first speech to the House. It is a pleasure to follow my hon. Friend the Member for Barrow and Furness (Michelle Scrogham).
It is the honour of my life to have the chance to represent St Austell and Newquay, the stunning heartland of Cornwall that touches both of our beautiful coastlines and that has so greatly shaped my life. That ranges from the springboard that I was given at Fowey community college, to learning to play the violin in Par and to ride the waves at Newquay, or by inspiring me to craft a career in financing the kind of natural resources that we are fortunate to have there—I am always available with that experience for Opposition Members who cannot quite spot it—and as a campaigner these past few years, where I have heard so many inspiring voices that helped me to build the grassroots platform that brought me to this House. It is with deep gratitude that I take my place here, mindful of the trust and responsibility placed in me by the people of St Austell and Newquay.
I pay tribute to my predecessor, Steve Double, for the work that he did for St Austell and Newquay during his five years in office. Steve was a hard-working MP who championed, among many other things, the Cornish railways and Cornwall’s pioneering model of tri-service safety officers, both of which I look forward to taking up with vigour.
St Austell bay, Newquay and the clay country that lies in between mean that we are perhaps the most diverse and therefore representative of Cornish seats. From the tributaries of the White river that shipped our clay to the world, down on the eastern side from Roche, Bugle, Stenalees, Penwithick, Trethurgy and Tregrehan, down past St Blazey and Tywardreath to the great harbours of Par, Charlestown, Mevagissey, Fowey and its peninsula, and to the numerous namesakes of St Columba and her parish, Quintrell Downs, St Colan and the village and parish of St Enoder, with Summercourt, Fraddon and Indian Queens. In the west, we have St Stephen-in-Brannel, Grampound, Creed, St Ewe, Sticker, Polgooth, Trewoon, Lanjeth, Foxhole, Nanpean, Treviscoe, St Dennis and Whitemoor—to name a few.
With such a patchwork of ancient settlements across this powerhouse of the Cornish economy, the House will forgive me for seldom referring to the constituency as rural, despite our wealth of prime farmland that feeds our Cornish nation, Britain and beyond. Not only does St Austell and Newquay feature well-known agrifood, beverage and tourism industries; it is also the industrial heartland of Cornwall, boasting many of the industries we need to build a greener future, including renewables, critical minerals and the supply chain that sits behind them. Our constituency stands as a testament to Cornwall’s resilience and ingenuity, blending traditional industries with modern innovation, and I am committed to ensuring that this balance continues to flourish, so we can ensure that this once powerhouse of the Cornish economy is restored.
Beyond our unique economic challenges and opportunities, which demand a right to local decision making, we have a distinct Celtic heritage, language and national minority status, and a national pride: a pride that is inclusive, whether of families resident here for generations, those of proud northern stock or Windrush stock—or all of the above, like my own family—or those who have chosen to make their home in Cornwall more recently. Cornwall’s heritage is not just a relic of the past but a living, breathing part of our identity, shaping our values and aspirations as a community. It is therefore vital that we preserve and promote that heritage for future generations, ensuring that it remains a cornerstone of our cultural and social fabric.
This new parliamentary Session under the Labour Government offers real promise, and I am particularly pleased that they will deliver the largest increase in social homes in a generation. That will change lives, particularly the lives of my generation and the next, and give hope to those who never had it. It is also important to ensure that the right kind of homes are built, and that local people can afford to live and work in Cornwall—a reality that has long been impossible because of the vicious cycle of low wages and housing unaffordability. I will work tirelessly to ensure that Cornwall’s interests are represented and the voices of my constituents are heard at the highest levels of Government, and I will advocate policies that will bring tangible benefits to our people.
I am entering Parliament alongside three other Cornish Labour MPs, who reflect a sea change in the political landscape there. With Cornish Labour MPs in a Labour Government, I am thrilled to provide the strong voice in Westminster that we have so seldom had. But our political culture remains consistent: in people’s rightful expectation of our service; in our egalitarianism; and in our healthy scepticism towards established politics and the centralisation of power, whether that be in Westminster, in single individuals or in out-of-touch bureaucracies that fail to deliver for working people.
In that spirit, I pledge to serve with integrity, to listen to all voices within our community and to champion the values that make Cornwall so special, ensuring that our future is as bright and prosperous as our history is rich and storied. No more shifting the deckchairs: we are going to get Cornwall building again—to a blueprint built of the voices of those who put me here.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Angus MacDonald to make his maiden speech.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Thank you, Madam Deputy Speaker. That was a very heartfelt speech from the hon. Member for St Austell and Newquay (Noah Law). Cornwall and the highlands of Scotland share our westerly reaches and Celtic background.
I am very proud to have been elected to serve the people of the west highlands and Inverness in this Parliament. Following the Electoral Commission’s mistaken decision to cut the number of highland constituencies from three to two, I have, to a large extent, replaced two former MPs in Ian Blackford and Drew Hendry, who represented to the best of their ability Ross, Skye and Lochaber, and Inverness, Nairn, Badenoch and Strathspey respectively.
To say that my constituency is geographically challenging would be an understatement. It takes four hours to drive from east to west and from north to south. The highlands of Scotland are bountiful in their beauty—from the miles of sandy beaches in Gairloch and Lochaber, the mountains of Ben Nevis, and the Skye Cuillins and Torridon, to the castles of Urquhart on Loch Ness and Eilean Donan in Wester Ross. Our oaks and Scots pine trees are bent over as a result of the prevailing westerly wind. We have beautiful lochs and large, powerful rivers around every bend in the road.
Astonishing though the beauty is, it is the people of the highlands that I—like my amazing predecessor Charles Kennedy—love and am delighted to represent. Although the highlands are beautiful and the people wonderful, the region struggles financially. The Highland council is burdened with debts of £1.2 billion. Inverness’s population has increased rapidly, but the three-and-a-half hour drive from our highland capital to Scotland’s capital is not dualled and is not safe. The rural west faces severe fuel poverty, long journeys for NHS treatment, public service cuts, and a lack of essential services, with many young people leaving for cities.
Would it not be wonderful if a fairy godmother came along and bestowed a wonderful asset on the highlands—something that generated serious money for the area over generations, and a long-term provider of great employment? There is such an asset. The west highlands is the wettest area in Europe, and the wind is virtually unceasing. We have the most fantastic land to benefit from the move to renewables. That opportunity has not gone unnoticed: utilities and infrastructure firms from all over the world are queueing up to install 200-metre-high wind turbines on our hills; our hydro schemes are getting upgraded; and there are £5 billion pump storage sites at various stages of development in my constituency. Major construction projects abound across the highlands. Thousands of workers are brought in and accommodated in temporary modular housing.
Peak electricity use in Scotland is 3 GW, while our peak production is 10 to 14 GW. Scotland may add as much as another 10 GW of production capacity by 2030. We will be producing seven times more electricity than we use. Like for prospectors to a gold rush, the rich opportunities are accompanied by challenges. There are two important issues to which we need to pay attention. First, there is a cost to that for the highlands: the industrialisation of our countryside. What was a beautiful view of the mountains is now rows of 200-metre-high whirling turbines, and large new pylons marching across the country to the cities, where the demand is. Secondly, what is in it for the locals? The turbines and generators are manufactured overseas, the developer and utilities firms are from outwith the UK, and the workers are shipped in. Last year, our total community benefit from that multibillion-pound industry was an estimated £9.1 million in the highlands, and £26.4 million across Scotland as a whole. It should be a multiple of those figures. We in the highlands pay 50% more for electricity connection than people in the south of England, yet increasingly, the highlands is where that electricity is generated. The Government are releasing the restrictions on onshore wind farms in England, so what is an issue for Scotland now will become an issue for many rural areas across Great Britain.
What can be done about this? I propose that 5% of revenue from all newly consented renewable energy generated both onshore and offshore should be paid to community benefit funds. For onshore projects, two thirds of that should be paid to the affected council ward, with one third paid to a council infrastructure fund; for offshore projects, all of that 5% of gross revenue should go to council infrastructure funds. Existing renewable projects over 1 MW should pay 2%, as per the split already outlined. For transmission lines and substations, the Irish have an excellent community benefit plan that we can learn from—I would like the energy Minister to listen to this, rather than do his emails. The Norwegians handled the revenue from the North sea oil boom well, and their sovereign wealth fund is now valued at $1.7 trillion. Britain saved nothing, and we are in real danger of repeating that mistake with the renewables bonanza.
I close by saying there is considerable disadvantage to the people of rural Britain in taking on the downsides of hosting our move from a carbon-based economy to a renewable electric alternative. It is only fair that we make it beneficial to the people affected. It is great that the Great British Energy Bill will be further strengthened to include enabling community energy—that is really important.
Finally, Inverness is the centre of onshore and offshore wind, the existing hydropower industry, and massive pump storage projects. I am glad that GB Energy is going to be headquartered in Scotland, and I believe Inverness would be the right place for it. Irrespective of that, one of its first jobs should be to look at my proposals and to ensure that the benefits of Scotland’s renewables can be properly shared, because this is an opportunity that we cannot afford to miss.
Mr Toby Perkins (Chesterfield) (Lab)
It is a great pleasure to follow the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald). I congratulate him on that excellent speech. In particular, when he speaks of Charles Kennedy, who is still tremendously missed in this place, he speaks of a political giant we all reflect on very fondly. It is also a great pleasure to follow my hon. Friend the Member for St Austell and Newquay (Noah Law), who I also congratulate on an excellent speech.
I speak today in support of a Bill that has the potential to be a real game-changer in the fight to decarbonise our energy supply. I applaud my right hon. Friend the Secretary of State on his determination in bringing this Bill before the House so soon after the general election. It is hugely encouraging that the Government have got straight on with the business of setting up GB Energy, following hot on the heels of the excellent auction that we heard about just this week. GB Energy’s task—working hand in hand with the private sector to power an ambitious expansion of renewable energy—is a crucial one. The task of decarbonising our energy supply could not be more urgent. Scientists have made it clear that the warming of our climate due to carbon emissions is having disastrous consequences that are already being felt. We are not heading towards a climate emergency: we are already living in one.
We should reject the voices that say that China’s growth means that anything we do is futile. That is an excuse never to take the steps needed to decarbonise. Of course, there is a role for international negotiation and bringing pressure to bear on other nations, but we do that more convincingly when our own house is in order. That is why I am so pleased to support GB Energy. We have also seen the danger of being reliant on other nations for our energy security. Energy supply chains are increasingly fraught with geopolitical tensions and, in the case of Russia’s senseless invasion of Ukraine, outright conflicts. That lays bare just how vulnerable we can be when we cannot provide for ourselves. Make no mistake, energy security is national security.
We should benefit from the great natural riches this country is endowed with, yet the last Government’s inconsistency of approach detracted from the investment in renewable energy that we need. From the ban on onshore wind to the downgrading of feed-in tariffs and the disastrous, failed contracts for difference round 5 auction, the renewables sector has not previously had a consistent partner to maximise the potential for renewable energy.
Dave Doogan
I am fully aligned with the hon. Member’s priority for national security in energy not to rely on other nations. Of course, within the UK, Scotland generates vastly more energy than we can consume. Although we are in the same state—in the United Kingdom—Scotland is a different country and a different nation. Does he think it is appropriate that Scotland should reap no benefit whatsoever from its energy endowment relative to anywhere else on these islands?
Mr Perkins
I do not recognise the hon. Gentleman’s description at all. We are part of a United Kingdom, and we all make contributions and we all receive benefits. The people of Scotland were given an option to vote to leave, and they chose not to. I know that is a result he bitterly regrets, but that is the choice the people of Scotland made. It is absolutely true that Scotland produces a large amount of renewable energy and of energy more generally, and it also gets many other benefits in many other ways. That is why I suspect the number of Members on the Benches next to him is so much smaller than it was previously, because people have recognised, overall, the benefits of being part of this great Union.
As I say, we should benefit from the great natural riches that his country is endowed with, but the previous Government’s approach withheld those opportunities. What today’s Bill offers, alongside the astonishingly successful round 6 auction, is a strong signal that the new Government are taking the generation of renewable energy far more seriously. It is imperative that the sector knows it has a Government who are a reliable partner, without constant knee-jerk changes in policy: not a pushover or a Government who give away taxpayers’ money thoughtlessly, but one setting out a fair and reliable basis for firms to invest.
Alongside the imperative to reduce emissions and bills, GB Energy can be crucial for our economy. I am pleased that the Government have announced that GB Energy will be headquartered in Scotland. Scotland is proportionately the leading nation in the UK for renewable power. However, I caution the Secretary of State not to ignore the contribution of coalfield communities such as those that he and I represent. In north Derbyshire and across the north midlands and south Yorkshire coalfields, communities that were created to power the nation with coal from the dawn of the industrial revolution should be central to the Government’s thinking in this arena.
This Government have laid down demanding targets to double energy generated by onshore wind farms, triple solar power and quadruple offshore wind. Those objectives are a vital part of decarbonising the grid by 2030, but we should not be in any doubt about the challenge they represent. There are still many legitimate questions about the operation of this new enterprise and where the balance will sit between being a conduit to private investment and being a provider in its own right, but criticism of the Bill from Opposition Members has been wildly overblown. The truth is that this small Bill is introducing the company—it is not the entire energy policy of this Government—and much of the criticism has been fanciful. However, I would be interested to know from my hon. Friend the Minister how the new company will work across Government to unlock the planning system while taking communities along with us.
I am extremely pleased to speak in support of this Bill, and I will be voting for it with great enthusiasm. Yes, there is lots more work to do, but this Government have made a damn good start.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Ann Davies to make her maiden speech.
Ann Davies (Caerfyrddin) (PC)
Diolch yn fawr, Dirprwy Lefarydd—thank you very much, Madam Deputy Speaker. It is a pleasure to follow the hon. Member for Chesterfield (Mr Perkins), to hear so many maiden speeches here today—especially from our fellow Celts in Cornwall and, of course, the hon. Member for Clwyd East (Becky Gittins)—and to contribute to this important debate. The climate crisis and the need to decarbonise our energy generation are among the most pressing challenges of our time, and how we choose to respond will shape the future of all our communities, including those in Carmarthenshire I have the privilege to represent.
I am deeply honoured to have been elected to represent the newly formed constituency of Caerfyrddin, which was created from the previous seats of Carmarthen East and Dinefwr, and of Carmarthen West and South Pembrokeshire. Although new in this Parliament, the constituency has historical roots, having existed under similar boundaries between 1918 and 1997.
I would first like to pay tribute to my immediate predecessors, Jonathan Edwards and Simon Hart. Jonathan served our community diligently for 14 years, demonstrating the essence of being a constituency MP, which is to work hard, serve all and be rooted within our communities. Simon also served for 14 years with dedication, and I acknowledge that to the western parts of Caerfyrddin.
Our constituency has a proud history, and it is impossible to speak of it without mentioning Gwynfor Evans, who won the seat back in 1966 as the first ever Plaid Cymru MP. His victory was a watershed moment for Welsh nationalism, and I am acutely aware that I would not be standing here today without Gwynfor, so his name might make a few appearances in this speech. It is in part thanks to him, and those who worked alongside him, that Plaid Cymru today represents our highest ever proportion of Welsh seats in this esteemed organisation, and we do not take that responsibility lightly. It is also thanks to Gwynfor that today we are able to take the oath of allegiance in Welsh, and in Cornish as was mentioned earlier, within this establishment. He was the first MP to attempt to do so in 1966, and was rebuked by the then Speaker. We have, of course, moved on since those days.
I also want briefly to mention Megan Lloyd George, who was the first female MP for Carmarthen—I am the second—between 1957 and 1966. It was a surreal moment, on the morning that I was sung off from the train station in Caerfyrddin, to find when we landed in Paddington that I was on the Megan Lloyd George train.
In many respects, Caerfyrddin is a microcosm of Wales. We have the lush green Tywi, Taf and Teifi valleys, rich in natural beauty, and to the south and east we have a proud industrial heritage with the coalmines of Cwm Gwendraeth and Dyffryn Aman. Those communities, like so many across Wales, still bear the scars of that industrial past—poor housing, low-paid work, and poor health outcomes are legacies that we must all address. We are all too aware of the effects that that extractive economy has had on Wales. Our land produced vast mineral wealth, yet much of the economic benefit was extracted for the profit of others, leaving our communities to bear the human cost.
Renewable energy now presents an historic opportunity for the Welsh economy, similar to the role that coal once played. However, I fear that history has little regard to our communities, and is in danger of repeating itself. Under this Government’s Great British Energy Bill, private companies will be encouraged to build wind farms and develop tidal energy, solar, hydropower and carbon capture projects under leasing agreements with the Crown Estate.
Let us mention the Crown Estate for a moment—a company that holds assets in Wales valued at more than £853 million in 2023. Despite having powers over Welsh natural resources, the Welsh Government have no powers over the Crown Estate, so the profits from leasing to private companies go straight to the UK Treasury, with a cut for the royal family. Those powers were devolved to our friends in Scotland in 2017, so why not to Wales? The large often multinational companies that the Government will be encouraging to lead development under GB Energy will mean, yet again, profits flowing out of Wales, with little gain for our communities. Ironically, some of those companies are state-owned enterprises, but it is citizens of other nations who will benefit, rather than our own.
I mentioned the lush valleys that I represent, the Teifi and Tywi. Under the current plans of Green GEN Cymru and Bute Energy, a 90 km long, 132 kV dual circuit overhead line is being proposed, which has been met with widespread local resistance. Local people are passionately in favour of decarbonisation, but we simply ask that the Welsh Government’s policy is implemented, which is that,
“electricity transmission cables should be placed underground where possible, not just in designated landscapes but where possible.”
We know that undergrounding is already commonplace in many European countries, particularly using developing cable plough technology. The UK and Welsh Governments should be placing greater emphasis on developers incorporating such undergrounding into their proposals. Landowners across the Tywi and Teifi valleys are prepared to allow access to land if an undergrounding commitment is made by Green GEN Cymru. Unfortunately, despite many attempts by me and others, the company refuses to make that commitment. It would undoubtedly save developers time and money if they would just fully engage meaningfully with our communities.
In his maiden speech, Gwynfor Evans described Carmarthenshire as
“a county of very great natural wealth”.—[Official Report, 26 July 1966; Vol. 732, c. 1499.]
He said it was home to the only anthracite coalfield in Britain, steelworks and ports, and that it had vast agricultural potential, but he added that people
“see no evidence of this prosperity. What they see is mines closing, railways closing, steel workers being made redundant”—
as we have now—
“and a decline in agriculture.”—[Official Report, 26 July 1966; Vol. 732, c. 1498.]
It was as true then as it is today. Rural depopulation remains an impending crisis in Caerfyrddin.
I was born and raised in Llanarthne. I have moved only four miles in my entire life. I farmed there. I have a tenanted dairy farm unit with my husband Gareth, who is up in the Gallery with my family and friends. I am a mother of three daughters and a mamgu of seven. I know I do not look it—you all should have jumped in there. You lost your opportunity, boys.
I am all too aware of the shift among many of those in our younger generations away from agriculture, with many moving to cities to work. If we allow global corporations to treat Wales as a playground for their activities, without ensuring that local communities benefit economically, socially and ecologically, we only exacerbate the depopulation of our countryside. We have already seen large international corporations buying up farmland in Carmarthenshire to plant trees to offset their own carbon footprints, but without changing any of their commercial practices. That is not the path to a sustainable future for our communities, and it is not the path towards food security or the best use of land. We need legislation that ensures that local communities derive the greatest benefits from renewable energy investments.
Climate action cannot succeed while we continue to encourage an extractive economy, and it is our responsibility to develop our rural economy to be locally focused. That creates well-paid jobs for local people and regenerates wealth within our communities. As the Member for Caerfyrddin, I want to see a different economic model for Wales that is locally owned, where the benefits are retained within our communities and where development is driven not solely for profit, but for the wellbeing of our people. We should adopt a distributed, decentralised model of energy generation that spreads ownership and benefits broadly across our communities. Those two aspects—ownership and benefit—must go hand in hand.
To return to Gwynfor’s words from his maiden speech, he said that
“the Welsh are beginning to take their country as seriously as the English take their country and as seriously as the Danes and Swedes take their countries.”—[Official Report, 26 July 1966; Vol. 732, c. 1498.]
Thanks to Gwynfor and the foundation he laid, the people of Wales take their country seriously. We have our own lawmaking Parliament, and our two languages—Welsh and English—officially have full equal status in public life. There is much we can still do and much we can learn from other nations. Denmark has rooted its decarbonisation efforts in local ownership, which has accelerated its progress, because it has garnered widespread public support. In Denmark, there has been a legal requirement since 2009 for at least 20% of renewable energy projects to be offered to local ownership. The Institute of Welsh Affairs has recently suggested a similar threshold of around 15% as a minimum for Wales. That is the kind of forward thinking that we need.
During the election campaign, many people kept saying to me, “You’re not a normal politician.” My response was, “Why aren’t I? I am a mam, a mamgu, a farmer, a business owner—running a children’s nursery that we started from scratch—a former teacher and a lecturer. And there isn’t a training module for this job, is there? It’s just life experience.” I am determined in this new role to show women in Carmarthenshire that we all belong in the rooms where decisions are taken, absolutely.
I carry with me the voices of those who have been overlooked for far too long: farmers who toil the land; families who strive for a better future; and communities who deserve far more than crumbs from the table. The path forward must be one where Wales controls its own destiny, where the wealth of our natural resources enriches our people and where the decisions that shape our future are made not in boardrooms far away but by the very people who live and work in our communities. That is how we will ensure protection for our environment and our society for the years to come. Diolch yn fawr.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Elaine Stewart to make her maiden speech.
Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)
I begin by congratulating the previous speaker, the hon. Member for Caerfyrddin (Ann Davies), on making an excellent maiden speech. I also congratulate all new Members who have made interesting and inspiring contributions today. I am delighted to be making my maiden speech as part of the debate on the Great British Energy Bill. GB Energy will, of course, be headquartered in Scotland. With clean energy infrastructure already in place and the workforce to match, Ayrshire would be an ideal setting. However, regardless of where it is located, GB Energy will create thousands of jobs and deliver energy security and lower prices for consumers throughout the UK.
As it is customary, it is right that I pay tribute to my direct predecessor, Allan Dorans, who served his constituents well through the last five years. Politics aside, it is important to acknowledge the hard work and dedication that is asked of us elected Members. We carry out our duties and represent all constituents to the best of our ability. In his maiden speech, my predecessor said he hoped that voters in Ayr, Carrick and Cumnock would never again elect an MP to go to Westminster. On that point, I am glad to say he was wrong.
I also pay tribute to my Labour predecessor, Sandra Osborne. Sandra was the first Labour and first woman MP for Ayr from 1997 until 2015. Sandra was an outstanding MP and is still remembered fondly by many throughout the constituency. I also pay tribute to her predecessor as MP for Carrick, Cumnock and Doon Valley, George Foulkes, who now sits in the other place as Lord Foulkes of Cumnock.
Madam Deputy Speaker, allow me to say a few words about my constituency of Ayr, Carrick and Cumnock. It runs all the way from Pinwherry to my beloved Dalmellington, with many rural and coastal towns and villages in between. Ayr is the county town of Ayrshire and hosts vital services such as Ayr university hospital and the University of the West of Scotland campuses, as well as a first-class racecourse that hosts the Scottish grand national.
The constituency is also famous as the birthplace of Scotland’s national bard, Robert Burns. Robert Burns is a global icon. His poems and songs are renowned across the world. It would be difficult to pin Burns down on his politics, but our shared admiration for the red, red rose fills me with quiet confidence.
Carrick lies to the south of the constituency. Maybole and the seaside town of Girvan both look out on to the Ailsa Craig—yes, I have an island, too. Ailsa Craig is famous for granite, which is quarried to make curling stones worldwide. There is a joke that Scottish women make champion curlers because they are used to sweeping around dead weights.
Cumnock and Doon Valley consists of former mining areas, and Cumnock was a home to Keir Hardie, the founder of the Labour party. When critics take a pop at the Labour party, they say, “Keir Hardie would turn in his grave.” They do not realise that he was, in fact, cremated in Maryhill in Glasgow. A fine marble bust of Keir Hardie sits outside Cumnock town hall. It is a popular spot for a photo for leading Labour figures visiting the area. Even Michael Portillo felt obliged to have his picture taken for his travel documentary. He, too, will be happy that this Government have been so quick to act to improve the great British railways.
When hon. Members decide to travel to my constituency, they will also find the magnificent Dumfries House in Cumnock. Saved by an intervention in 2007 from the Prince of Wales, now His Majesty King Charles, the project has developed much-needed educational, research and employment opportunities across the area, with great success.
There are many gems to be found across the constituency. However, my fond memories are of growing up in a small village called Dalmellington and being born and raised in Bellsbank, as part of a scheme built to house the miners moving into the area. Picnics at the spectacular Loch Doon, pit parties with all the miners’ weans and playing kerby in the street—it was a simple life, but filled with joy. I am the proud daughter of a miner and an NHS worker. Given that, I was delighted to stand on a manifesto to end the injustice of the mineworkers’ pension scheme, and I was proud to ask about that very issue in my first question to the Government yesterday.
As the youngest of four siblings, times were tough growing up in our house—it was a case of first up, best dressed. These humble beginnings make my journey to this place even more remarkable. The journey was made easier by my two beautiful children, who have supported me all the way. My friends keep me grounded every day, and I thank them for that. I have always been keen to push and challenge myself, which is why I decided at the age of 18 to move to New York, where I worked as an au pair. If someone had told my younger self where I would be standing today, I simply would not have believed it. The odds were stacked against me—back then, the glass ceilings were still very much in place. Around that time, I assume a young Kamala Harris felt the same.
Thankfully, progress has been made. I am thrilled to sit as an MP in this place alongside a record number of women. I am thrilled to see a Government with a record number of women in Cabinet. I am thrilled that this Government have appointed the first female Chancellor in history. Yes, progress has been made. In November, I am sure that the whole House will welcome the prospect of yet another glass ceiling being smashed in the world of politics.
I returned from the United States to become a youth worker. Through my work in the third sector, on projects such as the Zone initiative and the Coalfields Regeneration Trust, I have supported communities to help them flourish. Over the years, I have worked tirelessly in those communities to give children and young people the opportunity to socialise and to champion them. It is about providing vital training and employment opportunities to deprived areas. My work in this place and in my constituency will continue in the same vein, as it always has—supporting communities through public service. My direct experience of how local communities are suffering is exactly why I am standing here today. The chance to change the lives of people, who are often vulnerable and feeling left behind, is a passion that lies deep in my soul.
I will end with this: the day before his tragic, untimely death, the late leader of the Labour party John Smith ended his last speech by saying:
“The opportunity to serve our country—that is all we ask.”
I promise to serve my constituency to the best of my ability.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Anna Sabine to make her maiden speech.
Anna Sabine (Frome and East Somerset) (LD)
Thank you, Madam Deputy Speaker. I thank the hon. Member for Ayr, Carrick and Cumnock (Elaine Stewart) for her speech, particularly what she said about women in politics and smashing the glass ceiling. All the maiden speeches today have been fantastic, but in particular I mention that of the hon. Member for Stroud (Dr Opher), because he talked about developing vaccines for cancer. That was rather poignant for me, because while I have been in the Chamber I have learned that a good friend of mine has died of bowel cancer, which she had had for many years. I pay tribute to her and her young family.
The Great British Energy Bill is particularly important to the residents of Frome and East Somerset, many of whom, especially in more rural areas, live in fuel poverty. Frome and East Somerset is a wholly new constituency created by the recent boundary review, which means I have the very great privilege of being its first ever MP. Frome has a reputation as a cultural and arts hub for the south-west, home to the Cheese & Grain, the Mark Bruce Dance Company and the renowned Frome Independent market. It also has the dubious honour, I am told, of being the most mispronounced town in the UK. Given the number of mispronunciations of my own surname, Sabine, clearly my constituents were looking for someone who sympathises with their linguistic challenge. For the House’s information, it is definitely “Froom” not “Froam”.
I do not think my constituents would mind my describing Frome as feisty. The town is free spirited and forward thinking, often pioneering new ways of doing things, whether having a proudly independent town council, starting the UK’s first community fridge or sharing best practice on social prescribing in GP surgeries. Frome is awash with local groups doing incredible work for the environment, such as Friends of the River Frome and Frome Families for the Future, with which I have already had the pleasure of working. I look forward to championing their causes throughout my time in this place.
Until July, Frome was represented by my hon. Friend the Member for Glastonbury and Somerton (Sarah Dyke), and I hope to be able to emulate her energy and enthusiasm in serving this very special place. The East Somerset half of my constituency comprises the settlements of Midsomer Norton, Radstock and Peasedown St John. These areas have a proud coalmining history dating back to the 1700s. They also share a fantastic sense of community, some wonderful local schools, and plenty of walks and open countryside to enjoy. Midsomer Norton is also home to a section of the Somerset and Dorset railway, with one mile of track running from Midsomer to Chilcompton. My late father was both an ardent Lib Dem and a massive steam train enthusiast, so I think he would have been delighted to see his new MP daughter being given a tour of the railway by the trust’s wonderful volunteers during its 150th birthday celebrations this summer.
Until July, East Somerset was represented by Sir Jacob Rees-Mogg. I know from my time in the constituency the high regard in which he and his team were held by local people, particularly when it came to responding to and resolving casework. That commitment to supporting local residents, shown by both Sir Jacob and my hon. Friend the Member for Glastonbury and Somerton, is one I aim to emulate.
Dotted throughout the constituency are a whole host of other villages, hamlets and communities, many with farming and rural traditions at their heart and with a real sense of community spirit. If I have made it sound like my constituency comprises three distinct parts, then hon. Members should know that they are linked by many factors, such as a proud industrial heritage, a sense of community spirit and, of course, a love of Somerset cider. However, there are constituency-wide issues, which I will work hard to resolve, such as a lack of access to dentists, serious challenges around safety on our A roads, and a need for better bus services to help link up all the different settlements. I moved to Somerset over 20 years ago and intend to spend my time in this place working hard on the issues I know matter to the people in Frome and East Somerset.
Finally, let me say a word on my journey to Parliament. I am technically not the first member of my family to be found on the parliamentary estate. My great, great aunt, Helen Fraser, was a Scottish suffragist and her picture is part of the display on the wall in the admissions office. In 1922, she was the first woman to stand for Parliament in Scotland—of course she stood for the Liberal party—but sadly she did not make it to the Chamber herself.
I attended a state comprehensive school in Hampshire, where I grew up with my mum and brother. I won a county music scholarship that enabled me to join my amazing local youth orchestra and have a whole range of experiences I would not otherwise have been able to take part in. I managed to secure a place at Oxford University and I can well remember feeling like a fish out of water when I arrived there, absolutely bemused by its architecture and traditions, and often wondering if Oxford was really a place for someone like me. Fast forward 26 years and many of those emotions welled up again as I wandered around the parliamentary estate and grappled with the intricacies of its systems and procedures. As a single mum now myself, I am acutely aware that many of the ways in which this place works were not designed with parenting in mind, and they do not always feel accessible to many of us—although I should mention that I am grateful for all the support, as I am sure all new Members are, from the extraordinarily kind and helpful House staff.
Part of the reason I stood for Parliament was to give my wonderful children some faith in our political system and to show them that anyone can be an MP. I am absolutely determined that in my time here I will always have one eye on ensuring that the young people of Frome and East Somerset are not made to feel that anywhere is out of their reach. I want young people from all backgrounds in my constituency to know that the great institutions of this country, be they our universities, our scientific bodies, our civil service, our orchestras or indeed this place, are institutions where they are not only able to participate, but are actively welcomed.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call Julie Minns to make her maiden speech.
Ms Julie Minns (Carlisle) (Lab)
Thank you for calling me, Madam Deputy Speaker. I also thank the hon. Member for Frome and East Somerset (Anna Sabine) for her maiden speech, made on what I understand is a very difficult afternoon for her. I am sure that everyone in the House would join me in sending condolences to her and to the family of her friend.
This has been a most entertaining and enjoyable debate. Any debate that marries ABBA, Stan Laurel and Shane Warne is one that I want very much to be part of, so I am delighted to have the opportunity to make my maiden speech in this context. It is also apt that I make it during a debate on Great British Energy. It is apt not just because the transition to clean energy and tackling climate change are critical to Carlisle—flooding has already decimated our city twice during this century, and local villages are too often cut off by localised flooding—and not just because we need to remove the obstacles that prevent Cumbria’s farmers from connecting their solar and wind farms, but because people right across Carlisle and north Cumbria tell me that they are desperate to see that cut in their energy bills.
It is also personally apt that I speak on this topic. My great-grandfather, a Conservative alderman and councillor for Carlisle, was a man of unusually progressive thinking. In 1909, he urged our city’s industries to set aside coal and instead harness the hydroelectric power of the three rivers on which our great border city stands. I like to think that, whatever our political differences, my great-grandfather and I would have agreed that Great British Energy is not just right, but essential for Carlisle, for Cumbria, and for our country.
I am the first Carlisle-born Member of Parliament since 1918, and the very first woman to represent England’s most northerly city. It is a city of many little-known facts. For example, in the 1830s, it was home to Britain’s first black police officer. In 1916, David Lloyd George nationalised all our city’s pubs and breweries, declaring that their intoxicating effect on munitions workers was doing more damage to the British war effort than the entirety of the German submarine fleet. In 1963, the Beatles were thrown out of Carlisle’s Crown & Mitre Hotel after a complaint from the local golf club that the young Liverpudlians were too casually dressed. My predecessor John Stevenson is himself a keen golfer, and I like to think that while he might be a stickler for the rules, he would have recognised the fledgling talent of the Fab Four, and would not have been so hasty in demanding their removal. I say this because John was a strong advocate for the potential of our young people, and played an important role in securing the new Pears medical school at the University of Cumbria, which will open its doors next year.
In over 2,000 years of city history, the University of Cumbria is a relative newcomer, and its creation is testimony to the work of the last Labour MP for Carlisle, Eric Martlew, who did so much to secure a university for our city. I look forward very much to the opening of the new medical school, and the contribution that it will make to our Government’s mission to rebuild our NHS and train the next generation—like my own daughter—of home-grown doctors, nurses and paramedics.
My constituency lies between the Lake district and Hadrian’s Wall. It is plentiful in sheep and cattle, and is populated by folk known for good craic and a love of XL crisps. For the uninitiated, let me explain that the XL crisp is a savoury, cheesy—no onion—delight, whose availability in the catering outlets of this House I shall passionately campaign for. I shall also campaign for more critical matters, such as the completion of our flood defences—defences that were promised but not delivered by the last Government—the rebuilding of NHS dentistry across north Cumbria, and the growth of Carlisle’s night-time and visitor economies.
Carlisle and north Cumbria already have much to offer visitors. I challenge Members to name another UK city than can boast not only citadels, city walls and a Norman castle, but a Victorian railway station, a cathedral, and original Turkish Baths. At this point I must declare an interest, as chair of the charity working towards the refurbishment and reopening of Carlisle’s historic Turkish baths. It is one of only 12 original baths still in working order in the UK, the only one left in the north-west of England and the only one with a tiled interior made by the company responsible for the exquisite tiles here at the Palace of Westminster.
We are also blessed with a rich industrial heritage. Over the years, Carlisle has been a hub of food manufacturing, with the sweet manufacturer Teasdale, famous for its liquorice Nipits; Cavaghan & Gray, which produces not just any ready meals, but M&S ready meals; and Carr’s biscuits, home of the Table Water and employer of generations of cracker packers.
I could not be prouder to represent the city where I was born and raised. I owe a debt to Robert Ferguson school and Trinity school for helping a working-class child from Denton Holme to become the first in her family to go to university. Without university, I would not have become involved in politics and would not have had the privilege of campaigning for John Smith, a great parliamentarian, to become leader of our party. Nor would I have realised the ambition of my distant cousin Ernest Lowthian, who was Labour’s first parliamentary candidate for Carlisle back in 1918.
In conclusion, I return to my great-grandfather. At the opening of one of the bridges that cross the rivers whose energy he sought to harness, he said:
“Our job as servants of our great border city is to leave it a little better than we found it.”
That, Madam Deputy Speaker, is the task that I have set myself.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. To allow time for one more maiden speech, the next speaker has agreed to speak for two minutes. Thank you so much, Llinos Medi.
Llinos Medi (Ynys Môn) (PC)
I congratulate the hon. Member for Carlisle (Ms Minns) on her maiden speech. I thank her for sharing her passion and for her mention of the delicatessens in her area after a long afternoon.
Ynys Môn is known as the energy island because of its rich natural energy potential, its powerful, predictable tides and the proud history of nuclear production on the island. The Wylfa site has been a political game for over a decade. Back in 2019 we were so close to the finish line, but the site lacked political support from the Government at the time. The community has witnessed the false dawn of Wylfa Newydd, and there is uncertainty regarding site under this Labour Government. The Government’s fact sheet for the Bill says that Great British Energy’s functions will include
“exploring how Great British Energy and Great British Nuclear will work together”.
The people of Ynys Môn do not want more consideration; they want clear commitment and timelines. I urge the Government to give Ynys Môn a straight answer about the future of the Wylfa site, and a clear timeline.
I was pleased that the HydroWing tidal project won 10 MW in the latest contract-for-difference auction. This technology will produce energy for the community-owned Morlais project off the coast of Holyhead. However, Wales received only 1.63% of the total auction allocation and no contracts were awarded to Welsh floating offshore wind projects. We were promised that a Labour Government in Westminster and a Labour Government in Wales would benefit Wales. This is yet to be seen.
A commitment for GBE to massively expand local and community ownership energy alongside devolution of the Crown Estate would ensure that ownership and profits from energy projects are in the hands of the people of Wales and could help lower bills. I urge this Government to make sure that those decisions are put in local hands, but not to rush the decisions on large solar panels, because food security is paramount and losing valuable agricultural land could mean a decline in the economy of Ynys Môn.
Ultimately, the immense natural energy potential of Ynys Môn and the rest of Wales can be truly realised only if control of Welsh natural resources is held by Welsh communities, backed with sufficient public investment to meet our climate and economic goals. I hope I was within the time limit, Madam Deputy Speaker.
Madam Deputy Speaker
That was magnificent. To make his maiden speech, I call Mark Sewards, who has five minutes.
Mr Mark Sewards (Leeds South West and Morley) (Lab)
Thank you, Madam Deputy Speaker. In the interest of saving time, I am sure you will grant me permission to skip to the part of my speech where I celebrate my great constituency of Leeds South West and Morley.
It is the greatest responsibility and honour of my life to stand before you as the Labour MP for Leeds South West and Morley. Alongside being a husband and a dad, this is the most important job I will ever do, and I give sincere thanks to my constituents and neighbours for sending me to this place.
It has been nine years since Morley and Outwood, the old constituency, sent Dame Andrea Jenkyns to represent us, and I would like to give sincere thanks to my predecessor. Dame Andrea is a ferocious campaigner for the issues she passionately believes in. During her time as our MP, she was a strong advocate for animal welfare and always stood up for the people of Ukraine. She will always speak her mind and her truth to power, as Members of this House will be able to confirm. While the list of things that we agree on is reasonably short, we were in broad agreement, prior to the general election, that there needed to be change in Prime Minister. I sincerely thank Dame Andrea Jenkyns for her service to her constituents and this House.
Leeds South West and Morley is steeped in history and tradition, and it is made up of some of the best and proudest communities in the country. The town of Morley is in the centre, and I am proud to say that I was raised there. However, some of my constituents will hear me say that and take issue, because I was in fact raised in Churwell, a village that is geographically attached to the town of Morley. While I will always call myself a proud Morleian, the truth is that there are distinct differences in each part of my constituency. Each one has its own proud history and its own stories to tell.
Part of Morley’s history is that it was once home to the penultimate Liberal Prime Minister, Herbert Asquith. You can find his name on buildings and in streets, including, I am sorry to say, the infamous Asquith Avenue, which is in desperate need of resurfacing. I know that some of the historians among us will never forgive Herbert Asquith—not for the quality of the roads in his name, but for the shell crisis of 1915, which saw the British Army left without the munitions it needed during world war one. This ultimately brought down his premiership, but given that the crisis was abated when the state stepped in to provide a solution, it stands as a reminder that, as powerful as the free market can be, at times there are problems and crises that require the power of the state to solve.
While I am sharing a snippet of the history of my constituency, it would be remiss of me not to talk about the place of the mills and the mines in the history of Leeds South West and Morley. Whether it was the role of Morley, Tingley, Gildersome or East Ardsley in the heavy woollen trade, or the mines in the villages of Lofthouse and Robin Hood, these industries have shaped our constituency and the home that we know and love today. But it is not just the history of my constituency that makes it great; it is the people. It is the people at Drighlington village’s Coffee Pot Memory Café, who do outstanding work for people with dementia. For their efforts, they were recently awarded the King’s award for voluntary service—one of the highest honours that such an organisation can receive. I commend them for their work.
While I am talking about Drighlington, I must also pay tribute to not one but two Olympic medallists who live in the village: Jack Laughter and Lois Toulson, who both won bronze in the 3-metre and 10-metre synchronised diving events in Paris. I congratulate them on their incredible success. It is Lois’s first medal and Jack’s fourth—he now has one of every colour.
In Churwell village, we are blessed with the environmental action volunteers, who keep the community looking outstanding. In Farnley, we have the 8th South West Leeds scout group, who work in conjunction with our litter pickers to keep our community looking outstanding. In Wortley, residents have gone to great lengths to protect and restore the TV Harrison football field. Leeds United legends have trained there, including Paul Reaney and David Batty, and I look forward to working with residents and the Leeds Schools Sports Association, which has responsibility for the site, to restore it to its former glory.
Although Farnley and Wortley are new additions to the constituency, it is a place that does not have its own community hub or library. But what it does have are some outstanding sports teams that make up the community hub for our community in Farnley and Wortley. These are Wortley FC, the Farnley Falcons, West Leeds RUFC and, of course, New Farnley Cricket Club. Wortley is the place where I am raising my own children, Oscar and Arthur, who will never be able to call themselves Morleians, I am sorry to say.
Finally, Madam Deputy Speaker—I know that my remaining time is very short—I want to reference the work of WF3 Kindness, which works across Tingley, Ardsley, Thorpe, Lofthouse and Robin Hood. Its sole aim is to help people in those communities to live stronger and better lives, and I look forward to supporting the charity in that work.
These organisations and constituents have sent me here to return politics to public service once again. They have sent me here to restore stability to our country and our economy. They have sent me here to plug the gaps that they have often had to fill themselves. My constituents have stepped up for their community time and again, and it is my turn to do the same for them.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It has been a great privilege to listen to so many maiden speeches this afternoon, with so many Members of Parliament, pretenders to the throne, representing what they claim to be the most beautiful constituency in the country. Everybody, of course, knows that is West Aberdeenshire and Kincardine, but listening to everybody was a great reminder of the fact that there is so much more that unites us than divides us. We are all privileged to serve in this place, and we are all privileged to serve the constituents who sent us here for however long or short.
However, reading through the list of the 18 constituencies whose Member gave their maiden speech today felt like reading the list of all the parts of the country where I either spoke or campaigned over the last year. The fact they are now all represented by parties not my own perhaps says something about my campaigning ability: Clwyd East; Northampton South; North East Hertfordshire; Eastleigh; Stratford and Bow; Cheadle; Truro and Falmouth; Camborne and Redruth; Stroud; Barrow and Furness; St Austell and Newquay; Inverness, Skye and West Ross-shire; Caerfyrddin; Ayr, Carrick and Cumnock; Frome and East Somerset; Carlisle; Ynys Môn; and Leeds South West and Morley—all fantastic maiden speeches. Welcome to the House of Commons. It is just unfortunate that, on such an auspicious and a proud day for those Members, we had to spend our time talking about an unnecessary and costly gimmick that will not improve our energy security and will do nothing to reduce consumers’ bills or our carbon emissions.
We heard the Liberal Democrats claim that we left a mess for the Government to clean up when it comes to energy. Well, if having the first to fifth largest offshore wind farms in the world, the fastest reduction of carbon emissions in the G7, an end to coal-fired power production and net zero in law is a mess, I would like to see a good job well done.
We heard great claims from the Secretary of State that GB Energy will incentivise investment and speed up the deployment of new technologies while scaling up more mature ones, all of which is debatable to say the least. As the public out there watch their bills go up again, the Labour party claimed through the election that creating this company will automatically lead to lower bills. We heard again and again that bills will be £300 lower. Funny that we do not hear that figure bandied around as frequently today. That is the most questionable claim.
If not £300, as the Secretary of State used to claim, by how much will bills fall as a result of establishing this company, and by when? How will this company speed up deployment? What will it do differently, given that we already have the first to fifth largest offshore wind farms generating power here right now without this costly gimmick? Although I respect the ambition and agree that we need to see more jobs for British workers and the establishment of a UK-based supply chain, which is why we created the sustainable industry rewards that will come in at allocation round 7, does the Minister acknowledge that this will take time and that we are hundreds of thousands of workers short of the plans that we have to build right now, and that this will make no difference to the Government’s 2030 plans?
The Secretary of State’s claim not to be neutral about where things are made rings hollow to the supply chain in and around Aberdeen, which is worried about the future of North sea oil and gas because of his Government’s decisions. The announcement, with much fanfare, that GB Energy will establish an unprecedented partnership with the Crown Estate is fantastic, but what does that mean for Scotland, where the Crown Estate is devolved? The private sector projects are, in the Secretary of State’s words, guaranteed to return a profit, so why do they need to be de-risked by the taxpayer? What will be the cost to the taxpayer when, inevitably, some of these new technologies fail? What will be the company’s final bill for taxpayers?
Although £8 billion is a large amount of money—just think how many pensioners could heat their home for that amount, for example—the TUC, no less, conducted an analysis last year that found that GB Energy will need around £61 billion to £82 billion of investment between 2025 and 2035 to scale it up to the level needed to do all the miraculous things that the Government claim.
This initial £8.3 billion capitalisation, large when we have such pressure on public finances, seems a little on the low side if the Government really want to create a British Ørsted or EDF, bailed out annually by the taxpayer, especially given that £3.3 billion is planned to fund local authorities and provide low-cost loans to communities, leaving £5 billion to do everything else. When does the Minister expect his boss, the Secretary of State, who has returned to the Chamber, to go cap in hand to the Treasury asking for more money? What exactly does he think the Chancellor’s response will be?
How will the establishment of GB Energy impact the independence of GB Nuclear? Will GB Energy now have the final say over the small modular reactor drawdown process? How is that process progressing anyway? Do we have a timeline for a final decision on that or on a third gigawatt-scale reactor at Wylfa?
Josh MacAlister (Whitehaven and Workington) (Lab)
I thank the hon. Gentleman—apologies, the right hon. Gentleman—for giving way. Some 18 years ago, a younger Member for Doncaster North approved land at Moorside, next to Sellafield, for new nuclear use, but 18 years on we are now at the eleventh hour, thanks to the indecision, chaos and confusion of the last Government, who were unable to make long-term decisions about the nuclear future of our country but are now lecturing this Government. Why is the shadow Minister defending the last Government’s approach when it is so apparent that a new approach is needed?
Andrew Bowie
I thank the hon. Gentleman for his question. He was right the first time—hon. Gentleman, not right hon. Gentleman. I was very pleased to visit Sellafield and Moorside in his constituency, and I was proud to be the first Minister for nuclear in the history of this country. I was proud to launch Great British Nuclear, and to announce the small modular reactor drawdown scheme, our route to market for alternative energy, that we would build a third gigawatt-scale reactor at Wylfa and that we would carry on with things at Sizewell. Now it is in the hands of the hon. Gentleman’s party to take the decisions necessary to move the nuclear industry to the next level, moving forward on our proud, world-leading agenda for reinvestment and our revolutionising of this country’s nuclear industry, of which he is rightly proud.
Andrew Bowie
I will not, because that will eat into his own Minister’s time to respond. Oh, maybe I will as it is the hon. Gentleman who is asking.
Mr Perkins
The shadow Minister is such a generous man. He is listing all the commitments he made, but we all know that his Government made £22 billion-worth of commitments that they had no idea how they would pay for. Why does he not tell the truth?
Andrew Bowie
“Truth” is quite an interesting word coming from the party that has decided to prioritise train drivers over pensioners and that, on the very day it announced a 22% increase in junior doctors’ pay, told the pensioners of this country they would be going cold this winter.
To go back to the matter at hand, what will be the relationship between GB Energy and UK Industrial Fusion Solutions or the International Atomic Energy Agency? How will that affect the plans for STEP—the spherical tokamak for energy production—at West Burton? The Secretary of State wants the UK to export more energy, but has he done an analysis of the impact on bill payers of building the required infrastructure and interconnectors? Will GB Energy and not Ofgem now be the final decision maker when it comes to the approval of new international interconnectors to the continent? If so, how will it be held responsible for those decisions by the Department and by Parliament?
I know the Minister is a respectful person, so I ask him sincerely to please end the disrespect being shown to the people of Aberdeen, with the “will they, won’t they” game being played around the location of GB Energy’s headquarters. Politics aside, that area of the country is already worried about its economic future. My plea to him, as my hon. Friend the Member for Gordon and Buchan (Harriet Cross) asked earlier, is to end that situation and make an announcement as soon as possible.
Ultimately, the simple question the Minister will have to answer, after having considered all the points made by hon. Members this afternoon, is why? Why are the Government doing this? Britain is already a world leader in clean energy production. We are already leading the world in cutting our carbon emissions. We already export energy. We are building new technologies at unprecedented rates. We have halved our emissions and done so while growing the economy.
The Secretary of State regularly, and rightly, claims that it is Britain’s over-reliance on gas that has led to bill payers here paying higher bills than in other countries. As I say, he is not wrong. It is acknowledged by the Climate Change Committee that we will be reliant on gas for a significant proportion of our energy supply for many years to come, so his decisions for the North sea will leave us, in the short term, even more reliant on foreign imports and on the countries and regimes he claims he wants to free us from, and there will be a lower tax return for the Treasury from a smaller sector. Jobs, capabilities and skills will be lost overseas, and bills will not fall, certainly not by the £300 he claimed during the election.
So if there is nothing in GB Energy for bill payers, it does not have the capital to enable it to be an Ørsted or an EDF, we are already a world leader, it will open the taxpayer up to huge risk, investing in emerging technologies might fail and it will not increase our energy security, the question is why do it? What is the point in GB Energy? Surely the Secretary of State is not that desperate to have something to put on his “Ed stone” or to have a new plaque to unveil. It may well be about the “Ed stone”, but the Secretary of State should be aware that this Bill could be the Government’s tombstone. We have seen how these projects end up: Robin Hood Energy collapsing, leaving Nottingham City council with a bill of £38 million; and the same with Bristol Energy. What will the bill for the country be if GB Energy follows the same path?
Great British Energy will not produce any energy, it will not cut household energy bills by £300 as the Prime Minister, the Chancellor of the Exchequer and the Secretary of State for Energy Security and Net Zero have all stated, and it will not compensate for the amount of investment in energy projects that will be deterred by the Government’s plans to prematurely shut down the UK’s oil and gas sector. It is an unjustified use of taxpayers’ money at a time when the Government are withdrawing the winter fuel payment for 10 million pensioners as energy bills rise. I echo the words of the Secretary of State and urge Members on the Government Benches to ignore their Whip and vote for our amendment this evening.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
May I begin by thanking right hon. and hon. Members who have participated in this extremely wide-ranging debate this afternoon? I particularly pay tribute to all Members across the House who made their maiden speech in this debate. Thankfully, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) has already run through all the constituency names, so I do not need to do that again. However, I do want to highlight specifically some of the really emotional contributions that we heard from hon. Members, particularly my hon. Friends the Members for North East Hertfordshire (Chris Hinchliff) and for Stratford and Bow (Uma Kumaran) and the hon. Member for Eastleigh (Liz Jarvis), who spoke so passionately, as many did, about their pride in their communities and the importance of this moment and this decisive decade in tackling irreversible climate change. There will come a point in this Parliament when we will not have debates that are dominated by maiden speeches, and I will really regret that, because every time I sit here I learn a lot more about the country in which we live. I thank all those Members for sharing their communities with us this afternoon.
This has been a thorough and interesting discussion about the principles behind this Bill and the establishment of Great British Energy. The UK faces immense challenges, from energy insecurity and our over-reliance on volatile fossil fuel markets to the cost of living crisis and climate crisis. This Government are determined to address those challenges with clean energy being a key part of the solution.
Other countries have already seized the opportunity of publicly owned energy generation companies, which has left Britain behind. Unlike previous Governments, this Government are committed to the benefits of public ownership in the UK, and we want UK citizens and taxpayers to own parts of our infrastructure, too.
Great British Energy will drive clean energy deployment, boost energy independence and generate benefits for all parts of the United Kingdom. It will deliver for the British people, creating good jobs, delivering profits and demonstrating international leadership.
Michael Shanks
I will carry on just now, because we have a very short time before we finish.
I wish to address the reasoned amendment tabled in the name of the right hon. Member for East Surrey (Claire Coutinho). I shall address many of these points in more detail, but, in short, Great British Energy will produce clean energy, protect bill payers in the long term, and invest in projects that expect a return on investments, generating revenue and delivering for the people of this country in the process. We will manage the transition in the North sea in a way that is prosperous and just and enables our offshore workers to retrain into the industries of the future in a long-term sustainable way. I urge the House to vote against this so-called reasoned amendment tonight.
I turn to some of the specific points that have been raised. I am sorry that I will not be able to get to all of them, because I have very little time. We have already announced a substantial amount of detail on GB Energy beyond this Bill, including publishing its founding statement, announcing the first major partnership with the Crown Estate, confirming that it will be headquartered in Scotland, and appointing Jürgen Maier as the start-up chair. This Bill is the next stage of Great British Energy’s journey, giving it the statutory footing that is needed to deliver on our ambitions. It is drafted to help establish Great British Energy and sets out the necessary legal framework.
GB Energy will be an operationally independent company, just as Great British Nuclear and the UK Infrastructure Bank are. It will be accountable to Parliament, not run by Ministers as some Members have claimed today. It will be overseen by an experienced board, benefiting from industry-leading expertise and experience right across its remit, bringing the most skilled and experienced individuals to the heart of the decisions that it will make.
GB Energy will not be a trading fund, as suggested by the hon. Member for Angus and Perthshire Glens (Dave Doogan). Instead, as I have already said, it will be an operationally independent energy company that owns, manages and operates clean energy projects. I suppose the confusion arises from the fact that the SNP’s commitment to set up a publicly owned energy company has not come to anything at all. I think it has been seven years since it was announced. Only this week, the Scottish Government drew down even more money from the ScotWind inheritance to plug the gaps in their day-to-day spending.
Michael Shanks
We have heard from the hon. Gentleman already.
There were multiple questions in this debate about how Great British Energy will lower bills and when taxpayers will see a difference. That features in the reasoned amendment tabled by the Opposition. Conservative Members want to raise the issue of bills as if they have been nowhere for the past 14 years. Their record is why people up and down this country are paying more in their bills, and the people will not forget it.
Michael Shanks
I will not give way; I am very short on time.
In an unstable world, the only way to guarantee our energy security and protect bill payers from future energy shocks is to speed up our transition away from fossil fuels and towards home-grown clean energy. We have been clear that we cannot flick a switch and fix 14 years of dither and delay overnight, but we have set about starting to do so, and we will continue. Throughout supporting the transition, Great British Energy will save families money by ensuring that electricity bills are no longer exposed to those kind of price shocks—[Interruption.] If Conservative Members want to put a number on this, let us just ask them to go back to their constituencies and ask their constituents how much more they are paying in their bills thanks to 14 years of Conservative government.
On the question of jobs, a number of hon. Members rightly raised the importance of investing in our supply chains and in the skills of the future. Great British Energy will create thousands of good jobs and build supply chains in every corner of the UK through the projects that it supports, as well as at its future head office in Scotland. Its investments will support companies across the energy industry, providing opportunities for high-quality, well-paid work rebuilding the UK’s industrial heartlands.
Several Members raised the question of community energy, which is at the heart of the Bill. Local power generation is an essential part of the energy mix, ensuring that energy projects deliver not just a community benefit but the social outcomes that local communities need. Many Members mentioned that.
Michael Shanks
I have said that I do not have time. The hon. Gentleman gave a speech in which he raised a number of points, and I am happy to come back to him at another time.
Community energy also reduces pressures on the transmission grid and the need for expensive investment, so community ownership will be critical. Great British Energy will deliver a step change in investment in local and community energy projects, putting local authorities and communities at the heart of the energy transition.
Finally, I will address a few points on devolution, which was raised by the hon. Member for Angus and Perthshire Glens, the right hon. Member for East Antrim (Sammy Wilson) and my hon. Friend the Member for Camborne and Redruth (Perran Moon). Great British Energy is intended to support all parts of the United Kingdom, and will help to ensure that every part of this country has a role to play in delivering our energy independence. Since we came into government, we have been engaging regularly with the devolved Governments, on this Bill and a range of other issues, to reset the relationships with them. I hope that soon the devolved Governments will indicate their support for the Bill by passing motions of legislative consent.
One of the Government’s five driving missions is to make Britain a clean energy superpower, and at the heart of that mission is Great British Energy. This is a bold idea, overwhelmingly backed by the British people—not only by people who voted Labour, but by people who voted SNP, people who voted Conservative and even people who voted Reform. Surprisingly, there were people who voted for those parties. This is an idea that has the public’s support. It will speed up the delivery of the clean energy that we need. It will deliver the next generation of good jobs, with strong trade unions, helping to re-industrialise all parts of our nation. It will protect family finances. It will learn the lessons of the past and allow the British people to reap the rewards of this transition. I urge the House to support the Bill and bring a fully operational Great British Energy one step closer to reality. I commend the Bill to the House.
Question put, That the amendment be made.
The House proceeded to a Division.
Madam Deputy Speaker (Ms Nusrat Ghani)
Will the Serjeant at Arms investigate the delay in the No Lobby?
Great British Energy Bill (First sitting)
Tuesday 8th October 2024
(4 months, 2 weeks ago)
Public Bill CommitteesGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 8 October 2024 - (8 Oct 2024)
The Chair
We are now sitting in public and the proceedings are being broadcast—Big Brother, so watch your words. Date Time Witness Tuesday 8 October Until no later than 9.50 am Juergen Maier CBE Until no later than 10.20 am Trades Union Congress; Prospect Until no later than 11.00 am Green Alliance; Nesta; Aurora Energy Research Until no later than 11.25 am RenewableUK; Energy UK Until no later than 2.30 pm SSE plc; EDF Renewables Until no later than 2.50 pm The Crown Estate Until no later than 3.10 pm Flint Global Until no later than 3.50 pm The Carbon Capture and Storage Association (CCSA); Scottish Renewables; Net Zero Technology Centre Until no later than 4.10 pm Offshore Energies UK (OEUK) Until no later than 4.30 pm GMB Union Until no later than 5.00 pm Michael Shanks MP, Minister for Energy, Department for Energy Security and Net Zero
I have a few preliminary announcements. Hansard colleagues will be grateful if Members email their speaking notes. Please switch electronic devices to silent mode. Tea and coffee are not allowed during sittings.
We will first consider the programme motion on the amendment paper, and then a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about divvying up the questions before we get into the oral evidence sessions. In view of the time available, I hope that we can take such matters formally, without debate. I will first call the Minister to move the programme motion, which stands in his name and was discussed yesterday by the Programming Sub-Committee.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 8 October) meet—
(a) at 2.00 pm on Tuesday 8 October;
(b) at 11.30 am and 2.00 pm on Thursday 10 October;
(c) at 9.25 am and 2.00 pm on Tuesday 15 October;
2. the Committee shall hear oral evidence in accordance with the following Table:
3. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 15 October.—(Michael Shanks.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Michael Shanks.)
The Chair
Copies of written evidence will be made available on the desk in the Committee Room.
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Michael Shanks.)
The Chair
We are now sitting in public again and the proceedings are being broadcast. Before we hear from the witnesses, does any Member wish to make a declaration of interest in connection with the Bill?
Olivia Blake (Sheffield Hallam) (Lab)
My husband is company secretary of Sheffield Renewables, a community energy project in Sheffield that generates energy.
Andrew Pakes (Peterborough) (Lab)
This is registered, but I have been told to say it out loud: I am a member of the GMB, which is appearing before us later, and before the election I was the deputy general secretary of Prospect, which is also speaking to us this morning.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I am also a member of the GMB.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I am also a member of the GMB.
Josh MacAlister (Whitehaven and Workington) (Lab)
I am also a member of the GMB.
The Chair
For full transparency, I am a member of Unison.
Examination of Witness
Juergen Maier gave evidence.
The Chair
We will begin by hearing oral evidence from Mr Juergen Maier, chair of Great British Energy and of Digital Catapult. Before I call the first Member to ask a question, I remind Members that all questions should be limited to matters within the scope of the Bill. It is a short and quite a narrow Bill, and if you stray I will tell you off, so do not stray in the first place. We must stick to the timings; for the first evidence session we have until 9.50 am.
Will the witness introduce himself for the record?
Juergen Maier: Good morning, everybody. It is a pleasure to be here. I am the start-up chair of Great British Energy. I am in the process of stepping down from Digital Catapult; we are just looking for the new chair to replace me, so that I can focus on this role.
Andrew Bowie
Q
It was announced with great fanfare at the Labour party conference that the new headquarters of Great British Energy would be in Aberdeen. What does that actually mean? What will the HQ actually do? How many people will be employed at the HQ?
Juergen Maier: The HQ is where we will centre all our operations. That means that all the key staff will be there, including the chief executive when we get around to appointing one. We will probably start with an interim chief executive who might not be located there, but eventually that is our plan.
There will be other locations. We would also like a location in Edinburgh and one in Glasgow, in particular to help on innovation and maybe financial services. I see the main role in Aberdeen as being particularly around operational engineering jobs. Ultimately, those are the jobs that are in abundance in Aberdeen; they are the well-paid jobs and the ones that are in greater quantity.
Andrew Bowie
Q
Juergen Maier: There are two very simple answers. The first is how many renewable energy and clean energy projects Great British Energy has been a part of, as a co-investor, an investor or an enabler, and how much more renewable energy we have thereby managed to get on the grid. The second is how many jobs and how much prosperity we have created as a result, making sure that as much of the supply chain is Scottish/British, rather than overseas.
Catherine Fookes (Monmouthshire) (Lab)
Q
Juergen Maier: Community energy is definitely a priority for Great British Energy. If you want to point specifically to the Bill, clause 3, “Objects”, refers in subsection (2)(a) to
“the production, distribution, storage and supply of clean energy”.
I see community energy as a core part of that. As Great British Energy, we definitely want to support the schemes that you have been talking about, whether those are in Wales, Scotland, England or Northern Ireland. We will definitely be doing that.
Stephen Flynn (Aberdeen South) (SNP)
Q
Juergen Maier: Indeed. You are right that I did not answer your first question directly. The reason, obviously, is that we have not been able to put a direct number on it yet. It will be in the hundreds; it may eventually be 1,000 or more in the HQ. You will now say, “That is not going to help manage the energy transition,” but the reason is that the large numbers of people we will be helping to employ will be in the supply chain. If we look at some of the numbers already, by the end of the decade 100,000 people will be employed in offshore wind. I hope that many more of those will be in floating offshore wind, and floating offshore wind will happen off the coast of Aberdeen and indeed the whole east coast of the United Kingdom.
The jobs will be the sort that work with supply chains and the private sector to determine how we will enable floating offshore wind. What is the technology? What are the innovation challenges? What about project-managing the schemes, helping them to get through planning permission and making sure that they get on the grid? There will be all those sorts of questions. I very much see the role of Great British Energy as that of an enabler to get such new technologies on to the grid, and as that of an investor and co-investor. It will take quite a team of people and skills to achieve that.
Stephen Flynn
Q
Juergen Maier: The only way to get energy bills down and to get greater energy security is to get more renewable energy on the grid. We have to keep reminding people that the reason why energy bills went up was not renewable energy; it was a global oil and gas price crisis. Every megawatt and gigawatt of renewable energy that we put on the grid will help to bring bills and prices down. The exact mechanism by which that happens is, of course, a matter of policy—how you decide to bring those bills to the consumer. That is not the scope of Great British Energy; it is not the scope of the Bill, either.
Torcuil Crichton
Q
Juergen Maier: Thank you for the question. We have laid out the five key priorities of Great British Energy. One is to invest and co-invest; another is to enable and help to accelerate development; the third is very much about the local community energy that your colleague talked about earlier. That will be through community energy schemes. The reason we are so keen on that is that it is where community engagement really comes in. That will not be the gigawatts of renewable energy— the gigawatts will be in floating offshore wind—but I passionately believe that by engaging with local communities, whether that is with local solar, with onshore wind or with tidal-type schemes, you can really get that community engagement and community acceptance. Indeed, you can really deliver the local social benefit that those schemes can deliver.
Torcuil Crichton
And economic benefit too, we hope.
Juergen Maier: Of course.
Wera Hobhouse (Bath) (LD)
Q
Juergen Maier: Certainly the enabling part of what we do will be pre-CfDs, as you say. That is also where our partnership with the Crown Estate comes in. This is where we will be doing a lot of the early consenting and engaging on the willingness to co-invest and give confidence, but we will also be there past the CfDs. As and when the schemes get developed, there may be opportunities to come in and be a co-investor. We would also be supporting that.
The Chair
Order. Is this within the scope of the Bill? Our last question will be at 9.47 am, and four more Members have indicated that they wish to come in.
Wera Hobhouse
Q
Juergen Maier: There will be two things. The Bill clearly sets out the structure of how we will set up Great British Energy and the key areas of focus. Obviously there will then be a business plan and a framework agreement between us and the Secretary of State, in which we will have to clarify exactly those questions and where Great British Energy and the UKIB take their role. Those are things that will need to be clarified, but I do not think that putting them in the Bill would particularly help us to do that.
Wera Hobhouse
Q
“The Secretary of State must prepare a statement of strategic priorities for Great British Energy.”
Do you have any idea of when we can expect that statement to be laid before Parliament?
Juergen Maier: I am not sure of the exact timings. Maybe when you get evidence from the Minister he will be able to put a time on that.
Perran Moon (Camborne and Redruth) (Lab)
Q
Juergen Maier: Indeed. The earlier question was pointed at the north-east and Aberdeen, hence my response, but you are right. As a matter of fact, the two key areas where floating offshore wind will be developed are in the north-east and in the Celtic sea. From a logistics point of view, you could not put them further apart, so it is not exactly ideal—
The Chair
Order. We are moving outside the scope of the Bill.
Juergen Maier: Anyway, the answer to your question is the same answer that I gave for Aberdeen. There will be an HQ, a lot of the activities, project management, knowledge and engineering, but obviously when it gets to installation and port-type infrastructure work, there will be significant opportunity in Cornwall and anywhere serving the Celtic sea.
Harriet Cross (Gordon and Buchan) (Con)
Q
“sources other than fossil fuels”.
Where is the cut-off? With things like blue hydrogen, there is a crossover: fossil fuels are involved, but the product is not necessarily what you would call a fossil fuel. Where does GB Energy come in?
Juergen Maier: Our core focus will be on renewable energy that is not derived from fossil fuels, to be clear. However, there are obviously energy sources that are part of the transition, and the Bill so allows. Clause 3(2)(b) refers to
“the reduction of greenhouse gas emissions from energy produced from fossil fuels,”
which would include blue hydrogen, for example. I believe that blue hydrogen is necessary as part of the transition, because you just cannot produce enough green hydrogen to get us going from the get-go, so you need a transitional way of getting there, as long as the clear purpose is to see it as a transition to ensure that the future is all green hydrogen.
Harriet Cross
In that respect, we would still need fossil fuels—oil and gas—going forward to help the transition.
Juergen Maier: Of course, yes.
Uma Kumaran
Q
Juergen Maier: It certainly gives me a very clear direction, along with the framework document that we will develop together with the Secretary of State and the Minister. The short answer to your question is that it is pretty clear. The purpose is clear, and that is the most important thing: the purpose, at the end of the day, is that we will accelerate the amount of clean renewable energy that we put on the grid, and that we will create as much prosperity and as many jobs through it as possible.
Pippa Heylings (South Cambridgeshire) (LD)
Q
Juergen Maier: We are seeing pretty good evidence of that right now, aren’t we? At the end of the day, this is now a pretty well-established model for being absolutely state-owned and independently run. “Independently run” means excellent governance, and obviously as start-up chair I am going to ensure that that is the case. That does not all need to be in the Bill, because we know what it means. We have the Companies Act 2006 and numerous Acts about how good governance works. We will ensure through our board and our non-executives that there is proper governance, and of course there will be many opportunities for reviews by the Secretary of State and ultimately for the usual sort of public scrutiny.
The Chair
Order. That is the end of our first panel.
Examination of Witnesses
Mika Minio-Paluello and Mike Clancy gave evidence.
The Chair
We will now hear oral evidence from Mika Minio-Paluello, who is the senior policy officer for industry and climate at the TUC, and Mike Clancy, who is the general secretary of the Prospect union. We have until 10.20 am for this session. Will the witnesses please introduce yourselves—and pronounce your name correctly, which I abjectly failed to do?
Mika Minio-Paluello: No worries; nobody ever gets it right. I am Mika Minio-Paluello and I co-lead on industry, climate and energy for the Trades Union Congress. Thanks for having me.
Mike Clancy: I am Mike Clancy, general secretary of the Prospect trade union. We represent people across the range of public and private sectors, and we have 22,000-plus members in the energy sector.
Andrew Bowie
Q
Mika Minio-Paluello: It is true that trade unions want to see good-quality jobs going forward, and that there are concerns about how we deliver a just transition, because we see the reality that transitions are not easy. To make that happen, we need some levers—some tools that can help to ensure that workers either have their existing jobs future-proofed or have transfers to new places. GB Energy is a tool that can help to make that possible that we currently do not really have in the UK. In France, Norway, Denmark and Germany there are a lot more institutions—the public sector effectively has a bigger stake—and we do not have that.
As Juergen said earlier, GB Energy can be part and parcel of enabling the supply chain growth that we have not seen in recent years, because CfDs have not delivered that as they are. It can also deliver the co-ordinated collective pathways for workforce, as well as upskilling, which does not really happen given the piecemeal way it is working at the moment. It can also play a role by ensuring that renewable jobs will be good jobs, both through procurement and through, in effect, ensuring a race to the top. That is all part of a plan, and what came out of our congress recently was that we need to see a plan. To have that plan, we need institutions like GB Energy.
Andrew Bowie
Q
The Chair
Order. I do not think there is anything in the Bill about jobs, shadow Minister, so I am being steered by the Clerk to get you off the subject. Let us go to Olivia Blake.
Olivia Blake
Q
Mike Clancy: Following on from what Mika said, and as we are focusing on the content of the Bill, we welcome the creation of GB Energy but our concern is that for some time energy policy has been long on rhetoric but short on delivery. By that we mean that, in the context of a just transition, the losses of jobs—
The Chair
Order. The Whips are saying there is something wrong with the mics—nobody can hear me either. You need to speak into the mic because nobody can hear what anyone is saying.
Mike Clancy: It is unusual for a trade union official to be asked to increase their volume; none the less, I will run counter to type and try to do that.
We welcome the creation of GB Energy and we welcome the Bill, but the reality is that communities are facing job losses now. The promise of jobs tomorrow is where the challenge lies. As we are talking about the Bill, I should say that we certainly want to see GB Energy created as an exemplar in terms of social partnership, job creation and turning the promise of quality green jobs into a reality. That is the pathway that the Bill has to provide for communities that are directly affected by technological and other changes. I guess that in other questions we will bring out further things about organisational design, because we certainly have some views on whether the Bill leads to an organisational design that will enable that.
Mika Minio-Paluello: You asked, “Will it ensure?” We very much welcome the Bill, but will it, in itself, ensure a just transition? No. Does it provide a mechanism and a tool that the Secretary of State and the Government can then use to help to deliver that? Yes. We also think the Bill is good because it creates a basis for GB Energy to grow. Ultimately, if we are going to see that successful transition, and all the jobs and the prosperity that we need to see in the UK, GB Energy needs to be on a par with the equivalent companies that we see in other countries, such as Ørsted, Statoil or Equinor, Vattenfall, or EDF. That is a long-term process, and over time, it can be good for workers and it can make the whole country richer.
Stephen Flynn
Q
Mika Minio-Paluello: I mean, you would not build an Ørsted in one, two or five years. ESB, the Irish state-owned company, moved into offshore wind gradually, step by step. It took it about four or five years to get well inthere. We think we should aim to get there by 2040 or 2045. You start somewhere, so you start with the capitalisation. We can all talk about whether the Government could access more borrowing, and the fiscal heritage, but you can start with that. It will not be on that scale by 2030, but it can put in place the mechanisms and a plan so that by 2040 or 2045, we are a more powerful and richer country because we are finally on a par with our peers.
Mike Clancy: We have made some commentary about the treatment of public debt and this space in relation to GB Energy, and whether the debt rules, which are subject to current debate, should be adjusted so that public investment companies are appropriately excluded because they will provide a return to the Exchequer. We are also interested in the structure of GBE arising from the Bill in this regard. Clearly it is going to be a public investment vehicle, but if it is going to be an operator like Ørsted and so on—obviously we heard Juergen talk about the nature of the assets that it may bring under its control—these are significant engineering assets and propositions. If you are going to build a company in that respect, you had better start now, and you had better think about the labour markets in which you are going to obtain the skills, which are very competitive. I could keep you all morning talking about how that will not happen if it is constrained by public sector pay constraints.
A serious point is that there is more than one pathway for this entity, and if it is going to have a dual pathway, it needs to be thought through pretty early. That is because realising the floating offshore wind proposition—whatever sea it may be in—is a very significant endeavour, requiring an operational, management, engineering, construction, planning, and indeed operating capacity that need to be thought about right now, at the Bill stage.
Andrew Pakes
Q
Mike Clancy: Andrew, you are absolutely right. There are various things that need to be brought together that the Bill itself probably needs to consider, in terms of the skills profile generally and other forms of generation that are within this space. There is going to be an office of nuclear jobs developed by the Secretary of State, and so on. Our view is that it comes down to the extent to which the Bill can specify that GB Energy should be an exemplar company, and that it sets objectives for its board in relation to not only its community engagement, but how it conducts its processes to ensure that the short-termism that sometimes emerges from the private sector form of energy ownership is not characterised by a public company, which should be an absolute champion in these areas.
It comes down to governance and to the objectives and how they are set for a public company, and knitting them into the other parts of the skills landscape. That is why I also make the point—not in a usual trade union way, may I say—that we have to think about the labour markets in which GBE is going to play because they are very tight and very demanding, and there is a whole range of infrastructure that this country needs to invest in to deliver the growth mission.
Mika Minio-Paluello: There is good practice to learn from other countries: from Ørsted, Statoil—now Equinor —and Statkraft. They took a proactive role and identified where they thought the country needed to be in 10 years —not just where they might need to be from a minimalist, reactive position, but where the country needed to be—and then how to invest for the long run in those skills.
The Chair
Order. The Clerk is saying that we are straying from the scope of the Bill. We are okay for time because we have until 10.20 am, but it is getting a bit hypothetical about what will happen on top of the Bill, which, I am being told, is not really allowed.
Harriet Cross
Q
Mike Clancy: I am not sure. As extensive as the powers of Parliament are, I am not sure a Bill in itself can give any of those guarantees. I am not trying to avoid an answer; the reality is that the Bill will set up a company with certain objectives, and those objectives should address directly the generation of employment. You have already heard and asked questions about how many jobs there will be in Aberdeen, what that will scale up to, and what it will mean in terms of the supply chain.
We are seeing a lot of very considerable numbers in a lot of different energy spaces: potentially great demand and very high-quality jobs in both the public space and the private ownership of utilities. But it is all promise. Some of the numbers are so significant in aggregate that you have to wonder where they are going to come from, because there is pressure on different parts of the infrastructure. There are lots of synergies between this sector and others—the skills are the same in aviation, defence and so on—and the basic throughput of science, technology, engineering and maths skills in this country is a long-term inhibitor to our productivity and our delivery. In terms of the narrow focus of the Bill, this organisation needs to be the stimulus for that supply chain, with good employment conditions throughout.
One of the issues in a just transition is that you replace public and private structured, high-quality jobs with jobs that are flimsier, more fragile and more temporary. If GB Energy can be a champion for long-term, durable relationships with its workforce—and that is how you want the energy sector to go—that is your best bet for having the jobs promise to replace those that have to be removed due to the climate impact.
Mika Minio-Paluello: The easiest solution is to keep someone working in their current workplace, precisely because, as Mike explained, there is a significant risk that, in shifting across, you end up with more precarious work. A lot of the onshore supply chain for offshore oil and gas has been struggling; we have seen a big decline over the past 14 years both within the supply chain and directly. Chunks of that supply chain can be future-proofed to support offshore wind and other parts, and GB Energy has a significant role to play in supporting those supply chain sites. Whether it is Shepherd Offshore, Smulders or cable manufacturers, GB Energy should say, “We will be purchasing from you, and not just from China.” There is a big risk of China coming to dominate the offshore wind supply chain. We could end up in a situation with offshore wind like the one with solar at the moment, where if you buy a solar panel, it is 97% made in China. GB Energy can play a role in making sure the offshore wind supply chain is situated here, and that is part of the protection.
The other part is about what could be done in the Bill, although it will not necessarily protect jobs—Mike is right; the Bill itself cannot entirely protect individual jobs. In our submission, we suggest that there could be an amendment to the strategic priorities section and that the statement of strategic priorities should have regard for a just transition, job equality and job creation. It should be embedded as a core part of the statement so that, when the Secretary of State sits down to prepare it, they go, “Okay, part of what we are going to put in here is about a just transition, job equality and job creation.” That is a possible amendment.
We have also suggested an amendment on protection, particularly given that a lot of the job creation and economic impact will be in Wales and Scotland, so the Bill will play an important role for those nations. That means that those nations should probably have a say, through their devolved Governments, on what happens down the line to GB Energy. Let us say that down the line a future Government goes, “Well, actually we are going to privatise it,” or, “We are going to instruct it to dispose of a lot of assets,” Scotland and Wales should be able to have a say and go, “Well actually, this is about our economy here and we think that shouldn’t happen.” We suggest doing that through an amendment but you could explore different mechanisms, including golden shares for those devolved Governments that specifically say that.
The Chair
Order. Sorry, but I did tell off the shadow Minister for talking about jobs when they are not in the Bill. I think we are straying quite a fair distance away. We are meant to stick within the scope of the contents of the Bill. With that in mind, a brilliant example will be Josh MacAlister.
Josh MacAlister
Q
Mike Clancy: We are always dealing with very long-term propositions when it comes to energy assets. Whether it is public or private, you need stable investment conditions so that the entity can build confidence and recruit the staff it needs to deliver its mission. I will keep coming back to this: it is an extremely challenging space if you create uncertainty, and even more so for a public entity, in terms of whether high-calibre people wish to commit their energies and talents in what is a globally competitive environment for their skills.
The most important thing we can do is create that stable investment circumstance. For Government, that means accepting the different challenges there are fiscally and in terms of spending. We would say that there can be no successful transition without a nuclear component, and we are obviously advocates of that. Therefore, we are strong advocates of Great British Nuclear. It will need to have—shall we say—that ability to operate within its own circumstances. Nuclear is particular; it has to be done to time and cost, and that is the big issue. The most important thing that the Bill can do is ensure that you have that stable investment and that you make the commitment.
I have been around for a little while. I have probably been involved in more nuclear and energy renaissances than anyone else in the room put together, and I think we need to get to the actual renaissance and get building. If you can give that stability, people will come to this because they are mission-driven, committed individuals who will want to be part of that renaissance.
Wera Hobhouse
Q
Mike Clancy: The simple answer is yes. The longer there is a concept phase, albeit a positive concept phase, the more that we are talking about a multiplier effect from GBE in many respects. If GBE is delivered, starts to operate and gives confidence to the direction of energy policy, other investors will see this as a serious proposition and therefore we will be engaging in this huge process of energy transition.
As I said just a moment ago, it also means that talented people can see a future. We want to be part of that. So, within the process of parliamentary drafting, the more that we have a clear set of objectives—actually differentiating it as a public entity and setting the tone for what you want from energy assets in the future—the better, because that will give that confidence. That also has a knock-on effect for the confidence of private investors in other parts of the energy environment.
Uma Kumaran
Q
Mika Minio-Paluello: There is a lot of demand at the moment, and a part of the challenge is a significant lack of supply. Part of the reason for that lack of supply is that there is a lack of investment. We as a country have not invested into our workforce sufficiently over time, which is why you get into a situation where different sectors effectively end up poaching people who are most in demand.
GB Energy provides a mechanism as part of solving that. It will not solve it as a whole—the Government have other plans as well to try put that investment in— but it can have a significant role in going, “Yes, here, we are going to provide that long-term investment directly.” Also, clearly, GB Energy will be partnering with the private sector. In that co-operation, it can then say, through its procurement powers, “Okay, in our joint project on this big offshore wind farm, we are going to require the supply chain across the board to be investing into apprenticeships, whether that is one, two or three tiers down,” so that we get that overall growth. It therefore can play a significant role there.
Mike Clancy: I have already touched on this. It might sound strange, but we probably have a bit of a mission at present because of the constraints applied by the previous Administration to remove our members in technical occupations in the energy field from the public sphere, because the labour markets that they operate in reward better in the private sector. The private sector is in a war for talent in this area because, in this country, over the many decades, we have not valued STEM skills and engineering. I speak as a humanities graduate who is always in awe of people who actually go to institutions and learn things that matter and are then applied for the health of the nation.
We have to start with valuing STEM—valuing it on a diverse basis, ensuring that the workforce reflects our diversity objectives more generally—and having a clear understanding that, even within Government, there can be an element of robbing one to pay for the other, such as with defence and aviation. Lots of areas need these STEM skills, which are then easily transferable into digital skills, and there are better salaries for some of those elsewhere.
If you want to deliver that promise about high-quality jobs, you really have to think and have a labour-market strategy for GB Energy that works in this competitive context at all levels—from apprenticeship, through to technical, through to engineering and even through to doctoral level. Again, in terms of the direction and objectives of the Bill, it is about being an exemplar for the entire energy sector in relation to the skills matrix, with how people are employed and the diversity objectives that any public company should have. That is what the Bill should try to address in sufficient detail.
The Chair
Order. Just a reminder again that we are talking about what is in the Bill—not blue-sky thinking about what GB Energy might do and that kind of stuff.
Andrew Bowie
Q
“the production, distribution, storage and supply of clean energy”
should include nuclear energy—very important to your members, Mr Clancy. But to build on the point from the hon. Member for Whitehaven and Workington, I think there is a lack of clarity in the Bill at the minute over the operational independence and the autonomy of Great British Nuclear. Are you seeking that from the Government? Is it something that we should seek to have in the Bill as it moves through Committee?
Mike Clancy: That is not just in terms of the Bill, I think; the actual future of Great British Nuclear has a degree of uncertainty around it, per se, because, again—I am in danger of repeating myself—we have been here before. I used to be a member of the Nuclear Industry Council some moons ago, and we are rightly evangelists for our members, who deliver nuclear energy. We recognise that there are lots of controversies down the back end, in terms of decommissioning, but nuclear is an essential part of the future energy mix and the achievement of our climate goals. Therefore, there has to be a range of certainties in response—that is not a glib remark at all—and, in the GB Energy area, it is about companies knowing that they can invest and get the return. The Bill needs to be consistent with that.
Stephen Flynn
Q
Mika Minio-Paluello: My understanding is that it is not currently in there, but it will be contained in the statement of strategic priorities. There are questions about how much should be added in. We understand that the logic is that the Bill will create an enabling vehicle—it will enable GB Energy to act and do things—so is it useful to put in many, many limitations? Probably not, because adding in too much detail will slow it down. Is it, on the other hand, useful to put in a clause that says that the statement of strategic priorities should have regard to a just transition and job creation? That could be a consideration.
Stephen Flynn
Q
Mika Minio-Paluello: Bringing energy bills down is a complicated process that depends on lots of things, including—
Stephen Flynn
Q
Mike Clancy: I suppose my response would be, “How could it be within the Bill?”
Mika Minio-Paluello: Theoretically, the Bill could say, “We will cap energy bills at a certain level,” but it would not be part of GB Energy’s role to cap energy.
Mike Clancy: You cannot divorce this from the fact that GB Energy will operate in a still-privatised energy asset environment, and consequently there are much broader questions about how bills are composed, the energy mix and so on. Those issues are not in the Bill, and I am sure the Chair would stop me going down that path. But I was the field official in energy, so if anyone wants to talk about that we can spend hours on it and the construction of the energy sector. I understand why you asked the question, but GB Energy is one entity within a much broader firmament of energy assets, owned in different ways.
Mika Minio-Paluello: Does the Bill enable the creation of a company that can, over time, grow to be something like EDF, Ørsted or Vattenfall? EDF brought bills down significantly during the energy crisis, when we had soaring bills. Does the Bill create the capacity to do that? Yes.
Mike Clancy: Often the focus in energy policy is on retail, because it affects domestic consumers more than wholesale when things are going a certain way. The biggest thing for us—we represent engineering and science staff—is where the generation is going to come from, what is going down the pipes and how we ensure that consistently and for the long term so that we have energy security and energy down those lines at a competitive price. Clearly, a public sector champion in that regard can be a significant contributor to changing the trajectory of energy prices and giving us indigenous energy security.
The Chair
Well, we are not going to fill the time for the sake of it. If you have a genuine question—
Stephen Flynn
Q
For full clarity, you have clarified that it is possible for these things to happen—I do not think anyone would disagree with that—but as it stands the Bill does not provide any certainty about any of those points.
The Chair
Order. Is this a repeat of the previous question? I think—[Interruption.] Okay, there is a minute left. Go on.
Stephen Flynn
Again, just for clarity—because you pushed back and said that EDF brought down bills—there is nothing in this Bill, unless you tell me otherwise, that says that GB Energy will do likewise. Is that correct?
Mika Minio-Paluello: I do not think it forces GB Energy to do likewise, but I doubt the legislation that set up EDF forced it to do that. I think it probably set up EDF as a company to operate and gave it freedom to act. The question for Members is: “What do we do to enable the UK to finally be on a par with our peers elsewhere?” Does this create a basis for that? Yes. Then, yes, can you please push and hold the Government to account—
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask this section of questions. I thank our witnesses on behalf of the Committee.
Examination of Witnesses
Shaun Spiers, Ravi Gurumurthy and Marc Hedin gave evidence.
The Chair
We will now hear oral evidence from our third panel. We have Shaun Spiers, executive director of Green Alliance, Ravi Gurumurthy, chief executive officer of Nesta, and Marc Hedin, head of UK and Ireland research at Aurora Energy Research. We have until 11 am for this session. Could the witnesses please introduce themselves for the record?
Shaun Spiers: I am Shaun Spiers, executive director of Green Alliance, a think-tank and charity committed to environmental leadership.
Marc Hedin: I am Marc Hedin, head of research for UK and Ireland at Aurora Energy Research. We are a power market analytics company.
Ravi Gurumurthy: I am Ravi Gurumurthy. I am the CEO of Nesta and the behavioural insights team. Nesta designs, tests and scales solutions to big societal problems, including sustainability.
Andrew Pakes
Q
Marc Hedin: I think we can reflect a little bit on the role of Great British Energy here. One of the areas for innovation is around investments in less mature technologies. It is one of the roles that was highlighted in the founding statement, published in July earlier this year. There is a role for that, but I would argue that there is also a possibility for dedicated schemes to deploy capital in less mature technologies. For instance, with regards to long-duration energy storage, we had a consultation earlier this year, generally welcomed by the industry, which looked into implementing a sort of capital flow regime to promote investment into long-duration energy storage. There is a role for GB Energy here, but there are also alternative routes that are potentially less capital-intensive.
The second aspect, touched on earlier, is around supply chain. There is huge scope here for Great British Energy, where, out of all its potential roles, it may provide the best value for money. In GB, the domestic supply chain has not generally benefited that much from the high level of renewable build-out that we have seen in the past decade or so. There is a role for providing visibility to the supply chain, and implementing innovation into the supply chain more generally in the energy sector.
Ravi Gurumurthy: If you think about different barriers to innovation, I think three stand out. One is co-ordination challenges; second is the provision of certain public goods, such as ports infrastructure, which are critical to investment; and third is risk appetite. I think GB Energy can potentially address all those in different ways.
On the risk side, co-investing—particularly in the novel technologies that Marc mentioned—can accelerate that innovation. Secondly, on things such as ports infrastructure, having a body that is trying to do whatever it takes to solve some of the co-ordination issues and the dependencies on public inputs can drive that innovation.
One other thing I would mention is that Government have a role, and have increasingly played a more co-ordinated role, in driving directed R&D through the net zero panel. I think Government can be better at that, if they are more informed, and one of the things I think GB Energy will do is to give a stronger insight into the constraints and opportunities in the market, and therefore potentially inform Government’s ability to drive innovation in a smarter way.
Shaun Spiers: I obviously agree with all that. The really difficult thing about clean power by 2030 is the last 10% or 20%. It is clear that the market on its own, at the moment, will not provide that, and just adding renewables and grid will not provide it. What GB Energy provides is the potential to invest in things like pump hydropower, compressed air and new technologies that we are going to need. That is going to be essential to achieving the 2030 power decarbonisation.
Perran Moon
Q
Shaun Spiers: It is really quite hard to see how the UK will be able to decarbonise power generation, certainly by 2030. By 2035 was really ambitious and by 2030 is even more ambitious, so you do need a vehicle of this sort to crowd in investment and to give a really clear sense of direction to overseas investors and other investors who are looking for places to put their money. This gives a huge impetus to that mission. It is easy to set targets, but unless you have a vehicle to deliver them, they are going to be impossible to achieve. GB Energy is the key vehicle. I would say it is essential.
Ravi Gurumurthy: Nesta and Boehringer co-authored a report that I was part of, which included some of the time and cost savings that we think GB Energy can deliver—for instance, the role of GB Energy as what we call the pre-developer, where the Crown Estate takes on this role of basically preparing the sites, doing the planning consents, doing the grid connection and doing the environmental surveys before having potentially a single auction process rather than the current dual auction process. We thought that would reduce the time of getting offshore wind built by two to four years. We also produced some cost savings from doing that, including some reduction in rents. We think this institution can deliver genuine improvements in terms of time and cost.
I would not just stop at the vantage point of 2030, because although I think this will make some impact on 2030, remember that we have to double electricity capacity in this country if we are going to electrify heating and transport, so the 10 years beyond 2030 are just as important. I think GB Energy is an institution for the long term, not just for the next five years.
The Chair
I am being reminded again that we should focus on what is in the Bill; I know we can extrapolate what might happen. Next we go to Olivia Blake.
Olivia Blake
Q
Shaun Spiers: We have concerns about the huge powers given to the Secretary of State in the Bill. Clause 5(2) says:
“The Secretary of State may revise or replace the statement.”
A subsequent Secretary of State could significantly revise the aims of GB Energy. We think that the statement should be consulted on. We would propose an addition or amendment to say that the Secretary of State must consult anybody likely to be affected by the statement, or such bodies as considered appropriate by the Secretary of State— something like that, just to say that there should be more scrutiny so that the Secretary of State cannot simply change the aims of GB Energy in the way it is currently set out.
Ravi Gurumurthy: I run an innovation organisation, and the hallmark of good innovation, or of good companies, is that they pivot and adapt. I know that it is sometimes challenging to set up an institution like GB Energy and not lock down all the parameters, but actually that is critical. There are issues and barriers that we do not even know yet, and I think it is important that this organisation can do whatever it takes to achieve the mission, even if we cannot right now identify exactly every single aspect of its role.
Marc Hedin: I would echo that message that the role of Great British Energy is very broad and is being defined as we speak. That is what we in this room, but also the people working for Great British Energy, are doing at the moment. It could also change in the future as the challenges of energy administration evolve. I therefore think it makes sense for the Bill to provide present and future flexibility in scope.
That being said, there are two points or questions that should potentially be answered. First, what are the governance arrangements to ensure that Great British Energy carries out its duties and focuses on its remit? Part of the answer could be that it should be ensured that Great British Energy provides additionality and works with stakeholders, which is what Shaun Spiers mentioned. Secondly, since Great British Energy’s role is primarily to fill gaps in the market, it would be useful to assess its effectiveness there. Clause 7 only mentions an annual rendition of financial accounts, and there is no mention of effectiveness or impact. Reflecting on the possible roles of Great British Energy, some, such as speeding up project delivery, will lead to value added for the whole system but not necessarily additional revenues for Great British Energy. Financial accounts may only tell part of the story, and there is a need for more comprehensive reporting, in my view.
Shaun Spiers: If I may, just quickly: to require consultation on the strategic priorities if they are going to change radically should not be too onerous.
Pippa Heylings
Q
Can you explain a little more your concerns? First, given that innovation needs to pivot, but also given that we are being asked to allow for the objects to be so broad to allow for flexibility within them, Shaun, can you explain a little more why you think there should be consultation on such broad objects? Secondly, can you discuss any concerns you may have around environmental requirements for what GB Energy is going to do? That is also absent at the moment from the objects of the Bill.
Shaun Spiers: On the concern about the ability of subsequent Secretaries of State simply to change the strategic direction of the organisation, you can look at recent history to know that there can be radical changes. It does not seem to me to be too demanding; it is just good governance to suggest that that should be consulted on, and that you do not give absolute powers to a Secretary of State to do that. I do not see that as a particular constraint on innovation; I just think of that as good governance.
The Chair is keen that we do not lever in lots of other things on the Bill, but there is a concern. Clearly, 2030 power decarbonisation is an imperative and we need to achieve net zero, but we also have a nature crisis and there are concerns about whether GB Energy will seek to enhance nature or whether nature will take second place. Both the Secretary of State and Chris Stark, the head of mission control, have emphasised that there will be a role for considerations of nature in energy planning. But, again, that is not in the Bill, and it would be nice to see it there or to see some statement to that effect from the Dispatch Box to ensure that it is central to how GB Energy will behave. There are lots of public companies that do not prioritise nature—they prioritise bills or the delivery of their main objective—and we see the consequence of that, for instance, in the water industry.
Josh MacAlister
Q
Ravi Gurumurthy: It is a very challenging question. As you know, good intentions in this area often do not translate. You can mandate and say you want to operate with risk appetite, but it does not really translate into behaviour. What do I think are some of the components? The capitalisation of GB Energy is really important, because that gives it some degree of resource to take risks. I am quite interested in whether, as well as investing in novel technologies with a high-risk appetite, GB Energy can either take cashless equity stakes or invest in more established technologies, because if you have a more balanced portfolio, it might give you the ability to take risks in some aspects.
That gets you into a conversation about the fiscal rules. The one thing I would say about this area is that if you compare offshore wind and other established energy technologies with roads or hospitals, the big difference in my mind is that for offshore wind we will build those wind farms whether the state invests or not, and we will pay as consumers, whereas roads and hospitals will not get built if the state does not. The point is that we are going to pay for it, and we will pay more through private sector borrowing than we will through the state.
The second big difference is that unlike a road or a hospital, there was a guaranteed revenue stream through a contract for difference, so there is a really good rationale for why we should not have fiscal rules that bias us towards 100% private sector borrowing, rather than the state either taking a cashless equity stake via this development process or actually investing. If you do that, it will give GB Energy the ability to then take risks on the much more novel aspects of the portfolio and have failures. If GB Energy does not have failures, it will not be doing its job.
Harriet Cross
Q
Marc Hedin: I may be playing devil’s advocate here, but there is a slight risk if a public company were to invest in a utility scale project. At the moment in GB, we manage to attract quite a lot of capital to deploy renewable projects, for instance. There is also a risk of perceived unfair competition that would be detrimental to future capital attractiveness, so I would add that to the global reflection around this topic.
Ravi Gurumurthy: To come in on that, it is very common in other countries for the state to co-invest. I have spoken to a lot of other organisations, and we need to attract £350 billion to £500 billion of capital into power generation in the next 10 years. I think it is perfectly possible for the state to play a role in that. Everything that GB Energy is trying to do is to reduce the risk and increase the predictability of the investment environment. If you take the developer role, at the moment the private sector, when it bids in for a seabed lease, has to have the uncertainty of whether that project will ever get commissioned and the long delay in planning and consenting, grid connection and environmental surveys. If we can actually have the state do some of that and de-risk it, I think it is more likely to get that private sector investment. That is what happens in the Netherlands and it is what the Danes are moving towards, and it is also partly what happens in Germany. There is a good track record of these sorts of environments working well to attract private sector investment.
Shaun Spiers: That is right. You cannot dictate the culture of a company in a Bill. There was a criticism of the Green Investment Bank, for instance, that it invested in rather established technologies and had an insufficiently high appetite for risk. It will be important that GB Energy does pump-prime private investment and not replace it.
Torcuil Crichton
Q
Shaun Spiers: Ravi has written the report on it.
Ravi Gurumurthy: Your question is: what can it do to drive private sector investment?
Torcuil Crichton
Yes, what can the Bill and GB Energy itself do?
Ravi Gurumurthy: I have already articulated what it can do on the development side to get rid of some of the risks to do with planning, consenting, grid connection and so on. On the more novel technologies—small modular reactors, floating wind, tidal range and so on—I think we have also talked about how if the state is co-investing in some way, it signals a degree of commitment and insulates companies slightly from the risks. In both the investor and developer roles, GB Energy can play a role in accelerating things. The biggest way in which the state can de-risk investment and increase private sector contribution is through the National Energy System Operator, providing a clear, strategic plan and forward visibility of what is happening in terms of technology and location. That is how I think we will get the investment—not just in the assets, but in the supply chain as well.
Shaun Spiers: On clean, flexible power, what Green Alliance has proposed is a sort of vaccine taskforce-style operation to crowd in all potential technologies for this. It is not clear who would fund it, if GB Energy did not. That is a really important part of 2030 power decarbonisation. There is also the local power plan. The previous Government had a plan—I think it was in 2014—to power 1 million homes by community energy, which was abandoned four years later with about 67,000 homes powered. There is a clear remit here for making community energy economically viable and getting local investment in community energy.
Wera Hobhouse
Q
Shaun Spiers: I think a nature recovery or nature protection duty in the Bill would be helpful in reassuring communities. The investment in community energy, where people really have a stake in the energy, will take some of the sting out of the opposition to renewables, but I would not overload the Bill with things that are better dealt with in the planning system. This is a Bill to enable a lot of investment in achieving a decarbonised power system and long-term energy security. To try to overload it with things that are best dealt with in other parts of government, or other legislation, would be a mistake.
Wera Hobhouse
So the Bill is sufficient in protecting communities?
Shaun Spiers: I would like to see a nature recovery duty in the Bill.
Catherine Fookes
Q
Shaun Spiers: One thing that is necessary to say is that this is a major part of the transition and a priority of the Government. That was the case for periods during the coalition, when there was a really vibrant community energy movement and a sense in which people were coming around to supporting renewable energy—which otherwise they would have opposed—because they could see they had a financial stake in it but had also been engaged in developing it. What snuffed that out had more to do with planning issues than with investment, but there are ways in which GB Energy can pump-prime some of the investment.
I am trying to think back to the community energy manifesto we put together in 2018. I cannot think of any specific things, but I can write to the Committee, if that is helpful. There are specific financial incentives that would help get this off the ground. To be honest, though, communities across the country were really keen on community energy. It was a vibrant movement and could be again, with the right political framework as much as investment.
Uma Kumaran
Q
Ravi Gurumurthy: You have to think about this as a whole package. If you have absolute clarity and conviction around the 2030 decarbonisation target and the pathway beyond that, and if you translate that intent into a strategic plan—with clarity about the technologies and their location through the NESO—and if you then have an enabling, activating agency like GB Energy clearing away some of the barriers, then the combination of that overall ambition, that plan and GB Energy does I think hugely accelerate investments into the sector. But you have got to do all three.
Marc Hedin: I think that is right. I think there are two key components here. One is identifying gaps in the market, where Great British Energy can provide a lot of value and can reinforce confidence from investors, and thinking hard about where it makes sense for Great British Energy to invest. We have mentioned points like local power plans, innovative technologies. I think there is a range of areas in which it makes a lot of sense for the state to co-invest through Great British Energy to develop those industries. The last point is around supply chain, to really support the whole energy transition.
Shaun Spiers: I agree with that. This is a part of a bigger picture. We keep coming back to the scope of the Bill. The Bill, in its objects, talks about
“measures for ensuring the security of supply of energy”
One area that really has not been given sufficient attention is critical raw materials, where we import 100% and then we export 100% for recycling elsewhere. There are 37 lithium recycling factories in the EU but none in the UK. This is the sort of industry that Great British Energy could help pump-prime, if that is seen as within its scope.
Stephen Flynn
Q
Shaun Spiers: I think the more that can be done to set out the strategic priorities, the better. I do not think it necessarily needs to be in the Bill. The explanatory statement and the introductions and so on I think do give a reasonably good steer on what the strategic priorities are, but obviously this body is being set up at pace. The more clarity there is on what it is going to do, the better. I would not set unreasonable expectations of a body that is being set up really quickly, with a pretty clear short-term aim of 2030 power decarbonisation and of supporting that. However, in the longer term the priorities clearly need to be set out.
Ravi Gurumurthy: The NESO will be producing its plan in October, and you have then got the next carbon budget in February, so the actual pathway to 2030 and to 2050 will start to become even clearer in the coming months. It will need to be flexible, however. There will be technologies which emerge that shift our sense of what to focus on. You need priorities, but you do need quite a lot of flexibility in this system.
Marc Hedin: I made the point, I think, at the very beginning that we need a very flexible scope because there will be challenges to the energy transition. We need room to adapt. If this vehicle is to facilitate the energy transition, we need that scope to be relatively broad. I did mention a couple of safeguards, more like accountability, and I think that is still reasonable to ask. However, in terms of strategic priorities, I think the scope is broad enough and makes sense.
Perran Moon
Q
Shaun Spiers: By investing in it. It is more a question of the recycling, because there is a big recycling industry elsewhere. When the UK was the pioneer in offshore wind, it was easy to import critical raw materials and then not bother about reusing them and just import more. As the Foreign Secretary was talking about in his speech at Kew, there are now real concerns about the shortage of critical raw materials across the world. Because they are needed for so many technologies, and so many technologies that are essential to the transition, we need a plan for the transition that includes recycling plants. Lithium mining in Cornwall is great, but we also need not be exporting our critical raw materials to be repurposed elsewhere, and then reimporting the repurposed ones. There are 37 recycling plants in the EU, while in China there were 61 waste lithium battery recycling and processing companies two years ago, and it is a growing industry. It has not grown in the UK, it has not had attention, and I think that if GB Energy is committed to long-term energy security, which it is, then it could play a part in getting that industry going in the UK.
The Chair
We are straying quite far from the scope of the Bill. It is an interesting discussion, and it could carry on offline afterwards, but it is not within the scope of this Bill. Are there any more questions? If there are no further questions from Committee members, I thank the witnesses for their evidence.
Examination of Witnesses
Dan McGrail and Adam Berman gave evidence.
The Chair
Welcome to our fourth and final panel this morning. We will now hear oral evidence from Dan McGrail, CEO of RenewableUK, and Adam Berman, who is director of policy at Energy UK. For this session we have until 11.25 am. There are questions at 11.30 am in the Chamber—I have one myself.
The Chair
A few of us have. Okay, if we finish early, we have more time to leg it over there. Please could the witnesses introduce themselves.
Dan McGrail: Good morning everybody, my name is Dan McGrail, I am the chief executive of RenewableUK, which is a trade association representing the wind industry predominantly, but also the tidal energy sector and crucially, the supply chain that sits within that. We have about 500 member companies across the UK and we work closely with devolved Administrations and national Government.
Adam Berman: Good morning. My name is Adam Berman, I am director of policy and advocacy at Energy UK, which represents the whole of the energy sector really, short of upstream oil and gas extraction—everything from all the forms of generation, right through the networks and into household level. We represent the retail energy suppliers as well.
Andrew Bowie
Q
Dan McGrail: It is good to see you too, shadow Minister. First, I think there is a trade-off in legislation like this, between the focus you want to provide, and the guard rails put into the Bill, and giving the entrepreneurial freedom to the organisation to invest where opportunities arise. We believe, and the report we wrote prior to the release of this was quite clear, that focus is important, but is legislation the place to put the focus? Our view is that the business plan that is set up and put in place by the chief executive and their team, once appointed, is the place to put that focus. It will be much more predictable if it is developed by experts in the sector who have conducted a thorough analysis of where the opportunities are for investment, and where the real additionality is.
One additional point that is important to detail in the statement, when it comes, is how the investment priorities of GB Energy would be different from those of the private sector. Would GB Energy take a longer view on returns on investment? Would it have a different rate of return? That would help to clarify the role of GB Energy within the ecosystem of the sector and with other private investors so that there is understanding of where real partnership opportunities lie.
In short, the answer to your question is that it is important to have a focus, but do the focus in the plan rather than in the legislation.
Adam Berman: I certainly agree with Dan. My one reservation with the legislation is that GB Energy will face two distinct competing priorities: the first is making money, which would probably primarily come from established mature renewables, and the second is solving distinct problems within the energy system that are a result of market failures. There is some overlap—although not complete overlap— between those two priorities. The question is whether there should be more clarity in the legislation over which strategic objective GB Energy should be solving. That is not an issue for industry to resolve, but it is something that, without stronger guidance in the legislation, GB Energy may struggle to reconcile once it is formed.
Andrew Bowie
Q
Adam Berman: I do not think there is a deficit in terms of accountability, and I do not think there are 500 bodies that should be consulted before any decision is made by GB Energy; if you look at things like the planning system and statutory consultees, you can see how that is an issue. That being said, there is a list of organisations that any Secretary of State should consult, through their due diligence, which is everyone from the National Energy System Operator to the Climate Change Committee to industry to devolved Administrations. We would very much assume that the Secretary of State and the Department would do that due diligence themselves. However, I do not think shackling GB Energy through the legislation to having to do that to make every decision is necessarily the right approach.
Dan McGrail: I fully agree with that.
Olivia Blake
Q
Dan McGrail: From my perspective, the definition is probably good enough. It is quite tricky to go too narrow and say renewable energy only, because there are certain areas, such as long duration storage, where the sector would like GB Energy to participate in, or at least to have the freedom to participate in, which, if it is too narrowly constrained or defined, may prove problematic later down the line.
One thing I think would be advantageous in the definition, or in the objects, is to clearly set out the guard rails, such as ensuring the carbon budgets are referenced. If we reference the carbon budgets, future Secretaries of State would need to make sure that any investments that were made were in line with the delivery of the carbon budgets. That is comparable to what was done with the set-up of the Green Investment Bank, where there were specific references to what the Secretary of State would need to go back to primary legislation to change, and what would be foreseeable within secondary legislation—not directing the Green Investment Bank to invest in fossil fuels, for example, would have required a complete change of mandate. I think some similar thinking, therefore, would be helpful here.
Adam Berman: I do not completely agree. I do not think there is a big problem of definition, but I would say that we need to ensure it is consistent with the CCC’s existing language and with the technologies that it thinks are consistent with the sixth carbon budget. Clean energy may encapsulate all of them, but I think we would have to make sure that it includes established mature renewables, nuclear, carbon capture, utilisation and storage and hydrogen, just to leave those options on the table. I do not disagree with Dan that there needs to be a focus, but GB Energy needs to at least be given the option to engage in the technologies where it thinks there may be additionality in terms of bringing in GBE’s involvement.
Pippa Heylings
Q
Adam Berman: Clearly I agree that they are of incredible importance when it comes to planning the energy system and that the dialogue with them about the local communities that they know better than anyone else is pivotal. The challenge is that for GB Energy, as far as I understand it, a major part of it is local power plans, which will already have involved close consultation with local authorities and communities in lots of different ways.
From an industry perspective, I would be hesitant about placing that as a condition on GB Energy’s investment. That is not to diminish its importance; it is just to ensure that we are allowing GB Energy to be successful and that we are not holding it back. There is a very good argument that that should be included in the legislation, and that the national energy system operator and the Climate Change Committee should be included in the legislation, but once we have gone through all those bodies, it starts to become prohibitive for the investment process, which we want to be free and fair for GB Energy. We are therefore slightly hesitant about saying that we necessarily have to look to any particular body for consultation.
Pippa Heylings
Q
Adam Berman: That is a really good point. I think that there could be something in the legislation to ensure that GB Energy’s investments are consistent not only with the local area energy planning, but with the strategic spatial energy planning that the energy system operator is doing.
Dan McGrail: There is a really important point here about how, to be successful in the market, GB Energy will need to engage with those processes anyway. There will be accountability around the company, but one nervousness I have is about trying to put too much into the Bill specifically on GB Energy. I agree that the point should be about complying with the things that we need to deal with, whether those are in law, in programmes such as the strategic spatial energy plan or in the work of the national system operator. Those are all interconnected and contiguous pieces of a system in which GB Energy needs to be able to operate effectively. The onus, if we put anything in legislation, is to be compliant with all that.
Torcuil Crichton
Q
Dan McGrail: I firmly stand by the idea that GB Energy, at least in its initial phase, should do three or four things excellently, with some fundamental underpinning. It should champion the UK supply chain; it should act to promote skills; it should enable innovation. The market segments in which it operates should be focused on and defined early. Its budget of £8.3 billion is a lot of money, but to get value from that in the context of the energy sector, GB Energy needs to focus on two or three areas in which it can really deliver additionality. I think the place for that is in the business plan, rather than in the legislation. As the legislation is currently framed, it allows the team the space, when they begin the work of the company, to define those two or three areas; it does not narrow them down. My view is that the legislation as drafted gives it that space.
Josh MacAlister
Q
Dan McGrail: Occupying space where there is a highly liquid market for private capital is unlikely to bring much additionality. Offshore wind is one of those places —fixed-bottom offshore wind, to be precise. That is a mature market; there is capital that will flow to projects if the wider investment conditions of those projects are right, and that is more Government policy-related. However, there are other markets. For example, onshore wind in England has basically been under-invested in for the past decade. There will still be nervousness within the private sector: “Do I want to be the first developer to test local planning? What does the risk profile of that look like?”
I see a clear role for GB Energy to partner with the private sector to help to accelerate the return of investment in that market, or for example within the growth of the floating offshore wind market, where there are clear opportunities that go beyond just the energy sector and into transition, such as floating offshore wind in Scotland or in the Celtic sea, where we know that there is a much bigger economic growth story. Those are areas where I think we could see public and private capital working very comfortably together.
Wera Hobhouse
Q
Adam Berman: A fundamental conundrum with GB Energy will be the extent to which, through legislation, you want to constrain its investment activities. Clearly, from an industry perspective, we are very keen that there be an emphasis on additionality, on complementing and not duplicating private sector capital that is already there.
Dan mentioned wind. The recent CfD allocation round 6 auction crowded in about £20 billion of private sector investment—that is one year and one auction. That is not to say that £8.3 billion capitalised over a Parliament is not a significant sum of money; it is to say that if we want the most bang for buck, it is absolutely about thinking about those areas where it can be complementary to the private sector. On the one hand I am saying that, yes, industry would be very happy for GB Energy to have that as a focus, but it is also fair to say that it would be a restriction in GB Energy’s activities if it were only to engage in a space that enabled additionality, because it would restrict some of the investment portfolio that it could end up with.
Dan McGrail: The private sector and the industry in general have been quite clear that we see a real benefit in the participation of GB Energy in emergent technology, such as tidal energy. However, even within the five founding statements, there is nothing specific about fostering UK home-grown innovation. I would err on the side of caution within legislation, or at least I would not put it as a boundary condition. It should not be the only thing, but if it were somewhere in the plan—either in the founding statements, if they get modified, or in the plans brought forward by the Secretary of State—that would be healthy.
Catherine Fookes
Q
My question is about tidal power. I represent a Welsh constituency, Monmouthshire. We have the River Severn in the south of the constituency, which is a tidal river, and we have the Celtic sea. What opportunities will the Bill give to generate more tidal power?
Dan McGrail: The Bill allows space for GB Energy to take quite an activist role in the sector. I am aware of tidal power companies that are already very keen to engage with GB Energy on specific proposals. One thing about tidal power is that we have seen the success of many projects through the CfD auctions. We need to see them come to investment decisions. The more we can see a state actor enabling companies to take decisions, the more it will help to scale up the industry and then the technologies. From the technologies, we can hopefully deliver the kind of supply chain growth and jobs in local communities to which we all aspire.
Perran Moon
Q
“prepare a statement of strategic priorities”.
I have been listening carefully to the priorities on skills and innovation from your perspective. Let me ask you both: if you were Secretary of State, what would be your key strategic priorities be for the Bill?
Adam Berman: The first is public value, which goes beyond the ability of GB Energy to create profits and return them to energy bills or whatever mechanism it might come up with. That is not to say that that is not important, but if this is new money—a significant amount of new capital—being made available by the Treasury, it is about how we, as a society and as an economy, can get the most out of those investments. So I would say public value, which is about not just financial returns but broader public benefits.
Secondly, it is about spreading economic activity and about how that links into the industrial strategy. That might be for the supply chain and also for GB Energy, but we should think not just about particular technologies but about particular regions.
A third priority would be the delivery of the UK’s legal objectives—its legally binding climate commitments.
A fourth priority would be the delivery of the National Energy System Operator’s priorities, which links to the strategic spatial energy plan that we have already been talking about, and ensuring that it helps to foster a workable decarbonised power sector. For example, we could see solutions such as GB Energy putting investment into wind or solar in areas with higher constraint costs or lower population centres with higher land use costs, which are not as attractive to private investors at the moment, but which with GB Energy’s lower cost of capital may well still be a profitable enterprise. It is about how we can have a win-win with NESO’s objectives.
Finally, impact on investment cannot be ignored. I recognise that it is not the Government’s intention at all that there be an impact on private sector investment, but we need to ensure, as a founding principle, that there is not a risk that any GB Energy investment could deter or crowd out private sector investment.
Dan McGrail: I would add one thing to that very good summary. There are a number of new institutions being set up at the same time—NESO, mission control, GB Energy. There are also a number of big initiatives such as strategic spatial energy plans and centralised network planning. It would be very helpful for the sector and for industry to understand the interaction of those with the national wealth fund. I almost see an organogram in my mind of how things flow. In my conversations with the sector, there have been questions about where the limit of GB Energy ends and where the National Wealth Fund begins, and so on and so forth. It would be enormously helpful for the sector and for other institutions such as the Scottish National Investment Bank and UKIB to understand how they fit within that matrix.
The Chair
If there are no further questions from Members, may I thank the witnesses for their evidence?
That brings us to the end of our morning sitting. We have had four panels with eight witnesses—thanks, everyone. The Committee will meet again in this Committee Room at 2 o’clock, when I will have turned into Sir Roger Gale.
Ordered, That further consideration be now adjourned. (Anna Turley.)
Great British Energy Bill (Second sitting)
Tuesday 8th October 2024
(4 months, 2 weeks ago)
Public Bill CommitteesGreat British Energy Bill 2024-26 Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 8 October 2024 - (8 Oct 2024)
The Chair
The Committee will now hear oral evidence from Alistair McGirr, group head of policy and advocacy at SSE, and Tristan Zipfel, director of strategy at EDF Renewables. We have until 2.30 pm for this session. Will you be kind enough to introduce yourselves for the record, gentlemen?
Alistair McGirr: I am Alistair McGirr. I look after our cross-cutting policy and public affairs. I sit within our group structure, but SSE has interests across renewable energy, flexible capacity and electricity networks.
Tristan Zipfel: I am Tristan Zipfel, director of strategy, markets and investments for EDF Renewables. We are one of the leading renewable energy developers in the UK. We have about 1.5 GW in operation, with 600 people across the country in five different offices. It is a real pleasure to be able to share some evidence today.
The Chair
Mr Zipfel, one of the disadvantages of having a geriatric Chairman is that my hearing is not as good as it used to be. But for everybody’s benefit and, most particularly, for the Hansard reporters, it might be helpful for you to speak up a little and be very clearly on microphone. I call the shadow Minister.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Q
“objects are restricted to facilitating…the production, distribution, storage and supply of clean energy”
and must include
“measures for ensuring the security of the supply of energy.”
SSE and EDF Renewables are involved in both those objects right now, so how do you see the Bill and the creation of this company as either assisting or facilitating you in your objectives?
Alistair McGirr: At SSE, we welcome GB Energy, and as a company that is headquartered in Scotland, we particularly welcome its location. We think that Scotland has a larger opportunity for investment across the clean energy transition. To answer your question directly, it depends on how the organisation is set up and on its governance, but if, as has been suggested, GB Energy will be focused on crowding in investment, there is an opportunity for it to help to accelerate that transition and, importantly, to capture some of the wider opportunities that can come from the transition.
Tristan Zipfel: You can probably tell from my accent that I come from a country where state-owned investment in energy assets is commonplace, so that is something that we at EDF are very comfortable with and see very positively. In fact, I would say that any initiative that leads to directing more investment, capital and effort into decarbonisation is a very good thing. As Alistair said, it will be important that GB Energy is set up in a way that triggers and supports investment in the sector and does not disrupt the competitive playing field that we currently have in it.
Andrew Bowie
Q
“The Secretary of State must prepare a statement of strategic priorities for Great British Energy.”
If you were the Secretary of State and were tasked with drawing up strategic priorities, what would they be?
Alistair McGirr: On the way that we think about the particular benefits from GB Energy, first, we look at it as a potential partner for some of our investments. We work with a number of commercial entities, some of which are state owned—for example, Equinor, which we work with on the Dogger Bank offshore wind farm and on our carbon capture and storage projects. We work with these parties on a commercial basis and we would be open to working with GB Energy on projects that would help to accelerate the transition. So co-investment is one area. We would be keen to see that targeted at areas where there may be a bit of policy risk. With things like hydrogen storage, hydro-pump storage or CCS, there may be an opportunity for GB Energy to take some of the policy risks that private companies perhaps cannot.
Offshore wind is an area where there has been lots of debates, and there was some nervousness relating to the initial discussion about the Crown Estate tie-up. However, we think that with the principle they were trying to achieve, which is the acceleration of that environmental consenting process, there is an opportunity to accelerate projects and, importantly, reduce the cost of bringing those projects to fruition.
To give an example, our Berwick Bank offshore wind farm up in Scotland, which is one of the largest in the world, is currently sitting within the planning process and has been for 20-plus months now. Projects like Berwick Bank could be accelerated by a focus on areas where GB Energy can accelerate environmental consenting, basically by taking a more strategic approach to how it thinks about environmental consenting rather than considering that on a project-by-project basis.
To make a point on offshore wind, the one area that everyone will talk about—I am sure we will come back to it—is floating offshore wind. There is a big opportunity for not only GB Energy, but the national wealth fund to capture a whole range of benefits from the emerging sector, in terms of both bringing the costs of delivery down and making sure that there is a supply chain available to deliver the projects that are currently under development.
Perhaps a last point to mention is the local power plan. We would be quite keen, as an operator of electricity distribution networks, that the local power plan was able to be targeted in areas where there is a wider system and societal benefit in supporting and unlocking a lot of the low-carbon projects in the distribution network, because it is no secret that there will be lots of questions about how things connect to that local distribution network. We think that the local power plan has a particular route in targeting some of those investments in a way that can better integrate low-carbon technologies into the distribution network.
Tristan Zipfel: To add to what Alistair said, for a start, the UK is in a really strong position to maintain its leadership in the renewables market. There is a strong industry in place, and I think GB Energy can fit into that and strengthen the framework. As a co-investor, in particular, I think GB Energy could bring value, as Alistair said, by investing in frontier technologies, but also by helping to strengthen the link and connection with local communities. For our projects to be successful, it is absolutely paramount that they are adhered to by the local communities. As a developer, we spend tremendous efforts on being present and creating a connection with local communities. Having GB Energy on board for certain projects could reinforce that link and even provide a sense of public ownership in the project, which I think would be very strong.
Alistair talked about emerging technologies and how some of them present certain risk profiles, where having an investor like GB Energy could help kick-start the development of this segment of the market. He mentioned CCS; I think we could talk about hydrogen as another example.
GB Energy also has an interesting role to play as a developer. We have seen the announcement of the partnership with the Crown Estate on the offshore site. There is an opportunity for GB Energy to focus on the segments of the market where the private sector is struggling to make progress, perhaps because the infrastructure is not yet there, or because there are specific risk profiles that make the private sector struggle to invest in these segments of the market, despite them presenting long-term value. That is where there is a real opportunity for GB Energy.
Andrew Bowie
Q
“The Secretary of State must consult the Scottish Ministers before including in a statement under this section anything which concerns a subject matter provision about which would be within the legislative competence of the Scottish Parliament”.
As a company that has heavily invested in Scotland, did you realise that there was detail in the Bill about how GB Energy will interact with the devolved Administrations, given that so many aspects of what it is seeking to achieve are competences of the devolved Administrations, specifically in Scotland?
Alistair McGirr: In terms of the premise, I definitely agree that the devolved Administrations have to play an important role in the direction of GB Energy. I do not think there necessarily needs to be anything in the legislation. I suppose it is also worth mentioning that there might be a view about how the investments are spread across different parts of the country. In reality, a lot of those will be up in Scotland because of the opportunities that Scotland has.
The Chair
I have three Members on my list already, and we have 15 minutes left, so please be short, sharp and to the point.
Uma Kumaran (Stratford and Bow) (Lab)
Q
Tristan Zipfel: If you take the example of France, EDF is indeed state owned, but it is a competitive market. Nowadays, EDF is one actor among others. If you take, for instance, offshore wind in France, EDF competes—sometimes it wins, and sometimes it does not. The benefit for the general public is a sense that that body can execute the strategic vision of the French Government in delivering net zero or a decarbonised future. EDF is very much the arm that executes that vision—independently, at arm’s length, but it does it. I also think there is a creation of long-term value by the ownership of assets. EDF provides dividends to the French state, which I think are valuable.
Uma Kumaran
Merci.
Alistair McGirr: If I may add to that, there is the question of the role of the state. Not everything has to be through GB Energy or the national wealth fund. In terms of the GB Energy policy framework, the creation of the National Energy System Operator can help to drive a lot of economic value through the transition here in GB by taking a much more strategic approach to how infrastructure is going to be deployed. GB Energy is one element of that, but I think the wider value can be brought together by a more strategic approach through the policy framework.
Pippa Heylings (South Cambridgeshire) (LD)
Q
Tristan Zipfel: For sure, yes, they could be part of the scope. Choices will need to be made, of course, on where those investments are directed, and I think it is important to direct the investments where they will have the maximum impact. When it comes to onshore wind, for instance, perhaps it could be a case not of investing where the private sector is already doing a good job on its own, but of looking at areas where there is a need to develop infrastructure to unlock these onshore wind opportunities, or of looking at Government-owned land that could be used to develop new projects. As you said, Alistair, it is going to be complementary to what the private sector is doing, but there will be pockets of opportunities for GB Energy to really make a difference, even in an area like onshore wind, I think—100%.
Alistair McGirr: I agree with that answer. The question would then be: where is the biggest bang for the buck? Is it building large onshore wind projects that actually have developers in that space and have a route to market? That is probably the question for GB Energy: is that the best use of taxpayers’ money, rather than other things that can be done in terms of investment in frontier technologies?
You mentioned tidal. There is the question there of an absence of a business model. If there was this supported business model, there might be an opportunity for private investors to come into that space. There is the issue that just because the private sector is not doing it does not mean that the public sector should do it, because ultimately, if it is a bad deal for private shareholders, it is probably a bad deal for taxpayers as well. I think this is about making sure that the technologies that are useful are brought forward with business models that provide a return for whoever the investor is.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
Q
“the production, distribution, storage and supply of clean energy”,
you have welcomed state intervention and the role of GB Energy in that. How would you feel about communities taking a direct stake in your onshore and offshore developments—say, 20%, as they do in Denmark?
Tristan Zipfel: On our side—I am sure SSE does the same—we are definitely looking at that. We are trying to develop some schemes that go exactly along those lines. We have not done it so far. The link and the reward to communities have been through the community benefits fund linked to our projects. I live in Teesside: we have an offshore wind farm there, and I can tell you that the community benefit fund, over the last 10 years of operation, has helped dozens of local projects and initiatives. You are absolutely right to think the next frontier is to have more local ownership of wind farms. That could be through GB Energy, but it could also be through direct ownership schemes. We are looking at those options at the moment.
Alistair McGirr: As I mentioned at the start, we partner with a number of different organisations; I mentioned Equinor, which is a state-owned entity. We are open to working with any kind of party on a commercial basis, be it a community or another developer. In that sense, the communities taking a stake in some of the projects is something that could be done. The question is: what are the terms of that arrangement? There is the critical point that any community ownership should be focused on co-investment. It should not just be the case that 20% of a project is passed on to a community, because that will be value that is basically taken out of the project, which then inflates the cost of the project. So the co-investment piece is very important. Whether it involves another developer, another state-owned entity, GB Energy or a community, I think that is a useful way of bringing capital into the UK’s low-carbon infrastructure.
Wera Hobhouse (Bath) (LD)
Q
Alistair McGirr: Yes, frankly. I think there will be other protections in place—what was in old money called state aid protections but is now subsidy control. There will be wider provisions that ensure that GB Energy does not have adverse impacts on investment into the competitor space, be they state aid provisions or subsidy control provisions. That will ensure that what GB Energy is effectively legislated to be able to do does not adversely impact a competitive playing field. It is important to make sure that that is maintained. Ultimately, if there is a tilting of the playing field towards GB Energy, that will be a bad deal for either the taxpayer or the consumer.
Tristan Zipfel: I concur with what was said. It is really important that the establishment of GB Energy does not disrupt the dozens of billions of pounds that are going to be directed by the private sector into the renewables sector, or the clean energy sector in general, over the next decades. For that it is important to maintain trust in the fact that it is indeed going to be a level playing field and that GB Energy is not going to benefit from forms of assistance that would disrupt competition. That being said, I think GB Energy will have its own criteria, strategy and approach, which is absolutely fine. But it needs to be in the context of a level playing field from a competitive standpoint. That is really important.
Catherine Fookes (Monmouthshire) (Lab)
Q
Alistair McGirr: I am very supportive of those projects coming to Wales. Obviously the Celtic sea auctions are another example of the upcoming opportunities in Wales. The reality is that GB Energy is not going to be the vehicle that drives that—that will be the wider policy framework in terms of what happens here in Westminster, and also in the regulatory frameworks that are in place and what happens in the devolved Administrations. My reference to Scotland is not to say that other parts of the country could not have the opportunities for investment. It is just that the sheer scale of the opportunities in Scotland for wind, hydro, some of the grid projects, CCS and hydrogen mean there is a significant opportunity in Scotland. That is one of the reasons why GB Energy has been located up in that area.
Tristan Zipfel: I can only concur. Wales is very important for us. We have onshore wind projects that we are actively promoting in Wales. I think GB Energy could play a role there. I want to emphasise, however, that I do not think GB Energy on its own will be the solution to unlocking the opportunities you describe. I think it is really important in Wales in particular that there is an effort on the policy side to provide more certainty and more visibility of the projects, as well as the question of the grid, which is a problem. But I concur that Wales is very important strategically from our standpoint as a renewable energy developer.
Stephen Flynn (Aberdeen South) (SNP)
Q
In relation to some of the objects that are detailed in clause 3, I think we are all excited about the potential for the state to take a proactive role in the production of energy, but the Bill is quite clear that it is about
“the production, distribution, storage and supply of clean energy…the reduction of greenhouse gas emissions…improvements in energy efficiency, and…measures for ensuring the security of the supply of energy.”
SSE is investing £40 billion in clean tech over the next 10 years, and EDF is investing £50 billion or so. How far do you think £1.6 billion can go, in real terms, given the breadth of the different things the Bill seeks to achieve?
Alistair McGirr: In reality, it is not going to be the sole investor that is going to deliver the clean energy transition. As you allude to, we have a significant investment programme that we would be keen to bring to fruition over the next 10 years or so. It is about how you best use the money that is available. Where can we accelerate the investment and crowd in the scale of investment that is going to be required? We may be talking about big numbers, and in EDF as well—not only here in the UK but elsewhere—but there will not be just one investor. If you look at the National Infrastructure Commission, for instance, they are projecting in the region of £25 billion to £30 billion of investment in energy infrastructure per year for the next decade. The scale of the investment is going to be much bigger than any single entity, be it GB Energy, SSE or EDF.
Tristan Zipfel: Choices will need to be made—you cannot do everything with that pot of money—and it is really about identifying the areas where they will have maximum impact and where they will be most complementary to the effort of the private sector. It is not about displacing the private sector; it is more about covering the gaps and providing a boost to more investment in the sector.
That is also the spirit of the agreement with the Crown Estate. Looking at offshore wind, what is currently the blocker for more investment? It is the timeframe that it takes to develop a project. The spirit of that agreement is to look at an early stage and make it easier for private investors to invest in projects that are more de-risked than they are at the moment. That is the right approach, in my view, and it could be expanded to the other technologies in the scope of GB Energy.
Perran Moon (Camborne and Redruth) (Lab)
Q
Tristan Zipfel: I can start with solar energy. As a business we do not look at geothermal, so I do not want to elaborate on that, but we invest a lot in solar. When you look at solar, the issue is not to get private capital—there is more than enough capital to invest in this. However, where GB could provide value is perhaps in creating that link with local communities. I keep going back to that, but it is so important for us to create a sense that those projects are not just there for private investors but have an element of state and public ownership. That could mean a lot for local communities. In partnership with GB Energy, we could even imagine GB Energy taking the lead on the relationship with local communities or in certain parts of the development that are so essential to the project. Recent studies have shown that local communities would respond very favourably to projects in which Great British Energy is an investor alongside the private sector. In that sense, it would make a difference.
Alistair McGirr: I think the local power plan is an opportunity for these technologies. It is not just about the big, mature technologies. It will play an important role in developing projects in solar and geothermal in Cornwall, in Wales and in other parts of the country, too. It is about making the most of the local power plan and working with developers to help to bring those to fruition as soon as possible.
The Chair
Thank you. I apologise to Members who have not managed to ask all the questions they want to ask, but we are out of time on this panel. Mr Zipfel and Mr McGirr, I thank you very much on behalf of the Committee and the House for affording us the benefit of your opinions and your time.
Examination of Witness
Dan Labbad gave evidence.
The Chair
We will now hear oral evidence from Dan Labbad, who is the chief executive officer of the Crown Estate. For this session, I am afraid that we have only until 2.50 pm. For the benefit of the record, Mr Labbad, could you introduce yourself?
Dan Labbad: I am Dan Labbad, the chief executive of the Crown Estate.
Andrew Bowie
Q
Dan Labbad: First, thank you for having me here this afternoon.
The Crown Estate has been operating in the offshore renewable energy space for a long time—roughly 25 years—and, working with Government, the private sector and the third sector, we have created what is the second largest offshore wind capability in the world. That is something that we as a country should be very proud of, but obviously what got us here will not get us where we need to be.
When you look at the Climate Change Committee’s report on what is required from offshore wind and other renewable and zero-carbon technologies into the future, you see that we need to accelerate our deployment in a way that is balanced with other marine uses, including the environment, and ensure that we are deploying at a rate that meets the targets that were set for good reason. We have been organising the Crown Estate for the last five to 10 years in order to do that, accelerating leasing and starting the de-risking process for developers.
We also have a Bill before Parliament to enhance our powers to do more in this space. For example, we have something called the marine delivery route map, which looks at all uses on the seabed to ensure that we can create spatial co-ordination for different uses. That is fundamental to being able to achieve deployment, but even with our new powers we cannot do it alone. We need support, certainly support from Government.
There are three key areas that we would have called on had GB Energy not been announced, but Great British Energy offers a number of things. First, there is the co-ordination of all the agents involved in what is a very complex energy sector, both within and outside of Government. One of the big encumbrances at the moment is that everyone is working in slightly different directions; you do not achieve targets if everyone is working in slightly different directions.
Secondly, there are the increased investment powers to ensure that we are additive to what the private sector needs and ensure that we can achieve the acceleration throughput that we are talking about and invest in new technologies.
Finally, it can ensure that we are evolving policy around areas that are not limited to planning and grid, for example, so that we have the pathways not only to lease seabed for renewable deployment but to deliver generating capacity. We see GB Energy bringing those things.
Andrew Bowie
Q
Dan Labbad: Consultation across the country is fundamental. In fact, if you look at our Celtic sea round 5 tender, which is live at the moment, you will see that we consulted heavily with the Welsh Government and with Welsh stakeholders. In fact, we evolved our approach quite considerably in the deployment of that tender approach through that consultation, adding a lot of value.
I should say that to get a leasing programme out like round 5—which is the 4.5 GW floating wind programme that we have at the moment live in the Celtic sea—you engage with many stakeholders. The count in the case of the Celtic sea was more than 70 stakeholders from global and local environmental groups, developers across Government, the third sector again and a whole host of users of the seabed. Without doing that we do not deploy, because we do not get everybody’s buy-in. If we are talking other parts of the country, there is no difference whether it is Northern Ireland or Scotland.
We enjoy a good relationship with Crown Estates Scotland and with the Scottish Government. They are partners in our marine delivery route map and we are co-ordinating on systems issues, because obviously some of the environmental issues and deployment and grid issues do not have borders, so that consultation is, as you suggest, fundamental.
Perran Moon
Q
Dan Labbad: First, as regards the Celtic sea, there are social requirements as part of the tender process. I obviously cannot talk about them too much, given that we are in a live tender for procurement purposes, but there are social requirements as part of that tender.
To your question, it is fundamental. It will be a real failure if we end up deploying renewable energy on the seabed in the way we need to in the next 20 years and are not able to capture a fair proportion of that industrial complex for ourselves as a country. It would be a real pity if we did not build new jobs and new futures for young people across the country and if we did not support the distribution of that benefit across the country, including to coastal communities.
We have to bear in mind that there is a role for developers and a role for Government and the Crown Estate. For example, in the Celtic sea a 4.5 GW tender does not build a supply chain. It is not enough; the critical mass is not there. Again, that is why it is so important that Great British Energy and the Crown Estate work together, with our additional powers and being able to provide forward commitments to, for example, the Celtic sea. We estimate at the moment that it has the potential for another 12 GW of offshore wind, predominantly floating but also fixed. You need that type of scale so that both Government and private sector investment in the supply chain, including in coastal communities, will stick. That is why this partnership is so important and why we have to remember the size of that prize, so to speak.
Stephen Flynn
Q
Dan Labbad: First, from the Crown Estate’s perspective —I know this is a little out of scope—we operate under an Act of Parliament and have an obligation to enhance the value of our portfolio nationally, on behalf of the country, into perpetuity. We must ensure that we, like any business, balance safe investments with more risky investments. There is no doubt that investing in the seabed in the way we are talking about is a higher risk activity than other things that we do.
The increased borrowing powers do two things. First, they give us the capital throughput to do more—to accelerate and offer more. Secondly, because we know that we will have a line of credit, they allow us to make commitments. To use the Celtic sea as an example, as we move from what we envisage we can do about 12 GW to the reality of knowing that we can do that, we can then say to the market that we are committed to that leasing programme over the next 10 years. That is huge. From a developer perspective, they are not chipping away. For argument’s sake, let us say that we have 4 GW divided into three bits. You are talking about small gigawattage for companies of the scale of Equinor, for example. Being able to provide a pipeline where we know there is more to come means that they invest more—that is what that does.
The other thing that comes with the borrowing powers is a broader investment remit, which allows us to turn our attention to supply chain opportunities and to support the industrial complex and jobs. Again, we have been restricted in what we can do there in the past, so that is fundamental. With regard to GB Energy, as I said earlier, the Crown Estate cannot do it all on its own. We need additional capital support, support with co-ordination and support with policy evolution. All those things are required, which is why the partnership is so fundamental.
The Chair
Order. The issue of scope has raised its head again. I gently say that while this Chairman is not in the business of seeking to tell witnesses what they can and cannot say, he is in the business of making sure that Members, at least, stay within the scope.
Catherine Fookes
Q
Dan Labbad: Yes. Both the Crown Estate and GB Energy moving forward will support that type of thing. It is an example of a local community energy project, and I think there needs to be more of that, as I said in my answer to the earlier question. Where we can build community support for renewable projects, we should. The Crown Estate and GB Energy will be looking to that as part of our core mandate moving forward. I am very excited about that type of thing because it benefits everybody, so it is fundamental to what we do moving forward.
Pippa Heylings
Q
Within the scope of the Bill, under clause 3, we also heard in evidence this morning the request that we seek a duty towards nature and nature recovery and the achievement of the Environment Act 2021. Would that provide the reassurance that while we are dealing with the climate emergency, we are not disregarding the nature emergency and the environmental value of the seabed and the sea?
Dan Labbad: While I cannot comment specifically on the Bill, I would say that the Crown Estate already has a responsibility to protect the environment and look at nature recovery. In fact, this week we launched our nature commitments, which have undergone significant consultation. You can find those live on our website. We are obligated under our Act to do that. That obligation maintains in the partnership, so we will be doing that as part of what we bring to the GB Energy partnership.
Harriet Cross (Gordon and Buchan) (Con)
Q
Dan Labbad: If you look at where we are today, we have just under 12 GW generating. The Crown Estate in England, Wales and Northern Ireland has about 42 GW in the pipeline. The first thing is: how can we bring as much of that to generating as possible? That is really important. Where and how do we remove immediate encumbrances? That is something we can work on immediately. From there, even to bring 20 GW to 30 GW to market by 2030 needs a lot of work and co-ordination.
To put it another way, we have delivered 12 GW of generating capacity in 25 years and if, as informed by the Climate Change Committee, we are to move up to 125 GW of generating capacity by 2050, that means we need a five to tenfold increase in the next 25 years. What we do in the next few years is incredibly important to ensure that we are laying the foundations for that to be a successful deployment.
The Chair
I said that that would be the final question, but we have a couple of minutes left, so, very briefly, I call Torcuil Crichton.
Torcuil Crichton
Q
Dan Labbad: We are looking to learn all the time from what happens around the country and around the world. One thing that it is worth saying quickly is that sometimes we are too focused on interior discussions and debates about how and what goes on where in the UK. The elephant in the room, in some ways, is losing the first mover advantage we have had in this sector to the rest of the world. It is essential to demonstrate that as a country we can do floating wind better than anyone else, and to build the integration and maintenance capabilities in this country, because that is what will bring the jobs, for example. We are always focused on that.
We have learned a number of things. Obviously, focusing on the supply chain is fundamentally important. That has been a learning over the past 10 years. The other thing that has been a learning is that we need to work to de-risk the sector for the private sector as much as possible, because in a world that has a growing offshore wind pipeline, even the companies that you are listening to today all work internationally, and we need to retain the UK as a competitive place for them to want to deploy renewable energy. The way that to do that is to build the pathway to the future, so that they can see the pipeline using the marine delivery route map. We must de-risk such projects up front so that they still put their capital in and earn the requisite return on it for the risk that they take, but we are not asking them to take a disproportionate risk on projects that are being stalled. Those are all learnings over the past 25 years.
I will also make a final point. The industry and Government—the Crown Estate and others involved in this sector over the past 25 years—have been exceptional at course correcting when things have not gone exactly to plan. The innovation capacity in the sector is there, and all we need to do through things like the partnership with Great British Energy is empower that capacity. Then, I think, we have every chance of meeting those deployment targets.
The Chair
Thank you. Mr Labbad, it may seem like a long way to have come for a very short period of time, but your evidence is extremely valuable to the Committee.
Examination of Witness
Josh Buckland gave evidence.
The Chair
Good afternoon. We will now hear oral evidence from Josh Buckland, a partner at Flint Global. For this session, we have until 3.10 pm. Mr Buckland, will you identify yourself for the purposes of the record, please?
Josh Buckland: I am Joshua Buckland, a partner at Flint Global.
Andrew Bowie
Q
“the production, distribution, storage and supply of clean energy”.
Do you see the Bill and the creation of GBE as an assistance in unlocking private capital and the investment that we need in the new technologies, or are you worried, as some are, that this might be a blockage and get in the way of the private sector?
Josh Buckland: I think that that is the right question to ask. Ultimately, the amount of capital we need to invest in the energy transition is so significant that we will have to deploy and leverage in private finance at a scale that has not really been seen before, and any intervention from Government needs to play a role in unlocking that private capital. The Government have set out that Great British Energy will be mobilised with £8.3 billion of public capital. On the surface, that is a significant amount of money, but in comparison with the hundreds of billions that we will need to deploy through the overall transition, the way that it crowds in greater levels of private investment will be the key test of its success.
The Bill sets out a range of roles that Great British Energy could play, some of which could have a bigger impact on mobilising capital than others, and a range of different mechanisms that it could deploy. It is probably too early to tell whether the structure and the decisions it makes will mobilise capital at the scale that the Government intend, but the framework set out in the Bill will definitely give it the potential to do so.
Olivia Blake (Sheffield Hallam) (Lab)
Q
Josh Buckland: The financial assistance statements set out in clause 4 are relatively broad; they give Great British Energy the ability to invest in a variety of ways. It comes back to the question of how you create value through Great British Energy. One of the key tests will be whether it can drive additionality, so whether it can deploy capital in a way the private sector cannot. That usually rests on two issues. One is whether it can invest earlier in the development curve when private investment at scale is tricky, so where there is technology risk or development risk. An alternative is whether it can invest on a sub-par basis, so effectively whether it can create catalytic capital—that is the terminology often used—in a way the private sector would not be able to.
Clause 4 could potentially do those things, and there is no restriction on its ability to do them, but obviously the Government have not yet said much about exactly what format these investments will take. That is not necessarily an issue from a legislative perspective. I have looked back at the legislation that underpinned the UK Infrastructure Bank and the Green Investment Bank, which I was involved with when I was in government, and both those Acts are relatively high-level in terms of the interventions and mechanisms that they can deploy. On the surface, there is nothing that restricts that. As the Government think about the deployment of Great British Energy, I imagine that they will want to set out how it will give more clarity to the private market on the sorts of interventions and mechanisms that it will look to deploy at scale.
Olivia Blake
Q
Josh Buckland: My personal view on financial assistance is that it is fine to keep it relatively broad. Having been a civil servant in government for a long time, I know that primary legislation, if it is relatively broad, gives you the ability to think commercially, and clearly the energy transition will be set out with a range of different technologies. Innovation will come through, and the ability for the Bill to be flexible will assist that.
There are other questions about things that are referenced less in the Bill—let’s put it that way. In some of the previous legislation—for example, the Enterprise and Regulatory Reform Act 2013, which set out the Green Investment Bank—the Government talked about the need for operational independence undertakings and gave more clarity on the importance of creating an independent institution that can act in a way that ensures it can partner with the private sector and can take investment decisions that mobilise private investment and do not distort the market. Although that is not necessarily linked to clause 4, there are some interesting questions around whether the independence framework set out goes far enough to give that reassurance to the private market.
Harriet Cross
Q
Josh Buckland: On the surface, a range of different countries have publicly owned energy companies of different sizes and scales. Therefore, I do not agree with the concept that private investors are either unfamiliar or concerned at a general level. It will all come down to your point around the design of the actual institution and how it operates with the private market.
I think you are right to say that the Bill is relatively high-level. Looking back at some of the precedents that exist, I would mention the Green Investment Bank again. That was operational for a number of years and was established and grown while the legislation was then taken later down the line. It was easier, if you were a private investor, to understand the role that the Green Investment Bank would play and then have the legislation to effectively inform and solidify that.
The challenge in this context is that the Government have obviously proceeded with the legislation early on, as the institution is being established. That does not mean to say that it cannot be created as an institution that is independent and galvanises private investment but, clearly, the current level of uncertainty around the design and the mechanisms that it will deploy will add to that challenge.
Therefore, the Government have said that alongside the Bill they will look to publish more detail on a framework agreement with Government, and how they will set that out and consult with private industry. That, in tandem with the Bill, is critical at this formation stage. That is not to say that it necessarily leads to all that detail being in the Bill itself, but it is critical that it goes alongside it.
Josh MacAlister (Whitehaven and Workington) (Lab)
Q
Josh Buckland: It is a fair and good question. I think your substantive point is absolutely right; the mechanisms set out under clause 4 give Great British Energy the opportunity to take different approaches as technology shifts and changes. We have definitely seen, over the past decade, a shift towards different mechanisms deployed by Government. At the early stage, they were largely bilateral, non-competitive and largely done on a kind of long-term contract basis. It is very instructive to look at what the UK Infrastructure Bank is now doing; it is now looking at different mechanisms—earlier stage investment, development capital at risk, and equity investments. Those are the sorts of things that Governments have not traditionally done at the scale that is necessarily required for the energy transition but that obviously Great British Energy could play a role in extending.
There is an interesting question around where you draw the line between Great British Energy and the role of other existing institutions. The Government have already talked about the fact that they are going to evolve the UK Infrastructure Bank to be the national wealth fund, and obviously that will have some crossover with the operations and focus areas of Great British Energy. For me—this may be an issue that is separate from the Bill—how the Government set out how the governance will work between the Department, the Government, Great British Energy, the national wealth fund and other institutions will be critical to making that a success over time, as the executive of Great British Energy looks at new issues and technologies as they come through.
I would stress—I imagine that this point may be made by other witnesses—that the fact that clause 3 is relatively broad, in terms of the sectors and areas that the entity can invest in, is really beneficial, because that also allows some level of independence for the executive to take choices as the energy sector evolves. Clearly, we know the many technologies that we have now, but there will be a range of different issues that come through. I therefore think that that flexibility under clause 3 is quite important.
Wera Hobhouse (Bath) (LD)
Q
“the Secretary of State must prepare a statement of strategic priorities”.
Do you think that it would be important to have a timescale for that, so that we know when the Secretary of State is preparing the strategic priorities, and so that it happens quite quickly? That is something that we can do: put a possible time limit or timeframe into this Bill.
Josh Buckland: That is a very good question; I look back to my time as a civil servant. Sometimes timelines can be very useful because they give clarity, externally, as to when priorities will be updated and when there will be new interventions from Government, but sometimes they do not necessarily reflect the external environment as things change. If there were to be a decision to include an additional requirement around the timeframe, I think you would still want the ability to respond to external events as the world changes, to ensure that the priorities set out to the institution could adapt as the external world changes. Obviously, that is very true in the energy transition.
Clause 5(8) states that Great British Energy must have the ability
“to publish and act in accordance with”
that statement. The thing for me—again, it may not be an issue for the Bill itself, but it will be interesting to watch—will be how bound Great British Energy is to the specifics of the Secretary of State’s statement and what latitude it has beyond that, because clearly it will want to take its own commercial decisions. Fundamental to its independence and ability to crowd in private finance will be that it is taking commercial decisions with strong justification. That is an area that may not need any greater clarity in the Bill, but it will be one thing that private investors will look at quite closely.
Uma Kumaran
Q
Josh Buckland: Completely. There are plenty of precedents in various sizes and scales. Critically, they are not necessarily all in the concept of a developer company, which obviously has got most of the attention as a result of the Great British Energy Bill. There are those examples, and there are significant European energy developers and national energy companies right across the world, and quite often they partner with other entities, whether they are private investors or developers. It is welcome that in the broader statement the Government have been clear that, especially at an early stage, they want Great British Energy to partner with other developers. We should not forget that we have a lot of leading companies in this country, both headquartered here and inward investors.
The other interesting area is the role that the state can play more generally. I might be wrong, but I think that is alluded to in clause 4, which mentions that the financial assistance may be applied “pursuant to a contract”. That is an interesting dynamic. In Denmark, for example, the state in its new leasing process for offshore wind will take a 20% stake in projects as it offers out contracts to the private sector. That is an interesting model that could potentially be applied here and has been applied in other European jurisdictions.
I am not entirely sure about the Government’s intentions on whether that would be a matter for GB Energy or for broader policy, but clearly it creates different opportunities. We should not necessarily think about Great British Energy just as an investor of capital, to go back to the question asked earlier; this is a significant amount of money but, given the scale of investment required, it will be deploying other capital through it that is the key test of success.
Perran Moon
Q
Josh Buckland: I have looked through the project life cycle, and clause 4 gives a lot of flexibility around it. There is the early-stage development capital, which is quite difficult at this stage to develop at the scale required. Developing large-scale energy projects costs not just tens of millions, but potentially hundreds of millions through the development phase, so there is a role there that GB Energy could play in the deployment of development capital.
Potentially more important in a development phase is the ability to help projects to de-risk other things that they cannot control, such as their ability to access a grid connection, to get planning approval and to access the right supply chain domestically, to go back to the point about unlocking economic potential here. That could potentially be a significant role for GB Energy. That comes back to the governance question of where Government draw the line between a role for Great British Energy and the Government, because a lot of those issues are effectively for the Government to deal with, but that is an interesting dynamic to watch.
If we move through to the construction phase, there is slightly less of a role, in truth, because the level of capital required in building out projects once they have got over the initial financing barrier is potentially lower. I know the Government have talked a lot about that separately from the Bill. The exception is local and community energy projects, where clearly the barrier to unlocking investment is higher, and there is potentially a role there for Great British Energy that the Government have talked about.
The final piece is whether, once an asset has been built out and is operational, Great British Energy should have a role there. Again, that is potentially more a question about how you want the capital to be deployed. The Government could take a stake in a project, or invest to then seek a return, and utilise that money either to reduce energy bills or to reinvest. That is a question around prioritisation of public spending, because that might be a sensible thing to do, but there is a range of other things you could invest in that might look beyond the energy transition. Hopefully that gives you a bit of a feel. The role will definitely change depending on where you are in the asset life cycle.
Pippa Heylings
Q
Josh Buckland: There is a question around consultative processes, I suppose. One thing we have seen, or that I have experienced, especially on the planning side, is that when the Government set out statements of intent—for example, through the planning regime and national policy statements—it is important to consult on those extensively in advance so that there is certainty around what they mean. Then they have to wait as institutions respond. There may be a question about what level of external input is given before the statement of strategic priorities is set out, or whether it is just a Government statement that is then passed through. There is an interesting question about consultation in advance.
Once it is established, those acting and investing alongside Great British Energy will be more interested in how it as an institution interprets that statement. If it has to set out a strategic business plan as set out under subsection (8), that is the area that companies will be more interested in, because—assuming it is operationally independent—that is the thing that they will take more seriously.
The other dynamic in terms of updates is the risk that regular updates to the strategic plan create uncertainty. That might go back to the question of timeline and expectations of when the statement is reviewed, when it is republished and at what stage, and what needs to change externally to make that a reality. That is probably an important dynamic. Whether that is a matter for the Bill I will leave to others to guide on, but obviously it is an area that will be of interest externally in understanding how Great British Energy operates in practice.
Andrew Pakes (Peterborough) (Lab)
Q
Josh Buckland: Ultimately, the question of supply chain is broader than this Bill. Great British Energy could absolutely play a role, especially if it is doing place-based investments or is particularly investing in certain projects. but there is a fundamental question for the Government, as they look to build out the supply chain, around what they are doing at a skills-based level, what they are doing at a technology development level and how they are giving greater clarity on the pipeline of projects over time, some of which might be invested in by Great British Energy and some of which might not. For me, supply chain and skills deployment is a matter of broader Government policy, which Great British Energy can support.
As we stand here today, we do not necessarily have the right level of skilled capacity in the country to deliver all the ambitions that have been set out across infrastructure. It is important not just to look at the energy sector; a lot of the changes will require changes in the transport sector, the water sector and others, but that does not mean that we cannot have those skills if there is a broader framework to develop them, to train and to invest at scale in the supply chain. Great British Energy could play some role in that, but the broader policy framework and the Government’s ambitions more widely will dictate that to a greater degree.
The Chair
Thank you very much indeed for your time this afternoon, Mr Buckland. The Committee is indebted to you.
Examination of Witnesses
Olivia Powis, Jack Norquoy and Myrtle Dawes gave evidence.
The Chair
We are now going to hear oral evidence from Jack Norquoy, the director of communications and public affairs, Scottish Renewables, Myrtle Dawes, the chief executive officer of the Net Zero Technology Centre, and, I hope, from Olivia Powis, the chief executive of the Carbon Capture and Storage Association, although Ms Powis has been slightly delayed. We will proceed and hope that she is able to join us later. For this session we have until 3.50 pm. Please introduce yourselves for the benefit of the record.
Myrtle Dawes: My name is Myrtle Dawes. I am a chemical engineer and am currently CEO at the Net Zero Technology Centre. For those of you who do not know that organisation, it uses government funding to work with industry to accelerate and develop emerging technology.
Jack Norquoy: Good afternoon, Committee. I am Jack Norquoy, representing Scottish Renewables. We are the voice of Scotland’s renewable energy industry. We represent nearly 400 organisations working across all renewable energy technologies and the supply chain in Scotland.
Andrew Bowie
Q
“the production, distribution, storage and supply of clean energy”,
to include technology that might be involved in carbon capture and storage. It is not set out clearly within the Bill that that is the case. Ms Dawes, as somebody who works with the companies involved in the extraction and production of fossil fuels in Aberdeen and the drive to transition to net zero, do you share the concern with the narrow prescription of what GB Energy will be allowed to invest in and be involved in?
Myrtle Dawes: I understand their concern. From my perspective, I understood that that would be covered under clause 1(2)(b), which concerns the reduction of greenhouse gases. Fundamentally, the storage or utilisation of carbon dioxide comes with the reduction of greenhouse gases. [Interruption.] As Olivia is here, she could probably respond.
The Chair
Order. If I may interrupt, we have now been joined by Olivia Powis, who is chief executive of the Carbon Capture Association. For the benefit of the record and Hansard, could you identify yourself?
Olivia Powis: I apologise for being a couple of minutes late. I am Olivia Powis, chief executive officer of the Carbon Capture and Storage Association.
The Chair
There is no need to apologise; we understand the vagaries of travel in London and are grateful to you for joining us. Minister—shadow Minister, I beg your pardon—would you like to come back?
Andrew Bowie
Q
Thank you for joining us, Ms Powis. I was going to ask about the concerns that your association has brought to our attention about the definitions in the Bill, particularly in clause 3, concerning the objects that GBE is restricted to facilitating, encouraging or participating in. Please could you expand on those, and also on your suggested changes to the Bill, about which you kindly wrote to us two weeks ago?
Olivia Powis: I would be pleased to expand on that. We welcome the Bill and its support. In his opening remarks on Second Reading, the Secretary of State stated that
“Great British Energy will support project development”
to
“help speed up the roll-out of offshore wind and other technologies”—[Official Report, 5 September 2024; Vol. 753, c. 460.]
such as CCUS, wave, tidal and hydrogen.
We believe, however, that the narrow definition of clean energy in the current draft of the Bill could be prohibitive to low-carbon technologies and inadvertently limit the scope of GB Energy’s investments, thereby reducing the potential for public projects and hindering the UK’s ability to meet its net zero targets.
The definition of clean energy should be clarified to ensure that it encompasses energy sourced from fossil fuels when combined with carbon capture and storage—that is, when abated. We, alongside Hydrogen UK, have proposed some alternative wording that would enable abated fossil fuels to be included, and ensure the reduction of greenhouse gas emissions from energy produced from fossil fuels. We must future-proof this definition to make sure that GB Energy is able to invest safely in projects such as low-carbon energy with CCS and is not at risk of being challenged.
Jack Norquoy: I understand the concerns that have been raised. Some of our members will also be members of the Carbon Capture and Storage Association. I understand those concerns and am happy with the suggestions. Our recommendation for the Bill, and moving forward, is that it maintains alignment with what the Climate Change Committee has within its scope as part of our transition to net zero.
Andrew Bowie
Q
Olivia Powis: No, we would recommend that the wording is changed in the Bill so that it is future-proof. We welcome the words that came alongside it, but we want to ensure that it is future-proofed for when people come back to this legislation in five years’ time. It must be on the face of the Bill.
Andrew Bowie
Q
Myrtle Dawes: I am really excited about this. For reference, the Net Zero Technology Centre received £180 million of Government funding. We have managed to raise and match that with industry and go on to have more than 100 start-ups. We have more than 69 commercialised technologies. We have done more than 300 projects and gone on to give value back to GB of an order of one to nine in cost-benefit terms. When I see something like this, on a much bigger scale—our work is really a microcosm of this—it is really exciting. It is a catalyst sitting at the heart of Government, which will make sure that there is support for innovation during the period when it needs acceleration, when we need this technology to make things more efficient and drive down costs, and when we need to get good technology into the next set of infrastructure projects. For us, it is really exciting. Given what we have seen at the NZTC, it could go on to deliver quite a lot of value.
Jack Norquoy: I share that enthusiasm. Scottish Renewables has welcomed the development of GB Energy, alongside many of our members in industry. Of course, we welcome any additional investment at this time, particularly when we have heightened ambitions towards 2030. We have an unprecedented line of sight in Scotland with our pipeline, so we welcome the conversation and the development of GB Energy to deliver the support that will be needed to accelerate deployment.
We are particularly interested to see what the goals of GB Energy are. That has been set out in the Bill and in the surrounding documents, but we will need to see some clearer objectives and pathways to support that with industry. We appreciate that that might come after the Bill. We have interest in the governance, too; the importance of operational independence has been discussed today. Finance is very important to the heightened ambitions for what GB Energy will do, as the Bill sets out, but we also want GB Energy to work with industry.
This comes at a time when there are a lot of welcome moving parts in industry, such as the development of a strategic spatial energy plan, the national wealth fund and GB Energy. We welcome the Bill and we would like to see the establishment of GB Energy, but in the steps ahead we would like to see a pathway to give some assurance to our members in industry who are now actively involved in the pipeline on how they can help towards the deployment to 2030.
Andrew Bowie
Q
Jack Norquoy: The Bill includes a reference to working with Scottish Ministers, which is welcome, as part of improved relations at the moment, which are welcome too. On governance and devolved competency, as we heard in earlier evidence from the Crown Estate, the partnership with GB Energy is welcome. There will have to be development across the UK to support our net zero targets, but we want to ensure that there is parity with Crown Estate Scotland too. At the start, I highlighted the pipeline that we have sitting in Scotland. On the point about the competency of the Scottish Government, we would like to see some more detail—again, probably outwith the Bill—on how we can ensure parity between extra powers to the Crown Estate and to Crown Estate Scotland.
Stephen Flynn
Q
Myrtle Dawes: I suppose it would have to be towards the impact. Naturally, the budget we are looking at is well suited to innovation. The crowding in of money that we could get around that from investors—the impact that we could have by moving on a lot of projects—is quite significant.
To take the example of floating offshore wind, we have some of the best wind resources in Europe and actually the world. We are sitting with one of the best supply chains for subsea in the world, because the North sea has been the harshest place in the world to do business. If we are ever going to get an effective floating wind business, with technology and jobs here in the UK, we need to start and move on it now. Not only is there an opportunity to get electricity here in the UK, but we are very close to the heartland of Europe, which is also looking for electricity and for hydrogen. We can do lots of things where the impact, if we were to move now, would be great.
I have also worked on de-risking in major projects. They do need de-risking. I do not think that those in the supply chain are necessarily looking for a handout; they are looking for clarity, for investable business cases and for things where they can do the commercial work that they normally do. I can tell you that at the heart of this is technology that has to be sufficiently robust and reliable, and cheap enough that the product is cheap for the customer, who in this case is those who are using our energy.
Olivia Powis: I support everything that has been said. I think GB Energy offers the potential for targeted investment and support in areas of the value chain, for new innovations and across the supply chain. In particular, we look at some capture technologies with lower TRLs that would benefit from some investment, enabling them to move forward from what we refer to as the valley of death, to be able to compete on the open market. There are many opportunities within the innovation space.
Jack Norquoy: A big part of what GB Energy will do is the local power plan, to which a sizeable contribution of that £8 billion allocation has been made. You raised a point about how the rest of it will be spent; I echo the comments that have been made about innovation.
There will be a need for GB Energy to have a balance. That has been outlined in what we have seen so far, in that there will be a need to generate revenue in order for there to be a public return, but it is important that that money be targeted at high-risk areas where we need the longer-term strategic view to support innovation. Sectors in Scotland such as the marine energy sector would very much welcome that targeted support. So we have a balance between GB Energy being willing to take more risk than perhaps we have seen so far and some investment going towards the local power plan, developing the stable revenue that we will want to see coming through.
Olivia Blake
Q
Olivia Powis: We have proposed instead that the statement must provide that Great British Energy’s objects are restricted to facilitating and encouraging investment in, and participating in, one or more of the production, distribution, storage and supply of clean energy, and the reduction, directly or indirectly, of greenhouse gas emissions from energy derived from fossil fuels, where that clean energy definition means energy and molecules produced from sources other than unabated fossil fuels. It is just about being clear about that clean energy definition. We have been told that, as drafted, it would exclude those with fossil fuels.
Olivia Blake
Q
Olivia Powis: CCUS, as an industry, very much welcomes the announcements from Government last week and the further detail provided yesterday. There is lots of private sector investment helping to drive forward these projects. The funding commitment from Government is for projects once they are operational. Obviously there are still first-of-a-kind projects here, so I would not classify it as a very high risk. This is not a new technology; it is an industry that has been deployed elsewhere, and there is an understanding of how it will work.
There will be first-of-a-kind projects in the UK, and there could therefore be areas in which GB Energy could play a critical role. We have yet to really explore the extent—we would welcome further discussion on that—but there could be a role in enabling infrastructure, oversizing pipes, import terminals and port infrastructure. There is a role it could play in driving forward that enabling infrastructure investment.
The Chair
Ms Dawes and Mr Norquoy, have you anything to add?
Myrtle Dawes: I am glad to get the clarification. We also invest in CCUS; it is really important technology for industrial decarbonisation. As an engineer, I will tell you that there is risk involved in that, because we are used to steady state, and we will want to stop and start things. It is a refrigerant, so it will not like it.
There is quite a lot to do to reduce costs. The monitoring and verification of the stores is super-important. If we can turn a waste stream going to store into a product stream that is being utilised, that will be fantastic. That has to be the way we need to go. There is lots of technology to look at, both on the capture of emissions—direct air capture has its role, especially if we are going to look at some kinds of synthetic fuel—and on some of the emerging technologies around capturing carbon dioxide from seawater. Apart from the fact that we might also be able to mine some minerals from doing that, these are things that we should be looking at. It is all about getting the security of doing these things closer to home.
Pippa Heylings
Q
Jack Norquoy: I am happy to clarify that. We are content with the Bill; we understand the need to enable flexibility so that it can evolve over time. We certainly want GB Energy to be durable at a time that we are building a new energy system. There are various mechanisms, which I highlighted at the start. This is an opportune time to enable that durability. I think the scope is right; yes, it is wide, but that is important for longevity. We would want to see clarity within the business plan and as part of the statements that come following the Bill.
I think industry is very keen. We are operating at pace, so we want some clarity around the architecture in which this will sit, to give assurance to businesses that are ready to engage and want to work closely with the Government and GB Energy. As has been highlighted to the Committee today, we want a sense of the role of GB Energy, where it will end when it comes to the national wealth fund and where those can complement each other. We also want clarity on the established array of institutions at a UK level, primarily the UK Infrastructure Bank. That is compounded when you come to Scotland, where we have the good work of the Scottish National Investment Bank and Scottish Enterprise. I do not think that this detail is needed in the Bill, but clarity on some of that architecture would be very welcome shortly thereafter.
The Chair
As nobody else on the panel wishes to respond, and there are no further questions, may I thank you for your evidence? We are very grateful to you for coming in.
Examination of Witness
David Whitehouse gave evidence.
The Chair
We will now take oral evidence from David Whitehouse, the chief executive of Offshore Energies UK. For this session, we have until 4.10 pm. Mr Whitehouse, for the benefit of the record, could you please identify yourself?
David Whitehouse: I am David Whitehouse. I am the chief executive of Offshore Energies UK.
Andrew Bowie
Q
David Whitehouse: Looking at the 400 members that we represent—people investing in our oil and gas, wind developers, people investing in carbon storage, but also a huge supply chain—I do not think we are sceptical. As an organisation, looking at our 400 members and at the 200,000 people who work in the sector, we see that journey to net zero as a real opportunity for the UK and for Scotland if we build on our industrial strengths. We are so lucky in this country that we have brilliant people and a world-class supply chain; we are also lucky that the wind blows and that we have the North sea and other assets. We must make best use of them.
Within the context of a wider energy strategy, we absolutely welcome GB Energy. It will play a role in a bigger energy strategy and a bigger industrial strategy. How do we see GB Energy working? We see it unlocking opportunities that otherwise would not happen. It will not create value if it simply replicates what the private sector would do anyway—I think that will be acknowledged in the priorities that I would expect to see from the Secretary of State. There is a still a huge role to play in de-risking projects, as well as in some of the local energy projects that have been raised. There is a huge opportunity to invest in technology and future infrastructure.
We touched on infrastructure with our European neighbours. How do we interact with it? Already, we have a number of companies looking at what kind of projects meet the mandate of GB Energy and would fulfil it. Do not forget the world-class supply chain that we have. We will fail in this country if we do not recognise how important our supply chain is. Our oil and gas supply chain is world-class. The transferability of those skills to what GB Energy needs to deliver is huge. There is a massive appetite for us to leverage the skills that we have and use GB Energy as a vehicle to deliver value for the country.
Andrew Bowie
Q
David Whitehouse: I think what you have is a Bill that, as you have heard in evidence, provides broad definitions and broad statements of intent. In and of itself, it is a platform to deliver that. What will be critical is that the Government, the Secretary of State and the devolved Governments, who have welcomed this, work together and honour the words about working in partnership with industry to take what is on paper and turn it into a reality of unlocking opportunities that would not be happening—opportunities for communities up and down the UK, and certainly for our key supply chain companies—to help us to accelerate some of the critical projects that need to be unlocked.
Andrew Bowie
Q
“Great British Energy’s objects are restricted to facilitating…the production, distribution, storage and supply of clean energy…the reduction of greenhouse gas emissions…improvements in energy efficiency, and…measures for ensuring the security of the supply of energy.”
Is there any concern from among your members that the stated objects will prevent GB Energy from partnering with or investing in some of those companies, given that they have an existing footprint in the oil and gas sector?
David Whitehouse: We will look to bring clarity in that area. The interpretation we have taken and the conversations we have had indicate that this would not preclude companies from investing in that manner, and that the Bill is broadly defined to allow all companies to invest. That is something we very much welcome. We see the journey to net zero as being one of inclusivity, not exclusivity. As I have said, we represent companies that produce oil and gas, which have a critical role in our energy mix, but in terms of bringing forward technology, as it stands, no, we do not think that. There is an opportunity, though, as the Secretary of State brings forward the priorities, to provide clarity that those things would not be excluded.
Andrew Bowie
Q
David Whitehouse: The position we have always taken is that you have energy communities up and down the UK. We have a very proud energy sector, and in principle I think you could have put GB Energy in many places, but we welcome it in Aberdeen. The reason we welcome it in Aberdeen is because that is where you see a real density of high-quality operators, high-quality developers and high-quality supply chain. That is the right place to put it. We take confidence that this journey to net zero must be about inclusivity, and about breaking down barriers and building bridges. Having GB Energy centred in Aberdeen is a good statement of intent that this Government—it was also supported by the Scottish Government—recognise that as well. We need to make the most of our industrial strength. Placing this in Aberdeen is a good statement of intent, so we welcome that.
Torcuil Crichton
Q
David Whitehouse: Apologies: what was the word they were using?
Torcuil Crichton
Some see them as a threat, not an opportunity.
David Whitehouse: Okay. So I need to do a better job, because I do not see a threat whatsoever. In the UK at the moment, we are on a journey. The Climate Change Committee says that we must hit our net zero targets by 2050, and on that journey 50% of our energy under the balanced pathway will come from oil and gas. Today we produce only about half of what we need, so it is right that, in my opinion, if the industry is held to account, we should prioritise domestic oil and gas.
Our members see no threat from accelerating the path to renewable energy. It will take time, but it is absolutely the right thing to do. The only concern or consideration from our perspective is, “Yes, of course, accelerate.” Our members are actually investing in that, and our supply chain members are using their revenues from oil and gas to invest in that transition. It is an opportunity, not a threat.
What we need, though, is that balanced discussion with those who work in the oil and gas sector. We have a voice: we are Offshore Energies UK, not “Oil and Gas UK”. That is because companies, supply chains and people are evolving, and you want that big tent if you are going to be successful in bringing it forward. If you are getting that feedback from those in the sector, I hope that in the coming weeks and months you will not hear that.
Stephen Flynn
Q
David Whitehouse: I think we all recognise that on the journey to net zero a huge amount of investment is required to get us there—the Climate Change Committee says that £1.4 trillion is required. The lion’s share will come from the private sector, so GB Energy will help, but actually we need to create the conditions more broadly where we have investment in the energy sector that turns into enduring value. That is what we need to deliver, and we can talk about that.
Where GB Energy can play a role is in those opportunities that would not otherwise have happened, such as through the opportunity to de-risk projects. If we look at things such as carbon storage, de-risking and understanding the nature of the carbon stores and using that as an opportunity to buy into future investments is a role that GB Energy can and should play.
We have spoken about connectivity with Europe. Scotland and the UK’s future will be hydrogen pipelines to Europe, and there is a role for a state player to crowd in private sector money make those projects happen. We often talk about GB Energy as an investment vehicle but, if we work in partnership with industry, it should be much more than that. Getting money is difficult, but it is not always the most difficult thing that we have to do, so it is about unblocking the other issues. There are 13 years from consent to the delivery of the first electrons. It is in those areas where we can have a state player sitting with industry that understands our challenges and what we need to do. We often talk about GB Energy as an investment vehicle, but it should have a bigger vision than that.
Harriet Cross
Q
David Whitehouse: There is no doubt that the UK and Scotland are in a global race for investment, and we need to create an environment where we are attracting investment. I sit in a sector that has been battered to some degree by public perception and by tax changes. There are things that are happening outwith GB Energy that, as a country, we need to look at. We need to make a great environment for investment.
Time does matter; GB Energy will start to come to life when the Secretary of State puts forward priorities. The thing that we would ask—I think you have heard it from others—is about bringing forward the strategic priorities for GB Energy. The statement should be something that we are engaged in and are bringing forward now. It should come forward in a timely manner, but it must make sure that it has taken on board the necessary engagement with industry, Governments and other key stakeholders. Time is always of the essence.
Perran Moon
Q
David Whitehouse: For me, there are areas—I have touched on them slightly—where you look at the projects and their timelines, and if you have more data and more information up front, it massively shrinks the time from taking on a licence, or whatever it is, to turning that into carbon stored or electricity generated. There is an opportunity for an entity like GB Energy to invest in some of that up-front data gathering to de-risk those projects. GB Energy would then have the opportunity to trade that for a share in the future projects that come from that. We will see how that shows in the priorities, but that is a clear area where GB Energy can invest now to get data and use it to leverage equity stakes in projects moving forward, which I think is very much consistent with the founding principles of GB Energy.
We also touched on the infrastructure that is required in the UK, much of which is now being dealt with through the National Energy System Operator, and people will have spoken at length about the issues around the grid. There is so much more that we need to deliver a net zero future for the UK and for Europe. Again, a state investor with a long-term investment horizon can now be in the position where we start talking about what networks we need across the North sea to be successful. Having an entity like GB Energy crowding in private sector money is a great opportunity to unlock some of that.
Perran Moon
Q
David Whitehouse: I think it will and should be one of the priorities of GB Energy that our drive for clean energy must be done in a way where we create those supply chains. How do we do that? We already have—we can provide it to the Committee—a good assessment of the quality of the UK supply chain and what its capabilities are. We have a good understanding of what those future renewable opportunities are, and you are absolutely right that there are supply chain opportunities across the country, in essentially every constituency. We have that knowledge.
Now we need GB Energy to recognise what those opportunities are. There are projects to be invested in that GB Energy should be part of, and it should be directing and working with industry and the supply chain to make sure that we take the opportunities to grow our supply chain. We have a lot of significant companies that we should grow. It is a fantastic export but also delivers in our own country. Myrtle will have touched on it: we have a whole host of acorns around this country that could be grown into massive oaks. It will probably use less flowery language, but that should be one of the principles of GB Energy. We have supply chain acorns that we can identify, and we must turn them into the oaks that this country needs.
Wera Hobhouse
Q
There was a question this morning about whether the Bill should specify that GB Energy should look at the gap in financial markets when it comes to support for new technology companies that otherwise would not make it through the valleys of death. As I understand it, there are not enough financial products out there, from private equity, ordinary banks or other investment opportunities. Can we put anything in the Bill to make addressing that particular gap more of a priority?
David Whitehouse: I am sorry; I wish I could give you a better answer. I have spoken with our members. In some way, shape or form, we think the Bill as it stands is broad and provides the opportunity for the Secretary of State and others to bring forward the statement of principles. That is where we would see some of that.
The Government will also bring forward an industrial strategy, and linked to that will be our energy policy. I think there is such a good opportunity within those—we will have representation from industry, which understands some of the issues, and there will be representatives from our investors across the sector. From our members’ feedback, I think that is where they would see that input: in those broader ways.
Catherine Fookes
Q
David Whitehouse: Let me talk about inclusivity in general terms. I am studying for a master’s in renewables; I am the energy transition, albeit slightly older. When we talk about inclusivity, those who come from an oil and gas heritage are sometimes excluded from the conversation. You need all those voices. When I talk about inclusivity, it is about “bring all the voices”.
How do we improve what we are doing? I have a couple of brief comments. Speaking personally, I thought the legislation on the gender pay gap was excellent. What does it do? It makes conversations and debates happen. Last week in the sector, we spoke about Vision 2030—how we are going to deliver on a sector that is truly inclusive, that looks like the future, not the past, and that is attracting the next generation, with commitments about targets that we wish to achieve.
There are seven pillars on the path to getting there. How do we do that? You need commitment from leaders in the sector; I think we can give you that. You need some targets; I think we can give you them. We also need a plan of action that holds us to account. I come back to the path to net zero: we will not do this if we are not inclusive and not attracting across the entire spectrum, the entire country.
The Chair
Order. I think we can say that that is fairly close to being outside the scope of the Bill. I am absolutely confident that the next question will be within it.
Uma Kumaran
Q
David Whitehouse: I am an engineer, so it is simple engineering stuff. Collaboration: I was pleased to see the Scottish Government and other devolved Governments welcome this. I do not think GB Energy is the convening force in and of itself, but the convening power, which means we have Governments around the country working together for a common goal, is an important part of what GB Energy can provide a focus for.
Collaboration is really important. We need collaboration among our regulators. We have a complex regulatory framework. The view many of our members take is that to change our regulatory framework to be exactly what we require for this journey would take so long that the train would have gone. What GB Energy will do, and what it can see and help with, is alignment between our regulatory bodies—bodies in the devolved Governments and the wider UK Government. It will also see what the other barriers to investment are.
I think there is good cross-party consensus about the journey we need to go on to drive collaboration. Looking at what needs to be done to help with the simple co-ordination between different competing projects can drive down costs and drive efficiency. We should look at what we can do to reduce the cycle time. There is 15 years from licence to electricity—unfortunately, in my experience, I am probably on year 30 from carbon storage to actually injecting it. There is a significant role there that GB Energy should be growing into, and it should be playing in that space.
The Chair
I apologise for the slight distraction at this end of the table. We have been trying to juggle timings in connection with the imminent Division.
As there are no further questions, Mr Whitehouse, may I thank you for your contribution? We are most grateful.
Examination of Witness
Andy Prendergast gave evidence.
The Chair
We are likely to have a Division in the House, so I am afraid that we will have to ask you—if you have the time, Mr Prendergast—to allow us to go and vote and then come back if we have not finished your evidence session.
Andy Prendergast: Yes, that is fine.
The Chair
You are most kind. With that in mind, we will now hear evidence from Andy Prendergast, who is the national secretary of the GMB. We have until 4.30 pm, in theory, but we may be interrupted. Mr Prendergast, for the benefit of the record could you identify yourself?
Andy Prendergast: I am Andy Prendergast, national secretary of GMB union.
Andrew Bowie
Q
Andy Prendergast: We see GB Energy as a long-overdue, desperately needed step. As a country, and as someone who works for a union supporting tens of thousands of energy workers and people who work in energy-intensive industries, there is a real problem at the moment when we look across the world at the investments being made in green technologies and what other Governments are doing to ensure that those investments lead to jobs and supply chains in their nations. What we see in Britain is a complete failure to match that, whether it is the Inflation Reduction Act in America, or European subsidies.
As a union, we regularly sit down with investors who have shovel-ready projects that have the opportunity and potential to transform huge swathes of Britain in areas that we have called “left behind”, “post-industrial” or “red wall”, but we simply cannot get the support to get those through. The investors are telling us that if they decide to put their site in Philadelphia, they get huge subsidies and tax breaks; if they decide to put it in Germany, they get subsidies and Government support, but in Britain there is simply a void.
I have heard quite a lot of people talk about the importance of supply chains. I will be honest: for my union, we do not necessarily see that to the same degree. If we look at offshore wind, we see jackets, technology and blades that are not made in Britain. We have huge swathes of the country where people are willing and able to work, yet they are sitting there watching this technology be imported in. In the case of the Methil fabrication site in Scotland, which is currently sitting without work, they are watching the wind turbines that they could be building being put up in the sea in front of them. We need to avoid that, and I think GB Energy is the first step to doing that—a step, frankly, that should have been taken a long time ago.
Andrew Bowie
Q
Do you think that the aims and objects of this Bill go wide enough? Do you think that there is broad enough scope for the different technologies that GB Energy will have to invest in? We have heard the CCSA raise slight concerns that there might not be the scope for investment in carbon capture, for example, where a lot of new jobs are going to be created, and presumably a lot of those will be members of the GMB.
Andy Prendergast: We fought for carbon capture to be included. As far as we are concerned, having checked the wording, we think that is covered. An issue we have on the scope is whether the funds are sufficient to back the ambition. Before the election, we were talking £28 billion at one point. What we have offers a huge scale and a huge opportunity, and while ultimately we would like to see more money, this is genuine, real money that was not there before. That is a step in the right direction. From a trade unionist point of view, I very frequently argue about a lack of money—we do it on a daily basis everywhere.
Another concern with the Bill, which I think the Bill itself addresses, is the relationship between GB Energy and GB Nuclear. We desperately need new nuclear. We are waiting for the decision on Sizewell and we would like to see the decision on Wylfa as well as small modular reactors. There is a genuine question about whether SMRs fit under the remit of GB Energy or GB Nuclear, and it needs to be resolved. SMRs are another of those technologies that British brains created but, if we are not careful, we will see the supply chains go overseas. It is an industry that is likely to be £180 billion within a decade. The choice we have with that is either to support British companies such as Rolls-Royce or, as with wind, to import this key technology that should be supporting companies and jobs throughout Britain.
Andrew Bowie
Q
Andy Prendergast: I am not necessarily saying that it needs to be in the Bill, but it needs to happen quite quickly. The Bill refers to the fact that it needs to be bottomed out, and every route we look at to net zero requires a huge increase in the amount of nuclear power. We need that decision on Sizewell quite quickly. I do not look at that as key to GB Energy, but it needs to be resolved.
Josh MacAlister
Q
Andy Prendergast: The most important thing to say about nuclear is that the nuclear industry in Britain is, to a degree, a tragedy. We invented it. The first civil nuclear site in the world was British, and yet when we came to Hinkley Point, we had to import the know-how and technology and reinvent the wheel. What we have done in Hinkley Point has been amazing. The site employs tens of thousands of people and provides real, skilled jobs—the kind of jobs people are proud to do, which is very important.
If we look at the lessons we learned from Hinkley and transfer them to Sizewell, we start speeding up the process. If we then go on to Wylfa, it becomes easier to take them through. The key thing it shows is that we cannot have those huge gaps. When we have gaps, we lose the skills. What is frightening for us in so many areas is that we are talking about an energy transformation, but we simply do not have the skills to transform at the speed we need to.
There is an estimated lack of 40,000 welders in this country. In the near future we will need more pylons, a huge amount of work on the water mains, SMRs, CCS and hydrogen. I sat on a load of Government bodies with the last Government, and all I kept hearing was, “We need more welders.” You had to take a view that, sadly, repeating “We need more welders” does not magically lead to a lot of welders showing up. We need the investment in the skills and in the supply chain to ensure that we get the right people in the right place.
It is important to say that welding jobs are fantastically well paid. They are jobs that get paid more than most people in this room. There should not be a problem employing welders in this country if we simply resort to capitalism, so if there is a problem, how do we identify it and how do we get around it?
Josh MacAlister
Thank you. I think I should have declared an interest at the start of that question as the chair of the all-party parliamentary group on nuclear energy.
The Chair
Thank you. That is a matter of record, and I gently advise any other Members who have a similar interest to declare it.
Wera Hobhouse
Q
Andy Prendergast: From a lot of the conversations we have had, talking about a one-stop shop, assistance in planning and further regulatory support, I think that is something that will evolve over time and will be matched by the funding. An investment vehicle is badly needed on its own because it is something we do not have, which makes us almost unique among advanced economies. Looking at the Bill itself, there are parts that could be fleshed out. We would like to see more about skills, as I just mentioned, and there are some parts that we need to look at, but that is an evolutionary process as opposed to something we definitely need in the Bill now.
Stephen Flynn
Q
Andy Prendergast: If I may take the second part first, one key thing the public want is to see lower energy bills. We know that. A potential issue with GB Energy being so popular is that, to a degree, not everyone knew what it was. Some people think it will lead to an immediate reduction in energy bills. We are likely to see that over a longer period of time, but GB Energy needs to make the investments in new technologies that we have failed to make and that we have too often missed the boat on. If you compare us to Denmark, for example, 14% of its exports are in green technology. That is because it has Ørsted, which is very similar to what we are trying to do with GB Energy, but ultimately it has had a long run into this and has stolen a march. What GB Energy belatedly allows us to do is potentially to steal a march on some of the new technologies that have not been exploited, with a view to supporting those supply chains in the important parts.
Could you repeat the first part of your question, please?
Stephen Flynn
It was about the quantum that is available. You referred to IRA and the EU’s corresponding investment. The quantum for GB Energy is £8.3 billion over the course of five years, or £1.6 billion per year. Do you think that is sufficient to meet the objectives laid out in the Bill?
Andy Prendergast: I think it is sufficient to make some of them and sufficient to make a difference; it is not sufficient to make as much of a difference as we would like it to, but compared with what we had beforehand, it is light years ahead of where we have been.
Olivia Blake
Q
“measures for ensuring the security of the supply of energy”—
in the Bill for your members, given the global situation in which we find ourselves? Secondly, which of the objects in the Bill will have the most impact, or in what ways will the Bill have an impact on your members?
Andy Prendergast: The first point about energy supply was really brought home around the start of the Ukraine war, which exposed how unprepared we were. Whereas your average European country had months of gas supplies, we had a matter of weeks. We went into that war with the largest gas supply place in the world, Rough, unused. One thing we must understand, with the evolving nature of Government, is what is the very minimum that we expect Government to do. I think the very minimum people expect Government to do now is to keep the lights on and keep us secure. That is how important energy is. Sometimes, when you speak to some politicians, there is almost a view that energy is an optional extra, but I do not think that that has been the case for about 150 years. God forbid we go back to that.
When we talk about energy supply and security, it is about two things—[Interruption.]
The Chair
Mr Prendergast, I am sorry that you were interrupted. It was very good of you to stay. I believe I am right in saying that Ms Blake had a second question.
Olivia Blake
Q
Andy Prendergast: Both in terms of shoring up the jobs we currently have and potentially creating the jobs we so desperately need, one of our real concerns about net zero is the fact that, in a lot of countries, there is a perception that net zero is something being done to people, not with them. Look at the response in America, which is very much typified by “Drill, baby, drill”; look at Germany, where, bizarrely, Alternative für Deutschland is organising around heat pumps. We already have Reform UK talking about fighting the next election on the basis of net zero.
What we have recognised is that we have to make net zero work for people, and we think the best way of making that happen is to ensure that net zero comes with jobs and opportunities. The simple reality is that, if we get it right, those jobs and opportunities are going to be in the post-industrial areas. We have seen the maps put forward by people in the hydrogen lobby and from carbon capture and storage. These are jobs in places that desperately need them. If we are going to be serious about levelling up and making sure that prosperity is spread in Britain, we need to rebuild those industrial heartlands with proper, decent technologies that we can start exporting.
Andrew Pakes
Q
Andy Prendergast: That is a very good question. We have been really pleased to see that the role of trade unions is incorporated in the Bill, although we do need to flesh out exactly how that works.
Your criticism of the renewables industry, particularly for members of the GMB, is absolutely critical. When people talk about our role in industry, what they are often talking about is the white-collar jobs—the ones in universities, getting the technology. They are not talking about the blue-collar jobs, which, at the moment, are the ones in the energy sector that are very well unionised, with good rates of pay and excellent terms and conditions, and which give the security that families and communities need for the long term.
What really concerns us about the renewables industry so far is that it came with the promise of mass jobs that simply have not materialised. Alex Salmond promised 30,000 jobs in offshore wind; 10 years later, fewer than 10,000 have been delivered. Particularly when you are looking at maintenance jobs, you are talking about jobs that are subcontracted with terrible terms and conditions and that are anti-union. When we look at the success that places like America or Europe have had in renewables, trade unions are at the heart of that.
What we have seen so far is a real willingness from the Government to work with both ourselves and employers. One of the bizarre things about it is that those coalitions really have an impact. One of the most surprising days in my job was attending a meeting here and being praised by a Tory MP, which I never thought would happen—it was one of those pinch-yourself moments. It was in relation to Hinkley Point: it was recognised that we had a huge role there in helping to develop the workforce and to manage the process of ensuring both that they benefited and that we got things done quickly and properly.
If we get that right, this is an opportunity to bring not just jobs but good jobs. In a lot of the areas that we are talking about, we have this constant debate about “red wall” and about “post-industrial”. It is not that there are no jobs there; it is just that the jobs being brought in are not very good ones. They are not jobs that offer permanent contracts. They are not jobs that offer good pensions, sick pay or opportunities for advancement. They are zero-hours contracts—got here today, gone tomorrow—that give people very little pride. This is an opportunity to reverse that 40-year decline in our industrial base and do something positive about it.
Uma Kumaran
Q
Andy Prendergast: Part of this is about listening without prejudice. Look, we are going to be absolute clear: we agree with the Labour Government on a huge swathe of things, but one thing we do not agree on is the ending of oil and gas licences. We look at oil and gas licences and every single scenario into the future requires us to have oil and gas. We as a nation have a choice. We either take it for ourselves, with high working and environmental standards, or we import it from a number of frankly disreputable regimes.
Part of that transition has to be listening to those communities and the people doing the jobs and actually take their expertise. We are absolutely clear—and I think it is obvious to anyone with half a brain—that global warming is happening and the speed at which is happening is quicker. It is the biggest challenge that humanity has faced, certainly in my lifetime, and we need to deal with it. The concern for us, and this relates to what I was talking about earlier, is that if we get this wrong and we do not listen to communities and do not bring them with us, we risk getting a reaction against that, which is what we have seen in America and Europe. Then, instead of doing it a little bit slower but in a demonstrable and deliverable way, we end up with an electorate being offered simple solutions and quick fixes, and ultimately due to a mixture of climate pessimism and snake oil salesmen, they take the wrong decision. We have to look at some of this from a pragmatic angle, ask what is best in the national interest and listen to the workers and communities who are currently benefiting.
Torcuil Crichton
Q
Andy Prendergast: The role of trade unions is key. I have always had a very simple view: trade unions are about democracy at work. We are a country that believes in democracy so much that we invade other countries to give it to them whether they want it or not, and yet the idea of democratisation at the workplace is an anathema—certainly to what was over half of Parliament.
We need to listen to workers and ensure that they share in the success of businesses and ultimately that their sacrifices and those of their families are recognised. When we look at the work that is going to be coming out, we know that we have to do this. We have been asking for an industrial plan for years, and I think GB Energy is part of that industrial plan. That industrial plan has to be a road map of how we do this properly, how we engage those communities and how we provide the support necessary to make a transition.
I mentioned going to Denmark. When I was there, something fascinating happened: they closed a bacon plant, which was 1,000 jobs. You sit there and say, “That’s terrible. In Britain, we’d be fighting that. We’d be on picket lines.” In Denmark, because of the support given in social security and retraining, and the industrial strategy, it was seen as an opportunity for people to get better jobs. That was also helped an awful lot by the fact that those people were getting 90% of their salary paid for up to a year, so people thought, “Well, it’s a better job and a bit of a holiday in the meantime.” That shows what happens when you engage people properly.
What you ended up with is something that would decimate a community in Britain but rejuvenated a community in Denmark. That is because there was a tripartite strategy of listening to unions, talking to Government and talking to employers, and everyone put their heads together to come up with a solution to what would clearly be a problem. We have failed at that in Britain for years.
The Chair
Mr Prendergast, thank you very much indeed for your patience and for answering our questions this afternoon. The Committee is indebted to you. I am most grateful.
Would the Minister leading on the Bill like to meta-morphose himself and take the witness stand?
Examination of Witness
Michael Shanks MP gave evidence.
The Chair
Q
Michael Shanks: Good afternoon. I am Michael Shanks, the Minister for Energy.
Andrew Bowie
Q
“There will be a range of projects, in some of which we will certainly have the controlling stake, and some of which we might help to get over the line, but in every single project there will be a return for the British taxpayer.” —[Official Report, 26 July 2024; Vol. 752, c. 939.]
We have already talked about how GB Energy will be important—almost the key partner in investing in riskier technologies. How can you guarantee that every single project will have a return for the British taxpayer?
Michael Shanks: It is important to say that the return for the taxpayer will take different forms. We have been really clear in all the briefings we have done on the Bill and in the founding statement that in some we will take an equity stake, in some there will be debt financing, and in others we might provide some of the capacity for organisations to take forward some of the funding or project delivery themselves. In each one of those, we expect that GB Energy will play a part in delivering those projects, getting them over the line and delivering for the British people. That will be done in a variety of ways.
Some of it will absolutely be money coming back to GB Energy, which we have said will either be further invested in more projects or give a return to the Treasury to fund public services in different ways, but it might also be that on community energy, for example, we help community projects to get up and running. That also delivers a return for those communities.
Andrew Bowie
Q
Michael Shanks: I am saying very clearly that the aim of setting up GB Energy is that, like other countries right across the world, we can have a stake in some of the projects we are delivering. That is quite normal in many European countries. Indeed, the previous Government found it acceptable for those projects to set up in the UK too; it is just that they did not want the UK to have a stake in any publicly owned energy. It is a very common method of delivering projects like this, and giving a return to the British taxpayer is important. It will take many different forms.
In time, there will absolutely be a significant financial return on many of these projects, but in some of them, as you rightly say, de-risking them and getting them over the line will involve us taking a strategy that means that, on individual projects, we might not make an immediate return. But the overall vision of GB Energy is that it will play a part in helping us achieve our targets by 2030, and the British public will have a stake in that future. That is something we believe in, and we hope all Members of Parliament support it.
Andrew Bowie
Q
Michael Shanks: I think there are two different questions there. If you look at the rest of Europe, there are fantastic companies—EDF, Ørsted, Statkraft—that are delivering many of these projects in the UK. It is a model that clearly works, and that delivers economic and social benefits to those countries and to the people living in them. If we look at the price spike when Ukraine was invaded, EDF was able to mitigate some of that significant rise in bills for people in France. We are not saying that within six months of setting up GB Energy, it is going to compete with Equinor or Ørsted—of course we are not—but it is important that we start that journey. Of course, all these publicly owned companies started somewhere. They have been able to invest in the future to get to the scale that they are now, and to deliver significant projects in the process.
The second point of the question is important. GB Energy is not designed to displace any of those companies—or any other companies, incidentally—in delivering projects in the UK. It is about crowding in additional investment. We know that 2030 is going to be a real challenge. We have been very clear that we have set a target that we think is extremely ambitious, but achievable. When NESO publishes its road map shortly, it will give the detail on how we are going to get there. But we have to start somewhere, and I think GB Energy is a critical part of delivering that and will play a significant role in getting us to 2030—and, crucially, beyond 2030.
Andrew Bowie
Q
Moving on, some concern has been raised today that there has not been very much clarification, or that there is some confusion, over the status, operational independence and autonomy of Great British Nuclear within GB Energy. I wondered if you might expand on that and maybe think about putting something in the Bill regarding Great British Nuclear and its relationship with Great British Energy.
Michael Shanks: That is a really important question. We have said throughout that we want to have further discussions about the role of Great British Nuclear. I think folding it into Great British Energy is probably not the right solution, because what is really important—credit to your Government for doing this—is that the board of Great British Nuclear has significant expertise in nuclear projects. I think that is important for us to maintain. Clearly, there will be synergies and work together on certain projects, but they have, in some ways, quite different remits in terms of the investments we expect them to make, so I think they probably will remain in some form independent of each other. Clearly, the partnership working between them will be important, and we will say more on that in the coming months.
Andrew Bowie
I agree with you entirely on what you said about Great British Nuclear. Sir Roger, I think we should note that the Minister has just credited the former Government with something. I think it is the first time—
Michael Shanks: I think I credited you earlier as well. This is becoming a habit.
Andrew Bowie
Q
Michael Shanks: No, I will not be. To be fair to Juergen Maier, what he said very clearly was that in the initial set-up phase and for some time afterwards, we are talking employees in the hundreds based in the headquarters. Eventually, we think it may expand beyond that in Aberdeen and in the satellite offices, and indeed in any other set-ups that we have across the UK. I think the critical point on jobs is that the role of GB Energy is to invest in projects where we are creating new well-paid, trade-unionised jobs in the UK. That is critical. The jobs are not necessarily going to be in the headquarters of GB Energy, but they will be created by GB Energy’s investment. That is where the tens of thousands of jobs right across the UK will come from.
The Chair
I understand that that was out of order this morning, but you got your answer in the end.
Perran Moon
Q
I can safely say that the people of Cornwall are really excited about GB Energy. Expectations are very high. We are a post-industrial community that has suffered for decades from lack of investment. More recently, however, we have discovered that investment is now going into our tin industry; we have the third highest-grade tin deposits in the world. We also have lithium. We face the Celtic sea, so we have a huge opportunity with offshore wind and onshore wind. We have companies setting up in geothermal, solar and tidal, and we have the country’s largest ground source heat pump.
Can you elaborate on the potential benefits for communities such as Cornwall, where we have such a wide array of opportunity, and say how GB Energy will support those opportunities? And if I may be a little bit cheeky, we have heard quite a lot today about the head office being set up in Aberdeen with satellite offices being set up in Edinburgh and Glasgow, but I will just point out that there is another corner of the United Kingdom that would be delighted to have a satellite office.
Michael Shanks: May I thank you for the question? I think that, in asking it, you have successfully elaborated on all the potentials of Cornwall, which I am sure your constituents will be delighted about.
However, you make a really important point on two fronts. The aim of GB Energy is to crowd in investment in projects right across the United Kingdom. Yes, we are very proud to say that the headquarters will be in Scotland and—importantly—specifically in Aberdeen, as the Prime Minister announced. That is partly to recognise the energy story in the north-east of Scotland for the last 60 years in oil and gas, and the importance of the transition. However, it is also important to say that on the renewables journey Scotland has also been leading the way and will continue to do so in so many ways. It is right that the headquarters is in Aberdeen, building on the talent, experience and skills that are already there.
On the broader point, though, there are real opportunities for investments in every corner of the UK. To go back to some of the earlier points that witnesses made, this is a combination of policies; it is not just GB Energy in isolation. We have been really clear that we are a Government that are not agnostic about industrial strategy, and that we want to see manufacturing in the UK, and the thousands of jobs that could have been created by some of our offshore wind projects, for example, but actually went to other countries before we towed the projects into British waters. We want to see those jobs in this country and that will create opportunities across the country in the supply chains, in skill developments and in lots of other opportunities, including in Cornwall.
Although I absolutely cannot commit to opening an office in Cornwall and I would like the record to reflect that, I think there will be opportunities for your part of the world and indeed for the whole of the UK.
Harriet Cross
Q
Michael Shanks: That is a really fair question. The question of risk appetite is important; that is partly why setting up GB Energy as a company, regulated by the Companies Act and with a fiduciary board made up of financial experts who have a responsibility as a board of directors for the direction of the company and for its financial results, is so important.
There has to be some risk appetite, and one of the earlier witnesses made a point that I would agree with—if there are absolutely no projects that do not have any risk at all, GB Energy is not really filling the gap. It is really important that GB Energy can move in the spaces where the current investors are not necessarily finding those opportunities. Crucially, however, GB Energy is obviously owned by the taxpayer and therefore, as a backstop, there is a real conviction that it will only invest in things that have a likelihood of producing a return for the taxpayer.
Of course, when we get into making individual decisions, that is partly why it is important the Bill does not go into a granular level of detail on every single thing that GB Energy will do, because it is really important that we give that board, those experts and everyone they bring in to advise them, the space to move into opportunities as they emerge.
If we were to go back five or 10 years, we would not have thought that we were about to have the world’s biggest floating offshore wind farm off the coast of the UK. That would not be on the face of a Bill like this, but actually it is a huge potential opportunity for us and we would like those kinds of opportunities to be open to GB Energy to explore.
Olivia Blake
Q
Josh MacAlister
He has had this from every Scottish MP for the past six months.
Olivia Blake
Well, we have not heard enough about God’s own county here today.
There has been a lot of positivity from witnesses; some of them seemed quite excited about the Bill. I want to understand, from your perspective, why it has taken a change of Government to see this sort of Bill come forward, and what your ambition is for it.
Michael Shanks: That is really important. Last week, I visited Ratcliffe-on-Soar power station, the last coal-powered station in the UK, and it was a good example of the just transition in practice. It was the right thing that we phased out coal; the TUC itself confirmed that that was exactly how to deal with workers in such a difficult situation where you are moving people from one industry and transitioning them into something else. It was a properly planned process, which is what we want to see in industry.
You are right: we absolutely want to avoid what happened with coalmining in the 1980s. It goes back to what I was saying earlier: this Government are not agnostic about the future of jobs and manufacturing in our industrial communities right across the country. It is important that we invest in them not only because, frankly, we are in a race against the world for all the parts we need to deliver the future of energy, and we will need to produce some of them in this country, but because good, well-paid, skilled jobs are how we will manage the transition in a fair and prosperous way. It is critical for us.
I think it matches other policies. Yes, GB Energy will be a key part, but the industrial strategy will also be important. The national wealth fund and a whole range of levers will be important. The office for clean energy jobs is all about saying that, as a Government, we are committed to the future of this workforce and to creating tens of thousands of new jobs that do not currently exist.
Wera Hobhouse
Q
Michael Shanks: I think it is a combination of things. I urge you to read the Great British Energy founding statement document alongside the Bill, because it is important. The Bill is about setting up a company, and what we do not want to do is hamstring that company by putting in so much detail that it cannot move into the right places that give good investment opportunities for the taxpayer and deliver good energy projects.
The statement makes it clear that community energy, for example, is a key part of our local power plan. We want to see many more community-owned energy projects, for a combination of reasons. They have real social and economic benefits for communities. For us, there is the belief that communities having a stake in those projects is important: communities having ownership and feeling part of the mission will help us with some of the arguments for the amount of infrastructure that we will have to build in the next few years. Also, in certain areas we want small-scale generation projects to have access to connections that bigger projects cannot have. Frankly, in a lot of cases, building the power generation near the population is where we have issues with spatial energy planning across the country.
There are huge opportunities. We are committed to increasing community ownership. We have also said in the local power plan that it could look like municipal ownership of certain generation projects, or it could look like local authorities or combined authorities. We are quite open about what it looks like, but we want to create a landscape where Great British Energy can invest and also provide some capacity to help organisations to get over the line. We all know that local government is struggling and is on its knees right across the country, after years of underfunding. The capacity to deliver a lot of the projects is not there, so GB Energy can fill that gap.
Catherine Fookes
Q
Michael Shanks: That is an important question. We have done several different things already. I have had many conversations with my counterparts in the Welsh Government, in the Scottish Government and, to a different degree, in the Northern Ireland Executive. Energy is of course transferred in Northern Ireland, but we are keen that they are still part of the Bill, so that they can benefit from some of the GB Energy possibilities, although it will be a different relationship because they are part of a different grid.
All my conversations with the Scottish Government and the Welsh Government have been about how we collaborate, not just on the formal process of consulting on the statement of priorities, but on how they can be part of helping GB Energy to set its priorities on an ongoing basis. On Monday, I met the Cabinet Secretary in the Scottish Government. We talked about, for example, the Scottish Government having a role in a much wider sense in the company to help with some of the priorities in Scotland.
There are a variety of ways. What is critical is that the devolved Administrations should absolutely be consulted, and we want that to be an open process, but we have also reset the relationships with the devolved Administrations in a way that means that this is not now a combative process. Across the UK, we have broadly the same outcomes in mind for clean power, with slightly different targets here and there, but we are all on the same journey. That allows us to align a lot of our priorities and to deliver for people all across the UK. I want that to be an open and collaborative approach. Consultation is the formal part, but it is not the limit of what we think can happen.
Stephen Flynn
Q
Michael Shanks: In the election, we committed that bills would come down. That figure was from independent analysts. We never said that bills would come down overnight; this is a process that will take time. GB Energy is part of delivering that. Without GB Energy, it would be harder to reach our targets by 2030 and to bring down bills for everyone. The reality with bills is that we remain far too wedded to fossil fuels; whether they come from the North sea or not, they are traded on the international market and we are subject to all the spikes, so reducing our dependence on unabated gas is critical. That is why I hope that all Members will vote to support GB Energy as part of the solution, including you.
Uma Kumaran
Q
“measures for ensuring the security of the supply of energy”.
For our constituents watching at home, which I choose to believe they are, what does the Bill actually mean for energy security? What does it mean for our constituents in the years ahead?
Michael Shanks: Our constituents and the wider population are watching every moment of this sitting, I have no doubt.
That is an important question. Security of supply is one of the critical questions that we have to answer. We have this challenge at the moment of how we bring down bills; how we move towards our climate targets for clean power, which is essential; and how we ensure security of supply. The only way—the only long-term solution—is for us to move to cheaper renewable energy at pace. Every single year that we are dependent on volatile fossil fuel markets, we open ourselves to the kind of exposure that people have still been paying the price for in the past few years. That cannot continue.
We will not be able to flick a switch overnight. We have come in after 14 years of chaos, frankly, in so much of government, and we are doing as much as we can to move at pace, but this is the journey that we need to be on. As I have said, 2030 is ambitious, but it is absolutely achievable. I was heartened when every single one of our witnesses today confirmed that although this is an ambitious programme, they see GB Energy as a critical part—not a silver bullet; of course it is not, and we never said that it is—in moving us toward energy security, cheaper bills and the climate leadership that the public want.
Pippa Heylings
Q
Michael Shanks: There are two separate things here: the objects in the Bill, which are around the restrictions placed on Great British Energy, and the five key functions, which are outlined in the founding statement. I was referring to the five key functions, one of which is the local power plan, which is how we think we will deliver a lot more community-owned energy.
The important thing about the Bill is that we do not want inadvertently to create a list of things that we think are good to have—I do not disagree with you at all about the importance of that—but that actually end up restricting it in ways that we do not expect. There is that danger with Bills like this; it was the same with Great British Nuclear and the UK Infrastructure Bank, where they have a clear, focused remit. There is nothing in the objects that prevents community energy projects—in fact, they are intrinsic to several of them—but we think that adding more and more detail, including the amendment that you propose, is not the right way to go. But it is clear in the founding statement, in the evidence from Juergen Maier and in numerous answers from the Secretary of State and me that this is something to which we are absolutely committed.
Torcuil Crichton
Q
Michael Shanks: That is really important. There are two strands to this. The capacity building point, to which you allude, is critical. A lot of communities absolutely have the possibility, the option and the potential for some of these projects, but just do not have the capacity to deliver them. We see that as a critical role that GB Energy could have, as a sort of one-stop shop of experts to provide that support, help with the essential pre-planning work and help to navigate the connections issues.
The second point around connections is really important, and it is something I am focusing a lot of time on within my wider remit as Minister: how do we clear the connections queue, while also prioritising the projects that we want to get connected much faster? Some of that will require us simply to build more network infrastructure to alleviate the pressures; some of it is building on the work that the previous Government did around prioritising the queue.
There are difficult trade-offs. Far be it from me to give credit to the former Minister again, but there are trade-offs because it is important for us not to say that one project is more valuable than the other. There might be, for example, mechanisms around saying that one is more likely to be connected faster, or is further through its delivery phase and should therefore get priority over something else. There are also a lot of projects still in the queue that just should not be there at all, because they are nowhere near ready to be delivered. It is important that we work on both those things, but GB Energy can be a real catalyst for communities to unleash the potential that they have. I am really excited about the opportunities that are there.
In closing, may I thank Committee members for their forbearance today? Can I also say that it is the first time since 2010 that a Minister has given evidence in a Bill Committee? I am glad that this Labour Government have brought back the practice of Government Ministers being responsible to Parliament and answering these questions. I look forward to doing more of that in future.
Ordered, That further consideration be now adjourned. —(Anna Turley.)
Great British Energy Bill (Third sitting)
Thursday 10th October 2024
(4 months, 1 week ago)
Public Bill CommitteesGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 10 October 2024 - (10 Oct 2024)
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 12 / Noes: 3 - Question accordingly agreed to.
The Committee divided: - Ayes: 4 / Noes: 12 - Question accordingly negatived.
The Chair
Good morning. I have some reminders for the Committee. Please set your electronic devices to silent. No food or drink is permitted during sittings, apart from the water provided, still or fizzy. Hansard colleagues will be grateful if Members could email their speaking notes, or alternatively pass their paper notes to the Hansard colleague in the room, to my left.
We now begin line-by-line consideration of the Bill. The selection list for today’s sittings is available in the room and shows how the selected amendments have been grouped for debate. Amendments grouped together are generally on the same or similar issues. Decisions on each amendment are taken when we come to the clause to which the amendment relates. Decisions on new clauses will be taken once we have completed consideration of the Bill’s existing clauses—saved by the bell, maybe.
I remind the Committee that the Member who has put their name to the lead amendment in a group of amendments is called to speak first. In the case of a debate on clause stand part, I will normally call the Minister first to introduce the clause. Members who wish to speak in any debate should indicate to me that they wish to do so. At the end of a debate, I shall call the Member who moved the lead amendment, or the Minister in the case of a clause stand part debate, to speak again in conclusion.
Before Members who move an amendment or new clause sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a decision. If any Member wishes to press a grouped amendment to a vote once we have disposed of the lead amendment, they should indicate that in the course of their speech on the group.
Clause 1
Great British Energy
Pippa Heylings (South Cambridgeshire) (LD)
I beg to move amendment 8, in clause 1, page 1, line 3, at end insert—
“within 6 months of the day on which this Act is passed.”
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
New clause 1—Energy efficiency reporting—
“(1) Within two years of the date of Royal Assent to this Act and every 12 months thereafter, Great British Energy must report to Parliament on its progress towards the object of improvements in energy efficiency set out in Clause 3(2)(c).
(2) The report mentioned in subsection (1) must include—
(a) the means by which energy efficiencies are being made;
(b) an assessment over time of the energy efficiencies made; and
(c) the projected impact on consumer energy bills.”
Pippa Heylings
Thank you, Chair, and all Committee members. I apologise for being a moment late. My hon. Friend the Member for Bath will be slightly late too, but will be in Committee.
As we heard in the oral evidence, we need a lot of reassurance before we can be supportive of the scope of the Bill, because it is so wide-ranging. We understand that flexibility is needed, but so much comes down to the strategic priorities and the business case. As the Bill stands, there is no deadline for the production of the critical delimiting document in which the Secretary of State will state the strategic priorities to reassure businesses, communities, bill payers and Committee members that Great British Energy, within its broad and wide-ranging objects, will focus on the innovative and on what is not duplicating or perverting the market and is not uncompetitive, to ensure a fair playing field and that communities have a say and a part to play in the generation of energy, and receive the benefits as well.
All that will come out in the Secretary of State’s strategic priorities statement. I therefore propose some level of certainty for everyone—business in particular—by putting in a deadline for the publication of the statement, which we suggest should be six months.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
Good morning, everyone. It is a pleasure to be back in Committee. I will begin by addressing amendment 8, tabled by the hon. Member for South Cambridgeshire, before moving on to why clause 1 should stand part of the Bill.
The amendment seeks to specify the time within which Great British Energy will set out its priorities. For reasons I shall set out, we will not support it. First, though, it is important to say that the Government have already moved at pace on a range of energy-related matters, but particularly on Great British Energy. We have shown very quickly, in not quite yet 100 days in office, that we are moving forward to set up Great British Energy, and there will be no further delays in doing so. It is in our interests—indeed, as the hon. Member rightly said, it is in all our interests—that we move quickly on setting it up.
We have said clearly that we want Great British Energy to deliver a publicly owned, operationally independent energy company, and we are here today, within 100 days of Labour forming a Government, to make that happen. That work will continue. With the progress we have already made, and with a commitment that we want to quickly get Great British Energy delivering what we are setting it up to deliver—it is not at all in our interests to drag our feet—there is really no need for a specific timeline. I therefore hope that the hon. Member will not press her amendment to a vote.
Clause 1 allows the Secretary of State to designate a company as Great British Energy. Legislation often provides for a company that is set up under the Companies Act 2006 to be designated for certain statutory purposes, especially when substantial amounts of public money are involved, or where the company is being asked to fulfil a particularly important role. A recent example from the previous Government is the legislation on the UK Infrastructure Bank, which includes a similar provision.
Clause 1 simply sets out in detail the processes and arrangements to allow the Secretary of State to designate a company as Great British Energy. Perhaps most importantly, the clause allows Great British Energy to be founded as a publicly owned company, which gets to the heart of what this Government are committed to doing: giving the public a stake in Great British Energy. The clause protects the principle of public ownership by making explicit that the company would terminate if it ceased to be wholly owned by the Crown. I therefore commend clause 1 to the Committee.
Stephen Flynn (Aberdeen South) (SNP)
I rise to speak briefly to new clause 1, which is grouped with amendment 8 and clause 1. It is very straightforward. It will be for Government Members to consider whether it is appropriate for the House of Commons to be in full knowledge and understanding of what the Government seek to do on energy efficiency. They must also consider whether the steps that the Government take in that regard should be reported to this House to ensure that we are fully abreast of the progress that the Government hope to make and how that meets the promises that they as individuals made to their constituents prior to the election. We as parliamentarians can collectively hold the Government to account on those promises and ambitions.
In discussions on further amendments, we will talk in more detail about the promises that were made, and hopefully the Government might be minded to agree to include some of those promises in the Bill. For now, though, I think it worth while for Members to consider the role that this Parliament plays in scrutinising this Government in a constructive fashion.
Pippa Heylings
No one can deny that, as the Minister said, we have seen huge progress coming through immediately, and commitment from the Government. I thought we would have heard from the oral evidence that certainty is critical, and therefore that giving a deadline and a timeframe in which people and businesses could expect to see the statement would be good reassurance. As the right hon. Member for Aberdeen South indicated, it would also be good to have some kind of revision. I hear from the Minister that the Government will not accept the amendment, so I will not press it to a vote, but it should be considered.
Michael Shanks
On the hon. Lady’s point, I reiterate our absolute commitment to move faster—frankly, far faster than in six months—to deliver the statement of strategic priorities. We will talk about that later in relation to further amendments.
On the point from the right hon. Member for Aberdeen South, we do not think the theme of the new clause is particularly important in this part of the Bill. It is important, of course, that the aim of Great British Energy is to be part of what will deliver cheaper bills for all, and efficiency, but it is only part of the story. Of course, in the election campaign we made it clear that across Government—yes, through Great British Energy, but also through a series of other measures, including our reforms to planning and including a lot of areas on which I am working closely with his colleagues in the Scottish Government to expedite progress—we will deliver cheaper bills.
The right hon. Gentleman must acknowledge, despite his not supporting Great British Energy so far—I hope that he and his colleagues will change their minds when the Bill comes back—that on this point it is in fact an important vehicle. [Interruption.] He looks as if he does not agree with what I said. He did not vote for the Bill on Second Reading, so I took it from that that he did not support it. It is important that he recognises that Great British Energy has a really important part to play in delivering what I have set out. His colleagues in the Scottish Government certainly think so, which is why we have been working so closely together on the matter.
Stephen Flynn
I am sure that the Minister, as an esteemed and well-versed parliamentarian, will understand that the voting system in this House means that should a Member choose not to vote in favour of something, that does not mean that they are against it, as he is outlining. I would hate for him to inadvertently suggest to the public that something is the case when it is not the case. As he knows, I of course welcome the set-up of GB Energy, but what I want to see is the scrutiny that the new clause would obviously provide.
Michael Shanks
I am delighted to hear the right hon. Gentleman’s wholehearted support for Great British Energy. That is fantastic. I did not know that, so that is wonderful, and I thank him for that great support. It has really cheered my whole day, in fact, that I now have his support. Things can only get better, as we say.
On the right hon. Gentleman’s specific point about efficiency measures, we are already taking a number of steps on that matter in other areas. For example, our warm homes plan will transform homes across the country, making energy in individual homes cleaner and cheaper to run. We announced a local grants programme to support that. Of course, that does not apply in Scotland, where such work is devolved. I think the Scottish Government could probably do more in this policy area. The Scottish Government have made significant budget cuts to projects—£133 million was taken out of energy efficiency measures in 2022 and 2023—so I think work could be done across the board on the matter.
On the point about updating Parliament, it is really important that we are talking about a publicly owned energy company. It will be independent of Government, but of course it will be responsible to Parliament in the way that any other independent companies wholly owned by the Secretary of State are. A copy of the strategic priorities will be laid before Parliament. Any directions given to Great British Energy by the Secretary of State will be laid before Parliament. Of course, there are already several other mechanisms that the right hon. Member for Aberdeen South, as an extremely well-versed parliamentarian—far more so than I am—knows he can avail himself of.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
In respect of the point that the Minister has just made, and also the point that he made to the hon. Member for South Cambridgeshire, who represents the Liberal Democrats, he said that the strategic priorities would be laid before Parliament. Does he have a timescale for that? He said it would be far quicker than six months, so are we talking about before Christmas? Are we talking about before the November recess? Does he have in mind a date when the strategic priorities may be laid before Parliament?
Michael Shanks
If the hon. Gentleman is proposing that the Bill will be through Parliament by Christmas, that would be great—we could move forward. Of course, we need the Bill to have Royal Assent before we can move forward. I welcome his co-operation on making sure that it has a swift passage through the House of Lords and the Commons. We will move as quickly as possible. It is in no one’s interest, let alone that of a Government who are moving as quickly as possible to deliver this, for it to be delayed any further.
Finally, the requirement in new clause 1, tabled by the right hon. Member for Aberdeen South, to report to Parliament on energy efficiency measures is unnecessary because there are already many mechanisms for that. We have been consistently clear that Great British Energy will be operationally independent. I hope that the right hon. Gentleman will therefore not press his new clause to a vote.
Pippa Heylings
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clause 2
Crown status
Question proposed, That the clause stand part of the Bill.
Michael Shanks
We are making great progress—this will be a good day. Clause 2 is straightforward. It ensures that Great British Energy will serve the public as an independent company and operate in the same way as any other UK company, that it will not have any special status, immunity or privilege normally associated with the Crown, and that its property will not be seen as property of the Crown. It will be subject to exactly the same legal requirements as all other companies. That is in line with the vision we had for Great British Energy from the beginning: that it should be operationally independent and an agile market player. We will ensure that it remains that way.
Question put and agreed to.
Clause 2 accordingly ordered to stand part of the Bill.
Clause 3
Objects
Pippa Heylings
I beg to move amendment 2, in clause 3, page 2, line 18, at end insert—
“(e) measures to increase low carbon and renewable energy schemes owned, or part owned, by community organisations.”
This amendment includes community energy schemes in the objects that the Great British Energy company will be restricted to facilitating, encouraging and participating in.
The Chair
With this it will be convenient to discuss amendment 9, in clause 5, page 3, line 8, at end insert—
“(1A) A statement under this section must include as a strategic priority, consistent with Great British Energy’s objects under section 3, measures to be taken to ensure that local communities benefit directly from low carbon and renewable energy projects operating within their area.”
This amendment would require the Secretary of State to set a strategic priority for measures to be taken to ensure local communities benefit from low and renewable energy projects operating in their area.
Pippa Heylings
The objects of Great British Energy need to be wide-ranging and flexible so that it can be innovative and pivot where necessary. But one issue, which the Liberal Democrats also raised during the oral evidence sessions, is community energy: that which is owned, managed and generated by, and brings benefits directly to, the community. We propose this amendment for the Government’s serious consideration because the founding statement for Great British Energy says that local communities will derive benefits. That is not just in the five functions but part of the purpose of Great British Energy. Juergen Maier says in his foreword to the founding statement that Great British Energy will actively co-invest and support communities to generate energy. That is fundamental. As most of the rest of the provision is for large-scale clean energy projects, it is critical to include the amendment in the objects, given that communities are included in the five functions in the foundational statement.
Olivia Blake (Sheffield Hallam) (Lab)
I thank the hon. Lady for her opening remarks on the amendment. Is there anything in the Bill that would preclude the kind of support for community energy projects that we have discussed in Committee so far?
Pippa Heylings
The debate so far has all been about the ability to delimit what limits Great British Energy, but that allows for everything else that has not been mentioned. However, it is critical to reassure everybody that Great British Energy is about both large-scale clean energy projects and community projects. I do not think the amendment would change or limit Great British Energy any further; it would add to the understanding of the objects. I do not think it would in any way pervert the flexibility in the wide-ranging objects; it would bring the necessary emphasis and balance between large-scale and community energy projects.
Catherine Fookes (Monmouthshire) (Lab)
I rise to speak to amendment 2, tabled by the hon. Member for Bath, which seeks to include community energy in the objects of the Bill. The amendment has gathered support from across the House. I find it encouraging that so many hon. Members understand the important role that community energy schemes play in our energy sector and our mission to make Britain a clean energy superpower.
Community energy schemes currently generate 0.5% of the UK’s electricity. However, studies by the Environmental Audit Committee show that they could grow twentyfold in the next 10 years. They not only power many homes but reduce our dependence on energy imports and support the development of critical local infrastructure, and of course they create local jobs. It is clear to me that community energy schemes play a key part in tackling climate change. I have seen at first hand in my constituency of Monmouthshire great schemes such as the community solar project at Bridges community centre, which saves the centre money, which can then be reinvested in the community.
Further afield, in Bangor Aberconwy, we have Ynni Ogwen, which does fantastic work to produce electrical energy from hydro power using the Ogwen river. Again, the profits are used to fund community and environmental projects in the community. My commitment to community energy is clear, as is the Government’s. We are inviting communities to come forward with projects and to work with local leaders and devolved Governments to ensure that local people benefit from energy production.
Although the amendment is well intended, it is not necessary. The Government and the chair of GB Energy himself made it clear at the evidence session on Tuesday that community energy will be a “core part” of GB Energy.
Andrew Pakes (Peterborough) (Lab)
I want to join in the conversation about community energy, which I know is very important to the county that the hon. Member for South Cambridgeshire and I share. Lots of great initiatives are going on there. Having read the amendments and thought about them this morning, I am deeply encouraged by the comments that the Minister and Juergen Maier made in our session earlier in the week.
I think I am the only Co-operative MP here—[Interruption.] I can see my hon. Friend the Member for Redcar indicating that she is one, too. As someone who has worked in the co-operative energy sector for much of my adult life, this is the first time in many years that I have seen a Government genuinely committed to community energy and working with the mutual sector to deliver that. I am proud of the work that the Co-operative party and the Labour party have done to bring forward GB Energy and work with the co-op sector.
In recent weeks, as we have prepared for the Bill, I have met Central Co-op, Midcounties Co-op, Unity, Greater Manchester Community Renewables, and a range of agencies that are fully behind the Bill because they see the power of it. The scale of the Government’s ambition is clear. The Secretary of State himself has said that the local power plan will deliver the biggest expansion of community energy in history. It would also be remiss of us to consider the amendment without acknowledging the local power plan, which is part of GB Energy’s founding statement, which includes a clear commitment from the chair, Juergen Maier:
“We will be investing in community-owned energy generation, reducing the pressures on the transmission grid while giving local people a stake in their transition to net zero.”
The local power plan is also listed in GB Energy’s three initial priorities.
Although I sympathise with, and support and wish to work with, the hon. Member for South Cambridgeshire on community energy in Cambridgeshire in the localities that we operate in—it is really important that we keep a focus on that—this is a Bill that will transform our energy. The co-op movement is behind it and communities are behind it. It is important that we drive the Bill forward, so that it enables the local power plan, rather than—as it is almost the festive season—treating it like a Christmas tree, which is what I worry some legislation can become like. There are so many baubles that we could put on this legislation, when we should let the majesty of the tree speak for itself. We should get on and pass it, by Christmas or in six months or however long it takes. Community energy is coming, and we do not need an amendment to tell us it is on its way.
Uma Kumaran (Stratford and Bow) (Lab)
It is really good to see this cross-party support for community energy. I am sure all Members here today can speak to brilliant innovations in their constituencies. I have one in my constituency of Stratford and Bow, Community Energy Newham: its vision, very much like that of the Government, is to provide clean, affordable energy to homes and public buildings across the borough of Newham.
As we heard extensively on Second Reading, GB Energy will be owned by and for the British people, to help to promote energy independence, as well as to maintain Britain’s standing as a global leader. I echo the comments of my hon. Friend the Member for Monmouthshire. The Bill has already baked in the fact that community energy will be possible. We heard extensively from our witnesses that if the Bill does not give GB Energy the ability to innovate and advance, or to be flexible, there may be constraints in the years ahead. That is why we do not need the amendment.
Community Energy Newham is looking to provide our local library with a cleaner source of energy. As I said, many Members have exciting projects in their constituencies. That is why it is so important to maintain this cross-party support for the Bill and get it through as quickly as possible, so that not only our constituents but the whole country can benefit from Great British Energy.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I rise to reinforce not just the evidence that we heard from the Minister and Juergen Maier about the commitment to community energy, but the evidence we heard from private companies about foreign Governments that are willing to allow communities and municipalities to take a share in community energy.
None of what is in the Bill or what GB Energy proposes will happen without communities being involved. Communities will have to be involved at every stage —in generation, in transmission and in the purchase of the energy—otherwise we will find ourselves fighting communities every step of the way. It is vital that communities are involved. They are not just knocking at the door; they are taking over.
My constituency, Na h-Eileanan an Iar, has the largest number of community-owned windfarms in the UK. They serve as a template for what could happen across the rest of Scotland and Britain if communities are engaged and take on the challenge of producing their own power.
I was delighted with what the Minister said in the evidence session on Tuesday: GB Energy will be there to enable and help communities to get on the grid, get over the planning obstacles and the legal and financial obstacles that are sometimes in their paths. I think we should allow GB Energy to be set up and to get on with its business, and to enable communities to be engaged and involved not just in the production of energy, but in earning and reaping some of the profit that we will see from the wealth of wind.
Josh MacAlister (Whitehaven and Workington) (Lab)
The witnesses we heard from on Tuesday demonstrated a near-enough consensus that the Bill provides the chair, the board and the executive of GB Energy with the necessary flexibility to make sensible decisions, which include—and as has been backed by the Government and the current chair—the ability to back projects such as community energy. All of us should take reassurance from that.
There is a bigger point of principle on the amendment. We as Members should have the humility to recognise where the limitations of our own expertise reside. We do not want MPs setting the details—dotting the i’s and crossing the t’s—of how GB Energy should operate. The whole purpose of this legislation is to set up an autonomous, dynamic and fast-moving company, wholly focused on the 2030 mission and the Government’s wider aims and objectives for the net zero, energy transition and energy security agendas. We want to provide GB Energy with the full flexibility and freedoms to enable it to do that, and we heard that point from witnesses.
My constituency of Whitehaven and Workington demonstrates the full range of opportunities that GB Energy could support, whether in the earlier stages of research and development of projects, or by linking with nuclear—not just decommissioning but hopefully new nuclear energy. We were home to one of the first offshore wind farms at Robin Rigg, which is an RWE wind farm. That will come to the end of its life, and there are big questions about its future. All the opportunities of west Cumbria demonstrate that we need GB Energy to have full scope and freedom. It should not be for Members of this House to set that scope in detail. The Bill, backed by the witnesses and with the wisdom of the Government, is set up with that intention.
Michael Shanks
Amendments 2 and 9 seek to add provisions on community energy to the Bill. As I have said in a number of answers in Parliament and in our session on Tuesday, support for community energy is something that I absolutely share, and it is clearly shared by a number of hon. Members across the House. It will be an integral part not just of Great British Energy, but of the Government’s entire energy strategy. That is why the local power plan is a key part of Great British Energy’s delivery model, and it goes broader than GB Energy, to every other part of Government policy on energy.
As my hon. Friend the Member for Na h-Eileanan an Iar pointed out, it is essential that communities are involved. It is not a nice-to-have; it is critical. If we are to build the infrastructure we will need in future, we want communities across the country to reap the rewards. A key part of that is community-driven projects and community-owned projects.
Andrew Bowie
Last year, almost to the day, we launched the £10 million fund for community energy projects, building on the success of previous community funds, to be delivered through local energy hubs. How does the Minister envisage Great British Energy working with those local hubs to deliver those community projects that we announced funding for last year?
Michael Shanks
That is a really helpful point. The community energy hubs that already exist are certainly something that we want to build on. The £10 million commitment is welcome. We have committed more than £1 billion to the local power plan over this Parliament, but we are building on what is already there, such as the local hubs. In Scotland, there is the community and renewable energy scheme, where we are already working with the Scottish Government to look at how we can jointly fund the project. It is really important that we work to build on what is already there.
The Government will not be supporting amendments 2 or 9 today. Amendment 2 seeks to insert an additional object to clause 3 specifically about community energy. As a few hon. Members have said, the purpose of the Bill is to set up the confines of Great British Energy as a company in as little detail as possible. We are not seeking to fill the Bill with every possible mechanism the company could use or every possible priority it could have. We are clear that we are setting up the minimum necessary provisions for Great British Energy to function.
My hon. Friend the Member for Whitehaven and Workington made the really important point earlier that we are not seeking to set in train, for however long GB Energy will deliver projects, our objectives right now, in 2024. We want to give it the most minimal possible scope, so that it can go forward in an agile way and move into areas that, at the moment, we may not think are critical. Community energy will change over time—it already has changed with regard to the models we are using.
There is nothing in the Bill that excludes communities at all. The production, distribution, storage and supply of clean energy extends to large-scale offshore programmes, but I do not think we should discount communities’ involvement in those. There are some really good models around the world. In Denmark, 20% is now expected for community ownership, so there are models of large-scale projects as well, although as the hon. Member for South Cambridgeshire rightly said, much smaller-scale generation projects that directly benefit local communities should sit alongside that.
Amendment 9 would require the Secretary of State to specifically set, as a strategic priority, measures to ensure that local communities benefit from low and renewable energy projects operating in their area. As we will discuss later, the Secretary of State will outline Great British Energy’s strategic priorities to ensure that it remains aligned with Government policy on energy more generally. The first statement, which we will make as soon as possible after Royal Assent—before Christmas, as was said earlier—will focus on driving clean energy deployment, creating jobs, boosting our energy independence and, crucially, generating benefits for UK taxpayers.
We have been clear that that process—I will say more about this later—will include consultation with Ministers in the devolved Administrations. We are already working on community energy with the devolved Administrations in Wales and Scotland, in particular, which are doing great work on it.
Clause 3 sets out the parameters for Great British Energy to carry out the five key functions that we outlined in the plan for it, one of which is to deliver the Government’s local power plan. We are very clear that Great British Energy’s role in delivering the local power plan will be to support and champion local community groups. In my evidence on Tuesday, I built on the comments of a number of our witnesses and said that there are two strands to our proposal. GB Energy will provide some of the funding, but it will also have a critical role where communities can access funding but lack capacity. I am thinking in particular about rural communities and local authorities across the country that previously had in-house energy expertise but are no longer in a position to lead on some of these projects.
There are great municipal schemes across Europe, and we would like to see some of them in this country. That will require GB Energy to provide funding and, crucially, capacity building.
Torcuil Crichton
I am pleased to hear that the Minister has such enthusiasm for municipal and community schemes. There are examples in my constituency of communities that have come together. There are three community-owned estates on the west side of Lewis with a plan for nine turbines generating 43 MW. That could bring in £4 million into that community, but it needs need pump-priming and help to get it there. Similarly, onshore windfarm schemes have been proposed and are in planning, with the offer for municipal and arm’s length companies of local authorities to take shares of up to 20%, as the Minister said. That is the kind of thing that GB Energy could do if we just get through this Bill.
Michael Shanks
I take my hon. Friend’s point in the spirit in which it was intended and not as an attempt to rush me through the rest of these proceedings so we can get the Bill up and running, but we will move at pace. Every time he speaks, he is very good at reminding me that I need to visit those projects in Lewis with him at some point. He is absolutely right that it is important that we give communities, in whatever form—local government, local island communities, villages or towns —the ability to come together with the capacity to deliver on their energy potential.
I fundamentally believe that the Bill is at the heart of what the Government desire to do on the local power plan and community ownership more generally. We are absolutely committed to community energy, including through things such as what the Co-operative party has put forward. There is nothing in the Bill that prevents that from happening. For those reasons, I hope that the hon. Member for South Cambridgeshire will withdraw her amendment.
Pippa Heylings
It is wonderful to hear hon. Members say how supportive they are of community energy and give examples from their local areas. In Cambridgeshire, the expertise is still there—it is absolutely amazing. We have community energy projects, including wind energy, and a whole village has an off-grid heat network, which is a national case in point.
I ask the Minister once again to take into account the cross-party support for the amendment. It is not a bauble, nor is it about crossing t’s and dotting i’s; it is about public ownership models. At the moment there is real concern, because although we talk about the great things happening, in the latest meetings we have held with advocates of community energy, we have been told that it is in crisis. Although GB Energy is removing the barriers to large-scale clean energy projects, there are barriers to community energy, which is why we have so few new community energy projects, in contrast to the past. We need investment, but it is not just about the money and capacity. It is about the rights—the ownership model and the right not only to generate but to sell locally, with an equal cost to connect.
Torcuil Crichton
I take the hon. Member’s point about rights. Usually, land rights prevent communities from taking a stake in energy projects. Community-owned land, which we have plenty of in the Western Isles and across Scotland, is the key—land that the community has ownership of.
The other problem, which I am sure GB Energy should and will unlock, is access to the grid, to get community companies on to the grid; GB Energy and regulation from the Department should be crucial to achieving that.
Pippa Heylings
I thank the hon. Member for making that point about the cost for communities of connecting to the grid, which makes it completely unviable for them to do so. It is not about capacity; the communities know what they want to do and are ready to do it. Unfortunately, although there is a right to sell energy locally, the cost of connection makes it completely unviable.
Wera Hobhouse (Bath) (LD)
An additional problem is that small community energy projects cannot provide directly—cannot sell directly—to the consumer. That is one of the major problems. Therefore, the Government should really put their mind to it and accept our amendment, so that we can assure our communities that the Government are really serious about this issue. Does my hon. Friend agree?
Pippa Heylings
I very much agree. Indeed, I find it very hard not to agree with my hon. Friend, who tabled the amendment.
We are obviously waiting to see the local power plan. We hope that it contains detail not only about the benefits, as with the Scottish and Welsh examples, but about the ownership model empowering local communities to do this work.
Given the cross-party support for the amendment, I will not withdraw it.
Question put, That the amendment be made.
Pippa Heylings
I beg to move amendment 10, clause 3, page 2, line 18, at end insert—
“(e) an emergency home insulation programme with targeted support for people on low incomes, and
(f) the expansion and development of renewable energy and technology.”
This amendment would set objects for Great British Energy of facilitating, encouraging and participating in an emergency home insulation programme with targeted support for people on low incomes, and the expansion and development of renewable energy and technology.
As I understand it, the Bill’s scope has changed, enabling us also to consider the customers in all of this and the benefits to customers from the creation of Great British Energy. For that reason, the issue of home insulation should be considered.
The need for Great British Energy and the demand for the energy that is being created is also generated by the amount of energy that leaks from cold, draughty homes. We are approaching winter now. In my constituency of South Cambridgeshire and, I am sure, in constituencies across the country, including those represented by Members of this Committee, a large number of people, many of them vulnerable, are in cold, damp homes. Although those people may be able, through their local authority, to have some renewable energy features and insulation added to their home, a proper emergency home insulation programme—not just for this winter but for the long term—is not being considered.
As we know from the Climate Change Committee, the calculation of the demand for energy generation changes when we look at the amount of energy lost through heating homes. We would need to generate less energy if we managed our home insulation programme. I therefore think that it is within scope to show not only the price of people’s bills but the standards under which they are living in their homes, and the amount of energy being lost without a home insulation programme. I know that the Government have their warm homes plan, which we will see in the spring, but we should consider home insulation within energy efficiency, given the importance of GB Energy to the consumer.
Olivia Blake
This is a really valuable discussion, even if the amendment does not make it into the Bill. In the last Parliament, I served on the Energy Bill Committee. Conservative Members will remember the hours and hours of debate—it felt like days, months, years—about wider energy policy, and unfortunately there was nothing on reducing home energy use through insulation. I pay tribute to the wonderful Alan Whitehead, who kept us all entertained as the shadow Minister on that Committee. [Hon. Members: “Hear, hear!”] He was a very good man and gave a lot to this subject in particular.
Although I understand why the amendment has been tabled, this discussion is related more to wider energy policy than to the setting up of GB Energy. I understand why it has come up and it is good that we are discussing it, because it is a matter not just of energy efficiency but of human health. Sir Michael Marmot published a paper this year, reiterating the very human cost of poor-quality housing and the fact that so many homes in the UK have an energy performance certificate under level C. That is why I am pleased that in the run-up to the election we were championing the warm homes plan. I very much look forward to that, and I think it will cover the concerns of the hon. Member for South Cambridgeshire.
The Bill focuses not only on reducing emissions, but on reducing the use of energy within the objects. We have covered the issue with the words “energy efficiency” in clause 3(2)(c). I know that that sounds quite limited, but there is much more to energy efficiency than loss within our homes; it is also about loss of energy within the system, so it is right to have a broader framing of energy efficiency within the Bill.
Andrew Bowie
I will not detain the Committee long, but I want to express the Conservatives’ support for the Liberal Democrat amendment, primarily because of our concern about the impact of the removal of the winter fuel allowance from so many pensioners this winter, and the fact that the warm homes plan, as welcome as it is, will not be up and running until next spring, which leaves considerable concern over what might happen in and around this winter.
Those pensioners should be at the forefront of our mind as we look towards winter and as we are discussing an increase in the number of well-insulated homes in this country—on which, by the way, we had quite a good record when we were in government; we increased markedly the number of homes at EPC level C or above. For those reasons, we will support the amendment if it is pressed to a vote.
Torcuil Crichton
It is difficult to argue against home insulation, but I do not know whether we need legislation or an amendment to the Bill to achieve it, particularly when it is happening already in community-owned power companies such as Point and Sandwick Trust in my constituency. The company raises £1 million a year for its community, and distributed in the last 18 months £250,000 to people living in fuel poverty, to help with home insulation and heating costs. That is the template, the model and the example that GB Energy could help and sustain without need for the amendment.
Andrew Pakes
I share huge empathy with the sentiments behind the amendment, but I believe that the answer to home insulation sits not in the Great British Energy Bill, but in the wider clean power and clean energy mission. I find it quite rich for Opposition Members, who used to be in government, to talk about supporting an emergency home insulation programme when they decimated the apprenticeship programme that delivered the workforce that could actually insulate our homes.
Andrew Bowie
The record of the last Government was that we increased the number of homes that were insulated in this country to EPC C or above from 14% to more than 50% over our time in government. That is a record of which we can be proud. Can we do more? Absolutely—that is one of the reasons why we are actually backing the Liberal Democrat amendment—but I think that to castigate our record as somehow disgraceful, or to say that we did not deliver for the British people, is wrong. I ask the hon. Gentleman to withdraw or rethink his remarks.
Andrew Pakes
I thank the hon. Gentleman for being kind to me in the first intervention that I have ever taken in this House, but I will stick to my point: that we could achieve so much more in this country. We would be having a fundamentally different conversation about insulation efficiency and renewable energy if we had not gone through the last 14 years, in which budgets were cut. There are young people in my constituency of Peterborough who could have contributed, by moving from blue-collar to green-collar jobs, if we had had a further education system that was functioning and could train them—if we had a home insulation system that had a workforce that could get out and deliver.
Whatever we say in any resolution, motion or primary legislation in this place will not be enacted unless we have a people plan that delivers for it. That is why delivering on this issue should come in a different piece of legislation, even though I have huge empathy with the sentiments expressed by the hon. Member for South Cambridgeshire.
Perran Moon (Camborne and Redruth) (Lab)
Although I entirely agree with the importance of the warm homes plan, I am getting really concerned that we are losing focus. We are looking to create a Bill that allows the scope and flexibility to ensure—I am glad the Minister mentioned this earlier—that the UK taxpayer gets the best bang for their buck. As the expert witnesses consistently testified, one of the key benefits of the Bill is that it is not overly or unnecessarily prescriptive and allows the scope to develop the strategic priorities, referred to in clause 5, that focus on ensuring that we get this right. I look forward to speaking to the Minister in due course about those priorities. GB Energy will work alongside and in partnership with the private sector, but we must avoid trying to be too prescriptive in a specific Bill focused on this area.
Wera Hobhouse
The hon. Gentleman is a new Member of Parliament; I have been here a little longer. Those of us who have been here longer always want to ensure that something is in statute—in law—because we parliamentarians are always a little wary of leaving it to a further document that may or may not come. We would like to see some assurances in law to ensure that whatever has been promised will actually happen. Does the hon. Gentleman share my concern?
Perran Moon
I am absolutely delighted that the Government are already talking about the warm homes plan. We have a plan, and it is coming through; we have talked about it coming through in spring. Today we are talking about the Great British Energy Bill, and it is really important that we retain the focus on ensuring that the Bill has flexibility, so that we can see the strategic priorities delivering on GB Energy specifically.
Michael Shanks
The hon. Member for South Cambridgeshire has rightly and passionately outlined the scandal of people living in cold homes and poorly insulated homes. She is right that it is an absolute scandal.
Stephen Flynn
The Minister is being generous with his time, as always. It is a scandal that people are in cold homes. Why is he supportive of the Government taking away the winter fuel allowance?
Michael Shanks
The right hon. Gentleman is combining two different things there.
Michael Shanks
It is not within the scope of the Bill, but I am happy to answer the question. Whether or not there is a winter fuel payment, people are still living in homes that are poorly insulated, including in Scotland where the right hon. Gentleman’s colleagues have cut consistently, year after year, the budget that delivered insulation programmes in Scotland.
Michael Shanks
They cut more than £100 million last year to plug gaps in their own budget. If we are looking at energy efficiency, the right hon. Gentleman could look closer to home at what his own Government in Scotland are doing.
To return to the Bill, I want to address both paragraphs in the Liberal Democrats’ amendment 10. First, the new object proposed in paragraph (e) would mean that Great British Energy’s objects included facilitating and participating in emergency home insulation programmes. Several of my hon. Friends have pointed out that although those programmes are incredibly important—I will come in a moment on to what the UK Government are already doing on the issue—it is important to detach the Bill from every other part of our energy policy. Although I totally understand the perspective that says, “These issues are important. Let’s put them on the face of a Bill to say so,” it is really important to say that the Bill itself does matter. This is about setting up and delivering the Great British Energy company. It is not the answer to every single part of the energy system. There are places where we are already moving forward on home insulation programmes, such as the warm homes fund, and it would be more appropriate to talk about those matters in that connection.
That is not to downplay the importance of the issue. As a Government, we are committed to taking bold action. Within the first 100 days, my colleague the Minister for Energy Consumers, my hon. Friend the Member for Peckham (Miatta Fahnbulleh), has outlined the work that we will do on this. The warm homes plan that we have announced is the most ambitious such plan ever. It will be implemented from the spring, delivering cleaner, cheaper energy in the process and ensuring that people, particularly in those low-income households where fuel costs already account for a disproportionate amount of income, can spend less money on them because their home is insulated and warm. That is a right that everyone should have.
Harriet Cross (Gordon and Buchan) (Con)
Does the Minister appreciate that although in the run-up to the election it was assumed, or said, quite often that GB Energy would save households £300, that figure seems now to have been dropped? Is this not a mechanism to ensure that low-income households see some benefit from the Bill? They will not necessarily take the Government’s word for it that it may come later, when we have already seen announcements such as the figure of £300 being dropped.
Michael Shanks
We have not dropped any announcement on reducing bills, but GB Energy was not going to be the single thing that would deliver that; it was the Government’s whole energy strategy. It is important to say that. I said in my evidence to the Committee on Tuesday that GB Energy is an important part of delivering that, but it is not a silver bullet. It will not be the thing that deals with every single aspect of our energy policy. It is also about what we are doing, for example, around increasing the renewables auction to get more cheaper energy on to the grid. It is about what we are doing around planning, consenting and connections. All that work is related to bringing down bills in the long term.
The Conservative party—the party that was in government when all our constituents suffered some of the highest price spikes that we have ever experienced—has to recognise, as it did for many years until it moved away from this policy, that the only way to reduce our dependence on the volatile markets that have led to increases in bills is to move towards greener, cheaper energy in the long term. That is what GB Energy is about delivering, that is what will bring down bills in the long term, and that is what we continue to deliver through this Bill.
I turn to paragraph (f) of amendment 10, which I am afraid we cannot support today, partly because it says what is already in the Bill on expanding renewable energy and technology. The Bill itself facilitates exactly those points and defines clean energy as
“energy produced from sources other than fossil fuels.”
That existing object already enables Great British Energy to drive the deployment of clean energy, helping to boost our energy independence, create jobs and ensure that communities reap the benefit of home-grown energy. Therefore, as a whole, amendment 10 is unnecessary, as the Bill already enables all of those points in clause 3.
The words of the hon. Member for South Cambridgeshire are heartfelt and have been genuinely heard; I hope she gets that sense from all my hon. Friends and me. Such initiatives are an important part, not of GB Energy in itself, but of the whole Government’s mission to make communities in their households much safer from the lack of insulation and cold homes from which they are suffering at the moment. For those reasons, we will not support the amendment, and I hope that the hon. Lady will not press it.
Pippa Heylings
I thank all hon. Members for their serious consideration of the amendment. The hon. Member for Sheffield Hallam said that it was important to consider the role that energy efficiency plays within overall demand. I agree that it is part of the wider policy, but I think it is also critical in the context of GB Energy, because there is room for interpretation of clause 3(2)(c), which is about energy efficiency, as in energy efficiency in the process of generating energy.
Michael Shanks
In summary, clause 3 is about restricting Great British Energy’s activities to those specifically listed in the Bill, around “facilitating, encouraging and participating” in clean energy projects, reducing greenhouse gas emissions, improving energy efficiency, and ensuring energy security in the long term. Clause 3 thus provides the framework for Great British Energy to carry out the five functions outlined in its founding statement.
I turn to the objects set out in clause 3. Clause 3(2)(a) will enable Great British Energy to facilitate, encourage and participate in clean energy projects. Clean energy is defined in the Bill as
“energy produced from sources other than fossil fuels”.
The object will enable Great British Energy to drive the deployment of clean energy, helping to boost our energy independence.
Clause 3(2)(b) will enable Great British Energy to facilitate, encourage or participate in projects that would contribute to the reduction of greenhouse gases from energy produced from fossil fuels. Building on some of the evidence we heard on Tuesday, I want to be very clear that that includes, for example, projects relating to carbon capture and storage, or blue hydrogen.
Clause 3(2)(c) will enable Great British Energy to deliver measures to improve energy efficiency. That could include, for example, supporting demand reduction through the local power plant.
Clause 3(2)(d) will enable Great British Energy to respond to any future energy crisis, and deliver measures to support the long-term security of supply. Great British Energy is part of a bold, long-term strategy to harness our nation’s clean energy potential, and ensure that we reduce our exposure to the volatile fossil fuel markets.
Through those objects, clause 3 provides the framework from which Great British Energy can carry out its five functions. Although the five functions are set out in the founding statement rather than in the Bill, it would be helpful to refer to them in the context of clause 3. First, Great British Energy will invest in and own energy projects. Secondly, Great British Energy will lead projects through their early development stages, to speed up delivery while capturing value for the British people. Thirdly, Great British Energy will deliver our local power plan, working with local authorities, combined authorities and communities to deliver the biggest expansion of community owned energy in British history. Fourthly, Great British Energy will work with industry to develop supply chains across the UK to boost energy independence, but also, crucially, to create good, well-paid, trade unionised jobs.
Andrew Bowie
On the point about supply chains, the sustainable industry rewards were being designed to come with the next auction round next year. How will GB Energy work alongside the existing frameworks to deliver those sustainable industry rewards, to ensure that we build up the domestic supply chain that everybody across the parties wants?
Michael Shanks
That is an important point. We will announce more about allocation round 7 in due course, and how our industrial work and British jobs will work together to create those supply chains. It is an important point about the broad nature of what we want to do: to give confidence to industry that a pipeline of projects will be coming long into the future—beyond 2030, actually, although that is our initial key target—so that it is worth investing in and building the factories and supply chains in the UK. Great British Energy will be part of that, but it will certainly not be the entirety of it. We are working with the national wealth fund and the UK Infrastructure Bank to deliver more of those projects in the UK.
The final function, which the shadow Minister will appreciate, is that Great British Energy will help advance the work of Great British Nuclear. We will say more in due course about exactly how those two organisations work together. Those five functions enable Great British Energy to deliver on its clear mission of driving forward clean energy deployment, boosting our energy independence, creating good jobs and ensuring that UK taxpayers, bill payers and communities reap the benefits of clean and secure home-grown energy.
Wera Hobhouse
Will the Minister confirm that he said that we might cross-reference the five functions in the Bill? In that way, people will be clear, for example, that community energy is cross-referenced in the Bill as one of the five functions. Did he say that earlier?
Michael Shanks
No, I did not say that. What I was saying was that the context of the objects in the Bill is given by the functions that we set out in the founding statement. It is clear that those founding principles of Great British Energy, which the Secretary of State announced in that founding statement along with the start-up chair, Juergen Maier, will be largely what drives the initial statement of priorities for the company.
The objects themselves are around creating restrictions on what Great British Energy can do. We have left them deliberately broad so that the company is able to move in and out of different spaces. I am not sure whether the hon. Lady was here earlier, but we said clearly that there is nothing in the Bill that precludes community energy at all. I have repeated a number of times our absolute commitment to that and to the local power plan.
We will turn to clause 5 in due course, but it is relevant to the point we are discussing. Great British Energy will, of course, be operationally independent—a model adopted by a number of different companies; it is important for it to have its own board of experts in their fields. However, the Secretary of State will be able to set the company’s strategic priorities, which we will debate later. That is to ensure that although Great British Energy is operationally independent, it is setting out the functions in its founding statement while remaining agile to the Government priorities of the day. Importantly, it is a vehicle for delivering the central points of Government policy, including community energy, energy efficiency and many of the other things we have talked about. I commend the clause to the Committee.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
Financial assistance
Question proposed, That the clause stand part of the Bill.
Michael Shanks
Great British Energy will be operationally independent, with the Secretary of State as the sole shareholder. To operate, Great British Energy clearly needs funding, and clause 4 will give the Secretary of State the power to provide financial assistance to Great British Energy. That is so that GB Energy can take action in line with its statutory objects set out in clause 3, including financing its investments, joint ventures and day-to-day running costs.
To be clear, our intention is that Great British Energy will become financially self-sufficient in the long term. Great British Energy will invest in projects and expect a return on investments, generating revenue and delivering profits that benefit the public. It will also create tens of thousands of good jobs. However, it is prudent to ensure that the Secretary of State has the power to provide further financial support if required. Just as private sector companies would rely on the financial strength of their corporate groups to raise funds, there could be a case for providing Great British Energy with further financial support for specific projects in the future. The clause will enable that.
I assure the Committee that any further financial assistance to Great British Energy provided by the Secretary of State will of course be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s “Managing Public Money”.
Finally, in the highly unlikely situation of Great British Energy facing financial difficulty, the powers set out in clause 4 would allow the Secretary of State to step in to help prevent any disruption to Great British Energy’s intended interventions. I commend the clause to the Committee.
Andrew Bowie
I am comforted that the Minister thinks it very unlikely that GB Energy will get into any financial difficulty. But let us look at state-owned energy companies around the world. Just last year, for example, EDF—a fantastic company investing a lot into the United Kingdom—had to be bailed out to the tune of about €20 billion. Although I am comforted by his assurance, I think we would like to see a little more evidence for that assertion before moving forward.
The Minister says that any financial assistance will be governed by the usual processes of being accountable to Parliament, and that the Secretary of State would be, should that be the case, but clause 4(3) states:
“Financial assistance under this section may be provided subject to any conditions the Secretary of State considers appropriate.”
Should it not be conditions that Parliament considers appropriate? Will the Minister expand more on what those conditions might be?
Michael Shanks
I am always willing to give the hon. Gentleman comfort, in this and many other things. On both those points, the Bill quite rightly says that it is subject to any particular requirements of the Secretary of State. That is about saying that, instead of giving money to a company without any requirements, requirements will of course be put on what that funding is for—a fairly standard thing that I think we would expect.
On the broader point about parliamentary scrutiny, there are of course a number of mechanisms through which Parliament can bring scrutiny to these decisions. As I have already said, it will be outlined that any additional funding that should be given to GB Energy in the future will be in the course of the normal processes of any financial transactions that the Government undertake.
I think this is important, though: the hon. Gentleman has used the EDF example on a number of occasions, but he does not often reference the other side of the equation —hugely successful state-owned companies around the world. The truth, in all this Bill, is that for the first time in more than 70 years we are delivering a publicly owned energy company in this country, in the same vision as many of the publicly owned energy companies that are hugely successful around the world and delivering huge returns to their taxpayers every single year.
We are starting off GB Energy on a much smaller scale —of course we are—but, in time, we see it as a vehicle for delivering some of the huge successes that those companies have, and delivering a huge return to the public. We believe that public ownership of infrastructure is a good thing, and we hope that we can convince hon. Members across the House that this is the right thing to take forward.
Question put, That the clause stand part of the Bill.
Andrew Bowie
I beg to move amendment 11, in clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include the reduction of household energy bills by £300 in real terms by 1 January 2030.”
The Chair
With this it will be convenient to discuss the following:
Amendment 12, in clause 6, page 3, line 38, at end insert—
“(1A)
(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of reducing household energy bills by £300 in real terms by 1 January 2030.
(b) A report under paragraph (a) must include a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years.
(c) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(d) The Secretary of State must lay a report made under paragraph (a) before Parliament.”
Amendment 24, in clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include a priority to reduce household energy bills by at least £300 in real terms.”
Andrew Bowie
It is a pleasure to serve under your chairship, Dr Huq, and a privilege to be back in another Committee Room debating a Bill on energy—we did not do enough of that last year.
Amendment 11 would provide a specific strategic priority for Great British Energy to reduce the average household energy bill by £300 in real terms by 1 January 2030. Amendment 12 would require an annual report to be laid before Parliament on how GB Energy activities are affecting household energy bills. The often repeated claim that the purpose of GB Energy was to save each bill payer £300 on their energy bill seems to be conspicuously absent from the legislation before us, which states that the objects of GB Energy are only to facilitate, encourage and participate in the production of energy, the reduction of greenhouse gas emissions, improvements in energy efficiency and measures for ensuring security of supply.
This morning, we checked the Labour party’s website. It still says:
“Great British Energy is part of Labour’s Green Prosperity Plan”,
which will
“cut bills by £300 on average and deliver real energy security.”
On 19 June, the Chancellor of the Exchequer said on Twitter:
“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300.”
On 24 May, the now Prime Minister said on ITV’s “Good Morning Britain”:
“Well, we want to, as you rightly say, set up Great British Energy. That is a publicly funded, publicly owned company, which is owned by the taxpayer, making money for the taxpayer”,
and that it would reduce household bills by—he claims —£400. It is a little surprising that this has not made it into the legislation setting up Great British Energy, given that it was a prime reason for the delivery of this company in the first place.
Josh MacAlister
Can the hon. Member cite any legislation from the past 14 years that included a specific financial saving, to illustrate his point that it would be appropriate to put that in a piece of legislation? Does he not accept that his quote from the Labour party’s website includes the words “part of”—the point that the Government have made all along?
Andrew Bowie
The fact is that the Labour party has brought forward this legislation and is creating this company—a company that the Prime Minister, the Chancellor of the Exchequer and Labour candidates, now MPs across the country, claimed time and again through the election would cut bills by £300. It was one of the reasons why Labour is creating the company in the first place, so it is surprising that it did not want to put the £300 as a specific object in the Bill, given that it was so proud of the fact that this would deliver the savings it said it would.
Torcuil Crichton
I, too, have been checking online—with Full Fact, which discloses that the £300 figure that the shadow Minister raises is not based on Labour’s plans; it comes from a report from an energy think-tank Ember, and it is an estimate of what people would save. There was no Government commitment—there never was a Government commitment—to such a figure.
Andrew Bowie
That might be in Full Fact, but if the hon. Member goes to Channel 4’s “FactCheck”, he will see that it says:
“During the election campaign Labour suggested bills would be brought down around £300 a year”
through its “net zero energy plans”, including the creation of GB Energy. The Prime Minister said:
“Yes, I do. I stand by everything in our manifesto and one of the things I made clear in the election campaign is I wouldn’t make a single promise or commitment that I didn’t think we could deliver in government.”
So the question is this: will energy bills be cut by £300 by 2030 and, if so, why is that not in the legislation before us?
Andrew Pakes
The hon. Member sets great stock in saying what this Government might do. To give us context, can he tell us what his Government did? Did bills go up or down in his tenure as a Minister?
Andrew Bowie
While we were in government, we paid half of every single person’s energy bill in this country to get us through the energy crisis, which was created as a result—
Andrew Bowie
It was created as a result of the invasion of Ukraine by Vladimir Putin, as everybody in this room knows. I know that out there in the country, constituents would like clarification that that remains an express aim of GB Energy, especially the cutting of £300 from their energy bills and particularly for the pensioners out there who are having that exact amount removed from them by this Government, as one of their first acts having got into power.
The Secretary of State has reiterated that clean energy will deliver cheaper energy; it has been repeated in the House, on the campaign trail, in videos and in leaflets. I believe it is important to enshrine accountability to that ambition in this Bill, which will create the institution of Great British Energy. We must introduce a mechanism by which the Secretary of State and GB Energy are accountable to households.
Olivia Blake
Surely the shadow Minister agrees that Great British Energy will reduce the costs of energy, because the types of energy projects in which it will be investing will be of lower-cost energy production and we will be less reliant on foreign fuel markets, which have been very volatile for a range of reasons. I accept what he says about what he did as Minister in the last Parliament, but this Government, in our first piece of legislation, are acting to create a vehicle that will enable us to get much further.
We have had a very successful auction, compared with the absolute farce of an auction at the back end of the last Parliament, for clean energy projects that are cheaper and will hopefully deliver on a scale never seen before in this country. I am proud to stand here and say that I think the amendment is not necessary. It is playing quite cute with the rhetoric around this question; it should be withdrawn, because it is playing politics rather than tackling the substance of what the Bill is intended for, which is very serious, as we face a climate and nature emergency.
Andrew Bowie
I do not disagree entirely with the hon. Lady. I think we should be aiming to reduce the cost to taxpayers, and that investing in new cleaner technologies, including nuclear, will see energy bills fall in the long run—so why not have that as one of the objects of the company in the Bill? The Bill states that the objects of Great British Energy will be
“the production, distribution, storage and supply of clean energy…the reduction of greenhouse gas emissions from energy produced from 15 fossil fuels…improvements in energy efficiency, and…measures for ensuring the security of the supply of energy.”
There is not one mention of reducing consumers’ bills. Surely we want to enshrine that in the legislation, if that is indeed one of the aims of the creation of this company.
My amendment 12 would include the necessity to present
“a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years.”
Transparency and accountability should be key to the operation of GB Energy, particularly when the investments and activities that the organisation undertakes have a potential impact on household bills for every family in this country. Thank you for allowing me to speak to the amendment, Dr Huq; I do so to ensure that the Bill makes provision for GB Energy to be held accountable on its aim to reduce energy bills for households.
It is in the best interests of GB Energy and of the British public that the company have a clear directive to ensure, through investment in clean energy technology, that the cost of household energy is reduced. Labour MPs made clear the intention of GB Energy to reduce bills—indeed, they campaigned extensively on the £300 reduction—so I hope that they will support amendment 12, which would support them in achieving that goal, along with including provisions on accountability and transparency to the public on the overall impact of GB Energy’s investments on consumer bills.
Stephen Flynn
I rise to support amendment 24, which is broadly similar to the shadow Minister’s amendment 11. I am intrigued by the discussion that we have had, various aspects of which appeared to disagree with evidence we have heard.
First, the hon. Member for Sheffield Hallam, if I picked her up correctly, made great play of the fact that GB Energy will reduce costs. Yet just a couple of days ago, each and every one of us was in the room with the chair of GB Energy, who was very clear that reducing bills
“is not the scope of Great British Energy”.––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q5.]
We can all watch the footage online, and we can all read Hansard.
Secondly, the hon. Member for Na h-Eileanan an Iar made the argument that the £300 promise was not actually a promise. Which is it? Will it or will it not reduce costs?
Olivia Blake
I think the right hon. Member is purposely misunderstanding my comments. It is obvious: is the cost of cheap, green energy lower or higher than the costs that we have seen in the oil, gas and coal markets? It is as simple as that. Is it cheaper? Yes, it is. Doing things like Great British Energy will help produce more cheaper, cleaner, greener energy.
Stephen Flynn
The hon. Lady misunderstands my point. I do not disagree with that; in fact, I would like to see the Government go further and separate the price of electricity from the price of gas as they promised. That is one of the reasons why the Tories allowed people’s energy costs to soar, irrespective of their narrative about extenuating circumstances far outwith all our control. The point that the hon. Member for Sheffield Hallam made, quite clearly, was that GB Energy would reduce costs. Juergen Maier, the chair, said that that was not the scope of GB Energy. Which is it? The two things cannot be true at exactly the same time. We cannot say that something is going to happen and then say that GB Energy is not going to do it.
The crux of all this is that the public have expectations that GB Energy will reduce their energy bills by £300. Government Members can argue that that was not the promise; if that was not the promise, they were very quiet about it when they let the public believe that during the election campaign. If the public believe that, the Government need to deliver on the commitment that they made, and they should learn a lesson. The Conservatives made promise after promise after promise, and they failed to deliver when it came to energy. [Interruption.] Does the Minister wish to intervene?
Michael Shanks
I am very happy to. The right hon. Member talks about promises in an election campaign. He may distance himself from some of the promises that his Holyrood colleagues make—at least at the moment, until he makes his move—but it is important to say that, time and again, his own party made promises in its 17 years in power. We have committed to lowering bills, and as I will outline in a minute, we will continue to commit to that. GB Energy is the vehicle for doing that. I am delighted that he has pledged support for it today. That, along with all the Government’s policies, is how we will reduce bills in the long term.
Perhaps the right hon. Member should take a bit of a lesson from us about promises in election campaigns and how to win them, which is not to promise to set up a publicly owned energy company in Scotland and still not have done so 15 years after it was announced. We are doing it now within 100 days.
Stephen Flynn
I admire the Minister’s attempt to compare GB Energy, as supposedly a producer and generator of energy, with an organisation that could have sold electricity—
Stephen Flynn
Of course it did not do anything, because the capital was not there to do that. If it had existed under the price shock that the Tories brought in for all of us, it would not have been able to function, in the same way that so many others in the private sector were not able to function. The Minister is trying to equate two things that are not comparable. When he rises to his feet, as he seems very keen to, perhaps he will confirm, first, when bills will fall by £300, and secondly—as he failed to do the other day—when they will come down at all.
Before the Minister interrupted so pleasantly, I was pointing out to Government Members that the Conservatives made promises on energy that they failed to deliver. The public have high expectations—so get on and deliver.
Michael Shanks
We will not support the amendments tabled by the shadow Minister or that of the right hon. Member for Aberdeen South, but it is important to say why. As several of my hon. Friends have made clear, putting specific figures into a Bill is not what any Parliament does, but it is important to set out the objects, purpose and vision of GB Energy, as it will play a crucial role in bringing down bills in the long term and preventing the price spikes that we and our constituents still face.
Andrew Bowie
The Minister is being generous with his time, and I appreciate that; he is a generous individual. If he will not commit to a £300 cut, why will he not stipulate that one of the objects of GB Energy is to reduce consumer bills? That is one of the arguments that Labour used in favour of its creation throughout the election, and indeed afterwards. Why will he not consider at least putting on the face of the Bill a commitment to reduce consumer bills?
Michael Shanks
For the reasons I have already outlined, that is implicit in the policy; it is why we are doing it. I think the shadow Minister agreed in response to one of my hon. Friends that this is a useful approach to reducing bills, and the push towards green energy is important.
Michael Shanks
The shadow Minister nods in support. I look forward to his support for the Bill as a vehicle for delivering it.
Michael Shanks
He stops short of that.
The shadow Minister spoke earlier about the rising bills caused by Putin’s invasion of Ukraine, as if somehow the UK had no vulnerabilities that particularly exposed us to that invasion. Of course it was an external factor, but it led to huge price spikes in this country, and we are still exposed to volatile fossil fuel markets. We are determined to push towards energy security through cleaner green energy. That is moving at pace—our recent renewables auction was the biggest we have ever had, with 131 projects—and Great British Energy will drive that forward.
Harriet Cross
We have already discussed the financial assistance in the Bill. It is therefore anticipated that there may be financial strain. Given that the objects in the Bill do not include reducing bills, what guarantee is there that reducing bills will be a priority if and when finances become tight?
Michael Shanks
On the financial point, the Bill is an enabling mechanism, like a number of other pieces of legislation, including the UK Infrastructure Bank Act 2023, which the hon. Lady’s party introduced in government to allow the Secretary of State to give additional funding to companies. We said throughout the election that we would reduce energy bills, and we stand by that, but we cannot flick a switch. The idea that some Members have put forward that somehow, after 14 years of chaos from the Conservative party, a Government can come in and, within 100 days, turn everything around overnight is simply and deliberately disingenuous. Conservative Members take no responsibility for the actions of the previous Government.
We are putting in place as quickly as possible the basis for delivering energy security in the long term and removing volatility from our energy market, so that we can deliver cheaper bills for everyone in the long term. We made no pledge during the election that we would do it in 100 days, a year or two years, because we know fine well that that commitment will take time. But it is the right journey for us to be on, and it is right that we have started by building the energy resilience we need in the system.
Stephen Flynn
I do not think that my Commons colleagues and I would suggest that the Government should have reduced energy bills within 100 days, but, my goodness, they have just gone up by 10%. The Minister says that it will not happen within a year or two years, so I would be keen, as would the public, to know broadly when he expects energy bills to come down. I do not say that from an angry position; I want the public to have a bit of clarity about his objectives.
Michael Shanks
It is an important point, and I take it in the spirit in which the right hon. Gentleman says he intends it, but nobody is in a position to say what will happen to bills on a particular date. They will start to come down as our exposure to more expensive forms of energy is reduced, but the price cap has already increased because we continue to be exposed to those international markets, and there are actions taken by the previous Government that will continue as we move into the winter. We are doing everything we can to turn that around as quickly as possible.
The right hon. Gentleman knows as well as anyone that at the next election we will absolutely be judged on this and on a whole series of commitments that we have made, as any party is judged on its commitments in elections. We stand by that. We are doing everything we possibly can to deliver the change that is necessary. It will bring down bills in the long term. It will be difficult— I am not suggesting that it will not—but it is a commitment that we have made and it is one that we will work towards.
Harriet Cross
Just for clarity, will the other changes that Labour is bringing in, such as ending North sea licences, increasing and extending the windfall tax and ending investment allowances, make us more or less secure in the meantime, before GB Energy is set up? Will they expose us more or less to the international market?
Michael Shanks
We are moving slightly off the Bill, but that is an important point; we have spoken about it before, and I am very happy to keep speaking about it. The difference is that, whether gas comes from the North sea or from international markets, it is traded on an international market. We pay the price whether it comes from the North sea or not. That is why the price spikes have been so important.
Michael Shanks
I fully suspect that in my time as Energy Minister, I will come back to the hon. Lady’s question. It is an important one, and I am very happy to discuss it.
Turning back to the amendments, we have been very clear that the creation of Great British Energy is about helping us to harness clean energy and reduce our reliance on volatile fossil fuels. But it is important—with the patience of the Chair—to outline the other things that we are doing, more broadly than Great British Energy and the Bill. It is important that Labour’s reforms dovetail with what Great British Energy is doing, particularly the review of market arrangements started by the previous Government. We will conclude that work.
We will continue to deliver the warm home discount, which provides a £150 annual rebate off energy bills for eligible low-income households. We are also looking at the burden placed on bills by standing charges, which still make up too much of so many people’s bills; the Minister for Energy Consumers, my hon. Friend the Member for Peckham, is looking at that now. We are working with Ofgem to look at how we can reduce that.
There is a series of measures that are all important and that all work towards the same goal. GB Energy is one of those, and it is important that we implement it as quickly as possible so that we can move forward with increasing our capacity for cheaper energy and reduce bills in the long term. For that reason, the amendments are not necessary.
Andrew Bowie
The Minister has our full support on the broad approach that he is taking on market frameworks, standing charges and working with Ofgem, given that we started that work when we were in government. However, a commitment to work towards reducing consumer bills, and specifically the £300 reduction that the Labour party promised during the election would result from the creation of Great British Energy, should be in the Bill. That is why our amendment is essential. I will press it to a vote.
Question put, That the amendment be made.
Great British Energy Bill (Fourth sitting)
Thursday 10th October 2024
(4 months, 1 week ago)
Public Bill CommitteesGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 10 October 2024 - (10 Oct 2024)
The Committee divided: - Ayes: 3 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 10 - Question accordingly negatived.
The Chair
Good afternoon, ladies and gentlemen. I assume that by now everyone is an expert in Standing Committees and knows how procedure works, but for the record, although I am sure this has been explained already, amendments are grouped in debating order, not sequential order, so you may find that something will be voted on much later than it is debated, because it appears in the Bill later. If you are worried, ask; otherwise, assume that we shall vote on the right things in the right place at the right time. Although I do not know what I am doing, the Clerks most certainly do. If in any doubt about that or anything in the way of procedure— I notice that one or two new Members are in Committee —please do not hesitate to ask. I shall not know the answers, but the Clerks will.
Because it is so warm, anyone who wants to take their coat off is welcome to do so. [Interruption.] I am tempted to say, “Run around to keep warm,” but unfortunately here you cannot.
Clause 5
Strategic priorities and plans
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
That I beg to move amendment 13, in clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include ensuring that wholesale electricity prices must be lower in real terms on 1 July 2030 than the day on which this Act is passed.”
The Chair
With this it will be convenient to discuss the following:
Amendment 14, in clause 6, page 3, line 38, at end insert—
“(1A)
(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of reducing wholesale electricity prices in the United Kingdom.
(b) A report under paragraph (a) must include a projection of—
(i) how Great British Energy’s activities are likely to affect wholesale electricity prices in the United Kingdom, and
(ii) the likely effect of the projected wholesale electricity prices on consumer electricity bills over the following five years.
(c) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(d) The Secretary of State must lay a report made under paragraph (a) before Parliament.”
Amendment 19, in clause 6, page 3, line 38, at end insert—
“(1A)
(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State within three months of each investment it makes on the impact that the relevant investment is projected to have on wholesale electricity prices over the following ten years.
(b) The Secretary of State must lay a report made under paragraph (a) before Parliament.”
Andrew Bowie
It is a pleasure to serve under your chairmanship, Sir Roger. The amendment would bring to the Bill a concrete objective for Great British Energy to reduce the wholesale price of electricity. I am pleased to move this amendment, which will introduce a specific strategic priority to reduce wholesale electricity prices and to require that an annual report is produced on how Great British Energy’s activities are affecting wholesale energy prices and therefore consumer electricity bills.
Further to the discussion earlier about the impact of Great British Energy on bills, notable by its absence, sadly, is a purpose for GB Energy to reduce wholesale electricity prices. As we noted earlier, the Bill states that the objects of GB Energy are only to facilitate, encourage and participate in the production of energy, the reduction of greenhouse gas emissions, improvements to energy efficiency, and measures for ensuring the security of supply. It would be remiss of the Government not to include the ambition to reduce the wholesale price of electricity as a strategic priority of the company.
Why is reducing wholesale electricity prices important? Wholesale costs account for about 60% of a customer’s energy bill and are a major consideration in suppliers’ retail pricing decisions. In the two years since Vladimir Putin’s invasion of Ukraine, we have seen the sizeable impact of the international energy crisis on bill payers in the United Kingdom. Tensions rising in the middle east could very much affect our domestic energy costs, so it is more significant than ever that we take into account the impact that Great British Energy could have on wholesale electricity prices to reduce consumer bills as much as possible.
It should be incumbent on Great British Energy, through its investments and its part and full ownership of projects, to drive down wholesale electricity prices to the benefit of UK bill payers and businesses. In winter 2022-23, the Conservative and Unionist Government paid half the country’s energy bills to protect households from the worst of the energy shocks triggered by that war in Ukraine. Energy bills, alongside the pressures of inflation, have been a consistent worry for all our constituents. We also have the highest energy costs for industry in Europe.
The Government have outlined that their plans to tackle future energy security, to reduce bills and to lower wholesale prices for electricity hinge on the creation of GB Energy. Therefore, it would be prudent to write into the Bill the strategic priority to reduce wholesale electricity prices. On Tuesday, we heard from the chair of GB Energy that
“Every megawatt and gigawatt of renewable energy that we put on the grid will help to bring bills and prices down.”––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q5.]
I agree. Therefore, it has been intimated that that is indeed a strategic priority for GB Energy, and the Bill ought to reflect that.
This group of amendments also introduces the requirement for the Secretary of State to give a specific direction to Great British Energy that it must report on its progress.
Wera Hobhouse (Bath) (LD)
I have an honest question. Since energy is sold in a daily, 10-minute or whatever market, and that market operates, how can the Government ensure that the market behaves in the way they want it to behave? Is that question useful? I want to understand what the hon. Gentleman’s amendment will actually do to guarantee the price, since British energy operates in a market.
Andrew Bowie
That is an important question. I think we all agree that the reason the United Kingdom was so exposed to the energy price shocks that the entire western world has experienced over the past two years was our overreliance on the highly volatile fossil fuel market. Building new technologies to drive us towards a cleaner future and lower bills is therefore important. Our exposure to the market to which the hon. Lady refers had an adverse impact here in the United Kingdom. Just as stating in the Bill that a reduction in bills is important, the reduction of wholesale electricity prices should also be a stated object in the Bill. If GB Energy is to do anything, alongside all its other strategic objects, surely it must be working towards a reduction in electricity prices. We would therefore like to see that on the face of the Bill.
Wera Hobhouse
The hon. Gentleman is being generous in giving way. Would that not be a clear state intervention in the market?
Andrew Bowie
I do not think so, but the creation of the company is a state intervention in the market. That is one reason we on the Conservative Benches disagree with the Bill. We think that we can drive up investment in renewables and new technologies in this country by allowing companies the freedom to invest and by creating the best environment for private investment in this country. That is what we did when we were in government. That is why we have the first to the fifth-largest offshore wind farms in the world, and that is why we cut emissions faster than any other country in the G7, at the same time as growing the economy. That is a record that I am very proud of, and I worry that this state intervention in the market will have a negative effect.
We are debating the creation of GB Energy and this Bill. As part of that, a reduction in electricity prices should be one of the strategic aims.
Perran Moon (Camborne and Redruth) (Lab)
The Conservative party in government—I do not know whether opinion has changed—had little regard for private businesses. On Tuesday, however, we clearly heard expert witnesses from private businesses consistently testify that one of the Bill’s key benefits is that it is not overly and unnecessarily prescriptive, so it allows the scope to develop the strategic priorities that focus on ensuring that we get this right. The amendment is completely unnecessary, because it is yet another example of being overly prescriptive, which is not what businesses asked for on Tuesday.
Andrew Bowie
I completely agree that we should not be overly prescriptive of business, but one of the strategic objectives in setting up this company should be to work towards a reduction in wholesale electricity prices. The Bill sets out everything else that the company will seek to do, so why not add that to the Bill as an objective for the company in the long run? I do not know why there would be any disagreement with including that objective in the Bill, given that we all agree that electricity prices and the cost of doing business are far too high in this country. Surely, therefore, GB Energy should be working towards that objective—hence I think the amendment is necessary and we have moved it today.
On the requirement on the Secretary of State to give a specific direction to GB Energy, we think that it should report its progress on the priority of reducing wholesale electricity costs to Parliament. Amendment 19 would also introduce the requirement for GB Energy to report to the Secretary of State within three months of every investment on the projected impact on wholesale energy prices over the next 10 years. It is essential that we in Parliament, Government and Great British Energy take a sufficiently long-term view of the decisions and investments that will impact wholesale electricity prices and, therefore, consumer bills and the cost to industry in the years and decades to come. Those are the reasons for our amendments.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
It is a pleasure, Sir Roger, to serve in this Committee under your—
The Chair
Order. In case hon. Members are not fully aware, ordinarily we would call any Member on either side of the Committee before calling the Minister. It is not the same procedure as on the Floor of the House, where we would normally call, in this case, the Opposition and then the Government Front Bench. That is why I paused slightly to see whether anybody wanted to intervene.
Michael Shanks
I will take the amendments in turn, starting with amendment 13, tabled by the hon. Member for West Aberdeenshire and Kincardine. The creation of Great British Energy allows us to harness clean energy and have less reliance on volatile energy markets. I must resist the amendment for a number of reasons. Parts of the various amendments are linked, so I will deal with what they have in common.
First, a founding principle of Great British Energy is that it should be operationally independent. The Bill is clearly about making the minimum necessary provision to establish the company. Adding further unnecessary detail, as we have talked about with regard to various amendments today, risks restricting the company in carrying out its activities and going against our commitment to the British public. The hon. Gentleman will be familiar with this model of legislation, given his involvement with pieces of legislation such as on the UK Infrastructure Bank. We heard from a number of witnesses on Tuesday that they want the Bill to be broad enough to allow Great British Energy to move into different opportunities as they arise but, clearly, the focus we have set out for it concerns the long-term energy security of the country and bringing down bills.
Secondly, the Secretary of State has the power—we will come on to this, I have no doubt—to set the strategic priorities. It is right that the statement of strategic priorities sets out what Great British Energy’s objectives are. As the hon. Gentleman knows, because he and other hon. Members have referred to it at various points, we live in an increasingly unstable world. The last few years have brought that to the front of our consciousness. Our energy security and the protection we need to give to bill payers mean that we need to speed up the transition from fossil fuels to home-grown clean energy. We are unwavering in our commitment to that as a long-term project and a cornerstone of our sustainable plan to safeguard bill payers for good.
In speaking to these amendments, the hon. Gentleman referred to our witnesses on Tuesday and the fact that putting more green energy on the grid reduces overall costs. I agree with him on that, but it is therefore important to recognise that Great British Energy is a vehicle to speed up that process. Measures under the previous Government, of which he was of course part, made that more and more difficult—for example, the onshore wind ban, which one of his colleagues said was “always mad”. We need to recognise that this is a change of direction. If we agree that the only way to bring down bills and reduce the wholesale cost for good is to move to more secure home-grown green energy, we need to have the full commitment of Government to deliver that.
I will now turn to amendment 14, which would require the Secretary of State to give
“specific direction to Great British Energy that it must report…on the progress made by Great British Energy towards”
electricity prices. The report set out in the hon. Gentleman’s amendment must be made within two years of Royal Assent. We will resist the amendment today, because we think it is unnecessary.
As I have already outlined, the shift to clean energy is about increasing home-grown power and accelerating the reduction of our exposure to international markets. Broader than Great British Energy, the Government are running a series of programmes and reforms to pass on cheaper renewables to consumers. For example, as we mentioned earlier, there is the review of electricity market arrangements.
As a publicly owned company, Great British Energy will be accountable through regular reporting to the Department for Energy Security and Net Zero. Furthermore, like other arm’s length bodies of Government, it will be accountable to Parliament, but will operate independently, at arm’s length, from Ministers. That is important, because the point of setting up a publicly owned energy company independent of Government is to bring in the skills and experience of an executive board and staff who will not be directed day to day by Government, but will, of course, work within the parameters that we have set it. As I have said in response to a number of amendments today, adding further unnecessary detail risks restricting the company in carrying out its activities, and is against what we have said in setting out the Bill.
Andrew Bowie
I have nothing to add, other than to inform the Committee that we will press the amendment to a vote.
Question put, That the amendment be made.
The Chair
I am not sure whether Dr Huq referred to this in the morning, but before we proceed, I will say that ordinarily, at the end of a clause, there is a stand part debate on whether the clause, or the clause as amended, should stand part of the Bill. That debate is in the gift of the Chair. I am usually pretty relaxed about this, and I dare say that Dr Huq is as well. I understand that there was a fairly comprehensive debate on the first group of amendments this morning, so my impression is that we will probably not require a stand part debate.
The quid pro quo for that is a degree of flexibility when we come to talk about things, because very often matters overlap. I have always said that as far as I am concerned, you can have a stand part debate on the first group of amendments if you like, because very often the greater includes the lesser, but you cannot have your cake and eat it—you cannot do it twice. Hon. Members should bear in mind that if there are things that they want to say, it might be a good idea to say them, because they probably will not get the chance in a clause stand part debate. I hope that that is clear.
Andrew Bowie
I beg to move amendment 15, in clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include the creation of 650,000 new jobs in the United Kingdom by 2030 resulting directly or indirectly from Great British Energy’s pursuit of its objectives under section 3.”
The Chair
With this it will be convenient to discuss amendment 16, in clause 6, page 3, line 38, at end insert—
“(1A)
(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of creating 650,000 new jobs in the United Kingdom by 2030.
(b) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(c) The Secretary of State must lay a report made under paragraph (a) before Parliament.”
Andrew Bowie
The amendments would create a specific strategic priority for Great British Energy to create 650,000 new jobs in the United Kingdom by 2030, and require the production of an annual report on the progress of meeting that strategic priority.
It is worth our while this afternoon to take some time to consider the achievements of the previous Conservative Government in driving towards a cleaner energy future. It was a Conservative Government, under Prime Minister Theresa May, who legislated for net zero in 2019. It was a Conservative Government who began and created the contract for difference process, which was looked at with awe by the world at that stage—
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
Will the hon. Gentleman give way?
Torcuil Crichton
Was it not also a Conservative Government who refused to take the decision to give Harland & Wolff the funding that would have kept it open and avoided administration and now sale, and who left that hard decision to the incoming Labour Government?
Andrew Bowie
As the hon. Gentleman knows, there are many hard decisions to be taken in government, and every decision that the Government have to take has to provide value for money for the British taxpayer. I know that this Government recognise that, given the decision they have taken to remove £300 from every pensioner in the country—something I think they will come to regret.
As I was saying before I was so rudely interrupted, the Conservative Government built the first to fifth largest offshore wind farms in the world, ended coal for power generation and halved emissions at the fastest rate of any G7 power. In that regard, I know that everybody in the room is proud of the record of the Conservative Government just gone and will champion it in our work as we move forward.
Nevertheless, the issue of skills, and the lack of the skilled workforce required to deliver the next phase of the transition, was always at the forefront of Ministers’ minds. Indeed, because of that we established the nuclear skills fund when I was the Minister responsible for nuclear.
Andrew Pakes (Peterborough) (Lab)
The hon. Gentleman has forgotten to mention the onshore wind ban, which is really important. If he wants to celebrate his record, let us celebrate it in the full glare of light. Does he agree that one of our big challenges in this country is that we failed to make any progress on nuclear in the last 14 years? We talk about new jobs, but we are losing skilled engineering and nuclear jobs in this country today because they are going to other countries, because those countries are making the progress that we have failed to make.
Andrew Bowie
The hon. Gentleman draws me on to nuclear, which is a dangerous place for me to be drawn, as the Minister will know, because we could spend all afternoon talking about the Conservative Government’s legacy on nuclear—
Andrew Bowie
You might have other ideas, Sir Roger. The legacy is the creation of Great British Nuclear; the beginning of the small modular reactor down-selection programme; the development consent order move in respect of Sizewell C; £200 million invested into high-assay low-enriched uranium fuels to be developed here in the United Kingdom; moving forward at pace with Hinkley Point C; and a commitment to build a third gigawatt-scale reactor at Wylfa—something that this Government have abandoned. It is not the Conservative party that the nuclear industry has a problem with; the industry is now worried about the go-slow on nuclear being implemented in this country by the new Labour Government, because of their obsession with putting all their eggs in one basket of renewables and not looking to the wider benefits of investing in nuclear as well.
On the hon. Gentleman’s point about the onshore wind ban, we delivered everything that I have listed while respecting the rights of communities in this country not to have the countryside where they live, and that they respect and enjoy, industrialised. That is why we had stipulations on communities having a right over what was built in them. I stand by that. It was a good policy and we still halved our emissions faster than any other G7 nation.
When we were in government, we established the nuclear skills taskforce to address the skills gap of 250,000 people that the nuclear industry alone would have were we to deliver all the projects we seek to deliver in defence and energy. We all know that clean energy technology brings employment with it. Estimates for job creation in the transition range from 136,000 jobs to 725,000 jobs by 2030. We all know how beneficial clean energy technology can be for local communities when it comes to employment. Projects such as Sizewell C drive investment—it will bring as many as 25,000 new jobs to Suffolk, and there are already 1,000 apprenticeships in the area. These are high-paid, high-skilled jobs that deliver for the community.
We have heard from the Labour Government that GB Energy will create 650,000 new jobs. On Tuesday, when I asked the chairman, Juergen Maier, about the number of jobs to be based in Aberdeen, he told us that it would be hundreds or even 1,000. I hope that Aberdeen will benefit significantly from being the base for the HQ of GB Energy and that that is not merely paying lip service to a community that is losing out in investment, prosperity and employment opportunities as a result of the energy profits levy increases, the lack of investment allowances, the disinclination to offer new licences in the North sea and the impact that that will have on investment in the transition.
I represent a constituency near Aberdeen, where a significant proportion of constituents are employed in the oil and gas industry directly, or indirectly in the supply chain. The potential for new jobs and the preservation of existing jobs are deeply personal to me and other MPs in the room. In fact, 65,000 people in Aberdeen and Aberdeenshire are employed in that industry and in the supply chain, so I know how impactful on communities those jobs are. I therefore move that we include the creation of 650,000 new jobs as a strategic priority for GB Energy, as well as including the requirement to report on the progress made towards that ambition. If we do not deliver the new jobs and do not ensure that as we move through the transition, those working in the oil and gas industry will have jobs secured into the future—as well as creating the new jobs by delivering the projects we were seeking to, as I know the Labour Government seek to—we will have failed in all our shared ambitions.
Olivia Blake (Sheffield Hallam) (Lab)
The shadow Minister’s amendment seems to be a bit of a fig leaf over the failure of the previous Government to secure good, high-quality, unionised jobs in the green energy sector. We need only look at offshore wind. I have cited these statistics before, but in 2010 some 70,000 jobs were promised from the UK offshore wind sector. Unfortunately, 10 years later, it had delivered only 11,900, which is only 5,600 more than were achieved by 2014.
The capacity of offshore wind went up by a huge percentage under the previous Government, for which they should be commended, but their strategy in the past 14 years meant that while they were building offshore wind, they were also offshoring all the jobs that went with it. There was no strategy to cultivate labour-intensive sections of the supply chain; the majority of jobs went abroad. Not enough went into supporting the creation of servicing jobs in the UK. Furthermore, in another element of policy, the embarrassment and failure of the green homes grant truly laid bare the fact that we did not have the right industrial strategy—we had no industrial strategy to support the creation of jobs in those industries or to support a Government intervention such as the green homes grant.
A lot can be said about the opportunities that GB Energy offers. On Tuesday, the TUC agreed that GB Energy would be an enabler for a just transition for those currently working, but it is also my belief that this is a real opportunity for new jobs for the next generation. We have real potential to lever in a huge opportunity going forward to be a main player internationally in some of our emerging technologies.
I am proud to represent a constituency in Sheffield, where we have a lot of research capacity in many different areas related to energy, from battery storage to hydrogen and new nuclear. A lot of research is happening. Such innovation is important to allow for manufacturing jobs to spin off from the primary research.
The amendment is all well and good, but I think it is a little bit rich coming from the Conservative shadow Minister, given the abject failure to deliver on the jobs that we were promised under the previous Government.
Andrew Bowie
I have said publicly on the Floor of the House and in other places that we did not see the creation of the jobs that we wanted as a result of our revolution in energy production here in the United Kingdom. As I said, we have the first, second, third, fourth and fifth largest offshore wind farms in the world, which is a source of great pride, but the jobs onshore created as a result of that simply did not come about, hence why we were moving towards the creation of the sustainable industry rewards and were encouraging companies to invest and create the jobs. If the hon. Lady agrees that we should have done more to create jobs, surely she also agrees with the purpose of the amendment, which is to ensure that GB Energy will have as one of its stated aims the creation of 650,000 jobs in new and emerging technologies.
Olivia Blake
I would not want to limit the possibilities of GB Energy with a number. It is a big number that the hon. Gentleman has put here but, to be honest, there are huge opportunities in all the energy areas—especially in the supply chain within the UK, but also in the transition of jobs. It is really important that we take it in the round and allow GB Energy to play its role. Not all jobs will come from GB Energy; they will come from the much broader investments that we will see over the next decade. We have had a lost decade in this regard, and there is a lot of skills work that needs to come.
Michael Shanks
I will start where the brilliant speech of my hon. Friend the Member for Sheffield Hallam left off. It is a bit rich for the Opposition to talk about fixing the issue with jobs in the renewables sector that they failed to fix for 14 years. First, I take the issue that the hon. Member for West Aberdeenshire and Kincardine raised about jobs in Aberdeen, because it is an extremely important subject, but I think he confuses two things— I would suggest perhaps deliberately. Juergen Maier clearly said on Tuesday that the headquarters of Great British Energy in Aberdeen will have jobs in the hundreds, perhaps expanding in the years ahead, but that the jobs created by Great British Energy are much more than the headquarters. We have always said that it is the investments that Great British Energy makes that will invest in jobs in Aberdeen, in the north-east of Scotland and right across the UK, in the tens of thousands. That is important to separate out.
The hon. Gentleman’s point about the transition is really important, both to the Bill and more broadly. He is right: long before this Labour Government were elected, there was a transition under way in the north-east of Scotland. It is a declining mature basin. It is important that we now take seriously what that transition looks like, and that will require tens of thousands of new, skilled and—crucially, for the north-east of Scotland in particular—well-paid jobs. That is what we are attempting to do with Great British Energy but, as my hon. Friend the Member for Sheffield Hallam says, Great British Energy is not the only vehicle for it. We have deliberately said that we will set out an industrial strategy, because we are not a Government who think that manufacturing jobs in this country and an industrial strategy are an irrelevance. Actually, they are critical to our economic future.
Stephen Flynn (Aberdeen South) (SNP)
The Minister has tempted me to have a look at what Juergen Maier said. I asked him very clearly how many jobs would be in Aberdeen. His response was quite clear:
“It will be in the hundreds; it may eventually be 1,000 or more in the HQ.”––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q4.]
The HQ is, of course, Aberdeen. That would run contrary to what the Minister has just said.
Michael Shanks
That is not what I said at all. What I said a moment ago is exactly the same, which is that in the short term—in the start-up phase of the company—there will be a few hundred people. That is exactly what Juergen Maier said. In future, our aim—particularly with the right hon. Gentleman’s support, which I was not expecting at the start of today—is that it will grow even further, into a much bigger company. As a result, we expect that there could very well be thousands of jobs in the headquarters in Aberdeen. I am not ruling anything out or limiting the potential of Great British Energy, and I hope that the right hon. Gentleman is not either. I make this point again, for the benefit of the right hon. Gentleman: critically, that is not the limit of the jobs that will be created by Great British Energy. It is important to recognise that the jobs potential will come from the investments and partnerships that it makes.
Harriet Cross (Gordon and Buchan) (Con)
The second part of the amendment states that the jobs should be created by 2030. That timescale is really important, because it ensures that the expertise we have now can be retained to help build these jobs of the future. Even if the Government will not commit to the figure, will they look at the timescale, which will give the industry certainty?
Michael Shanks
For reasons I will come to in a moment, we will not agree to the amendment because we will not put timeframes and numbers in the Bill—we do not see those in any piece of legislation from the previous Government or any other Government, and for very good reason. However, the hon. Lady is right that this decade is absolutely critical for this issue. That is why I am taking it very seriously, and will happily have conversations with her about how we get these jobs as quickly as possible. The timeframe for that is important, but it is also important that we start with building things such as Great British Energy, which I hope she will support, and our broader policy around the office for clean energy jobs, our industrial strategy and our increased investment in things such as the renewables auction.
To come back to what the hon. Member for West Aberdeenshire and Kincardine said about offshore wind, he took some credit for it, but of course his Government have to take responsibility for the complete failure on offshore wind in the last auction. We have turned that around with some really successful projects and want to build considerably more in the future. He gave an absolute masterclass for a new Minister like me on how to speak to something—the onshore energy ban in England—that I know he does not believe in, because he is a smart guy.
The reality is that that was ideology over delivery of something critically important. Now, we have inherited not just a lack of projects that would help us towards clean power and deliver jobs right across the UK, but an empty pipeline of projects, given the length of time where wind in England was banned. It is a ridiculous policy that I do not believe for a second the hon. Gentleman supports, but it was a very good example for me on how to deliver a line.
As I said earlier, this clause is specifically about giving very particular, rare directions in urgent or unforeseen circumstances. It is not a clause we expect the Secretary of State to be using regularly. That is important, because I suspect that if it was phrased in any other way, the hon. Gentleman would quite rightly propose an amendment limiting the powers of the Secretary of State to doing exactly that. This clause is about ensuring that Great British Energy has the space to fulfil its strategic priorities. Amendment 16 would widen that intention by adding a long-term goal.
More broadly, and relevant to both the hon. Gentleman’s amendments, I repeat that the aim of Great British Energy is to be operationally independent from Government. The Bill focuses solely on making the absolutely necessary provisions to establish the company. Adding further unnecessary detail—detail I know the Conservative party would not dream of adding to any of its own legislation—risks restricting the company in carrying out its activities and goes against what we have said. That sentiment was supported by almost every witness, including on specific questions about this matter, where I think people were hoping for different answers. Every single witness confirmed that the Bill is in the right place here. For those reasons, and many others, we will not be supporting the amendments.
Andrew Bowie
In confirming that we will be putting the amendments to a vote, I put on the record my congratulations to the Minister, because he may have achieved what I thought was unachievable: getting the right hon. Member for Aberdeen South to welcome and support something with “Great British” in its title. That is a quite a significant achievement, if I may say so.
Question put, That the amendment be made.
Andrew Bowie
I beg to move amendment 17, in clause 5, page 3, line 8, at end insert—
“(1A)
(a) The statement of strategic priorities under subsection (1) must include developing supply chains within the United Kingdom in the pursuit of Great British Energy’s objects under section 3.
(b) ‘supply chains’ means the network of individuals, organisations, resources, activities and technology involved in the creation and sale of a commodity connected with Great British Energy’s objects under section 3.”
The Chair
With this it will be convenient to discuss amendment 18, in clause 6, page 3, line 38, at end insert—
“(1A)
(a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of developing supply chains within the United Kingdom.
(b) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(c) The Secretary of State must lay a report made under paragraph (a) before Parliament.”
Andrew Bowie
Amendment 17 would introduce a specific strategic priority for Great British Energy to develop UK energy supply chains and require that an annual report be produced on the progress towards meeting that strategic priority.
We believe it is essential that our transition to net zero does not increase our reliance on foreign countries, foreign supply chains or, in particular, hostile foreign countries. We all want to see a “made in Britain” transition, where our offshore wind turbines are constructed by British manufacturing companies, are erected by highly skilled British workers and deliver clean, cheap energy for British homes and businesses. That is why I have tabled amendment 17, which would make establishing domestic supply chains a strategic priority for Great British Energy.
In the transition to net zero, we are presented with a great opportunity for investment and new jobs. As with employment, we must ensure that it is people in these islands and domestic companies that will benefit from the increase in investment that we hope to see in the new technologies in the coming years. We must not outsource our energy transition. In this transition, we will need steel for our turbines and oil for our turbines. The transition is one that spans the energy industry and incorporates the North sea.
Catherine Fookes (Monmouthshire) (Lab)
The hon. Member mentions steel. While his party were in power for 14 years, they had the chance to intervene and support the workers at Llanwern and Port Talbot, many of whom live in my constituency. Does he not agree that if his party had done more during their 14 years in power to support those workers, we would have much greater capacity to produce our own steel and for the transfer to green steel, which would help us to have a stronger UK-based energy industry?
Andrew Bowie
I am very proud of everything that we did in government to support our steelworkers and those communities around the country that depend on those jobs. It is desperately sad to see what has happened in Port Talbot recently. That is an example of what we must avoid moving forward, and something that we must avoid happening in the North sea, for example, where workers engaged in traditional industries are fearful about where their jobs sit in the forthcoming transition. Although I do not agree that we did not do everything we could to support steelmaking at Port Talbot, I do think that it is an example to learn from and one that we must avoid in the future.
Torcuil Crichton
What the shadow Minister is describing sounds like an industrial strategy—something that we have been missing for 14 years.
Andrew Bowie
Well, not quite. We did have an industrial strategy. We had a Department for Business, Energy and Industrial Strategy. It is not an industrial strategy. The amendment aims to establish within the strategic priorities of this company a commitment to deliver a UK-based supply chain, which is something that we sought to do while in Government, with the sustainable industry reward scheme that will launch next year with the auction round for the contracts for difference, and through other programmes and investment opportunities that we were seeking to see come to fruition. I am very glad that this Government seem to be taking the challenge in this regard just as seriously as we did.
The transition we are in just now spans our entire energy industry and incorporates the North sea and our homegrown petroleum outputs. As noted by the Climate Change Committee, we will need oil and gas for decades to come, not just as an energy baseload but as a key component in the transition and in the technologies for the transition.
In our electric vehicles and our batteries, we will need lithium. In 2023, Cornish Lithium opened Britain’s first lithium mine in Cornwall, with £53.6 million investment led by the UK Infrastructure Bank, which we established in 2021, to invest in our domestic supply chain, our clean technology supply chain and our energy future.
In our solar panels, we need silver, indium and copper. In our grid systems, we need kilometres and kilometres of copper. In fact, renewable energy will drive 45% of copper demand by 2030. Our reliance on China for low-cost, clean technology and minerals should worry us all. In 2022, we imported 64% of rare earth metals and 49% of lithium batteries from China.
Andrew Bowie
I would be delighted to give way to the hon. Member for Cornwall.
Perran Moon
The hon. Member for Camborne, Redruth and Hayle—but I take the shadow Minister’s point. As he said, it is important to consider that an awful lot of our critical minerals are imported from the other side of the world, from Australasia and China, but that in Cornwall we have massive deposits of tin, lithium and tungsten. Does he agree that one opportunity that might come from GB Energy is to expand British jobs in Cornwall and areas that are extremely deprived? In that respect, might he support GB Energy?
Andrew Bowie
The hon. Gentleman almost had me —I was almost there. We support creating new jobs in Cornwall. The opening of the mine last year was an incredibly positive step. It was delivered as a result of the UK Infrastructure Bank and the £53 million investment that we drove. The future for Cornwall is incredibly bright when it comes to critical minerals and its ability to supply UK projects and, moving forward, to export across the world. We have not even touched on the potential of geothermal in Cornwall, which is huge and extensive. Cornwall will match only Aberdeen in its importance on our energy journey—nearly match, but not quite.
We need to ensure the supply chains required. The building of clean energy infrastructure will benefit British companies with as much domestic involvement in supply and manufacture as possible. Not only does that safeguard our energy future against the impacts of disruption to the international system, such as we saw during the pandemic, but it reinvests the capital at Great British Energy’s disposal into UK supply chains. Supply chains are a vital component of the employment opportunities here in the UK, as well as our energy security in future.
Harriet Cross
Does my hon. Friend agree that the supply chains that we have are used to delivering large-scale multimillion-pound projects? That is important not only for home-grown jobs, but for the success of GB Energy and any infrastructure and skills that will come out of it. We need our home-grown supply chain, which is world renowned, to help deliver this.
Andrew Bowie
My hon. Friend and constituency neighbour is absolutely right. I completely agree. She is a doughty champion for supply chain jobs based in her constituency, in mine, in that of the right hon. Member for Aberdeen South and in others across the country. One reason that we have been so critical of this Labour Government’s North sea policies—the extension and increase of the energy profits levy, the removal of investment allowances, the removal of further licences in the North sea—is the impact on the domestic supply chain jobs that exist already and, by the way, on the high-skilled jobs that will deliver the cleaner energy future that we all want to get to.
That is why I and others in Committee have been so critical in the past—it is not that we do not want to see the transition; it is that we want the oil and gas industry, and those people in the supply chain who are employed by it now, to be a part of that transition. Without a successful domestic oil and gas industry or domestic supply chain, we will not deliver any of the projects that we are speaking so glowingly about in Committee and over the past few weeks, months and years. As my hon. Friend the Member for Gordon and Buchan says, it is critical for the supply chain to support net zero transition.
Security of supply chain is absolutely relevant to the objectives of GB Energy and should be included as a strategic priority, hence the amendment. I also tabled amendment 18, which would introduce the direction for GB Energy to report to the Secretary of State on the progress being made towards developing domestic supply chains.
Michael Shanks
I am enjoying this debate more and more. I feel that by the end of today, or Tuesday at a push, we may get the hon. Gentleman’s support for Great British Energy. I look forward to that.
The very argument that the hon. Gentleman has put forward for both amendments emphasises the absolute failure of 14 years of his Government. The very fact that he is making those points emphasises how much they failed. I welcome the realisation, albeit somewhat late, that manufacturing in the UK and having jobs in this country delivering for the energy future are important. The Kincardine wind farm off the coast not far from his constituency—perhaps it is in his constituency—is a very good example. It was towed into place, with all the jobs offshored somewhere else. That example that shows why we need to do things differently. Great British Energy and our industrial strategy are part of that.
While I could spend this time criticising the previous Government, I will simply welcome the fact that the hon. Gentleman has showed up to the party at all. This is a key part of what Great British Energy will do. The supply chains are critical, because 80% of the jobs in the oil and gas industry are in the supply chains, and the good, well-paid jobs we need for the future will be there too. I think it might have been the witness from the GMB who made a very good point about jobs in welding. That is a good example of where we can have real, well-paid jobs for the future if we invest in those skills now, and that is exactly what Great British Energy will do.
However, Great British Energy is not the only part that will deliver on those jobs. The Department for Business and Trade is also working at pace to develop an industrial strategy that will include detailed work on the supply chains, and we are working through the various taskforces launched under the previous Government and continued by this Government. For example, on the solar taskforce we have been looking clearly at how we can bring those jobs to the UK. The hon. Gentleman rightly talked about the security of where some of those manufacturing jobs are in the world—places in the world that we would rather they were not. Bringing some of that manufacturing capacity to the UK will be difficult in some of those industries, but it is important to do it so that we have resilient, diverse and sustainable supply chains.
My Department has also established an office for clean energy jobs, which will focus on developing the skills and the training for the workforce in core energy and net zero sectors around the transition, but also, critically, on bringing on the next generation of apprentices and workers in the skills and jobs that we did not know existed until the last few years. That will ensure the sustainability of our supply chains and meet our mission to make the UK a clean energy superpower.
Although it is welcome to hear the commitments from a Conservative party that has had something of a conversion on this issue, we do not think that amendments 17 and 18 are necessary to the Bill, because the Government are already committed to delivering our intentions.
Andrew Bowie
I do think that the amendments are necessary. If we are to go through the process of creating this company, we should set out as one of its objects the creation and sustainability of a UK-based supply chain, and indeed of the manufacturing jobs that come with that. For that reason, I will press amendment 17 to a vote.
Question put, That the amendment be made.
Stephen Flynn
I beg to move amendment 4, in clause 5, page 3, line 10, leave out subsection (3) and insert—
“(3) A statement under subsection (1) or a revised or replacement statement under subsection (2) will not take effect unless a draft has been laid before and approved by a resolution of each House of Parliament.”
Before I begin my remarks, it is probably best that I correct the record on behalf of the shadow Minister. It is not just in relation to Great British Energy that I have expressed some positivity; I did once watch “The Great British Bake Off” as well.
That aside, it was put to me by some members of the Labour party back in Scotland that I was not supportive of GB Energy, because I did not go through the Lobby with the Government some weeks ago, as I think the Minister referred to in his remarks today. The reason I did not go through the Lobby with the Government that day was that I was not entirely sure what GB Energy was going to do.
In fact, based on the information before us in this Bill, I am still not entirely sure what GB Energy is going to do in practice; it seems to be all things to all people. In principle, perhaps that is not a bad thing, and those who gave evidence to us put forward a number of positive arguments of the necessity for that to be the case, whether in relation to production, generation, the supply of energy or the community projects that Members have spoken about at length.
The purpose of my amendment is to ensure that the House of Commons is fully apprised of exactly what the Secretary of State intends GB Energy to achieve. That will be hugely important, particularly in the context of Scotland, because much of what has been discussed in relation to GB Energy, and the opportunities that may or may not exist, will ultimately be intrinsically linked to the success of projects in Scotland, where the majority of the UK’s renewable energy resource sits. Indeed, I think the director of the Confederation of British Industry said that it is a “golden ticket” to economic growth for the entire UK. Imagine what an independent Scotland could achieve in that context.
The point of the amendment is to ensure that the House of Commons is able to fully appraise the direction that the Secretary of State wishes to take. That might cause Labour Members some consternation, because they have just been elected with a massive majority and may well be able to set out their strategic vision, but they need to remember that they will not be in government forever. They will at some point be replaced—I am not entirely sure who will replace them; there is a decent suggestion that it will probably be by the Lib Dems rather than by the Conservatives, based on the leadership candidates.
However, the amendment would ensure that future parliamentarians and future groups of politicians will be able to apply the same scrutiny that I expect of Government today. I think it is good practice. In years to come, should the Conservative party, the Lib Dems or perhaps some other nefarious party come to control the UK state, they should not be able to do anything contrary to the wishes of Parliament without its having the ability to shape the future of what will hopefully be a successful intervention into the energy market, albeit one with very small amounts of money to drive forward the multiple goals that it seeks to achieve.
Michael Shanks
The right hon. Gentleman tempts me into discussing both independence and the future of the Conservative party, but for your sake, Sir Roger, I will not go into either, although I hope there will be such opportunities in the future. I will make two points in response to the amendment, and there is a broader point, which I will stay off for the moment, that we will return to in the next series of amendments around the role of the devolved Administrations—
Michael Shanks
The devolved Administrations in terms of the Governments—I thank the right hon. Gentleman.
The first thing to say is that the statement of strategic priorities cannot overrule the objectives in the Bill. If an incoming Government—I will not say “nefarious” or otherwise—were seeking to use Great British Energy for a whole other purpose, they would not be able to, because the legislation sets out exactly what it will be used for, and that will be in the articles of association. Those objects set the overarching framework for Great British Energy’s activities and it is right that this framework is in legislation passed by Parliament and debated here today in clause 3.
Were we to move to a point where we required parliamentary approval of the statement of strategic priorities, which is only designed to provide direction in the priorities that the Government sets for the company, we would create unnecessary burdens on the company. Going back to the points in the Lib Dem amendments from earlier, I am concerned that, rather than Great British Energy getting on with delivering, we would end up in a constant cycle in which people add various things—I think someone said “baubles” earlier on, but I am not sure that I will continue that metaphor—into the statement of strategic priorities that would take away from it actually delivering the objects that we will hopefully pass in this Bill.
Pippa Heylings (South Cambridgeshire) (LD)
Taking away labels such as “nefarious” or “baubles” and moving to the serious intent of our interventions, this is about scrutiny, and I take the point from the right hon. Member for Aberdeen South in that respect. We heard from witnesses that if the objects remain broad, they are reassured that all their issues will be contained within the statement of priorities. Will the Minister reassure us about the engagement that will happen prior to the development of those priorities? If it will not happen through the House, what will the process be? Instead of baubles, we may find bits of home-made tinsel hanging on this majestic tree, which is not exactly what was bought in the shop, to continue the metaphor.
Pippa Heylings
British-made and home-made. I think the serious issue is the extent to which there is reassurance that a statement of priorities, which everybody is accepting will be within the remit of the objects, will fulfil expectations and not steer into areas in which there will be duplication.
Michael Shanks
I think my hon. Friend the Member for Peterborough has a lot to answer for, with the metaphors that have now started, but the hon. Lady makes a serious point. I would just gently challenge one point that she makes. The statement of strategic priorities is not about giving every detail on all the objects. The direction of the company is already very clear. The reason that the objects have been left broad is so that the company can explore opportunities in all those areas without having to come back and get direction on every single point.
Michael Shanks
I will answer the previous intervention first. The point of having an independent company—this is why it is used as a mechanism by Governments of all types—is that it can have the flexibility to move. That flexibility is within the very strict parameters set by Government, but with a broad scope to move into opportunities as they arise.
Wera Hobhouse
I thank the Minister for giving way. The second part of his reply answered what I am worried about, and what we as a Committee have been worried about all along, which is parliamentary scrutiny. Will the Minister advise at what point that parliamentary scrutiny can be exercised?
Michael Shanks
The hon. Lady is well versed in how Parliament works, and there are a number of mechanisms already open to Parliament to scrutinise the work of the Department and the Secretary of State. Indeed, the transparency around clause 5 is that this will be laid before Parliament in the same way that the priorities for the UK Infrastructure Bank and various other independent companies are laid before Parliament.
On the hon. Member for South Cambridgeshire’s second point, which I did not get to and is a very fair point, we are not seeking to design something behind closed doors that has no engagement. I have taken a lot of meetings in the three months that I have been a Minister, and I am very happy to take many more. We want to hear a broad range of views on this and we are happy to discuss it, but there is a balance between having an open approach to how we create, draft and bring ideas together, and ending up with a document—in the end, it will not be a huge document—that just goes round a process for months on end and stops the company from getting on with what we want it to do.
We heard from all the witnesses on Tuesday that speed is important; we do not want to waste any time, and I think that the Liberal Democrats support that approach. We want to get on and do it, and that is important. As I said earlier, I will come on to the point about the devolved Governments and the engagement that we plan with them in due course.
Furthermore, in setting up a company, the company is subject to all the requirements that other companies are, in terms of Companies House and having to produce annual accounts and an annual report. The activities of the board will also, of course, be available so that people can see what decisions the company is making. It is important that this company is at arm’s length from Government but has all the benefits of being publicly owned, in that it is required to manage the stewardship of public funds in a careful and accountable way.
In my view, the amendment is unnecessary, as the processes are already in place to scrutinise the work of Great British Energy and the work of the Department more generally. We will not be accepting the amendment today.
Stephen Flynn
I thank the Minister for his reply. I gently suggest that, if he were still sitting on the Opposition Benches, his view would be slightly different. I simply remind him in that context that he will not always be sitting on the Government side. If a future Secretary of State decides to change the strategic priorities of Great British Energy, then I am sure, at that point, he and his colleagues would like to have the ability to review, revise and discuss that within the democratic structures that we have. On that basis, I will press the amendment to a vote.
Question put, That the amendment be made.
The Chair
I think that we can safely say that the Noes have it.
Question accordingly negatived.
Stephen Flynn
I beg to move amendment 5, in clause 5, page 3, line 12, leave out “consult” and insert
“seek and gain consent of”.
The Chair
With this it will be convenient to discuss the following:
Amendment 7, in clause 5, page 3, line 28, leave out “(4) to (6)” and insert
“(5) and (6) or to gain consent imposed by subsection (4)”.
This amendment is consequential on Amendment 5.
Amendment 6, in clause 5, page 3, line 29, at end insert—
“(7A) The Secretary of State must by regulations provide for a process by which consent can be signified under subsection (4).”
This amendment is consequential on Amendment 5.
Stephen Flynn
These amendments are hopefully self-explanatory to Members. I am extremely keen to hear the Minister’s thoughts on them. As I referred to in my initial remarks, much of the success of the UK’s energy sector will be derived from the success of renewables projects in Scotland, whether that is the continuation of onshore wind, further development of fixed-bottom offshore wind, floating offshore wind, pumped storage hydro, green hydrogen, blue hydrogen, tidal, wave, and so on. The sun sometimes shines as well, so we might get some solar panels in there too—perhaps just in Na h-Eileanan an Iar, though, as opposed to Aberdeen.
I know that the Minister has been engaging proactively with my colleagues in Scotland, that there have been a lot of positive discussions, and that Mr Maier was up with the First Minister in recent weeks to discuss the future outlook for GB Energy. If the respect agenda that the new Labour Government appear to have put in place is to mean something, it is important that they are willing and confident enough in their arguments to seek the fulsome consent of the Scottish Parliament—not just the Scottish National party, because I am conscious, as I said earlier, that it may not always be the Scottish National party that is there.
Torcuil Crichton
I rise not just to reassure the right hon. Gentleman that the sun does shine in the Western Isles, but to note that these amendments seem quite complex—blocking amendments, actually, that would prevent the business and progress of GB Energy. They read a bit like last year’s script because, as he mentioned, the Scottish Government and the UK Government work hand in hand now. My friend the Secretary of State for Scotland, and the Deputy First Minister of Scotland, who is a frenemy, speak on a regular—daily or at most weekly—basis. The Governments work together, rendering these clauses unnecessary.
Stephen Flynn
I thank the hon. Gentleman for his intervention, although I am a bit disappointed that he regards seeking the consent of Scotland’s nationally elected Parliament as a blocking amendment. That is quite a Westminster mentality that he has adopted already in the few short weeks that he has been here—perhaps that is an indication of where his party intends to go in the months and years to come. Notwithstanding that, because I do not believe it was a necessary or helpful intervention in that context, I would be very keen to hear from the Minister on why he does not believe he should seek the consent of Scotland’s Parliament.
Michael Shanks
These are very important amendments, as I alluded to when discussing the last group of amendments. Since I became a Minister, I have worked very hard to reset the relationship. Indeed, the Prime Minister’s first official visit was, deliberately, to Scotland. He has set a clear expectation that all Ministers should be engaging with not just the Scottish Government but the Welsh Government and the Administration in Northern Ireland. That is particularly important in the energy space, because our priorities are broadly aligned. There are slight differences in targets and projects, but we all want to move in the same direction across all Governments of the United Kingdom, which is beneficial.
Andrew Bowie
I must take issue with some of the language about this reset—the normalisation of relations and the new respect agenda. We had an incredibly constructive working relationship with the Scottish Government while we were in government. Indeed, had we not, none of the projects that we see established now—we have talked about having the first to the fifth-largest offshore wind farms—and none of the discussions we are having about new technologies would actually have gotten off the ground.
A lot is made of the fact that the new Prime Minister’s first visit in office was to Scotland, but it was also the first visit of Prime Ministers Theresa May, Boris Johnson and my right hon. Friend the Member for Richmond and Northallerton (Rishi Sunak). Our commitment to working with the Scottish Government was demonstrated by what we delivered in our time in office. I very much hope that the Minister continues to enjoy his relationship with the Scottish Government, although I worry that as we move towards 2026 and the devolved election, this new warm relationship between the Labour party and the Scottish National party may become somewhat chillier.
Michael Shanks
I would have stopped short of the hon. Gentleman’s final point, which I will not repeat; I think that was more to salve his own conscience than to add any value to the debate. He may want to speak to the other side about some of those discussions to get a sense of whether the joyous relationship that he described was reciprocated. The fact is that if we want to achieve outcomes across the UK, whatever the political differences—they are significant, and he is right that they will become more significant in the few years ahead—we still need to be the grown-ups in the room and work to deliver them. My engagement has been very much around how we bring in the views of Welsh, Northern Irish and Scottish colleagues.
Catherine Fookes
It is a bit rich hearing the Opposition talk about how to work with the devolved Administrations. I am pleased to see in the Bill that Welsh Ministers will be consulted. The previous relationship between the Conservative Government here and the Labour Government in Cardiff was appalling. Often, the phone was not picked up to Mark Drakeford when he was First Minister. Could the Minister confirm that he will work with the Welsh Government and with our organisation, Trydan Gwyrdd Cymru, which is similar to Great British Energy, and how he will do that?
Michael Shanks
I thank my hon. Friend for her well-made point. Across the UK, we are resetting the way we do these relationships. It is not just the visits and set-piece moments; it is the day-to-day engagement and agreement. There is fulsome discussion and disagreement, but it leads to the view that, actually, we generally agree on the same outcomes and want to work out how to work co-operatively to achieve them. That is what the public would want us to do across these islands.
I will point out some of the engagement we have already had. The First Minister met recently with the start-up chair of Great British Energy and the Cabinet Secretary. I have met the Cabinet Secretary almost every week that I have been in post. It is important to talk through these issues and we think that consultation on the statement of strategic priorities is incredibly important.
I object to the amendment to move to a consent process for exactly the same reason that I gave in answer to the previous point. It is not that I do not want any engagement, but that I do not want us to get tied up in a process. In our engagement with Scottish colleagues, the challenge is how the Government reflect the view of the Scottish Parliament without everything going back through a process in committees. My real worry is that we get tied up in months and months of engagement, trying to find dates in calendars to discuss elements of the strategic plan, and do not actually get on with delivering things.
Josh MacAlister (Whitehaven and Workington) (Lab)
The right hon. Member for Aberdeen South made an important point about elected representatives from Scotland having a role in the strategic priorities for Great British Energy. But this is the United Kingdom Parliament, in which we have good and appropriate representation of Scottish electors, and very strongly and proudly so on the Labour Benches. Surely the UK Parliament and the UK Government are well-positioned to reflect the interests of the whole United Kingdom rather than, as the Minister is indicating, going through multiple repetitive processes that would hamper the ability of Great British Energy to achieve the goals that the right hon. Member for Aberdeen South surely wants for his own constituents.
Michael Shanks
I take that point. I will come back to the role of the UK Government in Great British Energy in a moment, as it is important. Of course I want to engage with Scottish, Welsh and Northern Irish colleagues in this place, but I also want to find a way to engage constructively with the devolved Parliaments and Administrations, not just on the statement of priorities but far beyond that. We have already had conversations about how the board of Great British Energy might engage with the Scottish Government on a more regular basis. We are very open to those ideas, but—to come back to this point briefly—it is important that Great British Energy is funded and directed by the UK Government and therefore ultimately responsible to the UK Parliament.
Andrew Bowie
I thank the Minister for giving way; he is being incredibly generous with his time. Subsection (6) deals with Northern Ireland in the context of what we are discussing. Energy is a devolved competency within Northern Ireland, which works on an all-Ireland grid to deliver electricity on the island of Ireland. Is that the reason the language in that subsection is slightly different? It refers to consulting the Department for the Economy, as opposed to consulting Welsh Ministers and Scottish Ministers in the previous two subsections. How will GB Energy and the Department interact with our Northern Irish colleagues, given that GB Energy will be a body of the UK Government and paid for by UK taxpayers, but will have very little role in delivering energy in Northern Ireland?
Michael Shanks
I thank the hon. Gentleman for that important point. Early on in the development of the Bill, we had a genuine conversation with the Northern Irish Executive about whether Northern Ireland should be included in the Bill at all, on the basis—exactly as he says—that energy is completely transferred in Northern Ireland. We agreed that it was better to keep Northern Ireland in scope so that some of the benefits may come to Northern Ireland, in particular around skills and supply chains, but clearly the relationship will be very different. We do not anticipate Great British Energy funding specific projects, for example, for the reasons that he outlined.
The broader point here is a reiteration of an earlier point: Great British Energy will not have special powers compared with any other company. It is therefore important to recognise that if Great British Energy is delivering projects in Scotland, it will have to conform to Scottish planning and all the other regulations and consenting regimes in Scotland exactly as any other company operating in Scotland would. It will not have additional powers to supersede any of the regulations set by the Scottish Parliament. That is important because, clearly, although the funding will come from the UK Government through Great British Energy, the delivery of those projects, if in Scotland, will largely be the responsibility of the Scottish Parliament through the environmental planning and consenting regimes. Great British Energy will not have additional powers to supersede any of those regulations.
Stephen Flynn
I do not know whether I misheard the Minister’s last point, but I am not sure that we should view consulting the Scottish Parliament as burdensome. In fact, with both the Scottish Parliament and the Welsh Senedd, and indeed with the Northern Ireland Assembly, there is a benefit for the United Kingdom in being proactive in its positive engagement with the devolved Governments and Administrations on these isles.
Notwithstanding that, I am pleased that I have been able to get this matter on the record. It is not unusual for this sort of provision to appear in legislation that applies across the UK that may carry implications for the devolved areas. In that regard, I will not press the amendment to a vote. However, I say to the Minister that my colleagues and I will hold him to account on this. As he knows, the delivery of projects relies on the Scottish Government and the UK Government working in practice on planning, consenting, the Crown Estate Scotland and the associated infrastructure. I would hate to see a situation where the strategic priorities of GB Energy, and the whole of the UK Government, change and they seek to impose their will on the Scottish Parliament in the way the previous Government did, which is why we did not have positive relations.
Michael Shanks
I agree with the broad arc of what the right hon. Gentleman has just said, but there is no mechanism for Great British Energy to impose anything on the Scottish Parliament. The whole point I was making is that it is important to recognise that Great British Energy has to operate within whatever framework any Scottish Government set for it.
Stephen Flynn
Forgive me, Sir Roger; I think the Minister and I were in agreement there. The point I was making was that a future Secretary of State may seek to change the framework of GB Energy, and that would cause me concern in that regard. However, as it stands, I am content with the Minister’s comments and will not seek to press the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
I am satisfied that matters arising from clause 5 have been adequately debated, so I do not propose to call a stand part debate.
Clause 5 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Anna Turley.)
Great British Energy Bill (Fifth sitting)
Tuesday 15th October 2024
(4 months, 1 week ago)
Public Bill CommitteesGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 15 October 2024 - (15 Oct 2024)
The Committee divided: - Ayes: 1 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 3 / Noes: 11 - Question accordingly negatived.
Stephen Flynn (Aberdeen South) (SNP)
I beg to move amendment 3, in clause 6, page 3, line 38, at end insert—
“(1A) The Secretary of State must, in particular, direct Great British Energy that any revenues generated from activities of Great British Energy in relation to resources located in Scotland must be invested back into projects located in Scotland.”
Good morning.
Stephen Flynn
I thank the shadow Minister for that warm welcome. What a delight it is to be back in Committee Room 10 on a Tuesday morning to discuss the Great British Energy Bill.
Last week, we all spoke at length about the massive opportunities in the renewable energy sector in the UK and particularly in Scotland. From fixed-bottom and floating offshore wind to green hydrogen, blue hydrogen, tidal and wave, pumped storage hydro, onshore wind and so forth, Scotland has a plethora of resources. I believe it was the chief executive officer of the Confederation of British Industry who said last week that Scotland’s renewables sector could unlock economic growth for the UK—imagine what it could do for Scotland’s economy.
It is important to reflect on the fact that over the past 50 or 60 years or so of North sea oil and gas, £450 billion has flowed from Scotland’s waters down to Whitehall. Can anyone seriously and reasonably argue that Scotland’s society reflects the magnitude of that wealth in our public environment, our infrastructure or our energy projects, which are in their infancy? They should be much further on, using the wealth that we had accumulated over many decades.
I do not want to see the same mistake repeated. I want to see the revenue generated from Scotland’s energy resources returned to Scotland so that we can ensure a society that is greener, more inclusive and fairer, and that delivers the continual economic growth that we so badly need. Scotland produces six times more gas than we consume, with some 28 to 36 GW of floating offshore wind coming down the pipeline—and that is before I get into all the other energies that are keen to come on stream should the Government finally put in the financial mechanisms to support them.
That affords Scotland the ability to have a competitive advantage, not to repeat what Ireland has done on corporation tax—we cannot all chase the same reduction, which would be a race to the bottom—but to create a competitive advantage that attracts big business to Scotland based on the energy that we consume. The prize is so great that we surely cannot miss out on it. I appreciate that Members around this Committee Room in the United Kingdom Parliament may not share my enthusiasm for Scotland to have its resources returned, but it is an important point to engage with.
Andrew Bowie
I am listening carefully to the right hon. Gentleman. Does he share my concern that—should the amendment be agreed to and should the Minister consent to any revenue generated from Scotland by GB Energy being returned to Scotland—the Scottish Government will not be competent enough to deal with it, given that in only six years they have squandered the £700 million generated from the ScotWind leasing round, which was returned directly to Scotland to plug gaps in their own Budget and was not invested in new energy projects, new technology or new infrastructure across Scotland?
Perran Moon (Camborne and Redruth) (Lab)
I am interested in the right hon. Gentleman’s premise. If Scotland is granted this amendment, surely the Welsh and the Cornish—in Cornwall we have onshore wind, offshore wind, geothermal, tidal, solar, tin and lithium, which are all critical to the UK’s move away from fossil fuels—will demand the same thing. The point is that it is GB Energy, not “Scotland Energy”.
Stephen Flynn
Would the hon. Gentleman like to clarify to the Committee whether he has just equated the nation of Scotland to Cornwall?
Perran Moon
Under national minority status—well, the right hon. Gentleman can draw his own conclusion.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I question whether amendment 3 would be beneficial to Scotland or give Scotland a competitive advantage, as has been claimed. I think it is deeply contrary to Scotland’s interests.
As my hon. Friend the Member for Camborne and Redruth has pointed out, we are not in separate energy markets. We live in one energy market, and that would not change even if we were divided into separate states, as Cornwall might well one day become. The transmission of energy does not respect borders. It is pretty obvious that it would make no sense to invest only in the national grid north of Berwick, while someone else invested in the national grid south of Berwick.
In my constituency of Na h-Eileanan an Iar, we have the glaring anomaly that the energy companies of other states—Norway, Ireland, France—are investing in renewable generation, but there is no British state energy company. That is what I hope will come into being under the Bill. At one time we had the British National Oil Company, but that fell when Mrs Thatcher came to power—on the back of SNP votes, of course.
The fact that other state energy companies are investing in my constituency points to another glaring inconsistency in the amendment. If we followed its principle, Ireland would invest only in Ireland, France only in France and Norway only in Norway, but we know that that is not how things work. Norway’s sovereign wealth fund does not just invest in Norway; it makes global investments. It is not built just on narrow investment or narrow nationalism within its own borders; Statoil, now Equinor, invests globally. I hope that in due course GB Energy will invest globally so that the profits serve every corner of the United Kingdom, not just one.
I can understand why the right hon. Member for Aberdeen South wants to talk just about hypothetical money and future money. As the shadow Minister pointed out, the Scottish Government have already squandered the money that they raised from renewables. The Scotland licences for offshore wind farming were sold off cheaply by the right hon. Member’s colleagues in Edinburgh, although they still got 10 times more than they thought they could. Astonishingly, the SNP was ready to sell all 14 leases for just £75 million, but fortunately the Crown Estate auction in England and Wales went first and raised more than £1 billion, which gave the Scottish Government pause for thought. They called in the consultants, multiplied the figure by 10 and managed to raise £750 million, which was still too little in comparison with what could have been raised. That £750 million has been frittered away; it has not gone into any sovereign wealth fund or been used for the future benefit of public expenditure on energy infrastructure.
It is all well and good to talk about hypothetical, sealed-off, insular energy markets, but that is just not how it is or how it will be. Scotland, together with the rest of the UK, can have a huge input into GB Energy, which the Bill will set up, and we can all gain through a common effort in the benefits of its evolution.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
It is a pleasure to serve under your chairship, Dr Huq, and to see Committee members again. Having started the sitting with contributions from four Scottish MPs, we have gone through the greatest hits of Scottish politics, from the Thatcher Government to independence, Scotland’s wind and everything in between. It was a good way to start the Committee this morning.
Amendment 3 misunderstands not only the potential of Great British Energy, but how investments are already made in renewable projects in this country. The right hon. Member for Aberdeen South made a legitimate argument about the revenues from oil and gas over the past 60 years but, as hon. Members have already said, in more recent times and much closer to home, the legacy of the future of our energy story has already been squandered. What could have been almost £1 billion for our wealth fund to invest in future projects or in the inheritance of the country has already been spent to plug day-to-day spending. There is a danger that in such a short space of time we will repeat that oil and gas legacy in Scotland.
Great British Energy will invest in all four nations of the United Kingdom, and we are working closely with the devolved nations to make that a reality. Investments by Great British Energy will be made on the basis of the individual project, with decisions made at arm’s length from Government by an independent company. Clearly, with its leading role in renewables, Scotland will benefit from a great many of those investments, creating skilled, well-paid jobs in the process, with a genuine long-term investment in Scotland. That public investment is about crowding in private investment as well—and that is where I think the amendment misunderstands how the projects are delivered.
As much as the right hon. Gentleman and his colleagues might talk about how it is Scotland’s wind and Scotland’s waves, the reality is that without having crowded in investment through a publicly owned energy company such as Great British Energy, every penny that has already been spent on constructing projects in Scotland to generate electricity from our natural resources has gone offshore to private companies and foreign publicly owned companies. We greatly welcome that investment in Scotland and in the UK, which will continue in the years to come, but the purpose of the Bill is to ensure that a publicly owned energy company, owned by our taxpayers, can have a stake as well. The Bill, through Great British Energy, will allow some of that wealth to be retained for the benefit of our citizens.
It is our intention that the profits generated by Great British Energy will either provide a direct return to the Exchequer, benefiting the UK taxpayer, or be channelled specifically into measures that benefit the public, such as investment in more clean energy infrastructure. It is about benefiting people right across the United Kingdom, recognising that the investment came in the first place from taxpayers right across the United Kingdom. For those reasons, the Government will not support the right hon. Member’s amendment 3.
Stephen Flynn
I am incredibly surprised at the stance that the Minister has adopted. I jest, of course: it is no more than I expected. However, I do take issue with some of the points that have been raised.
First, it does a great disservice to this Parliament and to the supposed Union of equals to try to diminish the status of Scotland as a nation and equate it to other areas within the UK. Secondly, I agree to an extent with the notion put across by the hon. Member for Na h-Eileanan an Iar that energy is not constrained by borders, but under the watch of multiple United Kingdom Governments, energy-rich Scotland has been left with people living in fuel poverty. We have missed out repeatedly on the opportunities afforded to many other sovereign nations that have had control over their energy.
The hon. Gentleman also mentioned Equinor. The reality is that Equinor can advance its cause globally and seek to grow globally because it has benefited from its nation’s own natural resources, which is something that Scotland has never been able to do. The supine nature of Labour Members in Scotland continues, and people in Scotland will remember that in the days, weeks and years to come.
Conservative and Labour Members have referred to Scotland and to the supposed squandering of resources. How dare they, when Scotland’s Parliament has had to face up to 14 years of austerity from this place?
Stephen Flynn
If they had any desire to support Scotland’s cause, they would stand up against that and be truthful with the people of Scotland in that context. The Minister expresses dismay at that notion, but I am sure he was elected on a platform of fighting Tory austerity. Why is it different when it is Scotland?
Amendment 3 would ensure that Scotland benefits from its resources. That should not be too much to ask in this place. If the Minister and hon. Members around this Committee Room believe in respecting Scotland, they should agree to it, because it is the right thing to do.
Question put, That the amendment be made.
Andrew Bowie
I beg to move amendment 20, in clause 6, page 3, line 38, at end insert—
“(1A) (a) The Secretary of State must give a specific direction to Great British Energy that it must, within six months of the date of Royal Assent to this Act, report to the Secretary of State on the projected cost of fulfilling its strategic priorities under Clause 5 in accordance with its objects under Clause 3.”
It is a pleasure to serve under your chairship, Dr Huq, and to be back debating Great British Energy. Given that Margaret Thatcher has already been referenced this morning, we should appreciate that her legacy is the very reason we are standing here today, because she was the first world leader, at the 1989 UN General Assembly, to raise the prospect of irretrievable damage to the atmosphere, ocean and Earth itself from climate change. Had it not been for her global leadership in so many areas, we would not be debating the issues we are today, nor would the United Kingdom be the world leader in combating climate change we claim it to be.
Michael Shanks
I know that the Conservative party is in shifting political sands at the moment, but I was not expecting this morning to lead with such a full-throated defence of Thatcher—I do not think she is in the running for the leadership of the party.
Michael Shanks
Some things are outwith even the hon. Gentleman’s powers.
There are a number of reasons why we will resist amendment 20. First—I have made this point a number of times—the Bill is about making the minimum possible provisions to support the establishment of the company. Great British Energy will be operationally independent and, although directed at key points by the Secretary of State, its financial responsibilities will be the same as any other company, subject to all the regulations and laws that any company in this country has to face.
The amendment would introduce unnecessary detail into the Bill. As the hon. Gentleman would have agreed in previous Bills that he was involved in, this is an unnecessary amendment, and he would be making that exact argument if he was standing where I am today. As a publicly owned company, Great British Energy will be accountable through regular reporting to the Department, and its annual accounts and reports will be laid before Parliament so that Parliament can see them in detail. As a publicly owned company, it will also be subject to HM Treasury’s value-for-money guidelines. Like all existing public finance institutions, its investments will be subject to the usual safeguards and risk assessments to minimise the risk to taxpayers.
As I said in our last sitting, the purpose of clause 6 is for the Secretary of State to give direction to the company only in the most urgent or unforeseen circumstances. It is not for day-to-day operational reasons; I gave the example last time of national security issues. The power is meant to be used sparingly to ensure that Great British Energy has the space it requires to fulfil its role and deliver its strategic priorities. The amendment would change the intention of the clause, which is one reason we will resist it today.
As the hon. Gentleman knows, the Secretary of State will set Great British Energy’s strategic priorities to ensure that it remains aligned to current Government policy and strategy. It is therefore appropriate that we use clause 5 to set Great British Energy’s strategic priorities and objectives, not clause 6.
I assure the hon. Gentleman that the Secretary of State, rightly, has ambitions for Great British Energy—as the whole Government do and as I hope the whole House does. Those achievable objectives will be achieved through the funding envelope set for it by Parliament, backed by £8.3 billion of new money over the lifetime of this Parliament, and working in partnership with the private sector, local authorities and communities to spread skilled jobs and investment across the country.
Great British Energy’s aim is to become a financially sustainable, self-financing organisation in the long term, reinvesting its profits in the Treasury or into new projects. Therefore, I assure the hon. Gentleman that Great British Energy will be held accountable for the delivery of its objectives through the usual mechanisms. For those reasons, the Government will not support his amendment today and I hope that he withdraws it.
Andrew Bowie
I am sad not to hear a full-throated defence of Mrs Thatcher’s legacy when it comes to climate change—maybe the Minister is more of a “Hug a husky”, “Vote blue, go green” kind of guy in the Cameron mould.
Andrew Bowie
Well, that was a long time ago. Although I do not agree with all those arguments for not accepting the amendment, I will not press it to a vote. We will explore those points more deeply, however, on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Andrew Bowie
I beg to move amendment 21, in clause 6, page 3, line 38, at end insert—
“(1A) (a) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on—
(i) Great British Energy’s in-year rate of return on investment, and
(ii) a forecast of the following year’s expected rate of return on investment.
(b) A report under paragraph (a) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(c) The Secretary of State must lay a report made under paragraph (a) before Parliament.”
Amendment 21 would require Great British Energy to provide an annual report to Parliament on its annual rate of return and investment, and a projection for the following year’s expected rate of return on investment. We heard from the Minister that every project will see a return—we heard it on the Floor of the House—and, as discussed under amendments 11 and 12, GB Energy will drive household bills down by £300. In line with that, it would be useful to include in the legislation a direction for GB Energy to report to the Secretary of State on its in-year rate of return on investments, and a forecast of the following year’s expected rate of return on investment.
We heard assurances from the Government that GB Energy will return lower bills for households, and indeed, as I said, that every project will see a return. As it is a company that intends to invest in and de-risk projects in rising new clean energy technologies, it would be useful to see the return on investment from those projects—statutorily, in the Bill. I imagine that the Minister will have no issue in accepting this amendment, given his confidence in the financial success of GB Energy, and indeed his confidence that every project will generate a return.
Michael Shanks
I thank the hon. Gentleman for succinctly introducing his amendment; I will be succinct in my response. In debates about previous amendments, I made the points—I will not repeat them—that we should not add unnecessary burdens to the Bill or use the power in clause 6 for different purposes. I know he takes that argument seriously. Amendment 21 significantly widens clause 6 from its intention, which is why we will not support it.
I reiterate, however, that Great British Energy will operate not through some extra-legal mechanism, but in the exact same way as every other company in the UK, and will be responsible in the usual way, under the Companies Act 2006, for the presentation of its accounts. In addition to filing those accounts, financial information, annual reports and so on with Companies House, they will of course be laid before Parliament, and I will personally make sure that the hon. Gentleman receives a copy the moment that it is printed—he can hold me to that—so that, quite rightly, he can scrutinise them.
It is important to say that the day-to-day financial management of the company will be in line with Government regulations. The point of setting up Great British Energy as an independent company is that it will have an expert fiduciary board that will scrutinise the accounts in the usual manner. For those reasons, we do not think that amendment 21 is necessary.
Andrew Bowie
While not accepting all of the Minister’s arguments, I look forward to him personally presenting me with the financial returns. I will not press amendment 21 to a vote, but we will obviously explore the issues in more detail when the Bill returns to the Floor of the House. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Andrew Bowie
I beg to move amendment 22, in clause 6, page 3, line 38, at end insert—
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must take all reasonable steps to satisfy itself at the time of any investment in renewable energy infrastructure that connection to the National Grid will be made in time for energy produced from the relevant investment asset coming onstream.”
Amendment 22 would require Great British Energy to take all reasonable steps to ensure that access to the national grid is ready for any energy infrastructure invested in by Great British Energy. The great grid upgrade is, without a doubt, a necessary component of our journey to net zero by 2050. Currently, new energy infrastructure such as wind turbines and solar farms—the clean energy-generating technology that we need to invest in in this country—has a significant wait time for grid connection, as do many other projects.
That is why, when in government, we commissioned the Nick Winser review to set out recommendations on how to reduce that timeframe. We accepted every single one of the recommendations and the advice on all 43 areas to ensure that the continued work to drive down connection times was accelerated. Despite the work we initiated in government by accepting those recommendations, the timeframe for obtaining grid connections for new projects can be as long as 10 years, so a project without grid connectivity will potentially not come online until the mid-2030s—well beyond the new Government.
Ms Polly Billington (East Thanet) (Lab)
It is a pleasure to serve under your chairship, Dr Huq. I am staggered that the hon. Gentleman is talking about the national grid as though the previous Government—his Government —had not been in power for the last 14 years and did nothing to transform the national grid to support the renewable energy that is essential for the country’s prosperity. All the failures in the national grid system, and all that backlog, are because of the failure to grip the problems with the national grid that happened on his Government’s watch.
Andrew Bowie
I thank the hon. Lady for her intervention, but I think she is being slightly unfair. When I was Networks Minister, we commissioned and accepted every one of Nick Winser’s recommendations on how we could speed up connection times, improve the national grid, build new infrastructure and ensure that the queueing system was brought into a much better shape than we found it in when we came into office in 2010—
Stephen Flynn
In fairness to Committee members who may not have been here, perhaps the shadow Minister will remind us why he chose to step down as the Minister with responsibility for the grid.
Andrew Bowie
When I was moved to the position of Renewables Minister, it was impossible for me to carry on also being the Networks Minister. It is clear what the right hon. Gentleman is driving at: namely, the situation in the country today, where many communities feel under siege because they are hosting this new energy infrastructure—[Interruption.] The Minister laughs at the words “under siege”, but they do feel that.
Communities in this country face the prospect of new pylons, new energy infrastructure, new substations and battery storage facilities being built in the countryside. That industrialisation of the countryside is the reason that we proposed a review to investigate the costs of other technology that would not be so invasive of their communities, their landscape and the land in which they live and work. That is why we did that, and that is what I was about to speak about, but the right hon. Gentleman provoked me into coming to it earlier than I had planned.
We need to get this right. We need to take the country with us and have a discussion with the country about consent and consultation. It is about doing things not to communities but with and for communities.
Torcuil Crichton
The hon. Gentleman has almost made my point for me. Through GB Energy, communities will have a share and an investment. We will all share in the wealth of wind and in the grid connections that will come through this company.
Andrew Bowie
I am delighted to hear that the hon. Gentleman has such confidence in GB Energy’s ability to be the problem-solving fix-all. I have my concerns that that will not be the case and that the many issues we face—from grid connectivity to the targets that we in government set and the building of new infrastructure—will not be resolved by the creation of this company, given that the capital expended to it is so low in comparison with other state energy companies.
Torcuil Crichton
I agree with the hon. Gentleman that none of that will happen without the involvement, commitment, backing and consent of communities. Through GB Energy, that is what we will achieve.
Andrew Bowie
I thank the hon. Gentleman for his intervention. We must agree to disagree on this point. Of course, we want to see this effort succeed; we just have our doubts that it will.
Future renewable energy projects face huge connectivity challenges that the Government must be prepared for, but as I said, there is another equally significant challenge: the one facing communities. In my constituency, communities are expected to host hundreds of kilometres of new large pylon infrastructure, but the burden for new infrastructure falls particularly heavily on north-east Scotland, the north of England and East Anglia.
My key points are about the need to gain consent from communities, to reduce the burden where possible, and to have community benefits. We need to bring communities with us; there needs to be a conversation. If we are ever going to get to net zero, we need to stop alienating the communities hosting this infrastructure on behalf of the nation by imposing, rather than seeking, consent.
Ms Billington
The hon. Gentleman might have been reading my speeches from my career before I was elected, because I have been campaigning for a long time to improve the consent of and support for communities, so that they get some actual benefit from the investment that we will need to make in the renewable energy that we are talking about. That would require a change to the planning rules, which has not happened over the last 14 years, and a proper land use framework that involves energy. That is a bit of a diversion from the Bill, which is specifically about setting up a company to be able to generate electricity, but I am keen to hear the kind of rhetoric that we have heard from the hon. Gentleman in future when we talk about the transformation of the national grid and energy market reform, which would reduce bills for consumers.
The Chair
Order. The Clerk is reminding me that interventions should be brief—I remember being told that myself when I sat on a Public Bill Committee at exactly the same point in 2015.
Andrew Bowie
Thank you, Dr Huq. When the hon. Member for East Thanet has a spare moment or is struggling to sleep at night, I advise her to go back and review the Hansard of our contributions to the Energy Bill Committee in the last Parliament, during which we debated such points at length.
Andrew Bowie
It was inspirational. The Minister is absolutely right; they were inspirational speeches. Indeed, we talked about those issues at great length. When in government, I was proud to launch a consultation on community benefits, for example, which has still not been implemented. Although it is outside the scope of our discussion, it would be interesting to get an update from the Government on when they will bring forward the community benefits package and if any changes will be made to the package unveiled by us last November.
I return to the discussion on consultation and consent. In an attempt to reduce the burden on communities, we pledged to have a review into the presumption for overhead lines and to examine all other options that would be cost-comparable so as not to inflict that huge burden on communities.
Stephen Flynn
I am listening closely to the shadow Minister, and I am a little confused. On the one hand, he seems to be in favour of making sure that the grid capacity is there; on the other hand, he seems to be sticking up barriers to that grid capacity coming on stream and using terms like “reviews” and “consultations” that have no appropriate timescale attributed to them. What does he want to happen?
Andrew Bowie
Both can be achieved. Of course we need to improve the national grid and grid connectivity times. When I was in a ministerial position, not a day went past when a colleague did not come up to me on behalf of an individual, company or organisation that had been given grid connectivity times of seven, eight, nine or 10 years, and sometimes even more. That is an impossible place for the country to be in. It is preventing inward investment and holding back the economy, so we need to improve the national grid, review the queuing system and improve connectivity times, but we need to do it in a way that brings the country with us and does not inflict misery on the communities that are being asked to host this huge infrastructure on behalf of the rest of the nation. That is why we need to get it right and examine all the available options. We need to examine whether undergrounding or offshoring could be cost-comparable or preferable to overhead lines when we move forward.
Stephen Flynn
The shadow Minister is being generous with his time, as always. What sort of timeframe would he associate with that level of engagement going forward? He seems to lack certainty on what that new technology would be. Can he advise us of the cost savings that would go to the consumer from these new technologies, which I am not aware of and do not think that any Member in this room is aware of?
Andrew Bowie
It is precisely because we do not have all the answers that we commissioned that review in the very last days of the last Parliament, which we committed to in our manifesto and which sadly has been abandoned by the Labour Government.
It should be incumbent on Great British Energy to take into account the challenges that we all acknowledge we face to ensure that the investments that it undertakes give the best value for money on behalf of British taxpayers, whose money is invested in the funds for the company. It should also ensure that each project has grid connectivity available at the right time so that it is a worthwhile investment and returns can be realised as soon as possible from each investment.
Michael Shanks
I have to say that of all the amendments before the Committee, I find this one utterly extraordinary. The shadow Minister’s amendment says that Great British Energy
“must take all reasonable steps to satisfy itself at the time of any investment in…infrastructure that connection to the National Grid will be made in time for energy produced from the relevant investment asset coming onstream.”
The recognition, after 14 years, that dealing with the issues with connections to the national grid should somehow be important is extraordinary. For the hon. Gentleman to wake up this morning, just a few months after leaving government, and decide that fixing this problem is a massive priority is quite something.
I am genuinely concerned by some of the language that we have heard today. The shadow Minister spoke, quite rightly, about Cameronian support for the climate. I wonder whether the Conservative party, after such a short time, ever takes a look at itself and wonders whether the rhetoric that it uses about the mechanisms we are going to use to tackle the climate crisis is in the right place. I know we have some net zero sceptics in the running to lead the party, but it is quite extraordinary to say in one breath that there are huge connectivity challenges for the country and that communities are “under siege”.
Harriet Cross (Gordon and Buchan) (Con)
I understand that in some constituencies this might not seem to be an issue, but in the north-east of Scotland it is a massive issue. For example, I have a town in my constituency called Kintore, which is next to a place called Leylodge. It is getting a 3 GW hydrogen plant next to an extended substation, with at least four or five battery plants and all the new pylons coming in to feed that. If the residents of Leylodge, where there are about 40 houses, and Kintore, where they number around 4,500—and similarly those in New Deer, up in the north—do not feel under siege, how do they feel?
Michael Shanks
I think that doubling down on the language is not helpful either, but I will come back to both those points.
I recognise the importance of the point about communities and a more strategic approach to infrastructure to ensure a balance. That is why we have commissioned the National Energy System Operator to look at the strategic spatial energy plan, which is important in how we look at energy in a strategic way. To say that communities are under siege is not the right language. This is nationally important infrastructure.
The Opposition do not support Great British Energy, but as my hon. Friend the Member for Na h-Eileanan an Iar said, Great British Energy is one mechanism whereby communities can benefit from infrastructure where they are not benefiting at the moment.
Perran Moon
Does the Minister agree that the people of Cornwall are ready, willing and able to take any renewable energy opportunities we possibly can?
Michael Shanks
My hon. Friend never misses an opportunity to mention Cornwall, but let us not relitigate our earlier argument.
There are huge opportunities. The hon. Member for Gordon and Buchan made the important point that there are certain parts of the country, particularly in the north of Scotland, where for obvious reasons there are a number of wind projects, and we need to look at the infrastructure that comes with that. We want to ensure we build the nationally important infrastructure to deal with the connections issue that the shadow Minister rightly raises, but we also need to recognise the need for cohesion in planning to make sure that there are not some of the issues that we have seen in other parts of the UK, where a number of projects have come on stream over time rather than being planned coherently.
Finally, on community involvement, the point about consent in dealings with communities is important. We want to take some of the previous Government’s work on consulting on community benefits—we will say more on this in the coming months—to make sure that there is genuine community benefit in hosting not just energy generation infrastructure, but network infrastructure, which will be critical. Nothing that we have said runs roughshod over the planning and consenting process, which will remain for communities.
Andrew Bowie
The Minister is being typically generous with his time. He says that nothing will ride roughshod over the planning and consent regime and allowing communities to have their say. Am I to take it from that that there are no plans afoot to resolve the Scottish planning and consenting issues that remain as a result of its being governed by the Electricity Act 1989 while the rest of the United Kingdom is governed by the Planning Act 2008 on electricity, which means that the automatic right to public inquiry remains in Scotland? Is the Minister assuring the Committee and me that that right will remain and that he has no plans to resolve that issue?
Michael Shanks
The question of balance, which I was just about to come to, is important. The right to a public inquiry can be triggered by a much smaller number of people in Scotland than in the rest of the UK, so there have been real issues: communities do not generally have a view, so individuals or campaign organisations trigger public inquiries. We are looking at the consenting regime, as I think the hon. Gentleman’s Government was, to bring balance to this.
Balance is key. The Government, from the Prime Minister down, have been clear that we will need to build this infrastructure, which is nationally important for all the reasons that the shadow Minister set out. That is why the amendment is so extraordinary. The shadow Minister said that we need to tackle the huge connectivity challenge—I wrote that down—and the Bill is the mechanism for doing that. Balance is key: my hon. Friend the Member for Na h-Eileanan an Iar made it clear that we want communities to benefit from having a stake in what Great British Energy will deliver, but it is important that we get on with building this infrastructure. For those reasons, we will not support the amendment.
Andrew Bowie
Right hon. and hon. Members have made some disparaging comments about the Conservative legacy on our climate, but I remind them that we halved our carbon emissions faster than any other G7 nation, built the first floating offshore wind farms in the world, ended coal for power generation and led the world in so many other ways, including developing new technologies and delivering the very successful COP26 conference in Glasgow. It is because our views on this are so aligned that I think the amendment would sit well within the Bill.
Josh MacAlister (Whitehaven and Workington) (Lab)
I think the shadow Minister is a secret supporter of the Bill, not a true believer in his amendment. In an interview that he gave to Politico earlier this month, he said that there were “mistakes” in the roll-out of mini-nuclear reactors, because it was a slow process, and he called the infrastructure delays facing the UK “absurd”. I think he knows that the Bill will help to speed those things up and that his false dichotomy between the Government and communities will not really pose a risk to projects.
Andrew Bowie
It is a matter of public record that I think we should have gone faster on small modular reactors, and I hope that this Government pick up the pace. On the hon. Gentleman’s other point, my concern is that the creation of GB Energy will get in the way of delivering our objectives and shared goals and supporting new technologies. We oppose its creation because we think it will actually be a block on getting where we need to more quickly.
Andrew Bowie
I do. That is why I would like to press the amendment to a vote.
Question put, That the amendment be made.
Michael Shanks
I will not detain the Committee long, as we have already discussed aspects of the clause in our debates on the various helpful amendments tabled by the shadow Minister.
Clause 6 will ensure that there is a mechanism in place purely for any unforeseen or urgent circumstances that may arise. For example, it could be used if the Secretary of State considers it necessary to give Great British Energy some kind of direction, in the interests of national security or otherwise, to respond to something in the public interest. This is about preparing for all eventualities, as we would expect of the Government.
It is important to know that the power is very similar to that set out in other legislation of this kind. For example, it was included in the UK Infrastructure Bank Act 2023 and the Energy Act 2023 for Great British Nuclear. Finally, I hope the Committee will be reassured by the requirement in the clause for the Secretary of State to consult both Great British Energy and other appropriate stakeholders before issuing a direction. To ensure public transparency, as we would expect, any directions given to Great British Energy will be published and laid before Parliament. I commend the clause to the Committee.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Annual accounts and reports
Question proposed, That the clause stand part of the Bill.
Michael Shanks
Clause 7 has fairly standard wording for a Bill of this kind and for a company of this kind. Under section 441 of the Companies Act 2006, the directors of any company—Great British Energy will of course be one such—are required to deliver annual reports and accounts. The clause simply requires that Great British Energy deliver its annual reports and accounts to the Secretary of State, in addition to filing them with Companies House, and that the Secretary of State lay a copy before Parliament in due course.
It is common practice for a company to publish its annual reports and accounts on its website. They will also be available on the Companies House website in the usual way. None the less, the clause will ensure that Parliament receives the annual report and accounts directly so that it can scrutinise them and assure itself that the company is fulfilling its duties. I commend the clause to the Committee.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Extent, commencement and short title
Question proposed, That the clause stand part of the Bill.
Michael Shanks
I am hoping that at some point someone will want to take part in a debate, to save the Committee from hearing only from me.
Clause 8 sets out the extent of the Bill, which is important, and its commencement. The Act will come into force immediately on its passing, reflecting the fact that setting it up has been one of the Government’s key priorities, which is why we commenced the process and introduced the Bill to the House within our first 100 days.
It is important to us that the Bill reach the full territorial extent of the United Kingdom and that it benefit citizens in England, Scotland, Wales and Northern Ireland. We have shared net zero targets across the whole UK. Clearly the devolved Administrations have different responsibilities for different aspects of energy policy—it is generally reserved, but in Northern Ireland it is transferred—so the role of Great British Energy will be slightly different in different parts of the UK, but it is important to say that the investments that Great British Energy makes can still drive deployment, create jobs, boost energy independence and ensure that taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy across the UK.
I thank the devolved Administrations, who have engaged with me since my appointment as Minister on the Bill. We have had detailed and helpful conversations with my counterparts in all the devolved Governments across the UK. I thank them for how they have engaged in our discussions: they have been supportive of Great British Energy, recognising the benefits that it brings to all parts of the UK, while clearly advocating on behalf of their own Governments. It is important that we continue that. My commitment to them and to the Committee is that we will continue the process after the Bill passes to ensure that we have a company that delivers for all the people of this United Kingdom. I thank them for their constructive and collaborative approach. I commend the clause to the Committee.
Question put and agreed to.
Clause 8 accordingly ordered to stand part of the Bill.
New Clause 2
Review of effective delivery
“(1) The Secretary of State must appoint an independent person to carry out reviews of the effectiveness of Great British Energy in—
(a) delivering its objects under section 3,
(b) meeting its strategic priorities under section 5, and
(c) complying with any directions given under section 6.
(2) After each review, the independent person must—
(a) prepare a report of the review, and
(b) submit the report to the Secretary of State,
as soon as is reasonably practicable after the completion of the review.
(3) The independent person must submit to the Secretary of State—
(a) the first report under this section within the period of 12 months beginning on the day on which this Act comes into force, and
(b subsequent reports at intervals of no more than 12 months thereafter.
(4) On receiving the report, the Secretary of State must, as soon as is reasonably practicable in each case—
(a) publish the report,
(b) lay a copy of the report before Parliament, and
(c) prepare and lay before Parliament a response to the report’s findings.
(5) In this section, references to an ‘independent person’ are to a person who appears to the Secretary of State to be independent of—
(a) the Secretary of State, and
(b) Great British Energy.”—(Andrew Bowie.)
Brought up, and read the First time.
Andrew Bowie
I beg to move, That the clause be read a Second time.
The Secretary of State is establishing a new state-run body—for the record, that is something that I oppose—of which the energy sector has many. For example, we have the UK Infrastructure Bank, an organisation that has many similarities with Great British Energy. As with UKIB, the Bill aims to give statutory force to the company’s objectives. However, unlike the legislation for UKIB, the Bill does not endeavour to create statutory forms of transparency, accountability and governance for the firm, so it is concerning that the Great British Energy Bill gives the Secretary of State sole powers of direction. We cannot possibly think why that would appeal to the Secretary of State, so my new clause 2 would ensure a level of independence in the governance of Great British Energy.
The Minister said on Thursday that Great British Energy would be “operationally independent”, but it lacks specific, key components to ensure that. Indeed, it seems that a significant level of direction lies with the Secretary of State. I suggest to the Minister that accepting the new clause to introduce a requirement for an independent person to review the effectiveness of Great British Energy in delivering its objects would ensure its independence and transparency.
There is a precedent in the legislation on the UK Infrastructure Bank for the designation of an independent person to carry out reviews into the effectiveness of GB Energy. If that does not happen, we are concerned that any review of its effectiveness may be perceived externally as Great British Energy simply marking its own homework. If the UK Infrastructure Bank has appointed an independent person to conduct reviews of its effectiveness, why are the Government so reluctant to set out the same standards for Great British Energy?
Michael Shanks
I thank the shadow Minister for his attempt to add an additional clause to the Bill. I will speak briefly about why we do not support new clause 2, but I agree with him on the importance of ensuring that Great British Energy be accountable, transparent and clear about how it is delivering on its objectives. We absolutely want to see that as well.
We believe that the Bill is in a strong place at the moment. It will, of course, utilise all the mechanisms already in place for other companies, including publicly owned companies, through its annual reports and accounts. It will provide regular updates on its work, meeting its objectives and the stewardship of the public funds that it is given. It is important to recognise that the reports, accounts, other information and directions that have been given will be laid before Parliament and will therefore be readily available to hon. Members. In the same way as any other company operating in the UK, Great British Energy will undergo external audit of its accounts, providing a further level of assurance. It will be expected to publish its own strategic plan on how it will deliver its objectives, which will be laid before Parliament.
I do not think it proportionate to add another mechanism for an annual independent review. I note the shadow Minister’s point about the UK Infrastructure Bank, but the rhythm of independent review was that it would happen once the bank had been operating for seven years and would be repeated at intervals of no more than five years. I do not think the new clause proportionate to what was introduced in the UK Infrastructure Bank Act 2023.
In the light of what my hon. Friend the Member for Whitehaven and Workington described as the shadow Minister’s secret support for the Bill—he doth protest a little too much in saying that he opposes it—I would hate to suggest that the new clause was some kind of mechanism to stymie the action of Great British Energy. However, the frequent cadence that the shadow Minister proposes for the review would considerably interrupt the work of the company in actually delivering. It would be under almost continuous review, which does not seem proportionate or effective for a company that we aim to move in a nimble and speedy way to deliver for the British people. I would rather Great British Energy got on with delivering for the British people on its important mission to deliver projects to benefit all the United Kingdom. We will not support the new clause.
Andrew Bowie
I am disappointed that the Minister will not accept the new clause. We have some concerns about transparency and accountability, which we will explore further on Report. I will not push new clause 2 to a vote today—not least because I seem to have lost my Whip, but also because we wish to explore the issue on the Floor of the House. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 3
Directors: appointment and tenure
“Great British Energy must secure that its articles of association provide that—
(a) Great British Energy is to have at least five and no more than fourteen directors;
(b) the chair of Great British Energy’s board, Great British Energy’s chief executive officer and the non-executive directors are to be appointed by the Secretary of State;
(c) the Board is to appoint one or more directors to be responsible for ensuring that the Board considers the interests of the appropriate national authorities when making decisions;
(d) the period of a non-executive director’s appointment is not to exceed four years, or such shorter period as may be specified in the terms on which the director is appointed;
(e) a person may be appointed as a non-executive director no more than two times;
(f) a person ceases to be a non-executive director as soon as—
(i) the person ceases to be a director by virtue of any provision of the Companies Act 2006 or is prohibited from being a director by law,
(ii) the person becomes bankrupt (in relation to England and Wales and Northern Ireland) or the person’s estate has been sequestrated (in relation to Scotland),
(iii) a registered medical practitioner who is treating the person gives a written opinion to Great British Energy stating that the person has become physically or mentally incapable of acting as a director and is likely to remain so for more than three months, or the person has resigned as non-executive director in accordance with notification which the person has given to Great British Energy.”—(Andrew Bowie.)
Brought up, and read the First time.
Andrew Bowie
I beg to move, That the clause be read a Second time.
On governance, new clause 3 would require Great British Energy to appoint between five and 14 directors, alongside a chair of the board, a chief executive officer and non-executive directors. Like new clause 2, it would bring checks and balances to the governance of Great British Energy to ensure that the powers of direction do not rest too heavily on the Secretary of State. Like new clause 2, it has a precedent in legislation: section 7 of the UK Infrastructure Bank Act 2023 sets out precisely the same requirements for the appointment and tenure of its directors. I therefore commend new clause 3 to the Committee.
Before I sit down, Dr Huq, may I take the opportunity to thank you and Sir Roger for your chairship? I thank the Clerks, the Doorkeepers, the Minister for his time, and all right hon. and hon. Members for their attendance.
I also thank the officials in the Box. I had the distinct privilege of serving in the Department for just shy of two years. The Minister is very lucky to have such an able team of civil servants supporting him in his work; it was a genuine privilege to work alongside them. Although I do not think that Great British Energy will succeed in its objectives, I wish them the very best in endeavouring to set this company up.
Michael Shanks
I was going to end on an argument about why the Conservative party is in such a rut, but the hon. Gentleman has changed the tone completely. I feel lost with my political attacks, so I will move swiftly on to why new clause 3 is not necessary.
I will not detain the Committee long. The argument is clear that there are quite established governance arrangements in place for companies of this type, and it is not necessary for primary legislation to make provision on the detail of the board of directors. There are a number of very well-established governance documents that set the course for this. The UK corporate governance code published by the Financial Reporting Council sets out best practice, to which Great British Energy will conform.
The interim chair Juergen Maier, whom we met last week, is in place to start up the company. Recruitment is under way for other key posts, and the permanent chair and the non-executive directors will be recruited in due course. The governance code on public appointments will make it clear how those will be carried out; they will be regulated by the Commissioner for Public Appointments. Although I recognise the shadow Minister’s legitimate points about transparency and accountability, I think his new clause unnecessary.
Rather than giving my prepared remarks criticising the Conservatives’ position, let me gently say that I am grateful that in the three days on which the Committee has met, the shadow Minister has moved closer and closer to voting Aye. I am confident that by Report he will be in the right Lobby. I welcome that move.
I genuinely thank all hon. Members for serving on the Committee; it has been a pleasure. Dr Huq, I thank you and Sir Roger for your stewardship of the Committee, along with everyone who has been involved in delivering its sittings. I also thank all our witnesses who gave their time freely last Tuesday. It was quite a lengthy session, but they gave important evidence—not least because every single witness confirmed how important Great British Energy is to delivering our mission to move to clean power by 2030.
As it has been three months now that I have had the privilege of having this job, I will finish by echoing the shadow Minister’s points, which were heartfelt, genuine and absolutely right, about the exceptional skill and qualifications of civil servants in what was once the Department of Energy and Climate Change. A change of Government is a considerable thing for the civil service, but it has moved at pace, as the Government have. I give real credit to the civil servants who make things happen and who so often do not get the credit for their hard work. I thank them all, and I thank hon. Members for their consideration. I do not support new clause 3, but I thank everyone for their time today.
Andrew Bowie
I will not push new clause 3 to a vote. We will discuss the issue further on Report, but I will not detain the Committee any longer. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
The Chair
Thank you, everyone, for your patience with me and Sir Roger in the first Bill Committee of this Parliament.
Bill to be reported, without amendment.
Great British Energy Bill
Tuesday 29th October 2024
(3 months, 3 weeks ago)
Commons ChamberGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 29 October 2024 - (29 Oct 2024)
17:58 - The House divided: - Ayes: 96 / Noes: 353 - Question accordingly negatived.
18:14 - The House divided: - Ayes: 124 / Noes: 361 - Question accordingly negatived.
18:29 - The House divided: - Ayes: 115 / Noes: 361 - Question accordingly negatived.
18:53 - The House divided: - Ayes: 361 / Noes: 111 - Question accordingly agreed to.
Claire Coutinho (East Surrey) (Con)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Judith Cummins)
With this it will be convenient to discuss the following:
New clause 2—Nature Recovery Duty—
“(1) In exercising its functions, Great British Energy must take all reasonable steps to contribute to the achievement of targets set under sections 1–3 of the Environment Act 2021.
(2) Under the duty set under subsection (1), Great British Energy must consider opportunities to incorporate nature-based solutions in—
(a) the design and maintenance of any assets in its ownership, and
(b) its investment decisions.”
This new clause would give Great British Energy a new duty, requiring it to contribute to the achievement of Environment Act targets. The duty specifies the incorporation of nature-based solutions (including nature friendly design and building measures) in all assets owned by and invested in by Great British Energy.
New clause 3—Prohibition of investments which would increase greenhouse gas emissions—
“(1) Prior to making any investment, Great British Energy must publish an assessment of the impact of the investment decision on—
(a) greenhouse gas emissions and
(b) the production or combustion of fossil fuels.
(2) Where the assessment carried out under subsection (1) showed that the investment was expected to contribute to an increase in greenhouse gas emissions, Great British Energy must not make that investment.”
This new clause would require Great British Energy to publish an assessment of potential investments on greenhouse gas emissions and the production or combustion of fossil fuels. Any investment which the assessment showed was expected to increase greenhouse gas emissions would be prohibited.
Amendment 3, in clause 1, page 1, line 3, at end insert—
“within 6 months of the day on which this Act is passed.”
Amendment 4, in clause 3, page 2, line 18, at end insert—
“(e) an emergency home insulation programme with targeted support for people on low incomes, and
(f) the expansion and development of renewable energy and technology.”
This amendment would set objects for Great British Energy of facilitating, encouraging and participating in an emergency home insulation programme with targeted support for people on low incomes, and the expansion and development of renewable energy and technology.
Amendment 1, in clause 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include a priority to reduce household energy bills by at least £300 in real terms.”
Amendment 5, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include a priority to advance the production of clean energy from schemes owned, or part owned, by community organisations.”
This new section would require the statement of strategic priorities to make specific regard to facilitate community-based clean energy schemes.
Amendment 6, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include the reduction of household energy bills by £300 in real terms by 1 January 2030.”
Amendment 8, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include the creation of 650,000 new jobs in the United Kingdom by 2030 resulting directly or indirectly from Great British Energy’s pursuit of its objectives under section 3.”
Amendment 11, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include a priority to allocate 3% of Great British Energy’s budget to marine energy projects.”
This amendment would require 3% of Great British Energy’s budget to be allocated for marine energy projects.
Amendment 12, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include a priority to work with Great British Nuclear on the development of nuclear energy projects.”
This amendment would require Great British Energy to work with Great British Nuclear on developing nuclear energy projects.
Amendment 13, page 3, line 8, at end insert—
“(1A) The statement of strategic priorities under subsection (1) must include a priority to require any renewable energy development located in Wales that Great British Energy owns or invests into offer a minimum of 10% community and 10% local ownership for each project.”
This amendment seeks to ensure that all renewable energy projects in Wales which are owned or invested in by Great British Energy would be required to offer a 10% stake in community ownership i.e. for individuals and households, and a 10% stake of local ownership, i.e. any Wales-based organisation.
Amendment 15, page 3 line 16, leave out “consult” and insert “receive the consent of”.
This amendment would require that the Secretary of State receives consent from Welsh ministers before including in the strategic priorities and plans any matter concerns a subject matter provision about which would be within the legislative competence of Senedd Cymru, if contained in an Act of the Senedd.
Amendment 7, in clause 6, page 3, line 38, at end insert—
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of reducing household energy bills by £300 in real terms by 1 January 2030.
(1B) A report under subsection (1A) must include a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years.
(1C) A report under subsection (1A) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(1D) The Secretary of State must lay a report made under subsection (1A) before Parliament.”
Amendment 9, page 3, line 38, at end insert—
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of creating 650,000 new jobs in the United Kingdom by 2030.
(1B) A report under subsection (1A) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(1C) The Secretary of State must lay a report made under subsection (1A) before Parliament.”
Amendment 10, page 3, line 38, at end insert—
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on—
(a) Great British Energy’s in-year return on investment, and
(b) A forecast of the following year’s expected return on investment.
(1B) A report under subsection (1A) must be made within two years of the date of Royal Assent to this Act and annually thereafter.
(1C) The Secretary of State must lay a report under subsection (1A) before Parliament.”
Amendment 14, page 3, line 38, at end insert—
“(1A) The Secretary of State must, in particular, direct Great British Energy that any revenues generated from activities of Great British Energy in relation to resources located in Wales must be invested back into projects located in Wales.”
This amendment would require the Secretary of State to ensure that all revenue generated by Great British Energy from resources in Wales are invested back into energy projects in Wales.
Claire Coutinho
It is nice to be back discussing Great British Energy, and on the day before the Budget, too. I am sure that Labour Members are worrying about what kind of horrors they will be forced to defend next. They will have had a miserable summer trying to explain to their constituents why they are scrapping the winter fuel payment for pensioners in poverty, just weeks after a general election in which no mention was made of that. They will have spent the last few weeks explaining that the term “working people”—the people they promised to protect in their manifesto—does not include small business owners, or employees with savings, and that their use of the term “national insurance” does not prevent a national insurance rise for employers. They will be getting a bashing from companies, who were told that Labour would be pro-business, yet have been clobbered by post-election announcements of tax rises and trade union charters, and who have a Prime Minister with an optimism about Britain that puts him on the charts somewhere between Eeyore and Victor Meldrew. And tomorrow Labour Members will have to explain why the Chancellor who said before the election that any change to the fiscal rules would amount to fiddling the figures is now changing them to open the door to billions of pounds of borrowing.
This is a timely return to the Great British Energy Bill. Our amendments today will give Labour Members an opportunity, which I am sure they will welcome, to hold their leadership to account for at least some of the promises that they were told to go out and sell. Let us take a look at a few of the promises that Labour Members made during the election. The hon. Member for Brent East (Dawn Butler) wrote on her website:
“We will set up Great British Energy…cutting energy bills by an average of £300 a year.”
The hon. Member for Bracknell (Peter Swallow) posted on Facebook:
“Why am I backing Labour’s plan to set up Great British Energy? It will save £300 off average household energy bills in the South East by 2030.”
The hon. Member for South Norfolk (Ben Goldsborough) said on Facebook:
“everyone in the east of England will get £300 off their energy bills…no ifs, no buts, no maybes, these will be measurable and you will be able to check our progress at the end of the next Parliament.”
At least 50 MPs made similar claims.
Why were Labour candidates up and down the country saying these things? Perhaps they were simply listening to the Cabinet. The Science Secretary said on “Good Morning Britain”:
“I can tell you directly…by the end of this Parliament that…energy bills will fall by up to £300.”
The Work and Pensions Secretary said:
“Great British Energy will get people’s bills £300 a year lower.”
This is my personal favourite: the Chancellor—the woman of the hour—said,
“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300.”
These were not one-off promises; it was the party line, as dictated by the Secretary of State for Energy Security and Net Zero. These promises are still up in writing. In fact, the Labour party website still says that its energy plans will cut bills by £300 on average. Oddly, Ministers now do not seem so keen on that pledge. We have asked them about it in this House, as have the media, but the number seems to have vanished. They have even taken down the Great British Energy website, and the newly appointed chair even said in Committee that cutting bills is
“not the scope of Great British Energy.”––[Official Report, Great British Energy Public Bill Committee, 8 October 2024; c. 6, Q5.]
This is not trivial; these are promises that people care about. Every single Labour Member will have had constituents vote for them because they believed that Labour’s promise of £300 off their energy bills would make a meaningful difference to their lives. Amendments 6 and 7 in my name will hold the Government to account on their election promise to cut bills.
Our amendments would give Great British Energy a strategic priority to cut people’s energy bills by £300 by 2030, and would require Great British Energy to produce an annual report on progress towards meeting that target. Surely all Labour Members who made these promises and kept them up on their social media accounts will want to track the Government’s progress on this important issue for their constituents. Well, tonight is their chance.
But £300 off bills was not the Secretary of State’s only promise at the election. He also claimed that Great British Energy would create 650,000 new jobs, but he did not mention that figure on Second Reading, and the Energy Minister, the hon. Member for Rutherglen (Michael Shanks), did not mention it in Committee. It does not appear in Great British Energy’s founding statement, nor does it appear in the Government’s explanatory notes on the Bill.
The only detail we have heard about the number of jobs to be created by Great British Energy came from the Secretary of State’s hand-picked chair of that body, who said that “hundreds” of people will be employed at its Aberdeen headquarters. We have since found out that the chair himself will be based in Manchester. It is a funny kind of headquarters if the head will not be based there, but that is the kind of sophistry that the public are starting to expect from this Labour Government.
More importantly, those few hundred people will hardly make up for the 200,000 jobs this Government are putting at risk through their plans to shut down the North sea, or the missed opportunities for jobs thanks to their go-slow on nuclear. On the Secretary of State’s watch, we have already seen thousands of jobs in industry lost.
The Secretary of State can talk about skills passports and Government transition projects all he likes, but the truth is that they do not pay the bills. He likes to say that we need to cut carbon at an extreme pace, faster than any other major economy, in order to show climate leadership and save the planet, but if our gas production, steelmaking or energy-intensive manufacturing moves to Asia, which is still powered by coal, he will be adding to emissions. That would mean more carbon in the atmosphere, and would be devastating for the hundreds of thousands of people who would lose their livelihoods here in Britain. I say that as someone who, before entering Parliament, worked on regenerating some of our most deprived communities once the jobs were gone.
As with our amendments on the Government’s £300 pledge, amendments 8 and 9 in my name would give Great British Energy a strategic priority of creating 650,000 new jobs by 2030, and would require an annual report to Parliament on progress towards this aim. That is important, because even the trade unions that normally support Labour have warned the Secretary of State and his team that his plans will lead to the mass deindustrialisation of Britain. The general secretary of the GMB has said that the Secretary of State’s plans are
“hollowing out working class communities”,
and will amount to “decarbonisation through deindustrialisation.” He said that importing more from China is
“bad for communities, not great for national security and it makes no sense in terms of the environment.”
He also said, and I hope the ministerial team are listening closely to this one:
“Our message to Ed Miliband is very clear: We are worried about a lot of promises that are not being delivered on jobs.”
Those Labour MPs who are members of the GMB, including the Energy Minister, have the opportunity tonight to hold the Government to account by voting for annual reporting on the jobs being created. The question is, will they listen to the general secretary’s concerns?
The next promise was that Great British Energy would turn a profit for the taxpayer. The Secretary of State admittedly got himself into a mess on this one. He has never had to make commercial investment decisions, and neither has any of his ministerial team, which is why they have been caught out promising the British public that they can turn a tidy profit, while at the same time telling multimillion-pound energy companies that they will take the least attractive parts of their investments off their hands. That is important, because the Secretary of State has written this Bill to give himself powers of direction. That was not the case for the UK Infrastructure Bank, and there was a recurring question in Committee about how much independence the supposedly independent Great British Energy will have.
This is my proposal: if the Secretary of State wants the power to meddle, he should be duty-bound to report the results of that meddling—its profits and losses—to this House. Amendment 10 in my name would require Great British Energy to produce an annual report on the performance of its investments, including its in-year return on investment and a forecast of the following year’s expected return. That is the bare minimum we can expect, so that British taxpayers can see what he is doing with £8 billion of their money.
I tabled clause 1 because it is crucial that we have proper oversight of the wider activities of Great British Energy. New clause 1 would require the appointment of an independent reviewer to assess Great British Energy’s effectiveness in achieving its objectives and strategic priorities. In Committee, the Energy Minister said that the Government want Great British Energy to be
“accountable, transparent and clear about how it is delivering on its objectives.”––[Official Report, Great British Energy Public Bill Committee, 15 October 2024; c. 168.]
I agree, and that seems a perfectly good reason to support new clause 1.
As I have said previously, Great British Energy is pretty much a carbon copy of the UK Infrastructure Bank, which was set up to provide loans, equity and guarantees for infrastructure to tackle climate change, backed by £22 billion. No Minister has been able to tell us the real difference between Great British Energy and the UK Infrastructure Bank, or why the taxpayer has to pay for two headquarters, two chief executives and so on. The one difference appears to be that Great British Energy will mean additional powers for the Secretary of State.
If Labour Members are so intent on handing this Secretary of State billions of pounds to gamble with, I expect they will also want to replicate the independent review enacted by the United Kingdom Infrastructure Bank Act 2023. New clause 1 would provide that scrutiny and, although I intend to withdraw it this evening, if the Minister would like to table a similar amendment in the other place to follow the precedent set by the Act, I assure him of our backing.
The Secretary of State and his ministerial team have made big promises. It is crucial that this House can hold them accountable, as the consequences could not be more important for people’s energy bills, people’s jobs and businesses’ ability to succeed. As the respected energy and climate economist Dieter Helm has said, the risk is that this Government will head towards a 2029 election with industries lost and bills higher—exactly the opposite of what the electorate has been promised.
The Government’s refusal to publish evidence for their claims, to set out the details of their plans or to engage in any meaningful policy discussion outside their normal slogans and mantras means that their policies are more likely to fail. For example, the Secretary of State has said that this Bill and Great British Energy are part of his plan to ramp up renewables at breakneck speed because every wind turbine and every solar panel constructed will lead to cheaper energy and greater security, but that is simply not true. First, it depends on the price we pay for them. Expert analysis by Cornwall Insight found that the contracts for difference round that the Secretary of State bumped up, and that he now boasts about, will actually increase people’s bills by £5. Moreover, he has advertised to the multimillion-pound energy companies that he will buy whatever they sell, no matter the cost, up to 2030. People do not need a business background to work out what that will do to prices.
Secondly, if we are building renewables faster than we can connect them to the grid, the constraint payments needed by 2030 could add hundreds of pounds to people’s bills. Then there are the network costs, the green levies and the cost of dispatchable power. If the Secretary of State wants to replace gas, which is our main form of dispatchable power, he should set out the cost of what will replace it.
The options in this country are coal, which I assume Labour Members do not want, biomass, carbon-capture gas or unproven technologies, none of which will make our system cheaper. All the signs are that, far from making energy cheaper and more secure, this Secretary of State and his ministerial team will send people’s bills through the roof, and more and more people are sounding the alarm about whether he can even keep the lights on. Perhaps that is why he never commissioned an accurate assessment of his plans. Labour Members had 14 years in opposition, 14 years hankering for the jobs and the responsibilities they now have, but when we asked for the full-system cost of the Secretary of State’s approach, he could only say that it will be published “in due course.”
Luke Murphy (Basingstoke) (Lab)
I am enjoying the right hon. Member’s lecture on energy security, but where was that argument during the last Government, when they left our country reliant on Putin and volatile fossil fuels, and when we saw energy bills soar? This Government are cleaning up 14 years of mess that the right hon. Member’s Government left behind.
Claire Coutinho
I suggest the hon. Gentleman does some homework. We do not get our oil and gas from Putin. Instead, some 50% of our domestic gas supply comes from the North sea, which the party in government is trying to shut down. If he wants to talk about energy markets, he should do some reading about how they work. On that note, I commend our amendments to the House.
Madam Deputy Speaker (Judith Cummins)
I call Natalie Fleet to make her maiden speech.
Natalie Fleet (Bolsover) (Lab)
It is the honour of my life to be in this Chamber as the Member for Bolsover, a seat made famous by the legend that is Dennis Skinner. From Calow to Pilsley, they tell me stories of him singing to them on the phone, and they remind me of his witty one-liners. He showed the very best of politics: what can be achieved when we send one of our own here to fight for us. I accepted a long time ago that I will not fill his shoes, but when I feel like I do not belong here, I remember that I am following in the footsteps of a “beast”, whose legacy is that kids like me can be here against the odds.
Dennis famously praised half the Members on the Conservative Benches for not being crooks, and I like to think that he would have included his successor, Mark Fletcher, in that group. Mark saw that kids in Bolsover were 10% less likely than those in the rest of England and Wales to get higher education qualifications, and he fought to change that. He worked so hard to get us our own sixth form within Bolsover. I am also passionate about smashing down barriers to opportunity, so that is a fight that I am delighted to take up. Mark made the most of his time here. He appreciated the privilege of serving and continues to show that there is more that unites us than divides us. I wish him so very well.
In his maiden speech, Dennis spoke about the more than 10,000 working miners he represented. I do not have that pleasure. Born at the start of the strike, I grew up seeing our pits go. I had to stop visiting the canteen that my Dar took me to on the way to race the pigeons, because it closed. My community grieved, and I grew up seeing more kids like me go to prison than to university.
In place of industry, mine is a story of the state—stepping in, once again, to pick up the pieces and make sure that every child can reach their potential. I was really lucky to have a Government that prioritised my education, and that gave teachers like Mrs Gregory the opportunity to nurture me, as she did. When my home was dangerous, there were police to keep us safe. When I did not have a home at all, the state stepped in. When I was pregnant at 15, I had a Government that wrapped their arms around me in the form of Sure Start. Better still, they implemented a long-term strategy that meant that when I visit schools in Bolsover now, fewer children are facing parenthood. That is really cool.
I always felt like the exception, but I am seeing more families struggle than ever before. That is why it has been so heartbreaking to see the state ripped back again. A care home in Shirebrook and a day centre in Bolsover face closure. Kids in South Normanton are waiting years for special educational needs support. Some 52% of children in Carr Vale live in poverty although their parents work hard to earn. It is not just our most vulnerable who are struggling. Professionals in Cresswell are accessing food banks that used not to exist. There is more antisocial behaviour in Whitwell because there are fewer police. Mortgages are up in Barlborough. The amount that people can buy with their money in Tibshelf has gone down.
The reason I am here—the reason I leave my family every week to do this—is because I feel so deeply about the difference that politics can make. Things have been better before, and they will be again. That change has begun. I am here to make sure that this powerful state has the most positive impact on lives in Bolsover.
This Great British Energy Bill will mean that fewer children in Pleasely have their lights switch off as they are doing their homework. Kids in Holmewood can start the day with full tummies because they will have free breakfast clubs. Children in Glapwell will not have to feel the shame of asking their parents to pay for their school trips, because those parents will have good jobs, and great terms and conditions. Families in Clowne will get access to dentists, and entrepreneurs can succeed in Wessington, with global companies investing in Markham Vale. My daughter can start her own family in Pinxton, making me the world’s proudest Nana, knowing that this Government will make getting childcare that much easier.
For my daughters and my soon-to-be granddaughter, and for your daughters and granddaughters, I stand here proudly as the first woman MP for Bolsover. It is a privilege to be a part of the most diverse Government in our country’s history, because representation matters. I stand on the shoulders of the women who came before me, and who raised, supported, educated and mentored me. They threw that ladder down and would not take it up until I had grabbed it.
They were women like Gloria De Piero, who showed me that we are not all the same, and who proved to me that we can carry the scars of poverty and still belong in this House; Bess of Hardwick, who never took no for an answer, built the best of Tudor England and put her initials on the top of her house for us all to see; Margaret Cavendish, who was not mad but a difficult woman ahead of her time; and Arkwright’s Norma Dolby, who kept her community together during the strike, faced police intimidation and made sure the miners’ families were fed.
Being the first woman to stand in this post is a huge privilege, but it comes with a greater responsibility. It is my duty to speak up for the women in my constituency whose stories are not being told, even when it is difficult to do so, and even when I wish they were stories that they did not have—like those women who have been raped and are having to wait years for trial; attempting suicide as they fear that nobody will believe them. I have a moral obligation to speak on behalf of the women who have been hurt in the worst possible way and then told that it is their own fault.
So, to the women in my constituency, who I represent, who will be raped today, raped tomorrow and raped every day of this Parliament, I say: “I do not know where you are, I cannot find you, but you can find me. I will believe you, I will support you, and I will fight to make sure that we can all tell our truth, backed by a Government who will make it easier for us to get justice, determined to make sure that our daughters grow up safer.” Being able to speak your truth until you can—that is privilege.
So, to the people of Bolsover, I say that I am thrilled to be here, for my family and for yours. I will not let you down.
Dr Kieran Mullan (Bexhill and Battle) (Con)
It is a pleasure to follow the maiden speech of the hon. Member for Bolsover (Natalie Fleet), who showed real courage in talking with emotion, pride and passion, which is not always easy in this place.
Today we are debating a number of amendments related to the strategic priorities of Great British Energy, and that will be the focus of my remarks today. I rise to ask the Government to assure the House that, given that this is not specifically mentioned in the Bill, they understand that one of the biggest challenges we face when it comes to decarbonisation is in relation to heating, and to make that a strategic priority. The UK has more than 28.5 million homes, and another 1.9 million buildings, offices, hospitals, shops, warehouses and more, the majority of which are heated by gas boilers, which also provide hot water. Nearly one fifth of all the UK’s emissions come from these buildings. The Climate Change Committee considers decarbonising heat to be one of the greatest challenges we face in getting to net zero, but that is not specified in the Bill.
Getting to net zero by 2050 will require us to pull every possible lever available. GB Energy needs to encompass the full thermodynamic meaning of the term energy, rather than focusing just on electricity. Although there is much to be said for the current plan to use air source and ground source heat pumps alongside other methods of using electric to heat buildings, attempting to convert our entire housing stock to this approach will place enormous strain on our electricity grid and supply chains.
When we consider this issue, there is one stand-out technology that will help us: geothermal energy, both shallow and deep. I am pleased to tell the House that there is cross-party consensus on this topic, and I have been able to work with a number of Members across the House, including the hon. Members for Bishop Auckland (Sam Rushworth), for Truro and Falmouth (Jayne Kirkham), for Camborne and Redruth (Perran Moon), for Rushcliffe (James Naish) and others to form the deep geothermal all-party parliamentary group. Although I have mentioned shallow geothermal, which includes technology such as coal mine water, promoted by the hon. Member for Ashfield (Lee Anderson), my remarks will focus on deep geothermal.
When I was first introduced to deep geothermal technology, my reaction was that it must be too good to be true: an environmentally friendly, dependable and cost-effective source of heat and power that can be found right under out feet—surely not. But over the past few years I have been pleasantly surprised to learn that deep geothermal is, in fact, just as good as it sounds. This technology uses the heat from naturally occurring sources of hot water deep underground to generate a large amount of usable heat and energy. In the UK, heat, rather than electricity, is the key benefit of deep geothermal, as that best matches the resources in counties such as East Sussex. This naturally occurring heat is a real resource—just as wind and sunlight are for other technologies, but unlike them it is there all year round whatever the weather.
Suella Braverman (Fareham and Waterlooville) (Con)
May I applaud my hon. Friend for really championing this innovative source of energy? May I officially log my support for Hampshire as well, because in our previous conversation we have spoken about the potential for parts of my county to exploit this energy source? Does he agree that, whether Labour says that it will not raise taxes on working people, or that GB Energy will reduce energy bills by £300, its promises are falling apart and the real way to lower energy costs is not by setting up quangos that cost the taxpayer billions of pounds, but by investing in innovative energy forms such as geothermal and other forms such as North sea oil and gas, which the previous Government did.
Dr Mullan
My right hon. Friend is right that the Government have made some big claims in this House, but the detail of the work and how to get us over the line in an affordable, cost-effective way is 10 times more challenging than that, and that reality is fast catching up with them.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
It is a pleasure to follow the maiden speech of my hon. Friend the Member for Bolsover (Natalie Fleet), who has proved by her passion and ability that she will soon emerge from the shadow of the beast and make the constituency her own.
I welcome the Report stage of the Bill, which will be the first to pass into law in this Parliament. Labour is delivering change within weeks of coming into office. The Bill has the potential to transform not just the way in which we produce power in this country and the impact that we have on our burning planet, but the way we live our lives. It could also have a transformative effect on the communities we serve. I commend the work of the Secretary of State and, in particular, of the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Rutherglen (Michael Shanks), who has seized the agenda and grasped the potential of that transformation, which could be huge. It will match the scale and ambition of Tom Johnson, the legendary Labour Secretary of State for Scotland who brought power to the glens through the creation of the hydroelectric dam schemes that are now part of the highland landscape.
Moving to renewables and transitioning away from carbon must involve balancing and maintaining jobs in the North sea, which are such a vital element not just of our economic and energy mix, but of the incomes of many families in Na h-Eileanan an lar. That is why I welcome the move to introduce a skills passport to help workers transition from one industry to the other, and why I welcome the co-operation this week between the UK Government and the Scottish Government in reviewing the outdated bureaucratic processes building new infrastructure and creating large energy projects. Untangling that regulatory framework and rewiring the national grid is a hugely complicated exercise. The Bill will achieve that by setting up a company, GB Energy, which will itself be the vehicle for reducing bills, involving communities and transforming the way we produce energy.
If the shadow Minister, the right hon. Member for East Surrey (Claire Coutinho), is looking for £300 off energy bills, she can accompany me to the village of Tolsta in my constituency, where one community-owned turbine has just distributed, as it happens, £300 per household to help people with their household bills and energy needs. Community energy will be a large part of what GB Energy does. We heard in evidence from Juergen Maier, who will chair GB Energy, that he and the Labour Government are committed to community energy as part of that mix.
Some of the amendments will seek to make community energy a part of the founding structure of the Bill. It will be part of the company, as set out in the explanatory notes to the Bill, but there is no necessity—[Interruption.] It is not necessary—
Torcuil Crichton
I could have said it in Gaelic. [Laughter.] It is not necessary for that to be part of the Bill or the company.
Communities must be at the heart of what GB Energy does, and community energy is at the heart of much of the wind production in my constituency—although there are commercial plans, too. Scotland’s community-owned wind farms provide, on average, 34 times more benefit payments to local communities. I have given the example of just one village with one turbine, so imagine what three estates with nine turbines could do in terms of community benefit. Let us be in no doubt, the transformative move towards wind-farming—onshore and offshore—will be mean an extremely profitable, multibillion-pound industry. Communities that host such infrastructure, or which have serious infrastructure passing through their areas, must benefit as well. People will not mind the pylons going past as long as some of the profit comes to them. That will be a critical part of the contract between GB Energy, developers and communities. Communities settling and making deals should not be left to chance.
Richard Tice (Boston and Skegness) (Reform)
Does the hon. Member seriously think that people in my constituency and across Lincolnshire and the east of England will be happy with thousands and thousands of huge pylons going through their area, damaging the value of their properties and businesses?
Torcuil Crichton
I remind the hon. Member that to switch on one lightbulb in Lincoln from a turbine on the Isle of Lewis will require a link and a chain of dominos to fall in order, on a scale that we have only ever seen in the Guinness record books. For each of those dominos to stay in place, the communities along that line must be involved and rewarded locally, or nationally with a sovereign wealth fund, to ensure that they play a part and have a sense of ownership in the transformation. The only way for this to succeed is if we all benefit. The wealth of wind is owned by no one man, and we should all share in the transformation. That is what I think GB Energy will deliver, and it is why I support the Bill.
Madam Deputy Speaker (Judith Cummins)
I call the Liberal Democrat spokesperson.
Pippa Heylings (South Cambridgeshire) (LD)
I start by thanking the Minister for how constructively he has worked with me, and by thanking the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton) for his words just now. I also thank all the colleagues who have sat on the Great British Energy Bill Committee. It is encouraging that this legislation has been given a prime spot at the beginning of this Parliament, and I thank the Clerks and the Speaker’s Office for their diligent work in administering the Bill thus far, as well as all the Members who have taken the opportunity to represent their constituents’ aspirations and concerns regarding the Bill. As many Members know, this is my first Bill as spokesperson for energy security and net zero, and I have appreciated all the support I have been given.
I also acknowledge colleagues from across the House who have lent their support to the amendments to which I am going to speak, and have also tabled their own. In particular, I recognise the contribution made by the hon. Member for Waveney Valley (Adrian Ramsay), whose amendment promotes a nature recovery duty. He will know that nature recovery is close to my heart, and that I raised that topic in Committee. Last week, I had the privilege of attending the UN conference on biodiversity in Cali, Colombia—a poignant reminder of how it is impossible to address climate change and energy security without tackling the nature emergency. National energy infrastructure must therefore be nature-positive and aligned with the obligations in the Environment Act 2021.
As the Minister knows, the Liberal Democrats support the Bill in principle, because we want a nationwide energy system that will bring down energy bills and provide clean, green energy. Amendment 3, which stands in my name, would guarantee that Great British Energy is established within six months of the Bill becoming law. We all know that as a result of the Conservative Government’s delay and dither, we are not on track to meet our ambitious targets.
Steve Darling (Torbay) (LD)
I echo that. Torbay has an oven-ready solar scheme that would power our hospital and our council, yet because the national grid is not fit for purpose, that scheme has remained a blueprint. Does my hon. Friend agree that building capacity in the national grid is absolutely essential if this Bill is to be successful?
Pippa Heylings
I agree very much with my hon. Friend. National grid capacity is critical if we are to unblock all of these projects, which are so critical to powering our community services, our public services and the national economy. That is why we need to ensure there is no delay, and that is what amendment 3 speaks to.
Amendment 4, which also stands in my name, would ensure that Great British Energy has an explicit duty to help deliver energy efficiency through
“an emergency home insulation programme with targeted support for people on low incomes”,
as well as the expansion of renewables. This Bill has the power to transform lives, but also to protect lives. Warm hubs are becoming too familiar in my constituency of South Cambridgeshire: Comberton, Duxford, Melbourn, Meldreth and Toft are just a few of the village hubs run by amazing volunteers in the local community that provide warmth to those who have to make the heartbreaking choice between heating and eating. It is frankly astonishing that this is now a reality for so many in the UK in 2024, and is a damning indictment of the last Government’s record on prioritising home insulation. Insulated homes mean warmer homes, which in turn means safer homes. The NHS spends an estimated £1.4 billion annually on treating illnesses associated with people living in cold and damp housing, and amendment 4 would seek to address this.
Amendment 4 also seeks to capitalise on our unique opportunity to be world-leading in renewable energy, which the Lib Dems know from our own track record. We must ensure that Great British Energy is duty-bound to support those activities. If renewable energy and home insulation can be rolled out at speed so that we can meet those vital climate targets, that will reduce energy demand, bring down energy bills and provide green, future-proofed, well-paid jobs for the UK.
I turn to amendment 5 on community energy. At every stage of the Bill, the Liberal Democrats have raised our concerns, and those of many MPs from other parties and of the many community energy groups and communities that we represent, that as it stands, the Bill is missing a vital limb. It lists four objects for Great British Energy, but nowhere does it mention supporting the growth of community energy.
Lisa Smart (Hazel Grove) (LD)
I am grateful to my hon. Friend for giving way. She mentions community energy and I wonder if she recognises, as I do, the value of projects such as Stockport Hydro in Romiley in my constituency, which since 2012 has been using its two Archimedes screws, Thunder and Lightning, to power around 60 homes, thereby saving more than 100 tonnes of CO2 a year. Is that the sort of project that she thinks the Bill should do more to support and encourage, so that we can tackle climate change and ensure that communities benefit from community energy projects?
Pippa Heylings
I thank my hon. Friend for that fantastic example from her constituency, which is exactly the kind of project we are talking about. We know that
“Local power generation is an essential part of the energy mix, ensuring communities own and benefit from clean power projects, and reducing pressures on the transmission grid.”
In fact, those words are taken from the Government’s founding statement for Great British Energy, and the Minister said in this Chamber that
“Great British Energy will deliver a step change in investment in local and community energy projects, putting local authorities and communities at the heart of the energy transition.”—[Official Report, 5 September 2024; Vol. 753, c. 530.]
Yet the community energy sector was brought almost to a standstill by the former Conservative Government, and barriers still exist in selling directly to customers and in the cost of connecting to the grid, so welcome words are not enough.
Ms Polly Billington (East Thanet) (Lab)
I thank the hon. Lady for giving way. I would like to clarify what she said about there not being anything in the Bill about community energy. It is in the founding statement of GB Energy, because we know the importance of locally delivered community energy in facilitating this transformation. I want to correct that for the record, because the suggestion that community energy is not one of the aims of this legislation is a misunderstanding.
Pippa Heylings
I appreciate that, which is why I quoted from the founding statement. The problem is that those words are not enshrined in the Bill itself, which is why we are surprised that the Government continue to vote down amendments that would put communities at the heart of the Bill. We will continue to push on that.
I thank the 58 Members from different parties who have supported amendment 5, which requires that the statement of strategic priorities for Great British Energy has specific regard to community-based clean energy schemes. I would also like to give recognition to my colleagues who are leading the way in promoting the benefits of community energy, including my hon. Friend the Member for Hazel Grove (Lisa Smart), as we have just heard.
Torcuil Crichton
Does the hon. Lady recall the evidence of Juergen Maier, EDF, SSE and the Minister to the Committee? They all gave commitments to community energy and to the local power plan being almost an eighth—almost £1 billion-worth—of GB Energy’s plans.
Pippa Heylings
In fact, I said at the beginning of my contribution that I welcomed the constructive debate in Committee.
Wera Hobhouse (Bath) (LD)
If the Government have bought into the idea of community energy, does my hon. Friend not think it odd that they are so afraid to put it in the Bill?
Pippa Heylings
I could not have put it better myself. I thank my hon. Friend for leading the fight for the Liberal Democrats as the former spokesperson on energy security and net zero. That question goes to the crux of the matter.
We have fantastic examples from many communities of how important community energy is. My hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) led the recent Westminster Hall debate, in which there were fantastic examples from rural communities of how they feel about community benefits. There are also the efforts of my hon. Friend the Member for Edinburgh West (Christine Jardine) in supporting the Aikengall community wind farm, which provides a direct benefit of an amazing £120,000 for the community.
Community energy is not just for Scotland. In my own county of Cambridgeshire, there is the Swaffham Prior community heat network, and the village is the first of its kind to switch to reliable zero-carbon heating. It was started by the Swaffham Prior Community Land Trust, and it addresses fuel poverty and the village’s reliance on oil heating. The Liberal Democrats will continue to promote those who have pioneered community energy schemes, proving their worth and championing their critical importance to our energy future.
While the Government have not previously backed our amendments, which is incomprehensible to us, I am grateful to the Minister for the conversations we have had recently and the assurances he has given us that the Government really do want to make provisions in the Bill for community energy in the Lords. I look forward to supporting our colleagues in the other place in this endeavour, but the interventions from Labour Members—saying that this will be in the founding statement and the strategic priorities, but not in the Bill—are causing us to doubt that commitment. I therefore urge the Government to make good on their promises. We know their commitment to community energy, so let that be understood clearly and let us put it in the Bill.
Madam Deputy Speaker (Judith Cummins)
I call Adam Thompson to make his maiden speech.
Adam Thompson (Erewash) (Lab)
Thank you, Madam Deputy Speaker, for your kind invitation to present my first speech. May I first congratulate my hon. Friend the Member for Bolsover (Natalie Fleet) on her deeply moving and powerful speech this afternoon, alongside the many Members who have spoken for the first time in this House in recent days and weeks? If the high bar set by the newest Members of this House is indicative of the quality of debate to follow in the coming Parliament, I am very confident about the future of our nation.
In my own first speech, I will lay out why I stood to represent my home of Erewash, my plans for my time in Parliament and why I love the area it is now my honour to represent. By the way, before I start in earnest, for the information of all Members present, the constituency is pronounced “Eh-ruh-wash” or occasionally “Eh-ree-wash”, but never under any circumstances “Ear-wash”. I look forward to seeing how that is recorded in Hansard.
I begin my speech by thanking my predecessor, Maggie Throup, for her efforts in serving the people of Erewash over the past nine years. Maggie worked diligently for our community, consistently lobbying for funding to support our towns and villages. Given her background in the health sector, Maggie regularly contributed to health policy throughout her tenure, and she served the nation admirably through the latter stages of covid-19 as Vaccines Minister. While Maggie and I rarely saw eye to eye on policy, our relationship across the political divide has always been courteous and collegiate, and I wish her the very best for the future.
I would also like to pay tribute to my colleague Liz Blackman, who served Erewash as our Member of Parliament throughout the last Labour Government. Liz’s guidance during my campaign to become the MP for Erewash was invaluable, and I am sure I will continue to seek her advice throughout my tenure.
In my first months in Parliament, as I have met colleagues from across the country, the question I have most frequently been asked is: “What even is an Erewash, anyway?” Named for the river and the canal, we comprise two towns—Ilkeston and Long Eaton—the five villages of Breaston, Draycott, Risley, Sandiacre and Stanton-by-Dale, and other communities in Sawley, Kirk Hallam and Cotmanhay. More often, though, I find it easiest to answer, with a reference to our geography, simply, “We’re junction 25 of the M1.”
Like many towns that operate as a binary star, Ilkeston and Long Eaton exist in a delicate balance, with residents of Ilkeston—or “Ilson”, as we call it—regularly declaring, “Long Eaton gets everything.” It is probably no surprise then, Madam Deputy Speaker, that if you spent 10 minutes talking to someone in Long Eaton, you would similarly and resoundingly hear the mantra, “Ilkeston gets everything.” I should note that I have sanitised these statements somewhat; references to the other town in my constituency are often a little more colourful.
In truth, both of our towns have been hard done by in the past 14 years. Despite the hard work of incredible and passionate teaching and support staff, for example, many of our schools struggle with underfunding—something I witnessed at first hand when I trained as a secondary physics teacher. Both high streets have declined, and while towns funding is helping to support Long Eaton’s regeneration, the underlying problems remain: antisocial behaviour, crime, shopkeepers forced out by online giants, and a general malaise and the feeling that nothing will fix the foundations.
Despite the difficulties we face, I would like to explain why Erewash is a fantastic place by paying tribute to the people and the groups in our towns who are doing everything they can to lift the area up by its bootstraps—people like Joe Cahill, who, by liaising with shopkeepers and landlords through a local Facebook group focused on incredible independent shops, has empowered our community and begun restoring Ilkeston as a thriving market town. Similarly, I commend the work of Paul Opiah and others in building the new Friends of Ilkeston Town Centre, providing grassroots regeneration to our town. The efforts of Joe and Paul have been fantastic and I want to provide them with more support. Joe recently noted that he had done as much as he could without changing the law to bring the remaining, rotting shop units back into service—units that are currently held hostage by absentee landlords. I am therefore excited about the Government’s proposals to revive our town centres, and I will do everything in my power to support local people in their efforts.
In Long Eaton, I pay tribute to Scott Clayton and his team, who have created a beautiful new community focused on supporting mental health through the joy of song, where men of all abilities can come together to sing and discuss their issues. It was a pleasure during my campaign to become a Member of Parliament to join Scott and the Bluetonic community and to dive head first out of my comfort zone to sing with new friends.
I also pay tribute to Chris and Jackie Brookes, along with the team at Long Eaton rugby football club. The club serves Long Eaton so well, providing access to sport in our local park for children and adults, and supporting local charities and the armed forces community. After growing substantially over the past decade in the men’s game, in the women’s game and now with its new minis side, Long Eaton RFC has become a pillar of our community.
Then there is Lindsay Rice and her team, who have built a food bank and a lunch club, and are on their way to creating a brand-new Ilkeston carnival through their Every One Eats institute, alongside the collective churches in Long Eaton that have similarly supported those in our community struggling through poverty. Lindsay recently asked me, “Adam, as a food bank, when are you going to shut us down?” I responded, “As soon as possible, Lindsay, as soon as possible.”
Erewash has a thriving veteran community, and as a member of the Royal British Legion, I am very proud that our current mayor, Councillor Kate Fennelly, is a Royal Air Force veteran. I recently met the local charitable trust, Forces Veterans Afloat, which does incredible work housing veterans for whom bricks and mortar are not the answer on narrowboats. As a cadet warrant officer in 1344 (Cardiff) Squadron ATC for much of my childhood, I have long supported our forces and veterans; without 1344 and the citizenship, leadership and community spirit instilled in me by the wider cadet movement, I would not be standing here as a Member of Parliament.
Erewash is the birthplace of many national stars, from Douglas Houghton, Baron Houghton of Sowerby, who served our country in the first world war and in Harold Wilson’s Government as the last British Cabinet Minister born in the 19th century, through to Robert Lindsay, who has played countless parts, including the infamous Wolfie in “Citizen Smith” and the former Prime Minister, Tony Blair. We also have Bru-C, who today is putting Long Eaton on the map in the grime scene. Our towns, villages, and people are fantastic, but they have been let down by the previous Government, by politicians and by their country.
So what do I bring to this place, and what do I hope to do for Erewash? My background is in academia and education. In my previous day job, I taught engineering apprentices at the University of Nottingham. I worked there for a decade, specialising in metrology research and training the next generation of world-leading manufacturers. I believe I am the first metrologist elected to this place, metrology being the science of measurement and definitely not meteorology—as I said in the opening quote to my PhD thesis, it has nothing to do with clouds.
Erewash, and the wider east midlands, has long been the engine of our nation’s manufacturing base, producing everything from drain covers—look down on nearly every street in the country to see the logo of the famous Stanton Iron Works—to the fine lace worn by the Princess of Wales on her wedding day, produced by Cluny Lace in Ilkeston, to tunnels for HS2 made by Sateba UK, and composite motorsport and aerospace components from Atlas Composite. I want to see an expansion of our manufacturing base through an industrial strategy and reform of the apprenticeship levy, so that we can cement Erewash’s position as a centre for advanced manufacturing.
We also need new infrastructure to build the new homes to support our local economic growth, which I am glad to see the Government commit to. As the Stanton industrial regeneration site grows, I will fight every day for infrastructure works. We need a new junction on the M1 to support the growing industry in the area and to reduce the impact on residents in Sandiacre and Ilkeston, who currently endure a huge volume of heavy goods vehicles passing through the towns.
Siân Berry (Brighton Pavilion) (Green)
I am pleased to speak in this debate, and the Green group of MPs is pleased to back this Bill. I will be speaking in support of new clauses 2 and 3, tabled by my hon. Friend the Member for Waveney Valley (Adrian Ramsay), which are designed to make the Bill even stronger. The new clauses would create a new nature recovery duty for Great British Energy and prevent investments that increase climate emissions.
I thank the hon. Member for South Cambridgeshire (Pippa Heylings) for her statement of support for my hon. Friend’s work and for making the Bill better for nature recovery. I also thank her for her proposals on insulation and community energy, which we support. All those things are vital for the Bill’s success.
Sammy Wilson (East Antrim) (DUP)
If nature recovery is to be important in the Government’s present drive, does the hon. Member accept that renewable energy has been destructive of nature? Some 17 million trees have been cut down in Scotland to facilitate windmills. Now, there are studies indicating that offshore wind is leading to dead porpoises, dead dolphins and dead whales being washed up on beaches because of the effects of drilling.
Siân Berry
I do not agree with all the assertions that the right hon. Member makes, but the duty is intended precisely to ensure that every single project would have a positive impact on nature. Under new clause 3, they would all be renewable projects.
The nature recovery duty under new clause 2 would help GB Energy invest only in projects that deliver significant biodiversity benefits and meet targets under the Environment Act 2021, by building nature-friendly design features into renewable energy projects and creating and restoring habitats on development sites in and around clean energy infrastructure.
The Bill Committee heard from Shaun Spiers of Green Alliance, who made a strong case for a nature recovery duty being created for GB Energy. The ensuing discussion saw the Crown Estate used as an example for how a public body could deliver for nature without having a statutory duty to do so. However, the Crown Estate is a highly relevant case study that demonstrates why non-statutory duties are not enough. The Crown Estate’s lack of a statutory duty to consider nature in its own decision making has led to its involvement in a number of environmentally damaging schemes.
For example, let us consider mining proposals in the Sperrin mountains area of outstanding natural beauty in Northern Ireland. The Crown Estate entered into an initial mineral extraction agreement with a mining company there in 2016, leading to proposals for goldmining. That has provoked significant environmental concern about harmful chemicals and waste from mining operations polluting nearby rivers and degrading the surrounding AONB. An application was submitted in 2017 and is now subject to a public inquiry, following nearly 40,000 objections from local people. So an abundance of warm words about protecting and conserving the environment, and about the Crown Estate’s status as a public body, did not inhibit it from playing a role in a project that threatens nature.
Sammy Wilson
The hon. Lady mentioned Northern Ireland and particularly the Sperrin mountains, which is an area of great natural beauty. It has many features, including wildlife and wild uplands, but it has been industrialised. I took a motorbike journey around the area three weeks ago, and there are hundreds of huge wind turbines. The peat has been dug up, the landscape has been destroyed and thousands of birds are killed every year. What has happened in the Sperrin mountains is hardly a good example of renewable energy being nature-friendly.
Siân Berry
I am sure we can have those debates in the context of a statutory duty. These are important questions to consider.
I want to give some other examples of public bodies damaging nature, because they abound—from the granting of new oil and gas licences in marine protected areas by the North Sea Transition Authority, to Highways England pursuing damaging road construction projects on the edges of national parks. Without legal backing, nature considerations can be and are brushed aside.
There is no reason to think that Great British Energy, without a duty to consider nature recovery, will be any different. A statutory duty to deliver for nature’s recovery would be complementary to GB Energy’s other objectives around clean energy, energy efficiency and energy security. It would also reflect the Government’s manifesto commitment to tackle the interconnected nature and climate crises together. I hope the Government will carefully consider those arguments.
New clause 3, which was also tabled by my hon. Friend the Member for Waveney Valley, is vital to guarantee that our energy investments are not only financially responsible but aligned with the legal requirement to reach net zero by 2050. As legislators, we have a duty to hold GB Energy accountable, preventing investments that will lock us into high-carbon energy pathways and undermine our net zero commitments. The new clause mandates environmental impact assessments before any investments are made, ensuring that each decision is grounded in evidence. It forces us to ask, “Will this investment push us at speed towards, or risk pulling us away from, our climate goals?” Publishing those assessments opens the process to public scrutiny—an essential principle in democracy. The public deserve to know exactly how their tax money is being used, particularly when it comes to funding projects that may exacerbate the climate crisis.
The new clause would also bar public money from being spent on fossil fuel and unsustainable high-carbon projects such as biomass. We cannot ignore the facts: Drax, the largest biomass-burning plant in the UK, emitted over 11 million tonnes of CO2 in 2023. Worse still, it receives nearly £900 million in Government subsidies a year. If we allow investments in projects such as Drax or new fossil fuel infrastructure, we risk undermining the very goals we are trying to achieve. The new clause would close the door on such contradictions.
When we talk about greenhouse gas emissions, it is crucial to acknowledge that carbon dioxide is not the only danger. Methane is a greenhouse gas with over 80 times the warming potential of CO2 over a 20-year period. Methane emissions, often associated with fossil fuel extraction and agriculture, must be tightly controlled to ensure that the UK meets its climate commitments. The new clause would ensure that all climate emissions, including methane, are thoroughly assessed before any public investment is made. If we do not account for methane and other greenhouse gases, we risk underestimating the climate impact of certain energy projects, and particularly those related to natural gas production and transport.
Fossil fuel infrastructure does not just burn carbon; it locks us into long-term dependence on dirty energy. Every pound spent on high-carbon infrastructure makes it harder and more expensive to transition away from fossil fuels in the time that we have. This amendment ensures that we avoid that trap, by making it impossible for Great British Energy to invest in projects that would limit our ability to end our reliance on carbon-emitting technologies.
Great British Energy should also be a true trailblazer in the global transition to clean energy. The amendment strengthens that mission by making clear that only projects contributing to emissions reductions should receive investment. With countries around the world watching, we have a unique opportunity to lead by example. A failure to act boldly now will leave us behind in the global race for climate leadership.
We are in a climate and nature emergency, and we cannot afford to repeat the mistakes of the past by further locking ourselves into harmful high-carbon infrastructure. These amendments reflect that. The stakes could not be higher. These decisions are about securing a liveable planet for future generations. I hope the Government will listen.
Graeme Downie (Dunfermline and Dollar) (Lab)
Let me begin by congratulating my hon. Friend the Member for Erewash (Adam Thompson) on his maiden speech. I am delighted that he gave us a lesson on how to say his constituency name. How can I say “Erewash” to further confuse Hansard? I also congratulate my hon. Friend the Member for Bolsover (Natalie Fleet), who is no longer in her place, but I think everyone in this House felt the passion in her speech. I look forward to hearing more from her on a number of issues.
I will focus my remarks on how to ensure that GB Energy delivers effectively for Scotland and the rest of the United Kingdom. To do that, it must generate investment that delivers tangible results and brings jobs and economic growth, along with the energy security that we all want. In Committee, witnesses said that one of the challenges for GB Energy will be finding a balance between accelerating renewable energy delivery and ensuring a return on investment, while supporting less mature technologies. I agree that it will be a difficult balance to strike, but we are more likely to succeed in our investments if they are encouraged in areas where there is likely to be a warm welcome and strong understanding of electricity generation, and where the foundational skills and engineering heritage already exist. They include former coalfields across Scotland and the rest of the United Kingdom, including in west Fife in my constituency.
Although the mines closed decades ago, the heritage of electricity generation lived on in the Longannet power station near Kincardine, on the banks of the River Forth. Constructed in the 1960s, Longannet was once Europe’s biggest coal-fired power station and one of the largest carbon emitters on the continent, before shutting down in 2016. Having represented that community as a councillor, I know that people across west Fife accept that coal had to go and things had to move on, but they want something to replace it. Like so much of our past energy infrastructure, and like in so many industries, Longannet was closed down with little or no consideration for what might replace it or how the thousands of jobs lost could be replaced and the skills maintained, particularly in the rural villages of west Fife, where losing even a few families or employees can put their whole sustainability at risk.
I believe that GB Energy and the investment opportunities that it presents is a chance to change that. The site is currently being safely demolished by ScottishPower, but there are still no clear plans for the future of the site. Longannet is perfectly situated to play its part once again in helping to provide electricity for our country and leverage some of the £60 billion possible investment that could be available via GB Energy. The site is designated for major employment, and due to its location right on the coast it is likely to be suitable for major industrial use only. It has the potential to bring jobs and investment to the coalfield villages of west Fife and the whole of central Scotland, securing opportunities for those communities to fulfil the aspirations of the people living there.
Despite being listed as a strategic priority site by the Scottish Government, they have had no plans for it, and from what is available in the public domain, it seems they have not prioritised any action at all in recent years. Promises made of train manufacturing being brought to the site came to nothing, and the decision by that company to withdraw from an agreement came to light only because of a freedom of information request I made back in 2022. Nothing was discussed publicly at all. Indeed, some people in that community still talk about when the train manufacturer is coming. Similarly, both Fife council and Scottish Enterprise have struggled to engage with ScottishPower about the future of the site, although I have a meeting with ScottishPower this week, and I hope to gain more clarity after that. Will the Minister, in winding up, agree to meet me and other stakeholders to ensure that sites such as Longannet, once a symbol of Scottish and UK electricity generation and the skills that come with it, are priorities for GB Energy? How will it work with the industry to create the right plans to bring investment to the area?
We know the wreckage that the Conservative party made of UK and Scottish industry over the past decades: change without a plan. GB Energy offers an opportunity not only to have a plan for our low-carbon secure energy future, but to fix yet another part of the mess left for us by the deliberate actions of the Conservatives and the incompetence of the SNP in Scotland. The Bill is a huge opportunity for Scotland. We must ensure that it is passed today, so it can get on with its work as quickly as possible.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
I pay tribute to the two excellent maiden speeches that we have heard so far in this debate, from the hon. Members for Erewash (Adam Thompson) and for Bolsover (Natalie Fleet). I hope that people from former mining communities are listening to this debate, because I am sure they will have some choice words to say about a Conservative talking about de-industrialisation. In Wales, we will never forget what the Conservatives did to our industries, and the jobs and futures they took away from people.
Harriet Cross (Gordon and Buchan) (Con)
Does the hon. Gentleman therefore appreciate why Conservatives are so concerned that the plans coming forward from the Labour Government will do exactly the same to north-east Scotland if this is not handled properly?
David Chadwick
I thank the hon. Member for that contribution. De-industrialisation has been happening for a very long time across the United Kingdom, and we are yet to see a real industrial strategy that would restore the wealth, prosperity and jobs that used to exist across our industrial areas in the entire United Kingdom.
Wales stands ready to play its part in powering the United Kingdom once again, but this time Wales would like to experience the tangible benefits from these projects. In my constituency, Llangattock Green Valleys has the ambition to develop plans for a large, community-owned renewable energy scheme to supply premises in the Crickhowell region. The scheme will have a mix of technologies, such as solar, hydro, wind and storage, to give a year-round supply of energy. It will be developed from the start in consultation with the community. It will be managed by the community and the profits will benefit the community itself.
We Liberal Democrats are firm believers that this is exactly the model of community ownership that will provide communities with security and prosperity well into the future. It is for this reason that I urge all Members to support amendment 5 and ensure that the Bill puts the principle of community ownership at the very front and centre of what the Government are trying to achieve.
Sarah Champion (Rotherham) (Lab)
I welcome the Bill, which brings us one step closer to establishing this much-needed, publicly owned energy company. To quote the Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for Doncaster North (Ed Miliband), at the UN General Assembly, this is a Government who are
“willing to tell the truth”
and “show international leadership” when it comes to climate change. In that spirit, I would like to bring to the attention of the House the importance of upholding human rights and the principles of a just transition in our renewable energy supply chains.
I am heartened by the determination of our Front Bench to see human rights protected across our energy transition. When questioned on forced labour in the solar industry, the Secretary of State for Business and Trade, my right hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), stated that he
“would expect and demand there to be no modern slavery in any part of the supply chain”—[Official Report, 5 September 2024; Vol. 753, c. 418.]
In a similar vein, the Minister for Development, my right hon. Friend the Member for Oxford East (Anneliese Dodds), recently spoke about
“galvanising just energy transition partnerships, to making sure that everyone feels the benefits of green innovation”.
While GB Energy must ensure that everyone benefits from green innovation, it must also guarantee that no one suffers from it. However, I have grave concerns that if we charge ahead with our net zero transition without safeguards in place, we will knowingly be doing that on the backs of those in slavery. Let me outline why.
Wind turbines, solar panels, electric vehicles and battery storage all require large quantities of critical minerals. There is conclusive evidence of human rights abuses associated with critical minerals. The abuse is most severe and systemic in the Xinjiang Uyghur autonomous region of China, where the Chinese Government are systematically persecuting millions of Uyghur, Turkic and Muslim majority peoples on the basis of their religion and ethnicity. It is well documented that the lower tiers of our solar supply chains are concentrated there, and have a sinister dependency on state-imposed Uyghur forced-labour programmes. Those programmes have bolstered China’s global market share, which exceeds 80% across the whole solar PV supply chain. I raise these concerns not to undermine our business relationship with China, but because through the purchasing power of GB Energy, we can protect human rights around the world.
Graham Stringer (Blackley and Middleton South) (Lab)
My hon. Friend says that she does not want to undermine our commercial relationship with China. I do. China is carrying out genocide of the Uyghurs. It is an appalling country—or, rather, it has an appalling leadership, to be precise. It is trying to monopolise crucial supply chains around the world in order to oppress people. Surely we should be reducing our relationship and making ourselves independent.
Sarah Champion
I appreciate that my hon. Friend has put that on the record. I think that what we need to be doing is reducing our dependency—some might say “stranglehold”—on China for some of our most critical resources.
Perran Moon (Camborne and Redruth) (Lab)
I agree with my hon. Friend about China. Does she agree with me that we should be looking at domestic production of critical minerals such as tin, lithium, tungsten and manganese? In Cornwall we have plenty, and we are very hopeful that the Bill will support the opportunities that they offer.
Sarah Champion
I completely agree with my hon. Friend, and that, to my mind, is what GB Energy should be doing. It is using its purchasing power around the world to increase human rights and improve working conditions, for example, but it also needs to be supporting British-based businesses, because our businesses need that support more than ever before. What we need to be doing is applying pressure on all our trading partners around the world, not just China, to improve standards. There are allegations of child labour in cobalt mining for EV batteries in the Democratic Republic of Congo, and there is evidence of labour exploitation in nickel processing in Indonesia.
With those examples in mind, I ask the House a simple question: do we turn a blind eye to modern slavery in our energy supply chains, or do we lead the way with a just transition? As the Chancellor outlined in her conference speech, this Government are
“Calling time on the days when government stood back…and turned a blind eye to where things are made and who makes them.”
It is vital that we follow up her words with real, meaningful action, because, as things currently stand, we are a global outlier. In 2021 the United States enacted the Uyghur Forced Labor Prevention Act, banning the importation of products from the Uyghur region, including shipments of solar panels with connections to Xinjiang. That has been highly effective, with the market responding with new, ethical supply chains. Canada and Mexico have followed suit with similar regulations, and this year the European Union passed the corporate sustainability due diligence directive, which will ensure that companies prevent and address the adverse human rights impacts of their actions.
Ms Billington
We should bear in mind that the regulations established by those other countries apply to all companies. It seems to me that we should be going in that direction, rather than simply saying that we will focus on one company, GB Energy. Given our high ethical standards, this is the kind of sectoral approach that we should be able to create ourselves, as an international leader.
Sarah Champion
My hon. Friend pre-empts me. This will work only if we do it across the whole of Government and in all sectors, and I want my Government to be leading the way on that. We have a hugely important role to play internationally, as well as in our own industries.
The UK’s failure to keep pace with our partners has resulted in the global supply chain splitting. Slave-made renewable products are being redirected to countries with weaker regulations, such as the UK. As the other place’s Modern Slavery Act 2015 Committee recently recognised, without forced labour import bans, the UK risks becoming a dumping ground for tainted products. Current legislation, such as the Modern Slavery Act 2015 and the Procurement Act 2023, cannot meet the scale of the problem, especially while human rights due diligence remains optional for companies.
I appreciate that the Department is looking into these issues through the solar taskforce’s upcoming solar road map, which I really welcome. However, the solar taskforce, made up mostly of industry voices, needs to have civil society and trade unions on the team for its work to be truly credible. That is especially the case given my concerns about Solar Energy UK’s solar stewardship initiative, or SSI, as I am doubtful that an industry-led solution can meet the scale of the challenges I have outlined today.
A just transition is not only about international workers’ rights; it is also about securing UK jobs and industry. Our energy strategy must prioritise green jobs and wealth creation here, and avoid fuelling growth in economies known for cutting corners. Following my discussions with the industry and unions, it is clear that the UK’s inadequate response to these issues is creating a competitive disadvantage for businesses here and an uneven playing field internationally. If GB Energy allows exposure to state-imposed forced labour, it creates a distinct risk for investors and businesses here in the UK.
The arguments I have laid out today have the support of unions, businesses and human rights advocates alike. They echo the sentiments of our Prime Minister, Foreign Secretary, Business Secretary and Energy Secretary. For too many years, tackling modern slavery has received a siloed, disjointed response from Government. We now have an opportunity to change that and to embrace cross-departmental, collaborative working. Renewable energy has a key role to play in our transformation to a low-carbon economy, but without placing human rights at its centre, our green transition will come at a grave cost.
This Bill is aptly named the Great British Energy Bill. It simply cannot live up to its name if it depends on modern slavery to achieve its aims.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
I invite hon. Members to refer to my entry in the Register of Members’ Financial Interests. I thank my hon. Friend the Member for South Cambridgeshire (Pippa Heylings) for her commitment to our essential amendments, both in Committee and here today. I also thank the hon. Member for Na h-Eileanan an Iar (Torcuil Crichton), who has been incredibly supportive of our ambition for communities to benefit from renewable energy. I have one little correction: Tom Johnston, who invented the hydro boards, and the Labour Government did not actually put in place a proper system whereby local communities could benefit. They supplied a lot of power to the south and the cities, but it was of very little benefit to those of us living in the highlands, even then.
The Government have argued that nothing in this Bill limits community ownership. That is almost certainly true, but as my colleagues and I have emphasised, amendment 5 would not restrict GB Energy; it would simply clarify that community-led energy is a priority.
The Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), recently experienced a powerful story of community-driven energy on his visit to the island of Eigg. Just 25 years ago, Eigg’s residents, frustrated by years of poor management and a lack of investment, took matters into their hands and purchased their island. The Eigg buy-out succeeded in 1997, sparking what is now a beacon of self-sustained energy. Since then, Eigg has moved away from fossil fuels, becoming the world’s first island to generate 24-hour electricity from a variety of different renewables. This small community of just 110 people demonstrates the innovation and resilience that flourish when communities are empowered.
Eigg’s journey is a true example of prioritising community ownership and how that drives forward sustainability and local resilience. To paraphrase the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Rutherglen (Michael Shanks), community involvement is critical, not a mere “nice to have”. If we are to build the infrastructure of the future, we must ensure that communities benefit directly. Community-driven projects are key to making that a reality, so let us follow Eigg’s lead and put the Government’s own words into action.
The current Government have an opportunity here to show their commitment to cross-party collaboration by embracing community energy. We are all aligned on the goals, so let us not get bogged down by technicalities or party politics. The Minister knows of the huge cross-party support for community energy ownership. If this goes to a vote, do this Government really want to vote against community energy ownership? Let us show the people of Britain that this Bill truly supports the right to own and benefit from our natural resources through Great British Energy.
Tom Hayes (Bournemouth East) (Lab)
It is an honour to welcome this Bill as it is moving forward, and I want to commend the leadership of the Secretary of State and the Energy Minister. To show such leadership so early on in the Parliament on such an important topic is really commended in my community.
My community of Bournemouth, and Britain, have suffered the worst cost of living crisis in a generation, driven by the energy shock that followed Putin’s invasion of Ukraine. This cost of living crisis has been a disaster for businesses. Typical energy bills have nearly doubled in the space of a year. It has been a disaster for family finances, with millions struggling with fuel poverty and many still facing enormous debts. It has been a disaster for public finances because the Government that we replaced left our country so unprepared. They were forced to spend an eye-watering £94 billion to support households with the cost of living—almost as much as our entire defence budget over the entire period. Because energy costs underpin economic performance, inflation soared, growth sputtered and Russia’s invasion of Ukraine sent inflation in the UK to over 10%, with a full third of that directly due to rising gas prices as a direct result of our vulnerability over the last 14 years.
We risk paying an even heavier price if we stay exposed to fossil fuels. We still depend on gas to generate more than a third of our electricity and to heat more than four out of five of our homes. No more. We must make sure that we are energy secure, and we must be able to bring down our bills. The Office for Budget Responsibility has warned about our exposure to surges in energy prices, and the potential costs to bill payers, taxpayers, consumers and businesses alike. The OBR now estimates that another fossil fuel price shock would cost the economy 2% to 3% of our GDP in the 2030s.
The crisis is not over. It still casts a long shadow and we cannot go on like this. We must learn the lessons, and the fastest way to reduce our vulnerability is to end our dependence on volatile global fossil fuels. The cheapest way to meet our energy needs is to enhance our home-grown renewables and British-based nuclear. I was intrigued to hear the Conservative spokesperson, the right hon. Member for East Surrey (Claire Coutinho), saying that this Government want to go slow on nuclear, so I have to ask: what nuclear projects were built over the last 14 years of the Conservative Government and five Prime Ministers? What small modular reactors actually moved ahead? What did those Prime Ministers do with the investment and the work that developers wanted to bring forward? Nothing. Our nuclear industry has been starved of funding and attention, but no more. When the energy is produced here and consumed here, Britain is protected against the volatile international markets that send our bills soaring.
The Climate Change Committee’s report, published two weeks after the Labour Government came into office, laid bare the true reality of energy policy under the last Conservative Government. It states:
“Last year…the previous Government signalled a slowing of pace and reversed or delayed key policies”.
We did not hear about that from the right hon. Member for East Surrey. It also stated that
“announcements were given with the justification that they will make the transition more affordable for people, but with no evidence backing this claim”.
We did not hear anything about that. The assessment of the committee was that
“only a third of the emissions reductions required…are currently covered by credible plans”
by the previous Government. We did not hear anything about that. That is this Labour Government’s inheritance, for a target that has to be achieved in just five years’ time. Britain is way off track to hit our 2030 international target of a 68% reduction in emissions. That is why the Government are in a hurry, and it is why they introduced the Bill so early in this Parliament.
In the five years ahead, our big challenges will be building an energy system at speed and supporting people through the energy transition. We need to demonstrate the benefits of the infrastructure we are building and make sure that host communities benefit in return. When we ask our communities to host this infrastructure, I am confident that they will say yes. They will do so on behalf of our nation. They will do so for cheaper bills in the long run, for good jobs that pay well and to benefit our communities.
National Grid estimates that five times as many pylons and underground lines will need to be constructed by 2030 than in the past 30 years. Underground cables cost six to 10 times more than overground cables. If part of our challenge is to cut bills and to reduce overall costs in a time of scarcity, we must be willing to invest in our infrastructure.
The faster we go, the more secure we become. Every wind turbine we erect, every solar panel we install and every piece of grid we construct will help our families and protect them from future energy shocks. Conversely, every wind turbine blocked, every solar farm rejected and every piece of grid left unbuilt will make us less secure and more exposed.
The faster we go, the better our economy will work for working people by creating a new generation of good jobs that finally pay decent wages in our industrial heartlands. Labour Members do not seek deindustrialisation; we seek decarbonisation. And decarbonisation will be achieved through reindustrialisation and the creation of good green jobs. The faster we go, the more we will be early movers and lead the world in new technologies. Why should these jobs be created in Pennsylvania or Shanghai? Let us create them in Bournemouth and across our country. And the faster we go, the more we can tackle our climate challenge. This is no longer a future threat. It is right here, right now, and we need to be able to tackle it.
Over the past few years, the race for jobs and the industries of the future has accelerated across the world. For too long, our country has been opted out of that race against our will. We have lost out, and our communities have fallen behind. Pay has not kept pace, and jobs have not been created on the scale needed. Why did the previous Government allow other countries to lead in these industries and clean jobs? Why did they not bet on our country and our potential?
I am delighted to see this Bill make progress. I commend Ministers for introducing it, and I look forward to seeing true investment in our green industries and the jobs of the future.
Sarah Dyke (Glastonbury and Somerton) (LD)
I rise to support amendment 5, tabled by my hon. Friend the Member for South Cambridgeshire (Pippa Heylings), to require a statement of strategic priorities on the facilitation of community-based clean energy schemes.
Energy supply is the second largest contributor to UK domestic greenhouse gas emissions, making up 20% of carbon emissions in 2022. Community energy should play a key role in reducing this and in helping the UK to meet its net zero targets. Community energy projects have positive impacts on equality, social cohesion and economic opportunity. We must therefore encourage local communities to take ownership of energy production. This way, we can ensure that decisions are taken in the best interests of local communities, and in collaboration with them, to better meet their needs.
The local economic benefits are clear, with community energy businesses in 2021 raising £21.5 million of investment for new projects and spending £15 million of community energy income to boost local economies. Community energy schemes currently produce just 0.5% of UK electricity but, according to studies by the Environmental Audit Committee, this could grow twentyfold over the next 10 years.
My constituency has seen the benefit of community energy schemes, with Avalon Community Energy in Street and South Somerset Community Energy in Wincanton providing services to the local area. Avalon is currently focused on delivering the clean energy project as one of the projects that make up the Glastonbury town deal. The £2 million project will develop renewable energy and carbon saving for the community. It is currently estimated that the project will save around 1,000 tonnes of carbon per year, and there will be an annual revenue surplus of over £100,000, some of which will be used for ongoing local community benefits. South Somerset Community Energy has installed three solar panels on the roof of Stanchester academy in Stoke-sub-Hamdon. Those solar panels produce around 100,000 kWh of energy per year, at least 70% of which is used by the academy.
The Liberal Democrats want to support the expansion of community energy schemes by requiring large energy suppliers to work with community schemes to sell the power they generate to local customers. If the Government want to drive a clean energy revolution, community energy has to be part of that. Community energy schemes have the potential to power 2.2 million homes, to save 2.5 million tonnes of CO2 a year and to create over 30,000 jobs. The Government have sadly neglected community energy provisions in the original Bill, as many of my Liberal Democrat colleagues have and will outline. That is a major missed opportunity.
Engagement and consultation with local communities is crucial if GB Energy is to be a success. GB Energy should also provide communities who host renewable energy infrastructure with the ability to realise community benefits from that. I have spoken on this point at length over recent weeks, because it is crucial if we are to boost the much-needed roll-out of renewable energy, particularly in areas like Glastonbury and Somerton. Communities must be part of the process. They have a critical role to play and a voice that must be heard. Through engagement, we can deliver clean energy, increase social cohesion and allow communities to invest in their place.
For the reasons I have laid out, I will be supporting the amendments tabled by my hon. Friend the Member for South Cambridgeshire, and I urge the House to do the same.
Brian Leishman (Alloa and Grangemouth) (Lab)
Before I make my contribution, I apologise to you, Madam Deputy Speaker, and to the House for failing to mention during the Employment Rights Bill debate last week the financial donations made to me by Unite the Union of £7,500, and by the Communication Workers Union of £3,500. I appreciate that being a first time MP is no excuse, and I extend my sincere apologies to you and to the House. On that note, I refer to my entry in the Register of Members’ Financial Interests, where it also says that I am a member of Unite the Union, which I will refer to later in my remarks.
There is so much to like in the GB Energy Bill: a publicly owned clean energy company, the creation of skilled jobs, reindustrialising communities and cutting household bills. It is a transformative and bold idea, which is to be applauded and to be proud of. Since coming to this place, I have heard it said—indeed, I have said—that a nation’s energy security is linked to its national security. GB Energy should eventually help with both those things and create thousands of skilled jobs. That is excellent.
However, what about the jobs of the Grangemouth refinery workers, the same workers who are right now crucial to Scotland’s energy security, and therefore to Scotland’s national security? Those workers are nearing the end of their 45-day consultation process, during which the focus should be on how jobs can be saved and maintained for those workers. Recent comments include, “These workers will be okay and it will all be fine because they’ll get employment elsewhere.” If the workers have to leave, that will not help my community. Stopping refining does not help Scotland’s fuel or national security.
There can be no doubt that my constituency will be much weaker for losing the refinery—job losses will run into the thousands. There can also be no doubt that Scotland will be weaker for losing the refinery. After all, Scottish Enterprise has reported that the economic contribution of the Grangemouth refinery is north of £400 million.
Mark my words, stopping refining at Grangemouth and closing Finnart will have monumental consequences for all of Scotland. It will not take long for the pumps on forecourts all over the country to be impacted, and so too the public. Although this is not a problem of this Government’s making—the previous UK Tory Government and the current SNP Scottish Government have long since turned their backs on the refinery, and it was previous UK Ministers and Scottish Cabinet Secretaries who got us into this mess—make no mistake, it is our mess to clean up now.
Harriet Cross
There are few areas of the country that are as reliant on, and therefore as vulnerable to, the energy industry as my constituency of Gordon and Buchan and wider north-east Scotland. It is because of this that I want the Government’s energy strategy to be a success. Indeed, my constituents need it to be a success. However, that is why I have severe reservations about the Bill and why I believe that we must view the Great British Energy Bill not in isolation, but alongside the Government’s wider energy strategy.
I begin by considering the public money involved—the £8.3 billion of taxpayers’ money going into Great British Energy. Labour has cited international examples, such as France’s EDF, as inspiration for Great British Energy, but let us examine EDF’s recent history, which reads like a cautionary tale of state intervention gone wrong. In 2022, the French Government were forced to fully nationalise EDF, costing €9.7 billion, and in 2023, they had to inject another €13 billion. That huge expenditure of taxpayer money did not even solve EDF’s problems; the company now faces debts exceeding €64 billion. Therefore, is £8.3 billion of investment into Great British Energy realistic?
Let us move on to Labour’s wider energy strategy—perhaps there are assurances there that can help mitigate the apparent inadequate funding. Let us not forget that the UK will be using oil and gas for years to come, which is not disputed. The expectation that we should get this from our domestic oil and gas supplies should not be controversial, yet our energy security is being put at risk through the Government’s actions and words. Jobs and investment in Gordon and Buchan and across north-east Scotland are being lost, and a home-grown energy transition is being made ever more difficult. It is incoherent to pump public money into the energy sector, while at the same time scaring away private investment from the very companies that will be vital to the energy transition, whether by announcing that there will be no new North sea licences, extending and increasing the windfall tax or removing investment allowances.
Offshore Energies UK has warned that expected tax changes could see investments in UK projects by oil and gas producers fall by about £12 billion by 2029. Last week, Reuters reported that a North sea producer is looking to sell stakes in its North sea assets and relist on the US stock exchange. The same article quoted the chief executive officer of TotalEnergies, who said that his team had halted exploration in the basin, and that:
“With this political landscape, even if you find something you’re not sure you can develop it… The situation in the UK is very problematic.”
The CEO of Deltic Energy also announced plans to cut spending, telling Reuters:
“The clear message from key investors was ‘do not invest in the UK’.”
That is just a snapshot, but it puts the Government’s £8.3 billion into context, alongside the other decisions that they are making.
Torcuil Crichton
Does the hon. Member accept that my constituents and hers have earned energy security for this country for the last two generations, and will do so in the North sea for another two generations?
Harriet Cross
I certainly hope that we will have the opportunity to do so, but as I am setting out, the Government’s proposals for the North sea in respect of taxation and cutting down on licences do not guarantee that. As much as I and the hon. Member want and need for that to be the case for our constituents, we cannot guarantee it. That is why it is so important that we get the transition right.
The Bill must include consideration of the impact on the public. Communities such as Leylodge and Kintore in my constituency face unprecedented infrastructure pressures. Those communities have seen a 3 GW hydrogen plant, an expanded substation, multiple battery facilities and new pylons. What are their statutory protections? What assurances are there in the Bill that certain communities will not be over-saturated with an unsustainable amount of infrastructure?
Before the election, the Labour party claimed that GB Energy would reduce household bills by £300. Since then, Ministers have not repeated the promise and have not explained when or how it will be achieved. I am sure that the Labour Government would not want us to think that that promise was simply a headline-grabbing figure before an election, so I look forward to their clarifying that commitment and voting for our amendments on that figure.
Let me move on to the jobs of today and the jobs of tomorrow. We hear that GB Energy will create 650,000 jobs—apparently, 69,000 of them will be in Scotland, which, if delivered, would be welcome—but as is the running theme in this Bill, we do not have sufficient detail to offer even a grain of certainty to comfort those whose jobs are on the line now. Existing oil and gas and supply chain businesses in Aberdeen, Aberdeenshire and the north-east need a timeline so that they can plan their business and workforce. How, when and where will jobs be created? What kind of jobs and skills will be required?
Of course, we now have certainty that one job will not be coming to Scotland, as we hear that the CEO will be based in Manchester. Is Aberdeen a headquarters in name but not in nature? We already know that there will be satellite sites in Edinburgh and Glasgow. Which other executive management jobs will not be based in Aberdeen? We in north-east Scotland are not buttoned up the back, so will the Minister confirm today that Aberdeen is still the headquarters for GB Energy—and I mean that in no other way than the meaning that the general public would understand?
The funding may not be sufficient, the overall energy strategy is incoherent and there is no clarity on the delivery of jobs or any mention of £300 energy bill savings, but surely the Bill offers certainty to the very industry that will deliver the energy transition. That brings me to the strategic statement. One thing that we know for sure is that we do not know all we need to know about what GB Energy will do. As a result, the uncertainty will continue. For communities such as mine in Gordon and Buchan, and for businesses, supply chains and those working in the existing energy industry, that is profound. We need to know how those communities will be brought with us in the transition—if it is, indeed, to be a just transition.
GB Energy will not generate energy, but it cannot instead generate mass redundancies across north-east Scotland. As has been mentioned, the Bill gives the Secretary of State extensive power to dictate what is in the strategic statement, and he has given himself the huge responsibility of ensuring that GB Energy delivers its aims. The work of the existing energy industry, and of communities such as Gordon and Buchan, must be taken into account. If it is not, the transition to cleaner, greener energies will be less efficient, less affordable and less possible. As such, I sincerely ask that the Secretary of State prepares the strategic priorities in a timely manner, taking account of stakeholders in the industry, the impacted communities, the current jobs and skills, and the existing businesses that are the bedrock of our future energy generation.
Because the Bill gives us all but no clarity on what is going to happen, the strategic statement—which we are all waiting for—is going to be the key document in dictating whether it will or will not be a success. As I said at the start of my speech, I want it to be a success; I want the UK to be a clean energy superpower, just as we are, and always were, an oil and gas superpower. If we get this right, that superpower status will drive the economy and jobs of the future. We cannot allow investment to be lost, because that means that investment in new technologies will be lost.
If we lose the expertise, the supply chains and the private investment because of the way this Bill is handled and how GB Energy is handled—there is no guarantee that private investment will stay in the UK just because GB Energy has been created—we will look back at this time and wish we had done things differently. I really do not want to be in that situation, because it is my communities in Gordon and Buchan and in north-east Scotland who will suffer the most.
Madam Deputy Speaker (Ms Nusrat Ghani)
In a debate like this, it is important for Members to ensure that they link their contributions to the amendments we are addressing. I call Polly Billington.
Ms Billington
Thank you, Madam Deputy Speaker. I will speak specifically to the amendments on community energy, and I refer the House to my entry in the Register of Members’ Financial Interests.
Back in 2016, I founded UK100, a network of local government leaders who are ambitious about shifting their communities and their economies to net zero. It is because of that experience, working with local leaders of all political persuasions across the country, that I would like to highlight the importance of a local-led approach to reaching our net zero targets. GB Energy will be able to play a crucial role in doing so by facilitating and encouraging local authorities to meet the ambitious net zero targets that have been set across the country. People will be familiar with the ambitions of big cities such as Leeds, Liverpool, Birmingham, Bristol and Brighton—to name but a few—but towns and villages in rural and coastal communities have also made those commitments. That is why community energy is so vital, and why it is so much a part of this Government’s overall project and of this Bill.
Through the local power plan, GB Energy will be able to work with local and combined authorities to deliver hundreds of millions of pounds of funding to small and medium-scale clean energy projects, helping to turn those ambitious targets into reality. GB Energy will also be able to work with communities across the country to help deliver that local-led approach. I have seen some great real-world examples of community-led climate projects. For example, Green Meadows is a community climate action project in Nottingham, funded by the National Lottery’s climate action fund, that aims to deliver home insulation, clean energy generation for local homes, planting projects and workshops to give residents the tools and skills they need to install their own energy upgrades.
With no disrespect to the National Lottery’s fund, we need a more strategic approach to the local delivery of clean, home-grown, secure energy. That is the role of the GB Energy company. By working with communities and local people, GB Energy will be able to play a crucial role in building consent and support for clean energy projects, in order to reach our ambitious targets and avoid a backlash to net zero—we have already seen that backlash, particularly driven by some of the attitudes of the Conservative party. We have to bring people along with us and show them how they can tangibly benefit from the transition.
Net zero must not be something we do to people; it must be something we do with people. If we do not work with communities, we will face resistance across the country, but not because people are against tackling climate change. By involving people and showing them how they can tangibly benefit, we will face less resistance and deliver much quicker deployment of the energy projects we need to build. Swaffham Prior, which was mentioned by the hon. Member for South Cambridgeshire (Pippa Heylings), is indeed a valuable project, but we cannot leave the transition to projects of that scale. To support community projects at scale, we need a transformative approach that is about transforming the rules of the market as much as it is about establishing GB Energy. Lastly, de-risking those projects—both at scale and community assets—will be a vital role of GB Energy.
Reaching net zero will be a partnership between the state, the private sector and the community. Government investment to help “crowd in” that private sector and community investment will be crucial. In that context, we often talk about new and developing technologies, but it is crucial not to forget existing, proven technologies.
Caroline Voaden (South Devon) (LD)
I rise to speak to amendment 5 alongside my hon. Friends. I welcome the fact that the Government are keen to increase the amount of energy produced by renewables—we have certainly waited far too long in this country for the priority and urgency needed to try to shift electricity production away from fossil fuels definitively. Unlike the shadow Secretary of State, the right hon. Member for East Surrey (Claire Coutinho), I look forward to the day when I can turn my lights on knowing that the electricity has been produced by the sun or wind.
I will acknowledge four excellent projects in my constituency, which are brilliant examples—or potential future examples—of community energy. South Brent Community Energy Society runs a community energy fund with the surplus from the operation of the wind turbine and solar panels that have been erected in the village. The fund is directed to new energy saving measures and renewable energy generation projects for the benefit of the community. Charities, schools and community groups have all benefited from the surplus energy that it produces, and it is a brilliant example of what can be done in a village environment with a community energy project.
Totnes Renewable Energy Society has solar panels on the roof of the civic hall that I can see from my bedroom window, and that power the electricity in my house, along with others. We also have a turbine in the river, which sadly does not have a name such as Thunder or Lightning like the ones in the constituency of my hon. Friend the Member for Hazel Grove (Lisa Smart), but does power the local high school. I also give a shout-out to Sustainable Blackawton, which is keen to find a site for a wind turbine, and to the Bigbury Fan Club, which is setting out on a long journey to try to get a turbine there.
I have spoken to many constituents who are excited by the prospect of creating new solar or wind projects on community or municipal buildings, or wind turbines in a village, but they are struggling. It is complicated to get planning permission, it is difficult to get funding, and it is virtually impossible to connect new projects to the national grid. We must make it easier, simpler and faster to connect up community energy projects, not only so that we can transfer to clean energy, but so that communities across the country, like the brilliant example from Eigg in Scotland, can connect to renewable energy in that way.
In the early 2010s, we had the Green Investment Bank—what a shame that we lost it in 2014, and with it 10 years of potential investment in green projects. We need to catch up for the lost decade since the Liberal Democrats did so much to grow offshore wind when we were in office. We will support the Government’s ambitions to transform our energy network, but community energy must be at the heart of it and baked into the Bill, so that every village that agrees to a wind turbine can benefit from it, knowing that they are using their own clean, locally produced energy for the benefit of their community, for lower bills and for cleaner energy.
We are calling for larger energy suppliers to work with community schemes across the country so that we can sell power to local customers at a discounted rate and provide community benefits.
Ms Billington
I would like further clarification about this interesting proposition from the Liberal Democrats about community energy groups working with the big energy companies. What plans do the Liberal Democrats have for the concept of securing ownership at community level? My concern about the model being suggested is that, rather than there being a community energy ownership model, it would instead be one of big companies investing in small communities.
Caroline Voaden
I thank the hon. Member for the intervention. The model would involve part ownership by the community and part ownership by large energy suppliers—
Caroline Voaden
And community energy groups—but, yes, I will hand over to my hon. Friend, if I am allowed to do so.
Pippa Heylings
I think I will intervene, if that is okay with you, Madam Deputy Speaker. We welcome that question from the hon. Member for East Thanet (Ms Billington). In fact, there are multiple ownership models, so it is quite right to get clarification. Some of these will need investments from other companies, but others will—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Please be seated. We have a speech mid-flow. Is that correct?
Madam Deputy Speaker
Then please continue. If you wish to respond to that intervention, you may do so, and I will go to another speaker afterwards.
Caroline Voaden
Thank you, Madam Deputy Speaker.
To guarantee that local communities receive a fair share of the wealth generated from community energy projects, it is crucial that these are at the heart of the Bill, so I would welcome the Government’s support for amendment 5.
Luke Murphy
I welcome the opportunity to speak at the Report stage of the Great British Energy Bill. It is a pleasure to follow my hon. Friends the Members for Bolsover (Natalie Fleet) and for Erewash (Adam Thompson), who gave such eloquent and powerful maiden speeches earlier in the debate. It is also a pleasure to follow my hon. Friend the Member for East Thanet (Ms Billington), who showed such leadership on this issue prior to her being elected to this House. As well as commenting on the overall thrust of the Bill, I want to comment on new clause 1 and amendments 6, 8 and 5.
It is somewhat surprising and, indeed, interesting to hear Conservative Members calling for a review of the effective delivery of energy policy, for legislation to reduce energy bills by £300 and for the creation of jobs as a result, not least because a review of energy policy and the trajectory of bills and jobs created under the previous Government would reveal some stark facts. Every family and business in Britain paid the price of 14 years of Conservative failure through rocketing energy bills. Indeed, Britain faced a worse cost of living crisis than other countries, because the Tories left us exposed to international fossil fuel markets controlled by dictators such as Putin.
When I said in my intervention on the right hon. Member for East Surrey (Claire Coutinho), who has since vacated the Opposition Front Bench, that we were reliant on Putin, she responded that I did not understand energy markets. I am afraid that just shows that she does not understand energy markets, because the truth is that we are at the mercy of international markets of which Russia is a part. The previous Government did absolutely nothing to reduce our reliance on volatile fossil fuels, and as a result of their failure to invest in clean energy, they left us with a legacy of high energy bills, energy insecurity and a lack of clean energy jobs. With our plans for Great British Energy and clean power by 2030, the new Labour Government are determined to change that.
I am somewhat surprised by amendment 8, which calls for legislating the creation of 650,000 jobs, not least because we create these jobs not through legislation but by having a meaningful industrial strategy, which was lacking under the previous Government. Figures from the Institute for Public Policy Research—which, I must admit, is my former employer—show that around 4% of our GDP is made up of green goods and services compared with the European average of 6%. If we had had an industrial strategy and created jobs from offshore wind at the same rate as Denmark did from its offshore sector, we could have green goods and services making up 11.5% of the economy and we could have created 100,000 more jobs. So although I admire the chutzpah of Opposition Members calling for price reductions, and the creation of 650,000 jobs, through legislation, I welcome instead our approach of creating a publicly owned energy generation company—the first in 75 years.
Andrew Bowie
All we are asking through our amendments is for the Government to put on the face of the Bill what they promised the British people, in their manifesto and many election campaign commitments, that Great British Energy would achieve. Why will the hon. Gentleman not challenge his Ministers to put on the face of this Bill the very things on which he stood for election, such as the creation of 650,000 jobs and the reduction of bills by £300?
Luke Murphy
I have to say that, whoever is the winner of the Conservative party leadership contest, I am not sure legislating for the creation of 650,000 jobs is the direction in which they will be heading. I do not believe we can legislate our way to job creation; I believe that is done by introducing an industrial strategy, something that was so lacking in the last 14 years.
Harriet Cross
Does the hon. Member appreciate that the issue is not legislating for jobs but the lack of accountability in the Bill?
Luke Murphy
We have set out our industrial strategy, along with this Bill on GB Energy, and a few weeks ago, with the investment summit, the investment that will be coming in. I am confident that the best way of creating jobs is through the industrial strategy and the creation of GB Energy. Yes, we made those commitments and I am confident that by 2030 we will have met our clean power target, reduced bills and created jobs and revived the industry across the country.
Nick Timothy (West Suffolk) (Con)
If the hon. Gentleman is so confident in the policies of his Front Bench, will he take this moment to use the words that were used before the election by the Energy Secretary? He can repeat after me if it makes it easier: “We will cut bills by £300.”
Luke Murphy
I will take absolutely no lectures from Conservative Members about the need to reduce energy bills after they soared under the previous Government. Great British Energy’s core focus will be to drive clean energy deployments to create jobs, boost energy independence and ensure British taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy. I am also surprised by the Conservatives’ opposition to a publicly owned clean energy company, not least because 50% of our offshore wind capacity is already publicly owned but by foreign states. I am surprised that Conservative Members are so happy with that scenario.
On amendment 5, I welcome the Liberal Democrats’ support for community energy, but as my hon. Friend the Member for East Thanet commented, it is in the founding statement. Labour Members are absolutely committed to community energy. It does not need to be on the face of the Bill, but it is important that it is part of the founding statement of GB Energy. Opposition Members can be reassured that we will champion community energy. In Basingstoke, we have Basingstoke Energy Services Co-op, which is a wonderful champion for this issue. I look forward to seeing what GB Energy will deliver for such community organisations.
Dave Doogan (Angus and Perthshire Glens) (SNP)
I rise to speak in support of amendment 1, in the name of my right hon. Friend the Member for Aberdeen South (Stephen Flynn), and amendment 5, tabled by the Liberal Democrats.
I am supportive of the Bill in the abstract, and I am certainly supportive of its headline ambitions, like many Members, but I trust that the Minister is hearing what the House is saying today about the substantive lack of information and detail, and the troubling direction of travel, which will place significant executive authority in the hands of the Secretary of State in discharging GB Energy’s responsibilities.
It is a pity, too, that the attrition to the original budget of £28 billion has nearly quartered it to £8 billion. I hope that the jobs associated with this implied investment do not go the same way as the budget, before they get the chance to take root in the north-east of Scotland and support my constituents and many others in that part of the country. It is a shame that the only person appointed to GB Energy is not working in Scotland at all. I am not sure that was on the script going into the election, but it seems to be what has happened afterwards.
Amendment 1 from the SNP asks the Labour Government to deliver upon what they said they would do ahead of the election. That does not strike me as particularly unreasonable. I do not think our amendment will be selected for separate decision, so I think we will be forced to vote with amendment 6 in the name of the right hon. Member for East Surrey (Claire Coutinho), which asks for basically the same thing. [Interruption.] The Minister is getting very excited. Of course, we would not have had to table an amendment if the Labour party had just put the measure in the Bill. It was in the leaflets, so I do not know why it was not in the Bill. It is also no longer £300 that we need to see reduced from hard-pressed working people’s bills. Since Labour made that claim, bills have gone up by £149, so the Government will need to get £449 off people’s bills before they can get back to where they started, certainly in terms of them having any credibility.
The Liberal Democrats have a well-worded and noble ambition on community energy, and the SNP would have been pleased to support it. One of the things missing from GB Energy is a statutory responsibility to develop and accelerate community energy at pace in a measured fashion. Referring back to my opening remarks, I am supportive of the Bill’s outline ambitions, but I am worried about the lack of detail. The more we discuss and debate the Bill, the more I am concerned that GB Energy will end up doing lots of things that nobody particularly needed it to do, because they were all done by a department within the Department for Energy Security and Net Zero.
What we do not have is what people want GB Energy to do. We do want it to generate energy independently and to have an effect on the energy market in the United Kingdom. We do want it to sell energy to the retail market. We do want it to buy community energy from community energy generators and to introduce it into the market. And we do want it to enable community energy and to lower bills.
Ms Billington
All the things that the hon. Gentleman mentioned are exactly what GB Energy will do. There is literally no reason why he cannot go through the Lobby with Labour Members this evening, because the Great British Energy Bill will do all the things he has asked for it to do. It is nothing to do with sucking up the energy of the civil servants doing policy; that is a completely different role, and they will continue their work.
Dave Doogan
I thank the hon. Lady for her intervention, but I politely disagree. No amount of emphasis on her part will change the detail in the Bill, and that is what MPs are concerned about.
Dave Doogan
No, I am going to make progress.
The Minister has advised us that GB Energy will not seek to displace foreign-owned energy companies but will instead crowd in investment. In reference to the previously mentioned £300 bill reduction, he has also said that GB Energy will play a role in lowering bills but that that will not happen immediately. When he sums up, perhaps he can tell us when that will be, because it is not unreasonable for people to hear that ambition and to want to see a timeline attached to it. I also mentioned the attrition in GB Energy’s funding. Given its now drastically reduced funding, will the Minister advise us what challenges he sees GB Energy facing?
When the Secretary of State was in opposition, he often made big play of the fact that there is a nationalised energy industry in the United Kingdom but that none of it is owned by the United Kingdom—it is all foreign. It seems a little odd that there is not the ambition, now that he is actually in power, to deliver that ownership.
Luke Murphy
Could the hon. Member update the House on the progress of the SNP Government’s commitment in 2017 to create a publicly owned energy company by 2021?
Dave Doogan
He can indeed. The hon. Member may think he is being terribly smart—he is a self-professed expert in the energy market—but he will know how difficult it is for someone to penetrate the UK energy market unless they happen to be a large plc or a multinational. When the Scottish Government took forward that noble ambition, they found precisely the same barriers to entry as community energy companies and trusts. If the hon. Member wants to get excited about that situation, I suggest he takes it up with the Department for Energy Security and Net Zero.
Mr Angus MacDonald
Will the hon. Gentleman explain why the SNP Government have left community benefit at the same £5,000 level it was in 2014, even though prices have gone through the roof? Their advisory information could have been changed. They have been pressed on the issue many times because it has severely damaged the income of rural communities.
Dave Doogan
I am not sure what the hon. Gentleman is driving at, but if he wants to get in touch with me after the debate, I will be happy to discuss it further.
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. We are debating the amendments to the Bill, not SNP policy.
Dave Doogan
Well, indeed.
Will the Minister advise us whether we are talking about GB electricity or GB energy? I would be keen to know what investments and ambition this supposedly state-owned company—I have to grit my teeth when I say that, because it is actually little more than a trading fund—will be involved in? Will it be involved in carbon capture, utilisation and storage? Will it be involved in attenuated hydro? Will it be involved in pumped storage, geothermal or hydrogen? What are the limits of GB Energy? That is not in the Bill, and we do not understand what it will deliver. As other hon. Members have asked, what is the Government’s ambition on GB Energy when it comes to Grangemouth? Is it just limited to the common or garden production of electricity?
I will not vote with the Government on the Bill. I do not want to condemn it as an election prop that is now desperately looking for some sort of function—I hope it amounts to more than that—but I will vote for the amendments, and so will my colleagues, to try to make some sense of the Bill.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
The Bill’s job is to set up a new and unique public energy company, to work within the clear objects set out in clause 3(2)—not simply as an investment bank, but as part of a developing strategy for renewables across the UK.
Cornwall, where I am from, is set to benefit hugely from the investment from GB Energy into unblocking floating offshore wind in the Celtic sea, which will create jobs. Cornwall was post-industrial a long time ago, and we need the kind of investment that GB Energy can bring. We also have a strong local area energy plan, which is an integral part of Cornwall’s renewable energy offer. It has co-operative, community and local authority energy as part of that plan, and as a Co-operative MP I support the local power plan that the Government are proposing, which will be part of GB Energy. We could have partnerships for deep geothermal energy on council land, which would bring potential for partnerships with local authorities and others. In Cornwall we have had numerous community energy schemes, such as the one in Ladock at the end of last Labour Government, before the Conservatives cut the schemes and the feed-in tariffs. We could invest in infrastructure with GB Energy, in partnership with the Crown Estate, for the cables, the grid and, potentially, even the ports.
The Bill offers a huge opportunity. There is so much that GB Energy can do in future as part of a developing strategy to secure clean energy and reduce greenhouse gas emissions, as it says in the Bill. As its ambitions and horizons expand, in partnership with the Crown Estate and others, so too must its object and its strategy be able to expand.
Sammy Wilson
I rise to support amendments 6 and 8. The Bill was promised in order to do a number of things. First, it was to reduce the cost of energy to consumers—during the election, the Government gave a specific promise that the reduction this year would be £300 per household. As others have said, and as the Government have accepted, that will not be delivered. That is not a great start. Secondly, it was going to deliver a certain number of jobs. Thirdly, it was going to deliver sustainable and clean energy, and energy security. The Government could argue that these things are in the Bill’s strategic objectives and priorities, but they are not. I do not believe that any of those things can be achieved, given the net zero strategy that we are pursuing.
Let us take the first claim: that costs for consumers would come down. We know that they will not come down this year, and given what needs to be done to deliver the strategy, huge costs will be imposed on consumers. We will turn our backs on a lot of the hard plans we already have in place, even though they are not defunct. We are going to build new power sources. Whether they are built by the state or by power companies, capital expenditure will be involved, and there will be a return on that capital. Who will give the return on that capital to the companies? It will be the consumers. We are going to build many of these power sources away from where people live, because the open areas for wind or solar are not beside centres of population.
We already know that putting in a totally new network will require a huge expenditure of billions—indeed, some have mentioned it here today. That will be costly and controversial. I have listened to Members today saying, “Oh, to ensure the lights are turned on and there is a supply of energy, my constituents will be quite happy to have huge pylons erected in their back gardens or down beside their houses.” Of course they won’t; it will be controversial. That is why the Government will have to change the planning system, too.
Graham Stringer
Does the right hon. Gentleman agree that this debate would be much easier if the Committee on Climate Change had produced a year-by-year estimate of the costs of getting to net zero by 2050? The previous Government always promised to do a proper impact assessment on costs, but they never did. I believe that this Government should do that, so we can have an objective and evidence-based debate. Does he agree?
Sammy Wilson
I do agree. There have been variations on the cost, from £3 trillion to £10 trillion by 2050. Those Monopoly money figures mean nothing to people. Setting out the cost on a year-to-year basis, where people understand and Members who vote in this House understand what they are putting in front of their constituents by way of bills, would at least be honest. It would also mean there could be a proper debate.
I support amendment 6, which includes the price commitment. The second commitment was on jobs. We are told there will be 650,000 jobs. I agree with the hon. Member for Basingstoke (Luke Murphy) who said that we cannot legislate for jobs. That is quite right. But if a promise is made about the job implications of a policy, there should be no fear of sticking it in the Bill. Not that the Government are going to produce those jobs; the companies are going to produce them. We could then measure that. If the Government cannot legislate for jobs, they should not promise that they are going to create 650,000 jobs, especially at a time when we know that jobs are being lost as a result of commitments relating to North sea oil and energy-efficient industries. The emissions trading scheme means that there is little or no investment in Grangemouth, for instance, and the place is going to close.
Luke Murphy
Successive Governments have made commitments on jobs, but can the right hon. Gentleman name any Government who have legislated for a jobs target? Can he specify a single Bill that has contained such a measure?
Sammy Wilson
As I have just said, it cannot be done. What I have said is that a Government should not make a promise if they believe that when the Bill in question is scrutinised, that promise will not be fulfilled—especially here, when it is known that the policy will cost jobs, and unions have already made that point.
I have some sympathy with the amendment tabled by the hon. Member for Brighton Pavilion (Siân Berry) in respect of the impacts on nature. I come from one of the most beautiful parts of the United Kingdom—the Antrim coast is famous for tourism—and I am already seeing the impact of net zero policies on the landscape and the flora and fauna of the Antrim plateau. When I look out of my window in the morning, there is the wind farm that has been erected on top of the plateau, which involved stripping off 3 metres of peat and destroying a bird habitat; every year these windmills chew up birds and bats. I have already mentioned the admission that 17 million trees had been cut down in Scottish forests, and the hon. Member for Brighton Pavilion was unfortunate to mention the Sperrins, another beautiful part of Northern Ireland of which I have some knowledge and which has been totally despoiled by hundreds of windmills.
Let us not pretend, then, that the policy of renewables is a green, clean policy, because it is not. Let us be honest: any energy production will require the extraction of fuels and materials from the earth, and that in itself will be destructive, so let us not describe it as nature-friendly or green. Let us just accept that what we need if we are to bring about economic growth and reduce the cost of living for our constituents is the cheapest, most available fuel that we can have. That will drive economic growth and decrease the cost of living, and that is the kind of energy policy that the Government ought to be following.
Perran Moon
The Conservatives are generally adamant that there very are few Labour Members with any business experience, so having spent more than 30 years in business—latterly in electric vehicle charging infrastructure—I was reassured to learn while listening to the hon. Member for Bexhill and Battle (Dr Mullan) that there is at least one Conservative who is not a renewable-energy Luddite, and I am glad to see him back in his place. I wish that the right hon. Member for East Antrim (Sammy Wilson) would spend a bit of time understanding a little more about geothermal energy, which does not require the wind to blow or the sun to shine.
I was honoured to be part of the Committee considering the Great British Energy Bill, a core plank of this Government’s policy programme whose benefits will be felt in every corner of the UK, including my own constituency of Camborne, Redruth and Hayle. I pay tribute to my right hon. Friend the Secretary of State and the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Rutherglen (Michael Shanks), for their diligent work on and defence of this transformational Bill. Let me also put on record my thanks not just to my right hon. and hon. Friends who sat on the Committee, but to other Members on both sides of the House who contributed to it.
I will refer to the amendments. In Committee we heard from experts and stakeholders, and we extensively debated the issues, from oversight to community benefit. Opposition Members who were on the Committee know that, because they were there. As I said when I made my maiden speech on Second Reading, my focus will be on using the opportunities of this Bill to unleash the Cornish Celtic tiger.
Renewable energy—onshore wind, offshore wind, geothermal, tidal and solar—and critical minerals such as tin, lithium, tungsten and manganese are fundamental for our transition away from fossil fuels. There is no silver bullet; we need a mix of renewable energy, which will form part of our policy going forward. That is what GB Energy will give us the opportunity to do.
There are few areas of the UK where there is a greater distillation of renewable energy and critical mineral opportunities than in Cornwall. I refer to the comments made by my hon. Friend the Member for Rotherham (Sarah Champion) about human rights and the opportunity to produce domestically an awful lot of the energy and the critical minerals that we currently import from places such as China, Indonesia, Australia and South America. As a result, there are extremely high expectations in Cornwall for local jobs in industries that support community initiatives and domestic supply chains in one of the most deprived areas of northern Europe.
Given the distillation of raw materials and natural resources in Cornwall, the fact that the new Centre for Critical Minerals, which will accelerate the move towards a green economy, opened very recently in Cornwall, and the fact that Exeter University, which has a campus in Penryn, has the largest number of top-100 climate scientists in the world, it will not come as a surprise to the Minister that I ask him to consider opening a satellite office for Great British Energy in Cornwall. They may not want it in Aberdeen, but we want it in Cornwall.
I support the Bill as it is. We discussed the amendments in Committee, and I look forward to the opportunities that this Bill will bring to the people of Camborne, Redruth and Hayle.
Several hon. Members rose—
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. To ensure that I can call everybody in the time remaining, Back-Bench speeches will be limited to three minutes, after a maiden speech by Iqbal Mohamed.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
Thank you, Madam Deputy Speaker, for giving me the opportunity to make my maiden speech today. I congratulate my hon. Friends the Members for Bolsover (Natalie Fleet) and for Erewash (Adam Thompson) on their excellent maiden speeches. They have set a high bar that I will struggle to match.
I thank the people of Dewsbury and Batley for the trust they have placed in me. I am honoured and humbled to be their representative and a voice for all residents. Dewsbury and Batley is a newly formed constituency, so I thank my two predecessors. First, I thank my hon. Friend the Member for Spen Valley (Kim Leadbeater) for her service as the MP for Batley and Spen. She helped secure funding for the town centre, and became an MBE for helping to promote social cohesion and tackling loneliness. I wish her well as the new Member for Spen Valley.
Secondly, I thank Mark Eastwood for his service as the MP for Dewsbury. He was a man of great perseverance and helped secure over £40 million in funding for the town. I am honoured to follow Mark as the second locally born and bred MP for Dewsbury.
I stand here as the eldest of six children born to Gujarati Indian immigrants who came here in the ’60s. I am an immensely proud, passionate and no-nonsense British Indian Muslim Yorkshireman who grew up on a council estate in Dewsbury Moor on free school meals and uniforms. My late father, Gulam Ahmed, and my mother, Noorjhan Fatima, gave us love, put food in our bellies and taught us proper British and Islamic values, such as honesty, integrity, hard work, friendship, compassion and wanting the best for others.
My political journey started when I was around nine or 10 years old. I remember standing in front of my parents’ wardrobe mirror and asking God to make me one of two things when I grew up. I asked to be either a “Blue Peter” presenter, because a job that paid you to travel the world, do amazing activities and be on TV was surely the best gig in town, or—and I did not know why at the time—I asked God to make me a parliamentarian. I remember looking down at the colour of my skin and thinking that that might be difficult, but here I am today in the most diverse Parliament in history, where I look forward to breaking down barriers, making friends, doing good and preventing harm. If a “Blue Peter” producer is watching, however, I am still available for a guest appearance or a Christmas special.
Victoria Collins (Harpenden and Berkhamsted) (LD)
I refer Members to my entry in the Register of Members’ Financial Interests.
Energy is at the heart of our economy. It powers our homes, our schools, our workplaces and even our democracy. Most importantly, it is at the heart of our communities. This Bill must ensure that it brings those communities and community energy projects with it, which is why I am speaking wholeheartedly in support of amendment 5.
Local to Harpenden and Berkhamsted is the Grand Union Community Energy benefit society, which runs several community energy fund schemes, including solar canopies, and is investigating heating from aquifers. As a not-for-profit, it aims to use its proceeds to help householders, especially the most vulnerable, to reduce their energy bills and energy use. It also supports other community organisations that do not have a regular income. In Berkhamsted, it has worked with Sunnyside Rural Trust to review the energy strategy of its Northchurch site. I have spoken to passionate members, such as Sarah, Paul and John, about why they are making it work and the difficulties they face.
If we are to reach net zero, community energy is needed to fill a gap between individuals, businesses and councils. It was John who reminded me that if community energy is supported, there is a significant resource of people ready and waiting to put their voluntary efforts into getting schemes off the ground. By their very nature, they are embedded in their communities, and we must bring our communities with us if we are to make the change that is needed.
However, our community energy projects need support. Community energy projects face insurmountable costs when trying to sell the power they generate to local consumers. Grand Union Community Energy is nervous about taking on the delivery of projects, as there is uncertainty about how electricity prices may change in the future. Community energy needs stability too. As it stands, community energy schemes find it nigh impossible to sell their power directly to local consumers, which leaves pricing and some projects financially unviable without further support.
Previously, feed-in tariffs helped to provide pricing stability, but when that scheme ended in 2019, many planned community projects were scrapped and the number of new projects slowed significantly. Current access to funding has been vague, erratic and uncertain, especially since the rural community energy scheme ended, and I know many people have not bothered to apply for funding because they find it so difficult.
We must unlock the potential of our community energy projects, and that is why I support amendment 5. There are many ownership models. The Liberal Democrats are calling for large energy suppliers, when they work with community energy projects, to work with them to sell the power they generate to local customers at a discounted rate and provide community benefits. Overall, we must ensure that these projects are financially viable and supported with technical, commercial and legal advice, and we must seize this opportunity to bring our communities with us.
Wera Hobhouse
I welcome that the Government are taking renewable energy investment seriously and creating a mechanism for it. In common with many Liberal Democrat Members, I will focus on amendment 5, which would specifically require Great British Energy to support community energy projects as part of its strategic priorities.
Labour Front Benchers have supported community energy for a long time, and cross-party support was clearly displayed on Second Reading, as it is by the large number of Members’ signatures on amendment 5. The same was true of my amendment 2, which was sadly defeated in Committee. To their credit, the previous Government introduced the community energy fund, which made a difference, but more needs to be done to support community energy. Despite strong cross-party support for community energy, the Great British Energy Bill makes no mention of it. Liberal Democrat Members believe that it should be on the face of the Bill.
In Committee, the Minister said that including community energy in the Bill was not appropriate. I understand that GB Energy is not precluded from supporting community energy by the Bill, just as I understand the Government’s argument that if the new company is to be able to work flexibly, it should not be hampered by too many provisions in the Bill. However, our concern remains that unless something concrete is included in the Bill, future Ministers, Governments or chief executives of Great British Energy may decide not to support community energy and the full benefits of local energy may not be realised. Amendment 5 would strengthen the Bill in line with the clear parliamentary consensus in support of growth in this highly promising clean energy sector.
The community energy sector has seen minimal growth in recent years. It has suffered from damaging policies, such as the end of the feed-in tariffs that helped fuel growth. Since 2010, there has been no growth in the sector. Regulatory changes are required to ensure that communities receive the benefits they deserve for hosting clean energy infrastructure. All of these arguments are well understood and the benefits of community energy have been well researched. The new Government have said time and again that they support community energy and that it is a shared aim.
I welcome the conversation and the open debate on this issue. I understand that the Government take issue with putting the term “priority” on the face of the Bill. The passage of the Bill has not reached its final stages, and there is room for further debate. I very much hope that the Government recognise how strongly colleagues across the House feel about including specific support for community energy, and that such an inclusion will create cross-party support for the Bill as a whole.
Llinos Medi (Ynys Môn) (PC)
First, let me congratulate the hon. Member for Dewsbury and Batley (Iqbal Mohamed) on his passionate maiden speech.
I rise to speak to amendments 11 and 12, tabled in my name, which seek to provide certainty to particular energy sectors that they will be prioritised by GB Energy. I must declare an interest as an officer of the marine energy all-party parliamentary group, of which the UK Marine Energy Council is the secretariat.
Nick Timothy
I shall speak briefly about amendment 6 tabled by my right hon. Friend the Member for East Surrey (Claire Coutinho).
In this debate, we have heard much from Government Members about cleaner and cheaper energy, not much of which has been connected to reality. This has been exposed by Labour’s campaigning before the election, promising £300 off bills, only to drop that commitment as soon as the party entered government. That disconnect, as I have said, has been present throughout the debate.
Blind faith in renewable technology without the acceptance of the intermittency challenges and costs of wind and solar will lead to less security of supply and higher costs for industry and households. We cannot allow policy to run faster than technology without risking a crisis in the grid and, therefore, in our economy. We need baseload power, which means nuclear—where the Secretary of State is going slow—and oil and gas, where the Secretary of State is refusing new licences. To pursue the ideological objectives of the Secretary of State, we see giant solar farms forced on communities like mine, against expert advice by examining authorities, contrary to the quasi-judicial responsibilities of the Secretary of State and dependent on solar panels made by slaves in Xinjiang. I say enough of the nonsense about fossil fuels and the dependence on dictators.
Tomorrow the Chancellor of the Exchequer will announce her intention to borrow to invest. We know that the borrowing will not just be for investment, but what investment there is will be dominated by energy schemes that will cost more to do less. We do have an underinvested economy, but net zero zealotry will make the problem worse, not better.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)
I thank all Members who have made contributions to the debate, and I am grateful for all the points raised in Committee. I thank the witnesses who gave their time to the Committee, as well as the Clerks, House staff and civil servants, who put so much work into legislation such as this. I apologise to the House in advance both for the speed of my speaking and the speed with which I will have to go through the amendments—there is not a huge amount of time left.
First, I want to highlight the three maiden speeches that we have heard today. My hon. Friend the Member for Bolsover (Natalie Fleet) gave an incredibly emotional speech, and spoke passionately about the importance of the state having an impact on people’s lives. I also pay tribute to my hon. Friend the Member for Erewash (Adam Thompson) for telling us, apart from anything else, how to pronounce his constituency, and to the hon. Member for Dewsbury and Batley (Iqbal Mohamed), who I am sure will at least receive a Blue Peter badge in the post for his speech.
Great British Energy is at the heart of our clean power mission, and the Bill provides the statutory basis for it, enabling the Government to deliver on the ambitions that we set out during the election and that the country voted for so resoundingly just a few months ago. Let me turn to the amendments. New clause 1, in the name of the right hon. Member for East Surrey (Claire Coutinho), would create additional reporting mechanisms for Great British Energy. I agree with her that Great British Energy should be accountable, transparent and open in all its dealings and in how it delivers a return on investment. That is why we have made provision in the Bill to ensure that regular updates are given in the form of annual reports and accounts, which will be laid before Parliament for all Members to review. Of course, as a company, it will undergo external audit in the usual manner. As I outlined in Committee, my view remains that adding additional requirements at such frequent intervals is disproportionate and will stop the company from getting on with delivering its mission.
On amendments 6 and 7 in the name of the right hon. Member for East Surrey, and amendment 1 in the name of the right hon. Member for Aberdeen South (Stephen Flynn), every family and business in this country has paid the price for our dependence on fossil fuels during the cost of living crisis. Speeding up the roll-out of clean energy is the only way to get our country off the rollercoaster of volatile international gas markets and to protect families from future energy shocks. That is the argument that the Conservative party used to support but that it seems increasingly to distance itself from, as it has with so many principled positions.
Michael Shanks
I do not have time, I am afraid.
We are unapologetic that Great British Energy is a long-term project for this country, as part of a sustainable, long-term plan to protect bill payers for good. I stand by that commitment today. However, I also say, as we have said about so much of the mess that we have to clean up, that we cannot simply flick a switch and turn everything around, which is why these amendments are inappropriate. Conservative Members would never have made such amendments to a Bill when they were in government.
Let me turn to the amendments on jobs and industrial strategy. The Government are clear that clean energy is the economic and industrial opportunity of our time. Around the world, a race for jobs and industries of the future is speeding up, but for too long Britain has opted out and lost out. Great British Energy is at the heart of our plan to change that. It will help to rebuild the UK’s industrial heartlands through its investments across every part of the UK, and locating Great British Energy’s headquarters in Aberdeen will tap into the high-quality talent pool of Aberdeen and Scotland as a whole. We will use every tool at our disposal to win jobs for Britain. We have established the office for clean energy jobs, and are focused on developing the skills of the future, so that we have a workforce that can deliver what we need in future. Crucially, it is why the Government are, as many hon. Members have said, committed to a proper industrial strategy.
The amendments tabled by the hon. Member for South Cambridgeshire (Pippa Heylings) relate to the timeline for establishing Great British Energy, to energy efficiency and to community energy. Although I welcome and, frankly, share the hon. Member’s eagerness to get Great British Energy up and running as quickly as possible, we will not be supporting amendment 3. The Government have already shown themselves to be committed to setting up Great British Energy as quickly as possible, and there will be no further delays in doing so. Indeed, of all the things that my right hon. Friend the Secretary of State could be accused of, not moving quickly is not one of them.
Michael Shanks
I do not have time—I have a minute in which to finish.
I hope the hon. Member for South Cambridgeshire will recognise that there is really no need to put an amendment such as this one on the face of the Bill. Turning to her amendment on the topic of community energy, she will know, however, that I am passionate about community energy, as are the Government. It will form an integral part of Great British Energy’s local power plan, which will put communities at the heart of the energy transition, giving them a stake in the shift to net zero. As a member of not just the Labour party but the Co-operative party, that is at the heart of my politics and that of many of my hon. Friends. We have been advocating for community energy for decades—this is not a new idea for us—and empowering communities is critical. The hon. Lady and I share that passion and a commitment to community energy.
I can assure the House that the Department is looking to take a cross-government approach—not just through Great British Energy but, crucially, on a number of the points that have been made—to ensuring that community energy projects can be delivered, with all the changes to planning and governance that are required to make that happen. I always want to work with Members across this House, and have done so throughout the passage of the Bill. We continue to engage with the Liberal Democrats and other interested parties on this important issue, exploring options to ensure the Bill has the effects they are seeking. I look forward to further such discussions in the weeks and months ahead. I hope all who have tabled or spoken to amendments today will feel reassured by what I have outlined—albeit considerably more briefly than I was expecting—and will perhaps feel able to withdraw, or not move, their amendments.
This is a truly historic Bill, delivering on the Government’s promise to establish a new national, publicly owned energy champion for our country. It has been a privilege to take it through Committee, and I repeat my sincere thanks to everyone involved in that process. Great British Energy is the right idea for energy security, for bills, for jobs, and for delivering the climate leadership that the people of this country demand of their Government. It is the right idea for our time, hugely supported by the British public, and I urge all Members of the House to support it this evening.
Claire Coutinho
I also thank the Minister for his work in Committee, but I am afraid we are not reassured. Labour Members have a clear opportunity to prove to their constituents that they will stick to the promises they made just a few months ago. They promised to cut energy bills by £300 and to create 650,000 jobs; if Labour Members do not vote for amendments 6 and 8 this evening, we will know that they never had any intention of delivering on those promises. With the leave of the House, I will seek to withdraw new clause 1, which stands in my name, but we look forward to dividing the House on amendments 6 and 8.
I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Clause 3
Objects
Amendment proposed: 4, page 2, line 18, at end insert—
“(e) an emergency home insulation programme with targeted support for people on low incomes, and
(f) the expansion and development of renewable energy and technology.”—(Pippa Heylings.)
This amendment would set objects for Great British Energy of facilitating, encouraging and participating in an emergency home insulation programme with targeted support for people on low incomes, and the expansion and development of renewable energy and technology.
Question put, That the amendment be made.
The Secretary of State for Energy Security and Net Zero (Ed Miliband)
I beg to move, That the Bill be now read the Third time.
It is a privilege to open the Third Reading debate—another milestone in setting up Great British Energy. In less than four months, this Government have incorporated GBE as a company, appointed Juergen Maier as its start-up chair, and launched its first partnership with the Crown Estate. Next will be the national wealth fund. Earlier this month, we announced GBE’s partnership with key public bodies in Scotland. We have also announced its headquarters in Aberdeen. We are acting on our mandate from the British people.
I want to thank everyone who has played a role in getting the Bill to this stage: the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Rutherglen (Michael Shanks), who has done an incredible job steering the Bill through Committee; Members across the House who have scrutinised the Bill in Committee; all the parliamentary staff who have worked on the Bill; and the fantastic officials in my Department who have moved at such speed over the last four months.
I also want to thank the witnesses who gave evidence to the Committee, all of whom were in support of establishing Great British Energy. I am sure that the House will be interested in the list. They include SSE, EDF, Energy UK, RenewableUK, Scottish Renewables, the Carbon Capture and Storage Association, Nesta, the Green Alliance, the Net Zero Technology Centre, the TUC, Prospect and the GMB. And they are not the only ones. I can inform the House that they join a growing list of supporters, including the CBI, the Aldersgate Group, Octopus Energy, E.ON, the Hydrogen Energy Association, the Scottish Chambers of Commerce, the Port of Aberdeen, the University of Aberdeen and, of course, the British people themselves, who overwhelmingly backed Great British Energy at the general election. Sadly, the only people you can find to oppose Great British Energy are the faction of a sect of a once-great party sitting on the Opposition Benches.
The reason for such support—this will be the argument behind politics for the next few years—is that this country recognises it is time to invest in Britain’s future and put an end to the decline of the last 14 years. That is the choice of this Bill and the choice of the coming years in British politics, and we should relish it: invest or decline.
Sarah Champion
I am fully supportive of GB Energy, but what assurances can my right hon. Friend give to the House that it will be a just transition, that it will be adopted across Government, and that the broadest sector will buy into it?
Ed Miliband
My hon. Friend has made really important interventions on this point. We have been clear that no company in the UK should have forced labour in its supply chain, and we will be working with colleagues across Government to tackle the issue of the Uyghur forced labour in supply chains that she has raised during the passage of the Bill. As part of that, we have relaunched the solar taskforce and we will work with industry, trade unions and others to take forward the actions needed to develop supply chains that are resilient, sustainable and free from forced labour.
Great British Energy is the national champion that our country needs, for three reasons. First, it is at the heart of our mission to make Britain a clean energy superpower. Every family and business has paid the price for our country’s exposure to volatile fossil fuel markets over the last two and a half years. A sprint to clean energy is the way to increase our energy independence and protect families and businesses. We need to invest in wind, solar, nuclear, tidal, hydrogen, carbon capture and more—geothermal too.
Secondly, Great British Energy will help to generate the jobs the UK needs, not just the power. Here’s the thing: our European neighbours recognise that a publicly owned national champion is a critical tool in industrial policy, and the good news is that after 14 years of industrial policy being a dirty, taboo phrase, it is back at the heart of policy making in this Government. Great British Energy is part of our plan to ensure that the future is made and built in Britain.
Thirdly, Great British Energy will ensure that the British people reap the benefits of our natural energy resources, generating profits that can be returned to bill payers, taxpayers and communities across the country. I know that many Members of the House are passionate about the issue of local power, so let me reassure them that the Government are committed to delivering the biggest expansion of support for community-owned energy in history.
Great British Energy is the right idea for our time and has in a short time won huge support. I am sorry that the Opposition have chosen to wallow in their minority status and stand out against it, but let me tell them: their vote tonight will have consequences. For every project that Great British Energy announces in constituencies around Britain, every job that it creates, every local solar project it initiates and every wind project it invests in, we will tell their constituents that they opposed it. They are the anti-jobs, pro-energy-insecurity party, and we will hang their opposition to GBE round their necks from here till the next general election. Invest or decline: that is the choice, and GBE is the right choice for energy security, bills and jobs. I commend the Bill to the House.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the shadow Secretary of State.
Claire Coutinho
When we said that we could not support the Bill in its original form, it was because we had no detail to justify giving this Secretary of State a blank cheque for £8 billion of taxpayers’ money. In the intervening two months, I am afraid that we have not learned anything to give us confidence. We have not seen a business plan, a framework agreement or an explanation of how this is different from the UK Infrastructure Bank, which was set up to do exactly the same thing.
We know that there will be a headquarters in Aberdeen, with a head who will be based 360 miles away in Manchester. We know that that same head does not think that the scope of Great British Energy includes reducing bills. I remind the Secretary of State that, in an interview in June, he said not only that he was ready to launch Great British Energy within days—so he should have this information—but that it would lead to a “mind-blowing” reduction in bills by 2030. Now he has completed the embarrassment of the bright-eyed MPs behind him by forcing them to vote against their own election promises.
Tonight, Labour Members have voted against holding Great British Energy accountable for cutting people’s energy bills by £300 and for creating 650,000 jobs. The Secretary of State talks about hanging things around people’s necks. Well, he made his colleagues repeat those promises over and over again during the election, and we will see what the electorate remember. These are not trivial matters. This is about people’s energy bills, people’s jobs and businesses’ ability to succeed in this country. The risk is that this Government are heading towards a 2029 election in which industries have been lost and bills have gone up—exactly the opposite of what the electorate have been promised. That is not just my argument; it is the argument of the respected energy and climate economist Dieter Helm.
The Secretary of State, whether he is talking about Great British Energy or his plan for a zero-carbon grid by 2030, likes to talk in slogans and political mantras, but he does not deal in detail or fact. He knows that Great British Energy does not have the power to reduce household bills, which is why he has refused our attempts to hold him accountable for his own promises.
The Secretary of State argues that ramping up renewables at breakneck speed will lead to cheaper energy and greater security—I believe he just said that—but the latest renewable auction, which he bumped up, will increase people’s bills by £5. He has advertised to multimillion-pound energy companies that he will be buying whatever they are selling, no matter the cost, until 2030—he even named a few and said that they welcome his approach. I can understand why! I know that he does not have a business background, but he does not need one to understand what kind of signals he is sending.
The Secretary of State has not modelled the cost of constraint payments, network costs or green levies. He has deprioritised exciting new technologies such as small and advanced modular reactors, which will come online after 2030, and he refuses to address the question of dispatchable power. If not gas, what is he arguing for in its place and how much will it cost? Far from making energy cheaper and more secure, he will send people’s bills through the roof. And more and more people are sounding the alarm about whether he will even be able to keep the lights on, which we were able to do even during the height of an energy crisis.
Tonight, Labour Members have shown their true colours by voting against making their own energy company accountable. If the Secretary of State cannot even back up his own election promises, why should we back him on this Bill?
Question put, That the Bill be now read the Third time.
Great British Energy Bill
Wednesday 30th October 2024
(3 months, 3 weeks ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Amendment Paper: Consideration of Bill Amendments as at 29 October 2024 - (29 Oct 2024)
Great British Energy Bill
Monday 18th November 2024
(3 months ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 29 October 2024 - (29 Oct 2024)
Lord Hunt of Kings Heath
That the Bill be now read a second time.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, it is a great pleasure to open the debate on the Great British Energy Bill and to welcome the interest shown by so many noble Lords. I particularly welcome the maiden speech of my noble friend Lady Beckett. It is almost impossible to do justice to her remarkable career and her service to the country and my own party. It is a long time ago, but I particularly valued the discussions I had with her when she was shadow Health Secretary. I wish her a long and happy membership of your Lordships’ House.
I welcome too the maiden speech of the noble Lord, Lord Mackinlay; he comes to this House with considerable experience in the other place. He earned the admiration of so many people in the country and in Parliament for his brave battle following sepsis. He is very welcome to your Lordships’ House and we look forward to what he has to say.
Our country faces huge challenges, more than two years on from Putin’s invasion of Ukraine, as families continue to pay the price for Britain’s energy insecurity. At the same time, we are confronted by the impacts of the climate crisis all around us, not as a future threat but as a present reality.
On climate change, human activity has already resulted in warming of 1.3 degrees Celsius above pre-industrial levels, leading to widespread impacts on people and nature. Professor Penny Endersby, chief executive of the Met Office, has made it clear that if we do not limit temperature rises to 1.5 degrees Celsius, we will see many more weather and climate extremes, including loss of food, water and energy security, leading to increased global conflict, so we have to act fast to reduce emissions to get to net zero. The pace of that reduction is as important as the eventual date when net zero is achieved, because it is cumulative emissions which determine global temperature rises. As the Climate Change Committee has said:
“The faster we get off fossil fuels, the more secure we become”.
That is why the Government’s mission is to make Britain a clean energy superpower, delivering a decarbonised power sector by 2030 as part of an acceleration to net zero. In the first four and a half months of the new Government, we have: lifted the ban on onshore wind; consented some major solar farm developments; agreed major developments in carbon capture, usage and storage; signalled our support for the role of nuclear power as an essential baseload for our electricity generation; conducted a hugely successful allocation round, which delivered a record number of new clean energy projects; announced funding of carbon capture, utilisation and storage; signalled reforms to the planning system and the grid to speed up consent connections; and launched Great British Energy.
We see Great British Energy as a new way of doing things at the heart of our clean power mission. It is a new, publicly owned and operationally independent clean energy company, designed to drive clean energy deployment to create jobs, boost energy independence and ensure that UK taxpayers, bill payers and communities reap the benefit of clean, secure homegrown energy. Headquartered in Aberdeen, with branches in Glasgow and Edinburgh, it will own, manage and operate clean energy projects across the country, generating abundant homegrown electricity and accelerating the energy transition. Backed by a capitalisation of £8.3 billion of new money over this Parliament, Great British Energy will work in partnership with the private sector, local authorities and communities to spread skilled jobs and investment across the country.
We have published Great British Energy’s founding statement and announced its first major partnership, with the Crown Estate, to exploit our offshore wind asset. Progressing the Great British Energy Bill to Royal Assent is the next stage of GBE’s journey, giving it the statutory footing needed to deliver on our ambitions.
The Bill itself draws on best practice from previous legislation, including the Great British Nuclear provisions in the Energy Act 2023, and the UK Infrastructure Bank Act, which have set up successful government companies. The Bill is drafted deliberately to give GBE the flexibility and independence that it needs to carry out its functions and achieve its objectives over time, giving it space to develop and grow. It is focused solely on making the necessary provisions to support the company, provide the finance and set the appropriate guardrails to ensure that it delivers on the Government’s ambitions.
The Bill underpins the wider programme needed to deliver both Great British Energy and our wider mission to establish the UK as a clean energy superpower. The founding statement for GBE confirms that the company will have five key functions to support this: first, project investment and ownership, by investing in energy projects alongside the private sector, helping to get them off the ground; secondly, project development, by leading projects through development stages to speed up their delivery while capturing more value for the British public; thirdly, local power plans that support local renewable energy generation projects through working with local authorities, combined authorities and communities across the UK; fourthly, building supply chains across the UK, boosting energy independence and creating jobs; and, fifthly, exploring how GBE and Great British Nuclear will work together.
Great British Energy will be accountable to Parliament. It will be overseen by an independent board and benefit from industry-leading expertise and experience. The appointment of Jürgen Maier, the former CEO of Siemens UK, as start-up chair exemplifies this; he brings a wealth of experience to the GBE board. His background, in a variety of roles across sectors, positions him to drive GBE’s mission to innovate and to expand the UK’s clean energy capabilities.
The case for GBE is simple: it will speed up the delivery of the clean energy we urgently need. The only way to protect families from the risk of future price shocks is to accelerate the transition away from volatile fossil fuels and towards clean energy. GBE will mobilise and crowd in investment from the private sector, and it will invest in technologies such as wind, solar, tidal, hydrogen, nuclear, and carbon capture. In the October spending review, the Chancellor announced £25 million to establish the company, with a further £100 million of capital funding to spend in 2025-26 so that GBE can get to work. By backing clean energy projects up and down the country, GBE will help to build a new era of energy independence, firmly establishing us as a clean energy superpower.
GBE will ensure investment in clean energy and create good jobs across the country. We have made progress on the rollout of renewables over the last two decades, but the reality is that we have underdelivered on the jobs that should have come with it. GBE will help to support our plan to create the next generation of good jobs, with strong trade unions and decent wages, by joining forces with our national wealth fund and the British jobs bonus, and working hand in hand with industry to build supply chains up and down the country and driving the reindustrialisation of Britain.
Great British Energy will generate a return for the taxpayer and will own, manage and operate clean energy projects around the country.
I will briefly go through the details of the Bill. Clause 1 allows the Secretary of State to designate a company as Great British Energy, provided that it is “limited by shares” and “wholly owned” by the Crown. A company has already been incorporated for that purpose, so it can be designated as soon as the Bill receives Royal Assent.
Clause 2 ensures that Great British Energy is not regarded as a “servant or agent” of the Crown and will be subject to the law in the same way as any other company.
Clause 3 restricts the objects of Great British Energy, providing the framework for it to carry out the functions I mentioned, which are
“facilitating, encouraging and participating in … the production, distribution, storage and supply of clean energy … the reduction of greenhouse gas emissions from energy produced from fossil fuels … improvements in energy efficiency, and … measures for ensuring the security of the supply of energy”.
Clause 4 enables the Secretary of State to provide financial assistance to GBE, which is key to unlocking the £8.3 billion committed. Financial assistance to GBE will occur in line with its agreed financial framework and His Majesty’s Treasury’s delegations. Financial assistance may be provided in any form, including grants, loans, guarantees and indemnities, as well as through acquisitions and contracts.
Clause 5 requires the Secretary of State to provide Great British Energy with more detail on where it should prioritise and focus its activities, via a “statement of strategic priorities”. The clause also requires GBE to secure that its articles of association provide for the company to
“publish and act in accordance with strategic plans”—
which must reflect the Secretary of State’s strategic statement—and for it to update those plans whenever the Secretary of State’s strategic statement is revised or replaced.
Clause 6 allows the Secretary of State to direct GBE; for example, in the interests of national security. The Secretary of State is not able to do so until they have consulted GBE and such other persons as they consider appropriate. Any directions given must be published and laid before Parliament by the Secretary of State.
Clause 7 ensures that GBE is subject to parliamentary and public transparency by requiring its annual reports and accounts to be laid before Parliament.
Clause 8 sets the territorial extent of the Act and the date on which it will come into force, which is immediately once passed to enable GBE to start delivering benefit for the people of this country.
The Bill will help ensure that every part of the UK has a role to play in delivering energy independence for our country. With GBE, we will harness the UK’s clean energy potential and ensure we are never again at the mercy of volatile global fossil fuel markets. It will speed up delivery and drive investment. It will create good jobs and build supply chains. It will protect family finances and ensure energy security, reaping the benefits for all. I commend the Bill to the House. I beg to move.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I thank the Minister, the noble Lord, Lord Hunt of Kings Heath, for so ably introducing this debate on a Bill which relates to one of the most critical issues this country must address: energy security. I very much look forward to the maiden speech of my noble friend Lord Mackinlay of Richborough and that of the noble Baroness, Lady Beckett—a very warm welcome to them both.
This Bill gives the Secretary of State total power to establish the publicly owned Great British Energy, which will receive £8.3 billion of British taxpayers’ money. The purpose of Great British Energy will be to assist the Government in ramping up renewables, which will always be naturally unreliable, to achieve their unachievable target of 100% clean energy by 2030. I am fully in favour of ambitious targets, but this is a target driven by political ideology which industry experts have described as aggressive, unrealistic and expensive—requiring far more than the allocated £8.3 billion of funding. Yet the Bill contains little detail on how this will be achieved. We have not seen a business plan or a framework agreement, nor do we understand how the Secretary of State and Great British Energy will be held accountable.
Over the past month, as was the case both this time last year and in March, we have seen another dunkelflaute, indeed in March the capacity factor—the measure of how often turbines generate their maximum power— failed to reach 20%, and for the past two weeks it has been virtually zero. The UN’s Intergovernmental Panel on Climate Change predicts that average wind speeds in the UK will decline and that wind droughts will become more frequent. Relying on new interconnectors to Belgium and Holland will not offer energy security if either their wind farms suffer the same weather conditions as ours or their countries’ needs are greater than ours. Indeed, it is possibly only Xlinks’ proposed HVDC cable bringing solar and wind-generated energy from Morocco to the UK that comes close to offering baseload power as well as exclusive supply.
Throughout the election campaign, the Government repeatedly promised that Great British Energy would cut household energy bills by an average of £300. A similar claim was made by at least 50 MPs as well as by both the Science and Work and Pensions Secretaries of State. The Chancellor said:
“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300”.
In an interview in June, the Secretary of State claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. However, the quotes in the weekend press from the wind farm industry are damning. They say that the rush to deliver by 2030
“would create very short-term resource constraints, spikes in prices and the consumer risks losing out”—
a fear also expressed in the recent NESO report that supply chain pressures might add a whopping £15 per megawatt hour to the price of our electricity.
I therefore express my deepest concern that in the other place the Government voted against a Conservative amendment to make cutting energy bills by £300 a strategic priority for Great British Energy. By doing this, they voted against an amendment that would hold them to their word and to their election promise. the Minister confirm by how much they anticipate energy bills to fall by 2030? The pledge to cut household energy bills by up to £300 was not the only promise the Government made. They also promised that Great British Energy would create 650,000 jobs. Yet this too was defeated from becoming a strategic objective of Great British Energy and is absent from the Government’s Explanatory Notes to the Bill and the Great British Energy founding statement. Why?
These are not trivial matters; they are promises that are important to people, and the Government have already put 200,000 jobs at risk through their plans to shut down North Sea oil and gas. The Secretary of State has made huge promises which greatly impact people’s energy bills, their businesses and their jobs. It is therefore crucial that the Government are held accountable. Will the Minister tell the House how the creation of Great British Energy will impact employment in the UK?
The Government have said that Great British Energy is part of their plans to ramp up renewables, which they say will result in cheaper energy and greater energy security. This is simply not true. Instead, the Government’s renewables plans will cost the British people. First, analysis by Cornwall Insight found that the contracts for difference round that the Secretary of State bumped up will increase people’s energy bills. Secondly, if we build renewables faster than we can develop and connect them to the grid, the constraint payments needed by 2030 could increase bills by hundreds of pounds. Why was the need for long-term energy storage not realised before the approval of all these huge solar farms being built on prime agricultural land?
Thirdly, the cost of the transition to renewable energy will be paid for by consumers, through environmental levies on bills. The Office for Budget Responsibility has forecast that this tax will increase by 23% by 2030, highlighting the upfront cost of the Government’s ambition to decarbonise the grid by the end of the decade. In fact, households in the UK are expected to pay the equivalent of £120 per year, via green levies, to fund the Government’s race for clean energy. This is far from the Government’s promise that Great British Energy and the race to renewables would cut bills.
It is clear that the cost of investment in renewable energy projects will be incorporated into prices. Not only will consumers be burdened by environmental levies but experts have warned that the funding required to build new electricity pylons and overhead wires, enabling the connection between wind and solar farms to the grid, is and will be added to bills in the form of network charges. The Government have not modelled the cost of constraint payments, network costs or green levies. What is more worrying is that they have deprioritised new technologies such as small and advanced modular reactors.
The inescapable truth is that intermittent, non-dispatchable renewable energy sources can never compete on level terms with nuclear power, which can harness the extremely high-energy density of nuclear with very little fuel and very little waste. For its entire lifecycle, it is the lowest-carbon electricity source and that is even before the potential uses of its excess heat, such as the creation of green hydrogen, are taken into account. Shockingly, solar requires 17 times more material and 46 times as much land for the same installed capacity as nuclear. Moreover, these new technologies will not only bring supply chain opportunities, jobs and inward investment but will attract data centres such as Microsoft to the UK if we can deliver the kind of co-located energy sources as offered by such companies as TerraPower, X-energy and others.
In the meantime, by increasing the windfall tax by 3% in the Budget, the headline rate of tax imposed on UK oil and gas firms is 78%. Energy firms have described this as “a devastating blow”. This hike will cut investment in UK natural resources and oil and gas production and will make the UK increasingly dependent on imported supply. Not only will this compromise the UK’s energy security but consumers will be exposed to price fluctuations. If investment in UK oil and gas decreases, the revenue generated from the energy profit levy, which the Government are relying on to help fund Great British Energy, will decrease. Twelve billion pounds in tax receipts have been lost from the North Sea by pressing ahead with ending oil and gas licences, a move no other major economy has taken. This, combined with £8 billion which will be spent on Great British Energy, is a staggering £20 billion.
I come back to the details of the Bill, or the lack thereof. I repeat that we have not seen a business plan or a framework agreement. This is deeply concerning. We have learnt that Great British Energy will be headquartered in Aberdeen—incidentally, in a country totally opposed to nuclear power—but that the chair will be based in Manchester. Another promise was that Great British Energy would turn a profit for the taxpayer, yet there is nothing in the Bill that elucidates an investment profile or even a targeted rate of return. Why not? The British taxpayer must be able to see what the Secretary of State is doing with £8.3 billion of their money.
We have also not seen an explanation of how this Bill is different from the UK Infrastructure Bank, which was set up to do the exact same thing. Great British Energy is almost a duplicate of the UK Infrastructure Bank. This was established to provide loans, equity and guarantees for infrastructure to tackle climate change, funded by £22 billion. Great British Energy seeks to do something extremely similar but gives far greater powers to the Secretary of State. The UK Infrastructure Bank Bill had important accountability and report measures which are removed from this Bill. Why is this and why should taxpayers be burdened twice?
Furthermore, how is Great British Energy going to link in with the underresourced Great British Nuclear, which has yet to receive this Government’s encouragement to craft a vision that industry, government and the private sector can work collectively towards? Indeed, the word “nuclear” does not even appear in the Government’s new industrial White Paper, and the Minister reported at the all-Peers briefing last week that Great British Energy will not be investing in nuclear at all. What is going to happen to Wylfa?
In conclusion, this legislation is premature, lacking in detail and fuelled by an unrealistic target which will be unnecessarily costly to the people, jobs and economy of this country. This is particularly concerning given the wide-ranging powers the Bill gives to the Secretary of State and the absence of accountability measures and a business plan. We need clarity from the Government on the priorities and intention of Great British Energy. I hope that the Minister—indeed, the Minister for Nuclear—for whom I have the greatest respect, will engage constructively with these concerns.
Baroness Hayman (CB)
My Lords, I declare my interest as chair of Peers for the Planet. I thank the Minister for his interaction before this Second Reading debate and for the very clear and positive way in which he explained the Bill.
I look forward to both maiden speeches, and it is a particular pleasure for me to speak before the noble Baroness, Lady Beckett. We celebrated last month the fact that it is 50 years since we both entered the House of Commons, in 1974. She, of course, had a much longer career in the House of Commons—and a very prestigious one—than I did; I spent much more time in your Lordships’ House. It is an enormous pleasure to be reunited in the discussion of this important Bill.
I welcome the Bill and the opportunities that it presents in accelerating progress towards the Government’s clean power ambitions and delivering emissions reductions. The objectives the Government have set out for GBE are laudable, but it will be a large, complicated agenda, with a short runway to achieve it.
I do not share the gloom of the noble Baroness, Lady Bloomfield; I think that there are opportunities here. I certainly do not take the view that this is cost, cost, cost that we should not indulge in. We have all known, from the day that the noble Lord, Lord Stern, reported and from the reports that have gone through ever since, that the costs to this country and the costs to this world of not taking action on climate change are, in 10, 20 and 30 years, far higher than the costs of action.
I agree with the noble Baroness, Lady Bloomfield, that, as currently drafted, the Bill is very broad-brush—a skeleton without much flesh. It is clear that much will depend on the statement of strategic priorities and plans, which will be given by the Secretary of State under Clause 5. I hope that, as the Bill progresses through your Lordships’ House, we will be able to see the draft statement of strategic priorities. We need to have clarity here, as there will undoubtedly be some difficult decisions and difficult trade-offs to make as we progress.
In its 2024 progress report, the Climate Change Committee said that in order to make greater progress in decarbonising energy,
“British-based renewable energy is the cheapest and fastest way … The faster we get off fossil fuels, the more secure we become”.
It is really important that the projects that GB Energy participates in, facilitates or encourages—in the words of the Bill—are those which will be most effective in helping to deliver emissions reductions and the decarbonisation of energy.
At present, it is not clear how projects will be assessed and prioritised. Despite what the Minister said at the beginning, the accountability to Parliament that he suggested was there is, in fact, very thin indeed. It consists of the Secretary of State having a responsibility to publish the reports and accounts submitted to Companies House by GBE; frankly, I do not think that is good enough for such an important issue.
Apart from consulting with the devolved powers, which is welcome, there is no requirement for the Secretary of State to consult with any of our expert bodies, such as the CCC, the NESO or the wider energy sector in producing the statement of strategic priorities.
I have no doubt at all about the intentions of the Minister or the Secretary of State, but I gently ask them to reflect on how they would have approached a Bill as skeletal as this one when they were in Opposition. We need to set up GB Energy to be an organisation that is future-proof, robust and sustainable for the next 50 years, not just the next five.
On its funding, it is welcome that GB Energy is receiving £8.3 billion of government funding in this Parliament. However, the crucial question is how this will be split between the different objectives. There will need to be an assessment of what proportion should go to, for example, the reduction of greenhouse gas emissions or improvements in energy efficiency, and some clarity on how competing funding options will be prioritised as necessary. While £8.3 billion sounds like a lot of money—and it is—it can be very quickly spent, and there needs to be hard-headed discussions on how it should be spent. It would be helpful if, in his response, the Minister could say a little about how the Government plan to assess and prioritise projects to ensure that they benefit communities and offer best value for money for the taxpayer.
Energy UK has highlighted that it is important that GB Energy avoids conflicts of interest and market distortions by crowding in to areas where the private sector is already active. There is a real issue as to whether, if there are projects which can easily attract private sector funding, it would be appropriate for a government-owned company to compete. To ensure that it delivers additional emissions reductions, it will need to prioritise areas which are more nascent, need greater investment to scale up and will be less likely to happen without government partnership and support. Equally, it would be a real missed opportunity if a large proportion of the £8.3 billion were to find its way to fund projects already receiving significant public subsidy.
There are a few issues that are not mentioned in the Bill. We know that it is crucial we take the public along with us on the journey to net zero. One of the ways to do that is to give the public a real stake in progress. This is precisely what community energy projects do—or, I should say, could do, if there was a proportionate and fair playing field for them to operate in. I am sure that other noble Lords will raise these issues, which were debated at length during the passage of the Energy Bill 2023. I hope the Minister will be able to give some detail tonight about how GB Energy will be able to help remove the blockages that currently exist.
In his opening remarks, the Minister made it clear that the Government hope that GB Energy will bring in its wake new highly skilled jobs across the UK. Again, there is nothing in the Bill to explain how this will be implemented and how we can ensure that the skills of workers in our oil and gas industries are not lost, and that those workers are supported to transition to new green jobs, should they wish to do so. We also need to ensure that younger workers are being skilled-up to join the new green economy.
NESO’s advice to DESNZ highlighted the huge challenge ahead to achieve a clean power system by 2030 and concluded that this is possible with the right interventions, in a way that does not overheat supply chains and can offer
“Opportunities for local growth and good jobs”
and for
“positive impacts on nature, the environment and public health”.
Before I end, I will focus briefly on those positive impacts on nature. As the Minister knows, we are in a double-headed crisis. Climate change and biodiversity loss are two sides of the same coin: one exacerbates the other. In establishing a new company that will control substantial assets, there will be in many cases an opportunity for it not only to reduce emissions but to work to restore our native biodiversity and towards our mandated Environment Act targets—for example, by incorporating nature-based solutions and habitat restoration in the building of renewable infrastructure. Again, I am sure that is an issue which other noble Lords will wish to debate during the passage of the Bill.
The Bill and the creation of GB Energy offer real opportunity to move forward on the aspiration of achieving a zero-carbon grid, freeing us from the volatility and unpredictability of fossil fuel prices. I look forward to working with other noble Lords to ensure that, when we return the Bill to the Commons, it will establish an organisation that is effective, transparent and accountable, and equipped to take on the challenges it will undoubtedly face.
Baroness Beckett (Lab) (Maiden Speech)
My Lords, I hope noble Lords will understand, perhaps even sympathise, when I say that it is with considerable trepidation that I rise to address your Lordships’ House for the first time. For one thing, as the noble Baroness, Lady Hayman, pointed out in her kind remarks, I am not used to being new here. I am also very mindful that this noble House will have courtesies and conventions of its own with which I am as yet unfamiliar. Perhaps I should say at once that if I am found to be in breach of any such courtesies or conventions, it will be only by inadvertence or misadventure and never through deliberate disregard.
The trepidation to which I made reference is tempered somewhat by the extraordinary courtesy and kindness I have been shown here ever since my introduction. That commenced, of course, with Black Rod, her officers and staff, and the assistance and support I have received from them, but it has been faithfully followed by officers and staff at literally every level in the House, and not least by Members themselves.
I was conscious from the outset of having Members I regard as friends in every section of this House, not least because among the great good fortune I have experienced over the years has been the considerable privilege of chairing a Joint Select Committee of both Houses, namely the Select Committee that scrutinises the national security strategy. In that context, I have been lucky enough to work with some of the most distinguished and senior Members of this House. Of course, among the most long-standing and close of my many friends here are my two distinguished sponsors, the noble Lord, Lord Kennedy, and the noble Baroness, Lady Merron. This is only the most recent of the many debts of gratitude I owe them for the friendship they have shown over the years both to my husband and to myself.
I am particularly pleased to have the opportunity to participate very briefly in today’s debate for two principal reasons. First, I recall some years ago hearing our Prime Minister speak—I think at a Labour Party conference, but I would not swear to it—when he suggested that, in the years ahead, some country was going to become the world leader in a number of key policy areas, including climate change. He said: “Why should it not be Britain? Why should it not be us?” It was a challenge I strongly welcomed then, as now. I hope the Bill we debate today—and I recognise the concerns raised by some, including the party opposite—will help to shape our approach in the future, facilitating the spread of clean energy.
My second reason for welcoming this debate is that the issue and the impact of climate change has formed the background to and context of a substantial part of the work I have been able to undertake hitherto. When the then Prime Minister invited me to preside over bringing together the departments of agriculture and of environment to form the basis of Defra, one of my reactions was to think, “That’s reform of the common agricultural policy and the follow-on to the Kyoto Protocol—this is going to be a lot of work”, as indeed it proved to be.
That was my second reaction. As I recall, the then Prime Minister had first told me that the scientific modelling of the then raging foot and mouth outbreak indicated that it would continue and perhaps even strengthen, and told me that my first duty was to work to bring it to an end. The words “hospital pass” sprang for the first but not the last time at once into my mind.
I take this opportunity to pay tribute to the world-class civil servants and experts with whom I had the great good fortune to work, respected as they were and are across the world. It is my hope that we still have in this country practitioners of that quality, so that Britain may find itself once again among the major contributors to addressing threats of such importance and relevance to us all. Indeed, the two main issues on which I hope to engage in future in your Lordships’ House are the two great threats of nuclear weapons and of climate change. It was a former Chief of Defence Staff and a Member of this House who I heard years ago refer to nuclear weapons as: “The greatest threat to the continued existence of the human race, second only”—these are his words—“to climate change”.
I confess to a slight feeling of irritation when I hear no doubt well-meaning people talk, as they sometimes do, of the threat we collectively pose now to the planet. The planet will be fine. It is the human race, along with the rest of life on the planet, whose continued existence is at risk. However, I of course welcome the serious degree of concern which such comments reflect, and wish I could be sure and confident that that degree of concern is universally shared, especially at the most senior levels of power and responsibility across the world.
I have been advised that the underlying purpose of a maiden speech to your Lordships’ House is in effect to introduce oneself to this noble House, so perhaps I should say at once that I am extremely conscious of having enjoyed considerable good fortune over my years in public life. I did not set out to pursue a life in politics, although, as I say, in doing so I have enjoyed considerable good luck along the way.
Even my first job in an engineering apprenticeship taught me a number of useful life lessons. I went from a quiet convent school to an engineering factory in Manchester’s Trafford Park, which then housed a workforce of some 20,000 strong, including about 2,000 apprentices, of which some 20 were women. Apart from the discipline of physically clocking in and out, especially at lunchtime, I learned the necessary ability to at least appear impervious to anything said to or around you, often at considerable volume—something which remains occasionally relevant and useful to this day.
Those days, however, reinforced what has since been a lifelong love for British manufacturing, and I always felt myself blessed to have over 40 years in my then constituency the last manufacturer of rail rolling stock in this country to have capacity to design, manufacture, test and service new trains, and, separately but equally importantly, the civil aviation headquarters of Rolls-Royce, a source of great pride to all who live in and associate with the city of Derby.
I am honoured to be a Member of this noble House and will endeavour to make a useful contribution here—in which endeavour I know I will enjoy much assistance and support, for which I should be extremely grateful.
Lord Falconer of Thoroton (Lab)
My Lords, I look forward to the maiden speech of the noble Lord, Lord Mackinlay of Richborough, who is very welcome to this House.
It is a great personal pleasure to follow the truly excellent maiden speech of my noble friend Lady Beckett. I told her that I would say it was excellent even if it was not, but it turned out to be exactly as expected—brilliant. My noble friend has made a contribution to public life that is second to none. She served in the Governments of Harold Wilson, James Callaghan, Tony Blair and Gordon Brown. There are others who have served as many Prime Ministers, but many of those other Prime Ministers lasted only 49 days. While my noble friend Lady Harman has the longest continuous record as a female Member of the other place, my noble friend Lady Beckett has the longest service of all as a female Member of Parliament at 45 years.
She was first elected in October 1974. There was a break between 1979 and 1983 when there was a misunderstanding with the electorate of Lincoln, who elected a Conservative and indeed continued to elect Conservatives until 1997, when my noble friend Lady Merron was elected on behalf of Labour. In 1983 my noble friend Lady Beckett became the Member of Parliament for Derby South, and she served the people of Derby South until 2024. She never forgot Lincoln, if for no other reason than because she married Leo Beckett, the chair of the Lincoln constituency Labour Party. Leo and Margaret—if I may call her that, just for this remark—were always together, the most famous couple in the Labour Party, more Jennie and Nye than Victoria and David but very much loved. Sadly, Leo died in 2021 and is much missed by everybody.
Within months of entering the House of Commons in 1974, my noble friend was made a Whip. Over the next 35 years she held a series of offices, including Secretary of State for Trade and Industry, Secretary of State for Environment, Food and Rural Affairs, Leader of the House of Commons and Foreign Secretary. But a description of her distinguished career does not adequately describe the characteristics that will make her so important and valuable a contributor to this House.
She is wise. In those years in government from 1997 to 2010, she was the wise owl whose advice we wanted. In 1997 there would have been those who thought she might be an early casualty, but the Prime Minister—like all the Prime Ministers who followed—very quickly realised that there was no more reliable and insightful person on his Front Bench than my noble friend. She ended up as his Foreign Secretary, leaving government on the same day as the Prime Minister, although the next Prime Minister had her back on the Front Bench within 18 months.
She is loyal. She has been a member of our party for even longer than those 50 years. She is universally loved. She held our party together during the dark days that followed the tragic death of John Smith. When she announced her retirement, the East Midlands Labour Party gave her a dinner that was massively oversubscribed, a love fest that few politicians in either party could have inspired.
Above all, she is trusted. Her commitment to our party will not prevent her saying when we are on the wrong track. She is a great public servant with profound loyalty and commitment to our country. Her words are always worth listening to. She is seldom wrong in her judgments.
It is particularly good that my noble friend Lady Merron, now on the Front Bench, was a successor to my noble friend Lady Beckett in Lincoln in 1997, when finally it was won back after 18 years. The current Member of Parliament for Lincoln is my son, Hamish. He could not be prouder to be one of my noble friend’s political children. She is so very welcome and will hugely enhance the deliberations of your Lordships’ House.
I thank the Minister for his clear and helpful exposition of the Bill, which I greatly welcome. I was unable to determine from her contribution whether the noble Baroness, Lady Bloomfield, was in favour of the Bill; I took the view that she was probably not, but it was not clear. The merit of the Bill is that it will bring British public ownership back into the United Kingdom energy system, albeit through a state-owned private company.
All agree that the clean energy revolution that is required will not come from either public or private sector investment alone. There has to be a combination, and the effect of the creation of Great British Energy is likely to promote the crowding in, not the crowding out, of private sector projects in this field. They have to operate together. The Government’s description of the working of the company seems right:
“Led by its own CEO, Great British Energy will be overseen by an independent fiduciary Board, rather than ministers, benefitting from industry-leading expertise and experience across its remit. Trade unions will have a voice and representation within Great British Energy”.
The creation of Great British Energy right at the start of this Government, coupled with the commitment of £8.3 billion for Great British Energy to invest, shows both the urgency with which the Government are addressing the issue and that they have hit the ground running on it. I strongly welcome the early partnership with the Crown Estate in offshore wind power—this is exactly the sort of drive and leadership that Great British Energy can give. I also welcome the early appointment of Jürgen Maier. To have secured the services of a serious, successful figure in the private sector of his stature shows the depth of the commitment and the likely ability of GB Energy to deliver results.
I completely understand the wisdom of setting up an entity in private company form, albeit wholly owned by the state. It imposes the private sector disciplines on the company, including the need for a sensible return on investment, but in a way that allows this company to pursue the overarching aims of the Government to deliver on the aims of clean energy. I also underline the point made time and again by the Secretary of State that the promotion of our clean energy agenda will be a major contributor to the creation of a whole new infrastructure, the creation of community energy projects and the widespread retrofitting of the built environment to growth, upon which the future of our economy depends.
I thoroughly welcome the Bill and what it demonstrates about the Government’s readiness and commitment to addressing the climate emergency. I have two questions on which I would welcome assistance from my noble friend the Minister. The first is how this Bill fits in with the state subsidy and competition regime in law. There are limits on what state subsidies may be given by the state, particularly in the context of competition law, which prevents a state subsidy warping a Minister. Can the Minister say a little about what limits there are on the subsidies that the Government can give to Great British Energy and on the subsidies that Great British Energy can give to third parties?
My second query is that the Bill does not address the strategic objectives of Great British Energy, which will come from a statement by the Secretary of State. We are well acquainted with the aims of this Secretary of State, but would it be better, from a constitutional point of view, to incorporate the strategic aims in the Bill so that they cannot be subverted subsequently without parliamentary approval? We know that this House has always been keen to repel skeleton Bills.
Lord Howell of Guildford (Con)
My Lords, I declare my interests in energy-related companies, institutions and organisations, as in the register. I join most heartily in the comments made on the maiden speech we have already heard in this debate, by the noble Baroness, Lady Beckett. She seems to have held an enormous portfolio of high offices over the years, and the way she has swept through the offices of state makes many of us look like part-time politicians. She was Secretary of State for Trade, as the noble Lord just mentioned, Foreign Secretary and—if my memory serves me right, and it serves me wrong more and more nowadays—I think she was leader of her party as well. Anyway, she is a considerable and major figure who we are honoured to have among us as we grapple with the huge new issues sweeping into politics and policy today.
Obviously, I am also looking forward to my amazing noble friend Lord Mackinlay’s maiden speech, which I am sure we will all listen to with enormous interest.
An entirely new politics of energy is taking shape at the moment, at a very rapid rate. I am referring not just to the prospects of President Trump, who, of course, has announced that he will break totally with all the major assumptions on which this Bill and many other energy policies are based, so we will have to think anew on all that. I am talking about the fact that we are heading into yet another era of oil and gas surplus. It all goes up and down in very volatile ways; it always has and will continue to do so.
The new Secretary of State, Mr Miliband, has said that he has, I think, three priorities—he has many, but three in particular. The first is to save the planet; that is the climate change challenge, of course. The second is to create jobs. That is certainly right, because we are heading into a considerably bigger change in world energy than the Industrial Revolution. There will obviously be a huge shift in the patterns of jobs, training and the education behind them.
The Secretary of State’s third concern is lower energy prices. I am very glad to hear that, too, because it makes me uneasy all the time, as I am sure it makes all of your Lordships, that probably 3 million or 4 million families wake up every morning in this United Kingdom of ours in desperation and apprehension about the coming winter and how on earth they are going to pay—or even try to pay—for the necessary energy for putting hot food on the table, heating, cooking, hot water and a comfortable home, which they know they cannot do. The sums still do not add up. Energy cap or no energy cap, they are impossible prices for millions and millions of households in what is supposed to be a mature and rich country in which we look after our citizens. So I am very glad that he puts that as one of his trio. Maybe there are others.
So how will this new body, the Great British Energy company, help tackle all this? The first thing I would add, which has not come up very much in any of our recent energy debates, is that we must be clear about what the real situation is. To get to an all-electric society by 2030, which I think is the Government’s aim—or is it by 2035? I am not quite sure—will require five times more electricity than we are generating now. People say “No, no, that can’t be true”. I was just looking at the briefing from the voice of the energy industry, which says, “Oh, it’s all right. Today, the UK’s electricity grid is powered more by renewable and low-carbon sources of energy than fossil fuel”. Wait a minute; that cannot be right. It sounds right and it may be true at this moment, but, if we are talking not about the electricity grid but about the UK’s economy, that is powered vastly more by fossil fuels than by renewable energies of any kind. This is a complete misapprehension of the reality, which is that renewable energy provides slightly under 10% of the nation’s total energy usage. It is the other 90% that has to be decarbonised if we are to get anywhere near net zero by 2030 or 2035. It is important to start with a realisation of the colossal hill we have to climb to get to a situation where net zero of any kind, even by 2050, is faintly achievable.
Some 27 million households now use about 6 kilowatts of electricity a day. If all gas and oil are illegal and unavailable—just not there—by 2030, each household will need 29 kilowatts, on average. Obviously, some will need much more; some less. This is about 4.5 to 5 times what is currently produced. This nation produces about 65 megawatts of electricity a day, half of which comes from renewables. On good days, all of it comes from renewables but, averaged out over a year, 30 to 40 megawatts come from renewables.
The most sober estimates are that, between now and 2030 or 2035, we will need 200 gigawatts of clean, green energy, plus a back-up system of intermittency, because the wind does not blow all the time and we have not finished redeveloping and rescuing our nuclear industry. The decisions have not yet been made and we have all the problems of storage and hydrogen yet to solve—although they will play their part in in the future and their place will come.
In short, fossil fuels may be fading over the next 20 to 30 years, but in modern economies electricity demand will not fade. On the contrary, it will grow. Although there are mitigations, which I will address in a moment, they will not help the fact that we have to produce vastly greater amounts of electricity. The question is, who will pay?
There are good things in what the Minister and others have said: that this Government are anxious and realise that, being short of money, they will have to rely on the private sector. I would like to hear much more about the private sector, if we are talking about sovereign wealth funds, pension funds with £3 trillion, insurance funds or other international sources of investment. They have the money and the Government have the challenge and the need to finance this colossal energy transition. Somehow, we have to think of new ways to bring these two sides together, possibly as the grandson of the private finance initiatives of the end of the last century—something, at any rate, that faces up to the fact that very large new sums of investment are required.
Will they save the world, as the Energy Secretary wants? Well, we produce about 1% of emissions at present, a tiny little bit. Carbon emissions are rising faster than ever; methane emissions are 80 times as vicious in global warming and are rising faster than ever. Carbon capture and storage will need to capture the carbon that we will still be producing, because obviously will go on burning gas or electricity for many years to come. These schemes are beginning, but they have not got very far and we have not heard much about them.
Meanwhile, the wider world is still dedicated heavily to coal. The Secretary of State wants more jobs. Of course, there will be a lot more green jobs, but many jobs will be lost in the energy transition—thousands in oil and gas and in many other parts of the industry as well, particularly where that industry’s high energy costs undermine our competitiveness and we lose exports.
Lower bills? I just cannot see it. The consumer will have to pay somehow, in some way, for the huge transition. Far from being a world leader, as several people have suggested, we are falling dangerously behind. I will enumerate the real reasons why we are in serious difficulty.
First, the nuclear situation is a mess. Hinkley is turning out to be immensely expensive, years behind on timing, and years over budget. A proposal for Sizewell C as a replication of Hinkley is a very questionable proposition. No private investor will touch Sizewell C with a bargepole. It will cost £20 billion, take 10 years to build, and will not help at all with the move towards net zero.
Secondly, the entire grid needs a remake to accommodate the switching stations bringing our electricity—which has to increase on a great scale—from the North Sea to the market. We can bring it to the coast; it then has to be transmitted to consumers, homes and industry by an entirely new system of pylons. As an example, the Hinkley transmission system, which is being put in now, has taken 10 years to get going. It took seven years of planning argument followed by three years to build.
Thirdly, about 1,000 to 1,500 new pylons will be required. We are told by the national grid that they cannot go underground. I would like to hear a lot more about what Great British Energy can do to change that situation because that will involve years and years of planning as well.
Fourthly, the interconnector system, on which we rely very much, from all the countries around us, as well as from Morocco, is falling behind and not yet under way at the pace that it should be.
Fifthly, according to the Times, we are trying to take the whole thing at breakneck speed, and we all know that in politics the faster you push people without consent, the slower the realisation.
Sixthly, heat pumps are not yet fully efficient, especially below 40 degrees Fahrenheit, and therefore cannot solve the problems of heating domestic homes in the way we want.
Seventhly, this new organisation seems to be part of a sort of political or institutional indigestion. We now have GBE; we already have Great British Nuclear—how they are related I have no idea. We have NESO, which is the operator of the whole system of energy, or is said to be. We have Ofgem, of course, and the national wealth fund, which is deeply involved in this area. We have the UK Infrastructure Bank and many more ministries. All of these have a finger in the energy pie.
The need for co-ordination, and the working out of salaries of every individual, will be colossal. I think that we have an old “socialist Adam” showing through here. It is like the old Neddy system, on which I served many years ago—it is all right as long as we deal with the big boys in the trade unions and the corporations, and the other 99% of enterprises in this nation can go hang. That, I am afraid, will not solve the problem any more than some of these other organisations.
All the world is on fire at the moment, and energy reliability is absolutely essential for a modern industrial nation. This morning, we had Lord Cormack’s memorial service, at which someone reminded us that Lord Cormack would ask, wisely, about new policies: “Is it a plan or is it a story?” Even after listening to the marvellous clarity of the noble Lord, Lord Hunt, I am, frankly, not at all sure which this is. I am sure that the Great British Energy system needs to get its climbing boots on, because the mountains it has to climb are very high and very dangerous. This is the serious situation we face, and which we are only just beginning to address. There is a long, long way to go.
Baroness Winterton of Doncaster (Lab)
My Lords, it is a pleasure to follow the noble Lord, Lord Howell of Guildford, who demonstrated his long-standing interest and expertise in this area.
It was also a huge privilege and pleasure to have been here for the maiden speech of my noble friend Lady Beckett. Her speech demonstrated once again why she is such a towering figure in the Labour movement. My noble and learned friend Lord Falconer of Thoroton expressed perfectly why we are so lucky in your Lordships’ House to be able to benefit from my noble friend’s experience and wisdom. I add my own thanks to her for all the kindness she has shown to me and the advice she has given me over the many years that I have known her. I am sure I speak for many Members of this House, not least those who came from the House of Commons, when I say that.
Baroness Winterton of Doncaster (Lab)
I welcome the Bill, not only because it fulfils one of the Government’s manifesto commitments to establish the first new, national, publicly owned energy company in our country for more than 75 years but because it is a key plank in our commitment to reach net zero. The company, as legislated for in the Bill, has the potential to contribute to the UK’s energy independence and climate goals, create good jobs directly and through its supply chains, support pathways for the oil and gas workforce, and deliver long-term revenue streams for the public.
Of course, state ownership of UK energy assets is already widespread, especially offshore wind, but the unfortunate fact is that it is state ownership by the Governments of France, Denmark, Sweden and Norway rather than the UK. Today, more offshore wind is owned by the city of Munich than by the UK public. Surely if it is right for the Danish, French, Swedish and Norwegian publics to own our offshore wind and clear energy, the British public deserve a stake as well.
I believe that GB Energy will make us stronger in an insecure world and provide us with a national energy champion. However, it is essential that GB Energy has a sharp focus on creating quality jobs, both directly and through its supply chain. At the moment, while the UK has installed more offshore wind than any other country but China, we lag far behind European countries, including Denmark, Germany and Spain, in terms of supply-chain and job creation. That has to change. China has begun manufacturing cheaper and bigger offshore wind turbines, and we cannot let a situation develop where we become as dependent on China for offshore wind turbines as we are today for solar panels.
If we do not see GB Energy playing a key role in delivering the Government’s industrial strategy, we risk a backlash to the clean energy transition, as touched on by the noble Baroness, Lady Hayman, so we need GB Energy to have a strategy that includes long-term proactive commitments, underwriting demand, and using its procurement powers so it can build up the UK supply chain and deliver a just transition pathway for North Sea oil and gas workers.
My noble friend the Minister may be aware, for example, of the proposal for a small modular reactor national manufacturing centre of excellence, which would present a British high-value manufacturing industry-led approach to deliver an SMR, the first of its kind here in the UK and, as it happens, would be based in South Yorkshire. I hope my noble friend the Minister will agree that this is exactly the type of UK-based manufacturing that the Government and GB Energy should be supporting.
As my noble friend the Minister said in opening, the GBE founding statement said that the company’s mission would be
“to drive clean energy deployment, boost energy independence, create jobs”.
Will my noble friend the Minister consider the point being made by the TUC that we should strengthen the Bill by adding a requirement, perhaps to the objectives in Clause 3, that Great British Energy contribute to the UK’s commitments to a just transition and to the creation and maintenance of quality jobs, so that this commitment is actually enshrined in legislation? GB Energy needs to look across all areas, including wind turbines, small nuclear reactors, solar and clean hydrogen power. It should be clear about how companies can access funding through GB Energy’s £8.3 billion capitalisation.
My noble friend the Minister referred to carbon capture and storage in opening. I am sure he will be aware of the concern of the Carbon Capture and Storage Association that the Bill defines clean energy primarily as energy produced from non-fossil fuel sources. This could inadvertently restrict investments by GBE in technologies such as carbon capture and storage, reduce the potential for public/private projects, as the noble Lord, Lord Howell, referred to, and hinder the UK’s ability to meet net-zero targets. My noble friend Lady Liddell has also raised this issue, and she is in her place today. I hope the Minister will be able to comment on these concerns in his closing remarks.
This has been an extremely interesting debate so far. I am looking forward to hearing the maiden speech of the noble Lord, Lord Mackinlay of Richborough. I see that by his side he has the noble Baroness, Lady Laing of Elderslie. I do not know if this is unparliamentary language, but she was my “old mucker” in the Commons, when she was Chairman of Ways and Means and I was First Deputy Chairman of Ways and Means. We enjoyed lively exchanges at times with the noble Lord, Lord Mackinlay. I want to say how much I admire his bravery—I know many here do—in overcoming so many obstacles, which is epitomised by him being here today. I look forward to his speech and to hearing my noble friend the Minister’s response to the points made on this very welcome Bill.
Lord Ravensdale (CB)
My Lords, I live and work in Derby, so it is a particular delight to see the noble Baroness, Lady Beckett, make her maiden speech. She is a living legend in the city of Derby, having served Derby South for 41 years—an incredible achievement.
I declare my interests, including as a chief engineer for AtkinsRéalis and a director of Peers for the Planet. I support the Bill; as the Minister said, it is a means of supporting more private investment in the industry and much-needed investment in energy in the UK. However, I agree with the noble Baroness, Lady Hayman, on the benefits to the House of being able to see the strategic priorities and plans in order to allow us to assess the aims in more detail as the Bill progresses through your Lordships’ House.
I will make three high-level points. First, there is the issue of cost, which was put across very well by the noble Lord, Lord Howell. It is at times like this that I regret the inability to use visual aids in your Lordships’ House. If I could, I would have projected a graph on one of the screens showing the changes in industrial electricity prices over the past five years, by country. In Italy and Germany, prices have increased by around 50%. In France, the figure is 93%, and in the UK there has been a 124% increase in industrial electricity prices over the period since 2019, which highlights the particular challenge of energy prices here. In the USA, prices have increased by 21% over that period and are now a quarter of the price we see in the UK.
Beside the obvious effects on bill payers for households and businesses, this has a real effect on the number one mission of the Government, the highest-priority mission, which is getting economic growth going again in the United Kingdom. Many companies I have spoken to in recent months have set out that they want to invest in the UK but cannot make the numbers and the business case stack up, due to that high electricity price, if they are energy-intensive users. That really needs some focus. The reason I mention it in the context of the Bill is that, looking at the objects of Great British Energy, we see set out, quite clearly, decarbonisation, sustainability and security of supply. But we do not see cost, which is conspicuous by its absence.
I would come at this from the point of view of join-up across the other agencies within government that are looking at the energy system—for example, the National Energy System Operator. The legislation that set up NESO, the Energy Act 2023, clearly set out its responsibilities in terms of costs, sustainability and security—the three sides of the energy trilemma. From the point of view of consistency and systems alignment, there is a real opportunity here for the Government to consider that as an object or duty for Great British Energy, given its priority for economic growth and the other missions.
My second point is on systems governance. It is welcome how the Government have set out the importance of local governance in terms of the energy system. In recent years we have seen a lot of work done on top-down energy system governance, but we have not seen the corresponding plan for how the energy system is to be governed from the bottom up, from local authorities up to regions up to the national level. That is vital if we are to deliver a coherent energy transformation to net zero over the coming years. It has been really encouraging to hear about the potential role of Great British Energy, as the Ministers set out in their remarks here and in the other place, in local power plans and local area energy planning. The issue we have seen over recent years with local area energy plans is their patchwork nature—varying levels of quality and robustness in how they are set out within local authorities. But they are essential in delivering the scale of investment we need for net zero. So I urge the Government to use the Bill as an opportunity to more clearly set out how that local governance structure is going to work, particularly in the context of NESO, which is responsible for the regional energy strategic planner role. If Great British Energy has a separate role within the energy system, that energy governance needs to be set out more clearly in the Bill.
My third point is on nuclear. The Minister in the other place set out quite clearly, as did the Minister here in his remarks, the need for a separation between Great British Nuclear and Great British Energy, which is absolutely the right way to go. Great British Nuclear needs that clear role and stakeholders on its board who have expertise in nuclear. But we need to see the roles and responsibilities more clearly set out and split between Great British Nuclear and Great British Energy, so I would welcome clarity on that.
I will finish with a few final questions. One of the objects is the distribution of clean energy. Can the Minister clarify what the role of Great British Energy is in relation to NESO in this respect? Another object is on security of supply, but that can encompass many things, from reliability to fuel security to physical security to cybersecurity. Can the Minister say how the Government would define security of supply within the Bill?
I look forward to working with the Minister and his team as this Bill goes forward to Committee.
Viscount Hanworth (Lab)
My Lords, I express my admiration for the maiden speech we have already heard, and I look forward to the one that will follow immediately.
The Bill seeks to establish the parameters and rules affecting a new government-owned clean energy company that will pursue the objectives of a transition to clean energy. The name of this enterprise conforms to those of Great British Nuclear and Great British Railways. These are boastful and grandiloquent titles that tend to conceal a lack of substance.
It is too early to pass judgment on Great British Energy, but so far we have scant information regarding its programme. Some indication of its purpose can be gathered from a policy paper titled Great British Energy Founding Statement, published in July this year. Here we learn that Great British Energy seeks to
“clear a path for those emerging technologies which could revolutionise the entire sector”.
Examples that are given in the document concern
“floating offshore wind, tidal, hydrogen generation and storage, and carbon capture”.
There is also mention of nuclear power, which falls under the auspices of Great British Nuclear. It is yet to be determined how the functions of Great British Nuclear can be aligned with those of Great British Energy. However, a clear impression is conveyed that nuclear energy is to be regarded as a secondary consideration.
The Great British Energy project seeks to redress the failures of the privatised energy industry. At present the Government have little leverage over the privatised companies that dominate the energy sector. They cannot easily guide them towards their vision for the future. It is unrealistic to propose that this can be achieved by renationalising the UK electricity-generating companies. They are controlled by foreign energy conglomerates and international financial consortia, which remit to their owners substantial dividends and interest payments.
The considerable financial resources that would be required to renationalise the companies and to compensate their owners are not available to the Government. Prior to privatisation, the supply of electricity was governed by the Central Electricity Generating Board, and the profits of the industry were fungible. They could be devoted to the maintenance of the generating capacity of the national grid, and they could be used to aid the research and development that was undertaken by the UK Atomic Energy Authority.
Nowadays, the only way in which the industry’s profits could be deployed for such purposes is by imposing levies on the private companies of the industry. The previous Government did this hesitantly by imposing levies on the oil and gas companies. But this has been a temporary measure to defray the exorbitant energy bills that have been affecting domestic consumers. It appears that the present Government share these inhibitions. Nevertheless, there are indications that the levies will continue and that the money raised will be used to support the transition to clean energy.
Perhaps it is hoped that, eventually, Great British Energy will become a major player in the energy markets, capable of deriving large profits that could be deployed for the maintenance and development of energy infrastructure. The company will be sustained by a grant of £8.3 billon for the duration of the current Parliament. It will be encouraged to pursue joint enterprises with private industry and to seek capital funds from institutional investors. It has been declared that the Secretary of State will be the sole shareholder of the company. This seems to impose a limitation on its ability to raise finance.
Since it would be precluded from issuing shares, it will have no opportunity for attracting individual personal investments from ordinary citizens. If it were able to do so, this might be one way of avoiding the danger of its falling into the hands of institutional investors intent on reaping excessive returns.
I feel it appropriate now to broaden the discussion to consider more generally the strategy for a transition to a carbon-free economy, and to question what appear to be some of the Government’s assumptions. I am perplexed by the lack of attention being paid to the intermittence of the so-called renewable sources of energy, which are the energies of the wind, sun and tides. The energy from tides should be described as variable, as opposed to intermittent, but at present that energy contributes little to the total supply.
In electricity generation, the intermittence of renewable energy is redressed by activating gas-fired power stations that are on standby. To achieve the target for staunching the emissions of carbon dioxide these must be eliminated, or else their emissions must be captured and stored, but the technology for large-scale carbon capture and storage is not available. Notwithstanding the reliance placed upon it by some parties, one is inclined to be sceptical about its prospects. Nor, given the insecurity of its supplies and the volatility of its price, does it seem appropriate to continue to rely on natural gas as a major source of energy.
Another way of redressing the intermittence of renewables is to rely on supplies of electricity generated abroad and imported via cables. This implies an undesirable dependence on supplies that are largely beyond our control. In the case of a temporary restriction of supply, it is possible to limit the demand for electricity by raising its price to encourage consumers to limit their usage and manufacturers to suspend their operations, but this is bound to have damaging consequences.
A heavy dependence on renewable sources of energy implies a need to store the energy by accumulating it when it is plentiful and drawing upon its stores when it is scarce. The only viable means of storing energy on a large scale is to use its surpluses to generate hydrogen. The gas can be used to power electricity generators when there is a dearth in the supply of renewable energy. For this option to be viable, a vast and expensive infrastructure is needed for generating, storing and using the hydrogen. When these facilities are taken into account, the costs of using renewable energy on a large scale seem excessive.
It should be observed that the storage of hydrogen would be in direct competition with the storage of carbon dioxide captured from the emissions of industrial processes. Both gases would require to be sequestered in caverns, which could be salt caverns on land or exhausted oil wells at sea. At present, Britain has a dearth of facilities for gas storage. This is because we have been able to rely in the past on plentiful supplies of North Sea gas, which could be treated as if they were on tap.
This analysis points inevitably to the need to exploit nuclear energy to generate our electricity. The need to generate hydrogen, to be used either as a store of energy or directly in industrial processes, could be met most effectively by high-temperature electrolysis powered by nuclear energy. The conclusion must be that it would be cheaper to rely on nuclear power for satisfying most of our energy requirements than to depend upon renewable sources of energy.
Nuclear power is a tried and tested technology that can be implemented rapidly. However, Britain’s nuclear programme has been beset by hesitation and delay. It seems that we are intent on relying on foreign suppliers to create a fleet of small modular reactors. We have failed to support our native projects that have been pursuing advanced nuclear technologies, and we have driven away some promising projects of foreign origin that have sought to establish themselves in Britain.
Lord Mackinlay of Richborough (Con) (Maiden Speech)
My Lords, I am particularly grateful to be in this place and very lucky because, just over a year ago, my luck had sincerely run out. I have to give thanks to my dear wife, now Lady Mackinlay, for her forthrightness and robustness—her insistence that a DNR notice and palliative care were not in order for me, and that they should fight for me until the end. But once we got over that small hiatus, I thank the NHS for keeping me alive, getting me on my feet and getting me into the state that I am in today.
I give particular thanks to the right honourable Rishi Sunak, the previous Prime Minister, for including me on the Dissolution Honours List. I hope it was a recognition that I had a little more to give to the political life of this country but which I could no longer do adequately as an MP at the other end—a job that I thoroughly enjoyed. I am sure that noble Lords who have taken that route into this place will know exactly what I am talking about.
I give my great thanks to the staff of this House—I am looking at some who I have had a relationship with for many years. My thanks go to Black Rod, the doorkeepers and the many other staff who have rallied round and offered me help and assistance. I might look like I need help but it is not quite as deep as you might think. Many noble Lords in this House, once they see my office on the first floor—right next to a lift and very close to here—will be green with envy; I have a rather nice room on my own, complete with fridge. They might get an invite and a welcome there in due course.
On 28 September last year, completely out of the blue, and within 12 hours of feeling perfectly well, I was given a 5% chance of living. The sepsis started from nowhere. They said that it was down to pneumonia, but I had had no symptoms and a clear chest. It was completely out of the blue, which highlights the danger of the disease. It is not a disease in itself; it is yourself trying to fight off a disease, and doing it particularly badly and going into overdrive.
There is a lot to be learned about sepsis. It is a killer of 48,000 people a year in the UK. Some will be, dare I say it, very end-of-life, and so little can be done, but there will be many tens of thousands of others whose lives could be saved—or bits and pieces that could be saved—and that is worth doing. I will be devoting a lot of my efforts and the voice that this place gives me to, among other things, highlighting sepsis, working with great charities such as the UK Sepsis Trust, which I have already done a lot of work with. This is not a condition or disease where we are looking for some magic bullet that has yet to be found, as might be true of some forms of cancer. This is easily solvable if you find it and recognise it early—if you can recognise that your loved one is feeling possibly the worst that they have ever felt in their whole life. Thankfully, my wife asked the question: could this be sepsis?
I got through it, after seven months under NHS care. I spent a lot of time just over the bridge in St Thomas’ Hospital. I am very grateful that so many colleagues from the other place, and some from this House, could come and visit me regularly. That is what kept me going. I did not feel that I was really out of the swing of politics for too long, despite laying in a bed for a very long time.
I was unlucky; many people go through sepsis and lose nothing. They might find themselves with brain fog or temporary conditions from which they will recover, but many people do lose bits and pieces. They might lose a few fingers or a bit of a foot. I was very unfortunate; because of the extent of the clotting, I lost all four limbs. They were all amputated on the same day, 1 December last year—a day that, for obvious reasons, I will not forget. After the NHS having spent probably many hundreds of thousands of pounds keeping me alive over a long period, you then come to the question of what we should do to get people like me on their feet.
Do we provide them with appropriate prosthetics? The prosthetics we see here are trial ones—I know we should not use props in this place, but I hope that noble Lords might forgive me today. They are provided by the private sector and on a trial. The NHS, obviously not wishing to spend too much money on items that perhaps will not get used, might give me these prosthetics in year 3. But I want to get on with life in year 1, and I am doing that with this type of prosthetics. To his great credit, the new Secretary of State had a meeting with me and many other multiple amputees last week to discuss this very point. Could the NHS please adjust its way of doing things, so that it is focused on the patient rather than on a menu of what is usually done—a page saying, “We do this in year 1, this in year 2 and this in year 3”?
What was I in my normal old life? I was—and still am—in practice as a chartered accountant and chartered tax adviser, as in my register of interests. There are not many across both Houses, so noble Lords will not be surprised to hear that finance Bills have always been of great interest to me. Sadly, in the last few years of being in the Government at the other end, I did not have too much good to think about many of the finance Bills, so I used my mother’s great saying, “If you have nothing good to say, best say nothing”.
However, that does not apply now, does it? I am over on this side and, if noble Lords want to hear my thoughts on various aspects of the Finance Bill that will be before us—I know we do not have too much influence at this end—I wrote about the IHT APR position on X, or Twitter, over the weekend, and much support that has had. That 20% rate of IHT is not really true if you have to extract money out of a cash-poor business, and then CGT, dividends or income tax has to be paid to get the wedge of cash required to pay the 20% IHT—but that is straying into another field.
Why did I choose “Mackinlay of Richborough”? Looking around, I have noted that many ex-MPs have taken the name of their dear constituencies that they represented for so long. I thought that was right for me, too. I had an unusual constituency: South Thanet. It went from Cliftonville in the north, right the way around through Broadstairs, Ramsgate and Sandwich Bay, into Sandwich and then the hinterlands of Kent, with some beautiful villages. But, right in the middle of the north and south bits, is a place called Richborough. Not many people know that—they do not know the significance of it. It is a hugely significant part of this country. It was where the Romans first came ashore, and there is a substantial Roman fort. I will not go into its history, which is easily available if noble Lords look up Richborough fort on English Heritage—they will find more about it than they probably ever wanted to know. Additionally, in the First World War, there was a major port at Richborough—a proper working port, long since not used because of silting up. It was the site through which much of the apparel for the First World War passed—it was hugely significant in its day.
Nobody lives in Richborough now, to my knowledge, although there might be the odd farm cottage. But one of the reasons why I thought Richborough was such a good name was that it used to have a major power station, fired by good old Kent coal from the Kent coalfields. It was significant in the provision of energy. That has long since been blown up—it went in around 2013. The cooling towers could be seen from north Kent. I was a keen sailor, and you could see it off Whitstable, miles and miles away across the flats of Thanet. But it is long gone and has been replaced with proposals for a huge battery farm, which will be part of the mix of renewables into the future. It is the site where interconnectors from Belgium, Germany and France come in to make up the difference when the renewables we are discussing today fail us—we will probably be using energy on the back of German coal, but never mind that. There is a massive solar panel field nearby and a bigger one has been proposed, and there is even a biogas facility.
So all around that area of Richborough is the past, the present and the potential future of energy provision. That is why I took the name, because this is will be the subject of the future. I fought, through all my years since 1991, to extricate Britain from the European Union. I know this is not a day for contentious speeches, so I will steer clear of contention—a little—but energy will be the discussion point for the next 10, 15 or 20 years. I founded the Net Zero Scrutiny Group of Peers and MPs because of its importance. I am minded of a phrase, although nobody can tell me who came up with it: it is either Benjamin Franklin, General Patton or John F Kennedy—take your pick. It is, “If everybody is thinking the same, nobody is thinking”. My worry is that, on this topic, nobody is really thinking because we have all been working to the same pattern and the same hymn sheet.
This is too expensive, complex and important, and it will change our lives too much—when, frankly, most of the rest of the world is giving up—for us just to let this go through on the nod. That is why I thought today’s debate on GB Energy was a good one to be making my maiden speech in—not least because I can have 15 minutes rather than about five. But this topic will run, and I will take a full part in it.
On that name Richborough, I sincerely thank the outgoing Prime Minister, who represents the seat of Richmond. The name is not only a nod to my former constituents, who were so bold and so brave—I am so thankful that they supported me for those nine and a bit years that I was an MP for them. It is also a little nod to the outgoing Prime Minister, who so graciously gave me this life peerage to continue my work. I thank noble Lords for listening. Today is a day of non-contentious speeches, including from me, but there will be a lot more around the corner.
Lord Lilley (Con)
My Lords, it is a great privilege and pleasure to follow and pay tribute to my noble friend Lord Mackinlay of Richborough. His was an outstanding maiden speech from an outstanding new Member of this House—robust, inspiring, informative, energetic and with a touch of provocation, which he uncharacteristically toned down.
My noble friend Lord Mackinlay is a friend whom I knew before his illness to be as courageous intellectually as he proved to be physically. He is a fighter and a winner, and, mercifully, his lovely wife Kati is also a fighter. We are grateful to her for ensuring that my noble friend is with us today. He entered the Commons in 2015 for South Thanet in a forcefully fought general election, when both Nigel Farage and the comedian Al Murray had the temerity to stand against him. I am glad to say that he saw both jokers off and had the last laugh.
As I rapidly discovered when I got to know him after he entered the House in my last Parliament as an MP, he is refreshingly different from so many of the new intake. He is not just a spad and a PPE graduate, like so many of them; he has a science degree and an accountancy qualification. So he takes into account facts and figures, which is terribly refreshing in Parliament. Noble Lords will find that they have to contend with his facts and figures in debates to come.
My noble friend told me that his mother gave him a piece of advice early on in life: above all, to your own self be true. That he always has been, and it is perhaps one reason, he says, why he did not become a Minister in the House of Commons: he was quite prepared to back up his beliefs with his vote, and clearly the Whips did not think he would cease to do so if they tried to buy him off. But he had more influence in the House of Commons than many who did have a period on the Front Bench, as most of them did during the rapid turnover in the last Parliament. This influence was not least through the Net Zero Scrutiny Group, which I have the privilege to belong to, as well as the Common Sense Group and the European Research Group, in all of which he was an influential person. We look forward with enthusiasm to hearing his combative and well-informed contributions to this House in the years ahead.
I also pay tribute to the noble Baroness, Lady Beckett. She, like me, was President of the Board of Trade, and we presidents must stick together. Probably not all presidents would meet her approval currently, but I have always admired her contribution in the House of Commons over an enormous period of time.
I want to welcome this Bill, which is essentially a prospectus—an incredibly attractive investment opportunity. I use the word “incredibly” advisedly. It is backed by 22 of the most prominent people in this country—members of the Cabinet. True, none of them has ever launched a company before. Indeed, none of them has ever worked in the private sector. But that perhaps gives them a clarity of view which enables them to see investment prospects that have escaped the attention of commercial businesses up and down the country.
The principal promoter of the Bill is of course the Secretary of State, Ed Miliband. It can be said that no company he has been involved with has ever failed—because he has never been involved with any company. He will have the power to issue directions to the board about anything. There is no limitation in the Bill on what he can direct them to do or not to do. He has said, however, that he will use that power sparingly—which will be a disappointment to the board: only rarely will it have his superior wisdom to guide it on the true path.
We are asked to endorse this prospectus before the priorities and strategy of the new company have been published: they will be in due course, but they have not been yet. Investors may be concerned that the Government are putting up costs in the sector in which all the investments are to be made but are saying the prices are going to come down by some £300 per family. Investors might think, “Well, how on earth is it going to make a profit, with rising costs and falling prices?”. But do not worry, the Government have abandoned their promise to cut prices by £300 per family and have rejected all amendments in the other place which would have made that part of the duties of the company, as promised by the Labour Party at the last election. Anyway, as a nationalised company, it will clearly bring the cost control of HS2 and the profit-making capacity of the Post Office to the businesses in which it invests. That must give us all great confidence for the future.
I do not see noble Lords reaching for their chequebooks to invest in this—although clearly the noble Baronesses, Lady Winterton and Lady Hayman, will be, as indeed will the noble and learned Lord, Lord Falconer. They have all welcomed it and they will be putting in their money in—or they would if they could. Sadly, the Government have concluded that they might not be able to attract equity investors into this rather strange company that will not tell us quite what its priorities and strategies are going to be. I think the only previous company that was ever successfully launched like that was the South Sea bubble company, which said in its prospectus that its purposes would be revealed “at a later date”. And it went on to have initial great success—before the bubble burst.
Setting irony aside, this Government have said that, even though they do not expect to be able to attract investors to put their own money into the company, they are going to take £8.3 billion out of the pockets of taxpayers and put it in. But, more than that, they say it is going to crowd in investment several times that amount into the sector. Will it do so? Yes, it will. I am not being ironic here. It will succeed in attracting other companies to invest alongside it, because other companies will know that, if they invest in projects in which Great British Energy has invested taxpayers’ money, the politicians are not going to let those projects fail. That is why they will be attractive to the private sector: because they know the Government will always come and bail them out, because of the embarrassment of failure. That is why—and the only reason why—a nationalised company such as this can crowd in investment from outside. I think we should all realise that that is the case.
It is significant that the Minister, who spoke with great clarity and little conviction about this Bill, did not give any example of any similar nationalised concern that has ever met the expectations that have been raised for it as they have been raised for this. We know that doing the same thing again and expecting a different outcome is supposedly Einstein’s definition of madness. I suspect that is what we are being asked to vote for today.
Lord Grantchester (Lab)
I have always been an admirer of sovereign wealth funds. They enable significant investment, targeting strategic national priorities for the benefit of their relevant populations. They can be consistent long-term enablers of plans for national leadership in their focus on identified industries. So I very much welcome this Bill wholeheartedly.
I also welcome—and commend the maiden speech of—my noble friend Lady Beckett. Her words were inspirational and I well recall when years ago she brought about the merger of the Department for the Environment and the Agriculture Ministry into the new department we have today. I also welcome the noble Lord, Lord Mackinlay. I have long been an admirer of his courageous path back into the House. I look forward to both his future remarks and those of my noble friend.
There can be no higher or more important task than transforming the national economy towards a more sustainable future, to stabilise the threat of ever more damaging climate change. The science is indisputable. The world is accelerating through the threshold of 1.5 degrees warming above pre-industrial levels, jeopardising the two degrees limit in the Paris Agreement. That public ownership does not occur more in the UK is curious: indeed, allowing—almost welcoming—foreign ownership of all parts of the economy has often been a long-term detriment to the interest of the nation. It enables foreign owners to set their own objectives and priorities to their own overseas interests and enables virtually unfettered reshaping of the relevant company invested in.
Other countries undertake national plans. For example, in France, the French have prioritised nuclear power, and the Danes have Ørsted to focus on offshore wind projects, including projects in the UK. I am sure the Government are correct to focus on all renewable energy in the pursuit of net zero and more competitive sources in the long term. The Government are to be congratulated on bringing this legislation forward so early in the new Parliament. It must start as soon as possible.
However, I have one major concern. How can this energy public ownership be protected in future from attacks by some rogue future Conservative Administration? Is the Minister confident that all necessary steps are contained in the legislation to keep Conservative privatisations and other asset stripping or sell-offs from undermining this public investment in projects? The debate between the relative merits of public ownership and state enterprise is ultimately sterile. There are good and bad examples to be found within both definitions. The emphasis must be to enable effective management to be accountable for their stewardship.
I am concerned that in Clause 1(4), the Secretary of State has the power to revoke the designation of Great British Energy by notice. Am I right to be alarmed that this is an open goal for the Conservatives? Public money under public ownership of such a fund should be consistent and for the long term. It must be shielded from short-term political interference and be appropriately financed.
On previous assessments, total infrastructure requirements on the pathway to net zero have been assessed at £28 billion per year. While that ambitious investment by government may be beyond reach in the near term, is my noble friend confident that £8.3 billion of capitalisation over the course of this new Parliament will be sufficient? Does he envisage this to be sufficient essential investment, and is he confident in the checks and balances necessary to provide effective value for money for public funds? When he comes to reply, can my noble friend explain how recent announcement of investments in carbon capture and storage may go ahead in conjunction with the structure of the Bill? In this, I refer to the remarks of my noble friend Lady Winterton.
Great British Energy must be more than a bit player in hastening the nation towards energy security from renewable power sources. While welcoming the Bill and noting the issues debated in the other House, I draw attention to a few areas of interest in the setting of objects under Clause 3 and strategic priorities under Clause 5. Great British Energy aims to ensure that clean, home-grown energy makes Britain a clean energy superpower by 2030. NESO’s recent Clean Power 2030 report identifies demand flexibility as a key factor in achieving clean power. Does the Minister agree with this assessment and acknowledge that the UK’s clean energy plan should also focus on the demand side, which, unlike supply-side flexibility, is not subject to the same administrative, regulatory or cost barriers that are often seen with supply chain solutions for clean energy? Does he support NESO’s plans to offer the demand flexibility service, a scheme facilitated by the smart metering network, all year round?
Alongside the Government investment, does the Minister agree that the smart metering network can help households to adopt more flexible, cost-effective behaviours through better understanding their usage? While investment in clean, home-grown energy is urgently needed, there are also existing assets that can help the Government’s mission to make Britain a clean energy superpower. Does my noble friend the Minister agree that in a time of fiscal constraint, alongside this Bill, the Government need to take advantage of existing national assets, such as the smart metering network, as this can help manage energy demand and can be harnessed to unlock wider benefits, such as identifying and targeting support to retrofit energy-inefficient housing?
Furthermore, it seems counterproductive to withdraw renewable energy sources by temporarily closing down their supply at various times. Can my noble friend the Minister confirm that energy storage is part of the objects contained within the Bill? With GB Energy set to turbocharge production into renewable energy, all of which we will need in the grid, does my noble friend agree that maintaining grid stability and reducing balancing costs will be vital for hitting the clean power ambition and maintaining UK energy security? Will he also look at how the smart metering network can help the Government deliver that much-needed stability and flexibility?
One of the aims of the Bill is to ensure more value for bill payers and taxpayers. Does the Minister agree that existing infrastructure, such as smart meters which provide more accurate information about energy usage, leading to lower consumption and bills, also has a major part to play in the Government’s plans to reduce those energy bills? For example, although the Bill outlines ambitious plans for clean energy development in the future, many households continue to face fuel poverty. Does the Minister acknowledge that we could better utilise existing infrastructure to deliver solutions more quickly, whether by saving users money on their bills or by providing anonymised data, which can identify those most at risk of or living in fuel poverty who would benefit from that targeted assistance? Can he confirm that encouragement and examination of these smart meters and their progress will be part of the Government’s agenda?
It is interesting that this Second Reading debate is happening today when, next Wednesday, we will be drawing the nation’s attention to Fuel Poverty Awareness Day. I draw my remarks to a close by noting how appropriate it is that my noble friend Lord Hunt of Kings Heath is once more the Minister introducing a landmark piece of legislation, as it was he who oversaw the climate change legislation in your Lordships’ House in 2008. I wish this legislation as much success as he brought with that Bill.
Lord Bourne of Aberystwyth (Con)
My Lords, I declare my interests as set out in the register. It is a great privilege to follow the noble Lord, Lord Grantchester, who as always put his finger on some very important points that I will come to later. It has been a particular pleasure to listen to two outstanding maiden speeches. The noble Baroness, Lady Beckett, is clearly going to bring great wisdom to this House and I very much welcome and look forward to many contributions from her in future. My noble friend Lord Mackinlay spoke from the heart. It was a really stirring speech and raised some very pertinent issues about sepsis; I hope that we revisit those as a House and that the Government will be receptive. I look forward to working alongside him in future.
The Minister set out the Bill’s aims very clearly, and I thank him for that. As we debate this issue, the Government are representing the country at COP 29 in Azerbaijan—I think that conference comes to an end at the end of this week—and it is right that they are there, representing the nation. I hope that in raising points about this prospective legislation and criticising it, we do not lose sight of the undoubted challenge of the age, climate change. I hope that recognition of that challenge will remain a largely bipartisan approach. Although the way we tackle it may vary, and we may have differences on that, the global response needs to recognise that the challenge does not recognise ideologies: it is a question not of ideology but of survival, and I hope we approach it on that basis.
I had the great honour of being the Lords Minister in the Department of Energy and Climate Change at the time of the Paris Climate Change Conference and worked there alongside Amber Rudd, who was outstanding. I had the great privilege of signing the climate change treaty at the United Nations on behalf of the United Kingdom. That treaty was an important milestone and we must not lose sight of the fact that, as I say, this is the challenge of the age. The issues we are raising are issues of how we meet that challenge. As a party, we need to remember that Margaret Thatcher first identified this important challenge, and that has been followed by notable contributions by my noble friends Lord Deben and Lord Sharma, Amber Rudd and many others. We should not apologise for that.
As I say, this is not an ideological issue but we have been raising issues across the Chamber about what is not a plan but an aspiration, with a lot of power seemingly concentrated in the hands of the Secretary of State. I think we are right to raise questions about that £8.3 billion. It is not a lot of money compared to the challenge but it is a lot domestically, and we must make sure not only that it helps to deliver energy security and green energy, but that it represents value for money. We have not heard enough on that so far, and no doubt we will pick up on that as the legislation proceeds.
There are questions about that and about the reduction in energy prices, which was made much of during the election campaign. That £300 reduction in energy bills was not mentioned at all by the Government as the legislation proceeded through the Commons, and again, they have not mentioned it today. Can we pin this down? What is that reduction going to be? If not £300, why was that the claim made during the campaign and what is the reduction going to be? These are issues that people will rightly want addressed.
Then, there are the competing bodies—at least, they seem to be competing—and how they mesh together. How will the Climate Change Committee, British Nuclear and the UK Infrastructure Bank work together? In a Bill as brief as this, these things are necessarily not dealt with in sufficient detail. I wonder whether the Minister could pick that up in his closing speech.
How is the performance of the bank to be reviewed? That, again, is a fair question. So much power is concentrated in the hands of the Secretary of State, who no doubt has expertise in this; I do not think that is at issue. He tells us—and I am sure we will take it at face value—that he knows what he is doing. But that might not always be the case. How is that power going to be exercised by others? We need some system of reviewing that power.
Lastly, I turn to the much more specific issue of the siting of Great British Energy in Scotland. The Minister mentioned that it is headquartered in Aberdeen, and some offices are in Glasgow and Edinburgh. I realise that it is a Scottish company, but there are going to be issues with ensuring that power is devolved around the country. Energy projects are going to be sited around the country, and in an island nation such as ours, I think that is right. As you would expect, I have specific concerns about Wales, particularly in the light of the Crown Estate Bill, in respect of which Wales, to my mind, was short-changed. It is about to be short-changed again, and I hope the Minister can address that issue, too, when he sums up.
With that, I look forward to participating in consideration of this legislation as it proceeds through the House.
Lord Alton of Liverpool (CB)
My Lords, in congratulating and welcoming today’s perfect pitch, well-judged and outstanding maiden speeches, may I also scatter some stardust in the direction of the Minister, the noble Lord, Lord Hunt of Kings Heath, who I admire and like? The Government are fortunate to have him to drive forward their Great British Energy Bill. The noble Lord, Lord Bourne, was right to remind us that this relatively small Bill carries a large ticket—some £8 billion of taxpayers’ money—and as the noble Baroness, Lady Bloomfield, and my noble friend Lady Hayman said earlier, it will rightly be subject to scrutiny and amendment in your Lordships’ House.
I support a mixed economy of ownership: partnerships between the public and private sector and more community-owned energy, along with diversity of supply—everything from ever more resources for nuclear fusion technology to hydrogen, wind, solar and tidal barrages. In another place during the 1980s and 1990s, I founded and was chair of the All-Party Parliamentary Group for a Mersey Barrage. Although the then Government promised me they would consider the barrage project as part of the non-fossil fuel obligations and renewable energy policy, it never happened. The Mersey barrage would deliver enough clean, predictable energy to power hundreds of thousands of homes for 120 years, creating thousands of local jobs and turning the Liverpool City Region into a worldwide centre of excellence. I hope the Minister will agree to meet me and Steve Rotheram, the Mayor of the Liverpool City Region, to help ensure that the unique opportunity provided in this Bill is not squandered, as it was some 40 years ago.
In introducing the Bill in another place, the right honourable Ed Miliband rightly pointed to the absurdity—referred to by noble Baroness, Lady Winterton, earlier—of the city of Munich owning more of our offshore wind capacity than do the British Government. He has a point, but the missing reference was, to mix a metaphor, not to the elephant in the room but to the CCP dragon, and that is what I want to address my remarks to today. We all know that dragons wallow in sulphurous caves, snorting fire. Perhaps that is why China is responsible for around one-third of global CO2 emissions. It has pumped out more pollution in eight years than the UK has in 220 years. It is building the equivalent of two new coal-burning power stations every week. It is doing this to build its industrial and military might and certainly not to do its bit toward tackling climate change.
Mingyang Smart Energy, China’s largest wind turbine firm, is involved in several projects in the North Sea. What are we thinking of, handing over such important capability in the net-zero transition to an entity that comes from an authoritarian and hostile state, and doing so as the European Union is launching its antitrust investigation into Chinese turbine manufacturers? Recall that the Joint Committee on Intelligence and Security says that China has been able to
“successfully penetrate every sector of the UK’s economy”,
that
“Chinese money was readily accepted by HMG with few questions asked”,
and that external experts concluded
“very strongly that HMG did not have any strategy on China, let alone an effective one”.
Instead of resilience, we have dependency. We currently have a trade in goods deficit of £32.3 billion, which we seem intent on adding to. A Civitas report documents over £140 million paid to United Kingdom universities by Chinese companies. Some are involved in military projects and some have links to institutions complicit in, facilitating or directly involved in the Uighur genocide, nuclear development, military research, espionage and hacking. Civitas identified “an existential threat” and says that China’s ambition at a global level is
“to become a technological and economic superpower, on which other countries are reliant, that represents the greatest risk to the UK”.
In recognising that threat, your Lordships’ House gave all-party support to my successful amendments to the Procurement Act, the Health and Care Act and the Telecommunications Security Act, and to remove some of the 1 million Chinese-made surveillance cameras now in the UK. I have also raised with RUSI the flooding of our markets with Chinese-made electric cars, Chinese-made cellular modules that are components in non-Chinese-made cars, and other electronic equipment which can be used to spy on us and to displace cars made by workers in democratic countries. South-east Asia is awash with Chinese EV car plants and sales, and it is producing electric long-haul lorries and mass-produced cheap EV cars for the mass market.
China is doing this to dethrone and destroy our automotive industry and to enhance its ability to withstand a blockade following the military occupation of Taiwan. It will also cost around 100,000 European car workers their jobs by the end of the decade. Many will lose those jobs because we simply cannot compete with slave labour. The Secretary of State has said that there should be no modern slavery in any part. So, can the Minister say what assessment has been made of reports that there are 96 companies relevant to the automotive sector and the production of electric cars operating in the Uighur region, including 38 that have documented previous engagement in state-sponsored labour transfer programmes, as highlighted by the International Labour Organization, and reports from Human Rights Watch detailing the use of slave labour in aluminium production, with Xinjiang accounting for 9% of total global supply?
I note the call from 50 legislators for Volkswagen to end its presence in Xinjiang and the damning red flag notice to Volkswagen from Morgan Stanley Capital. A US congressional select committee has found that two Chinese EV battery producers—CATL and Gotion High-tech—have links to companies operating in Xinjiang and forced labour programmes. The committee’s report connected both companies to XPCC, a Chinese paramilitary company sanctioned for its links to gross human rights violations in Xinjiang. Its customers include BMW, Volkswagen, Mercedes, Volvo, Stellantis and Renault. I note that Hikvision and Dahua, now banned across the UK from so-called sensitive sites and with links to Uighur internment camps, are selling EV chargers and kit boasting a facility to—I quote from their own advertisements—“scan licence plates and check them against the DVLA database”.
The supply chain story does not end there. Quite recently, as part of an inquiry into the Democratic Republic of the Congo, I took testimony from Nobel Peace Prize laureate Dr Denis Mukwege. He raised concerns about Chinese exploitation of critical minerals for green technology in the DRC. Cobalt is essential in making lithium-ion EV batteries. Around 75% of global cobalt supply comes from the DRC and 80% of its output is owned by China. CATL is linked to the Chinese state enterprise CMOC, which operates multiple copper cobalt mines in the DRC. Some 25,000 children are working in cobalt mines. Dr Mukwege asked what weight is attached to the use of child labour when it comes to our own purchasing policies. I hope the Minister can tell us.
I draw the Minister’s attention to the report of Sheffield Hallam University’s Helena Kennedy Centre for International Justice, entitled In Broad Daylight: Uyghur Forced Labour and Global Solar Supply Chains. It indicates that the PRC has placed millions of indigenous Uighur and Kazakh citizens from Xinjiang into what the regime calls “surplus labour” and “labour transfer” programmes, or as we should call them, modern-day slavery state-operated programmes. To be clear, workers cannot refuse the work or refuse employment, or challenge the inhumane conditions of work. We are talking about the forcible transfer of a population and enslavement. The report concludes that the solar industry is particularly vulnerable to forced labour in the Uighur region and identified 90 Chinese and international companies whose supply chains are affected.
In 2023, another report from Sheffield Hallam University, Over-Exposed, found that transparency has decreased in the solar industry, making it increasingly difficult to verify whether supply chains are free from risk of Uighur forced labour.
In responding to these findings, could the Minister ask his friends in the Ministry of Defence what response it has made to the December 2023 BBC report that the British Army was investing £200 million in solar panels made by companies believed to have an exceedingly high exposure to forced labour in China? The PRC’s global market domination across the solar photovoltaic supply chain has been expanding rapidly, with 93% of global polysilicon and about 2.1 million tonnes used in almost all solar panels produced in China, and about half of that is produced in Xinjiang. The Secretary of State has confirmed that he is worried about slave labour in the supply chains. Was the Secretary of State warned about companies involved in solar panel production in Xinjiang before awarding contracts to them and, if so, why did he go ahead?
I want to talk also about the Forced Prison-Made Goods Act 1897. Given that Xinjiang has been referred to as a vast prison, and that British law prohibits the importation of prison-made goods, what consideration has been given to the compatibility of the importation of goods made by Uighur prison labour with that Act of Parliament?
Against the backdrop of the 2021 House of Commons decision to name a genocide by the CCP against Uighurs in Xinjiang, the admirable Labour Member of Parliament Sarah Champion, chair of the International Development Select Committee, tabled in another place an all-party amendment to this Bill to tackle what she called,
“a sinister dependency on … forced labour programmes”—[Official Report, Commons, 29/10/24; col. 734.]
in the supply chains for solar panels. She said also that the UK has become
“a dumping ground for dodgy solar”—[Official Report, Commons, 5/9/24; col. 486.]
and tainted solar goods.
That has other implications for the UK. In July, during the Kings Speech debate, I raised the Mallard Pass solar project, which uses Xinjiang-produced solar panels. On 1 August, in reply to a Written Question, the Minister said:
“Ethical procurement is considered at paragraphs 4.104-109”
of the Secretary of State’s planning decision. Is it not the case that, elsewhere in the planning decision, it states that human rights concerns are not a reason to refuse a planning application? If so, why is that? Should not this Bill be used to change it?
Today, Prime Minister Sir Keir Starmer met Xi Jinping. Reports suggest that he raised sanctions against seven parliamentarians, of whom I am one. These are trivial in comparison with Uighur genocide. Can the Minister tell us whether that issue was raised? If so, what was the response?
On several occasions, I have been privileged to stand with the Minister when he moved amendments on forced organ harvesting in China. In a powerful speech, particularly relevant to this Bill and to Uighur slave labour in Xinjiang, he said:
“It is now a multimillion-pound commercial business in China”.
He went on to say:
“Millions of Chinese citizens are currently detained in labour camps. UN experts estimate that at least 1 million Uighurs are being held in camps in the region of Xinjiang… Companies from the West are complicit in this. Adidas, Nike, Zara and Amazon are among the western brands which, according to a coalition of civil society groups, currently benefit from the forced labour of Uighurs in Xinjiang. In July this year, a 13-tonne shipment of hair products from Xinjiang, worth more than $800,000, was seized by US Customs and Border Protection. This shipment included wigs made from human hair, which is hugely concerning considering the many reports and personal testimonies of female Uighur Muslims having their heads forcibly shaved in the camps”.
The now Minister then reminded the Grand Committee that parliamentarians had the opportunity to strengthen the legislation and
“prevent British complicity in such crimes and to send an important signal to other countries”.
He reflected that issues such as 5G and potential Chinese investment in new nuclear energy presented dilemmas but concluded that,
“there must be a time when we make a stand”.—[Official Report, 28/10/20; cols. GC 141, 142.]
The noble Baroness, Lady Kennedy of The Shaws, was sanctioned with me for doing precisely that. Although she is unable to participate today, we will work together at later stages in moving all-party amendments to create a human rights-centric approach to greener energy supply chains. Let us put that insistence in the Bill and amend it accordingly. Let us do as the Minister said and make a stand.
Lord Duncan of Springbank (Con)
My Lords, it is a privilege and a pleasure to follow the powerful words of the noble Lord, Lord Alton. I declare my interest in both decentralised and nuclear energy.
When I first picked up the Bill, I was surprised at how slight it appeared to be. As I have listened to the debate, I was reminded of some remarks from “Blackadder”. Noble Lords might recall the episode in question, when Blackadder decided that he was going to become an explorer. Lord Melchett says to him:
“The foremost cartographers of the land have prepared this for you; it’s a map of the area that you'll be traversing”—
and he hands him a blank sheet of paper—
“They’ll be very grateful if you could just fill it in as you go along”.
I get the impression that much of the serious work of the Bill will be filled in later, and that in itself is a principal challenge.
The noble Lord, Lord Howell, raised some very interesting points about where we currently stand and the importance of honesty. Our challenge as a nation right now is that many people in the land believe that we are close to achieving many of our aims in decarbonising our electricity, and they are wrong. However, they believe that because quite often they are misled by well-intentioned individuals.
The challenge remains very simple. When I last checked the current electricity generation and its sources today at 5 pm, over half was generated by gas. Renewables accounted for less than 10%. That is an extraordinary gulf that we will have to bridge in very short order. Tellingly, much of our resilience comes not domestically but from our interconnectivity to the continent. Since we have these periods of great calm which affect not just the United Kingdom but this part of Europe more broadly—the North Sea itself and the basin—we cannot always rely upon securing electricity generated by renewables from across the sea either.
I have great hopes for Great British Energy because I think it has the opportunity to address some of the more fundamental issues. If I am being frank, I am a little disappointed that nuclear does not play a greater role in that. I understand the shortcomings of some of the large-scale nuclear, but small modular reactors really have a part to play. Given that baseload will become absolutely critical as we become more reliant upon renewables, we need to be able to ensure that when the lights drop, we can get them back on.
The other revealing element from the data about generation today was that only 3.2% is from storage. This is a key element missing from Great British Energy. We need to up our storage capacity. When I was a Member of the European Parliament, I campaigned strongly to ensure that we did just that, and the European Union continued to turn its back on it.
I hope that in the unfolding of this piece of legislation, we will see an opportunity for storage to have a much more significant part to play because, truthfully, renewables are by their nature intermittent. If we have a wide enough array of them, we might be able to draw upon that; if we have interconnectors, they might be able to help us. But if we cannot store it, we are simply going to be reliant upon good luck at particular points. Sadly, as we enter into winter periods, when we simply do not have the certainty within the renewable sector, we really have a problem. I hope the Minister will have something to say about that; namely, how we might up our renewables storage.
I am also struck as I think about this in terms of the honesty I touched on at the beginning. I understand why the party now in government chose to say that bills would be reduced by £300, because in elections you do not say that bills will go up—you say they will go down. That is a natural part of winning a campaign. The key thing, however, will be to live up to that.
I am not expecting the Minister to confirm that £300 figure today, but it is important that people confronted with ever-increasing bills can plan with certainty and affordability to ensure that they can stay warm during the challenging winter months. That will be a critical aspect of the confidence that will be necessary for Great British Energy to move from being—as it is at the moment—quite a short Bill, to a flourishing opportunity for investment in the key elements we require to move ourselves towards a net-zero future.
I take on board the points made by others—that we alone cannot do that. We are generating and are responsible for a very modest amount of carbon. However, our leadership in this area—which the Bill can offer some of—could well be powerful. It can then begin to demonstrate how we as a nation can decouple our economy and our electricity from our carbon generation. If we can get that right, we have a message to sell to those who can follow in our pathway. Equally, as we link this to other aspects of funding on a global basis, we can then help fund others to join us on that journey.
It will not be easy; it will be costly. Again, this goes back to honesty. No one is going to be better off because of this. This will involve a significant contribution of funds, and the Government must be frank about that. However, if we get it right, get focused and are careful, and if we recognise, as I have said already, the importance of small modular reactors and the necessity of storage—which I will come back to at the later stages of the Bill, and I hope to meet the Minister for a brief chat about some of these things—I think this has the opportunity to deliver.
Viscount Stansgate (Lab)
My Lords, I am not entirely sure that it is a pleasure to follow the noble Lord, for reasons that will become clear in a moment. I think it would have been better in my case if I had preceded the noble Lord; nevertheless, it is obviously a pleasure to follow him, not least because he is a fellow Deputy Speaker of the House.
I rise in support of the Bill and its objectives. I begin by congratulating my noble friend Lady Beckett on her maiden speech and the noble Lord, Lord Mackinlay of Richborough, on his. The House is very fortunate to have heard two such remarkable maiden speeches in the same debate.
My noble friend Lady Beckett is someone with enormous parliamentary experience. She was first elected to another place over 50 years ago; I well remember her as the candidate for Lincoln in 1974. She was later the able—if only temporary—leader of my own party. The noble and learned Lord, Lord Falconer, has said everything that one might wish to be said about her remarkable career. She is very welcome to this House. She mentioned that she knows something of it in advance through chairing the Joint Committee on the National Security Strategy. As a member of that committee, I know what she means.
I also pay tribute to the noble Lord, Lord Mackinlay of Richborough. What a remarkable personal story. He has attracted the most universal admiration for what he has been through. I do not know about other noble Lords, but I, for one, will never forget the reception he got when he returned to another place just before the end of the last Parliament—which was itself remarkable.
The Bill is the centrepiece of the Government’s strategy to achieve net zero and, as such, will pave the way for a wide range of measures in the years ahead. Noble Lords have spoken about a wide variety of different aspects of energy policy. If I may say so, I thought the noble Lord, Lord Howell of Guildford, gave a pretty comprehensive description of the range of current relevant factors in the energy debate. Other noble Lords have used their speeches to focus on other areas.
In directing my remarks to Clause 5(1), I will make one point that I wanted to bring to the House’s attention. It is a pity that the noble Lord, Lord Duncan, has temporarily left his place, because I wanted to raise the issue of long-duration energy storage. LDES is not exactly an acronym that trips off the tongue, but it is vital to the transformation to net zero which the Bill hopes to promote.
Your Lordships’ Committee on Science and Technology—of which I am a member—looked at this issue earlier this year, and today is a relevant moment to bring our main conclusions to the attention of the House. Your Lordships may want to know what long-duration energy storage is. Medium-duration energy storage refers to technologies best suited to storing energy for between four and 24 hours—batteries, for example—or up to a few days at most. Long-duration energy storage applies to technologies that store energy across multiple days, weeks, months or even years.
In this country we are going to need both medium- and long-duration storage, but in my remarks today I want to refer only to long-duration energy storage and the technologies that could provide it. We are going to need government policies in support of long-duration energy storage in the UK and wider changes in the energy system required to facilitate its deployment.
To reach the UK’s net-zero targets, our energy system, as other noble Lords have mentioned, must be transformed. This is going to involve its substantial electrification, where fossil-fuel use in transportation, heating and industry will need to be replaced by electricity, in parallel with the expansion and decarbonisation of the electricity supply. This will replace fossil-fuelled electricity generation with low-carbon alternatives. Renewable energy, predominantly from wind and solar, is expected to play a major role in the UK. The Climate Change Committee forecast in its balanced pathway scenario that electricity demand is likely to double by 2050.
However, renewable energy from wind and solar will deliver a variable supply of electricity due to changes in the weather. If noble Lords want an example, they need look no further than what life was like in the UK two weeks ago. At the beginning of November, the UK experienced a period of anticyclonic gloom, which occurs when an anticyclone of high pressure traps pockets of wet weather close to the ground. In turn, this creates a period of dull, grey and cloudy weather, with a high chance of mist and fog. If noble Lords look back just two weeks, the weather was dull, grim and grey—not remotely windy or sunny. In fact, a place called Odiham in Hampshire received zero minutes of sunshine for the first week of November.
By contrast, about a month earlier, just over half of UK electricity came from zero-carbon sources—including solar, which briefly at that point during the day peaked at providing 83% of all the electricity being used that day. The noble Lord, Lord Duncan of Springbank, is not the only person who looks up the amount of energy being used at any given moment.
The balance between renewable sources and baseload provided by nuclear and gas can and does change. That is just a fact of energy life. The electrification of heating and transport means that demand for electricity will be larger and more variable over time. Climate change and its effects on weather will also impact renewable energy demand. The electricity system will need to be substantially expanded and made more resilient—another word I emphasise to your Lordships tonight—to ensure that it can deliver a secure power supply whatever the load demands or weather systems that we experience. This question of resilience is a key factor behind what makes long-duration energy storage so important. Energy storage technologies that allow energy generated by renewables to be stored over time and used when required will be increasingly essential in achieving net zero.
The one sentence that I would like your Lordships to remember tonight is this: I believe that a strategic reserve of stored energy will be an indispensable part of our future energy policy, and that it will be for the body set up by this Bill to deliver it. I would be interested to hear what the Minister says on this point. The Royal Society estimates that a substantial volume of long-duration storage, enough to supply approximately one-third of current annual UK electricity generation, could ultimately be needed. This could fulfil different roles on the grid and there are facilities for the storage of it. Hydrogen is probably the leading candidate for long-duration energy storage over weeks and months. Low-carbon hydrogen can be produced—for example, from electrolysis, where electricity is used to split water into hydrogen and oxygen. The hydrogen can then be stored under moderate pressure in, for example, underground salt caverns, as has already been mentioned, or converted in depleted gas fields and later burned to produce electricity or converted into gases that are easier to transport, such as ammonia. Perhaps my noble friend the Minister can give an updated response in the light of the new Government’s deadlines and targets and some of the key institutions responsible for planning, operating and regulating the energy system.
The national grid used to be considered so boring that people went to sleep if you talked about it. Now, on the contrary, how we use our national grid and how, for example, we enable the vast new wind power resources to connect to it from the North Sea is anything but boring. In fact, it will be pretty controversial, not least because of the need for more high-tension pylons to carry the electricity from where it is generated to where it is needed onshore.
The scale of long-duration energy storage needed and the benefits to the grid are vital. The Select Committee report said:
“Domestic energy storage is not just about a resilient decarbonised grid—it is about the security and stability of the whole economy. The global energy crisis that began in 2021 has been an object lesson in the UK’s vulnerability to global wholesale energy price fluctuations, and the consequent effects on inflation. The UK had less storage capacity than comparator nations”.
In his reply, perhaps my noble friend the Minister can give some indication of what role he sees for long-duration energy storage in the future. I gently remind him that the subtitle of the Select Committee’s report published earlier this year was “Get on with it”. The Minister’s response will be an important clue as to the scale of the task ahead and our chances of success.
Baroness Noakes (Con)
My Lords, paragraph 4.52 of the Companion says that it is usual for a Member making a maiden speech to be congratulated by the next speaker only, on behalf of the whole House, plus the Front Benches if they wish. I shall be complying with that paragraph.
This is a seriously flawed Bill. At first sight, it looks a bit like the 2023 UK Infrastructure Bank Act, which set up the body that has renamed itself the national wealth fund, although it is of course no such thing. I shall return to that organisation later, because it seems entwined in how Great British Energy will work. I did not support the 2023 legislation in principle or in its detail, but it does at least have more substance than the Bill before us today. I shall explore that in Committee, but I flag for now that the 2023 Act sets out key governance requirements and requires periodic reviews of the UK Infrastructure Bank’s effectiveness and impact, which are mysteriously absent from this Bill.
Another major difference is that much of the detail of the operation of the UK Infrastructure Bank was available to the House in the form of a draft of the framework document, which was then finalised after the Act received Royal Assent. Importantly, that document covers strategic objectives, which have already been referred to, but also operating principles and investment principles, as well as details of the company’s capitalisation and financial objectives. It was quite substantial and ran to 28 pages. What do we have for this Bill? As far as I can see, we have nothing at all. The so-called founding statement published by the Government in July said that a framework would be established “in due course”. I hope that the Minister can update the House today on what that time-hallowed phrase means in practice for the framework for Great British Energy. I am sure that he is well aware that his job of getting this Bill through your Lordships’ House will be very much easier if the Government publish the draft framework document well in advance of Committee.
For example, we need to know how the financial regime for Great British Energy will work and what its financial remit will be so that we can be sure that this Bill contains appropriate guardrails and accountability measures. We also need to understand what money will be involved and how it will flow into and out of Great British Energy. The Labour Party in opposition talked up a green prosperity plan with a price tag of £28 billion every year, but that of course did not survive contact with reality. It eventually ended up with a plan to capitalise Great British Energy with £8.3 billion of new money over the whole of this Parliament. It might be a shadow of the earlier plans but it is nevertheless a significant sum.
One of my pastimes is reading Budget documents, so I have been hunting for the £8.3 billion in this year’s documents. I have to tell noble Lords that there is no £8.3 billion in the Government’s spending plans. Instead, there are a couple of references in chapter 3 of the Red Book to
“providing funding to kickstart Great British Energy”,
amounting to £125 million, which the Minister referred to earlier. That comprises £100 million capital funding for clean energy projects and £25 million to set up the Aberdeen headquarters. However, that £125 million is for 2025-26 only. There is no sign of anything after that.
Intriguingly, chapter 4 of the Red Book goes on to say:
“As GBE is established, the investment activity will be undertaken by the National Wealth Fund”,
which apparently will help Great British Energy
“to make initial investments as quickly as possible and draw on the National Wealth Fund’s resources, experience and pipeline of projects”.
I have never understood why Great British Energy was needed, given the existence of the UK Infrastructure Bank/national wealth fund, which my noble friend on the Front Bench referred to earlier. That was set up to do lots of the green things referred to in the Bill before us.
Can the Minister explain the relationship between Great British Energy and the national wealth fund? Will the wealth fund’s pipeline of investments be made by Great British Energy or by the wealth fund? Will the investments be funded from Great British Energy’s £100 million, which applies only for 2025-26, or will they come out of the wealth fund’s rather larger budget, which by the way is also rather hard to find in the Budget documents?
This is all rather opaque, and that is before we try to understand what kinds of investments will be talked about. Will they be loans or equity investments? If they are equity investments, will they be controlling stakes or minority stakes? If they are loans, where will they sit in the creditor hierarchy? To what extent will the private sector be involved? We have answers to none of these questions.
The UK Infrastructure Bank—and I assume this will continue to apply to the national wealth fund—is supposed to make a financial return on its investments, and it is also required to adhere to the additionality principle, so that it does not crowd private finance out. Do these requirements apply to Great British Energy? We need answers to that.
This is not only a Bill with almost no content, it is a dangerous Bill, because it grants almost unfettered powers to the Secretary of State for Energy and Net Zero, as other noble Lords have pointed out. He sets the statement of strategic priorities; he decides what financial assistance is given and on what terms; he has an untrammelled power of direction; and, as the owner of 100% of the shares in the company, he has the power to appoint or remove any or all of the directors. Parliament has no say in any of this and, as I mentioned earlier, it does not even receive a periodic review of effectiveness and impact, as is the case with the UK Infrastructure Bank, also known as the national wealth fund.
We need to look at all these areas in Committee, but I hope that, when the Minister winds up today, he will explain what transparency and accountability arrangements the Government see as ensuring that Parliament can effectively hold Ministers to account.
Lastly, to pick up on a point made by the noble and learned Lord, Lord Falconer of Thoroton, can the Minister confirm that the Subsidy Control Act 2022 applies to Great British Energy? Assuming that the promised £8.3 billion finds its way to Great British Energy somehow, there would be limitless opportunities for Great British Energy to subsidise activities and distort competition. It is clearly important that it is fully subject to the 2022 Act and I hope that the Minister will confirm that.
I am not a fan of the big state, or of state involvement in commercial activities. Nor do I worship at the altar of net zero. I do not like this Bill at all, but I accept that, as a manifesto Bill, it will become law. It is, however, the duty of your Lordships’ House to work during the passage of the Bill to achieve clarity, accountability and transparency about Great British Energy, all of which are currently missing from the Bill.
Lord Cameron of Dillington (CB)
My Lords, I am a supporter of Great British Energy, its purpose and the proposed flexible approach inherent in the Bill. We need to quickly adopt the new generating technologies we have available to us. Apart from the drive to net zero, the main reason for my support is based on the issue of energy security. Having long maintained that the food security of our nation is the most important role that any Government have to play, I now think that energy security must come a pretty close second. Our cherished peaceful security from wars, and even worldwide pandemics, seems more precarious now than for most of the past 80 years; thus our ability to import electricity, or the fuel to generate it, must also be more precarious. But, if we invest wisely and we can harness the sources of power we are blessed with—wind, sun and tide—we can creep nearer to that energy security; and investing wisely is precisely what we all hope GBE will do.
One of the features I like about the proposals is that GBE will be taking equity in the businesses it chooses to support, and not just giving loans or grants. In other words, it can enjoy the upside of a successful business, as opposed to shouldering only the downside risks that loans or grants allow. I was pleased to hear that the Government have an expectation that, at some time in the future, GBE will, hopefully, contribute to its own funding. I was also pleased to hear that the Government expect that some of its investments will fail. Frankly, if it invests only in guaranteed successes, it will not be doing its job. So, although it sounds odd, I hope that some of its investments will fail—but not too many.
However, hopefully, GBE’s ownership by government will give the private sector the confidence it needs to invest in this exciting energy transitional arena. I am advised that, for a successful transition of our electricity landscape, we need to attract some £400 billion-worth of capital into power generation in the next 10 years. In that context, £1.6 billion per annum does not sound like very much. However, hopefully—I fear there is a lot of hope here, including from me—GBE’s investments, if well used and specifically targeted to reduce risk to private capital, should pull in some of the outside investment that is so badly needed.
But GBE’s role will need to be not only to use money in a wise and, I would hope, “magnetic” way—magnetic in that it will attract other investments. It must also be an enabler. GBE needs to become a real driver of projects, using all the powers at its disposal to try to help clear away some of the barriers to the production and use of renewable energy. As we all know, one of the biggest barriers lies in our planning system and our judicial review system, which can cause excessive delays, and thus costs, in so many of our infrastructure projects. I am sure all noble Lords will have read about the Lower Thames Crossing, where, before a single spade has been put in the ground, apparently more money has already been spent on planning and reviews than Norway has spent on completing the longest road tunnel in the world.
On this subject, it has always interested me that in France, where they pay over the odds for land compulsorily taken by the state, property owners often fall over themselves to offer their land for a state-run project. Of course, these owners do not object at planning inquiries, nor do they instigate judicial reviews. Maybe there is a lesson there for our Treasury—maybe it saves money in the end.
When it comes to energy projects, GBE must ensure there is generous community involvement. In Denmark, the local community gets 20% of the profits of a local wind farm. We need to do something similar here, and then, hopefully, our communities will be falling over themselves to have a magnificent wind farm on their doorstep—and I do think our modern wind turbines are magnificent.
I will leave others to speak about community energy companies themselves, which need all the support we can give them. However, in terms of speedy delivery of projects, the difficulty arises when dealing with National Grid infrastructure, such as pylons—“the plumbing”, as it was referred to in the debate last Thursday. This infrastructure needs to grow to at least four times its current size to deliver power to everywhere it is needed and receive power from all the generating sources that are going to come along. Some projects are currently being told they will be delayed by 10 years or more for the want of a connection; we really cannot afford such delays.
The problem is that no project could possibly afford to financially involve every community along the whole route of its delivery line. So, what is to be done? First, the National Grid has to work with generators to pull together various projects, particularly North Sea projects, to minimise the number of power lines needed from source to delivery point. Then, I fear, a calculation has to be made by GBE and the National Grid as to the extra costs of burying cables in certain places—these costs are slowly coming down—versus the costs of planning delays and judicial reviews caused by objectors to such essential schemes. But I am afraid that I see this issue remaining the biggest fly in the ointment of our desired speedy energy transition.
I turn briefly to the details of the Bill. With all the talk of flexibility and this new GBE being agile and fleet of foot, it surprised me that it should be specifically forbidden by law from going to the open market to raise some of its own money when needed. Clause 1(4) says it can only
“be wholly owned by the Crown”.
That is a mistake, and we should amend it in Committee. A minimum of 80% Crown investment would suffice to keep it essentially a Crown entity but with some financial flexibility. A small amount of private sector money, when needed, would not go amiss.
I bristled at the total power being given to current and future Secretaries of State. Again and again, the efficiency and success of GBE appears to depend on guidance and control by the Secretary of State. Nowadays, as has been made clear by other speakers, very few Secretaries of State will have the relevant business or entrepreneurial experience and skills that might help them to take good decisions.
Having said that, I am not sure what the right solution is. GBE has to be a company independent of and yet part of government to effectively exert the power it needs, but to involve Parliament in any detailed decision-making role would clearly not be efficient. Parliament seems incapable of moving forward on the restoration of its own infrastructure, so it definitely should not be let loose on the national electricity infrastructure.
Thus I fear that having the Secretary of State report directly to Parliament after having widely consulted, as envisaged in the Bill, is probably the best answer to protecting taxpayers’ money. But—and this is a big but—we definitely need to firm up the consultation and reporting. For a start, Clause 6(3)(b), leaving the Secretary of State to decide who he consults with and how he responds to that consultation, is an unnecessary surrender on the part of the taxpayer. Then, for the only reporting to Parliament in Clause 7 to be what I would describe as the minimal information required by Companies House is totally inadequate. The Secretary of State must present to Parliament his own detailed annual report as to how GBE is progressing with its mandate—both the how and the why. I also like the idea of an independent review being carried out every few years, similar to Section 9 of the UK Infrastructure Bank Act 2023; it is the idea of the noble Lord, Lord Vaux, not mine.
I have just two further points to end with. First, the question of whether SMRs fit under the remit of GB Energy or of GB Nuclear needs to be resolved very quickly, as others have said. These generating units will be vital to our electricity supplies over future decades and we need to get their rollout under way as soon as possible.
Secondly, I have great faith in the future of hydrogen. Apart from gradually helping to heat our homes, hydrogen can be used, free of CO2 emissions, in the production of steel, the production of which currently creates 8% of the world’s CO2. More importantly, hydrogen will be critical for the decarbonisation of our road transport system. In the UK, road transport currently contributes some 26% of our greenhouse gas emissions. Noble Lords should know that a hydrogen fuel cell battery can give a car a range of over 1,000 miles. Because of this characteristic, such batteries are really the only serious contender to providing a zero-carbon fuel for our HGV fleet.
I have this theory that our current electric cars, with their low mileage range, heavy weight and high use of rare earth metals, will disappear from the marketplace in coming decades, in the same way as fax machines and video recorders—both miracles of their time—have now both completely disappeared. I believe that hydrogen fuel cell cars have a much brighter long-term future, if we can get the hydrogen.
That brings me to the point of mentioning hydrogen in the context of the Bill. For a start, GBE needs to look favourably on any hydrogen projects that come before it, but I also believe that all wind farms, on land or offshore, and solar parks above a certain output should be obliged by law to have a direct connection to a hydrogen production plant. That way, whenever their power is not needed by the grid—in the middle of the night, say, for wind farms—they can be creating green hydrogen to decarbonise our transport system or as a long-term generating fuel, as the noble Viscount, Lord Stansgate, mentioned. The point is that no more should millions or even billions of pounds be paid to wind farms for not producing electricity. In times of excess production, or when the grid cannot accept their power, they should all be producing green hydrogen as a form of power storage.
As noble Lords will have gathered, I support this Bill. I look forward to working with the Government to improve it in Committee.
Lord Naseby (Con)
My Lords, we know that the challenges of the age can be met only by energy. We have before us the vehicle to achieve that objective: Great British Energy. Of course, a fair number of questions have been raised in the other place and this afternoon, particularly about the relationships with the other energy corporations and agencies. I will not get involved in that; I do not want to duplicate those questions. Although many of them are valid, the situation we face calls for an independent vehicle such as the one we are debating in the Bill. In historical terms, looking at the state of our railways and comparing them with those on the continent of Europe, where they are all nationalised, I think for once that we need again to look at the success Europe has had in not dissimilar circumstances.
I will raise four points to look at in more detail in Committee, partially because some of them came up many years ago when I was on the energy Select Committee in the other place. The one that did not come up then was hydrogen, on which we just heard some wise words. I have had a meeting with the boilermakers’ union, which knows exactly what was put in when almost all gas domestic heating was put in. That was done highly successfully over many years. Work has been done on hydrogen mixed with gas. The indication is that it is successful and that all that needs to change is the burner to the boilers. If that is the situation, it would save huge sums of money for the infrastructure for heating the vast majority of the homes in the United Kingdom. Yes, certain areas will need heat pumps, but no way can heat pumps ever overtake this opportunity for domestic heating at this point in time. That means we need to look at the definition of clean energy in the Bill. I will put down an amendment to that effect.
Secondly, there has been much discussion about small modular reactors, which is absolutely right. I had discussions with Rolls-Royce two and a half years ago, when it claimed it was just about ready to go forward. It is not the present Government’s fault but, if Rolls-Royce was ready then, I cannot understand why there was no decision. I asked questions of my noble friends on the Front Bench on that when we were in government, and we still do not have a decision. I say to the Minister: if I and, more importantly, Rolls-Royce are right, let us please have a decision on that.
Thirdly, I have had some talks with and briefings from the UK Sustainable Investment and Finance Association. I hope very much that the Minister has had the same. If he has not then I would be delighted to hand over the briefing I received, but I am sure he has had it. Therefore, I do not need to go into great detail, but it raised five areas that I think should all be looked at very carefully.
Fourthly, the area that nobody has raised, as far as I know—and I have been sitting here all afternoon—is the situation in small countries around the world. We have a Commonwealth and our own small-country groupings. We need to recognise that we must help them deal with their problems, which will not be similar to ours in most cases. We should be considerate and understanding. After all, the Commonwealth is a family, and we should help them in that relationship.
The Bill is a good one, as far as I can see. As I said, I will put down some amendments, but I wish the Government well. It is so important that this is successful and I will do my best to help it on its way.
Baroness McIntosh of Pickering (Con)
My Lords, I declare my interests, especially as honorary president of National Energy Action. I congratulate the noble Baroness, Lady Beckett, and the noble Lord, Lord Mackinlay, on their excellent maiden speeches. They are both remarkable role models in their own right. I also congratulate the Minister, who has sat through all the speeches today and displayed his staying power and great interest in this subject. I wish him well through the passage of the Bill.
The country is facing twin challenges of energy and food security. They are both extremely serious and should be tackled together. Specifically, I agree with all those who have said that the remit of the Bill is extremely broad—too broad. I hope we can clarify that through its passage, as one of my concerns is that this is a potentially massive land grab.
I would like to explore how relationships with those affected by the decisions will be handled. There is talk of consultations, but there must be more joined-up decisions between the Government, investors, local authorities, local communities and consumers. Take the position of offshore wind farms: consent for the wind farm is currently given separately from consent for the substation needed to land the energy onshore, then separate planning permission is sought for the overhead power lines. These pylons to transfer electricity long distances, losing up to 10% of the energy in transmission, are deeply unpopular among those in rural communities, who have to live with them but recognise that they have absolutely no benefit to those living there. Can the Minister explain and define the engagement process with interested parties—for example, farmers, fishermen, residents, consumers and industry? What form will that consultation take?
The Bill seems to give a blanket power to the Secretary of State to decide. There is very little parliamentary oversight, merely reports to Parliament. In Clause 5:
“The Secretary of State must prepare a statement of strategic priorities for Great British Energy”.
He
“may revise or replace the statement”,
but need only
“lay a copy of the statement, and of any revised … statement, before Parliament”.
We need to amend that to have greater parliamentary oversight over the Secretary of State’s powers, so that they are not completely untrammelled.
There needs to be formal consultation with the interested parties before decisions are made. Take the example of the spatial squeeze; it has raised very real concerns among fishermen about how their fishing grounds risk being squeezed out by offshore wind. I wonder whether the Minister has already had the opportunity to meet with farmers, and particularly with fishermen, to address their concern about this spatial squeeze. What form does the Minister expect the relationship with these interested parties to take—not just with farmers and fishermen but with intensive energy users, such as brickmakers, those in ceramics and others in the manufacturing sector? What form of consultation will there be?
The Minister referred briefly to finance and talked about some finance coming from the national wealth fund. He will be aware that the Association of British Insurers has been closely engaging with the Treasury on the development of this fund, and I was very pleased to receive a briefing from it. The ABI hopes that the national wealth fund’s success will be in
“unlocking investment, delivering economic growth and creating new green high skilled jobs”,
but it has identified current barriers that could prevent this happening. They include the need for
“a national transition plan … sector specific investment roadmaps, especially for the five priority sectors identified by government”.
I will name them:
“green steel, green hydrogen, industrial decarbonisation, gigafactories, and ports”.
It also identifies the need for
“greater engagement between investors and local authorities to develop investable propositions”.
To ensure the success of Great British Energy and the funding from the national wealth fund, how does the Minister expect the current barriers identified by the ABI to be addressed?
I turn to sustainable sources of energy. We had a little debate on Drax at Oral Questions last week. It raised the question of why we are importing woodchip from abroad when we could use more sustainable, locally produced willow coppice and miscanthus, easily meeting the Government’s own sustainability criteria. Equally, we should use offshore and onshore wind energy locally, close to where it was produced. That would reduce the need for pylons; as I fear the Minister will find out, rural dwellers do not accept them criss-crossing the countryside, bringing no benefit to them locally.
The Minister did not mention energy from waste. Together with renewable energy, this is a very powerful strand of energy source in Denmark, Sweden, Austria, Germany and other European countries. It disposes of household waste and creates energy. What is the Government’s position on this?
Environmental levies of £2 billion are added to energy bills, primarily in the standing charge to every household and business, which goes towards future infrastructure. I ask the Minister to name any other utility or public service whose future infrastructure is paid for up front by the consumer.
Offshore-generated wind coming on shore at massive power stations poses problems, particularly when transported long distances to the national grid. We are soon to see offshore floating turbines to replace fixed turbines at sea. I urge the Minister to address these problems and to meet with the fishing fleet to avoid dangers not just of their grounds being squeezed but to marine life, porpoises and dolphins from the constant buzz of turbines. What happens to wind turbines and electric vehicle batteries at the end of their working lives? How will they be disposed of? These two issues alone, among others, create real environmental challenges.
At COP 24 the Prime Minister agreed and signed up to an 80% reduction in emissions. This will impose a heavy burden on households and businesses alike going forward, while countries that deny climate change, such as the US, China, India and Brazil, continue to pollute regardless to ensure that their industries remain competitive.
In conclusion, I simply ask how this Bill to create Great British Energy will benefit Great Britain, given the massive impact the work of the company will have on the countryside, local communities, industry and consumers.
Lord Vaux of Harrowden (CB)
My Lords, I declare my interest as a small-scale generator of hydroelectricity. I welcome the intentions behind the Bill: an affordable, secure and decarbonised power system must be a good thing. I suspect that the stated timeframe of the next five years is rather overoptimistic but, again, I commend the intention. I caution against rushing the transition too much. We must ensure that we do not undermine our energy stability, and rushing could create that risk, make it more expensive than it might otherwise be and undermine the intention of reducing energy costs over the period. Again, the intention is good.
However, the Bill does not do anything beyond allowing for the creation of the company. It sets out only some very broad parameters as to what it may do. In that, as we have heard, it is quite similar to the UK Infrastructure Bank Act 2023. Indeed, whole clauses of the Bill seem to have been copied verbatim from that Act, and I suspect that we will have many of the same debates that we had then. I seriously considered taking my Second Reading speech on that Act and changing the name, but I decided against that.
However, there are important differences between this Bill and that Act. First, like the UK Infrastructure Bank Act, there is a requirement in Clause 5 for the Secretary of State to
“prepare a statement of strategic priorities for Great British Energy”.
In the case of the UK Infrastructure Bank, the then Government provided a detailed draft of that statement, along with the detailed framework document referred to by the noble Baroness, Lady Noakes. We were able to see what the bank was intending to do and the assumptions around, for example, whether it would be required to make a positive return. That was extremely helpful. In this case, I understand that the Government have no intention to provide such a draft before the Bill is passed. I hope that that is wrong, but it sounds as if we will be having these debates rather in the dark, which is deeply unsatisfactory but, rather depressingly, becoming something of a theme.
The Government have made many claims about the benefits from GBE, which the Minister has repeated today. Being something of a finance nerd, it was therefore with great excitement and enthusiasm that I turned to the impact assessment. Let me give your Lordships some highlights from that. The total net present social value from GBE is given as not applicable; the business net present value is not applicable; the net cost to business per year is not applicable; the CO2 equivalent change in greenhouse gases, which is its core purpose is—guess what?—not applicable. In fact, in every single section of the impact assessment, it says not applicable. But I read on, and it goes on to say that:
“This legislation is not expected to have any direct benefits associated with it”.
Which is, I suppose, straightforward. We are being asked to scrutinise a Bill where we are not going to be allowed to see the statement of strategic priorities and for which there is no meaningful impact assessment for what the Government are planning to do.
That makes my next point even more important. Apart from a requirement to publish a report and accounts that simply comply with the Companies Act 2006, there is absolutely no reporting and accountability required for Great British Energy in the Bill. Given that we know nothing about the strategic priorities, that has to be unacceptable. It is in stark contrast with the UK Infrastructure Bank Act, where there is a whole section requiring an independent report to be laid before Parliament on,
“the effectiveness of the Bank in delivering its objectives, and … its impact in relation to climate change and regional and local economic growth”,
and, importantly,
“(including the extent to which its investments … have encouraged additional investment … by the private sector)”.
That references the additionality concept that the noble Baroness, Lady Noakes, and others have referred to. With the UK Investment Bank, that report is to be laid before Parliament, and is carried out initially after seven years and then at five-yearly intervals.
It is surprising that the Government do not feel that something similar should apply here and that they actively excluded that clause from their copy-and-paste exercise. They have made all sorts of claims about what GBE will achieve but seem unwilling to have the actual performance measured and reported on. I confess to finding that rather shocking. Can the Minister please explain why the Government felt they should copy the UKIB Act but exclude all meaningful accountability aspects, especially given their own support in opposition for the independent review clauses in the UKIB Act? This is something of a change of tune, I think. Infrastructure is, by definition, long-term, so the UKIB timeframes were long—seven years. GBE is talking about completing the decarbonisation within five years, so it must be the case that shorter duration performance-reporting periods should apply.
The impact assessment says that:
“All investment into and expenditure of GBE will be subject to future spending reviews and business cases, which will set out in detail the monetised and non-monetised impacts of GBE’s activities”.
That sounds promising. Can the Minister explain how and when those spending reviews and business cases will be published, and whether they will be made available for scrutiny by Parliament? Perhaps more importantly, how will the actual performance of GBE against those business cases be reported on and scrutinised? I am absolutely certain that we will have many more debates on this element, especially if we do not see the statement of strategic priorities.
During the debates on the UKIB Bill, we had many discussions about how important it was that the activities of the bank should be aimed at crowding in private investment and avoid crowding out private investment. I said during those debates that,
“if the bank simply ends up becoming a cheaper form of subsidised finance in situations where private finance is already available, we will have failed”.—[Official Report, 14/6/22; col. 1555.]
The same sentence applies with bells on in this case. The Government keep repeating the mantra that every £1 of public investment will generate £3 of private investment. I wish it was that simple. If done badly, it can have the opposite effect, so it is critically important that the reporting that I have said we need covers that aspect of additionality. It must be about not just how much we have spent—anyone can spend money—but how effectively we have spent it and what the real impact on private investment has been. Does the Minister agree?
Speaking of the UK Infrastructure Bank—now rather misleadingly called, as we have heard, the national wealth fund—there is clearly quite considerable overlap between the activities of the two entities. Indeed, the UK Infrastructure Bank was set up originally to do quite a lot of what this entity will do. Can the Minister please shed some light on how that overlap will be managed and how duplication between the two entities will be avoided?
The UKIB Act includes details on the composition of the board; this Bill does not. Can the Minister please explain what the Government have in mind about the composition of the board of GBE?
The Bill includes some very broad financial assistance provisions. We have heard that it is intended to provide equity finance of £8.3 billion over this Parliament. However, other forms of finance appear to be completely unlimited and subject to no obvious scrutiny. Can the Minister please explain what is intended in that respect, and what accountability and controls will exist around it? How will any borrowing by GBE be treated within the UK debt figures?
Somewhat related to that, GBE can be designated only if
“it is wholly owned by the Crown”,
and the designation will terminate automatically if it ceases to be wholly owned. That would preclude the possibility of raising any external equity finance into GBE, although I suppose it might be possible into a subsidiary entity. Has the Minister considered whether some flexibility—perhaps allowing minority external equity into GBE—might be advantageous?
Finally, on a different subject, I have a proposal to add an element to GBE’s objects. Since the end of the feed-in tariffs, the only way that domestic generators of electricity can receive any income from any excess electricity that they generate above their own usage requirements is through the smart or export guarantee. Although there are now some better export rates, most are still very low compared with the retail price of electricity. There is little incentive for people to install excess capacity over and above their own usage requirements—for example, putting another two or three panels on their roof. It would surely be a good thing to incentivise people to install more than they need.
I believe there is a way that that can be done at zero cost for the Government, through a peer-to-peer trading facility that would allow generators to sell any excess, perhaps to their neighbours. The only way of doing that at the moment—which I know to my cost—is to wire them in, which is extremely expensive. This facility would allow the generator to earn more than the smart export guarantee rates, so providing a greater incentive to install more capacity, and would allow the neighbours to obtain the excess power at a discount to their own retail cost—a win-win situation. All that is required is a trading company to stand in the middle, and perhaps to take a cut of the trade to cover the costs of the activity. That is a role that GBE could easily undertake, thereby incentivising people to increase domestic renewable generation at, as I said, no cost to the taxpayer. In order to do that, I think that “trading” should be added to the objects in Clause 3(2)(a).
I support, in concept, what the Government are trying to do, but there is an awful lot to do to improve the Bill, especially around the areas of accountability, where it is woefully lacking.
Lord Ashcombe (Con)
My Lords, I declare my interests as an insurance broker for the energy industry, as set out in the register.
The Bill before us, dealing with the creation of Great British Energy, has the laudable aim of decarbonising the power sector by 2030. That is an ambitious target, especially given the broader commitment for the United Kingdom to reach net zero by 2050. Achieving such a transformative goal requires careful handling, not only in its practical implementation but in securing the support and understanding of the population.
Energy is foundational to growth for any nation, and growth is something we undoubtedly need. As outlined in the founding statement of GBE, published by DESNZ on 25 July, the company’s mission is to
“drive clean energy deployment, boost energy independence, create jobs and ensure UK taxpayers, billpayers, and communities reap the benefits of clean, secure, home-grown energy”.
However, such aspirational language does not appear within the Bill itself, nor are there clear metrics by which Parliament might assess its ongoing success. Other noble Lords, including the noble Lord, Lord Vaux, have addressed these omissions in great depth. I am not going to repeat their arguments here other than to say that I agree.
Instead I shall turn to Clause 3 and the stated objectives of GBE. Electricity generation accounts for approximately 20% of the UK’s overall energy demand. Our current energy mix highlights the challenges ahead: 31% from wind; 28% from gas; 15% from nuclear as a constant baseload; 8% from biomass, largely from Drax, whose environmental credentials merit scrutiny; and 5% from solar, with the balance met by interconnectors with Europe. The other 80% of UK energy is hydrocarbon-based.
The Bill envisages that most of the new clean power will come from offshore wind, onshore wind and solar. However, the scale of expansion is extremely challenging. According to the National Energy System Operator’s report Clean Power 2030, offshore wind capacity must triple and solar capacity must more than triple, while onshore wind needs to double. These are staggering targets that far exceed our historical rate of progress.
As has been noted many times in your Lordships’ House, the wind does not always blow, and the sun does not always shine. Gas, as the swing fuel, is consequently frequently called on, sometimes accounting for 60% or more of generation—it has been 55% this afternoon—during lean or cold periods. Conversely, during periods of overproduction, typically when the wind blows too hard, surplus power must be shed, meaning that the producers are paid a curtailment fee to not generate. The situation will be exacerbated as more renewable power comes online. Hydrogen production, which has been discussed by various noble Lords and which I will address shortly, has the potential to address that issue.
While the construction of fixed wind and solar farms is well understood, it is unlikely that GBE will play a significant role in that technological development. It will need to deploy resources in the floating offshore wind arena, which is still in its infancy but has a significant upside. In addition, GBE might contribute to solving the associated planning, environmental and conservation challenges by encouraging the integration of clean energy production in all new infrastructure.
Equally daunting are the upgrades to our grid infrastructure. An estimated £40 billion will need to be invested annually until 2030 to enable the increased generation targets. I am afraid that collectively that dwarfs the £8 billion available to GBE. I am all for ambition, but one must ask: are these goals realistic and achievable?
Importantly, how does that correlate with the much-touted £300 saving per household that was so widely discussed before the election? It seems increasingly elusive.
It is certain that gas will remain a key component of our energy mix for years to come. The UK currently consumes nearly 1 billion barrels of oil equivalent annually for its energy. We are fortunate to have significant hydrocarbon reserves within our territorial waters. At the end of 2023, the North Sea Transition Authority estimated 3.3 billion barrels of oil equivalent in reserves, which are likely to be produced; 6.1 billion BOE in contingent resources, representing known but undeveloped assets awaiting regulatory or investment approval; and 3.5 billion BOE in mean exploration prospects—that is, potential resources yet to be discovered. These reserves, weighted 70% towards oil and 30% towards gas, could meet over half the UK’s expected energy demand over the next two to three decades. However, production is falling at more than 10% annually, outpacing reductions in consumption and exposing us to increased reliance on imports.
The 200,000 jobs connected to the hydrocarbon industry, both directly and within the supply chain, which will decline rapidly as the industry is shut in, are hugely significant. While some of these skilled workers may transition into the renewable power industry, we must ask ourselves: will it be all of them?
Beyond employment, the economic contribution of oil and gas remains substantial. According to the Office for Budget Responsibility, revenues from offshore corporation tax, petroleum tax and the energy profits levy raised £5 billion in 2023-24. Although those revenues will decline over time, they remain significant. Furthermore, the Office for National Statistics reported that the extraction of crude petroleum and natural gas contributed £27.6 billion to the UK economy in 2023, accounting for 1.2% of the total economic output of £2,369 billion. These figures remind us of the industry’s enduring impact and the need for a carefully managed transition.
Recent gas discoveries, such as the Selene and Baker fields, underscore the remaining potential of the North Sea, yet these projects depend on competitive regulatory and fiscal conditions, which are not guaranteed. Projects already licensed, such as Jackdaw and Rosebank, which are essential to our energy security, are before the courts, resulting in further delays and potential cancellation, which could put further strain on our domestic production.
It cannot be right that we are importing increasing volumes of LNG to satisfy our gas needs when we have abundant resources of our own. Imported LNG is often produced under less stringent environmental controls and must be transported across oceans, increasing our carbon footprint threefold. Furthermore, are we not merely transferring the problems to others rather than addressing them ourselves? This does not reduce emissions, which is the ultimate goal, and it undermines our commitment to true environmental responsibility. That clearly highlights the need for the ongoing issuance of licences in our territorial waters. I strongly urge the Government to reconsider their current position and take action to support this vital initiative.
Other noble Lords have discussed nuclear generation. It is certain that the country needs a smorgasbord of generation types, and nuclear must be an important part.
I see two further areas in which GBE may make a positive impact. First, renewable generation is inherently intermittent and, while battery storage can address short-term issues, it cannot manage significant downtimes. Excess renewable electricity could be used to produce green hydrogen by electrolysis with no greenhouse gas emissions, which in turn could fuel hydrogen turbines during low renewable production periods. Developing the necessary storage and turbine infrastructure should be a priority for GBE, preventing curtailment payments and generating electricity with the cleanest of fuels.
Secondly, the development of carbon capture, utilisation and storage is crucial to the UK and to other countries. Due to geology, the UK has significant CCUS potential, amounting to the equivalent of approximately 200 years of current carbon emissions. Its development will be crucial to UK decarbonisation and that of other countries. It is of course not a single solution to emissions reduction but could provide a crucial route for some sectors, such as large industrial users and gas-fired power generation. GBE should play a leading role in advancing this technology.
While I commend the ambition of the Bill, I fear it may overreach in its expectations of the industry’s capacity to deliver. Simultaneously, it underestimates the continued importance of hydrocarbon resource in ensuring our energy security. Without sufficient oversight or clear metrics, GBE risks becoming an unchecked entity with uncertain outcomes. Nevertheless, we must remain steadfast in our commitment to net zero by 2050. If managed prudently, we may even reach that target sooner, without jeopardising the growth and prosperity of our nation.
Baroness Young of Old Scone (Lab)
My Lords, I declare my interest as chair of the Labour Climate and Environment Forum. I add my name to the commendations given to the maiden speech of my noble friend Lady Beckett. She was my boss when I was chief executive of the Environment Agency. She was a very scary lady, but hugely kind and incredibly supportive. She taught me a tremendous amount. Our House will be a better and more thoughtful place for her presence and wisdom.
I welcome the Bill—it seems that not many people do—and the opportunity that GB Energy will provide to use public money to leverage and create direction for private investment to tackle climate change and meet our net-zero objectives. Unlike practically everybody else, I am going to simply raise five points for my noble friend the Minister. All of them are about Great British Energy and the content of the Bill.
First, community energy has already been raised by the noble Baroness, Lady Hayman. The propaganda text around GB Energy’s creation has been very explicit about GB Energy playing a big role in supporting community energy. Community energy schemes are really important if we are to persuade communities that the disruptions and downsides of renewables and rewiring the grid have something in it for them by way of cheaper, greener and more secure energy. Local power plans, which I hope include community schemes, are one of the five priorities for GB Energy in its founding statement. If it is a real commitment for GB Energy to deliver community energy schemes, why not put that requirement in the Bill?
Community energy schemes currently generate around only 0.5% of the UK’s electricity. Studies by the Environmental Audit Committee and others estimate that this could increase twentyfold in 10 years, powering 2.2 million homes and saving 2.5 million tonnes of CO2 every year. It can create jobs, reduce local people’s bills and boost local infrastructure investment. Lots of other nations have seen community-led renewable energy schemes growing over the last 10 years, but we are stuck at the level it was when feed-in tariffs ended. We have not grown since.
What is most worrying about not having a statutory requirement for GB Energy to support community energy in the Bill is that Jürgen Maier, who was much praised by the Minister as the chair of GB Energy, is already on record as saying at a parliamentary hearing that he did not believe that community energy had the potential to generate gigawatts. That is totally at odds with the assurances given by the Government both in the Labour manifesto and during the passage of this Bill in the other place. If we are to have the confidence of investors and communities, and not have confusion on the role of GB Energy in this area, we need community energy in the Bill.
My second point leads on from that, to some extent. It is about the Secretary of State’s statement of strategic priorities. It is important that we see this in draft, at least in Committee. Community energy is only one issue that we want to see in it. Without sight of the statement of strategic priorities, we are being asked to buy a pig in a poke to some extent. Can the Minister tell us when we might see the Secretary of State’s statement of strategic priorities?
The third issue I want to go on about is in my capacity as a long-playing record. Many noble Lords around this House can remember what a long-playing record is, whereas vast quantities of the British public would not have a clue what I am talking about—but I am a long-playing record in this respect. Although GB Energy clearly has excellent net-zero objectives—that is what it is there for, as the noble Baroness, Lady Hayman, said—we face a twin crisis of climate change and biodiversity recovery. GB Energy needs to be given an objective on biodiversity recovery.
It will have a role in de-risking and accelerating clean energy developments. There is always a possibility, at that point, that there could be a trade-off between biodiversity and delivering net zero, but it is not either/or—it is both/and. We need to be smart, and GB Energy needs to be given objectives on both net zero and biodiversity recovery; they need to complement each other.
There is a quick way around this. We could support the Private Member’s Bill in the name of the noble Lord, Lord Krebs, which would give the twin objectives of climate and biodiversity to all relevant public bodies. I think it is important that we have these twin objectives for GB Energy. There are lots of examples of similar—although not quite the same—entities, which are virtually independent of the state but are sponsored and wholly owned by the state, that kind of lose the plot. The Forestry Commission plants trees, but it does not do very much to plant trees for biodiversity and climate change. The water companies, which are basically creatures of the public purse, have gone seriously off the rails. I hope we can make sure that GB Energy does not get a rush of blood to the head with its new-found independence and become so fixated with net zero that it cannot do anything else.
My fourth point is on accountability, which has already been raised. We can all read the published accounts of plcs from Companies House. They do not cast much light on many occasions. It is important that this body, which has an important role and a fair slug of public money, provides more back to both Parliament and the public on how it is delivering on its role. It needs to provide a report on a regular basis about the Secretary of State’s strategic priorities and how they are being delivered. If the Secretary of State has not had the foresight to see community energy and biodiversity recovery as strategic priorities, we need reports on these—whether they are strategic priorities or not.
I do not want to see some of the inflexibility that I have heard described around the House today in requiring more and more burdensome reports from this company. It is being set up specifically to give flexibility to allow the Government to influence the direction of an emerging set of technologies as they emerge. We do not want to strangle it at birth with reporting requirements, but there needs to be a happier medium between that and simply the Companies House report.
Last but not least, you could not expect me to do a speech in this House without talking about land use. Great British Energy will inevitably be engaging with spatial issues, such as new grid infrastructure and other energy development locational issues. Any planning role or role that engages with land use and spatial issues will need to complement the existing work of both private and public bodies, including the National Energy System Operator, in producing the strategic spatial energy plan. Spatial energy issues are important, but they need to be resolved in the context of all the pressures on land—for example, other infrastructure types, housing, flood risk management, food production, biodiversity, forestry and carbon sequestration, to name but a few.
The previous Conservative Government promised me the publication of a land use framework for England as a Christmas present last Christmas. I thank the new Labour Government for their commitment to producing a land use framework for England. I know it is there in draft and I had hoped we might be out to consultation by this Christmas. That would be a nice Christmas present. Can the Minister confirm that the Government see the importance of setting the strategic spatial energy plan in its broader land use context and framework? I think it is called joined-up government. If so, when might the land use framework consultation emerge?
Finally, I wish good luck to the Minister in responding tonight. The discussion has been amazingly wide, right across the energy policy agenda and beyond, for a very tiny Bill for a very specific purpose. It is going to be a bit like summarising the entire works of Proust in 21 seconds.
Viscount Trenchard (Con)
My Lords, I thank the Minister for introducing this Bill today. I declare my interests as a member of the advisory board of Penultimate Power UK Ltd and as a consultant to Japan Bank for International Co-operation. I, too, congratulate the noble Baroness, Lady Beckett, and my noble friend Lord Mackinlay of Richborough on their excellent maiden speeches.
In the debate on the King’s Speech, the noble Lord, Lord Hunt of King’s Heath, explained the Government’s aim to make this country a clean energy superpower. He told your Lordships that the Government were focused on achieving clean electricity by 2030, with a system based on renewables and nuclear power, and then building on that momentum to achieve the ultimate goal of net zero by 2050.
It is not widely understood that the electricity grid provides only around one-fifth of our total energy consumed. The Minister said:
“The Great British Energy Bill, put forward in the gracious Speech, will establish a publicly owned company to spearhead our mission to become a clean energy superpower”.—[Official Report, 18/7/24; col. 33.]
Although he mentioned nuclear power as well as renewables, it appears that His Majesty’s Government have little interest in nuclear. In his briefing on the Bill, the Minister said that GBE, for now, would invest solely in renewables. That will disappoint the noble Baroness, Lady Winterton, who asked whether GBE could fund an SMR factory in South Yorkshire. Can the Minister confirm that he agrees that nuclear power provides energy that is just as clean as that from renewables? Could he also confirm that there is a compelling need for firm baseload power that does not suffer from intermittency? Large-scale, affordable energy storage is still decades away.
It is surprising that the Government have introduced this Bill to set up GBE without clarifying how GBE is going to relate to Great British Nuclear—GBN. GBN’s remit is not sufficiently clear, but, if the Government properly recognised our need for new nuclear and the huge contribution it could make to achieving clean energy, surely the two bodies should be combined, or at least work together. I was pleased to hear the Minister say that the Government will explore how GBE will work with GBN, but there is nothing at all, yet, in the Bill about this. The noble Viscount, Lord Hanworth, expressed similar concerns in his well-informed speech, with all of which I was in full agreement.
There is of course, as my noble friend Lady Bloomfield well explained, a third government body in this space—the former United Kingdom Infrastructure Bank, now known as the national wealth fund. Its website explains that it will continue to make private sector investments against a clear set of priorities, with a focus on “crowding in” private finance to sectors and technologies that are critical to the UK’s clean energy and growth ambitions.
Clause 3 of the Bill before us today states the objects of GBE, of which the first is the provision of clean energy. Another object is improving energy efficiency. But pursuing a dual system of renewables and gas which you only use when there is not enough wind is inherently inefficient and leads to excessively volatile and unnecessarily high prices. These objects are substantially the same as several of the objectives of the national wealth fund, contained in Clause 2 of the UKIB Act. The NWF is set to be capitalised with £27.8 billion, compared with £8.2 billion for GBE, and that only within the course of this Parliament. GBN is clearly the poor cousin as it does not have any money to make investments. It has only the £342 million of net assets showing on its balance sheet on 31 March 2023. This again shows the low priority that the Government give to nuclear power. How is GBN going to make a contribution to funding the procurement of at least two SMRs, as declared?
In January this year, the former Secretary of State designated the former British Nuclear Fuels Ltd as GBN under the Energy Act 2023. According to Companies House, the Secretary of State referred to in the Act as the “person of significant control” is the Secretary of State for Energy Security and Net Zero, Ed Miliband. Can the Minister tell the House what ambitions the Secretary of State has for nuclear in the next five years? Could he tell the House whether the last Government’s 24-gigawatt target for nuclear, which many think too low, is still in place, and, specifically, what are the targets for large-gigawatt stations, SMRs and AMRs?
It is widely accepted that we need firm baseload power to provide electricity when the wind does not blow and the sun does not shine. My noble friend Lord Frost, in his excellent speech on 14 November, drew attention to the fact that in the week of 3 to 10 November, wind accounted for a mere 10% of electricity generated. I have checked this fact on the National Grid’s energy dashboard website. What that means, as was so well explained by my noble friend Lord Howell, is that wind power provided only around 2% of the country’s energy consumption during that week. As noble Lords are well aware, we have not seen much sunshine lately.
In the same week, solar power accounted for 0.7% of electricity generated: that is, 0.14% of total energy consumed. During that same week, gas-fired power stations accounted for 52.2%, nuclear for 14.3% and electricity imports for 11.3%—even that was more than the contribution from wind. And what do imports do for energy security? Do these facts not suggest that we absolutely cannot rely on renewables to continue to decarbonise the grid, or even begin to replace our much larger industrial energy consumption, which is still dependent largely on oil and gas?
Even those of us who are not convinced that the slight increase in the proportion of carbon dioxide in the atmosphere in recent years—from 0.037% in 2000 to 0.042% in 2024—controls nearly all aspects of climate strongly support the development of clean energy. But if we need firm baseload energy, as shown in the week of 3 November, why do we not prioritise nuclear power now? The Government have said that they will work with the private sector to double onshore wind, triple solar power and quadruple offshore wind by 2030. They will invest in carbon capture and storage, and hydrogen and marine energy, and ensure that we have the long-term energy storage our country needs. That would all be prohibitively expensive, and we are already losing our remaining manufacturing competitiveness because our electricity is among the most expensive in the world: twice as much as in Japan and more than twice as much as in the United States.
The OBR’s economic outlook forecasts that subsidies to gas providers to maintain a fleet of power stations “just in case” will have to quadruple. Is it not true that the Government continue to push the 2030 net-zero agenda harder and faster than ever, but without any proper cost-benefit analysis? My noble friend Lord Frost has queried why we need subsidies at all if the real cost of offshore wind is £44 per megawatt hour, as suggested by NESO—well below current market prices and the prices agreed in auction rounds. Onshore wind projects have been subsidised since the first wind farm at Delabole in Cornwall in 1991. Why are we still subsidising them? Why are electricity consumers forced to pay much higher prices for their electricity because a significant part of those charges are subsidies for renewables? That has distorted, and continues to distort, the market.
The proposal to transfer renewables electricity subsidies to gas bills does not solve the problem; it merely delays it for another day. But if subsidies are justifiable, why is the consumer not subsidising nuclear technologies too? Can the Minister justify continuing to force the consumer to pay for wind but not nuclear? The Government have provided a tiny amount of financial support to developers of nuclear technologies, compared with other countries such as the United States and France. France generates around two-thirds of its electricity from nuclear power. By 2018 the United States was generating half its emissions-free electricity from nuclear sources.
GBN is concentrating on selecting winners in the SMR competition. There are four companies still in the race, of which three are American-owned. Only Rolls-Royce represents British industry and technology. There are other technologies, some of which were invented here, such as the high temperature gas-cooled reactor technology invented at Winfrith, Dorset in 1965 by the UKAEA. The IP is owned by the Japan Atomic Energy Agency. The Japanese Government, who are still constrained in their domestic development of nuclear power because of the 2011 Fukushima disaster, have wanted to collaborate with overseas Governments, especially the UK, in supporting the commercial development of this technology. The demonstrator has been running in Japan for more than 10 years and is inherently safe. The heat energy produced by an HTGR at 950 degrees Celsius enables the decarbonisation of many industrial processes, including the production of green hydrogen at scale.
Unless the Government change course very soon, we will miss the chance to become the manufacturing and distribution hub for EMEA—this invaluable technology, which is now languishing in phase B of the Government’s AMR competition. They have committed a mere £55 million from the future nuclear enabling fund, to be shared between two successful bidders, but there is no commitment that this competition will continue; its only purpose is to construct a demonstrator by the early 2030s, in time for potential AMRs to support net zero by 2050. We will have missed the boat by a country mile.
We have the chance to put together a public-private UK-Japan consortium to commercialise this technology now. We should press ahead with that, and with Rolls-Royce’s SMR technology, using home-grown knowledge and experience developed over 60 years of supporting the Royal Navy’s nuclear fleet. New nuclear builds would support thousands of highly-skilled jobs, directly and in the supply chain, during construction and then for decades during operation, often in remote areas of the country. They would reuse locations where existing grid connections are in place.
The Bill is very short and says little about the governance of the company. Some of it is similar to the UKIB Act but it gives little indication of what the company will do and how it will operate. The Government claim that
“GBE will take a stake for the British people in projects and supply chains that accelerate technologies for the future”.—[Official Report, 18/7/24; col. 33.]
Yes, the Government should do this but GBE, as envisaged by the Bill, does not provide the answer. As my noble friend Lord Lilley said in his powerful speech, we need to know much more about the strategies and priorities of GBE.
We may or may not be close to a climate emergency or climate crisis, but we are most certainly facing an energy apocalypse now. The Government should urgently reconsider the role of nuclear energy and bring GBE together with GBN now, properly capitalised to act as a catalyst in averting the energy emergency we face; or, at the very least, they should devise a structure whereby possible nuclear energy projects are evaluated in a manner similar to renewables projects. Furthermore, the Bill gives the Secretary of State very great powers. He is required to inform Parliament of general or specific directions, but he is not accountable to Parliament at all in respect of his position of control within GBE. Parliamentary oversight needs to be strengthened.
I apologise for going on for so long, but this is very important. I look forward to working with noble Lords on all Benches to carry out our duty to scrutinise and improve this Bill.
Earl Russell (LD)
My Lords, it is a pleasure to wind up in this debate. I welcome to the House the noble Baroness, Lady Beckett, with her 45 years of experience and her wisdom. I know that she will make an important contribution here. I also welcome the noble Lord, Lord Mackinlay. Not only did he beat Al Murray and Nigel Farage on the same night but I am so delighted that he beat sepsis as well. I wish him well in his campaigning in this House—it was emotional for me when he entered, so I wish him well.
We on these Benches welcome this important and timely Bill. But, like many of your Lordships, we have concerns with it and how it is set out. These relate to the clarity of the strategic objectives, the purpose, the definition and the scope, as well as the lack of reporting, accountability and oversight within the Bill. The noble Baronesses, Lady Bloomfield, Lady Hayman and Lady McIntosh, and the noble Lord, Lord Ravensdale, all raised this.
Other areas of the Bill are not defined well enough, which leaves us in a difficult position as legislators. The noble Baroness, Lady Noakes, said that it is a “seriously flawed” Bill. I do not agree with that—it is an important Bill—but some points need clarification. I hope to work with Members across the House to help clarify some of these matters, because the Bill is important to our energy security and our future. I thank the Minister and his Bill team for meeting us all, cross-party, before the debate. This is important, and I welcome his commitment, his openness and his approach to the Bill.
The Bill is very short—in some respects, it is perhaps too short for its own good. It establishes Great British Energy, a publicly owned company owned solely by the Secretary of State. Some Members questioned whether other options might be appropriate, looking at whether that could be expanded slightly or changed. The Bill fulfils a Labour Party manifesto commitment to achieve net zero and to make energy generation clean from carbon by 2030.
Great British Energy’s founding statement says:
“Great British Energy stems from a simple idea: that the British people should have a right to own and benefit from our natural resources. That these resources belong to all of us and should be harnessed for the common good”.
What is not to agree with there? We definitely agree with that. Backed with an initial capitalisation of some £8.3 billion over this Parliament, the plan is that GB Energy will work closely with industry, local authorities, communities and other organisations to make progress on our energy independence. It should be noted that this funding does, however, drop to £125 million in 2025-26.
GB Energy will invest in and partly own new projects, crowding in and not crowding out private finance. This is key to the energy transition, but this will be a difficult tightrope for that organisation to walk—that is a very small space. It aims to take on elements of risk, invest in emerging technologies and lay the groundwork for investment, helping to build the UK supply chains and deliver much-needed jobs and growth.
We have the third-best wind resources in the world, and they are still largely underdeveloped. We also have some of the highest domestic energy bills in Europe. But our continued dependence on the importation of gas must end. If we continue to lack energy independence, we will continue to be vulnerable to the vast fluctuations in the international markets. It is always our domestic bill payers who suffer. Today, we are at the start of a cold spell in winter. Continued international tensions mean that the gas and energy markets are rising as we speak.
The energy transition will bring short-term costs, but it will bring long-term benefits and security, and it will reduce bills permanently. However, energy bill payers must be supported and must benefit from that transition process. Equally, huge costs come from simply doing nothing. It is estimated that, in 2022-23, the energy bill support scheme cost the Government £6 billion, with absolutely no long-term benefits. So when the Conservatives go on about costs, they should remember that the biggest cost of all is that of doing nothing. The promise is that GB Energy will save some £300 a year. I hope that it does and that that happens soon.
I turn to our areas of concern with the Bill. The first is the general lack of funding available. There is a big, long shopping list of stuff that needs to be done, and my concern is that, because Labour cut its green budget virtually in half before the general election, there is not enough money to do everything on that list. Therefore, priorities will have to be set, which means that the money needs to be spent very wisely.
Can I ask the Minister to provide the House with further clarity on what, if any, borrowing powers GB Energy will have and how they will be used and monitored? Further, will the national wealth fund be supporting GB Energy and, if so, how? Many Members have asked that. It is also unclear whether GB Energy will be able to use debt financing powers and how that would sit on Treasury balance sheets. When does he believe GB Energy will be able to make its own investments?
A great concern for us is the lack of any written strategic priorities for GB Energy. A plan needs to be made and there needs to be scope in the Bill for parliamentary oversight of it. I welcome the comment by the noble and learned Lord, Lord Falconer, that this needs to be in the Bill. It is clear from discussions with the Minister that the plan is not yet written and is unlikely to be ready before we finish scrutinising the Bill. That puts us, as a House, in a difficult position. The legislative cart has been put before the strategic priorities horse.
We need to find a way forward through that. The noble Baroness, Lady Hayman, said it was a skeleton without any flesh. There are ways in which we can find solutions—we could delay Report; we could ask for a draft publication to be made available; we could even ask for heads of terms to be agreed with the Minister, or verbal assurances to be given by the Minister from the Dispatch Box. We should have an opportunity for parliamentary oversight. That is really important. Moreover, there should be opportunities for a further strategic review of those priorities if they change.
There is no overall reporting or accountability for GB Energy in the Bill. Other than what it must provide—like every other UK company—to Companies House, there is literally no reporting. That is not good enough, and it needs to change. Many Members have raised that in the House. We added a reporting duty to the Crown Estate Bill. My suggestion is that a similar thing is done here for GB Energy—it could have agreed headings and things that need to be reported on. Reporting needs to happen, and there needs to be parliamentary scrutiny.
What is the area for GB Energy? The Bill has such an inclusive and broad range that it is impossible to know what is included and what is not. It could virtually spend 98% of its money on nuclear energy or it could spend 98% on carbon capture and storage, despite the fact that that has already been given £22 billion. There are no definitions at all and, looking around the House, I think that worries noble Lords considerably. They do not know where the money will be spent and what the priorities are. The House as a whole is asking for clarification on those issues.
We understand that the Government do not want to be restricted, that a lot of this money will be seed money and enabling money, and that the Government want freedom to do that work. However, that needs to be balanced against the need for some clarity of what we are signing up to and approving.
There is also a need for a general environmental duty. We put one in the Crown Estate Bill. That should be copied over. I welcome the support of the noble Baronesses, Lady Hayman and Lady Young, for a nature recovery duty as well. We will support that; it is an important duty. I ask the Minister to consider that.
Clause 6 was raised by the noble Lords, Lord Lilley and Lord Bourne. It gives the Secretary of State sleeping powers. I note that he has to consult with GB Energy beforehand and to report to the House afterwards. Are those powers really necessary? Are they appropriate? Should the Minister maybe come to the House before using those powers and seek some kind of approval? I do not know—they seem a little over the top for what is necessary. They are copied from the nuclear industry. We are talking about windmills and stuff here. Do we need that power?
Other elements are missing from the Bill altogether. Community energy is something that we on these Benches will be concentrating on a lot. Community energy must appear in the Bill and in the strategic objectives for GB Energy. I thank the noble Baronesses, Lady Hayman and Lady Young, for supporting this. The founding statement makes welcome claims, and the Minister gives his assurances. However, the reality is that there is nothing in the Bill or in the strategic priorities.
We all want community-led energy to succeed and to experience accelerated growth from its very small base of 0.5% of our energy, but this will happen only if those who invest to make that growth happen have the confidence that this Government truly support this as a way forward. Vague promises are not investment options. Real-worth investment in this sector requires firm commitments from the Government, so I will seek to work with the Minister to make sure that we write this into the Bill and the strategic objectives, because, without that, it will not happen. It is an important part of the energy transition, an important part of taking communities with us and an important part of strengthening and decentralising our grid. In fact, I would like to see a plug and play system designed for community energy, linking together planning, investment and everything else that needs to happen across the piece, so that this stuff can really get off the ground. When will this investment in community energy come?
There is no point in creating renewable energy if we cannot plug it in when it is finished. Similarly, there are real issues around grid capacity and grid connections—lots of noble Lords raised that. My understanding from the Minister is that the grid is not in or crucial to the Bill, so where will the funding for grid connections come from? How that will be done is really important. Similarly, home heating accounts for 18% of CO2 emissions in this country. I call on the Minister to look at using GB Energy as a vehicle for helping to get heat pumps into homes. We need 600,000 heat pumps to be brought into our homes annually by 2028. There is no mechanism and no promise of doing that at the moment. The noble Lord, Lord Deben, suggested allowing people to borrow against their mortgages to pay for the cost of heat pumps. I suggest that GB Energy could be a vehicle to help make that happen, making it affordable to homeowners so we can get this stuff done.
In the transition, jobs and skills are really important as well. The noble Lord, Lord Ashcombe, and others mentioned this. There was not much in the Budget. The Budget itself, despite all the investments, is not creating real long-term growth, so I really encourage the Minister and the Government to invest more in jobs and skills so that the green transition benefits people and brings benefits to them.
Spatial planning has also been mentioned. A number of new organisations are being created here; the landscape is changing. We have NESO, Ofgem, the Crown Estate, GBN and GBE. How will they all work together? These are questions that people asked.
Finally, to wrap up, I encourage the Government to look at future-proofing GBE to make sure that it outlasts this Government and the next.
Lord Offord of Garvel (Con)
My Lords, I begin by welcoming the noble Baroness, Lady Beckett, and the noble Lord, Lord Mackinlay of Richborough, to this House and congratulate them on two magnificent maiden speeches.
We are debating a Bill that grants the Secretary of State sweeping powers to establish Great British Energy, a publicly owned energy company, with an £8.3 billion allocation of taxpayers’ money. With the Government unilaterally accelerating the target for zero-carbon electricity to 2030, it is obvious that the Bill is ideologically fuelled, with energy analysts such as LCP Delta stating that there is “zero chance” that the Government will meet that 2030 goal.
The substance of the Bill is equally concerning. Despite its far-reaching aims, the Bill is notably lacking in detail, as my noble friend Lord Lilley pointed out. There is no clear business plan, no accountability framework and no specific road map for how the Government intend to deliver on these unrealistic promises. In short, the Bill seems more about political grandstanding at COP 29 than about practical solutions.
During the last election, the Government made countless promises to working people that this Bill would reduce their energy costs. Yet, what we see today is a Bill that is short on details and long on empty promises. When the Government had the chance to enshrine this pledge in law, they voted in the other place against a Conservative amendment that would have made the £300 reduction a legal priority for GBE. Why, then, have the Government refused to commit to the very promise they made to the British public? I join my noble friend Lady Bloomfield in asking the Minister to give guidance on how much energy bills are expected to fall by 2030: maybe not by £300, but can we please have at least an indication of how that will be fulfilled?
Labour’s plan to create 650,000 green jobs across the country by 2030 as part of the green prosperity plan also need to be substantiated. Again, there is no mention of this in the Explanatory Notes or the founding statement. While they made this bold claim again in their manifesto, they have failed to provide any concrete details on how this would be achieved, leaving many workers concerned about their future. There is a genuine fear that without proper planning and support, individuals could find themselves jobless or unable to transition their skills to new industries.
While this Government claim to be the party for working people, they have failed to anticipate where the jobs for these working people will come from in the Great British Energy Bill. As mentioned by my noble friend Lady Bloomfield, 200,000 jobs already exist in the North Sea oil and gas sector. We know that 40,000 of those are at risk under the current plans, so again, my question to the Minister is quite simple: what is the plan to deliver on these pledges on jobs, when jobs are already being lost in the existing oil and gas sector?
The Government’s 2030 target to decarbonise the UK electricity grid sounds bold but in reality, the National Energy System Operator has called it immensely challenging. Is not this clean energy target really about infrastructure? NESO’s latest report lays bare the scale of the hurdles we face. To come even close to hitting this target, we need to invest £40 billion a year, every year, to fund grid upgrades, renewable generation and storage capacity. When you start looking at the facts, you see that this should not be reduced to a political slogan. It is a monumental challenge that requires far more than the details outlined in the Great British Energy Bill.
We are told by energy players that, in order to meet this 2030 target, we need to overhaul the national grid. Again, I ask the Minister: where is the national grid even mentioned in this Bill? If the Government are truly serious about addressing the energy crisis, why is the grid, the very backbone of our energy system, not even part of the conversation? Where are the clear policies on expanding grid infrastructure? Where is the commitment to solving the grid bottleneck that hampers renewable energy connection at the moment? Why are we talking about targets without addressing the structural issues that will make or break any decarbonisation effort?
I must agree with the noble Lord, Lord Rooker, who said last week in our energy debate that:
“The UK is world class in setting targets”,—[Official Report, 14/11/24; col. 1954.]
but less so at delivering actions. How can we decarbonise when the grid cannot even handle today’s demand, let alone the future of renewable energy? If we are serious about the 2030 target, then surely the grid must be at the heart of this Bill, not an afterthought.
Let us consider the Bill’s relationship with the UK Infrastructure Bank, which was highlighted by a number of noble Lords, particularly the noble Lord, Lord Vaux. The bank was launched with a £22 billion fund and comes and with a clear and structured accountability and transparency framework. It is governed by rules that ensure that taxpayers’ money is used efficiently, and it is subject to rigorous annual reporting, providing the public with the necessary details on its performance and investments. If we are to create another institution with overlapping responsibilities, it is fair to ask: where is the real added value here?
In fact, Great British Energy hands over far greater powers to the Secretary of State. As highlighted by my noble friend Lady Noakes, £8.3 billion of taxpayers’ money will be handed over with too much discretion and without the proper frameworks to hold this body to account. How can we trust that the British taxpayer will get value for money if we are not putting in place on day one the necessary safeguards and reporting structures to ensure transparency and proper governance?
We have had the benefit of two such debates before today’s Second Reading, and in this time a number of themes have been discussed in your Lordships’ House. As my noble friend Lord Ashcombe pointed out, there is a consensus that at the moment, our energy system is run approximately 75% hydrocarbon and 25% non-hydrocarbon. We need to flip that on its head and make it 75% non-hydrocarbon, 25% hydrocarbon, but that does not mean zero hydrocarbon, and it does mean that we need more room for nuclear power.
In fact, in the debate last week, the noble Lord, Lord Browne of Madingley, said that we have a real good chance in the UK to meet these targets because of our pre-eminent position in science and technology. Therefore, when we hear the warnings of the industry that we are going too fast and the sudden acceleration is simply unachievable, I think there is a red warning flag that must be heeded.
We understand that, if it is £300 per household and there are almost 28 million households, that comes to £8 billion and we know that renewables cannot deliver at a return of £8 billion on top of £8 billion in five years, because renewables returns come over 20 years and not five years. So why are unreasonable numbers being put out into the public domain? Is it actually a good use of taxpayers’ money to put £8 billion into renewables? For example, there is a target of 100 offshore wind farms, with £35 billion committed and another £60 billion in the pipeline. Rather than being crowded in, the private sector has already decided this is a good area to invest in. Would the money not be better targeted, as was said, at the plumbing and the national grid? As we said last week, it was designed to send energy from Scunthorpe to Stornoway and is now sending energy from Stornoway to Scunthorpe.
These questions have been raised by a number of noble Lords across the House. We also have the issue of the North Sea oil and gas being shut down too quickly. There will be a real knock-on effect on our net zero by 2050 target. At the moment, more than half the renewable investment comes from hydrocarbon companies reinvesting their profits, and the skills of the people required to do the transition exist in the oil and gas sector.
Having had these two debates and the Second Reading, we have given this Bill a really good airing, and there are some warnings for the Government in accelerating this. We cannot be in a situation where the Government put forward bold targets and empty promises: we must have details. It is not reasonable to take on trust that £8 billion of taxpayers’ money will be well spent; we need some transparency and accountability in the Bill to ensure the funds are used effectively.
In conclusion, we have heard grand pledges on lower energy bills, but I think it is only fair that the Government back them up with some concrete actions, or at least some commitments. Again, with the promise of green jobs, we have yet to see any plans as to how those jobs are going to be protected. There are already workers facing job insecurity in the transition towards a low-carbon economy. As we have discussed, despite all the talk of decarbonisation, we still have not addressed the major issue of infrastructure.
So I ask, in conclusion, how can we trust the Government’s ambitions when the foundations for success are not set out more clearly in the Bill? Where is the plan for infrastructure? Where is the commitment to accountability? Where are the protections for the British taxpayer? And, most important of all, how will Great British Energy result in cheaper energy for UK consumers?
Lord Hunt of Kings Heath (Lab)
My Lords, I begin by thanking all noble Lords who have taken part in this—yet again—very interesting debate about energy, climate change and the future. I particularly welcome the maiden speech of my noble friend Lady Beckett; her emphasis on UK climate leadership was particularly welcome, and hospital passes are something I certainly know a bit about. I was also very moved by the maiden speech of the noble Lord, Lord Mackinlay. I echo his tribute to the Sepsis UK, with whom I have worked in the past, and I am glad he was able to meet the Secretary of State. I certainly agree with him about the importance of Parliament being able to scrutinise energy policy and I look forward to his further engagement in these debates.
The noble Lord made a reference to what was happening globally. I would say, though, that the International Energy Agency has shown very recently in its Renewables 2024 report that there will actually be a massive—2.7 times—increase in renewables leading up to 2030. It is clear that countries are not turning away from it. It is also clear that there is a global renaissance in nuclear energy, in which the UK will play a full part. This is the fourth time I have said this, because the noble Viscount, Lord Trenchard, asks the same question each time. What more can I do to say that nuclear is a very important part of what we are developing in the future, in terms of low-carbon and clean energy?
I think my noble friend Lord Grantchester and the noble Lord, Lord Naseby, really said it: in this area, government intervention is essential, and the link to climate change is absolutely critical here. The noble Lord, Lord Bourne, was so right: we are talking about the survival of the human race—nothing less than that.
Lord Lilley (Con)
I tabled a Question some time ago to ask the Government whether they knew of any peer-reviewed science or any science collected by the IPCC which suggested that there would be extinction of the human race if we did nothing worldwide—not as much as we are doing now, but nothing—and they said that there is no such peer-reviewed science. Why does the Minister rely on alarmism?
Lord Hunt of Kings Heath (Lab)
I am not alarmist at all. I rely on report after report showing the consequences. Shall we turn to our own independent Climate Change Committee? The noble Lord supported the Conservative Government over a 14-year period. I did not see that Conservative Government disowning the independent advice they had received. He might as an individual, but I do not think his Government did. Noble Lords opposite, when they run down organisations such as the Climate Change Committee—or, indeed, the OBR, as they seem to now—need to remember that they listened to and reflected on the advice of those bodies during that 14-year period.
I agree with the noble Lord, Lord Cameron, that if climate change is critical, energy security comes a close second. That is, of course, what makes the Bill so important, so I hear what noble Lords are saying. The noble Lords, Lord Offord, Lord Duncan and Lord Bourne, the noble Baronesses, Lady Bloomfield and Lady Hayman, my noble friend Lord Hanworth, the noble Earl, Lord Russell, and a number of other noble Lords have commented on the structure of the Bill, with concerns about a lack of detail and questions about the accountability of GBE to Parliament, how it is to be reviewed, and its relationship with the national wealth fund, Great British Nuclear, the Crown Estate, NESO, and, as the noble Lord, Lord Bourne, mentioned, the Climate Change Committee.
I also say to the noble Lord, Lord Bourne, that the fact that GBE is going to be headquartered in Scotland of course does not inhibit its UK-wide responsibilities. I have noted what he had to say about investment in Wales.
However, I accept that there are a number of organisations here and I will take it upon myself to write to noble Lords, setting out how we think the relationships will work together, as I think that will inform our discussions in Committee. On the structure of the Bill, noble Lords will know that this was laid in the Commons very soon after the election as an early priority of the Government. Because of that, we have focused, inevitably, on the provisions that are fundamental to the establishment of Great British Energy. Clearly, we are still working through some of the policy issues on which we need to come to a view, including, of course, discussing them with GBE and the devolved Governments. That is why the Bill, to an extent, does not have the detail which noble Lords wish to see.
However, I have listened very carefully. We will come to Committee, and I hope I can respond constructively to some of the issues that noble Lords have raised. Equally, I want to ensure that GBE is operationally independent and able to make its own decisions within the structure of the Bill and the strategic priorities laid down by the Secretary of State. We are listening very carefully to what noble Lords have to say.
As I said to the noble Lord, Lord Howell, last week in our debate on energy, I fully accept that our drive towards clean power by 2030 is but one aspect of the decarbonisation of society in this country and the move to net zero. In relation to transport, heating and industrial processes, this is a huge challenge and one which we are committed to achieving. The noble Lords, Lord Offord and Lord Ashcombe, and the noble Baroness, Lady Bloomfield, asked about the clean power target. There are a number of different ways of reading the report from NESO, but it is quite clear that the number one message from NESO was that it is possible to build, connect and operate a clean power system for Great Britain by 2030 while maintain security of supply. I accept that it is very challenging—there is no doubt whatever about that—and the NESO report contains a number of those challenges. However, this is independent advice; it says that it can be done and we believe it can be done. It is very challenging, but it is doable.
On cost, as the noble Earl, Lord Russell, said, the biggest cost is doing nothing. As the noble Baroness, Lady Hayman, said, the Climate Change Committee has said that the net cost of transition will be less than 1% of GDP over the entirety of 2020 to 2050. The OBR has highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts and that acting early could
“halve the … cost of getting to net zero by 2050 compared to acting late”.
I noted also the comments of the noble Lord, Lord Ravensdale, on this.
I come to the Bill itself. The noble Baroness, Lady Noakes, and the noble Lord, Lord Vaux, raised that we have partly used the UKIB legislation as a model for some of the clauses in this Bill. The noble Lord and the noble Baroness were particularly focused on the make-up of the board of directors. The fact is that we have brought in clauses from the Great British Nuclear provisions in the Energy Act. The structure very much follows that. We do not think that it was necessary to put into primary legislation provisions in relation to the board, because this will be covered. It is a company, and so will be encompassed within company law, the code of practice and sound corporate governance. GBE will have a chair and a chief executive officer, both of whom will be accountable to Ministers. It will have a board of directors that follows sound corporate governance practice, including the provisions of the UK Corporate Governance Code and those published by the Financial Reporting Council.
We want GBE and the national wealth fund to work closely together. As Great British Energy scales up, we will set out how the two institutions will collaborate and complement each other. On the issue of crowding out investment, surely my noble and learned friend Lord Falconer was right. The whole point about GBE is to speed up the deployment of mature and new technologies but with a focus on where this can complement existing private sector activities.
I must say that the references that the noble Lord, Lord Lilley, made to HS2 and the Post Office were a bit rich, considering the record of the Conservative Government’s stewardship, or not, over 14 years.
I will come on to Clause 3, the objects, which has drawn quite a lot of comment. I say to my noble friends Lady Winterton and Lord Grantchester and to the noble Lords, Lord Cameron and Lord Naseby, among others, that emerging technologies such as CCUS or hydrogen could be very much part of GBE’s portfolio once it is operational. I noted the comments from the noble Baroness, Lady McIntosh, on waste. On Drax, we had a good run on that a couple of weeks ago, although I may not have convinced noble Lords of the Government’s position. I look forward to discussing storage with the noble Lord, Lord Duncan, and my noble friend Lord Stansgate. I also agree with the noble Lord, Lord Ashcombe, on the potential of floating offshore wind.
We, of course, are reluctant to see a list of technologies. Noble Lords sitting on the Front Bench will be readily aware of the list argument, and it is well taken. If you list, you are at risk of excluding other technologies. One must be very careful not to constrain the ability of GBE in its operational independence and its ability to spot the technologies that need supporting. I do accept, with my noble friend Lady Young, that community energy has huge potential in itself and as a way to leverage public support generally for the kinds of changes that we need to see happen. We certainly believe that GBE will deliver a step change in investment in local community energy projects and will work strongly in partnership with local authorities and community groups to deliver this. I know that local authorities would welcome a much stronger partnership to enable this to happen. I take the point from the noble Baroness, Lady Hayman, and my noble friend Lady Young about biodiversity. I look forward to discussing that further with them and in Committee.
I come now to my favourite topic: nuclear energy. First, we want to make sure that GBN can carry on with its work—the technology appraisal of the shortlisted technologies for the SMR programme is particularly important—and that it will work in complementary ways to GBE without there being duplication of effort. I picked up the important contribution from the noble Lord, Lord Ravensdale. I say to the noble Viscount, Lord Trenchard, that nuclear power is not being underprioritised in my department. I need no persuading of the importance of nuclear energy. It acts as the essential baseload, and when it is aligned with gas that, in future, will be abated by CCUS, we will have the right balance to complement the intermittency of renewable energies.
On nuclear and resources, we have just announced a huge resource allocation to Sizewell C to get it over the next two years. We are working very fast towards final investment decisions over the next few months; we have the SMR programme and we are very excited by the potential of AMRs. I very much take what my noble friend Lady Winterton said about the potential of SMR manufacturing in the UK.
A number of noble Lords mentioned the grid and planning and what they described as the roadblocks to developers. I very much take that point. We have already signalled, in parallel with GBE, our intention to reform the planning system to enhance our grid connections. I take the point about the delays to the connection which developers are suffering at the moment. Clearly, we have to do something about that, but GBE’s main priority will be to help developers get through some of the roadblocks and focus on the energies that need support.
I noted with interest the comments the noble Baroness, Lady McIntosh, made about the impact on farmers and on fishing fleets. I accept that consultation and environmental assessments must continue to be made in any more streamlined planning process and expansion of the grid.
My noble and learned friend Lord Falconer and the noble Baroness, Lady Noakes, raised the question of state subsidies and competition law. As an operationally independent company, GBE will be subject to the same legal and regulatory framework as other entities in relation to subsidy control and competition law, such as the Subsidy Control Act 2022. The Bill does not alter that framework.
I hear what noble Lords say on Clause 5 in relation to strategic priorities and the statement. It is unlikely that we will have published the statement of strategic priorities before Royal Assent, but I have listened to what noble Lords have said. I will reflect on that and I am sure we will discuss it further in Committee. Noble Lords seem to be indicating that they would like to discuss it in Committee.
On power of direction, the noble Lord, Lord Lilley, was particularly assertive that the Secretary of State would wish to take almost micromanagement control. I assure him that that is not the intention. It is a backstop, reserve power.
On the annual accounts and reports, there will, of course, be accountability. The chief executive officer will be the accounting officer. The National Audit Office will oversee. Ministers will answer to Parliament. Select Committees can invite GBE in to give evidence. Noble Lords will debate. We will have Questions and more general debates.
I listened to noble Lords and I understand that they have looked at the UKIB legislation. We will reflect on that, but my noble friend Lady Young is right: there is a balance here between due accountability and not putting a load of bureaucratic micromanagement on this organisation, which is not what we want to happen.
I absolutely agree with noble Lords that we must make the most of the supply chain. I picked up the point about skills and managing the transition in the North Sea.
The noble Lord, Lord Alton—my noble friend, if I may call him that—and I have worked together on these issues. I congratulate him on his work and the huge effort that he has made in Parliament, the influence that he has had on legislation, and the help that he gave me around enforced organ harvesting, particularly in Xinjiang province but in China more generally. At this stage, we expect UK businesses, including GBE, to do everything in their power to remove any instances of forced labour from their supply chains. They should not approve the use of products from companies that may be linked to forced labour. I am very happy to talk to the noble Lord about the energy potential of Merseyside, as he suggested, and to discuss the issues that he raised so eloquently.
I have reached the time limit. This has been a very good debate and I am most grateful to noble Lords. I would like to think that contributions were constructive, and I look forward to debating this in Committee.
Great British Energy Bill
Tuesday 3rd December 2024
(2 months, 2 weeks ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-I(b) Amendments for Committee (Supplementary to the Marshalled List) - (3 Dec 2024)
Lord Offord of Garvel
Member's explanatory statement
This would probe into the relationship between Great British Energy and the National Wealth Fund - formerly the UK Infrastructure Bank.
Lord Offord of Garvel (Con)
My Lords, I am grateful to all noble Lords who are present for this important debate, which deals with an essential topic for the future of our nation: our energy production, security and ownership. I will also speak to Amendments 3 and 5 in my name.
Amendment 1 seeks to probe into the relationship between Great British Energy and the National Wealth Fund, which was formerly known as the UK Infra- structure Bank. Amendment 3 seeks to probe into the fact that Great British Energy may be designated a company only if it is wholly owned by the Crown. Amendment 5 would specify that Great British Energy would be owned by the Secretary of State for Energy Security and Net Zero.
We cannot discuss this Bill without giving due consideration to Great British Energy’s relationship with the UK Infrastructure Bank. We have not seen an explanation of how this body is different from the UK Infrastructure Bank, which was set up to do the exact same thing that Great British Energy claims it will do. In fact, Great British Energy is almost a duplicate of the UK Infrastructure Bank, which was established to provide loans, equity and guarantees for infrastructure to tackle climate change, funded by £22 billion of taxpayers’ money. Great British Energy seeks to do something extremely similar, or so it claims, but the Bill gives far greater powers to the Secretary of State. I must ask why this is and why taxpayers should be burdened twice.
The UK Infrastructure Bank Bill had important accountability and reporting measures which have been removed from this Bill. It had a clear and structured framework for accountability and transparency. It was governed by rules to ensure that taxpayers’ money was used efficiently and was subject to rigorous annual reporting, providing the public with the necessary details on its investments and performance.
Lord Vaux of Harrowden (CB)
My Lords, I rise to speak to Amendments 4, 6 and 7 in my name. I start by reminding the Committee of my interests as a micro-generator of hydroelectricity.
Amendments 4, 6 and 7 are designed to probe—a bit like Amendment 3 in the name of the noble Lord, Lord Offord—whether it might be desirable to allow Great British Energy to accept minority equity finance. I thank the noble Lord, Lord Cameron of Dillington, for his support on this. As these are simply probing amendments, I will try to be brief.
As the Bill is currently drafted, Great British Energy can be designated as such only if it is wholly owned by the Crown and will lose its designation automatically if that changes. It follows, therefore, that none of its shares can be owned by another party, and therefore no equity finance could be raised, at least at the Great British Energy level, from parties other than the Crown.
I can imagine situations where being able to introduce external capital into GBE could be a good thing. Clearly, I can understand why the Government would wish to retain control, which is why in my amendments I have set a required level of ownership of at least 75% of the issued share capital. Shareholders with more than 25% have the right to block special resolutions; so as long as the Crown controls 75% or more, it would still have full control of the company.
In that aspect, Amendments 4, 6 and 7 are more restrictive than Amendment 3 tabled by the noble Lord, Lord Offord of Garvel, although they are probing the same question. Can the Minister explain why the Government feel that they need GBE to be wholly owned and why they would not want the flexibility to raise external equity finance in future, while retaining control?
I am also interested to hear the answers to the questions raised by the noble Lord, Lord Offord, on his Amendment 1 on the relationship with the former UK Infrastructure Bank, now called the National Wealth Fund. I see from the letter that the Minister kindly sent us after Second Reading that the activities of GBE will in fact be carried out, at least initially, by the National Wealth Fund,
“in line with the NWF’s investment and operating principles”.
The letter goes on to say:
“This will enable GBE to invest quickly and draw on the NWF’s experience and existing pipeline of projects”.
That raises a serious question as to why we really need GBE at all. If the National Wealth Fund’s investment and operating principles and its existing experience already cover what GBE is being set up for, as the Minister’s letter confirms, and if it already has an existing pipeline of projects, would it not make more sense simply to provide the National Wealth Fund with the additional finance and resources to carry out the activities that are envisaged for Great British Energy—whatever those are, given the lack of detail in the Bill—and to leverage the experience and scale already built up in the National Wealth Fund? Are we in danger of duplicating responsibilities and adding another unnecessary layer of cost and bureaucracy with the Bill?
We could go further. The Bill carves out an area of activity that is currently already covered by the National Wealth Fund’s objectives and activities—again, as confirmed by the Minister’s letter—and puts that into a vehicle that has substantially less clarity on the way it will behave and substantially less accountability for what it does, as both your Lordships’ Constitution Committee and the noble Lord, Lord Offord of Garvel, have pointed out. One wonders what the Minister would have said if the previous Government had tried to do that—I suspect we know.
While Amendment 1 is a probing amendment, the noble Lord, Lord Offord, might have hit on a very neat solution in proposing to make GBE a subsidiary of the National Wealth Fund, where it would be subject to the accountability regime that already exists, which has already been accepted by Parliament. It would not in any way prevent Great British Energy meeting its objectives, but it would solve a lot of the issues that will come up later around accountability and transparency, as well as reducing the possibilities of cost duplication and ensuring that the expertise already built up in the National Wealth Fund is fully utilised. It would streamline the way the two organisations work together, removing the potential for future conflicts. There is no reason why the subsidiary could not still be separately located in Aberdeen as planned. In fact, ownership by the National Wealth Fund would not stand in the way of any of the plans that the Government say they have for Great British Energy.
The more I think about it, the more it seems that a simple change of ownership from direct to indirect would solve a lot of the issues that we will debate as this Committee goes forward, with no obvious downside for the Government or their plans for Great British Energy. I strongly encourage the Minister to give Amendment 1 serious consideration.
Baroness Noakes (Con)
My Lords, I support what both my noble friend Lord Offord of Garvel and the noble Lord, Lord Vaux, have said about the confusing overlap between what is now the National Fund Wealth and Great British Energy. I am one of those sad people who look at annual reports and accounts, and I was anxiously waiting for the UK Infrastructure Bank’s reports and accounts, which finally dropped last Monday. Through that, I discovered that it had legally changed its name to the National Wealth Fund two or three weeks ago, although no announcement seems to have been made about that at the time.
I agree that Amendment 1 is a very neat way of tucking Great British Energy into a more satisfactory set of governance and oversight arrangements, which we wrestled with when the UK Infrastructure Bank was set up. But my main reason for speaking today is in connection with Amendment 3 in the name of my noble friend Lord Offord of Garvel and Amendments 4, 6 and 7 in the name of the noble Lord, Lord Vaux.
I do not support these amendments, because I think the concept of minority stakes in government-controlled companies is a complete nonsense. Over the whole history of nationalised industries and publicly owned corporations and companies, there are relatively few examples of entities in which minorities held equity stakes. The exceptions are normally accidents of history—such as in the case of RBS/NatWest—rather than acts of conscious design.
I cannot think of a single good reason to encourage the Government to seek private capital in Great British Energy, as opposed to seeking to leverage private capital alongside public investment in projects that need public involvement to help to de-risk them. Equity is always more expensive than debt, and minority holdings in illiquid shares are even more expensive. The Government do not need to pay that premium. They can borrow money, to the extent that GBE needs it, by issuing government debt. That will be much cheaper than raising equity for GBE, even after the post-Budget bond yield increases.
Equity costs more to raise than debt because it carries more risk than debt. It is the first bit of the capital stack to be wiped out in liquidation—at least, that is what happens in the private sector. But does anybody believe that minority holders would be wiped out if the state decided to liquidate an insolvent Great British Energy? The Secretary of State has so many powers over Great British Energy that in practical terms the Government will find it very difficult, if not impossible, to escape underwriting all the liabilities of Great British Energy, and that includes its minority holdings. If the Government did try to wipe out the minority holdings in a liquidation, I predict a decade or more of shareholder litigation.
Having minority holdings can also engage a lot of unnecessary legal problems around protections for minorities that are built into our company law to prevent minorities being treated unfairly. It can raise issues about dividends, which are not normally part of the regime for state-owned enterprises since retained earnings, if there are any—and history tells us that there are not usually any—are generally kept within the public corporation. I am not a fan of state-owned activity, but we should accept it for what it is, which is taxpayer or debt-funded activity, and not try to mimic the real world where equity investors genuinely do take on risk.
Lord Cameron of Dillington (CB)
My Lords, I added my name to my noble friend Lord Vaux’s Amendments 4, 6 and 7. This was largely because when the Bill went through its stages in the other place, the Government made frequent references to the fact that an essential quality of Great British Energy was that it would be flexible, vibrant, resilient and fleet of foot. These are all good qualities to allow this new company to take advantage of opportunities in the marketplace, maybe even sudden ones when, say, an international investor is looking to throw its weight behind a tidal initiative or a new hydrogen production plant but is looking for a commitment from the UK Government in the form of some investment from GBE.
What happens in these circumstances if the Treasury reduces its annual funding for GBE in future or if GBE’s annual budget has already been spent and there is a danger of this vital project going overseas unless GBE invests? Will the opportunity just get missed or, as my thinking goes, should GBE be truly flexible, vibrant, resilient and fleet of foot and be able to go out into the financial marketplace and draw in sufficient funds to promote and thus enable this one-off opportunity?
I recognise that, to be effective, GBE must be part of government and yet not part of government. That is why the figure of 75% government ownership is crucial; 24% of outside investment would not prevent the Government remaining in total control and, more importantly, being seen to be in total control, but it could also mean that the private sector could help contribute to the success of GBE.
Your Lordships may ask why the private sector cannot just invest in the proposed investment itself. The answer is that by investing in the parent company, GBE, the private sector would be hedging its bets by spreading its risk across the renewable sector generally rather than just putting its money into, say, a hydrogen project or whatever. Furthermore, allowing GBE to attract some outside investment would be a good way of taking some of the risk away from the Treasury.
There may of course be other ways of doing this, such as issuing class A shares with a different standing from ordinary shares, but I do not believe they would ever be as attractive as the solution in our Amendments 4, 6 and 7.
The noble Lord, Lord Vaux, and I are keen to see GBE succeed, but we think it needs the greater flexibility of being able to attract some investment from outside government.
Lord Howell of Guildford (Con)
My Lords, I approach this amendment, and many others that are coming, broadly with sympathy and understanding about the enormous complexities of what we are dealing with. Obviously, I also wish to see us succeed, in the sense that a nation with a bad, interrupted or poor energy supply will be a nation drained of blood. It will be an absolute catastrophe if we do not somehow get all this right; whether in five, 10, 15 or 28 years remains to be seen, but right we must get it, because the dangers are overwhelming.
I also declare my interests in the register as connected to energy-related firms. Also, at one stage in the not very distant past, I attempted to do the same two jobs as the Minister is trying to do now, which is, first, in his department, to begin to piece together in very precarious and dangerous world conditions all the necessary equipment and organisations for energy policy success and, secondly, to explain it all to the House of Lords. That is a double job, which I am sure he will try to do with all his abilities, but this is very tough going in a very dangerous area.
We now come also to a third vast task that lies behind these amendments in particular, which is: do we need entirely new relations, far away from the old polarities of left and right in politics, between the state, with all its overload and difficulties in the digital age, and the role of the markets and the private corporations in achieving the energy transition that we somehow have to achieve? That question hangs in the air. One can see these questions about the relationship between GBE and other bodies and whether it should collaborate and have minority stakes, and so on, as the shower of questions that come out of that task. I hope that somewhere, in government and indeed in the politics of all parties, that is being worked on. We have to develop a whole new generation of co-operation, particularly in the energy field and in infrastructure, to replace the difficulties and problems that we and Labour ran into with PFI 10 or 15 years ago, which was a good idea but it did not work, and unless we understand why it did not work, we will not get it right this time.
The amendments in the name of the noble Lord, Lord Vaux, are of course probing but are very interesting. I beg the Labour Government of today, who want a national reset, a renaissance and all that, not to fall for the old socialist Adam, which is that you can solve problems by creating more and more institutions, bodies and bureaucracies. That is not the way—we have to be cleverer than that. That is the old socialisation pattern, which always goes too far and never works.
So I am in considerable sympathy with these amendments and I hope that, when the Minister answers, he will show some sympathy for the importance of flexibility and the importance in the energy field of not making too many rigid definitions and delineations. The trouble, as we will find as we debate, is that everything is connected to everything else. We are trying to rule out nuclear in debates on later amendments, but in fact you cannot—nuclear is intimately connected with all other public investment decisions. We are trying to work out about the National Wealth Fund, which is very interesting. It is having a show here in Parliament tomorrow and I am looking forward to hearing its views in detail on its relationship with GBE.
We had the famous letter from the Minister, describing some of the connections and linkages that he wants to see developing, telling us how all these things are going to be linked together. He lists straight off six or seven organisations that have to work together: the National Wealth Fund, Great British Nuclear, the Crown Estate, the National Energy System Operator, the Climate Change Committee—and of course there are dozens of others beyond those. There is the office of energy resilience; there are regional co-operation planning organisations—dozens of them. I can hardly read my writing, but there is a list that practically goes off the page of organisations that think they are in the business of investing in either the supply chains or the actual projects related to energy transition.
This is the biggest thing since—in fact, it is far bigger than—the Industrial Revolution. It is the most enormous project ever undertaken in the modern world and certainly in this nation. There is a huge amount of co-ordination and tidying up to do before we have even started. Yet, in examining this one further new organisation, far from tidying up, we are tidying down—we are untidying—the pattern of the future. So these are very important amendments and I look forward very much to some clear answers on how we can go forward towards a greater effectiveness and focus in this whole area, rather than scattering assignments, arrangements and responsibilities in every direction, always with great complications and always at great cost.
Lord Hamilton of Epsom (Con)
My Lords, I support my noble friend Lord Offord in his amendment but, funnily enough, not for the same reasons that he does. He says that Great British Energy should become a subsidiary of the National Wealth Fund. I am very worried—I do not know whether anybody else is—about the enormous powers that Great British Energy will give to the Secretary of State. It strikes me that we are right back to Ministers choosing winners, when on the whole the role of government in choosing winners has been pretty abysmal.
I am old enough—I am reluctant to admit how old I am in case somebody suggests I should retire—to remember Ted Heath, who started out as being the “Selsdon Man”, supposed to believe in free trade and free enterprise, and then bailed out Upper Clyde Shipbuilders. I do not think he did that because he thought he was choosing a winner—I think he knew he was choosing a loser—but he was, of course, faced by critical political embarrassment at the fact that this shipbuilding company was going bust, and he had the thought that he would use taxpayers’ money to try to bail it out.
I have been reading that the fund will be have £8.5 billion of taxpayers’ money put into it and it will be sitting there and there will be the temptation for Government Ministers to say, “Oh well, we’ll bail out this or that company, or we’ll take a punt on the fact that we do not have a battery maker” and perhaps the reason for that is that the market will not support that; or, with electric cars, for instance, we are having great difficulty making enough of them. So we will see taxpayers’ money being put into ventures which the private sector would never support. But it will be done for good political reasons. No doubt, rather like DeLorean, we will find that the enterprise will be pitched in some part of the country where there is high unemployment and not enough activity and the Government might think that they will be able to buy themselves a few votes in those areas or whatever. But, for all the wrong commercial reasons, we will end up using taxpayers’ money on ventures that will never succeed and would have been picked up by the private sector if they were profitable.
This is what worries me about energy generally. We rather fancy that people who put up wind turbines are really concerned with renewable energy. I have to tell your Lordships that they are not; they are financiers. What they do, long before they put up any wind turbine, is put up an experimental one to find out how much wind is blowing over a long period, and then they work the feed-in tariffs and, by the time they have done all that, they then have a cash flow on which they can then borrow money and put up the wind turbines. So it is a financial venture which is basically controlled by government in terms of all the criteria that matter and I do not really see that venture capital using taxpayers’ money has any great role to play in this. So I support my noble friend’s amendment and hope that he puts it to a vote.
Earl Russell (LD)
My Lords, I rise very briefly. I thank noble Lords for bringing forward these amendments. These are really important issues that are worth examining in Committee. However, on these Benches we do not feel that any of these amendments really provide proper solutions to some of the problems that are contained within this Bill.
We feel that GB Energy is separate and distinct from the National Wealth Fund; as GB Energy grows and develops over time, that will become clearer. We welcome the setting up of GB Energy, and we think it is absolutely essential that Britain has a chance to own and manage part of its energy resources and that we are investing in having our energy security and independence.
I read recently on the old Government’s website a press brief from No. 10 during the Sunak Government, which proudly proclaimed that they had spent £40 billion subsidising home owners and businesses through the energy price crisis that we had in the last few years. Obviously, that cannot continue, and our bill payers are suffering, which is not good for us.
We do not really feel that having minority equity stakes is the answer to these problems either. There are problems in this Bill: the Government have chosen to have a very short Bill; the strategic priorities are not written up and are not ready; Clauses 5 and 6 give more control than the Government should have without adequate parliamentary scrutiny—I recognise that this has been picked up by reports in this House. Those are all matters we can discuss and work constructively with the Government to find solutions to them. Ultimately, this is a useful conversation, but we do not see the answers within these amendments; we see the answers within other amendments that are yet to come.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, we have started our proceedings in Committee with a very interesting discussion about the relationship between Great British Energy and the National Wealth Fund. I certainly agree with the noble Lord, Lord Offord, on the importance of our debates on energy and net zero more generally and with the noble Lord, Lord Howell, about the complexities of our energy system and the challenges that we have undoubtedly set ourselves. The recent report by NESO, the National Energy System Operator, sets out those challenges, but gives us some confidence that we can achieve them.
Amendment 1, in the name of the noble Lord, Lord Offord, seeks to require that Great British Energy must be a subsidiary of the National Wealth Fund. Clearly, he indicated he wanted to explore in more detail the relationship between the two organisations. I should say at once to the noble Lord, Lord Howell, that we are certainly not creating organisations for the sake of it. As someone who has spent most of my life dealing with NHS structures and restructuring, I have learnt over the painful years that simply creating new organisations and merging other ones very rarely leads to a successful outcome. We believe that Great British Energy is a key component of our energy and net-zero strategy; that is why it was a manifesto commitment and why we are determined to plough on with this proposal.
On the relationship and the difference between the National Wealth Fund and Great British Energy, the Government have stated very clearly that we see the National Wealth Fund as the state-owned investment bank and wealth fund. It will invest across clean energy sectors, including green hydrogen, green steel, gigafactories and ports, as well as other sectors central to delivering our industrial strategy. On the other hand, Great British Energy will be the UK’s state-owned energy company. It will own, manage and operate key energy projects across the country, including making investments across the clean energy sector and supporting the development of clean energy technologies. It will also support local power and community energy projects as well as supply chains. This is a distinct role, which is why GBE should be a stand-alone company focused on its important mission.
Lord Hamilton of Epsom (Con)
Is it not the case that the Secretary of State can override the chair of Great British Energy?
Lord Hunt of Kings Heath (Lab)
The noble Lord is referring to a power of direction. We are coming on to relevant amendments later in the Bill, but let me make it clear that this power is often contained in legislation, although we believe it will be used very rarely indeed. I certainly would not expect it to be used. I think the noble Lord is suggesting that the Secretary of State will attempt to micromanage Great British Energy through the power of direction. I simply do not believe that this will happen under any Secretary of State.
I listened to what the noble Lord, Lord Vaux, said about duplication. At the beginning, we think it is sensible for GBE to use the National Wealth Fund’s expertise. He suggested that this is duplication; I think it is a pragmatic, sensible approach. We have certain expertise within the National Wealth Fund that can help as we establish GBE, but they are complementary functions. Having listened to the debate, I can assure noble Lords that my department will work closely with His Majesty’s Treasury to provide clarity to the market on how the two institutions will complement each other, and set out how this relationship will evolve in time.
I turn to Amendments 3, 4, 5, 6 and 7, tabled by the noble Lords, Lord Offord, Lord Vaux and Lord Cameron. There was an interesting discussion about whether GBE could or should be allowed to raise equity through the sale of shares while it remained majority-owned by the Crown. Amendment 3 proposes enabling external equity ownership of Great British Energy without its losing its status as a Crown-owned company. Similarly, Amendments 4, 6 and 7 specify enabling third-party ownership of up to 25% of the shares in Great British Energy without its losing its status as a Crown-owned company. Amendment 5 seeks to specify that Great British Energy is owned by the Secretary of State, rather than by the Crown.
We do not think that it is necessary for Great British Energy to sell its own shares to bring in external equity funding, or any funding, for its projects. In the case of the example which the noble Lord, Lord Cameron, gave, it would, though, be possible for Great British Energy to encourage private sector investment into the scheme to which he referred, or to co-invest with external partners, each taking an equity stake in a project that Great British Energy wished to support. I understand that the model has been used successfully by similar bodies, such as the former Green Investment Bank.
Clause 4 enables the Secretary of State to provide financial assistance to Great British Energy. This is so it can take action to meet its objectives. To be clear, our intention is for Great British Energy to become financially self-sufficient in the long term. It will invest in projects that expect a return on investments, but it would be prudent to ensure that the Secretary of State has the power to provide further financial support, if required.
Just as private sector companies would rely on the financial strength of their corporate group to raise funds, that could be the case for providing GBE with further financial support for specific projects in the future. However, we believe that any such financial assistance should be provided by the Secretary of State and, as such, be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s Managing Public Money.
It is also unnecessary to specify that Great British Energy is owned by the Secretary of State rather than the Crown. The Bill simply follows normal legislative practice in its drafting. For instance, Section 317 of the Energy Act 2023, which the Government of the noble Lord, Lord Offord, took through, expresses the ownership requirement for Great British Nuclear in the same way. Other legislation, including Section 6 of the Freedom of Information Act 2000, uses the same formulation. Clause 1(6) of the Bill explains that
“wholly owned by the Crown”
means that each share is held by a Minister of the Crown, which includes the Secretary of State, or a company wholly owned by the Crown, or a nominee of either of those categories.
We also think that it is entirely appropriate for the Secretary of State to be the sole shareholder in Great British Energy. I very much agree with the noble Baroness, Lady Noakes, on this. Introducing minority third party ownership, whether held by one minority shareholder or several, would add unnecessary complexity to its governance. A shareholder agreement or agreements would need to be put in place. They would need to cover elements relating to the control of Great British Energy, setting out which matters required approval of a simple majority of shareholders and which might require unanimous consent. For an organisation such as Great British Energy, playing such a key part in our mission to deploy clean energy—I take note of what noble Lords have said about parliamentary accountability—is it not surely right that Ministers both are accountable for their actions and can exercise full shareholder rights?
This has been an interesting debate. I am aware of noble Lords’ issues around the role of Great British Energy and the National Wealth Fund and its ability to draw in private sector investments, but we think—and it was a manifesto commitment—that this is a very important body that should stand alone. We are grateful that the National Wealth Fund is able to provide some support at the moment, but we think that this is the right way forward.
Lord Offord of Garvel (Con)
I thank noble Lords for their insightful contributions on the designation of a company as Great British Energy and the ownership of such a company. I welcome the amendments from the noble Lords, Lord Vaux and Lord Cameron—Amendments 4, 6 and 7. They were designed to probe the benefits of having flexibility to allow minority external equity ownership of Great British Energy. However, I cannot disagree with anything that the noble Baroness, Lady Noakes, said about introducing private equity into what is, in effect, government-underwritten risk, which means that it really should be debt.
The fact we are debating this indicates that there is no clarity about the substance and purpose of the Bill or about the exact ownership of Great British Energy. Given that we are debating £8.3 billion of taxpayers’ money, and that there is no limitation on how that financial assistance can be given or structured, we have a concern that will continue through Committee.
The experience of the House was brought into the debate by the noble Lords, Lord Howell and Lord Hamilton, who looked back over previous generations to instances of how overarching powers given to Secretaries of State can be used if not abused, sometimes with the best of intentions. Again, it speaks to how there could be more clarity in the Bill about how those powers will be allocated. We believe that accounting and reporting measures are absent from the Bill and that we need further detail and clarity on the priorities and plans of Great British Energy. I expect that we will return to those matters on Report but, in the meantime, I beg leave to withdraw the amendment.
Lord Frost
(1A) The objectives which the Secretary of State must seek to advance in designating a company as Great British Energy are—(a) reducing household energy costs in a sustainable way, and(b) promoting the United Kingdom’s energy security.”
Lord Frost (Con)
My Lords, I rise to move Amendment 2 in my name, and I thank my noble friend Lord Offord for his Front-Bench support for it. I draw noble Lords’ attention to my interests as set out in the register, and I note my regret that I could not be here for Second Reading.
The purpose of my amendment is to establish why the Government are creating Great British Energy and what its underlining objectives and purposes are. Ideally, this would be clear from the Bill or the related documentation, but it is such a thin Bill that calling it a “skeleton” Bill really does not do it justice. Its rather evanescent, wraith-like provisions provide no solidity other than giving a fig leaf of cover to the willed actions of the Secretary of State. I think that we as legislators and the British people are owed a bit more than that from the Bill.
Before I come to the detail, I note that the Bill includes a requirement for the articles of association to contain a statement of “objects”. Of course, objects are not the same as objectives, and what is now Clause 3(2) bears that out. The objects there described are process requirements on the company and limits on where it may spend its very generous taxpayer funding: production of energy, reduction of carbon emissions, energy efficiency, security of supply and so on. They are a “what”; they not the “why”.
The Bill also includes a requirement, in Clause 5, for Great British Energy to have strategic priorities and plans but, again, there is absolutely no constraint on the Secretary of State as to what those strategic priorities may be. Really, this is not good enough for a vehicle for £8 billion of taxpayers’ cash. It is important to have a clear idea of why Great British Energy exists and what its purposes are. That is what my amendment is there to secure and why it is written as it is.
My amendment sets out two objectives for Great British Energy:
“reducing household energy costs in a sustainable way”
and
“promoting the United Kingdom’s energy security”.
In putting those two objectives forward, I am not inserting my own view to substitute for that of the Government. Rather, I am ventriloquising into the Bill, looking at the political statements, spoken and in writing, of the Government and the party opposite and trying to use them to ascertain why they feel this Bill and this company are necessary.
I will briefly take noble Lords through this. I look first, of course, at the Labour Party manifesto— a document whose probative status has been quite significantly weakened in recent months, one might say, but it is all that we have. Number four of the six priorities of the party says:
“Set up Great British Energy, a publicly-owned clean power company, to cut bills for good and boost energy security”.
Those are the two purposes set out in my amendment. Similarly, the launch document for Great British Energy, which was published on 25 July, says that:
“In an unstable world, the only way to guarantee our energy security and protect billpayers permanently is to speed up the transition away from fossil fuels”,
et cetera. At Second Reading in the Commons on 5 September, the Secretary of State said that the Bill would “protect family finances”. The Energy Minister said that it would
“guarantee our energy security and protect bill payers”—[Official Report, Commons, 5/9/24; col. 529.]
once again.
It seems a fair reading to see these as the underlying purposes of Great British Energy and to see them reflected in the Bill. If the Minister, speaking for the Government, thinks differently on this, then perhaps in winding up he could explain what the Government see as the objectives of Great British Energy instead and why they should be different from those in this amendment.
Noble Lords may ask why, if those purposes are understood by all concerned to be the objectives of Great British Energy, they need to be reflected explicitly in the Bill. There are a few reasons. The first, which I have touched on, is simple transparency. The hard-pressed British taxpayer needs to know why they are being asked to stump up over £8 billion.
Baroness Noakes (Con)
My Lords, I thank my noble friend Lord Frost for bringing forward this amendment. It crystalised in my mind that the Bill is a solution in search of a problem. It does not have a clear statement of what it is trying to achieve. Without that, it is likely that Great British Energy will end up with a set of activities that lack proper cohesion.
Like my noble friend Lord Frost, I have been searching back through what the Government have been saying, from the manifesto through to the “founding statement” and the Bill. The Government have been quite clear that they regard energy security and keeping bills low as important objectives of their Great British Energy project.
Being able to specify overarching objectives is logically separate from what we have in Clause 3: the objects of the company. These objects are designed to constrain Great British Energy to doing particular things that in turn will, in theory, deliver the objectives. If the objective is to deliver energy security, that can be delivered in a number of ways. Some could argue that having more oil and gas would be one way of giving us greater energy security. That is not the way that the Government have chosen, so through Clause 3 they restrict what Great British Energy will do to clean energy. As my noble friend Lord Frost said, after a number of years we should be able to judge whether they have achieved energy security through the way they have chosen to set up Great British Energy and the specific objects that it has been given.
My noble friend Lord Frost has outlined the way that the sands seem to be shifting on whether bills will be reduced. I heard on the radio this morning that the Prime Minister will reiterate his £300 promise this week. We look forward to hearing what he will say. Reducing bills and holding them down is clearly something that the Government have been promising for a good number of months by way of Great British Energy, and they need to be judged on whether they achieve that. They are choosing to do it through clean energy, as proposed in the Bill. We will need to look in due course at whether that objective has been achieved.
I have just a couple of drafting quibbles with my noble friend’s amendment. First, and most importantly, I do not think that the objective relating to bills should be confined to household energy bills. We know that the energy bills borne by British industries are ruinously high—much higher than those of all our competitors. Energy bills should be reduced for all energy consumers, not just households.
My second quibble is that the second objective in my noble friend’s amendment refers to “promoting” the UK’s energy security. I do not think it is good enough for this organisation to promote energy security; it should achieve energy security. I hope that, if my noble friend brings this amendment back at a later stage, he will bring a somewhat tougher version. However, these are minor quibbles with the drafting and do not detract from the fact that his amendment is very good.
Lord Hamilton of Epsom (Con)
My Lords, I would like to support my noble friend Lord Frost’s amendment because we have to judge this Bill on what it achieves, rather than on the processes it goes through. I have a slight problem, because it seems to me that if you want lower energy prices, you want to recognise the advances made by technology and have lower feed-in prices paid by the consumer. That is the way you get energy prices down; but, of course, if Great British Energy is investing in the companies, it wants the feed-in prices to be as high as possible, so the companies make profits.
It seems to me that there is a conflict here, with government standing on both sides of the commercial argument. Let us face it, my noble friend Lady Noakes is right: the price industry is paying for energy as a result of this extraordinary pursuit of net zero is making us extremely uncompetitive in world marketplaces and makes the reindustrialisation of this country something we can only dream about. No company is going to locate in Britain to start a business here if it is paying much higher energy prices than in the rest of Europe, as my noble friend Lord Frost has reminded us.
The Government have to be much clearer in their own mind on what they are trying to achieve with Great British Energy. Just saying that it is going to lower energy prices is not quite good enough, really; you have to say how it is going to lower energy prices. That is something we all want to see, but it is very difficult to attain. Perhaps the Minister can explain how all this is going to be done.
Lord Murray of Blidworth (Con)
My Lords, I just wish to make one submission on this amendment, in support of my noble friend Lord Frost. Clause 1(1A)(a), proposed by the amendment, contains the phrase
“reducing household energy costs in a sustainable way”.
The great merit of this is that “sustainable” has two meanings in this context: first, that the low prices are sustained over a long period, which is clearly a good thing; and secondly, that they are sustainable in the sense that they are good for the environment. It is a very well-drafted purpose clause and I commend it to the Committee.
Lord Offord of Garvel (Con)
I rise to speak to Amendment 2, in the name of my noble friend Lord Frost and my own. This amendment brings critical clarity to the purposes of the Great British Energy Bill. It clearly outlines the two primary objectives the Secretary of State must pursue when designating a company as Great British Energy: first, reducing household energy costs in a sustainable manner; and secondly, promoting the UK’s energy security. I should add that I would not in any way quibble with my noble friend Lady Noakes’s amendments to both those provisions.
These objectives reflect the values of economic responsibility, national sovereignty and long-term sustainability. In the face of rising energy prices and global uncertainty, ensuring that energy remains affordable for British households and businesses is paramount. Reducing costs while maintaining a focus on sustainability means we can protect consumers without compromising the environment. Moreover, energy security has never been more important. The UK’s reliance on foreign energy sources leaves us vulnerable to geopolitical instability—today we still import 40% of our energy. By emphasising energy security in this amendment, we are prioritising the resilience of our national energy infrastructure. A secure energy supply is not just a matter of economic policy; it is a matter of national security.
This amendment provides the framework for a holistic energy strategy that benefits consumers, supports industry and strengthens our nation. As Conservatives, we on these Benches believe that the Government’s role is not to overregulate or restrict but to create the conditions for growth and sustainability. Therefore, Great British Energy must not be a mere title, but an institution, if at all, that advances these vital objectives of lowering energy costs and ensuring energy independence for future generations.
It is imperative that we recognise the significance of Amendment 2, not only in the context of the Bill but as a cornerstone of sound legislative practice. Providing a clear statement of purpose ensures that any future actions taken under this Bill align with the objectives of affordability and energy security. Without such a guiding clause, we risk leaving the interpretation of the company’s aims open to ambiguity or to shifting priorities over time. Does the Minister not agree that a purpose clause of this nature would greatly improve the clarity of the legislation? If he does not agree to support this clause, could he outline on what grounds that decision has been taken?
This amendment would also serve to reassure the British public and industry stakeholders that Great British Energy will not deviate into activities that may undermine these core objectives. We have seen in the past how well-meaning initiatives can become overly bureaucratic or lose sight of their founding principles. A purpose clause acts as a safeguard, compelling policymakers and administrators to remain true to the Bill’s intent.
Lord Hunt of Kings Heath (Lab)
My Lords, that was an interesting debate, led by the noble Lord, Lord Frost, proposing an addition to Clause 1 which would set Great British Energy’s objectives as
“reducing household energy costs in a sustainable way, and … promoting the United Kingdom’s energy security”.
The noble Lord asked why we are doing this. He then, to be fair, referred to the—I think three—debates we have had on energy policy in the last few weeks, in which we clearly set out our aims and drive towards clean power and net zero. We see Great British Energy, with the provision of financial assistance from the Secretary of State, as being at the heart of our clean power mission. It will speed up the deployment of mature and new technologies, as well as local energy projects. It will support the Government’s aim of decarbonising our electricity system by 2030, while ensuring we can meet future demand as we further decarbonise the economy.
I noted the intervention from the noble Lord, Lord Hamilton, and I thought I detected some scepticism about net zero. I remind him that his party, over 14 years, has made various statements in support of net zero. I note that Mrs Thatcher, at the UN General-Assembly in November 1989, said:
“the environmental challenge which confronts the whole world”—
Lord Hamilton of Epsom (Con)
I thank the noble Lord for giving way again. I think he will be the first to acknowledge that two wrongs do not make a right.
Lord Hunt of Kings Heath (Lab)
My Lords, it was more than two. I can quote Prime Minister May, and I acknowledge her leadership in this country being the first to enshrine the 2050 net-zero carbon target. Prime Minister Johnson only recently addressed COP 26 in Glasgow; I think we all acknowledge the leadership the noble Lord, Lord Sharma, showed there. The noble Lord, Lord Ahmad, announced to the UN the £11.6 billion in international climate finance for the period 2021-22. Although we are having this friendly discussion about future energy policy, there is still some consensus on the need to decarbonise our energy supply, and Great British Energy is part of the way we are going to do it.
The key thing in the structure of the Bill is the objectives set in Clause 3. They will be informed by the statement of strategic priorities that Great British Energy will operate in, making sure that it will be aligned with the Government’s priorities. We have been clear that the first statement, which will be published in 2025—after due consultation and discussion with the devolved Governments and with Jürgen Maier, the chair of Great British Energy—will ensure that GBE is focused on driving clean energy deployment to boost energy independence, create jobs and ensure that UK taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy.
Of course, the issue of energy bills is very important. We are relying strongly on the advice of the Climate Change Committee, of which the noble Lord, Lord Hamilton, is probably not a great fan—but none the less, over 14 years his party listened to it. The committee said that a clean energy future is the best way to make Britain energy independent, protecting bill payers, creating good jobs and tackling the climate crisis.
The independent National Energy System Operator confirmed a few weeks ago that our 2030 clean power goal is achievable and can create a cheaper, more secure energy system. More broadly, the OBR—another body to which the previous Government paid great attention; they ran into trouble when they did not—highlighted that delayed action on reaching net zero will have significant negative fiscal and economic impacts. The Committee on Climate Change has said that the net costs of the transition, including upfront investment, ongoing running costs and costs of financing, will be less than 1% of GDP over the entirety of 2020 to 2050—lower, it said, than it concluded in its 2019 Net Zero report.
I have already said that we will publish the statement of priorities in 2025. How will GBE be judged? It will be judged on its performance against the statement of priorities within the context of the objectives set by Clause 3.
Lord Vaux of Harrowden (CB)
The Minister has said again that the objectives of the company are set out in Clause 3. I am afraid that is not correct. The objects of the company are set out in Clause 3. As the noble Baroness, Lady Noakes, said, those objects restrict the activities—they do not set out the objectives. Nowhere in the Bill are the objectives of the company—what it is trying to achieve—laid out. I have not yet heard an argument from the Minister as to why that is.
Lord Hunt of Kings Heath (Lab)
I really do not read Clause 3 in that way. Subsection (2) says:
“The statement must provide that Great British Energy’s objects are restricted to facilitating, encouraging and participating in”.
One way to read that is that Great British Energy’s objects are around the following four paragraphs, informed by the strategic priorities and plans that the Secretary of State will prepare over the next few months.
Lord Vaux of Harrowden (CB)
There is only one way to read the words the “objects are restricted to”. That is what the clause says.
Baroness Noakes (Con)
My Lords, the noble Lord, Lord Hunt, may not be as familiar with company law as the noble Lord, Lord Vaux. The object of a company, which is what the clause refers to, is a constitution document, and it restricts what a company can do. That is what company law sets up for it. The Minister is trying to read “objects” in a broader sense. It is very clear that the clause refers to the legal documentation that will surround the full legal implementation of Great British Energy as a company. It does not have any other meaning.
Lord Hunt of Kings Heath (Lab)
My Lords, it is always helpful to have that kind of clarification, because I certainly was not intending to mislead the Committee in any way. From what I see in Clause 3, I am clear that GBE can participate in, encourage and facilitate the production, distribution, et cetera—informed, as I say, by the strategic plans and priorities. But I will obviously look at that and, if I have got myself confused, I will certainly reflect on it.
Lord Frost (Con)
My Lords, I am most grateful to the Minister for his response and to all those who contributed to our discussion, including the mini-discussion at the end about the difference between objectives and objects, which is important and I am sure we will return to it. I do not want to detain noble Lords long but, as the Minister repeated the words of Lady Thatcher on this subject, I cannot forbear repeating her words in her final work on it:
“By the end of my time as Prime Minister I was also becoming seriously concerned about the anti-capitalist arguments which the campaigners against global warming were deploying”.
She—rightly, in my view—added:
“We should be suspicious of plans for global regulation that all too clearly fit in with other preconceived agendas. We should demand of politicians that they apply the same criteria of commonsense and a sense of proportion to their pronouncements on the environment as to anything else”.
Those wise words are worth bearing in mind today when we discuss this issue.
I am not sure that we have entirely got to the bottom of this issue, and I suspect that we will have to return to it in some form on Report, because it is so fundamental to what the Bill is about. For now, I beg leave to withdraw my amendment.
Baroness Noakes (Con)
My Lords, I tabled the Clause 2 stand part notice to probe the reasons why Clause 2 rules out Crown status for Great British Energy, but I also tabled it to explore further one of the topics we have already discussed: the relationship between Great British Energy and the National Wealth Fund.
As we debated at Second Reading, the Bill is a partial cut-and-paste job on the UK Infrastructure Bank Act. The main difference is that some important chunks did not get all the way over to the paste bit of the instruction. One way in which this Bill and that Act differ is that Clause 2, which deals with Crown status, has no counterpart in the 2023 Act. I do not know why the 2023 Act was silent on this, and I do not think we debated it when we went through the UK Infrastructure Bank Bill, as it then was. But, since the National Wealth Fund is fairly closely controlled by the Treasury, it may well have Crown status.
As we have discussed, the precise relationship between Great British Energy and the National Wealth Fund is something of a mystery, and I have to say that it remains so after the Minister’s letter to noble Lords after Second Reading. The Minister told us in that letter that the Government will set out the relationship in detail
“as Great British Energy scales up”—
I think that is code for saying, “We will make it up as we go along”.
The Minister said, as has been referred to, that in the early days Great British Energy investments will be made by the National Wealth Fund. This is another plea for him to explain how the interaction between the National Wealth Fund and Great British Energy will work in the context of one possibly having Crown status and the other very definitely not.
Lord Howell of Guildford (Con)
My Lords, I support my noble friend Lady Noakes. We cannot let this clause float by with a nod of the head, because it omits vital developments—as our debates have done—in the whole pattern of energy supply and energy-environmental compatibility across the planet. They are developing fast in other countries but get no mention here, confirming that this piece of legislation, while sounding fine and fitting into the jigsaw of the past, is already out of date and being bypassed by major developments in the global politics of energy and the environment.
I will give the Committee two examples. The first is zonality. The thinking in many circles, certainly in America and increasingly here, is that energy security, which we discussed in relation to the amendment from the noble Lord, Lord Frost, will have to be considered in zonal rather than national terms; in other words, national, centralised organisations, even National Grid, do not fit into the pattern of a future that will deliver security, clean energy and affordability. If one applies a zonal lens to this scene—I listened to senior officials from the National Energy System Operator talking strongly about this the other night—many of the arguments we are having around Clause 1 fall to bits.
Secondly, US corporations, big corporations in other countries and some in this country are beginning to recognise that grid thinking and the centralised patterns of energy delivery compatible with net zero and our other objectives are never going to happen. We will have increased climate violence and it is too late to prevent the growth in carbon emissions which is going on now and continuing faster than ever. Methane, which is 80 times as lethal as carbon dioxide, is also growing very fast, according to the latest figures. Despite all our efforts, climate violence is coming and many feel that it is here already. Big corporations in America and some here are losing faith in the capacity of our system—a transformed, completely renovated grid system of transmission of power and a necessary pattern of generation which is reliable and does not stop when the wind stops—to supply their needs.
Such corporations are investing, or planning to invest, and finding out from National Grid that they have to wait 15 years to get any electricity, to adjust from gas to electricity, or whatever it is, and, in doing so, realising that they are on a futile course unless they can get their own assured, dedicated source of electricity. That is why we are reading in the papers about ideas for converting old coal stations to mini-nuclear power stations, and other technologies. All these things are racing ahead but none is mentioned in Clause 2. It is, in fact, if we are frank with ourselves, a completely unrelated and irrelevant clause.
Therefore, one’s inclination is to shrug one’s shoulders. I hope that when we come back to these things in detail at a later stage, we will have a rather more focused image of what is really happening in the world of energy supply, carbon dioxide and methane growth, climate violence, or anything else of which there is not much of a sign in this clause.
Lord Offord of Garvel (Con)
My Lords, I rise to speak in favour of my noble friend Lady Noakes’s stand part notice. This clause deals with the Crown status—or more accurately, the lack of Crown status—of Great British Energy, and it is imperative that we probe the Government’s reasoning and consider the implications of this approach.
Clause 2 states clearly:
“Great British Energy is not to be regarded as a servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown”.
Additionally, it specifies that the property of Great British Energy
“is not to be regarded as property of, or property held on behalf of, the Crown”.
Let us pause and consider what this means. Great British Energy is envisaged as a significant player in the energy sector, with the Government making it central to our net-zero ambitions and national energy security. It may well handle substantial public funds, represent the UK’s interests domestically and internationally, and carry out critical projects on behalf of the Government. Yet the Government have deliberately chosen to sever this body from the legal, financial and symbolic framework provided by Crown status.
I pose the question: why? Why has this decision been taken, and what are the potential consequences? There are three areas of concern I wish to highlight; the first is accountability and oversight. Without Crown status, Great British Energy sits outside the constitutional framework that traditionally governs Crown bodies. Will this weaken Parliament’s ability to scrutinise its actions? Will the Comptroller and Auditor-General have clear access to audit its books? In an age of heightened public interest in corporate governance and transparency, these questions should be considered.
Secondly, on legal implications, by denying Crown status, Great British Energy forfeits the legal immunities and privileges that might ordinarily protect a public body in its dealings. Does this leave it more vulnerable to litigation? Could it become ensnared in disputes that detract from its primary mission?
Thirdly, this is a public body intended to work for the public good. Denying it Crown status might send a message—rightly or wrongly—that it is not fully embedded within the public sector, raising questions about its mission and accountability to the public interest. I do not suggest that Crown status is a necessity in all circumstances. Indeed, there may be good reasons for taking this route, such as granting Great British Energy greater operational flexibility or shielding the Government from certain liabilities—but these reasons have not been clearly articulated by the Government, and they deserve to be.
As we face unprecedented challenges in energy policy, the creation of Great British Energy is a momentous step. Its structure and status must instil public confidence, ensure robust accountability, and align seamlessly with the broader aims of our national strategy. Clause 2, as it stands, leaves too many unanswered questions.
Lord Hunt of Kings Heath (Lab)
My Lords, we think Clause 2 is very important. It ensures that Great British Energy will serve the public as an independent company and operate in the same way as other UK companies. Before I come on to the main body of the argument, I say to the noble Lord, Lord Howell, that he had some interesting points to make about the role of advanced nuclear reactors tied into industrial processes and data centres. We are watching very carefully what is happening in the US and we are in discussion with some of the companies themselves. I very much take his point about that.
The clause ensures that Great British Energy will not have any special status, immunity or privilege normally associated with the Crown, nor will its property be seen as the property of the Crown. It will also be subject to the same legal requirements as other companies. This is in line with the vision we have had for Great British Energy from the beginning: that it should be an operationally independent and agile market player, and we want to ensure it remains that way. If we were to leave out the clause, either Great British Energy would be regarded as a servant or agent of the Crown and have the immunity or privilege associated with that status; or, at least, there would be ambiguity as to whether it has that status.
I understand that the courts in recent years have been faced with questions about whether certain persons or bodies had Crown immunity, and the issue was not clear in the legislation—for example, the Commissioners of Customs and Excise, and the Commissioners of Prisons. The clause avoids that ambiguity and the possibility of any litigation arising regarding Great British Energy’s status. Examples of how this might arise in the context of Great British Energy, are, first, that Crown bodies are generally not covered by the requirements of the Employers’ Liability (Compulsory Insurance) Act 1969; and, secondly, that parts of the Health and Safety at Work etc. Act 1974 do not bind the Crown. We would not want Great British Energy to be exempt from that legislation or for it to be unclear whether it is bound by such legislation.
As I mentioned earlier in response to the noble Baroness, Lady Noakes, we expect Great British Energy and the National Wealth Fund to work well together. It is while Great British Energy is being established that it will utilise the National Wealth Fund’s existing expertise, which I think has been widely acknowledged. This is work in progress, and I cannot say very much more than that at the moment. We are not making it up as we are going along. There are earnest discussions between ourselves, His Majesty’s Treasury and Jürgen Maier, the chair of Great British Energy, and we will work closely with His Majesty’s Treasury to provide clarity to the market on how the two institutions will complement each other and how their relationship will evolve over time.
I also acknowledge that the partnership with the Crown Estate will be hugely valuable. On the question of the Crown Estate’s own position, I will have to seek further advice and write to the noble Baroness, Lady Noakes, because I do not have the answer at the moment.
Lord Naseby
Lord Naseby (Con)
My Lords, in moving Amendment 8, I will also speak to Amendments 9, 12, 13, 14, 31 and 32 in my name. They are focused on Clause 3, “Objects”, and they arise from a key part of the energy world that has problems with those objects as they exist in the Bill. I will refer particularly to the hydrogen industry; all my remarks will be on that industry’s reading of the Bill as currently drafted.
I have had discussions with the leading and largest trade association, Madano, which has 120 members across the value chain for Hydrogen UK. It is concerned that the current definition of clean energy in the Great British Energy Bill lacks clarity and could unintentionally hinder the growth of the UK hydrogen sector. That is why I am seeking to amend the definition in the Bill.
The proposed amendments aim to provide an inclusive definition of clean energy that includes CCUS-enabled hydrogen. The amendments are supported by Hydrogen UK and the Carbon Capture and Storage Association to address the concerns they have about limiting sector growth and investment. The UK’s unique twin-track approach to hydrogen production that supports the use of CCUS-enabled hydrogen and electrolytic hydrogen is, in my judgment, a major strength that can help kick-start the UK hydrogen industry. Excluding critical CCUS-enabled hydrogen production technology at this early stage would harm the UK hydrogen industry.
Earl Russell (LD)
My Lords, I rise to speak to five amendments in this group, so I apologise that I will be a few minutes—but at least they are not in five different groups. I start with two amendments on heat pump technology. They both seek to explore how Great British Energy could have a greater and more useful and productive role in helping with the uptake of heat pumps.
Amendment 16 would set an objective for GB Energy to ensure the uptake and use of heat pumps. Amendment 17 would set an objective for GB Energy to ensure the uptake and use of heat pumps, including by leading efforts to develop a mortgage opt-in financing scheme, where payments for heat pumps could be included in mortgages on an opt-in basis. Helping people to decarbonise home heating has been a long-running and difficult issue. Very little progress has been made in these areas, which are responsible for a quarter of our total CO2 emissions. We all need to recognise and work together to ensure that policies and plans are put forward to bring people with us on the journey to net zero, and that means ensuring that vulnerable and low-income households are supported through the transition.
Heat pumps are up to four times more energy-efficient than gas boilers and they are a crucial element of the Government’s plans to decarbonise home heating. I welcome a lot of the measures that have recently been announced by the Government as part of the warm homes plan, including boosting the budget for the boiler upgrade scheme, supporting more households to switch to a heat pump and removing unnecessary planning restrictions which were a blockage to people taking up and installing heat pumps. While I recognise that these measures are useful and help to remove some barriers, my worry remains that they are still not enough to get us back on track to meet our heat-pump targets.
To meet the UK’s climate change target, the Government need to install 600,000 low-carbon heat pumps annually by 2028. The 2024 progress report to Parliament from the Climate Change Committee identified heat-pump installations and the training of heat-pump installers as being “significantly off track”. In 2023, less than half the number of heat pumps were installed to keep us on track for these goals. While figures have improved a little this year, it has not been dramatic enough to make progress. The marketplace faces continued resistance from many of the gas boiler companies; there is still a prevalence of disinformation and cost barriers and a lack of installers necessary to get these heat pumps installed. So I wish to explore with the Minister and with the House whether it is worthwhile giving GB Energy a role in this space, to help progress with the installation of heat pumps and to help us meet these challenging targets. To be frank, I do not see much of another plan from the Government that is going to get us anywhere near where we need to be in time. Furthermore, has any consideration been given to bringing the warm homes plan and the associated budget within the control of GB Energy?
Turning to Amendment 17, I wish to acknowledge from the outset that this is not my idea; this is an idea I read about and it originates from the noble Lord, Lord Deben. It made sense to me. This would be a way of helping people who own a house and have a mortgage to overcome the cost barrier to the installation of heat pumps. I think it is sensible and possibly worth pursuing further. So, I wanted to ask the Minister and to explore with the House whether GB Energy could act as a facilitator and a broker to help make this happen. There are significant government grants available—£7,500 for installing a heat pump—but that still leaves over half the cost with the householder. That is still a significant amount of money and it is a barrier to people taking this up. However, if the total cost of the heat pumps that was left over could be put on a mortgage, that could spread over a longer term and the process would become inherently much more affordable. So I will be interested in the Minister’s comments on whether that is something that GB Energy might have a role in helping to facilitate.
I will now move on to Amendment 23. To be clear, this is a probing amendment. Sorry, that was not written in the amendment. The amendment prevents GB Energy facilitating, encouraging and participating in carbon capture and storage, as the Government have already allocated a budget for CCS to be spent elsewhere. I tabled this amendment so that the whole House could gain a better understanding of the proposed role for GB Energy in the CCS sector and in this space. I want to hear from the Minister what the objectives are. What value will GB Energy add here, why are they investing in it and what are the proposed outcomes that will flow from that investment?
I understand from the Minister that the Government do not want to put a list in the Bill and that they are keen to maintain flexibility for GB Energy. GB Energy is about investing in emerging technologies, helping them to get off the ground and taking on some of the risk that needs to be taken to help create new markets. It is about crowding in and not crowding out private capital. Those are clear objectives. It is a tightrope that needs to be walked, but there is a clear purpose there. I am not against GB Energy having a role in CCS, but I wish to understand a little better what that role is, what is planned and what percentage of GBE’s proposed budget might be spent in this area.
Against that background, I am concerned about the availability of budget and government resources for GB Energy. I know that government discussions around budget resources are ongoing, that £100 million has so far been pledged over the first two years, and that a total of £8 billion over the five years of this Parliament is proposed, but that is not a huge budget resource and there is a growing list of priorities and possible areas for GBE to invest in. Eventually, we could end up in a position where the cake is cut so small that each slice begins to have a very diminishing value.
Of course we need to set up the organisation, but only £100 million-worth of investment will be available to GBE for the year 2025-26, other than what might come from the National Wealth Fund. Time is running out for GB Energy to make these investments, because the ambition here is obviously to decarbonise our energy by 2030. If you are 25 or 26 making these investments, once you have made them they need to create real things that make a real difference. We are running out of time.
I speak also to Amendment 24, which is similar to Amendment 23 but looks at GB Energy’s role in nuclear and at the relationship between GB Energy and GBN. I do not have time to go through it all, but basically I want to explore all the points I made on CCS in relation to GBN. I note the Minister said in the letter he wrote to us that the detail is being worked through and that considerations are being given to how GBN’s functions could be best aligned with GBE. Briefly, can he confirm that there are no plans for GBN to become part of GBE, and that the plan is that they will always be separate organisations but will have close working relationships with each other? Again, I assume that that is about initial investment and risk-taking in new nuclear technology.
My worry these amendments address is that, without proper strategic priorities, the ever-growing areas that GB Energy could invest in will leave it with inadequate resources to do the core job that I want to see, which is renewable energy. The Government have made £200 billion available for carbon capture and storage, so I do not quite see why GBE also needs to be involved in it.
Amendment 25, to which I have added my name, is in the name of my noble friend Lord Bruce. Unfortunately, he cannot be here, so I will speak to his amendment, which would require GBE to have consideration
“to measures that ensure oil and gas supply chains contribute to … the development of renewable technology during transition to net zero … the decarbonisation of remaining oil and gas production, and … the reduction of oil and gas production consistent with net zero”.
I pay tribute to my noble friend and his years of experience in Aberdeen and the North Sea oil and gas sectors, and his very real concern to ensure the transition is indeed just. These processes are extremely difficult even in the best of times and with the best will, so it is important to ensure oil and gas workers are protected and treated fairly, that adequate support is given to them, and that they are able to transition into the green energy and technologies of the future. We need these people and their skills, and we need these industries to ensure we can deliver the green technology that we need. However, these processes can be bumpy. It is in all our interests to ensure that their rights and futures are protected, and that these British industries continue to be supported and flourish, and are able to transition. All projections to and through net zero envisage oil and gas as part of the plan, so this will continue to be part of our energy mix even in net zero.
The oil and gas sector currently accounts for £25 billion of UK GDP and supports around 200,000 jobs. The plans are that even more people will be employed in the green sectors. The simple purpose of the amendment is to ensure that the decline of the oil and gas supply chain does not proceed faster than the expansion of the renewable sector. If we get the balance right, the UK can deliver net zero at home and help develop it abroad; if we get it wrong, we could depress one successful if declining sector before the new sector arrives to take it forward.
Just before I finish, I give my support to Amendment 18, which will no doubt be spoken to very well by my noble friend Lady Grender. It calls for GB Energy to support an emergency home insulation programme. This is one of the key amendments to the Bill from my party. The best energy of all is the energy we never need to burn, use and consume. More must be done on energy efficiency to support our home owners and bill payers to make sure that they can afford to keep their homes warm and safe. Finally, I lend my support to Amendment 91 on tidal barrages. With that, I think I have run out of time.
Lord Alton of Liverpool (CB)
My Lords, I rise on the final note of the contribution of the noble Earl, Lord Russell, on those amendments to speak to my Amendment 91, which he just mentioned. It is in my name and that of my noble friend Lady Finlay of Llandaff and the noble Lords, Lord Storey and Lord Woodley. I know it enjoys support from all parts of your Lordships’ House. It would insert the following new clause after Clause 7:
“Within six months of a designation under section 1(1) coming into effect, Great British Energy must publish an assessment of the potential use of tidal barrage projects to support decarbonisation of the energy sector”.
That sits comfortably with the other amendments in this group. I strongly support what the noble Lord, Lord Naseby, said about the use of hydrogen, what the noble Earl, Lord Russell, said about heat pumps, and what I think my noble friend Lady Boycott will say about biomass.
I also thank the Minister, the noble Lord, Lord Hunt, with whom I have already had one meeting—he promised that at Second Reading and I am grateful to him for it. It is partly about whether we can reduce reliance on forms of energy that come with a price tag connected to slave labour in places such as Xinjiang. If one is to stop using sources that have a human rights dimension, we have to find alternatives. In a way, that is what these amendments seek to do: to look at what some of the other alternatives may be. I also know that the Minister has kindly agreed to meet with me and the metro mayor for Merseyside, Steve Rotheram, along with his noble friend, the noble Lord, Lord Woodley, in due course, so we can talk further about the Mersey barrage, which I will come back to in the course of my remarks.
The noble Lord, Lord Naseby, talked about security and diversity—very important concepts that have come out in all the previous groups we have talked about. We should make sure that we are not so dependent on any one source that anyone else can then hold us to ransom. I would add to security and diversity the need for more reliance in the United Kingdom on ourselves and a reduction in dependency on countries such as the People’s Republic of China or Russia. I think all of us were horrified to see the dependency that Germany had at the beginning of the war in Ukraine, and we must learn the lessons of that.
Why tidal energy? I am grateful to the House of Lords Library for producing some notes on this for me. However, I have been interested in this issue since the 1980s, when I served in another place on the Environment Select Committee, but also because I founded the Mersey Barrage All-Party Parliamentary Group. This idea had not come out of the blue. In fact, tidal barrages have been around for many years. The first was thought of by the French in 1921. It did not come to pass until 1966, when the La Rance barrage, quite close to Saint-Malo in Brittany, opened. So this is not a fantasy or something out of dystopian fiction; they have been done and here are decades of experience.
Tidal energy could be a crucial pillar for delivering the objectives of the energy Bill. It would strengthen the UK’s renewable energy mix, complement intermittent sources such as wind and solar, drive the green industrial strategy by fostering innovation, create jobs and support regional economic growth. The United Kingdom is uniquely positioned to be a global leader in tidal energy.
We can learn from projects such as the La Rance estuary barrage in France, but we can also learn—I think the noble Lord, Lord Howell, will be particularly interested in this—from the experience of South Korea, where the largest operating tidal power station is based: the Sihwa Lake project, which produces 254 megawatts of energy. It is a 43.8 kilometre artificial lake constructed as a land reclamation project in 1994. It used a 12.7 kilometre seawall at Gyeonggi Bay and, after some false starts, if you look at its history, nevertheless, construction led to 552.7 gigawatts of electricity generated by the tides. I asked what that really means to a layman like me, and I was told that it is the equivalent of 862,000 barrels of oil, or 315,000 tonnes of CO2, equivalent to the amount produced by 100,000 cars annually. It has 10 water turbine generators, enough to support the domestic needs of a city with a population of about half a million. After some false starts initially, as I said, it led to some very positive developments in the ecosystem there as well.
That neatly takes me to the Mersey barrage, an idea that, as I said, has been around for over 30 years now. There has recently been a new public consultation, which closed last month. I know that when the Metro mayor comes to meet the noble Lord, Lord Hunt of Kings Heath, there will be an opportunity to discuss the findings of that.
None of these things, whatever energy we produce, comes with no downside—we all accept that—but there are surprisingly few downsides to the use of tidal barrages. Merseyside would argue that the green industrial revolution could be started off there, and Britain’s renewable energy coast could be there, on the River Mersey and in the Irish Sea. It would power hundreds of thousands of homes and create many jobs. I visited Cammell Laird a few weeks ago to see the wonderful renaissance that has taken place there, alongside the extraordinary renaissance of the Port of Liverpool; these are big success stories that need to be understood and learned more widely. Listen to what the mayor himself says: “There is a strong strategic case for taking forward a Mersey tidal power project and we are developing detailed plans for how it could be made a reality. I also believe there is a strong moral case for it too—our planet’s future depends on it.”
As people such as the noble Lord, Lord West, will confirm, the Mersey has a huge tidal range—green energy to power every home in the city region for more than 100 years. Surely that is something worth giving serious consideration to. It is predictable, so it complements offshore wind and solar energy; but it is predictable in a way that they are not always. It should be a key part of the diversity that we heard about earlier. It is a well-established technology with minimal decommissioning needs. I would also point the Minister to other experience, not just overseas. The Orbital O2 project in Orkney is the world’s most powerful underwater turbine: 2,000 homes there receive their energy from it, and more than 2,200 tonnes of carbon are cancelled as a result of the work of the project.
Then, of course, there is the Severn barrage project, which has been around a long time and has had many advocates, not least on the Official Opposition Benches over the years. I know that some noble Lords, one of whom cannot be here today, are great supporters of it, as are some of my noble friends. This is an issue that has captivated the party of the noble Lord, Lord Wigley, who is in his place, and others. The idea was dropped back in 2010, but it was resurrected in 2024, with New Civil Engineer reporting that a new independent commission had been established. It estimates that 7% of the United Kingdom’s electricity could be generated, and challenges such as cost, risk and environmental impacts, which have previously halted major barrage projects, are believed to be capable of being overcome by the use of new technologies.
The UK could be in a position to be a global leader. I certainly think this is worthy of exploration, and that is all the amendment commits us to doing. This should not be seen as some sort of science fiction, as some projects undoubtedly appear to be from time to time. It is not unrealistic, and there are already very good examples, which I have cited. It is worth looking at further, and if the Minister cannot support the amendment, I hope he feels that the principle of delving further into the potential of barrages should be part of what Great British Energy seeks to achieve.
Baroness Boycott (CB)
My Lords, I very much support what the noble Lord, Lord Alton, and the noble Baroness, Lady Finlay of Llandaff, said about tidal power. I have followed what has happened on the Severn, and it is terrific to see that it is now coming back into play. Tides are probably our most reliable power source in the UK. There will always be a tide, when there might not be some wind.
I support pretty much all the amendments in this group which look at diversifying the sources of energy—all of what the noble Earl, Lord Russell, and the noble Baroness, Lady Grender, said. I shall speak specifically to Amendments 30 and 33, which would exclude biomass from the definition of clean energy, and there are many reasons for this. Over the past few years, it has become completely clear to me and, I think, to many other noble Lords—including the noble Lord, Lord Forsyth, who is not in his place, and who spoke about this issue during a Question of mine a couple of weeks ago—that while biomass is okay on paper, in theory, and on a very small scale in practice, it is not at all okay on the big scale at which we practise it. We cannot go on using it to reach net zero. I do not know whether noble Lords saw the “Dispatches” and “Panorama” programmes; also, an Ofgem investigation has found that biomass energy generators in the UK have “misreported”—that is not my word—the data on where they get their wood from. In other words, it is not waste wood. The idea was that offcuts and waste wood were used and burnt. That in itself was a fallacy, because the burning of wood releases so much carbon, but the story gets worse.
As the Wildlife and Countryside Link put it:
“Bioenergy which burns woody biomass actively harms nature restoration efforts and will not contribute to GB Energy’s goals of clean energy, energy independence, nor cheaper energy bills.”
This is before you get to the negative health impacts of sourcing and burning biomass, the damage it is doing to the renewable energy brand, or, importantly, habitat destruction, which so often gets missed in the race towards net zero.
I want to raise a couple of wider bioenergy issues. I am really worried by the idea of BECCS—bioenergy with carbon capture and storage, which the Government seem intent on believing is an inherently negative emission technology. Let us look a little further. The assumption is based on the idea that all biomass inputs are waste—which not even our sustainability requirements require—or are balanced out by regrowth. If it was entirely the former, let us be clear that burning waste wood releases more emissions than natural degradation, through which carbon is absorbed by the soil—and that is before you get to all the other environmental benefits of leaving forestry residue in the forest where it belongs. If we assume the latter to be true, it is only the case after several decades and, again, only if the trees are actually replanted. In short, there is no way to verify that biomass is carbon neutral at any point.
I feel that this has gone so far that it would even be worth the department itself sending someone out to where these pellets are apparently sourced from—in North America and in the province of British Columbia. Perhaps there is something that DESNZ or its predecessor, BEIS, has already done, which I have heard rumours about. I would be very grateful if the Minister could tell me if this has happened or is planned.
Biomass is not carbon negative. I understand that the Minister’s department baked BECCS into our carbon budgets over a decade ago and that they are ongoing in future carbon budgets, but the logic is flawed and, at its worst, truly deceitful. Just because we classify something as renewable or carbon negative does not mean that it is. We do not have time to grow the trees to absorb the carbon we are pushing into the atmosphere. As the noble Lord, Lord Forsyth, said, we are cutting trees down in North America and Canada, turning them into wood pellets, shipping them by various means back across Canada and the Atlantic, often to a power plant in Yorkshire where they are belting out carbon into the atmosphere, and we are calling this clean and renewable. My Lords, it is not.
My question for the Minister—apart from whether he is on this mission to find out the extent of this—is whether he will rule GBE out of involving itself with biomass power generation, and will he come back to me on what investigations his department has done in the past few years? Can we be honest at this point and remove the absurd assumption that biomass is inherently carbon-neutral at the point of use?
Baroness Grender (LD)
My Lords, I rise to speak in favour of Amendment 18, not Amendment 28— to be clear. I regret that I was unable to be here for Second Reading.
This amendment inserts two additional objects for GBE. The first is to implement
“an emergency home insulation programme with targeted support for people on low incomes”.
The second is to have as a clear object
“the expansion and development of renewable energy and technology”.
I also support many of the amendments in this group, particularly those in the name of my noble friend Lord Russell. Most of my comments will address his Amendments 16 and 17, which, alongside the spirit of my own amendment, seek to promote an eco-friendly and affordable way to heat homes.
On these Benches we would argue that these amendments are essential if the welcome aims of the Bill are to be fulfilled; namely, to reduce dependence on fossil fuels, drive down costs for individual households and ensure long-term security of supply. Failure to give these two issues due prominence, especially when it comes to insulation, would be like running a hot bath with the plug missing. My amendment focuses on getting GBE to support and innovate on behalf of its customers, because GBE, like any other part of our society or any other organisation, should be working towards and contributing to net zero.
The UK has one of the worst records in western Europe when it comes to losing heat from homes—three times faster than neighbouring countries—resulting in exorbitant costs, poor health and a level of wastage which is breathtaking. The greatest impact of our older, damper, leakier housing stock is on those who can least afford it; and it particularly impacts on people who live in the private rented sector. While residents might be able to access help with insulation from their local authorities at present, that is not what this amendment attempts to achieve. It is about the rollout of a proper emergency home insulation programme—yes, for this winter but, above all, as a long-term measure to improve living conditions and drive down costs. I ask that the Minister particularly addresses our aim for an emergency scheme. The benefit is obvious and has been laid out by the Climate Change Committee in the past. Demand for energy can reduce if we deal urgently with the energy which is lost and seeping out of homes that are not insulated and are leaking heat.
The potential savings are significant. The New Economics Foundation estimates that £2 billion alone could be saved for the NHS from reducing cold and damp in current housing. In addition, home energy efficiency is highly necessary to get us to the net-zero target. Regrettably, according to the previous Conservative Government’s own Climate Change Committee, while the UK over recent years should have installed nearly 3 million individual measures in energy efficiency, the last Government achieved just under 16% of that target. This was such a wasted opportunity to help those who need it most, in the leakiest of homes.
The worst part of this historical record is the abandonment of targets for energy efficiency and insulation in 2015, allowing houses to be built without energy-efficiency measures at all. We urge this new Government to make this record of lost opportunities a thing of the past, and to adopt an emergency programme of insulation through the scheme proposed to support those on low incomes. While we are of course aware that the Government’s warm homes plan is due next year, if this Bill is intended to champion the consumer alongside the objective of energy efficiency, which is one of the best ways to help them, it should be included within this legislation, particularly given how far these programmes have, tragically, lagged behind and how much progress and catch-up now need to be made.
I ask that the Minister responds in the context of the warnings from Age UK and Disability Rights UK about the urgent and imminent impact of the changes to the winter fuel allowances. This is something that could be reduced as an impact, crisis and concern right now, if countless vulnerable pensioners were lifted out of fuel poverty with the emergency programme we have described.
Leading the way in previous years, my noble friend Lady Pinnock introduced an amazing scheme that I urge the Minister to look at called the Kirklees Warm Zone scheme—noble Lords may have heard her reference it once or twice in the past—that offers over 170,000 households support with an insulation programme, regardless of the tenure of the property. It was an award-winning programme over a three-year period, and the largest domestic insulation scheme in the UK. It is estimated that approximately 55,000 tonnes of CO2 were saved in that period, and it helped to dramatically reduce fuel poverty and won many awards for sustainability.
In October, Wokingham Borough Council launched a new home decarbonisation advice service aimed at supporting residents who want to make their homes more energy efficient and reduce their energy bills. Eastleigh, as part of a much wider consortium of local authorities, secured home upgrade grants to help vulnerable households. I have given the Minister those three local government examples where there is such a strong appetite for the emergency action that we are trying to bake into this legislation.
The second part of the amendment would also reinvigorate an ambition that has fallen away in recent years for the UK; namely, to be a global leader in development and expansion of renewable energy, which many noble Lords have talked about in this group. This is an ambition, sadly, that the Conservative Government dropped like a wet, cold potato when they ditched—according to the Sun, not me—the “green crap”. This new ambition today should be baked into primary legislation. We should immediately remove the last Government’s restrictions on new solar and wind power. When it comes to renewables, we should be innovating and proudly leading. From insulation and heat pumps to wind, wave and solar, the UK is uniquely able to lead in this, in part because of the geography.
We are ambitious for what this Bill can achieve and, as a result, what the UK can achieve. We believe that investing in renewable power now will ensure that 90% of the UK’s electricity is generated from renewables by 2030. Innovation that is referred to in this amendment would include things such as a rooftop solar revolution, with strong incentives and a guaranteed fair price for electricity sold back into the grid, for instance.
Finally, this part of the amendment is connected to jobs that can be created in this area. I think everyone would agree that one of the best examples of that over a few years now is Hull, where the new blade factory with a recent contract worth £1 billion is yet another example of how growth in jobs can be generated through great innovation in this area. That is why the amendment refers to expansion and development: it is with these schemes in mind.
Our ambition as a nation must be to be a leader in this, and it should have no limits. I hope noble Lords and the Minister will support this amendment, its intentions and the spirit of the other amendments as the Bill progresses through Committee.
Lord Cameron of Dillington (CB)
My Lords, I do not believe that the Bill should be too specific on the investment targets of GBE. As I said in an earlier group, I believe that GBE should remain flexible and fleet of foot, adapting itself over the years to the development of science and changes in the marketplace.
Nevertheless, there is no harm in us discussing where we think some of the current opportunities lie. In that context, and in the context of the amendments in this group, I will touch on both heat pumps and tidal energy. Unfortunately, it was not clear from reading the script that the amendments from the noble Lord, Lord Naseby, referred to hydrogen. Had I known this, I would definitely have been supporting his amendments, because I am very keen on hydrogen. It has a crucial part to play in our energy infrastructure, as a storage of intermittent power—as the noble Lord himself mentioned—as well as in the making of steel and in transport. Hydrogen fuel cell cars have a range of more than 1,000 miles. Hydrogen is a really important part of our infrastructure. As I said at Second Reading, I hope that GBE will support the hydrogen industry.
I turn now to heat pumps. Heating and hot water make up around 40% of the UK’s energy consumption and nearly one-third of our greenhouse gas emissions. I see a role for GBE not so much in individual domestic heat pumps but in community heat pumps—particularly where, to coin a phrase, we can use the heat under our feet. Many major population centres in the UK are above, or adjacent to, hot, sedimentary aquifers at, say, 500 to 2,000 metres depth, with temperatures ranging from 25 to 60 degrees and higher. These, combined with an at-scale community heat pump, have huge potential to produce heat for hundreds of thousands of homes, factories, hospitals and greenhouses. In Holland, they hope to meet 23% of their heat demand by 2050 using geothermal heat.
We have geothermal resources in the UK; we have the heat beneath our feet. We also have the drilling skills left over from oil and gas explorations to use in this nascent industry. The industry is poised to deliver growth, renewable heat and employment. It just needs a small amount of government focus and pump priming.
I turn to tidal energy and the amendment tabled by the noble Lord, Lord Alton. I strongly believe that it is imperative for the UK to play to its strengths in the whole energy field. One of its real strengths is its range of tides. While in Gibraltar, for instance, the tidal range is only about one metre, in the Solway Firth it can be eight metres or, in the Bristol Channel, 15 metres- plus. We also have tidal races around our shores and between our islands which flow at great speed and with considerable power.
Of course, tidal power is classed as intermittent, but it is guaranteed and predictable. We know now how much power we can produce from a given site between the hours of 6 pm and 7 pm on today’s date in 2124 because, if we build, say, a tidal lagoon now, we know it will still be producing electricity almost for free in more than 100 years’ time.
We have tidal races in our firths and between our islands but, to me, the most compelling solution for harnessing our tidal power are large, offshore tidal lagoons. Any site with a depth of between five and 10 metres, and a tidal range in excess of five metres, can produce guaranteed power. They are better than a barrage across a bay because you can have turbines all round, not just on one side. This means they are almost half the price per output of power. They can be any shape, with curves in any direction that can follow the required underwater contours to produce maximum return on investment. There are about 20 ideal sites around the UK coastline.
I come from southern England, as compared to the noble Lord, Lord Alton, and the other side of the channel from the noble Lord, Lord Wigley. If noble Lords look up, they might be able to imagine a wall of water the height of this Chamber and several miles long. This is the sort of power that the Severn Estuary can produce four times a day. One lagoon in Bridgwater Bay alone—right next door to Hinkley Point, with its connections to the grid—could produce 1,900 megawatts. These lagoons do not have to be shut down for repairs. If a turbine—one of 20 or 30—needs servicing, it is lifted out for maintenance, while the rest just keep on turning.
As opposed to a barrage across an estuary, these lagoons do not upset shipping traffic in any serious way, because they sit at the side of shipping channels in the shallow waters. Furthermore, their environmental effect makes only peripheral difference to the course of the tide, migratory fish, wading birds and so on. They have the support of most environmental NGOs. There are numerous sites for these lagoons, from the north to the south of the UK. There is a seven-hour tidal difference between Bristol and Solway. If the tides are used on both flood and ebb, this gives an almost consistent baseload of power for England—and that is before we tap into some of the Scottish tidal ranges. Tidal lagoons as a whole could provide three times the capacity of Hinkley Point. We must play to our strengths. Tidal power is our natural advantage and I believe it would be well worth the focus of GBE.
Lord Wigley (PC)
My Lords, I apologise for coming in late. I am here at the behest of the noble Baroness, Lady Finlay, who apologises to the Committee that she cannot be here to speak in support of Amendment 91, proposed by the noble Lord, Lord Alton. I very much support the points that he made.
The noble Baroness has asked me to make a brief contribution to the debate. I wholeheartedly agree with the points she has asked me to raise. These relate mainly to the importance of tidal power in both its devices, which we heard analysed a moment ago. Tidal range is one part of the possibility of creating tidal power; tidal stream is the other. Tidal stream has not yet been well developed and that could be something for the future, but tidal range most certainly has been. There is a predictability about it which gives it a tremendous advantage.
Tidal range devices use water height. The differential between high and low levels in the Severn, for example, is an enormously important factor. Using the same principles, there are locations suitable for lagoons as well—certainly around the coastline of Wales, in Swansea Bay and up around Anglesey. I understand that the Marine Energy Council recommends reaching a gigawatt of tidal stream capacity by 2035. This would be an enormous contribution.
The noble Lord, Lord Alton, spoke about the possibility that 7% of the UK’s electricity needs could come from the Severn Barrage. That would have the advantage of providing very important construction work, which could make a massive contribution to the south-east Wales economy. Given what has happened recently to the steelworks in Port Talbot, those jobs are very much needed. I hope that the Government will look seriously at this.
The case for this type of electricity generation is overwhelming. I hope the Government will give it the attention it deserves.
Baroness Hayman (CB)
My Lords, I rise very briefly, first to declare my interest and secondly to comment on some of the amendments in this group.
I have sat in the Minister’s chair, so I understand that he will not want to add a long list of exclusions or inclusions to the objects of the Bill. Even with that in mind, I hope that he will have listened carefully to the issues that have been raised. They are important and there is a theme to them.
I support the comments of the noble Baroness, Lady Boycott. Two issues have come out of the debate for me. The case for energy efficiency, insulation and heat pumps was made very powerfully by the noble Baroness, Lady Grender, and the noble Earl, Lord Russell. It is important that GB Energy looks to how it can provide a long-term, consistent environment for the policies that each Government pick up and put down. Industry, which has to be a key partner, finds this so frustrating and retrenches from investing in the skills training and expansion that are needed if we are effectively to retrofit the millions of homes in this country.
As we said in the debate on a Question earlier today, this is important not only for carbon reduction. We saw what happened from 2014: emissions from buildings fell by two-thirds after the change in policy. It is therefore really important that someone is boosting this and making sure that it is there for the long term to provide that stable environment. GBE will be in a position to do that, particularly if it is tied in with what we discussed in the Question earlier about the planning framework, again providing a clear and consistent road map for those who will need to invest in this.
The other thing that came out of the debate was that we have to be innovative, look to our strengths and be open-minded about sources of renewable energy. We have to understand that some of those sums that we had in our heads 20 years ago, about the cost of wave power, tidal power or whatever, have changed. They have changed financially but also in other dimensions, such as energy security and our priorities in energy. It is important that GBE is in there supporting those things.
I absolutely support Amendment 17. It may not be for the Bill but, as part of the innovative thinking we need from GBE, we need to look at such things as financial instruments. When we know that solar panels or heat pumps will pay off over the years but people are not going forward with them simply because they cannot afford the capital expenditure, it is important that we look not only at upping the government grant—helpful though that is in some instances. Houses can have mortgages on them for 10, 20 or 30 years. The costs of that investment can be spread in other and innovative ways, so I hope that the Minister can respond supportively to that amendment.
Lord Offord of Garvel (Con)
My Lords, I thank my noble friend Lord Naseby for introducing his thoughtful and technical amendments, which no doubt would improve the quality of the Bill should they pass. I also thank all noble Lords who have spoken on this group. Each amendment contributes meaningfully to the Bill’s ultimate aim by ensuring that governance reflects accountability, fairness and long-term sustainability.
I will limit my remarks to Amendments 8, 9, 12 and 13. Amendment 8 proposes the addition of “investing in” alongside “encouraging”. This is quite important, because it seeks a balance between fostering enterprise and ensuring strategic government investment to safeguard our national energy. We want a partnership between government and the private sector. By explicitly including “investing in”, the amendment aligns with our commitment to a dynamic and sustainable energy sector.
Amendment 9, by adding “one or more of”, would bring clarity and flexibility to the Government’s strategic objectives in advancing energy policies. It would ensure that the Government could prioritise specific energy initiatives based on strategic needs without being overburdened by one limiting obligation. It reflects the core principles of pragmatism and efficiency, ensuring that resources can be allocated where they can deliver the greatest impact.
We know that energy security and innovation in this area—referred to by my noble friend Lord Howell as bigger perhaps than the Industrial Revolution—require adaptability. Whether we are investing in offshore wind, nuclear power or emerging technologies, the amendment would allow for a tailored approach that maximised value for taxpayers’ money and strengthened our energy independence. I urge colleagues to support it to make sure that we have smart, effective and flexible governance in the Bill.
My noble friend Lord Naseby’s Amendment 12 is again quite technical. It seeks to insert the phrase “directly or indirectly” into Clause 3, which would again enhance the Bill by acknowledging the interconnected nature of emissions reductions and energy initiatives. This addition would ensure a pragmatic approach to addressing climate goals. Emissions reductions often involve complex supply chains and secondary impacts. Recognising these indirect contributions reflects our understanding of the broader economic and technological dynamics that drive innovation and decarbonisation. For example, investments in nuclear power or advanced grid infrastructure may not lower emissions immediately but they create the conditions for sustainable reductions in the long term, towards 2050 net zero. The amendment therefore provides the flexibility needed to pursue bold initiatives while holding true to the principle of cost-effectiveness for taxpayers. By adopting it, we would make the Bill more robust, practical and reflective of real-world energy systems. I urge my colleagues to support it.
Finally, my noble friend Lord Naseby’s Amendment 13 proposes the substitution of the word “produced” with “derived” in Clause 3. Again, this is a technical and seemingly small change, but it holds significant importance for our energy policy. “Derived” more accurately captures the diverse and evolving sources of energy in our transition to a low-carbon future. Energy comes increasingly from various integrated systems, including renewable sources, nuclear, tidal—as we have heard in great detail—and hydrogen. The term “produced” can be limiting, whereas “derived” acknowledges the broader, more dynamic approach needed to secure our energy future. The amendment provides the flexibility to encompass a wide range of energy sources and technologies, ensuring that our energy policies remain adaptable and forward thinking. It should reflect our commitment not only to reduce emissions but to foster innovation and maintain energy security in the face of global challenges.
Lord Hunt of Kings Heath (Lab)
My Lords, this was a very interesting group. It clearly refers to a range of technologies in which Great British Energy could invest. I should start by saying that we intend GBE to be operationally independent and it is not for us to rigidly define what it should do or in which technologies it should invest.
The noble Baroness, Lady Hayman, of course anticipated my list argument because she has used it herself a number of times, but I take her point about ensuring long-term certainty and a stable environment for some of these crucial sectors. I recognise that GBE has great potential so to do, particularly in sectors where investment from the private sector may initially be difficult. I also take her point about how this has to be aligned with planning reform, enhanced grid connections and infrastructure.
Amendments 8, 9, 12, 13, 14, 23, 31 and 32, in essence, relate to technologies specific to GBE’s objects in Clause 3. Amendment 23 from the noble Earl, Lord Russell, would prevent Great British Energy being involved in CCUS projects, whereas the amendments from the noble Lord, Lord Naseby, would ensure that both carbon capture and storage and hydrogen fell within the scope of the Bill. The Government view both hydrogen and CCUS as vital to our drive towards net zero and to ensuring a just transition for industries based in the North Sea.
Lord Howell of Guildford (Con)
My Lords, I am sorry to interrupt again—the Minister has been very patient—but can we be very clear on what he just said? Is he saying that GBE can involve itself and will be involved one way or another in part of the nuclear sector or not? This is very important: we need about 500 SMRs or AMRs to have the slightest hope of getting anywhere near net zero. At the moment we are plodding along, not very fast at all, and it requires all hands to the helm. So far, I understand that GBE is supposed to stand quite clear of nuclear. That does not make sense, because it is all one ball of wax, frankly. We have to get nuclear right, and only then will we get any hope of net zero.
Lord Hunt of Kings Heath (Lab)
Yes, I want to be absolutely clear: nuclear clearly falls within the definition of clean power, so it would be within the competence of Great British Energy to invest and do the other things in the Bill in relation to nuclear. However, we have Great British Nuclear, which I believe will continue. We are still finalising discussions, but GBN is focusing at the moment on small modular reactors. The department is involved in major funding of the nuclear developments, but GBE could also invest in nuclear energy. I hope that is clear.
I turn to oil and gas. Amendment 25 from the noble Earl, Lord Russell—and the noble Lord, Lord Bruce, who was not able to be present—would require Great British Energy to consider oil and gas supply chains and a reduction in and decarbonisation of oil and gas production. I say to the noble Earl that I understand the need for a just transition and acknowledge the skills of people working in oil and gas in the North Sea.
The Bill is focused on making the minimum necessary provisions to enable the establishment of this operationally independent company. Clause 3 provides the framework for Great British Energy’s functions and limits the areas where it can act, but it does not say how Great British Energy should deliver its functions or objectives. One of the worries about the noble Earl’s amendment is that it would widen the intention of this clause, perhaps unnecessarily. I say to him that, as we invest in the UK’s energy potential, we want to rebuild supply chains at home, of course. In relation to oil and gas, we want to help the transition and use the skilled workers in the most effective way possible. Oil and gas production in the North Sea will be with us for decades to come, so we want to manage the North Sea in a way that ensures continued support for that sector but enables some of the workers there to transition to other sectors, particularly in energy where they have such expertise.
Amendments 30 and 33 in the name of the noble Baroness, Lady Boycott, wish the Government to confirm or state that biomass is not included in the definition of clean energy in the Bill. Although I understand that many noble Lords share her viewpoint, as was clear from the Oral Question we had a few weeks ago, the Government believe that biomass plays a role in balancing the energy grid when intermittent renewables are not available. It is well evidenced that sustainably sourced biomass can provide a low-carbon and renewable energy source. That view is supported by both the Inter- governmental Panel on Climate Change and the Climate Change Committee.
Biomass sourced in line with strict sustainability criteria can be used as a low-carbon source of energy. Woody biomass that is sustainably sourced from well-managed forests is a renewable, low-carbon source of energy, as carbon dioxide emissions released during combustion are absorbed continuously by new forest growth.
The noble Baroness mentioned the Ofgem investigation, which she will know was about incorrect data being provided. It would be fair to say that Ofgem did not find the process at fault; it was the data provided. She asked me what visits officials in my department had made to the US. Officials have been in contact with US regulators but I would be happy to provide her with more details on what we have been doing.
The noble Baroness also mentioned BECCS, as it is known, or bioenergy with carbon capture and storage. Again, the Committee on Climate Change and the International Energy Agency recognise that BECCS can play a significant role in supporting net-zero targets through the delivery of negative carbon emissions with the co-benefit of producing low-carbon energy.
The noble Lord, Lord Alton, spoke eloquently and passionately to Amendment 91 on tidal barrages. I listened to the noble Lord, Lord Cameron, too, who suggested that tidal barrage and, in particular, lagoons play to the UK’s strength. The noble Lord, Lord Wigley, also spoke. The National Energy System Operator—NESO—is leading a network innovation allowance project aimed at establishing a holistic knowledge base on the potential development and impacts of tidal barrage in Great Britain within the context of grid operability. That is a very important development that I hope picks up the point that noble Lords have raised—the situation may have changed over the past 10 or 20 years.
I look forward to discussing the Mersey barrage with the noble Lord, Lord Alton. When I did this job at the Department of Energy and Climate Change from 2008 to 2010, I chaired a forum that we established on the Severn estuary potential, so I would certainly be interested in taking discussions forward on the Mersey barrage.
I hope that I have reassured most noble Lords that the energy technologies they wish to see supported can be covered in the Bill, but Great British Energy must be allowed to make its own decisions within the context of the objectives and strategic priorities the Secretary of State will set.
Earl Russell (LD)
I thank the Minister for his detailed response to all the amendments in this group. I want to follow up with a quick question. I and the noble Baroness, Lady Grender, asked the Minister whether any consideration will be given to rolling the warm homes plan into GB Energy. The answer might be that no consideration will be given, or that the Minister does not have an answer—though he could possibly have one in a minute. I am happy to take a written response or come back to it at a later stage.
Lord Hunt of Kings Heath (Lab)
My Lords, I am not aware of any intention. I will certainly write to him if I have got that wrong but I am not aware of any intention to do it. The whole issue of home insulation and heating is crucial to getting to net zero and we are giving it a huge amount of attention.
Lord Naseby (Con)
My Lords, I am grateful for the depth of the Minister’s answer. He may well be right that Amendments 8, 9, 12, 13 and 14 are unnecessary. I would like to reflect on that. I am far less convinced on Amendments 31 and 32 and I reserve the right to come back on Report if necessary. I beg leave to withdraw the amendment.
Lord Vaux of Harrowden
Member’s explanatory statement
This amendment would add energy trading to the allowed objects of Great British Energy.
Lord Vaux of Harrowden (CB)
My Lords, given the relevance of this amendment, I remind the Committee of my interests as a generator of small-scale hydro.
Before I get on to the specifics of the amendment, I will try to clear up a confusion that crept into the debate on the previous group, at the risk of reopening the mini debate we had at the end of the second group. There is still confusion between “objective” and “object”, and the Minister is still guilty of falling into that trap. The objectives are what the company has to try to achieve. The “objects” in Clause 3 are what the company is restricted to being able to do. If it is not in the objects, the company cannot do it—it is not allowed to. If it is in the objects, the company is allowed to do it but does not have to. Therefore, putting something into Clause 3 does not mean, as the Minister has suggested, that we specify what GBE should be doing or making, or in any way restrict its ability to make its own decisions. That is a really important difference. I suspect that a number of noble Lords who tabled amendments to Clause 3 think that they are adding an objective. They are not.
That said, my Amendment 10 is designed to allow GBE to do something, not to tell it to do it. Since the removal of the feed-in tariff system, of which I am a recipient, there has been only a very limited incentive for people to install greater domestic renewable generation capacity than the amount that covers their own usage. Own usage brings quite a substantial return because it replaces the cost of buying electricity from a main supplier plus the VAT, but the only way to be paid anything for any excess you send into the grid is the smart export guarantee, and the rules around that are simply that the amount has to be positive. That can be, and in many cases is, as low as a penny per kilowatt hour. That is not much of an incentive to add an extra couple of panels on to your roof, or whatever it might be beyond your own needs.
There are now some higher smart export guarantee rates but they can be reduced at will by the electricity companies. There is no guarantee of them, so when you consider installing solar panels or any other renewable generation there is no incentive to install more than you want to use yourself. The cheapest and easiest way of increasing renewable generation—because you already have the scaffolding up and the builders—is to add two or three more panels, but you will do that only if there is a return from doing so.
So would it not be a great thing if you were able to sell your excess to your neighbours, at a discount from the full retail price but at more than the smart export guarantee? That way, both the generator and the consumer would win. At the moment, the only way to achieve that is to hardwire your neighbours into your system, and that is an extremely expensive and not very practical thing to have to do.
One potential solution to that problem is peer-to-peer trading, which would allow neighbours to buy your excess electricity over a trading platform. With trading via peer-to-peer networks, neighbourhoods, districts or entire towns can join forces and trade their self-produced electricity. This is not just a theoretical concept; there are projects all over the world investigating the possibilities of this approach in field trials. There are working examples as far afield as Spain, Switzerland, Bangladesh, the Netherlands and many more. There are also studies in the UK, such as the one by Repowering London, UK Power Networks and EDF in Brixton. The technology is available now.
The huge advantage of peer-to-peer trading is that it can incentivise greater installation of solar and other technologies at no cost to the Government or to the consumer. GBE can take a role in this process as a trading hub, or it could support local trading hubs. The trading operations themselves could be financed by taking a fee for using the trading platform. It is also a great way to create community energy networks. There are wider advantages than the purely financial. Peer-to-peer networks can improve resilience, improve energy access and reduce losses from long-distance transmission.
That links quite nicely, I think, to the Amendments 11 and 15, tabled by the noble Earl, Lord Russell, which would add community energy to the objects, and to Amendment 20, tabled by the noble Lord, Lord Ravensdale, which looks at local energy planning. I would support both of those amendments, alongside Amendment 10, as I believe they are highly complementary.
All that Amendment 10 does is add the trading of electricity to the allowed objects of GBE. This would allow it to create, manage or support peer-to-peer trading arrangements, for all the reasons that I have given. I hope, therefore, that the Minister will look favourably on it. It would be odd and rather sad if this interesting and relatively new technological way of incentivising small-scale generation was not allowed under GBE’s objectives.
I shall not comment on the other amendments in this group as the tablers have not yet spoken to them, but a number certainly appear to be very sensible and constructive suggestions. I look forward to hearing more detail. I beg to move.
Earl Russell (LD)
My Lords, I will speak to two amendments in this group: Amendments 11 and 15. Before I do so, I want to thank the noble Lord, Lord Naseby, for his amendments. They fit well with the amendments on community energy. I was thinking about this subject myself. It is an essential system that needs to be put into place as part of that broader community energy scheme so that people can trade their energy; that would be better for all of us.
Amendments 11 and 15 both seek to include community energy in the objects of the Great British Energy company. It would be
“restricted to facilitating, encouraging, and participating”.
One of our key aims in debating this Bill is to work to ensure that community energy is both in the objectives for GB Energy and on the face of the Bill. The development of community energy has ground to a halt since the end of the feed-in tariff here in the UK. In Europe, by contrast, it is a very different story, where these systems are far wider, better understood and embedded in local societies. They are championed by their Governments and they are bringing great local benefits.
Community energy accounts for only around 0.5% of the UK’s electricity, but it has been estimated by the Environmental Audit Committee and others that it has scope for exceptional growth and could generate up to 8 gigawatts in combination with local power networks. Power for People, which has been supporting these amendments, estimates that community energy could power 2.2 million homes, save 2.5 million tonnes of CO2 and help to create some 30,000 jobs. Community energy programmes are good ways of providing local jobs and are a useful means of addressing local fuel poverty. This is a continuation of the work that was started by Pippa Heylings in the other place; I have promised her that I will continue that work here as the Bill progresses.
Our view is quite simply that there is no Great British Energy without Great British community energy. Our vision for this Bill is that there should be an “out of the box” system, whereby every hamlet, local parish, town council and small village can pick up the phone and find an end-to-end system for creating a small-scale community energy programme.
GB Energy is perfectly placed to provide this tailored service. It is a one-stop shop turning ideas into reality, helping with systems choices, design, planning, building, local grid connections, finance arrangements, shared part ownership, et cetera. GB Energy should crowd in finance and not crowd out private investment, and this is one area where development is well suited to that. The big players and big companies are not investing in community energy; this stuff will not get off the ground unless GB Energy does it. There is no other market here; there is no competition.
Local community energy should be included in the energy transition, and communities should benefit from the local energy that they host or generate. We have tabled a forthcoming amendment on community benefit, which will be published shortly and debated in January when we come back for the second day of Committee. It seeks proposals for ensuring that local communities benefit from the renewable energy projects undertaken by Great British Energy.
We can make the national grid more resilient; it saves wasting energy in unnecessary transmission. We are currently transmitting energy from far up north to down south, losing a third of it on the way. As has been said, a trading system should be established so that local communities can sell excess energy. These systems make the grid more resilient, more robust and more stable. They help our communities to prosper and to benefit from that which they host.
The energy transition affects us all, in much the same ways that the Industrial Revolution did. We all need to make changes to the way we heat our homes, the way we travel and many other aspects of our daily lives. Such societal-level changes require broad and continuing levels of community engagement, participation and support if they are to be successfully enacted and carried through to completion, especially when the changes needed must take place at the speed and scale that is required here.
My personal view is that too much of what has been done to date is overly centrally controlled; it is much more “done to” than “done with”. We need community buy-in. We need to provide ways and means for our local communities to both participate in and benefit locally from the changes that we require them to make. Without this sustained local support, the whole net-zero project is in danger of being derailed by a lack of common purpose and want of determination to be part of the change that is required. Community public support is the key factor for the success of the whole project.
In some ways, this has been a strange task. There is broad cross-party support for the need for community energy. This was shown quite clearly in the other place, with many MPs supporting a Motion on this issue. There have been reassuring words of support in the other place, particularly from the right honourable Ed Miliband, the Energy Secretary, who said:
“I know that many Members of the House are passionate about the issue of local power, so let me reassure them that the Government are committed to delivering the biggest expansion of support for community-owned energy in history”.—[Official Report, Commons, 29/10/24; col. 776.]
Equally, here in your Lordships’ House, the Minister responded positively at Second Reading to the issue of local community energy. He has already spoken about his involvement in Birmingham and I know that he is passionate about the work that he did. He knows the difference that this makes.
The founding statement for GB Energy itself also has strong words of support for the principle and objectives of community energy, saying that
“we will be investing in community-owned energy generation, reducing the pressures on the transmission grid while giving local people a stake in their transition to net zero”.
Lord Ravensdale (CB)
My Lords, I declare my energy interests in the register. I will speak to my Amendment 19 and I thank the noble Baroness, Lady Noakes, for her support of that amendment. This amendment is very straightforward and we have had some discussion already in the second group around cost and the importance of cost and reflecting that, but I will put a bit of a different slant on that.
Noble Lords will be very familiar with the energy trilemma and balancing the competing demands of cost, sustainability and security. Any public organisation that has energy system responsibilities should be focusing on and balancing these objects. We look at NESO, for example. This was set up in the Energy Act 2023 with a cost, sustainability and security duty. Likewise, Ofgem has cost and security considered in its consumer duty and a sustainability duty was added as part of that 2023 Act as well.
However, when I reviewed the objects—I was very grateful for the education provided by the noble Lord, Lord Vaux, on the difference between objects and objectives and that is certainly something we need to come back to—cost was conspicuous by its absence. My first point is that we really should be considering system alignments and consistency across all those UK energy system organisations in terms of their objects and duties. Cost, sustainability and security should be running as a golden thread through all of them so that all those organisations are aiming at the same thing. Great British Energy is a central player in the energy system. It will be making significant investments of public money and aiming to crowd in private investment. Through these investments it will presumably be aiming to lower the cost of energy, which is a key government objective, as well as decarbonisation and security objectives.
My second point is on the importance of cost. We have already heard about the UK having the highest industrial electricity prices in the developed world. They are now four times those in the US. This not only has the obvious impact on bills but is a real brake on growth. I have spoken to a number of industrial companies recently which want to set up in the UK but cannot make the numbers stack up in their business cases because of our high electricity prices so are taking their business elsewhere. For the Government to achieve their number one mission of economic growth, they need to have a laser focus on reducing electricity prices and I know the Minister and the Government are very focused on this area. I hope the Minister can consider this small change and come back with a government amendment on Report which would really help align GBE with the critical priorities of the Government.
My Amendment 34 seeks to clarify the definition of security of supply. I look at Clause 3 and can see clear definitions for “clean energy”, “distribution”, “fossil fuel” and “greenhouse gas” but cannot see a definition for “security of supply”. Noble Lords have made the point in earlier debates about the importance of energy security. It is important to clarify this term: first, because the definition can be very broad; and, secondly, because it can mean different things to different people.
I have some personal experience here in that I recently chaired an energy security task force for the Midlands region and we spent a fair bit of time debating what we really meant by energy security. It is not as straightforward as it first appears. Many when considering this term would jump straight to fuel security and having sovereign energy so that we are not dependent on foreign states and can avoid the energy price spikes that we saw following the invasion of Ukraine. Of course, there is also price predictability: we could have fuel security but volatile prices remain. System reliability is also key so that people can access energy when they need it. Cybersecurity and physical security are other important aspects.
It is very important that in the primary legislation we are clear on what is meant by terms and help guide stakeholders, including business and industry, on how GBE will undertake its duties. I would welcome some further engagement with the Minister on how the Government would define this term and I again hope that he can consider this and come back with a government amendment on Report.
Finally, my Amendment 20 relates to local area energy planning. Great British Energy could play a really important role in energy system governance and I have been encouraged to hear from the Government the renewed focus on local planning, with a potential role for GBE in local power plans and local area energy plans which could bring in the focus on community energy, spoken to earlier by the noble Earl, Lord Russell, and the noble Lord, Lord Vaux.
Given the role of GBE, the Government have an opportunity with the Bill to set out in more detail how energy system governance will work at a local level. The story of net zero so far has been a top-down one—in essence, central planning from the Government, which needs to be done—but that transition will not succeed unless this is matched by a bottom-up governance approach from local areas to regions to the national level. So much of the knowledge rests in those local areas; for example, the condition of housing stock relating to energy efficiency measures, and local energy infrastructure.
Local area energy plans could be the foundation of how energy system governance is planned and undertaken at a local level. The issue we have seen over recent years with local area energy plans is their patchwork nature. We have many in place but with varying levels of quality and robustness in how they are set out within local authorities. I note that only 31% of local authorities are covered by local area energy plans. These plans need to be delivered to a consistent standard, with robust data and analysis, and consideration should also be given to how this can be aligned to meet the input requirements necessary for regional energy strategic planning to undertake that flow-up of governance.
Three things are needed: guidance from government on what a local area energy plan is, as has already been set out in Wales; funding for stretched local authorities to develop these plans; and an oversight function to co-ordinate and ensure that those local plans are joined up. There is a really good opportunity here. If GBE is the organisation that is going to take on all or some of those roles, setting that out in the Bill would be an excellent step forward in firming up that crucial local governance function to stakeholders, and unlock local planning of energy. I would be grateful if the Minister could perhaps give us more detail on the role of Great British Energy in this area.
Lord Wigley (PC)
My Lords, I will just intervene very briefly indeed in support of the noble Lord, Lord Ravensdale, with regard to Amendment 34 and the question of system reliability. In my previous incarnation I represented a constituency that had the Dinorwig pumped storage scheme. That scheme was brilliant in terms of being able to help guarantee the availability of electricity when it was needed. Half-time in the cup final was a traditional way of interpreting that, when there was a surge of demand. It had the capability of going from zero to full output in eight seconds.
The economic benefit of that is obvious in having a system that does not need to match the total maximum demand. The peaks of that graph are cut off and equalised in a way that makes a lower capacity, and therefore lower total capital investment, a viable proposition. The point I put to the Minister is this: a number of pumped storage schemes are being developed at the moment. There is a significant number in Scotland, including some of the larger ones, but they are also in Wales. They have been waiting for years to get the necessary information on which to base investment decisions. There is one using an old slate quarry hole in Talysarn in my former constituency. It is raring to go but, until it gets the details of the prices that will apply, it obviously cannot make an investment decision. We are talking about tens of millions of pounds, possibly hundreds of millions, and a benefit to the overall system.
In responding, can the Minister give any comfort by way of the timescale by when the framework for such decisions can be made? We really need to get on with it. I am quite sure that those in charge of Great British Energy will also need this information.
Lord Hamilton of Epsom (Con)
My Lords, I have always been a great supporter of small nuclear reactors, because it strikes me that they have the enormous advantage of supplying a locality and not getting involved, as the noble Earl, Lord Russell, said, with massive transmission costs. That would be all cut down, which has enormous advantage. Of course, Rolls-Royce is making small nuclear reactors to go into submarines, so we are probably better on the technology than most other people might be.
I have always had a worry that local people would react adversely to a planning application for a small nuclear reactor, because they would see it as devaluing their houses. Despite all-party support in Parliament, this will not stop local concerns raising their heads. I refer back to what the noble Earl, Lord Russell, said on that. I thought the answer was quite simply to offer people in the locality free electricity, and so immediately they would have an advantage. But from what the noble Lord, Lord Vaux, said when speaking to his amendment, that would not actually work. That is why I want to be absolutely clear about this. He seemed to say that wiring up all the local houses to the nuclear reactor—oh, he is shaking his head. Now I am confused. Could the noble Lord intervene and explain what he meant?
Lord Vaux of Harrowden (CB)
The nuclear reactor would just pump into the grid, which will be attached to everybody’s houses. The network I was talking about was one with the ability for house A, which has solar panels, to sell its excess electricity to house B, which does not. But a nuclear reactor would pump electricity into the grid and be available to all the houses.
Lord Hamilton of Epsom (Con)
That is enormously reassuring. I will support his amendment, even though that was a concern I had.
I think the answer to getting small nuclear reactors planning permission is to offer free electricity to people in the locality. When they come to sell their houses, they will find that any depreciation in the price from being near to a nuclear reactor will be off-set by the fact that they have free electricity written into the sale of the house. That would balance things out. That is very reassuring, and I am glad we cleared it up. I am grateful to the noble Lord and thank him. I very much support his amendment.
Lord Hardie (CB)
My Lords, I support the amendment in the name of the noble Lord, Lord Vaux of Harrowden. Like the noble Baroness, Lady Hayman, in a past life I sat on the Front Bench where the Minister is and resisted amending legislation by making additions.
I appreciate the Minister’s reluctance to accept amendments that might constrain Great British Energy once it is established, but Amendment 10 is in a different category. It does not constrain Great British Energy; it empowers it to facilitate, encourage or participate in community schemes that trade in excess energy locally if that is what GBE wishes to do.
Baroness Noakes (Con)
My Lords, I start by underlining what the noble Lord, Lord Vaux, said about the difference between objectives and objects. It really does repay all noble Lords taking part in debates on the Bill to understand the differences between them. That is why earlier I supported my noble friend Lord Frost’s amendment trying to set objectives for the Bill. It may or may not have been the right list of them, but it would have been an important addition to the Bill.
The Earl of Effingham (Con)
My Lords, I thank the noble Lord, Lord Vaux of Harrowden, for his valuable contributions to this group. The amendments noted are crucial for ensuring that Great British Energy remains aligned with its goals of promoting energy security, affordability and sustainability. This fifth group of amendments focuses on the objectives and duties of Great British Energy.
I begin with Amendment 10, which turns the focus on the trading element of GBE. By explicitly including trading, the amendment demonstrates a forward-thinking approach to GBE’s role. While market dynamics naturally encourage competition and efficiency, active participation in energy trading enables GBE to enhance price stability, bolster supply resilience and reduce market volatility. This strategic involvement not only fosters a more competitive energy landscape but empowers consumers by offering greater choice and flexibility. In doing so, it strengthens the UK’s energy security, ensuring the system remains adaptable to both domestic demands and global shifts, while at the same time promoting long-term sustainability and cost effectiveness free from overreliance on dominant energy providers.
Furthermore, on Amendment 11 to Clause 3, the insertion of the line
“including from schemes owned, or part owned, by community organisations”
is important when addressing the need for a more inclusive energy system that empowers local communities. By specifically including community energy schemes, this amendment acknowledges the growing role of grass-roots initiatives in the energy transition. It ensures that GBE will actively support, facilitate and encourage energy generation models that are owned or part-owned by local and community organisations. This naturally leads us to Amendment 15 to Clause 3, which outlines measures to increase low-carbon and renewable energy schemes owned or part-owned by community organisations.
This approach not only helps democratise energy production but empowers communities to take control of their energy future, fostering a more decentralised and resilient energy system. Community-led schemes have proven essential in driving local economic growth, creating jobs and promoting energy independence. By ensuring that GBE is aligned with these objectives, we not only advance environmental sustainability but cultivate a more equitable and diverse energy landscape, one that shifts power back into the hands of local communities.
Amendment 19 proposes important
“measures for reducing the cost of the supply of energy”.
This is a critical step in aligning GBE with the Government’s key missions for this Parliament. The Labour Government committed not only to
“make Britain a clean energy superpower”
but to deliver cheaper bills for British households. The amendment is a fair and necessary step to ensure that the Government deliver on their promises. By incorporating the reduction of energy costs into Great British Energy’s legislated objectives, it would ensure that affordability, alongside security and sustainability, remained a core consideration in its operations.
This leads us seamlessly to Amendment 34 to Clause 3, which would insert a definition of
“security of the supply of energy”
into the objects of GBE. The inclusion of system reliability, price predictability, fuel security and cybersecurity is vital to fully encompass the concept of energy security. This clear and detailed definition ensures that GBE’s mission is comprehensive and aligned with the broader goal of delivering a secure and sustainable energy future for all.
Amendment 27 would ensure that GBE took no action that risked the sustainability of commercial shipping. This is a key consideration in the broader context of balancing the development of renewable energy sites with other vital sectors, such as fishing and shipping. As we know, 90% of goods in the UK are transported here by sea. Ports, often specialising in certain goods, are essential to our economy, and well-established shipping lanes must remain open to ensure the smooth operation of this vital sector. If we are to invest in offshore energy infrastructure, we must not overlook the potential risks posed to these critical maritime routes.
The amendment draws a parallel with the Crown Estate amendments. It specifically aims to ensure that GBE does not take any action that could jeopardise the sustainability of commercial shipping. With offshore energy production, particularly offshore wind, continuing to grow, it is crucial that this growth is balanced with the needs of commercial shipping. If we are to meet our energy goals, we must not undermine the sector that is responsible for bringing nearly all the goods we rely on.
While offshore wind is undoubtedly a critical part of the UK’s energy future, accounting for 17% of our electricity in 2023, up from 14% in 2022, we must recognise the impact that the siting of wind farms and other offshore developments could have on existing industries. GBE has a responsibility to ensure that the growth of sustainable energy does not come at the expense of shipping lanes, port operations or coastal communities.
Amendments 20, 28 and 29 are designed to protect local communities. Amendment 20 would clarify the role of GBE in local area energy planning and governance, ensuring that decisions regarding energy infrastructure were made in collaboration with local authorities. As the energy landscape evolves, it is essential that local communities are not only kept informed but are actively involved in shaping their energy future.
By explicitly requiring GBE to engage with local authorities, the amendment fosters a more inclusive and transparent approach to energy planning, enabling communities to have a say in how energy systems are developed, managed and integrated at the local level. Such involvement is critical for addressing region-specific needs, ensuring that energy solutions are tailored to the unique characteristics and priorities of different areas, from rural communities to urban centres. The amendment supports the broader goal of decentralising energy governance, empowering local authorities to take a more proactive role in shaping the energy systems that affect their residents. It would also ensure that local insights were considered in the development of energy infrastructure, from renewable energy projects to the distribution and storage of energy.
Amendments 28 and 29 address the wider concerns that may be raised by local coastal communities. As we continue to develop renewable energy infrastructure, it is crucial that we consider the impact of such development on the very communities that depend on the seas for their livelihoods and way of life, including the tourism sector, which many coastal areas rely on. I hope the Minister will acknowledge that to achieve the Government’s 2030 renewable energy targets it is essential to balance the need for sustainable energy development with the preservation of those communities. Their voices must be heard; they are important working people, and their livelihoods must not be unduly impacted by offshore energy projects. The presence of offshore developments, particularly wind farms, can have significant consequences for local tourism, which is often a key economic driver for those communities. We must ensure that any developments do not disrupt the natural beauty or accessibility of those areas, which attract visitors year round. This is an additional consideration, not directly addressed by these amendments but worth highlighting.
We may return to this on Report, as I believe that a review and/or an annual report might go some way to reassuring Parliament that GBE is making decisions that truly benefit all stakeholders. Such a mechanism would ensure that potential trade-offs were identified, quantified and fully considered, especially as we navigate the complexities of offshore energy and its impact on local communities.
I trust that the Minister has listened carefully to the concerns raised by all noble Lords and hope that the Government will consider improving the Bill to ensure that GBE properly considers the impacts of its activities on fishing, shipping, coastal communities and the environment. We must not lose sight of the importance of those local industries and the people whose livelihoods depend on them.
Lord Hunt of Kings Heath (Lab)
My Lords, I thank all noble Lords who have taken part in this debate. I agree with the noble Lord, Lord Vaux, and the noble Baroness, Lady Noakes, in relation to Clause 3. It does set statutory limits on Great British Energy’s objects, and these must be reflected in the company’s articles of association. However, the four objects in Clause 3 have been broadly drafted, so although they impose a restriction, it is very wide and intended to cover all the conceivable activities that Great British Energy may engage in. If I have confused the Committee by loose terms, I apologise.
In Amendment 10, the noble Lord, Lord Vaux, proposes adding “trading” to Clause 3(2)(a). I will resist this because, although trading is not explicitly referenced, the current objects in the Bill allow Great British Energy to facilitate or encourage the supply of clean energy. We see no reason why that activity could not include the encouragement or facilitation of a trade in clean energy. But, if the noble Lord has examples of schemes that are operating, we would be interested in the details.
Lord Ravensdale (CB)
My Lords, I thank the noble Lord for his response to my amendments. I wanted briefly to clarify something he said in responding to my Amendment 19. He essentially made a link between a clean energy system and price stability, therefore making the argument that “costs” was not required in the objects. But there are of course wide variations in the costs of a clean energy system: there are expensive clean energy systems, and cheaper ones. NESO is developing a wide range of scenarios here. So I argue that we cannot rely purely on making that link—the organisation needs to take costs into account more broadly as well.
Lord Hunt of Kings Heath (Lab)
I very much take that point. Clearly, my department is cognisant of costs. Much of our discussion with His Majesty’s Treasury on the resources made available obviously takes in those constraints. The point I made earlier is simply that we believe—and we are supported by NESO, the Committee on Climate Change and the OBR—that the best way to secure stable prices in the future is to charge on to clean power net zero.
Lord Wigley (PC)
Could the Minister give some comfort to those waiting to invest in pumped storage schemes about the timescale on which information will be available to enable them to do so?
Lord Hunt of Kings Heath (Lab)
My Lords, I cannot give the noble Lord chapter and verse today but will certainly write to him with what we can say in public.
Lord Vaux of Harrowden (CB)
My Lords, I thank all noble Lords who took part in this interesting debate and the Minister for his fairly fulsome answer. On Amendment 10, I am not totally convinced that trading is covered by the objects as they stand but I will read his answer in Hansard to see whether I can convince myself that he is right. As he says, the issue is that if it is not in the objects, it is not allowed. I want to make sure that it is allowed—not that it has to happen—in the same way that he argued the other way around on the security definition. That said, I beg leave to withdraw my amendment.
Great British Energy Bill
Tuesday 3rd December 2024
(2 months, 2 weeks ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-I(b) Amendments for Committee (Supplementary to the Marshalled List) - (3 Dec 2024)
Lord Offord of Garvel
“(e) the production of nuclear energy.”Member’s explanatory statement
This would amend Great British Energy’s objects to include the production of nuclear energy.
Lord Offord of Garvel (Con)
My Lords, Amendment 21 is in my name. The UK led the world, becoming the first country to split the atom. This was followed in 1956 by the world’s first nuclear programme and a nuclear power station at Calder Hall—Windscale. At its peak in the 1990s, the UK generated approximately 13 gigawatts of power from nuclear energy, but this has slipped to around six gigawatts today. This story of decline stands in stark contrast to our modern understanding of nuclear power as the only current form of reliable, secure, low-carbon electricity which can be deployed at scale in the UK and therefore has to be considered a key component in the drive for net zero.
In January this year the previous Government published their policy paper, Civil Nuclear: Roadmap to 2050, and this was considered vital so that nuclear could offer the reliable, resilient and low-carbon power we need to reach net zero by 2050 and ensure our energy security so that we are never again dependent on the likes of Putin. Many other nations, including the USA and France, have endorsed a net-zero nuclear declaration which calls for a global tripling of nuclear energy by 2050.
Global energy is increasingly based around electricity. That means that the key to making energy systems clean is to turn the electricity sector from being the largest producer of CO2 emissions into a low-carbon source that reduces fossil fuel emissions in areas such as transport, heating and industry. While renewables are expected to continue to lead, nuclear power can also play an important part, along with fossil fuels, using carbon capture, utilisation and storage, and indeed the removal of flaring, turning our hydrocarbon fields into the greenest in the world. Countries envisaging a future role for nuclear account for the bulk of global energy demand and CO2 emissions, but to achieve a trajectory consistent with sustainability targets, including international climate goals, the expansion of clean electricity would need to be three times faster than at present. It would require 85% of global energy to come from clean sources by 2040, compared with just 36% today. Along with massive investments in efficiency and renewables, the trajectory would need an 80% increase in global nuclear power production by 2040.
We recognise the importance of renewables in achieving net-zero goals. However, going for a 100% renewable energy scenario represents a considerable gamble, especially given that grid balancing and storage technologies are still relatively nascent. One of the most pressing concerns is that solutions to renewables’ inherent variability fail to materialise quickly enough, and Britain either has to live with constraints and interruptions to its energy supply—an economic no-no—or pivot back towards an energy mix of yesteryear, reliant on fossil-fuelled power plants to provide a dependable baseload of electricity, albeit at a great environmental cost. If this were to transpire, the UK would seriously risk reneging on its 2050 net-zero target.
A lack of investment in existing and new nuclear plants in advanced economies would have implications for emissions, costs and energy security. In the case where no further investments are made in advanced economies to extend the operating lifetime of existing nuclear power plants or to develop new projects, nuclear power capacity will decline.
Nuclear power blends the best attribute of renewables, zero-carbon generation, with the best of fossil fuel power stations, dependability. According to the International Energy Agency, over the past 50 years, the use of nuclear power has reduced CO2 emissions by over 60 gigatonnes —nearly two years-worth of global energy-related emissions.
The Prime Minister has made a vital promise to lower energy bills for households across the country—a commitment that resonates deeply with families facing financial pressures—but to ensure that this promise is more than just words, the Government must take decisive action to secure a diverse, competitive and sustainable energy supply. One critical way to achieve that is by expanding the production of nuclear energy.
Nuclear energy has the potential to significantly increase the UK’s energy supply. By introducing more nuclear power into the grid, we create a stable and abundant source of electricity. This additional capacity can ease pressure on prices by reducing reliance on imported fuels, particularly during global energy crises. With a greater supply of energy comes the opportunity for competition. Competition in the energy market pushes prices down for consumers, ensuring that families and businesses benefit from fairer, and lower, energy costs. Nuclear energy, as a reliable and low-cost source of power in the long term, plays a key role in fostering this competitive environment.
In respect of this amendment, nuclear energy is not just a technological option but a strategic necessity for the UK’s future. As the Government themselves have stated, nuclear energy
“will play an important role in helping the UK achieve energy security and clean power”.
To fulfil this vision, surely the Department for Energy Security and Net Zero must place nuclear energy at the core of its policies and strategies.
With 40% of the UK’s energy currently imported, this leaves us vulnerable to global market volatility and geopolitical tensions. Nuclear energy, with its long operational lifespan and domestic production potential, reduces our reliance on foreign energy sources. As electrification expands across sectors, from transport to heating, the demand for clean and reliable electricity will surge. Nuclear energy can meet this demand, ensuring a secure and steady energy supply for the long term. I beg to move.
The Deputy Chairman of Committees (Baroness Morris of Bolton) (Con)
My Lords, I must inform the House that if Amendment 21 is agreed to, I cannot call Amendment 24 for reasons of pre-emption.
Baroness Bloomfield of Hinton Waldrist (Con)
I draw attention to my interests as outlined in the register and thank my noble friend for introducing this amendment. His insights underline the importance of collaboration as we address the dual challenges of energy security and achieving net-zero carbon emissions.
The amendment would build on prior commitments and take the steps needed to ensure that nuclear energy plays a full role in our energy mix. The amendment is not a new initiative but an essential next step in fulfilling the Government’s stated commitments to nuclear energy. It would ensure that we moved from exploration and consideration to concrete action in facilitating, encouraging and participating in the production of nuclear energy. By accepting it, we can bridge the gap between aspiration, implementation and participating in the production of nuclear energy.
The Government have already acknowledged the importance of nuclear energy, but acknowledgement alone will not suffice. There must be a tangible, unequivocal commitment to its production. This includes setting clear targets for both large-scale nuclear reactors and, more importantly, small and advanced modular reactors. A stronger commitment sends a signal to investors, developers and the broader energy sector that the UK is serious about leading the world in advanced nuclear technology.
Public investment is critical to establishing a foundation for nuclear development, but, equally, we must incentivise private sector involvement. This requires the Government to offer meaningful incentives, loan guarantees, tax breaks or grants so that private investors see nuclear as a viable and profitable area to support. Such a strategy will not only unlock funding but drive innovation, reduce costs and bring nuclear projects online faster.
I must also highlight the critical role of Great British Nuclear, which my noble friend mentioned earlier. Established by the previous Government, GBN is uniquely positioned to co-ordinate and drive nuclear development across the country. The Government should not only recognise the value of GBN but ensure that it is fully resourced and empowered to develop on its mission. GBN can act as a central point for collaboration between public and private stakeholders, fostering innovation and scaling up nuclear energy production.
The importance of nuclear energy in securing the UK’s future cannot be overstated. It is vital for energy independence, affordability and achieving our climate goals. By accepting this amendment, the Government would take a decisive step towards fostering a robust nuclear sector, one that combined public investment, incentivised private participation, reduced barriers to progress and built on the foundation laid by Great British Nuclear.
I was delighted to hear earlier in the Committee the Minister mention a new siting policy. As he will know, this will be crucial in supporting the ambitions of data companies such as Microsoft to base operations in the UK. If we can deliver security of supply of energy, with that will come jobs, new technologies and the possibility of levelling up those areas of the country which so desperately need it.
Lord Ashcombe (Con)
My Lords, I will speak very quickly in support of my noble friend Lord Offord. Nuclear fuel is very much a positive, as it is a baseload generator, which to me is critical. That is what we are short of in this country. Unfortunately, wind, solar, whatever, are not always with us. The excess that is produced by wind and solar when they are actively working, which is fantastic, could then be used to drive hydrogen production—we have touched very briefly on that in this House this afternoon. Hydrogen is the clean fuel of the future, possibly the cleanest; but we need to be able to store and then burn it, in times of need, to generate the electricity that will reduce our dependence on gas generation, particularly, which I know we are all in favour of. I just wanted to add that to this small debate, knowing that nuclear reactors are also most useful for data centres.
Lord Hunt of Kings Heath (Lab)
My Lords, I really cannot disagree with anything noble Lords have said in this debate, although I do not believe we need an amendment. I utterly agree that nuclear power is essential to the future; it provides the essential baseload; it is safe, secure and reliable. We have great opportunities in the UK to develop nuclear energy and the supply chain, even more than we have now. Obviously, Rolls-Royce, from a UK company point of view, has great potential.
We are keeping a very close eye on Hinkley Point C; the operational date that has been given for the first unit between 2029 and 2031 is very crucial. We are working very hard to get Sizewell C to final investment decision in the next few months. We have the SMR programme, and I agree with the noble Baroness, Lady Bloomfield, about the importance and value of the work of Great British Nuclear. We are regularly engaged with GBN, and I pay tribute to the great work that its chair and chief executive are doing.
I have met a number of companies who are very interested in developing AMRs. We have all seen the experience of companies such as Amazon, in the US, linking small modular reactors and advanced modular reactors with data centres; clearly, we wish the UK to be very much part of that. In terms of the UK’s growth agenda, if we combine military and civil nuclear defence requirements, we know that the nuclear skills task force has now estimated that we need about 40,000 extra people in the industry by 2030, and moving on with even more people by the 2040s. This is at once a challenge and a huge opportunity, because the careers that are offered in the nuclear industry are secure and well paid, and it is a very exciting industry to go into.
The noble Lord, Lord Offord, quoted figures from the IEA. Although we have seen a global downturn in nuclear energy, it is right to now talk about a renaissance. At international gatherings, it is pretty clear that there are countries coming back to nuclear, as we are, and other countries that wish to develop nuclear energy for the first time. This is very encouraging; we know that, in terms of popular opinion, there is a much more positive attitude among the public towards nuclear energy.
In saying I do not believe that the amendment is necessary, I do very much embrace the comments of the noble Lords and I can assure them that, in the department, we see nuclear energy as having an essential role for the future.
Lord Offord of Garvel (Con)
I thank the Minister for his clarity and unequivocal support of nuclear, and, indeed, for his reply to my noble friend Lord Howell of Guildford, who asked a specific question in relation to the GB Energy Bill. GB Energy can, if required, participate in nuclear, but the clear understanding is that discussions are ongoing with GB Nuclear. So I would encourage the Government to continue to clarify what that will look like and how it will be funded going forward.
Lord Hunt of Kings Heath (Lab)
If I may come back on that, the noble Lord may have seen that the energy Select Committee had a hearing at which the chair of Great British Energy and then the chair of Great British Nuclear gave evidence. It is clear from what they said that we will have no difficulty at all in establishing a co-operative relationship.
Lord Offord of Garvel (Con)
That is noted. I thank the Minister. I beg leave to withdraw the amendment.
Lord Hamilton of Epsom (Con)
Can I ask my noble friend why the new power station in Somerset is costing four times as much as an identical one in South Korea? Surely this will add to energy costs, not detract from them.
Lord Hunt of Kings Heath (Lab)
I am not sure which “noble friend” that was aimed at, but I will have a go if the noble Lord likes. I was at the department when we started talking about Hinkley many years ago. Two or three things happened. First, it took an awfully long time to come to a final investment decision. Secondly, EDF thought it could bring a design model from France and place it in Hinkley Point C without having to make design changes. The reality was that it had to make thousands of design changes because of the requirements of the regulatory system in the UK.
Lord Ashcombe
“(e) the exploration of oil and gas in the North Sea where the UK’s energy security is compromised.”Member’s explanatory statement
This would amend Great British Energy’s objects to include the exploration of oil and gas in the North Sea where the UK’s energy security is compromised.
Lord Ashcombe (Con)
My Lords, Amendment 22 in my name is about energy security. Energy security is a matter of utmost importance—a foundation on which our homes, businesses and industries depend. We must ensure that our nation can provide reliable power to keep the lights on and our economy running.
I was not in this country during the 1970s but lived in the Republic of Ireland. We suffered power cuts that caused significant disruption. I recall a farming friend who lost his entire pig herd due to a lack of ventilation—a stark reminder of the devastating consequences when power systems fail. We cannot afford to let such a situation arise here.
While I wholeheartedly support the goal of achieving net zero by 2050, we must temper ambition with pragmatism. The United Kingdom accounts for 1% of global carbon dioxide emissions, compared with 33% from China and 12.5% from the United States. While we strive for cleaner energy, we must be realistic about the scale of transformation required. Getting electricity production to net zero by 2030 is a noble aspiration, but it remains a significant challenge.
Progress has been made. According to the Department for Energy Security and Net Zero, the UK’s carbon dioxide emissions decreased by almost 50% between 1990 and 2023, including a 6.6% drop in the year ending 2023. Electricity generation contributes 11% of our greenhouse emissions. Efforts to reduce this share are ongoing. However, our energy mix relies on a delicate balance. Nuclear power—which we have just discussed—and biomass provide baseload capacity most of the time, while solar and wind offer renewable contributions that are inherently variable. Interconnectors, though helpful, depend on surplus supply from neighbouring countries.
The swing producer in our energy system remains gas, which under certain circumstances—when the wind is not blowing and the sun is not shining—supplies upwards of 60% of our energy needs. As the Government push for greater electrification, whether in transport, heating or industry, the strain on our grid will only increase. Targets for offshore and floating wind are ambitious, as are those for solar power, which raises concerns about land use and its impact on food production—an amendment for later discussion, I am sure.
Onshore wind also faces resistance, and these challenges make clear that gas generation will remain a critical component of our energy mix for years to come. Let us not forget that electricity accounts for only 20% to 25% of the energy consumed in this country, and that 87% of UK homes rely on gas for heating and hot water, yet domestic gas production declined by 10% between 2022 and 2023 and nearly 14% to August this year, according to Offshore Energies UK.
This leaves us increasingly reliant on imports, as our current production is about 40% of requirements. Imported gas comes via pipelines from Europe or as LNG shipments. Global instability, such as sanctions on Russia, has tightened supply, while demand in Europe has risen. Norway, a trusted ally, provides the majority of gas imported by pipeline, some 35%, placing many of our eggs in one basket. The additional 25% required comes as LNG, sourced from countries such as the United States and Qatar, both of which have indicated that their supplies will increase. This has a significantly higher carbon footprint—on average four times more than our domestic production—due to transport and production methods.
The North Sea Transition Authority’s 2024 Emissions Monitoring Report indicates that UK gas production is a top-quartile performer according to kilograms of carbon dioxide equivalent per barrel of oil equivalent—kgCO2e/boe. The NSTA report also shows a good methane emissions performance—arguably a greater concern than carbon dioxide emissions—with the UK having an intensity of 1 kgCO2e/boe versus the global average of 16 kgCO2e/boe. I apologise for all the figures.
New UK developments are being delivered far more cleanly than the average of current existing UK developments. New UK developments are significantly cleaner than imports, producing emissions roughly 10 times cleaner than LNG imports. We are fortunate to have an abundance of hydrocarbons in our offshore waters. Despite the decline, there is still potential for two or three decades of production, as I mentioned at Second Reading. Exploiting this resource responsibly would protect some 200,000 direct and indirect jobs, sustain some critical industries and provide a bridge to the renewable future. Moreover, recommencing the issuance of oil and gas licences would help reduce global emissions by avoiding the higher carbon intensity of imports, stabilise our energy and bolster our economy.
However, I must caution that the current tax regime risks an 80% slump in investment in the UK oil and gas industry over the next five years, according to OEUK. This would undermine both energy security and our ability to transition effectively. Lifting the ban on new exploration and production licences, while ensuring robust environmental standards, offers a pragmatic path forward. It will protect jobs, reduce emissions and, most importantly, help secure the energy future of the United Kingdom. I very much look forward to the Minister’s response and beg to move.
Lord Offord of Garvel (Con)
My Lords, I thank my noble friend Lord Ashcombe, whose amendment I support, for his insightful contributions on the important issue of energy security. This issue cannot go unaddressed when discussing the Bill because of the consequences to our country’s energy production, supply and security. Indeed, Clause 3 explicitly states that GBE’s objects
“are restricted to facilitating, encouraging and participating in … measures for ensuring the security of the supply of energy”.
However, the Bill makes no provision to ensure the security and future of our energy supply, and I express my deepest concern that the tunnel-vision focus on renewable energy to achieve the Government’s overly ambitious target of clean energy by 2030 will inevitably compromise our energy security.
The UK’s energy security should indeed be at the forefront of the debate on the Bill. The Government have said that Great British Energy is part of their plans to ramp up renewables, which they say will result in cheaper energy and greater energy security. However, this is simply not true. Instead, the Government’s renewable plans will cost the British people and our national energy security.
We on these Benches of course recognise the need to cut household energy bills for families, to accelerate private investment in energy infrastructure, and to protect and create jobs in the energy industry across the UK, but the Bill gives no indication as to how this will be achieved. It does not include any measures to ensure the effective delivery of a reduction in household energy bills, nor an increase in British jobs, nor the long-term security of our energy supply. We understand that the purpose of Great British Energy will be to assist the Government in ramping up renewables to achieve their self-imposed target of 100% clean energy by 2030. This is a target that I believe to be driven by political ideology and which industry experts have described as aggressive, unrealistic and expensive, requiring far more than the allocated £8.3 billion of funding.
It is an undeniable truth that renewable energy will always be naturally unreliable. As my noble friend Lady Bloomfield brought to our attention at Second Reading, over the last couple of months, as was the case this time last year and in March, we have seen another dunkelflaute. Indeed, in March, the measure of how often turbines generate their maximum power failed to reach 20%, and we have recently seen levels drop to nearly zero. Relying on new interconnectors to Belgium and Holland will not offer energy security if their wind farms suffer the same weather conditions as ours or if their countries’ needs are greater than ours.
All this being said, it is therefore vital that we acknowledge the UK’s North Sea oil and gas industry when we discuss the future of our energy production and security. This industry has suffered under the Government, as they increase their taxes on North Sea oil to punitive levels. Energy firms have described increasing the windfall tax by 3%—with the headline rate of tax now a staggering 78%—and extending this to 2030 as a devastating blow. This hike will cut investment in UK natural resources and oil and gas production, as indicated by my noble friend Lord Ashcombe, which will make the UK increasingly dependent on imported supply. This will compromise our energy security, but consumers will also be exposed to price fluctuations. The country will become increasingly dependent on imported electricity and will therefore be forced to pay the market price for power as fossil fuel powered generators are closed at a quicker pace than we are ramping up the necessary capacity to replace them.
Not only this, but if investment in UK oil and gas decreases then the revenue generated from the energy profit levy, which the Government are relying on to help fund GBE, will decrease. By pressing ahead with ending oil and gas licences—a move no other major economy has taken—£12 billion in tax receipts have been lost from the North Sea. This, combined with the £8 billion which will be spent on GBE, is a staggering £20 billion of taxpayers’ money.
Analysts have spoken out and warned about relying on North Sea oil taxes to fund the Government’s green energy plans while the Government tax the operators to the point that revenues fall by 80%, as indicated by my noble friend Lord Ashcombe. We must address the fact that the revenue generated from the energy profit levy, or windfall tax, may fall if investment in UK oil and gas decreases. Alongside private sector investment, the Government are relying on windfall tax revenues to fund GBE and support the transition to clean power by 2030. Furthermore, the £8 billion allocated to GBE does not compensate for the amount of investment in energy projects that will be doomed by the Government’s plans to prematurely shut down the UK oil and gas sector.
The North Sea oil and gas industry is not only critical to the UK energy supply but a bedrock for many economies and communities. Economic ecosystems have developed around this industry. It is therefore critical that we manage the energy transition properly. The Government’s plan for GBE, combined with the energy profits levy, puts the industry at risk at this vital time. The proposed increases and the removal of the investment allowances could be detrimental to investment. Offshore Energies UK has warned that the tax increase could see investment in the UK cut from £14 billion to £2 billion between now and 2029. That is not scaremongering; it is what the industry is telling us.
Lord Hamilton of Epsom (Con)
I hope the Committee will forgive me. I was slow on the uptake and should have preceded my noble friend instead of following him. I think doing so is legitimate within the rules of Committee.
I very much support my noble friend Lord Ashcombe’s amendment. The Minister has already made the point that I have the greatest possible reservations about net zero. This is not because I have some tremendous hang-up and that I want to pollute the atmosphere and make the place less liveable than it might otherwise be, but because we are now reaching the point on net zero where the costs are starting to come in and getting very severe indeed. That is why we have to think very closely and carefully about where we go from here.
We have done an awful lot to lower our net emissions into the atmosphere, largely by closing down vast areas of our generation industry, in which coal-fired power stations have now been phased out almost completely. What has happened? We think we are setting a wonderful example to the rest of the world but our net emissions come down and world emissions go up. That is hardly surprising, because the Chinese and the Indians are still building coal-fired power stations. They account for massive amounts of coal-fired energy, which keeps their energy prices low and makes them very competitive with the rest of the world. Are we really going to see a change of heart from China and India? Will they suddenly say, “No, no, we’ve been polluting the atmosphere too much and we must now start cleaning everything up and working to net zero”? I do not think they will. They want to keep their competitive position.
That is why it is so essential, to refer back to my noble friend’s amendment, that we continue to accept that we will need oil and gas for much longer than we might originally have thought. The cost of saying we will not explore for any more oil and gas in the North Sea is absolutely massive in terms of jobs for people living in Scotland. The pigeons are starting to come home on all this. That is one of the reasons why I have the greatest possible reservations about driving on towards this net-zero target: the costs are becoming prohibitive. Our energy prices are already higher than almost everybody in Europe. This will cost us jobs and competitiveness in the world generally for years to come.
Lord Hunt of Kings Heath (Lab)
My Lords, one of the joys of debating energy is that, on every occasion, we come back to the substance of the whole argument about energy and where we are going. I am grateful to the noble Lord, Lord Ashcombe, for stimulating such an interesting discussion. The noble Lord, Lord Hamilton, in a sense, has brought this into the open. Clearly, it was his Government who signed up to the legislation on net zero by 2050. The last Government, as much as we do, saw the huge risks involved in climate change and the need to take action.
The international position is that, despite what the noble Lord says, the fastest growth in use of renewable energy is occurring in China. The International Energy Agency indicated in its recent renewable energy report that we will see a 2.7 times increase in the use of renewables globally between now and 2030. So, there is a global movement towards clean power and net zero. Yes, it is going at different paces, but we believe the UK can gain great advantage by taking a leadership role. The National Energy System Operator—NESO—has shown that there is a pathway to clean power by 2030. We are now committed to taking that and turning it into an action plan, which I hope we will be able to publish very shortly.
I would not deny that North Sea oil and gas still have important roles to play, and I am of course listening to what noble Lords say about the tax situation and proposals, and the investment issue. Clearly, the Government are in very close discussions with the industry. Our aim is an orderly transition, and that is what we mean to achieve. So we clearly see the value of what happens in the North Sea, and we need it to continue to provide supplies to the UK in the years ahead. Equally, however, we need to manage the transition to clean power and net zero.
On the issue of jobs, obviously, the number of people employed by GBE will not balance out the people who may be lost to the oil and gas industry in the future. This is important. It does not really matter where the chair comes from; the point is that the headquarters of GBE will be firmly based in Aberdeen. I have already referred to the extra 40,000 people we need in nuclear by 2030. If you look at the other sectors we are talking about investing in—CCUS, hydrogen—all of them will need more people. So, the energy sector as a whole will provide a huge number of opportunities, but I accept that, if there is a reduction in the number of people employed in the North Sea, it is our responsibility, with industry, to help manage that transition effectively.
In the end, we may disagree about this, but the Government are confident that we are right to go towards clean power as quickly as possible. We have had endorsement, both from the Committee on Climate Change and the Office for Budget Responsibility, that investing in clean energy now will pay dividends in the long term.
Lord Ashcombe (Con)
I am grateful to the Minister and, indeed, to my noble friends. I continue to worry that, as we import LNG, our effective emissions, by passing the problem elsewhere, are significantly higher than they would be using our own production. That is an important fact in this debate. We may have to come back to this issue on Report, but for now, I beg leave to withdraw my amendment.
Lord Offord of Garvel
Member's explanatory statement
This would probe into the types of financial assistance which can be provided to Great British Energy by the Secretary of State.
Lord Offord of Garvel (Con)
My Lords, I rise to speak in support of amendments tabled to Clause 4 of the Great British Energy Bill, particularly those in my name and the name of my noble friend Lady Noakes. These amendments are crucial as they aim to provide clarity, ensure accountability and protect the taxpayer in what is undoubtedly an ambitious and complex policy area.
Let me first address the central issue that these amendments seek to probe: the nature and scope of the financial assistance the Secretary of State can provide to Great British Energy. We all agree that our energy future is crucial, both for achieving net zero and for ensuring security of supply in an increasingly uncertain world. However, noble intentions must be underpinned by rigorous safeguards, and the current wording of Clause 4 leaves far too much ambiguity.
Amendments 35, 37 and 38 in my name are designed to question the breadth of the financial powers the Bill affords the Secretary of State. It is entirely appropriate to scrutinise these provisions. The taxpayers of this country, who have faced significant financial pressures in recent years, deserve reassurance that the Government are deploying their public funds prudently. The inclusion of vague terms such as the ability to provide assistance by way of guarantees, indemnities and other financial assistance could allow for open-ended commitments.
These are not theoretical concerns. History is replete with examples of well-meaning initiatives that spiralled into financial mismanagement. By narrowing or better defining these provisions, we can ensure that GBE operates within a framework that prioritises efficiency, accountability and value for money.
I turn to Amendment 36 in the name of my noble friend Lady Noakes. This amendment questions the inclusion of specific provisions under subsections (2)(b) to (2)(d). These allow for financial support in connection with acquisitions, liabilities or the provision of assets. While there may well be situations in which such support is necessary, we must ask what checks and balances will be in place and what mechanisms will ensure that public money is not used to underwrite reckless decision-making or speculative ventures.
These amendments are not designed to obstruct the creation of Great British Energy or its objectives; rather, they are about ensuring that its financial underpinnings are solid, transparent and accountable. British principles dictate that the Government must always act as a careful steward of public funds, balancing ambition with fiscal prudence. It is also worth noting that robust safeguards will strengthen the Bill. Clear financial rules do not hamper innovation; they foster confidence for investors, for industry and for the British people.
In conclusion, I urge the Government to take seriously the concerns raised by these amendments. By supporting them, we send a clear message that while we are committed to achieving our energy goals, we will not do so at the expense of fiscal responsibility. The energy transition must be sustainable, in not only environmental terms but economic ones. I beg to move.
Baroness Noakes (Con)
My Lords, in this group I have Amendment 36, which partially overlaps Amendment 37 from my noble friend Lord Offord of Garvel. My noble friend asked some general questions about the financial assistance clause. My Amendment 36 is somewhat narrower: it is trying to find out exactly how paragraphs (b) to (d) actually work.
I understand how paragraph (a) works: the Secretary of State gives money to Great British Energy, or possibly lends it money, or guarantees or indemnifies something that Great British Energy does. However, when we get to paragraph (b), somehow the financial assistance is provided by the Secretary of State acquiring shares or securities, but Great British Energy does not appear to be involved at all in that transaction.
Lord Hamilton of Epsom (Con)
My Lords, I support this amendment, but for all sorts of different reasons from those given my noble friend Lady Noakes. I am very worried that this money will be wasted. At the end of the day, there is a whole mass of commercial companies out there that are more than happy to invest in energy projects of one sort or another as long as they show a return. Why we need taxpayers’ money is slightly beyond me. I do not quite understand why that will make a big difference, unless the taxpayers’ money goes into projects that are completely uncommercial and therefore lose money for the taxpayer.
This comes back to the remarks I made earlier about the Government trying to pick winners. They have no record of success on this whatever. Indeed, if Ministers were so good at picking winners, no doubt they would be doing it commercially somewhere else and not bother to be in this place. It worries me that, at the end of the day, they will be left with nothing but the non-commercial aspects of development of energy projects rather than those that work and make money, because if they work and make money, the private sector will invest in them anyway.
I would like to know the Minister’s view on this, because it strikes me that there is a contradiction in terms. There are not going to be a mass of profitable projects that Great British Energy can invest in; there will merely be those that people say are not profitable and do not work. Therefore, the only way of getting them going is to shove taxpayers’ money into them and probably lose it. That is why I support my noble friend’s amendment.
Lord Cryer (Lab)
My Lords, before I move on to the substance of the quite extensive amendments, let me say that this has struck me as being a very constructive and interesting debate, with some genuinely deeply interesting contributions. For those of us who served in the House of Commons—I was there for 22 years, and I am fairly new here—what is striking is that the way of working here seems to be that we have confrontation only when it is necessary. For those who do not know, at the other end of the Corridor, it tends to be the other way round; you have confrontation whether you need it or not.
Amendments 35, 36, 37 and 38 in the names of the noble Lord, Lord Offord, and the noble Baroness, Lady Noakes, seek to understand how the specific mechanism envisaged in this clause might be used and why it represents financial assistance. The Government have committed to capitalise Great British Energy with £8.3 billion, as we are all acutely aware, over this Parliament.
Clause 4 gives the Secretary of State the power to provide financial assistance to Great British Energy—simply put, to allow the Secretary of State to fund the company. Subsection (2)(a) allows the Secretary of State to provide financial assistance in the form of a grant to Great British Energy. That provision might be used while Great British Energy is in its initial set-up phase, and before it can undertake revenue-generating activities. It could also be used in circumstances where the Secretary of State required Great British Energy to undertake non-revenue-generating activities.
At Second Reading, and in conversations inside and outside the Chamber, noble Lords have asked how Great British Energy will be able to raise equity. Subsection (2)(b) allows the Secretary of State to acquire shares in Great British Energy. This will be an important mechanism by which the Secretary of State will fund Great British Energy through this kind of equity injection. This method has been used to fund other public bodies, such as the formerly publicly owned but no longer publicly owned Green Investment Bank.
Great British Energy must be wholly owned by the Crown, so it will not be possible for other parties to acquire shares. Subsection (2)(c) allows the Secretary of State to acquire assets on behalf of Great British Energy. This provision might be used while Great British Energy is in its initial set-up phase, before it can undertake its own acquisitions. It could also be used in circumstances where it might be more appropriate for an asset to sit on the balance sheet of the Department for Energy Security and Net Zero—or DESNZ, to use one of the worst acronyms I have ever heard—rather than on that of Great British Energy.
Subsection (2)(d) allows the Secretary of State to enter into contractual arrangements with Great British Energy. This might be used where Great British Energy acts as an agent of the department under a contractual arrangement; for example, to deliver a support scheme. Subsection (2)(e) allows the Secretary of State to incur expenditure on behalf of Great British Energy, similarly to how I have already set out with regard acquiring assets. This provision might be used while Great British Energy is, again, in its initial set-up phase, before it can undertake its own acquisitions and operations, and/or where it might be more appropriate for expenditure to sit on the balance sheet of DESNZ rather than on that of GBE.
Similar provisions can be found in other legislation; for example, in Sections 320 and Section 129 of the Energy Act 2023, the latter regarding financial assistance in respect of carbon capture and low-carbon hydrogen production. There is therefore nothing unusual about the inclusion of these forms of assistance.
Amendment 39 in the name of the noble Baroness, Lady McIntosh, who I am glad to see is now in her place, seeks to make the provisions of Clause 4 regarding the ways in which the Secretary of State can provide financial assistance to GBE subject to a condition that a plan be developed for the transition to clean energy. We must resist this amendment because it is not needed and would produce what could be perceived as an unhelpful result, although I appreciate that the noble Baroness may simply be probing the Government’s priorities in providing financial assistance to GBE. Her amendment would mean that the Secretary of State would have no means of providing funding to GBE until the condition had been met and would, in effect, prevent the company being set up, recruiting any resources or undertaking any of the general activities required to create a new business. This would be a highly unusual provision and would curtail GBE’s ability to operationalise its activities through lack of financial assistance.
We have already set out GBE’s mission and five functions in its founding statement. Its mission is to drive clean energy deployment to boost energy independence, create jobs and ensure that UK taxpayers, bill payers and communities reap the benefits of clean, secure, homegrown energy. I am happy to reassure the noble Baroness that in due course GBE will clearly set out plans as to how it will contribute towards the transition to clean energy and the nature of interventions in specific sectors.
Amendments 40, 41, 42, 44, 45 and 108 are in the name of the noble Lord, Lord Offord. Amendment 40 requires any financial assistance to GBE to be included in the national debt. I am happy to assure the noble Lord that this is the case. Therefore, the amendment is superfluous to the situation. As a company wholly owned by the Secretary of State, GBE will sit fully within the consolidated accounting boundary of DESNZ. It will be on the department’s balance sheet and funds provided to it will be shown transparently through not just GBE but the department. Similarly, investments in projects or businesses made by GBE will also be shown in its annual report and on its balance sheet.
Amendment 41 seeks to require that GBE cannot sell shares without the approval of Parliament. Clause 1 already requires that GBE must be wholly owned by the Crown. It is entirely appropriate for that to be the case and for the Secretary of State to be the sole shareholder—we debated that earlier this evening. GBE will not be able to sell its shares to a third party, so the amendment is not needed.
If the amendment also includes the Secretary of State as a party who may acquire further shares in GBE—which, as set out in Clause 4, is one of the means by which the Secretary of State may provide financial assistance to the company—it is not necessary to require additional parliamentary approval for these individual issuances of share capital, not least because Parliament’s approval is already being sought through the Bill to allow the Secretary of State to provide financial assistance to GBE.
Amendment 42 seeks to limit financial assistance to GBE, above the announced commitment of £8.3 billion, without laying regulations approved by a resolution of each House. I again resist this amendment, as there are existing parliamentary controls and processes if any additional financial assistance were considered for GBE in the future. Any spending of public money requested by the Government must be voted for in the other place. There is an annual process that we are probably all aware of: the estimates cycle. Although I acknowledge that your Lordships’ House has no role in the estimates process directly and passes supply and appropriation Bills without debate, the other place provides the required degree of scrutiny, including the use of Divisions.
Amendment 44 would require the Secretary of State to produce an annual report on all financial assistance provided by GBE and to lay it before Parliament. I resist this amendment because, again, it is unnecessary. The reporting requirements upon GBE are already sufficient to achieve the objective of the noble Lord’s amendment. Detail on any financial assistance received from the Secretary of State will be included in the accounts of GBE, submitted as part of its annual report and accounts, as per its obligations under the Companies Act 2006.
Amendment 45 requires the Secretary of State to make regulations, to be approved by both Houses, to define the conditions that the Secretary of State may impose on financial assistance provided to GBE. I again resist this amendment. It is right that the Secretary of State can set out appropriate conditions for financial assistance provided to the company, but it would create a great deal of inflexibility if the Secretary of State were required to itemise any potential conditions in regulations. Where conditions for financial assistance are occasionally outlined in legislation, these are typically not limiting, as is the case in sections of the Energy Act 2023 relating to Great British Nuclear—GBN. In that case, Section 320 details financial assistance to GBN, and subsections(3)(a) and (3)(b) stipulate some potential conditions. However, that list of conditions is explicitly exhaustive and their application is left to the discretion of the Secretary of State. The Energy Act provides some good examples of the types of conditions that the Secretary of State may decide to put in place for GBE, but it is important that the legislation grants flexibility to the Secretary of State not only to provide financial assistance in any manner but to set any conditions deemed appropriate.
I assure the noble Lord that, while there is a broad power, it will of course be subject to the normal spending and budgeting controls. It will be subject to parliamentary scrutiny through the estimates process and to HM Treasury financial delegation controls, which are applicable to all government departments and tailored to mitigate specific risks, and it will be overseen by the accounting officer of the department, who can be called before various Select Committees, particularly the Public Accounts Committee.
Amendment 108 in the name of the noble Lord, Lord Offord, seeks to add a new clause allowing the Secretary of State to limit the ability of GBE to finance itself through borrowing. Noble Lords will be aware that, as a publicly owned company, GBE will not be permitted to borrow money from commercial bodies without explicit permission from His Majesty’s Treasury. Generally, the Exchequer can always borrow money more cheaply than financing from the private sector. If circumstances were to change and GBE received such permission, then, because it is a public sector body, any borrowing by Great British Energy would appear as a liability on the Government’s balance sheet and therefore would be transparent and visible to any interested party, including us.
Lord Hamilton of Epsom (Con)
I would be most grateful if the Minister could answer my question. Is there not a danger that, if there is a profitable energy project, the private sector will pick it up and make money on it but, if it is much dodgier and more speculative, and it might lose money and the risk is much higher, GBE will be left with it and probably lose money for the taxpayer?
Lord Cryer (Lab)
I see the point the noble Lord is making, but that is a matter for the board. I have a certain degree of faith in the Secretary of State and we have an extremely competent chair with a well-proven track record. In due course, we will hopefully have a board with a similar track record. I do not think we will be dealing with the sort of people who fritter money away because they happen to fancy it. But that is a matter for the board of GBE.
Baroness Noakes (Con)
At the outset, the Minister said that Great British Energy was going to be capitalised at £8.3 billion. That formulation was used in the manifesto, the July statement, et cetera. He then seemed to imply that the amount of financial assistance given under Clause 4 was not within the £8.3 billion. Could he clarify whether it is or not?
Baroness Noakes (Con)
Perhaps I could take us on to another aspect of the £8.3 billion. Helpfully, the noble Lord confirmed in response to my noble friend Lord Offord’s Amendment 40 that financial assistance would be included in general government debt, so we expect to see the £8.3 billion in the measurement of debt. At Second Reading, I raised the issue that I could not see the £8.3 billion in the Budget Red Book and therefore within the forecasts produced by the OBR for government debt—one of the key items in the Chancellor’s fiscal rules. I failed to ask the Minister for direct confirmation of that at the time. I do so now: is the £8.3 billion included in the current OBR forecasts for government debt?
Lord Cryer (Lab)
As far as I know, the answer to that question is yes. That is to the best of my knowledge. If it is not, I will have to write to the noble Baroness.
Baroness Noakes (Con)
I would be very grateful if the noble Lord would write, because it is very difficult to see the £8.3 billion. The £125 million for 2025-26 is visible in DESNZ’s departmental numbers, but it is not clear that anything else is. If the Minister is right, there is no problem. If he is wrong, it looks like another potential black hole in the nation’s finances—one wholly of this Government’s making. So it is important that we sort this out.
Lord Cryer (Lab)
I have answered the noble Baroness’s question to the best of my ability; I will write to her.
Lord Offord of Garvel (Con)
I thank the noble Lord for his response to these amendments. I reiterate that the core aim of these amendments is to protect the taxpayer, ensure proper scrutiny and secure the financial integrity of Great British Energy, so I am sure we will come back to that on Report. I am very taken with the advice given by my noble friend Lord Hamilton of Epsom, that nationalised industries do not have a great track record of producing profits and returns for the taxpayer. In the meantime, I beg leave to withdraw the amendment.
Lord Alton of Liverpool
“(6) Financial assistance under this section must not be provided if there exists credible evidence of modern slavery in the energy supply chain of any company designated Great British Energy.”
Lord Alton of Liverpool (CB)
My Lords, in moving Amendment 43, I thank the noble Baroness, Lady Kennedy of The Shaws, the noble Lord, Lord Blencathra, and the right reverend Prelate the Bishop of St Albans for their support. I thank the noble Earl, Lord Russell, for indicating his support and that of his colleagues. I in turn am very happy to support his Amendment 100, which is grouped with Amendments 43 and 109.
I begin by thanking the Minister, the noble Lord, Lord Hunt of Kings Heath, for making good on his promise of a meeting to discuss this amendment, and for the involvement at that meeting of the Inter-Parliamentary Alliance on China. The noble Baroness, Lady Kennedy, is co-chair of IPAC with Sir Iain Duncan Smith, Member of Parliament. He, she and I are all sanctioned by the People’s Republic of China with four other parliamentarians. The noble Baroness, Lady Kennedy, regrets being unable to be here this evening.
During the meeting with the noble Lord, Lord Hunt, we discussed a number of questions I had raised at Second Reading. I would be extremely grateful if, when he comes to reply this evening—if he is in a position to do so—he could answer the question I put to him about the Foreign Prison-Made Goods Act 1897. In addition, can he say what assessment he and his officials have made of the implications of the Proceeds of Crime Act, which in the context of the Uighurs has been to the Court of Appeal on other issues, and for that matter of compatibility with the European Convention on Human Rights? I mention that as a member of the Joint Committee on Human Rights, which is about to be reconstituted tomorrow. I hope it will look at this question of human rights compatibility.
I should also mention the reports that have appeared on BBC World in the last couple of days. One of those reports concerns tomato purée being sold in the UK under the false label of being Italian, when it was actually made by slave labour in Xinjiang. Reports included details of Uighurs who were beaten and subjected to electric shocks for not meeting their targets. Last night, “Panorama” reported that other Uighur Muslims told BBC Eye—the World Service investigations unit, made possible by a grant from the FCDO—that if they failed to pick 450 kilograms a day, they would be strung up by chains from the ceiling and beaten until they fainted.
The BBC showed huge factories linked to the detention camps, with millions of square feet of space. It is easy to imagine solar panels being made in such places, which of course are not open to inspection. They are part of a vast collocated complex, which aims to undercut all competition and replace capacity, crucial to domestic and military needs in the United Kingdom, with a world dependent on an authoritarian state with hegemonic ambitions.
This amendment returns to the question that I raised at Second Reading and poses a simple question to the Committee: do we want a slavery-free green transition, or are we content to allow the laudable aims of the Government to be achieved through forced labour? Some noble Lords may disagree with the framing of the question, perhaps because they are fearful of overstatement. Unfortunately, as I have just described, the reality is that stark. My argument revolves around the following three predicates. First, China dominates much of the renewables supply chain—an issue that was raised earlier in our debates by the noble Lord, Lord Hamilton, and others. Secondly, forced labour is widely and credibly demonstrated to be present throughout the Chinese renewables supply chain. Thirdly, net-zero targets are unachievable without Chinese-made renewables. Therefore, the argument runs that 2030 cannot be achieved without slavery.
Let me unpack those predicates, beginning with China’s dominance. According to the International Energy Agency:
“Solar … is on course to account for two-thirds of this year’s increase in global renewable power capacity and further strong growth is expected in 2024”.
Indeed, the Minister referred to that in earlier exchanges. The International Energy Agency also said:
“China has invested over USD 50 billion in new PV supply capacity—ten times more than Europe—and created more than 300,000 manufacturing jobs across the solar PV value chain since 2011. Today, China’s share in all the manufacturing stages of solar panels (such as polysilicon, ingots, wafers, cells and modules) exceeds 80%. This is more than double China’s share of global PV demand. In addition, the country is home to the world’s 10 top suppliers of solar PV manufacturing equipment”.
This is a concerning picture.
Yet this should not come as any surprise. It is no secret that China has, for a long time, wished to develop strategic monopolies over the renewables sector, together with other areas of critical infrastructure. As I have argued here before—some might say rather tediously, and I apologise if that has been the case—we have allowed ourselves to become more and more dependent on the CCP regime as our own national resilience has simultaneously been emasculated. As recently as 2020, Chairman Xi Jinping gave a speech to the seventh session of the Communist Party’s finance and economy committee, in which he said that China will aim to form a counterattack and deterrence against other countries by fostering killer technologies and strengthening the global supply chain’s dependence on China.
The problem is broader than photovoltaics. The production of rare earths, which noble Lords will know is essential to the renewables supply chain, is again utterly dominated by China. As far back as the 1990s, Deng Xiaoping himself is reported to have said:
“The Middle East has oil, China has rare earths”.
A report by the Oxford Institute for Energy Studies says that
“China dominates the supply chain, accounting for 70% of global rare earth ore extraction and 90% of rare earth ore processing. Notably, China is the only large-scale producer of heavy rare earth ores. This dominance has been achieved through decades of state investment, export controls, cheap labour and low environmental standards”.
It is not just think tanks that are exercised about the degree of UK renewables market exposure. As James Basden, co-founder of Zenobē, said last year, China controls
“the supply chain all the way from the minerals through to assembly and distribution. That means both our power sector and automotive sector are very dependent on Chinese products”.
Suffice it to say, nobody disputes that China has a stranglehold on the renewables supply chain.
I turn to my second predicate: forced labour is unavoidable in the renewables supply chain. Forced labour is widely and credibly demonstrated to be present throughout the Chinese renewables supply chain. The problem is especially pronounced in the solar supply chain. According to Jenny Chase, the head of solar analysis at BloombergNEF:
“Nearly every silicon-based solar module—at least 95 percent of the market—is likely to have some Xinjiang silicon in it”.
Why would it be a problem for 95% of the market to have Xinjiang silicon? First, it is important to understand that polysilicon material is crucial—it is the single primary material needed to produce most solar panels.
Solar panels that do not use polysilicon enjoy a negligible share of the global solar-power market. Most crucially of all, according to a 2023 report by Crawford and Murphy, all manufacturers of this material in Xinjiang are tied to Uighur forced labour. The reason for this is that the entire process used to create metallurgical-grade silicon from mining to production is highly dependent on state-sponsored labour transfer programmes.
Earl Russell (LD)
My Lords, my Amendment 100 seeks to insert a new clause after Clause 7 that would require Great British Energy to verify its supply chain in respect of unethical practices and to attempt to engage in ethical supply chain practices only. I will also speak in favour of the principles contained in Amendments 43 and 109 in this group, moved by the noble Lord, Lord Alton, and supported by others.
To be clear, I believe in people and planet, and we should not have to choose one or the other. The two are intertwined and co-dependent. Our goal of reaching net zero must not come at the expense of supporting repressive regimes which do not support the human rights of their own citizens, or on the back of slave labour.
The truth is that it is certain that a proportion of the supplies and materials used in this country as part of our efforts to decarbonise have unknown ethical origins or, if we look more closely, are probably produced in regimes with modern slavery practices.
Polysilicon manufacturers in China account for some 45% of the world’s supply, and some 80% of the world’s solar panel manufacturing. As the noble Lord, Lord Alton, alluded to, Sheffield Hallam University has linked forced labour in China’s labour transfer programme directly to the global supply chain of solar panels. Some 11 companies were identified as engaging in forced labour transfer, including all four of China’s largest polysilicon producers. Some 2.7 million Uighurs are subject to state detention and coerced work programmes.
The combination of unethical practices, cheap labour and deliberate foreign policies means that China controls much of the world’s rare earth materials and manufacturing that is necessary to produce solar panels. China built more renewable technology than the rest of the world combined last year. But China is still opening and highly dependent on coal mines. It is time for China itself to choose which side of the green revolution it is on.
It is not in our national interest to continue with such foreign power dependence in order to secure our net-zero goals. What actions are the Government considering or planning to undertake, along with our allies and partners, to verify supply chains and build our own manufacturing capacity, particularly for solar panels, so that we are not dependent on foreign countries for the materials we need to decarbonise, and so that we can be certain that the products we use are not the result of human suffering? I hope the Prime Minister raised these important issues in his recent meeting with the Chinese President.
My amendment would place a duty on GB Energy to verify and engage in ethical supply chain practices. This is not the end of the journey, but it is a start. Of course, these problems extend way beyond GB Energy and these measures should be implemented nationally.
Amendment 43 says that no financial assistance must be provided
“if there exists credible evidence of modern slavery in the energy supply chain”.
Amendment 109 calls for a warning to be placed on any products sourced from China that are used by GB Energy. Although I support the spirit and intention of both these amendments, my worry is that the Government will not be able to support them and that they will fail.
My fear is that if Amendment 43 passed it would put GB Energy at an unfair disadvantage in relation to other competitors in the industry operating in the UK. For this reason, the Government will most likely reject it. On Amendment 109, I expect that the implication of labelling these products might simply be to prevent their purchase by GB Energy, while other competitors in place in the UK marketplace without this labelling requirement would be able to continue their supply. Again, my worry is that this would do more to put GB Energy at a disadvantage versus its competitors operating in this country. The Government will probably reject the amendment on those grounds.
My hope is that my amendment or a newly tabled one on Report might help us to find a way forward together on this important issue, which we all need to make progress on. To be clear, this issue goes well beyond GB Energy, and the real long-term solutions to it sit with the verification of supply chains, strong and determined diplomacy, the creation of and investment in solar panel manufacturing on our own or along with our allies, or the research and development of new forms of manufacturing processes for these technologies. These are essential issues, but I suspect we will need to engage constructively together to find a way forward prior to Report, and that the solution, ultimately, goes beyond the scope of the Bill and GB Energy.
Lord Offord of Garvel (Con)
My Lords, I thank the noble Lord, Lord Alton of Liverpool, and the noble Earl, Lord Russell, for their amendments. We all agree that modern slavery is one of the great scourges of our time. It is estimated that tens of millions of people are trapped in forced labour worldwide, many of them in sectors tied to energy production and manufacturing. Indeed, as the noble Lord and the noble Earl pointed out very eloquently, renewable energy technologies such as solar panels rely on materials such as polysilicon, much of which is sourced from regions where reports of forced labour and human rights abuses are widespread.
These amendments seek to ensure that GBE operates with integrity and accountability in its supply chain practices. Each amendment addresses a crucial aspect of ethical responsibility, and together they would bind the Government to ensure clean energy does not come at the expense of human rights, ethical labour practices or transparency. I encourage the Government to look at this matter carefully. Can the Minister explain what measures will be put in place to ensure that there is oversight of Great British Energy’s supply chains? If Great British Energy is to represent the values of this nation, there is a strong case for tougher measures to prevent public funds being spent in a way that supports or sustains supply chains that exploit human beings.
On Amendment 109, while I recognise the sensitivity and complexity of this issue, it is crucial that we approach it with transparency and courage. Consumers and stakeholders have a right to know the origins of the products they use and the conditions under which they are made. I hope the Minister will listen carefully to the arguments made on this matter; we on these Benches will be very interested to hear his reply.
As a publicly backed entity, Great British Energy has an opportunity to set an example and be a model to other countries. I am sure the Government agree there are opportunities here and we look forward to hearing their response.
Lord Hunt of Kings Heath (Lab)
My Lords, I thank the noble Lord, Lord Alton, for his expert introduction to the amendment. I also thank the noble Earl, Lord Russell, for his wise comments. I say to the noble Lord, Lord Offord, that we are, of course listening very carefully to this important debate, and I have no doubt whatever about the gravity of the issue. The amendments seek to highlight the importance of ensuring that our supply chains are protected from forced labour, and I wholeheartedly support this.
Lord Alton of Liverpool (CB)
I am indebted to the Minister—I will come back to that in a moment—and I thank the noble Lord, Lord Offord, and the noble Earl, Lord Russell, for their contributions to this debate. I was heartened by the in-principle support that they gave for what these amendments are seeking to achieve. I pick up a point from the noble Lord, Lord Offord, about the consumer having the right to know the origins of products. I feel very strongly about that and there is much more that we can do about it in due course.
I am a free trader, but I am always struck that it was Richard Cobden who drew lines in the sand. He said no to free trade when it came to human beings in the slave trade and no when it came to the opium trade. A three-day debate in the House of Commons led to the overturning of that trade, which to this day has some relevance in the context of China. Consumers can play their part in those activities and campaigns, because they can say no by voting with their feet, but they have to know what the origins are. That means that we have to do more to detect them. The noble Lord, Lord Rooker, often says that we can look at the cotton that comes out of places such as Xinjiang to detect its DNA, or at silicon or other raw materials.
And we should go right back in those supply chains. I made the point at Second Reading that 25,000 children are believed to work in cobalt and lithium mines in the Democratic Republic of the Congo. So these are things that matter a great deal to a lot of people in different places, and we can do more about them.
I know the Minister is no stranger to these issues. He was right to mention the Procurement Act and the joint efforts we made successfully to raise amendments to that. As he knows, I was involved in the modern slavery legislation in 2015, and I always give great credit to noble Baroness, Lady May, as she now is, who was then the Home Secretary, in bringing forward what was bipartisan and bicameral legislation.
Picking up a point that others have made this evening, the noble Lord, Lord Cryer—whose father I had the privilege of serving with in the other place— said earlier today that what he likes about this House is the willingness to try to find solutions, being less confrontational and working with one another to find ways forward. I hope we will try to do that.
It is difficult to square the circle. There are contradictions and inconsistencies here; it feels almost like Jekyll and Hyde in some respects. We have the Business Secretary, Jonathan Reynolds, saying:
“I give … an absolute assurance that I would expect and demand there to be no modern slavery in any part of a supply chain that affects products or goods sold in the UK … I promise … that, where there are specific allegations, I will look at those to ensure that”
this happens.
“It is an area where we have existing legislation, and indeed we would go further if that was required”.—[Official Report, Commons, 5/9/24; cols. 418-19.]
So I welcome what the Government have been saying, but the reality, when you start to look at supply chains and where these products are made, does not sit very comfortably with those promises.
On the basis of what has been said evening, I beg leave to withdraw Amendment 43, and I hope we can find scope to come forward with something on which we can agree at Report stage.
Great British Energy Bill
Tuesday 17th December 2024
(2 months ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-II(a) Amendments for Committee (Supplementary to the Second Marshalled List) - (16 Dec 2024)
Baroness Young of Old Scone (Lab)
My Lords, if one were of a nervous disposition, one would be alarmed at the clearing of the Chamber that the simple act of standing up to move an amendment can provoke in this House.
I will speak to Amendment 46 in my name and those of the noble Baronesses, Lady Hayman—who, alas, cannot be with us today due to family illness—and Lady Boycott. It deals with the priorities that the Government will set for Great British Energy, and returns to the issue of community energy, which was given an airing by the noble Earl, Lord Russell, in the previous Committee session.
Amendment 46 inserts into Clause 5 a specific requirement that the strategic objectives of GB Energy should include delivering reductions in emissions, improvements in energy efficiency, security of energy supplies and a more diverse range of ownership of energy facilities—especially community energy schemes—whether connected to the grid or providing energy solely for local communities.
The mention of community energy in the debate about Clause 3 was very much about the objects of GB Energy. The amendments in this group are more about framing the articles of association of the company, in line with the strategic priorities that the Government impose on GB Energy. Clause 5 is more specifically about what the Government will determine on the strategic priorities and plans for GB Energy. I believe that the Bill should specify that the key issues outlined in this amendment be included in the objectives and plans. Clause 3 is about what GB Energy could do; Clause 5 is about what it will do. It is important that these priorities are on the face of the Bill.
In the case of community energy schemes, your Lordships will be glad to hear that I do not intend to repeat the excellent case made by the noble Earl, Lord Russell, in speaking to his amendment to Clause 3.
The grouping of amendments in Committee on this Bill has been interesting—I think that is the word—but it has had one silver lining in that it has given us opportunity to debate energy community for a second time. One can never have too many debates about community energy.
Much of the promotional material around Great British Energy has been clear that it will play a role in supporting community energy. Community energy schemes are important if we are to persuade local communities that the disruption and downsides of renewables development and rewiring the grid have something for them by way of cheaper, greener, more secure energy in which they have a stake.
Local power plans, including community energy schemes, are one of the five priorities for Great British Energy that were put forward in the founding statement. If all these assurances and promises represent genuine commitment, why not put this in the Bill, as my amendment proposes, as indeed does Amendment 50 in the name of the noble Earl, Lord Russell, which I also support?
During the debate on his amendment in the previous Committee session, the noble Earl, Lord Russell, indicated praise for Jürgen Maier, who is on record supporting a role for GB Energy in community energy. But Mr Maier is also on record as saying at a parliamentary hearing that he did not believe that community energy had the potential to generate gigawatts. This does not gel with the assurances that we have been given by the Government both in their manifesto and during the passage of this Bill in the other place.
I very much welcome the fact that my noble friend the Minister undertook to give greater consideration to community energy schemes and their place in the Bill between Committee and Report. I hope he will reach a conclusion on the basis of that consideration, which would result in the role of Great British Energy in community energy appearing in the Bill to ensure, above all, that confidence is not lost by communities or investors alike.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
I thank my noble friend for giving way. She has asked me a question so I might as well answer it. What that means is that the Government have not committed ourselves to a position, but we are looking seriously at the arguments that we received when we debated this issue last time.
Baroness Young of Old Scone (Lab)
I thank the Minister for that intervention. It reveals the importance of having more than one debate about community energy that he has now said that twice. I beg to move.
Baroness Boycott (CB)
I will speak to my Amendment 46A and to Amendment 46, to which I have added my name. I also support Amendments 50 and 51A in this group, among others. I tabled Amendment 46A because I want to ascertain from the Minister whether this was something that GB Energy would or could be doing. As drafted, this amendment, very simply, requires Great British Energy to deliver a public information and engagement campaign on the work it is doing as part of the transition to clean energy—about renewables, reducing greenhouse gas, improving energy efficiency and contributing towards energy security.
The first inquiry that I was part of in the then newly established Environment and Climate Change Committee, which was under the wonderful chairmanship of the noble Baroness, Lady Parminter, was on public engagement —or, to be quite honest, after many months of looking at it, the lack of it. Shortly after that inquiry, the Skidmore review also identified that public engagement is the missing piece of the puzzle. I am really not sure how much the dial has moved since then in this Government and certainly in the previous one. With GBE being a government-owned company, we could decide here and now, today, that the Government are going to take an active role in this; I think, and many others agree, that this would have a very beneficial knock-on effect.
The reason it is important may not be abundantly obvious at first, so I shall just lay out why I believe it is crucial. As we found on the committee, 32% of emissions reductions up to 2035 rely on decisions by individuals and households, while 63% rely on the involvement of the public in some form or another. We need to tell the public what we are doing and why we are doing it. We know that the public support the transition to net zero. Even last week there was a new poll that found that across all the major parties there was a high amount of support for anything to do with the environment. But you cannot expect people to support something if they do not know the reasons or what it is going to mean for them. We are not shepherds herding sheep, but we need to explain why it is happening,
I have real faith that the public will largely—if not exclusively—support all the energy infrastructure that we need to decarbonise the grid, including pylons wherever they have to be put, and they will be up for getting EVs and charging them in the middle of the night at times when electricity is abundant. They will do all these things because if they can buy into the common good, then you are in a win-win situation. But we must engage them, and the continued absence of a public engagement strategy leaves lots of space for lots of very negative voices to chip away with misinformation about why we do not need to do this and how we are not really in a climate emergency. Explaining these changes and how they are going to come in is crucial to secure public consent and address all the concerns that both the public and too many sections of the media, sadly, have.
I also fully support the amendment in the name of the noble Baroness, Lady Young of Old Scone, who made a wonderful introduction to it. I just add that with such little accountability, as the Bill stands, and as the Minister has said, we are not going to see a draft strategic priority statement before the Bill passes. It is important that there is some constraint around what the statement includes. The contents of this amendment are fully consistent with the objects in Clause 3 but correct a wrong area where GB Energy has the ability to invest in a wide range of “things or areas” but has no long-term security of knowing roughly what its strategic priorities will be.
I do not believe that this is too prescriptive. It seems to be wholly consistent with everything I have heard the Minister say in this House—and, indeed, the Secretary of State in the other place. I challenge the Minister to come up with something that he thinks GB Energy ought to have a role in, either now or in the future, that does not feasibly come under the list in this amendment.
It has to be said that my amendment is broad, so a few points apply to both it and the amendment from the noble Baroness, Lady Young. I will say a few words on emissions reductions. This has to be the overarching purpose, which, from conversations we have had with the Minister, I think is the case. But it is important that as a principle it is a publicly funded company which is not at present aligned to our emissions reduction targets. We should have no issue in including this in the Bill as its priority.
Everything to do with energy efficiency must be an area where GBE has a meaningful contribution by bringing in investment. The CCC has highlighted that we are really behind and that progress is slow. The warm homes plan—which I greatly welcome; indeed, I tabled an amendment to the last Energy Bill, now an Act, which included a warmer homes and business plan—aims to see 300,000 homes upgraded over the next year. I ask the Minister whether his department has yet produced a credible plan for the year after that. I am thinking particularly about the target to reach 600,000 heat pump installations by 2028.
These are large numbers. I remind noble Lords that we have 29 million homes in this country—more each year—which at present are likely to need retrofitting. As for security of the supply, I understand the Minister sees this as critical to what GB Energy will achieve. Indeed, his department’s 2030 clean power target, which this Bill helps to achieve, will mean more renewable energy. There should be no issue about including this as well. I also include community energy, which I can see has had a lot of airtime already. That is really important for bringing the public along on our journey, because if you can look out of your window and see a turbine and think, “That is powering and heating my home” or “The solar panels on my roof are feeding into the grid as well as cooking my dinner”, we will come up against a lot less opposition to all renewable developments.
Lord Whitty (Lab)
My Lords, I have a short but crucial amendment in this group—Amendment 51A—which deals with the key issue of employment. It rather shocked me when I checked the wording of the Bill that the words “employment”, “skills” “training”, “retraining”, “upgrading” or even “fair transition” are not mentioned in it. At one of his briefing meetings, I asked my noble friend the Minister for a clear chart of the various bodies we are now envisaging having influence on energy policy—NESO, Ofgem and now Great British Energy and Great British Nuclear. None of them have as a central mission to provide the new and upskilled workforce that will be needed to deliver both the grid and the new forms of energy which will take us to clean energy by 2030 or 2035.
I also looked through the previous Act of the last government—the Energy Act 2023—which is 473 pages long. It provides much of the body of approach to energy policy which the new Government have largely adopted. From a rough-and-ready word check, I do not think that the words “employment”, “skills” and “new skills” appear in that either.
If we are to deliver a clean energy system, from generation to delivery, and energy efficiency in our homes, offices and buildings, as well as a transformation of our industry and transport, we will need a much more skilled, or differently skilled, workforce than the one we have at the moment. That requires somebody to take responsibility for that. None of the bodies has that as one of its central tasks. That needs to be remedied before this Bill disappears from this House.
We need to ensure that those currently employed in sectors of energy which will reduce in gas and oil have a high level of skills which will be relatively easily transformed into skills delivering the new clean energy—or those further down the line delivering home efficiency and other forms. We do not have that in the energy policy. It is mentioned in passing in one of the White Papers, but it is nowhere in proposed legislation. This amendment would at least put it in the statement of priorities required to be issued by NESO early in the transition. It will need following up; it will need more than that. It will need substantial intervention, provision of retraining, apprenticeships and skills, and redefinition of jobs if we are to achieve the timescale and trajectory to net zero that we are envisaging.
This amendment, which is supported by the TUC, would put a marker down that we need to address this issue. Without a transformation and extension of the workforce, we will not deliver the full energy system in anything like the timescale currently envisaged. Can my noble friend the Minister ensure that the Government come back with some way of reflecting in this Bill that employment and the transformation of employment are an important priority, as is assigning responsibility for them to one of the many bodies now in this arena? It may not be regarded by many as central to this Bill, but it is central to the delivery of the outcome. I put down this simple amendment at this point, and I will return to it at a later stage.
Baroness McIntosh of Pickering (Con)
My Lords, there are a number of interesting and thought-provoking amendments in this group. I am delighted to follow the noble Lord, Lord Whitty, in speaking to his. I will speak to my Amendment 55 and ask the Minister to respond on a number of issues when he winds up on this group.
I felt that this amendment was necessary to probe the thinking of the Government. Clause 5(7), on strategic priorities and plans, says:
“The duties to consult imposed by subsections (4) to (6) may be satisfied by consultation carried out before this Act comes into force”.
What is the timetable for those consultations? Can the Minister assure the Committee that they will be meaningful and last, as in the terms of my Amendment 55, for the usual 12 weeks—ideally not covering the summer or Christmas holidays, which is so often the case? Will they be meaningful and be over a 12-week period, and will they consult farmers, fishermen and local communities?
Why are those three groups important? With farmers, as the Minister knows because we debated this in Questions and earlier in Committee, the Government are minded to take over highly productive land—often grade 2 or 3 land—for solar farms. In preparing for today, I have been issued information from David Rogers, an emeritus professor of ecology at the Department of Zoology at the University of Oxford. He is not personally known to me, but he has some very good figures.
I think the Government are underestimating, as of today, the amount of agricultural land that will be taken out of useful production. Let us look at the five most affected constituencies. In Newark, it is a land take of 7.9%. In Rayleigh and Wickford—I declare that I represented Rayleigh many years ago in the European Parliament—4.9% would be taken out of production. Sleaford and North Hykeham will have a reduction of 4.62%. In Newport East, the figure will be 4.6%, and Bicester and Woodstock will see 3.96% out of production.
We have to have a very grown-up debate about what the land use framework will be. I do not think that it will be published before this Bill passes, but I pay tribute to the work of the noble Baroness, Lady Young, in this regard. She has put an inordinate amount of work into this. There will be other opportunities to discuss the impact on farming. I hope the Minister will give us an assurance today that farmers will be included in the consultation and say what form the consultation will take.
I turn now to fishers and the spatial squeeze they face. The National Federation of Fishermen’s Organisations provided a briefing, at my request. It is the first to understand that fishers must share the sea, and if other industries expand so much that fishing is squeezed out of its traditional grounds, they obviously do not want to see the industry collapse. In the NFFO’s view, it is a mistake that when a new wind power station is built or protected areas are designated, the fishers who previously worked there are deemed simply to go and fish somewhere else; that is often not the case. Fish can be caught only in the places where they live and breed. They have been caught commercially in UK waters for centuries, and the areas where they feed, migrate and breed are well known, so expecting displaced fishing efforts to simply resume somewhere else entirely misses the point.
In the NFFO’s view, there is an absolute need for a strategic approach. The UK’s needs for food, energy, communication, transportation, waste disposal and recreation all intersect at sea, and the interests of fishers —and, in fact, of all users—can be met only with a strategic approach to using the marine space. How will the Government use the consultation to ensure that that is achieved, and that fishers’ voices will be heard when such a plan is developed, to ensure their future?
I turn to the work we did on the EU Environment Sub-Committee, chaired by the noble Lord, Lord Teverson. We took evidence on the environmental impacts of these developments, particularly offshore wind farms and their future replacements, on marine life and the future of the fishers. The NFFO views with increasing concern the environmental impacts of such vast industrial developments in the sea. It makes a plea that, as we go forward, any strategic overview will be consulted on. A ban on fishing is obviously not an option, in its view. We hope that fishing will not be automatically damaged through any development of the marine environment, but that common ground will be found, so to speak, in any consultations on developing strategic priorities and plans within the remit of Clause 5.
I turn finally to local communities. It is regrettable that in the past, planning permission has been granted separately for offshore and onshore wind farms, because then, a separate planning application takes place, particularly for offshore windfarms, wherever the energy reaches the shore. That poses all sorts of problems that really came to life during the general election. Perhaps it is no surprise that we have a Green Member of Parliament for part of the Suffolk coast, because if you are going to have a large substation created separately from the original planning application for the offshore windfarm, that poses problems for the Government—whichever Government it happens to be.
Also, there is alarm that the Government are planning to take back control, so to speak, of planning decisions. Under the proposals the Government envisage, we are taking the decision away from local communities— I pay tribute to all who have served and who continue to serve as local council representatives—and giving it to the Secretary of State. That is wrong, because local communities should be asked to decide where these electricity substation superstructures will be placed and, just as woefully, where the overhead pylons will be placed. I still bear the scars, as the then newly elected Member for the Vale of York, from when we were deemed to take an additional, second overhead line of pylons. This does not go down well with local communities.
I hope the Minister will look kindly on the points I have made and listen to the voices of the farmers, fishermen and local communities as the Government proceed to develop their strategic priorities and plans.
Baroness Bennett of Manor Castle (GP)
My Lords, I begin by apologising that I did not take part at Second Reading and earlier parts of Committee—noble Lords had my noble friend Lady Jones of Moulsecoomb with them then. I am pleased to report that her hip operation on Friday went well, and she should be back soon after Christmas, but in the meantime, noble Lords get me stepping in on this Bill.
I want to speak on this group particularly, because I feel like we are having a bit of a déjà vu revisit over again revisit. It is worth reminding your Lordships of the last energy Bill this House debated, under the previous Government, which I was thinking of as the noble Baroness, Lady Boycott, was speaking. On that Bill, it was the community energy amendment that we stuck out on until the absolute bitter end, through several cycles of ping-pong, so it is worth stressing to your Lordships how strongly community energy has won support previously. I very much hope that we will see that continue, or, better still, that the Government will hear the level of enthusiasm for community energy and act accordingly before or on Report.
Amendments 46 and 50 are well worth stressing. They would insert into the strategic priorities the objectives and plans having a direction, rather than the possibility that some of the earlier amendments covered. I also commend Amendment 51A, tabled by the noble Lord, Lord Whitty. This, in shorthand, is the just transition amendment. Just transition has to be the foundation for communities who have often suffered a great deal from different government policies and who need to be treated fairly this time, just as all communities affected need to be treated fairly. That is the just transition we need.
Finally, I will say just a couple of sentences on community energy. This is the way in which we can deliver real prosperity to communities, enabling people to invest in their own renewable energy and to use it to get the profits. This is the way we can get enthusiastic consent for renewable energy schemes.
Lord Hamilton of Epsom (Con)
My Lords, I first apologise to the House. On the first day in Committee, I extolled the virtues of small modular reactors and said that Rolls-Royce were in a very good position to supply these, because I knew about what they had done on nuclear powered submarines. I then remembered afterwards that I am a shareholder of Rolls-Royce, although not a big enough one to bother the Registrar of Lords’ Interests. I hope that I can now apologise unequivocally to the House that I did not mention this earlier, and that noble Lords will forgive me for not having raised it at the time.
I will pick up the remarks of the noble Baroness, Lady Boycott, who said how popular net zero was. I would slightly caveat that, because at the end of the day, the whole concept of net zero is extremely popular until people have to start paying for it. It was certainly a big problem when it became apparent that people were going to have to pay £15,000 for a heat exchanger to replace their gas boilers. I know that this proposal has now been withdrawn, but that was just an example of the problems caused by careering very fast towards a very near date of net zero, because the bills start rising all the more markedly.
One could argue that people are already paying some of the highest prices in the G7 for energy, and that is largely to do with our drive towards net zero, which has not produced cheaper energy now. We just have to hope that it does in the future, but there is no evidence of that actually happening, and I am not sure there is much in this Bill, either, to encourage one that we are going to see a great era of cheap energy.
It is quite interesting that the newspapers today said that we had reached 70% of energy being produced by renewable sources—wind, solar and so forth. What they did not mention was that the week earlier, we had gone through a period when the whole country was covered in cloud and there was no wind whatsoever, so we had a combination of neither solar panels nor wind turbines working. At that stage, 70% of our energy was coming from natural gas. It veers from one extreme to another. The problem with most forms of renewable energy is that they do not work all the time. If they did, it might be possible to get the price down to something slightly more reasonable. We need to be very wary.
The noble Lord, Lord Whitty, raised the problem of training enough people to carry out all the tasks that we are envisaging. There seem to be a number of things that are checking the process and involve the spending of money of one sort or another. I am far from sure that we are going to see all this forthcoming in the timescale to hit these very near targets for when we want to reach net zero in this country. We must be wary of being too optimistic that somehow GB Energy is going to solve all these problems. I do not think there is any evidence whatsoever that it will do so.
Lord Teverson (LD)
My Lords, I want to reassure the noble Lord, Lord Hamilton, that there is a form of renewable energy that can be on all the time, and that is geothermal. We are developing that quite rapidly in Cornwall and it has been proven worldwide. Recent reports have said that, if we were to roll it out, costs could reduce by something like 80%.
Lord Hamilton of Epsom (Con)
At one stage, I was involved in geothermal energy in Cornwall. We had a problem in that, when we pumped cold water down into very hot rocks, there were small earthquakes, which rather upset people locally.
Lord Teverson (LD)
There were a number of issues previously about that. Of course, geothermal originally required a certain degree of fracking, but that is no longer necessary. Since the development of United Downs, there have been no such earthquake tremors, all of which were very low indeed. But it is an issue for the public and one that needs to be recognised.
Coming back to what the noble Baroness, Lady McIntosh of Pickering, said, I want to thank her for bringing out some of the issues that we looked at in the sub-committee, and I congratulate her on being the champion of fishers that I know she is. On the issue of solar energy and the take of land, I do not think that we should in any way be questioning or pessimistic; indeed, solar should not be on high-grade agricultural land, but we should look at dual use of these areas. Even where there is solar on grade 3 or grade 4 agricultural land, it is not inevitable that this should be its only use. I would like to see the equivalent of a Section 106 agreement in the planning regime to say that there needs to be allied agricultural use on that land such as harvesting the grass, grazing or biodiversity objectives, which are absolutely possible.
However, I really wanted to intervene on community energy and re-echo what the noble Baroness, Lady Boycott, said. The great thing about community energy is not just the transition but the involvement of people in making that transition happen. It makes them part of the great process that we have to go through, and that is why it is essential that achieving this is part of Great British Energy’s remit.
Lord Grantchester (Lab)
My Lords, while the Committee considers the amendments in this group drawing attention to immediate overriding priority objectives, I would like to provide a wider context that includes consumers and demand-side aspects. Perhaps it could be summed up by adding to Amendment 46 “assist in the management of consumer demand”, but it would apply equally to many of the other amendments.
The Minister may recall that, in my Second Reading remarks, I drew attention to digital infrastructure and smart metering. Recently, the department has made statements on the Clean Power 2030 Action Plan, which builds on NESO’s plans, and on the capacity market to incentivise investment in demand-side response mechanisms. The amendment in the name of my noble friend Lady Young mentions improvements to energy efficiency and community ownership. In this regard, consumer-led flexibility can play a vital role in shifting their electricity use through smart technology such as smart-charging EVs and heat pumps.
The smart meter network is a critical national asset that is uniquely placed to enable the transition to a modern energy system. The DCC and Vodafone have signed a deal to bring 4G connectivity to Britain’s smart metering network beyond 2033, and Vodafone’s 4G has 99% coverage in the UK. The Government have committed to invest £6.6 billion to upgrade 5 million homes and cut bills for families as part of their warm homes plan. The smart meter network can be used completely securely to identify energy-inefficient housing stock, as well as damp and insulation issues.
NESO’s plans include offering a demand flexibility service to help consumers save money by reducing their usage during peak times, thereby helping to balance the grid. This DFS, powered by smart meters, should be a key part to facilitate Amendment 46 and the Government’s plans. In the Government’s Clean Power 2030 Action Plan, will the DFS be brought forward and be applicable to all housing at all times of the year, and will it target support to retrofit energy-inefficient housing? Have any costings been considered by the Government and savings identified? That is the subject of the next group of amendments.
Lord Teverson (LD)
My Lords, I apologise. In my excitement to contribute in Committee, I forgot to apologise for not being able to come to previous sessions. I also forgot to declare that I am a director of Aldustria Ltd, a battery storage company, and that I chair the Cornwall & Isles of Scilly Local Nature Partnership, which is involved in biodiversity issues.
Earl Russell (LD)
My Lords, I will speak to my Amendment 50 and signal my support, and that of our Benches, for Amendments 46, 46A, 49 and 51A.
My Amendment 50 seeks to add a statement to the strategic priorities, including a specific priority for the advancement and production of clean energy from schemes owned, or part-owned, by community organisations. This amendment seeks simply to have community energy added to the strategic priorities for Great British Energy. I apologise for talking about community energy again, as my Amendments 11 and 15 were about the objects of the Great British Energy company; these amendments work alongside those, and, combined, we want to see community energy in the Bill, both in the objects of the company and in the strategic priorities.
Labour has looked to Europe for its inspiration—for want of a better word—for Great British Energy. In Europe, community energy is being embedded in local power networks at an ever-increasing level. Europe is doing that because it knows that it is good for energy security, continuity of supply and local communities and that it brings local benefits. Here at home, we have seen the end of the feed-in tariff, but since that time there has been very little development, with still only 0.5% of our electricity being generated from community-based energy schemes. Reports have indicated that there is a possibility for that to grow exponentially up to some possible 8 gigawatts of local community energy by working with local energy plans, provided that the investment and policy are put in place to make that happen.
I thank Power for People, which has helped me with these amendments and provided your Lordships with briefings. It believes that up to 2.2 million homes could be powered by community energy, that it could save some 2.5 million tonnes of carbon dioxide and that it could help to create some 30,000 jobs in the UK.
Community energy is good not just for us but for our communities. Without going through all the arguments I made the other day, our position is that there is no Great British Energy without a Great British community energy. Our vision is for an end-to-end community energy scheme, so that our local communities can contact one person and get an end-to-end system to help them to get the investment, planning and ideas to turn their wishes to help contribute and be part of this transition into reality.
The point is that the big players will not do this; they are not operating in this field. This simply will not happen if GB Energy does not take it on and make it part of its core strategic priorities—it just will not happen. There is no other realistic option for this. This is good for us and for our communities, and we want to see communities benefitting from the energy infra- structure that they host or run. I apologise, but there will be a third bite of the cherry, as my Amendment 118A, in group 14, argues specifically for this point.
Lord Fuller (Con)
My Lords, I will speak briefly in strong support of Amendment 55, tabled by the noble Baroness, Lady McIntosh. Of course we want to consult widely with farmers, fishermen and communities; after all, these are the people who are most likely to be greatest affected by the generation of renewable energy in the countryside. However, that energy will be consumed in the cities, and so those people will not necessarily see the benefits. The harms could be damaged landscapes, the consumption of land, and the introduction of noise and general disruption from construction. We are looking at towering turbines and new pylons. In my own area, in Norfolk, Diss faces being surrounded—fenced in—on both sides by two huge lines of pylons as part of our drive to net zero. Acres of land are lost to solar, with the loss of jobs in the countryside and the debilitating hum of battery storage.
What can the Minister say about the extent to which the consultation will be coupled with reassurances and promises of compensation for those in parts that are most affected—possibly a reduction in electricity or energy bills? It should not be just the generality of everyone’s electricity or energy bill but particularly those people who are most affected.
Lord Offord of Garvel (Con)
My Lords, I thank the noble Lords, Lord Whitty, Lord Hamilton, Lord Teverson, Lord Grantchester and Lord Fuller, the noble Earl, Lord Russell, and the noble Baronesses, Lady Young, Lady Boycott, Lady McIntosh and Lady Bennett, for their thoughtful contributions so far to this debate. This group has dealt with the critical subject of the strategic priorities of Great British Energy, and we must recognise the importance of this issue.
I begin with Amendment 46. As we discussed on the first day in Committee, the drafting of the Bill is concerningly lacking in detail. Unlike other Bills we have scrutinised in this House, the Great British Energy Bill lacks a clearly defined purpose and does not set out the company’s strategic priorities and plans. I am grateful that Amendment 46 looks to define the impacts of Great British Energy’s strategic priorities: the security of energy supply and the diversification of the ownership of energy facilities for the benefit of people and communities.
By explicitly stating that Great British Energy’s strategic priorities will assist in the reduction of greenhouse gas emissions and improve energy efficiency, we would ensure that the £8.3 billion of taxpayers’ money is used effectively for the Government’s stated purpose. Not only this but it is critical that Great British Energy looks to achieve a secure energy supply, as mentioned by the noble Earl, Lord Russell. We saw how that was disrupted with the war in Ukraine. This is not an issue that can go unaddressed when discussing a Bill that the Government claim is so consequential to our country’s energy production, supply and security.
In fact, Clause 3 explicitly states that
“Great British Energy’s objects are restricted to facilitating, encouraging and participating in … measures for ensuring the security of the supply of energy”.
However, the Bill makes no provision to ensure the security and future of our energy supply. We are concerned that there may be some tunnel vision here on renewable energy to achieve the Government’s unilateral, and perhaps overambitious, target of clean energy by 2030; that would inevitably compromise our energy security. I am grateful to the noble Baronesses for addressing this concern in their amendment.
Amendment 47 in my name requires the statement of strategic priorities and plans to include the reduction of household energy bills by £300 by 2030. Throughout the election campaign, the Government repeatedly promised that Great British Energy would cut household bills by an average of £300. A similar claim was made by at least 50 MPs, the Science Secretary and the Work and Pensions Secretary, and even the Chancellor said:
“Great British Energy, a publicly owned energy company, will cut energy bills by up to £300”.
In an interview in June, the Secretary of State himself claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. As the noble Baroness, Lady Boycott, put it so eloquently, the public are hearing this message and must not be misled.
It is worrying that in the other place the Government voted against a Conservative amendment to make cutting energy bills, quoting the £300, a strategic priority for Great British Energy. By doing that, the Government voted against an amendment that would hold them to their word. They voted against ensuring delivery on their promise to cut energy bills for the British people. Why do this? If it is not £300, what is it? The public genuinely believe that Great British Energy, as a new energy company, will supply them with cheap electricity. Can the Minister give the Committee a cast-iron guarantee that GB Energy will cut energy bills? By how much will they be cut?
The pledge to cut household energy bills by up to £300 was not the only promise the Government made during their election campaign. They also promised that Great British Energy would create 650,000 jobs, yet this too was defeated from becoming a strategic object of Great British Energy and is absent from the Government’s Explanatory Notes on the Bill and the Great British Energy founding statement. Why is this? Amendment 48 in my name would ensure that the Government are held to their word and that the creation of 650,000 new jobs is included in the statement of strategic priorities.
These are not trivial matters: they are promises that are important to people. The Government have already put 200,000 jobs at risk with their plans to prematurely shut down North Sea oil and gas. The public are aware of this transition and they want a just transition, but they are hearing of an acceleration in offshore oil and gas to the detriment of jobs and no commitment given as to the new jobs that will replace them. The Secretary of State has made huge promises that greatly impact people’s energy bills, their businesses and their jobs. It is therefore critical that the Government are held accountable.
Amendment 49 in my name would introduce a specific strategic priority for Great British Energy to develop UK energy supply chains and require that an annual report is produced on the progress of meeting this strategic priority. It is essential that our transition to net zero does not increase our reliance on foreign states, as has been mentioned many times, and particularly not on hostile foreign states. I think we all want to see a “Made in Britain” transition, where our offshore wind turbines are constructed by British manufacturing companies and erected by British high-skilled workers, and deliver clean, cheap energy for British homes and businesses. With that in mind, my Amendment 49 would make domestic supply chains a strategic priority for Great British Energy. In this transition to net zero, we are presented with great opportunities for investment and for new jobs. As with employment, we must ensure that British people and domestic companies benefit from the increase in investment we hope to see in the coming years. Therefore, we must not simply outsource this transition; the transition will not be just if it benefits only Chinese companies.
I am grateful to the noble Baroness, Lady McIntosh, for tabling Amendment 55. It is critical that the Secretary of State must consult with various groups and local communities, including farmers and fishermen, when implementing a statement of priorities that will almost certainly have significant implications for them. I remind noble Lords of Amendments 26 and 110, to which I spoke on the first day in Committee. I raised the importance of local community consultation when the activities of Great British Energy might result in the erection of pylons.
I also draw the attention of noble Lords to Amendments 106 and 107, which will no doubt be addressed in future debate. I too have expressed my concern on the impact of Great British Energy’s functions on coastal communities and commercial fishing. I seek to ensure that an annual report is prepared and published to assess those potential impacts.
I turn to Amendment 50 in the name of the noble Earl, Lord Russell. I do not intend to be repetitive, but this too is a fundamental issue with the Bill—it lacks strategy. How can the Minister expect the Committee to have thorough debate when the details of the Bill are so vague? The Bill lacks substance and we need to clarify the strategic priorities. However, by addressing amendments such as Amendments 50, and Amendment 73 which will come later in the debate, we can begin to address some of these glaring omissions.
Lord Hunt of Kings Heath (Lab)
My Lords, this is a very interesting set of amendments, and I am grateful to all noble Lords who tabled amendments and have spoken in this debate. Clearly, as we said before, the overarching aim for the statement of strategic priorities is to ensure that Great British Energy operates in line with, and delivers on, the priorities set out by the Government. That is proper for the Government to do.
It is clearly important that we have a means through which to influence the strategic plans of Great British Energy. Equally, we want Great British Energy to have as much operational independence as possible within the parameters of Clauses 3 and 5. Inevitably, that makes me cautious about a number of the amendments proposed during this debate, which one way or another seek either to constrain the powers of GBE or to direct where it ought to focus its priorities and energies.
Amendment 46 tabled by my noble friend Lady Young proposes an addition to Clause 5 to ensure that Great British Energy will reduce greenhouse gas emissions, improve energy efficiency, ensure security of supply and include community ownership. As she said, we debated some of those matters on our first day in Committee. I agree with her about the vagaries of groupings, which after 27 years of membership of your Lordships’ House remain an eternal mystery to me, as we are enabled to repeat many of the debates already held. Indeed, the noble Earl, Lord Russell, has promised to come back to the very issue of community energy when we meet again on some distant future date in mid-January.
The Bill clearly provides a statutory basis for facilitating and encouraging the reduction of greenhouse gas emissions, improving energy efficiency and ensuring the security of supply of energy under the objects set out in Clause 3. Clearly the statement of strategic priorities must be consistent with these objects. I understand the point that the noble Lord, Lord Hamilton, made about prices; there was an Oral Question today on the impact these are having on UK businesses. He will know that, as I said then, the highest price for energy was achieved under his Government’s watch.
The noble Lord, Lord Offord, also spoke on that topic, and talked about security of supply. I think he very much reinforced what the noble Lord, Lord Hamilton, said when the latter raised the issue of the sun not shining and the wind not blowing, and the resulting reliance on gas. In our aim to move towards clean power by 2030 we envisage using renewables much more than currently. However, we also need nuclear as an essential baseload for our energy generation, and gas as the flexible energy generation which you can turn on and off. Currently gas is unabated, but with CCUS it will largely become abated. That is the way we see ourselves going forward, along with having long-term energy storage as set out in our clean power action plan.
On North Sea oil and gas—again, the noble Lord, Lord Offord, has raised this with me a number of times—I repeat that we are committed to a just transition, working with industry and the workers involved themselves to recognise the importance of the sector, which will operate for decades to come. We remain in close engagement with the industry on these matters. Like the noble Earl, Lord Russell, my essential response to these issues about energy price reductions and the need for long-term price stability is that reliance on international fossil fuels, and the markets that operate in the way they do, is simply not the way to solve them.
I turn to the specifics in Amendments 47 to 50 and 51A, tabled by the noble Lord, Lord Offord, my noble friend Lord Whitty, and the noble Earl, Lord Russell, and supported by the noble Baroness, Lady Bennett, and the noble Viscount, Lord Trenchard, although he did not speak to them. These amendments would require the statement of strategic priorities to include targets relating to consumer bills, jobs and supply chains, and to include reference to community energy schemes.
On the general principle, we want Great British Energy to operate independently. The Bill is focused on making the minimum necessary provisions to support establishing the company—that is why the Bill is constructed in the way it is. Normally, Governments are accused of trying to micromanage the institutions they are responsible for, but here the Government are saying that GBE needs to have as much operational independence as it can within the constraints of Clauses 3 and 5. However, some noble Lords wish to constrain, in one way or another, what Great British Energy should do. We are resistant to that as a general matter of principle.
Lord Vaux of Harrowden (CB)
I am rather baffled by the Minister’s argument. The Government are going to publish a statement of strategic priorities, but if Great British Energy is going to be independent why does it need such a thing? Presumably the statement of strategic priorities will point the company in the right direction, but the implication of the Minister’s argument is that it is going to be incredibly thin. Is that correct?
Lord Hunt of Kings Heath (Lab)
I do not really know why the noble Lord is baffled by what I said. I thought I clearly said that we wish Great British Energy to have as much operational independence as possible, within the constraints of Clauses 3 and 5. At this stage, I cannot tell him what will be in the statement of strategic priorities, because it is being worked on, but it will have sufficient detail to make absolutely clear the Government’s priorities within the constraints I have suggested, while allowing Great British Energy the breadth and room to move in the way it thinks best.
On the issue of jobs, which my noble friend Lord Whitty was absolutely right to raise, all the organisations he mentioned have a role to play to ensure not just that we create the required jobs but that we can fill them. The issue is not so much lacking jobs for the future but enabling enough people to come forward to be given the right training and skills to fill them as effectively as possible. There is a clear message in the action plan we published last week:
“The wider transition to net zero is expected to support hundreds of thousands of jobs, with Clean Power 2030 playing a key part in stimulating a wealth of new jobs and economic opportunities across the country. These jobs will cross a range of skill levels and occupations, including technical engineers at levels 4-7 … along with electrical, welding, and mechanical trades at levels 2-7, and managerial roles including project and delivery managers at levels 4-7. Many of these occupations are already in high demand across other sectors”.
We have within the department the Office for Clean Energy Jobs, whose role is to co-ordinate action to develop a skilled workforce to support and develop our clean power mission.
I should mention the nuclear industry. I am at risk of repeating myself, but other noble Lords have enjoyed doing that during our deliberation. The Nuclear Skills Taskforce calculated that we need 40,000 extra people working in the nuclear sector—civil and defence— by 2030. That is in five years’ time. That goes up into the 2040s. There is a huge job to be done, and I believe it is my department’s role to work with industry and all the other organisations to spearhead that.
Lord Hamilton of Epsom (Con)
Does the noble Lord share my concern that the nuclear power station being built in Somerset is costing four times as much as an identical one in South Korea? Does he have any plans to bring the price down for future nuclear power stations?
Lord Hunt of Kings Heath (Lab)
That question really should be addressed to the noble Lord’s own Front Bench and their stewardship. I want to be fair to EDF: a lot of the reasons for the high cost related to starting afresh with new nuclear in this country and issues with designs, because the UK regulator wanted thousands of design changes. Covid did not help. Developing a supply chain and the skills also contributed. EDF has made considerable progress recently. It is sticking to its commitment that the first unit will start operating between 2029 and 2031.
Of course the noble Lord is right to raise the issue of cost. He will probably know that we will move to a final investment decision on Sizewell C over the next few months, but because it is an 80% above ground replication of Hinkley Point C, a lot of the things EDF learned from the whole process of construction will be transferred to Sizewell C. We are trying to bring in private sector investors to bring in commercial discipline, which, if we can get to FID, should ensure that Sizewell C will basically proceed on time and on budget, while learning all the lessons from Hinkley Point C.
Baroness McIntosh of Pickering (Con)
May I have a reply, if possible, on having joined-up planning applications for offshore oilfields and substations or pylons, so there is one planning application for the whole project?
Lord Hunt of Kings Heath (Lab)
I am sorry, I should have responded. Clearly, the noble Baroness will know from the Clean Power 2030 Action Plan the Government’s intent with regard to planning generally. She will have seen what we said in it about seeking to reform the whole planning process. I will ensure that the point she makes is embraced within that. I see the force of her arguments.
Baroness Young of Old Scone (Lab)
I thank noble Lords who took part in this debate, including the noble Baroness, Lady Boycott, the noble Earl, Lord Russell, and my noble friend Lord Grantchester. The noble Baroness, Lady Hayman, is no doubt watching Parliamentlive.tv and cheering us on as we speak. I also thank the noble Lord, Lord Offord, for his party’s support for community energy and for the remarks about land use, which we will come to in Amendments 67, 73, 104 and 105. It highlights the need for a land use framework for England. I was kind of hoping that we would get it for Christmas, but it looks like it might be slightly later. We were supposed to get it last Christmas, as well.
I was delighted to hear that the Minister welcomes the further amendments on community energy, tabled by the noble Earl, Lord Russell, that will come up in our next session. It will be the third opportunity for the Minister to tell us that he is pondering. Perhaps I should change my wish for a land use framework this Christmas to a wish for some new arguments in favour of community energy before our next debate, because it is becoming slightly repetitive. On the other hand, a good case can bear repetition.
The Minister clearly understands the importance of community energy. I am not sure he quite understands the distinction I was making between the objectives of GBE—which are about what it can and, by implication, cannot do—and strategic priorities and plans, which are what, in the Government’s view, it must do and do now. That is a material difference. In order to inform these reflections between Committee and Report, and in view of the wide support around the Chamber for community energy issues being addressed in the Bill, will the Minister meet with some of us who have indicated that very wide support?
Baroness Young of Old Scone (Lab)
I thank the Minister for that. In the meantime, I will withdraw the amendment, though perhaps not before dwelling briefly on the statement from the noble Baroness, Lady Boycott. She talked about looking out your window and seeing the local wind turbine in which you would have some skin in the game as a result of a community energy scheme, and so think kindly on it rather than it being the enemy. That reminded me of how the Labour Party used to feel about Arthur Scargill: “He may be a bastard, but he’s our bastard”. There may well be hope for this policy.
In begging leave to withdraw the amendment, I reserve the privilege to decide, when the noble Baroness, Lady Hayman, is back in harness, whether this should return on Report. That will very much depend on what the Minister tells us about the outcome of his reflection between Committee and Report. I wish him a happy Christmas while he does that.
Lord Vaux of Harrowden
“(1A) The Secretary of State must comply with subsection (1) within the period of six months beginning with the day on which this Act comes into force.”Member's explanatory statement
This amendment would introduce a time limit by which the Secretary of State must prepare and publish the statement of strategic priorities.
Lord Vaux of Harrowden (CB)
My Lords, in moving Amendment 51, I thank the noble Baroness, Lady Noakes, and the noble Viscount, Lord Trenchard, for their support on this.
In many ways, this group addresses the key problem with this Bill: namely, that it includes no detail at all as to what GBE will do. There are no objectives of any sort in the Bill. We have discussed previously the difference between objectives, of which there are none, and the objects in Clause 3, which simply restrict the company’s activities. There is absolutely nothing in this Bill against which success can be measured or the use of public money measured and scrutinised.
The last group was about what the statement of strategic priorities required under Clause 5 should include. That debate demonstrated clearly how much better it would be if we had the statement of strategic priorities before the Bill finishes its process through this House. The Minister said clearly on the last group that that is not going to happen, which makes this group much more important.
This group is about the process by which the statement should be published and scrutinised. In response to some of the concerns that have been raised in this respect, the Minister said at Second Reading:
“On the structure of the Bill, noble Lords will know that this was laid in the Commons very soon after the election as an early priority of the Government. Because of that, we have focused, inevitably, on the provisions that are fundamental to the establishment of Great British Energy. Clearly, we are still working through some of the policy issues on which we need to come to a view”.—[Official Report, 18/11/24; col. 98.]
Others have described that as meaning, “We will make it up as we go along”. It is quite hard to disagree.
The Minister referred earlier to having found the right balance. I find that a difficult concept, given that there is no balance. There is nothing at all about the strategic objectives of Great British Energy in this Bill—that is not a balance. However we look at it, we are being asked to scrutinise a Bill when we have no information as to what the Government are planning and no meaningful impact assessment on those plans.
This Bill looks rather like a skeleton Bill: a Bill where most of the detail is added by the Government at a later date. This Government, when in opposition, were rightly critical of the use of skeleton Bills by the last Government. I agreed with them then and I agree with them now. However, there is an important distinction between this skeleton Bill and the more usual skeleton Bills that we have seen in the past. In a typical skeleton Bill, the Government give themselves the ability to add the missing detail by means of statutory instruments. We all recognise that the scrutiny of statutory instruments is not that strong, but parliamentary scrutiny does take place and there is at least the theoretical ability for Parliament to decline them. In this Bill, no such scrutiny of the strategic priorities is available. The Government will simply publish the statement of strategic priorities at some unknown future date, and there will be no opportunity at all for Parliament to debate it, and certainly no opportunity for Parliament to amend or decline it.
That is clearly unsatisfactory, and your Lordships’ Constitution Committee said so in its report dated 28 November, in which it pointed out that,
“in the light of the centrality of Great British Energy to the delivery of a significant policy initiative, we are concerned that clauses 5 and 6 amount to ‘disguised legislation’”.
It went on to say:
“We are concerned that clauses 5 and 6 do not offer an adequate degree of parliamentary oversight”.
I cannot disagree with any of that.
Baroness Noakes (Con)
My Lords, I have added my name to Amendment 51 from the noble Lord, Lord Vaux, and I also have four other amendments in this group. One of my concerns about the Bill is that Great British Energy is the last in a long line of unelected quangos, which have precious little parliamentary oversight and weak accountability processes. All the amendments in this group in one way or another seek to increase the role of Parliament, and thereby go some way towards remedying the accountability deficit that exists in the Bill.
As the noble Lord, Lord Vaux, has already reminded the Committee, the Constitution Committee has called out Clause 5 as being disguised legislation. I agree with that. I do not agree with it in relation to Clause 6, which I will explain when we get to that clause. The important thing is that this underlines the need for strong parliamentary processes around Clause 5.
Amendment 51 from the noble Lord, Lord Vaux, is important. If the Secretary of State delays setting out his strategic priorities, the company, Great British Energy, will be left rudderless and may start to spend taxpayers’ money in ways that are not in line with what the Secretary of State wishes to prioritise. Alternatively, a less generous perspective is that the Secretary of State might delay issuing the statement of strategic priorities in order to delay laying it before Parliament and thereby exposing it to public scrutiny.
There is no unanimity even among the green lobby as to what would amount to a good use of taxpayers’ money under the Great British Energy banner. Some of the things that the Secretary of State might choose to prioritise may well horrify some of the climate activists. We might expect nuclear to be one of those examples. The Secretary of State could probably get Great British Energy to act in accordance with his wishes without going through the Clause 5 process by using—or more likely, threatening to use—the Clause 6 power of direction, which we will debate later. He could thereby sidestep public and parliamentary scrutiny for quite some time.
Whichever analysis is the correct one, it is clearly important that we ensure that there is a public statement of priorities as soon as possible. The amendment from the noble Lord, Lord Vaux, generously allows for six months after the Act comes into force. I could easily argue for less time, but six months is good enough for today’s debate.
On the question of timing, I also note that in Clause 3 there is no time limit for the Secretary of State to lay his statement after he has prepared it. Amendment 51 concentrates on a time limit for the preparation of the statement, but similarly does not have a time for when it has to be laid before Parliament. That is another defect in this clause that we will need to seek to remedy on Report.
The noble Lord, Lord Vaux, has already referred to some of my amendments. Amendment 119 is another way of making sure that the strategic priorities statement is pursued quickly. It allows Clause 5 to come into effect immediately after Royal Assent, but the rest of the Bill cannot come into effect until the statement is laid before Parliament. Importantly, that means that Great British Energy could not make any practical progress until the statement of strategic priorities had been dealt with in accordance with Clause 5.
Amendment 52 tackles a different problem, namely the toothless involvement of Parliament in the statement of strategic priorities. As we have heard, under Clause 5 the Secretary of State merely has to lay a copy of that statement, or any replacement statement, before Parliament. That is it. Parliament has no say whatever. My Amendment 52 gives each House of Parliament 40 sitting days to resolve not to approve it, and in that event the Secretary of State has to withdraw it and have another go. That is the procedure adopted, for example, in relation to the national procurement policy statement published under Section 13 of the Procurement Act 2023. As the noble Lord, Lord Vaux, has suggested, it is probably the lightest of the parliamentary procedures that are available to give Parliament some opportunity to challenge the Secretary of State’s priorities.
The amendment from the noble Earl, Lord Russell, is in similar territory but would require the Secretary of State to table a Motion. It does not, however, specify what that Motion might be or the consequences if the Motion were not agreed. There could be other formulations for parliamentary oversight of the strategic priorities. The important point is that it should not be a “take it or leave it” situation when Parliament is given the statement of strategic priorities. Parliament is entitled to some substantive involvement in the priorities.
My Amendment 128 is a companion amendment to Amendment 52. It is similar in structure to Amendment 119 so that the commencement of the Act after Royal Assent, other than in relation to Clause 5, would be delayed until 40 sitting days had passed. That would ensure that GBE could not be operationalised until Parliament had had an opportunity to consider the statement of priorities. That is a belt-and-braces addition to Amendment 52.
Lastly, my Amendment 58 in this group is also intended to enhance Parliament’s oversight of Great British Energy. Under Clause 5(8), Great British Energy’s articles of association have to ensure that GBE will publish its own strategic plans and act in accordance with the statement of strategic priorities. My Amendment 58 goes further and would require GBE to send a copy of the plans to the Secretary of State, who then has to lay them before Parliament. It is clearly insufficient for Great British Energy simply to upload its strategic plans to its website. There needs to be a formal communication of those plans to Parliament. That is all that my amendment is aimed at, and I hope that is not controversial.
The broad thrust of all the amendments in this group is effective parliamentary engagement. The Minister might not like the detail of the amendments, but he ought to subscribe to the notion that effective parliamentary engagement in the work of quangos is necessary. I hope he will see that the parliamentary involvement allowed for in the Bill falls short by some way. I am sure the whole Committee would be delighted if the Minister were to take this issue away and bring forward government amendments to achieve proper recognition of the role of Parliament in Great British Energy’s scrutiny. If he is unable to do that, I am sure we will need to return to this aspect on Report.
Baroness McIntosh of Pickering (Con)
I will speak to Amendments 53 and 90 in my name. Before I do, I lend my support to the two authors of the other amendments who have spoken. In particular, I congratulate the noble Lord, Lord Vaux, on his amendment and on setting out the problems of Clause 5.
I am a fan of the National Wealth Fund. I have been watching the Norwegian series on BBC Four, which ended at the point when Norway set up its sovereign wealth fund with the proceeds from oil and gas in the North Sea. I could not quite understand why we did not do the same when we were receiving all the profits that we did. We have fallen behind Norway in living standards in that time.
The points from the noble Lord, Lord Vaux, about the relationships of GBE and its ability to raise funds, were very well made. Previously in Committee we have questioned what its relationship to the National Wealth Fund will be. This goes to the heart of what the national transition plan for the National Wealth Fund will be. We keep hearing that there will be a transition plan, but I would be interested to know what that plan will be and what its relationship with the National Wealth Fund and GB Energy will be.
When will we see the sector-specific road maps for the five priority sectors? Will they be in the impact assessment or come at a later stage? Some clarity in this regard would be good, as well as some greater engagement at this stage between investors, both those of the National Wealth Fund and GBE, to raise these new funds, and to have local authorities develop projects and propositions which are investable as well. I lend my support to the amendments in this group in the names of the noble Lord, Lord Vaux, and my noble friend Lady Noakes.
Viscount Trenchard (Con)
My Lords, I agree with my noble friend Lady McIntosh that the Bill is defective so far in terms of parliamentary scrutiny and involvement. I have added my name to Amendment 51, so ably proposed by the noble Lord, Lord Vaux of Harrowden, and my noble friend Lady Noakes. It requires the Secretary of State to prepare the statement of strategic priorities for GBE within six months. That is quite an easy target. Perhaps when the Minister thinks about this—of course, I am very optimistic that he will come back with his own proposal to deal with the lack of accountability—he could suggest a shorter timescale within which the Secretary of State might lay out the statement of strategic priorities. As has been said, at Second Reading many noble Lords expressed the view that it is a pity that that is not in the Bill.
I apologise to the Committee that I was not able to be present on the first day, when we discussed the objects which refer to clean energy but with little detail. It is very unclear, as other noble Lords have said, what Great British Energy is going to do and particularly how it will relate to other companies and entities in the same space.
I also support Amendment 52 in the name of my noble friend Lady Noakes. It is right not only to prepare the statement of strategic priorities but to give both Houses 40 days to approve it or not. On reflection, I also agree with the noble Lord, Lord Vaux, that it perhaps should be subject to the affirmative rather than the negative procedure.
I look forward to hearing my noble friend Lord Effingham speak to Amendment 57. He rightly proposes that the consultations with devolved Administrations should take place before the publication of the statement of strategic priorities. However, this only goes to show how essential it is, as many of us believe, that we have a co-ordinated national strategy, given that devolution has taken place over many areas of our national life, as it would be cheaper and make more sense. But we are not in that place, and we have to take account of the settlement of the devolved Administrations that exists. So, it is obviously absolutely essential, and I hope the Minister will confirm that he will make sure that the policies put forward and GBE’s strategic priorities will not be squabbled over by the devolved Administrations.
My noble friend Lady Noakes, with her usual forensic expertise, has also identified that the articles of association of GBE need to make sure that it is able to prepare the strategic plans, and that the articles must empower the company to do that. It must reflect the Secretary of State’s statement of strategic priorities.
Lastly, I also support Amendment 119, proposed by my noble friend Lady Noakes, which deals with the accountability and other provisions which must not take effect until after the statement of strategic priorities is laid before Parliament.
Lord Hamilton of Epsom (Con)
My Lords, I too support the amendment of the noble Lord, Lord Vaux. It strikes me that the real problem with the Bill is that if nothing happens with GB Energy, the Secretary of State intervenes. On the whole, politicians intervening in investment decisions does not have a very good history, and an awful lot of taxpayers’ money has been wasted. Therefore, it would be a very good idea if there was a system of reporting back to Parliament.
The real problem with the whole energy scene in this country is that the private sector is well in there already. I am not sure how committed these people are to energy, but they are certainly very good at crunching the numbers. Of course, with any project, they establish that the supply of, say, wind, is reasonably constant in a certain area. Then, the key thing is the feed-in tariff that they negotiate. That gives them a guaranteed cashflow. Among other things, with wind turbines they even managed to negotiate that they get paid when the wind is blowing and nobody wants the energy. So, if you can do that, it seems to be relatively easy to make money on these things.
If you want to put up wind turbines, there is no problem getting private finance. It is the more vexed areas of energy where you will find people with DeLoreans appearing, saying, “I’ve got a wonderful scheme all organised for carbon capture”, or something that is incredibly difficult in technological terms—or indeed nuclear fusion, come to that, which is another very hard nut to crack. It would be wonderful if we could have nuclear fusion power stations pumping out energy, but we are still a very long way from getting there. What guarantees do we have that taxpayers’ money will not be ploughed into these things and an awful lot of money completely wasted?
I would like to pick up some remarks from my noble friend Lady McIntosh of Pickering. She was concerned that GB Energy would have great problems raising finance. That is not quite the way it works. You actually get tiered finance when it comes to some of these projects, and I can tell noble Lords what the tiers will be: a whole lot of outside investors will get their money back almost whatever happens, and all the high-risk capital will be produced by GB Energy. GB Energy will be the one that will lose absolutely everything if it goes wrong and make a minimal amount of money if it goes right.
We need to be very wary about all this, which is why I support these amendments. It is important that Parliament has some check on all this and is able to say whether it thinks it is a good idea or a bad one. That discipline on the Secretary of State will be very important. Otherwise, I see politicians wheeling off, backing all sorts of incredibly speculative ventures and losing taxpayers’ money as a result. I am not sure that anybody in this House wants to see that happen.
Lord Teverson (LD)
My Lords, perhaps I could come back into the real world. I agree with the amendments and their purpose but let us be clear: there is a duopoly in this Parliament that stops negative or fatal resolutions ever being passed in either House. We may say that we agree that an affirmative or negative resolution is needed on something equivalent to secondary legislation. In this Parliament, the practical effect—in relation to what is already in the Bill—is zero because the Labour and Conservative Parties have a duopoly agreement that they will not vote fatally on secondary legislation Motions. To the outside world, all the rhetoric in this debate looks great but, even if it went into the Bill, the effect would be zero. I wanted to make that point because I believe that if you look at this with a democratic point of view from outside this building, the workings of secondary legislation in this Parliament would be seen as completely fatuous.
Baroness Noakes (Con)
May I just say to the noble Lord that what was proposed in my amendment was not secondary legislation? It was the simple possibility of a Motion to disapprove of something. It did not fall within the category of secondary legislation, therefore the convention does not apply.
Lord Teverson (LD)
I accept that point entirely, except I cannot see this Parliament rejecting such a strategy under any circumstances, however it is dressed up. But I fully respect the intentions of the amendments in the names of the noble Lord and the noble Baroness.
The Earl of Effingham (Con)
My Lords, I shall speak to Amendment 57 in my name. It addresses an essential aspect of transparency and accountability in the development of Great British Energy, as outlined in Clause 5.
This amendment ensures that all consultations conducted under Clause 5(4) to (6), which are critical for the development and implementation of Great British Energy, are not only carried out but made fully accessible to the public and—more importantly—to Parliament.
In the modern world, transparency in governance is not just a nice to have: it is an absolute must-have. It is essential that both public and Parliament have access to the results of consultations that influence decisions on policies with such far-reaching consequences.
The energy sector is at the heart of the challenges we face today—whether it be securing a sustainable, affordable and clean energy supply for generations to come or meeting the ambitious carbon reduction goals that are integral to our environmental commitments. The implications of these decisions extend to every household and business and, indeed, to the global environment and climate. Too often, decisions are made by Administrations around the world which are disconnected from the lived realities of those who will be most affected. It is crucial that we bridge this gap. This amendment ensures that the voices of all stakeholders are heard.
Can we consider the important role of the devolved nations of Wales, Scotland and Northern Ireland? As your Lordships are aware, energy policy intersects deeply with our devolved Administrations. Each nation has its own priorities, challenges and opportunities, and the decisions made here and in the other place must reflect the needs and perspectives of all four nations that make up the United Kingdom.
Amendment 57 achieves precisely that. It ensures that the devolved nations are not sidelined in the policy- making process. Wales has made remarkable progress in renewable energy, with a strong focus on wind, solar and tidal power. The Welsh Government have set ambitious decarbonisation targets and are actively working to ensure that local communities reap the benefits of this transition.
Earl Russell (LD)
My Lords, I will speak to my Amendment 54 in this group and signal our support for Amendments 51, 53, 57 and 58. I thank the noble Lord, Lord Vaux, for his excellent introduction to this group of amendments and for setting out everything so ably.
Jumping to the end, it appears to me that the settled will of the Committee is that something should be done on this issue; I suggest one way to achieve that would be for the Government to bring forward their own amendment before Report. It might be that further collective discussions happen between now and Report. Everyone has a slightly different way of doing this, and I do not think that anyone has the answer—it is something that needs more work. However, the settled opinion of the Committee seems to be that there needs to be some check on this part of the Bill.
I said previously that the Bill is a little too short for its own good. I understand the Minister’s concerns about having lists and the problems with them, and why he does not want them. We are in favour of the Bill and we do not want to stand in its way. This is a manifesto commitment that the Government are delivering. However, as it stands, it has numerous issues. No timescales are provided for when it must be done. Although there is a condition to lay this before Parliament, as has been said, there is no parliamentary process to scrutinise, question, amend, approve or reject the strategic priorities. There is a condition to consult the devolved Governments, but, if they all unanimously said that they had the same problem with the strategic objectives, there is no way for Parliament to know that that happened, and there is also no way for them to reject or change the strategic priorities. It feels a bit unusual to be in this potion, because we are being asked to scrutinise and approve the Bill but we do not have the strategic priorities in front of us.
I welcome the constructive engagement that the Minister and his Bill team have had with us to date. He has been clear with us that these strategic priorities are being written and prepared. I recognise the need for urgency and that they are a new Government, but, ultimately, we are being asked to approve something when we do not know what it is. Indeed, the organisation itself has not written the strategic priorities, so the organisation does not know exactly what they are yet. That is a difficult position to be in.
However, there are ways forward through all of this. This quandary needs to be resolved through collective compromise and a meeting of minds. At a minimum, there need to be some guard-rails. Some general principles need to be laid out, including what will be in the priorities and a general sense of the outputs that GB Energy will be responsible for. That can be done—we can find a way to do that collectively. It should be done on Report.
Between now and Report, I would welcome the chance to have a conversation in which we can talk about this collectively. I do not want to delay Report—that is not the answer to this—but the Minister could put forward a draft publication for us. There could be draft heads of terms on what the current thinking is for GB Energy and the Ministers about what will and will not be included, as well as what has already been excluded. The Minister could give verbal assurances to this House from the Dispatch Box on some of these matters.
Finally, this amendment is my hard backstop, because it requires a resolution in both Houses. I will keep it in reserve. To be clear, in the final group of amendments, I have Amendment 122, which requires that the strategic priorities are “laid before Parliament”. I also have Amendment 123, which requires that they are laid and approved by Parliament, and Amendment 124, which is maybe more of a compromise on these issues. It would mean that the Bill cannot come into force
“unless a document setting out the thematic headings of the statement of strategic priorities have been laid before Parliament”.
Maybe somewhere around there is where we might be able to coalesce. In any case, this is an issue that needs further work and constructive compromise. My sense is that there are some concerns about these matters on all sides of the Committee. In the first debate on the Bill, the noble and learned Lord, Lord Falconer, mentioned that this needs to be in the Bill—I welcome that statement. I look forward to working with the Minister to find a solution.
Lord Howell of Guildford (Con)
My Lords, I was going to stand aside from this debate early in the process because of the mountain of expertise that is building up on all sides of this Committee against many aspects of the Bill. It is not our job to turn it down in this House, but it is our job to try to improve and rescue some of the bits that may be particularly dangerous and damaging, of which there are several that we will no doubt come to. I was going to stay silent, but my noble friend Lord Effingham’s splendid speech touched on so many of the fundamental problems that are so obvious in this exercise—setting up this kind of body with this kind of money.
We have of course been here before. We went over this again and again in the 1960s, with the Industrial Reorganisation Corporation, when almost exactly the same arguments were used. Many of us on all sides—it was not partisan—questioned whether that bright idea of Harold Wilson and a Mr Cant, one of its designers, would work. I hope now that we leave our mark of doubt and scepticism about whether this whole approach works.
The IRC failed because the belief prevalent among economists at the time was that if you built big and created such things as British Leyland, size would deliver. Unfortunately, size did not deliver and there was a mood and a realisation—this was long before the digital revolution—that size might have diseconomies, as was then proved with projects such as British Leyland, a disaster from which Japanese inward investment 10 or 20 years later saved us. That was the third reason why I was not going to say very much at this stage.
I apologise for being a few minutes late for the Minister’s excellent speech on the last set of amendments, but there was a gap, something which he did not mention. My noble friend Lord Hamilton intervened about Sizewell. The Minister then produced the standard line on Sizewell, but he did not mention money. Yet money is the whole issue in organising our resources for the energy transition to come, which will be fearfully expensive, particularly if we have to leave unused a very large chunk of intermittent supporting energy—nuclear and other sorts—for the 3,000 hours every year when the wind does not blow. Until we get to the hydrogen stage, which we are a decade or so off, I suspect, that will leave a big gap to fill with otherwise idle machinery—which is very expensive indeed if it is not earning or producing. None of that has been touched on yet. The more that I listen to this, the more I see that we are heading into a nightmare of expenditure problems and dilemmas.
The noble Lord, Lord Vaux, with his ruthless clarity, hinted that this is the way things are going. The only saving grace from here is to have a system of accountability, a strategy and a clear and honest recognition of the colossal dilemmas ahead and the timescale, particularly for nuclear. Perhaps we will not discuss nuclear very much, although there are related amendments, but the issues of not only cost but timescale have been totally ignored.
There is chatter around, although even the Government estimate that Sizewell C will cost about £20 billion, as opposed to whatever Hinkley C is now running at. My bet would be that it is much nearer to £20 billion than £30 billion, but never mind about that. The question is: who has the money? The Government have not got it. Governments all across the world, and certainly our Government, are underwater on debt, understandably reluctant to tax more and not really able to borrow more. It will have to be done with the private sector, but the private sector will not touch something like Sizewell C, which is a dodgy EPR design that has not worked well anywhere in the world so far.
The timescale for Sizewell C is probably the mid to late 2030s. The alternatives of the new technologies in nuclear—I am sorry to bring this into a non-nuclear discussion—are massive. Rolls-Royce is talking about being able to deliver clean green electricity by 2030 or 2031. No one, even a super-optimist, believes that Sizewell C can touch our electricity supply before 2037 or 2038; I bet it will turn out to be 2040 or later still. These things have not been touched on yet, so goodness knows how we will deal with them as we come to all the amendments lying ahead. The one saving grace is that we would have a chance for both Houses and those who are informed about these things to point out at every point some of the further dangers and damages into which this entire structure will slump.
That is what one has to add at this stage. I am afraid that the Minister will not be pleased to hear that ahead lies a vast pile of questions and doubts about this project and the philosophy behind it—a philosophy of setting up large, semi-state-owned or state-owned organisations to push through things that apparently cannot be produced by the private sector alone. The philosophy simply does not work in the digital age. It did not work with the IRC before the digital age, it will not work in the digital age, and it will not work in the AI age. The nature of the economy is quite different from even 20 or 30 years ago. These are the problems which now have to be addressed, and they certainly will not be addressed by this.
I am afraid that we are heading for a lot more amendments on the detail of everything I have said. In the meantime, both the amendments that have been debated are excellent and should be accepted by the Government as part of the vital need for Parliament to have a regular, continuous, accountable and effective say, maybe with a special Select Committee. We invented Select Committees in the 1960s and they worked very well for departments. The Select Committees here are excellent and produce superb reports. Maybe this is an area where we need to beef up our own penetrating techniques on Select Committees and reports, to ensure that there are no more blunders ahead. I would bet $100 or more, if I was a betting man, which I am not, that there are plenty of blunders coming along, written into the Bill as it stands.
Lord Offord of Garvel (Con)
My Lords, I thank noble Lords who have contributed: the noble Lord, Lord Vaux, for opening this group, the noble Earl, Lord Russell, and my noble friends Lord Hamilton, Lord Effingham, Lord Howell, Lord Trenchard and Lady McIntosh. I particularly thank my noble friend Lady Noakes for her detailed scrutiny of the Bill and her expertise.
The debate has raised crucial issues regarding how our energy future is shaped, particularly community energy, transparency and the governance of strategic priorities. It is evident that we in this House today share many of the same concerns about the absence of a statement of strategic priorities and plans. I reiterate that this is in the context of the Bill being responsible for £8.3 billion of taxpayers’ money, with no detail as to GBE’s plans, priorities, objectives and purpose. As the noble Lord, Lord Vaux, said, the Bill is merely a skeleton, providing unabridged powers to the Secretary of State without clarity on how they can be used.
With that in mind, I welcome Amendment 119, tabled by my noble friend Lady Noakes, which would delay the commencement of other provisions in the Bill until a statement of strategic priorities has been laid before Parliament. This is a sensible and necessary step to ensure that Parliament and the public have sight of the plans that will guide the operation of this great new company, GBE. Furthermore, Amendment 58 would ensure that Parliament is made aware of Great British Energy’s strategic priorities, and Amendment 52 would give Parliament the power to reject a statement of strategic priorities once received. We cannot, in good conscience, simply allow this Bill to proceed without the opportunity to scrutinise these priorities, which will guide £8.3 billion of taxpayers’ investment.
Amendment 51 would introduce a clear time limit for the Secretary of State to publish the statement, while Amendment 54 would ensure that a motion for resolution is tabled in both Houses of Parliament. These amendments provide the necessary transparency and accountability to ensure that Parliament can scrutinise and approve those priorities before any further steps are taken. The Bill cannot and should not proceed until we have seen the strategic priorities.
This brings me to the question of whether Clause 5 should stand part of the Bill. In its report, the Constitution Committee expressed concern that Clauses 5 and 6 amount to disguised legislation and that Clause 5 does not offer an adequate degree of parliamentary oversight. This is a serious constitutional issue, and I hope that the Minister takes the committee’s concerns seriously as we continue our debate.
Amendment 53, tabled by my noble friend Lady McIntosh of Pickering, seeks to insert a provision into Clause 5 requiring the Secretary of State to produce a statement to the chairs of the relevant Select Committees in both Houses of Parliament. This amendment is fundamentally about transparency, and its purpose is simple: to ensure that Parliament can properly scrutinise the actions of the Secretary of State and guarantee that public money is being used efficiently and in the public interest. This is why we propose that a copy of a strategic statement be sent to the relevant Select Committees for their review and input.
As discussed earlier on Amendment 57, tabled by my noble friend Lord Effingham, transparency is not a luxury; it is a necessity. Transparency ensures that decisions are made openly and subject to public and parliamentary scrutiny. He brought to our attention consideration of the requirement that GBE deal with the devolved Administrations throughout the UK.
Finally, Amendment 90 seeks to insert at the end of Clause 7 the provision that the Secretary of State must
“arrange for a statement to be made in each House”.
The intent behind this amendment is to ensure that the actions of the Government in relation to Great British Energy are made public and accountable. For such a significant and impactful initiative, there must be a mechanism for direct communication with Parliament. This would allow both Houses to question, debate and hold the Government to account on any developments or changes in the direction of the company.
A comparison has already been drawn by the noble Lord, Lord Vaux, with the National Wealth Fund, previously the UK Infrastructure Bank. That organisation experienced thorough scrutiny and testing before its establishment. Why should we treat GBE any differently? If we expect such rigorous assessment for the UK Infrastructure Bank, it stands to reason that a similar level of transparency and parliamentary scrutiny should apply to Great British Energy. I urge noble Lords to support this amendment, as it reinforces the principles of accountability that should be at the heart of this Bill.
In conclusion, I welcome the amendments and the ongoing discussions regarding the strategic priorities and transparency of Great British Energy. The strategic priorities are critical to the success of the Bill, and I am grateful to all noble Lords who have expressed similar concerns. I reiterate my support for my noble friend Lady Noakes and all other noble Lords who have raised similar issues.
Lord Hunt of Kings Heath (Lab)
My Lords, I am most grateful again to noble Lords who have raised a number of very interesting points in relation to Clause 5 and the statement of strategic priorities. I remind the Committee that the founding statement set out GBE’s purpose, priorities and objectives, including its mission statements and its five functions. The first statement of strategic priorities is intended to ensure that Great British Energy will be focused on driving clean energy deployment, boosting energy independence, creating jobs and ensuring that UK taxpayers, bill payers and communities reap the benefits of clean, secure, home-grown energy.
Clearly, Clause 5 is important in that respect. The noble Lord, Lord Offord, will not be surprised that I will resist his opposition to it standing part of the Bill. He made another point in relation to the investment bank legislation. I understand the point; he knows that we have looked at this legislation and taken parts from it, but we have also looked at Great British Nuclear, which his Government put through in the last Energy Act. In some cases, we think that that is appropriate to look at in relation to the way this legislation has been framed.
Amendments 51, 52, 53, 54, 57, 58, 90, 119 and 128 all refer to the statement of strategic priorities, with some amendments seeking to defer commencement of the Bill in relation to the statement. The noble Lord, Lord Howell, always speaks with great experience on energy, and he is threatening us with many more amendments the next time we meet. We believe that the best way to get stability on prices and security of energy, and to deal with climate change, is to move in the way that we have set out. Numerous organisations have looked at it and say that, in the context of value for money, investment decisions and cost to government, this will be the cheapest way forward in the end, and that staying reliant on fossil fuels, with the unreliability of the international market, would not be a productive use of our resources and would do nothing for climate change. That is why we are going down this path.
I come to the amendment of the noble Lord, Lord Vaux, and his opening remarks on this group. We do not wish to escape parliamentary scrutiny. I say to the noble Baroness, Lady Noakes, that we do not want to weaken accountability processes. I assure her that there is no way we will use the power of direction in the way that she suggested might happen. She referred to the power of direction and from what she said I took it that she thought it could be used in a way which would simply direct GBE, instead of the statement of priorities, but perhaps I have confused that.
Baroness Noakes (Con)
The noble Lord might like to read Hansard. I did not say that, but I do not think that need hold us up. We are not talking about the power of direction in this set of amendments.
Lord Hunt of Kings Heath (Lab)
I know we are coming to that in later amendments, so I will certainly do that.
I understand the points that noble Lords are making about parliamentary involvement in the statement of strategic priorities. I have read the report of the House of Lords Constitution Committee. The Government have no interest whatever in delaying the statement of strategic priorities in order to escape parliamentary scrutiny. I would have thought that the publication of our clean power action plan, and the work of the National Energy System Operator in its advice to the Government of a few weeks ago, would suggest that getting to 2030 in the way we wish to do will be very challenging. We believe we can do it, but we cannot mess around.
The statement of strategic priorities is certainly an important element in allowing Great British Energy to move forward, but we have to work through a number of important issues. We have to consult the devolved Governments. I take the point made by the noble Earl, Lord Effingham, about the need for that to be a thorough process, and that will take time. Time is imperative. There are issues about the delay that would be built into this, if we were to accept some of the amendments being proposed.
I hesitate to bite on the comments of the noble Lord, Lord Teverson, about the effectiveness of secondary legislation. I suppose the real response to him is that, in 1911, there was very little secondary legislation, and therefore the Parliament Act 1911 did not encompass it, the result being that your Lordships’ House has an absolute veto on secondary legislation, which it has been loath to use for very understandable reasons.
Amendment 53, from the noble Baroness, Lady McIntosh of Pickering, would require all versions of the statement of strategic priorities to be put before the chair of the relevant Select Committees. Clause 5 already requires the statement to be laid before Parliament, and the chairs of any relevant Select Committee could access the statement and any revised or replacement statements. I assure the noble Baroness that it is the normal practice of my department to provide such information on a regular basis to the chair of the energy Select Committee in the other place. Moreover, where Select Committees in your Lordships’ House have produced reports that are relevant to any announcement being made, it is normal practice to send a copy to the chairs of those Select Committees. I accept absolutely the principle of what she is proposing.
Let me be clear that the process of developing, agreeing and publishing the statement of strategic priorities is intended to enable the Secretary of State to provide strategic steers to Great British Energy within the framework of its objects, as set out in Clause 3. The statement of strategic priorities cannot overrule the objects clause in Great British Energy’s articles of association. Those objects set the overarching framework for Great British Energy. We believe it is right that the framework provided for in legislation is scrutinised by Parliament, through Clause 3, as we have already done in the previous day in Committee.
Lord Vaux of Harrowden (CB)
There was one other question I asked the Minister which he has not answered, which is whether the strategic priorities document will be accompanied by an impact assessment. The impact assessment we have with this Bill basically says that there are no benefits or costs because all it does is create the company, so we are effectively going to go through this process of creating something that can spend £8.3 billion with no impact assessment if that does not happen. Will there perhaps be an impact assessment that accompanies it?
Lord Hunt of Kings Heath (Lab)
My Lords, at this stage, I cannot answer that because it is still to be decided as part of the work that we are taking forward in relation to drafting the statement.
Lord Vaux of Harrowden (CB)
My Lords, I thank all noble Lords who have taken part in this debate. Before I sum up, I say to the noble Lord, Lord Howell, that I am not against this Bill. The problem we have here is the lack of any detail in it and the lack of any scrutiny once we have that detail, which is what the Constitution Committee pointed out. As the noble Earl, Lord Russell, pointed out, there is a high degree of unanimity around the House that the current situation set out in the Bill in that respect is really not adequate and that we need a greater level of parliamentary involvement in what will be the core element of this Bill: what GBE is going to do.
I take on board the points that the noble Lord, Lord Teverson, made about secondary legislation. I agree, but it is what we have at the moment, so we have little choice but to work with it. I would love to see a change to the way secondary legislation is debated, and it should be amendable, but we have a way to go before we come there.
There were plenty of ideas in this group as to how we might improve the scrutiny. I do not think any of us are wedded to any one of them. I am encouraged by what the Minister says about listening to the Constitution Committee and his belief in parliamentary scrutiny. I therefore hope that we can have some useful and constructive discussions between now and Report on this subject and come up with something that we can all agree on as an appropriate level of parliamentary scrutiny on this most critical aspect of the Bill. If we do not, I am absolutely confident that we will come back to this on Report. For now, I beg leave to withdraw Amendment 51.
Lord Whitty
“(1A) The statement of strategic priorities under subsection (1) must further the goals of a fair transition for energy workers and the creation of quality energy sector jobs.”
Lord Whitty (Lab)
I advise my noble friend that, while I will not move Amendment 51A now, I will return to this subject, because I do not consider that we have dealt properly with the transformation of the workforce to deliver the net-zero targets.
Lord Ravensdale
“(6A) Prior to publishing a statement of strategic priorities for Great British Energy the Secretary of State must consult—(a) the Climate Change Committee,(b) the National Energy Systems Operator,(c) Natural England,(d) the Environment Agency, and(e) any other person the Secretary of State sees fit.”Member’s explanatory statement
This amendment would require the Secretary of State to consult relevant stakeholders before publishing the statement of strategic priorities.
Lord Ravensdale (CB)
My Lords, I declare my energy interests in the register and rise to speak to Amendment 56 on behalf of the noble Baroness, Lady Hayman, who cannot be here today. This is a probing amendment around which bodies the Secretary of State ought to consult with ahead of publishing a statement of strategic priorities. I note that the noble Lord, Lord Cameron of Dillington, has tabled Amendment 86 in relation to this, which is similar and which we will come on to in a later group.
On previous groups, noble Lords have been quite clear that we would like to scrutinise the statement of strategic priorities alongside the legislation. As that will not be possible, in lieu of that we need to ensure the robustness of the process of agreeing the statement. This amendment is simply about ensuring that all the relevant information, evidence and expertise have been factored in ahead of the publication of the statement of strategic priorities to ensure that the relevant trade-offs, difficult questions and conflicting pressures are being considered ahead of that fixing of GBE’s strategic priorities.
Between them the organisations listed in the amendment have a comprehensive overview of what needs to be done to deliver our climate change targets, the Government’s target to achieve clean power by 2030 and our environmental targets. Consulting each of them will ensure that their views and recommendations have been fully considered in the preparation of that statement of strategic priorities. I hope the Minister will consider this suggestion as a helpful addition to the Bill.
I also support Amendment 116 to which the noble Baroness, Lady Young, will speak. It would align with other recent legislation that specifically mentions our climate and nature targets and would ensure that we take a consistent and systems-led approach across all that legislation. I reference here the recent work on the Crown Estate Bill. I beg to move.
Amendment 56A (to Amendment 56)
Viscount Trenchard
“(da) Great British Nuclear,(db) the National Wealth Fund, and”
Viscount Trenchard (Con)
My Lords, I was interested to read the amendment by the noble Baroness, Lady Hayman, and I tend to agree with it. It makes absolute sense that before the statement of priorities is published, these bodies should be consulted.
As many noble Lords said at Second Reading and on our previous day in Committee, there are many different bodies all trying to do much the same thing in this space. What was the UK Infrastructure Bank is now called the National Wealth Fund, and it is quite rich. It has, I think, £28 billion to deploy, and will no doubt be able to make many investments that will help not only the decarbonisation of the energy system but energy security. But as the Minister knows, I continue to believe that the Government’s energy policy so far does not take enough account of nuclear and its potential. For example, the consumers, whether households or companies—industrial consumers—do not have any say over where their subsidies go. A part of electricity bills goes in subsidies to renewable energy projects, for example, but not to nuclear. This means that the market to date has been distorted to the disadvantage of nuclear projects.
That is one reason why there are not enough viable and financially well-funded United Kingdom nuclear projects. There are quite a lot coming to the UK from the United States, whose Government have been extremely generous in providing grants and financial help to American nuclear consortia. There is a danger that Great British Energy will operate too much in a silo and that Great British Nuclear, which does not have very much money, will not be required to co-ordinate its strategy and policy sufficiently with GBE, or indeed with what is now called the National Wealth Fund.
It is right—as the noble Baroness, Lady Hayman, has proposed, and the noble Lord, Lord Ravensdale, told us—that the Secretary of State should be required to consult those bodies, but we should also include Great British Nuclear and the National Wealth Fund, so that each of these three bodies knows what the others are doing, so that they have a greater chance of working out a co-ordinated policy, and so that we have some joined-up thinking.
That is why I tabled Amendment 56A as an amendment to Amendment 56. I beg to move.
Baroness Young of Old Scone (Lab)
My Lords, I will speak to Amendment 116, which is in the name of the noble Baroness, Lady Hayman, who cannot be with us today, and to which I added my name. I was greatly encouraged by the Minister’s words at Second Reading that he looked forward to discussing biodiversity further in Committee. I do not think I have ever heard a Minister say that before, and now is his moment.
The noble Baroness, Lady Hayman, has previous with this sort of amendment, having tabled similar amendments to a variety of previous Bills, so colleagues may now be familiar with her modus operandi in this respect. The amendment aims to address the challenges of how the objectives, strategic priorities and other functions of GBE fit with the legally binding targets in the Climate Change Act 2008 and the Environment Act 2021, which the Government have a statutory requirement to achieve.
At Second Reading there was recognition that when making decisions about the rollout of renewable energy, clean power and the associated infrastructure, it is important that we bring together all the different responsibilities, issues and trade-offs in one scheme—one structure or place—so that Great British Energy and the Government are fully equipped with all the information to weigh up these decisions and to take account of all these different factors in an integrated way, rather than in the siloed approach to decision-making that we distressingly see all too often in government. This is particularly important where there are legally binding targets that the Government have to achieve and where it would be distinctly unhelpful if Great British Energy were working in the opposite direction.
We have a real opportunity here to set the long-term strategic direction by putting in place the right frameworks to provide a stable structure for Great British Energy to make decisions and to be as transparent as possible in its decision-making, both now and into the future. The aim is to try to make sure that the projects invested in are the most effective at delivering on GBE’s objects but operate in such a way that they do not militate against the Government’s achievement of the binding climate change and biodiversity targets. We want to be cunning; we need to learn to walk, talk and chew gum at the same time. We want to achieve the strategic climate objectives that Great British Energy is there to deliver but we also want to achieve other objectives—it is both/and, rather than either/or.
The amendment does not imply that in every single case Great British Energy needs to contribute to the statutory binding targets, but it does aim to ensure that they are considered from the outset when Great British Energy makes decisions—and indeed when the Government make decisions—about strategic priorities; that it factors them into the decision-making process and, where reasonable, contributes in a positive way to the statutory target achievement; and certainly that it does not make it more difficult for the statutory targets to be achieved.
I have said that the noble Baroness, Lady Hayman, has previous on this. Noble Lords who took part in the Crown Estate Bill recently will have heard the her argue for a clause very similar to this. She successfully persuaded the Government of the need to join up the functions of the Crown Estate with the climate and nature targets. During that Bill’s passage, the Minister agreed both in Committee and on Report that:
“It is right that the public and private sectors make every contribution they can to help achieve our climate change targets”.—[Official Report, 14/10/24; col. 75.]
I hope we can persuade the Minister that this is an even more important case than the Crown Estate having an eye to the climate change and biodiversity targets, and that GB Energy will have an appreciable impact on both of those targets. We need to hardwire it in from the outset, particularly since, as was outlined in the previous debate, we have not yet seen GB Energy’s strategic priorities and plans.
I hope the Minister will accept that what was good for the Crown Estate goose applies equally to the GB Energy gander. I want to make a festive allusion, if noble Lords will pardon my lame attempt: I hope the Minister will agree that what is sauce for the goose is sauce for the gander, and that GB Energy should have a similar requirement laid on it as was accepted and passed for the Crown Estate. I hope we can persuade the Minister of that.
Baroness Bennett of Manor Castle (GP)
My Lords, very briefly, I offer Green group support for Amendment 56 and, in particular, Amendment 116, which has broad support, as we see from the signatures. I declare my interest as a member of the advisory committee, as I think it is now called, Peers for the Planet. The noble Baroness, Lady Young of Old Scone, has already said many of the things I was going to say. I just add that I can go back even further than she did, to the Pension Schemes Act 2021. That was an historic moment, with climate being written into a finance Bill for the first time ever.
I have been in your Lordships’ House for five years, and we have had win after win, as the noble Baroness just outlined. It really is time for us to stop having to bring this to the House to be inserted, taking up so many hours of your Lordships’ time to get us to the point at which clearly the Government should have started.
I will add an additional point to what the noble Baroness, Lady Young, said. In the recent election, Labour explicitly said that it was aiming to take a joint nature and climate approach to its way of operating the Government. This surely has to be written into the Bill.
To set the context, a nature recovery duty was discussed in the other place. My honourable friends Siân Berry and Adrian Ramsay were prominent in that, along with people from other parties. We are one of the most nature-depleted corners of this battered planet, but our statutory duty is at the moment only to stop the decline, not even to make things better. We surely cannot be creating such an important new institution as this without building nature into its statutory obligations. The Government regularly remind us that the economy and GDP growth is their number one priority, but the economy is a complete subset of the environment. The parlous state of our environment is an important factor in the parlous state of our economy.
Earl Russell (LD)
My Lords, I will speak very briefly to Amendment 116, in the name of the noble Baroness, Lady Hayman, to which I have added my name. I am sorry the noble Baroness is unable to be here today, and I wish her well. I thank the noble Baroness, Lady Young, and the noble Lord, Lord Bourne, for speaking to this amendment.
The amendment would give Great British Energy
“a climate and nature duty requiring it to take all reasonable steps to contribute to the achievement of the Climate Change Act 2008 and Environment Act 2021 targets in exercising its functions and delivering on the objects in clauses 3 and 5”.
We face a climate change issue and a nature issue; they are interlinked and co-dependent. The actions that we take on climate change cannot be at the expense of biodiversity and nature, particularly in our seabed, which locks up so much blue carbon. We are still developing our understanding of just how important that is, and how susceptible the seabed is to disturbance. The two are interlinked and interdependent, and they have to be seen together. The more that we can do this across all our public bodies, the better we will be.
A nature recovery element to the proposed duty would give GB Energy statutory direction to invest in clean energy projects that meet the highest of environmental standards. It is really important to make sure that the work GB Energy does on climate change also supports nature. That would give it a key concentration in its broad decision-making and investment decision-making, as well as in projects, project management and delivery. A nature recovery duty would give GB Energy the power to use nature-based solutions and to review what it does and hold itself to account, and for us in Parliament to do the same.
The Crown Estate Bill and the Water (Special Measures) Bill have been mentioned already. Both those Bills have had the addition of a general climate change and nature target. This was a welcome development, which I was very pleased to see. I pay tribute to the noble Baroness, Lady Hayman, for the work she has done, and to Peers for the Planet and other Members of this House who were involved in those processes. That target is an important part of our transition.
I was pleased to see the same amendment proposed to the GB Energy Bill. The noble Baroness, Lady Hayman, worked constructively with the noble Lord, Lord Livermore, to get that done, and they found a wording that worked for both of them in the context of this Bill. The context exists: GB Energy’s primary partner is the Crown Estate, so half of this partnership has a reporting requirement already. At a very minimum, if this amendment is not accepted or amended to make it acceptable, the amendment in the Crown Estate Bill has to be mirrored in this Bill. I have tabled an amendment in a later group which picks up on that work and seeks to make sure that that happens.
These are important matters. I hope that this amendment can be carried forward. Labour made a commitment in its manifesto not only to fight climate change but to protect nature. It is important that the institutions that this Government set up to fight climate change also implement Labour’s other manifesto commitments.
Lord Bourne of Aberystwyth (Con)
My Lords, in speaking to Amendment 116, I declare my interest. I thank the noble Baroness, Lady Hayman, for all she has done in this area in general, and in relation to this amendment in particular.
I want to make a specific point, and I made it at Second Reading. I do not think that we have enough detail on the objects, directions or priorities; there is a lack of specificity to them. The Minister has said he does not want what he has called constraints, which I can understand, but to other people such constraints are clarifications. Somewhere between the two, there has got to be a measure of talking to see how we achieve that.
There is a case in company law called Re Introductions Ltd. I mention it because the facts illustrate how important it is to get these things right. The company in the case was set up to introduce overseas visitors to the delights of Britain at the time of the Festival of Britain. For reasons that are not entirely clear, the company changed its activities and went into pig-breeding, completely against what was said in the objects clause and in breach of directors’ duties and so on. The law on objects clauses has changed a great deal, but it is still important that we are able to see that directors are going to do the things that we want them to do. That is what Amendment 116 is all about.
I will not delay the Committee too long because the ground has already been trodden on how this is something we should be doing. It should not come as a surprise to the Government that your Lordships want this Bill to be about ensuring we take proper regard of the Climate Change Act, which has had support from across the House. We supported it during our period in government; indeed, the noble Lord, Lord Deben, chaired the Climate Change Committee. It is important that we embed it and the commitment to the environmental targets for biodiversity in the legislation, as there is a read-across between the two: if you do one it has a beneficial effect on the other, and vice versa.
As other noble Lords have said, this would be consistent with the Government’s approach. They have already done this in the Water (Special Measures) Bill, which they amended so that Ofwat has to abide by the climate and nature duty, and in the Crown Estate Bill, as has been mentioned, which was amended to ensure that the commissioners keep under review the impact of their activities on the achievement of sustainable development. I do not think it is a great deal to ask of the Government to have a consistent approach, to adhere to it and to make sure this legislation works accordingly. I hope the Minister will be able to give a favourable indication of what will happen between now and Report, because it is very reasonable to request that this be written into the legislation.
Lord Howell of Guildford (Con)
My Lords, I support my noble friend Lord Trenchard’s amendment to Amendment 56. He knows a great deal about the oncoming revolution in civil nuclear power, which does not seem to have quite arrived in the Government’s thinking. They are still contemplating building backward-looking, out-of-date technology structures. That will all emerge as we debate it.
I also ought to declare my interests. The noble Lord, Lord Ravensdale, rightly reminded me that that is what I should have done. I do indeed have registered connections with energy-related companies.
I am left almost bereft of words of surprise and dumbfounded that my noble friend’s amendment is not assumed to be vital to the entire structure and operation of this project. I am talking particularly about including Great British Nuclear in the Bill. The National Wealth Fund will also be in the game, as it will look at sites and at projects, but Great British Nuclear and Great British Energy need not only to talk to each other. It is always nice to talk and so on, but they are treading on exactly the same immensely complicated ground, on which the most intimate integration and co-operation will be required.
I refer first to transmission and the whole question of redesigning our transmission grid over the next five years, if we can do it. As a matter fact, I do not think it can be done, but if it could, it will need to get electricity, first, from the North Sea to the switching stations, most of which have not even been started—one or two have—and then to the markets where electricity is consumed. That raises a whole lot of questions about transmission that we will discuss later. Secondly, it will need to get electricity from new nuclear sites, which I hope will be covered—I think they will in other countries—by smaller nuclear reactors, advanced boiling water reactors and others, all in the 250 megawatt to 400 megawatt range.
The process of siting these reactors is already going on. More than one government agency, including GBN, is putting around consultation documents to see what we mean by siting. Is it just that we will use disused sites—the old Magnox sites? Can we reuse them? I suppose we cannot if we persist with Sizewell C, but if we had the wisdom to postpone it, that site could be covered with eight or 10 SMRs. To get a sensible balance by 2050, let alone 2030, we will need about 500 SMRs of various designs across the country, sited mostly, I imagine, on disused or current nuclear sites but maybe on other sites as well. These are possibilities on which the public have had no say at all so far. I think their initial reaction will not be very well informed, because they have been told nothing about it. There is a whole operation of siting SMRs, combined cycle gas turbines and other energy installations. Heads have to be put together very closely so they do not end up in a glorious muddle on where things should be sited, who gets there first and that sort of thing.
Then, of course, there is the whole issue of how much electricity we will need. It is underneath our discussions now, but we know there is a hopeful view, which I think is still the Department for Energy Security and Net Zero’s view, that we have to aim for a couple of hundred gigawatts of cleaner electricity. We have now about 33 to 40 gigawatts of clean electricity—half our electric sector, which is 20% of our total energy care, so that is about one-ninth of what we need even to satisfy present demand. But there are stories in the papers—there is one this morning—indicating that demand is already surging far ahead of any predictions any of the governmental experts have made. This is a sign of something to come. In particular, if oil and gas are forbidden by 2030, so you cannot get oil or gas for your home and you cannot get petrol, the demand for electricity to replace all that will be absolutely enormous. Even if nothing very dramatic happens in the way of overall demand for power, it will be enormous.
Meeting this demand will require the closest possible co-operation between organisations such as GBN and GBE. The noble Lord, Lord Vaux, said that it was implied, perhaps wrongly, that he is against the Bill. I am not against it for the simple reason that we cannot be. Our constitution in this Chamber does not allow us to knock down the whole purpose of a Bill. All we can do is desperately try to improve something that we know will obviously be a nonsense in the end. The aim of 200 gigawatts always struck me as way below what will be needed; I think it will be more like 300 or 400 gigawatts of electricity in the all-electric age. There are 40 million vehicles in this country, vans and cars. Will they all be electric? If they are, that will use a lot of electricity, even if some of it can be fed back into the system.
But these issues sit above what we are dealing with now, which is how bodies we set up can possibly be kept apart when they deal with the same ground and the same issues—transmission and siting. I find it quite incredible. Perhaps I am being premature and the Minister will stand up and say that this obviously got left out of the Bill and must be put in it now so that those bodies should at least talk. Of course, they should do more than that; they should co-operate.
I support my noble friend Lord Trenchard, who has rightly spotted a great gap in the logic of this organised project. We should put this one right, which we can do, and recommend to our friends in the other place on the basis of the very considerable expertise that exists in this Chamber that this would at least repair one dislocation in this unhappy legislation.
Lord Hamilton of Epsom (Con)
My Lords, if I am brutally honest, I do not really like this Bill at all. It is a vehicle for a nationalised industry that should not even be set up by a Labour Government who want to gamble with other people’s money with no parliamentary scrutiny. Therefore, and on that basis, I really should support the amendment, because if they have to consult all these quangos and unelected bodies, which have made life such a nightmare for people for so long, they will never get anything done anyway, but that is just too cynical even for me. I have found that the Climate Change Committee represents a dwindling number of people in this country and basically keeps the Reform party in business.
As for the environmental committee, that is the one that, of course, the Government are going to ignore when they introduce their housing target of 1.5 million, because that has basically been blocking the number of planning permissions. Once again, I have a vested interest here: my family has land in Surrey that they are hoping to develop, so we are very keen on the recent Statement from the Deputy Prime Minister.
These quangos have not done anybody any good at all. The Government would be absolutely right if they resisted this amendment, because we have been run by these people for much too long and it is time that the country was run for the interests of the people.
Lord Offord of Garvel (Con)
My Lords, once again, I am very grateful to the noble Baronesses, Lady Young of Old Scone and Lady Bennett of Manor Castle, the noble Lord, Lord Ravensdale, and my noble friends Lord Trenchard, Lord Howell, Lord Hamilton and Lord Bourne of Aberystwyth.
Amendment 56 would require the Secretary of State to consult the relevant stakeholders before strategic priorities for GBE were published. Under this requirement, the stakeholders to be consulted would include, but not be limited to, the Climate Change Committee, the National Energy System Operator—also known as NESO—Natural England and the Environment Agency. Amendment 116 would introduce a new clause on the duty of GBE to contribute to climate-change and nature targets. This would require GBE to “take all reasonable steps” when
“exercising its functions and delivering on the objects in clauses 3 and 5”,
and
“all reasonable steps to contribute to the achievement of the targets in the Climate Change Act 2008 and Environment Act 2021”.
These objects reflect the values of climate and environmental responsibilities and sustainability which, within this House, are championed on all Benches. Great British Energy, and therefore the Secretary of State, have a unique opportunity to be involved in helping to achieve the targets of the Climate Change Act and the Environment Act. They are in a privileged position, undertaking meaningful actions to be involved in nature and biodiversity recovery. They can tailor their strategic priorities with the Climate Change Act and the Environment Act in mind. In fact, as a publicly owned company, GBE has a clear duty to protect and nurture the environment by consulting key stake- holders such as Natural England, the Climate Change Committee and the Environment Agency. The Secretary of State will ensure that the activities undertaken by GBE will be those which best help to tackle climate change, promote nature recovery and protect the UK’s environment.
At present, however, I do not believe that this Bill creates sufficient provisions to consult the relevant environmental agencies on GBE’s skeletal strategic priorities and plans; nor does it ensure adequate reporting measures, which we have discussed. In Committee and on Report on the Crown Estate Bill, we on these Benches scrutinised the unprecedented relationship between the Crown Estate and GBE. It appeared that this Government introduced this legislation with one major objective: to enable the Crown Estate to build more offshore windfarms in partnership with GBE. My noble friends acknowledged that it was important, when legislating, to increase commercial activity on the seabed around our shores, but a restriction must be placed on the development of salmon farms in England and Wales, especially given the damaging effects on nature and the environment resulting from salmon farms operated in coastal waters and sea lochs in Scotland.
As a result of the rigorous and critical debate on the protection of the environment and the preservation of animal welfare standards at Report on the Crown Estate Bill, this House successfully voted on an amendment requiring the commissioners to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. It is evident that this House cares about environmental protections. Concerning this, I hope we might receive an encouraging response from the Minister on amendments discussed today.
Lord Hunt of Kings Heath (Lab)
My Lords, let me begin with Amendment 56 tabled by the noble Baroness, Lady Hayman, and spoken to today by the noble Lord, Lord Ravensdale, and Amendment 56A tabled by the noble Viscount, Lord Trenchard. These amendments propose an addition to Clause 5, which would require the Secretary of State to consult the Climate Change Committee, the National Energy System Operator, Natural England, the Environment Agency, Great British Nuclear, the National Wealth Fund and other relevant people before publishing a statement of strategic priorities.
I pay tribute to the noble Baroness, Lady Hayman, for all the work that she has done and all she has contributed to legislation in the last few years. I also thank the noble Lord, Lord Hamilton, for his rather barbed support in relation to the Government’s response to these amendments. It was not a complete surprise that he does not entirely welcome the Bill, although there will be unalloyed pleasure for my colleagues in Defra at the support that he is giving to our planning reforms, which actually do relate as well to the energy infrastructure and the investment that we wish to see.
The noble Viscount, Lord Trenchard, is particularly focused on nuclear energy and its potential, which I always welcome. Great British Energy and Great British Nuclear are already talking very closely together, and he can be assured that this will continue. In response to the noble Lord, Lord Howell, I say that electricity demand in the future is clearly going to go up hugely over the next 20 to 30 years. If he looks at the clean power action plan, he will see that we really recognise the need to speed up planning consent and connections to the grid. This is fully understood, which is why it is a such an important component. In a sense, this is for the Government to take forward: GBE will have to work within those policies that we are taking forward. It is for the Government to do this, and that is why it is not really reflected in the provisions of the Bill.
Lord Bourne of Aberystwyth (Con)
The same could have been said of Introductions. As I said, it did not intend to go into pig breeding when it set the company up.
Lord Hunt of Kings Heath (Lab)
We will reflect very keenly on that between Committee and Report.
There is no doubt about the argument. We are facing a twin climate and nature crisis. They are inextricably linked. Not only are the Government committed to reaching net zero by 2050 and clean power by 2030, we are also committed to restoring nature—for example, with the Environment Act targets in England to halt the decline in species abundance by 2030—and to effectively protect our marine protected areas as part of our global 30-by-30 commitment.
We know that the UK is one of the most nature-depleted countries in the world, so it is not enough for us to protect or conserve. This is why the Government are committed to restoring nature through such targets, and our related international commitments. The real opportunity available to the UK is to deliver clean power by 2030 in a way that does not simply avoid or compensate for damage to nature, but is constantly innovating to deliver the target in a nature-positive way, such as rewetting lowland peat soils at the same time as constructing new solar farms or creating new wildlife corridors alongside or underneath linear energy infrastructure. The noble Lord, Lord Teverson, referred to that potential earlier in our previous debate.
It is not so much about balancing energy and infrastructure needs but about trying to integrate them, rebuilding our natural infrastructure at the same time as building the new energy infrastructure we need in the 21st century. It is significant that in the Clean Power 2030 Action Plan, the Government have said that we
“will launch an engagement exercise in early 2025 to invite communities, civil society and wider stakeholders to submit their ideas on how government can best encourage nature-positive best practice into energy infrastructure planning and development. Feedback from this exercise will allow government to better understand how we can integrate nature restoration through Clean Power 2030”.
We want Great British Energy to focus on its mission of driving clean energy deployment, but I have listened very carefully to what noble Lords have said today and I understand the point that noble Lords are making about the Crown Estate Bill. I assure noble Lords that we are going to reflect on this between Committee and Report.
Viscount Trenchard (Con)
My Lords, I thank my noble friend Lord Howell for his support for my amendment and all other noble Lords who referred to my amendment in the debate. I appreciated the whole debate, and I am grateful to the Minister for his thoughtful reply. There will be another opportunity to discuss the same kind of thing in a future group, of which he is aware, so I will have an opportunity to return to that. I beg leave to withdraw my amendment.
Lord Ravensdale (CB)
My Lords, I shall make a few brief points. I take the point made by the Minister about the list system with Amendment 66, but I hope we can get some assurance leading up to Report on the stakeholders that Great British Energy will engage with.
On Amendment 56A, without retreading some of the debate on previous groups, I support what the noble Viscount, Lord Trenchard, is saying about this. There is clear consensus that GBN should remain a separate organisation from Great British Energy, but that is not to say that Great British Energy cannot invest in nuclear projects—fuels, components or nuclear batteries, for example. Clearly, there is an important interface there.
I was very encouraged by what the Minister said on Amendment 116 about the importance of the consistency, and by the strong arguments made by the noble Baroness, Lady Young, on the Crown Estate Bill and consistency with other legislation. I also enjoyed the interesting and unique angle that the noble Lord, Lord Hamilton, had on his support for Amendment 56. I look forward to further discussion with the Minister between now and Report. I beg leave to withdraw the amendment.
Great British Energy Bill
Monday 13th January 2025
(1 month, 1 week ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-III Third marshalled list for Committee - (9 Jan 2025)
22:08 - Division on Baroness Williams of Trafford’s Motion - Ayes: 122 / Noes: 120 - Motion agreed.
Lord Offord of Garvel
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State on the progress made by Great British Energy towards the strategic priority of reducing household energy bills by £300 in real terms by 1 January 2030. (1B) A report under subsection (1A) must include a projection of how Great British Energy’s activities are likely to affect consumer energy bills over the following five years. (1C) A report under subsection (1A) must be made within two years of the day on which this Act is passed, and annually thereafter.(1D) The Secretary of State must lay a report made under subsection (1A) before Parliament.”Member's explanatory statement
This amendment would require an annual report to be laid before Parliament on how Great British Energy’s activities are contributing towards taking £300 off consumer energy bills.
Lord Offord of Garvel (Con)
My Lords, I rise to move Amendment 59 and to speak to Amendments 60, 61, 63, 65, 69, 70, 72 and 76 in my name.
Amendment 59 requires an annual report on how Great British Energy’s activities are contributing to reducing consumer household energy bills by £300. This frequently repeated claim, that the purpose of Great British Energy is to save each household £300 on their energy bills, seems conspicuously absent from the legislation, which states that the “objects” of Great British Energy are only to facilitate, encourage and participate in the production of energy,
“the reduction of greenhouse gas emissions … improvements”
in
“energy efficiency, and … measures for ensuring security of … supply”.
It is imperative that the Government be held accountable for their promises. The Secretary of State has reiterated that clean energy will deliver cheaper energy, and this has been repeated in this House, in the other place, on the campaign trail, in videos and on leaflets. It is therefore important to enshrine accountability for that ambition in the Bill that creates the institution of Great British Energy. We must introduce a mechanism by which the Secretary of State and Great British Energy are accountable to households for their pledge to reduce bills through investment in renewables, and for their specific promise to reduce household bills by £300 per household.
Amendment 60 in my name also seeks to introduce a mechanism by which the Secretary of State and Great British Energy are held accountable. Amendment 60 holds the Government to their word by requiring Great British Energy to report to the Secretary of State on the progress made towards creating 650,000 new jobs—another election pledge.
Amendment 61 in my name introduces a specific strategic priority for Great British Energy to develop UK energy supply chains and requires that an annual report be produced on the progress of meeting this strategic priority. It is essential that our transition to net zero does not increase our reliance on foreign states, particularly hostile foreign states. I am sure we can all agree that we want the so-called “clean energy” transition to utilise British industry, whereby offshore wind turbines and solar panels are produced by domestic manufacturing companies and erected by British workers. It is with that in mind that I bring Amendments 61 and 76.
Amendment 61 requires a fixed percentage of materials sourced or purchased as part of any investment made by Great British Energy to be produced in the UK and supplied from UK manufacturers. The transition to net zero presents our country with a great opportunity for investment and job creation; we must ensure that it is domestic companies and the British people who benefit from the increased investment promised by Great British Energy.
We must not outsource our energy transition. Amendment 72 in my name requires Great British Energy to report on the impact it has on imported energy. The Government’s target to achieve clean energy by 2030 must not increase our reliance on imported energy, which risks jeopardising our energy security and exposing British consumers to price spikes. It is already concerning, given that the hike in the windfall tax to 78% is already cutting investment in UK natural resources and oil and gas production, and will make the UK increasingly dependent on imported supply.
The distribution and transmission of electricity is intrinsic to the production of clean energy as set out in Clause 3. It is therefore critical that Great British Energy should take all reasonable steps to ensure that access to the national grid is ready for any energy infrastructure invested in by Great British Energy, and Amendment 65 in my name works to do just that.
The “Great Grid Upgrade” is without doubt a necessary component of our journey to net zero by 2050. Currently, new energy infrastructure—new wind turbines and new solar farms—have a significant wait time for grid connection. That is why the previous Government commissioned the Winser review, setting out recommendations on how to reduce this timeframe. The previous Government accepted advice on all areas—all 43 recommendations—to ensure that we could continue the work to drive down construction and connection times.
Despite the work that we on these Benches initiated in government by accepting these recommendations, the timeframe for obtaining grid connections for a new project can be as long as 10 years. In fact, a project without grid connectivity today might not come online until the mid-2030s, well beyond the Government’s ambitious goal of grid decarbonisation by 2030. It is therefore essential that the development of the national grid coincide with the development of renewable energy production.
Amendments 69 and 70, in my name, require GBE to report to the Secretary of State on the impact of each investment on carbon emissions and on the progress made by GBE towards reducing those emissions. I am grateful to my noble friends Lord Petitgas and Lord Trenchard, whose Amendment 80 would require Great British Energy to produce a quarterly unaudited and an annual audited report, including on the rate of returns for and the carbon emissions resulting from each investment. I support my noble friends’ amendment, which neatly covers both emissions resulting from, and the rate of return of, each investment. I expect that the latter will be debated thoroughly in the following group.
Supposedly, Great British Energy is to be established to drive the Government’s clean energy by 2030 goal and net-zero target, yet the Bill makes no provision for reporting on the impact of each investment on carbon emissions, which is critical if the Government are to achieve that pledge. Amendments 69 and 70 in my name, and Amendment 80 in my noble friend Lord Petitgas’s name, seek to rectify that, as does Amendment 85A in my noble friend Lord Hamilton of Epsom’s name, which I wholeheartedly support.
Finally, I return to the strategic priorities of Great British Energy as set out under Clause 5. As I have discussed previously, it is critical that we have sufficient oversight of and reporting measures on the financial assistance provided to Great British Energy. In that vein, Amendment 63 requires Great British Energy to report on the projected cost of fulfilling all its strategic priorities.
I trust that the Minister has listened to and carefully considered the array of issues raised in the amendments in my name and in those in my noble friends’. We must not lose sight of the sweeping powers that the Bill provides to the Secretary of State in issuing Great British Energy with directions over which Parliament will have no oversight. We must give due consideration to the purpose and impact of each direction. I beg to move.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, Amendment 77 in my name
“would require … 75 per cent of all materials purchased as part of an investment by Great British Energy”
to be produced in the UK. I will speak only briefly, as my noble friend Lord Offord of Garvel’s Amendment 61, for which I thank him, similarly requires a fixed percentage of materials sourced or purchased as part of any investment made by Great British Energy to be produced in the UK and supplied by UK manufacturers. However, I will make some additional points.
It is essential that the race to clean energy by 2030 and net zero by 2050 benefit British industry. As my noble friend Lord Offord explained, we must not outsource our energy transition. I draw attention to the warning from the former head of MI6 that the courting of Chinese investment risks handing power to Beijing. Up to 40% of solar panels in Britain are produced by companies linked to forced Uighur labour in eastern China. Furthermore, Chinese businesses have funded or provided parts for at least 14 of the 15 offshore wind projects in, or about to be in, operation. Firms owned by the Chinese Government have large stakes in three projects, together producing the energy for 2 million homes. While the Government’s energy agenda is overly ambitious, it could benefit the domestic manufacturing industry if we look to prioritise British industry over that of foreign states.
I am sure that the Government will have no hesitation in supporting my amendment, considering that the Secretary of State has repeatedly said that Great British Energy will deliver jobs for the British people. Can the Minister tell the Committee what impact Great British Energy will have on British industry? Will he confirm that the Government’s clean energy targets will not increase our reliance on foreign supply chains?
Viscount Trenchard (Con)
My Lords, I declare my nuclear power-related interests, as stated in the register. I support my noble friend Lord Offord of Garvel, who has moved Amendment 59 which, together with other amendments in this group, seeks to align the objectives of GBE with claims made by the Government before the general election as to what GBE would achieve for consumers.
I think it is fair to say that the pledge to cut consumers’ bills by £300 per household was a specific promise, and it was repeated often. I understand that the £300 pledge was made on the back of a report by the energy think tank Ember, but that it was based on the energy price cap that applied in 2023. Is it not also based on the less ambitious plan for transition to net zero, to which the previous Government had committed? However, the previous Government had not planned on setting up GBE. Will the Minister please explain where the savings figure of £300 came from, and whether the Government still support it? In that case, is it not right that it should be made a specific objective of GBE?
Will the Minister also tell the Committee whether my noble friend Lord Frost was correct in his warning, in his debate on 14 November, that NESO’s figures predicting the cost of electricity generated from offshore wind were rather optimistic at £44 per megawatt hour? My noble friend told your Lordships that recent payments to offshore wind farms under contracts for difference suggest that the real cost may be three times as much, at some £150 per megawatt hour. If that is so, NESO’s report on the Government’s plan to decarbonise the grid by 2030 may need some adjustment.
I still do not understand why the Government choose to subsidise only wind and solar schemes rather than nuclear. If consumers are required to subsidise only intermittent sources of energy, it follows that the total energy mix will be disproportionately dependent on intermittent sources. We need much more nuclear, which should not be seen as an add-on, to ensure that we can keep the lights on when the wind does not blow and the sun does not shine. It should be seen as a core and important part of our firm baseload energy system.
Indeed, we were once global leaders in nuclear power, but we now have a severe shortage of skilled workers with experience in the sector. Those we have are relatively old, and we need to train many more younger workers in nuclear technologies, and rebuild the supply chain. I am talking not just of gigawatt scale large plants like Hinkley Point C and Sizewell C, but small SMRs and AMRs which are flexible and very cost effective. That is why I have added my name to Amendment 61, also in the name of my noble friend Lord Offord. We must ensure that we benefit from the so-called clean energy transition, which is particularly relevant in the case of nuclear technologies. It is right that GBE, as a publicly owned company, should report annually to the Secretary of State on progress in re-establishing supply chains as a strategic priority.
There is not much about nuclear in the Government’s new publication Clean Power 2030 Action Plan, published on 13 December. It refers to GBE’s founding statement published in July. That document explains GBE’s five functions, of which building supply chains in “every corner of the UK” is listed fourth out of five, in two short paragraphs. “Working with GBN” is listed last, in a short single paragraph.
I have also added my name in support of Amendment 63. It is essential that GBE must understand what fulfilling its strategic priorities will cost—otherwise, how can the Secretary of State exercise his powers of direction in a responsible manner? Similarly, Amendment 65 would ensure that GBE must not waste money by investing in schemes that are too far from a grid connection or have no cost-effective access to the grid and no realistic prospect of acquiring one in a timely manner.
I have also added my name to Amendments 69 and 70 in the name of my noble friend, who has eloquently explained to your Lordships the purposes of these amendments: namely, to require GBE to consider carbon emissions from each investment and to do the same in respect of its whole investment portfolio, reporting to Parliament annually. We may not agree on the absolute prioritisation, regardless of cost and damage to our industrial base, of the elimination of all fossil fuels from our energy generation system, but we can all agree that it is a good thing that public money should be spent in such a way that increases clean power at the expense of less clean power—that is, as long as the benefits gained justify the cost. The Committee will have a chance to debate this matter in the next group.
Among the investments that GBE will make, I very much hope there will be some investments in nuclear power schemes, particularly in SMR and AMR technologies. As the Minister told your Lordships in his briefing before Second Reading, he does not expect GBE to make investments in nuclear, at least initially. I think this is because the Government think that it is not possible to deploy any of these new technologies before the 2030 target for clean power. The 13-page press release accompanying the release of the Clean Power 2030 Action Plan contains “nuclear” only once, explaining that the Government’s clean power mission is the solution to this crisis,
“by sprinting to clean, homegrown energy, including renewables and nuclear”.
But the action plan’s sparse references to nuclear comprise only a single reference to the GBN-led SMR programme, and a reference to the extension to the life of the four existing AGR reactors as a stopgap measure. I cannot find any evidence that the authors of the action plan see nuclear as playing much of a role in sprinting to clean energy.
I have also put my name to Amendment 72, which requires an annual report by GBE of its impact on the amount of imported energy. In preparing for this debate on Saturday morning, I took a look at the National Grid’s energy dashboard, which revealed at 10.15 am that we were drawing 14.7% of our electricity from imports, which is too high. Indeed, the name of the Minister’s own department emphasises the importance of energy security. The winter sun was shining brightly, but solar contributed only 4.3% and wind a mere 8.8%, less than the 11.4% generated by our existing, ageing nuclear power stations. Noble Lords will appreciate that the electricity grid accounts for around 20% of total energy consumption, which means that wind power on Saturday morning was supplying around 1.76% of the country’s total energy requirement, and solar less than 1%, even on a sunny day. Overreliance on intermittent energy sources does not help energy security—quite the reverse.
I have added my name to Amendment 80, tabled by my noble friend Lord Petitgas. Of course, it must be right that GBE should be required to produce quarterly accounts and audited accounts annually. As far as the requirements for reports on carbon emissions are concerned, the amendment duplicates Amendments 69 and 70. If the Minister can assure the Committee that the Government will bring their own amendments to satisfy these requirements, I am sure that such duplication can be avoided.
Lastly, I support Amendment 85A in the name of my noble friend Lord Hamilton, which seeks to achieve substantially the same result. Amendment 80 is also necessary to ensure proper scrutiny of GBE’s decision-making process with regard to its investments. Will the Minister explain his view on GBE’s role as a potential investor in joint public and private partnerships?
Lord Berkeley (Lab)
My Lords, Amendment 74 in this group is in my name. It seeks to ensure, in the creation of GB Energy and the delivery of its objectives, a specific consideration of decarbonisation challenges faced by the 1.7 million households in the UK that are not connected to the gas grid—I declare an interest in that I am one. An awful lot of other people—including many noble Lords opposite, I am sure—are not connected to gas and will have to use electric. The amendment provides for direction to be given to GB Energy to review the decarbonisation challenges that these households face but also, importantly, to consider the solutions that exist to help them do so practically and affordably. They include the value of adopting renewable liquid fuels.
Taking into account the recommendations of GB Energy, the amendment would also require the Secretary of State to implement existing measures within the Energy Act 2023 that would help off-grid households—namely, to hold a consultation on the benefits of introducing a renewable liquid heating fuel obligation or RLHFO. This measure secured all-party support in the last Parliament but has not yet been implemented. I hope that my noble friend will look at this again.
To go into a bit more detail, the challenges facing off-grid households, which are mostly in the countryside, are their existing energy efficiency, location, age and construction. As many noble Lords will understand, this means that these households will face substantial challenges to decarbonise using technology based on electrification. The research undertaken by the department and the Scottish Government shows that installing a heat pump in such a house, including full retrospective costs and the cost of servicing, will cost off-grid homes on average over £21,000, which is unaffordable for many.
I am concerned that there will also be an impact on the local grid. We tend to forget about the local grid. If everything is to be heated by electricity, placing unmanageable pressures on the grid, we need to have a good grid. In the National Grid’s Future Energy Scenarios report, the scenario “Leading the Way” has estimated that to achieve clean power by 2030, 1 million properties in the UK will require a solution other than electric heating, due to the high cost of local networks.
There are probably several solutions, but the one I want to describe briefly is that renewable liquid fuel can make decarbonisation affordable and practical for off-grid consumers, significantly reducing emissions and delivering on the carbon budget. It will help deliver clean power by 2030 and the commitment that no one who does not want to will be forced to remove a boiler.
In Cornwall, where I live, a fuel distributor has successfully created the country’s first renewable liquid fuel village, in the coastal village of Kehelland, converting homes, businesses and the local church and schools to a fuel called HVO. It has been a fantastic success in helping residents to reduce their carbon emissions and allowing them to play their part.
I appreciate that my noble friend’s ministerial colleague in the other place gave evidence on this issue the other week, but she referred to issues of supply and cost to consumers. I was concerned to hear that the department may be delaying the Energy Act consultation. I hope that is not the case, because this consultation needs to go ahead. I know that the industries that support off-grid households found that she said something rather surprising, given that there is clear evidence that should reassure my noble friend and his colleagues.
Lord Petitgas (Con)
My Lords, I rise to discuss Amendment 80. It proposes that GBE be required to produce both quarterly unaudited and annual audited reports. These should disclose the rate of returns for each investment and the carbon emissions resulting from each investment. This amendment is a matter not only of transparency but of accountability. It will ensure that taxpayers are fully informed about how their money is being spent.
Let me address first the rationale behind requiring disclosure of carbon emissions. This is standard practice. Indeed, the Secretary of State has compared GBE to Ørsted in Denmark; Octopus in the UK is another possible comparison. Both companies measure scope 1, 2 and 3 emissions, following certain protocols. These align with the Task Force on Climate-Related Financial Disclosures and EU taxonomy. Will the Minister confirm whether GBE will follow the same practice and taxonomy?
The principle behind the amendment in my name on financial returns is abundantly clear: if the Government are going to use public funds to invest in energy projects, they must be duty-bound to report the results of those investments. This proposal is an essential part of providing insight and knowledge of the operation of GBE. It is a principle of good governance to avoid taxpayers writing blank checks; it aligns with the notion that taxpayers should know not only how their money is being spent but how it is being invested and managed to ensure it delivers adequate returns.
I remind the Committee that GBE will be not an operating company but an investing company owning minority stakes in a large number of projects of different sizes. This will be complex, and the only way to track and measure performance will be to look at individual investment returns. I also remind the Committee that there is no investment committee yet set up and no reference—it looks as if the Secretary of State, ultimately, is in charge of making decisions on these investments. I have never seen this in an investment company. No private equity firm would be run like this.
Operating companies produce classic annual reports and accounts, but GBE will be more akin to a permanent capital venture fund. Therefore, its annual report and accounts really should be supplemented by disclosure of the rates of return on its investments.
I will address a comment made by the Secretary of State during the Bill’s Second Reading in the other place. He made an interesting argument about the potential of state-owned companies. In his own words:
“State ownership is the right idea for creating wealth for Britain”,
as GBE’s investments
“will help generate return for the taxpayer”.—[Official Report, Commons, 5/9/24; col. 456.]
GBE, he argued, would not only contribute to energy security but create jobs and foster economic growth. While I am encouraged by the potential for GBE to generate wealth and drive the economic growth that we need badly, I will ask the Minister to clarify a few points in relation to this statement.
First, if GBE is indeed intended to generate returns for the taxpayer, can the Minister confirm the expected rate of return on investment for these projects? In particular, will these returns be sufficient to justify the use of £8.3 billion of taxpayers’ money? To be clear, the £8.3 billion of capital for GBE will be borrowed by the Government. I do not need to tell your Lordships this as it is everywhere, but the long-term gilt yield stands now sadly at 5.5%—up more than 50 bps in the last three weeks. Infrastructure returns typically are above 10% and venture capital is above 15%. Therefore, the benchmark that GBE should be aiming at must be in the range of 10% to 15%.
We all know that we get what we measure. I worried when I read the evidence given by GBE’s chairman-elect, Jürgen Maier, in the Public Bill Committee debate in the other House on 8 October, when he said that GBE’s success will ultimately be measured by the number of projects it is able to finance and the quantum of energy it is able to deliver to the grid. So are we measuring returns or the number of projects? Therefore, it is critical that we understand the financial viability of these investments and ensure that they will not end up being a burden on the public purse.
Secondly, there is significant concern about the risk of GBE becoming a dumping ground for less profitable or riskier energy projects, especially those that private sector companies are unwilling to back. I should add that there was no shortage of capital for net zero when I was in No. 10, so I have to assume that GBE will back transactions that are perhaps less profitable. This concern was raised in Committee and by my right honourable friend Claire Coutinho, who questioned whether the Government’s aim to derisk projects could result in throwing taxpayers’ money into unprofitable ventures.
Representatives of energy trade associations such as RenewableUK and Energy UK have also raised questions. In particular, Adam Berman from Energy UK identified what he described as two competing priorities for GBE: making profitable investment and addressing problems in the energy system arising from market failures. He said that the company might struggle to resolve this potential conflict if it was not addressed in the Bill. Can the Minister provide assurances that GBE will not be disproportionately directed towards these high-risk, low-return projects, which could undermine the Government’s goal of creating wealth for Britain?
The Secretary of State and the honourable Member for Rutherglen, Michael Shanks, have cited Ørsted as a model and precedent for GBE. Ørsted is not only an operating company—it is the main energy entity in Denmark—but is 49% owned by the stock market. Its equity is researched by 20 investment banks, creating public and financial scrutiny each quarter. That is certainly a very different picture from GBE. GBE will invest in illiquid, minority positions, yet will be a large operation, at £8.3 billion of capital. Incidentally, this is about half the market value of Ørsted. This compels us to scrutinise it seriously and to ensure disciplined governance and oversight.
In summary, it is crucial for the Minister to provide further clarification on the financial viability of the investments to be made by GBE, the risks involved, and how the Government will ensure that taxpayers’ money is used wisely. Transparency and accountability, as we have discussed through Amendment 80, will be key to answering these questions and demonstrating that GBE is indeed acting in the best interests of the British taxpayer.
Lord Alton of Liverpool (CB)
My Lords, I support the remarks made by the noble Lord, Lord Offord of Garvel, and the noble Baroness, Lady Bloomfield, and Amendments 60 and 61, which they spoke to, particularly what the noble Lord said about reducing our dependency on foreign states. I will not repeat the remarks I made on day one in Committee, or indeed during our debate on China on 20 December, but I will add two or three germane points to what has been said to the Committee this afternoon.
Since we had our debate in Committee, I have sent the Minister a report by Ignites Asia that identifies funds run by global managers who had at least £1.4 billion linked to 14 solar and EV companies using slave labour in Xinjiang—a point referred to by the noble Baroness, Lady Bloomfield. These amendments are primarily about accountability; Parliament has a right to understand on a regular annual basis, as the noble Lord said, precisely how what will become the Great British Energy Act is working out in practice. It has a right to know what we are doing about supply chains and around the objective to create, as Amendment 60 mentions, some 650,000 jobs. How are we getting on with those things and how are we doing on the other side of the coin?
Already we are seeing the loss of jobs—in companies such as Vauxhall, for instance—not because of fair competition or trade, which most of us in this House support, but because of unfair trade that is based on massive subsidies for companies operating in China that use slave labour. We will never be able to compete on fair terms with companies that do that, but we aid and abet those practices by simply turning a blind eye to what is happening. As well as looking at the jobs we might gain, let us look at the jobs we are likely to lose.
We should think seriously about the supply chain question. The amendment I tabled for day one did not come out of thin air. I am glad to say it had been promoted as an idea in earlier debates in another place by Sarah Champion, chair of the House of Commons International Development Select Committee. That shows that it is a bipartisan and bicameral concern. People from all parties and none have anxieties about the kind of things that can go on in our supply chains and the lack of resilience and increase in dependency implicit in this. I remind your Lordships of the excellent report produced in 2023 by the Joint Committee on Intelligence and Security, chaired by Sir Julian Lewis MP, which reminded us of the massive security dangers we have to address as a result of the threat that the People’s Republic of China undoubtedly poses to us.
We should learn the lessons of the pandemic. We bought billions of PPE items with millions and millions of pounds of public money—taxpayers’ money—when many of those products could have been made in this country by British workers. We have to be a lot more careful than we have been so far. The noble Lord, Lord Offord of Garvel, is right to point us in his amendment towards justifying the case made by the Government in favour of the Bill.
I tabled a Written Question to the Minister that I hope he will be able to answer, if not today during our oral exchanges then at least in writing before Report, about how many solar panels we intend to buy to fulfil the ambitions of the Bill: how many, and at what cost? What are the alternatives? Can they be made elsewhere? Only this morning I heard from a company that operates out of South Africa that says it can produce solar panels without any of the risks involved in using slave labour from Xinjiang. There must be others—we should be doing more to look for those alternatives.
We have to take the issue of genocide more seriously than we have, not least because of what we would be placing on the shoulders of those companies that will be encouraged through this legislation to buy these products. They can be prosecuted under the 2015 legislation that was promoted in an incredibly enlightened way by the then Home Secretary, the noble Baroness, Lady May, who we referred to in our Question Time exchanges earlier today. The Joint Committee on Human Rights is about to embark on a new inquiry looking at supply chain transparency and the effects on modern day slavery. I hope that the noble Baroness might be one of those who comes to give evidence.
We have to take this issue more seriously. There was a good example of pre-legislative scrutiny when both Houses looked at this, amendments were made and there was a coming together; that should happen again this time. The House of Commons declared that a genocide is under way in Xinjiang. This is the crime above all crimes. I do not need to convince the Minister of this—I know that—but it seems that I have to convince the Government. Whenever Mr Miliband is questioned on this, he simply says, “We care about human rights”. We all care about human rights, but this is the crime above all crimes. The 1948 convention on the crime of genocide requires us to prevent, to protect and to punish. We do not do any of those things very well.
Lord Hamilton of Epsom (Con)
My Lords, it is always a great pleasure to follow the noble Lord, Lord Alton. We have to admire his doggedness in bringing up the question of slave labour in China. As we are totally dependent on so many different exports from China to this country, it is something that we have to bear in mind all the time. I wish him the best with his endeavours, although I do not hold out an awful lot of hope, as the problem is that China produces everything so much cheaper than anywhere else.
I support my noble friend Lord Petitgas in his amendment. He has outlined the real problem of investing billions—let us face it, it is billions—of pounds of taxpayers’ money in energy projects. The problem is that the only ones that will become available for the taxpayer, and for the Minister to make his decisions upon, will be projects rejected by the private sector.
The fact is that the people who invest in renewable energy are not the people who particularly believe in renewable energy; they believe in making money. The whole technique when putting up a wind farm or a wind turbine is that you test the amount of wind, look at the feed-in tariff from the consumer, do your cash-flow adjustments from there, borrow the money and put up the turbine.
My Amendment 85A is to do with the whole question of emissions, about which I am very worried. My amendment says that there should be an annual report,
“which must include information on carbon emissions resulting from each of”
Great British Energy’s
“investments in renewable energy technology”.
We have reached the point where we have to look much more closely at the whole question of renewable energy. People think that, if you put up a wind turbine and the wind blows, that is all free, and that you do not create any carbon emissions in putting up a wind turbine. I am afraid that is not true: you do. You create a tremendous carbon footprint when you create the steel. I gather we cannot make it in this country any more, so we have to import it, and there is an increase in carbon emissions when bringing it in. At the end of the day, a serious carbon imprint is involved in putting up a wind turbine. The great advantage of a wind turbine is that, once you have got it up, from thereon in the chances of creating a carbon imprint are rather less.
The same applies to solar panels. As we have discussed, solar panels are highly likely to be manufactured in China, and they have to be transported here. The Chinese are creating massive carbon emissions with their industry, which we basically exported to them. When we talk about carbon emissions, we are talking about global emissions; we are not talking about individual emissions here.
My real problem is with growing crops and trees which then get burned. Because these are a renewable resource, this is then taken as a renewable source of energy. I have a slight problem with that. Take the very extreme example of oilseed rape, which is grown in this country. When you come to think of it, you create a carbon imprint when the tractor tills the field and sows the crop. I am not an expert in the growing of oilseed rape, but I suspect it needs spraying and fertilising and so forth. All of this adds to the carbon impact. The seeds that come off oilseed rape are then compressed to produce a form of vegetable oil, which is then refined. All of this has a carbon footprint. Eventually, it is burned. I gather that it is proposed to be used for aircraft as a substitute for aviation fuel. When you burn aviation fuel, you are creating a carbon imprint.
This does not affect national Governments quite so much because the whole business of the carbon imprint of aviation is not counted against the targets for a particular country. The problem of CO2, as we know, is a global problem. If we want to clean up the planet generally, we cannot ignore aviation.
Many of us also have quite serious worries about Drax power station. For a long time, it was importing the offcuts of North America’s timber industry to burn at the power station. There is obviously a serious carbon imprint involved in cutting down trees, stripping the unwanted bits off them and loading that on to ships, which bring it over the Atlantic to this country. Have we really taken into account the CO2 emissions this whole process at Drax power station creates? It is rumoured that Drax has moved on to saying that it can take all this bark and stuff and turn it into aviation fuel. That will have the same problems as using oilseed rape. There is a massive carbon imprint all the way through.
We are trying to talk about reducing the carbon imprint, and it strikes me that with some forms of renewables we are increasing the carbon imprint unnecessarily. Surely what we should be doing is looking at hydrogen and seeing if we can get that down to a more manageable cost. That could be used in its compressed form in aircraft, heavy vehicles and so forth. The great advantage of hydrogen is that, when it is burned, it produces no carbon. I worry that, although we think we are doing something to help the planet, we are not. If we take that extreme example and go on looking for aviation fuel from oilseed rape in perpetuity, then, in the name of some renewable crop, we will be having very large carbon emissions right the way through the process, in perpetuity.
We have to look at the whole question of renewable energy and what form it takes. We need an audit which tells us how much carbon imprint is being made by producing fuel in this way, whichever fuel it is, so that we can make a more objective judgment about whether this is helping the climate and helping to meet CO2 and net-zero targets, or doing the precise opposite.
Lord Bruce of Bennachie (LD)
My Lords, I rise briefly to speak to Amendment 60, and also to Amendment 74, tabled by the noble Lord, Lord Berkeley. Amendment 60 relates to the Government’s projection of 650,000 jobs. This is to be achieved over five years, when we achieve net zero. It is a very ambitious target. I hope it can be achieved, but there are questions related to where those jobs will come from, whether we have the skills and whether jobs will be lost in the process as well.
I make no secret of the fact that I live in the north-east of Scotland and I represented the constituency of Gordon for 32 years. I have monitored the oil and gas industry from its very early days in the North Sea right through to the present, and the massive contribution it has made to the UK economy throughout that time—not just in terms of money but in terms of technology, the balance of payments and skills. I accept that the Government have said that we will continue to operate our North Sea oil and gas fields and that we will continue to have oil and gas in the mix, to and through net zero.
My basic concern on jobs is that we do not expand jobs in renewables at the expense of the naturally declining jobs in oil and gas: that we do not accelerate that process, especially as we do not quite know how fast we can achieve this creation of jobs. We do know right now that we have at least 200,000 people employed directly in the oil and gas industry, and many more in the supply chain, which, of course, is also part of the supply chain for the renewables sector. Not all of the skills are directly transferable, but many of them are. Provided that the transition is orderly, just and sensible, it will be possible for the decline in the oil and gas industry to be orderly while we expand the renewables sector and hopefully deliver the jobs that the Government are looking for.
I was surprised that, when I suggested that we were going to have oil and gas in the mix to and through net zero—which all projections from all sources say we will—there were people who thought we should just shut down our oil and gas now. There are people who say that. When I asked, “Why would you do that?”, I was told, “Well, you can set an example to the world. Yes, we will need oil and gas, but plenty of other people produce it, so we will just import it”. So we close down our own industry and then import it from other people—further away, with a higher carbon footprint and less efficient—so undermining UK technology and expertise. So my plea is: let us have the jobs, but not at the expense of existing jobs. Let us have an orderly transition that maximises them both.
I was at an awards ceremony for the industry in Aberdeen last month, and what impressed me was the wonderful array of bright, young people engaged in the sector who were very committed to the transition to net zero. But they were equally aware that oil and gas were part of the transition and that many of the supply-chain companies were now investing in technology relevant to the industry, including subsea connections, cabling and electronics. A lot of the things that have been developed in the North Sea are transferable to oil and gas, and that is a welcome factor; but let us not accelerate the loss of jobs while we build the new ones up. That is the simple point that I wish to make.
Turning to the amendment of the noble Lord, Lord Berkeley, I am in the same situation as him, so I declare an interest. I live in a village in Aberdeenshire where we do not have gas. In the dying days of the nationalised British Gas, I was involved in a fairly high-profile argument with the then chair of British Gas, Sir Denis Rooke, making the point that he and his company, in the run-up to privatisation, were not interested in extending the gas network. I had some success: I sort of shamed him into it and managed to get some substantial extensions in the dying days of British Gas in my own constituency. I was also right that, once British Gas was privatised, there was no more extension of the gas network beyond what already existed. Those were the days when everybody wanted gas, and gas was the option.
For many parts of the country, however, gas is not an option and the main alternative is oil. The House of Commons produced an interesting report at the end of last year, which I had a look at. I point out to the noble Lord, Lord Berkeley, that it says that the number of households off the gas grid is 4.5 million—a higher figure than his. I do not know which is right, but it is quite a lot.
It then did an analysis of the proportion of households that use oil for central heating. In England and Wales, it was 3.5% in total; in Scotland, it was 5.1%; and, in Northern Ireland, it was 49.5%. I suggest that that is an issue. The other point—and, again, I thank the House of Commons Library for this—is that it gave a constituency analysis. The overall figure does not quite focus on some of the communities that are much more dependent—ones that I know well—so I picked out three constituencies to give the House an example. The highest was Caithness and Sutherland, where 31% of households have oil central heating. The second-highest was my former constituency of Gordon and Buchan, at 26%, while the neighbouring constituency of West Aberdeenshire and Kincardine was 22%.
Lord Howell of Guildford (Con)
My Lords, I declare an interest, as in the register, in connection with energy-related companies. I will raise two questions on Amendments 59 and 65 in this bunch of amendments before the Minister starts to wind up—if that is what is coming next. I know that Amendment 59 is about household energy bills, but I start by observing that, as far as industrial energy bills are concerned, it is a disgrace—frankly, it was not much better under the previous Government—that, according to government figures, we now have some of the most expensive electricity prices in the entire world. That cannot be right. It obviously undermines our competitive power and economic growth. Obviously, therefore, it is holding back the whole investment in the energy transition and it is a classic case of shooting ourselves in both feet. That is the electricity scene.
As for household energy bills, there is an irony here, because the truth, as I shall try to demonstrate in a few words, is that the best chance of keeping down domestic energy bills, with all the other circumstances, many of which are completely unpredictable, is not through anything that Great British Energy is empowered to do at present, as the Bill stands. It lies in cutting down the colossal costs of having standby facilities in standby production from some combined cycle gas generation, but even more in having some cheaper forms of nuclear development than those we have had in the past—or indeed in the present, because all our current nuclear developments are wildly over cost.
The key lies in getting private money into shorter-term, smaller and more flexible, nuclear modules. That is what we should be doing; it is what many other countries doing, and it will be the way in which to greatly reduce the overall cost of having a reliable energy supply for a modern industrial nation, which includes facilities for 3,000 hours a year when the wind does not blow. Today is probably one of them, as my noble friend Lord Trenchard was arguing. A strong, intermittent standby system has to be there, and we know it is very expensive, by definition, if it is not being used all the time. We cannot sell electricity all the time—on the contrary, in many cases, as we can read in the newspapers today and yesterday, colossal sums of taxpayers’ and consumers’ money have to be paid in order to not produce electricity. There is a fatal difficulty here that we have to resolve.
The point is that, if we want costs to be held down, the way to do it is by making sure that private money can be mobilised, which it can for smaller nuclear reactors, whereas we all know that private money does not wish to touch with a barge pole a so-called replica of the gigantic Hinkley C EPR design, which is a difficult design and bound, although it calls itself a replica, to be miles over cost and cost-forming of the Government at Sizewell C as well. That is a way to ensure that costs and energy bills stay up, and that is the opposite of what we are trying to achieve.
The simple answer to this bit of the excellent Amendment 59, which I totally support, is that, if we can now begin to get a grip on the whole nuclear side and bring GBN together with Great British Energy and work in a serious approach to managing our, at present, wildly costly and unmanageable energy supply, we will begin to get a chance of getting that £300 off bills. Personally, I think it going to be very hard to achieve, but that is the one way it can be done—by getting private money in, because the Government have not got any money and have to go to the consumer, the taxpayer and the borough to get the money. We all know what that is costing, and all of it ends up in charges on taxpayers and working people and their hard-earned earnings.
That has to be answered, if this is going to stand. I hope that the Minister will go to his colleagues in the department, and maybe in the Treasury as well, if he can get any response from them, and point out that this just does not make sense. It does not fulfil the aims that the Government want, the Opposition want and all parties want. As the noble Lord, Lord Alton, and others have said, this is not a bipartisan issue, at least in this House, because we all know on both sides of this House that this does not make sense—and this viewpoint should be passed on to the Secretary of State politely within the department, so he can modify his approach, particularly on the nuclear side, where I worry a great deal that we are on the wrong track. We are heading to the wrong track, while others are racing ahead. That is all I wanted to say on Amendment 59.
Amendment 65 is interesting, because it is really about the level of demand that the National Grid will be able to meet. Many people—again, bipartisan—are worried that the estimates that seem to be in the mind of the department are miles too low. The figure of 200 gigawatts is being pushed around—others say 300 gigawatts. Today, there is something more in the newspapers that should make the Government think again on this one. We are told that we are going to have colossal data centres. Indeed, it says in one newspaper that we will have one of the world’s biggest data centres to move into the age of AI, modern innovation and investment and the kind of society and industrial and consumer pattern that will have in the second half of the present century. That is what we must be doing. Bit data centres are hugely expensive in energy demand; they drink up energy in colossal volumes—and that is on top of the hope or ambition of the Government for decarbonised, clean energy by 2030, or maybe 2035. Maybe it is to be 95%; there are all sorts of modifications coming out all the time. On top of that, I think that this demand will push up any reasonable estimate from 300 gigawatts to 500 or 600 gigawatts. We are moving into a hyper-electric, super-electric age and data centres will add vast amounts of demand to the system.
There are 40 million cars and trucks in this country still running on petrol; they will need to move over to EV as well. The chances of having a National Grid system fully invested to meet that kind of demand on even the 2050 timescale, let alone 2030 or 2035, is very small indeed. Does the Minister accept that, as we move into this all-electric age, there will be considerable increases in demand and that, if there is going to be effective supply for them, we must have the conversation and, what is more, the detailed explanations implied in Amendment 65. GBE should be able to go to the National Grid and say, “Can you link us up?”. The many industrial firms thinking of going over from gas-fired furnaces to electric furnaces should be able to go to the National Grid and say, “Can you link us up?” What answer are they going to get? Are they going to be told, “Come back in 15 years”, or are they going to be told, that it is all right and that we are investing to meet these colossal demands for increased electricity from every kind of energy transition, the related digital underpinning and the necessary data centre operations, which we now know we have to have in order to compete in the 21st century? Is that realised? That is my question on Amendment 65. Many other excellent comments have been made, but those are the two on which I would greatly value an answer from the Minister.
Lord Cameron of Dillington (CB)
My Lords, I support the last speaker on Amendment 65. When I saw Amendment 65 in the name of the noble Lord, Lord Offord, on the readiness of the National Grid for this brave new world, I realised that this is probably the key amendment to the Bill in terms of the success of Great British Energy. I am not sure that putting it into the Bill will actually make a ha’porth of difference, but there is no doubt that the issue is going to decide whether GBE is a success or not.
We need to quadruple, if not more, the size of the National Grid network, both to get power to all those new electric cars and heat pumps, et cetera, and to take power from all those new wind farms, solar roofs, et cetera, but with all the objections to the wires and pylons, I cannot see the National Grid delivering the necessary increase in this network any time soon. So, as the amendment states, GBE can really invest only in projects that have a guaranteed connection, however worthy they may be in other aspects. If no connection is likely to be in place by the time of the completion of the project, then GBE should probably save its money.
Lord Roborough (Con)
My Lords, I refer the Committee to my register of interests, including in solar and wind energy development and ownership, as well as as an investor in energy-related equities and as a farmer and lands manager.
I shall speak in particular to Amendment 80 in the name of my noble friend Lord Petitgas, but also support Amendments 85A in the name of my noble friend Lord Hamilton of Epsom and the amendments listed in the name of my noble friend Lord Offord of Garvel. These amendments put detail to the questions I posed to the Government, in my response to His Majesty’s gracious Address, regarding financial reporting and accountability.
Great British Energy is tasked with investing taxpayers’ money to allow taxpayers to benefit from the financial returns from the energy transition, as well as to accelerate and stimulate that transition. It must be right, as with any publicly listed company, that the company is accountable to its owners for its performance. That requires high-quality financial reporting. Listed companies report unaudited financials quarterly and audited annual reports—which also include carbon emissions accountability, as my noble friend Lord Petitgas pointed out. The first effect of Amendment 80 would be to bring GB Energy in line with those requirements.
The second effect would be to introduce a more granular analysis of the returns from each investment. This is usual with investment trusts and common in private equity. I see no reason why GB Energy should not report in equally great detail. Fully commercial organisations may choose not to do so to protect commercial confidentiality. However, in GB Energy’s case, it must be desirable to highlight where returns are the greatest in order to direct more private sector capital into those areas and help achieve the primary purposes.
It is also essential that GB Energy is fully accountable to Parliament on an individual investment basis, as well as holistically. This is taxpayers’ money, which could have been used to avoid destroying farmers’ and family businesses’ desire to invest and grow. That places a heavy burden of responsibility for GB Energy to perform well. The Minister may suggest that this is too expensive and cumbersome, but I point out that listed companies measured in the tens of millions of pounds are well able to comply without issue. GB Energy appears unlikely to be an operating company but more of an investment company. That should make these obligations straightforward to comply with, while ensuring that its investee companies and projects also have to keep accurate and timely books to allow GB Energy to comply.
The Minister may suggest that UK company registration requirements to lodge accounts are enough, as has been said in previous groups. Anyone familiar with those accounts will know that they tend to be published around nine months after the close of the financial year, are annual only and contain the least possible information to comply with registration requirements. There is little here that can be helpful in assessing performance.
Amendment 80 creates financial and climate reporting discipline that will then have to be extended throughout the organisation, to all of the investee companies, to everyone’s advantage. Examples of successful government investment in the private sector are hard to find. If this Government are confident that this will be the unicorn, surely the Minister will welcome the amendment, which will create many opportunities to showcase that success.
I also add my voice to Amendment 65 in the name of my noble friend Lord Offord of Garvel, and I have many of the same concerns as my noble friend Lord Howell and the noble Lord, Lord Cameron of Dillington. While this may almost seem like stating the obvious, there are a number of issues around grid connection, and I would be most grateful if the Minister could update us with progress. The first is the issue of nameplate grid capacity. Does the National Grid’s £35 billion investment plan from 2026 to 2031 fully address this need? And, given the increase in the UK Government’s borrowing costs and likely impact on UK companies, does the Minister anticipate any refinancing requirements to build out this transition?
The second is the human capacity of distribution network operators to work through projects with developers, to plan and deliver the grid connection. I understand there is a lack of capacity in this area and it is possible that DNOs could be prioritising their own projects at the expense of third parties. They do not appear to be meeting obligations, which is costing developers millions in delays and cost increases. I understand the bottleneck is largely human capital, which exists in Europe but of which there is not enough in the UK. The Minister has discussed training in previous groups, but would it not be also wise to fast-track visa applications for skilled operatives? Is the Minister confident that his Government have a plan that can deliver beyond 2030, as anecdotally the grid queue analysis and action that has been taken appear to have sacrificed confidence in developments beyond that timeframe in order to meet 2030 commitments?
Under the national electricity system consultation, I understand developers have been given only three weeks to consult on up to 16 documents per project. These developers need to see more resources and more evidence of planning beyond that timeframe in order to keep a strong project pipeline alive. Can the Minister update the House on the impact these actions have had on the developer community? Is he satisfied that the capital and talent are still available in that sector to meet his Government’s objectives?
I entirely agree with my noble friend Lord Hamilton of Epsom’s comments on the sustainability of biofuels. Displacement of food production in favour of growing energy crops risks causing higher prices for everyone. I draw the Minister’s attention to the US blending mandate, which has been in place for several decades and has led to around a quarter of the US corn production going into bioethanol for blending with gasoline. This has had a structural impact on food prices around the world and simply displaces one problem into another.
I disagree with my noble friend Lord Hamilton on green hydrogen, unfortunately, as its cost simply seems to be too high for most applications. Around one-third of the energy is lost in electrolysing water into green hydrogen, and another third is lost in turning it back into electricity, giving it a structural disadvantage versus other forms of energy.
Baroness Noakes (Con)
My Lords, I want to offer a slightly different perspective on this group of amendments. All the amendments in this group, and indeed some later groups, involve a series of rather worthy things—for which there are to be reports or other consequences—to be achieved by giving a direction to Great British Energy. While I support the amendments on the basis that they are probing amendments, I find it difficult to support the structure of the amendments themselves.
It seems to me that, by using the power of direction in Clause 6, the amendments would undermine the nature of that power and subvert the effectiveness of the power of direction, which is a long-standing feature of the control framework for public corporations. Powers of direction for nationalised industries were commonplace when nationalisation took hold from the 1940s onward. I do not know whether they existed before that, but they certainly have a pedigree of nearly 80 years. The first one of which I am aware is in relation to the Bank of England Act 1946, which nationalised the Bank of England. They have been a feature of public body legislation ever since, except in relation to bodies which are created as regulatory bodies.
The power of direction was never conceived as a mechanism for giving routine instructions to public bodies, which is what all the amendments in this group and the subsequent groups are trying to do. In fact, throughout the history of nationalised industries, the power of direction has almost certainly not been used. In relation to the Bank of England, I asked the previous Government fairly recently whether they would like to give up the power of direction over the Bank of England and whether they had used it since 1946; the answer was that they had never used it since 1946, but they definitely wanted to keep it. The fact that a power has not been used does not necessarily have any meaning, because it is designed as a backstop power for use in extreme circumstances. The mere fact of its existence can be a powerful weapon in the hands of the Government of the day.
It should be an uncontested fact that the Government ultimately call the shots in relation to public corporations, however much operational independence they claim to be handing over to them when they set the bodies up. The board of a public body should be very wary of not following the wishes of the Government of the day, unless those wishes conflict with their legal and statutory objectives.
I will always defend the ability of the Government to give directions to a public body, because public bodies should not be above the Government of the day. I think there are far too many public bodies, but if we have to have them, we must have an effective power of telling them what to do when necessary. I would definitely not want that core power to be diluted by being cluttered up with a lot of more day-to-day matters, which is partly what the amendments in this group and subsequent amendments do.
The concerns of my noble friend on the Front Bench and indeed other noble Lords who have drafted these amendments would be better met by placing specific requirements in the Bill, rather than by cluttering up the power of direction which has a very special place in the control framework for public bodies.
Lord Ashcombe (Con)
My Lords, I support my many noble friends in their amendments in this wide-ranging group. I declare my interest as an insurance broker in the energy industry for Marsh.
In the Labour manifesto under the section entitled “Make Britain a clean energy superpower”, its second mission to rebuild Britain, there is a plan to create 650,000 jobs by 2030. This will obviously need to include the supply chain, as the number of jobs required for running energy projects will never reach this amount.
In the Great British Energy Founding Statement, we learn:
“Backed by a capitalisation of £8.3 billion of new money over this Parliament, Great British Energy will work closely with industry, local authorities, communities and other public sector organisations to help accelerate Britain’s pathway to energy independence. That means installing thousands of clean power projects across the country, crowding in investment for next-generation technologies, and providing vital support to accelerate large-scale projects”.
For new money, we can read taxpayers’ money.
When taxpayers’ money is being spent, it simply cannot be thought of as a blank cheque, in this case with a large upper limit. It is imperative that there are checks and balances in the system to ensure that money is spent wisely to the benefit of the country. I suggest to the Minister that some of these measures might include the following: the need to demonstrate the benefit in each venture towards the £300 saving so heavily touted in the run-up to the general election; the need to demonstrate the benefit in each venture towards the creation of 650,000 jobs on the back of this clean energy drive and again touted in the run-up to the general election; and the need to ensure that grid connections, as have been mentioned, to connect the new generating assets are available as and when needed, something that has been very difficult to achieve in the past. That would also prevent ludicrous curtailment payments. The costs from NESO to do this are enormous—I believe I am right in saying some £40 billion a year until 2030.
The measures also need to show the net effect of carbon emissions and the reductions being made as the years progress, which is what this Bill is all about. However, it is especially important to consider not only scope 1 emissions, being direct greenhouse gas emissions that occur from sources that are controlled or owned by an organisation, and scope 2 emissions, being indirect greenhouse gas emissions associated with the purchase of electricity, steam, heat or cooling but also—and possibly most importantly—scope 3 emissions, being the greenhouse emissions resulting from activities from assets not owned or controlled by the reporting organisation but that the organisation indirectly affects in its value chain. My noble friend Lord Hamilton talked about one specific example. In my opinion, this has specific reference to solar panels, which are manufactured predominantly—some 85%—in China, and wind turbines, of which 60% are manufactured in China, which has certainly not demonstrated any restraint in curbing emissions. Then, there is the subsequent voyage to the final destination. Let us not forget what the noble Lord, Lord Alton, said.
There is also the need to show a reduction in imported energy—both via electrical interconnectors and hydrocarbons as LNG or by pipe from Norway and the continent—balanced against the production of our own North Sea gas and being allowed to continue to search for more off our abundant coasts.
Further, there is the need to show that a significant percentage of the materials used in any work done is generated in the UK and the need to demonstrate that we are becoming more self-sufficient in power generation—something we have not got to yet. Finally, but of no lesser importance, there is the need to demonstrate financial return to the benefit of the taxpayer.
In a number of these amendments, various timeframes have been suggested to produce a fair audit trail for Parliament and the taxpayer. Without them, who will know the real benefits of all this expense? Does the Minister agree that measurement provides results and therefore helps to determine the way forward?
Lord Berkeley of Knighton (CB)
My Lords, perhaps I may add a few words to some of the comments from the noble Lord, Lord Hamilton of Epsom. He mentioned the carbon cost of steel, but there is one other element we should not forget. I understand that building pylons to take power overground is cheaper than putting it underground, but I plead with the Minister to accept that there are areas that we should try to protect. In fact, in the long term, it is probably as cheap, if not cheaper, to put power lines underground. I recognise the dilemma that the Minister is in, but we should look at the aesthetic value of what we are talking about, as well as the financial one. I believe that there are some areas of the United Kingdom that we should protect at all costs.
Lord Fuller (Con)
My Lords, I will speak briefly in support of my noble friend Lord Hamilton of Epsom on carbon accounting. He said that he does not know very much about oilseed rape, but I do. About 20 years ago, in some of the very earliest stages of emissions reduction, I was involved commercially in that.
My noble friend asked that we should have pilot plants and studies to see whether the energy balance of oilseed rape can be done, as if it has never been done before. I can tell your Lordships that pilot plants were set up on Teesside, at enormous expense, and analysed to death. Although this is not a debate on farming, I can say that, at normal yields, when all was said and done, after the ploughing, sowing, fertilising, spraying, harvesting, processing and transportation, you came ahead on a carbon basis only when or if you burned the straw that otherwise would have been left behind in the field. Of course, at low yields, you spent more carbon on growing it than you got back at the end.
I make no other comment save to say that my noble friend is correct that, often, superficially attractive green energy schemes, when you boil them down, cost more carbon than they yield. That is important to look at because, otherwise, we could sleepwalk into an enormous waste of public funds through GB Energy, chasing projects that do not hit the target—which, of course, is to allow us to be more sustainable in future.
Earl Russell (LD)
My Lords, I will speak very briefly. If I may, I will call out the elephant in the room on this Bill. We have had 10 groups of amendments turned into 18 groups on this final day in Committee—over half of the groups that we are discussing today are the result of one party degrouping amendments. We have spent over two hours speaking to the first group of amendments, and we have 18 groups to speak to today. I have heard a lot of speeches, but in the case of many, I could not tell which amendment they were even speaking to.
I will say just this: we support the Government and the Bill. This is an extremely important Bill. I am pleased to see action taken on these measures after the Conservative Party failed to do anything about it, left bill payers vulnerable to the increase in bills as a result of the war in Ukraine and ended up spending £40 billion of taxpayers’ money subsidising bill payers for no long-term benefits. In this group, we are generally supportive of Amendments 61, 65, 69, 70 and 74. For groups that we feel were unnecessarily degrouped, we will probably not make comments.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I am very grateful to the noble Earl, Lord Russell, because it seems to me that we have “enjoyed” what essentially has been a rerun of previous debates, with Second Reading-type speeches, when the key concern, as the noble Baroness, Lady Noakes, suggests, is Clause 6 and the power of direction.
So I do want to come back to the intent of Clause 6. First, we want GBE to be operationally independent. A founding principle of GBE is that it should be independent as far as possible in executing its functions. The Bill is focused on making the minimum necessary provisions to establish the company. At Second Reading, some noble Lords opposite accused the Government of drafting the Bill in a way that meant we would use Clause 6 to micromanage GBE. We have always maintained, as the noble Baroness, Lady Noakes, rightly pointed out, that this is a backstop provision, yet now noble Lords opposite seek to micromanage both the Government and GBE by these various amendments, most of the issues in which we have already debated.
Secondly, we have set up GBE as a company for long-term success and as an enduring institution. Some of the amendments, which include short-term targets, would be wholly inappropriate in legislation. Indeed, it would be more appropriate for the Secretary of State to set priorities via the statement of strategic priorities in Clause 5, of course within the framework of Clause 3.
My third point is the intended use of the power in Clause 6. Let me make it absolutely clear, as I have done in the past, that the power to give directions to GBE is intended only for urgent or unforeseen circumstances. These amendments would widen the intention unnecessarily. The noble Baroness, Lady Noakes, is right about the relationship between government and such organisations. She and I have both had experience in relation to the NHS; it is a slightly different set-up, but we are talking about the relationship between a government department, the Secretary of State and public bodies. She will know that there the Secretary of State has always had a power of direction, but I think it has had to be used only a handful of times. The reason of course is that chief execs of NHS bodies understand that the Secretary of State is able to set the overall direction of the National Health Service without having to call on what is essentially a backstop power.
My fourth point on a number of the amendments is that the existing reporting requirements are set out in the Bill, which makes provision for GBE to produce and publish an annual report and accounts. They will undergo external audit; they will contain information on the activity of the company over the year; and they will also include reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures. GBE may also make information available through reporting, such as when projects or investments are announced. We think that that is sufficient accountability.
On some points raised by noble Lords on Amendment 59, we believe that in an unstable world, the only way to guarantee our energy security and protect bill payers permanently is to speed up the transition from fossil fuels to home-grown clean energy. This is consistent with advice from the Climate Change Committee and it is why we have set an ambitious target to reach clean power by 2030, which the independent NESO considers achievable. We believe that the key role of BGE is focused on driving forward deployment.
I say to the noble Viscount, Lord Trenchard, and the noble Lord, Lord Howell, that I agree with them on the importance of nuclear power. But I say to the noble Lord, Lord Howell, that this is the second time he has tried to divert the Government from supporting Sizewell C. I say to him that this is a massive development and we are moving to final investment decisions over the next few months. It will produce 3.2 gigawatts, it is a replica of Hinkley Point C, 80% above ground, and we have the regulated asset-based approach which will bring in private sector expertise and disciplines. So, in agreeing with him on the importance of small modular reactors and advanced nuclear reactors, we should not underestimate the potential of Sizewell C—and indeed Hinkley Point C when it comes on line, I hope at the end of this decade.
Of course I take the points that data centres will need a lot of electricity, that grid capacity issues are vital and that we need more investment in the grid. I also take the point made by the noble Lord, Lord Berkeley of Knighton, about the beauty, or not, of pylons. I of course accept the point he makes, but we are going to have to have more pylons. None the less, they will have to go through vigorous planning and meet environmental protection requirements.
On jobs and Amendment 60, GBE aims to revitalise the UK’s industrial areas and we think that, by situating its headquarters in Aberdeenshire—which I am sure the noble Lord, Lord Bruce, will welcome—it will be able to leverage the skilled workforce available there and throughout Scotland. More broadly, we have set up the Office for Clean Energy Jobs to promote clean energy employment and focus on skills development and training in the core energy and net-zero sectors.
Amendments 61 and 76 concern supply chains, which are of course very important indeed. GBE’s founding statement has already made it clear that my department expects the company to prioritise the development of supply chains and to report to government on progress. To come to the noble Lord, Lord Alton, of course we have debated these matters over the years and I absolutely understand where he is coming from. But it will be for GBE as an operationally independent company to determine the projects and technologies it chooses to invest in, in accordance with its objectives. It will be expected to respect human rights under the Human Rights Act 1998 and it will be subject to the provisions on forced labour and supply chains, both under the Modern Slavery Act 2015 and the Procurement Act 2023.
We recently set out our Clean Power 2030 Action Plan, which requires significant deployment of solar electricity—noble Lords are right on that. Developing sustainable, diverse and resilient solar supply chains, free from forced labour, is important for the Government. As the noble Lord, Lord Alton, knows, we also have the Solar Taskforce, which will be looking at these matters.
On Amendment 63 on the cost of fulfilling the company’s strategic objectives, I can assure the noble Lord, Lord Petitgas, that the Secretary of State will set ambitious but achievable objectives for Great British Energy that can be achieved through the funding envelope. GBE will be backed, as noble Lords will know, by a capitalisation of £8.3 billion over this Parliament, and its objective is to crowd in additional private sector investment. However, it will be subject to HM Treasury’s value-for-money guidelines and, like existing publicly financed institutions, its investments will be subject to safeguards and risk assessments.
On Amendments 69, 70 and 85A, on the impact on carbon emissions of GBE’s investments, the company is committed to advancing the deployment of clean energy to aid the Government’s goal of decarbonising our electricity system by 2030. The amendments would require a report to be produced for every investment made by Great British Energy, which seems neither proportionate nor effective. On importing energy into the UK, we acknowledge that reliance on imported fossil fuels presents economic and security risks, as evidenced by the situation following the Russian invasion of Ukraine. The best response is to increase domestic power generation through renewable energy sources and nuclear power, while simultaneously transitioning to more sustainable methods for heating homes, fuelling vehicles and powering industry. These can substantially mitigate our exposure to volatile international markets and energy price fluctuations. We see GBE as being at the heart of those efforts.
Lord Hamilton of Epsom (Con)
Does the Minister accept, however, that converting oilseed rape into aviation fuel does not produce clean energy?
Lord Hunt of Kings Heath (Lab)
My Lords, we rely on agreed definitions as to whether an energy is clean. The noble Lord mentioned biomass and Drax. He will know that the Government’s view, which his party also took when in government, is that the carbon absorbed by the forestry that replaces what has been transported to Drax more than covers the carbon expended in the process of bringing it to Drax, including the use of shipping. For 14 years, the party opposite accepted that this was an appropriate definition.
I turn to my noble friend Lord Berkeley’s amendment, on the risk to off-grid households and the value of renewable liquid fuels to these households. The noble Lord, Lord Bruce, also covered that point, and I listened with great care to what both had to say. Clearly, we want fuel-poor and off-gas-grid homes to benefit from the transition to net zero. The current energy company obligation includes incentives to deliver measures such as low-carbon heating to off-gas-grid rural homes in Scotland and Wales. Phase 2 of the home upgrade grant provides energy efficiency upgrades and low-carbon heating measures to low-income households living in the worst performing off-gas-grid homes in England in order to tackle fuel poverty.
We recognise that renewable liquid fuels could play a role in decarbonising heat off the gas grid. We therefore expect to prioritise the use of renewable liquid fuels for the small number of homes that are not readily suitable for electrification, as these have the fewest options to decarbonise through alternative low-carbon technologies. My noble friend Lord Berkeley suggested a meeting on this; I am very happy to engage with him and, indeed, with the noble Lord, Lord Bruce.
Amendment 76, tabled by the noble Lord, Lord Offord, and Amendment 77, tabled by the noble Baroness, Lady Bloomfield, relate to sourcing materials for GBE projects from the domestic supply chain. Adding the proposed detail to the Bill would too narrowly restrict the company in carrying out its activities, halting the potential feasibility of projects where UK sourcing is not currently possible.
On jobs, I take the point made by the noble Lord, Lord Bruce, concerning the importance of the UK continental shelf and the need for an orderly transition. My daughter supported her career as a wireline engineer in the oil and gas industry working out of Aberdeen, and I am well aware of the importance of the sector, what it has contributed to the UK economy and the skills and dedication of the people working there. As we have described, we want an orderly and just transition.
GB Energy will be committed to helping drive the growth of supply chains in the UK to accelerate the deployment of key UK energy projects. It is important, however, that we comply with the international trading rules that the UK is bound by, such as prohibitions on requiring local content contained under various agreements under the WTO.
Amendment 80, in the name of the noble Lord, Lord Petitgas, requires the Secretary
Lord Alton of Liverpool (CB)
I am sorry to interrupt the noble Lord, but I wonder if I can press him further on the issue of jobs and the impact on our own economy when countries run, in their own jurisdictions, the kind of slave labour arrangements that I and others referred to earlier. He will have seen the information about the loss of electric vehicle-related jobs because of the flooding of the market—we do not have any tariffs on those vehicles, whereas every other G7 country does. He will know that, in the last quarter, the trade deficit with China was some £32 billion but at no time since 1995 has there ever been surplus on our side of the equation. How can we justify, therefore, pouring more money into the economy of a country that relies on slave labour? It cannot just be left to companies, even Great British Energy, to identify whether a country is using slave labour or not; surely that is a matter for the Government, too.
Lord Hunt of Kings Heath (Lab)
The noble Lord raises matters of great geopolitical importance and importance to the UK’s economy. He will have seen that my right honourable friend the Chancellor has been in China in the last few days, seeking to engage that country in relation to economic co-operation and development, within appropriate security safeguards. We want to see jobs in the energy sector developed as much as possible in the United Kingdom, but equally, we are operating in a global economy. For very good reasons, we are concerned about the introduction of tariffs which may inhibit international trade, and we must also be mindful of the economic value-for-money issues that clearly have to come into play in this area.
Let me return to the Bill and what is appropriate for us to include in it. We believe that this issue is a matter for GBE, working within the constraints set through the statement of priorities and through Clause 3, and also in relation to the further work we are going to do. We have mentioned solar, and noble Lords are right that much of the raw material for solar panels comes from China, although it is British companies working in the United Kingdom that benefit more from the value of the work on solar installations.
Turning to the amendment of the noble Lord, Lord Petitgas, as a publicly owned company, GBE will be held accountable through regular reporting to my department. It will be subject to HM Treasury’s value-for-money guidelines, its investments will be subject to safeguards and risk assessments, and it will invest in the private sector to share risk and reward.
On green taxonomy, a decision about how a potential UK green taxonomy could be used or applied has not yet been finalised. The Government have launched a consultation to gather views on the value of the case for a UK green taxonomy, and it will close on 6 February.
We need to come back to what Clause 6 is for as a whole. It is a backstop which one hopes would never have to be used; it is not a way to encourage the Secretary of State to micromanage a company that we very much want to be operationally independent.
Lord Petitgas (Con)
I want to go back to the point about the company acting independently. There is little bit of confusion about this company being an energy company, as opposed to an investment company. There will be myriad small investments. If it acts independently, which is fine, it needs an investment committee, and I have not read anywhere that there will be one. The chairman-elect is Jürgen Maier. He may know the sector but he is not an investor. So, effectively, taxpayers will be limited partners in an investment company without an investment committee and with a chair who is not an investor, so it is not unreasonable to ask for information about rates of return and to understand exactly how it will be done. If the answer is, “Don’t worry, it’s an independent company but value for money will be done by the Treasury with DESNZ”, that is a different governance process, but the governance of investment and selection to me remains relatively obscure.
Lord Hunt of Kings Heath (Lab)
My Lords, I do not really think I can go any further than the remarks I have made this afternoon. It will ultimately be for GBE’s board to decide how it will arrange its board committees. I have noted what the noble Lord said about an investment committee. I will certainly draw his remarks to the attention of Jürgen Maier, who may not be an investment expert, as the noble Lord suggests, but my goodness me he has a lot of experience in this sector.
Lord Offord of Garvel (Con)
My Lords, in bringing the debate on these amendments to a close, I can deal head-on with the Minister’s comments and those of the noble Earl, Lord Russell, about the time given to the Bill. We have so far had one and a half days in Committee and we have one further day allocated, which will be only two and a half days on a Bill that spends £8.3 billion of taxpayers’ money, has no detail on how that money will be spent and gives endless power to the Secretary of State for Energy. It is entirely reasonable that we scrutinise it. The weekend’s press was full of the energy crisis that we face, with the shortage, storage and national grid issues.
Lord Hunt of Kings Heath (Lab)
My Lords, with the greatest respect, there is no energy crisis.
Lord Offord of Garvel (Con)
As I said, the point of government is to ensure that there is no energy crisis and at the weekend we had reports of there being gas supplies for less than one week, which is concerning to the public. Therefore, it is only fair and reasonable that Parliament debates that in some detail.
Lord Hunt of Kings Heath (Lab)
My Lords, what we had was one company looking for government subsidies using the opportunity to make alarmist headlines.
Lord Offord of Garvel (Con)
The point is that this is a topical debate that the whole of the public are interested in. They understand energy prices like nothing else now. They understand that, in terms of their household budgets, this is a major part of their cost of living and it is only reasonable that we get to debate this.
The amendments in this group are straightforward and simple. They are nothing to do with micromanagement; they are only to do with the accountability and transparency of this new company, which, as my noble friend Lord Petitgas pointed out, is not an operating company. The public think this is a company that makes cheap energy. It is an investment company sitting on one floor of a building in Aberdeen making investment decisions, and we have no idea how it will do that.
At the last election, the Government made promises to working people on this topic: to reduce energy costs, create jobs and drive forward our energy transition. Therefore, taking my noble friend Lady Noakes’s constructive point, we can argue about how we deliver the substance of these amendments, but we should not ignore the substance. Is it not fair and reasonable that we have in the Bill some consideration of government promises made to the public about the cost of energy—£300 in savings, which, incidentally, is £8 billion, the same amount as is being invested in 28 million households at £300—or the fact that 650,000 jobs are to be created? Is it not reasonable that the Bill somewhere talks about the fact that we want a strategic priority for the UK to develop its own energy supply chain? Is it not unreasonable that we have amendments that deal with how we make sure that the supply chain is fair? We have talked about a fair transition: well, where is the fair transition, to pick up what the noble Lords, Lord Bruce and Lord Alton, said, when we destroy our own highly skilled jobs in the north-east or end up using products made under dubious circumstances in overseas territories?
I would argue that all these amendments need to be considered. There is consensus in this House that we need energy security and that we need to get to 2050. The question is: why is this being speeded up artificially when we and the technology are not ready? Why are we doing this artificially?
My final point has been mentioned by many noble Lords so far: none of this works without the plumbing working. The national grid needs a serious upgrade and comprehensive investment to deliver this. If in these straitened times—we are continually reminded by the Government Benches that there is no money—there is a spare £8 billion, should it not be better used by being put into the national grid once and for all? In the meantime, given that we are where we are in Committee, I beg leave to withdraw the amendment.
Lord Offord of Garvel
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must report to the Secretary of State within three months of each investment it makes on the impact that the relevant investment is projected to have on wholesale electricity prices over the following ten years.(1B) The Secretary of State must lay a report made under subsection (1A) before Parliament.”Member’s explanatory statement
This amendment would introduce a requirement that Great British Energy reports to the Secretary of State (and subsequently Parliament) on the projected impact that each of its investments would have on wholesale electricity prices over the following ten years.
Lord Offord of Garvel (Con)
My Lords, I rise to move Amendment 62 and to speak to my Amendments 64, 68, 71 and 75. Aside from the promises to cut consumer energy bills and create 650,000 new jobs made by the Government throughout the election campaign, the British public were assured that GBE would turn a profit for the taxpayer. Yet there is nothing in the Bill that elucidates an investment profile or targeted rate of return. Why not? The British taxpayer must be able to see what the Secretary of State is doing with £8.3 billion of public money.
With that said, Amendment 64 requires GBE to provide an annual report to Parliament on its annual rate of return on investment and a projection of the following year’s expected rate of return on investment. That point was picked by my noble friend Lord Petitgas in the previous group. The company intends to invest in and de-risk projects in new clean energy technologies and it would be useful to see the return on investment of these projects. The point was well made in the last group and this amendment continues to hammer that point home.
During the last election, the Government made countless promises on bills and energy costs—again, a point we heard in the last group—that were rehearsed, debated and put out by the Prime Minister, Chancellor and various Cabinet Ministers, who gave the figure of £300. Once again, it is only fair that we have amendments that hold the Government to account on these promises made to the British people. It is widely understood that the cost of electricity is a matter of serious concern and, again, as has been indicated, it is now the major part of any household’s weekly costs. Therefore, it is deeply worrying that the Government are voting against enshrining these promises in law when they made them so directly to the British public.
The Government have said that GBE is part of their plans to ramp up renewables, which they say will result in cheaper energy. But, again, we do not have the background and analysis. The only analysis we have had so far, from Cornwall Insight, found that in the last contracts for difference, the Secretary of State, on these assumptions, will potentially increase people’s energy bills by £5. So, again, we have conflicting reports from different experts in this space. The Office for Budget Responsibility has forecast that removal taxes will increase by 23% by 2030, again highlighting the cost of this transition to the ordinary consumer. It is with that in mind that I bring forward Amendment 71, which requires GBE to produce and report
“a cost benefit analysis of the price of electricity produced from renewable energy technologies compared to that produced from gas”,
which plays a critical role in energy generation.
I return again to the Government’s promises of 650,000 jobs with no detail as to how that will be deployed, other than the fact that we know there may be 100 or so in the Aberdeen headquarters. I believe that the Government’s punitive attack on the North Sea oil and gas industry will actually cost jobs, as the noble Lord, Lord Bruce, already mentioned in the last group—some 200,000 highly paid, highly technical jobs in the North Sea, which are critical to the transition to the new green energy world for which we all wish.
Finally, Amendment 75 would require GBE to carry out an environmental impact assessment on each investment it makes. The Secretary of State and GBE should give due regard to their role in maintaining the protection of our environment while ensuring that they deliver healthy returns on investment.
I am pleased to speak to this group. I look forward to the corresponding debate. The function of GBE as a type of investment body is central to its operation as a company. It is therefore essential that the Bill makes provision to report on the success and impact of each investment it makes, backed by £8.3 billion of taxpayers’ money. I beg to move.
Viscount Trenchard (Con)
My Lords, I congratulate my noble friend on his clear and well-argued introduction of his amendments in this group, to most of which I have added my name. As he said, the taxpayer must be able to see what the Secretary of State is doing with £8.3 billion of his money. State-owned companies do not have a great track record in realising a strong, positive return on their invested assets.
Unless GBE does that, it is likely to have a negative, rather than a positive, effect on wholesale electricity prices. Amendment 62 will ensure transparency on that. GBE intends to invest in and de-risk projects involving new clean energy technologies. It is clearly necessary to have full transparency as to the rate of return on each of the investments that GBE achieves. The amendment would require GBE to consider every single investment it makes in terms of the impact that it will have on electricity prices in the future. Does the Minister not agree that this would be a good discipline for GBE? Amendment 64 would ensure that we have such transparency on the whole portfolio of GBE’s investments across the board.
Amendment 71 contains a requirement for a cost-benefit analysis of the price of electricity generated by each of its investments compared with that of electricity generated by gas. We certainly need to know that. Many of us think that we are already saddling the consumer and industry with unnecessarily expensive electricity. The grid is always bound to draw electricity from renewable sources when they are available, in priority to gas. This means that gas power stations are constantly being fired up and down, and are seldom operated at full capacity. This distorts the price of gas, which in turn distorts the price of electricity because gas power stations produce much cheaper electricity when operated consistently at or near full capacity than they do under the current modus operandi. The price of gas used in the cost-benefit analysis required by this amendment ought to be the price achievable from constant operation rather than the distorted price resulting from prioritisation of renewable sources.
I also refer briefly to Amendment 75. It is clear that the main purpose of GBE’s collaboration with the Crown Estate is to build a large number of offshore wind farms in coastal waters. This amendment will require GBE to consider carefully the environmental impact of its activities on marine life and inshore fisheries, among others.
The Government have made much of their determination to cut energy bills. Their refusal to accept Amendment 71 and other amendments would show that they are less than certain that their plans will result in lower energy prices. I look forward to hearing the Minister’s response.
Lord Hamilton of Epsom (Con)
My Lords, I was speaking to the noble Lord, Lord Mandelson, the other day. This was when he was chasing around after the chancellorship of Oxford University. I said to him that I thought he would serve his country much better in Washington than in Oxford. I congratulate him on becoming our ambassador in Washington. I think he will do a very good job.
I mention the noble Lord, Lord Mandelson, because a quote attributed to him is that, “When politicians try to pick winners, the losers invariably find the politicians”. People should recognise that the track record of politicians in trying to pick winners is absolutely abysmal. Invariably, political considerations and jobs come into it; profitability is the last thing that is ever considered.
Therefore, it is essential that we support these amendments. They are asking for some degree of accountability for Great British Energy, which will have billions of taxpayers’ money. If we are not very careful, it will go to all the projects that have been rejected by the private sector as not being viable and will invariably lose money. That should be of great concern to us all because it discredits government and wastes taxpayers’ money.
Lord Teverson (LD)
My Lords, can I make a comment on that? I am a trustee of the green share in the Green Investment Bank, which was privatised by the Tories after it was set up by the coalition Government. It was a very profitable operation, although it was fully publicly owned. The issue was that it was almost too conservative in terms of making money under Treasury rules, so it did not make as much of a difference—it did make a difference—as it should have done. One of the risks is that GB Energy could be too conservative because the Treasury is too close to it and will not let it do the innovation that needs to happen for decarbonisation to take place by 2030.
Lord Hunt of Kings Heath (Lab)
My Lords, I want to make just two points. The noble Lord, Lord Teverson, made a very interesting and wise contribution. I say to the noble Lord, Lord Hamilton, that of course I have heard the expression that Governments are not very good at picking winners. That is why we have set up GBE. We will have a company with people with expertise to enable investments to take place within the context we set under Clause 3 and Clause 5 as strategic priorities. None the less, it will have operational independence.
The noble Lord, Lord Teverson, is right; noble Lords in their various amendments are seeking to pin down GBE through excessive reporting requirements. The risk is that GBE, far from being allowed to flourish and develop, will be inhibited and micromanaged. That is why these amendments are wholly inappropriate in relation to Clause 6. The power of direction is not to be used in the way that noble Lords are suggesting; it is a backstop power. What is the point of setting up GBE if we are to undermine its independence in the way these amendments suggest?
Lord Offord of Garvel (Con)
My Lords, as in the previous group, these amendments are not designed in any way to micromanage. There is very little in the Bill that gives us any indication of how this company will operate. As indicated by my noble friend Lord Petitgas, it is an investment company without an investment committee or any investment directors. All that is being sought by these amendments is some level of accountability and scrutiny.
Once again, I say that when promises are made to the public that the Bill will address their concerns, it is not unreasonable that we ask for amendments to be made accordingly. For example, looking at employment in Amendment 68, we are simply asking for a report—as the noble Lord, Lord Bruce, said—on the impact these investments make on employment and bills. Why is that an unreasonable thing to say? We have 200,000 people in highly skilled jobs in the North Sea. They are worried that they are about to be phased out unilaterally and prematurely. Why is it unreasonable to have somewhere in the Bill a requirement that GBE comes to Parliament and explains what it is doing in relation to employment in this key sector?
As we have said before, the Bill has failed to substantiate the promises made. The job of the Opposition is to highlight that and to make it clear that this needs to be debated and scrutinised. That is what we will continue to do. In light of that, for now I will withdraw the amendment.
Earl Russell
“(1A) The Secretary of State may not give specific or general directions to Great British Energy unless they have delivered an oral statement setting out those directions before Parliament.”Member's explanatory statement
This amendment would prevent the SoS from directing GBE unless they have delivered an oral statement to Parliament.
Earl Russell (LD)
My Lords, I rise to open this group of amendments, all on consultation and oversight, and to move my Amendment 66 in this group. Amendment 66 seeks to prevent the Secretary of State from directing GB Energy unless they have previously delivered an Oral Statement to both Houses of Parliament. Our view is that this is a reasonable check and balance on the use of these powers. My amendment does not stop the Secretary of State from giving strategic directions; it simply requires that, before doing so, the Secretary of State must have previously given this Oral Statement to both Houses.
We recognise that, for the Government, this is a reserve power that would be used only in emergencies. We also recognise that the Bill as written requires the Secretary of State to have previously consulted with GB Energy and any other persons the Secretary of State considers appropriate, and that the directions must be laid before Parliament. Our concern is that these are both very powerful controls given to the Secretary of State and, even with the condition to lay the direction before Parliament, that is done only after the direction is given. There is no opportunity for Parliament to discuss in any form the direction given or the reasons for it, or to have any opportunity to amend it before the direction is given to GB Energy. Parliament also has no say or chance to contribute to the form the direction should take. There is no way that Parliament can change the shape of it or amend it. These powers are absolute: GB Energy is directed in statute that it must comply with the directions given under this part of the Bill.
I draw the Committee’s attention to the fourth report of the 2024-25 Session of the House of Lords Constitution Committee, published on 28 November, which says of these provisions that,
“we are concerned that clauses 5 and 6 amount to ‘disguised legislation’. … This is of constitutional concern because there is no parliamentary oversight over the making of the statement of strategic priorities or the directions to Great British Energy”.
I must admit that I have to agree with that assessment. Our view is that, if there is a level of need such that directions from the Secretary of State are required, then there is also a level of concern such that a Statement should be provided to both Houses of Parliament.
When matters have gone this badly wrong, it is also important that Parliament should be given the opportunity to scrutinise what went wrong and why and what proposals the Secretary of State is bringing to make them right again. It is important that Parliament is given the right to look at how the new plans might work in practice and to be able to advise and raise objections with and suggest improvements to the Secretary of State. The Minister may come back on this amendment and may speak of this being a reserve power. He may say that these will be used rarely, if they are ever used at all; but when they will be needed, they will be needed urgently. The Minister may also argue that the Secretary of State would have previously consulted with GB Energy and others as the Secretary of State saw fit. This is all correct, but consultation in private could amount to no more than delivering the unhappiness on behalf of the Government and instructing the direction to GB Energy. These meetings happen in private, and Parliament is not privy to any of this information or the outcomes.
The Minister may also argue that these powers have been used in—and, indeed, directly copied from—the nuclear energy Bill. To that, I might kindly argue that nuclear accidents and nuclear emergencies are of a different order of magnitude to our renewable sector, although I do recognise the need for urgency when it comes to our energy supply and energy security. I also recognise that GB Energy will have a role in the nuclear sector—although that is to be strictly defined as yet—and, if the Minister wishes, a government amendment to my amendment could call for an exemption for either a nuclear accident or a national energy security emergency. I would be interested in the Minister’s response to my amendment, and I would be happy to discuss this with the Minister prior to Report.
For all other cases, my view is that an urgent Statement can be tabled in both Houses in a matter of mere days, and this can run concurrently while the Minister fulfils his other obligations in respect of consulting with GB Energy and others. Our view is that this is a carefully crafted amendment which seeks to balance the need to address emergency issues against the need for proper and full parliamentary scrutiny to take place. These may be reserve powers, but they are absolute powers, and they are under the sole control of the Secretary of State. They are enacted after consultations and are merely reported to Parliament after they have been enacted.
I ask the Government to think carefully. I know that they might feel that these powers are safe in their hands, but how would the Minister feel if, for example, Labour were to lose the next general election and these powers were in the hands of another Administration? I think it is in that light that the Government should reflect on whether there is a need for a further check and balance on these powers.
Turning to the other amendments in this group, Amendment 87, in the names of the noble Baroness, Lady McIntosh of Pickering, and the noble Viscount, Lord Trenchard, goes further than my amendment. It says:
“A Minister must table a motion for resolution in each House of Parliament on any directions given to Great British Energy under this section before the directions are adopted”.
I am generally supportive of this amendment, but I have two concerns about it. First, holding a vote will take more time. Secondly, if Parliament, for whatever reason, decided not to approve the directions, I wonder what the consequence would be, because these directions are only given in emergency situations. That is an unlikely consequence, but I do not necessarily agree that having a vote actually helps in this case. What I am interested in is parliamentary scrutiny and conversation, not Parliament having the right to have a vote on this issue.
Finally, Amendment 86, in the name of the noble Lord, Lord Cameron of Dillington, amends Clause 6 by adding that consultation should take place with the National Energy System Operator, the Climate Change Committee and the Gas and Electricity Markets Authority. This amendment is helpful, but to my mind it does not resolve the issue; the issue is one of parliamentary scrutiny, and Amendment 86 does not provide further parliamentary scrutiny. The heart of this, for me, is simply having greater opportunities for parliamentary scrutiny while not delaying emergency actions. That is what I am trying to balance. I beg to move.
Lord Cameron of Dillington (CB)
My Lords, Amendment 86 in my name is, as noble Lords will realise, very similar to Amendment 56 in the name of the noble Baroness, Lady Hayman, which was spoken to last month by the noble Lord, Lord Ravensdale. The point is that we all have concerns about the overwhelming statutory powers of the Secretary of State to control, and give random formal directions to, GBE. As I said at Second Reading, we are worried that modern politicians are no longer likely to have had experience of running a business, particularly an investment business, which is what this is. On the whole, the same applies to civil servants who might be advising the Secretary of State. They also usually have little experience of the nitty-gritty of day-to-day private sector business and its associated hour-by-hour assessment of risk and, more to the point, when to take that risk. In other words, you cannot always be totally safety conscious.
Probably the key person with whom the Secretary of State should be consulting is a private sector investment analyst, or even a team of private sector investment analysts, as the noble Lord, Lord Petitgas, was saying early on in the previous discussions. That might be hard to spell out on the face of the Bill, so I will leave that one hanging. As noble Lords can sense, however, I am not at all happy that a politics-orientated—maybe even a party- politics-orientated—Secretary of State of either party should be able to give any direction at all on the issue of practical investment to a hopefully business-orientated board of GBE. I support Amendment 68 in the name of the noble Earl, Lord Russell.
The next thing to say is that Clause 6(3)(b) is superfluous. It states that the Secretary of State should consult
“such other persons as the Secretary of State considers appropriate”.
It is legally meaningless. The Secretary of State could take it or leave it. If he consults with no one, he can claim he did not consider anyone appropriate, so he is under no obligation to consult anyone, apart from Great British Energy, as it stands in Clause 6(3)(a). We therefore need some more specific recommendations.
It is of course right that the Secretary of State should have to consult GBE—after all, it will implement whatever direction he or she gives it—but the Secretary of State should also consult NESO. After all, it is responsible for driving the delivery of our power through the national grid and other transmission companies—we discussed this on another group—so, clearly, it needs to be consulted.
Then there is the Climate Change Committee, which is in very close touch with the state of play of the progress to net zero. It is also in touch with the latest science and knows the priorities of what is most needed to get us to net zero. It will have a view on what could or should be the essential focus of GBE, so it should also be consulted.
Then of course there is Ofgem, which represents the consumers and is their voice, so it seems only right that it should also be consulted on any formal direction from the Secretary of State to GBE. There may be others, and I take the point from the noble Earl, Lord Russell, about the fact that my list is of consultants, rather than Parliament, which might be able to influence the direction of the Secretary of State in a more formal way—although I hope that a consultation exercise would also influence his decision-making process.
In his response to Amendment 56 last month, the Minister seemed to say that the amendment was unnecessary because the Secretary of State would be in permanent consultation with all the organisations involved anyway, but he was at that time talking about the consultation on the strategic priorities in Clause 5 and here we are talking about later specific directions given by the Secretary of State to GBE. After all, the Government themselves put Clause 6(3) in the Bill, so they must have thought that highlighting the importance of consultation, and whom it is with, was important and necessary. In my view, they did not make it specific enough, or possibly wide enough, so I hope they can accept that they should enlarge their constituency of consultees.
Viscount Trenchard (Con)
My Lords, I rise first to propose my Amendment 86A as an amendment to Amendment 86, to which the noble Lord, Lord Cameron of Dillington, has just spoken. The purpose of my amendment is similar to that of Amendment 56A, which was debated in an earlier group. I agree with the noble Lord that the Secretary of State’s considerable powers to give directions to GBE should be subject to oversight. The Bill already requires any directions to be published and laid before Parliament, and it requires him to consult GBE and any other person he considers appropriate before giving any direction. The noble Lord, Lord Cameron, rightly proposes that NESO, the Climate Change Committee and the Gas and Electricity Markets Authority should also be consulted. He rightly did not add Natural England and the Environment Agency to the list—I guess because they are not qualified to have authority over the Secretary of State’s directions on energy projects to GBE.
However, both Great British Nuclear—GBN—and the National Wealth Fund should be consulted, because their objectives are associated specifically with the delivery of new energy schemes. In particular, it would have made more sense to have created GBE as a body incorporating GBN from the beginning, which would have provided for more joined-up thinking. It is seriously distortive to the market that GBE is well capitalised, with £8.3 billion of taxpayers’ money, and GBN has no such funding. That is why we do not have anywhere near enough UK-based nuclear companies and consortia going through the GDA process at present. At the very least, GBE should be required to work closely with GBN. The Minister should surely accept that GBN should be able to propose nuclear schemes, which may compete well with renewable schemes. A requirement to consult would make it more likely that that would happen.
Baroness McIntosh of Pickering (Con)
My Lords, I wish to speak to Amendment 87 in my name and to take this opportunity to thank my noble friend Lord Trenchard for lending his most welcome support to the amendment and the noble Earl, Lord Russell, for introducing this little group so eloquently and strategically. He is absolutely right to point out that the difference between his amendment and the amendment in my name and that of my noble friend Lord Trenchard is the difference between an Oral Statement which can just be debated and, in our case, the need for a Motion of resolution in each House of Parliament. To put his mind at rest, I cannot believe that that would need to delay the process at all. It could be called in exactly the same amount of time—probably half a day, an Oral Statement possibly taking an hour, or 30 minutes in each House.
The Minister, who I do not think is replying to this group, said in response to the first group that he believes and hopes that Clause 6 will never be used. But the very fact that it is in the Bill means that it is there to be used should the circumstances arise and I believe that the magnitude is such that it is important to debate it and to carry each House with the Government. I cannot believe that that would be a delaying tactic; I think it is absolutely essential. The noble Lord also, in reference to the question of giving directions, equated the situation to that of the National Health Service. It is clear to me that, were such a direction to be given to the National Health Service, that would be debated in each House of Parliament as well, particularly in the circumstances that the noble Earl, Lord Russell, related of a potentially dangerous one-off situation which we understand Clause 6 envisages.
Words were said earlier about Drax and I do not wish to dwell on that, but Drax is a major contributor to the whole of the Yorkshire and Humberside regional economy. I believe that we should go back to growing the fast-growing willow coppice and—a name I can never pronounce—miscanthus, as that would help Drax to have a local source of produce on which to rely. It would also help the farmers at this very difficult time for them.
On the question of directions and consultation raised by the noble Lord, Lord Cameron, and others such as my noble friend Lord Trenchard, it is important for it to be in the Bill that, before giving a direction, the Secretary of State must consult. Clause 6(3)(b) simply says
“such other persons as the Secretary of State considers appropriate”.
Well, it would be helpful, if there were a situation of some danger, for local authorities to be consulted, because they are the first responders in many cases. I am slightly baffled that they have not been mentioned so far. Do the Government intend to consult them? In previous debates it was also raised by the Association of British Insurers that, in these circumstances, potential and actual investors may need to be consulted if such an emergency were to arise. I do not think they have been mentioned so far. Again, is that something the Government have in mind?
I want to sound fairly relaxed about this, but I do believe that the amendment in the names of myself and my noble friend Lord Trenchard is preferable to the wording of the noble Earl’s Amendment 66 and I hope that the Government will respond favourably to our very modest request that a resolution should be debated in each House of Parliament and potentially voted on before the directions are adopted. I hope the Minister will also respond to my queries about who is to be consulted and why there are not more of them listed in the Bill. With those few remarks, I commend my amendment.
Lord Howell of Guildford (Con)
My Lords, it must be maddening for the Minister that a Bill specifically designed to exclude investment in the nuclear sector keeps on dragging back to the nuclear sector. This is for the obvious reason that these issues are completely and utterly inseparable. Investment in the energy sector generally has got to take account of all the different aspects, and nuclear is obviously one of them.
The Minister raised the question yet again of Sizewell C being a replica, and obviously he thinks I am being very boring on this, but can I plead with him to go back to his department and point out the obvious fallacies in the whole replica concept? If Sizewell C were to go ahead, it would be being constructed in the late 2020s and the early 2030s, probably for completion and producing kilowatts in the late 2030s or later. That will be approximately 25 years beyond the original design of Hinkley C, which was originally conceived under the Blair/Brown Government in the late 2010s.
Everyone in the civil nuclear sector knows that this is a highly fluid situation in which technology is rapidly developing and is going to create, along with the arrival of new things such as AI, a completely new set of designs, which will mean that by the late 2020s the Hinkley design will be frankly out of date. The idea that something that is 20 years old should be replicated is absurd in any advanced technology, and particularly absurd when it comes to electricity generation and civil nuclear power. If one just thinks about it for a moment, one will realise the replica argument carries absolutely no weight at all. I very much hope that any new nuclear installations—whether 300, 500 or gigawatt size—are definitely not going to be a replica of what has occurred at Hinkley C.
This is a view that is held very widely in France, where they say this design is unbuildable and should never be repeated, and it is the view of many other technicians involved in new nuclear development, which I strongly welcome in all sorts of shapes and sizes, but the idea that we should build a replica 20 years after the last one is frankly absurd. Please would the Minister go back to his department and point this out?
Lord Roborough (Con)
My Lords, I rise briefly to support the amendments in this group. It is clear from this and other groups that the mood of the Committee is in favour of fuller accountability to this House of the activities of GB Energy. This is not micromanaging; it is simply accountability and transparency. How the actions that are taken by GB Energy are directed, as is addressed by Amendment 66 in the name of the noble Earl, Lord Russell, and addressed more fully in Amendment 87 in the name of my noble friend Lady McIntosh of Pickering, is an essential part of that.
Financial markets have periods of irrational exuberance where greed triumphs over caution and experience. Most recently, we have seen the ill-fated wave of SPACs: special purpose acquisition companies. They are generally launched with great excitement and fanfare and with very loose objectives and end in disappointment. GB Energy is clearly a serious undertaking and its chances of success will be greatly aided by rigorous discipline and concentration of force. Applying strong parliamentary oversight of its directions can only aid that.
Amendment 86 in the name of the noble Lord, Lord Cameron of Dillington, and Amendment 86A in the name of my noble friend Lord Trenchard, will help in the rigour of those directions. The clause as drafted is simply too vague, as has been pointed out by other noble Lords. There is great and relevant knowledge in the five bodies nominated between these two amendments. It would seem essential for all directions that the Secretary of State should access this knowledge to ensure that these directions are as beneficial as possible.
I ask the Minister: how specific do his Government intend those directions to be? Will they prioritise jobs, bills, net zero or the commerciality of GB Energy itself? Having such directions is vital to ensure that GB Energy does not drift off course and stays aligned with the Government’s will. But the risk of conflicting objectives is confusion and muddle.
Baroness Noakes (Con)
My Lords, I do not support Amendments 66 and 87 in this group, for similar reasons to those that I gave on the first group that we debated today, in that they would weaken the role of the power of direction. The noble Earl, Lord Russell, referred to the fourth report of your Lordships’ Constitution Committee. I am not sure that that report stands up to close scrutiny. It is a very brief report with relatively little argumentation, and it is difficult to understand what the underlying logic really was. I suspect that the committee did not fully take account of the historical role of powers of direction in relation to public corporations, and it may well have reached a conclusion on the basis of a partial understanding of the role of public corporation powers of direction as they are designed.
Lord Offord of Garvel (Con)
My Lords, I thank the noble Earl, Lord Russell, the noble Lord, Lord Cameron of Dillington, and my noble friends Lord Roborough, Lord Howell, Lord Trenchard, Lady McIntosh and Lady Noakes for their contributions on this group. The debate raised critical issues regarding the sweeping powers, as we highlighted, given to the Secretary of State. Why is it that any and all directions that the Secretary of State gives to GBE are hidden from the eyes of the public and lack parliamentary scrutiny? Considering once again that GBE is funded by £8.3 billion of taxpayers’ money, is subject to an unlimited cap on financial assistance and will not cut the British consumer’s energy bills, this is deeply concerning.
Let me turn to the amendment of the noble Earl, Lord Russell. Amendment 66 would ensure that the Secretary of State does not give any direction to GBE without first delivering an oral Statement before Parliament setting out those directions. I am acutely aware of the lack of detail in this legislation, and it is crucial that we have proper oversight of the wider activities of GBE as ordered by the Secretary of State. It is not only I who thinks this: the Government have agreed. In fact, in Committee in the other place, the honourable Member for Rutherglen, Michael Shanks, said that the Government want Great British Energy to be
“accountable, transparent and clear about how it is delivering on its objectives”.—[Official Report, Commons, Great British Energy Bill Committee, 15/10/24; col. 168.]
I therefore see no reason why the Minister should not support amendments that seek to improve accountability and reporting measures in the Bill and ensure sufficient oversight of the objectives, directions and activities of GBE. If the Prime Minister stands by his statement that he would not make a single promise that he was not confident he could deliver, the Minister ought to support these amendments, which would ensure that GBE was indeed “accountable, transparent and clear about how it is delivering on its objectives”.
The UK Infrastructure Bank, referenced by my noble friend Lord Trenchard, was set up with the explicit purpose of financing projects to drive our energy transition, and it already includes rigorous safeguards to ensure that taxpayer money is spent effectively. Governed by strict rules and subject to detailed annual reporting, it provides the public with comprehensive information on its performance and investments. Given that these robust mechanisms are already in place for the Infrastructure Bank, is it not fair—indeed, essential—that GBE undergoes the same level of scrutiny and oversight? If we are truly committed to safeguarding public funds, surely the same level of accountability should applie to all publicly funded energy initiatives.
Amendment 87 in the name of my noble friend Lady McIntosh would require a Minister to table a motion for resolution in each House of Parliament on any directions that are given by the Secretary of State to GBE before the directions are adopted. In a similar fashion, Amendment 66 in the name of the noble Earl, Lord Russell, would prevent the Secretary of State from directing GBE unless they have delivered an oral Statement to Parliament. I am grateful to both noble Lords for bringing these amendments, which will undoubtedly improve the levels of scrutiny and oversight to which the directions which are given to Great British Energy will be subject.
The only details included under Clause 6 are that
“Great British Energy must comply with the directions”
and that:
“The Secretary of State must publish and lay before Parliament any directions given to Great British Energy”.
This is simply not good enough. It is the bare minimum to allow Parliament to have sight of the directions issued to Great British Energy before they are acted on. In fact, it would be negligible to allow Great British Energy to be directed without sufficient parliamentary scrutiny. I therefore trust that the Minister has listened carefully to the concerns raised by Amendments 66 and 87.
Amendment 86, tabled by the noble Lord, Lord Cameron of Dillington, seeks to ensure that, before giving any direction to Great British Energy, the Secretary of State must consult
“the National Energy System Operator”—
known as NESO—
“the Climate Change Committee and the Gas and Electricity Markets Authority”.
I discussed in detail the importance of consultation in our debate on Amendments 56 and 116. As I said, engagement and consultation with the relevant parties is crucial if GBE is to be a success. The Secretary of State must not act in isolation. It is crucial that he or she consults with the relevant stakeholders. I therefore welcome the amendments in the names of the noble Lord, Lord Cameron of Dillington, the noble Earl, Lord Russell, and my noble friend Lady McIntosh. I look forward to the Minister’s response on the concerns raised by noble Lords in the debate on this group.
Lord in Waiting/Government Whip (Lord Cryer) (Lab)
My Lords, I now turn, as you would expect, to Amendments 66, 86, 86A and 87, tabled by the noble Earl, Lord Russell, the noble Lord, Lord Cameron, the noble Baroness, Lady McIntosh, and the noble Viscount, Lord Trenchard. As I have said, and as my noble friend has said previously, Clause 6 sets out that the Secretary of State will be able to give directions to Great British Energy, and that Great British Energy must comply with those directions.
As Great British Energy will be operationally independent, the intention is that the power will be used only when it is really needed. This will ensure that GBE has the space it requires to fulfil its role and deliver its strategic priorities. I draw the House’s attention to the comments made by the noble Baroness, Lady Noakes, in this context.
The purpose of the clause is to ensure that there is a mechanism in place should any urgent or unforeseen circumstances arise. For example, it could be used if the Secretary of State considers that they need to give GBE a direction that is in the interest of national security or otherwise in the public interest. The amendments before us would risk delaying the Secretary of State’s ability to give Great British Energy that direction, potentially compromising national security under certain circumstances.
The noble Earl, Lord Russell, raised the perfectly reasonable points of accountability and scrutiny. I am not impugning his motives—or the motives of anybody else who has tabled amendments—but if there was an issue of national security that perhaps took place at the start of a recess, it would seriously hamper the Secretary of State’s ability to act.
The noble Earl also raised, interestingly, the possibility of Labour losing the next election. It may come as a shock, but we are not actually planning to lose the next election. However, the mechanism of accountability and the decisions of this Government and future Governments are subject to the views of voters. That is part of the democratic process. We might not like a future Government exercising the directions we have put on the statute book, but that probably applies to past Governments as well. It is part of the democratic process and the process of accountability and scrutiny.
The amendment in the name of the noble Baroness, Lady McIntosh, would take this point further by requiring the resolution of each House, which I genuinely do not think is practicable. However, to ensure transparency and accountability, any directions given to Great British Energy will be published and laid before Parliament before they are given.
Further, Clause 6 requires that the Secretary of State must consult GBE and other persons considered appropriate, before giving directions to GBE. This means that GBE’s management and its board—yet to be appointed—will have the opportunity to express any reservations they have about the direction to Ministers before any such direction is made. If appropriate, this could include the National Energy System Operator, the Climate Change Committee—which has been consulted by successive Governments—the Gas and Electricity Markets Authority, Great British Nuclear and the National Wealth Fund, as well as groups not referenced in Amendment 86.
The noble Lord, Lord Cameron, mentioned at least two of the organisations on that list; he mentioned others too, as I think did the noble Viscount, Lord Trenchard. We could end up with a list as long as your arm of bodies that have to be consulted, which would seriously hamper the Secretary of State’s room for manoeuvre.
Finally, it is not unusual for a Secretary of State to be able to direct an arm’s-length body and such powers are found in several pieces of legislation—again referenced by the noble Baroness, Lady Noakes. In the specific context of government-owned companies, such powers are, for example, included in the Energy Act 2023, which created Great British Nuclear, where named stakeholders are also not included in the directions clause.
For these reasons, I hope the noble Earl recognises that adding this detail would not be beneficial and will withdraw his amendment.
Earl Russell (LD)
In my speech, I recognised the needs of national emergencies or an energy emergency. One of the options I offered the Government was to allow them to amend my amendment to exempt those situations from the need to give an Oral Statement. Will the Minister respond to that specific point, please?
Lord Cryer (Lab)
The noble Earl makes a fair comment. However, what he is putting forward is far too prescriptive. There are plenty of precedents for Secretaries of State being able to operate in this way.
I am starting to sound like the secretary of the Baroness Noakes fan club, but the noble Baroness, Lady Noakes, pointed out that there is the ability to summon the Secretary of State before a Select Committee. There are various Select Committees which have the ability to summon Secretaries of State after the fact. Ministers of all Governments might not be that keen on appearing before Select Committees, but they do not have a lot of choice in the matter. In the vast majority of cases when they are summoned, they appear before the Select Committee and give an account of their actions.
Earl Russell (LD)
I thank the Minister for responding, and I thank everybody who spoke in the debate: the noble Lord, Lord Cameron of Dillington, the noble Viscount, Lord Trenchard, and the noble Baroness, Lady McIntosh of Pickering.
These are important issues; they are absolute powers. I recognise the point made by the noble Baroness, Lady Noakes, that there are other ways of summoning Ministers and that the whole idea of ministerial accountability is that Parliament afterwards can question Ministers. I think that is a bit of a second-tier kind of accountability, but I recognise that there may be situations where the Government need to act with urgency and even the act of giving a Statement could impede the Government from doing that, whether it relates to nuclear energy, energy security or foreign interference in our energy security. I did, therefore, offer the Government the possibility of amending my amendment.
It is important that we have discussed these issues. They are important powers, and it is important we debate them. I do not think we found an answer or a way forward, but the debate itself has been interesting. I thank the Government.
Lord Fuller
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must not facilitate, encourage or participate in the development of renewable energy technologies on agricultural land classified as grade 1, 2 or 3.” Member’s explanatory statement
This would restrict the types of land on which renewable energy technologies can be developed under Great British Energy’s activities, to protect the most productive and versatile land for food production.
Lord Fuller (Con)
My Lords, Amendments 67, 73, 104 and 105 on the Marshalled List stand in my name. This is the first set of amendments I have brought to your Lordships’ House and, on that basis, if I make some small procedural missteps, I ask the Committee to treat me gently.
The purpose of this set of amendments is to protect the best and most versatile land for food production. That is not to say that solar or renewables are intrinsically bad. It is just that solar and renewable energy should be focused on the poorer land and food production on the best. Having needed to dig for victory within living memory, we cannot afford to forget that having food in your belly ranks above having a roof over your head in the hierarchy of the most basic needs. I am not seeking to be obstructionist, but we have to recognise that we are a crowded island and we all have to eat—and you cannot eat a solar panel.
There are plenty of calls on land use, for housing, for water management and drainage, for amenity and the environment, for factories and transport uses and, of course, for food production. My amendment seeks to balance the tension between energy and food production. It cannot be left to an operationally independent private company—GB Energy—and the directors who have no concern for food to get carried away and undermine the food security of our nation.
It is because of these tensions that the last Government proposed a land use framework, so we can strike the right balance as a nation between these competing land uses. I note we are still waiting for that to be published by this Government, who have exhibited quite a cavalier disregard for anything that happens in the sticks, unless they can cover it with concrete or carpet it with panels.
At this stage I should declare my interests as a director of companies involved in the agricultural supply and farming industries. But this is not about my personal interests. Protecting the best and most valuable land is in the national interest. I am not alone in stating this. The Minister, the noble Baroness, Lady Hayman, talks about food security being national security, and I agree.
Put simply, the UK is not self-sufficient in food and continues to rely on the kindness of strangers to feed it. It is important, because last November I asked a Written Question about how many hectares of solar farms were currently being considered under the NSIP regime. The answer came back that there were about two farms covering 1,400 hectares under consideration. Now, I know in Norfolk alone there are 7,000 hectares and five schemes. It is the same elsewhere. The Government have simply lost control of the numbers on renewables. They are unsighted on the stampede to take our best land out of production and lock it away for a generation. There is an unthinking dash for renewables overlaid by a reckless indifference about one of our largest industries: the food industry, the backbone of private enterprise on our shores. GB Energy has no concern for any of this, but it should. That gets to the heart of why these amendments are needed to the Bill. We cannot afford to be careless with our food supply.
Last year national wheat yield was down 25%, from over 14 million tonnes to about 11 million. It is partly explained by bad weather, but also by so much productive land being temporarily placed in environmental schemes— there was a herd effect. I am pleased to say that plantings have bounced back this season; but that 25% reduction should serve as a warning about the fragility of our food supply.
A casual approach to land use materially affected our ability to feed ourselves before anyone even realised. As I say, the cultivated land has bounced back this year and the damage has been repaired, but when land is converted to solar it is locked away not for one season but for 30 years—a whole generation. That is consequential; we cannot accidentally sleepwalk into locking away our best land. It needs a more planned approach and that is why we need directions.
I am grateful to your Lordships’ Library for providing me with a best estimate of the different types of farmed land here in the UK. In essence, Natural England estimates that, under the classification system established in 1966, about 21% of the land under cultivation and grazing is grade 1 or 2, and 21% is the upper end of good grade 3—the best and most versatile land. If we make an allowance for the lower end of grade 3, I suggest that about half the 8.9 million hectares of farmed land in England could be classified as the most productive and worthy of protection. This is the land that is the subject of these amendments.
I am not going to dwell on the difficulties the Library tells me it had in collating this information, but if we just accept—and be gentle with me—that about half the land is grade 1, 2 or 3, which is the best land, that would still earmark about 4.5 million hectares for non-food uses, including renewables. I am going to refrain from describing this vast area—4.5 million hectares—in the traditional unit of measure, which is probably football pitches. I venture to say that 4.5 million hectares is about two Waleses, or nine Norfolks. I have heard it said that the amount of land that could be devoted to solar, even in the most adventurous scenario, is probably no larger than the area devoted to the UK’s golf courses, but that is to miss the point. If indeed the coverage is much less than 1%, there is nothing to fear from protecting the best land. In other words, if my amendment is accepted, there will still be plenty of the worst land for renewables, just not in the places where the best land feeds us.
Let us move on to the economics. Thanks to this Government, the public now start to realise how farmers work in difficult conditions to eke out a precarious existence in a risky enterprise buffeted by weather and global trade issues. The reward for this all effort is about £200 per acre, often having invested millions in productive plant and equipment such as sprayers, tractors and combines. These farmers are being offered about £900 per acre to sit on the beach, with no-risk, index-linked income streams for 40 years, by giving up farming and installing panels on their land. There are whispers that, should they do this, after a passage of time that land would then be zoned as previously developed land, rather than farmland, and be worth considerably more as a result. You cannot blame landowners for seeking to covert to solar—except that some landowners want to turf off their tenants, and that is no good. It is a completely rational thing to accept, and completely in their private interest to do so. This amendment recognises that, while it may be in their private interest, it is not in the national interest. We cannot have a situation where it is open season for renewables regardless of the wider consequences.
The state exists to arbitrate between the private and public interest, and I say that we cannot be cavalier or careless with our food supply, however much we crave clean energy. We need to strike the balance between eating and heating. That means ensuring that food is preferentially produced on the grades 1 and 2 land, while accepting that grades 4 and 5 can contribute in other ways—that is the way forward. That said, even where grades 4 and 5 land could be contemplated for renewable energy, it is often the case that while some of this is impaired in agricultural terms, it has other values. Some of those values may include amenity value, outstanding landscape value or contribution to a wider social benefit, perhaps in an area of natural beauty. It is for this reason that, even in cases where land may be at the poorer end of production, changes in use to solar or renewables should be consulted on by residents within a 20-mile buffer of the widest proposed land extent. My amendment 104 provides for this stipulation.
Taken together, my amendments seek to establish and enforce the balance and tension between the private and public interests. That is what the state is for: to protect us from the herd effect that can stampede a whole industry in a particular direction before it can be appreciated what is happening, as we saw last spring.
I want to talk about why it is important that GB Energy is constrained by these amendments to the Bill. It is partly because no one in the countryside is prepared to take anything on trust from this Government going forward. Labour does not really understand the countryside—but I tell you, the countryside understands Labour.
Great British Energy is a company. There is to be a fiduciary board, and there are duties under the Companies Act 2006 to promote its self-interest—the private interest. The Secretary of State will be empowered by the Bill to make certain directions, but we would not need these amendments if the nature of those directions were already in the Bill. We should not be surprised if, left uncontrolled, GB Energy acts as company law requires: in the best private interests of the company, not the public interest of the country. It is not scaremongering; it is what we have just seen, having spent hours and hours debating the Water Bill, so there is precedent for wanting these sorts of controls.
My amendments would require the Secretary of State to ensure that GB Energy focuses its activities in such a way that it does not undermine our food security—our national security—and that it acts in the wider national interest and does not pursue its own private interest. There is no such requirement, so it falls to us to ensure that there is.
My amendments are important for another reason, and I want to dwell on an economic reason why they are is so important. I referred to the nature of the contracts being offered to farmers to incentivise them to give up food production and sit on the beach: long-term, state-backed, secure income streams that are index-linked, underpinned by a physical asset in a country with strong property and commercial rights. These are the sorts of investments that pension funds around the world seek out. The parcelling, packaging and collateralising of such assets into derivatives is what Wall Street thrives on. If we do not apply limits, we risk the perverse incentive that would convert much more than 1% of the British countryside—a huge amount of land—into nothing more than a global energy play, with the benefits transferred to offshore territories, controlled from who knows where. The countryside is not there to be collateralised, so GB Energy should be directed to give preference to the hard-grafting and toiling farmers of the best lands, who feed us, rather than driving the countryside in the direction of providing passive income for global investors elsewhere.
Failure to accept these amendments would be a policy designed to kill the family farm even faster than the Government are planning to do so already, transferring control of much of the countryside to Wall Street, while British jobs—proper jobs—and real family businesses are greenwashed out of existence. Rural Britain will be rinsed unless we get a grip here, with its landscape and environment impaired.
To summarise, the stampede for solar is economically rational for individual farmers, but economically illiterate for the countryside and our environment. It is not a matter of food security versus energy security: I know we need to keep the lights on, but we have all got to eat. Food security and energy security can and should be bedfellows, and this amendment provides a sensible framework whereby they can live alongside each other, in the national interest, and with the consent of those most directly affected by the installations.
In essence, GB Energy should be required by statute to prevent a repeat of—a modern version of—the Highland clearances on the lowlands, in an unthinking and unconscious dash for renewables on our best land. GB Energy cannot have operational independence over our food supply without limit or regard to consequence. Can the Minister tell us why the Government would be against this when, under my proposal, we could still have nine Norfolks-worth or two Wales-worth of land to work with, but at least with the security of food in our bellies? I beg to move.
Lord Cameron of Dillington (CB)
My Lords, I sympathise with the amendments on land use put down by the noble Lord, Lord Fuller. He wishes to ensure that in this very densely populated country of England we use our limited available land wisely. England—not the UK—is, I think, the fifth or sixth most densely populated country in the world. That includes countries such as Singapore, which are, in essence, city states. So, it is right that we use our land wisely: per head of population, we do not have much of it. Furthermore, as I have said on several occasions, it is the primary duty of any Government to ensure that they can feed their subjects. I believe that the food agenda comes as high as—if not higher—than the defence agenda, although they are clearly very closely interlinked.
However—I am sure noble Lords could all sense a “but” coming down the line, though I shall try to be gentle with the noble Lord, Lord Fuller, as he requested—I am not certain that this is the right way to approach this issue. Land use must be planned in the round. We all need to step back and examine our needs from land as a whole, which include food, biodiversity, flood relief, forestry, access for leisure and health, much-needed housing and of course energy.
The noble Baroness, Lady Young, and others, including me, have been banging on about this for several years now. We need a land use framework in the round. I am afraid that a uni-purpose focus such as found in the noble Lord’s amendments, however sensible it may seem in today’s circumstances and business, can only limit our ability to sensibly plan a wider, step-back, more holistic strategy.
For a start, circumstances may change. I see our land use framework as a constant work in progress as the world changes around us. Such changes may include the way our food is produced, the latest imminent threats from foreign countries or the importance of energy to our economy—thus, in this context, the ever-changing balance between food security and energy security.
While today the priority of the noble Lord, Lord Fuller, is clearly food security over energy, it may be that in the future grade 3 land, for instance, is superfluous to our food security and better off focused on biodiversity or energy. I am afraid that I am not able to support these amendments, however much as a retired farmer I sympathise with their very good intentions.
Lord Roborough (Con)
My Lords, I support my noble friend Lord Fuller’s Amendments 67, 73, 104 and 105, which I have also signed. I first congratulate him on a polished and passionate introduction to his first amendments.
Amendments 67 and 104 would prevent GB Energy supporting renewable energy projects on, or owning, land that is grade 1, 2 or 3 to prevent the loss of good agricultural land. Amendments 73 and 105 would encourage GB Energy to pursue developments on land that has designations of grade 4 or 5 or on non-agricultural land.
The nationally significant infrastructure projects that have been signed by our Secretary of State have already had a detrimental impact on our best and most versatile farmland. In answer to my Written Question on 2 December about the agricultural impact of the Cottam, Mallard Pass and Gate Burton solar farms, the Minister—who is sitting in his place and is also doing such an able job of shepherding this Bill through this House and Committee—stated:
“For each of these cases, the Examining Authorities’ Reports have been published alongside the Secretary of State’s Decision Letters”,
so I had to find the answers myself. The examining authorities are clear that best and most versatile land, including grade 2, is being lost to existing solar developments. It seems hasty that some of the largest and most controversial solar developments appear to be being signed off with little or no weighting given to the quality of the land or food security. The justification seems to be that the land will be returned to agriculture after 30 or so years, as my noble friend pointed out. Unfortunately, we need to eat for those 30 years.
At Cottam, 5% of the area was best and most versatile land. The report said
“according to the ExA, the Proposed Development would not meet the requirements of the NPPF in this regard and subsequently accorded this a negative weighting”.
At Mallard Pass, 40.7% of this project was best and most versatile land, with the remaining 56% grade 3b —so captured by this amendment but not by “best and most versatile”. The report said
“the ExA acknowledges that there is a corresponding degree of conflict with the Government’s Food Strategy aim of broadly maintaining domestic production at current level, and that there is a potential higher agricultural yield and associated economic benefit from the farming of BMV land that would be lost”.
In answer to my Oral Question prior to Christmas, the Minister, the noble Baroness, Lady Hayman of Ullock, conceded that the Sunnica project had a negative albeit slight impact on farming. In answer to an Oral Question from my noble friend Lord Forsyth of Drumlean, the noble Baroness stated that grades 1 and 2 farmland were not being developed for solar. As my research has demonstrated, this is not entirely true for important grade 2 farmland nor for grade 3a.
It is clear from these examples that the Government’s goal of energy security from renewable energy trumps food security every time. I ask the Minister two questions: with so much land of grade 4 and below in the UK, including in areas with strong solar radiation, why is the Secretary of State so eager to approve sites which undermine our food security? Why are the Government not being straight that this is happening? I had to dig for some time to answer these questions after the replies I was given. Are the Government seeking to hide the embarrassing details of these actions? Research from SolarQ demonstrates that solar development is falling disproportionately on grades 1, 2 and 3 land, and underproportionately on weaker grades. Why is this?
The proposed changes to the National Planning Policy Framework would remove the protection for agricultural land for food production, simply requiring that poorer land be preferred. Given that the current NPPF is already undermining best and most versatile land use, weakening its protection makes a bad situation worse and makes my noble friend Lord Fuller’s amendments even more important.
At present, it seems that this Government will approve any renewable energy project development that anyone cares to put forward, without an overall strategy for where those projects are best placed. Our Government began development of a land use framework that would help inform and clarify this decision-making. The current Government have committed to continuing this work and publishing that framework in the not-too-distant future; I believe consultation is expected to begin at the end of this month. That would allow for an open discussion about our priorities and a rational process for determining where we want our solar and wind energy infrastructure to make sure that each of our limited and precious acres is put to its best use.
It is clear that our best farmland is not being treasured or protected by the Government and it is critical that we use every opportunity to protect it. In the Great British Energy Bill, we have the chance with these amendments to prevent at least part of the industry pursuing damaging developments that are not in our national interest.
I hope the Minister will see the wisdom of putting these protections in the Bill. Would he be willing in his department’s involvement in the land use frame-work also to ensure that renewable energy project development happens on our least agriculturally productive land?
Baroness Young of Old Scone (Lab)
My Lords, this group of amendments pick up the right issue but produce the wrong solution. There is no doubt about it: we need the land use framework to come forward very swiftly to avoid the sort of piecemeal decision-making that we are hearing about, not only on food security and energy but on all sorts of other issues.
To try to task GB Energy with this role is entirely the wrong approach, because the reality is that GB Energy is simply a medium-sized company aimed at investing in a comparatively small number of projects, and again would be a very partial solution to these big dilemmas about how we use the very scarce land we have at our disposition in this country. I want the Minister to press his colleagues in other government departments, because we require a multi-department land use framework that will take a multifunctional look at how we use land. We need not just to look at the strategic spatial energy plan, which will also talk about locational issues and land use in respect of energy; that spatial plan must be nested within the land use framework, and it is increasingly pressing that it comes forward.
The noble Lord, Lord Fuller, asked us to be gentle with him. I will say very gently that in this House we do not talk for 12 minutes on an amendment.
Lord Bellingham (Con)
My Lords, I support my noble friend Lord Fuller, who put forward a very convincing argument, supported by my noble friend Lord Roborough.
I will make three very brief points. First, surely one of the key lessons of the Ukraine crisis concerns food security. That means taking very seriously our attitude to grade 1 agricultural land. I do not agree with the noble Baroness that this is not the right mechanism for trying to entrench the value of that land. This is a narrow amendment that seeks to put the responsibility on Great British Energy, which is, after all, being created by statute. I can think of no better way of trying to curtail the use of this land in ways that undermine food security.
Secondly, I hope the Minister will find time to comment on the point that my noble friend made on tenant farmers. If a landowner, large or small, decides to embark on a solar project, that is something that he has the right to apply for: it is his land and, arguably, farmers are being encouraged to diversify. If there is a tenant on that land—for example, a family who might well have an expectation to go on farming that land for at least one more generation, maybe for 40 or 50 years—under the 1948 Act, the farmer in question cannot be kicked out if the landowner wants the land for farming. However, if the land will be allocated for other uses and permission is given for a solar array on that land, the tenant has no choice but to vacate his farming operation.
Of course, there will be issues with compensation, but we are talking about a situation that could be incredibly damaging and unfair to a group of farmers in this country. It is a large group of farmers, who are already under a lot of pressure because of other government policies. I urge the Minister to look specifically at that point. If he cannot respond to it today, could he ensure that he writes to Ministers in other departments to clarify it?
Finally, the Government have been quite cavalier in appreciating and valuing local opinion. I will give an example from Norfolk. I declare my interest as a landowner in Norfolk, although what I will discuss is nowhere near where I live. There is a group of solar array applications east of Swaffham on the A47. I think there are five sites—my noble friend Lord Fuller will correct me if I am wrong—amounting to 6,000 acres and straddling about four villages east of Swaffham. There is a huge amount of local opposition. Does the Minister think it right that these people should be ignored? Would it not be far better if the applications went through a local planning process? Indeed, there would be an appeal—but, if so, the local residents would obviously have the chance to put their point of view. Currently, there is a feeling that, in the interests of trying to get these key infrastructure projects through, local people are being ignored and cast to one side.
With those few remarks, I support my noble friends Lord Fuller and Lord Roborough, and wish them well with their amendments.
Lord Hamilton of Epsom (Con)
My Lords, first, I assure the noble Baroness, Lady Young, that I will not speak for 12 and a half minutes.
As I have established, I know a little about agriculture but not an awful lot. Something that occurred to me was that if you want to put up a massive solar plant covering a large area of agricultural land, you want low, sloping, south-facing land. That strikes me as precisely the same as the thing you want to grow crops on, so there is a direct conflict here between food production and solar panels. I point that out to the Committee because this is a vexed problem to which there is no easy solution.
Baroness McIntosh of Pickering (Con)
My Lords, I lend my support to my noble friend and congratulate him on moving his first amendment. As in Norfolk, there is a huge problem across North and East Yorkshire, where tenant farmers face being bounced off the land that they currently farm for solar panels. I hope that the Minister responding to this little group of amendments will use their good offices to ensure that solar panels are best built in more appropriate places. I say that as honorary president of the UK Warehousing Association, which has a campaign—of which the Minister, the noble Lord, Lord Hunt, is aware and, I hope, supportive—to ensure that we can get solar panels off the ground, particularly in productive grade 1, 2 and 3 agricultural land, while also helping warehouses to create more of their own energy.
I believe this is a debate to be had. I support those who say that it is perhaps not the role of Great British Energy to do this, but we have to raise this at every turn. If we run out of productive farmland on which to grow food—and to allow tenant farmers of every generation, including new entrants, to enter the market—it would be a very sorry state indeed.
Earl Russell (LD)
My Lords, I will speak very briefly to respond to the amendments in the name of the noble Lord, Lord Fuller. We congratulate him on moving his first amendment—indeed, he got his own group of amendments together, which is to be welcomed. I am afraid that, on these Benches, we cannot support what he is doing; this is just not the right Bill to do it. Even if his amendments were successful, all they would do is limit the powers of Great British Energy to do this stuff; they do not limit any other organisation or body from doing it.
It is very important that the Government come forward with the land use framework as quickly as possible—these are important issues. My understanding is that that Bill should come through in April or around then. These are complicated issues; we are a small island and there is lots of competition on our land use.
Labour also promised us a rooftop solar revolution. We strongly support that and encourage the Government to continue to work on its delivery. France, for example, gets 5% of its electricity from solar panels on car parks. I would like to see this Government replicating that. We have heard about warehouses, but many are constructed to a standard that cannot take solar panels, because the roofs are not strong enough. We must do more to get solar panels into commercial spaces and housing.
I also encourage the Government to do more on the future homes standard. There is uncertainty about whether it will have proper, fit and strong purposes and standards for new-build houses. Then there is the issue of retrofitting existing houses and how we get more energy-efficient measures into them.
I will point out something to the Conservative Benches. The idea that we can either eat or have solar panels is a false dichotomy. I note that, while Amendment 67 applies to agricultural land of grades 1, 2 or 3, Amendment 73 applies to agricultural land of grades 4 and 5, so the Conservatives are covering quite a lot of grades with their amendments. I argue that climate change itself is the biggest issue for us in terms of food security, not solar panels that cover far less than 1% of our land. We have just had the worst harvest since 1988—if not ever, as some people say—and that was because of a continuous wet climate. We have had the failure of the last autumn and winter crops. It is climate change itself that is causing us to have problems with food security—and that is causing massive problems for our farmers.
I welcome the amendments but they are not ones that we can support.
The Earl of Caithness (Con)
My Lords, I apologise to the Committee for missing the first bit of my noble friend’s introduction to his amendments. I take this opportunity to ask the Minister whether he could update the Committee on where we are with the land use strategy. Like the noble Lord, Lord Cameron, I, too, have been banging that drum for some time.
As the noble Baroness, Lady Young of Old Scone, gently chided my noble friend for the length of his introduction, I say to her that he is perfectly entitled to speak for 12 and a half minutes when introducing an amendment. That would not be the case if he were just one of the rest of us.
Lord Ashcombe (Con)
My Lords, I support my noble friend Lord Fuller’s group of amendments. Significant construction projects inevitably bring competing interests. In this case, the clash is between renewable energy development and agriculture, as well as other environmental considerations beyond decarbonisation. Land use, particularly on a densely populated island, must be approached with great care. Currently, we import approximately 40% of our food. While today’s discussions may focus on volatile oil and gas prices, tomorrow’s may shift to the cost and availability of food. This creates a fundamental dilemma. What should take precedence: food or energy?
Food security highlights the need to prioritise high-grade land for agriculture. However, the Government’s plan to build 1.5 million homes—typically on the edge of towns and villages—threatens this priority. Settlements have historically been sited on fertile land, and expanding housing developments will inevitably consume some of it. Essential services such as schools and shops will require further land use, compounding the problem.
Designating renewable energy as part of the nationally significant infrastructure plan risks bypassing legislation designed to protect communities and high-grade land. Restricting onshore renewable projects to grade 4 and 5 land would safeguard high-quality agricultural land and reduce the impact on the more heavily populated areas. According to Solar Energy UK, currently solar installations take almost 20 times the amount of grade 1 land available as opposed to grade 5. I seriously question whether this is the right ratio and ask the Minister whether he believes that it is.
With the Government’s ambitious housing targets, should it not be mandated that all new building, including homes and commercial premises, be fitted with solar panels, as mentioned partially by the noble Earl, Lord Russell? This would make better use of land already out of agricultural use and reduce the pressure while advancing renewable energy goals.
Great British Energy should refrain from developing high-grade agricultural land, nor is there any justification for it to acquire such land unless Amendment 104 is adhered to. Once agricultural land is repurposed for construction, it is rarely restored. At the end of their operational life, renewable projects will leave behind brownfield sites that will probably be redeveloped, permanently altering the land’s use, leading to unintended consequences for the environment.
I draw attention to the potential conflicts between decarbonisation and other environmental concerns—for example, the low-level but persistent noise from onshore wind and solar farms, generated by inverters and transformers, which can disturb rural communities. Biodiversity loss is another critical concern, also highlighted by my noble friend Lord Fuller.
I strongly support the amendments and urge the Committee to carefully balance food security, environmental protection and renewable energy expansion.
Viscount Goschen (Con)
My Lords, I remind the Committee of my interests in that I own a farm in Devon.
My noble friend Lord Fuller has done the Committee a service by raising the issues of planning and land resource allocation more generally in the context of the Bill. I listened carefully to the remarks of the noble Baroness, Lady Young of Old Scone, and I think she is right: this is a very much broader issue than this relatively narrow Bill. None the less, this is an important moment to raise such issues. I very much hope that we will get a substantive response from the Minister when he addresses these considerations.
Baroness Young of Old Scone (Lab)
I was promised by the Conservative Government a land use framework by Christmas 2022; I did not get it. I was promised it by Christmas 2023; I did not get it. I would like it now from a Labour Government.
Viscount Goschen (Con)
My Lords, knowing that the noble Baroness has waited so long puts my noble friend’s 12 and a half minutes into perspective. I dare say the Minister will ride to her rescue very shortly.
This is an important issue. We have had a number of agricultural debates over recent weeks, and one of the key themes has been the need to put food production at the very centre of agricultural policy. The view of the farming community is that that really is not the case at the moment. Farmers need clarity around the policy framework in the context of this Bill and, indeed, more broadly.
I listened carefully to the remarks of a number of contributors that even solar installations are long-cycle, high-capital-intensity investment decisions. There is an issue around whether land taken for solar would ever, in reality, be repurposed for agriculture.
I recognise that this is a broader issue in many respects than the narrow confines of the Bill but it is important for the Government to give us the context.
Lord Teverson (LD)
My Lords, onshore wind has a remarkably small footprint in terms of its use of the land, which seems to get forgotten. I can see 30 wind turbines from my bedroom window; the nearest is about 1 kilometre away. They are excellent: they show that renewable energy is working. We should have more of them, and I hope that the Government will continue to make it easier for these developments to take place towards our 2030 objective of decarbonised electricity.
Lord Offord of Garvel (Con)
My Lords, I speak in support of the amendments in the names of my noble friends Lord Fuller and Lord Roborough—Amendments 67, 73, 104 and 105. In bringing forward these amendments, my noble friends raise the matter of great importance that is the agricultural industry, which has been subject to punitive measures by the Government in the form of the family farms tax raid.
Amendments 67 and 104 prevent Great British Energy from supporting projects on or owning land that is grade 1, 2 or 3 to prevent the loss of good and high-quality agricultural land. Alternatively, Amendments 73 and 105 encourage GBE to pursue developments on land that is designated grade 4 or 5 —essentially, the worst agricultural land. It appears obvious that the Secretary of State, who directs Great British Energy, will support an approach that balances the need for renewable energy with the need to preserve our nation’s food security.
As explained by my noble friend Lord Fuller within his allotted time, the purpose of this group of amendments is to protect the best and most versatile land for food production. I echo the concerns of my noble friend Lord Roborough that some of the largest and most significant solar developments seem to be approved without due consideration given to the quality of the land which is being sacrificed in the process. It is an undeniable fact that grade 2, the best and most versatile agricultural land, is being lost to existing solar developments. That is not merely a matter of farming but of our country’s food security. As my noble friend Lord Fuller so neatly put it, at best Great British Energy may help to turn our lights on and heat our homes, but there will be no food on the British people’s plates.
The question is not whether we should develop renewable energy but where we should develop it. The goal of achieving energy security should not come at the expense of food security. I ask the Minister to give us his full assurance that under no circumstances will the Secretary of State approve developments that undermine our nation’s ability to feed itself.
Recent analysis of land take by ground-mounted solar installations shows a concerning trend: solar developments are disproportionately targeting the best and most versatile land—that is, land classified under grade 1 and 2. Across England, only 17% of land is classified as grade 1, yet 19% of the land used for solar installations falls into this category. This trend violates the general recommendation to avoid productive agricultural land development. In contrast, grade 5 land, the poorest agricultural land, has been disproportionately avoided. That is exactly the type of land that solar projects should be prioritising, yet it remains underutilised. Only 0.5% of solar installations are on grade 5 land, despite such land constituting 8% of England’s agricultural landscape.
The issue is particularly pressing, given the Government’s ambitious target to triple solar power capacity to 50 gigawatts by 2030. As we expand solar energy, more and more land will be acquired. However, unless active measures are taken to ensure that the correct land is used for these installations, we will continue to see the loss of high-quality agricultural land, exacerbating concerns over our nation’s food security. Amendment 73, therefore, is vital: it seeks to ensure that renewable energy development does not come at the cost of our most productive agricultural land.
Lord Hunt of Kings Heath (Lab)
My Lords, I welcome the contribution of the noble Lord, Lord Fuller, on his first set of amendments. Of course, he is right that our food security is very important indeed to this country, just as moving as quickly as we can towards clean power is also very important, and I certainly accept that of course there is a balance to be drawn. Certainly, the importance of maintaining our natural resources to support UK agriculture, and supporting local stakeholder consultation in affairs that affect their surroundings and the quality of the environment, are values that I share with noble Lords who have spoken in the debate tonight. But I must come back to the fact that we are talking about Clause 6 and the issue of whether we should seek to amend Clause 6 in the directions that the Secretary of State can give to GBE.
I repeat what I said in the first two groups: these directions are a backstop where an intervention is needed, not a way in which to develop policy in relation to land use. In response to my noble friend Lady Young and other noble Lords, my understanding is that the Government plan to publish a 12-week consultation on land use early in this year. The consultation will inform the publication of a land use framework in England, to be published later on in this year.
I have also noted constructive comments about the need for us to develop—indeed, some noble Lords wish us to mandate—the use of solar in warehouses and in industrial and domestic properties, and these matters are under very urgent consideration at the moment. But we will always need ground-based solar, as well as onshore wind, as the noble Lord, Lord Teverson, suggested, which of course is why we got rid of what was in effect a ban that the last Government so grievously introduced in relation to that development.
The projects that GBE will be concerned with, that it will invest in and that it will give guidance and encouragement to—because of course that is an important part of its role, too—will be mandated. Inevitably, its job will be to consider government guidance on the most suitable land for renewable energy projects, and any project that it is involved in will be subject to the same rigorous planning processes that currently exist to protect agricultural land, minimise the impact on food security and provide ample consideration for local community interests.
The environmental impact assessment regulations of 2017 require that certain types of projects, including large-scale renewable energy developments, undergo an environmental impact assessment to assess their potential impact on the environment. Developers must also ensure that their projects comply with environmental regulations, which can include mitigating impacts on local wildlife, water resources and soil quality.
Further, the National Planning Policy Framework includes the preservation of agricultural land for food production as a key consideration in its legal framework governing renewable energy projects. It emphasises the need to protect the best and most versatile agricultural land, namely grades 1, 2 and 3a, from development that could compromise its productivity. Developers must consider the classification of the land involved in renewable energy projects and ensure that developments do not conflict with planning policies aimed at safeguarding agricultural land.
On the noble Lord’s suggestion that there is a dash for renewables, yes, there is a dash for renewables—I do not deny it. We have to have a dash for renewables. But that does not mean that existing protections are being overridden. Of course we recognise that poorly sited onshore projects can have impacts on the local area, which is why we will retain important checks and balances to protect the environment.
But, in the end, we come back to why we have Clause 6. It is a backstop power which we hope will never have to be used; it is not a way of seeking to change policy in relation to land use.
Lord Fuller (Con)
My Lords, we have had a good debate that has explored the tensions between food and energy security in the context of the national interest. It has recognised the tensions between the establishment of a private company, GB Energy, acting as it is required to do in its own narrow self-interest, and its responsibilities as a public body with a duty to set the right example.
I have taken from some of the comments that, “Lord Fuller has perhaps played the right notes but in the wrong order”. I am not Morecambe and Wise to my noble friend Lord Roborough, but I would just like to refer to some of the points that have come along.
I am grateful to the noble Lord, Lord Cameron of Dillington, for his comments on the balance of land use and the importance of the “tilted balance”. Please do not misunderstand: my amendments are not saying that there should be no solar or renewables, or that we should have only food production. It is about where we put this thing in the tilted balance.
I am grateful to my noble friend Lord Roborough for shining a light on the fact that, notwithstanding that the Minister said, “Well, there are rules to be followed”, the rules are not being followed. That is why it is important that these amendments are made to the Bill, because we cannot really give the benefit of the doubt: if hitherto they have not been followed, why will they be followed now?
I am grateful to the noble Baroness, Lady Young of Old Scone, but even more grateful to the noble Earl, Lord Caithness, for being gentle with her so I did not have to be.
The noble Viscount, Lord Goschen, talked about the broad picture, and I am grateful to the noble Lord, Lord Bellingham, for his point about tenants, because that has been lost as part of the social fabric in this.
I will be brief. This is such an important issue that I do not feel we can just leave it on trust that the Minister for Energy Security will necessarily dovetail in with the Minister for Food Production to get that tilted balance right. The nation cannot risk GB Energy going rogue, and there has to be a better way with that. It is hard. Energy security and food security can be bedfellows: we are not being fundamentalist about this. At heart, my amendments are about putting food production on the best land, and solar and other renewables on other land.
We have we have fleshed out quite a few details and I know we are in Committee. I hope the Minister will meet with me and colleagues before Report, so that important safeguards can be taken into account in the Bill, if not in Clause 6 then perhaps somewhere else—who knows? I also hope that we may even have the heralded land use framework which the noble Baroness, Lady Hayman, promised before Christmas—but there we are.
On the basis that the Minister will meet me, I am prepared to withdraw these amendments, but in so doing I signal my intention to re-present them on Report, having taken soundings from colleagues that, if we cannot make satisfactory progress towards getting an acceptable way forward, we may need to test the opinion of the House. Meanwhile, I beg leave to withdraw my amendment.
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must re-invest all profits into the company.”Member's explanatory statement
This would require Great British Energy to re-invest all profits back into the company.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I rise to move Amendment 78 and speak to the other amendments in this group on Great British Energy. It is essential that we approach the future of energy in this country with the urgency that it warrants. The energy security of this nation is far too important to be left to chance. Today we have a pivotal opportunity to shape the future of Great British Energy in a way that prioritises transparency, accountability and the long-term benefit of the British people.
My Amendment 78 requires that all profits made by Great British Energy be reinvested in the company. This is a crucial provision that would seem to be self- explanatory. It is designed to ensure that Great British Energy focuses on long-term growth and the sustainable development of the UK’s energy infrastructure. It is crucial. If we are to establish a state-run energy company, it must operate with financial discipline and focus. Reinvesting profits ensures that GBE’s resources are used to strengthen its core business, to innovate and to contribute to the UK’s energy independence, rather than being diverted elsewhere. We must ask ourselves whether we want a national energy company that builds the future of Britain or one that becomes a drain on the public purse, burdened by external obligation?
I turn to Amendments 79, 81 and 82, tabled by my noble friend Lord Petitgas. Amendment 79 seeks to prevent Great British Energy from investing in projects that are reliant on government subsidies. Let it be clear. Subsidies distort markets, breed inefficiencies and create dependency. My noble friend sees this as a critical step in ensuring that Great British Energy operates as a self-sustaining entity. By preventing reliance on subsidies, we are ensuring that Great British Energy focuses on projects that stand on their own merits, fostering true innovation and competition. This is about making Great British Energy a commercially viable entity that does not lean on taxpayer funding but instead drives growth through its own strategic investments.
Amendment 81 introduces a critical measure of accountability and transparency. It requires that all investments made by Great British Energy undergo an independent third-party valuation. We cannot allow public funds to be spent without rigorous scrutiny. Independent valuations, such as the one that the UK Infrastructure Bank endured, will serve as an essential safeguard against potential mismanagement, ensuring that every investment is sound, justifiable and aligned with the long-term interests of our energy sector and taxpayers. This amendment goes beyond the traditional notion of financial oversight. It is about ensuring that every decision made by Great British Energy is transparent, free from political influence and fully accountable to the public. As we are entrusting a significant portion of taxpayers’ money to GBE, it is only right that we have an independent mechanism in place to assess whether the investments are wise and sustainable.
Amendment 82 limits Great British Energy’s investments to UK-registered companies. This is a straightforward yet powerful measure. Britain’s energy security in our national economy must be the top of this Government’s priorities when discussing this Bill. In an age when national security and economic resilience are increasingly under threat, why should we allow public money to flow into foreign companies when it can support British jobs, British innovation and British energy security? Investing in foreign registered companies undermines this goal. We must ensure that any investment of public money supports British interests first and foremost.
I now address the important amendments tabled by my noble friend Lord Effingham, Amendments 83, 84 and 85, which ensure proper governance of fiscal prudence for Great British Energy. Amendment 83 refers to the cost control and prioritisation of resources. It seeks to limit the size of Great British Energy’s delegation to the UN Convention on Biological Diversity, ensuring that taxpayer money is used efficiently and that the company remains focused on its primary mission rather than on unnecessary expenses for international events. Amendment 84 requires Great British Energy to publish its principles and criteria for evaluating investments. This promotes transparency and clarity for universities, companies and innovators seeking backing, while ensuring that the investment process is accessible and competitive.
Finally, Amendment 85, which my noble friend Lord Effingham tabled jointly with my noble friend Lord Trenchard, mandates that Great British Energy does not co-invest with Chinese state-owned companies without prior notice to the International Trade Committee. It requires Great British Energy to not co-invest with Chinese state-owned companies without giving prior notice to the International Trade Committee of the House of Commons. In light of ongoing concerns about foreign influence, particularly from state- controlled enterprises, this amendment would provide a necessary safeguard. It ensures that any such investments are subject to proper scrutiny, maintaining the integrity of our energy sector and the security of British taxpayers’ money.
Lord Petitgas (Con)
My Lords, I support the amendments in my name and those of my noble friends Lady Bloomfield, Lord Trenchard and Lord Effingham. They aim to ensure that the proposed entity, Great British Energy, operates in a manner that aligns with fiscal responsibility, transparency, accountability and the overarching national interest.
Amendment 78, tabled by my noble friend Lady Bloomfield, mandates the reinvestment of all profits back into the company. The reinvestment question is a good test of what GBE is about and its future performance. As I said, GBE is de facto a permanent capital investment vehicle that will be deploying capital in illiquid minority stakes. It is very unlikely that it will ever be able to dispose of those and realise a lot of liquidity, so at best it will deliver some dividends. If it did, it would be best for it to be reinvested, ensuring that the £8.3 billion is the maximum commitment for taxpayers.
My Amendment 79 in my name stipulates that Great British Energy must not invest in projects that are reliant on government subsidies. GBE is already structured as a crowding-in investment, which means that it is likely to take more risk and accept lower returns than the private sector. This is what the mandate of “facilitate, encourage and participate” means to me. There is nothing wrong with that, but the private sector and foreign funds should be attracted to the GB partnership for that reason. Therefore, I see no reason to pile in and give the private capital two bites of the cherry by allowing it to work with GBE with government subsidies.
I spoke enough about Amendment 80 earlier. Amendment 81 builds on it with a firm measure of accountability. By requiring independent third-party evaluations of GBE’s investments, we introduce an essential safeguard against conflict of interest and political interference. Transparency and objectivity in evaluating investments are paramount, especially when the risk of poor decision-making with public funds looms large. As your Lordships know, I am particularly concerned by the lack of detail and definition of investment process and framework within GBE, at least at this stage. I believe that the Minister has taken good note of my concern about the lack of precision on an investment committee.
Finally, Amendment 82 limits Great British Energy’s investment to UK-registered companies. The purpose of this entity, as set out by the Government, is to bolster Britain’s energy security and our national economy. Investing in foreign-registered companies undermines that goal. We must ensure that any investment of public money supports British jobs, British innovation and British interests. This amendment ensures that GBE prioritises domestic enterprises, strengthening the UK’s energy sector and reducing dependency on foreign entities.
I will remind the House of the holy grails that I think we want to achieve with GBE. Number one is energy security; number two is energy sovereignty; number three is economic growth; and number four is low costs for bills and more employment. Indeed, we do not want GBE to outsource, be it our energy security, sovereignty or supply chains. We know it is an incredibly difficult topic because, as a country, we are ahead on decarbonisation, but we are behind in terms of ownership of our own infrastructure. We are also behind in terms of supply chains and we are behind on production of cable, wind turbines and other technology. Therefore, we have a lot of work to do in this area and I think it will be an extremely difficult topic because of supply chains, China dominance and the fact that we are behind on infrastructure and technology.
All these amendments share a common theme: safeguarding taxpayer money, ensuring operational transparency and prioritising the interests of the British people. Conservatives believe in the power of the private sector and market-led solutions and, where state intervention occurs, as in this case, oversight is extremely important. We urge the Government to accept these amendments and commit to ensuring that GBE operates as a responsible, efficient and transparent entity.
The Earl of Effingham (Con)
My Lords, I rise to speak in support of the amendments I have tabled to Clause 6 of this Bill, along with the contributions from the noble Viscount, Lord Trenchard. These amendments reflect three core principles of fiscal restraint, operational transparency and the safeguarding of national interests.
Amendment 83 seeks to limit the number of Great British Energy representatives attending conferences of the parties to the United Nations Convention on Biological Diversity to no more than five. I greatly understand the importance of international collaboration on biodiversity, but we absolutely must be realistic about the need for cost control and proportional representation. These international summits are indeed vital, but we have to recognise also that very significant amounts of taxpayers’ money are spent on travel and accommodation. It is simply not appropriate for Great British Energy, funded by the public purse, to send unnecessarily large delegations. By limiting attendance, this amendment ensures that taxpayers’ money is spent wisely, without detracting from the company’s core mission, which can be accomplished with a lean and laser-focused task force.
Amendment 84 would require Great British Energy to publish its principles, policies and criteria for evaluating prospective investments. One of the most persistent criticisms of government-led initiatives is the opacity with which decisions are often made. Entrepreneurs, innovators, universities and companies across the country deserve clarity when applying for backing from Great British Energy. For example, what metrics will Great British Energy use and what constitutes a worthwhile investment? By requiring the publication of this information, we will not only promote transparency, which should be encouraged, but foster a more competitive and accessible process for any prospective partners. This is good governance in action.
Finally, Amendment 85, tabled jointly with the noble Viscount, Lord Trenchard, addresses the critical issue of national security and economic prudence. It would require that Great British Energy does not co-invest with Chinese state-owned companies without prior notice to the International Trade Committee of the other place. The risks associated with Chinese state-owned companies are well documented. Co-investment with such entities could compromise the integrity of Great British Energy and pose long-term risks to our national security. Furthermore, it would expose the UK to significant economic and political vulnerabilities. To be clear, this amendment does not propose an outright prohibition, but it does mandate a right and proper process of scrutiny. Requiring advanced notice to the International Trade Committee will introduce a layer of accountability which will ensure that such decisions are not made in haste or without proper oversight.
Together, these amendments reflect a responsible approach to managing Great British Energy. They ensure that the company operates in a manner that is transparent, cost-effective and aligned with the UK’s strategic interests. I urge all noble Lords to support these amendments and help guide Great British Energy to be an entity that truly serves the British people both efficiently and prudently.
Viscount Trenchard (Con)
My Lords, I rise to support my noble friend Lord Effingham in his Amendment 85, to which I have added my name. Certainly, there are good reasons to be very cautious in selecting international partners with whom we will co-invest in the energy sector. Chinese state-owned companies are managed under rather different governance systems from those which the London Stock Exchange would consider appropriate for its listed companies. I agree with my noble friend that the Secretary of State should consult the International Trade Committee of another place before considering such co-investment.
Among other amendments in this group, I also support my noble friend Lady Bloomfield of Hinton Waldrist in her Amendment 78, which would ensure that GBE will reinvest all profits into the company. I agree with what she said in her speech, especially as GBE, as a publicly owned company, will not be subject to the disciplines of the marketplace, and its shareholder will be more concerned with achieving policy objectives through GBE than with maximising its return on investments and contributing to long-term growth.
Lord Teverson (LD)
My Lords, I will make a few comments on this. I am rather attracted to the amendment from the noble Baroness, Lady Bloomfield—one worries that, if this were a successful organisation, all profits would disappear back into the Treasury, which would be very unfortunate. I think that is an excellent bonus, but I suspect I probably would not put it in as an amendment to the Bill.
In terms of investment committees, I cannot believe that this organisation will not have a proper professional investment committee, which, I hope will probably have some external members as well. But this misses one of the key points—which I also would not put in the Bill, so I have not put down an amendment—which is the discipline with which the great Green Purposes Company, of which I am a trustee, keeps the feet of the Green Investment Group part of Macquarie to the fire. It is around checking and making sure through proper systems that the investments that are made are truly green and add to low carbon, rather than otherwise. There needs to be a check on that side so that the organisation itself also avoids greenwashing, which is one of the big issues that would undermine the reputation of Great British Energy if it should ever happen. Obviously, we hope that it would not, and I am sure the Secretary of State would not want it to, but there needs to be something within the organisation—an external audit would be good—that includes the impact on greenhouse gas emissions and biodiversity as part of its performance.
In terms of foreign companies, again, I would not honestly see this as being part of the legislation, but I would absolutely say that Great British Energy should be involved in joint venture companies with foreign businesses. That is one of the key areas where we should be able to bring intellectual property back into this country and work together with other nations, as well as strong UK companies. Those joint ventures would be extremely important in terms of the performance of this company.
Lastly, why are we discriminating against the UN convention on biodiversity? It is an organisation that is struggling. I am not disagreeing on how many people we should or should not send to it, but why that and not the United Nations climate change committee or the COPs? I do not get that. It would be very negative for that organisation, for which we are struggling to get international consensus to tackle the real and huge biodiversity problems that we have on this planet, if it was mentioned in a Bill of the UK Parliament. That would be absolutely negative for our international reputation.
The Earl of Effingham (Con)
That is one example of where, to monitor the cost, we need to keep a tight grip on the number of people we send in delegations. It does not aim at that organisation specifically; it is that plus anything else to which GBE might wish to send delegates.
Lord Teverson (LD)
I understand the issue of public expenditure, travel and all that, but the noble Earl specifically names a culprit in his amendment. That is what the Committee looks at and what it tries to get into Bills, so the amendment specifically aims at that organisation rather than the broader canvas.
Lord Hamilton of Epsom (Con)
My Lords, I support these amendments. I have certain reservations about my noble friend Lady Bloomfield’s Amendment 78, because it assumes these investments will make money. I have a bit of a problem with that. The real difficulty, as we have discussed, is that all the low-hanging fruit when it comes to investment in renewable energy has already been picked by the private sector. It does this quite simply by calculating a return on guaranteed income. Therefore, what worries me is that Great British Energy will be left picking up the bits that other people do not want to touch. The chances of it making money are probably quite small. Of course, it will have to count off the losses against the profits, so you need to have something at the end of the day. I know that the noble Lord, Lord Teverson, has achieved something little short of miraculous by investing other people’s money and actually making money, but that is an exception rather than the rule. The chances of Great British Energy squandering billions of pounds of taxpayers’ money are rather higher than it making any profits for anybody.
Clearly, accountability is very important when it comes to these sorts of sums. We should do everything we can to ensure that taxpayers’ money is looked after in the best way possible. Everybody should have great reservations about believing—to come back to the point I made earlier—that politicians are able to pick winners. The record on this has been absolutely abysmal. The chances of more money being lost than made are, I am afraid, very great indeed.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I urge the Minister to give serious consideration to the amendments in this group. They are designed not only to strengthen the accountability and transparency of Great British Energy but to ensure that the promises made to the British public, particularly on national security and economic prudence, are fully delivered. During the last election, the party opposite made numerous promises to the British people, including a commitment that Great British Energy would first and foremost protect and benefit the British people. At the same time, we must remember that this is not just about creating another energy company but about establishing a cornerstone of national resilience—an entity that must operate with the highest standards of responsibility, transparency and accountability to the taxpayers who are entrusting it with significant public funds.
My noble friends’ amendments reflect three core principles: fiscal restraint, operational transparency and the safeguarding of national interests. As we consider these amendments, whether on reinvesting profits into the company, ensuring strict investment criteria or introducing greater scrutiny of foreign involvement, I urge us to draw from the examples set by the erstwhile UK Infrastructure Bank. When the bank was established, it was supported by clear frameworks for accountability, transparency and rigorous oversight, ensuring that taxpayer money was spent efficiently and aligned with national priorities. Let us learn from this experience and ensure that Great British Energy, in its critical role in our national energy strategy, is similarly held to account.
We must remember that the future of energy is not just about ensuring supply but about safeguarding our economy, our security and the well-being of future generations. By taking these steps, we will ensure that Great British Energy not only is accountable to the public but operates with the highest standards of governance, efficiency and integrity. The amendments before us are crucial to delivering that vision and I commend them to your Lordships, but at this stage I beg leave to withdraw my amendment.
Viscount Trenchard
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must consult with Great British Nuclear prior to investing in the production, storage and supply of nuclear energy.”Member’s explanatory statement
This would require GB Energy to consult with Great British Nuclear before it invests in nuclear energy.
Viscount Trenchard (Con)
My Lords, although I have already spoken extensively about the need for GBE to pay much more attention to nuclear power, I am glad that we now have a separate nuclear group of amendments. My Amendment 85B requires GBE to consult with GBN prior to investing in nuclear energy projects. A reader of the Bill and of the Explanatory Notes would probably take the view that it is not the Government’s intention that GBE should have any involvement with nuclear power. The word “nuclear” does not occur in the Bill and occurs only once in the Explanatory Notes, which inform the reader that the Secretary of State’s powers to give directions to GBE are consistent with the powers the Government have to direct comparable institutions such as GBN. Does the Minister agree that it is a bit of a stretch to argue that GBE and GBN are comparable institutions?
We have been told that GBE will be capitalised with £8.2 billion for the purposes of making investments in green energy. As I pointed out at Second Reading, a look at GBN’s accounts shows that it had only £342 million on its balance sheet at 31 March 2023. How can these two bodies be regarded as comparable?
On 17 December, the Minister told the Committee that
“we also need nuclear as an essential baseload for our energy generation, and gas as the flexible energy generation which you can turn on and off”.—[Official Report, 17/12/24; col. 177.]
I will make two observations on the Minister’s statement. First, to use gas power stations only as a balancing item for renewable energy is a very expensive way of using them, because they are constantly being fired up or down. Gas’s role in electricity pricing also distorts the price upwards, in a manner most damaging to the consumer’s interests.
I will not comment on CCUS, except to say that if only the Government would consider a funding commitment for nuclear of even one-tenth of that which they have made for CCUS—£21.7 billion—it would make an enormous difference to the prospects of British nuclear energy projects becoming viable and attracting funding from the private sector.
I was happy to hear the Minister confirm that we need nuclear as an essential baseload for our energy generation, but he has not convinced me that he recognises the urgent need to prioritise new nuclear projects now. He also said:
“Great British Energy and Great British Nuclear are already talking very closely together, and he can be assured that this will continue”.—[Official Report, 17/12/24; col. 209.]
This may be true, but the Government’s intention seems to be for GBE to concentrate initially on its clean energy superpower mission. The statement after the first energy mission board did not even mention nuclear at all. The Minister said at the Peers’ drop-in session before Second Reading that he did not expect GBE to invest in nuclear projects in its early years, and, as I mentioned in an earlier debate, he did not answer the noble Baroness, Lady Winterton, clearly when she asked him whether GBE might invest in an SMR project in South Yorkshire.
It is hard to escape the impression that, besides the two gigawatt projects at Hinkley Point C and Sizewell C, the Government see other nuclear as something that comes later—first SMRs and then later, AMRs—ignoring the important fact that some AMR technologies are more advanced than some SMR technologies. Can the Minister tell the Committee why GBN is prioritising SMRs over AMRs, which is surely an illogical approach, as some AMR technologies are more advanced than SMR technologies? Those that are ready now for commercialisation are being artificially held back.
I blame the Government for continuing the approach of the last Government in failing to recognise the potential of supporting a much quicker move to market for some AMR technologies, which are being sidelined by the limited scope and budget, and the slow pace, of the Government’s AMR research, development and demonstration programme, whose aims are merely to demonstrate high-temperature gas reactor technology by the early 2030s, in time for potential commercial AMRs to support net zero by 2050.
My Amendment 85B would ensure that GBE recognises that nuclear projects must form a part of its early investments. Amendment 85C would require GBE to monitor the impact of its nuclear investments on its ability to attract investment from the private sector in nuclear energy projects. I believe the latter could be substantial. Why does the Minister think that two important gigawatt projects initiated by Japanese companies—Toshiba’s NuGen project and Hitachi’s Horizon project—failed? Does the Minister not recognise how much better our energy security would be if either or both those projects had proceeded to successful deployment?
I have also tabled Amendment 118C, which adds a reporting requirement for GBE to undertake a review of the impact of this Act on the competitiveness of the UK nuclear industry compared to other countries. If GBE working with GBN acts as a catalyst in the adoption of new nuclear energy projects, their competitiveness will progressively increase compared with other countries. In September 2024, the International Atomic Energy Agency revised upwards its annual projections for the expansion of nuclear power for a fourth successive year. World nuclear capacity is now projected to increase by 2.5 times the current capacity by 2050, in the IAEA’s high-case scenario, including a significant contribution from small modular reactors.
The website Global Petrol Prices shows some interesting statistics. The price of electricity for businesses in the fourth quarter of 2024 in the UK was 51.7 cents per kilowatt hour, double that in Germany, where it was 23.5 cents per kilowatt hour, and three times that in France, where it was 17.4 cents per kilowatt hour. RTE, the electricity transmission network of France, showed that last Saturday nuclear accounted for 73% of French electricity generation, hydroelectric power for 12%, solar power for 7%, and wind power a mere 3%. It is very clear that the enormous cost of electricity for British businesses is now massively reducing their competitiveness compared with their French competitors. The more nuclear power we have, the more competitive it will become, and as the cost of electricity falls, the more competitive our businesses will become.
Does the Minister not agree that the economic growth that we all need so urgently can only be achieved by a radical adjustment to our energy policy? We need rapidly to commission more nuclear capacity—large, medium and small. I am not sure that all these amendments are perfect, but if he does not like my amendments as drafted, can he come back with some better ones to ensure that GBE, working with GBN, will ensure that much greater support will be given to nuclear projects so that nuclear can play its proper part—a much larger part—in our energy sector in the decades ahead? I beg to move.
Lord Hamilton of Epsom (Con)
My Lords, it seems quite extraordinary that no reference is made in this Bill to nuclear because, let us face it, if you want to have clean energy generation, nuclear is the only thing that is available at the moment. My noble friend Lord Trenchard must be right when he says that we should be much more seriously considering both small modular reactors and large ones for our energy supply in future, because that is going to be the only way we really get clean energy. I find it quite extraordinary that this has all been parked somewhere separately when it all should be integrated. We should certainly be looking at the potential for nuclear, because that is where the future lies.
Lord Offord of Garvel (Con)
My Lords, I express my gratitude to my noble friend Lord Trenchard for tabling the amendments that we are discussing in this group. All three amendments address a matter that many in this House have questioned—that being GB Energy’s role and involvement in the production of nuclear energy and its relationship with Great British Nuclear. Amendment 85B requires GB Energy to consult with GB Nuclear before it invests in nuclear energy. Amendment 85C requires GB Energy to report on the impact of its investments in nuclear energy and private investments in the UK nuclear industry. Amendment 118C ensures that the Secretary of State reports on the impact of the Bill on the competitiveness of the UK nuclear industry.
Nuclear energy will be critical to achieve the Government’s net-zero targets. However, historically, those on Government Benches have dismissed nuclear’s role in the energy mix. Let me draw on the Government’s own nuclear record. Since the 1970s no new nuclear power stations have been built under a Labour Government. Instead, all nuclear power stations still in operation were commissioned under Conservative Governments. Labour’s longest-serving shadow Energy Minister, Alan Whitehead, even said that we do not need nuclear. I disagree, and I am sure many in this House do too and I call on the Minister to update Labour’s thinking on this matter.
If the Government, via GB Energy, recognise the importance of nuclear, it is only right that they consult with GB Nuclear before investing in nuclear technology. Can the Minister confirm exactly what relationship is envisaged between GB Energy and GB Nuclear? Have the Government already consulted with GB Nuclear on the functions of GB Energy, and if so, will they continue to do so? We urgently need the development of new nuclear sites, as energy generated from nuclear technologies is both reliable and low carbon. Therefore, it is essential that GB Energy and GB Nuclear have a more formal collaboration. Industry bodies such as the Nuclear Industry Association have called for greater clarity on the interaction and relationship between the two organisations.
Lord Hunt of Kings Heath (Lab)
My Lords, it is always good to have a discussion about nuclear energy. The noble Viscount, Lord Trenchard, is ever consistent in putting forward his views. I assure him and the Committee that the Government see nuclear power as having a vital and important part in our energy mix.
I say to the noble Lord, Lord Hamilton, that the fact is that no technology is mentioned in the Bill, and that is quite deliberate—so the absence of nuclear in the Bill should not be taken as an indication that we do not think that it has an important role to play. I say to the noble Lord, Lord Offord, on Labour’s record on nuclear, it was in fact a Labour Government, in 2008, who took the decision that we would go back to new nuclear. Shortly afterwards, I was appointed a Minister of State at the Department for Energy and Climate Change, and I took part in many discussions at that point about how we got the sites, developed the supply chain and attracted investment. The fact is that we were succeeded by a coalition Government, followed by a Conservative Government, and it was not until, I think, 2017 that a final investment decision was made in relation to Hinkley Point C.
I am very proud of the nuclear sector. For all the challenges that Hinkley Point C has had, the fact is that a UK supply chain has been developed. The point about replication at Sizewell C is that that supply chain can then continue to service Sizewell C. We then want to see small modular reactors and AMRs developed, because we see them as having great potential. I say to the noble Viscount, Lord Trenchard, that he has not responded to the points raised by his colleague, the noble Lord, Lord Howell, in relation to Sizewell C. I am sure he will agree with me that, if we were to pull the plug on Sizewell C at this point, it would have a devastating impact on the confidence of the nuclear sector, in this country and globally. Actually—although he is not here—the point about replication is about the derisking of Sizewell C, building on what happened at Hinkley Point C, including the design changes and all the other issues, such as the time it took to develop the supply chain and the productivity issues. The case for Sizewell C is very strong indeed, and we look forward to moving towards a final investment decision over the next few months.
On the relationship between GBN and GBE, we have decided that GBN will remain a separate legal entity. That is important, because it makes sure that we have a body that can focus completely on nuclear energy, but working very strongly together with Great British Energy. The two chairs have met and have, I believe, built a very strong relationship already. I expect them to be able to work in strong partnership in future. I do not think it is necessary to put onerous requirements in the Bill. Certainly, Clause 6 is not the way in which to do it.
The noble Viscount, Lord Trenchard, is concerned about the approach that GBN is taking to the SMR technology selection process. It was instituted by his own party in government, and I think he was critical of his own Government. Well, I am not. I think the SMR technology assessment was absolutely the right thing to do. In September 2024 it concluded the initial tender phase of the process and downselected four companies. We hope for further progress over the next few months.
I recognise the huge potential that AMRs bring, and we will respond to the alternative routes to market consultation. We are obviously very keen to do what we can to attract nuclear company developers in this country.
On the impact of competitiveness, I really do not think the Bill is an appropriate vehicle for those considerations, and nor do I see that being part of Great British Energy’s role. But of course I want there to be a thriving nuclear industry in this country. I want to see us build on the supply chain that has been built around Hinkley Point C and then on to Sizewell C, as I have said.
In conclusion, I hope the noble Viscount will recognise that while he may disagree with elements of the Government’s policy on nuclear, he should be under no misapprehension: we believe that nuclear provides an essential baseload. We will continue to support the industry in the future.
Viscount Trenchard (Con)
My Lords, I thank the Minister very much for his reply, and I thank my noble friend for his intervention. To some extent I am heartened by the Minister’s words, although I remain a little unconvinced by his assertion that he sees nuclear as being so important. There is a fundamental difference between GBE and GBN, in that GBE has £8.2 billion of capital and GBN has only a few hundred million. The two vehicles are completely different, so I would be rather more relieved if the Minister had explained that the capital made available to GBE would equally be available to nuclear projects that GBN might recommend for investment.
Lord Hunt of Kings Heath (Lab)
Can I just respond? Nothing precludes GBE from investing in a nuclear development.
Viscount Trenchard (Con)
I thank the Minister again for his reply. Nevertheless, GBN does not have any money for investment, so GBN is by definition a very different kind of vehicle compared with GBE. In light of the Minister’s reply, I would like to withdraw my amendment for now.
Lord Murray of Blidworth
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must invest in additional energy storage infrastructure to store excess renewable energy.”Member’s explanatory statement
This amendment would require GB Energy to invest in storage for excess renewable energy with the intention of reducing the cost of curtailment of renewable energy in instances of excess supply.
Lord Murray of Blidworth (Con)
My Lords, I rise to speak to Amendments 85D and 85E in my name. I regret that I was unable to speak at Second Reading, but I am pleased to be able to take part in this debate in Committee.
My amendment seeks to address a lacuna in the Bill. As many noble Lords before me have observed, the Bill lacks a vital detail. Parliament is being asked to approve the establishment of a vehicle for the investment of £8.3 billion of taxpayer money, and yet we have no clarity on how this money will be spent. All these decisions will be for Great British Energy to make under the direction of the Secretary of State. We believe that this is a most unsatisfactory way to proceed, and my amendment seeks to probe the Government’s intention on energy storage, as well as giving the Government the opportunity to improve the Bill with a clear statutory duty to invest in energy storage.
Just last Thursday we had a debate in this House on the importance of energy storage, and I agree with the amendments that my noble friend Lord Lilley has tabled. Improvements in energy storage infrastructure will be crucial if we are to continue on our journey to greater reliance on renewable sources of energy. I am pleased that the noble Baroness, Lady Gustafsson, has recognised the importance of energy storage as part of our path to clean energy, as she did last week when she said the Government
“recognises the value of strategic energy reserves as a source of energy resilience and security of supply, balancing system flexibility, particularly during periods of energy supply shortage”.—[Official Report, 9/1/25; col. 845.]
Given the importance of investing in energy storage as part of our long-term strategy, we should surely put this at the centre of this Bill. In fact, the objects of GB Energy, as outlined in Clause 3, include
“facilitating, encouraging and participating in … the … storage … of clean energy”.
It is therefore deeply concerning that the Bill makes no provisions to effect that objective.
Amendment 85E in my name complements Amendment 85D. It is a simple amendment and merely requires an annual report from Great British Energy on the overall cost to the taxpayer of curtailing the supply of renewable energy. This will principally apply to offshore wind, which frequently produces excess supply. Under the current arrangements, the taxpayer pays offshore energy producers to reduce their supply and this has been extremely costly, driving up energy prices for consumers.
In December 2023 the think tank Carbon Tracker estimated that wasted wind power would add £40 to consumer bills, and predicted that this figure would rise to £150 in 2026. Clearly, consumers have a direct interest in us getting to grips with this problem, and the Government would surely agree that the establishment of Great British Energy presents an opportunity to do this. It is therefore critical that GB Energy looks to invest in long-duration energy storage, which would mitigate the increased cost to consumers resulting from wasted energy.
With this said, can the Minister clarify whether the Government anticipate that the Secretary of State will give a direction to GB Energy to invest in energy storage, to ensure we are prepared for what the Germans call Dunkelflaute periods, such as we had just last week when several gas power stations were fired up at great expense to the taxpayer? Do the Government see a role for Great British Energy in helping to improve planning for energy supply deficits in the future? Finally, do the Government agree that improved energy storage infrastructure will reduce our reliance on gas-powered power stations in the future? I beg to move.
Lord Ashcombe (Con)
My Lords, I speak in support of these two important amendments, proposed by my noble friend Lord Murray of Blidworth. Thanks to the Library research team, I have gained greater knowledge of the size of constraint payments to the power producers for either constraining production or to rebalance the system. These payments are not insignificant, and I would like to advise them to your Lordships. The years that I am about to cite run April to March. In 2020-21, the amount was £1,070 million; in 2021-22, it was almost £1.5 billion; in 2022-23, it was £600 million; in 2023-24, it was £1.3 billion; and, in this year from April to October, it was £960 million. This gives a total of £4.78 billion. As mentioned by my noble friend, these amounts get added to the bills of consumers, businesses and households.
Lord Hamilton of Epsom (Con)
My Lords, I am very keen that my noble friend Lord Ashcombe should reintroduce the whole prospect of hydrogen, because I thought that it was rather rubbished by my noble friend Lord Roborough, who said that it was all going to be much too expensive. I think that the future lies in hydrogen, and I hope that it will be developed much more cheaply, so that it can be available for so many different uses, not only in power stations but also in aircraft, heavy vehicles and so forth. As I understood it, it was being developed and the price was coming down, but maybe I am completely wrong on that. I would be very grateful to hear from the Minister what the position of liquid hydrogen is: whether it is still prohibitively expensive and not likely to be a solution to our problems or whether the future lies in liquid hydrogen.
Lord Offord of Garvel (Con)
My Lords, as we have heard throughout the debate on this Bill, as well as in the other debates in this House on the future of our energy, we know that renewable energy by its nature will always be unreliable. It is, by its nature, intermittent. Many of us have expressed concern that this undeniable fact will result in shortages. As has been mentioned by my noble friend Lord Murray, last year Europe in fact experienced several episodes of Dunkelflaute. On the other hand, as has been highlighted by my noble friend Lord Ashcombe, what happens to energy supply in periods of persistent sunshine and wind?
Unfortunately, we find ourselves in a position in which the national grid is unable to cope with excess renewable energy supply. Grid capacity is a particular challenge for the offshore wind sector, because those sites are necessarily located far from sources of demand. Currently, the national grid pays renewable energy generators billions to reduce supply when there is more renewable electricity than the grid can manage. This problem will only be compounded by the Government’s ambition to build renewables faster than we can develop and connect them to the grid.
With that in mind, we should address the fact that the timeframe for obtaining grid connections for a new energy project can reach 10 years. Not only this, but a project without a grid connection today may not come online until well after the Government’s target of grid decarbonisation by 2030. There is no doubt that the renewable energy projects that will supposedly be supported by the establishment of Great British Energy will face the same connectivity difficulties.
As my noble friend Lord Ashcombe highlighted, over £1 billion was coughed up by bill payers last year to pay renewable energy generators to curtail excess supply, including £20 million in one day alone. This will only worsen under the Government’s agenda, and it will be consumers who will bear the cost via their energy bills. If renewable generation is scaled up so rapidly without the grid capacity to transmit it to the areas of high demand, those curtailment payments will only increase. We know that excessive curtailment fees are already being paid to wind farm operators who are generating more power than can be used. This is paid to get operators to switch off their wind farms and avoid overloading the grid. How ridiculous is that? We expect these curtailment costs only to rise under the new Government’s regime, and by 2030 it is possible that there will be a staggering £20 billion a year in subsidies and in maintaining back-up grid capacity. That equates to roughly £700 per household each year.
I turn to the amendments in this group in the name of my noble friend Lord Murray of Blidworth, which I support in their entirety. Amendment 85E requires Great British Energy to
“report annually on the impact of each investment it makes on the levels of curtailed renewable energy in the UK”.
Amendment 85D requires Great British Energy to
“invest in additional energy storage infrastructure to store excess renewable energy”,
and thereby minimise the cost of curtailing excess supply. In tabling these amendments, my noble friend has addressed many of the issues that I have discussed.
It is essential that the establishment of Great British Energy does not cost the taxpayer more than the already allocated £8.3 billion, and that it assesses the impact of its investments on the cost of wasting excess supply and prioritises the means of storing renewable energy. I hope that the Minister will agree.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Lord, Lord Murray, for Amendments 85D and 85E, which are focused on the issue of renewable energy curtailment. I must repeat, as I said earlier, that this debate is, in essence, about technologies, rather than the appropriate use of the directions in Clause 6. However, I assure the noble Lord that we are determined to increase significantly the deployment of short-term and long-term duration electricity storage to reduce curtailment.
I, too, was present in the debate on energy storage last Thursday, which was very interesting. My noble friend Lady Gustafsson recognised then that a variety of energy storage technologies would be needed to achieve net zero. That includes technologies such as lithium batteries and pumped hydropower storage—which can deploy at different scales and provide output over different lengths of time—and it can include emerging technologies, such as liquid air energy storage and flow batteries. Low-carbon hydrogen, too, can act as a low-carbon flexible generating technology and provide very long duration energy storage.
Today, around 7 gigawatts’ worth of grid-scale electricity storage is operational in Great Britain. This is made up of 2.8 gigawatts of pumped hydrogen and 4.3 gigawatts of grid-scale lithium battery storage. I add that we have announced a long-duration energy support scheme. We will publish a technical document in February. Applications will open in the second quarter, and we hope that the first agreements under the cap and floor system will take place in early 2026. It will be technology neutral, and it will be for projects that could not be built without the cap and floor system.
There are some developments in train: SSE, for instance, is doing exploratory tunnelling in the north of Scotland for pumped-storage hydro. Highview Power has reached FID in terms of liquid air energy storage near Carrington. Points on curtailment costs are well made; we see it as a key priority to accelerate network infrastructure to increase capacity on network and reduce constraints.
I do not think there is a lacuna; the Bill is constructed in the way it is. We have Clause 3 and the strategic statement of priorities in Clause 5. I hope I have reassured the noble Lord that the substantive point he raises is important and accepted by the Government.
Lord Murray of Blidworth (Con)
My Lords, I thank the Minister for his reply and am provided with some reassurance that the Government take storage seriously. However, for the reasons given by my noble friend Lord Ashcombe, the cost of curtailing output is presently substantial, as the Minister conceded. As my noble friends Lord Hamilton and Lord Offord pointed out, the difficulty with the current structure of the Bill is that we are not moving fast enough to secure sufficient storage capacity such that we do not need to make such large curtailment payments.
I urge the Minister to consider inserting in the Bill, at the very least, some form of requirement for reporting in relation to curtailment payments, which would encourage the market in storage capacity. With that, I am content to withdraw my amendment.
Lord Murray of Blidworth
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must report annually on the impact of its investments on the levels of electricity generated from solar technologies in the UK.(1B) The Secretary of State must lay a copy of the report made under subsection (1A) before Parliament.”Member’s explanatory statement
This would require GB Energy to report annually on the impact of its investments on the levels of electricity generated from solar energy sources in the UK.
Lord Murray of Blidworth (Con)
My Lords, I shall speak to my Amendment 85F and support Amendments 85G and 85H in the name of my noble friend Lord Fuller.
Many in the Committee have expressed their concern that the Bill contains no provisions to ensure sufficient accountability and reporting measures. In fact, at present, we have no means to assess the success of Great British Energy in contributing to the Government’s overly ambitious clean energy target by 2030. In previous days in Committee, it was drawn to our intention that the UK investment bank Bill, which is similar in structure to this Bill, had important accountability and report measures. Yet these are removed from this Bill—why is this? The investment bank Bill had a clear and structured framework for accountability and transparency, governed by rules that ensure that taxpayers’ money is used efficiently and subject to rigorous annual reporting, providing the public with the necessary details on its investments and performance. The Great British Energy Bill, on the other hand, lacks any reporting requirements.
This Bill grants sweeping powers to the Secretary of State, backed, as I said earlier, by £8.3 billion of taxpayers’ money. Throughout the election campaign, the Government pledged that that GB Energy would be established in an effort to speed up the delivery of renewable energy. Can the Minister explain how the Government will be held accountable? It is in the public’s interest to introduce accountability mechanisms which allow for oversight of the £8.3 billion being handed over. Ultimately, we say, the Bill grants too much discretion yet lacks proper frameworks to report on the impact of GB Energy’s investments on the levels of renewable energy generated by the United Kingdom.
I am grateful to my noble friend Lord Fuller, who shares my concerns and addresses them in the amendments in his name. He rightly notes that a report on the levels of renewable energy generated by GB Energy and its investments will allow us to assess the potential energy deficit that must be met by sources other than renewables.
We risk jeopardising our energy security if we ramp up renewable at the pace suggested by the Government. This is a matter of paramount importance, and I urge the Minister to listen carefully and to consider the arguments on this group of amendments. I beg to move.
Lord Fuller (Con)
My Lords, I will speak to Amendments 85G and 85H in my name.
In this week of all weeks, when temperatures have dropped to minus 20 in parts of our nation and we are down to less than a week’s-worth of gas, it is time for the rhetoric on renewables to collide with the reality of what it takes to power our economy and protect the comfort and well-being of our citizens. There could not be a better moment to have this debate, with Mother Nature dialling a wake-up call to us all.
We need to be more realistic about the practicality of heating and lighting our homes, grounded in the world as it is rather than how we want it to be. The purpose of these amendments is to ensure that GB Energy takes a structured and quantitative approach to investing in energy production from renewable and wind energy assets. These investment plans would be evidence on an annualised basis, but broken down into monthly segments to reflect the seasonality that we all experience, with mandatory monitoring on a monthly basis. At its heart, my amendment seeks to force GB Energy to use a data-driven approach to address the structural energy gap we get every winter and, inter alia, to use that data to prioritise investments in energy assets that give energy security above the desirability of decarbonisation.
Energy security and decarbonisation are not necessarily mutually exclusive, but when the UK’s energy balance is published monthly, as these amendments would require, it will act as an obvious spur on investments to keep the lights on every month as a first and primary duty. These amendments do not dilute the ambition of GB Energy or abandon the obvious desirability of reducing our reliance on fossil fuels. However, requiring GBE to publish its plans for renewables and to address the predictable gaps that come each year will bring some reality to the rhetoric.
This country is bumping on empty this week—it is a serious matter. We are too reliant on the kindness of strangers to heat our homes. As the noble Baroness, Lady Brown of Cambridge, head of your Lordships’ Science and Technology Committee says, the crux of the matter is the robustness of our plans for
“the doldrums of winter when the sun doesn’t shine and the wind doesn’t blow”.
I am not rubbishing renewables but we need to be less starry-eyed about their ability to make the contribution some have thought they can, especially in winter. The amendments would therefore require GB Energy to be specific about how its investments in renewable and wind energy assets, and the planned additional investments over its existing ones, will contribute to the aggregate energy demand in monthly slices. There is a purpose to this, which is to ensure that when we flick the switch, the light comes on; when we press the button, the motor whirrs into action; and when you open the bill, you should not have to fall over in shock.
I am not interested in adding bureaucracy; NESO has a responsibility to produce these aggregate demands and I do not intend to interfere with those. But we know that there are seasonal variations in sunshine, and as with solar, also with wind; we all know the wind tends to blow harder in the winter as storms barrel across the Atlantic. My amendment will require GBE to take this predictable seasonality into account in its investment plans, to ensure that those investments in renewables can realistically contribute to meeting the energy requirement on a monthly basis, especially in winter. It is also about holding GBE accountable for the hard-nosed business of addressing these predictable structural energy gaps in the way that the noble Baroness, Lady Brown, highlighted, working hand in glove with NESO to address the market failure.
It sounds obvious that this should be the case, but my sense is that the Government are primarily focused on decarbonisation, even if it just ramps up surpluses in the summer that require these constraint payments to pay wind turbines to be switched off. If we are chasing carbon alone, we are missing the point. We need to balance renewables and wind investments in a way that also balances energy markets every month so that we do not run out of juice when it is cold.
This is important, because the total amount of standby generation capacity that we need is scaled by the months with the greatest deficit. It is on not an annual basis but a monthly basis. Because we have these predictable gaps, we pay standby gas power stations millions to keep ticking over, ready to jump into action when needed. Control rooms up and down the country are staffed by people playing patience and waiting for that call. That is expensive. It also underpins the entire speculative subculture in energy markets, in a process that the Daily Telegraph last week called the “gasino”, whereby speculators make a fortune while householders pick up the tab.
My colleagues have noted that the Guardian reported this week that two gas-fired power stations were paid £12 million for just three hours of electricity. We should not be surprised. Running a power station is expensive—there are staff, there is capital and maintenance, with people sitting around waiting for that call—and it is expensive to provide this insurance. The truth is that we are having to pay twice for much of our electricity, once for the renewable capacity, which we hope will boil that kettle, then again to have non-renewables on standby, ready to leap into action so that we can ensure that we can boil that kettle when the mercury falls. The consequence is that we are paying for some of the most expensive electricity in the world. Our costs rose 124% in five years, according to government figures. The UK’s energy price per kilowatt hour was 25.85p per kilowatt hour in 2023—significantly higher than in Germany, France and the US. We are becoming structurally uncompetitive as a result.
If enacted, my proposals would mean that the company’s objectives and functions would be forced by the market and public opinion to rank energy security above the decarbonisation function. That way, our £8 billion investment in GBE will keep the lights on. That is how we get best value from those investments, and we have energy markets that work more efficiently and at lower costs, which is a good thing. I expect the Minister to say, “Well, this is all rather burdensome”, and give ifs and buts and ask why would we need to publish this stuff. However, nobody questions when the OBR on a monthly basis publishes the forecast for the Bank of England. I do not see why, if it is good enough for the Bank of England, the GBE should not be forced to publish its investments as well.
I mentioned in the earlier debate how GB Energy is a private company, but it is established for public benefit. Publicising its plans and monitoring them is for the benefit of the public. It should not be entitled to cloak its activities in secrecy, as a private company established under the Companies Act 2006 would normally be expected to do. Mandating a monthly look at the markets, with a view to reducing the amount of back-up generation that we need, would avoid the perverse incentive to invest in renewables that make the surplus even greater. We do not want to overprovide standby back-up, so we end up paying excessive compensation payments, and we pay people more than is necessary to play solitaire in those control rooms. We do not want to underprovide, so that speculators hold us over a barrel in the short squeeze.
It follows that the requirement to publish the plan, to invest with the purpose of reducing the monthly or the predictable energy gaps, ensures that it brings a dose of reality to the complicated job of not only calculating the gap but doing something about it. That is where GB Energy can have a good, effective and ambitious role. Success looks like GBE publishing the plans and data so that we can see how effective it has been in needing fewer people in the control rooms by minding that gap, seeing fewer people falling over when they open their bill and a realistic, data-driven, balanced energy market that is not held hostage by ideology so much, so that we can move our economy forward—to keep the lights on and keep those motors whirring.
Viscount Trenchard (Con)
My Lords, I support Amendment 85F, tabled by my noble friend Lord Murray and Amendments 85G and 85H tabled by my noble friend Lord Fuller. As I explained in an earlier group, it is very clear that the price of electricity is presently adversely affected by the pricing mechanism applied by NESO, which is the price being determined by the last price of gas as used. If you are using gas only as a balancing item—that is, when the wind is not blowing and the sun is not shining, you fire up a gas power station to make sure the lights do not go out—it is much more expensive. The electricity generated by that last switch on of a gas power station determines the price of electricity, and that has a huge negative effect on the consumer, obviously. That is why these amendments are so necessary.
I would like to ask the Minister if he thinks that it is right that the electricity price is determined by the last firing up of a gas power station, which is being used simply as a balancing item when the wind does not blow and the sun does not shine. As we have seen over the last few days, there have been many days when the proportion of our electricity generated from wind is under 10% and that generated by gas goes above 50%, which means that power stations that are used only occasionally are being fired up, and that is very expensive.
Lord Ashcombe (Con)
My Lords, it is worth stating what is going on out there on the national grid right now. Gas and wind are supplying between 42% and 43% each; therefore, it is the gas price that is driving the price for everything. We are in the unusual position right now where we are exporting electricity to the continent because they need it more than we do. To have 42% driven by gas, with the price at over £100 a megawatt hour at the moment, seems worrying, and what we can do to curtail that must be important; but gas is not going away any time soon, and we have to be careful about how we moderate the reduction in it.
Lord Offord of Garvel (Con)
My Lords, I whole-heartedly support Amendments 85G and 85H in the name of my noble friend Lord Fuller, as well as Amendment 85F in the name of my noble friend Lord Murray of Blidworth. The objects of GB Energy, as outlined in Clause 3, state that they are restricted to
“facilitating, encouraging and participating in ... the production, distribution, storage and supply of clean energy”.
The Minister has made a virtue in this House that the Bill does not focus on any one particular technology or solution, but would it not be correct to assume that GB Energy has actually been set up in an effort to boost the production of renewable energy in the UK? Otherwise, what is the investment of £8 billion to be spent on? The Government say that GB Energy is part of their mission to make the UK a clean energy superpower, but how can we ensure that it delivers on these promises? I have seen in both the previous days of debate in Committee that the details in this Bill are at best scarce, and the Bill makes no provisions to report on the impact of each investment that GBE makes on renewable energy production. How, again, are we supposed to measure its success in delivering for the British people, as promised throughout the election campaign?
It is in the public’s interest to disclose the impact of GBE’s energy investments and activities on the level of energy produced from renewable sources, whether that be solar, wind or hydrogen. It seems incredible that this Bill, which establishes a so-called clean energy company, does not include a means by which GB Energy is required to report on the generation of clean energy. Indeed, this is an alarming oversight.
My noble friend Lord Fuller has rightly outlined an additional reason as to why the reporting on the impact of GB Energy’s investment on the levels of renewable energy generated is so critical. As has been mentioned many times, Europe has recently experienced another dunkelflaute. Just last month, for three consecutive days, more than 60% of electricity generation in the UK had to come from gas, as wind output dropped. At the same time, our partners in Germany paid the highest average price per megawatt since the Russian invasion of Ukraine, with a lack of wind being the main factor behind this escalation.
It is essential that renewable energy generation associated with GB Energy’s functions is closely monitored, if we are to maintain our energy security. The Secretary of State has said that one of the aims of GB Energy would be to improve our energy security— this, too, is mentioned in Clause 3. However, I am deeply concerned that the Government’s tunnel-visioned focus on green energy alone risks threatening our energy security. I am sure the Minister will want to see the successes, maybe even the failures, of GB Energy in helping to generate renewable energy. If this is true, he will have no problem in offering support to the amendments in my noble friends’ names. Ultimately, these amendments require the most basic and necessary levels of reporting.
Lord Cryer (Lab)
My Lords, Amendment 85F in the name of the noble Lord, Lord Murray, and Amendments 85G and 85H in the name of the noble Lord, Lord Fuller, would require the Secretary of State to give GBE directions to regularly report on the impact of its investments on electricity generation from solar, renewable and wind sources in the UK. We have already set out in this debate the need to avoid placing excessive reporting burdens on GBE. Nevertheless, the concerns raised remain pertinent.
It is important for GBE to maintain its operational independence and to ensure its long-term success, which these amendments would hinder. Further, the intended use of Clause 6, as has been repeated again and again, is to give directions for urgent situations only. These amendments would broaden it unnecessarily.
On renewables specifically, I assure your Lordships that GBE will focus on driving clean energy deployment. This will inevitably include a range of renewable resources, including solar and wind. GBE will be an operationally independent company and the exact mix of technologies it chooses to invest in will be determined in due course.
On accountability, which the noble Lord, Lord Murray, and others raised, let us bear in mind that the Secretary of State can be—and is—called before the energy Select Committee at any time. As far as the chief accounting officer is concerned, he or she can be called before the Public Accounts Committee, which, looking at the PAC’s track record, I would have thought is highly likely to take place. As we are all aware, the Secretary of State is also accountable to the House of Commons every few weeks. That includes—and this is pertinent—Topical Questions, which, in a fairly recent change to Question Time in the other place, are included in every Question Time, which means that things that have only just happened that do not have a relevant Question on the Order Paper can be raised by MPs of any party. Of course, annual reports will have to be submitted to Companies House in the usual way. That is set out in statute.
On that basis, I urge noble Lords not to press their amendments.
Lord Murray of Blidworth (Con)
I am very grateful to the Minister for that response to this group. Plainly, I am also very grateful to my noble friend Lord Fuller for advancing his amendments. I suspect that, given the weather forecast, those in the control rooms will be glad to get back to patience and solitaire.
I am also grateful to my noble friends Lord Trenchard and Lord Ashcombe for their contributions. We discerned from those speeches that it is unsatisfactory that standby gas generation appears to be driving the price. I agree with my noble friend Lord Ashcombe that this is necessarily worrying, and it seems appropriate for the Bill to contain a direction that the Secretary of State can require GB Energy to provide clear transparency on what is driving the allocation of these renewable prices. It is therefore vital that a measure similar those proposed in these amendments makes its way into the Bill, and I invite the Minister to so consider. With that, I withdraw my amendment.
Lord Lilley
“(1A) The Secretary of State must give a specific direction to Great British Energy that it must carry out a review on the use of long duration energy storage by Great British Energy and its projected costs.(1B) The Secretary of State must lay a copy of the assessment made under subsection (1A) before Parliament.”Member’s explanatory statement
This would require GB Energy to carry out a review on the use of long duration energy storage by Great British Energy and its projected costs.
Lord Lilley (Con)
My Lords, I rise to move my Amendment 85I and to speak to Amendment 131 in my name and that of my noble friend Lord Reay. Nature abhors a vacuum and Parliament abhors a blank piece of paper, which is what the Bill, in effect, creates in the way of the GBE company. It is a company that has no clear purpose, limits or functions, so it is our duty to write in some clear purpose and constraints, and that is what my amendments, like many tabled by other noble Lords, try to do.
Amendment 85I requires the Secretary of State to review
“the use of long duration energy storage by Great British Energy and its projected costs”.
Amendment 131 says the Act may come into force only when the Secretary of State has published the review.
The Science and Technology Committee of your Lordships’ House produced a report entitled Long-Duration Energy Storage: Get On With It, which we debated last Thursday. This recognised—indeed, took it as axiomatic—that, if we replace fossil fuels entirely with intermittent wind and solar, we will need storage to meet periods when demand exceeds supply. It will be absolutely essential to have that storage. It is not just short-term storage to cover daily peaks in demand, nor even for the medium-term periods the Germans call Dunkelflaute, when it is cold, windless and sunless, which it invariably is at night; there can also be whole years when supply is below average. So some storage needs to be of long duration.
As well as establishing that there will be a need for such long-duration electricity storage, the report evaluated different technologies providing that storage. It concluded that the best approach would be that, when wind and sun are generating more electricity than we need, instead of turning off the windmills, we should use the excess electricity to electrolyse water to create hydrogen that could then be stored in large salt caverns—largely under Chester, I gather—to be used when needed. The committee acknowledged that, by the time the electricity has been converted into hydrogen and then burned to generate electricity again, about 60% of the energy has been wasted—but that is better than wasting all the excess electricity that would be produced by wind.
Unfortunately, the report of the Select Committee provided only the widest possible range of estimates of the likely need for storage. It is literally almost a priceless report, in the sense that it reaches no conclusions of its own as to the likely price of storage, let alone the amount by which it will increase the price of electricity. So Great British Energy will not be able to rely on the Select Committee’s report and will need to carry out its own review, as specified in these amendments, into the amount of storage needed and its cost.
The Select Committee report does however cite a report by the Royal Society that indicates that the potential scale of costs is huge—the capital costs in particular. It says that the capital expenditure required for wind and solar to meet the increased demand when transport and heating have been electrified will be some £210 billion. On top of that, there will be additional capex for long-duration storage of some £100 billion, and investment to strengthen and extend the grid to reach the storage of an additional £100 billion. So, the cost of storage plus grid strengthening will effectively double the capital costs of a fully renewable generating system based on wind and solar. It is, incidentally, hard to see how that can reduce our electricity costs, as the Government originally proposed and claimed ahead of the election was the purpose of GBE. So I am not surprised that the Minister rejected the amendment from my noble friend Lord Offord requiring Great British Energy to set out how it would contribute to the objective of reducing costs.
Clearly, investments on the scale that the Royal Society envisages should not be undertaken lightly. It is highly unlikely that GBE, capitalised at £8.3 billion, will be remotely capable of crowding in private sector capital of £100 billion just for long-duration energy storage alone.
Indeed, witnesses to the report and noble Lords in the debate cast doubt on whether a credible way could be devised to remunerate private sector investors to make it worth their while to provide the storage capacity. The suggested scheme involves setting a floor and cap for the revenues generated by providers of stored hydrogen when they sell and buy electricity during periods when it is needed. Unfortunately, owners of storage will want to maximise their revenues by arbitrage trading as frequently as possible when electricity prices rise and fall. This may mean that they have insufficient gas when a period of shortage of renewable energy continues for a long time, which is precisely what this long-duration energy storage is intended for.
Those in the debate and, indeed, on the committee who pointed out that this problem exists tended to conclude that the logical option was that long-duration electricity storage would have to be provided and owned by the state. I am not an enthusiast for nationalisation but nor am I a doctrinaire opponent if it is indeed the least bad option, as may well be the case. If it is the case, can GBE be the vehicle that would help create such a state holding company? It scarcely seems credible given its capital base of £8.3 billion and potential investment required of £100 billion. Yet, without long-duration energy storage, it will be impossible to replace fossil fuels by renewables. So, the Government must somehow tell us how, through GBE or otherwise, they are going to finance this long-duration energy storage.
The Royal Society report on which the Select Committee relied made some heroic and barely credible assumptions. The costs and deficiencies of electrolysers and gas turbines needed to convert hydrogen back into electricity would fall dramatically, in some instances by up to 90%, over the period between now and 2050. The report that this amendment would require would also surely have to consider whether it might be more cost effective to defer investment in these technologies until those reductions in costs and efficiency improvements had materialised.
That would mean relying on gas, purely as a backup, for a few extra years, but the extra emissions would be small and negligible in the grand scheme of things. The Secretary of State for Energy Security and Net Zero has already reinterpreted decarbonising electricity production by 2030 to mean that, rather than reducing emissions by 100%, it will involve reducing emissions by only 95%. There is a precedent for anticipating a degree of flexibility. I hope, therefore, that any report that this amendment requires GBE to produce will consider that option.
We should remember that when Dieter Helm analysed the Government’s energy policy, he concluded that we have wasted up to £100 billion of taxpayers’ money so far by investing prematurely in immature technologies rather than waiting until they became sufficiently efficient for us to get advantage from that greater efficiency. These amendments would enable us to know the answers to some of those questions before GBE goes ahead and spends any taxpayers’ money.
Lord Swire (Con)
My Lords, I rise briefly to support the noble Lord, Lord Lilley, who makes some extremely good points in trying to put more meat on the bone of the Government’s proposals. It seems to me in a macro way that the Government’s energy policy is all over the place, not least their new desire to attract Chinese investment—have we not been there before? It is causing great concern, not least now to the Security Service.
That apart, whatever the Government decide to do, they will have to dramatically increase storage, as we have heard today. However, there is precious little in this Bill to tell us how that storage will be dealt with, where it will be located, or how that will be handled by planning. We have just heard that some of the storage will be below ground in Cheshire. Other storage will, of course, be above ground.
Lord Reay (Con)
My Lords, I will speak to Amendment 131 tabled by my noble friend Lord Lilley, to which I have added my name. It would require GB Energy to publish a report on the projected costs of long-duration energy storage. I regret that I was unable to speak at Second Reading, for which I apologise.
This is an ambitious Bill that is part of an ambitious policy. It is a policy that is fundamental to a frighteningly large part of our lives: the availability of energy, the dependability of energy supply and the cost of energy. According to whether Governments succeed or fail in these areas, economies sink or swim, and functions slide into dreary and dangerous dysfunctionality. They bloom like an English country garden in midsummer or wither, shrivel and slumber like any garden anywhere on these islands in coldest, darkest, most forbidding winter.
Energy is a policy area to which the precautionary principle should clearly apply. It is not an area where we should make a habit of leaping about in the dark or buying pig after pig in poke after poke or moving forward, fingers crossed, on a wing and a prayer.
It is the very opposite of such an area. It is a subject on which clear-sighted, far-sighted sceptics, expert sceptics, industry sceptics, and seriously sceptical scientists and engineers with the national interest at heart deserve a hearing. The stakes are just too great—the Bill is well named—for turning a deaf ear or blind eye in their direction, as indeed we were forcibly reminded last week. Last Monday, the Secretary of State for Energy was bragging that wind power was the UK’s biggest source of electricity in 2024. He said that it was
“a huge moment on our journey away from energy insecurity”.
Less than two days later, NESO issued a warning that there was a close to 30% chance of power cuts that very evening.
Although the operator managed to eliminate this risk by sourcing back-up power, this came at vast expense, as my noble friend Lord Fuller pointed out, with prices rising to a staggering £5,500 per megawatt hour, around 80 times the average price in 2024—the highest energy prices in Europe. These are costs that the consumer and business in this country must bear, and part of the reason why our energy costs are as high as they are. Our industrial energy costs are four times those in the United States and 46% above the IEA median. The Government’s policy of net zero at any cost will serve only to make this dire situation worse.
As many of us know, the operator last week came very close to disaster, with only 580 megawatts of headroom. This is equivalent to less than a single power station cutting out and, just three hours after the peak, two power stations with a combined capacity of two gigawatts did indeed trip out, exhibiting how close we came to the lights going out. This near-miss should be a wake-up call to this Government and a signal that we need to change course. It should be, but will it be? I confess that I am not holding my breath. As things stand, the Government’s policy to pursue intermittent wind and solar and to neglect baseload power such as gas and nuclear in all likelihood will cause the country to run into severe problems in the future and, as we have seen, power cuts could happen any week.
The Government believe that long-duration energy storage will be able to balance energy supply and demand over time. This early-stage technology, driven by hydrogen, will potentially allow storage of energy from renewables over extended periods of time up to months and years. Battery storage, on the other hand, at present only has the ability to store energy in a small capacity for a mere two hours.
In a debate on the Science and Technology Committee’s report on long-duration storage, held on Thursday in this Chamber, the newly appointed Minister for Investment, the noble Baroness, Lady Gustafsson, stated that
“we are going to need colossal amounts of hydrogen storage”.—[Official Report, 9/1/25; col. 845.]
What this equates to are colossal subsidies at colossal expense to taxpayers—a cost that the Government are currently showing no sign of wishing to calculate.
In theory, wind plus green hydrogen appears to be a sensible idea that uses the output of wind farms when not required for the grid to generate green hydrogen, which then gets converted into electricity. The document that underpins the Government’s promotion of long-duration energy storage is, as my noble friend Lord Lilley pointed out, the Royal Society report produced in 2023. The report estimates that, by 2050, public and private costs required to establish long-duration energy storage in the UK will be £100 billion for actual storage, £100 billion to increase associated grid capacity and £210 billion for the wind and solar capacity required.
Unfortunately, there are multiple issues with the report in terms of its costings and assumptions. The report is based on unfeasibly low costs for hydrogen electrolysers, storage and generation. It assumes no leakage of hydrogen stored underground at high pressure for up to a decade. The return on capital assumption posits that investors will be attracted by a 5% return, but a return of two to three times that would be required in today’s marketplace to invest in a risky, early-stage technology such as this.
This is even without the recent sharp increase in gilt bond yields, with the cost of borrowing rising to the highest level for nearly 30 years, which is making every equity investment more expensive. These costings were produced before the surge of inflation a couple of years ago, which means that they are too optimistic. Even if the costs are achievable by 2050, the infrastructure will need to be built using today’s cost base, which will push up the cost base dramatically.
Substantial hydrogen electrolyser capacity will be required, which will need thousands of engineers that the UK does not possess. Perhaps the Minister could tell us where all these engineers will come from, particularly as there is strong international competition for this capacity from the EU and the US, which have significant hydrogen subsidies.
Even after the construction of a long-duration energy storage system, with its vast cost, the overall grid is likely to remain unreliable. The large storage caverns proposed by the Royal Society will take 10 years to fill and could empty in 12 months of extremely low wind. What happens if you have more than one year of very low wind over the 10-year period it takes to restock the storage caverns? Further questions surrounding the viability of this technology include the possible negative reaction of residents to having large caverns of hydrogen situated beneath their homes. The Government’s pronouncements suggest that they will plough ahead with granting subsidies to energy storage developers without having conducted adequate research on this issue.
At the same time that a calamity has narrowly been averted in the energy markets, we are experiencing a developing crisis in the financial markets. It has become apparent to market participants that the Government’s high-tax, high-borrowing Budget has markedly reduced any chance of growth. With the cost of borrowing rising dramatically, the Government’s spending plans are spreading alarm among investors, including the blank cheque written in respect of their uncosted ideological pursuit of net zero.
With expenditure on renewable subsidies now amounting to £11 billion a year, with an additional £2.5 billion for grid balancing and another £1 billion per year for the capacity market, the UK’s industrial and consumer electricity prices have become among the most expensive in the world. This will only get worse with the Government’s commitment of over £110 billion to connect remote wind farms to the grid.
Given the current economic and financial climate, it is more imperative than ever that the Government produce a report and come clean on the costs involved for the taxpayer of their plans for long-duration energy storage. We need an energy policy in which we can have confidence, and that means that, as an absolute minimum, we need more information, clarity and realism.
Lord Offord of Garvel (Con)
My Lords, I will speak in support of the amendments of my noble friend Lord Lilley. It goes without saying that long-duration energy storage is essential if the Government are to achieve the clean energy targets that will ensure that fossil fuels are phased out. To replace fossil fuel-derived energy, the Government are ramping up renewables—an entirely unreliable source. It is therefore critical that we use long-duration energy storage if we are to maintain the electricity supply.
As has been referenced by my noble friends Lord Lilley and Lord Reay, the Royal Society has estimated that a substantial volume of long-duration energy storage—enough to supply roughly a third of current annual UK generation—could ultimately be needed. It found that a strategic reserve of long-duration storage will be particularly important to address supply shortfalls from renewables in periods of low wind and rain. If the Government are to achieve a fully decarbonised electricity system by 2030, they must make provisions for substantial energy storage to manage the gaps between increased supply and demand. While Britain has just 2.8 gigawatts of long-duration energy storage capacity from four pumped hydro-plants in Scotland and Wales, it is believed that terawatt hours of long-duration electricity storage will be needed to decarbonise the grid in the whole of the UK.
The storage of power increases the flexibility of the grid and minimises likelihood of wasted renewables in cases of excess supply. Therefore, if GB Energy contributes to a large-scale rollout of long-duration energy storage, it would increase the availability of renewable power and may even lower consumer energy bills. The previous Government consulted on policy mechanisms to support low-carbon storage and introduced a target in the British Energy Security Strategy to deploy enough to balance the electricity system. We also moved to reform energy systems, establishing the future system operator, and consulted on a long-duration energy storage business. Finally, the previous Government addressed the challenging economics of long-duration energy storage projects and activity, and they consulted on introducing a cap and floor mechanism to implement additional financial support mechanisms.
Clause 3 states that GB Energy’s objects include facilitating and participating in the storage of clean energy. I therefore ask the Minister to confirm exactly how GB Energy will be involved in the storage of electricity generated from these renewable sources. It is critical as it prioritises the storage of energy to avoid the risk of blackouts, price fluctuations and our reliance on energy imported from foreign states. We cannot afford to compromise our energy security even more by failing to do so.
In conclusion, the development of long-term energy storage technology must occur alongside that of the national grid. We cannot increase our energy storage if we have no means to transmit and distribute the electricity. We face an immense but urgent challenge in scaling up our clean energy infrastructure, whether that be storage or distribution. I look to the Minister to clarify what proportion of the allocated £8.3 billion of taxpayers’ money will be invested in long-term energy storage solutions.
Lord Hunt of Kings Heath (Lab)
My Lords, first, I welcome so many Members of the Opposition to our debate and I look forward to their continuing interest in our deliberations going on this evening. I must confess to being somewhat at a loss, because all the points raised in this debate have been raised tonight in other amendments. What we are seeing is clearly a filibuster, and the degrouping of so many of these amendments on Clause 6 is the visible evidence of this. We have already had a debate on energy storage, which the noble Lord, Lord Murray, moved. We have already debated power lines and planning environmental protections, and we have discussed nuclear power, SMRs and AMRs. I simply do not understand. What is the point of having yet another debate on these issues, which amount to Second Reading discussions about the Government’s energy policy? We are debating Clause 6 directions. This is a backstop provision, normal in Bills of this sort in relation to the bodies that we are talking about, and it is quite inappropriate for us to seek to micromanage GB Energy in the way noble Lords have suggested.
Lord Lilley (Con)
My Lords, I am grateful to the Minister for his non-reply to the debate. The answer to his point about whether it is necessary is that it is impossible to overstate the importance of cheap and reliable energy to the economic growth of this country. If the only way we can have reliable energy is by having hugely costly energy, either because, as the noble Lord, Lord Reay, said, to ward off delays as we saw in recent days costs eight or 10 times what it normally costs or because to prevent that sort of risk involves spending hundreds of billions of pounds, that is hugely important. I am very sorry that the Minister, whom I normally praise for his replies, which are usually fulsome and effective and substantive, has avoided addressing those points, because they are crucially important and they have many aspects and it is important that those many aspects be investigated in the course of these debates in Committee. Obviously, I shall withdraw my amendment, but I hope that none the less that we will force the Government to think seriously about these issues before carrying us further down a route which could make our already very expensive energy even more expensive.
The Deputy Chairman of Committees (Baroness Finlay of Llandaff) (CB)
I cannot call Amendment 86A as Amendment 86 has not been moved.
Baroness Noakes
“(1A) The period allowed for filing the reports and accounts of Great British Energy under section 442 of The Companies Act 2006 is six months.”Member’s explanatory statement
This amendment ensures that Great British Energy files its reports and accounts in line with the period allowed for public companies.
Baroness Noakes (Con)
My Lords, we now move to some more technical aspects of the Bill, compared to some of the really significant issues we have been debating in recent groups. I am sorry that the Minister dealt with these recent groups in such a perfunctory way. We did not get a response of substance at all to the very significant points that my noble friends have been making, and I think it is right that the Government think again about their attitude to whether or not they are prepared to accept proper legislative scrutiny in your Lordships’ House. I hope that we can move to a more constructive phase going forward.
I shall also speak to two other amendments this group. I have Amendment 92, to which the noble Lord, Lord Vaux of Harrowden, has added his name, and I have added my name to his Amendment 89.
Great British Energy will be a company formed under the Companies Act 2006, an Act imprinted in my memory. At the time, in 2006, it was the longest Act ever produced, and it took many months of my life. Under Section 442 of that Act, private companies are given nine months to file their accounts, while public companies have only six months. I am assuming that Great British Energy will be a private company, as there is no ability for its shares to be offered to the public; it will therefore have nine months to file its accounts, and my Amendment 88 changes that to six months, in line with public companies. GBE will be a substantial company, with upwards of £8 billion flowing through it, and it ought to be subject to the same degree of scrutiny that large public companies have.
Many public sector bodies manage to get their accounts out and laid before Parliament before the beginning of the Summer Recess, which gives them nearly four months, which should be plenty of time. Listed companies generally get their accounts out very much quicker, mainly because it makes no sense whatever to spend a long time in the new financial year looking backwards.
I would not normally have thought that an amendment like this would be necessary, but I was shocked to discover this autumn that the National Wealth Fund’s report and accounts for 2023-24 were not signed off until 21 November 2024. I was even more shocked to find that the previous year was only about four weeks better than that, with the report and accounts being signed off on 23 October 2023. I do not think we should tolerate such a laid-back approach to putting the only regular accountability document relating to Great British Energy into the public domain. If six months is good enough for plcs, it ought to be good enough for GBE and, indeed, any other public sector body.
The Government have been very unresponsive to calls in the various other amendments that we have been considering during this Committee for extra reporting going above and beyond what is included in the annual report and accounts. This underlines the need for a very timely approach to the one accountability document that the Government are prepared to concede will exist for Great British Energy—namely, its annual report and accounts.
My other amendment, Amendment 92, is more of a probing amendment. It would require the Comptroller and Auditor General to be appointed as Great British Energy’s auditor. Allowing the Comptroller and Auditor General to do company accounts was, incidentally, one of the minor achievements of the Companies Act 2006, reflecting the trend at the time for increasing use of limited liability companies to carry out public sector activities more extensively. I hope that the Minister will confirm that the Comptroller and Auditor General will be appointed as Great British Energy’s auditor. He is the auditor to the National Wealth Fund, and I cannot see that there could possibly be a case for not using him.
As I said earlier, I also support Amendment 89 in the name of the noble Lord, Lord Vaux. I will not steal his thunder, but I highlight the importance of proposed new paragraph (d) of his amendment, which would require Great British Energy to report on the extent to which its investments have crowded private sector money in. There will be many other measures of success for Great British Energy, but this is a key one. The Government have been very quiet about exactly how Great British Energy will work with the private sector. It is essential that there will be good public reporting to shed light on this area as Great British Energy moves into its operational phase. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, once again we return to the issue of accountability and transparency. I hope the Minister is starting to hear the trend. In this group we are looking at the annual reporting requirements that apply to Great British Energy, and I hope at least that the Minister will agree this time that Clause 7 is the right place to talk about reporting.
I thank the noble Baroness, Lady Noakes, the noble Lord, Lord Cameron of Dillington, and the noble Viscount, Lord Trenchard, for their support on Amendment 89. First, however, I state my complete support for Amendments 88 and 92, tabled and just introduced by the noble Baroness, Lady Noakes. We are talking about a company that is going to be spending £8.3 billion over the next five years, so it must be right that at least the discipline that applies to public companies should apply to GBE in terms of providing timely information and its audits.
The Minister said earlier that he thinks the Bill includes the appropriate levels of accountability and transparency. I find that quite hard to understand. As the Bill is currently drafted, the only reporting that GBE will be required to provide publicly—or to the Secretary of State—is the annual accounts and reports referred to in Clause 7, which need to comply only with Section 441 of the Companies Act 2006, as we have just heard.
The contents of such accounts are quite limited, and they do not have to include much information that will allow Parliament—or other parties—to scrutinise the performance of GBE against its objectives. Indeed, it is not impossible—depending on how the Government choose to finance GBE—that it might even be able to take advantage of small or medium-sized company exemptions to the information it must provide in its accounts, especially given the increase in the limits for those that are going to take effect this April.
The impact assessment that accompanies this Bill says:
“Future benefits will depend on GBE’s future activities and spending decisions which are not in scope of this impact assessment. Therefore, no quantification of benefits has been provided at this stage. All investment into and expenditure of GBE will be subject to future spending reviews and business cases, which will set out in detail the monetised and non-monetised impacts of GBEs activities”.
It says exactly the same in respect of the costs. My first question for the Minister is therefore simply whether, and in what form, those spending reviews and business cases that the impact assessment talks about will be published and reported on. I asked the same question at Second Reading, but I am afraid I did not receive a reply at that point.
In the absence of those spending reviews being published—which I suspect will be the case—and any reporting on actual performance against them, we need something more than the limited information that must be published in the accounts in accordance with Section 441 of the Companies Act. My Amendment 89 seeks modestly to expand those requirements for publishing information by which the success, or otherwise, of GBE can be measured.
Baroness Young of Old Scone (Lab)
My Lords, I rise to speak to Amendment 90A in my name. At the time that I tabled it, it was a simple little amendment at the fag end of a Bill. Instead, it is now an amendment that threatens to be hated by my own Front Bench and is obviously getting between many Members of the Opposition and whatever they have in mind before they can execute it. But I want to speak to what I think is a very sensible little amendment. Great British Energy has an important role; it has considerable public investment behind it and there is, probably across the Committee, agreement that the reporting requirement in the Bill—that GBE would be required only to submit a normal Companies House report—is simply not enough.
With the noble Baroness, Lady Hayman, I tabled Amendment 116, which we discussed earlier in the course of the Bill, which gave an objective to GB Energy, as part of its strategic objectives set by Government, to help to deliver the statutory targets for both climate and biodiversity enshrined in the Climate Change Act and the Environment Act. The Minister promised to reflect further on Amendment 116 between Committee and Report—which assumes that we will eventually finish Committee, which is highly doubtful as we are progressing at the moment.
As a minimum, the Bill should require Great British Energy to report on its achievement of the Secretary of State’s strategic priorities for GBE, including the climate and biodiversity targets, as well as on the progress of community energy. It would be rather strange to determine strategic objectives for GBE without requiring it to report on progress on achieving them.
Baroness Williams of Trafford (Con)
My Lords, it has just gone 10 pm. We are just over half way through the Government’s stated targets for this evening. As the noble Baroness, Lady Young of Old Scone, said, it is highly unlikely that we can finish another eight groups any time soon.
It is a firm convention that the House rises at 10 pm between Monday and Wednesday, and there has been no agreement to the contrary. We have had, thus far to date, one and a half days in Committee against a committed three days. This is a significant Bill; £8.3 billion worth of taxpayers’ money is going into it. We owe it the scrutiny that such public spending, rightly, should deserve. I ask the Government Chief Whip whether he will resume the House now or fairly soon after.
Earl Russell (LD)
Will the Opposition Chief Whip take an intervention? I just want to point out that there have been two and a half days of scrutiny and not one and a half days. She is not correct.
Baroness Williams of Trafford (Con)
I think that the noble Earl was not listening to me. I said that, to date, we have had one and a half days of scrutiny, and tonight would make two and a half days. The Government committed to three days. That was the point I was making.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
I thank the noble Baroness. I do not know why we could not have had those discussions in usual channels. I have been around all along today. No one has come near my office today to have this discussion—no one at all.
As I said to the noble Baroness—I spoke to her last week and at the weekend—we need to make progress on this Bill. It is an eight-clause Bill. When we started the first day in Committee, we had 13 groups of amendments. When we started today, we had 18 groups of amendments. We have seen lots of filibustering going on today. We need to make progress on the Bill.
Lord Kennedy of Southwark (Lab Co-op)
I am sorry, but lots of degrouping and lots of filibustering is not the way that this House should operate. When I was the Opposition Chief Whip for three years, I did not act like that. I was always fair with the previous Government—
Lord Kennedy of Southwark (Lab Co-op)
I am sorry, but I absolutely was. Every time, we would get to Report stage and if we did not like something, we would defeat the Government, as we did many times, but we never sat there filibustering and wasting people’s time. It is not on. We need to proceed with the discussions tonight and see how much further we get.
Baroness Williams of Trafford (Con)
My Lords, I cannot agree. The Chief Whip is absolutely right that we had discussions on Friday, in which we did not agree, and so no agreement was had. In light of there being no commitment from the noble Lord, I beg to move that the House do now resume.
Lord Kennedy of Southwark (Lab Co-op)
All I can say in response to the noble Baroness is that we have tried to get agreement on this. The House needs to continue with this important work and scrutiny. I oppose the Motion that the House should now resume.
Great British Energy Bill
Wednesday 15th January 2025
(1 month, 1 week ago)
Grand CommitteeGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-IV Fourth marshalled list for Committee - (14 Jan 2025)
The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)
My Lords, any noble Lords who were not able to speak on Monday and who wish to speak before the opposition spokesman may now do so.
Viscount Trenchard (Con)
At the point when the Committee decided to adjourn its deliberations on Monday, I was about to make a brief intervention in support of my noble friend Lady Noakes and the noble Lord, Lord Vaux. As my noble friend Lady Noakes explained, GBE will be a private company, which would normally allow it nine months in which to file its accounts. As my noble friend explained on Monday, Amendment 88 changes that to six months, in line with the requirement for public companies. GBE may not be a public company technically, but it certainly is a company of huge interest to the public. It is therefore obviously right that the company should be required to prepare its accounts in accord with the rules applicable to public companies, rather than taking advantage of the more lenient requirement applicable to private companies.
In his remarks in the House yesterday, the Minister said that he recognised that it was the role of the Opposition to scrutinise legislation. But I ask the noble Lord: is it not actually the role of the whole House to scrutinise legislation, including the Government’s own Back-Benchers? He probably did not mean it when he said that it was the role of the Opposition.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
The point was that I was responding to a comment made by the Opposition Chief Whip about scrutiny. But of course I very much take the point that this is a matter for the whole House. The very fact that my noble friend Lady Young spoke to this group shows how effective that scrutiny can be.
Viscount Trenchard (Con)
I thank the Minister for his kind explanation, which certainly clarifies that. As far as my interventions on Monday are concerned— I spoke at length and several times—I take issue with and very much resent being accused of having filibustered. If the noble Lord looks at my contributions, he will find that they were all different.
I suggest that one reason why there have been so many amendments to the Bill is that so little was included in it. It is very thin Bill, but it has £8 billion of public money. Many of us are puzzled that GBE is being established effectively with £8 billion of public money, whereas Great British Nuclear, which has no public money to speak of, continues to operate in a kind of silo. I recognise that the noble Lord attempted to reassure the Committee about how GBN and GBE will work together, but I do not think that they can be described as comparable organisations.
I had intended to support my noble friend Lady Noakes and the noble Lord, Lord Vaux, on Amendment 88, and I added my name to it. I think that it is necessary because although GBE is intended to be structured as a public company, it will have only one shareholder, the Secretary of State. As my noble friend explained on Monday—she is well known as an expert in these matters—we must be sure that GBE will be managed according to the standards that would be expected by shareholders in public companies. That is why changing the nine-month provision for filing accounts to six months is so necessary.
I have also added my name to Amendment 89, in the names of the noble Lords, Lord Vaux and Lord Cameron, and my noble friend Lady Noakes. It is particularly important that the accounts must comply with the stipulation in proposed subsection (d), to provide
“an assessment of the extent to which”
any investments made or partnerships entered into
“have encouraged additional investment by the private sector”.
It is clear that the very long incubation period for nuclear projects places them outside the criteria for many private sector investors, but some public investment can be effective in unlocking private investment through match funding, as the Rolls-Royce SMR programme has already shown.
I also support Amendment 92, in the name of my noble friend Lady Noakes and that of the noble Lord, Lord Vaux, which would ensure that the Comptroller and Auditor-General must audit GBE’s accounts.
Lord Roborough (Con)
My Lords, Amendment 88, in the name of my noble friend Lady Noakes, would require more timely publication of GB Energy’s accounts, in line with public rather than private company reporting. I also support Amendment 89, in the name of the noble Lord, Lord Vaux of Harrowden. On earlier groups I have addressed the limitations of private and public company reporting versus that of listed companies. I made that argument, given that taxpayers’ money, raised at great cost through tax increases impacting pensioners, farmers and all businesses in this country, is being invested. All this appears to have fallen on somewhat deaf ears with the Minister, who seems determined to avoid anything but the lowest level of scrutiny, transparency or accountability as to how GB Energy invests this, at least, £8.3 billion.
I also alluded to my comments in the debate on the King’s Gracious Speech and I remind the Committee of exactly what I said:
“it is private capital that has driven the rollout of renewables and infrastructure in our country, and it appears that Great British Energy will be targeting investments that private capital alone will not finance. That does not fill our Benches with confidence that these investments will necessarily be judicious. Please can the Minister assure the House that GB Energy will report on the performance of its investments regularly and in detail and that the Government will be held accountable in this House for the performance of those investments?”.—[Official Report, 18/7/24; col. 36.]
In response to this question, I received the following reply from the Minister, the noble Baroness, Lady Hayman of Ullock:
“The cost to the taxpayer of its set-up and investments will be carefully managed and monitored through Parliament, and investments will be subject to safeguards and risk assessments, similar to established public finance institutions”.—[Official Report, 18/7/24; col. 126.]
That answer may not have been the answer that I was looking for, nor the answer that I may be seeking today, which many amendments tabled to the Bill have also sought, but it does seem to offer at least some scrutiny through Parliament. It does not appear to me that the Minister here today is offering even that level of scrutiny in the Bill. His response in previous groups to amendments seeking this transparency and accountability has been:
“the existing reporting requirements are set out in the Bill, which makes provision for GBE to produce and publish an annual report and accounts”.—[Official Report, 13/1/25; col. 942.]
It is hard to disagree that the reporting requirements as determined by the Government are set out in the Bill. However, the point that these amendments, and many others already debated, make is that this is simply not adequate. One set of accounts published annually up to nine months after the year end, with the potential for minimal levels of detailed reporting, is effectively writing GB Energy a blank cheque, with next to no external oversight.
As other noble Lords have suggested to the Minister, if the Government were willing to table amendments to allow for greater scrutiny in a timely manner of the financial performance of investments, and the progress in achieving the overall objectives of increasing employment, reducing household electricity bills and reducing carbon emissions, I am sure that the Committee could be satisfied, without taking so much time making similar points. On previous groups the Minister has called this filibustering. That is an unfair characterisation, at least of the groups that I have taken part in. The Government have proven deaf to the Committee’s reasonable requests, but that will not make them go away.
I am particularly taken by Amendment 89 in the name of the noble Lord, Lord Vaux, and not in the least surprised to see that it has so many supporters. It avoids amendments to Clause 6, which the Minister has pointed out is the wrong place in the Bill for such amendments, and to which my noble friend Lady Noakes has given authoritative support, but it addresses key reporting requirements around the receipt of subsidies, reporting on individual investments, achievement of objectives and strategic priorities, and impacts on the wider financial ecosystem. For these reasons, I believe it is an excellent amendment. However, it may still be lacking by relying on the relatively lax Companies House requirements for limited companies, so I also support Amendment 88 in the name of my noble friend Lady Noakes to make reporting in line with that for public companies.
As I have argued in previous groups, in support of my noble friend Lord Petitgas, who is in his place, there is a strong argument that quarterly reporting should also be required, in line with the listing requirements for publicly traded companies. As I have pointed out, if companies worth less than £100 million can comply with this, I do not believe it is a challenge for the £8.3 billion-plus GB Energy. This would also impose more disciplined reporting on GB Energy’s investees.
Why is it that the Government are so resistant to GB Energy showing proper transparency and accountability, even less than the modest commitments that I read in my response to the King’s Speech? What do the Government fear, if they are so convinced that it is worth while taking so much taxpayers’ money and investing it in energy, which in theory will be a good financial deal for the taxpayer? Last year’s business-unfriendly Budget, despite the protestations that it was pro-business and pro-growth, fills us all with concern that this Government do not understand business.
Lord Cromwell (CB)
My Lords, I am not sure what the opposite of a filibuster is, but I am going to try. I add my support to Amendments 88 and 92. They are both simple, timely, consistent and robust: elements of good housekeeping, quite frankly.
I also add my support to Amendment 89. We need to draw lessons from the experience with the water industry, whose reporting was opaque. It simply was not transparent enough on key areas of its financial structuring. This amendment would tease out the things that people need to know—people who are not forensic accountants going through the balance sheets reported by companies. Therefore, I thoroughly endorse Amendment 89.
Lord Petitgas (Con)
My Lords, I too would like to voice my support for Amendments 88 and 89. I will be brief. The timing and regularity of this reporting seems to be normal, standard housekeeping. It is not onerous, and it is legitimate. On the substance, as I said on the previous day in Committee, this is not an operating company which would report, like Ørsted or others; this is a portfolio of investments. It would be a number of minority investments; this company will not be operating assets. The Member opposite seems to be sceptical, but it will be a collection of small investments. Therefore, it will be more complex to track, and it will be important that it is clearly stated in the accounts. Amendment 89 states that.
Lord Macpherson of Earl’s Court (CB)
My Lords, I add my support for Amendment 92. It is an important principle of public audit that institutions within the public sector are audited by the National Audit Office. Indeed, when I was at the Treasury, I spent many years trying to get the Royal Household and the Bank of England within the ambit of the National Audit Office, and finally I succeeded. Long may that continue.
Lord Offord of Garvel (Con)
My Lords, I speak in support of Amendments 88, 89 and 92, which stand in the names of my noble friends Lady Noakes and Lord Trenchard and other distinguished colleagues, including the noble Lords, Lord Vaux of Harrowden and Lord Cameron of Dillington. These amendments, although technical in nature, are vital to ensure that Great British Energy operates with the highest standards of transparency, accountability and good governance. This is not simply a matter of administrative precision; it is the fundamental issue of public trust.
Amendment 88 ensures that GBE files its reporting accounts within the same timeframe required of public companies under Section 442 of the Companies Act 2006. This alignment with established statutory requirements is essential. It demonstrates that GBE, although a public body, will not be afforded preferential treatment or lesser obligations than private enterprises. The public expect and deserve this parity, especially given GBE’s role as a steward of taxpayers’ funds.
Amendment 89 introduces additional requirements for GBE’s annual reporting accounts. Crucially, it provides the Treasury with the flexibility to define additional reporting requirements over time. This ensures that GBE can adapt to evolving priorities and maintain accountability as it grows. It is worth emphasising that comprehensive and transparent reporting is not an administrative burden; it is a cornerstone of effective governance. This amendment guarantees that GBE will meet not only the letter of the law but the spirit of public accountability. By ensuring this level of scrutiny, we are demonstrating a commitment to good governance that transcends political or ideological divides but sends a clear message that public funds and the public interest will always be protected.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to noble Lords who spoke in this debate, both today and in our deliberations on Monday. It seems quite a long time ago since then, and I am looking forward to a very constructive engagement today and welcome the contributions that all noble Lords are going to make.
Let me say at once that I very much understand the importance of information being provided in order to judge the performance of GBE and of it being held to effective account. There is no disagreement at all between me and other noble Lords on this. Noble Lords will know, as the noble Baroness, Lady Noakes, explained very clearly in her remarks on Monday, that her Amendment 88 requires GBE to file its annual reports and accounts within six months from the end of its accounting reference period. As she said then, and as noble Lords have repeated, this aligns with the Companies Act 2006 for public companies whose shares are publicly traded. Of course I agree that a six-month filing period is appropriate for public companies. Financial markets need up-to-date and timely information on the performance of a company, as do its range of stakeholders and shareholders, to help them make informed decisions when companies are seeking to raise capital.
I also understand why noble Lords wish this discipline to be applied to GBE, but it is a private limited company owned wholly by the Crown. It is not unreasonable for the Government to say that, on that basis, we should be in line with the Companies Acts requirements, which set a nine-month filing period for private limited companies. I should also say that this is an arrangement applied to most government-owned companies: for example, the National Wealth Fund, the National Energy System Operator and the Low Carbon Contracts Company. I know that the noble Baroness, Lady Noakes, was concerned about the filing deadline, but it is also the case that the vast majority of these organisations, government-owned companies, file their accounts well in advance of the statutory requirement.
I understand the point that the noble Viscount, Lord Trenchard, made about public interest in Great British Energy, and I welcome that. Indeed, I want GBE to be well-known and seen as spearheading the drive we wish to see in relation to Clause 3 and the statement of priorities in Clause 5. We wish GBE to be as successful as possible.
My point is that, in a sense, what is in statute in relation to the Companies Act is a minimum requirement because, as GBE is owned by the Secretary of State, it will be subject to the usual mechanisms that apply in the public sector. They are put in place to ensure that the public interest is discharged and proper public accountabilities are in place.
On Monday, the noble Lord, Lord Teverson, made an interesting point: one of the concerns some people have is that, because of GBE’s structure and because it is publicly accountable, it will be subject to a considerable number of the controls put in place for bodies that fall within public accountability. The key question is: can we ensure that GBE has sufficient operational independence to perform effectively in its work? There are a number of issues here around the way it will work in future.
I should also say that the annual report and accounts are not the only means of scrutinising the funding allocated to GBE. All funding to GBE must be voted on by Parliament; because of that, it will be scrutinised through the supply and appropriations debates in the other place.
Amendment 89 in the names of the noble Lord, Lord Vaux, and the noble Baroness, Lady Noakes, proposes specific topics to be included in the annual reports and accounts of Great British Energy, as well as the granting of an additional power to His Majesty’s Treasury to require further information. I can confirm that much of the proposed content will already be included and publicly available in the annual report and accounts, as required by Clause 7, and will be laid before Parliament. As an example, the financial assistance details under new paragraph (a), proposed by this amendment, will be included in the accounts of GBE. Details are likely to include issued share capital and items on the balance sheet of the company, such as borrowing from government if that method has been utilised.
The noble Lord, Lord Vaux, and my noble friend Lady Young of Old Scone were concerned that Great British Energy would need only to follow the provisions of the Companies Act in preparing its annual report and accounts. However, I can assure them that that is not the case. GBE will adhere to the additional reporting requirements for government-owned companies over and above the reporting requirements under the Companies Act. These include the obligation to follow the Treasury’s directions on accounts through the powers extended in the Government Resources and Accounts Act 2000, laid out in the government financial reporting manual and related “Dear Accounting Officer” letters. The most recent of these account direction letters requires bodies to give a true and fair view of the state of affairs, including net resource outturn, the application of resources, changes in taxpayers’ equity and cash flows for the financial year.
Furthermore, GBE will be required to report on its governance around exposure to and risk of climate-related scenarios in its operations, as set out by the Task Force on Climate-Related Financial Disclosures. Finally, any future funding of GBE will be subject to agreement through a government spending review, or another mechanism, as the Government see fit.
Amendment 92 in the name of the noble Baroness, Lady Noakes, proposes to require the Comptroller and Auditor-General to be the external auditor of Great British Energy; I think she said on Monday that it is a probing amendment. I am very happy to reassure noble Lords in this case. It is already the case that the Comptroller and Auditor-General will be the external auditor of Great British Energy. The company will also need to comply with the provisions set out in the Treasury’s Managing Public Money document, which requires the Comptroller and Auditor-General to be the external auditor for non-departmental public bodies such as Great British Energy. The requirement will also be set out in the framework document for Great British Energy, which we will debate shortly.
Amendment 90A, in the name of my noble friend Lady Young, seeks to require additional reporting from Great British Energy. Again, I assure her that much of the information that she seeks will be provided in GBE’s annual report and accounts, as a matter of course. The annual report and accounts will include key achievements and milestones, general business information relating to its strategic direction, a review of the company’s performance, challenges and future outlook, as well as financial statements and resourcing levels. It will also include reporting in line with the recommendations of the Task Force on Climate-Related Financial Disclosures.
GBE may also make more information available through reporting, such as when projects or investments are announced. We want to set this company up to be transparent and accountable, with a reporting regime appropriate to its company basis and status. The accountability of Ministers to Parliament for its performance will also be in place.
We very much take the point about the need for this organisation to be transparent and accountable. In the light of this debate, I will set out how this all comes together in detail and send a note to noble Lords. I hope that provides some greater reassurance.
Lord Vaux of Harrowden (CB)
I realise that Monday is quite a long time ago now and that the noble Lord has probably forgotten this, but I asked a specific question then. The impact assessment for the Bill says that, because the Bill does nothing but create the company, “no quantification of benefits” and costs
“has been provided at this stage”,
and that those benefits and costs
“will be subject to future spending reviews and business cases”.
I asked whether those future spending reviews and business cases would be made public.
Lord Hunt of Kings Heath (Lab)
I am not sure that I can answer that point in detail. The impact assessment is built around the legislation, rather than the future activities of GBE. May I take that specific question away? Clearly, the funding that the Government provide Great British Energy will have to be in the public domain and part of the normal process of dealing with a spending review and the financial consequences and flows of money that follow it. I am happy to look into that in more detail, if the noble Lord would like.
Lord Vaux of Harrowden (CB)
That would be very kind. The issue is that, if the Bill had been done in the normal way and included the detail of what GBE was going to do, the impact assessment would have covered those activities. However, those things are not included in the Bill so are not covered by the impact assessment. When the statement of strategic priorities and the detail of what the company will do are published, there will be no impact assessment on them, other than the spending reviews and business cases. It is important that they are made public, as if they had been part of the impact assessment that would have happened if this had been done in the usual way.
Lord Hunt of Kings Heath (Lab)
My Lords, as I said, I think we have acted properly with the impact assessment, which is based on the Bill. GBE has yet to commence its work. I have said that I will write to noble Lords detailing how we see GBE being held to account, in terms of its reporting and accountability, and I will add some more information about how that relates to the statement of strategic priorities in Clause 5.
Baroness Young of Old Scone (Lab)
I hope that in writing this note, which I welcome, the Minister will give us an account of how GBE will report on the strategic priorities set by the Government, and that they will include not just climate but environmental and biodiversity targets. They are the twin crises that GBE is helping to solve.
Lord Roborough (Con)
The noble Lord mentioned that the minimum requirement was the nine-month reporting window under the Companies Act. Could he give us an idea now of what he sees as a desirable reporting timeframe? If he would like to reflect, perhaps he could include those thoughts in his letter.
Lord Hunt of Kings Heath (Lab)
I do not think so. Clearly, there is a statutory requirement. All I was saying is that our experience in my department is that the bodies that have a similar discipline have generally reported well within that figure. I am certainly happy to say that one would always hope that an organisation such as this would report in a timely fashion, but I cannot go any further than that.
Lord Vaux of Harrowden (CB)
My Lords, the noble Baroness, Lady Noakes, regrets that she is not able to be here today, because this was scheduled after she already had other commitments, so, with the leave of the Committee, I will channel the noble Baroness to wrap up. I thank all noble Lords who have taken part in this constructive debate and the Minister for his constructive response.
Common themes are emerging throughout our discussions on the Bill, and the subject of transparency and accountability is probably the major one. I know that the noble Baroness will be disappointed by the response to shortening the reporting deadline to six months, which does not seem overly onerous. I was encouraged, I think, by what the Minister said about the reporting requirements and I look forward to receiving the letter he has spoken about. However, he did not refer in his answer to a couple of things that were in the amendment and are really important.
First, it is important that GBE reports on the investments it has made, and I do not think he mentioned that. Secondly, as a number of noble Lords mentioned, the key issue is that of additionality—in other words, what impact GBE is having on crowding-in private investment alongside the public investment. As I said on Monday, anyone can spend money. If this is to be in any way positive, it needs to attract private investment that would not otherwise have happened. It is really important that that is measured in the same way as it has to be by the National Wealth Fund. I think it is true to say that the National Wealth Fund, because it has the obligation to report on additionality, is actually performing rather well on additionality.
Lord Hunt of Kings Heath (Lab)
My Lords, I think I said by implication that I consider those matters that I would expect the company to report on.
Lord Vaux of Harrowden (CB)
I am reassured to hear that and I look forward to receiving the letter. We may need to come back to this, and I hope the noble Lord will be willing to sit down, discuss the overall questions around accountability and transparency and, I hope, put something forward himself that will strengthen what is, if I am honest, a somewhat thin Bill. With that, I beg leave to withdraw the amendment.
Lord Vaux of Harrowden
“Framework document(1) The Secretary of State must prepare a framework document which sets out the principles underpinning the relationship between the Secretary of State, Great British Energy and any other relevant public sector bodies.(2) The framework document must cover the operating and financial principles through which Great British Energy will pursue its strategic objectives and may include such other matters as the Secretary of State determines.(3) Relevant public sector bodies are public sector bodies and government departments which the Secretary of State considers will or may have a relationship with Great British Energy.(4) The Secretary of State may amend the framework document at any time.(5) The Secretary of State must consult Great British Energy before preparing or amending the framework document.(6) The Secretary of State must lay a copy of the framework document or any amended framework document before Parliament as soon as practical after it is finalised.”Member’s explanatory statement
This amendment requires the Secretary of State to prepare and publish a document setting out the operating and financial principles which Great British Energy will use.
Lord Vaux of Harrowden (CB)
My Lords, with the leave of the Committee I shall move Amendment 93 at the request of the noble Baroness, Lady Noakes, who, as I say, is unable to attend today. I will speak also to Amendment 121A, also in her name.
Amendment 93 says:
“The Secretary of State must prepare a framework document”
to cover
“the relationship between the Secretary of State, Great British Energy and any other relevant public sector bodies … The framework document must cover the operating and financial principles”,
at least, to be adopted by Great British Energy. Once finalised, the framework document must be laid before Parliament.
Amendment 121A goes a little further and would defer commencement of the Act until the framework document has been laid before Parliament. The noble Baroness, Lady Noakes, and I have several times contrasted the parliamentary passage of the UK Infrastructure Bank Bill with that of this Bill. In particular, she has raised the absence of a draft framework document for Great British Energy. All we know in relation to GBE is that the founding statement published for it last July said that a framework document would be established in due course. The Minister has not yet given any indication of the timing for that framework document.
I would not normally expect a Bill establishing a public sector body to contain a requirement for a framework document. That is because it is a document routinely put in place between the Government and public bodies, and there should be no question of a body commencing operation until all the details are in place. Hence, when we scrutinised the UK Infrastructure Bank Bill, an advanced draft was made available to those of us taking part in the Bill, which was extremely helpful in our debates. We knew the detail of what the Government were planning, and how they were intending to deliver it, which is missing from this Bill.
Although framework documents have no legal force, they set out in some detail what the Government expect of the new body. Sometimes they cover detail that could have been included in primary legislation, but usually the detail is of a nature likely to change over time and, hence, is inappropriate for statute. The important point, however, is that considerable thought and work are put into the contents of that document.
As we have discussed, it is clear that with GBE, the Government have not yet put in all the hard work on how it is to operate in practice, and what rules and restrictions will be necessary. The Minister has confirmed that this is under way and explained the thinness of the Bill on the basis that the Government had to get on with legislating, and that details would follow. That is not a sound basis for legislating, and failure to provide fuller details on things such as the framework document or strategic priorities treats the process of legislative scrutiny in a somewhat disrespectful manner. We have already discussed the concerns raised in that respect by the Constitution Committee.
I will quickly run through the key contents of the framework document for what is now the National Wealth Fund—what was the UK Infrastructure Bank—which will illustrate the things that we should have expected to see advanced drafts of by now. It sets out the strategic objectives for the National Wealth Fund. These might, or might not, be the same as required by Clause 5 of this Bill. We have seen no draft or even an outline of the strategic priorities that the Secretary of State will set under Clause 5, so we do not know whether to expect strategic objectives in the framework document. Objectives and priorities ought to be different things, but we are completely in the dark at the moment.
There are a number of operating principles, which are extremely important. They include the requirement to make a positive financial return over time, and a double bottom line—a phrase used frequently during passage of the UK Infrastructure Bank Bill, another complicated Bill—of achieving both the strategic objectives and financial return. We ought to know the financial objectives of GBE by now, especially in view of the open-ended financial assistance power in Clause 4, which might mean that GBE will not be required to make a financial return.
Another operating principle is that of additionality, by prioritising investments where there is an undersupply of private sector finance. The noble Baroness, Lady Noakes, asked whether additionality applied to GBE at Second Reading but did not receive a suitable answer, and I have raised this principle a number of times, including in the previous group. It would be helpful if the Minister spoke a little about the expectations for additionality for GBE. It is another fundamental question that Parliament ought to be informed about before allowing this Bill to become law.
Another section of the framework document sets out investment principles. It describes the kinds of investment that are to be undertaken and those which are not allowed. Not only must individual investments support its core objectives, they must also be intended to deliver a positive financial return, and to crowd in significant private capital. We have no idea what the guiding principles for investments made by GBE are. There is also a lot in the framework document on governance and other matters.
The key questions are whether we will see a framework document and when. I would not go as far as the noble Baroness, Lady Noakes, in Amendment 121A, which would delay commencement, but it is essential that we see a framework document as early as possible. Given the lack of detail in the Bill, it is important that the company should have to do that. I beg to move.
Viscount Trenchard (Con)
My Lords, I rise to follow the noble Lord, Lord Vaux, in speaking to Amendment 93, which he moved on behalf on my noble friend Lady Noakes. I have also added my name to this amendment.
As has been said several times in our debates, this is in essence a framework or enabling Bill but one that gives a large number of Henry VIII powers to the Secretary of State. A requirement to produce a framework document setting out the operating and financial principles that GBE will use would be a significant improvement to the Bill, as the noble Lord, Lord Vaux, explained so eloquently. It is essential that the principles underpinning the relationship between the Secretary of State and GBE should be publicly understood and supported. The arguments that I have previously used in relation to my Amendment 86A also apply here; other relevant public bodies, as mentioned in that amendment, clearly include GBN, NWF, NESO, Ofgem and Mission Control.
I also support my noble friend Lady Noakes in her Amendment 121A, which I think is justified in the circumstances, but I would certainly like to hear the Minister’s view on it. Amendment 121A would ensure that the framework document is laid before Parliament before the Act comes into force.
Earl Russell (LD)
My Lords, I shall speak briefly on this group of amendments.
I generally give my support to Amendment 93. I understand that these things are being done quickly and urgently to get GBE established and that the Government need to get that done, but there is a general lack of detail in the Bill and we do not have the framework agreement. If the Minister could update the Committee on where that framework document is and what stage it is at, that would be useful. In the interests of trying to find a compromise and a way forward on these issues, I do not know whether it might be possible for the Minister to provide the equivalent of heads of terms or to say something from the Dispatch Box about what he would expect the framework document to cover or to send us an outline of what is likely to be in that document. We are keen to support the principles of this Bill, but the Bill is extremely short and lacks detail.
On the other side of the fence, there is a slight feeling that we are being asked to approve things without knowing what it is we are approving. If it were possible to find a way forward on these issues before Report, that would be appreciated, but I am interested to hear from the Minister what stage these documents are at and what impediments there may be beyond the Minister’s control in these matters.
Lord Offord of Garvel (Con)
My Lords, I thank my noble friend Lady Noakes, in her absence, for her amendments in this group. In fact, this amendment, Amendment 93, ties closely with Amendment 125 in my name, which would ensure that this Bill does not come into force until a financial framework document has been published. Together, these amendments address an essential issue in the governance of GBE: the need for proper financial oversight and clear frameworks that ensure that this body is held accountable. That is the reason why I support Amendment 93 and why it is so critical to the Bill—because it would require the Secretary of State to prepare a framework document that sets out not just the operating principles but the financial principles through which GBE will pursue its strategic objectives.
Without this clear framework, GBE would operate without the financial clarity and accountability required to protect public funds and to ensure that GBE’s financial practices align with the UK’s broader energy strategy. A financial framework is not just a bureaucratic detail; it is fundamental because the energy sector is complex and fast-moving. GB Energy will be responsible for substantial public investment. Without this financial framework, there is a risk of financial mismanagement and inefficiency or lack of transparency. The framework simply provides clear guidelines on budgeting, expenditure, revenue generation and risk management; it also ensures that GBE’s financial decisions align with the Government’s energy and climate goals, such as achieving net-zero emissions and maintaining energy security.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Baroness, Lady Noakes, and the noble Lord, Lord Vaux, who spoke in her absence. As the noble Baroness raised earlier on in our debates, her amendment inserts an additional clause requiring the Secretary of State to prepare and publish a framework document setting out the principles underpinning the relationship between the Secretary of State, my department and other relevant public bodies and also requires financial and operating principles to be included in that document.
Lord Vaux of Harrowden (CB)
In effect, under the Bill GB Energy will take a chunk of the activity of the National Wealth Fund—approximately a third of the total value, in fact—and put it into another entity. As I said, the National Wealth Fund’s framework document includes quite a lot of information around requirements to make financial returns and, in particular, the additionality principle. Therefore, because we are, in effect, moving a chunk of the National Wealth Fund’s activities into a different entity, it would presumably be appropriate that that remains subject to fairly similar levels of governance and control. Could the Minister perhaps say a little about the expectation on financial returns and additionality, which he has not mentioned in his response so far?
Lord Hunt of Kings Heath (Lab)
My Lords, by implication, we would expect the organisation to be as transparent as possible and to cover the sort of areas that the noble Lord mentioned. It is also fair to say that, given the comparisons being drawn between Great British Energy and the UK Infrastructure Bank, in the case of the UKIB, the framework document was published before Royal Assent. The point is that the organisation was operational before Royal Assent, but this Bill is being brought to Parliament before we have operationalised the company, so there is a distinction. As I said, noble Lords can be reassured that there will be a stringent framework document to ensure proper accountability. I am searching to find something else to say to give comfort, but I have to say that this is as far as we can go. Having said this from the Dispatch Box, it has to happen.
Returning to the part of the amendment that would require the relationship between GB Energy and other relevant public bodies to be included in the framework agreement, noble Lords will know that that is not typically part of a framework document, but GB Energy’s relationship with relevant public sector bodies will of course be part of delivering its objectives. Again, the partnerships will be undertaken in accordance with GB Energy’s operating principles and, where appropriate, we will provide definition to those relationships in the upcoming statement of strategic priorities. As part of its annual reports and accounts, we will of course expect GB Energy to report on activities undertaken as part of its public sector partnerships. We expect it to enter into a number of partnerships or relationships with other public bodies, but that is not appropriate for the framework document.
The other point to make here is that GBE will be accountable to Parliament, with a statement of strategic priorities laid before Parliament, and the accounting officer of Great British Energy, and Ministers, will be accountable to Parliament for the work and performance of the company. Members of your Lordships’ House will be able to ask questions and debate, and I have no doubt that Select Committees will wish to examine the chair and chief executive of the organisation from time to time, which seems wholly appropriate and will provide the public accountability that needs to go alongside the normal accountability that a private company would expect to operate, within the legislation that it will be covered by. We need to remember that it is also publicly accountable alongside the accountability that it needs to discharge as a private company.
The issue I come back to is that we have to ensure that it has enough operational independence. A push-back from noble Lords might be to ask: will it be overly constrained? We have to get the balance right between proper accountability and reporting and—dare I say it —what I hope will be an entrepreneurial approach to the formidable task it is being given. That is why the appointment of the incoming chair has been so important —to give us that expertise and experience.
As noble Lords will see, it is very difficult for us to agree to Amendment 121A, which would defer commencement of most of the provisions in the Bill until a framework document had been laid before Parliament. We do not think it possible to produce a framework document without the active involvement of the company itself. That is probably as far as I can go on this interesting area, but I can assure noble Lords that there will be a fully fledged framework document, which I think will cover all the issues that noble Lords are concerned about.
Lord Vaux of Harrowden (CB)
My Lords, I thank all noble Lords who have taken part in this short debate, and the Minister for his response, which is helpful and encouraging—I understand his point. However, I think he put his finger on the fundamental problem with the Bill, which is precisely what he said: the company is being established before we really know what it is going to do and before it starts to operate. Therefore, there is no scrutiny of those things at the moment. When he says that there is accountability through, for example, the statement of strategic priorities, it is not strictly true. It gets laid before Parliament, but there is no debate, approval or anything. The framework document will not even be laid before Parliament.
Lord Hunt of Kings Heath (Lab)
My Lords, of course, that is a fair point but, equally, I would say, as a Minister accountable to Parliament, that the opportunity for noble Lords to ask questions and take part in debates is considerable. I would expect that GBE and any statement of priorities will be fully part of the rough and tumble of life in Parliament. Anyone who has been involved in a company organisation such as that will know that parliamentary accountability really does bite and is effective.
Lord Vaux of Harrowden (CB)
The Minister is right on that—I cannot disagree—except, again, that accountability is only as good as the information on which one bases it. If there is no information, or if it is really thin, it is hard—
Lord Hunt of Kings Heath (Lab)
My Lords, I do not want to intervene constantly, but I think noble Lords will be awash with information about GBE, its performance and activities.
Lord Vaux of Harrowden (CB)
I am very encouraged to hear that but there is nothing in the Bill that says that. If one is honest, what tends to happen is that if something is really successful, we will be awash with information telling us how successful it has been. If it is less than successful, I wonder how much information we will see. Fair enough, but there is a wider discussion to be had between now and Report on transparency and accountability, and I hope the Minister will be open to that. With that, I beg leave to withdraw Amendment 93.
Lord Offord of Garvel
“Review of effective delivery(1) The Secretary of State must appoint an independent person to carry out reviews of the effectiveness of Great British Energy in—(a) delivering its objects under section 3,(b) meeting its strategic priorities under section 5, and(c) complying with any directions given under section 6.(2) After each review, the independent person must—(a) prepare a report of the review, and(b) submit the report to the Secretary of State,as soon as is reasonably practicable after the completion of the review.(3) The independent person must submit to the Secretary of State—(a) the first report under this section within the period of 12 months beginning on the day on which this Act comes into force, and(b) subsequent reports at intervals of no more than 12 months thereafter.(4) On receiving the report, the Secretary of State must, as soon as is reasonably practicable in each case,—(a) publish the report,(b) lay a copy of the report before Parliament, and(c) prepare and lay before Parliament a response to the report’s findings.(5) In this section, references to an “independent person” are to a person who appears to the Secretary of State to be independent of—(a) the Secretary of State, and(b) Great British Energy.”Member’s explanatory statement
This amendment would require that the Secretary of State appoints an independent person to review the effectiveness of Great British Energy in delivering its objects, meeting its strategic priorities, and complying with its directions.
Lord Offord of Garvel (Con)
My Lords, I shall move Amendment 94 and speak to the amendments in this group, which, once again, address the review, scrutiny and governance of a publicly owned company.
It is alarming that so many in this House have had to table so many amendments to ensure that GB Energy undergoes proper independent review and governance. We find ourselves in the unfortunate position in which provisions to ensure the thorough review and governance of GB Energy are missing from the drafting of the legislation. This is rather strange. Why should publicly owned companies, funded by billions of pounds, not be subject to reviews by independent bodies or have to report on their successes or failures? The incoming chair himself has stated that “independently run” will mean “excellent governance” and that he will ensure that this is the case, but how? Although the Minister claims that these amendments, which would indeed ensure excellent governance, do not need to be included in the Bill, I strongly disagree. He claims that there will be many opportunities for review by the Secretary of State and, ultimately, for the usual sort of public scrutiny, but how will this be the case when the Bill does not include a single measure that requires GB Energy to be reviewed or allows for public scrutiny?
I am not alone in questioning the lack of governance to which GB Energy is presently subject. Marc Hedin, head of UK and Ireland research at Aurora Energy Research, also asked:
“what are the governance arrangements to ensure that Great British Energy carries out its duties and focuses on its remit? ”.—[Official Report, Commons, Great British Energy Bill Committee, 8/10/24; cols. 20-21.]
Amendment 94 in my name seeks to address this shortcoming. It requires the Secretary of State to appoint an independent person to review the effectiveness of GBE in delivering its objects, meeting its strategic priorities and complying with its directions. The amendment is closely aligned with Amendment 103, in the names of the noble Lords, Lord Vaux of Harrowden and Lord Cameron of Dillington, and my noble friend Lady Noakes. While demanding an independent review of the success or failure of GB Energy in achieving its objects, the amendment neatly requires a review of the company’s impact on private investment.
I draw your Lordships’ attention to Section 9 of the UK Infrastructure Bank Act, entitled, “Reviews of the Bank’s effectiveness and impact”. Under that section,
“The Chancellor of the Exchequer must appoint an independent person to carry out reviews of … the effectiveness of the Bank in delivering its objectives”,
and the results must be laid before Parliament. If the UK Infrastructure Bank—now known as the National Wealth Fund—has to undergo an independent review of its performance, why should GBE not face the same? It does not make sense. The Great British Energy Bill is almost a carbon copy of the UK Infrastructure Bank Act but with one glaring difference: provisions to ensure sufficient governance.
I hope that the Minister has listened carefully to the concerns I have raised and will be receptive to the worries other noble Lords will undoubtedly raise on this issue. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, I rise to speak to Amendment 103, and thank the noble Baroness, Lady Noakes, the noble Lord, Lord Cameron of Dillington and the noble Viscount, Lord Trenchard, for their support. As we have heard, once again we are returning to transparency and accountability.
Amendment 103 is similar to Amendment 94, which has just been introduced by the noble Lord, Lord Offord, but with some important differences. As we have discussed before, and as the noble Lord, Lord Offord, has just mentioned, most of this Bill has been copied across from the UK Infrastructure Bank Act, but with most of the transparency and accountability provisions removed. In particular, Section 9 of that Act, which provides for independent reviews of the effectiveness and impact of the bank—now the National Wealth Fund—has been omitted.
The Minister has previously explained that the reason for this omission was that no such reviews were included in the Energy Act in respect of Great British Nuclear, and he feels that this is the precedent which should apply here. That argument holds no water at all. Great British Nuclear is a completely different entity, with completely different activities. It has a clearly defined and specific role initially to administer the process to select which small modular reactor technology the UK will choose. It has a relatively small budget—I think it was £157 million initially—and it is not intended to invest directly in those technologies. Great British Nuclear has an important role, but it is very different to what is apparently planned for GBE.
GBE will, in effect, take over a substantial and important area of the National Wealth Fund’s activity, investing directly in projects and businesses. It has an initial budget of £8.3 billion, which is nearly a third of the National Wealth Fund’s budget. It is worth reminding noble Lords that there is no limit in the Bill on how much public money GBE can spend. Indeed, the activities of GBE and the National Wealth Fund are so close that, initially, the National Wealth Fund will carry out the activities of GBE on its behalf, so let us drop this pretence that GBE is like Great British Nuclear; it is not. GBE is taking over a part of the National Wealth Fund’s activities and has a substantial budget. A body with the ability to spend billions of pounds of public money should be subject to rigorous transparency and accountability, and not just to the Treasury and the Secretary of State. It must, therefore, be appropriate for GBE to have to follow at least equivalent accountability disciplines to the National Wealth Fund. It is doing very similar things.
Amendment 103 is an almost direct copy of the independent review process that the National Wealth Fund is subject to. That arose from lengthy debate during the passage of the UK Infrastructure Bank Act and was supported by the Minister’s party at the time. It is not clear why, in government, they have decided to omit it from the Bill. Accountability seems to be a good thing, so long as it does not apply to them.
For GBE, I have changed the provision slightly from how it is in the UK Infrastructure Bank Act, in two ways. I have limited the scope to reporting only on how GBE has met its objectives and how well it has encouraged private sector investment alongside its activities. This latter point—additionality—is critical, as I have mentioned before. I do not have time to get into the details of crowding-in and crowding-out theory, but if all that GBE does is invest in projects which could easily have been financed by the private sector, that would be a complete waste of taxpayers’ money. Indeed, it would be actively damaging, as it would undermine the emergence and growth of a thriving industry providing the finance for our move to net zero.
We had lengthy discussions around the additionality principle during the passage of the UK Infrastructure Bank Act. I asked the Minister to comment on it in a previous group. He has still not commented in any detail, but it is critical. I would like to hear from the Minister what the expectations of GBE are in that respect. The Government have stressed the importance of it, and I have referred previously to the £1 of public money capitalising £3 of private investment that has been claimed. Crowding in is fundamental to its success, so it should be part of the measurement and review of GBE’s performance.
The second tweak I have made to the section from the UK Infrastructure Bank Act is on timing. The 2023 Act requires that the first independent report should be after seven years and then every five years. Infrastructure is by nature long-term, so those timeframes made sense in that context. However, GBE is intending to have decarbonised the power sector by 2030, in just five years’ time, so we should logically be reviewing progress before then. I have suggested reporting every three years; that is probably the major difference between my Amendment 103 and Amendment 94 of the noble Lord Offord, which proposes an independent report every year. I think an annual independent review is probably unduly onerous, but we need an independent progress review before the end of the target period of 2030, so I hope that three years is an acceptable compromise. However we do it, as currently drafted, the Bill falls woefully short on transparency and accountability.
I hope that the Government look seriously at having an independent review of effectiveness. It was hard-wired into the UK Infrastructure Bank Act for good reason: routine annual reports and accounts are simply not a good vehicle for a deep dive into the effectiveness of what are often quite complex investments and other financial activities. A separate, independent review was a good idea for what is now the National Wealth Fund, and I cannot see how a valid distinction can be made between the two organisations. The Government should want to ensure that they both operate equally effectively. Again, I would be very happy to discuss this further with the Minister and I hope that he is receptive to strengthening these aspects of the Bill, just as he and his party, when sitting on the other side of the Chamber, were on other Bills including the UK Infrastructure Bank Bill.
I say in passing that I support Amendment 102 of the noble Earl, Lord Russell, which requires a biennial report on GBE’s relationship with other public sector bodies. We have talked about this previously and it is another example of the opacity that currently surrounds GBE. In particular, I have no idea what its relationship with the Crown Estate means in practice, as well as that with Great British Nuclear and the UK Infrastructure Bank. It would be very desirable to have reports on how those relationships would work.
Viscount Trenchard (Con)
My Lords, I support my noble friend Lord Offord’s Amendment 94, to which I have added my name. I have also added my name to Amendment 103 in the names of the noble Lords, Lord Vaux and Lord Cameron, and my noble friend Lady Noakes.
The noble Lord, Lord Vaux, made the same point that I tried to make on Monday much more eloquently than I did: GBE and GBN are not comparable institutions. Unfortunately, it seems that the Minister’s department does not recognise that. I refer to the Explanatory Notes at page 6, paragraph 22. The power to give directions in the hands of the Secretary of State
“is consistent with the power that the Government has to direct comparable institutions, for example: the Department for Energy Security and Net Zero has a statutory power to direct Great British Nuclear, although, to date, this has never been used”.
I repeat the point made by the noble Lord, Lord Vaux, that, despite what this says, I cannot think that they are comparable institutions.
Both Amendments 94 and 103 require an independent person to carry out a review of GBE’s effectiveness. Of the two, I prefer Amendment 103, which requires the independent person to review the extent to which investments by GBE have encouraged private sector investment in those projects. Amendment 94 requires an annual independent review, whereas Amendment 103 requires such a review only once every three years. Perhaps we could compromise at two years.
I have also added my name to Amendment 102, in the name of the noble Earl, Lord Russell. This requires GBE to report on its relationships with other connected bodies and is, to some extent, similar to some of the other amendments we have debated. It is obviously a requirement of working together on strategic objectives and directions that GBE should maintain excellent relationships with its stakeholders. One of the ways to achieve that would be by adopting the noble Earl’s amendment, and I look forward to hearing him speak to it and to hearing the Minister’s response.
Earl Russell (LD)
My Lords, I rise to speak to my Amendment 102 in this group, which concerns independent review and governance. It would insert a new clause after Clause 7 on Great British Energy stakeholder relationships. To be honest, it is a bit of a probing amendment and one that is looking for a bit of reassurance from the Minister.
The amendment argues:
“Within one year of the day on which this Act is passed, and every two years thereafter, Great British Energy must publish a report regarding its relationship with … Great British Nuclear … the Office of Gas and Electricity Markets (Ofgem) … National Energy System Operator (NESO) … the UK Infrastructure Bank … the Crown Estate”.
Obviously, it is essential that Great British Energy publishes reports and that these are available. It is important that we have a good understanding of how Great British Energy is working in practice. That involves understanding how it is establishing its working relationships alongside other partners and fulfilling its missions and goals, as we work towards net zero. It extends to objectives and joint projects and asks, “What problems are happening?” These are all key issues in the energy transition, which is itself a complicated business that involves lots of partner organisations and joint and crossover responsibilities. This is already a crowded space—or a tangled web, if you like—in which Great British Energy is being created. Indeed, the delivery of GB Energy’s goals will happen only if the new organisation builds strong and lasting relationships that develop well and help create both joint working and good outcomes.
I want to say a word about the Crown Estate Bill, if I may. It is the cornerstone of GB Energy’s relationship with the Crown Estate; their partnership was announced on the same day that GB Energy was created. Clearly—certainly for the initial part of GB Energy’s life—that partnership will be about developing floating offshore wind with the Crown Estate. As part of the Crown Estate Bill, an amendment was agreed in order that the Crown Estate produces an annual report on its relationship with GB Energy. So that is already happening on the Crown Estate side. I ask the Minister to give an assurance that, from the Government’s point of view, there is no reason why that requirement would not be mirrored on GB Energy’s side. I cannot see one; it seems like common sense to me. As others have said, reporting is a general issue running across this Bill.
I note what the Minister has said today in relation to group 10. I also note what he has said about the possibility for ongoing parliamentary scrutiny. Ministers are responsible, of course, for example at Question time. As the Minister has confirmed today at the Dispatch Box, GB Energy will be subject to scrutiny by all the Select Committees across both Houses of Parliament, but it is important that these relationships are reported on via an annual report. I would like to hear some reassurance from the Minister on that.
I turn briefly to the other amendments in this group. As we have heard, Amendment 94 in the names of the noble Lord, Lord Offord of Garvel, and the noble Viscount, Lord Trenchard, would require the Secretary of State to appoint an independent person to review annually the effectiveness of Great British Energy in delivering its objectives, meeting its strategic priorities and complying with its directions. The independent review would be required to cover Clauses 3, 5 and 6 of the Bill.
I would be interested in the Minister’s response to this amendment. My worry is that this would be overly burdensome for the organisation. I am not certain that I was able to find another comparable organisation where these conditions applied, so my concern is whether we are asking for something that is not on a level playing field with other, similar types of organisations. I note as well that strategic directions can be given and, as I said, there are also other methods of scrutiny, so it would be the Minister’s right, at any point, to give the strategic direction for that to happen.
Amendment 103 in the name of the noble Lord, Lord Vaux of Harrowden, would require an independent review of the effectiveness of Great British Energy in achieving its objectives and the extent to which it had encouraged private investment. But this would be every three years. I was interested to hear what the noble Lord said in relation to the UK Infrastructure Bank. Again, my worry is whether this is a level playing field, but I was interested that the noble Lord said that that is part of that organisation and how it works. That makes me more inclined to lend support to his amendment.
Lord Vaux of Harrowden (CB)
I am sorry to interrupt the noble Earl. This was lifted directly, almost word for word, from the relevant legislation, the UK Infrastructure Bank Act.
Earl Russell (LD)
I thank the noble Lord. I would be keen to hear what the Minister has to say in response to that amendment.
Lord Hunt of Kings Heath (Lab)
My Lords, this has been a very interesting debate and I am grateful to noble Lords for what they have said. I will start with Amendment 102, tabled by the noble Earl, Lord Russell, and supported by the noble Viscount, Lord Trenchard. As he said, the amendment focuses on Great British Energy’s relationships with its key stakeholders and would require the company to publish a report every two years detailing its relationship with a number of named public bodies.
As I have already said, we of course expect and want Great British Energy to enter into a number of partnerships or relationships with other public bodies. This will include public bodies beyond those highlighted by the noble Earl, including, for example, those operating in the devolved Administrations—although I agree with him very much about the importance of the relationship with the Crown Estate.
I think it was implied in what I said earlier that we are absolutely certain, as part of the rigorous reporting requirements that the organisation will need to take part in through its annual reports and accounts, that it will report on activities undertaken as part of these partnerships. That seems to me a perfectly sensible request, which I can affirm readily. In view of that, I am not sure that you need a separate report, but we can make it very clear to GBE that we expect it to report on this regularly. We have already publicly committed to setting out how Great British Energy and the National Wealth Fund will collaborate and complement each other. I can assure noble Lords that we have made the same commitment on Great British Energy’s relationship with Great British Nuclear.
In terms of Great British Energy’s relationship with Ofgem and the National Energy System Operator, again, we would expect GBE to be subject to the same legal and regulatory frameworks as other entities. Clearly, when it comes to the Crown Estate, I readily say that, of course, GBE will report on its relationship, just as the noble Earl said. The Crown Estate will be doing similar, and we hope that there will be a consistency of approach in their reports. I am sure that there will be.
Turning to Amendments 94 and 103, which would require independent reviews of Great British Energy’s effectiveness, I thank the noble Lords, Lord Offord, Lord Vaux and Lord Cameron, and the noble Baroness, Lady Noakes, for putting their names to them. We all agree that Great British Energy needs to be accountable, transparent and clear about how it is delivering against its objectives and the statement of strategic priorities. The Bill already ensures that GBE will provide regular updates through its annual reports and accounts. These documents will be laid before Parliament, ensuring public accountability. Clause 5 provides that GBE must “act in accordance” with the priorities set out by the Secretary of State. To ensure this, Great British Energy must publish a strategic plan on how it will deliver those priorities, and it will update this plan regularly.
On the question, generally, of a review, I certainly understand the point that noble Lords have made and agree that reviews are important. I am prepared to consider the principle of a review between Committee and Report. I would not want to get into a debate about how regular those reviews should be. It is important that GBE has a good run before it is subject to such a review. Equally, I do not think you want a review happening on a regular annual basis because that would detract from its ability to perform effectively, but I understand the principle of a review. I will take this away without commitment at this stage, but I am happy to talk to noble Lords between now and Report about it.
Coming back to additionality, we obviously agree that it is an important principle, and we would expect Great British Energy to learn from the UKIB/National Wealth Fund approach. Of course, GBE has rather a wider role than the National Wealth Fund, particularly in that it is not just an investor but a developer, and it has an important future role to play in trying to get rid of some of the barriers to investment that we have seen in the energy sector.
Having said that, I think additionality will be covered. Equally, we accept that undertaking reviews from time to time is important. But they should not be done so frequently that they lose impact in what they are there to do. I hope noble Lords will accept that I have tried to be constructive in my response to these amendments.
Lord Offord of Garvel (Con)
I thank noble Lords for their contributions to the debate on this group, and I thank the Minister for listening to these concerns, which, as always, are to do just with the review and governance of GB Energy for it to be held to rigorous and proper account. I thank the Minister for considering how he deals with this. In the meantime, therefore, I beg leave to withdraw the amendment.
Earl Russell
“Budget report(1) Great British Energy must publish an annual budget report and send it to the Energy Security and Net Zero Committee, or any successor Committee, of the House of Commons.(2) This report must include but is not limited to—(a) a breakdown of current and expected funding sources;(b) spending per sector;(c) grid spending;(d) future spending;(e) estimations of future profitability.(3) A representative of Great British Energy must appear before the Energy Security and Net Zero Committee, or any successor Committee, if requested by the Committee.”Member’s explanatory statement
This amendment requires GBE to publish an annual budget report.
Earl Russell (LD)
My Lords, in moving Amendment 95, I will speak also to my Amendments 96 and 97, on accountability to Parliament. This group is all about GB Energy reporting to Parliament. As I have said, the Bill is quite short and some bits are missing, so I think noble Lords are just looking for as much reassurance as the Minister can give on these matters.
As the Bill stands, there are no real basic requirements for GB Energy to produce an annual report, or requirements for it to report to Parliament, beyond those in Clause 7 and what the Minister has said at the Dispatch Box today. I note that GB Energy will be subject to the same general reporting as other arm’s-length government organisations.
My Amendment 95 would ask GB Energy to publish an annual budget report, which would be sent to the Energy Security and Net Zero Committee or a successor committee of the House of Commons. That report must include but not be limited to,
“a breakdown of current and expected funding sources … spending per sector … grid spending … future spending … estimations of future profitability”.
It goes on:
“A representative of Great British Energy must appear before the Energy Security and Net Zero Committee, or any successor Committee, if requested”.
Amendment 96 says:
“Great British Energy must publish an annual report and send it to the Energy Security and Net Zero Committee, or any successor Committee, of the House of Commons”,
and that that report
“must consider Great British Energy functions and activity in the contribution to the following … supporting local communities and economies … the achievement of the United Kingdom’s climate and environmental targets … the relationship with The Crown Estate … a just transition to green energy … a jobs and skills transition into the green economy”.
It would also provide that Great British Energy must appear before that committee if requested.
Amendment 97 would require GB Energy to commit to an ongoing sustainable development review of its activities. It states:
“Great British Energy must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom”.
This would require GB Energy to keep under constant review the impact of its activities on sustainable development goals, as recognised by the United Nations, the Commonwealth and other bodies that refer to human rights developments, which aim to meet the economic, environmental and social needs of the present, while also ensuring the ability of future generations to meet their own needs.
At the outset I acknowledge to the Committee that my amendment is a direct copy of one tabled by the noble Baroness, Lady Hayman, and so skilfully negotiated with the noble Lord, Lord Livermore, the Financial Secretary to the Treasury, as part of the Crown Estate Bill. It was agreed as a government amendment to that Bill as it left your Lordships’ House. I wish to put on the record my thanks to both of them for their work in getting the amendment into the Bill. My reasons for bringing the amendment here again are, as I said, simply to mirror the other Bill, because the two organisations are so closely interlinked. For me, this is a minimum backstop amendment. I have added my name to Amendment 116, in the name of the noble Baroness, Lady Hayman, and I continue to support it, but I wish to make clear that if that amendment falls, this one is a kind of backstop.
My amendments are relatively straightforward, so I will turn to the other amendment in this group, Amendment 117, in the name of the noble Baroness, Lady Bloomfield of Hinton Waldrist. This would hold Great British Energy accountable to the relevant parliamentary committees of both Houses of Parliament.
The Minister has said—I already suspected that this would be the case with an arm’s-length body—that this would be subject to parliamentary scrutiny. It is good that he has confirmed that from the Dispatch Box. I just wanted to indicate my full support for the amendment and the principles that it sets out. It is obviously important that all bodies that the Government set up should be subject to parliamentary scrutiny from the Select Committees.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I shall speak to the amendments in this group, which contains amendments in my name and those of the noble Earl, Lord Russell, one of which he moved. I thank the noble Earl for introducing this group; I appreciate the sentiment and spirit of his amendments, and his support for mine.
I do not wish to repeat noble Lords’ arguments from previous groups, but these amendments again seek to shape the governance, accountability and sustainability of the proposed Great British Energy entity. They have been drafted in line with the values of responsible governance, fiscal prudence and national interest, so, although I will not repeat his arguments, or those of my noble friend Lady Noakes from earlier, I wholeheartedly agree with the comments made by my noble friend Lord Roborough on the first group.
On Amendment 95, which would require GBE to publish an annual budget report, I appreciate the sentiment of ensuring transparency in how public funds are utilised. On these Benches, we have always championed the prudent use of taxpayers’ money, and this amendment acknowledges that principle. However, we must ensure that such reporting is not merely a box-ticking exercise. The report must provide meaningful insights, ensuring that GBE operates efficiently and delivers value for money. We cannot allow an additional layer of bureaucracy to stifle innovation or create unnecessary costs. Therefore, I agree with the noble Earl, Lord Russell, on the spirit of this amendment, and I look forward to hearing from other noble Lords about how the reporting requirement could best be used to ensure that GBE operates in the best interests of the nation.
Lord Hamilton of Epsom (Con)
My Lords, I, too, speak in support of these amendments. It is definitely important that accountability is brought to bear here. Of course, one has the constant worry that the private sector is going to pick up all the low-hanging fruit, which is quite profitable, while GB Energy is going to be left with all of the much more speculative stuff, which will probably lose money for the taxpayer.
I want to refer in particular to subsection (2)(d) in the new clause to be inserted by Amendment 96 in the name of the noble Earl, Lord Russell, which refers to
“a just transition to green energy”.
I use that as a bit of a hook on which to return to the question I asked in Committee on Monday; I should have intervened and asked the Minister to answer before he sat down, but I had a problem at that stage, which is why I have given him advance notice today. I hope that the Minister will be able to answer my question for me because there is a dispute on our side. My noble friend Lord Fuller is a great exponent of green liquid hydrogen. Let us face it: if we could manufacture it effectively, it would be a bit of a silver bullet in solving many of these problems. But, at the same time, my noble friend Lord Roborough said that it will always be much too expensive to produce. I was slightly surprised by this because, like my noble friend Lord Fuller, I have always taken the view that the technology will develop as it goes along and the price will start to come down. It used to be the policy of the previous Government to support hydrogen; it is certainly supported by JCB.
Lord Ashcombe (Con)
I thank my noble friend for letting me speak. I wish to correct the record: it was actually me who described what my noble friend is describing, not my noble friend Lord Fuller.
Lord Fuller (Con)
Although I do of course wish to be associated with those remarks.
Lord Hamilton of Epsom (Con)
I cringe, with apologies to my noble friend Lord Ashcombe; I did not realise that it was he who said it. Anyway, whoever said it, I very much supported the view that it might well be possible for the price of liquid hydrogen to come down as the technology developed and got better.
My noble friend Lord Roborough said to me that it was always going to be expensive. I said that it was being manufactured by wind turbines in the North Sea at the moment, but as we have already discussed, the problem with wind is that it is intermittent. The wind gets turned off every now and then, the windmills do not turn, and electricity is not generated. Apparently, it is very expensive to replace all the filters, and so forth, and you need to have a constant supply of electricity to produce hydrogen.
What is felt about this on the Opposition Benches does not really matter; what matters is the attitude that the Government are taking towards liquid hydrogen and whether this is something that Great British Energy will be investing in or not. I would be grateful if the Minister would tell us where the Government stand on liquid hydrogen, as it is an important component of having clean energy for this country.
Lord Petitgas (Con)
My Lords, I also support these amendments aimed, like others, at greater accountability and transparency of the delivery of GBE. In particular, I support Amendment 95 in the name of the noble Earl, Lord Russell, on budgets. It is all very well to check on delivery and ask for more reports, but you only get what you measure. It needs to be set against a budget and objectives. I have found the objectives in the Bill to be a little vague. I am therefore in favour of Amendment 95 to the extent that it will allow us to set reporting and disclosure against a set of objectives, and a certain budget. I would also add additionality in there, as that is the only way to understand whether the delivery has been effective.
Lord in Waiting/Government Whip (Lord Cryer) (Lab)
My Lords, I will begin with Amendments 95 and 96 in the name of the noble Earl, Lord Russell.
Amendment 95 proposes requiring GBE to publish an annual budget report and send it to Parliament through the Commons Energy Security and Net Zero Select Committee—or its successor, as he said, since its name seems to keep changing every five minutes. Amendment 96 proposes requiring GBE to publish an annual report on various topics which must also be sent to the Select Committee. GBE will already have a requirement to produce publicly available annual reports and accounts at Companies House, and the Secretary of State will lay copies before Parliament.
The noble Earl, Lord Russell, also mentioned the requirement that the Secretary of State appear before the Select Committee to speak to those reports. That requirement is already fulfilled. I know that Select Committees cannot subpoena witnesses, so there is no compulsion, but the Secretary of State and other Ministers regularly appear before relevant Select Committees. I emphasise other Ministers with specific interests. Once GBE is up and running, and producing these accounts, that is the time when the Secretary of State will appear before the relevant Select Committees. In theory, the Secretary of State does not have to appear—as I said, there is no compulsion—but it would be pretty odd if they did not do so under those circumstances.
There are also additional requirements on government-owned companies to ensure transparency and accountability. These include the obligation to follow the Treasury’s directions on accounts through the powers extended in the Government Resources and Accounts Act 2000, and laid out in the Government Financial Reporting Manual and related “Dear Accounting Officer” letters. Furthermore, GBE will be required to report on its governance around, exposure to, and risk of, climate-related scenarios in its operations as set out by the Task Force on Climate-Related Financial Disclosures a couple of years ago.
I acknowledge the noble Lord’s expectation that Parliament will hold a strong interest in the performance of GBE, which anybody who knows anything about how Parliament works would expect. I fully anticipate that the relevant Select Committees will call representatives from the company and from the department to provide evidence when required.
The point about hydrogen made by the noble Lord, Lord Hamilton, is a little wide of the scope of the amendment. However, I remind noble Lords that the exact mix of technologies in which GBE, as an operationally independent company, chooses to invest will be determined by its board in due course. His prediction—he is inviting me to look into the future, and I suppose he is doing the same—is that, as technology advances, hydrogen starts to fall in cost. That is fairly sensible, although I do not ask the noble Lord to hold me to it, because we are looking into the future and we do not know what technologies there will be then.
Amendment 97 proposes that GBE reviews the impact of its activities on sustainable development in the UK. This Government—this has been made very clear and repeatedly so—firmly believe in a healthy natural environment and that is critical to a strong economy and to sustainable growth and development. Our commitment to the environment is unwavering and will be in the future, including through meeting the Environment Act 2021 targets and halting biodiversity decline by 2030. That is a pretty demanding target, but that is what we have set out for five years’ time. I assure the noble Earl that the projects in which GBE is involved will be subject to the usual and rigorous planning and environmental regulations, where the impacts on the environment and habitats are considered. The Bill focuses on establishing the company, and adding more detail at this point may restrict its activities or add layers to its reporting and governance.
Amendment 117, proposed by the noble Baroness, Lady Bloomfield, seeks to legislate the scrutiny of GBE by relevant Select Committees. My noble friend and I have touched on that to some extent. This amendment goes beyond the precedent and practice of the involvement of Select Committees in public appointments. The chief executive of Great British Energy, once appointed, will also be its chief accounting officer and will be accountable to Parliament for their stewardship of GBE and its funds. As is common practice for public bodies, the management and leadership of GBE will be available to the relevant Select Committees as needed. There is no real need to legislate on this arrangement at this point.
I remind noble Lords that the chief accounting officer would, in all likelihood, be called before the Public Accounts Committee. Over the past few years, the PAC was chaired by Margaret Hodge, as was, who is now the noble Baroness, Lady Hodge; she was followed by the honourable Member for Hackney South and Shoreditch. Those who have seen those sessions know what an acute and thorough grilling that committee gives to anybody who appears in front of it. That Select Committee is always chaired by a Member of the Opposition; that is set up in the Standing Orders of the House of Commons. It is now chaired by the honourable Member for Cirencester and Tewkesbury. Having served with him in the other place for more than 20 years, I assure noble Lords that he will be just as incisive as his predecessors.
The Cabinet Office guidance on pre-appointment scrutiny by House of Commons Select Committees provides criteria and processes for such roles. It sets out that decisions on the scrutiny of individual posts should be made between the Secretary of State, the chair of the relevant Select Committee and the Cabinet Office. It is not common practice for this to be set in primary legislation. As per this guidance, no public body currently appears to have its full board subject to that kind of pre-appointment scrutiny. We anticipate recruitment for the substantive board to begin over the course of this year and will ensure that it is undertaken in a manner that aligns with best practice. To reassure the noble Baroness—
Earl Russell (LD)
I am sorry to intervene, but I think the noble Lord has moved on to the next group of amendments in his response to me, unless I am mistaken, because the next one is on government appointments, is it not?
Earl Russell (LD)
I thought the noble Lord had moved on; I apologise for interrupting.
Lord Cryer (Lab)
I am glad I was able to reassure the noble Earl. I hope that I have provided the assurances and explanations sought by noble Lords in tabling these amendments, and I sincerely hope that they will not press them.
Lord Hamilton of Epsom (Con)
May I press the Minister a bit harder on green hydrogen? If my noble friend Lord Roborough is right and, whatever happens, it will be much too expensive to produce, then we surely have to look elsewhere. What is the Government’s attitude towards liquid hydrogen as a fuel for the future?
Lord Cryer (Lab)
I am grateful to the noble Lord for that question. I cannot add anything to what I said before. GBE will look at a range of technology and sources. The whole of energy policy is predicated on security of supply and range of supply, because at various times in British history, although those two things have not been absent at the same time—or perhaps they have, briefly—there have been times when one or the other has been absent. If it is possible for hydrogen to play a part in that security of supply and range of supply—it certainly would on the latter—I do not see why that should not be part of the nation’s energy supply in the future.
Earl Russell (LD)
I thank all noble Lords who have taken part in the discussion on this group of amendments, and I thank the Minister for responding to me; I apologise for interrupting him. I appreciate everything he said, and I appreciate that there will be reports on GB Energy and that there are lots of opportunities for parliamentary scrutiny. It is appropriate that we ask these questions. The amendments in this group and others look to go a bit further to ensure that certain things will be reported on.
In response to the discussion on the previous group, the noble Lord, Lord Hunt of Kings Heath, asked me whether we were looking for a separate report. In my mind, this is about making sure that GB Energy produces a really good-quality annual report that covers a broad range of areas and is open and transparent about its activities.
Lord Hunt of Kings Heath (Lab)
Perhaps I may intervene. In the discussion on the first group of amendments, I promised to write a letter to noble Lords focused on financial information. It might reassure noble Lords if I pick up that challenge and say that we should perhaps also try to encompass the annual report arrangements. If that would be a sensible way forward, the letter will set this out very clearly in writing so that noble Lords can see it after Committee but before Report.
Earl Russell (LD)
That would be greatly appreciated and would really reassure us. That was the point that these amendments were trying to get to, so I thank the Minister.
Lord Frost
“The Chair of Great British Energy(1) The Chair of Great British Energy may not be appointed until the appointment has been scrutinised by the Treasury Committee of the House of Commons, or any successor committee.(2) The Chair of Great British Energy must be based full-time at the headquarters of Great British Energy in Aberdeen.(3) The Chair of Great British Energy must undergo an annual review on their performance and—(a) this review must be carried out by external auditors;(b) this review must be submitted to the Secretary of State and laid before Parliament.”Member’s explanatory statement
This would require the Chair of Great British Energy to undergo pre-appointment scrutinisation, to be based at Great British Energy’s headquarters full-time and to undergo an annual review of their performance.
Lord Frost (Con)
My Lords, in moving Amendment 98 I will also speak to Amendment 99 in my name. As it is the first time I have spoken in Committee, I take this opportunity to declare an interest as the director of the company Net Zero Watch.
I have a couple of preliminary remarks before turning to the text of the amendments. These two amendments very much echo themes that we have been debating at length over the last day or two. They are amendments to make up for the lack of detail in the Bill and to ensure, as my noble friend Lady Noakes pointed out the other day, that this company is subject to the same degree of scrutiny that large public companies would expect to face. With the Bill, we are creating a company with precious little oversight or scrutiny as normally understood in company law, and with an idiosyncratic version of the normal governance and accountability arrangements that go with a normal company. Of course, this fact is why nationalised public companies are typically so badly run.
The only detail we have had on the ground covered by these two amendments is in the founding statement, which says:
“Led by its own CEO, Great British Energy will be overseen by an independent fiduciary Board, rather than ministers, benefitting from industry-leading expertise and experience across its remit. Trade unions will also have a voice and representation within Great British Energy”.
Although Ministers both here and in the Commons have commented on that, they have not gone beyond what that statement says, and we are still left rather unclear about how these arrangements are to work, other than to say that normal company law will apply. As I say, that is not quite enough, and these amendments are designed to fill the gap here.
I turn to the text of the amendments. Amendment 98 is designed to set out a few minimum requirements for the themes that we have been talking about: transparency and accountability. Amendment 98 would make clear that there must be a chair and, more importantly, that the appointment of the chair would require a degree of parliamentary scrutiny, in this case by the Treasury Committee. As has been noted, we have already trespassed slightly on this ground, and the Minister noted that this degree of scrutiny would be going beyond precedent. He read out the Cabinet Office guidance on this subject, which is interesting but not decisive for this House and the legislators.
Certainly, the degree of parliamentary scrutiny is dictated by the very political nature of this job, and quite a political figure has been appointed to it as the current chair. He has not been shy in giving us his ambitions for the company. He told the Guardian on 17 October that he thought it should become a “national champion” and
“a longer-term operator in … areas, such as floating offshore wind”.
I do not know whether that is the Government’s view of the development of GB Energy—it might or might not be—but they are statements by the chair and, by making them, he is coming into the arena of political debate about the company. Therefore, some sort of political process in his appointment seems logical. I cannot help noting that he has made broader reflections on politics, populism and progressivism, and he has been a quite a critic of Brexit in the past. Of course, he is entitled to have these opinions but, once you get into the political field, you must expect to face a degree of political scrutiny of your appointment. That is why this amendment would require such public scrutiny.
Similar thoughts are behind the other part of this amendment: the requirement for a publicly available review of performance against the purposes of GBE, and that this should be done independently. Once again, we come back to the point that has been touched on at length: that this is an unusual company and that normal accountability mechanisms are not there. There is only one shareholder, the content of the board is uncertain and, as it stands, there is no requirement in the Bill for directors of any kind at all—although I will come on to Amendment 99. This is a public company, fulfilling absolutely classical public goals, so there must be accountability to the public in how it is run.
Proposed new subsection (2) would require the chair to be based full time at the headquarters of the company, which has been said to be Aberdeen. The Government have made a virtue of that fact, at some length, when talking about GBE. They also confirmed, in October, that the new chair would be based in Manchester. It is not unusual for a non-executive chair to be based somewhere else, but the current chair role is not exactly a non-executive one; it is quite hands on. I struggle to see how one can run the company in quite that way.
The Government say that he will
“regularly spend time in Aberdeen”.
That is good and important, obviously—but this is a new company. It needs leadership as it is built up. If the taxpayer is going to get value for money out of the chair, his salary and the process, he should be where the company is when he is working.
I wish to record that Amendment 99 is a copy of an amendment tabled by Andrew Bowie MP and debated in the Commons—although perhaps it was not fully debated. Again, this comes back to the fact that we are dealing with an unusual company. What is being created is, in many ways, more like an executive arm of HMG than a genuinely independent company. The description that the Minister just gave about the role of the CEO rather confirmed that. It sounded much more like the role of the Permanent Secretary of a department, responsible to Parliament as accounting officer, than the role of a genuine CEO of a company.
The Bill is literally silent on appointment processes, content of the board and so on. The amendment is designed to fill that gap, to give clarity on numbers, and to make it clear that there must be non-executives as well as executives, that there must be a CEO as well the chair, that there can be no repeated appointment beyond defined limits and so on. That is a bare minimum. There already are some provisions in the Bill connected with the articles of association, so the line of principle about what is right to include in the Bill and what is not has already been passed. I hope that, with that in mind, the Minister will consider that these are serious amendments designed to deal with potential weaknesses in the corporate governance and accountability of GB Energy. I look forward to hearing his response.
Earl Russell (LD)
I shall speak to my Amendment 101, and I thank the noble Viscount, Lord Trenchard, for adding his name in support of it. It would simply prevent the board of GB Energy from being appointed until each prospective appointment had been scrutinised by the Energy Security and Net Zero Committee. I believe in pre-appointment scrutiny, and I put this forward as a way of helping to ensure that that happens.
I shall not speak for long on this amendment, because I suspect that it will not win favour with the Government and that the Minister will argue that there are well-established processes and procedures for making such appointments. It might be useful if he could say a brief word about what those processes will be.
Amendment 99 is very similar to mine on pre-appointment scrutiny, so I lend my support to it. However, I would probably leave out the politics; I am much more interested in the skills and abilities people have to perform the functions that they undertake. Their personal politics should not really come into it.
Amendment 98, in the name of the noble Lord, Lord Frost, and the noble Viscount, Lord Trenchard, has three elements. The first reflects my amendment in this group. The second calls for the headquarters to be placed full time in Aberdeen. The third calls for the chair of GB Energy to undergo an annual review by external auditors, and for that review to be sent to the Secretary of State.
I cannot disagree with the first part, because we are kind of on the same ground, so I welcome it. Labour made commitments on the second part, but I am not certain that the Bill is the place to go into what a full-time headquarters is and how it should be defined, so I will park that. On an annual review by external auditors, my question is again about level playing fields. Would other people in other similar organisations find that that was part of their normal working relationship with their employment contracts? I suspect that they would not. If the answer is no, there is no precedent for putting it in the Bill, so I would not think it acceptable.
Lord Offord of Garvel (Con)
My Lords, I will speak to the two amendments in this group regarding the appointments of the chairman and board of Great British Energy. These amendments, in the names of my noble friends Lord Frost, Lady Noakes and Lord Trenchard, attempt to fix a glaring omission from the Bill as it stands. As drafted, there is no mechanism to govern the appointments process of the chairman and the board, and this is a concern as we have heard on many occasions that GB Energy will be responsible for £8.3 billion of taxpayers’ money. Those at the top of the company will have enormous responsibility and therefore it is paramount that adequate scrutiny is given to these appointments.
My noble friend Lord Frost has attempted to address these concerns with his amendments in this group. Amendment 98 requires the chairman of GBE to undergo pre-appointment scrutiny in front of the Treasury Committee. This amendment has not come out of the blue: it is exactly the same process as the appointment of the chairman of the Office of Gas and Electricity Markets, otherwise known as Ofgem, which is the regulatory authority for the energy sector. Once the Secretary of State appoints the chair, they must appear before the House of Commons Energy Security and Net Zero Committee. This is also the case for the chairs of the Climate Change Committee and the Nuclear Decommissioning Authority. The Commissioner for Public Appointments keeps a list of significant appointments, which details the public bodies of which the chairs must undergo pre-appointment scrutiny by Parliament. There are no fewer than 40 current chairmanships of public bodies for which this appointments procedure applies.
There is clearly precedent for the chairmen of significant public bodies with responsibility for large sums of public money to be subject to pre-appointment parliamentary scrutiny. If this is the case for these three other public bodies with responsibilities in the energy sector, why should the chair of GBE not also be subject to the same pre-appointment parliamentary scrutiny process?
The Bill also fails to detail the procedure for the appointments and tenure of the directors of Great British Energy. As drafted, there are no requirements for the composition of the board, no limits on the number of directors that may be appointed and for how long a director may serve on the board, and no statutory duties to be conveyed on the board. The amendment from my noble friend Lord Frost plugs this gap.
Once again, there is precedent for having this level of detail regarding appointments to the board of a major public body. The Utilities Act 2000, which created Ofgem and which—we must not forget—was passed by the last Labour Government, did exactly that. Schedule 1 to that Act lays out, for example, that:
“An appointment of a person to hold office as chairman or other member must be for a term of not less than 5 years and not more than 7 years”.
So that Act includes details of the tenure and the appointments of the chairman and the board, yet the Bill does not. I ask the Minister why Labour thought it pertinent to specify the executive composition of Ofgem but does not believe it necessary to do the same for Great British Energy.
Viscount Trenchard (Con)
My Lords, I congratulate my noble friend Lord Frost on his two amendments in this group, which deal with the governance of GBE. There is, as has been said in previous debates, almost nothing in the Bill about the corporate structure of GBE or how it will be managed. I welcome my noble friend’s proposals to require that the chair should be full time and be required to attend the office in Aberdeen, from which it follows that he must be based there. That would also ensure that the person will be fully committed and be a real check on the powers of the chief executive, who may need oversight in interpreting the priorities and actions needed in response to directions received from the Secretary of State. My noble friend’s proposal that the board must comprise at least five and no more than eight directors makes perfect sense and provides for the assembly of a group of people with the appropriate skills and experience.
I have also considered and support Amendment 101 in the name of the noble Earl, Lord Russell, which requires scrutiny of any proposed appointments by the Energy Security and Net Zero Committee of another place. That committee should ensure that an appropriate balance of skills and experience among the directors is maintained at all times.
Lord Vaux of Harrowden (CB)
My Lords, I was not going to speak on this, but I just point out very quickly that the other Act that has a clause that is not quite the same but similar to Amendment 99 is the UK Infrastructure Bank Act. As I have already pointed out, that is the really analogous organisation to Great British Energy, so it must be appropriate, I think.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Lord, Lord Frost, for initiating the debate on his Amendment 98, where he proposes to place a number of requirements on the role of the chair of the board of Great British Energy. I agree that the chair, the board and the chief executive officer have major responsibilities. I must say to him though that I do not recognise GBE as being an executive arm of my department. It is very interesting that he said that, because the noble Lord, Lord Teverson, made the interesting remark on Monday that there is a risk in having too many controls and reporting arrangements in relation to GBE, detracting from what we need it to do. We do want it to have operational independence, albeit working within the context of Clauses 3 and 5 of the Bill, the requirements under the Companies Act and the accountability arrangements I have already referred to. We need very highly skilled people at the top of GBE to find their way through this in order to ensure that it actually delivers on the things we want it to deliver on.
At the risk of inviting the noble Lord, Lord Hamilton, to intervene, I take his point about winners and Governments: this is the whole point of having an organisation that is not part of government—but, of course, it is owned by government—and being able to really get on with the job that needs to be done.
I will address pre-appointment scrutiny of the chair in relation to Amendment 101 soon. Amendment 98 requires the chair to be a full-time position based at the headquarters of Great British Energy in Aberdeen. I must say that it would be highly unusual to specify that a company’s non-executive chair should be full time or based formally at an organisation’s headquarters. Looking at the Grand Committee, almost all noble Lords here have taken roles as chairs or non-executive directors of organisations that can be based very far from where they are resident. Frankly, if we were to adopt this principle, we might inhibit the appointment of high-calibre people, notwithstanding that Aberdeen is a very fine place to live and work, as I know from the experience of having a family member working in the offshore oil and gas industry from there.
I do not think that a full-time chair is appropriate; I think it is perfectly appropriate to have a part-time, non-executive chair in that role, as the noble Lord, Lord Frost, has already remarked. Having an interim chair does not preclude having a very lively presence—and a jolly good thing too. I do not think we should insist that that should be a full-time role.
My main board experience is in the public sector, in the National Health Service, and I have been around in the NHS for long enough to know the problem of chairs who come in on a daily basis and inhibit the proper role of the chief executive. I would be wary of encouraging that development in GBE; I am sure that it will not happen.
Again, in relation to the annual review of the chair’s performance by external auditors, which is to be laid before Parliament, first, we will of course ensure that there are annual performance reviews for Great British Energy’s chair. This aligns with best practice followed by other public bodies, and my department is well used to doing this in relation to a number of the bodies it oversees. The review will typically be performed by a senior official in the sponsoring department, supported by the senior independent director on the board, who will have deep insight into the chair’s performance over the year.
Of course, there will also be regular meetings between the responsible Minister and GBE, as there is in my department between Ministers and other organisations, as would be expected. In a sense, these are also part of the accountability mechanism. However, I acknowledge the expectation of the noble Lord, Lord Frost, that Parliament will have a strong interest in the chair’s performance. I fully anticipate that the relevant Select Committees will call on them on a regular basis to provide evidence and, of course, I fully expect the chair of GBE to accept those committee’s invitations.
Amendment 99, also in the name of the noble Lord, Lord Frost, would place certain requirements on the composition of Great British Energy’s board. As noble Lords have said, it largely replicates provisions in the UK Infrastructure Bank Act. We made clear in our founding statement that GBE will be an operationally independent company, overseen by an independent board. We do not think that it is necessary to legislate these provisions, since established governance documents, such as the UK Corporate Governance Code and the Governance Code on Public Appointments, already apply.
The UK Corporate Governance Code, published by the Financial Reporting Council, sets out best practice in relation to corporate governance. Although it applies formally to listed companies only, it is standard practice for government companies to comply with it or, where they do not, explain why. The Governance Code on Public Appointments provides clear guidance for ministerial appointments, which are regulated by the Commissioner for Public Appointments and should be followed even where roles are not formally within the scope of the commissioner. I can give an assurance from the Dispatch Box that Great British Energy will comply with these codes, ensuring best practice in corporate governance.
GBE will also be required to follow corporate governance best practice to help guide the composition of its board. This will have an impact on the number of directors required at each stage of GBE’s development and operation. We think that, having given those assurances, there needs to be a degree of flexibility at this stage about how GBE goes forward in relation to the composition of its board. The noble Lord’s amendment would also place standard requirements on when an individual should cease to be a director. I can assure him that such provisions already exist, including in the Companies Act 2006, and that they will, as is common practice, be replicated in GBE’s articles of association.
Amendment 101 in the name of the noble Earl, Lord Russell, proposes to require all appointments by GBE to be scrutinised by the Energy Security and Net Zero Committee in the other place before they come into effect. This is similar to new subsection (1), proposed by Amendment 98. Noble Lords will know that Cabinet Office guidance on pre-appointment scrutiny by House of Commons Select Committees provides clear guidance on the criteria and process to be used in these circumstances. It sets out that decisions on the scrutiny of individual posts should be made between the Secretary of State, the chair of the relevant committee and the Cabinet Office. It is not common practice for this to be set in primary legislation.
The guidance gives the criteria of the types of roles which may be in scope. Importantly, it sets out the principle that the posts which require pre-appointment scrutiny are, most typically, the chair or equivalent of the organisations. None of the roles identified in the guidance as requiring pre-appointment scrutiny are in government-owned companies of the kind that GBE will be. No public body currently appears to have its full board subject to pre-appointment scrutiny. Where individual roles are scrutinised, it is done following agreement between the Secretary of State and the committee chair.
From our point of view, the calibre of Great British Energy’s director appointments will be of great importance. We want GBE to succeed, so we want the highest calibre of people to be appointed as chair, to non-executive positions and to the chief executive officer role. We anticipate that recruitment for the substantive board will begin over the course of this year, and we will ensure that recruitment is undertaken in a manner which aligns with best practice. I can assure the noble Earl, Lord Russell, and the noble Lord, Lord Frost, that in line with Cabinet Office guidance, any relevant public appointments to Great British Energy will be discussed with the appropriate Select Committee chair. I hope that I have been reassuring regarding this.
Lord Frost (Con)
My Lords, I thank the Minister for his comprehensive and understanding response, and I thank other noble Lords who spoke in support of these amendments. I have two very quick points in response.
First, I note what the Minister says about the likely degree of independence of Great British Energy. We will have to see how that turns out, but I make the point, which was not really dealt with in his response, that there will always be an area where the company thinks that something is operational, but the Government believe it is political. That is where it is important to have clarity on relationships and how accountability works, so I am not entirely persuaded that the Bill gets this right at the moment, but I hear what he says.
Lord Hunt of Kings Heath (Lab)
I am not sure that you can legislate for this. I understand what he says, because as Ministers, we have relationships with a number of key bodies at the moment. We have formal relationships, there are accountabilities, reports and meetings, but we also build up trust, understanding and working closely together. It is difficult to legislate for that. In saying that we want GBE to work, it has to feel operationally independent, or it is not going to work. We cannot micromanage it, but on the other hand, we are setting the tramlines in the context in which it operates. It is hard to go much further than that, in reality.
Lord Frost
Obviously, there is a degree of judgment and practice in how these things are done. There is also a degree of judgment on the extent to which it is desirable to fix the framework within which these judgments and relationships operate, which is probably the area of disagreement.
On the question of where the chair is based, the amendment may not be perfectly drafted. I think there is a difference between “based at” and “resident at”. The point of this amendment is to make sure that the business of the company, when transacted by the chair, is very firmly in Aberdeen, the HQ of the company, and not dragged elsewhere by the fact that the chair may not be resident there. This may not perfectly deal with that point, but it is an important point all the same, so I welcome the Minister’s comments on it. I will reflect on whether any of this is necessary at Report, because it is part of a wider discussion, but for the time being, I beg leave to withdraw the amendment.
Lord Offord of Garvel
“Annual report: impact on coastal communities(1) Within 12 months of the day on which this Act is passed, and annually thereafter, Great British Energy must annually report on the impact of their activities on coastal communities.(2) The Secretary of State must lay a copy of these reports before Parliament.”Member’s explanatory statement
This would require Great British Energy to annually report on the impact of their activities on coastal communities.
Lord Offord of Garvel (Con)
My Lords, I rise to speak to my Amendments 106 and 107 in this group and to support my noble friend Lady Bloomfield’s Amendment 118. These amendments are closely aligned with Amendments 27, 28 and 29 in the name of my noble friend Lord Effingham, which were debated on the first day in Committee. Amendment 106 introduces a new clause that ensures that Great British Energy must annually report on the impact of activities on coastal communities. Amendment 107 similarly requires GB Energy to report on its impact on commercial fishing.
The Government have committed to substantial wind developments, promising to double onshore and quadruple offshore wind by 2030. It goes without saying that there is a difficult balance to strike when undertaking considerable developments while minimising the damage to the communities and industries that are most likely to be affected. That said, we must not lose sight of the communities and sectors to which GB Energy’s activities may be costly. I remind noble Lords that the Government have said that GB Energy will work closely and collaboratively with local communities to achieve their clean energy targets. I therefore see no reason why they should not consult and report on the impact of its functions on the communities they suggest will reap the rewards of GB Energy.
The impact of GB Energy’s activities and the Government’s green energy agenda on communities throughout the UK has been a recurring theme and a point of serious concern throughout the debate on the Bill. Last year, I highlighted the burden facing rural communities in particular, as the Government looked to ramp up transmission and distribution infrastructure. It is essential that the energy transition, and GB Energy’s role within it, do not come at the expense of the communities and associated industries.
Many in this House urged the Minister to ensure that the Secretary of State and GB Energy consult local communities. I point to the noble Baroness, Lady McIntosh of Pickering, who rightly raised concerns that offshore wind development risks forcing fishermen out of the seas in which they operate. It is essential that we carefully consider the use of our country’s marine space. Preliminary results from the Plymouth Marine Laboratory concluded that all the proposed offshore wind farms in the UK are predicted to impact fishing, with fishermen pointing to both financial and safety concerns resulting from the construction and operation of offshore wind farms. Ultimately, this is an issue of spatial competition.
Amendment 115 of the noble Lord, Lord Teverson, is broader, addressing the impact of GB Energy’s activities on both fishing and commercial shipping. He is right to extend the scope to commercial shipping. I turn to the UK Harbour Masters’ Association, which notes the challenges faced by the sector from offshore renewable energy installations. It calls for a report on the impact of such installations on the shipping industry and insightfully draws a link with commercial fishing, noting that fishing vessels may be squeezed out of their usual channels and enter shipping routes to avoid sites of renewable energy generation. We must not ignore the worries and recommendations of these industry bodies. With this in mind, many environmental, biodiversity and wildlife bodies have called for GB Energy to deliver for nature alongside climate. I welcome and support my noble friend Lady Bloomfield’s Amendment 118, which requires GB Energy to make
“a positive contribution to nature recovery”.
Careful consideration is key to the success of GB Energy. We must not isolate but include those communities and sectors that will be most impacted by the Government’s attempts to create this green energy superpower. Additionally, we ought to consider how GB Energy will act in a way that seeks to benefit both the climate and biodiversity, which are inextricably linked.
I look forward to hearing the contributions of all noble Lords in the debate on this group of amendments, and the Minister’s response.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, Amendment 118 in my name would introduce a new clause which requires GB Energy and its partners to make only investments that make a positive contribution to nature recovery. As my noble friend Lord Offord of Garvel rightly explained, the UK is facing both a climate and a nature crisis.
Nature recovery, the restoration of our country’s biodiversity and the climate are matters that are so closely interwoven. They cannot and should not be considered in a separate capacity. Therefore, if GB Energy is to be established in an effort to achieve clean energy by 2030 and net zero by 2050 and to reduce the UK’s carbon emissions in an attempt to tackle climate change, GB Energy ought to operate in a way which looks to make a positive contribution to nature recovery.
The Government themselves recognised the ties between climate and nature recovery. Indeed, they were elected on a manifesto which said:
“The climate and nature crisis is the greatest long-term global challenge that we face”
and
“The climate crisis has accelerated the nature crisis”.
The omission of a nature recovery duty is another shortcoming of the Bill. Climate change and the loss of biodiversity both compound and reinforce one another. The Royal Society has acknowledged that a flourishing ecosystem has the ability to combat the effects of climate change. We know that the UK’s biodiversity is under serious threat, yet we know that natural habitats have a significant role to play in absorbing and storing carbon and regulating the climate.
Wildlife and Countryside Link has called for nature recovery to be put in the Bill and the amendment in my name would do just that. It recognises that restoration of the UK’s nature has the ability to provide up to a third of the climate mitigation effort that is required if we are to achieve net zero by 2050. Rightly, it describes the Government’s failure to include a nature recovery duty as a “missed opportunity”.
A nature recovery duty ought to be a general principle of GB Energy. It would hold the Government to account on the manifesto they were elected on. It would introduce a clear condition, ensuring that GB Energy and its partners operate in a way which seeks to contribute to the biodiversity targets introduced by the previous Government in the Environment Act.
Nature recovery must not be seen to inhibit the facilitation of the production, distribution and storage of clean energy. Instead, it must go hand in hand with the objectives of GB Energy, helping to protect and restore carbon-rich habitats. Indeed, it is complementary to the objectives of GB Energy surrounding clean energy generation and distribution.
We must be cautious that the establishment of this body to rapidly ramp up the installation and generation of renewable energy technologies does not adversely affect biodiversity in the UK. We must seek to mitigate the risk of further diminishing or undermining the UK’s natural assets. The amendment in my name would do just that by embedding a nature recovery duty into law.
Lord Teverson (LD)
My Lords, I shall speak to my Amendments 114 and 115. I agree very much with the spirit of the other amendments in this group. I say to the Minister that only one of my amendments is labelled as a probing amendment but they are both, in effect, probing amendments and I would not expect them to proceed beyond Committee as I have written them.
Amendment 114 is about national defence. Clearly, even since I wrote the amendment, this has become even more important in terms of offshore infrastructure, as we saw in the Baltic at the end of last year and following the serious shenanigans of “Eagle S”, the shadow Russian oil tanker which disrupted cables in the Baltic Sea, after which there was a NATO conference yesterday.
The purpose of this amendment is to hear from the Minister that GB Energy, in its offshore investments, will be plugged into the Ministry of Defence, and that the Ministry of Defence—which, if I may be slightly candid about it, has not always been positive about renewable energy onshore—will fully engage in these investments.
I think this is going to get more and more important. All sorts of technologies are coming out to ensure that, as soon as cables or pipelines are tampered with, it is quickly recognised and action can be taken. There is an Oral Question on this area in the House tomorrow, and I will be pressing more on the defence side, as we need to be a little more upfront in our reaction, as the Finns have been. I am really probing to see where that co-ordination with the Ministry of Defence is going to happen.
Lord Hamilton of Epsom (Con)
My Lords, I am a little confused by this conversation, because I always understood that oil rigs encouraged shoals of fish, providing them with a safe haven under which they thrived. If they thrive under oil rigs, why should they not thrive under wind turbines as well, if they are pinned to the bottom of the sea?
I agree that, if they are floating ones, it is more debatable whether fish could thrive under them, but, in my view, it does not necessarily follow that having such industrial structures in the sea goes against nature—it might actually go some way towards protecting it.
Lord Teverson (LD)
The noble Lord raises an important issue. As we know, when Shell wished to dispose of one of its oil rigs in the North Sea, to which a number of environmental NGOs strongly objected, there was a fair bit of scientific evidence that it made a positive contribution to North Sea biodiversity. Indeed, off the coast of Cornwall, an ex-naval vessel was sunk in order for it to become a reef, which increased biodiversity. We should not just reject the fishing industry’s views on this. The problem with offshore wind farms compared with oil rigs is the quantity—that is, the size of the area that would be an exclusive zone. That is the issue, but I take the noble Lord’s point.
Lord Hamilton of Epsom (Con)
I am grateful for the noble Lord’s intervention. May I take him up on his point about the Ministry of Defence, which I used to work for at one stage? He said that the people there were very much against such schemes, but I think that it is mainly to do with communications: if their radar and other communication systems are blocked by wind turbines, they will object to them. That is understandable. We should not paint the Ministry of Defence into the position of being anti all forms of renewable energy because I do not think it is; however, it is always concerned if it cannot reach out and listen to the enemy, wherever they may be, because there are wind turbines in the way. This is an interesting subject that probably needs looking into rather more carefully—it is certainly not as straightforward as some of my noble friends make out.
Lord Teverson (LD)
I shall not prolong the conversation tonight but the noble Lord is, once again, absolutely right about national defence, radar and being able to see an incoming attack with missiles or whatever. The problem was that the Ministry of Defence did not man that area enough. Decisions were extremely slow. There was a rumour—of course, I have no proof of this —that it used to use its slowness and its objections to insist that developers helped it upgrade its military equipment. I do not know whether it was true—I am sure that it was not, of course—but that was the perception. The main problem was the slowness of response.
Earl Russell (LD)
My Lords, I rise to speak to my Amendment 118A, which covers wider considerations. Let me be clear: it is also a probing amendment, as are all the amendments in this interesting and diverse group. I thank the noble Lord, Lord Macpherson of Earl’s Court, for adding his support to my amendment, which is about ensuring that communities benefit directly from the renewable energy projects that Great British Energy undertakes. I put it forward to see whether that is possible and to ask, from the Government’s point of view, what barriers to that might exist.
My amendment would ensure that 5% of gross revenue from all Great British Energy
“renewable energy projects generating over one megawatt”,
both onshore and offshore, would
“be paid into community benefit funds”.
The idea for it came from the honourable Angus MacDonald MP’s experience with Scottish Government Good Practice Principles for Community Benefits from Onshore Renewable Energy Developments. This guidance promotes community benefits of a value equivalent to £5,000 per installed megawatt per annum, index-linked for the operational lifetime of projects.
My amendment requires that:
“Within six months of the day on which this Act is passed, the Secretary of State must prepare and lay before Parliament a report setting out proposals for ensuring that local communities benefit from renewable energy projects undertaken by Great British Energy. The report … must set out, but is not limited to, proposals for 5% of the gross revenue from all such renewable energy projects generating over one megawatt to be paid into community benefit funds”.
I will not go into the rest of the details; the amendment is before noble Lords. It simply puts into the Bill that local communities should directly benefit from renewable energy undertaken, and that there is a mechanism available for doing that. On the 5% figure, I am happy to have a conversation with the Minister if it is an issue. I note that Denmark’s Law on the Promotion of Renewable Energy 2008 had a 20% figure, in relation to which 5% is a lot lower.
To talk more about the spirit of the amendment, this is really about helping disadvantaged communities, particularly those that are hosting our renewable energy. A lot of them are in the highlands and in Scotland. They disproportionately suffer from poor infrastructure and poor public services, and a lot of them are living in fuel poverty. They are putting up with having their landscapes covered in turbines, dams, electricity transmission lines, substations and all the rest of it. I support community energy, as everybody knows—I have spoken to it in two other amendments and will not go into it here—but this is about more than that. This is not a nice-to-have; in my opinion, this is an essential part of the energy transition. It is about ensuring the continued long-term support for this journey that we are undertaking as a society.
Recent opinion polls on these matters are really strong. Where local communities benefit from the energy infrastructure, particularly the infrastructure that they host, their support for this transition is much stronger and more resilient. If this support falls away, that could be the end of the whole transition and of all this, so this is not just about being fair and supporting the communities that need it most and that host this stuff. It is also about making sure that these things go on beyond one Government and one term, that they are here, that we manage to take society with us on this journey, and that those who are hosting things that other bits of society need benefit from them.
Turning to the other amendments in this group, I signal my support for Amendment 118 in the name of the noble Baroness, Lady Bloomfield. I note that the Wildlife and Countryside Link put out a detailed briefing on that and why it needs to be there. I also support Amendments 114 and 115 in the name of my noble friend Lord Teverson. I will not go into too much detail on that. As he said, there is an Oral Question on this tomorrow. It is unfortunate that we have had more recent incidents, not just in the Baltic but off the coast of Taiwan. Obviously, the UK has a number of electricity interconnectors and gas pipelines —we had a conversation about gas in the House this week—and they will only ever increase. New contracts have been signed. We have about 7.7 gigawatts at the moment, and that will rise to 18 gigawatts by 2032, so this is a crucial part of our energy security and our journey to net zero.
I would ask the Minister one thing. We can have conversations about the other aspects later on, but I am worried about the Government going away, stepping up their appreciation of this risk and maybe recalculating some of their calculations around the security of supply as we transition to net zero in 2030 and beyond. Is there is a greater need to look at some of those things again? We will talk about the rest tomorrow.
If the Committee will excuse me, the noble Lord, Lord Macpherson of Earl’s Court, has left me a note. Does the Committee mind if I read that in support of my amendment?
These are his words: “My Lords, I would like to speak in support of Amendment 118A. I should first declare an interest as a director of two family-owned hydroelectric companies in Wester Ross. Having worked in the Treasury during the 1980s boom in North Sea revenues, I am all too conscious that Britain has a poor record in reinvesting the benefits of energy windfalls and an even worse record in passing on those benefits to communities directly affected by energy production. I think Shetland receives some money, but other places do not”.
“It is in the nature of renewable energy production that it tends to take place in remote areas. I am thinking in particular of the Highlands of Scotland, but the same applies to Cornwall, Devon, Wales and Cumbria. People living in these communities often have to live with negative aspects of renewable energy: towering windmills or hydroelectric schemes which change the natural environment and can particularly scar a hillside. Because of the remoteness, oil and gas and electricity connections cost more”.
“Successive Governments in Westminster and Edinburgh have supported the principle of requiring energy developers to support their local communities, and there have been some good examples of community investment. But practice is variable, and often contributions are set in cash terms and bear no relation to the subsequent success of renewable energy schemes. Great British Energy has a huge opportunity to lead by example in exercising best practice. By setting up community benefit as a fixed percentage of gross revenue, this amendment seeks to ensure communities benefit more fairly. A 5% contribution is relatively modest, as I understand it”—and he then goes on to make the Denmark point.
“Of course I hope that the noble Lord the Minister will agree to the amendment, but I have a feeling that he will argue that this amendment will cut across the operational independence of Great British Energy and that this Bill is the wrong vehicle for addressing community benefits. If that is the case, I would like to ask the Minister if he can go beyond fine words of general support for community benefits. Will he commit to setting out a clearer definition of what represents a reasonable and fair rate of community benefit for a given level of revenue for renewable energy projects?”.
Lord Cryer (Lab)
Before the Minister responds, I should have pointed this out before, but I was not aware: reading out speeches from another Member is not acceptable, according to the Companion. That is partly my fault. I apologise: I should have said something.
Earl Russell (LD)
I apologise; I thought that it was acceptable. The noble Lord should have intervened earlier if it was not. I would not have done it if I had known that it was not acceptable, so I apologise to the Committee.
Lord Hunt of Kings Heath (Lab)
We certainly got the noble Lord’s point.
This has been an interesting debate with which to finish today’s proceedings. I start with Amendments 106, 107 and 115. The debate between the noble Lords, Lord Teverson and Lord Hamilton, on the benefits of oil rigs and other structures for fish populations allows me to say that other energy infrastructure can also have a positive impact on nature. We know, for instance, that wind farms can coexist with farmland easily. We have examples of solar meadows, which is a practice of growing wildflower meadows on solar farms. I have heard talk of green corridors, where beautiful new pylons are built to extend the grid. I am not being facetious here, as we need to look at ways in which energy can contribute to nature recovery. It is an important point to make.
I agree on the importance of our coastal communities and commercial fishing, as reflected in Amendments 106 and 107. Amendment 115 would require GBE to consult annually with the commercial shipping sector and fishing industry. I would expect GBE to provide regular updates on its work on such issues through its annual reports and accounts. We know that the projects that Great British Energy is likely to be involved in will all be subject to relevant regulations, including environmental impact assessments. There will be statutory stakeholder engagement to understand the potential impact of development. In line with other energy developers, GBE will consider the impact and risk of its activity on the commercial shipping sector and fishing industry, as it will other affected stakeholders. I will draw these remarks to the attention of the chair of GBE, so he can understand the importance of the issue that the noble Lord, Lord Offord, has raised.
In relation to coastal communities, there will be many opportunities in the energy sector in the future. We talked about the challenge of the North Sea transition. We obviously hope that, as jobs reduce in the oil and gas sector, the people involved can take up other jobs, some of which I hope will be in the wider energy sector. But overall, GBE has an important contribution to make in this area.
On Amendment 114, the noble Lord, Lord Teverson, raised an important point on the Ministry of Defence and security agencies. Clearly, to ensure resilience, GBE will have to consider the impact and risk of its activity on offshore installation, including its pipeline and cable connections, within the context of relevant security regulations and hostile state action. It is a very important and serious matter. All nationally significant infrastructure projects, which include projects in the energy sector over 50 megawatts, undergo rigorous scrutiny to monitor and mitigate security risks. In the end, these decisions fall to Ministers to make in relation to development consent orders.
There was an interesting debate on air defence issues between the noble Lords, Lord Teverson and Lord Hamilton. I have to say that my department is working very closely with the Ministry of Defence on these issues. We are talking closely and working to ensure that our own offshore wind ambitions can coexist alongside air defence. MoD programme NJORD will deliver an enduring radar mitigation solution, which will prevent turbines from interfering with MoD radar systems. In the context of our more general working relationship with the Ministry of Defence, it will be a responsibility of GBE to consider and consult relevant stakeholders. My department will of course ensure that that happens appropriately.
Amendment 118, tabled by the noble Baroness, Lady Bloomfield, would place a nature recovery duty on Great British Energy. Let me say at once that we are absolutely committed to restoring and protecting nature and meeting our Environment Act targets. We want GBE to focus on its core mission to drive clean energy deployment, but I assure the noble Baroness that the projects that GBE invests in and encourages will be subject to all environmental and climate regulations, in the same way that every other company is.
I draw her attention to our recently published Clean Power 2030 Action Plan, which dedicates an entire section to
“Integrating clean power and the natural environment”.
I was going to quote from it, but I do not think I need to do now. We are launching an engagement exercise in 2025 to invite communities, civil society and wider stakeholders to submit their ideas on how we can best encourage nature-positive best practice into energy infrastructure and development. Feedback from this exercise will allow the Government to better understand how we can integrate nature restoration through the clean power 2030 mission. We very much agree with the substance of what the noble Baroness said.
Lord Teverson (LD)
As the Minister will know, terrestrially, there is now biodiversity net gain, which came through the Environment Act and is applied to terrestrial developments. I do not think this is for the largest of them yet, but that is due to happen. I understand it is the Government’s intention to introduce marine biodiversity net gain regulations. I presume GBE will be subject to those.
Lord Hunt of Kings Heath (Lab)
My Lords, I am going to have to take advice on that as I do not have the information. However, if there are regulations which apply to companies, GBE will be expected to comply, and to act consistently with general government policy towards biodiversity. I will write to him about that in some detail.
On community benefits, I take the point of the noble Earl, Lord Russell, and other noble Lords. In our manifesto, we committed to ensuring that communities which live near new clean energy infrastructure projects can directly benefit from them. We are considering at the moment how to effectively deliver community benefits for those who live near new energy infrastructure, which includes new energy generation and transmission technology. We are developing guidance on community benefits for electricity transmission network infrastructure and onshore wind, which we will be publishing in due course. We are also reviewing our overall approach to community benefits, both to ensure consistency and quality and to ensure that communities are properly recognised and are able to come with us on our net zero and clean power journey. This includes looking to existing examples in Europe and further afield to see what has worked elsewhere. I look forward to updating the House on our approach to community benefits shortly.
The role of Great British Energy has been set out in its founding statement, and our commitment to putting local communities at the heart of the energy transition is a very strong component of what we are doing. The local power plan will support local communities to take a stake in the shift to net zero, as owners and partners in clean energy projects. They are important in themselves, as there is a huge appetite in many localities for community power, engagement and involvement. I agree that seeing a tangible benefit for local communities is important in itself, but it is also growing general support for the move to clean power and net zero, which is very important indeed.
We take the noble Lord’s point. It is clearly important, we are working on the details and will be publishing further information in due course. In my first week as a Minister in the department, I visited Biggleswade onshore windfarm, a small windfarm with 12 turbines. The company there is voluntary and there is a good practice trade guideline of paying £40,000 a year to the local community for such things as the local parish church, the community hall and other things. It was really good to see and is an example of what can happen.
Lord Offord of Garvel (Con)
I rise to close this group and indeed this sitting of the Committee today. It is worth saying that the chairman of Great British Energy, Jürgen Maier, has acknowledged the importance of communities. He used the words that GBE should be considered “a three-party partnership”, involving the private sector, the public sector and the community. If we also take account of the Labour assurances that have been given to communities along the way, I see no reason why we cannot consider these amendments further at the next stage, but for now, I beg leave to withdraw the amendment.
Great British Energy Bill
Wednesday 22nd January 2025
(1 month ago)
Grand CommitteeGreat British Energy Bill 2024-26 Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-V Fifth marshalled list for Grand Committee - (20 Jan 2025)
The Deputy Chairman of Committees (Baroness Scott of Needham Market) (LD)
Good afternoon, my Lords. If there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Amendment 111
Lord Offord of Garvel
“Impact assessment of offshore wind energy installations and generation(1) The Secretary of State must assess the impact on—(a) the environment, and(b) animal welfare standardsof offshore wind energy installations and generation which occur under Great British Energy’s functions.(2) If an assessment under subsection (4) determines that relevant offshore energy installation and generation—(a) is causing environmental damage, or(b) has significant animal welfare issues,then Great British Energy must cease facilitating, encouraging or participating in the relevant activity.”Member's explanatory statement
This would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of offshore wind energy technologies.
Lord Offord of Garvel (Con)
My Lords, I rise to speak to Amendments 111 and 112 in my name, and in support of Amendment 113, in the name of my noble friend Lord Fuller.
Amendment 111 would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of offshore wind energy technologies. Amendment 112, also in my name, similarly requires an environmental impact assessment, but with the focus on the decommissioning of oil and gas structures.
The threat posed by the installation and generation of offshore wind farms and tidal energy is not new to the House. Many will be familiar with these concerns, as we on these Benches raised such issues in Committee in debates on the Crown Estate Bill, and discussed the purpose of electricity generation and the Crown Estate’s role in the stewardship of our seabed.
In considering the amendments in my name and that of my noble friend Lord Fuller, we must again address the Crown Estate’s strategic and unprecedented partnership with Great British Energy, which is estimated to result in up to 30 gigawatts of new offshore wind developments reaching seabed lease stage by 2030. We should expect to see considerable and accelerated growth in offshore renewable energy projects, with offshore wind contributing significantly to these efforts. The UK is the second largest offshore wind market in the world. Under the new Government, allocation round 6 has awarded 5.4 gigawatts of offshore energy contracts across fixed and floating offshore wind and tidal stream.
The speed and scale of these planned developments raises concerns about the impact on the marine ecosystem, as expressed by bodies such as Birdlife International. As stewards of our seabed and investors in and facilitators of offshore renewable energy projects, the Crown Estate and GB Energy have a duty to assess the impact of offshore energy installation and generation. GB Energy must restrict such installation and generation if it is found to cause the environment and its associated animals harm. Environmental concerns linked to the installation of offshore energy projects and the operation of these technologies include, but are not limited to, increased noise levels, the distortion in light pollution, and the potential impact on carbon storage and the biodiversity of the seabed and its composition.
In an overview of the ecological impacts of offshore wind on the marine environment, Birdlife International highlighted the impact of the installation and operation of offshore wind farms on marine animals. It found that the installation and generation of offshore wind technologies produces underwater noise, affecting the echo location behaviour of marine mammals. Porpoises, seals and marine birds have been shown to be displaced by wind farms, with some marine birds displaying consistent avoidance behaviour during breeding seasons. Noise pollution produced by piledriving has also been found to impact the behaviour of pelagic fish.
I have briefly outlined the impacts on our environment caused by offshore wind, yet other technologies also have the potential to cause significant harm. I am grateful to my noble friend Lord Fuller for addressing the threat tidal energy poses to the fish which inhabit our seas. As he will no doubt discuss this impact in more detail, I will succinctly outline the problems associated with tidal energy generation, which is foreseen to increase rapidly in the coming years. Tidal turbines in open water could result in additional mortality caused by rotor blade collision. This is significant, as tidal waters serve as key feeding areas for fish, as well as passage corridors for migratory fish. Other risks include changes in underwater noise, electromagnetic fields and habitats, and displacement.
Finally, I hope the Minister will listen to the concerns highlighted in the amendments in this group and will confirm to the Committee that he recognises that Great British Energy is in a unique and critical position to assess and minimise the impact of offshore energy installations on our environment and the marine life which inhabits it.
Lord Fuller (Con)
My Lords, I rise to speak to my Amendment 113. I have previously tabled amendments to the Bill on land, and now I return to the sea, which well fits someone whose territorial designation is Gorleston-on-Sea in the county of Norfolk.
These amendments require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of tidal energy technologies and their associated cabling. When we consider tidal energy, I am not thinking just about the fish, important though they are—in the tidal races, the machines can mash their flesh—but about sea-birds and the rest of the marine flora and fauna. I am thinking about not just living creatures but the wider environmental effects that may happen slightly away from the installations of the machines themselves, in the associated cabling that links those machines to land—a topic I will return to.
I am not against harnessing this almost inexhaustible supply of energy. The energy is there; it is year-round, predictable and reliable. It deserves to be won and it should be won. But I am not starry-eyed about the practicality of building machines that can survive in the most hostile environment, pounded by the seas and eaten away by salt-water corrosion. I am involved in the liquid fertiliser business, so I know more than most how hard it is to reliably engineer things in these tough, salt-aggressive environments. It is hard to engineer reliability in these unforgiving places, but that does not mean we should not try.
We know that tidal generation is best located where the water flows fastest—where it is choked through the channels, so that the speed naturally increases—so the machines can operate most effectively. Last November, I visited Saint-Malo and saw for myself the world’s first tidal barrage power station, opened in 1966; it is nearly 60 years old. It was a really impressive spectacle. It is cheap energy, but it has not come without cost. Thomas Adcock, an associate professor in the department of engineering science at the University of Oxford, says that there has been a “major environmental impact” on the Rance estuary as a result of the tidal station. He said that
“this would make it very difficult to get permission to do such a barrage again”.
Researchers point to the adverse impacts on marine life of altering sedimentation patterns, as well as the impact on oxygen and nutrient levels in the water. I saw for myself that the fast-flowing water passing through the 24 turbines left nowhere for the fish to go. Sand-eels and plaice have disappeared, and the silting has reduced the number and variation of other fauna. Sand-eels are the subject of the very first post-Brexit EU fishing trade spat, and of course they are the preferred diet of British sea sea-birds, so this is an important matter. It is in the public interest that this all be taken into account, so that mitigations can be put in place.
My amendment would require GB Energy to take into account a number of factors and to continuously monitor them when assessing energy proposals. Examples include the cumulative impacts of the installations when considered alongside the predicted impacts of other projects in the area; transboundary impacts, whereby activities in other countries, such as commercial fishing, may be affected, as we have seen; and interrelationships whereby impacts on one receptor, such as noise, can have a knock-on effect on another and disturb species. Examples include sub-sea noise, which my noble friend mentioned, physical processes such sedimentation flow —we saw this in France—and the updated navigational risk assessment possibly deflecting vessels into the path of other sensitive zones.
For offshore tidal proposals, perhaps with tethered devices, we must have regard to the cables that will transfer the energy to the coast. Coming from Norfolk, I take particular interest in the Cromer shoal chalk beds marine conservation zone. It is one of 91 such protection zones established by the last Government, by an organisation lately chaired by my noble friend Lord Banner. The MCZ is a protected inshore site 200 metres off the north Norfolk coast, extending about 10 kilometres out to sea and covering 321 square kilometres. It protects our diverse species. It is predominantly sandy, but the chalk beds provide a stable surface for seaweeds and static animals to settle and grow, and they are home to the Cromer crab, one of the important exports of our county; it is an important source of economic activity too. So, even though marine energy machines may be some miles offshore, we need to consider the whole cable system as well, particularly if it passes through places like the Cromer MCZ on its way to the grid.
None of this is mentioned in the Bill, which is a slim Bill with fat consequences. The Secretary of State is not required to give directions to GBE to take these important environmental safeguards into account. My previous amendments observed that GB Energy is a company: there is to be a fiduciary board, and it is established under the Companies Act 2006 to promote its private self-interest. So, unless it is constrained, we should not be surprised if GB Energy acts in its private interests, not the country’s interests. If it follows purely commercial principles, why should it need to take the marine environment into account unless it is directed to? This amendment would require the Secretary of State to provide such directions.
I expect the Minister to say, “This is all very well but it is not really necessary”. However, we must learn lessons from the water Bill, which flowed through this House as an example of what to do when you have a private company that is established for public purposes yet strays from the path. I do not want a repeat of that. Success does not look like having successive legislation later to cure the unintended consequences of GB Energy getting carried away because it acts in the private interest, not the public one.
Let us put protections in the Bill now. This amendment would provide a simple safeguard, along with those proposed by my noble friend Lord Offord of Garvel, so that the Secretary of State is directed to ensure that sensible precautions are taken to protect our fisheries, sea-birds and other flora and fauna in the whole end-to-end tidal generation system, from the coast all the way to the grid. I am not trying to block tidal power and I am certainly not seeking to add cost or complexity—still less a set of directions or to provide excessive control. My concern is to make sure that this private body, established for public purpose, acts in the wider public interest—not just its self-interest—as to its environmental responsibility and sets an example to others.
Viscount Trenchard (Con)
My Lords, I rise to support my noble friend Lord Offord’s Amendments 111 and 112, to which I have added my name. It has become increasingly apparent, from many points of view, that impact assessments are necessary. In particular, in exercising its functions, GBE should be required to consider the environmental impact and the effect on sea-birds and marine life of its installation of offshore wind facilities, as well as of its decommissioning of oil and gas structures.
I also support my noble friend Lord Fuller’s Amendment 113, which seeks to place the same obligation on GBE with reference to tidal energy projects. I have looked for information on both the Sound of Islay project and the Bristol Channel project, both of which I was reasonably familiar with some years ago but about which I have heard nothing in recent years. I am heartened by my noble friend’s enthusiasm for the sector and look forward to hearing whether the Minister expects that GBE will be encouraged to make investments in it. As my noble friend Lord Fuller said, this is a slim Bill with fat consequences. We have to make sure that GBE will act in the public interest.
Baroness McIntosh of Pickering (Con)
My Lords, I am grateful to my noble friends Lord Offord and Lord Fuller for tabling the three amendments in this group, all of which I support. I want to address a few remarks to Amendment 111.
I had not realised that we are the second-largest renewable energy market in the world. Most of the equipment is made outside the UK; I hope this is something we will do better on in future. I do not think my noble friend referred to the position of porpoises and dolphins, which have been causing me great concern over the past few years for the same reasons that my noble friend Lord Offord gave. We took evidence on this from the RSPB and from the department of ocean systems—I think it was called that—at the University of Plymouth in 2020-21.
Two issues arose from that which I would like to put to the Minister. The first, from the RSPB, said that “substantial sums” are being made, which really should be
“reinvested back into the natural environment from which”
these sums are derived. Is that something the Government are keen to do? The reason I ask is simple: I asked for a moratorium at that time, when we were under a Conservative Administration, until we had established what the impact was on birds and other marine life, such as whales, porpoises and dolphins. Over the last five years, we have had a number of inexplicable bankings of whales in particular but also of dolphins and porpoises. It is up to the industry to fund this work, so that we better understand why this is happening. If, as my noble friend Lord Offord argued, there is interference with the sonar of marine life, that should be established before we build the next stage of these massive developments at sea.
Lord Cameron of Dillington (CB)
My Lords, I ought to report on Amendment 111 in the name of the noble Lord, Lord Offord. The assessment of the effects of offshore wind farms on the environment, with particular reference to sea-birds, has been ongoing for some years now. That does not necessarily undermine the future of the amendment, but it indicates that it might not be necessary.
The UK Centre for Ecology & Hydrology—the CEH—has been monitoring sea-birds in the North Sea since the 1970s. It largely studies birds on the Isle of May, just off the coast of Fife, but also sea-birds up and down the east coast of Britain. Over the past decade, these studies—largely funded by wind power operators, but also by the Scottish Government, the RSPB and others—have been extensively monitoring the effects of offshore wind farms on sea-birds. Admittedly, having to cope with and discount the simultaneous effect of bird flu has meant that this has proven a very complicated exercise recently but, with bird flu now on the wane, colonies of sea-birds seem to be flourishing in spite of the growth of offshore wind farms. The jury is still out, but the effect of these farms seems pretty low compared to that of bird flu and the new climate change-induced phenomenon of marine heatwaves. The latter winter current changes affect the growth and presence of sand eels, which are hugely important to the winter diet of many sea-birds.
The point is that the bottom tip of a marine turbine blade is 30 metres above sea level. That is pretty high and nearly all sea-birds fly below it. Kittiwakes are the notable exception but, even here, the CEH is helping the wind farm operators to examine how to minimise their losses. One solution is to paint one of the three blades black, which seems to have a beneficial effect. It is also helping to mitigate overall losses by building artificial nesting sites for kittiwakes on the Yorkshire cliffs, for example. The intention is that the overall kittiwake population should not be affected.
It is possible—and the jury, as I say, is still out on this—that offshore wind farms actually help sea-birds flourish. Most birds thrive relatively well during summer months, but they suffer and sometimes die from lack of food in winter months. While the recent cessation of sand-eel fishing by UK fishing boats has helped—they are now not allowed to fish for sand-eels—the Danes continue this practice in considerable quantities. However, neither the Danes’ nor other fishing boats tend to fish inside wind farms for fear of snagging their nets. Thus, wind farms have become a sanctuary for sand-eels and other fish and could therefore be having a beneficial effect on the overwintering of sea-birds. But, as I say, the jury is still out.
The environmental assessment of offshore wind farms is already happening, is based on data going back to the 1970s and seems to indicate so far that their environmental effects are not hugely harmful.
Lord Hamilton of Epsom (Con)
I should like first to speak to my noble friend Lord Fuller’s Amendment 113, on tidal energy. I ask the Minister what the position is on the Severn because, in theory, the Severn bore has immense capacity to generate electricity, going upstream and downstream. It always strikes me that if we are looking for tidal energy, the Severn bore offers better opportunities than almost anything else. I am told that when people looked at this, they found big problems with flooding land further upstream, which would have led to enormous compensation claims from farmers and so forth. I should be grateful if the Minister filled us in on the Government’s thinking on the Severn, because it strikes me that if we could create tidal energy there, that would be very beneficial to the country as a whole.
Amendments 111 and 112 address environmental considerations. We have seen in the newspapers today that the Government are bringing forth a Bill that will say that in future, environmental considerations will not be taken into account in quite the same way in respect of building projects. Can the Minister update us on the Government’s thinking on that Bill, when it is likely to appear and what it is likely to say? We are all interested in this issue. Will it read directly across to energy projects, as it does for construction projects? We have heard from the Prime Minister about this wonderful tunnel they have been building on the HS2 line to preserve bats, which is costing £100 million. Then, we heard that it was not going to preserve the bats after all, and they were all going to die somehow. We want to be updated on the Government’s thinking on that. We get all these remarks from the Prime Minister, but they are significant in terms of the environmental concerns associated with construction projects. What I really want to know from the Minister is whether this is going to read straight across to energy projects in the same way and make it easier to get other construction projects going, such as housing. I should be grateful if he filled us in on that when he sums up.
Lord Howell of Guildford (Con)
My Lords, I declare an interest as an adviser to a company deeply involved in the energy transition, particularly in some of the switching station construction, which, obviously, is the land-based part of the vast increase in electricity from wind pylons that is planned—necessary, in fact, for us to begin to get anywhere near the clean electricity volumes we require for the modern economy.
We all heard President Trump making some ambitious statements yesterday. He was very strong on the fact that vast investment would be required in clean electricity—indeed, electricity of all kinds, in his case—to cope with the great new data systems that he has persuaded private industry to co-operate with the state in building. I think he said it would be $500 billion, or £300 billion; whatever the figure was, it was enormous, and the amount of electricity will be colossal. Running the data centres that will be required, which we are trying to build here as well, can drain entire systems of electricity. The demand is vast. This relatively small area, worth £8.4 billion—he calls it “peanuts”, and it seems nothing compared with these figures—will be part of this, and it will obviously have a very large footprint: a major environmental impact.
My noble friend Lord Hamilton spoke about tidal power and the Thames Barrier. To give a little history—I am sorry, but it is relevant to where we are now—he will remember, because I know he has a crystal-clear memory, that, 40 years ago when he was my Parliamentary Private Secretary in the Department of Energy, the first folder on my desk on day 1 of moving into the job was a gigantic report on the Severn barrage. The conclusion was that it would not work and would have a huge environmental impact on nature and the surroundings, rather on the scale of the idea that has now been floated down at Hinkley—that some kind of marshland development should be promoted, which will also have an enormous impact and is causing a lot of protest. So, this is not a new question. We have been talking about barrages and tidal energy and its capacities, and the undoubted impact it can have in specific areas on a rather small scale, for at least 40 years, and we will no doubt be talking for the next 40 years.
In a specific situation it makes sense but, generally, as part of the huge electricity supply that we are now contemplating, as NESO told us only yesterday, we are now moving towards the base camp, to use its language—to this colossal increase in clean electricity by 2030. Just as we are at that point, we can now see that these small additions help, but they will not be part of the central solution.
My noble friend Lord Fuller raised a number of very interesting questions. He also made a general point which is relevant to this amendment as well as others: where are we on new thinking about public purposes harnessing private money? It is an old and obvious question. It is particularly obvious now, when the modern state has vast amounts invested and huge duties to fulfil. In fact, some of them are too vast for the state to cope with in its present form. It has no money, or, rather, it is underwater in debt, as the entire nation is—indeed, the entire world is—and it is hesitant to raise more by taxation and therefore has to look to the poor old consumer and the taxpayer for anything it can raise.
The private sector has the money. The sovereign wealth funds, pension funds and investment pools around the world have vast amounts of money and are looking for places to invest it, but they cannot find them. Somewhere in between those two—the Government having all the demands and the private sector having all the money—there has to be a reinvention of the co-operation between the state and the private sector, which the ideologists in our various parties will not like at all, but that is where we are going. We had a try with the private finance initiative, which was invented by the Conservative Party and taken up with some enthusiasm by Labour, now in government again, and then it ran into difficulties.
I believe that there used to be a unit in the Cabinet Office looking at this whole new area—I hope it is still there somewhere—of having new kinds of co-operation in the digital age between the Government, or the state, and private sources of money. I would quite like to know from the Minister whether that unit is still operating and, I hope, having some very new ideas, and not just in this area. The same problem arises in a vast range of areas.
As to the impact on the environment, which this amendment so rightly focuses on, something of this kind has got to be included in the Bill. It would be a dishonest Bill if it did not have something addressing these issues. I mentioned the switching stations; I am not quite sure how many new ones we will require between now and 2030. I think that two have just been started. I have a figure of 13 switching stations around the coast of this country. Whether they will be built in time, I very much doubt but, if they are, I would like to know what sort of impact they will have on the environment.
Earl Russell (LD)
I am sorry, but I am just a little confused which amendment the noble Lord is speaking to. This is obviously not Second Reading and we are not making general speeches. Could he help me with which amendment he is speaking to?
Lord Howell of Guildford (Con)
I had actually finished but I spoke repeatedly to the environment amendment. I mentioned it six or seven times. I am not sure what the noble Earl’s motive is. I thought that ought to be clear. Is it not clear?
Lord Hamilton of Epsom (Con)
Can we just return to the Severn barrage? I agree that, 40 years ago, my noble friend was looking at this and that I was looking over his shoulder at the time. The concerns about putting in a barrage on the Severn were mainly about flooding a whole mass of land further upstream. This was in the days when farmers were expected to grow food. It is rather changed now; we expect our farmers to have immense environmental concerns and, in many cases, the whole grant system is skewed towards people having nature reserves on their farms rather than producing food. Surely, if a lot of this land got flooded that would be incredibly encouraging for people who want to encourage wading birds and all the rest of it. I am sure there would be enormous environmental benefits, rather than a downturn in the prosperity of the land which then got flooded by the barrage.
Lord Roborough (Con)
My Lords, I briefly address Amendment 113 in the name of my noble friend Lord Fuller. I declare my interest in the ownership of salmon fishing rivers.
Proposals that I have seen in the past for energy generated from tidal turbines have tended to be located where currents are strongest. By definition, this is where sea movement is constricted by narrower channels —between islands, between islands and the mainland, in estuaries or on prominent headlands around which currents and tides race. These locations are precisely where the movements of migratory fish species such as salmon and sea trout, as well as saltwater species, will be concentrated. The wild Atlantic salmon is already an IUCN red list species and the greatest of care must be taken with any further risk to the survival of every individual fish, given that the species is so threatened.
For these reasons, I strongly support my noble friend’s amendment and those of my noble friend Lord Offord of Garvel, which he and my noble friend Lord Howell of Guildford have spoken to very convincingly. I urge the Minister to take these concerns seriously and consider incorporating environmental protections in this Bill.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, this first group of amendments has led to an interesting discussion that went somewhat wider than I expected.
Amendments 111 and 112 proposed by the noble Lord, Lord Offord, and Amendment 113 proposed by the noble Lord, Lord Fuller, would require the Secretary of State to assess the environmental and animal welfare impacts of Great British Energy projects. Amendments 111 and 112 relate to offshore wind energy projects and the decommissioning of offshore oil and gas structures, respectively, involving Great British Energy. Amendment 113 relates to Great British Energy’s offshore tidal energy projects. Under each of these amendments, if, following assessments, significant environmental damage or animal welfare issues are identified, Great British Energy must cease these activities.
The noble Lord, Lord Offord, started by referring to the partnership agreed between Great British Energy and the Crown Estate. He is right that we see great potential in this for our 2030 ambition for offshore wind at between 43 and 50 gigawatts. We also see potential in tidal stream. I relate that to the comments of the noble Lord, Lord Howell, on the huge increase in future electricity demand and his suggestion that it would likely have an environmental impact, which Great British Energy would be promoting through its investment in various projects and in clearing the way for other projects.
I very much take the point of the noble Lord, Lord Howell, on the partnership needed between government and the private sector and private finance. I do not know whether that unit in the Cabinet Office still exists, but I am pretty certain that the Cabinet Office is extremely interested in leveraging private finance. This Bill is partly to enable that and to promote expertise in the private sector on behalf of the polices that the Government wish to enact on clean power and net zero.
The noble Lord, Lord Cameron, had some interesting insights on the environmental issues and presented a balanced and helpful report. I make it absolutely clear that the Government’s commitment to the environment is unwavering. We have the Environment Act targets of halting biodiversity decline by 2030 and safeguarding our marine protected areas. We believe that a healthy natural environment is critical to a strong economy and sustainable growth and development. We have a duty to uphold environmental protection and minimise any impact on biodiversity. This must and will extend to any project that Great British Energy is involved in.
I reassure the noble Viscount, Lord Trenchard, that projects involving Great British Energy will be subject to rigorous planning and environmental regulations that consider impacts on the environment and habitats. The general theme of my argument is that it is not for GBE to do this; it will ensure that any project it is involved with follows the law and the guidance to protect our environment. It seems to me that the argument noble Lords have is with those environmental protections, which, by implication, they presumably think are not strong enough, rather than with Great British Energy.
Perhaps I can carry on that theme. As an example, projects will be subject to the Infrastructure Planning (Environmental Impact Assessment) Regulations 2017, under which the impact of these projects on the environment and habitats are considered as part of the development process. Additionally, as part of the nationally significant infrastructure regime, developers are required to provide environmental assessments as part of their application for development consent, which will be subject to detailed scrutiny through an examination held by the Planning Inspectorate. This will include scrutiny of the environmental impact assessment and a habitats regulations assessment, which would consider the likely impacts of a proposed development against a range of environmental receptors.
The planning process, at both national and local level, is underpinned by a number of other pieces of legislation that will apply to projects in which Great British Energy might have a role. They include: the Town and Country Planning (Environmental Impact Assessment) Regulations 2017; the Environmental Assessment of Plans and Programmes Regulations 2004; the Conservation of Habitats and Species Regulations 2017; and the Conservation of Offshore Marine Habitats and Species Regulations 2017. On offshore wind, I should say that we are working with Defra on the offshore wind environment improvement package to expedite offshore wind consenting while protecting the marine environment.
On the point made by the noble Baroness, Lady McIntosh, in England we are committed to meeting our four legally binding targets for diversity: to halt the decline in species abundance by 2030; to reverse declines by at least 10% by 2042; to reduce the risk of national species extinction by 2042; and to restore or create more than 500,000 hectares of wildlife-rich habitat, also by 2042. We have launched a rapid review of the environmental improvement plan to ensure that it fully supports our mission to recover nature.
We also intend to establish industry-funded marine recovery funds into which applicants can pay to discharge their compensation obligations, underpinned by libraries of approved strategic compensation measures. We are engaging in discussions with the Scottish Government with a view to reaching an agreement on the establishment of, and the delegation of appropriate functions to operate and manage, a separate marine recovery fund for projects in Scotland. We think that the offshore wind environmental improvement package—the OWEIP —will, on the whole, accelerate and de-risk the consent of offshore wind projects while continuing to protect the marine environment.
Great British Energy will not play a role in the decommissioning of oil and gas structures. However, I should say that the UK’s decommissioning regulatory regime requires a robust assessment of the potential impact on safety, technical constraints and costs, ensuring no harm to human health or the environment. Decommissioning proposals are subject to thorough environmental assessment before a regulatory decision is made.
On the matter of tidal, I was interested in the contribution from the noble Lord, Lord Fuller. He referred to the tough challenges involved. I well remember visiting the Pentland Firth when I was last in this job; Rolls-Royce was engaged then, I think. I readily accept that this is a very tough challenge. On the other hand, we are the world leader in tidal stream—half of the world’s operational capacity is situated in UK waters—and we want to go further. My understanding is that six tidal stream contracts, with a capacity of 28 megawatts, were secured in Scotland and Wales in the latest allocation round of the Government’s contracts for difference scheme.
I had responsibility for the River Severn project between 2008 and 2010. I chaired a number of community forums with people in the south-west who were keen to see progress in the Severn but, I have to say, I received the same advice as the noble Lord, Lord Howell: the environmental damage would be so considerable that it was not thought appropriate to go ahead. My understanding—I am not going to guess; I will write to the noble Lord, Lord Hamilton—is that the position is still the same, but I will find out some more and let him know, because he clearly has a keen interest in this matter.
Lord Offord of Garvel (Con)
My Lords, in concluding this group, I thank all noble Lords who have made thoughtful contributions on it. We are dealing with the impact of GB Energy and its activities on our environment.
In my concluding remarks, I will briefly mention Amendment 118, in the name of my noble friend Lady Bloomfield, which was discussed previously and is closely tied to the same issues raised in this group. That amendment would create a statutory duty for GB Energy to behave in a way that looks to promote nature recovery. The British Ecological Society has found that nature-based solutions can help to resolve the problems of climate change by reducing atmospheric greenhouse gas concentration. The alarming truth is that England is widely considered to be one of the most nature-depleted countries in the world, following historic and ongoing declines.
We must also note a point raised in the debate this afternoon: it is not just the deployment of wind farms or tidal technologies that causes environmental damage. If GB Energy is also set to decommission, as we have discussed, or to repurpose oil and gas structures, it must assess and mitigate the risk of this practice on the environment. As my noble friend Lord Fuller so rightly explained, GB Energy is a public company; it is only right that it acts in the public interest. I do not see why the Minister would disagree, but I thank him for his detailed response. In the meantime, I beg leave to withdraw the amendment standing in my name.
Lord Hamilton of Epsom
“Investment in subsidised renewable energy projects Great British Energy must not invest in any project that relies wholly or in part on subsidies from the UK Government.” Member's explanatory statement
This amendment would prevent GB Energy from investing in projects which rely on UK Government subsidies.
Lord Hamilton of Epsom (Con)
My Lords, the concern that we have here is all to do with financing projects, and the worry that the Great British Energy fund will be used to bolster the financing of some highly speculative energy projects that the private sector is not prepared to back. Those are the ones that will be moving in the Government’s direction and they will be very speculative. They may well not make money; they may be almost doomed to lose money when they start.
There is a great concern here that, when the Treasury is raking around to get contributions for a highly speculative scheme, it will be looking for Great British Energy to put some money into the pot in addition to taxpayers’ money. One thinks here about the development of batteries or energy storage—which is all very controversial—and the whole business of storing CO2 emissions and pumping that into existing oil wells. I am not sure that the technology for that has been completely satisfied. It all seems to be rather speculative as to whether it will ever happen.
That is the worry that many people have about this Bill. There is a very lively private sector that is happily picking all the low-hanging fruit when it comes to profitable ventures in the energy field. If we are not careful, Great British Energy will be left with everything else that is far from profitable, is extremely speculative and may well lose taxpayers’ money in the process. We want some reassurance from the Minister that this will not happen. Otherwise, it really will be an abuse of taxpayers’ money if Great British Energy just gets involved in all the things that the private sector is not prepared to back.
There are so many different areas that are very speculative when it comes to energy. We had a great debate about hydrogen in the past, for instance. My noble friend Lord Roborough and I do not in fact agree that there is a future for hydrogen. We do not seem to have had any great elucidation from the Minister on this; I do not know whether the Government think that hydrogen is a good idea or a bad one. Either way, it is a typical example of a very speculative form of alternative energy that could cost a fortune to develop and lose people an awful lot of money if it did not work out at the end of the day.
The point of my amendment is that I am very concerned that the Great British Energy fund will be used for these very speculative ventures and I am not sure that that is really what the taxpayer is looking for. I had an issue with what my noble friend Lady Bloomfield said about all the profit that would be made by Great British Energy. I am not sure that it will be making any profit; I think it is much more likely that it will make thundering great losses and all the billions of pounds that are put into it will merely disappear with very little to show for it in the future.
Lord Frost (Con)
My Lords, I speak to Amendment 130 in my name. I begin by noting my interests as set out in the register; I have a new interest as a director of Net Zero Watch.
Amendment 130 would postpone the entry into force of much of this Act until the Secretary of State publishes a comprehensive report setting out the full costs of the renewable energy industry. My noble friend Lord Hamilton has just set out the logic of having such a clause that delays the entry into force of certain provisions. From my point of view, the logic is that certain things need to be made clear before Great British Energy can effectively start its work.
It is in this area—the cost of renewables, the subsidies, the taxpayer support, the higher prices—that this problem of establishing the basis on which GBE is proceeding seems the strongest because it would be going into this without any reliable costings in this area and with a real sense that what is known about the costs of renewables is not being disclosed entirely frankly for full and honest debate. When we try to have a debate on this subject, we are often shot down by a statement that, whatever the costs, the costs of climate change are higher. But again, that is never set out. I was lucky enough yesterday to be able to ask the Secretary of State when the last cost-benefit analysis had been done on this subject, and he said it was in 2021. That was before the Ukraine war, which is used as the justification for the rush to renewables.
The NESO report was produced last autumn. It shows that both the pathways to decarbonisation of the energy grid in 2030 are more expensive than doing nothing. That is even clearer if you eliminate the vastly inflated carbon price included in those costings. My right honourable friend the shadow Secretary for Energy Claire Coutinho said last week that internal work within the department on the full system costs of renewables, which she commissioned when she was Energy Secretary, had been stopped. That work would have given us the data that would have enabled the report that my amendment requires.
To conclude on this point, I refer to a blog by Sir Dieter Helm, a well-known expert in this area and not someone with whom I agree on the fundamentals of climate change. He says in this blog, written last week, on the prospect of renewables costs falling:
“It would be wonderful if it was true, but sadly it isn’t anytime soon”.
He goes on to say the UK and the EU are
“telling fairy tales that ‘it’s all going to be cheaper’ here”.
He is one of the biggest experts in this area. We need honesty and GBE needs clarity about the reality on which it is proceeding with its work. That is why I have tabled my amendment, and why we need a proper report and clarity. GBE needs a reliable starting point so that its actions can be tested against reality and we can be sure that it is acting properly in the public interest. I hope the Minister looks at the issue with that in mind, and perhaps gives this amendment sympathetic consideration.
Lord Roborough (Con)
My Lords, I rise briefly in support of my noble friend Lord Hamilton of Epsom’s Amendment 118B, with which I obviously agree, as I do on most things—apart from the widespread competitiveness of green hydrogen. I also draw the Committee’s attention to my interests in solar and wind energy project development.
This amendment appears entirely logical in preventing GB Energy investing in any project whose economics depend wholly or in part on government support. This would prevent any impression that the Government may be self-dealing or that there could be any bias in project support from the Government. Without the amendment, there is a risk of a chilling effect on private sector projects that may wish to compete with projects backed by GB Energy, if there is a perception that the Government will always prefer GB Energy projects. There is also a risk that the Government will face the moral hazard of temptation to prop up failing GB Energy projects and investments. For these reasons, this is a highly desirable amendment.
I am also interested in the Minister’s replies to my noble friend Lord Frost on the whole system cost of renewables—particularly if the Minister were able to give this Committee some insight into the carbon costs that his department are using. If he cannot do so now, perhaps he can do so in writing. If the Minister does not agree with the wisdom of my noble friend’s amendment, what transparency can he offer into the amount of government support that may be falling into the hands of GB Energy’s projects?
Lord Howell of Guildford (Con)
My Lords, I have one question, prompted by my noble friend’s proposed amendment, about a major solar-based renewable project that was mentioned in White Papers under the previous Government; I think the former Secretary of State under the Conservative Government called it a project of central significance to the whole transition and net-zero aspiration.
It was in Morocco. They were planning, with financial support—a subsidy—from the Moroccan and British Governments, a colossal solar-based system to transmit electricity under the Bay of Biscay via a special new kind of transmission cord now being developed in Scotland. It would have delivered a final amount of 3.6 gigawatts of electric power into the British system. Going forward, that would remain a considerable contribution to our clean electricity of the future. Is the project still part of the scene under the new Government? If it is, will GB Energy have any role in it, because it is a very important factor in our overall energy needs?
Lord Petitgas (Con)
My Lords, I will make a link between Amendments 118, 118A and 130.
On Amendment 130, it will be interesting to see whether we get the results, but my impression is that, in this country, there is not a single net-zero or renewable project that is not subsidised by the Government in some way. In fact, that is one reason why there has been so much private capital: with the electricity price being run off the marginal cost of gas turbines and the marginal cost of renewable energy—particularly from wind farms—being zero, in effect, there is no way not to make money in that business.
This raises a question around the subsidisation of the whole system, including whether GBE should pile in further when it is already subsidised. It also raises the question of whether we need GBE, because we already have private capital in the system. In fact, we probably have more wind energy than anybody else in the G7. We have said this before. There is a lot of private capital coming into this industry.
The real question is less about GBE and more about what level of subsidisation we are prepared to put in. This may explain why we have the highest energy costs in the G7—double those of the US. This morning, my noble friend Lord Howell talked about Stargate and the announcement made by the US. We will find it very difficult to compete—let alone not having the money, our energy costs are double those of the US—if we want to run LLMs and supercomputers.
Lord Offord of Garvel (Con)
My Lords, I thank and express my support for my noble friends Lord Frost and Lord Hamilton of Epsom, whose amendments address the matter of subsidised renewable energy technology. Considering that GB Energy is already supported by £8.3 billion, I see no viable reason why it should invest in renewable energy projects that are already substantially supported by government subsidies and funded by the British consumer, as my noble friend Lord Petitgas highlighted. Surely it is essential that the renewable energy industry in the UK is not reliant on government handouts for ever. We must look to create an environment that promotes competition and innovation and mitigates the likelihood of inefficiency.
At present, the Government subsidise low-carbon electricity initiatives through contracts for difference, where they guarantee developers a fixed price for the electricity that they generate. This is funded via a levy on consumer bills and, at the end of last year, the Government were considering holding the largest auction yet in 2025 despite recent scrutiny over consumer energy bills. The British consumer is already burdened by the cost of turning off wind turbines to avoid overloading the power grid; this costs the UK £1 billion a year, with that predicted to rise to more than £3.5 billion in the next decade. Why should the taxpayer be burdened numerous times?
According to the OBR, environmental levies are around £12 billion. This amounts to £400 per household in the UK. Yet the cost of offshore wind is less than current market prices and those agreed in auction rounds. If renewables are supposedly cheaper, I query why we are paying these subsidies in the first place. The truth is that the Government’s clean energy by 2030 agenda will require substantial levels of borrowing, which will be spent on subsidising renewable energy technologies. This rushed target will only cost the consumer more. It will not cover energy bills by the £300 a year promised during the election campaign.
Amendment 130 in the name of my noble friend Lord Frost would prevent the Bill being passed until the Secretary of State publishes a report calculating the costs to consumers and taxpayers of the UK renewable energy industry. The amendment raises the issue of transparency. If we are to pass a Bill that is so financially consequential, we must have sight of the Government’s current spending on renewable technologies.
Amendment 118B from my noble friend Lord Hamilton of Epsom would prevent GB Energy investing in a project
“that relies wholly or in part on”
government subsidies. Amendment 129 would prevent the Act being passed until
“the Secretary of State publishes a report on the appropriateness of further Government subsidy for offshore wind developments”.
These three amendments neatly touch on the concerns that I have raised. I ask the Minister to thoroughly consider the worries expressed by my noble friends.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to all noble Lords who have taken part in this debate, which reflects previous debates in Committee. It started with the noble Lord, Lord Hamilton, being worried that GBE will invest badly, not make money and invest in speculative projects, which he thought the Treasury might encourage it to do. My experience of the Treasury is that that is not how it works out in practice. Our challenge is encouraging the Treasury to make investment decisions, and the scrutiny with which it approaches this matter can be described as vigorous.
Lord Hamilton of Epsom (Con)
Does the Minister anticipate that the Treasury will have a veto on anything that Great British Energy invests in?
Lord Hunt of Kings Heath (Lab)
No, I do not imagine the Treasury will have a veto, but I think it will keep a careful eye on the work of GBE. I have already mentioned in previous debates the number of controls that will be in place.
Noble Lords argue this many ways around, but we are trying to reach a middle ground where we get the benefits of a company with people on the board who are very experienced in this area making hard-headed commercial decisions, because we want GBE to be successful and to make a profit. On the other hand, it is also a public sector body accountable to the Secretary of State and therefore subject to the normal public sector controls. The skill of the GBE board will be to find a way through this, and that is why we wish to give it as much operational independence as possible.
At the risk of repeating myself on the cost issue, in its whole-system analysis undertaken for the previous Government, my department concluded that a renewables-led system, complemented by flexible technologies to ensure that supply and demand are balanced, alongside technology such as nuclear, would form the cheapest foundation for a future decarbonised power grid. Since that analysis was published, a range of external commentators, such as Energy Systems Catapult and the Climate Change Committee, have published analysis which reaches similar conclusions.
Noble Lords have quoted Dieter Helm and other commentators but I believe that there is a general consensus on the broad make-up of the most cost-effective future systems, although there will be some disagreement over potential technologies in future. For instance, the noble Lord, Lord Hamilton, raised hydrogen, and, in our short debate on small modular reactors in the House this afternoon, there was a question about value for money in their development. I readily accept that; however, we think that the general mix is the most cost-effective way to go forward.
Amendment 118B seeks to add after Clause 7 a new clause that would prevent GBE investing in any project that relies wholly or in part on government subsidies. I am not in favour of that. First, GBE is operationally independent, so commercial investment decisions need to be made separately from government decisions on subsidy provision. Secondly, GBE will be focused on driving clean energy deployment through its functions. The Government provide different subsidies in different ways across the energy market, so limiting GBE’s activities to areas where there are no government subsidies would unnecessarily constrain the company.
Coming back to a point from the noble Lord, Lord Hamilton, the advice we have had from the Climate Change Committee is that CCUS would enable us to have the lowest-cost pathway to net zero. It described it as
“a necessity, not an option”
for maintaining our climate commitments.
The way in which GBE will interact with existing and new government policies and influence the energy system will clearly be determined on a case-by-case basis. We will clarify the relationship between existing schemes and GBE in due course. I assure the Committee that we are currently seeking advice on Great British Energy’s compliance with the Subsidy Control Act in both its establishment and operation.
Amendments 129 and 130 propose additions to Clause 8. In essence, they seek to delay the commencement of the Act until the Secretary of State publishes a report on the appropriateness of further government subsidy for offshore wind developments, as well as a comprehensive report detailing the full costs to consumers and taxpayers of the UK renewable energy industry. Noble Lords will not be surprised to hear that I resist these amendments. We want to see Great British Energy get set up as quickly as possible and get on with the job. Frankly, I do not see it as necessary for those reports to be published.
On Amendment 129, as I said in our debate on the previous group, we are committed to increasing radically the deployment of offshore wind, which provides us with secure, domestically generated electricity. As I have already mentioned, we want 42 to 50 gigawatts of offshore wind by 2030, up from 15 gigawatts today. The contracts for difference scheme is the Government’s main mechanism for supporting new renewable electricity generation projects. We continue to evolve that scheme to ensure that it is aligned with the Government’s wider objectives. In addition, the clean power action plan that we published last year reconfirmed our view, and that of NESO, that clean power can be delivered by 2030 without increasing costs to the consumer and with scope for lower bills.
Overall, I really think that GBE should now be allowed to get on with the job. I do not believe that putting in amendments that would prevent it investing in schemes that attract subsidies is the right way forward. The Government would certainly resist that.
Lord Hamilton of Epsom (Con)
My Lords, my concerns remain. This is such a thin Bill and commits the Government to so little—other than spending other people’s money in inordinate quantities—that one can see the potential for things going wrong very easily. I beg leave to withdraw my amendment.
Earl Russell
“(2) This section and section 5 come into force on the day on which this Act is passed.(2A) Sections 1 to 4, 6 and 7 come into force on the day the statement required by section 5(1) is laid before Parliament.”Member’s explanatory statement
This amendment means the Bill cannot come into force unless the statement of strategic priorities has been laid before Parliament.
Earl Russell (LD)
My Lords, I stand to open the very last group of amendments as part of the final day in Committee on the Bill. This group is on commencement and, in moving Amendment 122, I will also speak to Amendments 123 and 124. I will be very brief on my amendments in this group, as I feel that I have already spoken to them in the group on strategic priorities during day 2 in Committee, a debate that was so nobly led by the noble Lord, Lord Vaux of Harrowden, who I note is in his place. We had a very good and useful conversation on the strategic priorities as part of that group.
Amendment 122 would require that the strategic priorities are laid before Parliament. I have also tabled Amendment 123, which would require that they be laid before and approved by Parliament, and Amendment 124, which is, as I said, more of a compromise on these issues. It says that the Act
“cannot come into force unless a document setting out the thematic headings of the statement of strategic priorities has been laid before Parliament”.
That last amendment is where I really want to be on these issues.
My sense is that there is a general concern across the House, and across parties, on the need for some further clarity on the strategic priorities, but I welcome the words of the noble and learned Lord, Lord Falconer, at Second Reading. He made a welcome statement that some work should be done to try to find a solution on this. I also recognise that the Minister is in a difficult position here and that there is a need to get on with the Bill. I recognise that these things are being negotiated with the devolved authorities.
My last amendment is really an attempt to try to find a solution to these issues, and my hope is very much that a solution can be found. I hope that the Minister can say something on that solution today and maybe, after further consideration prior to Report, give at least the heads of terms of the kind of things that will be in the strategic priorities. On that, I think we can progress. My worry is that it otherwise feels, from our point of view, a bit like we are signing a blank cheque on these matters. That being said, those are my amendments.
I turn to the three other amendments in this group. Amendment 125, in the name of the noble Lord, Lord Offord of Garvel, is on the publication of a financial framework document and calls for that document to be published before the Act is passed. From my personal point of view, I would like to see some progress on the financial document and what it might contain. I am not certain that I would refuse to pass the Act if it were not published prior to then.
Amendment 126 is in the names of the noble Lord, Lord Hamilton of Epsom, and the noble Viscount, Lord Trenchard. This amendment says that the Act cannot come into force until its impact
“on the number of jobs in Aberdeen”
has been published. We do not feel that we would support that amendment. The development of offshore renewable energy will help to create jobs, and GB Energy will be headquartered in Aberdeen. The exact manner of how that happens is to be seen, but green energy and green jobs are good for our future and the Bill is good for our energy security.
We have had a few conversations about the cost of this Bill and GB Energy. I kindly remind the Conservatives that they spent over £40 billion subsidising energy bills as a result of the war in Ukraine. While that money was useful to those who were suffering in fuel poverty, in the longer term it did absolutely nothing to generate energy security for our country and our future. The biggest cost is doing nothing. To continue to do nothing is not an option that remains open to us, either in terms of preserving our future or of looking after bill payers. In the main, therefore, we welcome the Bill.
I turn, finally, to Amendment 127 in the names of the noble Lord, Lord Hamilton of Epsom, and the noble Viscount, Lord Trenchard, which calls on the Secretary of State to publish a report on the cost and viability of the Government’s net-zero strategy. That is not necessary before the Bill is passed, but I take the point made by the noble Lord, Lord Frost, who is not in his place. It is important that the Government are clear on figures, and those figures should be updated. However, when we have these conversations on cost, they are, unfortunately, very one-sided. The cost is always on one side of the equals sign and not on the other. There is a huge cost in doing nothing. We have seen LA go up in flames, and there are huge predicted costs to the global economy and our future.
The Government, to my mind, must do more in continuing to look at reforming the electricity market mechanism. The Government’s projected direction of travel is for us to electrify, and it is important that we continue to look at the cost of electricity and that the Government continue to work on providing social tariffs and making sure that those in need can afford to heat their homes. With that, I beg to move.
Viscount Trenchard (Con)
My Lords, it is disappointing that no financial framework details were included in the Bill, as they should have been. Amendment 125, which will be spoken to by my noble friend Lord Offord, would ensure that the Bill cannot come into force until the Secretary of State has laid before Parliament, together with a Motion for resolution in each House, a revised financial framework document. This would improve transparency and accountability, which are in short supply in this Bill, as has been noted by many noble Lords.
I have also added my name to Amendments 126 and 127 in this group, which would essentially require the Government to explain the impact of their proposals on the number of jobs in Aberdeen and would require a report on the cost and viability of their net-zero targets. I fear that the negative approach to the oil and gas industry based in Aberdeen will lead to more job losses than will be created by the location of GBE in that city. I am also not at all sure that the type of people being made redundant by oil and gas enterprises being forced to destroy economically beneficial businesses are the same type of people GBE will wish to recruit. It is clear that the Government’s decision to locate in Aberdeen was intended to mitigate the damage to that city’s economy, but I am not at all sure that that will be the case. I support my noble friend Lord Hamilton in calling the Government to account on these matters through tabling these two amendments.
As I said at Second Reading, we cannot rely on renewables to continue to decarbonise the grid, or even begin to replace our much larger industrial energy consumption, which is still dependent largely on oil and gas. My noble friend Lord Frost explained on 14 November, and again today, how serious a problem the intermittency of renewables is. It is essential that the Government think again before confirming the premature ending of oil and gas, at least until more serious attention has been paid to the possibilities that nuclear may offer. In this regard, we should be a little bit more like France.
Lord Hamilton of Epsom (Con)
My Lords, I speak to the two amendments in my name. The first, Amendment 126, is about the jobs in Aberdeen. Unfortunately, this amendment gets involved only in the number of jobs that are created by Great British Energy in Aberdeen. As my noble friend Lord Trenchard has already referred to, it does not make any reference to the number of jobs that have already been destroyed by the Secretary of State for Energy in not granting any more licences in the North Sea, which will have—
Lord Hunt of Kings Heath (Lab)
It is all very well the noble Lord saying that, but I remind him that a lot of jobs were lost on the UK continental shelf during his Government’s stewardship.
Lord Hamilton of Epsom (Con)
Yes, but the fact that a number have gone already because the industry is declining is not a compelling reason for destroying even more, in my view—but I hear what the Minister says.
Of course, this contrasts tremendously with the inaugural address from President Trump, saying, “Drill, baby, drill”. He is quite keen on expanding the oil industry in the United States, which is interesting because he slightly gives the impression that the United States has been rather laggardly in producing oil. I have some quite interesting statistics from the Library that indicate that, throughout the Biden years, despite all the green initiatives that were produced, the United States was actually the biggest producer of oil in the world. In 2020, it produced 11.3 million barrels a day, and in 2023 it produced 12.9 million barrels a day. Of that, it was using about 8 or 9 million barrels for its own consumption and exporting the rest. The idea being put out by the Trump regime that drilling for oil will somehow be a new venture is quite interesting; it has been going on, fit to bust, under the Biden Administration—you slightly wonder how that ties in with all the green credentials that he was boasting about, when they were producing these vast quantities of oil. They were way ahead of the Russians, who were the second-biggest producer of oil, at about 10 million barrels a day.
We are now in an interesting situation, as there seems to be a recognition by the Trump regime that we will go on needing hydrocarbons and oil way into the future. At the end of the day, the idea that we can somehow phase all this out in this country slightly defies credibility because, as we have discussed already, the reserves of oil are higher than they have ever been, and we will go on needing it for quite some time. It is rather extraordinary that we do not produce our own oil in the North Sea for our requirements. As it is, we will have to import it from other places, creating CO2 emissions and so forth on the way.
Earl Russell (LD)
I was listening to what the noble Lord was saying, and the truth is that North Sea oil is declining by 7% a year—which will not change—and that we have the third-best wind resources in the world. North Sea oil will never meet our energy needs and, if we do not find alternative forms of energy, we will be dependent on the international markets, which will mean huge variability, no security and huge cost to our bill payers. Surely the best thing to do is use the third-best renewable resources in the world that we have to back that up with a system that works.
Lord Hamilton of Epsom (Con)
I find that an interesting comment because, at the end of the day, wind energy is totally dependent on the feed-in tariffs that end up on everybody’s electricity bills. That is one reason why we are paying such enormous sums of money for electricity at the moment. The idea that wind is somehow a cheap option does not seem to be quite working out.
The broad point is that anybody who looks at the energy demands of this country knows that we will go on needing oil for quite some time to come. It seems extraordinary that we then depend on imports of oil from around the world, with all the CO2 emissions that go with that, rather than producing our own. I can see no logic in that at all. The production of oil in the North Sea may be declining, but that does not mean that we should not, therefore, give licences to produce more oil from the North Sea if we actually need it in this country. That seems inexplicable when we are importing it from elsewhere.
Lord Vaux of Harrowden (CB)
My Lords, I wish briefly to comment on and support the intent of Amendments 122, 123 and 124 tabled by the noble Earl, Lord Russell. At the risk of sounding like a stuck record, the basic problem with the Bill is that it includes absolutely nothing about what GBE will actually do. Yes, there are the objects in Clause 3 but, as we debated at some length previously, they set out only what GBE is allowed to do, not what it is intended to do.
What it is intended to do—its objectives, if you like —will be set out in the statement of strategic priorities in Clause 5. We have not seen those and it would appear that we will not see them for a while—certainly not before the Bill passes. As the Constitution Committee pointed out, that key document will not be subject to any parliamentary scrutiny—in fact, the Constitution Committee referred to it as “disguised legislation”—nor is there anything in the Bill to prevent GBE starting its activities before that statement has been published.
As I say, we have had several debates on this, so I will try not to repeat myself. There are a number of ways to do this: the new amendments in the name of the noble Earl, Lord Russell, may or may not be the right way and we have had other amendments previously. However we do it, it is critical that at least some substantive level of parliamentary scrutiny should be available on how GBE intends to spend its £8.3 billion before it starts to spend significant amounts of money.
Lord Offord of Garvel (Con)
I thank the noble Earl, Lord Russell, for moving his amendment and all noble Lords who made contributions or comments. Perhaps I may take them thematically, starting with the importance of oversight. As regards the amendments in the name of the noble Earl, Lord Russell, we on these Benches are in favour of the sentiment of Amendments 122 to 124.
As mentioned by the noble Lord, Lord Vaux, the strategic priorities for GB Energy are not included in the Bill. Indeed, we have not had sight of those most important principles; we simply do not have any concrete examples of what GB Energy as a company will be trying to achieve. I must therefore ask the Minister: how can we support the Government if we do not even know what the proposed investment vehicle will put taxpayers’ money into? This House and the other place must have sight of the strategic priorities of GB Energy so that we can assess its goals, what it intends to achieve, how these goals will be achieved, in what order they will be prioritised, and how much money will be spent on those goals and priorities.
I turn to Amendment 125 in my name, which ensures that the Bill cannot come into force until a financial framework document has been laid before Parliament. Much like the noble Earl, Lord Russell, I am deeply concerned that we have not yet had sight of this most important information. I do not feel it is possible to move forward with the Bill, or GB Energy itself, until we have understood its financial structure. I therefore strongly urge the Government to produce a financial framework for GB Energy and let us examine it.
Amendment 126, in the names of my noble friends Lord Hamilton of Epsom and Lord Trenchard, requires the Secretary of State to publish an assessment of the impact GB Energy will have on the number of jobs in Aberdeen. The Government are already putting at risk 200,000 jobs in the North Sea oil and gas sector in the UK but, of course, this will hit the city of Aberdeen particularly hard, as it is the centre of the UK domestic oil and gas industry. None of us would object to the Government looking to bring a more diverse range of sovereign energy sources online, but we should not be sacrificing hundreds of thousands of jobs or people’s livelihoods in the process.
The transition to green energy, if it is managed correctly and done in an orderly fashion—not on an artificially accelerated basis—has the opportunity to provide a swathe of new well-paid jobs. We must therefore hold the Government to their word that GB Energy will create 650,000 jobs, which is a big number and target. It is for this reason that the Secretary of State must publish an assessment of the impact GB Energy will have on the number of jobs in Aberdeen. That will show noble Lords whether the Government are keeping their word, whether these jobs are created and will be of benefit to Aberdeen, and whether we have indeed seen the transition talked about.
Finally, I turn to Amendment 127 in the names of my noble friends Lord Hamilton of Epsom and Lord Trenchard. That amendment will ensure that the Bill cannot come into force until the Secretary of State has published a report on the cost and viability of the Government’s net-zero targets. We should transition away from the use of fossil fuels and reduce the volume of greenhouse gases we emit into the atmosphere, but it must be done in an economical and sustainable manner. I hope that the Minister has listened carefully to these concerns.
Lord Hunt of Kings Heath (Lab)
My Lords, I do listen carefully to what noble Lords have said. Our final debate in Committee, as the noble Lord, Lord Vaux, suggests, takes us back to some of the early debates and concerns that noble Lords have. I am particularly grateful to the noble Earl, Lord Russell, for his support. The point he made is that the cost of doing nothing will, in the end, be much more expensive than the cost of net zero. I say to the noble Lord, Lord Hamilton, that sticking to oil and gas is certainly not a free lunch, either. The noble Earl also pointed to the declining reserves in the UK continental shelf. This is a fact of life and why there were losses of jobs in Aberdeen under the previous Government. I will come back to the issue of Aberdeen in a moment.
Clearly, the effect of the amendments will be to defer the commencement of most provisions in the Bill until several requirements have been met. They include the laying before and approval by Parliament of a framework document and statement of strategic priorities, the publication of an outline statement of strategic priorities, the publication of an assessment on the expected impact of the Act on the number of jobs in Aberdeen and the publication of a report on the cost and viability of the Government’s net-zero targets. We have already discussed many of these matters in Committee and the Committee will be aware of the Government’s views and intents on this.
Our aim is to get this Bill on the statute book as soon as we can. It is also our clear intention that the statement of strategic priorities cannot be produced without the full involvement of Great British Energy in order to get its expertise, including that of the newly appointed non-executive directors, to inform the statement. This is why we do not believe that we can publish the statement of strategic priorities either during the passage of the Bill or before Royal Assent. Once parliamentary approval is given, we will ensure that we move as quickly as we possibly can to produce the statement.
On accountability, in the end, Ministers will agree with the statement that we are accountable to Parliament. I do not think your Lordships’ House is backward in holding Ministers to account for what they do. We have the Select Committee process, there are numerous opportunities for scrutiny of what we decide in relation to the statement and, of course, the statement is also subject to revision from time to time.
On the framework document, I suppose I can only repeat what I said before. We are committed to producing a framework document. It will, as framework documents do, cover the governance structure, the requirements for reporting and information sharing, and the financial responsibilities and controls. I have given this assurance from the Dispatch Box, so that is a government statement of what is going to happen. The framework document will be extensive and will follow the normal course of action. I hope that assures noble Lords that everything is being done in a proper way and with proper accountability, ensuring that Great British Energy is subject to the appropriate controls—as is only right for a body that is ultimately responsible to the Secretary of State for its activities.
We think that it is a very good thing that GBE will be based in Aberdeen; a significant proportion of GBE’s staff will certainly be based there. We think that Aberdeen will benefit from new jobs in the economy created because of GBE’s investment in renewable energy projects. I understand and very much accept the need to ensure, as we have talked about, a just transition for the people involved in the oil and gas sector. We want to do everything we can to enable offshore workers to lead the world in the industries of the future, which is why we are working very hard with businesses, employees and workers to manage our existing fields for the entirety of their lifetime and are putting in place programmes to support a transition. It is interesting that research from Robert Gordon University shows that 90% of oil and gas workers have medium to high transferable skills for offshore renewable jobs; knowing the skills that people who work in the North Sea bring to the jobs they do, that does not surprise me.
This is all I will say to the noble Lord, Lord Hamilton, in relation to President Trump’s decisions: it is interesting that, in his first term, the US actually saw quite a drive into renewable energy. It may be that we will still see the same direction under the new Administration in the end; that is for the US Government to decide. We as a Government are sticking to the Paris Agreement and to the need to get to net zero and clean power as soon as we possibly can.
Lord Hamilton of Epsom (Con)
There are interesting comments in the press that, although President Trump is committed to increasing the amount of oil the United States produces, that is very much dependent on the price. The frackers of oil and gas in the United States will frack it if they can get a good price for it; if the price drops, they will hold back, so it does not follow that he will actually increase the oil production of the United States by saying, “Drill, baby, drill”.
Lord Hunt of Kings Heath (Lab)
My Lords, that is a very interesting comment indeed.
I turn to Amendment 127, the effect of which I resist because in the end, it is inconsistent with our intention to set up GBE as quickly as possible. I understand noble Lords’ concerns about information being available now, but we are keen to see GBE up and running. The statement of strategic priorities will ultimately be subject to parliamentary scrutiny. We want GBE to play a full part in the discussions on it and the framework document will be extensive, following normal procedure.
On that basis, the Government are not willing to move in that area. However, I am looking at some of the issues around the statement of strategic priorities, particularly in relation to timing, and will perhaps give a sense of some of the pointers that will be raised in it. I will continue to have discussions with noble Lords on that between Committee and Report.
Earl Russell (LD)
I thank all noble Lords who have taken part in this debate. I start by reflecting the Minister’s last sentence in his response to this group of amendments. I thank him and his officials for the open nature with which they have engaged and continue to engage with us. The prospect of further discussions on these issues prior to Report is very welcome from my point of view.
As I have said, I recognise the need to set up GB Energy at speed, and I recognise that it needs to exist to feed into the strategic priorities. I particularly welcome the Minister’s last sentence. As I said, my amendments in this group were about trying to find a compromise and a way forward. I also welcome his comments from the Dispatch Box on the framework document, guaranteeing that it will be produced and will be extensive and follow the proper course of action. Again, those are welcome documents, and I am sure that Members of this Committee will note them.
It is welcome that GB Energy will be headquartered in Aberdeen. It is my opinion that GB Energy will help to create good and stable green jobs. The Minister said that 90% of oil and gas offshore jobs have high levels of transferrable skills. I think we can all agree that we need a just and fair transition for the people who work in our oil and gas industry, and we all need to keep that in mind. The Committee will also note the Minister’s comments on Amendment 127. With that, I thank all noble Lords for taking part in what has been an interesting set of debates.
Great British Energy Bill
Tuesday 11th February 2025
(1 week, 4 days ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-R-I Marshalled list for Report - (7 Feb 2025)
19:22 - Division on Amendment 14 - Ayes: 65 / Noes: 156 - Amendment 14 disagreed.
19:46 - Division on Amendment 15 - Ayes: 148 / Noes: 195 - Amendment 15 disagreed.
20:32 - Division on Amendment 18 - Ayes: 177 / Noes: 127 - Amendment 18 agreed.
Baroness Noakes
“ObjectivesGreat British Energy’s objectives are—(a) to reduce energy costs in the United Kingdom in a sustainable way,(b) to enhance the United Kingdom’s energy security,(c) to increase the levels of clean energy generation in the United Kingdom, and(d) to increase the availability of long-term energy storage infrastructure in the United Kingdom.”
Baroness Noakes (Con)
My Lords, I thank the noble Lord, Lord Vaux of Harrowden, for adding his name to Amendment 1. The amendment would add to the Bill a statement of objectives for Great British Energy.
In Committee we had a couple of debates about the difference between objects and objectives. While the words are closely linked etymologically, they mean rather different things in the context of the Bill. Objects are specified in Clause 3 in the context of Great British Energy’s articles of association, which is a document required by company law. Prior to the Companies Act 2006, every company had to have an objects clause, which defined the extent of the powers of the company. Since that Act, objects of a company are unlimited unless the articles specifically restrict its objects. That is what Clause 3 does—indeed, it uses the word “restricted” in subsection (2). Clause 3 does not require Great British Energy actually to do any of the listed activities—rather, it prevents Great British Energy carrying out things that cannot be fitted within the scope of the subsection (2) list.
My proposed new clause focuses on what Great British Energy should be achieving, rather than what it can and cannot do. It can then be held accountable if it fails to achieve what it was set up to do. Accountability is one of those concepts that is deeply unsexy but absolutely essential in the world of quangos.
Quangos such as Great British Energy are typically given a significant degree of independence, and Ministers, when it suits them, typically hide behind that independence. If strong accountability foundations are not created when a body is formed, Parliament will find it difficult to hold that body to account at a later stage.
The objectives that I have drafted in this amendment are fourfold. I have attempted to draft them in a politically neutral way that I think represents what the Government want to achieve with Great British Energy. I would not have drafted these objectives for Great British Energy, given a free hand—but then, given a free hand, I would probably not have set Great British Energy up.
The first objective is
“to reduce energy costs … in a sustainable way”.
I think there is common agreement that UK energy costs are too high, particularly for business consumers and by comparison with international standards. The other three cover energy security, levels of clean energy, and long-term storage infrastructure, which align with the Government’s aims for Great British Energy. If the Government prefer different words, I am not wedded to these ones and would be happy to discuss alternative formulations.
The Minister may well say that all of this will be covered by the strategic priorities to be set under Clause 5. Since the Government have refused to share even an outline of the strategic priorities which they intend to set for Great British Energy, or the framework document which will be agreed with it, it is difficult for the House to tell whether that is the case. In terms of ordinary usage of language, strategic priorities are not the same thing as objectives. Priorities might simply be things that the Secretary of State wants Great British Energy to focus on—perhaps based on technologies, types of energy, geographic locations and those sorts of things—but they might well fall well short of describing what Great British Energy is intended to achieve.
This amendment is not about the Government’s energy policies or the role of Great British Energy in those policies. It is straightforwardly about accountability and laying the foundations for Great British Energy to be held accountable in an effective way in due course. Great British Energy should, I submit, be judged on the outcomes that it achieves. There is a danger that if objectives are not set up front, we will be able to judge it only on what it has done and not what it has achieved. That is tantamount to giving Great British Energy a free pass on accountability.
I have also added my name to Amendment 37, in the name of the noble Lord, Lord Vaux. There are two important issues here, one general and one specific. The general point is that it is quite normal for the Government to take powers to specify what a public body reports on. Private sector reporting rules that exist for companies do not automatically ensure that the interests of public sector accountability are supported and, in many cases, public sector bodies do things that simply do not happen in the commercial sector. That will be the case for Great British Energy.
My specific issue is a subset of that general point. We need to make sure that Great British Energy reports on the extent to which it has achieved additionality, as in paragraph (d) of the proposed new subsection in Amendment 37. Additionality is a public sector concept and there is nothing in Companies Act reporting requirements that would ensure Great British Energy included relevant data and analysis. I believe we should ensure that this information is available routinely.
Lastly, this is a bit of a dustbin of a group, with a lot of individual things in it, but I will comment briefly on Amendment 17, in the name of the noble Earl, Lord Russell, which would require the Government to give Great British Energy £8.3 billion of financial assistance during this Parliament. I have remarked before that the £8.3 billion is nowhere to be found in the Chancellor’s Budget. The noble Lord, Lord Cryer, wrote to me after one of our Committee days, for which I thank him, to confirm that the Budget made no provision for Great British Energy beyond the £125 million to be spent in the next financial year. It is all to be settled as part of the current spending review.
If I were the Secretary of State for Energy Security and Net Zero, I would be looking at the deteriorating economic environment, made much worse by the Budget, with some concern. The fiscal rules are already under threat and I would not put my money on the Chancellor finding headroom for the full £8.3 billion promised in the manifesto. I shall be especially interested to hear what the Minister says in response to Amendment 17. I beg to move Amendment 1.
Lord Vaux of Harrowden (CB)
My Lords, I shall speak to Amendment 37 in this group and to Amendment 1, which has been introduced by the noble Baroness, Lady Noakes, and to which I have added my name. Before I start, I thank the Minister and his team for the very constructive and helpful discussions that we have had since Committee. We have made good progress and I am very grateful. I also thank the noble Baroness, Lady Noakes, and the noble Viscount, Lord Trenchard, for their support for my Amendment 37.
The noble Baroness, Lady Noakes, has already introduced Amendment 1 with her usual clarity, so I will try not to repeat her too much. As we discussed at some length in Committee, this Bill creates GBE as an entity, but nowhere does it set out what GBE is actually expected to achieve—what its aims or objectives are. As the noble Baroness just pointed out, Clause 3 sets out its “objects”, but we should be completely clear that the objects set out only what the company is allowed to do, not what it is intended to achieve. The only place where the company’s aims will be set out will be in the statement of strategic priorities in Clause 5. However, we have not seen these, even in draft. They will be published sometime in the future and are not subject to meaningful parliamentary scrutiny. They will be laid before Parliament, but there is not even the level of scrutiny that may be applied to a negative statutory instrument. Your Lordships’ Constitution Committee described this as being “disguised legislation”.
It is important that the Bill should include, at least at a high level, some statement as to what GBE is actually intended to achieve. The noble Baroness, Lady Noakes, should be commended for not trying to score political points with her Amendment 1, which is why I have supported it. I think that she has tried to align the objectives in her amendment with what the Government have said are the goals for GBE, so I hope the Minister will look kindly on it. If not, and if the noble Baroness were to divide the House, I would be minded to support her.
My Amendment 37 covers similar ground to my amendments in a later group. I apologise: I was told at a late stage to degroup them on the advice of the Public Bills Office, for some esoteric reason that I am not sure I fully understand. These amendments all try to inject some much-needed transparency and accountability into the Bill—something that is currently somewhat lacking. The only reporting that GBE must do, as it stands, is the annual report and accounts that it must file in accordance with Section 441 of the Companies Act. We had a lot of discussions on this in Committee and the Minister undertook to write to set out the additional requirements that will apply to GBE as a publicly owned entity. I thank him for his letter, which I think satisfies the first three proposed new paragraphs of my Amendment 37. The element that would still not be covered, as the noble Baroness just pointed out, is the assessment of the extent to which the investments or partnerships entered into by GBE have encouraged additional investment by the private sector.
This is extremely important. If all that GBE does is make investments that would happen anyway in the private sector then that would not be a good use of public money. Indeed, it could actually damage the creation of a thriving market for financing green energy—the well-documented concept of crowding out. There is an important role for GBE, just as there is for the UK Infrastructure Bank, now called the National Wealth Fund, to act as a catalyst to kick-start or accelerate investment in new technologies where the private sector is not yet ready to invest. There is a good precedent for this: it can be very strongly argued that the offshore wind industry, now so successful, would have been much slower to develop without the initial backing of the European Investment Bank, which the UK Infrastructure Bank was designed to replace in this country.
If the Minister will confirm clearly that he would expect GBE to report in its annual report and accounts on the extent to which it achieves additionality then I will be happy not to press Amendment 37.
Earl Russell (LD)
My Lords, I will speak to my Amendment 17 in this group. This probing amendment seeks further clarity from the Minister on the Government’s commitments to Great British Energy’s budget. It seeks information on the timing of the delivery of the budgets that have been promised and further clarity on Great British Energy’s ability to borrow funds in the future.
I have raised a probing amendment on Report because, as we have heard, this money is still subject to the spending review, and we have seen recent announcements from the Chancellor surrounding growth. For those reasons, we seek clarity that the £8.3 billion up to 2029 is available as promised and will be delivered. We previously saw cuts to Labour’s £28 billion green deal before the election. The key thing—and I hope the Minister will agree—is that there is absolute clarity on these matters; that is needed for securing the £60 billion in private investment. We need clarity and consistency in policy direction, which I hope this Government will maintain.
Lord Hamilton of Epsom (Con)
I am grateful to the noble Earl. He said that he thinks that green energy will lower costs. So far, green energy has actually raised costs. Why should it lower costs in the future?
Earl Russell (LD)
I thank the noble Lord for his intervention. Green energy over time will lower costs. There is an initial hump to get over with investment, but the trouble that we need to address is our increasing and continued dependence on the vast fluctuations in foreign gas markets. We saw what happened with the war in Ukraine, and we saw that the noble Lord’s Government had to invest £40 billion towards subsidising bill payers—money that was invested for no long-term benefit. We must get away from those things and we must have energy security. These are investments in Britain and in reducing our bills, and they are worthwhile doing. It is really important that GB Energy invests in these emerging technologies. That is why I have raised my amendment on GB Energy’s ability to borrow; if GB Energy cannot borrow it will not be able to make these key investments.
Amendment 20, tabled by the noble Lord, Lord Offord of Garvel, and the noble Earl, Lord Effingham, is about the annual report and financial assistance provided to GB Energy. We expect this to happen, so do not feel that the amendment is necessary.
We support the spirit of Amendment 37, but expect the Treasury to require all these areas to be reported on. Having reflected on what was said in Committee and the Minister’s response, we expect GB Energy’s reporting requirements to be similar to those of the Crown Estate. It would be useful if the Minister could confirm that.
Amendment 39, in the name of the noble Lord, Lord Frost, and supported by the noble Viscount, Lord Trenchard, is one of the strongest Conservative amendments to be tabled on Report. We have some sympathy with proposed new subsection (1), which is similar to an amendment I moved in Committee. At that stage, it did not win the Minister’s favour—I suspect that that might be the case again today. Where I slightly part company with noble Lord, Lord Frost, is in relation to the annual review for the chair of GB Energy. My view is that an important and good annual review would not be one that was fully made public. To me, that seems a slightly strange request, and may be counterintuitive to the object which he seeks.
I am going to stop there as I have run out of time and there are a lot of amendments in this group.
Baroness Coffey (Con)
I support Amendment 1, in the name of my noble friend Lady Noakes. I should declare at this point that I live about five miles away from Sizewell B nuclear power station and one that is about to be built, Sizewell C, and less than a mile away from other energy infrastructure that is still going through the planning process.
A lot of my time at the other end was taken up with considering the importance of energy, not only for a long-term sustainable future but the security issues rightly referred to in these objectives. The reason these objectives matter is that this is an unprecedented situation, where we are handing, in effect, a blank cheque to an arm’s-length body. Admittedly, it will have strategies set by the Secretary of State, but, as has been pointed out, there will be absolutely no reference to Parliament in its consideration. That is why the amendment tabled by my noble friend Lord Frost has attraction, in proposing at least having a direct connection with two Select Committees of the other place and a relationship with the chair of GB Energy. As my noble friend pointed out, these are the reasons that the Government gave us for having this new entity. Therefore, it would make a lot of sense for the Government to accept this amendment directly.
On Amendment 17, where I disagree with the noble Earl, Lord Russell, is that I do not believe we should get into legislation that dictates the amount of taxpayers’ money that will be spent. I have seen that happen before in legislation, and then all of a sudden money starts getting wasted. The whole purpose of this financial vehicle is to de-risk and bring in external private investment. That is a sensible approach, especially given the amount of uncertainty, which I appreciate the Government are trying to address in other ways. Nevertheless, for something such as energy security, a significant amount of investment is going to be required right across not just Great Britain but the United Kingdom, and this is a critical moment for our nation. That is why, while I think there will be money well spent, we should not be dictating a minimum.
The amendment tabled by the noble Lord, Lord Vaux of Harrowden, is really sensible. This company will be in an unusual situation—not unique, but unusual—and the extra information required, particularly in proposed new paragraph (d), is the core essence of why this company is being set up: it is stepping forward to try to get others to do so.
If anything, what has evolved over many years is the need for transparency and understanding. The amount of trust that people have in how their taxpayers’ money gets spent really matters in the contract that Parliament and government have with the electorate—the taxpayer. So, elements such as this will enforce the rationale rather than just necessarily seeing energy bills tick upwards, unfortunately.
So if Amendments 1 and 37 are pressed, I will certainly support them—although, regrettably, not Amendment 17 from the noble Earl, Lord Russell.
Lord Frost (Con)
My Lords, I will speak to Amendment 39 in my name. I thank the noble Viscount, Lord Trenchard, for putting his name to it, and thank the noble Earl, Lord Russell, for his warm comments on at least aspects of this amendment.
The broad aim of Amendment 39 is to do what a lot of other amendments have sought to do, both in Committee and no doubt today, which is to ensure that GBE gets the kind of scrutiny that a major public company would get: that is, its internal procedures, processes and purposes get a degree of public attention and comment. I worry that we are setting up a company over which there will be relatively little oversight and perhaps rather idiosyncratic governance compared with a normal public company. So it is with that in mind that I have tabled Amendment 39.
There are two aspects to the amendment. One is about pre-appointment scrutiny and the other is about what happens once the chair has his feet under the desk, as it were. I share the view of the noble Earl, Lord Russell, that the first part of this is the most important part of the Bill.
Before getting into the substance I should declare an interest, which is that I am an unpaid director of the group Net Zero Watch—I am sorry for not mentioning that at the very start.
On the first aspect of this amendment, its purpose is to make sure that the appointment at least attracts a degree of scrutiny and comment from relevant Select Committees. When I put this amendment down in Committee, I had in mind only the Treasury Select Committee in the Commons, but I have picked up the suggestions made by others that the Environment and Climate Change Committee also ought to have a role in this. I emphasise that this amendment would not give those committees a block. The right to make the appointment does not go to those committees; it is the right to comment on a decision that the Secretary of State proposes to make and which he or she will still be able to make after the Select Committees have looked at it. That degree of public scrutiny is important. The chair is a public figure in many ways, and in fact we have seen, from some of the statements he has made already, that he intends to use that public platform to make comments. It seems right in these circumstances that there should be a degree of political scrutiny of this.
The Minister said in Committee that this was not in line with the guidance of the Cabinet Office for such appointments. But I suggest that, even under the hard rein of the internal regimen of the noble and learned Lord the Attorney-General, guidance written by a department cannot constrain the Government, or indeed the legislature. Indeed, we see that in real life, because the appointments of the chairs of Ofgem, the Climate Change Committee and the Nuclear Decommissioning Authority, and so on, are all made in accordance with such a procedure. So there is really nothing novel here: it is the right thing to do for a major company of this nature and I hope the Minister will think hard about the defensibility of the position as it currently stands.
I will speak briefly to the second part of my amendment, which is really probing. The current arrangements for the accountability of the chair seem rather unclear. I guess formally he is accountable to shareholders, but the shareholder is obviously the Secretary of State and a chat with the Secretary of State is perhaps not enough for accountability for a company such as this. It may be that the auditors are not best placed to do that and it may be that there should be a degree of confidentiality to it, but there surely should be something that is formal and agreed and which can produce a degree of political debate. Perhaps the Minister can say exactly how this accountability will be achieved in practice, if it is not via some formal process of this nature. I repeat, to conclude, that the first subsection proposed by my amendment is the most important, and indeed, really quite substantively important to the nature of the body we are creating.
Lord Teverson (LD)
My Lords, I shall talk briefly to Amendment 1, because I probably disagree with it rather more strongly than my Front-Bench colleague. That list of objectives is more a list of government objectives than company objectives. It seems absolutely impossible that the company could ever satisfy its objective to reduce energy costs in the UK in a sustainable way in its own right. That seems inappropriate, in that it would not be able to meet those objectives.
I agree absolutely with the noble Baroness, Lady Noakes, that it is extremely unfortunate that we do not understand or know what the statement of strategic priorities is. That is the fault and that is the problem. On Amendment 1, I do not believe the company, with a budget of £8 billion, would be able in any way to meet all those objectives. I say also to the noble Baroness, Lady Coffey, that I agree with her and I do not think my noble friend Lord Russell would expect that amendment to be part of the Bill. As he said, it is a probing amendment to understand what the Government’s position is on that amount of money into the future.
Lord Ashcombe (Con)
My Lords, I support my noble friend Lady Noakes in this first amendment, because the four objectives outlined are highly relevant. In particular, I shall focus on the second objective, energy security, where maintaining a balanced mix of electricity generation is crucial. As we know, this includes baseload nuclear, renewables, gas and supplementary power by interconnectors.
My primary concern, as will not surprise your Lordships, is gas. It is essential not only to continue production from our existing North Sea fields but to allow further exploration and development in order that we may discover more. At this point, I very much thank the Minister for the time we spent last week discussing this item.
I think it is relevant to point out that, according to research from the Library, the UK’s indigenous gas supply still met 43% of our national demand in 2023, covering electricity generation as well as commercial and domestic needs. However, to bridge the shortfall, we rely on imports from two main sources: Norway, which supplies 32% of our pipeline but faces a growing political and resource pressures due to the European energy crisis; and the United States, which provides 15% through LNG, with other countries contributing less than 5% each.
The environmental impact of importing gas is significant. As of 2022, emissions from Norwegian imports were 50% higher than those from UK production, while LNG imports from the United States generated more than 3.5 times the emissions. Additionally, electricity accounts for only 25% to 30% of the UK’s total energy demand, with the remainder still dependent on fossil fuels. Many of these same arguments can be used for the continued production of oil, even though it is not, I am glad to say, used in electricity generation.
Given these facts, it is imperative that we continue to utilise the UK’s own resources by lifting the current pause on oil and gas exploration and production. I realise that this is slightly counterintuitive but, by doing so, we can assist the growth agenda, protect our jobs in the North Sea, reduce unnecessary imports, prevent higher global emissions and avoid shifting the environmental burden on to other nations. This amendment will very much assist the objectives of Great British Energy.
Lord Hamilton of Epsom (Con)
My Lords, I wish to pick up the concern voiced by the noble Lord, Lord Vaux, that GB Energy will pick up some of what I have described as the low-hanging fruit of projects in the energy sector, which can be serviced by the private sector. I do not think that that will happen very much. The putting up of wind turbines and so on by the private sector is well established. It is done by financiers who are more concerned by the feed-in tariff than they are by anything else. They even succeed, as I mentioned in Committee, in being paid at a time when nobody wants the electricity coming from the wind turbines, which I always think is a rather remarkable financial deal to be able to pull off.
Turning to Amendment 39 in the name of my noble friend Lord Frost, I raise with the Minister the question of tiered finance. There will be an awful lot of looking into the activities of GB Energy in investing in things but, in my view, here lies the problem: you will find that there are different layers of finance going into a project that may involve GB Energy. The risk we always run is that, unless the new chairman who has been appointed for GB Energy is incredibly smart, he is going to be left with the worst, highest-risk element of any of these deals being funded by the taxpayer. Of course, this means that, if the thing goes wrong, the private sector will suffer less than the taxpayer, who will lose all their money.
I would like to hear the Minister’s view on tiered finance, including how we will be able to have openness around it. Will it be possible for outsiders to look in on these deals and comment on them? Generally, does the Minister agree with me that the risk to the taxpayer seems extremely high on this? Of course, we will need Treasury authorisation for all these deals—the Treasury may stop them happening in the beginning—but it would be interesting to know how the Minister’s mind is working on this because it strikes me that the taxpayers are standing in the way of the high-risk elements of any of these deals in which GBE gets involved.
Lord Offord of Garvel (Con)
My Lords, I thank my noble friend Lady Noakes for opening the debate on this group of amendments, as well as all noble Lords who have contributed to the debate so far.
My noble friend Lord Frost pointed out in Committee that this Bill is even thinner in its contents than Bills that we would normally term skeleton Bills. I completely agree with this characterisation. As it stands, there is nothing in the Bill that tells us what Great British Energy will actually do. What will it invest in? How will it decide where its money goes? What criteria will it use for its investments? We have had three and a half days of Committee over five days on the Bill. We still do not know the answers to these questions.
On the first day in Committee, the Minister said:
“The key thing in the structure of the Bill is the objectives set in Clause 3. They will be informed by the statement of strategic priorities that Great British Energy will operate in, making sure that it will be aligned with the Government’s priorities”.—[Official Report, 3/12/24; col. 1066.]
We have discussed the different objects and objectives of Great British Energy, but I think that we need to return to this topic. It was pointed out by my noble friend Lady Noakes and the noble Lord, Lord Vaux of Harrowden, that, contrary to what the Minister has claimed, Clause 3 does not set out the objectives of Great British Energy.
Clause 3 establishes the objects of Great British Energy. Those objects set out what GBE will do. Those objects will be the means through which it will try to achieve its objectives, but what those objectives are still eludes us. That is why Amendment 1, tabled by my noble friend Lady Noakes and signed by the noble Lord, Lord Vaux, is so important. It establishes in the Bill the objectives that Great British Energy will have to work towards. Ensuring energy security, increasing long-term energy storage, increasing the levels of clean energy generation and reducing energy costs are all laudable objectives. They are all things that the Government have indicated that they want Great British Energy to work towards, but unless they are put into the legislation, there is no assurance that they will happen.
This point is especially pertinent given the recent refusal to re-commit to reducing energy bills. Noble Lords will be all too aware that during the election campaign the Government pledged to reduce energy bills by £300 per household. We then heard the chair of Great British Energy, Jürgen Maier, speaking on Sky News this weekend and refusing to say whether that promise still stood. Then the Prime Minister, speaking at the National Nuclear Laboratory last week, confirmed this figure and said:
“We said we’d aim for £300 … That’s what I want to achieve”.
We therefore have what appear to be different commitments from the chair and the Prime Minister. The chair will not commit to reducing household energy bills by £300 per year, but the Prime Minister will. Which one is it? If we already have a difference in opinion, and clearly no joined-up thinking before the Bill has even been passed, how can anyone believe that Great British Energy will follow through on its supposed objectives? It is evident that the only way this will happen is if there is a clear statement of those objectives in the Bill.
I turn to the other amendments in this group. My Amendment 20, and Amendment 37, tabled by the noble Lord, Lord Vaux of Harrowden, seek to ensure that there are clearer reporting requirements in the Bill. Currently, there are no requirements to submit reports other than the usual ones under the Companies Act 2006. Many noble Lords have argued that this is not acceptable. The reporting requirements in these two amendments are not overly onerous for GBE to comply with, yet the net benefit would be significant.
I have also tabled Amendment 41, which seeks to ensure that Great British Energy is given a specific direction to achieve a 10% minimum return on its investments annually. Like with the rest of the Bill, there has been absolutely no indication of the expectations that will be placed on GBE. Without this, how can anyone be certain that the taxpayer will see value for money from this investment? If £8.3 billion from the public purse is going to be funnelled into a state-operated investment company, I am certain that taxpayers would like some guarantee that it will pay off—or at least some measure of target return.
This brings me to Amendment 49. Given the permissive extent of the borrowing provisions in the Bill, it is pertinent to allow the Secretary of State to implement a restriction on borrowing. The amendment does this via affirmative statutory instrument, allowing the Secretary of State flexibility, while placing greater safeguards on the amount to be spent via Great British Energy.
In the same vein, we also need to ensure that there are adequate safeguards for the financial assistance that the Secretary of State can provide. Amendment 56 does this by preventing Clause 4 coming into force until the Secretary of State has established the conditions under which financial assistance may be provided. Once again, we need clarity around this issue. We need to know when, how and why the Secretary of State would give financial assistance, under what circumstances and with what conditions attached; otherwise, there is a distinct possibility of the Bill becoming a blank cheque to Great British Energy for unlimited sums of public money.
Finally, Amendment 57, in my name and that of my noble friend Lord Effingham, requires the publication of a revised financial framework document. I said in Committee that I did not feel it possible to move forward with the creation of Great British Energy until the Government were more forthcoming on this matter. Regrettably, this elusive information is still being withheld. We need sight of the framework document. Once again, I strongly urge the Government to produce this and allow noble Lords to examine its contents.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, I am grateful to all noble Lords who have taken part in this interesting debate. Of course, we have returned to some of the arguments that we had in Committee. I understand that noble Lords would like to have more information about the activities of Great British Energy, but we have chosen to bring a Bill that, essentially, sets up the basics of establishing a company. Much of the detail that noble Lords have discussed will come through the statement of strategic priorities, which we will debate later.
We do not think it right that we can publish our own statement, or a draft, without the full active participation of Great British Energy, and we are not really going to move from that position. Given that the statement of strategic priorities is to come and that we will hold Great British Energy to account for its performance, as would be expected with any normal public body for which the Government are ultimately responsible, we are resistant to putting what we believe to be unnecessary detail in the Bill, restricting what the company can do in carrying out its activities, especially as these evolve over the longer term.
Lord Hamilton of Epsom (Con)
Can the Minister be absolutely clear on the role of the Treasury? He talks about £8.3 billion being allocated to GB Energy, but will the money not actually be held in a sort of escrow account in the Treasury and will GB Energy not have to apply to the Treasury before it can spend any of it? It is rather important whether the ultimate decision lies with the Treasury or GB Energy.
Lord Hunt of Kings Heath (Lab)
My Lords, we need to await the outcome of the spending review and the timetabling of the money to be allocated to Great British Energy. We are trying to establish a balance between wanting to give Great British Energy operational independence and ensuring that the proper controls over public expenditure are kept appropriately. I think the noble Lord, with all his experience of how government works, will have confidence that the Treasury will be keeping a very close eye on this and the processes, and ensuring that public money is spent wisely. My role as a Minister, too, is to ensure that, none the less, GBE has sufficient operational independence to be able to make the kind of decisions that need to be made to get the investment decisions right. We are trying to get, and clearly want to get, a balance between proper control and giving GBE the right ability to make the decisions it needs to make without being excessively micromanaged.
We do not expect that GBE will need to borrow. However, if it turned out at some point in the long term that a Government decided that, and GBE asked for more borrowing facility, the normal processes of His Majesty’s Treasury would come into play. As a public body, GBE would require explicit agreement from His Majesty’s Treasury before being able to borrow from external providers, if HM Treasury agreed that this would be beneficial. We should also bear in mind that the chief executive officer of Great British Energy will be the accounting officer. That too should give a great deal of comfort on the proper expenditure of public money.
On Amendments 20 and 37, on the reporting requirements that were the subject of much discussion in Committee, I do not want to restate previous arguments, but much of the content proposed in the amendments would already be included in the annual report and accounts of Great British Energy, which, as I said, will be laid before Parliament. Also, the Treasury already has the ability to request specific reporting information from arm’s-length bodies through the Government Resources and Accounts Act 2000. Furthermore, GBE will be required to follow the provisions of the Government Financial Reporting Manual, which sets out details of required reporting by arm’s-length bodies through annual reports and accounts; these are additional to the requirements of the Companies Act 2006.
I thank the noble Lord, Lord Vaux: we have had a series of engagements between Committee and Report on the issue of additionality. I well recognise that this is an important matter, and noble Lords have been right to raise it. Let me be clear here: additionality will be an important principle for Great British Energy, and it will form part of the way in which Great British Energy assesses its opportunities and investment decisions. In the context of the noble Lord’s amendment, I am very happy to confirm our expectation that Great British Energy will include reporting on additionality as part of its annual report and accounts. I also confirm that all investment into and expenditure of Great British Energy will be subject to future business cases, including the cost and benefits of these investments, and the monetised and non-monetised impacts of Great British Energy’s future activities will also be considered.
Additionally, Great British Energy is part of the Government’s major projects portfolio. We therefore expect a summary business case for these activities to be published in due course. Moreover, we expect the outcomes of future spending reviews to be made public through the Chancellor’s Budget announcements, as is customary.
On Amendment 39, on the subject of Great British Energy’s chair, which was tabled by the noble Lord, Lord Frost, and returns to a point he raised in Committee, one accepts that it is important to ensure the quality and performance of the chair, but the existing framework and best practices, which I outlined extensively in Committee, already provide robust mechanisms for oversight and accountability. I will again say—the noble Lord, in a sense, challenges me on this—that the decision on scrutiny of appointments normally falls to discussions between the Secretary of State and the relevant Select Committee chair. It is a procedure that the previous Government followed; we will continue with that. Moreover, the proposal for an annual review of the chair by external auditors seems to be way over the top. I have already said that GBE will be subject to the normal accountability arrangements. I would expect Ministers, in addition, to meet the chair of GBE frequently, as Ministers in my department do in relation to a number of public bodies for which they are accountable. As ever, we are trying to find the balance between holding GBE properly to account and putting our trust in it, in the quality of people around the board led by the chair, and in the senior officials that they then appoint to do the job properly and effectively.
In relation to Amendment 41, proposed by the noble Lord, Lord Offord, on the rate of return, I think this is going into too much detail and is inappropriate for Parliament to insist on. The Bill we have before us is focused solely on making the minimum necessary provisions to enable the establishment of this operationally independent company. Adding the proposed detail risks too narrowly restricting the company in carrying out its activities, not least because GBE’s work will extend beyond investments. We do not want to be restrictive and put a rate-of-return requirement on all its activities. For me, one of the most important activities that GBE will do is to carry out a lot of the groundwork to enable investors to come in. We know that we have a big problem with the manifold delays in energy infrastructure development and investment. We, of course, seek to reform the planning system and find other ways in which we can speed up development, but GBE has a vital role to play in relation to that too.
I will resist Amendments 56 and 57, on the commencement of the powers in the Bill. These amendments would delay the designation of GBE under Clause 1 and the ability of the Secretary of State to provide financial assistance to it under Clause 4. Those clauses are fundamental to GBE’s ability to start its operations as soon as this Bill is passed.
I am very grateful to noble Lords for their interventions and contributions. I understand that they wish to ensure that GBE is properly held to account. I hope I have convinced them that we will indeed hold GBE to account. Equally, I must fly the flag for operational independence and for the ability of the board to do the job we set out for it to do.
Baroness Noakes (Con)
I thank all noble Lords who took part in the debate on this group of amendments. I will start with Amendment 37, in the name of the noble Lord, Lord Vaux. He will decide, when we get to Amendment 37 in its place on the Marshalled List, what he does with it. I will just say now that I was grateful for what he said on additionality, because it is important that we get proper public reporting on whether Great British Energy has achieved the additionality to which it is required to adhere.
I thank the various noble Lords who have given their support to my Amendment 1. I got lukewarm or even negative support from the Liberal Democrat Benches, but I think they were trying to engage in the wording of the objectives. My sense was not about the detailed wording; I was trying to capture what I thought the Government were trying to achieve in terms of objectives for Great British Energy, because the key thing for me is that we have things against which we can hold Great British Energy to account.
The Minister said that the strategic objectives would be set by the statement of strategic priorities. As I tried to argue, it is not inevitable that a statement of strategic priorities would include objectives. If the Minister is telling me that it will include objectives, then we should have something against which we can hold Great British Energy to account. He rather confusingly then went on to say that we would be able hold it to account for its activities. My argument is not that we hold it to account for its activities but that we hold it to account for what it achieves against what it is supposed to be achieving, but I assume that that was loose language on the part of the Minister and that the strategic priority statement will indeed set strategic priorities. On that basis, I beg leave to withdraw the amendment.
Member's explanatory statement
This amendment, along with others in the name of Baroness Liddell of Coatdyke, aims to broaden the definition of "clean energy" to include technologies that directly or indirectly reduce greenhouse gas emissions, such as Carbon Capture, Utilisation & Storage (CCUS) and low carbon hydrogen.
Baroness Liddell of Coatdyke (Lab)
My Lords, I refer to my entry in the Register of Members’ Interests: I am the honorary president of the Carbon Capture and Storage Association. The amendments listed in my name all relate to the same issue so, with the permission of the House, I will group them together. Their purpose is to give clarity and not to exclude vital technology
The UK is at a pivotal moment in energy transition and these amendments would update the Bill to reflect the role of CCUS and hydrogen in achieving a sustainable, reliable and low-carbon energy system. It is a very useful Bill, but it does not explicitly include these technologies in the definition of “clean energy”. Accepting these amendments would be a means for the Government of highlighting to investors and to the industry their commitment to supporting both renewable energy and low-carbon technologies in a balanced and inclusive way.
The purpose of the amendments is simply to broaden the definition of “clean energy” and ensure that GBE can support a wider range of innovations that will foster investment and partnership. That will be crucial to the UK achieving clean power targets by 2030.
In the Carbon Capture and Storage Association, which was established in 2006, we recognise that we have the commitment of the Energy Secretary and, indeed, the Chancellor of the Exchequer, who speaks of CCUS often to promote the concept of clean energy. However, to reach out to the myriad companies anxious to develop CCUS, it will be necessary to be a lot more precise. There are many out there who are very keen to get in on the act, not just here but around the world.
In the Bill, “clean energy” is defined as any energy
“produced from sources other than fossil fuels”.
Our argument is that you can “clean” energy. That is what carbon capture is about: cleaning the energy that has already been applied.
Some people think that carbon capture, utilisation and storage is a new concept, but it has been around for at least 25 years. When I was an Energy Minister about 25 years ago, it was described as clean coal technology. In 2006, Dr Chapman established the Carbon Capture and Storage Association. It has grown, and the benefit to the environment has been recognised. I have been to a lot of conferences on carbon capture and storage. It is not a terribly exciting issue to most people—it is to me—but the most recent conference in November was packed out. It was held in Central Hall Westminster and the sheer scale of interest was quite dramatic. Businesses see the opportunity.
The Intergovernmental Panel on Climate Change and the Climate Change Committee have both taken a great interest in CCUS as an integral part of limiting global temperature rises and the route to net zero. Indeed, the Climate Change Committee estimates that the UK needs to capture over 50 million tonnes of CO2 per year by 2035 to keep in line with emissions reductions.
The ambition, certainly on this side of the House, is to get to a clean power energy system by 2030, as we promised during the election. That might not be possible without carbon capture and storage. Indeed, CCUS is absolutely essential for industries such as cement. Without CO2 there is no cement industry; CO2 production is an essential part of the process of creating cement.
CO2 storage has operated for 25 years in Norway. There are now 50 operational large-scale CCUS facilities worldwide and 44 are under construction. These are countries that are out there, desperate to get in the lead. The IEA has stated that global CCUS deployment has
“tripled over the last decade”.
However, we cannot afford the delays that we have seen in the past. Yesterday, I was delighted to see that Drax can proceed with a £2 billion carbon capture upgrade at its north Yorkshire plant. It is more important to get things moving rapidly now, because there are so many businesses that are interested in carbon capture in the UK which are getting to a stage where they are wondering whether we are going to do anything about it.
Last week, the Public Accounts Committee published a report that was very sceptical about the delivery of CCS. Yes, it does not come cheap, but the much-quoted £22 billion is over 25 years; you do not have to put your hand in your pocket right now for £22 billion to pay for it. However, what we do have to watch is the pressure on the fuel bills for households; they must not carry the cost of other delays. The PAC report challenges the department more than the industry, not least on dispersed sites and the slow response to issues that we saw repeatedly with the previous Government—not helped by repeated reshuffles.
The time for CCUS is now. It will create jobs, not least for those currently in the energy industries who can bring knowledge and experience to the table. All I ask is for the Government to make clear their commitment and to get this country in the lead in cleaning up our energy systems. We will all benefit. I commend Amendments 2 to 6, 11 and 12 to the House.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I rise to speak to Amendment 7 in the name of my noble friend Lord Offord, to which I have added my name. This modest amendment merely asks the Government to insert
“the production of nuclear energy”
at the end of Clause 3, page 2, line 18. I also pay tribute to my noble friend Lord Trenchard, who sadly is unable to be in his place today, for his Amendments 10, 33 and 36, which all focus on the nuclear sector.
The Minister for nuclear will not be surprised that I bring this back on Report. He will understand that we merely wish to ensure that nuclear energy plays its full role in our energy mix; putting it on the face of the Bill signifies the Government’s intention that it should do so. I will not repeat the arguments in full that I made at Second Reading. The Government have already acknowledged the importance of nuclear in various speeches at Nuclear Week in Parliament, and the recent announcement that the nuclear national policy statement, EN-7, is to be updated is very welcome.
By accepting this amendment, the Government can bridge the gap between their stated aspiration and its implementation. It will also send a strong signal to investors, developers and the broader energy sector that the UK is serious in its ambitions for nuclear. While we can sadly no longer aspire to claim a world first in the development of new nuclear technologies—Canada has already claimed that crown—it is not too late to be building domestic supply chains and a home-grown industry that will contribute to our own energy security. At the same time, one must of course recognise the potential for creating good-quality jobs and careers in areas such as north Wales that need them most.
Of course, the relationship between Great British Energy and Great British Nuclear remains the big unknown. If properly resourced, GBN could have been uniquely positioned to co-ordinate and drive nuclear developments across the country. It still can. It was created 18 months ago and the small modular reactor drawdown was launched in October 2023. We await the outcome of that competition and I hope that the Government will pick up the pace.
Finally, noble Lords have been silent about the equally important relationship between Great British Energy and UK Industrial Fusion Solutions or the International Atomic Energy Agency. While the STEP project at West Burton will not help the Government towards their 2030 ambitions, in the long term fusion remains the holy grail and is one sector where the UK really does lead the world. I ask the Minister to give the House a clear assurance that Great British Energy will have a role in developing our nuclear energy capability.
Viscount Hanworth (Lab)
My Lords, Amendment 10 is a minor amendment and the noble Viscount, Lord Trenchard, has asked me to speak on it in his absence. I believe his amendment evinces frustration at the tendency of those who are averse to nuclear energy to exclude it from their definition of “clean energy”. He has therefore proposed that the Bill should state that clean energy means renewable energy, nuclear energy and energy produced from sources other than fossil fuels.
In assessing the hazards of nuclear energy, one must separate the issues of nuclear cleanliness, by which I mean the absence of nuclear pollution, from issues of nuclear safety. The latter range from concerns about the accidental spillage of radioactive materials to the risks of rare occurrences such as the accidents of Three Mile Island, Chernobyl and Fukushima.
A degree of laxity characterised the early nuclear industry, but the industry has since developed a stringent attitude towards cleanliness. The radioactive emissions of our nuclear power stations are negligible. They are a fraction of the emissions from the granite rocks of Aberdeen, and the human exposure is far less than that of a high-flying airline passenger on a scheduled flight. The industry’s attitude to cleanliness extends far beyond the question of radioactive contamination; I have seen the senior management of a nuclear power station become apoplectic at the discovery of a cigarette butt embedded in a gravel pathway.
The major accidents that I mentioned were occasioned by the meltdown of nuclear power stations embodying pressurised water reactors. They have led to a heightened emphasis on the safety of such power stations. That is evident in the design of the Hinkley C power station, where the consequences of the worst imaginable malfunctions would not extend beyond the power station itself. The same is true of the current designs of small modular reactors, which are also pressurised water reactors.
The SMRs employ a nuclear technology that is set to be replaced by fourth-generation technologies endowed with passive safety. A molten-salt reactor provides an example: in the unlikely event of a rupture of the containment vessel, the molten salt and the nuclear reagents would escape into wider containment, after which the nuclear reaction would cease and the salt would crystallise at 300 degrees Centigrade. Such reactors are fit to be employed close to industrial processes that require abundant heat and electricity. An unfortunate fact, to which I must testify, is that we are failing to support the development of such reactors. We are leaving it to others to develop the technologies that are vital for achieving our net zero ambitions.
Lord Hamilton of Epsom (Con)
My Lords, I support Amendment 10 as well, because the future of nuclear is very important if we are going to lead to a much cleaner environment in which to live. It is an important source of power generation that does not emit filth, like so many of the others do.
I shall pick up on the remarks of the noble Baroness, Lady Liddell, about Drax. I have a slight problem with Drax because, although it makes out that it is using renewable fuel, it seems to be cutting down quite a lot of trees in North America to feed it, and the stuff that comes out of the chimney is highly polluting. The fact that it is not as polluting as coal does not mean it is not polluting at all.
We have to look very closely indeed at the use of some renewables—I am not including solar and wind here. I mentioned in Committee that we are growing oil-seed rape to turn into vegetable oil that then gets refined and put into aircraft, but all the way through that process we are emitting CO2 and that is what we are supposed to be combating. Drax is emitting CO2 as well.
Baroness Boycott (CB)
My Lords, I will speak to Amendments 13 and 44 in this group. I thank the noble Baroness, Lady Young, and the noble Lord, Lord Randall of Uxbridge, for supporting Amendment 13, which is very straightforward. Very simply, it would exclude biomass from the things that GB Energy can invest in. Amendment 44 is drafted very tightly and makes the assumption that biomass will still be included, but then asks: will the Government report on the perceived carbon neutrality of that biomass, the percentage of power it will provide to the grid and the overall impact of it on achieving our domestic and international climate targets, particularly our nature targets?
I wanted to bring these back today as I did not feel like the Minister’s response in Committee addressed the issue. But it would be entirely remiss of me not to take the opportunity to say well done to the Government on what they have said about the future regime of Drax. I wondered whether the noble Lord, Lord Hamilton, had picked up on this. It came out yesterday and is a big move on behalf of the Government to start to rely much less on Drax and to really try to clamp down on all the things he was talking about, such as importing old wood from Canada and the sense that we just cut up wood in the Pacific and ship it all the way here. The Government have gone a really long way and I am really grateful, because I and a lot of people have banged on about Drax now for a very long time. It is terrifically encouraging to see that the phase-out of this type of power is on the cards as we build up all the others. From my point of view, it does not mean that all biomass is okay; I think it is a very dodgy source of fuel.
I noted, in a report by E3G last month, that the clean power mission could be delivered without extending the lifetime of Drax, so perhaps the Minister can tell us how far they have considered this as an option and what options were considered. I have a few specific questions. Bioenergy is costly and, as I said before, has a great impact on nature and land use, and particularly on what we will have for food production. I know there are lots of things such as miscanthus that you do not have to replant, but you are still using up some really good agricultural land. Is this a good use of the money we are going to invest in GBE?
Can the Minister confirm that Drax will not be allowed to burn wood from primary forests for any of its generation? I am so pleased with the work that has been done, but I would like some confirmation that we can all listen to. On the issue of transparency, can he commit to his department publishing whatever research, analysis or investigation it has done before arriving at the decisions it has today? When I asked a Written Question on this recently, the substantive point was not answered.
As many people who care about this have seen, “Dispatches”, Private Eye, “Panorama” and even an Ofgem investigation have found that all the biomass energy generators in the UK have misreported data. This is endemic—it is continual. Along with several other noble Lords, I wrote to the FCA last week about some of these allegations, which contradict Drax’s annual report. So, while I appreciate the announcement, I would like to know what measures the Government are taking to tackle this issue. The operators—or at least one—cannot be trusted to mark their own homework, and the regulator has thus far failed to be completely on top of it. I know that we are tightening all the regulations, but is the Minister confident that his department will be able to deliver what has been asked for, because what has been asked for is a terrific step forward.
While the Government have let the door open for BECCS in the future, we need to be honest about the fact that we do not know whether it will work at the scale that is needed. It was very interesting to hear the outline of the earlier amendments in this group, with the extreme positivity about what carbon capture and storage will be, and I look forward to hearing more about it. However, at the moment it is taking out very little carbon from the atmosphere and, in all the future carbon budgets, it plays a very big role in us getting to net zero. Many people are anxious about whether this will be deliverable, and on what timescale.
Lord Howell of Guildford (Con)
My Lords, the speech of the noble Baroness, Lady Liddell, was music to my ears. This really is the missing prince at the ball—the missing element in the whole strategy of reducing emissions in order to curb the violence of climate change, which, after all, is the main purpose of all our endeavours. It is not a secondary purpose, it is the main purpose, and of course it is failing. Emissions are continuing to rise worldwide and the forecasts are very gloomy that they will rise still further. Our own performance has been good in contrast, as one tiny bit of the jigsaw, but overall the aim of reducing emissions is not succeeding. Carbon capture, usage and storage is an area where vast improvements can be made, with real effort to store emissions, such that we no longer have to watch those gloomy monthly or three-monthly figures detailing rising emissions worldwide again and again.
Furthermore, it is admitted, quietly—I think I have heard NESO and other experts say it openly—that carbon capture and storage is an essential part of the 2030 story. Because we have delayed so much—all parties are to blame—and we have not got on with nuclear, which we have allowed to shrink because we dithered on various other technologies, there has been very little advance on carbon capture and storage, but we know that in order to achieve decarbonised electricity by 2030—I think we are talking about the present electricity output, which is one-fifth of our total energy storage, not the whole of an electrified economy—we will need, in order to prevent outages, further gas-generated power. That is not proclaimed very loudly; CGN plants are being contracted for, designed and built to make it possible for there to be reliable and, we hope, affordable energy in 2030, even though it is substantially decarbonised.
That will require an output of carbon of considerable size, which will have to be captured and stored, otherwise the system will not work. The 2030 target is literally unobtainable, unless we have an elaborate expansion of carbon capture and storage for gas-generated electricity, which is an essential part of the pattern for 2030, as it probably is for 2040 and 2050 as well. Domestically, this is a central issue, yet it is hardly mentioned in this discussion or in the Bill.
That is not all; worldwide, the one contribution that this nation could really make through its brilliant technology is in developing cheaper versions of carbon capture and storage. All over Asia, there are coal-driven electric plants belching carbon and smoke, and more are being built at the moment. China has achieved amazing things in reducing its coal-based electricity from 1,900 gigawatts a year down to about 1,000 gigawatts. As we now produce no electricity from coal, which is rather amazing, that is an infinite number of times the amount that we produce. China is down to 1,000 gigawatts, but that is still a vast addition every year and every day—it is producing much more than we do in a year in emissions of carbon dioxide and methane as well.
To deal with the world’s problem, carbon capture and storage is essential, capturing not only carbon emitted when generated from fossil fuels but carbon direct from the atmosphere. Some major projects are being developed around the world on that scale. All these are essential projects to achieve the main aim, which is to lower emissions. If that is the main aim then Great British Energy should surely have a serious role in it.
We should be using the resources of organisations with money to invest in getting the cost down, to the point where it is possible to put some kind of abatement on those 11,000 chimneys and have some control of the carbon to be captured. Can that be done in the next stages? Of the countries concerned, one is talking mainly about the United States, where it can be done; China, where they are trying to do it; and India, where they are trying hard but not succeeding at all. They need the engineering skills to install carbon capture and storage, once we have developed systems which are cheaper and more economic. There is a whole new programme there to be developed. Is it being developed and invested in? Is this organisation looking at it? We have not had a single word from the Government—not a word—on the idea that this should be a major part of the story.
The noble Baroness, Lady Liddell, is totally right that this should of course be a major part of the story. I fear that, as with so many parts of the endeavour to get to a green transition, we are losing sight of the main purpose, which is reducing emissions. This nation is superbly equipped to contribute on that front, but not necessarily by itself subsidising more and more low-carbon electricity for our own purposes. We should go that way but not push it too fast, because if we do that then we will slow things down.
If we are to contribute to the world’s efforts on this, which are failing and going backwards at the moment, and to make more progress, we must turn to carbon capture and storage. Why is there no mention of it in the Bill? Please can it go in, through this amendment or in other ways that the Government choose, to indicate that we are serious about reducing emissions and not just about the virtuous side of clean energy, which is very nice and very important but not the main aim?
Lord Berkeley (Lab)
My Lords, my Amendment 35 is about the renewable liquid heating fuel obligation, which is something we debated in Committee. I thank my noble friend the Minister for spending time with us and understanding the problems of some of the people who operate in this field. I am grateful to the noble Lord, Lord Bruce, for his support.
This issue affects 4 million people in this country, and about 250,000 businesses, who are off the gas grid and therefore generally rely on heating oil, as I do in the countryside—I declare an interest. These are big businesses and they are no more complicated than other similar systems, but it is a question of whether the renewable fuel obligation could be applied, so that it would be easier for people to continue to use fuel oil with this addition, rather than having to spend a lot of money converting to some other means, which I know has been debated at length.
Baroness Young of Old Scone (Lab)
My Lords, I will speak to Amendment 13, to which I have put my name.
I am very clear that biomass is not clean energy. It has substantial downsides: the harvesting cycle does not replace carbon in an equivalent way until many years have passed; and the same goes for the impact on biodiversity—there is not a like-for-like replacement at all.
If we were to grow our own biomass here in the UK, the land take would be substantial and would compromise land uses for multiple other requirements for which we need land, as outlined in the land use framework. If the feedstock comes not from the UK but from overseas sources, that is not a secure source and we are putting ourselves in a position of vulnerability—as indeed we are from other overseas sources of fuel at the moment. It is not a sustainable and secure feedstock.
I welcome the Government’s Drax Statement yesterday, provided that it is only a first step to a rapid phase-down of Drax; I would be grateful if the Minister could confirm that. Can he also confirm whether the Government support the recent Ember report on subsidies post-2031, which shows that the case for a 2030 clean power system for the UK is possible, while reducing considerably our reliance on this expensive, imported biodiversity-unfriendly biomass?
On Amendment 44 in the name of the noble Baroness, Lady Boycott, I will ask the Minister for clarification. Will the review of biomass power, which was signalled in the Drax announcement, cover absolutely all the points made by the noble Baroness in subsections (2)(a) to (e) in the new clause proposed by Amendment 44? Can he give us some clarity on that?
I was not intending to comment on Amendment 2 in the name of the noble Baroness, Lady Liddell, on carbon capture and storage, but I am afraid that I will have to. I really do not like being on the opposite side from the noble Baroness, because she is a bit of a fighter and two Scots against each other might not be a good idea. But I think we are making a big mistake in overrelying, in the carbon budgets, on carbon capture and storage. I also agree with the noble Lord, Lord Howell—this is an out-of-body experience for me—and disagree with the noble Baroness, Lady Liddell; this is all the wrong way round. The reality is that carbon capture and storage projects are failing worldwide at the moment; they are not proceeding well, and investment is being withdrawn. This is the emperor’s new clothes. We are all saying, “There’s a bloody great hole”—
Baroness Young of Old Scone (Lab)
Sorry, Hansard.
There is a huge hole in the carbon budgets, in which we have all colluded by saying, “Well, carbon capture and storage will fill that hole”. But what happens if it is the emperor’s new clothes and it does not work? We have to be very wary and understand what is happening at the moment. The Government are, quite rightly, throwing quite a lot of money at carbon capture and storage to trial it out as quickly as possible to find out whether we here in the UK can make it happen. If we can, great; let us replicate it very fast. If we cannot, we have to find some other solutions.
My final point is in support of the noble Lord, Lord Berkeley—
Lord Howell of Guildford (Con)
I thank the noble Baroness for giving way. I do not want it to sound as though CCUS is the answer to everything, but surely the whole concept of carbon sinks, of trying to preserve our forests—which are rapidly disappearing—and of developing new freshwater areas around the world in desert areas, as has been proposed in a very elaborate series of schemes, is doing just that: they are trying to capture carbon directly out of the atmosphere or from projects which are belting out carbon. What is wrong about that? I do not quite see why she is so dismissive.
Baroness Young of Old Scone (Lab)
I am probably breaking the rules here—I should address the House rather than the noble Lord—but nature-based solutions, which create biodiversity and other benefits, such as benefits for human health, mental health, water purification and flood control, are excellent schemes if they can be made to work effectively and cost effectively, bearing in mind all the benefits. Carbon capture and storage from industrial processes or, indeed, from air sources—from carbon that is already out there—is the bit that is not yet tested and not yet proven. We need to get ahead and decide whether we can make that work in the UK, which, I hope, is what the Government are trying to do. Perhaps the Minister will confirm that.
On Amendment 35, I share the joys with noble Lord, Lord Berkeley—not in the same house, I may say—of being an off-grid home owner who wants to do their bit for carbon reduction. At the moment, the choice for the average home owner in a rural property of an aged sort, which is highly dependent on oil because they are off the gas grid, is not terrific. You live in trembling fear of the wretched boiler breaking down: in an emergency situation such as that, the choice that then faces you is either just slamming in another oil-fired boiler, or else shelling out 20-odd thousand and waiting in the cold for six months while they work out how to put in an air source heat pump, which will probably not work at all anyway. It is not a choice. We need options for that rather beleaguered population in the country, many of whom live in aged, drafty houses and have very little assets of their own to be able to upgrade or may have a listed building of the sort you cannot upgrade.
Renewable liquid fuel seems to allow a simple transition using existing kit rather than having to capitalise up front for a totally new technology. It could produce—literally from next week, if you wanted it to—carbon reductions of up to 80%. I support the amendment tabled by the noble Lord, Lord Berkeley, and I hope the Government can do that too.
Lord Krebs (CB)
My Lords, I did not intend to speak in this debate, but I will say a few words about biomass and Drax. In so doing, I have to declare a conflict of interest in that I chair Drax’s independent advisory board on sustainable biomass.
The point I want to make is very simple: the devil is in the detail. There are circumstances under which biomass is not sustainable as a source of energy, where it does not replace the carbon emitted from the chimney stack by the growth of new trees. On the other hand, there are circumstances under which it is carbon neutral. Therefore, the crucial thing is to understand whether Drax is sourcing its material in a sustainable way.
It is not my job here to defend Drax and it is certainly not my job to comment on government subsidy, but I can say that there is a very detailed literature on forest carbon. If any noble Lords wish to make assertions about the carbon neutrality or otherwise of biomass burned by Drax at its power station, they should first study this literature in great detail and not rely on second-hand reports on “Panorama” or in other media outlets. So, I simply urge those noble Lords who wish to comment on Drax to study the detail.
Lord Hamilton of Epsom (Con)
What the noble Lord told us about being on the advisory board of Drax is very interesting. But how about the shipment of all this timber across the Atlantic and the burning of it in the United Kingdom? That seems to me to pollute the atmosphere, as well as contributing to CO2 emissions.
Lord Krebs (CB)
I thank the noble Lord for those questions. As I said, it is not my job to defend what Drax does. I am asked not to do that but to hold its feet to the fire on the sustainability questions relating to the sourcing. With regard to the life cycle analysis, Drax has an obligation to report the life cycle emissions of the power station, and the regulator scrutinises that reporting.
On the question of emissions from the stack at the UK power station, as I am sure the noble Lord is aware, under the UNFCCC accounting system, the accounting for those carbon losses are in the source country, not in the consumer country. Whether that is sensible is a matter for debate, but the fact is that the US has to declare the loss of carbon, and therefore in the UK’s accounting that counts as zero because the US has already accounted for it. Many people think that the consumer, not the producer, should have to account for it. It is not my part to adjudicate on that debate, but it is a perfectly valid debate to have.
Lord Teverson (LD)
My Lords, we seem to have gone into Committee mode.
I want to talk briefly to Amendment 35 from the noble Lord, Lord Berkeley, to which I have added my name. It is important never to forget that there are those issues in rural communities. I also am on oil, I regret to say. In Northern Ireland, 50% of households are dependent on oil and only 33% are connected to the grid. It is an important area, and I very much support the spirit of that amendment.
I also want to talk very briefly to Amendment 7, which is about adding “nuclear energy” to the list in Clause 3. I do not understand this amendment because Clause 3(2)(b) on the list refers to
“the reduction of greenhouse gas emissions from energy produced from fossil fuels”—
that must include nuclear—and Clause 3(2)(d) refers to
“measures for ensuring the security of the supply of energy”.
I would have thought that the nuclear sector would say it met both those objects. To add nuclear energy to that list would suggest that it does not meet the other two criteria, so that seems totally counterproductive.
Lord Ravensdale (CB)
My Lords, I declare my interest as a chief engineer working for AtkinsRéalis. I will make two very brief points.
My first point is on nuclear and the amendment the noble Lord, Lord Teverson, just spoke to, which was brought before the House by the noble Lord, Lord Offord, and spoken to by the noble Baroness, Lady Bloomfield. She made a great point; it is all about that statement of intent from the Government. The only other point I add is that, as regards Great British Energy, we need to think about not only the benefits in terms of the nuclear power stations but capturing that broader benefit for the economy of all the supply chains associated with it. The components, fuels, pumps, rods, control, drive mechanisms—that all requires investment in factories and infrastructure to capture the full economic benefit for the UK. I hope that perhaps Great British Energy could get involved in that, alongside Great British Nuclear.
My second point is around energy security. To follow on from something I raised in Committee, we have clear definitions for much of the terminology in Clause 3 but we do not have a clear definition there for energy security. I raise that because it can mean different things to different people. I think the Government are very focused on fuel security—gas and reducing our reliance on fossil gas. But of course there are many other aspects to energy security: there is cybersecurity, physical security, system reliability and price predictability. It is important to fully define that term so that stakeholders are not left guessing about what is really in the remit of Great British Energy. When summing up, can the Minister commit to having, certainly in the statement of strategic priorities, a firmer definition of what we mean by security of supply?
The Earl of Erroll (CB)
My Lords, people are talking a lot about carbon dioxide, and I hugely support carbon capture and utilisation. We have large plants manufacturing carbon dioxide deliberately. For instance, it is used for manufacturing fertiliser and in fire extinguishers—noble Lords may well have some in their house, and there are certainly some around Parliament. The food industry uses a whole lot of it, partly for carbonated drinks and also for refrigeration and some of the manufacturing processes. It is used for freezing and for transporting organs and such things in dry ice, which your Lordships have probably all heard of. It is used in greenhouses for bringing on the ripening of various things, and in the manufacture of a lot of chemicals. It has many industrial uses, and it is used in curing concrete. It is used for lots of things, so capturing it and using it would be very sensible, and we might manufacture slightly less of it.
Lord Bruce of Bennachie (LD)
My Lords, I rise very briefly to support the amendment in the name of the noble Lord, Lord Berkeley, but also to comment on the noble Baroness, Lady Liddell. I agree with the noble Baroness, Lady Young, that we need to get it right quickly or we cannot go there, but I hope we can go there. I was very encouraged that the Secretary of State said he might now prioritise the Acorn Project, the cluster in Scotland. That will be very welcome news for a very beleaguered Scottish industry that feels, frankly, that the Government are against it, and this would at least be a positive in the other direction.
On the amendment from the noble Lord, Lord Berkeley, and the comments of the noble Lord. Lord Teverson, the point has been made that the number of people is quite significant, but, if you look at the total across the UK, it is a relatively small percentage. The reality, however, is that, in some parts of the country, a very large percentage of people are genuinely concerned about what the future will hold. The point about Northern Ireland is the most powerful one. I thank the Minister very much for the meeting that he had with us, but what was discussed then was that the Irish Government seem to be on the verge of going down exactly the route that the noble Lord, Lord Berkeley, is recommending. That would clearly be an all-Ireland solution for the north of Ireland, but it would be rather odd if the UK could not find a way of running something similar at the same time.
I have just one other comment. The Minister gave me the impression that the priority for the Government was to get as many heat pumps installed as possible. I completely support that, but the reality, as has already been said, is that quite a lot of the houses are not actually suitable for heat pumps. I do not think there is a conflict here, but the point I would like to make to the Minister is: by all means promote heat pumps as much as you can, but recognise that some parts of the country need a solution fairly urgently, and heat pumps may not be the answer. So the amendment from the noble Lord, Lord Berkeley, has much to commend it and I hope the Government can give a positive response to it.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise very briefly, first to offer Green support for the two amendments in the name of the noble Baroness, Lady Boycott. I have just one point to add to our discussion of biomass. The Baroness, Lady Young, referred to the issue of using land that might be used for food production to produce biomass for energy. There is also a point about waste biomass. We talk about it as waste, but one thing we desperately need to do is store more carbon in our soil, and that is an alternative use of things that are being described as waste.
It may not surprise your Lordships’ House that I will speak against both the carbon capture and storage and the nuclear amendments in this group. I will be very brief, but I want to add a couple of factual points and respond to the question from the noble Lord, Lord Howell of Guildford, about why anyone would be against CCS. I point to SaskPower’s Boundary Dam 3 in Canada, which, after nine years and $1 billion, now has a capture rate for carbon dioxide of 57%, although it was built with the promise of 90% capture. That is what has happened in a number of projects around the world which have simply failed to match up to delivery.
I compliment the noble Baroness, Lady Liddell, for acknowledging the report from the Public Accounts Committee. This is a group with no particular horse in this race that has looked objectively at the Government’s plans and expressed great concern about the risk. One thing that the Public Accounts Committee rightly points out is that scientific evidence recently is showing that producing liquid fossil gas, which is planned to be used to run several CCUS projects, actually leads to the release of more greenhouse gas into the atmosphere than had been thought and so is less “green” than has been claimed. I think the noble Baroness, Lady Liddell, said, “Well, we don’t want to increase consumer bills”. The Public Accounts Committee notes that three-quarters of the almost £22 billion is envisaged to come from levies on consumers. That is where the funding is expected to come from.
Just very briefly on the nuclear points, I note that we are now up to £130 billion for clearing up old nuclear, Hinkley Point C is running behind time and well over budget and there is great concern about the £40 billion Sizewell C plans. I am sure that noble Lords will want to come back by citing small modular reactors as a response to this. I will just note that the Government on 6 February put out a press release headed “Government rips up rules to fire-up nuclear power”—rather Trumpian sounding, I think. Noble Lords might want to consider: do you actually want a small modular reactor on your doorstep or in your back yard?
Baroness Bennett of Manor Castle (GP)
Well, I ran that test at Eton College and I did not get many yeses from there.
Lord Fuller (Con)
My Lords, I shall speak very briefly in support of the noble Baroness, Lady Young of Old Scone, in her Amendment 13. It is said that when you are in a hole, stop digging—especially when it is a bloody great big one. It seems to me that it was the noble Lord, Lord Krebs, who dug himself into the mire by talking about CCC accounting principles, just delegating it to the regulators, so it is all right then, greenwashing away the IMO shipping carbon costs. He undermined his case, and it demonstrates how biomass burners such as Drax use smoke and mirrors to obfuscate. If the noble Baroness had tested the opinion of the House, she might have had much more support than she might have imagined. It is time to stop the classification of biomass as clean energy and I welcome her intervention.
Lord Offord of Garvel (Con)
My Lords, I will briefly include a consideration of the second group of amendments, talking about the definition of clean energy, and I express my gratitude to my noble friend Lord Trenchard. These amendments address a matter that many in this House have questioned during our debate: Great British Energy’s role and involvement in the production of nuclear. There is no doubt that nuclear energy in some shape or form will have a critical role to play in achieving the Government’s net zero targets. If the Government, via GB Energy, are to recognise the importance of nuclear, it is only right that they consult Great British Nuclear before investing in nuclear technology. That is where Amendment 36, proposed by my noble friend Lord Trenchard, becomes so crucial.
I also support Amendment 10, also proposed by my noble friend Lord Trenchard. This explicitly includes nuclear energy in the definition of clean energy. We know that it offers a reliable, low-carbon source of energy. In addition, Amendment 7, tabled in my name, includes
“the production of nuclear energy”
as part of GBE’s objectives, which complements Amendment 10 and further solidifies nuclear energy’s central role in being part of our long-term solution for energy security and decarbonisation.
Finally, turning to Amendments 2, 3, 4, 5, 6 and 11, proposed by the noble Baroness, Lady Liddell of Coatdyke, which would expand the definition of clean energy, we support the intention behind them to ensure that we remain inclusive of all potential technologies.
To conclude, I urge the Minister to consider the amendments in my name and those of my noble friend Lord Trenchard carefully, as they would help to ensure a clean, secure, sustainable energy future for the UK.
Lord in Waiting/Government Whip (Lord Cryer) (Lab)
My Lords, I shall speak not so briefly, actually, on this group of amendments concerning the scope of clean energy as defined in the Bill, particularly in relation of carbon capture, usage and storage, hydrogen, nuclear power, biomass and renewable liquid fuels.
Taken together, these amendments seek to broaden the definition of clean energy within the Bill to explicitly include CCUS, blue hydrogen and nuclear energy, while others aim to restrict biomass or impose additional reporting requirements on GBE. While the Government recognise the significance of these technologies and lauds them in achieving net zero, we must resist these amendments, for reasons I will now set out.
I turn first to Amendments 2, 3, 4, 5, 6, 11 and 12, tabled by my noble friend Lady Liddell of Coatdyke. These amendments aim to ensure that CCUS and CCUS-enabled blue hydrogen are explicitly covered under Clause 3. The Government recognise that hydrogen and CCUS are vital in our transition to net zero, contributing to decarbonisation and energy security while supporting jobs in key industrial regions.
Analysis by DESNZ—a great acronym—and the Climate Change Committee confirms that CCUS-enabled blue hydrogen will be crucial for scaling up hydrogen production into the 2030s, which was referred to extensively at Second Reading, in Committee and today. On hydrogen, Ministers remain committed to delivering on our current trajectory, which includes offering contracts to the 11 successful electrolytic hydrogen projects through the first hydrogen allocation round and delivering future allocation rounds, as well as providing support for blue hydrogen production through the CCUS programme, with the £21.7 billion recent funding paving the way for the first large-scale blue hydrogen production plant.
Clause 3(2)(b) already enables GBE to facilitate, encourage or participate in projects, such as CCUS and CCUS-enabled hydrogen, that would contribute to the reduction of greenhouse gases from energy produced from fossil fuels. Therefore, these technologies fall within the scope of GBE’s objectives. We have made it clear—in the founding statement, in the Explanatory Notes and during multiple stages of the Bill’s passage—that emerging technologies such as CCUS or hydrogen could be part of GBE’s energy portfolio once it is operational. However, while GBE will be able to invest in these technologies, as we have emphasised on many occasions, it will be an operationally independent company. The exact mix of technologies in which it chooses to invest will therefore be determined in due course and be influenced by available opportunities, now and in future. I hope that the noble Baroness, Lady Liddell, recognises that these arguments are not required and will therefore withdraw her amendment.
I now turn to Amendments 7, 10 and 36, which were spoken to by the noble Lord, Lord Offord, the noble Baroness, Lady Bloomfield, and the noble Viscount, Lord Hanworth, the latter speaking on Amendments 10 and 36 on behalf of the noble Viscount, Lord Trenchard. Amendment 7 in the name of the noble Lord, Lord Offord, seeks to add
“the production of nuclear energy”
as an objective in Clause 3. Amendments 10 and 36 in the name of the noble Viscount, Lord Trenchard, seek to expand the definition of “clean energy” used in Clause 3(2)(a) to ensure that it includes both renewable energy and nuclear energy and would require GBE to consult GBN before it invests in nuclear energy.
We must resist these amendments for two key reasons. First, it is already possible for GBE to invest in nuclear energy. Nuclear energy is already defined as clean energy under Clause 3; as such, its production, distribution, storage and supply are activities that GBE could undertake under Clause 3(2)(a). Secondly, I assure noble Lords that GBE would engage with Great British Nuclear ahead of any such investment in nuclear energy. I do not think that we need to include such a requirement for the Secretary of State to direct GBE to engage with GBN ahead of any investment in nuclear energy given both this context and the fact that the Secretary of State is the sole shareholder in both companies.
This Government view nuclear power as one of the reliable, secure, low-carbon sources of home-produced electricity. It will play an important role in helping to achieve energy security and clean power while securing thousands of good, skilled jobs as well as a range of power and energy supplies. The Government are taking significant steps to advance nuclear energy. GBN is leading the selection of small modular reactor technology. Incidentally, a record £410 million has been allocated for fusion research and development, supporting cutting-edge facilities and research.
I wish to add something regarding the comments from the noble Baroness, Lady Bloomfield. Considering the importance of the remits of the two entities, GBN and GBE, they will remain independent sister companies for the time being to ensure that both organisations are best placed to deliver on the Government’s ambitions for energy security and variety of supply. We are maintaining a nuclear focus board for GBN, with highly specialised and experienced personnel; again, this has been debated over a long period. The two organisations will work together effectively to ensure that the UK is on the path to achieving energy security and clean power while securing thousands of skilled jobs.
I hope that the noble Lord, Lord Offord, recognises that this Government are taking active steps to support the continued growth of the nuclear sector; that he is reassured that the Bill allows for GBE to support nuclear energy within the definition of clean energy; and that he will agree not to press his amendment.
I now turn to Amendments 13 and 44 in the name of the noble Baroness, Lady Boycott; my noble friend Lord Berkeley and the noble Baroness, Lady Young, also spoke to them. Amendment 13 seeks to exclude biomass from the Bill’s definition of clean energy. Amendment 44 would require GBE to produce a plan for its use of biomass power generation and assess the impact of it on both sustainability and its compliance with targets and obligations.
I must resist these amendments for the following reasons. The Government recognise biomass as vital to the UK electricity grid. The Intergovernmental Panel on Climate Change and the UK’s Climate Change Committee—the CCC, which engages with Governments of all hues—highlight its role in decarbonisation if strict sustainability policies are in place. Biomass sourced under strict sustainability criteria is considered a low-carbon energy source; the noble Lord, Lord Hamilton, also spoke about this.
The Government support only sustainable biomass, and generators such as Drax receive subsidies only for biomass that meets the UK sustainability criteria. A CfD has recently been agreed with Drax for short-term support from 2027 to 2031 to provide crucial low-carbon, dispatchable power for UK energy security. With our having introduced tough new sustainability measures with clear and enforceable standards, Drax will need to use 100% sustainably-sourced biomass—up from the current figure of 70%—and no more money will be paid for non-compliant biomass. There will be substantial penalties for any failure to meet these strict criteria, protecting both consumers and the environment.
The comments from the noble Lord, Lord Krebs, were interesting, to say the least. He set out that the figures are more complex than the headline figures might appear. I would add that the UK’s sustainability criteria limit supply chain emissions and include environmental protections. Where biomass comes from forests, land criteria ensure sustainable harvesting and productivity. Large-scale biomass generators can convert to bioenergy with carbon capture and storage—BECCS—which the Climate Change Committee and the International Energy Agency recognise as key to net zero, delivering negative emissions alongside low-carbon electricity. Of course, Drax’s activities are accountable to Ofgem.
Amendments 13 and 44 would unnecessarily constrain the company, despite the role of biomass in balancing an energy system with increasing renewables. GBE will operate independently, with its investment choices guided by strategic priorities and opportunities available at the time. Parliament will scrutinise its activities—we have just discussed this at great length, particularly with regard to Clause 5—through annual reports and standard accountability processes.
The Government have tabled an amendment requiring GBE to review its impact on sustainable development. This will ensure compliance with environmental regulations while supporting nature and biodiversity. The framework document will mandate annual reporting on sustainable development, embedding it into the company’s strategy and operations. Given these reasons, I hope that the noble Baroness, Lady Boycott, can see a way not to press her amendments.
Amendment 35 in the name of my noble friend Lord Berkeley seeks to direct GBE to assess energy-related issues for off-gas grid households and to report on the role of renewable liquid heating fuels. I must resist this amendment for the following reasons. While the Government recognise the challenges faced by off-gas grid households, GBE will have the autonomy to determine its investment priorities. The Government already have measures in place to support those households. For example, the boiler upgrade scheme is receiving an extra £30 million for this financial year, as well as a near-doubling of its budget to £295 million in the next financial year, so that families can benefit from £7,500 off the cost of a heat pump. Evidence shows that 42% of grants under this scheme have gone to properties off the gas grid; that figure is not bad.
As my noble friend Lord Berkeley discussed with my noble friend the Minister, although renewable liquid fuels may play a limited role in decarbonisation, their affordability and supply constraints make them unsuitable for large-scale deployment. We are committed to engaging with industry on the challenges and solutions for decarbonising heat in rural homes, and we will take a considered and proportionate approach. I therefore hope that, with my response and the meetings that my two noble friends have had, my noble friend Lord Berkeley will be able to see a way not to press his amendment.
Baroness Liddell of Coatdyke (Lab)
My Lords, I am grateful to the Minister for what he has said and am happy to withdraw my amendment. We understand that Great British Energy is independent, but we are very grateful for the statements that the Government have made around the issue.
Lord Hunt of Kings Heath
“(including through projects involving or benefiting local communities).”Member's explanatory statement
This amendment clarifies that Great British Energy may facilitate, encourage and participate in the things mentioned in subsection (2)(a) to (d) through projects involving or benefiting local communities.
Lord Hunt of Kings Heath (Lab)
My Lords, Amendment 8 relates to Clause 3 and makes it clear that community energy is within scope of the objects of Great British Energy. I am grateful to the noble Earl, Lord Russell, for his support and for our engagement between Committee and Report.
We had an interesting and somewhat lengthy debate in Committee on the role of community energy. I have always recognised the important role that community energy can have as we strive for clean power and net zero. Following positive discussions across the House, particularly with the noble Earl, Lord Russell, I accepted that the role of community energy could be made explicit in the Bill. That is why this amendment has been tabled. It sets out a clear intention that local and community energy is important for Great British Energy and the Government.
GBE will enhance existing support for community energy. This will be done through partnering with, and providing funding and support to, local and combined authorities, as well as community energy groups. This is very important. To support community energy groups to access funding and to establish themselves in all areas of Great Britain, GBE will provide commercial, technical and project-planning assistance, increasing the capability and capacity to build a pipeline of successful projects in local areas. This has clearly been missing in the current arrangements, where lots of local groups want to develop community energy but find it difficult to access advice and access the pathway to finance. GBE has a really important role to play here. I beg to move.
Earl Russell (LD)
My Lords, I support government Amendment 8 and will speak to my Amendments 14 and 25. I am deeply grateful to the Minister for putting community energy in the Bill with Amendment 8. It is now clear that Great British Energy may facilitate, encourage and participate in those things mentioned in Clause 3(2)(a) to (d) through projects involving or benefiting local communities.
I am really pleased, as this is a win for MPs on all sides of the other Chamber and for noble Lords on all Benches in this Chamber. There is notable strong cross-party support to see community energy in the Bill. It was a key objective for us, and I am delighted that we have had a successful negotiation and got this done. We have the third-best wind resources in the world. It is our view that there can be no Great British Energy without Great British community energy. With this amendment, our objective has been achieved.
It is worth noting that, as the Minister said, GB Energy has a unique role here. When Jürgen Maier was before the Energy Security and Net Zero Committee he talked about a system coming “out of the box”. That is exactly it—going into local communities, GB Energy will be able to deliver community energy and engage with them from start to finish.
I remind the House that community energy could deliver up to 8 gigawatts and power 2.2 million homes, saving two nuclear reactors-worth of energy. It could remove 2.5 million tonnes of CO2 and provide over 30,000 jobs. What is not to like about that? I am delighted that we have made progress on this and I thank the Minister.
Moving on, my Amendment 25 is a probing amendment in response to a question that my counterpart, Pippa Heylings, asked in the Commons this week about the fact that, at the moment, the £10 million community energy fund is oversubscribed. Some 100 projects are unable to get funding, and the money is due to run out in May. While I greatly appreciate getting community energy into the Bill, can the Minister provide clarity on what will happen with that fund? Is he able to put more money in? Is there an interregnum until GB Energy can start funding it? Ed Miliband gave very strong words in support of community energy but did not really answer my honourable friend’s point about the money. If the Minister can provide any more certainty or say whether this is being looked at, that would be appreciated.
Amendment 14 is our warm homes plan and emergency home insulation plan. It requires the Government to transfer the responsibility for the warm homes plan to GB Energy should it be requested. We have some of that coldest, dampest and most miserable homes in Europe. UK housing stock accounts for around 7% of total carbon emissions. They are among the least energy-efficient homes in Europe, with 12 million homes in England alone currently falling below adequate energy efficiency standards. The UK Climate Change Committee has said that residential retrofits need to increase to a rate of 500,000 a year by 2025 and 1 million a year by 2030 to meet our climate targets. This is a huge and daunting task. It is one of the biggest infrastructure tasks of the 21st century.
Our citizens have suffered cold, damp, draughty and unhealthy homes for far too long. In the single largest housing-related cost burden to the NHS in 2023, some £50 million was spent fighting cold-related illness. Homes cost more to heat than they should because they do not retain the heat that the homeowners pay for. The best energy of all is the energy that we never use, in particular the energy that we do not waste on absolutely nothing. Energy efficiency remains a missing part of overall energy policy. Citizens should not have to choose between heating and eating. In this country, 6 million people live in fuel poverty, while at the same time we are wasting this energy. It is utter madness.
The last Government completely failed to tackle this problem. They cut the funding and the ambition to deliver warm homes and to insulate our homes. That was not good enough. Carbon Brief calculated that UK energy bills were £22 billion higher over the past decade than they should have been because the Conservatives cut the “green crap”. The number of homes being insulated each year at the start of 2024 was 98% below 2012 levels. Of that £22 billion, £5 billion was due to poorly insulated homes and £3 billion was because homes were being built that were not meeting energy efficient standards.
However, no Government of any persuasion has ever managed to tackle this problem. It is a tough nut to crack, even with the best will in the world. Going house-by-house and retrofitting our mixed housing stock is an extremely challenging undertaking. I welcome this Government’s commitment to the warm homes plan and the £6.6 billion in funding that has already been provided. The programme that the Government are setting out will provide low-interest loans to support families to invest in insulation, encourage low-carbon heating and enable the retrofitting of our homes. The Climate Change Committee has estimated that £3.15 billion is probably the total cost of getting this done, but I welcome what the Government are doing. My amendment is not a criticism of that but is here to support.
The burden is on the private sector, where 90% of these properties are owner-occupied and not meeting standards. We need to do stuff with the over-65s, because that is a particular problem. We need to tackle fuel poverty, as we have 2.26 million homes in fuel poverty as of 2022. We need new financing options, particularly green mortgages, so that private home owners can take the cost of making these measures and put them against their mortgage, and we need similar situations for people in the private rented sector.
This is good, though. The New Economics Foundation has said that every £1 spent of public investment could generate £4.60 in capital expenditure and £6.90 in broader economic activity; this is good for our homes and our economy. It could create thousands of green jobs and increase local UK supply chains.
I am worried about the delivery of these plans; that is why I have put this amendment forward. I recognise that the Government are exploring these issues as we speak and that my amendment is a bit radical and left field. I say to the Minister that this is difficult, and at a time when the Government are also trying to put in solar panels and heat pumps. I am not the only person to be concerned about delivery of these plans. I recognise that GB Energy is an independent organisation. My amendment is not prescriptive; it is simply about not ruling out options from the start. It is about making sure that that door is not closed to GB Energy from before it is set up; it is about making sure that there is space for those conversations to take place.
If my amendment passes and GB Energy never approaches the Government or the Minister to say that it wants to take any of this on, for whatever reason, then my amendment does no damage at all; it makes no difference whatever. It comes into play only if GB Energy approaches the Minister and says that it has the skills and the contacts within the industry, that it fits with its community energy plans, and that it wants to do this and make a difference. This amendment, if it does nothing else, allows these conversations to take place, and I think that is a good thing. I dare the Government to be different and take a different approach to this daunting and challenging task.
The Deputy Speaker (Baroness Watkins of Tavistock) (CB)
My Lords, I apologise. I failed to make it clear at the beginning that, as Amendment 9 is an amendment to Amendment 8, I have to call Amendment 9.
Amendment 9 (to Amendment 8)
Lord Whitty
Lord Whitty (Lab)
My Lords, I thank the noble Baroness on the Woolsack for that clarification.
I applaud completely Amendment 8, and am glad that the Government have moved this amendment which reflects the discussion in Committee. However, I am deeply disappointed that they failed to reflect an amendment that I tabled in Committee and had hoped that Ministers would accept. I find it quite extraordinary that, in a Labour Government’s proposition on the transformation of the energy sector, there is no clear reference to the workforce, workforce planning or raising skills.
We are, in effect, transforming over time a workforce whose most skilled and probably best paid employees work on oil wells to then operate in the wind sector, other renewable energy sectors and the nuclear sector. We wish to transform the generation end, but it affects the distribution and transmission end as well, where the whole system has to be changed and made more connected. The development of storage and new skills will be required, right through to the retail end where today’s jobbing electricians, gas fitters and plumbers will have to change their skills to fit in with the new energy form. But the Bill does not mention it.
I criticised the Conservative Government, who had much longer Bills where the words “skills” and “workforce” did not appear, but this Bill, on the strategic requirement for Great British Energy, which will be a major mover in this area, does not really mention skills. I hope, therefore, that the Minister will accept that there is a requirement and bring forward an amendment at Third Reading which reflects that.
I gently say to the Ministers on the Front Bench that, unless we reflect on that, we are going to lose some support among the existing workforce and those who might be thinking of training to enter the workforce. This applies to other Bills as well; if I were capable of being in two places at the same time, I would be making the same point on the buses Bill, where a relatively elderly workforce is going to be faced with a transformation in technology and regulation. I might also have made the same point on the railways Bill.
I gently say to my colleagues on the Front Bench that these are quite heavily unionised industries that they are proposing to transform. It would be good to have the representatives of the existing workforce, and, potentially, the future workforce, on-side in the job of Great British Energy and the Government. I declare an interest as a member of the GMB and the former general secretary of Unite and UNISON. We are at an early stage, and the Government need to recognise that representation will be important during this transformation of a very important sector. I hope they will recognise that and commit to putting something in the Bill for Third Reading.
Lord Hamilton of Epsom (Con)
I will speak to government Amendment 8 about community energy supplies. The noble Baroness, Lady Bennett of Manor Castle, said that, when she was at Eton, there was nobody there who wanted to have a small modular nuclear reactor near to their home. This is something that I think may be more widespread than just Eton. I suspect that many people will be looking at the value of their houses and thinking that if they have a small modular reactor power station nearby, the value of their house may drop.
Therefore, I ask the Minister whether his idea of community energy supplies includes offering either cheap or free energy to people who live in the locality. That would make an awful lot of difference to the acceptability of SMRs—I once again declare my modest shareholding in Rolls-Royce—because then you might well have a situation where a buyer of a house that is slightly close to a small modular reactor gets a deal for either cheap or free energy. It is very important to make these things acceptable to people in the locality. I suspect that, if it is possible for the people who are putting in the small modular reactor to say to people locally that they can have cheap or free energy, that may well go an awful long way to making these things acceptable in a way which they otherwise would not be.
Lord Wigley (PC)
Before the noble Member sits down, will he address the point that many of the sites that have been earmarked for SMRs are existing nuclear sites? Any effect on property values has probably already happened, and those sites clearly have an appeal for such SMR projects.
Lord Hamilton of Epsom (Con)
I totally accept that fact, and people have certainly got used to having much bigger reactors on those sites and so will not worry about it. I have ambitions, though, for SMRs that go way beyond existing sites. There are not that many of them in this country, and I hope that we will have an awful lot more. When I come to move my amendment later on in the evening, I will be making reference to the fact that we might have a small modular reactor for specific purposes.
Baroness Hayman (CB)
My Lords, I will intervene very briefly on this debate, and I declare my interest as chair of Peers for the Planet. I have just a couple of points on the issues that have been raised. First, to follow up on what the noble Lord, Lord Hamilton, said, the idea of ensuring that communities gain the benefits of infrastructure that is near to them applies not only to small modular reactors but to many other things. In particular, the House knows of my concern for onshore wind and an increase in onshore wind developments. We have to do that in a way so the community, first, understands why we are doing it, and secondly, sees some benefit from those projects, whether on an individual or community level.
The other thing—and I of course welcome the government amendment on community energy—is that I very much agree with the spirit of what the noble Lord, Lord Whitty, said. Some of us get very weary trying to inject the same issues of principle into legislation after legislation. Skills and the needs of the workforce, and the way we practically turn aspirations for green growth and green jobs into satisfying, well-paid, sustainable jobs, has to be done through the nitty-gritty of skills training, passporting and making sure that the opportunities are there for transition and for young people. It is enormously important that the Government and GBE do not lose sight of that.
In exactly the same spirit, we have banged on—if that is a parliamentary phrase—about home insulation and energy efficiency on any number of Bills. If I may say so to the noble Earl, Lord Russell, it is probably slightly inelegant to put that in the Bill as a hypothetical for what GBE might want to do, but the spirit of what he is saying, and the fact that this has been such a recurring theme, is absolutely central: it has so many benefits in saving money, saving emissions, increasing health and ensuring that we lift people out of the poverty that is occasioned by the housing in which they live. I hope that the Minister can give us some encouragement that the warm homes strategy, or whatever we are calling it this time—we have called it lots of different things over the years but have not been very successful in delivering it—will be a high priority for the Government.
Baroness McIntosh of Pickering (Con)
My Lords, I will speak to Amendment 22, in my name and those of the noble Baronesses, Lady Boycott and Lady Young, and the noble Lord, Lord Teverson. I congratulate the Government on bringing forward their Amendment 8. I imagine that it will find favour with the House rather than Amendment 22, but I will take the opportunity to press the Minister on a couple of aspects, just to give me reassurance that he means more than the warm words that we see expressed in his amendment.
In particular, how do the Government intend to deal with the current uncertainty over the community energy fund’s future? Is the Minister able to give us a guarantee of how that will pan out? Also, does he intend to take, or encourage GB Energy to take, early action to ensure that the fund will be matched by other funds, as I understand needs to be done, and that clear instructions on the above will indeed be set out in the strategic priorities for Great British Energy, as required by Clause 5?
I am not that familiar with community energy schemes, but I have seen how they operate in Denmark—I declare my interest, being half Danish and taking a great interest in Danish matters. I understand that they are so successful in Denmark because there is a system where local citizens, often organised in co-operatives, which again is very Danish—Arla is a co-operative in the milk industry that many here are familiar with—own a significant portion of renewable energy sources, such as wind farms and heat networks. Does the Minister agree that community ownership is part of the success of these schemes and that that is a path down which he would seek to go?
Lord Fuller (Con)
My Lords, I will speak briefly to my Amendment 53, which seeks to ensure that the voices of local people are heard when proposals are made or encouraged by GB Energy for renewable energy projects that impact on local areas. This is a group about community involvement and consultation, and how people might have their say. I regret to say that, in so many cases, local people have been airbrushed from the debate, which has been conducted above their heads. We build resentment, scepticism and resistance when local people are denied their say. I speak with authority when I say that the NSIP system is being systematically abused by developers of solar farms, who string together otherwise stand-alone and discrete proposals for small-scale solar and aggregate them together as a device to somehow creep over the threshold. The voices of the local planning authority, locally elected representatives, local people and business are excised from the record.
The NSIP system was designed to allow truly exceptional and impactful infrastructure projects to be considered in the national context. I completely support that principle, but I see in my own area, for example, that one proposal, extending to 1,100 hectares but covering 40 square kilometres and at least a dozen separate landowners some 15 miles apart, has been cobbled together in the crudest and most cynical manner to creep over that 100-megawatt capacity line. It undermines public confidence in our planning system and acts as a recruiting sergeant for conspiracy theorists and their superficial, fundamentalist views. We will all become tainted and tarred by their brush while we deny the public due process and a proper say on these schemes, which should be decided locally but are not.
Later, on Amendments 50 and 52, I will say that solar should not be permitted on the best and most versatile land—grades 1 to 3A. I recognise that other land could be used for large-scale renewables, but we need to exercise care and caution. Even grade 4 or grade 5 land has a value, but that is more likely to include amenity value, outstanding landscape contribution or wider social benefit, perhaps in areas of outstanding natural beauty or other designations. It is for that reason that, for all land—even in cases where land may be at the poorer end of agricultural quality—changes in use to renewables more widely should be consulted on for residents within a 20-mile buffer of the widest proposed land extent. My amendment provides for this stipulation.
It is because the NSIP system is being abused and has fallen into disrepute that I have brought this amendment to repair the damage and indignation that local people rightly feel. We are storing up some terrible problems if the political class structurally sidelines views in an unthinking dash for renewables and fails to consider those wider impacts.
Baroness Boycott (CB)
My Lords, I rise briefly too to speak to my Amendment 22. I am very grateful for all the support of so many noble Lords, and I am thrilled to be standing here after so many attempts to get community energy into the statute books. I note the work of Power for People, which has done a fantastic job over the years to make this happen.
Following on from the point made by the noble Baroness, Lady McIntosh, my sister has lived in Denmark for over 50 years now and she has had a financial stake in a wind farm for a very long time. She gets good, reliable, cheap energy. They really like it; it makes you feel like part of something.
I do not support the Liberal Democrats’ amendment that GB Energy should have to pay for all the home insulation, but I am extremely worried about where this money is going to come from. I do not see a place. We all understand that we have to do something about homes, for all the many reasons that the noble Earl, Lord Russell, and the noble Baroness, Lady Hayman, set out, yet there seems to be a bit of a black hole, as we call it, in this department. You cannot get everything out of the GB Energy fund, and it is right that it should be ring-fenced around the actual production of the new green fuels that we all need, but there needs to be a be a really tough plan. I would be very interested to know what the Government have in store.
Earl Russell (LD)
The aim of my amendment is not that GB Energy should pay for it; I feel that GB Energy would be a good body to deliver it.
Baroness Young of Old Scone (Lab)
My Lords, may I add to the outbreak of harmony by thanking the noble Earl, Lord Russell, and the Minister for Amendment 8? As the noble Baroness, Lady Boycott, said, it is great to see local community benefit coming on to the face of the Bill. Especially since all the supporting material about GB Energy is very strong on community energy schemes, it just seemed rather crazy that it was not in the Bill, so I say thank you for that.
Ideally, of course—we environmentalists are miserable people who always want more, so I am moving on to Amendment 22, to which I also have added my name—with the Government having gone as far as Amendment 8, which puts community energy schemes on the face of the Bill, it would be quite nice to get slightly more specific recognition that such schemes need to be part of the strategic priorities. Therefore, can the Minister say why he will not accept Amendment 22, which I assume he will not support?
Baroness Bennett of Manor Castle (GP)
My Lords, I shall join in the general outbreak of harmony that has struck your Lordships’ House and welcome government Amendment 8 on community energy. This is one more demonstration that campaigning works—but, boy, does it often take quite a long while. I really must commend Community Energy England, Green Alliance, and Peers for the Planet, which have all been pushing this issue for a very long time. I also commend your Lordships’ House collectively, because your Lordships may recall that, in the previous Government’s Energy Bill—now an Act—this was the last amendment standing, as we defended again and again the need to include community energy on the face of that Bill. Perhaps this is a demonstration to your Lordships’ House that it is a good idea to stand up for principles, because eventually you will get there, even if it takes some time.
To echo the remarks of the noble Baronesses, Lady Young and Lady McIntosh, yes, we would like to see the Government go further, both in the strategic priorities and in the sense that we need long-term, stable policies. I remember meeting so many community energy groups that were just about ready to go when the feed-in tariff was ripped out from underneath them and their projects collapsed after so much voluntary effort had been put in. The people doing this need the certainty to know that this will work and deliver, and that means long-term, stable policies.
Turning to Amendment 14 in the name of the noble Earl, Lord Russell, I can say that, based on the clarification that he has just provided, the Green group will be pleased to support his amendment, should he press it to the vote.
In the previous group, we were talking about Drax, which has benefited from £6 billion of subsidies since 2012, which the people and the planet cannot afford anymore. Imagine if that £6 billion had gone into home energy efficiency instead; there is good evidence to show that we would have needed so much less generation in the first place. The cleanest, greenest energy that you can possibly have is the energy that you do not need to use. There are not only the environmental benefits and the cost-of-living benefits, as huge as they are; there are also the public health benefits, since so many people live in unhealthy homes. Your Lordships’ House often talks about productivity and all the people of working age who are not in paid work. The quality of our homes is a big issue there, and that must not be forgotten as an added bonus, as well as the environmental and cost-of-living ones.
Lord Ravensdale (CB)
My Lords, I too very much welcome the Government’s Amendment 8 and thank the Minister for the productive engagement we had in between Committee and Report.
I also thank the Minister for facilitating the very useful discussion with the CEO of Great British Energy on local area energy planning, which tunes into some of the things we are doing in the Midlands. I would welcome a brief reassurance from the Minister on local area energy planning and how that is to be taken forward. One of the concerns is that it is absolutely vital to get local authorities engaged in the process and have that bottom-up view on energy assistance governance to match the top-down view that will be brought forward in the spatial strategic energy plan, as other noble Lords have said. Local energy planning is central to that, but we have seen a great disparity in the UK, with large, well-funded combined authorities and councils taking a rigorous approach, but other, less well-funded ones simply not having the resources to do that. Great British Energy could provide a key role here in funding local authorities and in having that view across the system of local area energy planning. I would welcome some reassurance from the Minister on the way forward for local area energy plans. Will they be one of the things that Great British Energy invests in?
The Lord Bishop of Norwich
My Lords, I support the Government’s Amendment 8. It is good that the Government have introduced this amendment so that Great British Energy can facilitate, encourage and participate in local community energy projects. I pay tribute to the noble Earl, Lord Russell, for the work he has done on this, as well as a number of different campaigning organisations and other Members of your Lordships’ House. This is a very important amendment, and it will be a great help to a whole range of different community organisations.
I also support the comments made by the noble Baroness, Lady McIntosh, and the noble Earl, Lord Russell, in pressing the Minister about the community energy fund. Some reassurance there would be very helpful.
Village halls, sports centres, voluntary youth organisations and churches could all benefit from being able to generate local energy for local people. I certainly see the potential for our churches, which have wonderful south-facing roofs. With the planning consent given to King’s College Chapel in Cambridge to have solar panels and other landmark projects such as York Minister and Salisbury Cathedral, there are new opportunities emerging.
I warn your Lordships that, if you are ever invited to go to a dedication of solar panels on a church roof, just beware. When I went to dedicate the solar panels on the roof of St Peter Mancroft church in the centre of Norwich back in September, a very observant member of the public rang 999, saying that a youth was stealing lead off the roof. When I came down, having dedicated the solar panels, I had to answer to two local police officers who had turned up—it was a great compliment to be called a youth, though.
This is important work for community groups and the charitable sector to be able to contribute to their local communities in new ways, particularly in areas of low economic activity, and to provide income for their sustainability. There is a challenge that I wanted the Minister to be aware of, however. The connection charge that is asked for to upgrade the electricity connection to many churches and community centres often prohibits them being able to do this sort of work. In the diocese I serve, St Margaret’s church in Lowestoft has just been quoted a sum of around £100,000 to make the connection. That means that the project is just unaffordable, so we need to be creative and think more about how community groups can be able to engage.
But I warmly support the Government bringing forward their Amendment 8.
Lord Teverson (LD)
My Lords, I too very much welcome the Government’s amendment. I would also like to congratulate the noble Baroness, Lady Boycott, on her work to get her amendment there, which I think added pressure. The noble Lord, Lord Whitty, has made a very good point. It may be something that will carry on in other Bills as we go through the Session.
I want to talk briefly about the amendment from the noble Lord, Lord Fuller. There is some truth in it, but I think it is an amendment in the wrong Bill. This whole area of land use will come in when the Government finally bring forward their land use legislation. I would point out that onshore wind has a very small footprint in terms of agricultural land. If we had that 20-mile radius, I am thinking of the first field south of London that has, perhaps, a very modest wind farm or a single turbine. It would probably require a consultation with some 5 million people for that one turbine. So, I think it is the wrong place and the wrong amendment for this Bill, and it discriminates against certain parts of renewable energy. There is something in it in relation to land use that does need to be pursued, but perhaps in a Bill to come later in this parliamentary Session.
Lord Howell of Guildford (Con)
My Lords, I have glad tidings for the noble Baroness, Lady Boycott, regarding her concerns. There are between 23 million and 27 million homes in this country still using gas for heating, cooking and warmth. Clearly, that has to be tackled. The answer is quite simple, but complicated as well. The answer is that modern electric boilers can replace all those gas boilers, without having to dig and provide new hydrogen pipes and all sorts of other such complications.
The snag is that electricity is so hopelessly expensive. That is the deterrent. Here we are, wishing to transform millions of homes away from gas, and the pipes then will all become redundant. We can put in modern electric boilers, which can do the job just as well, but the cost goes up rapidly. If only we could focus on how to reduce the cost of electricity by building rapidly—which we are not doing—the cheaper, smaller modular reactors and cheaper devices for producing electricity, and even using more hydrogen on the electricity side; that is another story that we have not really discussed. Even on that basis, we are facing the problem that electricity is very expensive. As long as we keep it that way, as long as we play that game in relation to the overall energy cost, we are shooting ourselves busily in both feet.
Lord Offord of Garvel (Con)
My Lords, the topic of community energy was raised several times in Committee by noble Lords on all sides of the House, because it is a highly important aspect of energy provision. When in government, we introduced the community energy fund, which provided funding to specifically target the community energy sector. So, I would concur with noble Lords that it is very important that communities are involved, as they are able to raise and solve issues that are unique to their local community.
Lord Hunt of Kings Heath (Lab)
My Lords, I will first say that I am grateful to noble Lords for their support for my Amendment 8. I echo what the noble Baroness, Lady Bennett, said about the success of campaigning. She might have recognised the Government’s role in this, but she did not quite get that over the line. But there is always hope.
On the point made by the noble Lord, Lord Hamilton, about community benefits, I agree with the principle; we are looking at community benefit schemes. I have told noble Lords before about my visit to Biggleswade wind farm, where the company involved is giving around £40,000 a year to the local community. Certainly, we need to look at schemes like that and see what we can do to extend them.
As regards nuclear and that interesting discussion, the noble Lord, Lord Wigley, made it very clear that the existing sites contained in the last statement will always be recognised for what they offer. We are not seeking to undermine their potential; we are simply saying that we need a more flexible siting policy in the future.
The noble Lord did not mention Wylfa, so I will. Of course, he will know that Wylfa was identified as one of the sites in the last statement. Clearly, it still offers many potential opportunities. There was a great deal of interest earlier this week in the planning inspector’s report, which purportedly came out against the development of Wylfa. I, for one, think that it offers great potential.
Lord Hunt of Kings Heath (Lab)
My Lords, I have already spoken to my Amendment 8 and I now turn to Amendment 9 from my noble friend Lord Whitty, which is an amendment to my amendment. I had an opportunity for a very useful discussion with him after Committee. On jobs—the skilled people in the industry—I make it clear to the House that in Great British Energy’s policy priorities its mission is to drive clean energy deployment, boost energy independence and create jobs, alongside the other important aims. The GBE founding statement is explicit that GBE will boost the number of skilled jobs in this essential industry.
The statement of strategic priorities will reiterate these points and provide some more detail, and I am confident that GBE will take strongly on board the point that my noble friend has raised. We have already said that we expect trade unions to have a role in GBE, and I think the appointment as a non-executive director of my noble friend Lady O’Grady, the former general secretary of the TUC, supports this. I would also very much like to arrange a meeting between my noble friends to discuss this further.
On Amendment 22, we expect the statement of strategic priorities to outline any areas or programmes of activity that the Government would like GBE to prioritise in pursuit of its objectives. The problem with the wording of this amendment is that it would distort the work of GBE by placing community energy above and beyond the company’s other strategic priorities.
On Amendment 25, to support community energy groups to access funding and establish themselves in all areas of the UK—a point I made earlier—GBE will provide commercial, technical and project planning assistance, increasing the capability and capacity to build a pipeline of successful projects in local areas. Our local power plan will ensure coherence with other public sector advisory functions, and funding and finance organisations operating in the local energy space.
On community funds, of course we recognise the important role that community groups play in our efforts to tackle climate change and the sector asks around future funding. Great British Energy will build on the community energy fund by partnering with and providing funding and support to community energy groups to roll out renewable energy projects and develop, as noble Lords have said, up to 8 gigawatts of power. Further details will be set out shortly, but that is as far as I can go tonight.
As far as Amendment 14 is concerned, I make it clear to the noble Earl, Lord Russell, that there is no question about the importance of what he said about the challenge we face in relation to our building stock. That is therefore the challenge of our warm homes plan. We do not agree with the amendment because we do not think it should be the role of GBE to roll out the warm homes plan. I think he was talking about a wider principle than specifically the Bill and the role of GBE.
The warm homes plan has to be seen as a vital component of our ambition to become a clean energy superstar. As a first step we have committed an initial £3.4 billion in the next three years towards heat decarbonisation and household energy efficiency, and £1 billion of that has been allocated in the 2025-26 financial year. The intention is to upgrade up to 5 million homes across the country over this Parliament by accelerating the installation of efficient new technologies such as heat pumps, solar, batteries and insulation and to work and partner with combined authorities and local and devolved governments to roll this out. I accept that this is essentially a first step. It is a really challenging area, alongside our industrial processes. We will set out further details on the warm homes plan in due course, and we think that is the best way to proceed.
Finally, there are two responses to Amendment 53 tabled by the noble Lord, Lord Fuller, with whom I had the opportunity of a very useful discussion. I do not think it necessary to constrain GBE. Any development in which it is involved and provides finance will be subject to the existing stringent planning regulations, although we hope to see reform of our planning system, and the environmental impact assessments in environmental legislation that is brought to bear when considering these applications. The noble Lord’s argument should be with the planning system and environmental protections. The noble Lord, Lord Teverson, is right—we do not think that this Bill is the appropriate place for these proposals.
Lord Whitty (Lab)
My Lords, I will withdraw this amendment to an amendment. I tabled it because Clause 3(2) restricts the objects without mentioning the workforce. If my noble friend has other ways of dealing with this, that is fine.
Earl Russell
“Warm Homes Plan and emergency home insulation(1) The Secretary of State must accept any request from Great British Energy to have responsibility over the delivery and implementation of the Warm Homes Plan.(2) If Great British Energy makes a request under subsection (1), the Secretary of State must provide support to Great British Energy following the transference of responsibility.(3) If Great British Energy becomes responsible for the delivery and implementation of the Warm Homes Plan, that delivery must include an emergency home insulation programme which—(a) provides targeted support for people on low incomes,(b) seeks to achieve to the reduction of household energy bills, and(c) contributes to the achievement of the United Kingdom’s climate and environmental targets.”Member’s explanatory statement
This amendment requires the Government to transfer responsibility for the Warm Homes Plan to GBE should it be requested and further requires GBE to introduce an emergency home insulation programme that would seek to reduce household energy bills, and contribute to achieving climate and environmental targets.
Earl Russell (LD)
I appreciate the Minister’s response and what the Government are doing in relation to the warm homes plan. I also appreciate the commitment he has given, in time. My amendment is not prescriptive; it is simply about keeping those conversations open. I think that GB Energy could fundamentally have a role in delivering all or part of the plans, and I wish to test the opinion of the House.
Lord Petitgas
“(2A) The maximum amount of financial assistance provided by the Secretary of State must not exceed £8.3 billion.”
Lord Petitgas (Con)
My Lords, in moving Amendment 15 I will also speak to Amendment 16 in my name. I will start with Amendment 16, which seeks to establish baseline investment governance for GBE. Remarkably, the Bill as drafted provides no clear framework for GBE’s investment decision-making process, leaving critical questions of accountability unanswered. This amendment is a necessary safeguard for three reasons.
First, it addresses the glaring governance gap that I just spoke about. The Bill delegates ultimate authority to the Secretary of State but offers no clarity on how GBE itself will assess value for money or who, within GBE, will be accountable for such decisions. Without defined governance structures, we risk approving an open-ended cash flow without proper oversight. This is simply not acceptable when billions of taxpayer pounds are at stake.
Secondly, it highlights the need for financial expertise and accountability. At Second Reading the Minister suggested giving GBE free rein to pursue opportunities with an entrepreneurial spirit—I think he mentioned independence today. While I sympathise with this ambition, GBE is neither a venture capital fund with a proven investment committee nor a publicly traded company like Ørsted in Denmark, subject to rigorous market scrutiny. In the absence of such mechanisms, it is imperative that His Majesty’s Treasury provides oversight. We need experienced financial professionals—dare I say grown-ups in the room?—to ensure value for money, while balancing financial returns with broader strategic goals.
Thirdly and lastly, Amendment 16 is designed to ensure public trust and confidence. Some may argue that setting governance requirements could stifle innovation. On the contrary, clear accountability and oversight would enhance GBE’s credibility and reassure taxpayers that their money is being managed responsibly. Without these safeguards, we risk undermining trust in this ambitious initiative.
This amendment does not constrain GBE’s mission; it strengthens it by ensuring robust governance and responsible stewardship of public funds. In summary, we are asking for clarification from the Minister of how GBE’s spending will be monitored and how the Government will ensure value for money.
Amendment 15 seeks to establish a cap on the level of funding for GBE. While the Government have allocated £8.3 billion for this initiative, the Bill lacks clarity on whether additional funding may be sought without parliamentary oversight. This amendment is prudent and necessary, again for three reasons.
First, it ensures fiscal discipline and taxpayer protection. GBE’s mission is to attract private investment into renewables but, as we have said several times, there is absolutely no shortage of private capital in this sector. Companies such as Iberdrola, SSE and National Grid have already committed billions to clean energy projects, so there is a clear risk that GBE’s funds will be directed towards high-risk or less attractive ventures like a magnet. As the noble Lord, Lord Mandelson, once said, when politicians try to pick winners, losers invariably find the politicians. A funding limit would safeguard taxpayers, while allowing GBE to prove its effectiveness and build a track record.
Secondly, Amendment 15 aligns with precedents and market practice. Other government initiatives aimed at crowding in private investment have operated within defined financial limits. Moreover, to me, GBE’s structure resembles that of a venture capital fund holding minority stakes in multiple projects. It would be unheard of for such a fund to operate with open-ended financial commitments. That would undermine investor confidence and fiscal accountability.
Thirdly and lastly, a cap signals discipline, not doubt. Some may argue that limiting funding could project a lack of ambition. On the contrary, in an era of fiscal scarcity, such a measure would demonstrate resolve and responsible stewardship of public resources. It would also encourage efficiency in achieving GBE’s objectives while maintaining credibility with Parliament and the public.
This amendment would not hinder GBE’s goals. It strengthens them by ensuring accountability and the prudent use of public funds. I am minded to test the opinion of the House on Amendment 15.
Earl Russell (LD)
My Lords, I rise from these Benches to speak against Amendment 15 in the name of the noble Lord, Lord Petitgas. His amendment seeks to add a limit on the maximum amount of money that the Secretary of State can provide to GBE—anything above and beyond the £8.3 billion that the Government have committed to. We strongly oppose this amendment. The noble Lord talked about resolve, strength and all these things, but I do not agree with any of that. It is not for the Opposition to use an amendment to legislation to determine what funds a Government can spend on something in the future, when we do not know what is going to happen.
Just this week we have talked about the Drax situation; the Government have halved the subsidies to Drax. The money that the Government are saving from having to subsidise Drax is money that could well go to GB Energy—for example, to fund the long-duration energy storage that we desperately need, so that we can do the transition and keep the lights on. The money should be used for other renewables projects.
It is for the Government to make day-to-day spending decisions and they are accountable for the decisions they make, as GB Energy is accountable to the Treasury and the public for how it spends its money. Ultimately, the Government themselves are responsible to the public, but I do not think it is for the Opposition to put a cap on what Governments can spend. Core spending is a decision for the Government, so this would be a highly unusual amendment and, if it is put to a vote, we will oppose it.
Lord Offord of Garvel (Con)
My Lords, I support the amendments in the name of my noble friend Lord Petitgas. In tabling his amendments, my noble friend looks to protect the taxpayer while securing the financial integrity of GB Energy, establishing that GB Energy’s attempt to ramp up renewables must not come at the cost of fiscal responsibility and £8.3 billion. The drafting of Clause 4 is far too ambiguous. We must introduce sufficient safeguards by limiting the scope that the financial powers in the Bill afford the Secretary of State. The taxpayer is coughing up a significant £8.3 billion into an investment vehicle that, as my noble friend Lord Petitgas said, has the potential to completely de-risk the profits of multi-million pound energy companies. Meanwhile, the Government have cancelled winter fuel payments, introduced an NI jobs tax and launched a raid on British farmers, all to save money.
The reality is that £8.3 billion is actually a very tricky number. On the one hand, it is a lot of money, a big, significant investment into energy. On the other hand, in the scheme of energy investment required, it is a relatively inconsequential figure, especially when we talk about wind farms being built out to the potential tune of £100 billion. Either way, whether we consider that to be a big or a small number, the taxpayer deserves to know that the Government are deploying public funds appropriately. The Bill contains no limitation on how much financial assistance GB Energy will receive, there is no cap on the money that can be pumped into GB Energy and nor does the funding have to undergo any approval. What is to stop GB Energy becoming a bottomless pit?
Clause 4 states:
“The Secretary of State may provide financial assistance to Great British Energy”.
But, again, we are lacking in detail on ways to hold the Secretary of State and GB Energy accountable. We have seen no method to restrict the amount of financial assistance the Secretary of State may provide, nor do we understand how the success of each investment will be measured, or indeed reported on. I trust that the Minister will take these amendments seriously. Our transition to net zero must be done with an eye to fiscal responsibility, ensuring that the energy transition is both sustainable and affordable.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to the noble Lord, Lord Petitgas, for returning to a theme he developed in Committee. I assure the noble Lord, Lord Offord, that I take the amendments seriously. But, like the noble Earl, Lord Russell, I do not believe that they are appropriate, because I do not think it right to constrain the arrangements we set out in the Bill in this way. Nor do I think it appropriate for Parliament to take to itself the kinds of controls that the noble Lord is suggesting.
Let me make it clear, first, that in terms of the sum, we are committed to capitalising Great British Energy with £8.3 billion over this Parliament, but we have the flexibility in the future for a current or future Secretary of State to provide further financial support if it were required in this or a future Parliament. There must be flexibility here: one cannot set in stone a figure for all time. We must allow GBE to develop and grow, and we have to learn by experience.
However, the idea that the money being spent by GBE will not be subject to thorough tests and reviews is simply not true. As we have already said, any financial assistance to GBE provided by the Secretary of State will have to be subject to the usual governance and control principles applicable to public sector bodies, such as His Majesty’s Treasury’s Managing Public Money principles. GBE will be allocated funding through the spending review and will draw down on it when required in the normal way, through the supply estimates process, which is scrutinised, of course, by the other place. As is the case with any government spending, the Secretary of State will be able to finance planned activities only if Parliament votes the necessary financial provision.
Lord Petitgas (Con)
I thank the noble Earl, Lord Russell, for his comment, which I must say did concern me: in a way, he highlighted the fact that it is more likely than not that the amount will be exceeded. I should also thank the Minister. I am glad that he recognised a certain coherence in my arguments over the last few weeks, but I am not totally satisfied that we have the necessary limits on GBE and, with this in mind, I wish to test the opinion of the House on Amendment 15.
Lord Alton of Liverpool
“(6) Financial assistance under this section must not be provided if there exists credible evidence of modern slavery in the energy supply chain of any company designated Great British Energy.”
Lord Alton of Liverpool (CB)
My Lords, I thank all who have supported this amendment, both in Committee and tonight. It is an all-party amendment, so I particularly thank the noble Baroness, Lady Kennedy of The Shaws, the noble Lords, Lord Offord of Garvel and Lord Teverson, and the other signatories in Committee, including the right reverend Prelate the Bishop of St Albans and the noble Lord, Lord Blencathra, whom I see in his place. I am also grateful to the Inter-Parliamentary Alliance on China and its chief executive, Luke de Pulford, for its briefing note. I am always grateful to the Minister for the meetings we have had outside of the Chamber; I know that he cares as deeply about this issue, as I do. Whether or not there is a meeting of minds on the amendment this evening, I pay tribute to him for the work that he has done on this.
The Joint Committee on Human Rights is currently conducting a full-scale inquiry into supply chain transparency and modern slavery. We have heard powerful evidence from Rahima Mahmut of the World Uyghur Congress, which I commend to the House. I also urge noble Lords to look at the links not just to Xinjiang and the appalling treatment of Uighur Muslims there but to other parts of the supply chain that would be caught by this amendment. That would include, for instance, children who are sent down mines in the Democratic Republic of the Congo. There are 25,000 of them, and we know that many are linked to Chinese-owned companies. Those children are forced labour too, and this amendment seeks to address that.
The amendment is also informed by the July 2023 report of the Joint Committee on Intelligence and Security, which warned against increased and deepening UK dependence on the CCP regime, and it urged greater national resilience. It said that China had penetrated “every sector” of the UK’s economy, underlined by three decades of trade deficits with China, which currently stand at £32 billion. The amendment goes right to the heart of this dependency—which the noble Lord, Lord Blencathra, has regularly raised—exposing a fundamental incompatibility between a rules-based liberal democracy that respects human rights and one that does not. It builds on our obligations under the Human Rights Act 1998, the Modern Slavery Act 2015, the Proceeds of Crime Act 2002 and the 1948 convention on the crime of genocide, along with prohibitions from Victorian legislation, the Foreign Prison-Made Goods Act 1897, which I have mentioned to the Minister before. The amendment is modelled on, and consistent with, earlier all-party amendments, passed by substantial majorities in your Lordships’ House, to the Procurement Act 2023, the Health and Care Act 2022 and the Telecommunications (Security) Act 2021, as well as the genocide amendment to the Trade Act 2021.
Lord Wigley (PC)
I intervene very briefly to support the amendment that the noble Lord, Lord Alton, moved. I thank him for the campaign he has run on this issue for several years now, and for the way he has defended those who are enslaved or used in other countries—China in particular, but in other parts of the world as well. It is right and proper that we bear this in mind when we legislate and when we set up an organisation of the sort we are discussing.
I do not think that any of us, in any party in this House, would want to see us benefiting from the sort of suffering that has happened in other countries. The noble Lord mentioned China, but there are other countries where this happens. It is a consideration that should come into the deliberations we have as we build a new organisation with immense responsibilities and resources at its disposal. Those should not—in any shape or form—be used to support people who are being exploited in the way that they are in some overseas countries. I have no doubt that the Government would agree with that as an approach; the question is how we turn it into practice.
In supporting this amendment, I say that I too have links with Siemens. I am sure that we would not want to paint it with a brush of what happened during the war. Many other companies that have emerged in the post-war world would not want to have too much exploration of what happened during the Nazi regime. Having said that, I very much hope that there is some way in which the Government can respond to this amendment and that some guidance can be given to Great British Energy to ensure that no advantage is taken of those who are not in a position to defend themselves.
Baroness Bennett of Manor Castle (GP)
My Lords, I offer Green support for Amendment 18 in the names of the noble Lord, Lord Alton, and a range of other distinguished Members of your Lordships’ House. I will also speak to my Amendment 19, which goes further than the amendment from the noble Lord, Lord Alton, but which demonstrates just how moderate and reasonable his amendment is. Your Lordships’ House, the British Government and many parts of British society have long expressed their absolute horror at modern slavery, so surely we can put this into this important Bill, where it is such a crucial issue, as the noble Lord, Lord Alton, identified.
The noble Lord mentioned the Democratic Republic of the Congo and how the issues of modern slavery there, as well as child labour amounting to modern slavery, are very much an issue in terms of the energy supply chain. My amendment refers to
“credible evidence of deforestation or human rights abuses”.
I will take human rights abuses first. Much of what is happening in the Democratic Republic of the Congo might not fit the definition of modern slavery, but it absolutely fits the definition of human rights abuses. I note that I was at a briefing today with the DRC Foreign Minister, Thérèse Kayikwamba Wagner, who gave us the news, which has since been more widely reported, that, sadly, the ceasefire that had been called in the eastern Congo had been broken by M23, backed by the Rwandan Government. We have already seen nearly 3,000 people killed and some 3,000 people injured, and we heard from the Foreign Minister that, sadly, they expect those figures to rise very significantly. These are violent human rights abuses—there is simply no other term.
To tie this to the Great British Energy Bill, it is worth noting that the DRC produces 70% of the world’s cobalt, yet it somehow disappears without trace and reappears out the other side as legal, apparently appropriately sourced material, without any traceable chain to account for that. Of course, the people of the Democratic Republic of the Congo do not benefit financially from that. It is others—damaging, dangerous, aggressive forces—who benefit from it.
I wrote the amendment in this particular way because it goes back to the passage of what became the Environment Act, during which a number of noble Lords here today had much the same debate, with the tying together of deforestation and human rights abuses. One of the issues here is that indigenous people are responsible for protecting huge amounts of the world’s forests, and abuse of their rights is very much tied to the destruction of deforestation. I will note just one stat: if deforestation was a country, it would be the third-largest emitter of carbon behind China and the US. Much of that deforestation is of course linked in particular to agriculture. But in the DRC and parts of Latin America in particular, mining and deforestation are intimately linked.
So, your Lordships’ House has before it two amendments. I do not plan to push mine to a vote, but I offer the Green Party’s strongest support to the noble Lord, Lord Alton, for his amendment. How could we not vote to ensure that there is action on modern slavery?
Earl Russell (LD)
My Lords, I will speak also in favour of Amendment 18 in the name of the noble Lord, Lord Alton of Liverpool, and supported by the noble Baroness, Lady Kennedy of The Shaws, and the noble Lords, Lord Offord and Lord Teverson. I will speak briefly and will not repeat the arguments that I made in Committee.
We believe in people and planet, and we should never have to choose one or the other. The two are intertwined and co-dependent. Our goal of reaching net zero must not come at the expense of supporting repressive regimes that do not support the human rights of their own citizens, or on the back of slave labour.
In brief, we are very supportive of the intentions behind this amendment, but we feel that the ultimate solutions lie above and beyond GB Energy. The real solutions in the UK are about working with our allies and partners to develop our own manufacturing capacity for solar panels in particular, so that we are free of those from China. California has made progress on this; it can be done, particularly working with our European allies. This is really important stuff that the Government need to get to grips with.
We do not want to see GB Energy put at an unfair disadvantage vis-à-vis every other private contractor or engineering company doing solar panels in the UK. The noble Lord, Lord Alton, has already spoken about this, but I know that noble Lords will be very grateful to Jürgen Maier for having come and spoken to us. Unfortunately, I was off at the time, but my understanding is that it was a very good and productive meeting, and that he gave very strong and powerful arguments and responses to questions that were put to him on these issues. GB Energy, as we know, also has lots of stringent reporting requirements in place, including under the Modern Slavery Act.
Lord Teverson (LD)
My Lords, very briefly, I was pleased to add my name to this amendment and, like others, I commend the noble Lord, Lord Alton of Liverpool, for his long-time work on this crucial area. On supply chains, those companies involved in fitting solar or anything else in this area should really be concerned about their supply chain in terms of scope 3 emissions, where they have to track their supply chain backwards, so I would hope that was also a method to check means of manufacture as well. I am also very sympathetic to the amendment from the noble Baroness, Lady Bennett.
Lord Offord of Garvel (Con)
My Lords, Amendment 18 is a simple yet essential safeguard that ensures that public funds will not support companies tainted by modern slavery in their energy supply chains. The UK has long stood against forced labour and exploitation. If we are serious about a just and ethical transition to clean energy, we must ensure that Great British Energy, a publicly backed entity, operates to the highest moral and legal standards. There is a clear precedent for this approach. The UK’s Modern Slavery Act 2015 requires companies to take responsibility for their supply chains, yet we know that modern slavery remains a serious issue in the global energy sector, particularly in the sourcing of solar panels, batteries and raw materials such as lithium and cobalt.
This amendment does not create unnecessary bureaucracy or hinder investment; it simply ensures that taxpayers’ money does not fund exploitation. If there is credible evidence of modern slavery in the supply chain, public funding must not flow to that company. It is a basic ethical standard. It is also a matter of economic resilience, because reliance on unethical supply chains creates risk for businesses, investors and the public. Therefore, supporting this amendment strengthens the integrity of Great British Energy. aligns our economic ambition with our moral obligations and sends a clear message that Britain’s clean energy future must be built on ethical foundations. I urge all noble Lords to support this amendment.
Lord Hunt of Kings Heath (Lab)
My Lords, I am grateful to all noble Lords who spoke in this important debate, and particularly, of course, the noble Lord, Lord Alton. He and I have worked together on a number of these issues, particularly in relation to enforced organ donation in Xinjiang province, and I have always been tremendously grateful for the advice and support he has given.
On this debate in general, I agree with the noble Earl, Lord Russell, that behind it lies more fundamental changes that we need to see, including his point about the development, where we can, of a UK supply chain. He said that he is going to support the noble Lord, Lord Alton; I understand and accept that.
Let me say at once that the Government wholeheartedly agree on the importance of confronting human rights abuses, including modern slavery, in energy supply chains, and we are committed to tackling the issue. I am glad that the meeting with Jürgen Maier was helpful; he is providing some strong leadership in this area. I have had also had discussions with the noble Lord, Lord Alton, between Committee and Report, but we have not quite found a way through as yet.
My understanding is that Great British Energy will already have a range of tools in place to support its efforts to identify and tackle human rights abuses in its supply chain. Indeed, as a state-owned company, it will be expected not only to abide by but to be a first-in-class example of adherence to the UK’s existing legislation and guidance. We support voluntary due diligence approaches taken by UK businesses to respect human rights across their operations and supplier relationships, in line with the UN’s Guiding Principles on Business and Human Rights and the OECD guidelines for multinational enterprises.
The noble Lord, Lord Offord, referred to legislation passed by his Government, which I readily acknowledge. Under Section 54 of the Modern Slavery Act 2015, Great British Energy will be required to prepare a slavery and human trafficking statement for the financial year, in relation to its turnover of £36 million or more, outlining the steps it has taken in the financial year to ensure that slavery and human trafficking is not taking place in any of its supply chains nor any part of its business. Once the Procurement Act 2023 comes into force—on which the noble Lord, Lord Alton, and I shared a common endeavour—it can reject bids and terminate contracts with suppliers which are known to use forced labour themselves or anywhere in their supply chain.
We will also use the modern slavery assessment tool known as MSAT to assess the supply base for modern slavery risks. With these tools, I am assured and am confident that Great British Energy will not ignore credible evidence of modern slavery and human rights abuses. I believe that its exemplary adherence to this legislation, which the Government rightfully expect, will not only ensure that the company is doing all in its power to combat modern slavery but also pull up the standards expected of the UK’s wider energy industry under the existing legislative landscape. I think the chair of GBE has reinforced that point.
It is our belief that any action that has to be taken must not only be robust but—to take the point of the noble Earl, Lord Russell—take a whole-of-government and society approach. We expect UK businesses, including GBE, to do everything in their power to remove any instances of forced labour from their supply chain. Our guidance and international principles encourage business to remediate or mitigate when instances are uncovered, such as industry collaboration or improved internal purchasing practices. Amendments 18 and 19 would not allow GBE the opportunity for mediation; they would only penalise it.
There is a practical question around how these amendments might work in practice and what their impacts on GBE and its operations would be. They do not define what is meant by “credible evidence”, and this could be left open to interpretation. I am not trying to be pedantic here because, clearly, the noble Lord, Lord Alton, suggested in his opening remarks that he wanted to give the Commons the opportunity to debate this matter. I agree that we should not be too pedantic about the wording of the amendment, but I wanted to mention that as one of the practical consequences of enacting the amendments as they are currently drafted.
Combating human rights abuses, such as modern slavery, across the whole energy industry is a much more effective way to make progress than applying measures on a company-by-company basis, as these amendments would do. We recognise that the landscape has changed since the Modern Slavery Act was introduced; that is why we are committed to improving our response to modern slavery and will set out next steps more broadly in due course.
I should inform the House that we are partnering with an expert institution to provide detailed and relevant information on what modern slavery statements should cover, including practical advice for businesses to go beyond compliance with their legal requirements and actively identify and remedy instances of modern slavery in their supply chains. GBE will follow that, of course.
The noble Lord, Lord Alton, expressed some scepticism about the Solar Taskforce. Having been relaunched by my department, it will focus on identifying and taking forward the actions needed to develop resilient, sustainable and innovative supply chains that are free from forced labour. The aim is to support the significant increases needed in the deployment of solar panels to meet our ambition of seeing a large increase by 2030.
More widely, the Government are taking action to ensure that our clean energy supply chains are resilient as a key priority in the transition to net zero, in both de-risking the delivery of our carbon budgets and maximising the economic benefits from the transition. This will involve domestic action, such as investment in manufacturing, and international action, such as removing trade barriers and collaborating with our allies.
With respect to the speech from the noble Lord, Lord Alton, I know that the House wants to see action from the Government. I can assure noble Lords that my department is working collaboratively across Whitehall on this important issue, including with the Department for Business and Trade and the Home Office, to assess and monitor the effectiveness of the UK’s existing measures, alongside the impacts of new policy tools that are emerging to tackle forced labour in global supply chains, including in the energy sector. We are not ignoring the points made by the noble Lord. We take this seriously and, as I said, we are strongly looking at this across Whitehall at the moment.
I turn to the amendment in the name of the noble Baroness, Lady Bennett, to which she spoke so eloquently. Let me be clear: the UK’s existing sustainability criteria put limits on the greenhouse gas emissions of the supply chain and already include environmental protections. Where biomass is sourced from forests, the land criteria include requirements around sustainable harvesting and maintaining productivity. This ensures that forests are managed well and in a sustainable manner, as carbon dioxide emissions released during combustion are absorbed continuously by new forest growth. The statement that we made on Monday in relation to biomass reflects how the Government are moving. They might not be moving as fast as the noble Baroness wants, but we are, I think, moving in the direction that she wishes to see.
I remind the noble Baroness, Lady Bennett, that, as a public body, Great British Energy already has a duty to conserve and enhance biodiversity. The noble Earl, Lord Russell, was right to remind me of my own Amendment 38, which we will come on to at some point this evening. I do not want to repeat what I am going to say later, but it is a very important amendment and I hope it will provide considerable reassurance to the House.
Lord Alton of Liverpool (CB)
My Lords, I am grateful to the Minister. I have taken my own remarks at something of a gallop this evening, but this has been a very worthwhile debate. It was good to hear from the noble Baroness, Lady Bennett, the noble Earl, Lord Russell, and the noble Lords, Lord Wigley, Lord Teverson and Lord Offord. The fact that there was so much agreement across the House about the scourge of modern-day slavery and the failure, 10 years later, of the 2015 legislation to deal with this problem effectively demonstrates the truth of what has been—
Lord Hunt of Kings Heath (Lab)
My Lords, in my remarks, I accepted that life has moved on since 2015. The Government know that we need to look at this further, which is why we are working across Whitehall at the moment. I wanted to assure the noble Lord that we do not ignore the fact that we need to move on from the 2015 legislation.
Lord Alton of Liverpool (CB)
I accept that it is not the Minister who is at fault here. However, whether there is the same enthusiasm elsewhere across government is something that we can all speculate on. He will remember that, in Committee, I drew to his attention the report on 26 December 2024 in the Financial Times linking 14 companies to events in Xinjiang involving $1.4 billion of exposure.
Lord Hunt of Kings Heath (Lab)
I am sorry to challenge again the noble Lord but, seeing my noble friend Lord Collins on the Bench, I assure the noble Lord that I speak for the Government in saying that we are very concerned about this. We are not at all being complacent.
Lord Alton of Liverpool (CB)
I know that the Minister and his noble friend Lord Collins are concerned. The issues are not a problem here, but, as I suggested earlier, they may be elsewhere within government. Maybe we have to concentrate people’s minds, as the Minister and I have done previously on other legislation. He referred to the Procurement Act, when we were successful, together with other noble Lords, in concentrating the mind of the Government at that time. That is all I am seeking to do this evening.
The Minister referred to our duties. The Modern Slavery Act and its Section 54 are 10 years old. The author of that legislation was the noble Baroness, Lady May, then Home Secretary and who became Prime Minister. It was, at the time—everybody said it—landmark legislation. She recognises that the voluntary nature of Section 54, which is a tick-box exercise, does not do the job, but no one has brought forward changes to that. That is why the Joint Committee on Human Rights is currently conducting an inquiry into modern-day slavery and supply chain transparency.
The Minister will know that, on previous occasions, Ministers have said from that Dispatch Box that it cannot be done in this or that Bill at this time and that there will be other legislation and that will be the time to do it. It never is the right time. There never is the right legislation. The issue ultimately is whether we entrench dependency on a country run by a regime like that of the CCP or whether we have resilience in the United Kingdom and create supply chains between democracies that have similar values; otherwise, British taxpayers’ money, to the tune of billions of pounds, is going to pour into the coffers of a regime that is inimitably opposed to the values that we espouse. For all those reasons, I would like to test the opinion of the House.
Great British Energy Bill
Tuesday 11th February 2025
(1 week, 4 days ago)
Lords ChamberGreat British Energy Bill 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 43-R-I Marshalled list for Report - (7 Feb 2025)
21:59 - Division on Amendment 23 - Ayes: 121 / Noes: 131 - Amendment 23 disagreed.
22:09 - Division on Amendment 24 - Ayes: 119 / Noes: 130 - Amendment 24 disagreed.
23:05 - Division on Amendment 38 - Ayes: 125 / Noes: 103 - Amendment 38 agreed.
23:18 - Division on Amendment 39 - Ayes: 102 / Noes: 123 - Amendment 39 disagreed.
23:28 - Division on Amendment 40 - Ayes: 106 / Noes: 120 - Amendment 40 disagreed.
23:52 - Division on Amendment 46 - Ayes: 84 / Noes: 120 - Amendment 46 disagreed.
00:20 - Division on Amendment 50 - Ayes: 67 / Noes: 115 - Amendment 50 disagreed.
00:44 - Division on Amendment 54 - Ayes: 31 / Noes: 110 - Amendment 54 disagreed.
Lord Hunt of Kings Heath
“(1A) The Secretary of State must comply with subsection (1) within the period of six months beginning with the day on which this Act comes into force.”Member’s explanatory statement
This amendment requires the Secretary of State to prepare a statement of strategic priorities for Great British Energy within the period of six months beginning with the day on which this Act comes into force.
The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)
My Lords, in moving Amendment 21, I acknowledge and thank the noble Earl, Lord Russell, for putting his name to it. It requires the Secretary of State to prepare a statement of strategic priorities within a period of six months from the day on which the Act comes into force.
As noble Lords will know, we had extensive discussion about the statement of strategic priorities in Committee, and I am glad to say that we have had a lot of constructive discussion between Committee and Report. In recognition of the concerns raised on the length of time that Great British Energy could be operating without a set of strategic priorities, I am glad to bring forward this amendment, which clarifies the length of time in which the first statement of strategic priorities should be prepared.
In addition to this amendment, I make a commitment at the Dispatch Box that the Government will publish a Written Ministerial Statement when the first statement of strategic priorities is published, so that this House and the other place will be informed. I hope that noble Lords will support this amendment. I beg to move.
Lord Vaux of Harrowden (CB)
My Lords, briefly, I thank the Minister for tabling Amendment 21. It is identical to an amendment I tabled in Committee, and introduces a time limit of six months for the publication of the statement of strategic priorities. Given the importance of that statement, as we have had many discussions around, and that it is the only place where the aims for GBE will be set out, it is clearly essential that the publication should not be delayed. I am very grateful to the Minister for accepting the principle.
I was going to ask the Minister whether the statement will be accompanied by an impact statement or assessment, or whether the business cases and spending reviews will be published. He pre-empted that on the first group, and I am grateful for his positive answers to those questions.
Earl Russell (LD)
My Lords, I thank the Minister and his Bill team for listening and constructively engaging with the many discussions that we have had on the issue of Great British Energy’s statement of strategic priorities and for bringing forward this helpful amendment.
I will be brief, as we have had a lot of discussion on this, particularly in Committee. Our position is that we support the intentions of the Bill and recognise that the Government are acting at speed to establish Great British Energy. However, we have always said that the Bill is too short for its own good. We recognise the difficult position that the Minister finds himself in. It is for Great British Energy, as an independent organisation, to write its own strategic priorities, as long as they are consistent with the objects set out in Clause 3. Great British Energy obviously needs to be established in order to write the strategic priorities, and discussions are required with the devolved Administrations.
Against these needs, we as parliamentarians were being asked to approve the Bill with no sight of the strategic priorities prior to the Bill being passed, or even after it is passed and the strategic priorities have been finalised. This was an issue that the Constitution Committee rightly highlighted as an area of concern. To us, it felt a little like we were being asked to sign a blank check, and your Lordships were rightly nervous about the implicit ask in the Bill as it was drafted.
From these Benches, we have consistently argued for progress on these matters and for the reaching of constructive compromise. Compromise needs to rightly balance the actions and operational independence of Great British Energy and, at the same time, the justified right of parliamentary scrutiny and oversight of the strategic priorities. Is this amendment absolutely perfect? No. Does it do a good and worthwhile job of balancing these competing needs and moving the issue forward? Yes, it very much does. I welcome the words the Minister has spoken from the Dispatch Box about a Written Ministerial Statement. This is an essential compromise, and I thank the Minister for this good progress.
Lord Offord of Garvel (Con)
My Lords, I will speak in support of the amendment in my name and that in the name of my noble friend Lord Trenchard. They represent an important step in ensuring that the development and operation of Great British Energy are aligned with the national interests and strategic needs of our energy sector.
Amendment 21, put forward by the Minister, ensures that the Secretary of State must prepare the statement of strategic priorities for GBE within six months of the passing of the Bill. This timely approach is crucial, as it establishes an early foundation for the strategic direction of Great British Energy, permitting the organisation to operate with clarity and purpose from the outset.
The inclusion of Amendment 26 in my name is equally important. It requires that the statement of strategic priorities must specifically address the development of supply chains in the United Kingdom. This is vital to ensure that the Great British Energy objectives are not only met but integrated into the broader goal of strengthening domestic industries and fostering economic resilience within our own borders. The definition of supply chains in this amendment reinforces the need for a comprehensive and interconnected approach to the creation and sale of commodities relating to Great British Energy’s work.
Finally, Amendment 33, proposed by my noble friend Lord Trenchard, brings an added layer of scrutiny and collaboration by mandating consultation with Great British Nuclear and the National Wealth Fund before the publication of the statement of strategic priorities. This amendment will ensure that Great British Energy’s strategies are developed in consultation with relevant stakeholders, thereby promoting a more cohesive and informed approach to energy policy.
These amendments collectively reflect our commitment to a strong, secure and sustainable energy future. I support them, and I encourage the Minister to do the same.
Viscount Hanworth (Lab)
My Lords, I wish to speak to Amendment 33, which is somewhat misplaced in this group. I have been asked by the noble Viscount, Lord Trenchard—
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Viscount, Lord Trenchard, is not here to move Amendment 33.
Viscount Hanworth (Lab)
I have been asked to speak on his behalf. Is that liable? That was his request.
Viscount Hanworth (Lab)
I will be brief.
The noble Viscount declares an interest as a member of the advisory board of Penultimate Power. In speaking to his amendment, I will rely on text that he has provided. He is concerned that Great British Energy might be devoted to the pursuit of the immediate agenda of NESO—the National Energy System Operator—to the detriment of the nuclear agenda, which has a longer time scale. The recent NESO documents have concentrated on wind and solar power, alongside the capture and storage of carbon dioxide emitted by standby stations, but they barely mention nuclear power.
The noble Viscount, Lord Trenchard, acknowledges that the Minister declared that it would be within the competence of Great British Energy to invest in nuclear power and to do the other things in relation to nuclear. Here I must use the own words of the noble Viscount, Lord Trenchard:
“I’m afraid that on reflection I don’t think that was clear enough. The Minister’s mention of GBN suggests that its continuation restricts the scope of GBE in relation to nuclear”.
He goes on to say:
“The Minister seemed to be saying that GBE could always invest in a nuclear power project; but that this should fall primarily within the scope of GBN. The Energy Act 2023 specifies that GBN’s objectives are to facilitate nuclear energy projects. However, it is silent on the provision of financial assistance for such projects”.
Lord Cryer (Lab)
I apologise for intervening. For future reference, moving an amendment on behalf of another Member is permissible, but reading a speech out on behalf of another Member is not, according to the guide.
Lord Howell of Guildford (Con)
My Lords, as the noble Viscount, Lord Hanworth, pointed out, it is a bit odd if we think about it. Since we started on this Bill, the Prime Minister has been making some very lively speeches, but going in a different direction. According to the newspapers, he wants to power the energy-hungry data centres needed for artificial intelligence. We all know about those: they are being built and they cannot get enough juice. He expects this own party to back small nuclear reactors in their constituencies. The headline is, “Starmer to Push Past Nimbys and Build Many New Nuclear Plants”. This is all extremely welcome to me. It is the sort of tone we have to adopt 10 times over to meet the challenges and the vast amount of clean electricity that we need. So it is strange that we are here in the meanwhile pursuing an area where nuclear is “verboten”, to use a German term. The noble Viscount, Lord Hanworth, has got a point. I would like a comment from the Minister on whether we are still on the right track or whether we should scrap the whole thing and start with a different policy of him backing the Prime Minister.
Lord Hunt of Kings Heath (Lab)
My Lords, in answer to the noble Lord, Lord Howell, who speaks with such authority on energy matters, I have to say that is my view that we are on the right track. I do not see any inconsistency in government policies and actions and I thank noble Lords for their support for my Amendment 21.
Turning to Amendment 26, tabled by the noble Lord, Lord Offord, let me make this clear: the founding statement outlined that supply chains would be a key focus in the work of Great British Energy. It says:
“The sustainability of UK supply chains plays a key role in achieving greater energy security. Great British Energy will help to drive forward greater investment in clean, home-grown energy production and build supply chains in every corner of the UK. Great British Energy will work with industry to accelerate the deployment of key energy projects and support the transition to an affordable, decarbonised power system by 2030 built using domestic manufacturing and supply chains”.
That is an important statement of principle.
I can also reiterate that GBE will help drive the growth of supply chains in the industry by working with my department, the Crown Estate, the National Wealth Fund and other parts of the public sector to deliver a comprehensive package of support for domestic clean energy supply chains in everything from offshore wind to carbon capture and storage.
I turn to the amendment tabled by the noble Viscount, Lord Trenchard, and spoken to so eloquently by my noble friend. On the point about NESO, it was asked to report to the department on what we needed to do to get to clean power by 2030, so it is no accident that its focus would be on renewable energy. But in fact it did not ignore nuclear. In the Clean Power Action Plan which followed from the NESO report, there is an extensive section on nuclear power. On page 80 it says:
“Nuclear will play a key role in achieving Clean Power 2030 … and our long-term net zero objectives”.
Since then, we have published the new policy statement for consultation, which, as we debated earlier, essentially brings in a more flexible siting policy for the future. The Secretary of State has indicated the importance of nuclear energy in providing an essential baseload.
I say to the noble Lord, Lord Howell, that I do not see any conflict. We think it is very important to get Sizewell C over the line, and obviously we are now into SR discussions about the final investment decisions, and we see great potential in relation to small modular reactors. Of course, we are very interested in the developments we have seen in the US of the links between the big tech companies and the developers of advanced nuclear technology. Clearly, I am working with colleagues across government to make sure that the UK can take the potential of this as well. So, I want to assure the House that we see nuclear energy as having a very important role to play in the future.
Lord Howell of Guildford (Con)
The Minister has been very clear, but at the moment it just still does not add up. At the moment about 6% of our electricity comes from nuclear—that is what it has shrunk to. We have four and a half years until 2030. Nothing nuclear is being built except Sizewell C, where they are clearing the ground and have already spent £10 billion—miles above what they originally estimated—and apparently the word is going around that it will be ready in the mid-2030s. I suspect that it will be more like 2040. If the private investor is not attracted by it, whereas they are attracted by these SMRs, is there an agenda we have not quite heard about and the SMRs are going to be rushed forward, starting next summer? As in other countries, will they be built in series on the endless sites that are now becoming available—the old Magnox sites, maybe some of the new sites? All sorts of areas are possible and are so far acceptable to the public, although there is a lot of explaining to do. Is that the plan and, if so, can we hear it?
Lord Hunt of Kings Heath (Lab)
My Lords, the contribution of nuclear was more than 6%—I think it is about 13% or 14% as of today. Clearly, it will go down, because a number of the current nuclear power stations are due to go offline. However, I must pay tribute to EDF for going through the proper consent process. There have been extensions to a number of existing nuclear power stations and, in a statement it issued I think about three or four weeks ago, it made it clear that it saw further potential for extensions, subject to the regulatory provisions being required.
On Hinkley Point C, the company says that it expects the first unit to go online between 2029 and 2031. With two units, that will be 3.2 gigawatts. Sizewell C will follow. It is a replica of Hinkley Point C: 80% above ground, another 3.2 gigawatts. With the SMR programme, Great British Nuclear is going through a technological appraisal; it is in negotiation with the companies, and this is all subject to the spending review. Clearly, we want to see a long-term projection of new nuclear power stations opening, giving us energy security but also developing a much stronger UK supply chain. Although we will see a dip in the contribution that nuclear power provides, in time, it will start to go up again. I do not think there is a conflict; I think it is just a recognition of what has happened. It is worth making the point to the party opposite that there has been a lot of messing around in terms of decision-making on Hinkley Point C. There was disappointment at what happened at Wylfa. We are now getting this back on track.
Lord Offord of Garvel
“(1A) The statement of strategic priorities under subsection (1) must include the reduction of household energy bills by £300 in real terms by 1 January 2030.”Member's explanatory statement
This ensures that the statement of strategic priorities includes the reduction of household energy bills by £300 by 1 January 2030.
Lord Offord of Garvel (Con)
My Lords, I shall speak to Amendments 23 and 24 in my name. These amendments would require the statement of strategic priorities to include the reduction of household energy bills by £300 per household by 2030 and the creation of 650,000 jobs in the UK by 2030. As noble Lords will recall from our debates in Committee, throughout the election campaign, the Government repeatedly promised that GB Energy would cut household energy bills by an average of £300 per household. In fact, a similar claim was made by at least 50 MPs, and the Science Secretary said:
“I can tell you directly … by the end of this Parliament that … energy bills will fall by up to £300”.
On 19 June last year, the Chancellor said:
“GB Energy, a publicly owned company, will cut energy bills by up to £300”.
Finally, in an interview in June, the Secretary of State claimed that Great British Energy would lead to a “mind-blowing” reduction in bills by 2030. Considering that the Government had no qualms about repeating this promise time and again and appeared proud to do so, it is strange that they do not commit to this promise by including it in the drafting of this legislation.
That was not the only promise made by the Government. They also said that GB Energy would create 650,000 new jobs. Despite this, in the other place, the Government voted against Conservative amendments to make cutting energy bills by £300 and creating 650,000 new jobs a strategic priority for GB Energy. In so doing, they were voting against amendments that would hold them to their word.
Only last week, in a rather unconvincing interview on Sky News, the chair of GB Energy admitted that the Government’s pledge that GB Energy would create 1,000 jobs at its headquarters could take 20 years to deliver. In the same interview, he repeatedly refused to say when household bills would be cut, although the Prime Minister promised that GB Energy would save consumers £300 each. These promises are important to the British people, and the Government have already put at risk 200,000 existing jobs in North Sea oil and gas. They impact on people’s energy bills, their business and their jobs.
It is essential that the Government are held to account. We know there is a transition; we know that those 200,000 jobs can transition to the direction of travel in renewables and nuclear, but by accelerating unilaterally, there is going to be a gap, and the problem is that we are going to lose skills in the middle.
With that said, I look to the Minister to confirm exactly by how much consumers can expect their energy bills to fall—by £300, or pick another number. Will he give a commitment that GB Energy will reduce household energy bills, and how many jobs exactly will GB Energy create in the UK by 2030? I look forward to receiving a clear and positive reply, and I intend to test the opinion of the House on these matters.
Lord Teverson (LD)
My Lords, it seems to me that this is not the sort of thing that ought to be in this Bill. I do not remember Conservative Party immigration legislation ever mentioning numbers, despite everything that was said by it. That brings complete disrepute to legislation and Governments at the time; I do not think that we should be attracted into that situation with this Bill.
Lord Hamilton of Epsom (Con)
My Lords, it is clearly the Government who have come up with this number: that they are going to reduce energy bills by £300 per household. I say to the noble Lord, Lord Teverson, that it is nothing to do with the Opposition. This issue is very important. This is a commitment that has been made by the Government. We should have it in legislation to make sure that it is delivered on; if we do not, it will indicate that the Government are not serious about this matter. It matters very much to people in this country that we reduce their energy bills. Many of us think that it is not going to happen. On the other hand, the Government have constantly assured us that it is going to happen and that, somehow, energy bills are going to come down. I think that many people in this country are looking forward to that, because we want to see a dividend for all this greenery. We have heard already from the noble Lord on the Liberal Democrat Benches that this is the effect of green energy: it brings down your electricity bills. Well, as far as most people in this country are concerned, so far, we have just seen our energy bills go up and not down. I think there is a lot of cynicism around that green energy does not deliver lower prices.
Lord Hunt of Kings Heath (Lab)
My Lords, would the noble Lord like to comment on the energy bills when his Government were in office?
Lord Hamilton of Epsom (Con)
The British people made a decision on the previous Conservative Government. They did not think much of our record and thought even less of our manifesto, so they made it quite clear that they do not want to know anything about the previous Conservative Government. What we are now interested in is what the manifesto of the Labour Government, who are now in power, said. What happened to us is irrelevant because we have been virtually wiped out.
Lord Hunt of Kings Heath (Lab)
With the greatest respect, if the noble Lord starts to preach to this Government about energy prices, it is right for me to point out that the highest energy prices occurred under his Government’s stewardship.
Lord Hamilton of Epsom (Con)
That may well be so; it was probably as a result of our pursuing these green policies, which has led to higher prices and which some of us think was probably rather mistaken. We are now in a position where we continue to pursue a green agenda.
Earl Russell (LD)
My Lords, the prices were the highest prices we had because the previous Tory Government failed to do anything about our dependence on foreign gas. When the war in Ukraine happened, gas prices spiked and the noble Lord’s Government ended up spending £40 billion on subsidising bill payers across domestic and businesses. That money was spent for absolutely nothing—no long-term benefit at all.
Lord Petitgas (Con)
It seems to me that, earlier, the noble Lord, Lord Teverson, answered a question that was not the exam question. I do not understand why he brought immigration numbers into the equation, and I do not understand why—
Lord Hamilton of Epsom (Con)
I thank my noble friend for answering the question for me.
Lord Hamilton of Epsom (Con)
I just do not know where we think we are going on this. Surely the only thing that matters is the commitments that this Government have made. They have now been in power for six months, and the commitments that they make are the things that matter. What the previous Government did has been rejected by the electorate, and we must now to look at things again. I do not think that we should be held by anything that happened in previous Governments, because the electorate made it quite clear that they did not want to have anything to do with it.
What matters now is the commitments made by the Labour Government. If they think that they are going to reduce our energy bills by £300 in real terms, that should go down in legislation as a commitment from them. It is a figure that they have come up with; we did not dream of it. It was even in the Labour manifesto at the election, was it not? Therefore, we should see this commitment put down in statute so that something is done to keep to it.
I cannot quite understand the attitude of the Liberal Democrats, because they are keener than anybody on ensuring that we do not produce our own oil and gas from the North Sea. The Labour Government have cancelled the exploration licences for there, which means that we will be dependent on foreign supplies whatever happens. How the noble Earl can say that is a terrible problem when he supports not developing our own resources in the North Sea I cannot imagine.
This amendment is certainly something that we should vote for. The Government should be more than happy to be pinned down on this commitment, since they have made it quite clear that they believe in it. If they believe in it, why do they do not put it down in the Bill?
Lord Rooker (Lab)
Can I press the noble Lord before he sits down? How is this amendment consistent with the conventions of the UK Parliament? It seems to me that it is not, and I would like an explanation, please.
Lord Hamilton of Epsom (Con)
The noble Lord probably knows more about the consistency of the UK Parliament than I do, but this seems to me to be infinitely sensible. I did not ask the Labour Government to commit themselves to lowering energy bills by £300, but they have done so. Therefore, they should be happy to see it in the Bill. I do not what the problem is, really.
Lord Teverson (LD)
On a point of personal clarification, I mentioned it because there was an undertaking, made publicly, that net immigration would come down to 10,000.
Lord Cryer (Lab)
Order! We are not discussing an immigration Bill. We are discussing an energy Bill, so could we stick to order and stick to the scope of the amendment?
Earl Russell (LD)
My Lords, I shall speak against Amendments 23 and 24. If the Conservative Benches had put forward something saying that Labour should be held to account for the promises that they have made, then yes, they should. Should those promises be enacted in this overpoliticised amendment? No, because that is not the way that we do things.
This is a very politicised amendment. It does nothing to help bill payers, nothing to make Great British Energy any better at delivering for bill payers and nothing to reduce costs for bill payers. Amendments 23 and 24 are amendments for leaflets and nothing more. They are pointless, petty grandstanding.
Earl Russell (LD)
Yes, they can write a quick leaflet saying that they held the Government to account, when actually they achieved nothing other than tabling an amendment. The last Tory Government had a de facto ban on onshore wind, did little to develop renewable technologies, left us dependent on Russian gas and ended up spending £40 billion subsidising bill payers to import foreign gas, for little or no long-term benefit. The previous Government gave up on delivering on nearly all energy-efficient measures and left UK citizens in cold and damp homes. We believe that, if done well, GB Energy will provide energy security, reduce energy bills, create green jobs and kick-start economic growth. Many of these arguments also apply to Amendment 24.
Without wasting time, our response is much the same as to the previous amendment. Frankly, we feel that holding the Government to account by enacting something in a Bill is pretty delusional. It would be far better to do that outside of the Chamber.
Lord Hunt of Kings Heath (Lab)
My Lords, I resist these two amendments. My noble friend Lord Rooker, who knows more about parliamentary procedure than almost anyone in either House, is absolutely right about the inappropriateness of these kinds of amendments. I do not want to carry on this enjoyable debate with the noble Lord, Lord Hamilton, but I think it takes the biscuit in view his Government’s record. Also, as the noble Lord, Lord Teverson, said, I do not recall the last Government ever agreeing to change legislation in the way that has been suggested.
I want to allow the noble Lord, Lord Offord, to call a vote tonight, as I am sure he is very anxious to do, but the fact is that the only way to guarantee energy security and protect bill payers is to speed up the transition to homegrown energy; that is what we were elected on, that is the basis of this Bill and we are receiving huge support for doing so. Surely, the experience in the last few months and years of the kind of gas price shocks that we have seen, which have helped to drive increases and led to the introduction of the price cap, tells us that we have to get out of our dependence on fossil fuels and rely on homegrown energy.
As far as bills are concerned, the independent National Energy System Operator has confirmed that our 2030 clean power goal is achievable and can create a cheaper, more secure energy system. The Climate Change Committee confirms that a clean energy future is the best way to make British energy independent and protect bill payers, create good jobs and tackle the climate crisis.
As far as the question of employment is concerned, our expectation across this Parliament, in the early stages of the company, is that Great British Energy will employ 200 to 300 people at its Aberdeen headquarters. But, more substantially, through its activities and investments, GBE will also create and support thousands of jobs across the country. This is what we should focus on. I hope that, as the noble Lord, Lord Offord, puts this to the vote, the House will reject it.
Lord Brownlow of Shurlock Row (Con)
Before the Minister sits down, can he help me? I have been here since just after the debate started and the Minister has made some incredibly positive contributions today and has transitioned well from health to his current brief, but I am surprised that, in his answer to this particular amendment, he has not mentioned the £300. We have had a variety of quotes from various Labour politicians in the election campaign who mentioned £300, which is a specific point in the amendment. Will the Minister comment on when he thinks this Government will reduce energy prices, and will it be by up to £300?
Lord Hunt of Kings Heath (Lab)
I am very grateful to the noble Lord for his kind intervention. I actually did this job from 2008 to 2010, so I have some experience in this area. I am not going to answer the question in the way that he has asked me to. I am confident that the policies we are putting in place will lead to homegrown, secure energy and that, as a result, we will see a reduction in real terms in prices over the years ahead.
Lord Brownlow of Shurlock Row (Con)
My Lords, may I just come back and apologise, as I did not know—
Baroness Hayman (CB)
My Lords, we are on Report. Reference was made earlier to the conventions of the House. It seems to me that the debate is getting very diffuse and not within the advice in the Companion about behaviour on Report.
Lord Offord of Garvel (Con)
My Lords, I remind you all of what the Prime Minister said:
“I stand by everything in our manifesto and one of the things I made clear in the election campaign is I wouldn’t make a single promise or commitment that I didn’t think we could deliver in government”.
The number of £300 is not our number. The number comes from the Labour manifesto and a commitment to the British people.
The great British people think that GB Energy is a new electricity company that is going to deliver them cheaper energy; what we have discovered is that it is actually an investment plan employing 200 people in Aberdeen. It is a big delta: 650,000 jobs compared to 200 jobs rising to 1,000. These are not our numbers; these are the Government’s numbers. All these amendments are trying to do is hold the Government to account on commitments made in the election campaign, and I wish to test the opinion of the House.
Lord Offord of Garvel
“(1A) The statement of strategic priorities under subsection (1) must include the creation of 650,000 new jobs in the United Kingdom by 1 January 2030 resulting directly or indirectly from Great British Energy’s pursuit of its objects under section 3.”Member’s explanatory statement
This ensures that the statement of strategic priorities includes the creation of 650,000 new jobs in the UK by 1 January 2030.
Lord Hunt of Kings Heath
Member's explanatory statement
This amendment, and my amendment at page 3, line 13, provide that the Secretary of State must not, without the consent of the Scottish Ministers, include in a statement of strategic priorities anything which concerns a matter provision about which would be within the legislative competence of the Scottish Parliament.
Lord Hunt of Kings Heath (Lab)
My Lords, in moving Amendment 27 I will speak also to government Amendments 28 to 32 and 34. They relate to Clause 5 and the role for the devolved Governments in developing the Secretary of State’s strategic priorities for Great British Energy.
Clause 5 currently requires the Secretary of State to consult respective devolved Governments before including any references to matters within devolved competence in a statement of strategic priorities. Throughout the passage of the Bill, and through positive discussions with devolved Government Ministers, the case has been made to me and my ministerial colleagues that this requirement to consult should be changed to a requirement to obtain the consent of the devolved Governments.
Clearly, it is fundamental to the success of Great British Energy that it can operate across the UK. These amendments, to require the consent of the devolved Governments in relation to matters within devolved competence in a statement of strategic priorities, demonstrate our commitment to close collaboration and a resetting of relationships with the devolved Governments.
As I have previously set out to your Lordships’ House, Clause 5 is not a power to legislate in respect of devolved matters but rather enables the Secretary of State to provide Great British Energy with guidance on where the company should focus its activities. It is clear that we need to work together across the UK to achieve net-zero ambitions and drive economic growth. Given this, and the strength of feeling on this issue in the devolved nations, we have agreed with the devolved Governments to bring forward these government amendments.
I want to state for the record, on the related matter of Clause 6 and the process for issuing directions, our view that, where a direction relates to a matter that is within the legislative competence of one or more of the devolved legislatures, the relevant devolved Government would be considered an appropriate person under Clause 6(3)(b) and would therefore be consulted before a direction was issued by the Secretary of State.
I am pleased to share with the House that Motions for legislative consent for the Great British Energy Bill have been passed by the Senedd, the Scottish Parliament and, this morning, the Northern Ireland Assembly. This is good progress, and I hope noble Lords will agree to support these amendments. I beg to move.
Lord Wigley (PC)
My Lords, I welcome the progress that has been made on these issues. There will be times when there may be differences of opinion, but on devolved matters it is right that the devolved authorities should have the proper say. I welcome the change being proposed by the Government.
Lord Offord of Garvel (Con)
My Lords, I thank the Minister for tabling these amendments on devolution, which I welcome. They follow concerns that we raised in Committee. I emphasise that it is important that consultations on devolution are published. Amendment 27 proposes a significant change to the current wording of Clause 5, and we agree that we need to move away from “consult” to “consent”.
The key tenet here is the Sewel convention, which we know well in this House. It is not a trivial matter of semantics; it reflects the principle that the devolved Administrations must have a genuine say in matters that affect their legislative domain. At the end of the day, the Scottish Parliament in particular has responsibility for significant aspects of energy policy, including renewable energy, energy efficiency and environmental protection. We have mirrored that in Amendment 29 for the Welsh Government.
All in all, we think that by requiring consent from the Scottish and Welsh Governments we can ensure that the energy priorities are developed in a way that respects the distinct needs and perspectives of each nation. I urge the Government to monitor those relationships carefully.
Lord Hunt of Kings Heath (Lab)
I am grateful to the noble Lords, Lord Offord and Lord Wigley. I commend the amendment to the House.
Lord Hunt of Kings Heath
Member's explanatory statement
See the explanatory statement to my amendment at page 3, line 12.
Member's explanatory statement
This amendment, and my amendment at page 3, line 17, provide that the Secretary of State must not, without the consent of the Welsh Ministers , include in a statement of strategic priorities anything which concerns a matter provision about which would be within the legislative competence of the Senedd Cymru.
Member's explanatory statement
See the explanatory statement to my amendment at page 3, line 16.
Member's explanatory statement
This amendment, and my amendment at page 3, line 22, provide that the Secretary of State must not, without the consent of the Department for the Economy in Northern Ireland, include in a statement of strategic priorities anything which concerns a matter provision about which meets the conditions in subsection (6)(a) and (b).
Member's explanatory statement
See the explanatory statement to my amendment at page 3, line 20.
Baroness Williams of Trafford (Con)
My Lords, it is 10.25 pm. We still have six more groups to go. There was no agreement to go beyond 10 pm, and indeed the Order Paper says that the House should sit until 10 pm. We had three and a half days in Committee, and I expressed my reservation about getting Report done in one day. A number of things have happened today which are beyond people’s control, so it was a challenge anyway. I ask the Chief Whip to adjourn the House.
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, I have been clear with the Opposition that we are going to complete Report stage of the Great British Energy Bill today. I made that clear in my meeting with the noble Baroness last week.
In my time in the House—which will be 15 years in June—and particularly in over three years as Opposition Chief Whip, I always played fair with the Government. On more than one occasion I sat here until 2 am or even 3 am so that the Government could get their business through, often on Bills that the noble Baroness was trying to get through this House. The Opposition, who were the Government only a few months ago, would have been absolutely furious if I had come to that Dispatch Box to ask for the House to be adjourned at only 10.26 pm. The Government have a right to get their business through. The Opposition have the right to oppose and the House has the right to scrutinise legislation. All these things can be accommodated very easily, but if the Opposition are determined not to play fair then we get into these difficulties. It is unnecessary.
I can only imagine the complaints from the noble Baroness if I was behaving like this last year. It is wrong, it is unnecessary and it does the Opposition no credit whatever. We need to complete Report tonight. We have only two amendments left to vote on—I have been advised that that will be Amendments 46 and 50. With a bit of good will on all sides, we can complete Report easily before midnight.
Lord Hunt of Kings Heath
Member's explanatory statement
This amendment is made in consequence of my other amendments to this Clause.
Lord Hunt of Kings Heath
“Sustainable developmentGreat British Energy must keep under review the impact of its activities on the achievement of sustainable development in the United Kingdom.”Member's explanatory statement
This amendment requires Great British Energy to keep under review the impact of its activities on the achievement of sustainable development in the United Kingdom.
Lord Hunt of Kings Heath (Lab)
My Lords, in moving my Amendment 38, I begin this group by referring to the letter I sent to all Peers on 5 February.
This amendment relates to a new clause to be inserted after Clause 7, which requires Great British Energy to keep under review the impact of its activities on the achievement of sustainable development in the United Kingdom. Throughout our debates I have been clear that a healthy natural environment is critical to a strong economy and sustainable growth and development. Our commitment to the environment is unwavering, including through meeting the Environment Act 2021 targets, such as halting biodiversity decline in England by 2030. I have also been clear that through driving clean energy deployment and supporting decarbonisation, Great British Energy will support the delivery of our carbon budgets and net zero, helping protect nature from the impact of further climate change.
I thank noble Lords for their engagement in debates on nature and biodiversity. I thank the noble Baroness, Lady Hayman, and Peers for the Planet for their constructive engagement ahead of Report. We are clear that we want to work together, across the United Kingdom, to achieve our net-zero ambitions, and we are going to carry on working together in this regard.
We see sustainable development as a broad category, recognised by the UN, covering the economy, the environment and society. The legislative amendment will be explained further in the framework document that governs the relationship between my department and Great British Energy. The framework document will be published in 2025, following Royal Assent of the Bill, to ensure that it reflects the final form of legislation.
Baroness McIntosh of Pickering (Con)
My Lords, I shall speak to my Amendment 40. I am rather disappointed that the Minister did not refer to the other amendments in this group.
Lord Hunt of Kings Heath (Lab)
With great respect, my Lords, I think the form is that I move my own amendment and then respond to other amendments in the group when I wind up.
Baroness McIntosh of Pickering (Con)
I am grateful for that clarification.
I welcome the government amendment in this group. However, I seek a specific assurance from the Minister as to exactly how and when the Government will ensure that the impact of GB Energy’s activities will not harm sustainable development in the United Kingdom. Why I prefer the wording of my amendment to the Minister’s, and why I regret the fact that the framework document will not be available before the passage of the Bill through Parliament, is because the Environment Act 2021 set out very clear environmental standards that have to be followed in subsequent legislation.
Amendment 40 addresses the issue of Great British Energy operating in such a way as to meet the criteria and environmental standards in the Environment Act 2021, which set out clear standards for environment and animal welfare that any project approved by GB Energy should meet. The projects we have discussed during the passage of the Bill potentially risk criss-crossing the countryside, covering the landscape with intrusive miles of pylons and overhead transmission lines, as well as massive solar farms and battery storage plants, the latter also posing a fire risk. Up to 10% of land currently farmed could be taken out of production, with a consequential effect on farming and food security to create a strand of energy which will bring no local benefits whatever but feed energy into the already well-fed National Grid.
I call on the Government to address offshore wind farms in a clear and pragmatic way, with one planning application for any future offshore wind farm taken at the same time as permission to build an onshore substation, to take the electricity generated and, at the same time, any proposal for onward transmission of the energy through overhead power lines and pylons.
Other damaging aspects of offshore wind farms at severe odds with sustainable development are their impact on fishers and fisheries. Wind farms damage marine life and sea mammals, and interfere with fishers going about their business. I am grateful to the National Federation of Fishermen’s Organisations for its briefing, which clearly highlights the threat from offshore renewables, primarily winds but also wave and tidal.
Ten per cent of UK seas will be designated as highly protected marine areas, where fishing will be banned. The worst-case scenario could result in the loss of half of the UK’s fishing waters, some 375,000 square kilometres: Scotland would lose 56% of its fishing waters and England and Wales 36% of theirs. Even if the worst-case assumptions are not realised, 38% of UK waters are likely to be lost, threatening the very existence of UK fishing businesses and causing severe harm to coastal communities.
I feel that the sentiments expressed in Amendment 40 sum up those also expressed in Amendments 47 and 48, in the name of my noble friend Lord Offord, and Amendment 51, in the name of my noble friend Lord Fuller. All I seek this evening is an assurance that farmland and residential properties will be protected from massive solar farms, battery storage plants and the like, and the impact of major substations bringing electricity onshore from these offshore wind farms. The long lines of unwelcome, intrusive overhead lines transmitting the energy to the National Grid should be removed or reduced and spatial rights for fishers should be recognised. I hope that the Minister will look kindly on the assurance that I seek.
Baroness Hayman (CB)
My Lords, I have added my name to the new clause proposed in Amendment 38 by the noble Lord, Lord Hunt of Kings Heath. I thank him and his officials for the amount of time and effort that they have put into finding what is a very good resolution to the issues that we raised at earlier stages in the Bill. Obviously, in some ways, I would have preferred my own amendment as it stood in Committee, which would have put into the Bill an obligation on GBE to contribute to the targets under both the Environment Act and the Climate Change Act.
After discussion, I understand why the Minister wants to put in the phrase “Sustainable development” and to have that contribution. That is indeed the model that we adopted as a House during the passage of the Crown Estate Bill. I would not be happy with this amendment, were it not for the assurances that the Minister has just given at the Dispatch Box on what will be included in the framework document, so that we will actually see reference to contribution to achieving targets under both those Acts in the framework document. We will also see a commitment to tackling the issue of adaptation there, because none of us who has observed or experienced the weather—and the results coming out from international institutions—in the last six months will have any doubt that we have challenges already baked in by climate change and biodiversity loss that have to be met, as well as the efforts to stop things getting worse. I am very grateful for those assurances.
In some ways, a commitment to sustainable development may seem more nebulous than tying down to those particular commitments, but I believe it is really important that we acknowledge that there are differing forces—differing demands and aspirations—that have to be taken into account when we make decisions on infrastructure and investment, or whatever it is. Sustainable development, as defined by the UN, is about taking the economic, environmental and social effects of developments into account when decisions are made. Lots of difficult decisions will have to be made and there are lots of balances that have to be struck, whether about pylons or achieving net zero, and whether about growth or biodiversity and nature. We have to be able to walk and chew gum at the same time, and to actually recognise that all those strands have to be taken into account.
If we are going to get through and make the right decisions, frankly, we will have to be, first, very smart, and secondly, very frank with people about how we assess the different pressures and how we have come to individual decisions in individual cases. I have been very impressed by the work of the Crown Estate, looking at its different drivers and objectives and how it brings those into force when it looks at decision-making for investment, and I hope that GBE will be able to do exactly the same. So once again I end by thanking the Minister for the work he has done in bringing this amendment forward.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Hayman, for whom I have the greatest respect. I know that the whole of your Lordships’ House applauds her and Peers for the Planet for their enormous amount of work, but I am afraid that, on this occasion, I disagree with her. I speak to Amendment 40, to which I have attached my name, and government Amendment 38, to which the noble Baroness has offered her support. I am afraid that
“must keep under review … sustainable development”
is a very weak form of words.
I understand that the noble Baroness seeks compromise and is taking what she can get. It would be lovely to be in a situation where we can start with a government Bill that says these things and then look to improve it. None the less, in speaking to Amendment 40, I am in the curious position of agreeing with the noble Baroness, Lady McIntosh, about the amendment and totally disagreeing with lots of the things she said. If offshore wind farms are spaces from which fishers are barred, they can become wonderful marine refuges, and if we are talking about damage to the seafloor, then deep sea trawling is the issue we should be talking about, and, most of all, damage to marine life. Indeed, if we are talking about biodiversity, solar farms managed in the appropriate way can be vastly better for biodiversity than arable farmland, in which the soil and the whole environment are totally trashed.
I am aware of the time, so I will not take long, but I want to point to what this amendment says and contrast “take all reasonable steps” to achieve the legally binding targets versus “keep under review”. This is much stronger wording, it is the right wording for a country that has a state of nature that is in a state of collapse, where there is so much that needs to be protected and improved, and for which we have the legally binding targets to which this amendment refers.
Earl Russell (LD)
My Lords, I rise very briefly to say that I too have put my name to this amendment and I am delighted that the Minister, the noble Lord, Lord Hunt, and the noble Baroness, Lady Hayman, have been able to negotiate this compromise. It is important that this is in the Bill; it will make a difference and I am very pleased to see it here. It also reflects the language that was used in the Crown Estate Bill and that is particularly useful for GB Energy because of the strong connection they have with one another. I welcome the words that the Minister used at the Dispatch Box, mentioning the Climate Change Act 2008 and the Environment Act 2021. I welcome the monitoring that is taking place on this.
I have some sympathy with the noble Baroness, Lady McIntosh. These are obviously all very difficult conversations, and the noble Baroness, Lady Hayman, put that quite well. Actually, the way we talk about it, the spirit in which we put these things into place and how we make them work in practice are the big challenges that we all have, going ahead, but I am very pleased to see this here.
Baroness Coffey (Con)
My Lords, I will speak to Amendments 40 and 47. I have recent ministerial experience of the Environment Act and the powers available under it, which is why I tabled some Questions for Written Answer. I was somewhat confused by the responses from the Government. When I asked whether they would publish their assessment, under Section 20 of the Environment Act, about not having the effect of reducing the level of environmental protection, I was informed by the Minister that the information was “legally privileged”. It surprised me that the Government, who are committed to the environment—I do not dispute that—are not prepared to share with the House why they do not think this will have an adverse impact on the natural environment. I went further, asking which provisions would be “environmental law” or would impact, and I was referred to Clause 3.
Under the Environment Act, the Minister is not required to ask the advice of the Office for Environmental Protection, but I would be grateful to know whether he, or any other department, has done so. Again, that sort of information would be useful to this House, recognising that we still do not have the strategic priorities—we have the objects, but nothing wider than that—in our consideration of this. I know for sure, from living in Suffolk—I referred to this in my earlier contribution today—of the significant impact that this energy infrastructure can have.
Baroness Young of Old Scone (Lab)
My Lords, I was not going to say anything at this point because it is getting late in the evening, but I was pretty staggered by that last intervention. I found it pretty rich, coming from a Minister who signally emasculated Defra and knocked the legs out from underneath it. The statement of environmental principles to which she referred was significantly reduced as a result of the work that happened around that period. So I actually think that we should thank the Minister and the noble Baroness, Lady Hayman, and—
Baroness Coffey (Con)
I am very happy to have that discussion outside, but I think it is a complete impugnment of all that we did achieve. I assure the noble Baroness that the strategy for our ground-breaking biodiversity plan is under way. I wish the Environment Secretary, Steve Reed, well in getting on with some of this stuff. It is ridiculous to try to suggest that the work the Conservative Government did in Montreal did nothing; it did a hell of a lot for the environment and I want the Labour Government to continue it and to succeed—we all do. That is why this amendment that the Government propose is not enough.
Baroness Young of Old Scone (Lab)
Strangely enough, I find myself agreeing with the noble Baroness’s sentiments on this amendment. We should thank the noble Baroness, Lady Hayman, and the Minister for reaching an agreement so that we can get something in the Bill. Amendment 40 would have been a lot stronger, but at least we have got something. We now need to ride heavy shotgun on what is contained in the framework to make sure that that happens.
I cannot take a lecture from the noble Baroness, because I know for a fact that Defra was severely prejudiced in its ability to do any of this work by the way that she operated when she was in that department.
Lord Fuller (Con)
My Lords, I will speak to my Amendment 51. Before I get into the substance of what I want to say, I want to say how proud I am that the Conservative Government passed the Environment Act that resulted in cleaner water, purer air, less waste and lower emissions. Only the Conservatives could have done that, and I know my noble friend Lady Coffey had a hand in that.
At an earlier stage of this Bill, I probed the Minister on the environment protections for tidal energy. Upon reflection, the amendment was too tightly drawn around tidal and insufficiently drawn for protections for other types, such as wave and barrage energy. Further, I do not think that sufficient attention was paid in my earlier remarks to coastal and estuarine environments, which are all part of the offshore scene. I have altered my approach to ensure that all marine proposals must consider the environmental impacts of their introduction. I welcome the Government’s late acceptance of some of these principles and their belated tabling of Amendment 38. On this side, we are grateful for it, but, as my noble friends have said, it does not go quite far enough.
My amendment would require the Secretary of State to assess the impact on the environment and animal welfare standards of the installation and generation of tidal, barrage and wave energy, together with its associated cabling. Amendment 38 talks generally about sustainability in its widest sense. My amendment seeks to define what sustainability means. It is not just carbon; it is about the wider impacts on flora and fauna. I noted and listened carefully to what the Minister said about the framework documents that have come forward, but they are in the future and we are in the now. It is certainty that we crave.
I will not detain your Lordships, because it is late, with my tale of my visit in November to the Saint-Malo tidal barrage—the world’s first, opened nearly 60 years ago. However, I want for a moment to consider the environmental costs of that valuable piece of infrastructure in France. There are lessons from history to be learned as we look forward to a post-carbon world. While saving the environment by reducing carbon emissions on the one hand, the French have damaged it on the other. My amendment seeks to direct Great British Energy to strike the appropriate balance between the desirability of reducing emissions and the essentiality of protecting flora and fauna in these places.
In commenting on the Saint-Malo barrage, Thomas Adcock, an associate professor in the department of engineering science at Oxford University, said there has been a “major environmental impact” on La Rance estuary as a result of that tidal barrage, and that
“this would make it very difficult to get permission to do such a barrage again”.
Researchers point to the adverse impacts on marine life due to the altering of sedimentation patterns, as well as the impact on oxygen and nutrient levels in the water. Sand-eels and plaice have disappeared, while silting has reduced the number and variation of other fauna. It is in the public interest that this is considered, so that mitigations can be put in place. My amendment seeks to ensure that, when the Government’s tilted sustainability balance is engaged, it must give sufficient weight to flora and fauna under the environmental pillar, not just pull the decarbonisation trump card out of the top pocket. This is why my amendment is needed and why it goes beyond Amendment 38.
I am not starry-eyed about the practicality of building big machines that can survive in the most hostile environments, pounded by seas and eaten by saltwater corrosion. I am involved in the liquid fertiliser business, so I know more than most how hard it is to engineer these things in tough, salt-aggressive places, but that does not mean that we should not try. It is hard to engineer reliability in some of these unforgiving places, so the installations will be larger and more environmentally intrusive, and require more maintenance than is needed on land.
That is why this amendment is serious. It will require GB Energy to take into account a number of factors and to continuously monitor these when assessing offshore energy proposals—for example, the cumulative impact of installations when considered alongside nearby projects; the transboundary impacts, when activities in other countries may be impacted, such as commercial fishing; any interrelationships where one receptor, such as noise, can have a knock-on impact on others to disturb species, and in particular subsea noise, which impacts on marine mammals; physical processes, which include changes to the sedimentary flow; and navigational risk assessments, because sometimes vessels can be deflected into the path of others.
Taken together, consideration of these factors would ensure that some of the most delicate marine and coastal habitats, such as that introduced by my noble friend Lady Coffey—the 321 square kilometre Cromer Shoal Chalk Beds marine conservation zone, one of 91 such zones established by the last Government—would be protected.
I am not against harnessing this most inexhaustible supply of offshore energy, including tidal. The energy is there, it is year-round, it is predictable and reliable, and it deserves to be won and should be won. It is just remarkable that the Secretary of State is not required to give the appropriate directions to GB Energy to balance not just the carbon environmental benefits but environmental safeguards in the widest sense.
This evening, we sat on the water Bill. That Bill is the consequence of not thinking ahead about what might happen when a public utility gets carried away. Let us put the protections in the Bill now to constrain Great British Energy, and require the Secretary of State to ensure that a private body established for a public purpose acts in the wider public interest, not its private self-interest, and sets an example to others.
In summary, I agree with the sentiment of Amendment 38, but it does not go far enough. We must not allow carbon alone to trump all other environmental considerations. I will listen carefully to the debate, but I feel that, because of the inadequacy of government Amendment 38, if adjustments are not made then I may seek to divide the House accordingly.
Lord Offord of Garvel (Con)
My Lords, I will speak to Amendments 47 and 48 in my name and in support of Amendment 51 in the name of my noble friend Lord Fuller.
The threat posed to the environment by the rapid installation of renewable energy technologies is familiar to this House, as it was discussed extensively in Committee and during debates on the Crown Estate Bill. We know that the UK is the second-largest offshore wind market in the world, and that allocation round 6 under this Government has awarded 5.4 gigawatts of offshore energy contracts across fixed and floating offshore wind and tidal stream. Indeed, the Government have committed to quadruple offshore wind by 2030 as part of their wind revolution.
The speed and scale of the Government’s offshore wind developments raise significant concerns about the impact on our ecosystem. While offshore wind farms may have the potential to have positive impacts on natural habitats, we must not neglect the potential harm that wind or tidal technologies may have on our natural environment. On that note, I support Amendment 51 in the name of my noble friend Lord Fuller, which follows a similar line to Amendments 47 and 48 in my name.
Through their so-called unprecedented relationship, the Crown Estate and GB Energy have a duty to assess and mitigate the impact of their activities on the environment. By law, GB Energy must assess, report on and minimise the impact of its activities on our environment in seeking to ramp up renewables and phase out fossil fuels.
I welcome Amendment 38 in the name of the Minister. We stand by to support the noble Baroness, Lady McIntosh, if she pushes her Amendment 40 to a Division. Meanwhile, I remain to be satisfied by the Minister’s response to my Amendments 47 and 48, and will consider testing the opinion of the House.
Lord Hunt of Kings Heath (Lab)
My Lords, how good it is to see so many Opposition Members taking such an interest in this Bill.
First, I thank the noble Baroness, Lady Hayman, for her support for my amendment. As she rightly said, it has to be seen alongside my Dispatch Box commitment in relation to the framework document. I agree with her about the frankness required in some of these difficult decisions and the balances that must be drawn. I take her point about the Crown Estate; I will draw her comment to the attention of Great British Energy.
The noble Baroness, Lady Bennett—who I thought might get up to support my amendment but, as ever, I remain disappointed in that regard—said that this is a weak amendment, but it is not so. It is a strong amendment that fits with the architecture of the Bill. One has to read it alongside the commitment that I have made tonight at the Dispatch Box. The one thing I can say is that it is not, and will not be, a tick-box approach. We will ensure that it is much more than that.
On Amendment 40, let me be clear: the core focus of Great British Energy is to tackle the energy crisis and deliver clean power. While its mission naturally aligns with environmental and biodiversity goals, additional statutory obligations might undermine its ability to execute its primary objectives effectively. The point here is that GBE will be fully subject to all existing environmental and climate regulations, ensuring strict compliance with environmental safeguards. If we place additional duties on a new organisation, that risks overcomplicating its mandate. My amendment already ensures that GBE will continually assess its impact on sustainable developments, aligning with climate and biodiversity commitments. In the light of my amendment and the commitments that I made regarding Great British Energy’s framework document, we are surely broadly aligned in terms of a dedication to ensure that the environment and the climate crisis are dealt with collectively.
If made, the effect of Amendments 47, 48, 51 and 53 in the names of the noble Lords, Lord Offord of Garvel and Lord Fuller, would be Great British Energy being required to cease facilitating, encouraging or participating in the relevant activity if it is found to be causing significant harm to local communities, environmental damage or significant welfare issues. Amendments 47, 48 and 51 propose a new clause after Clause 7 which would require the Secretary of State to assess the impact of Great British Energy’s activities in relation to offshore wind installations and generation, as well as the decommissioning of oil and gas structures.
I do not think that these amendments are necessary for three reasons. First, GBE projects will already be subject to the UK’s rigorous planning processes and environmental regulations, including environmental impact assessments, habitat regulations assessments and statutory community engagement. These ensure full consideration of local environmental and social impacts before any project proceeds.
Secondly, existing regulations—the Infrastructure Planning (Environmental Impact Assessment) Regulations 2017, the Town and Country Planning (Environmental Impact Assessment) Regulations 2017, and the Conservation of Habitats and Species Regulations 2017—already require scrutiny. GBE will be held to the same high standards as any other developer.
Thirdly, on decommissioning, let me clarify that GBE will not be involved in decommissioning oil and gas structures. Even if it were, the UK’s strict decommissioning regulations require robust safety and environmental assessments before any decision is made. More broadly, our environmental commitment remains firm. We will meet the Environment Act targets, halt biodiversity decline and safeguard marine protected areas. Given these reassurances, I hope that noble Lords will not press their amendments.
Baroness Bennett of Manor Castle (GP)
My Lords, before the Minister sits down—
Baroness Bennett of Manor Castle (GP)
My Lords, 30 seconds. The Minister referred to rigorous planning standards. I note a government press release of 26 January saying:
“Sweeping reforms under the Planning and Infrastructure Bill will take an axe to red tape that slows down approval of infrastructure projects”.
Is the Minister confident that there will still be rigorous planning standards after the changes that the Government have announced?
Lord Hunt of Kings Heath (Lab)
My Lords, we are on Report, but I will answer this. Of course, we are talking about speeding up the planning processes without impacting on the environmental protections that we have. That is our aim and what we will achieve.
Lord Henley
“The Chair of Great British Energy(1) The Chair of Great British Energy may not be appointed until the appointment has been scrutinised by the—(a) Treasury Committee of the House of Commons, or any successor committee, and(b) Energy Security and Net Zero Committee of the House of Commons, or any successor committee.(2) The Chair of Great British Energy must undergo an annual review on their performance and this review must be—(a) carried out by external auditors;(b) submitted to the Secretary of State and laid before Parliament.”
Lord Henley (Con)
My Lords, my noble friends are not here at this stage. This was part of the first group that was discussed somewhat earlier, and I think quite a lot of us feel that this was not properly answered by His Majesty’s Government. I wonder whether we could have a further response from the Minister on Amendment 39, because I am concerned that the House has not yet had a proper explanation. I beg to move.
Lord Hunt of Kings Heath (Lab)
My Lords, I have great respect for the noble Lord, but I am not sure whether he was present when we debated it. I thought I gave a very full response to the noble Lord, Lord Frost. I referred to the issue of whether the appointment of the chair of GBE was subject to scrutiny by a Select Committee and said to the House that, following normal practice and the practice of the last Government, this would be a matter for discussions between the Secretary of State and the chair of the Select Committee. I think it was a very full and appropriate response.
Lord Henley (Con)
I am afraid I am not happy with that and I think I would beg to test the opinion of the House.
“Duty of Great British Energy to meet environmental criteriaGreat British Energy must, in the exercise of its functions, and when delivering the objects in section 3 and statement of strategic priorities in section 5 of this Act, take all reasonable steps to contribute to the achievement of environmental targets set under the Environment Act 2021.”
Baroness McIntosh of Pickering (Con)
My Lords, I beg to move, and I wish to test the opinion of the House.
The Deputy Speaker (Baroness Finlay of Llandaff) (CB)
I have already called it. We have finished that group.
The Deputy Speaker (Baroness Finlay of Llandaff) (CB)
My Lords, for the convenience of the House, I remind the noble Lord that I called that group but we have now moved on to the next amendment in the list.
Lord Vaux of Harrowden
“Reviews of Great British Energy’s effectiveness and impact(1) The Secretary of State must appoint an independent person to carry out reviews of—(a) the effectiveness of Great British Energy in delivering its strategic priorities, and(b) the extent to which its investments in particular projects or types of project have encouraged additional investment in those projects or types of project by the private sector.(2) After each review, the independent person must—(a) prepare a report of the review, and(b) submit the report to the Secretary of State.(3) On receiving a report, the Secretary of State must—(a) publish the report, and(b) lay a copy of the report before Parliament.(4) The first report must be submitted to the Secretary of State within the period of 3 years beginning with the day on which this Act comes into force.(5) Subsequent reports must be submitted to the Secretary of State at intervals of not more than 3 years.(6) In this section, references to an “independent person” are to a person who appears to the Secretary of State to be independent of—(a) the Department of Energy and Net Zero, and(b) Great British Energy.”Member's explanatory statement
This amendment would require an independent review of the effectiveness of Great British Energy in achieving its objectives and the extent to which it has encouraged private investment every 3 years.
Lord Vaux of Harrowden (CB)
I am really puzzled as to why I am not allowed to speak to my amendment.
I will speak to two amendments in this group—I hope on a more constructive basis than we have seen on some of the other discussions just recently. I apologise that there are two very similar amendments in the group, Amendments 43 and 45. This was caused by a quirk in our system that meant that when I made some changes to Amendment 43, so that it became Amendment 45, I was not allowed to withdraw Amendment 43. Please ignore Amendment 43 as Amendment 45 is the one I will speak to. I apologise for the confusion. I thank the noble Baroness, Lady Noakes, the noble Lord, Lord Offord, and the noble Viscount, Lord Trenchard, for their support on this.
Amendment 45 introduces a requirement for an independent review of the effectiveness and impact of Great British Energy. This, effectively, mirrors the review process set out in the UK Infrastructure Bank Act which applies to the National Wealth Fund. As we have discussed in depth, much of this Bill was copied directly from the UK Infrastructure Bank Act, and with good reason. The two entities are very similar in what they will do and, indeed, the wealth fund will be investing on behalf of GBE in the initial stages of its development.
The independent review clause in the UKIB Act, however, was left out when the Bill was drafted, which is a glaring omission. The main difference between Amendment 45 and what is in the UKIB Act is the timeline. The National Wealth Fund must commission a report after no more than seven years and then every five years. Because the Government have stated that they hope the GBE will have achieved decarbonisation by 2030, it must be appropriate that the review for GBE should take place before then, so Amendment 45 requires a shorter timeframe, with a first review after three years and every three years thereafter. It is better that we have a review when we are still able to take remedial action rather than just something that sets out after the event why we succeeded or failed. On the other hand, the annual independent review, as proposed by the noble Lord, Lord Offord, in Amendment 42, is unnecessarily onerous. I hope we can find a balance here that works.
In Committee, the Minister said:
“I am prepared to consider the principle of a review between Committee and Report”.—[Official Report, 15/1/25; col. GC 225.]
Since then we have had a number of very constructive discussions, for which I am very grateful. I am therefore optimistic that the Minister will be able to satisfy me that the Government will introduce a suitable independent review process. Again, I stress the additionality principle that I explained in an earlier group. If the noble Lord is able to satisfy me on the independent review and confirm that any review would be expected to cover the extent to which GBE is creating additionality, I would be delighted not to move Amendment 45.
The Deputy Speaker (Baroness Finlay of Llandaff) (CB)
My Lords, for clarity, we are debating Amendment 45.
Lord Hunt of Kings Heath (Lab)
My Lords, I am very grateful to the noble Lord, Lord Vaux, particularly for his patience because I think this was originally in the first group, so he has done great service. We have had a very constructive discussion with the noble Lord. I am happy to confirm that the Government will bring forward an amendment on an independent review of effectiveness at Third Reading.
I am also aware, as the noble Lord said, that his amendment includes an additionality element. I am happy to confirm that additionality will be an important principle of Great British Energy—I said that earlier this evening, or this afternoon or many hours ago—particularly in respect of its investment activity. As such, we expect that it will be covered for the requirement for the independent review to consider the effectiveness of Great British Energy and to have regard to the stated strategic priorities in doing so. I look forward to bringing an amendment to the House at Third Reading.
Lord Vaux of Harrowden (CB)
My Lords, I am very grateful to the Minister for those confirmations and, on that basis, I beg leave to withdraw the amendment.
Lord Offord of Garvel
“Impact assessment on erection of pylons(1) Great British Energy must assess the potential impact of the erection of pylons which occurs under or in support of its functions on—(a) local communities, and(b) the environment.(2) If the assessment under subsection (1) determines that the erection of pylons—(a) will cause significant harm to local communities, or(b) will cause significant environmental damageGreat British Energy must not facilitate, encourage or participate in the relevant activity.(3) Within 12 months of the day on which this Act is passed and annually thereafter, Great British Energy must produce an annual report on the impact of the erection of pylons used to support its activities on local communities and the environment, and lay all such reports before Parliament.”Member's explanatory statement
This would require Great British Energy to assess and report on the impact on local communities and the environment of the erection of pylons used to support its activities.
Lord Offord of Garvel (Con)
My Lords, I shall speak to Amendment 46 in my name and that of my noble friend Lord Effingham. This seeks to place a duty on Great British Energy to produce an assessment on the impact that the erection of pylons will have on local communities and the environment. Following such an assessment, if the erection of pylons will cause significant harm and damage to the above-listed categories, GB Energy must not continue to build them. The amendment also seeks to include an annual report on the impact of the construction of these pylons that must be laid before Parliament so that the proper accountability measures are in place.
To achieve the Government’s rushed and ideological target for clean energy by 2030, it has been proposed that nearly 1,000 kilometres of new power lines will have to be built. It is the undeniable truth that the infrastructure of the electricity network will need to be built at a far faster rate than it has been in the past decade if the Government are to meet this pledge.
The reality is this: it would be possible to find a way of distributing and transmitting electricity that will not permanently damage the countryside if the Government were to uphold our 2035 target. We understood this; we committed to exploring the use of undergrounding, because the energy system operator said that in the long term that can save costs and it will avoid irreparable damage to our countryside. It is strange that the Government have dismissed this advice, choosing to base their energy policy on ideology. This is particularly true, given that an official report into the East Anglia network has discovered that in the longer term it is cheaper to bury the cables underground. The evidence suggests that, if the Government stick to our original target, they may save £600 million through the use of underground cables rather than pylons.
However, if the Government insist on achieving a decarbonised grid by 2030 at the expense of the British countryside, it is essential that GB Energy assesses and reports on the impact of their use of pylons and ceases activity if it is causing significant environmental damage.
I am minded to test the opinion of the House. I urge all noble Lords to support this amendment.
Lord Ashcombe (Con)
My Lords, I understand that transporting electricity will continue to be a challenge; much of it is generated offshore in Scotland, but the need is far greater in the south. Pylons are not loved infrastructures by most but are a necessary evil. There is therefore an absolute need to assess their effect on not only those communities that live nearby but the environment, as pylons march across the countryside, often through much of our most scenic areas, not to mention the flora and fauna.
I suggest that pylons are not the only method of transport; my noble friend Lord Offord mentioned underground cables, and sea cables are also an option. There remain environmental factors, but power still has to come ashore to the areas of demand. The onshore issues therefore still remain.
The spend to achieve this, according to NESO, is some £40 billion a year for six years until 2030. I suggest two items of practicality: can the infrastructure be built on time, and do we actually have the workforce to complete this massive task? Local communities deserve nothing less than an assessment of the potential impact for the years to come.
Lord Hunt of Kings Heath (Lab)
My Lords, we come to the issue of pylons. This is of course an interesting issue; I well understand that pylons are not necessarily popular with the public. They are, I am afraid, just a consequence of what we need to do to expand the grid.
The projects that Great British Energy is involved in may require the erection of pylons, but the assurance I can give is that they will be subject to existing rigorous planning processes and the relevant regulations, as with any similar projects, including environmental impact assessments and statutory stakeholder engagement. We recognise that poorly sited pylon projects can have an impact on the local area, as has been mentioned, such as in relation to wildlife, heritage or sense of place. That is why we are retaining the checks and balances in the planning system and why we want to ensure that all developers continue to engage with communities.
Noble Lords have mentioned offshore solutions. We are already building an extensive offshore network. Indeed, the latest network design from NESO means that, by 2035, three times as much undersea cabling could be laid than pylons across Britain, so we are not ignoring the potential but we will need pylons. We are not reducing the planning regime in any way at all; we want to speed it up, but we will have the protections in place and environmental considerations will come to the fore.
We do not need this amendment. I am quite satisfied that the provisions in statute at the moment are sufficient.
Lord Offord of Garvel (Con)
My Lords, I believe that the Government’s tunnel-visioned focus on renewable energies means that the grid will have to be developed at a far greater rate than if we turned our attention to gas and nuclear. Renewables are by nature less dense in energy and require more infrastructure to connect their assets to areas of high demand. It is striking that, as reported by NESO, we will need twice as much grid to be built in the next five years as we have built in the last 10 years combined.
Under this Government, communities are being overridden and their concerns ignored. This is not the way to undergo a successful clean energy transition. By choosing to bring forward unilaterally their clean energy target by five years to 2030, the Government have shown that it is ideological dogma. Where is the community benefit scheme that we set out when in government?
NESO has also said that all grid projects need to be met on time and that three will have to be fast-tracked ahead of schedule. If that does not happen, the Government will not meet their target and families will pay billions of pounds in extra curtailment costs. This is the cost of these accelerated power plans. We must balance carefully the necessity of enhancing our energy infrastructure with the preservation of the landscape and the communities that rely on it.
This is not simply about building pylons; it is about ensuring that the energy transition does not come at the expense of the environment or local economies. That being said, I hope that noble Lords will look to support the amendment in my name. I wish to test the opinion of the House.
Lord Fuller
“Duty to meet national food security criteriaGreat British Energy must, in the exercise of its functions and when delivering the objects in section 3 and statement of strategic priorities in section 5 of this Act, take all reasonable steps to prevent the use of agricultural land classified as grade 1, 2 or 3a for solar energy production.”Member's explanatory statement
This amendment would require Great British Energy to take all reasonable steps to prevent the use of agricultural land classified as grade 1, 2 or 3a for solar energy production.
Lord Fuller (Con)
My Lords, I shall speak in support of my Amendments 50 and 52.
They say that a nation is never more than three meals away from revolution. In the 80 years since we had to dig for victory, we have developed ever more exotic tastes, which in turn have spawned new crises from which only a first-world nation could suffer. Who can forget the filo pastry incident? While memories of hunger have faded, the need to put bread on the table has not gone away. Our nation sustains itself on the kindness of strangers, and the proportion of food that we grow ourselves has diminished and is now barely over 60%.
Last year, we had a nasty shock: the weather was bad, and a record number of farmers put land into environmental schemes. Only at the very last moment did Defra realise the jeopardy that we were placing ourselves in. Those schemes were suspended and limited plantings resumed, but it was too late to stop a 25% reduction in wheat production last harvest.
This year, it looks as though plantings have bounced back. However, that 25% fall in food production was a salutary warning about the fragility of our food supplies and a warning that we should not recklessly discard our farmland. It was a wake-up call because when land is converted to solar production, it is locked away for a generation—
Earl Russell (LD)
I think the reduction in last year’s harvest was due to the persistent wet weather and not anything to do with solar power.
Lord Fuller (Con)
My Lords, if I may correct the noble Earl, Lord Russell, I said that bad weather played a part but that a major contributory factor was the volume of land that was placed into environmental schemes, not solar. I am going to go on to solar in a moment, because we will then be talking about the future and not the past.
When land is converted to solar production, it is locked away for a generation—at least 30 years—and the ability for farming to bounce back and repair the shortage that we saw last year falls away. That Rubicon is crossed. Food in your belly ranks as the most basic human need. When the chips are down, you cannot eat a solar panel, to mix metaphors. Quite simply, these amendments make it clear that GB Energy should not entice, invest, promote or encourage land-hungry solar farms to be built on our best and most versatile land.
When I tabled similar amendments in Committee, I contemplated that GB Energy should be prevented from buying grade 1, 2 or 3 land for the purposes of renewable energy production more generally. I invited the Minister to meet me to discuss the issues that I raised. I am grateful to him for having done so. In the meantime, I have taken standings from other quarters. As a result, I have adjusted my approach this time to limit the scope of my amendments to grade 1, 2 and 3a land only and to restrict it to the promotion of solar panels alone, rather than renewable sources that are less hungry for land. I hope that, by modifying my approach, the Government might do likewise.
Your Lordships’ Library tells me that grade 1, 2 and 3a land comprises 42% of the cultivated area of Great Britain. By difference, therefore, 58% of agricultural land would still be available for solar energy under my proposal. It is not the best and most versatile land that feeds us. For solar, 58% is plenty to go at; it is about 12 times the size of Norfolk or over two and a half times the size of Wales.
Last time, the Minister rejected my proposal on the basis that there really was nothing to worry about. It was not expected, he said, that any more than 1% of the land—much less than is currently devoted to golf courses, apparently—would ever be submitted for renewables and that this really was not something that GB Energy should be concerned about, and certainly not him. On another occasion, the Defra Minister told your Lordships’ House that grade 1 and 2 land would not be part of the large-scale solar scene—move along, nothing to see here—and that, in any event, this was not the place to debate these matters.
They might not be worried but I am, because the Government have lost control of the numbers on solar. Let us examine those numbers. In Lincolnshire, a county that does more than any other to put bread on our table, already 2% of the land is under threat. Worse, thanks to my noble friend Lord Frost, who is not in his place, we learned that the majority of the Heckingham proposal is predominantly for the best grade 1 land under the rules laid down 60 years ago.
In response to a Written Question last November, the Government told me that only two farms, amounting to 1,400 hectares, were being assessed under the NSIP regime. There are five such schemes in the county of Norfolk, where I live, comprising over 7,500 hectares. We were told from the Dispatch Box that there would be no grade 1 or 2 land included in the Sunnica proposal, but there was.
Warm words and soft soap have been spoken around the Government’s proposals for a land use framework. That is something that should be welcomed, but they are only proposals, they are subject to consultation, and, in any event, they would be advisory and not statutory, and so not something that you could hang your hat on. Nevertheless, we now learn that this framework contemplates that fully 9%—not the 1% we were assured—of our farmland will be subsumed under non-agricultural uses to meet our renewable energy and other environmental objectives.
On so many levels, the Government’s rhetoric is at odds with the reality. They have lost control of the numbers and in so doing are imperilling our food security, which is national security.
Given that the Government’s promised indications have unwound so quickly—rather like a summer shower evaporates on a hot solar panel—I do not consider that the Minister has earned the benefit of the doubt on this matter. For this Bill is before us now, this evening—or should I say this morning? It is in the here and now, so this is the moment to ensure that Ministers are required to give direction to GB Energy to take sufficient and proportionate account of our food security alongside energy security.
I will not dwell quite so deeply as I did before on the reasons why we should be concerned about the impact of the uncontrolled growth of solar panels on our food supply. Suffice to say that on the economics, a farmer would do well to earn £200 an acre from the fruits of his labour, having invested millions in plant and equipment, and taking his chances with the risks of weather and the market. By contrast, solar developers are offering him the chance to sit on the beach with an index-linked £900 per acre or more for the next 40 years. The incentive there is to go way beyond the 1% and put our nation’s food security at risk. It is our responsibility to contain and to prevent the uncontrollable contagion—in fact, a stampede for solar on the best and most versatile land, leaving us vulnerable and ever more susceptible to the supply shocks and inflation on the food goods that every person must buy every day.
I am grateful to the Minister for facilitating a meeting with the new chairman of Great British Energy. At that meeting, Herr Maier conceded that his company would be a private company but one that would need to act in the public interest. That was reassuring, although I was struck by how it seemed to be news to him that saving customers £300 a year was within his remit. However, now that this important public principle has been accepted, I really do not see the prejudice in enshrining those public benefits in statute to direct the Secretary of State to balance food security alongside energy security, to avoid the risk that a private company established under the Companies Act 2006, with statutory duties to promote its own self-interest, will not get carried away on a frolic of its own in pursuing its own energy-related objectives while blind to the wider impact.
That is why I have presented this amendment in the way that I have. Amendment 50 is significantly less restrictive than the one I previously suggested. It follows the pattern in principle of government Amendment 38, but it is related to ensuring that solar farms and energy security versus food security are correctly balanced—in fact, the appropriate balance with the Secretary of State’s directions to GB Energy to balance between energy and food security and the public and private interests.
I do not want anybody to misrepresent what this amendment is demanding. It is not a ban on solar; well over 50% of the land would still be available for it. It is not restricting renewable energy on our best land. I am not saying that GB Energy should not invest in solar in any way, shape or form; I am saying that the best land should be reserved for food production, and the less good can be preserved for other purposes. It is in the national interest that it is done this way.
The Minister has said that he has sympathy with my arguments but that this is not the device or place to make these points. However, I fundamentally disagree. As a private company with £8.3 billion burning a hole in its pocket, you would expect GB Energy to set the tone, to provide expectations and to be the physical expression of what the Government expect, so this is exactly the right place and moment to shape our nation’s future energy supplies. If we do not do it here and now, where will it be done, and when, or are we just prepared to risk further legislation to rein in GB Energy later, as we have needed to do this evening with the water Bill that flows through this House?
I am very interested to hear what other noble Lords may have to say on this matter. It is a serious one, and there is nothing more serious than ensuring that our nation is fed. I hope that the noble Lord, even at this late stage, will concede, as he has done on the similarly worded Amendment 38, that this is a reasonable, sensible and proportionate way of ensuring that GB Energy does not get carried away on solar. If he does not, I regret to say that, even at this late hour, I am prepared and minded to test the opinion of the House.
Lord Offord of Garvel (Con)
My Lords, I rise to speak in support of my noble friend Lord Fuller’s amendment. In tabling it, he raises a matter of utmost importance: our nation’s food security and the agriculture industry, which has been subjected to punitive tax measures by the Government.
This debate is not about whether we should install renewable energy technologies; it is about where we should develop renewable energy. At best, we can hope that, indirectly, GB Energy will help to power and heat British homes in a bid to achieve clean power by 2030. However, it is imperative that the Government’s race to renewables does not come at the expense of British agriculture and food production. It should be known that, when land is used for solar farms, it does not see agricultural use for decades. We must look to protect the most versatile and fruitful land to feed the nation. This is not to say that there will not be land that can be used for renewable energy production. Ultimately, we cannot find ourselves in a position where we have warm homes but no food on our plates. Our energy security trumps food security.
My noble friend raised his concerns in Committee but, regretfully, the Minister’s response was rather unsatisfactory. It is essential that the protection of agricultural land for renewable energy development is embedded in law. With that in mind, I urge all noble Lords to support my noble friend. The amendment in his name presents us and the Government with an opportunity to take decisive action to reserve agricultural land for food production. I will support my noble friend Lord Fuller if he wishes to test the opinion of the House.
Lord Cryer (Lab)
My Lords, I turn to Amendments 50 and 52 in the name of the noble Lord, Lord Fuller, and spoken to in his prose poem of a speech. The importance of maintaining our natural resources to support UK agriculture and of supporting local stakeholder consultation in affairs that affect their surroundings and quality of environment are values that we share with the noble Lord. However, for the reasons that I will now set out, I must resist these amendments.
Great British Energy will be subject to the same rigorous planning processes that currently exist to protect agricultural land and minimise the effects on food security. The National Planning Policy Framework includes the preservation of agricultural land for food production as a key consideration in its legal framework governing renewable energy products. It emphasises the need to protect the best and most versatile agricultural land—namely, as the noble Lord, Lord Fuller, said, grades 1, 2 and 3A.
More broadly, looking beyond these specific amendments, the Government recognise that food security is national security—again, as the noble Lord, Lord Fuller, said. The Government do not believe that the accelerated rollout of solar generation poses a threat to food security; I will come on to that in a minute. The total area used by solar farms is very small: even in the most ambitious scenarios, less than 1% of the UK’s agricultural land would be occupied by solar farms. Furthermore, solar generation can be co-located with agriculture, and many projects are designed to enable continued livestock grazing alongside energy generation. Innovation may also reduce the impact of solar farms on agriculture. The emerging science of agrivoltaics is developing innovative ways in which solar can be integrated with arable farming
On statistics, it has often been argued that the land use framework says that 9% of land will be used for energy development. The noble Lord, Lord Fuller, mentioned the 9% figure; although he did not actually say that that would cover energy generation entirely, it was implied. This is not actually correct. The 9% figure covers agricultural land that would be used for the creation and restoration of habitats—I emphasise “restoration of habitats”—such as woodland, heathland, grassland and peatland. It does not cover generation alone. Defra will publish in the near future a land use consultation as an important first step in starting a national conversation on land use. There is also evidence that solar can improve biodiversity in certain areas and under certain circumstances when it is installed on agricultural land.
For these reasons, I hope that the noble Lord is assured that Great British Energy will always consider the effects on our agricultural land as a necessary element of its regulatory approvals and will, therefore, withdraw his amendment—although I am not holding my breath.
Lord Fuller (Con)
My Lords, I listened carefully to what the Minister said. I will not respond in detail and this is not the place, save to say that you do not have to be an expert or a regular listener to “Gardeners’ Question Time” to know that not much grows in the shade. The suggestion that agrivoltaics on arable land might be some sort of amelioration is for the birds.
I am itching to withdraw this amendment, but the Minister and I are so far apart. He says “less than 1%”. The land use framework contemplates more than 9% being taken out of production. There is an appropriate tension to be drawn between food security and energy security. I am afraid that I have not received the assurances that I require. Therefore, I beg leave to test the opinion of the House.
Lord Fuller
“Offshore energy(1) The Secretary of State must assess the impact of offshore energy installation and generation which occur under Great British Energy’s functions on—(a) the environment, and(b) animal welfare.(2) If the assessment under subsection (1) determines that the relevant offshore energy installation and generation is causing—(a) environmental damage, or(b) significant animal welfare issues,Great British Energy must cease facilitating, encouraging or participating in the relevant activity.(3) For the purposes of this section “offshore energy installation” means any installation that is offshore for the purposes of energy generation, including wind, tidal and wave energy installations.”Member's explanatory statement
This would require the Secretary of State to assess the impact on the environment and animal welfare of the installation and generation of offshore energy technologies and its associated cabling.
Lord Fuller (Con)
My Lords, I am disappointed that the Minister did not adequately engage on the issues that I raised. For example, he mentioned biodiversity as being a matter, but that is not included at all, in any way, shape or form, in the Amendment 38 that he moved. I just think there is an insufficient balance between carbon and those other matters on sustainability.
It looks like we may have lost the battle this evening, but make no mistake: Labour’s war on the countryside continues. In the circumstances, I will not press this to the vote, and I beg leave to withdraw my amendment with disappointment.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
The noble Lord should not have spoken to the amendment if he intended not to move it, but we will take that as not moved.
Lord Hamilton of Epsom
(2) This section comes into force on the day on which this Act is passed.(2A) Other sections in this Act come into force on the day the Secretary of State publishes an assessment on the expected impact of this Act on the number of jobs in Aberdeen.”
Lord Hamilton of Epsom (Con)
My Lords, the reason why I am degrouping this amendment, and indeed Amendment 55, is because there have been developments that affect both these amendments.
Amendment 54 asks the Government to publish an assessment of the expected impact of the Bill on the number of jobs in Aberdeen. Since tabling the amendment, we have had a very remarkable interview with the new chairman of Great British Energy, who goes by the name of Jürgen Maier. For some reason, he did not seem even to know that the Government were committed to lowering people’s energy bills by £300. When he was asked about this, he just sort of waved the whole thing away. He also was asked about the number of jobs that were going to be brought to Aberdeen, and he said 300, which I think is a sort of top whack for the number of people he is going to employ in Great British Energy in Aberdeen. I think there was some hope that there would be rather more jobs than that in Aberdeen, but he did not seem to think that that was very important at all and, indeed, was something that stretched out to the next 10 or 20 years. He did not seem to want to be committed to any of this at all.
I think the Government have a slight problem if that is going to be the spokesman for renewable energy via Great British Energy, and I am not absolutely certain that they have the right man for the job. It seems to me important that you have somebody who stands up for the whole business of renewable energy and the ambitions—indeed, some of the things we voted on this evening—and objectives of Great British Energy. I think he should have a rather clearer idea of what he is trying to do because, if he does not, he will do nothing but bring embarrassment to the Government and everybody who believes in renewable energy.
The other thing, of course, that we must look for when it comes to jobs in Aberdeen is the renewal of the licences for the Jackdaw and Rosebank fields. I gather the Government are looking at this quite closely. It does seem to me to be absolute madness—which can only really be entertained by the Energy Secretary, Mr Ed Miliband—that, at the end of the day, we envisage a future where, inevitably, we are going to need oil and, for some extraordinary reason, that oil cannot come from our oil fields; the oil and gas will have to be imported from other countries, with, of course, a greater carbon footprint than there would otherwise be. That does not seem to be anything other than complete insanity.
I think the world is coming to realise that, although there have been these very ambitious goals of reaching net zero, the fact is that we are going to need fossil fuels for much longer than most people think. If that is the case, we might as well use our own sources of oil and gas and employ our own people, rather than employ Americans and people in the Gulf and import it from there. As I say, there will be a larger footprint if the whole thing is imported into this country from abroad.
So it strikes me that we have our priorities very seriously mixed up on this, and the Government will have to change their attitude on all of this, because otherwise we are going to make ourselves look absolutely ridiculous and do nothing to lower global emissions, which is the objective we are all trying to get.
My Amendment 55 deals with the viability of the Government reaching their net zero target. This, for me, has been very much affected by the breakfast I had this morning with people at JCB, who are very keen that we move to a much greater production of liquid hydrogen, because they believe that that is the one fuel that can actually drive heavy vehicles such as theirs, and that that fuel has a great future there. The good news about liquid hydrogen is that they think it could be very effectively used not only in heavy vehicles such as lorries and so forth but also in trains. They were not so happy that this was an answer for aviation—but aviation is a big and growing business, as the Government recognise, with their dedication to building a fourth runway at Heathrow. Obviously, aviation is going to be a growth business as more people fly around the world, and if we are not going to have a constant source of CO2 emissions from that, we have to move to a better fuel.
So there are many reasons why hydrogen ticks many boxes, but the problem about it is that it is not actually a silver bullet but a golden bullet. It is extremely expensive to produce and uses very large amounts of electricity. So I hope that what we will be looking at is using small modular reactors dedicated to actually producing hydrogen. Perhaps—and I am not saying this will happen—this will be able to bring the price down to a level that is bearable and something we can live with, because, if we could get the price of liquid hydrogen down, it would make a massive difference to the ability to run heavy vehicles and aircraft and other forms of transport without polluting the atmosphere and increasing the CO2 footprint, which is one of the problems that we have today. I look forward to what the Minister has to say about both my amendments and I beg to move.
Lord Offord of Garvel (Con)
My Lords, I rise to speak briefly in support of my noble friend Lord Hamilton of Epsom’s Amendments 54 and 55. My noble friend referenced an interview given on 3 February 2025, in which the chair of Great British Energy, Jürgen Maier, admitted that only 200 to 300 jobs would be created in Aberdeen by Great British Energy and it could take up to 20 years for the 1,000 promised jobs to materialise. Yet in January, the Energy Minister, the Member for Rutherglen in the other place, confirmed that the Government’s plan for Great British Energy to create 1,000 jobs in Aberdeen “has not changed”. It seems that we are told one thing by Ministers and another by Great British Energy’s chair.
It seems that the Government have given Great British Energy the responsibility for delivering on their commitments, but Great British Energy does not agree that Ministers’ ambitions are its responsibility. While Ministers and Great British Energy executives can disagree, the British people will be left without the tangible benefits they were promised. It strikes me that this should be of great concern to Ministers, who will be ultimately accountable for Great British Energy’s failure to deliver on the promises they themselves made.
Turning to Amendment 55 in the name of my noble friend Lord Hamilton, I supported his decision to probe the costs and viability of the Government’s net-zero targets. We have already had discussions around this question, most notably when we discussed pylons in an earlier group. We agree that the Government’s net-zero targets are driven by ideology and need to be reviewed to ensure that they are practically and affordably achievable. I hope that the Minister will look kindly on my noble friend’s amendment in his reply.
Lord Hunt of Kings Heath (Lab)
My Lords, I always look kindly on the contributions made by the noble Lord, Lord Hamilton, and enjoy debating these with him. However, sadly, I am not going to respond sympathetically to either of his amendments, perhaps to his disappointment and surprise.
The amendments would delay the designation of Great British Energy under Clause 1 and the ability of the Secretary of State to provide financial assistance under Clause 4. I must object to that. It is essential that Great British Energy starts its operations as soon as possible.
On Amendment 54, I will just say this: anyone who has met Juergen Maier will have been impressed with the quality and energy, and breadth of knowledge, experience and wisdom, that he brings to the job. He certainly has the backing of His Majesty’s Government.
We need to put to rest this nonsense around Aberdeen. I have stated very clearly already this evening that we expect Great British Energy to employ 200 to 300 people, initially at its Aberdeen headquarters. The substantial issue is that GBE’s activities will create and support thousands of jobs across the country.
As far as the continental shelf is concerned, I readily acknowledge the great contribution that it has made to the United Kingdom and the work of the skilled people who work in the North Sea. However, it is a declining asset. We have said that it will continue to play an important role in the future, but the future of energy in this country is to move to clean power as soon as we possibly can. We want to see continued extraction from the North Sea while that is necessary. We want to ensure a just transition for people working in the industry to other sectors, because they have a huge contribution to make.
In respect of the 200 or 300 people, the fact is that we are talking about this Parliament. As the years go by, there will be more jobs in Aberdeen and the GBE contribution will be enhanced.
I hope that the noble Lord, Lord Hamilton, will recognise that the Government are fully on top of these issues, and that we have a consistent, coherent policy to lead us to energy security, and will not press his amendment.
Lord Hamilton of Epsom (Con)
My Lords, I am extremely worried if the Government do not recognise that there are certain liabilities that seem to be carried by Mr Jürgen Maier. I do not think he is going to be an adequate spokesman for GB Energy, or indeed for alternative energy. His interview, with a very mild and pretty passive Scottish journalist, was a complete car crash.
Lord Hunt of Kings Heath (Lab)
My Lords, this is not the appropriate place to criticise a man of his stature and of the seniority which he brings. Noble Lords have had an opportunity to meet him, and they were generally impressed by the approach that he took. I would like to leave this morning’s debate with a sense that the House recognises that we have made a really good appointment. I express my full confidence in him.
Lord Hamilton of Epsom (Con)
I have no doubt that Mr Jürgen Maier will be very grateful for the confidence of the Minister, but I do not think that it is necessarily shared that widely. I would like to test the opinion of the House.