Great British Energy Bill (Fifth sitting)

(Limited Text - Ministerial Extracts only)

Committee stage
Tuesday 15th October 2024 Public Bill Committees

[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?

[Michael Shanks]

That has nothing to do with it.

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Division 8

Ayes: 1

Noes: 10

[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.

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Let us not forget that this is the Secretary of State who, on announcing the plan to achieve a net zero grid by 2030, promptly wrote to the National Energy System Operator to ask how it might be done and how much it would cost. I think hon. Members would be keen to ensure that Great British Energy is conducted with more sound financial planning and with the projected costs established before moving any further. I hope that the Minister will agree that we would wish to see the soundest costings from Great British Energy and that he will accept that the amendment would assist in delivering that shared ambition.

[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.

[Andrew Bowie]

A shame.

[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.

[Michael Shanks]

You were once!

[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.

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[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.

[Michael Shanks]

Inspirational!

[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.

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[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.

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Division 9

Ayes: 3

Noes: 11

Question proposed, That the clause stand part of the Bill.

[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.

--- Later in debate ---

[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.