Net Zero

Baroness Hayman Excerpts

Thursday 26th January 2023 Lords Chamber

Asked by

[Baroness Hayman]

To ask His Majesty’s Government what steps they plan to take in response to the report by Chris Skidmore MP Mission Zero: Independent Review of Net Zero, published on 13 January.

[Baroness Hayman (CB)]

My Lords, I declare my interest as co-chair of Peers for the Planet and express a debt of gratitude to Chris Skidmore MP and his team for providing the important, detailed and comprehensive report that we have before us today. I am also grateful to all noble Lords who will be speaking and to the Minister himself for being here to respond, given his prodigious workload in your Lordships’ House

It is worth emphasising at the outset that the Mission Zero report was not asked to provide a stocktake of the Government’s progress on net zero—that is a job for the CCC. Rather, the exam question the review was set was whether, given the recent dramatic global changes, particularly in energy, the UK can meet its net-zero ambitions in a way that is affordable and efficient and encourages business and enterprise. The report’s answer is an emphatic, “Yes, we can”, but with the crucial caveat that we will achieve sustainable growth only if we are given the right leadership and policy responses from government. To quote Energy UK, the industry body,

“the Government must seize this golden opportunity to drive a broad economic recovery and become a global leader in new technologies for years to come. Based on the evidence set out in today’s report, further delay would both be inexplicable and hand that economic opportunity to other countries.”

The effects of a once-in-a-generation cost of living and energy crisis have, as we know, been profound. The global dynamic has shifted, and a great industrial race to decarbonise has been triggered, with the US, China and the EU leading the way. The private sector understands this very well, which is why industry and business leaders across all sectors are urgently calling for clear, consistent and stable policy direction, effective regulation and sectoral plans so that they can plan and attract investment for a pro-growth transition.

However, the business community is increasingly concerned that the opportunity to keep up with those leading this global growth race is slipping away from us. As the director-general of the CBI warned this week, a lack of government strategy risks “haemorrhaging” business investment and green growth to other markets. He flagged that at the very moment the US and the EU are going bigger and harder, we are seeing very little “urgency and boldness” from the Government. If economic opportunities are not to be lost and investment decisions delayed, we need an urgent government response to the call made in the review for greater certainty, consistency and clarity across net-zero policy. If we embrace that strategic approach, the UK has every opportunity not only to keep up but to lead.

We have already seen how forward-looking, well-balanced government policies and regulation can support the development of new low-carbon industries and British success stories. For example, we invented the contracts for difference model that has powered the breakout success and cost-competitiveness of the onshore and offshore wind industry. Such innovative models can ensure that we steal a lead in other technologies as well, including solar, geothermal, battery storage and carbon removals. Policy intervention and smart investment could also provide breakthroughs in other areas, from low-carbon steel to plant-based alternatives to meat; from electrified kilns for brickmaking and ceramics to green fertilisers.

While the next stage of the transition will undoubtedly require careful management, the UK has proven that it can pioneer complex system change and create world-leading sectors in the process, where well-constructed, practical policy is in place from government to support that process. At the World Economic Forum in Davos last week, the noble Lord, Lord Stern, chair of the Grantham Research Institute, said:

“The world has in its hands a new growth and development story driven by investment and innovation in green technology … it is a much more attractive and inclusive story than the dirty and destructive paths followed in the past.”


However, to capitalise on these opportunities, we need to confront another major message from the report: at the moment, we simply do not have the necessary strategic planning, infrastructure and delivery mechanisms to nurture sustainable growth. It is evident that private and public sector stakeholders have little confidence that the Government are actually making good on the Prime Minister’s welcome promise to ensure that UK climate leadership

“pervades all aspects of Government now”.—[Official Report, 9/11/22; col. 263.]

The report highlights that we do not have the whole-government approach that such a multifaceted and complex challenge as the transformation of our economy—because that is what we are talking about—requires.

Of course, political leadership at the very top of government is essential, and the disappearance of the Cabinet committee chaired by the Prime Minster is hardly encouraging. However, we also have to recognise that policy change and delivery have to take place at every level, and that not only businesses but civil society and, crucially, local government all have pivotal roles to play. If we are to achieve the Government’s aim of

“matching world-leading ambition with world-leading delivery”,

we need the structures in place to realise that commitment and secure the opportunities of net zero.

I therefore hope that the Minister will take very seriously the recommendations in the review aimed at overcoming the current lack of joined-up policy-making and to embed action across all levels of government, all nations and all departments. The Government should look urgently at two specific proposals in this area, put forward both by the review and by committees of this House and the other place: a net-zero test across government policies and legislation, and an office for net-zero delivery to drive policy in areas where progress, frankly, is painfully slow at the moment.

As the review says, unless the Government take a strategic and holistic approach to both policy and delivery:

“Climate commitments and net zero targets remain just words on a page without a clear, consistent, and stable transition plan.”


It is clear to me from reading the report and from all the briefings I have received in the run-up to this debate, particularly from business, that not acting risks costing far more than the necessary investment to make the transition and the growth that will follow.

As an immediate positive response, the Government could show their direction of travel in areas where we actually have legislation going through this House and the other place. Energy efficiency is a no-brainer for most people. There are amendments to both the Energy Bill and the Social Housing (Regulation) Bill which could transform both cost and quality of life, yet we are not making progress. Also, there is wide-ranging support from all sectors for giving Ofgem a regulatory duty to support the net-zero transition, so why are the Government opposing such amendments?

At COP 26 in Glasgow, Rishi Sunak pledged to make the UK the world’s first net-zero financial centre. Yet the Financial Services and Markets Bill totally fails to take the opportunities to make that pledge a reality, and we are told that amendments are not necessary. The levelling-up Bill could catalyse action to support net zero by fundamentally reforming the planning system through the development of green skills and ensuring that our climate and nature objectives are in place, while also delivering the cheapest forms of energy generation: onshore wind and solar. Amendments already made to the Procurement Bill present opportunities to stimulate the innovative businesses and supply chains of the future. I therefore hope for a positive response from the Minister on these immediate issues and on the longer-term strategic direction.

We often discuss climate change in terms of the moral imperative we have to safeguard the future for our children, our grandchildren and the planet. For me, that imperative is overwhelming. However, I hope that for those who are anxious about the costs entailed in attaining net zero, this report will provide some comfort that at this global tipping point, responding to the climate and nature crisis is not only the right thing to do but the right economic strategy.

Net Zero (Industry and Regulators Committee)

Baroness Hayman Excerpts

Friday 20th January 2023 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I join others in congratulating the noble Lord, Lord Hollick, and his committee on a powerful and compelling report. I declare my interests as set out in the register, particularly as a co-chair of Peers for the Planet.

It is a pleasure to follow the rallying cry of the noble Lord, Lord Birt. Like him, I think that the theme that has emerged from the debate today is around strategic leadership, both on policy and resolving very knotty policy issues, and on delivery and a focus on a vehicle that will be successful in not only resolving issues but co-ordinating across departments. At the moment, Bill after Bill comes to this House without any net-zero lens being applied to it. From the Back Benches, we try to put that right, but it is ridiculous that this should be done on such a haphazard basis. This is an area on which the committee report really focuses and on which the Government should really focus.

We have gone backwards on this. I accept the idea of a task force as a delivery engine but, in their response to the report, the Government said that there were in fact two Cabinet committees, one led by the Prime Minister which would push forward the policies on net zero. We do not have two Cabinet committees; we have one domestic committee now, which is one of only three that is not chaired by the Prime Minister. That focus at ministerial level has gone, which is dangerous.

There are issues in the report that are legislative opportunities for the Government. On Ofgem’s remit and responsibility, there is a proposed amendment to the Energy Bill, which we spoke about at length in Committee, but obviously not persuasively as far as the Minister was concerned. I hope that he changes his stance given the support that there is throughout—from civil society, the industry itself, this committee, the Skidmore review—for Ofgem’s crucial role in this, which should be made explicit in its objectives, duties and responsibilities.

There are other opportunities on the Energy Bill, with the amendments on having the Government bring forward a strategic policy on energy efficiency and home insulation. We all know that these things are no-brainers, and yet we have stop-go policies that are inadequately funded. Year after year, we go on wasting money and energy because of the failings in our housing stock.

The last thing I will speak about are the costs. The committee and the report are very clear that there has to be transparency about costs, and there are very substantial costs involved. No one can deny that. However, less often mentioned are the costs of not taking action, in terms of lost opportunities and the huge costs of adapting and responding to the events that will happen if climate change is unabated. The OBR set that out very clearly a couple of years ago. The costs are also there for our children and our grandchildren, both economically and in terms of the lives that they will live. We boomers have been a very privileged generation.

I am stopping now, but I think it is really important that we take on our responsibilities here and move forward in the way the report shows us. In the terms of this Motion, I hope that the Government take very careful note of this report.

Energy Bill [HL]

Baroness Hayman Excerpts

Committee stage
Monday 16th January 2023 Grand Committee

[Lord Moylan (Con)]

I am grateful for that clarification. If the noble Lord is saying that the time has gone, that, it seems to me, is essentially a commercial and practical judgment. It may be right—I do not run a fracking company; I know very little in practice about fracking. It is possible that the time has gone in commercial terms, and that it might not be a sensible thing to do in current circumstances. None of that is grounds for ruling it out as a matter of statute and prohibiting it. It is complete nonsense to suggest doing that. We will leave fracking to one side for the moment.

I turn to Amendment 230, a much narrower and more technical probing amendment which relates to the composition of the domestic gas supply. It takes me back to my boyhood and the childhoods of a number of people in this Room, though not all, who might remember what life was like before we had North Sea gas pumped into our homes. We had town gas, which was produced from coal. Its content was a mixture of gases, including CH₄, CO, CO₂, H₂, higher-order hydrocarbons and phenols. The composition was adjusted according to the calorific value.

When we switched over to North Sea gas, the composition of the gas that we used became over-whelmingly methane, with a small amount of higher-order hydrocarbons. The switchover to using methane allowed the calorific value to be higher. Those of us with very long memories will recall that it was marketed as “high-speed gas”, which meant “hot”—it had a high calorific value, so you could cook that much faster. Moreover, we then put that composition into legislation, which I am grateful to the Library for finding for me: the Gas Safety (Management) Regulations 1996, which are referred to in my Amendment 230.

The result is that, today, a significant amount of gas that we could extract from the North Sea is not being extracted because it cannot be used in our domestic supply by law. In effect, a lot is going to waste. The proposal in this probing amendment is to ask the Government to reflect on this and consider whether, given the energy crisis we have been facing, it might not be sensible and possible to amend those regulations so that we could make use of many of these gases that are currently going to waste but could, none the less, be fed into our domestic system. It could mean that the calorific value would be a little lower in our cookers, so it might take a little longer to bake a cake—a number of television programmes might be affected by this in detail; the outcomes might change—but in terms of efficiency, at a time when we desperately need energy, it is certainly worth looking at.

[Baroness Hayman (CB)]

I have listened to the noble Lord with some interest, but those of us with long memories remember the dangers inherent in the gas that was used before the date he was talking about and the number of suicides that took place. Does he think there is a health and safety issue to consider before going back to those days and that sort of gas?

[Lord Moylan (Con)]

The name of the regulations that I am suggesting we review is the Gas Safety (Management) Regulations, so I fully acknowledge that this is a question of safety, but it is not necessarily the case that these regulations, passed in 1996, that we are still adhering to could not be looked at to see whether, precisely as I say in my amendment, they could be

“safely amended to allow more efficient use of extracted … gas.”

It may be that they cannot but, nearly 30 years on, it would be helpful if the Government could look more closely at this.

My principal point in raising these amendments relates to Amendment 224. A bit like the noble Baroness, Lady Worthington, earlier, I want to know whether the Government have a strategy for resilience. Do they contemplate the dependence on foreign supplies going on endlessly in very large measure, and what would they like to do about it? I think that an awful lot of people in this country were shocked to discover our level of dependency on imports and would like to hear that we are becoming more self-sufficient.

--- Later in debate ---

[The Deputy Chairman of Committees (Lord Lexden) (Con)]

My Lords, the amendment is Amendment 227B.

[Baroness Hayman (CB)]

For the assistance of the Committee, I point out that the numbering of the groups that we were given last night and was up to date was changed when we came to the paper that we received today, but no indication was given of that. Therefore, I believe that this is now the correct order.

[Baroness Bloomfield of Hinton Waldrist (Con)]

We are on the fifth group, with government Amendment 227B on pensions. I turn to Amendment 227C. The amendment that I just spoke to uses the phrase “relevant nuclear pension scheme” to describe the types of schemes that a designated person could be required to amend by virtue of that amendment. This amendment explains what is meant by that phrase. New subsections (1) and (2) provide that a relevant pension scheme is one run by, or on behalf of, the NDA under Section 8 of the Energy Act 2004, or one which provides pensions or other benefits to persons who are, or were, performing similar public functions. The new clause also clarifies that the UK Atomic Energy Authority pension schemes and pension schemes that benefit persons specified in Public Service Pension Scheme Act 2013 are not relevant pension schemes.

I turn to Amendment 227D. In order to implement the proposed pension reforms, the NDA and, in the case of the MEG-ESPS, Magnox Limited, will need information from others. Amendment 227D gives a person who has been required to amend a relevant nuclear pension scheme the power to require persons holding any information they might reasonably require to provide such information. Examples of information that they may need but which they might not otherwise be able to obtain include the number of members in a pension scheme and the salaries and ages of those members. Data protection legislation may still prevent the information from being shared; however, this amendment specifies that in making that assessment the requirement to disclose imposed by this clause must be taken into account. This amendment also provides that disclosure does not constitute a breach of confidence or a breach of any other restriction on the disclosure of information.

--- Later in debate ---

[Baroness McIntosh of Pickering (Con)]

My Lords, I shall speak to Amendment 229, which is tabled in my name.

Although I am against fracking, I am very much for energy from waste, and I am very proud of the facility close to the A1 at Allerton which is creating energy from waste material that is difficult to dispose of and used to go landfill. The benefits of energy from waste are twofold: we are creating an energy strand and we are disposing of waste. I think there is still an incinerator in Sheffield. I understand it was created by the Liberal Democrat administration at the time of the severe floods in the 2000s. One of the reasons for it was that there was a large quantity of furniture and other items damaged by the floods that needed to be disposed of very quickly. I hope that my noble friend will be minded to do more on energy from waste. Where it works, it works very effectively. We could learn from the experiences of other European countries, notably Denmark and other Scandinavian countries, Austria and Germany. In Allerton at the moment, the energy created is going into the national grid. I argue it should go to the local community. Allerton is one of the coldest parts of the country, and it would be in its interest to have a cheaper source of fuel.

The criticism that is made of energy from waste is around potential emissions. Looking at the BEIS figures which were brought to my attention thanks to the House of Lords Library, I see that the emissions figure for waste incineration was static between 2016 and 2020, at just 0.3 million tonnes of carbon dioxide equivalent, whereas the waste management total stayed at around 17 million tonnes of carbon dioxide equivalent and landfill was off the stratosphere, with extremely high methane emissions. That is another argument in favour of energy from waste.

I hope my noble friend will look favourably on rolling out more projects on energy from waste, such as those he knows about from exchanges we have had on the Floor of the House.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. I have Amendment 242A in this group, which is supported across all parties in the Committee—I am grateful to noble Lords who have signed it. It is similar to Amendment 228, which has just been moved by the noble Lord, Lord Teverson. There is a choice of amendments for the Minister, because we have the Labour amendment later on.

Like the noble Lord, Lord Teverson, I am in some ways indifferent to which of the three amendments the Minister supports or to whether he wants to put forward different drafting himself, but I hope that the number of ways the Committee has brought forward this issue will persuade the Government to move. It is worth saying that there is not just support from different parties and political support, and from the Skidmore report, as the noble Lord, Lord Teverson, said, but great support for replacing the existing language of Ofgem’s objectives and duties in the Electricity and Gas Acts with a new text which makes reference to enabling the Secretary of State to meet the targets set out under Part 1 of the Climate Change Act.

As has been said, the future systems operator—the new regulator created by the Bill—does have a specific statutory net-zero objective linked to our climate change targets. However, this is weakened by the fact that there is no equivalent provision in relation to Ofgem, which has only the much more limited duty given to it in the Energy Act 2010. In their consultation on the future systems operator, the Government noted that

“There were several strong calls for Ofgem’s remit to be reformed to focus on enabling net zero in the most economic and efficient way”.


This view is also shared by your Lordships’ Industry and Regulators Committee. I am sure that the noble Lord, Lord Hollick, who signed my amendment, will go into the committee’s rationale for this recommendation.

The case for updated net-zero duties goes far wider than this House or political circles. It has been argued for by environmental organisations such as Green Alliance but also by industry bodies such as Energy UK, the main trade body for energy, representing over 100 energy suppliers and generators. It has said that strengthening Ofgem’s statutory duties to explicitly support the delivery of the legally binding net-zero target would help ensure it balances the needs of both current and future consumers.

As has been said, the Skidmore review has been published in the last few days. It recommends that this change takes place to ensure that Ofgem gives sufficient weight to net zero and to incentivise network companies to plan ahead, emphasising the importance of future-proofing our energy infrastructure. It is essential that Ofgem is given, by government and Parliament, a very clear remit and role as to the importance of net zero and that it recognises the cost to consumers of delayed action. Regulators, given explicit responsibilities by government and Parliament, have a key role to play in demonstrating cross-government commitment to reducing carbon emissions. There is widespread support for this change and I hope the Minister will be able to respond positively to it.

I will turn briefly to two other issues. I record my support for the case made by the noble Baroness, Lady McIntosh of Pickering, and hope that she too will get a positive response.

Turning to Amendment 229 in the name of the noble Lord, Lord Teverson, to which I have added my name, the Minister and I have had many exchanges on the topic of onshore wind. I should start by saying that I welcome the movement the Government have made here and that they have opened a consultation on changing the National Planning Policy Framework guidance on onshore wind, to remove the effective moratorium to allow a new development where the proposal has community support and to encompass the repowering of existing sites.

I also welcome the commitment in the Written Ministerial Statement that the Government intend to make changes by the end of April this year. It is important that we move forward with some speed on this. It is now three years since I tabled a Private Member’s Bill to deal with this issue specifically. In that time, wind farms could have been built in the appropriate places, feasibly adding to the grid at this precise moment and reducing our reliance on expensive gas and foreign imports.

The amendment is not overly prescriptive, as the noble Lord, Lord Teverson, has laid out; it simply requires the Secretary of State to set out a plan as to how more onshore wind farms will be deployed. It does not force the installation of turbines anywhere and would complement the existing consultation, which is focused on allowing communities which can show demonstrable support for onshore wind the ability to install it.

It would indicate the need, and the recognition of the need, for an overarching plan. RenewableUK has long called for the Government to set targets for new onshore wind and solar capacity:

“While onshore wind and solar are now eligible for CfDs, there is no clear medium- to long-term ambition.”


I hope the Minister will recognise that setting a target of 300 gigawatts by 2030 would create 27,000 high-quality jobs and add £45 billion to the UK economy. It is time to set a target now and to be ambitious. I hope the Minister will respond positively.

Business: Greenwashing

Baroness Hayman Excerpts

Tuesday 10th January 2023 Lords Chamber

[Lord Clark of Windermere (Lab)]

My Lords—

[Baroness Hayman (CB)]

My Lords—

[Baroness Williams of Trafford (Con)]

My Lords, I think that it is the turn of the Cross Benches, followed by the Lib Dems and then Labour.

[Baroness Hayman (CB)]

My Lords, does the Minister agree that if we are to take action on claims of greenwashing, we need clear criteria and standards against which to judge those claims? The Government have recognised that part of this is the need for a green taxonomy. Work has been done on this, yet it seems to have been paused. We were promised the results of the working party by the end of last year, so can he update us on progress on the green taxonomy? I declare my interests as in the register.

[Lord Callanan (Con)]

The noble Baroness is right that we need some consistency on these matters. The work on a green taxonomy is being taken forward by the Treasury and as far as I am aware it is proceeding.

COP 27: Commitments

Baroness Hayman Excerpts

Thursday 24th November 2022 Lords Chamber

[Baroness Hayman (CB)]

My Lords, it is an enormous pleasure to follow the noble Lord, Lord Leong, and to congratulate him on what I think everyone will agree was an outstanding maiden speech. The noble Lord is very modest in his summary of his own career. He has been a hugely successful and entrepreneurial businessperson and has had great and creative success in many organisations, but what came over loud and clear from his speech is his commitment to making a difference. That thread has gone through all his achievements, not just in publishing and business but in all areas of his work within the Commonwealth and beyond. He has made a commitment nationally—in this country, of which he has become such a loyal citizen—and internationally.

He has had great achievements, and he will understand that I was particularly delighted to hear of his passion for making progress on climate change. No one in this Chamber begrudges the emissions caused by his mother’s flight to be here. I am sure that the quality of his contribution today makes us all certain that he will more than offset those emissions in his future contributions to the House. I first heard of the noble Lord because he was vice-chairman of Future First, an organisation which my own son was involved in setting up. At the time, I asked my son about his vice-chairman, and he said, “He’s one of the good guys”. I think that is an assessment we would all make after having heard him speak today.

I declare my interest as co-chair of Peers for the Planet. I congratulate the noble and right reverend Lord, Lord Harries, for the way he introduced this debate and his success in securing it in such a timely slot. I thank him, too, for what he said about that organisation.

I think all three of the speakers before me used the word “hope”. I am always interested in the distinction people make between optimism and hope—optimism being a fairly passive belief that things will be all right or turn out okay; hope being much less certain about whether things will turn out well, but believing that if things are done properly, they can turn out well. As the noble Lord, Lord Howell, mentioned earlier, we heard Alok Sharma’s view of COP 27:

“Emissions peaking before 2025 … Not in this text. Clear follow-through on the phase down of coal. Not in this text. A clear commitment to phase out all fossil fuels. Not in this text. And the energy text, weakened, in the final minutes. Friends, I said in Glasgow that the pulse of 1.5 degrees was weak. Unfortunately, it remains on life support.”


That is not an optimistic view of COP 27.

However, there is reason to have hope. The Prime Minister went to COP 27, which was important in terms of UK leadership—an issue that the noble Lord, Lord Howell, spoke about and that I will come back to later. The Prime Minister said—I think this is very important for those of us in this House—that in playing our part,

“Keeping the 1.5 degrees commitment alive is vital to the future of our planet … More must be done.”


He went on to say:

“It is not the work of any one Department or any one Minister; if we are going to make this commitment work, we are all going to have to play our part.”—[Official Report, 9/11/22; col. 263.]


That is absolutely right.

We made important commitments at COP 26, and we made a historic breakthrough at COP 27 in agreeing to set up a fund to assist vulnerable nations hit by climate disasters. But much more difficult will be delivering on commitments and getting agreement on how the world can come together to fund this and, crucially, how we can resurrect global ambitions for reducing the emissions that cause the damage in the first place.

The other thing that discussions at Sharm el-Sheikh brought into sharp focus was that while the destination we are all aiming for may be the same, the challenges we face as individual countries in responding to the climate crisis are not. In the UK, legislators focus on the potential of a green economy, the opportunities for better health, air quality and jobs, and all sorts of opportunities for our entrepreneurs and innovators in the new industries that the noble Lord, Lord Leong, spoke about. But for legislators in other countries, their focus is on survival, and on managing the devastating impacts of climate change they are facing immediately. Every country will have its own unique climate challenges and will have to plot its own pathways out of the crisis.

There is much we can do nationally, but there are many issues where we do not have that pipeline or attention in every department in every way. The Minister will not be surprised that I raise the issue of onshore wind with him; it is a perennial favourite, and one I would be very happy to ditch by getting a good result on it. In this country, if we cannot even agree that we should have a normal planning process for onshore wind development and the replacement of existing onshore wind, I will lose the will to live on how we will achieve all the much bigger things that we need to do. It is one example, but there are many others. The Procurement Bill, which reaches Report in your Lordships’ House next week, still has no reference to climate change, despite the enormous potential in it for both good and bad in terms of climate. So there is much that we can do to put our own house in order.

The noble Lord, Lord Howell, talked about our contribution as a country and whether other countries looked to our example. He is absolutely right that we will not be judged by the quantity of the emissions that we reduce as a country compared to everywhere else in the world; we will be judged by the quality of the leadership we give and the innovation we nurture and showcase, which can be used in other countries. I believe that we will not have the credibility to do that unless we put our own house in order. That is why the ongoing work of achieving our own goals and creating the green economic future that we talk about are so important, and why I feel hopeful—if not optimistic—that we can build on what came out of COP 27.

Climate Change: Behaviour Change

Baroness Hayman Excerpts

Thursday 3rd November 2022 Lords Chamber

[Lord Callanan (Con)]

I will certainly ask my DfT colleagues to update the noble Baroness on where we are with the new Great British Railways body, but much of the chaos and cancellations we have seen in train services have been caused by the trade unions, which she is close to.

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. The Minister spoke about energy efficiency in homes and buildings but does he accept that saving energy in them saves money for consumers and the taxpayer, and that it saves emissions for the planet? Bearing that in mind, is it not time that we had a comprehensive energy-efficiency strategy, including skills training and long-term investment, so that the market can be developed and, in the light of that, does he agree that it would be wrong for the Government to reverse the amendment passed by this House on this issue to the Social Housing (Regulation) Bill?

[Lord Callanan (Con)]

I certainly agree with the first part of the noble Baroness’s question. Energy efficiency plays a vital role, which is why we have a comprehensive energy-efficiency strategy. She will be getting bored with me repeating the statistics, but we are spending something like £12 billion over this Parliament on a whole range of retrofitting strategies, with energy-efficiency policies across all the different domestic and non-domestic sectors.

Energy Prices Bill

Baroness Hayman Excerpts

2nd reading
Wednesday 19th October 2022 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interests as set out in the register. Like the noble Lord, Lord Redesdale, I hope that I can be brief, because many of the points that I wanted to make have been made very eloquently by the noble Baronesses, Lady Worthington and Lady Young of Old Scone, and the noble Lord, Lord Foster. Nevertheless, I endorse and emphasise three particular areas that have been spoken about. The first relates to the length and breadth of powers given to the Executive in the Bill. The noble Baroness, Lady Young of Old Scone, said—although she did not use this phrase—that it was something of an unholy alliance between the Delegated Powers Committee and the energy companies. There is a reason for that: all of us as parliamentarians, whether we are interested in energy or not, ought to be worried about this Bill because it goes against the advice of the Delegated Powers Committee in general about these sorts of clauses, and it does so in fine form. So, on principle, we ought to be concerned about those clauses. We ought also to be concerned about the effect that they have, and the uncertainty that they create, on the stability of markets in the energy sector.

The concerns that the energy companies—Energy UK, RenewableUK, National Grid, and businesses such as E.ON and SSE—have all stated come partly from the proposals that we will come to in a moment. I cannot remember the acronym—I am back to, “If it quacks like a duck, and walks like a duck, it is a windfall tax.” I am mixing my metaphors horribly. But they are also concerned about the effect that the lack of certainty that comes with those ill-defined powers for government will have on their ability to function in future and on their investment plans.

I come to the second point that has been made, which I want to support, about the very real risk in this Bill of disincentivising new low-carbon investment because of the way in which the scheme operates—for reasons that we all understand—for those producers that are not under contracts for difference, and the disparity between costs and prices that has occurred. The uncertainties and unfairnesses of the scheme being put forward will disincentivise new, low-carbon investment. Under the energy profits levy, oil and gas extractors are able to offset new investments against the levy. Under the proposed payments for electricity generators, no such provision is made.

Ministers in the other place simply asserted that this would not happen, when it was raised by members of the governing party there. The industry does not think that this would not happen. We absolutely need to encourage new investment in low-carbon technology, including energy storage and carbon renewals. I declare an interest as someone who has old solar panels. I absolutely agree with the point made by the noble Lord, Lord Foster, about issues such as VAT on batteries being retrofitted on those homes. We need investment, and not simply in onshore wind, although, as the Minister knows, I am very keen on investment in new onshore wind. We need to look at new technologies—at batteries, energy storage and carbon renewals and removals—and get ahead of the game, as we have been on renewable energy, on the technologies that will support that and end the problems of intermittency.

Parity could be achieved to ensure a level playing field between fossil fuel investment and investment in renewables by making amendments so that the payments are determined not just by reference to the quantity of the electricity generated but by the new investments made by the firm over the same period. I know that the Minister hopes that this problem could be solved by everyone going over to the contracts for difference and that it would be a power to keep in reserve, but that is not clear in the Bill. The Bill gives very wide-ranging and long-standing powers to the Secretary of State to change this. The oil and gas levy has a sunset clause of December 2023 so, if it is a reserve power, perhaps the Government could clarify a timeframe for the scheme and use the contracts for difference scheme and a shorter sunset clause.

Finally, I reiterate some of the points that the noble Lord, Lord Foster, made on energy efficiency. The Chancellor said that, when he looked at what would come after six months of the current subsidy support scheme, he would look at targeting it on those who need it most and at energy efficiency. I hope that he will do that, and urgently. We need a clear national strategy for energy efficiency that encompasses raising the energy efficiency of existing homes and how they will move to low-carbon heat, supported by a skills pipeline and a single source of advice, with interim targets and secure funding. Setting a clear pathway by the Government showing leadership would not only help to reduce energy demand but reduce bills for customers—and the taxpayer—now, as well as contributing to achieving our net-zero targets.

As the noble Lord, Lord Foster, said, the Government agreed last night to consult on a plan for achieving this for our 1.4 million social housing properties that are below EPC band C. The House felt strongly enough to make the Government put that commitment in the Social Housing (Regulation) Bill. I hope that the Government will consider setting out corresponding plans for the private rented sector and for owner-occupiers.

Energy Supplies

Baroness Hayman Excerpts

Wednesday 12th October 2022 Lords Chamber

[Lord Callanan (Con)]

Not only can I guarantee that but we will be expanding renewables production. We need to do both. We need to roll out renewables, which have a good track record. They are relatively cheap, but they are intermittent—it is no good telling people that they can keep their lights on for only 60% of the time. The real watchword is that we need diversity of supply. We need more renewables; we need gas; we need nuclear; we need biomass production—we need all of them.

[Baroness Hayman (CB)]

My Lords, I declare my interests. I welcome the Government’s movement on the planning regime for onshore wind. I also endorse the need to change the illogical charging regime for electricity generation which was announced today. How will the Government ensure that funding for research and investment in renewables is maintained, given the effective windfall tax on renewables that is being introduced, when the detrimental effect on investment in research on oil and gas was the reason for not having a windfall tax on those industries?

[Lord Callanan (Con)]

I agree with the first part of the question from the noble Baroness, but we do have a windfall tax on oil and gas producers: the energy price profits levy was announced earlier in the year. We do not propose a windfall tax on renewables. I welcome her support for increased supplies of wind energy.

Energy Bill [HL]

Baroness Hayman Excerpts

Committee stage
Monday 5th September 2022 Lords Chamber

I am sceptical about whether this Bill will even get through. It could easily be overturned—it might not even get past this week, of course—but we must seize the opportunity to fix a broken system. We are living through a market failure. It will destroy the lives of millions of people, push more people into poverty and make life harder. If the Government cannot get a grip of the issue, they will deserve to be out of power for a generation.

[Baroness Hayman (CB)]

My Lords, I declare my interest as co-chair of Peers for the Planet. I will speak very briefly to the amendments. I have amendments of my own later in the Bill on energy demand reduction and the regulator’s responsibilities.

I support the amendments in the name of the noble Lord, Lord Ravensdale. It is important that this Bill is specific about the implementation of the aspirations that we hear from government. We have not had enough detail about the plans to implement the strategies, and we have not had enough detail in the strategy. For that reason, I have some sympathy with the amendment of the noble Lord, Lord Moylan. He raises important issues about putting flesh on the bones of the aspirations, but I disagree with him about changing the timetable. I also disagree with the noble Viscount, Lord Trenchard, on the question of whether, because our contribution to global emissions is low, we should go ahead with the contribution we can make in innovation and leadership, which completely ratchets up the effect of this country’s own policies on a global scale.

One serious point I want to make about the noble Lord’s amendment is that I am extremely worried about the suggestion that the Secretary of State should commission and publish “an independent assessment” of the costs, the implementation dates and the risks of the net zero strategy. We have the Climate Change Committee, which is admired for its work throughout the world. It is an important and respected body and it is independent of government. It would be ridiculous to try to get different independent advice: if we go down that road, we are in “anyone’s view is the best view” territory. We have an independent adviser for government. We have the Office for Budget Responsibility; we have lots of people who can comment on the advice it gives, but it would be quite wrong to put in this legislation anything that undermined its position.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

Let me say first what a pleasure it is to open for the Government in today’s discussions: I am sure we will have lots more as we go through the Bill. I thank the noble Lords, Lord Lennie, Lord Ravensdale and Lord West, the noble Baronesses, Lady Blake and Lady Worthington, and my noble friends Lord Frost, Lord Moylan and Lady McIntosh, for their amendments, which seek to address the purpose and strategic aims of the Bill and of course the Government’s energy policy more generally. That allowed us to have a debate with more of the flavour of a Second Reading debate, rather than addressing the specifics of the Bill, but that is understandable given the nature of the amendments.

I turn first to Amendments 1, 6 and 7 from the noble Lords, Lord Lennie and Lord Ravensdale, the noble Baronesses, Lady Blake and Lady Worthington, and my noble friend Lady McIntosh. These amendments all seek to address the fundamental purpose of the Bill. While they are well-intentioned, it is my strong contention that these amendments are not necessary as the Bill already has a clear purpose. Provisions in the Bill as drafted not only have regard to the outcomes those noble Lords seek, but they are actually designed with those outcomes in mind. For example, a number of measures in the Bill will contribute to the resilience of the UK’s energy system—most obviously, those powers related to the ensuring the security of the core fuel sector. I am happy to give the assurance that my noble friend Lady McIntosh sought today: that energy security is of paramount importance to this Government.

Amendment 245 would give effect to Clause 1 once the Act is passed and, for the reasons I described, I do not believe that it is necessary. On Amendment 5, from my noble friends Lord Moylan and Lord Frost, and the noble Lord, Lord West of Spithead, relating to energy strategy statements, I reassure them that the Energy Bill is to a significant extent an expression of the Government’s strategic intent as set out in the 10-point plan, the energy White Paper, the net-zero strategy and the various sector-specific policy papers we have published. Furthermore, government policy evolves over time and strategies do not always neatly replace others. Some aspects may remain government policy, and some are updated in response to a changing landscape—of course, we have seen that very recently with the Ukrainian invasion. I submit that, rather than prescribing policy intent in primary legislation, it makes more sense to allow Ministers to exercise discretion in these matters and respond to a changing policy environment and international environment.

I move on to the requirement to publish a strategy

“for managing intermittency of electricity supply”.

Intermittency is an important issue, but the National Grid Electricity System Operator is responsible for balancing electricity supply and demand, because while production is intermittent, so is demand. The Government remain confident that they have all the tools needed to operate the electricity system reliably. We can call on a wide range of technology types to do this, some of which were mentioned in the debate today, including emergency gas-fired generation, interconnectors and, crucially, demand-side responses such as insulation, retrofit measures, et cetera.

The capacity market is the Government’s main mechanism for ensuring the security of electricity supply. It has done a great job and we have already secured the majority of Great Britain’s capacity needs to meet future peak electricity demand out to 2025-26. The Government have also committed to ensuring a flexible system which involves the use of a wide range of technologies—again, a number of them were mentioned in the debate today—including battery storage and pumped storage, which I was really interested to hear my noble friend Lord Howell talk about. In my electrical engineering degree many years ago, we studied that particular development; for those who have not been able to see it, it is an incredible feat of engineering.

This amendment also has a requirement to commission assessments of the 10-point plan and of the costs of achieving net zero. My noble friend Lord Moylan raised concerns that progressing towards net zero is a “constraint” to achieving affordable and abundant energy in the UK. I reassure him that, as we transform the energy system, the Government are committed to pursuing the most cost-effective solutions, which, at the moment, are offshore and onshore wind. Ensuring security of supply and decarbonisation, and affordability to the consumer and the Exchequer, are of critical importance. While there will be costs, the costs of inaction in this sector, as we have seen through the invasion of Ukraine, are much greater. Had we not acted over the last decade or so to secure the second-largest supply of offshore wind in the world, the costs we would be facing now would be much greater and our security of supply would be at much greater peril.

As set out in the Net Zero Strategy, we estimate that the net cost to achieving net zero, excluding air quality and emissions-savings benefits, will be the equivalent of 1% to 2% of GDP in 2050. That strategy was informed by the Treasury’s 2021 Net Zero Review, which looked at the potential costs and benefits to businesses and consumers of the transition to a net-zero economy.

Furthermore, several mechanisms already exist to analyse the path towards net zero, as mentioned by my noble friend. For example, the Government’s approach to net zero is already subject to independent scrutiny by the Climate Change Committee, whose 2022 progress report included an analysis of the economic impact of decarbonisation. Much of this work already takes place.

I turn to Amendments 2, 3 and 4, tabled by the noble Baroness, Lady Blake, and the noble Lord, Lord Lennie. The Energy Act 2013 introduced the power for the designation of a strategy and policy statement that sets out the Government’s strategic priorities for energy policy, the roles and responsibilities of those implementing such a policy and the policy outcomes to be achieved. The Government have committed to laying a strategy and policy statement for energy policy later this year and a statement at the earliest appropriate time. Designation of a strategy and policy statement will ultimately be a decision for Parliament, not the Secretary of State. Therefore, I submit that these amendments are duplicative and unnecessary.

I thank my noble friend Lord Moylan for submitting Amendment 231. He raises an important point; splitting the wholesale market into two—namely, creating one market for variable renewables and another for firm generation—is already being considered as part of the review of electricity market arrangements, or REMA. An initial consultation, which included exactly this proposal, was published in July. Splitting the market is one of many options being considered within REMA. My department is currently assessing the viability of implementing a split market and the potential costs and benefits associated with doing so.

Based on stakeholder responses to the consultation and based on further policy developments, we will publish a second consultation in 2023 to set out any feasible options in more detail. Legislative proposals on how to implement recommended reforms will then follow. Adding a clause into the Bill that commits the Secretary of State to publishing legislative proposals on splitting the market by a specific point in time would, I submit, prejudge the outcomes of both the consultation and the review.

Energy Bill [HL]

Baroness Hayman Excerpts

2nd reading
Tuesday 19th July 2022 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interests as a co-chair of Peers for the Planet and a director of its aligned organisation. The Bill has been a long time coming, and its arrival is welcome. It provides, as the Minister very clearly delineated, many of the frameworks necessary to achieve the Government’s commitments set out in the energy security strategy: primarily, decarbonising our electricity system by 2035. As has been described already, we need to achieve that transition while ensuring security of supply and a price that people can afford. This is a task made much more urgent and challenging by the current energy price crisis and the conflict in Ukraine, issues which should have convinced even the most sceptical of the need to move away from expensive fossil fuels and to build up our renewables. Renewables are the cheapest form of energy; as well as increasing UK energy security, they would create high-skilled jobs and opportunities across the country. Therefore, the Bill is undoubtedly necessary, but even at some 360-odd pages it is not sufficient.

Both the Bill and the energy security strategy on which it is based lack the drive and focus—the mission that the noble Lord referred to—particularly on energy efficiency, where what we need is leadership and delivery. According to the CCC’s recent progress report to Parliament, the energy security strategy

“is almost entirely supply-focused and … There remains an urgent need for equivalent action to reduce demand for fossil fuels to reduce emissions and limit energy bills.”

It has been said that the cheapest form of energy is the energy that we do not use. Clear evidence that acting on both demand and energy efficiency brings positive outcomes, both short-term and long-term, is there for all to see. Providing funds for insulated properties would, alongside benefiting people and the planet, permanently lower bills and reduce the need for further subsidies in future. As the IFS has highlighted, it is simply not sustainable to continue this winter’s £17 billion energy support package year after year.

While the measures in the Bill that help to scale up the heat pump market are welcome, I fear that, without a clear strategy and delivery plan, and by not facing up to the issues that still remain in many properties, the market may not be able to deliver what is needed on its own. I hope that the Government will introduce a comprehensive energy efficiency and retrofit strategy, as well as a road map for getting there. We need long-term solutions to the problems of our cold, stifling or leaky homes, not short-term fixes. There have been calls for Ofgem to have its remit amended to include net zero, so that it can play its part in a comprehensive drive for progress. I hope that the Minister will say today that the Government will take that suggestion very seriously.

My second area of concern relates to the need for a clear vision for delivering more renewables. The Government’s ambitious target of 50 gigawatts of offshore wind by 2030 is extremely welcome, but despite the net-zero and energy security strategies recognising, on paper, that onshore wind has a key role to play in meeting net-zero targets, we do not currently have targets for onshore wind or other forms of renewables, such as solar. The Government have been urged by the industry to set a target for onshore wind of 30 gigawatts by 2030, with £45 billion of gross value added. This has strong public support; BEIS’s most recent Public Attitudes Tracker shows that 80% of the public support it.

The CCC highlighted in its progress report that:

“There remain further opportunities to reduce fossil fuel consumption on a timescale that will help people cope with current very high prices. These include a sustained push for both energy efficiency improvements and electrification, especially in the buildings sector, as well as deployment of onshore wind and solar, which can occur significantly quicker than offshore wind deployment.”


I ask again that the Government reconsider the 2015 ministerial Statement that has put an effective moratorium on onshore wind developments proceeding in England. This must be changed if we are to provide more of the cheap, renewable and homegrown energy we urgently need. If the Minister says in his reply that primary legislation is not necessary and that this does not need to be put in the Bill, I hope that he will commit today to altering the planning guidance to increase the contribution of onshore wind, therefore recognising both the need to put local communities in control and, more broadly—because I do not see it in the Bill—the crucial role of engaging and empowering local authorities if they are to bring their communities with them.

In their the energy security strategy, the Government committed to

“consult … on developing local partnerships for a limited number of supportive communities who wish to host new onshore wind infrastructure in return for benefits, including lower energy bills.”

It was hardly the wholehearted and comprehensive measure that I had hoped for, but it was something. I hope that the Minister can tell us when this consultation will commence and ensure that it aligns with planning guidance, so that communities who want onshore wind can start to access these benefits. We also need to ensure that we do not lose existing onshore wind capacity due to the current rules on the life extension of onshore wind farms. Again, a consultation has been promised: when will we see it?

A related issue raised by Power for People is the need to support community energy, so that people can purchase cheap, clean electricity direct from a local supply company or co-operative, instead of the current situation where local groups have to sell the power that they generate to large utilities that then sell it back to customers. It is asking for changes to be made to the energy market rules to make it affordable, proportionate and simpler for community energy schemes to sell their power directly to local customers. I hope that the Minister will consider including provisions within the Bill to enable these changes to be made by Ofgem.

I will speak very briefly about the use of hydrogen for home and workplace heating. It is clear that the Government view hydrogen as a key part of the future energy mix. While green hydrogen will undoubtedly have a role in some of the hard-to-decarbonise areas, such as fertiliser, cement and steel production, the question of pursuing a role for hydrogen in home heating is much more nuanced and debatable. There are alternatives readily available, and the proposals for a hydrogen levy could potentially bake in subsidies and higher bills for years to come. I hope the Government will look very carefully at the costs and environmental impacts of pursuing the strategy for the use of hydrogen in home heating.

Finally, I will pick up a theme that I have raised before: the current lack of comprehensive governance mechanisms to ensure that we deliver on net zero and, specifically, the need for a net-zero test to apply to decision-making across the Government, which we know from many reports is extremely patchy. Over the last 18 months, calls on the Government to build net zero into the structures and processes that govern departmental spending, prioritisation and decision-making have been raised by business organisations such as the CBI, the Climate Change Committee, the NAO, the Public Accounts Committee and the Environmental Audit Committee. Energy UK has recently highlighted this as a strategic issue which the Bill should address.

I must stress that no one is advocating some kind of bureaucratic tick-box exercise; energy companies and wider industry see such a test as an important mechanism for providing business certainty and clarity of direction from the Government. This sector, along with the others on which delivery of our decarbonisation goals depend, is asking for the Government to be clear, consistent and transparent in the way in which they take decisions not just within BEIS but across Whitehall. Developing a test will give them the confidence to invest, will help the Government to explain their decisions, and, by being transparent and clear, will help bring everyone, including the public, along with the Government, even when decisions are more difficult.

I hope that the Government will raise their ambitions for an energy system that is sustainable in every sense, and one that is based predominantly on homegrown, rapidly deployed renewables. This would be a system that weans us off costly fossil fuels—although I recognise the need for transition—lowers bills, provides warmer homes and improved health, and brings tens of thousands of high-skilled jobs in the energy efficiency and retrofit sector across the UK.