Draft Climate Change Levy (Fuel Use and Recycling Processes) (Amendment) Regulations 2026
(1 day, 12 hours ago)
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The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move,
That the Committee has considered the draft Climate Change Levy (Fuel Use and Recycling Processes) (Amendment) Regulations 2026.
It is a pleasure to serve on the Committee with you in the Chair, Ms Vaz. The draft regulations exempt from the climate change levy electricity used in—this is a word I am going to struggle to say repeatedly—electrolysis to produce hydrogen and natural gas used as a source of carbon dioxide to produce sodium bicarbonate from soda ash. They do this by expanding the climate change levy non-fuel use exemption to include the relevant new processes.
The CCL was introduced in 2001 with the purpose of encouraging energy efficiency across our economy by taxing energy supplies such as electricity or gas. From the outset, the tax has included a non-fuel use exemption, the principle behind which is that when fuels that are liable to CCL are not used for energy, they should not be taxed as if they were. Today, that principle needs to be applied to two modern industry realities that are not currently included in the exemption.
First, when produced in a low-carbon way, hydrogen can help to power the UK’s clean energy transition and support our 2050 net zero ambitions. One key method of hydrogen production is electrolysis. In that process, the electricity is not used as a fuel, as it is the feedstock that enables the chemical reaction. Yet without the change in the draft regulations, electricity used in the process would be charged CCL in most cases.
Secondly, the chemical process that converts soda ash into sodium bicarbonate is a new production technology in which natural gas performs two roles: it provides heat and serves as an essential source of the carbon dioxide needed for the production process. Where a taxable commodity is used partly as fuel and partly for a non-fuel purpose, the non-fuel use exemption is intended to accommodate such mixed uses. Yet as things stand, the natural gas used will attract CCL, despite the partial non-fuel use that is fundamental to the chemistry involved.
Similar non-fuel use processes in soda ash production are already exempt from CCL. The Government are satisfied that it is appropriate to add this use of natural gas to the exemption, thereby helping to ensure alignment and consistency across industrial processes, as well as supporting the relevant part of the chemicals sector.
The changes in the draft regulations deliver on the Government’s commitment at the 2025 spring statement to remove CCL costs in respect of electricity used in electrolysis to produce hydrogen. I commend the draft regulations to the Committee.
James Wild (North West Norfolk) (Con)
I am grateful to the Minister for setting out the scope and the impact of the draft regulations. We support the approach to update the legislation to put it beyond doubt that electricity used in electrolysis processes to produce hydrogen will count as a non-fuel use, and therefore benefit from the exemption from the levy.
I also acknowledge that the inclusion of the production of sodium bicarbonate came as a result of the consultation, so there we have it: a Government who listen. Sadly, there are a host of issues on which the Government have not yet listened that I could talk about, were they in scope, from the farm tax to the jobs tax. We live in hope.
I do not propose to detain the Committee unduly, but I would like to raise a couple of points. First, as Members will know, the consultation proposed three options to deal with the issue. The Government justified selecting option A on the basis that it was the quickest to implement. It is a sensible procedure to adopt, but option B included support for a broader category of methods of producing hydrogen. Will the Minister confirm the proposed timetable for the consideration of broader treatment as part of the wider review of the climate change levy to which the Government have committed? I note that the Finance (No. 2) Bill, which the Minister and I discussed in Committee, increases the overall levy, adding £2 billion to the cost on British industry.
My second point concerns the costings in the tax information and impact note and the explanatory notes, which refer to this change as having a negligible impact. Given the ambitions for hydrogen across the economy, and the ramping up of its production, can the Minister share any projections of the potential benefits for the sector?
Dan Tomlinson
I thank the shadow Minister for his questions. I always enjoy listening to him; one day, I am sure I will do so on a bumper car in his constituency. Those Members who did not serve on the Finance (No. 2) Bill Committee will not know that reference; I will have to update them afterwards.
We will conduct the wider review of the CCL as swiftly as possible. It is important that we keep all our taxation policies under review, not least given the changes that are taking place in the economy. It was right that the Government consulted on the changes in the draft regulations earlier in the year, and we will continue to listen to the various industries that are affected by the CCL.
We chose to proceed with the option that the shadow Minister outlined in large part because we wanted to make sure we could bring in the change as quickly as possible. Those in the industry have been asking for the change, which will support them in the move towards using low-carbon technologies and processes, and we wanted to implement it as swiftly as possible. It is my understanding that if the Committee agrees to the changes, they will come into effect immediately—as of tomorrow—which is good. Progress has been very swift now that we have finally got here.
There was one other question on which I will have to respond after the Committee, because it is has fallen out of my head.
Question put and agreed to.
Draft Data (Use and Access) Act 2025 (Consequential Amendments and Transitional Provision) Regulations 2026
(1 day, 12 hours ago)
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The Minister for Digital Government and Data (Ian Murray)
I beg to move,
That the Committee has considered the draft Data (Use and Access) Act 2025 (Consequential Amendments and Transitional Provision) Regulations 2026.
It is lovely to see you in the Chair, Ms Lewell, as it always is. We have a rowdy bunch of Members on the Committee—I hope does not mean that we will be here too long.
I am pleased to speak to these regulations, which were laid before the House in draft on 2 February this year. They are fairly straightforward: they make consequential amendments to references to the Information Commissioner and the Information Commissioner’s Office across the statute book, reflecting the reforms to the regulator’s governance structure that were introduced by the Data (Use and Access) Act 2025. The Act abolishes the Information Commissioner, which is a corporation sole, and transfers its functions to a new body corporate, the Information Commission, led by a chair, chief executive and other executive and non-executive members with collective decision-making responsibilities. That will increase diversity and resilience at the top of the organisation, so that the Information Commission can function effectively with independence and integrity. It will also bring the Information Commission in line with how other regulators, such as Ofcom, are governed.
The regulations prepare the statute book for the transfer of regulatory functions from the ICO to the new Information Commission later this year, and, as such, they ensure legal clarity and certainty by amending references to the Information Commissioner and their office in primary and secondary legislation to refer instead to the new Information Commission or, where appropriate, a specified member of the commission, such as the chair, in instances where it is necessary to allocate a specific statutory duty to a neutral person, such as supplying information on oath.
The consequential amendments will ensure that the statute book is coherent, consistent and provides full legal clarity to support the transition from the ICO to the Information Commission. The regulations also amend the title of the regulator across relevant Scottish, Welsh and Northern Irish legislation. My officials consulted devolved Government officials on these changes last summer, and they were content with the approach taken in the regulations and the specific amendments to Acts and instruments of the devolved legislatures. I have also written to the relevant devolved Ministers to inform them of the nature and scope of the changes.
Regulation 3 contains a transitional provision that provides for the Information Commissioner to retain their existing pension arrangements for the duration of their tenure as the first chair of the Information Commission, a role the Information Commissioner has assumed on the commencement of schedule 14 of the Data (Use and Access) Act on 20 August 2025, pursuant to sub-paragraph 2(2) of that schedule. I am sure everyone is keeping up.
The regulations also contain three minor and technical amendments to the Data Protection Act 2018 in consequence of section 67 and 91 of the Data (Use and Access) Act. Those changes are to signpost references correctly and reflect numbering changes. They do not have any substantive legal effect at all. The consequential amendments, alongside the transitional provision and other minor and technical amendments contained in the regulations, will facilitate the smooth governance transition from the Information Commissioner’s Office to the new Information Commission.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure to serve under your chairmanship, Ms Lewell. The statutory instrument makes consequential amendments to references in primary and secondary legislation to reflect the abolition of the Information Commissioner’s Office and the transfer of its functions to a new body corporate, the Information Commission. The Information Commission was granted additional powers and duties under the Data (Use and Access) Act, reflecting the increasing breadth of issues that impact data protection regulation, including the power to commission a new strategic framework and implementation plan. Obligations under the new framework set out a requirement for the Information Commission to take into account specified considerations when undertaking its duties, including the promotion of innovation and competition and the fact that children merit specific protection.
On the important question of protections for children, the Minister will be aware that His Majesty’s official Opposition, in my name, tabled a new clause to the Data (Use and Access) Bill on this very issue. It sought to compel the Secretary of State to undertake a review within 12 months of Royal Assent, which was received in June 2025, of the case for raising the age of consent for social media to 16 under GDPR. The new clause received broad cross-party support but was voted down by the Government. Having finally responded, albeit too little and too late, to His Majesty’s Opposition and widespread public pressure to act, the Government launched their consultation on social media access for under-16s earlier this week. Does the Minister agree that had the Government accepted our amendment, their review would now be well under way, and we would be several steps closer to a solution for this generationally important challenge. I hope that in future they will consider a bit further the question of accepting Opposition amendments.
In an increasingly digitised world, our industry regulators, including the Information Commission, face an ever-growing workload in circumstances where resources are under pressure. What discussion is the Minister’s Department having with the Information Commission about its ongoing strategy to ensure that it can meet its expanded role effectively?
Edward Morello (West Dorset) (LD)
The Liberal Democrats support the regulations, which make necessary and consequential amendments following the passage of the Data (Use and Access) Act. They ensure that references across more than 800 pieces of UK legislation are updated to reflect the replacement of the Information Commissioner and the Information Commissioner’s Office with the new Information Commission, maintaining legal clarity and continuity across all four nations of the UK.
The changes are technical and administrative, including minor amendments to the Data Protection Act on the definition of research and statistical purposes, the duty of the new Information Commission and the transition of pension arrangements for the incoming chair. They do not alter the regulator’s powers or the underlying policy framework, so we are happy to support them.
Ian Murray
Let me answer the questions from the shadow Minister. Do we agree with the Conservative party on how they tabled the new clause? No, we do not. The consultation into the Online Safety Act 2023 and the protection of children online was launched this week. The sheer volume of responses that we have had so far justifies the fact that we should have that national conversation. It is not straightforward. First, the Government have to get that right, and, secondly, we have to take into account a whole host of views, including from charities that are very much against those kinds of issues. We have to listen to young people, too, and that is a very clear component of the consultation. The regulations are not directly related to that, but I am happy to answer those questions. I hope that the Opposition will engage with that consultation in good faith and suggest what they think should happen. They already support the ban and should therefore propose it.
Dr Spencer
Apologies if I get this wrong, and I admit that I went through it quite quickly, but when I looked at the consultation data entry on the web earlier this week, I could not see a point where an entry could be linked to an individual person. Will the Minister’s Department double-check data security for the consultation? I am sure he agrees that we would not want the consultation to be hijacked by any group of a particular bent feeding in inappropriate responses or trying to drown out a particular type of view as the consultation goes forward.
The Chair
I remind the Minister and the official Opposition spokesperson that we are straying away somewhat from the statutory instrument. The Minister should keep his response quite short and the hon. Member for Runnymede and Weybridge should not intervene again on that topic.
Ian Murray
Let me take that away, but the answer should be yes. When a lobbying perspective has tried to influence consultations, from Governments of any colour, that has been taken into account when assessing the consultation. Let me take that away and give the hon. Member an exact answer. Even if the consultation receives a bulk of information, that is taken into account when the analysis is done.
The statutory instrument is very straightforward. It merely changes all references to the old Information Commissioner’s Office into the Information Commission to make sure that the legislation from this place and across our devolved Governments and Administrations is compliant.
Lincoln Jopp (Spelthorne) (Con)
I know that I am risking the wrath of the rest of the Committee, but, as I understand the Minister’s explanation, moving the functions from a corporation sole to a body corporate slightly dilutes the personal role of the Information Commissioner inasmuch as it spreads responsibility to a board. The last time I checked, the Information Commissioner was being paid about £200,000—that was in 2021. Will the changes put more or less responsibility on the current Information Commissioner? Will they be paid more or less?
Ian Murray
The current Information Commissioner, who becomes the head of the Information Commission, is contracted until January 2027, and the terms will not change for that contract. Through the process of public appointments, the Department will be going through the process of finding a new post-current commissioner. That will all be taken into account as part of that process. Does that answer the hon. Gentleman’s question?
Lincoln Jopp
Does the Minister think that that will expand or detract from the commissioner’s personal responsibilities and accountabilities?
Ian Murray
I do not think that it will expand or detract from them. The role of head of the Information Commission is exactly the same as the role of Information Commissioner. Obviously, before the role was held by an individual with the Information Commission below them. The regulations are formalising that under the 2025 Act. I am happy to write to the hon. Gentleman on the terms and conditions of the Information Commissioner.
Although we have strayed into other aspects of the subject, these are very straightforward regulations. I am glad that we have had that kind of scrutiny, and I commend the regulations to the Committee.
Question put and agreed to.