(2 weeks, 3 days ago)
Grand Committee
Lord Fuller (Con)
My Lords, we discussed this scheme in the Chamber some months ago, so I will not repeat all the points here or be so churlish not to recognise that any help for the materials economy that employs so many people—especially the chemical industry, which in turn produces the raw materials that other manufacturers can use for their output—is all to be welcomed.
However, the problem is that the sums of money we are talking about here are insufficient to make a real difference. They are no substitute for reducing energy costs, so that we at least stand a chance of competing in the global race. Of course, the industry is on its knees, suffering the highest energy costs in the western world. A relatively small number of businesses will benefit from BICS, leaving tens of thousands to fend for themselves and continue to pay for the feed-in tariffs, renewables obligations and capacity market obligations. If we just stopped all these well-meaning but counterproductive regulatory layers, we would not need BICS, which does not even start until next year.
With gas prices 12 times higher than the US NOLA benchmark, and TTF gas—upon which ammonia and other raw materials are produced—at €90 per megawatt hour, the need for help is now. Instead, only today, the Government announced a consultation on extending CBAM to refinery products, which will just drive up the cost of industrial raw materials even more. We will never get rich by erecting a high-tariff wall around our economy to keep everyone else out. We do not need more policy money-go-rounds like BICS; we just need energy costs that are comparable with those of our competitors. I hope only that the businesses that stand to benefit from this measure will be around to receive it on 1 April. Until then, we and they will just have to hold our breath.
My Lords, I am grateful for the opportunity to put a couple of questions to the Minister. I am also grateful to the Secondary Legislation Scrutiny Committee, which looked at this in a little detail. It gives a figure for the cost of energy per megawatt hour in Great Britain as £61, and compares that to the cost in France of only £2, if I have understood it correctly, and similarly only £10 in Germany. Curiously, we do not have the figures for the real beasts in the field, which are China, the US, Brazil and India. That would have been interesting.
My question relates to how this will be funded. The department said that cost reductions will be funded through a combination of Treasury funding and changes within the energy system, and that these changes include moving the annual adjustment for inflation under the renewables obligation scheme and the feed-in tariff schemes from the retail prices index to the consumer prices index; and, from April 2028, removing a tax on fossil fuels used in electricity generation. My concern is that, if we do not know what the rate of inflation is at any time, how will we know what the funds to cover this scheme are? With those few remarks, can the Minister satisfy me on that point of how this will be funded?
My Lords, I thank the Minister for introducing these regulations. On these Benches, we recognise the impact that high energy costs are having on businesses and we welcome government measures to provide further support. These regulations implement the British industrial competitiveness scheme which, as the Minister said, is the successor to the British industry supercharger, by exempting eligible manufacturing businesses from the indirect costs of the renewables obligation and the capacity market that suppliers pass on through energy bills. They also allow the Secretary of State once, and before the end of March, to revise the renewables obligation level for 2027-28.
The need for these is clear. The Government’s own impact assessment puts the policy cost for very large industrial users in Great Britain at around £61 per megawatt-hour against £2 in France and £10 in Germany. No manufacturer can compete on those terms. We have long called for more to be done in this space, so we welcome this scheme and its breadth. The supercharger supports around 550 of the most electricity-intensive businesses. This scheme is expected to support more than 10,000 with savings of £35 to £40 per megawatt-hour from 2027. I also welcome the commitment that it will not raise the bills for those who are not eligible.
I have a couple of questions. On timing, I note that applications opened on 1 October and close at the end of play on 30 November. This leaves about five weeks to gather evidence and submit an application that, as I understand it, cannot be amended. What happens to a firm that either misses that deadline or makes an error in its application? Do they need to wait a full year or is there the opportunity to amend, or is a later window available to businesses? What actions are the Government taking to reach the thousands of manufacturers who may not even know that this scheme exists?
Obviously, with any cut-off some businesses are included and by definition some are excluded. Firms must be registered at Companies House, so sole traders and unregistered partnerships fall outside. A site must use at least 33 megawatt-hours a year, and the relief itself is tiered. Those tiers are quite sharp as well, so any firm that falls just below that tier could receive substantially less support. Eligibility also depends on lists of industrial and commodity codes, and that, again, produces edges.
On funding, I note, as has been said, that it comes partly from moving the inflation adjustment on the renewables obligation from RPI to CPI and removing the tax on fossil fuels in generation from April 2028.
Although we welcome this support, we want to be clear that this cannot be the whole answer in terms of government support to industry with energy costs. This is only supporting a small section of our economy. For example, the hospitality sector and small and medium-sized enterprises face the same costs and they sit outside this scheme. Particularly for hospitality and small businesses, the cost of energy is having a real impact on their trade and turnover.
Policy costs are only one part of the problem. Gas still sets the wholesale price at least 60% of the time. Until we build faster, connect the grid sooner, help with energy efficiency or have energy market reform, these problems will persist. Do the Government accept that electricity cost support must reach beyond these sectors, and what work is under way to support SMEs and the hospitality sector outside of this cap?
The support mechanism is also complex to apply for and complex to administer, so I encourage the Government to do more to automate this system, as they are doing with residential electricity costs, so that the better use of data by government can help provide that support.
This is a sensible and long-overdue step. We welcome this regulation but I hope the Government are intending to do more in this space to support industry with the cost of energy.
(3 months, 4 weeks ago)
Lords Chamber
Lord Stockwood (Lab)
The Digitisation Taskforce and the access to data have many benefits, not only on promotions but for the issuers of shares to understand where exactly the shareholders are on their cap tables. We hope that that increased awareness of where shareholders and those transactions are will be covered by the current taskforce’s recommendations.
My Lords, my noble friend has identified one category of vulnerable small shareholders. There is an increasing problem of scams, to which smaller shareholders are most at risk. What cyber security is being extended to that category of risk?
Scams: fraudulent activity where people masquerade as a company wanting to buy back the shares—impersonation. Online shareholding accounts are particularly vulnerable to this type of activity.
Lord Stockwood (Lab)
Part of the FCA’s consumer duty is to ensure that consumers are well informed and protected. The Home Office has issued another policy on protection from particular scams. I am happy to write to the noble Baroness with the specific duties. The FCA has a consumer duty overall and that would fall within that somewhat.
(5 months ago)
Lords Chamber
Lord Stockwood (Lab)
It is really important not to conflate Royal Mail delivery and the Post Office, but Ofcom is committed to the universal post offering and the targets, so I will have to write to the noble Lord on this particular question, because this was the extent of what I researched for this particular Answer.
Does the noble Lord share my concern that perhaps the postal service and the Royal Mail are focusing too much on parcel delivery and not enough on a universal letters service that plays to elderly populations in rural areas? If we go fully digitalised and if we lose the postal service, it would be a very retrograde step for that group of people.
Lord Stockwood (Lab)
The noble Baroness raises a really important point about making sure the universal service offering is not to the detriment of people who are remote or not digital. Its CEO has confirmed that Royal Mail is focused on improving all aspects of its service across postage and parcels. The Government will be putting pressure on Ofcom to ensure that Royal Mail improves all its services without detriment to any particular user group.
(6 months, 3 weeks ago)
Lords Chamber
Baroness Lloyd of Effra (Lab)
We have seen the damage that volatility and energy price spikes have caused in the past. That is why the long-term plan towards a clean energy future will bring more stability, more resilience and more homegrown power.
In respect of the North Sea, as I mentioned earlier, we will introduce new transitional energy certificates that will enable some oil and gas production in areas adjacent to already licensed fields that are licensed via a tieback or areas that are already part of an existing field. That is what we are doing. The only way to take back control of Britain’s energy and bring down bills for good is with clean, homegrown power.
My Lords, I shall press the Minister on North Sea oil, as she rehearsed it this afternoon. We just had a debate on clean energy. My noble friend Lord Moynihan on the Front Bench said that 70% of gas imports to the UK are coming from Norway and that they are potentially under a challenge from the Norwegians because they are not that keen on exporting their oil to a third country. Are the Government apprised of that? That surely should be setting off alarm bells about why we need to take more oil from the North Sea.
Can I also just press the Minister on the urgent case for the phytosanitary agreement to be reached with the European Union? As my noble friend Lord Lansley said, our largest export now is food manufacturing. Salmon is part of that, and it is obviously very perishable. It is vital that we get a phytosanitary agreement with our nearest importing neighbours at the earliest opportunity.
(9 months, 1 week ago)
Lords Chamber
Lord Stockwood (Lab)
I share some of the views that the noble Lord put over. As I have learned from my 20-plus years in business, the role of government is to set the regulatory conditions so that business can do the work in growing the economy. What we are seeing from the Government is a commitment to reduce the regulatory burden overall. Our Regulation Action Plan commits to reducing the £22 billion annual burden by 25%. There are reforms in place, and the unlocking business consultation means that we will take direct feedback from the market. It is beholden on us to ensure we set the conditions for businesses to thrive, while also ensuring that we have the right regulation in place so that we do not see the abuses of power that have been suggested by these particularly restrictive covenants.
My Lords, does the Minister agree that the CMA also has a role to play in looking at the work of the Groceries Code Adjudicator? There is a great imbalance of power between the big supermarkets and the very small horticultural businesses and fruit growers in this country. Does he agree that it would be better if the Groceries Code Adjudicator could take an own-initiative inquiry off its own bat, rather than waiting for a producer to come forward with a complaint? That producer could so easily be identified and possibly lose their contract with the supermarket.
Lord Stockwood (Lab)
In my relative newness to government, I thank the noble Baroness for her questions. Overall, it is correct that the CMA’s regulatory framework should have independence. I would love to pick up that discussion outside the Chamber; I do not know the detail of that, but it sounds like an important thing that we should follow up on.
(11 months ago)
Lords Chamber
Baroness Lloyd of Effra (Lab)
Earlier this year, the Government published the Digital Inclusion Action Plan, which set out a number of the measures that we are taking, on top of the importance of the digital infrastructure being in place. They include measures on access to devices and the skills and confidence to enter the online world. There are social tariffs that consumers can use; they should contact their providers to make sure that, if they are eligible for them, they can take them up.
My Lords, the noble Baroness will be aware that the 5% hardest to reach in rural areas are being further disadvantaged by the taking out of landlines. Storm Arwen took all the landlines and mobile phones out over a large area of the north-east and north Yorkshire for nine days. People must be able safely to summon help in an emergency. That will not happen if these landlines are taken out.
(11 months ago)
Lords Chamber
Lord Stockwood (Lab)
I thank my noble friend for the reminder. I agree that the net-zero transition creates the most attractive and best use of our capabilities in the UK. I am happy to support his comment.
My Lords, given the distances in rural areas to charging points for those with electric cars, is it not a bit of an own goal to impose an upper mileage charge at this stage?
Lord Stockwood (Lab)
I thank the noble Baroness for her question. I do not believe that that is the case. We have a commitment to our climate goals, while balancing fairness in our tax take.
(1 year, 3 months ago)
Grand CommitteeMy Lords, I welcome these regulations and congratulate the Minister on introducing them. I have a couple of questions and will also support some of the comments made by the Secondary Legislation Scrutiny Committee.
Can the Minister tell us when the department will undertake the guidance that it has committed to produce before the regulations come into effect? Will the House have sight of that before they come into effect?
Paragraph 5.8 of the Explanatory Memorandum states:
“The whole super-complaints process must … typically be completed within 120 days, which reduces to 105 days in the event that an entity has retained eligibility status”.
Is that feasible? Can that actually be delivered within the procedure? I understand from the noble Lord, Lord Stevenson, that this is meant to be a streamlined procedure, but it is important that, if someone is limited to one complaint in a six-month period, they have the time to develop that complaint to the full, and 120 days might be quite a tight timetable.
Paragraph 5.9 of the Explanatory Memorandum says:
“Entities must not submit more than one complaint in a six-month period”.
Again, this may mean that a genuine complaint that is completely different from the complaint already before Ofcom will be delayed, so it is not streamlining the procedure at all. It also says, “except in specific circumstances”—I wonder what those circumstances might be—and goes on to say:
“Super-complaints should not merely repeat the substance of another complaint that has been made publicly available by Ofcom within the last two years and Ofcom will reject a complaint on this basis”.
On the two points from the Secondary Legislation Scrutiny Committee, I share the concern expressed by the noble Lord, Lord Stevenson, that there is neither an appeals mechanism nor the intervention of an ombudsman. For what reason was an ombudsman not considered appropriate in these circumstances? Given the pressure on Ofcom and the restrictions placed on it, particularly following on from the Online Safety Act, does the Minister feel absolutely convinced that Ofcom has all the resources that it needs at its disposal to deal with the super-complainants? Paragraph 49 of the committee’s report says:
“We note the Department’s explanation but remain concerned about the adequacy of the resources available to Ofcom, given its already extensive online safety responsibilities would be expanded further by this instrument”.
I have one final question, as I was not as closely involved in this Bill as others were. What happens to those individual complainants who do not fall within the super-complaint? Do they have a separate procedure under separate regulations? With those fair words, I welcome the opportunity to scrutinise these regulations.
My Lords, I thank the Minister for her comprehensive introduction. These regulations aim to establish a formal mechanism for super-complaints to be made to Ofcom under Section 169 of the 2023 Act, as we have heard. Potentially, this represents a significant step forward in implementing the Act’s vision for civil society oversight of our online landscape. The underlying purpose is clear: to enable eligible entities to raise systemic online safety issues, alerting Ofcom to significant risks or harms that might not otherwise come to its attention. These super-complaints are indeed a vital mechanism.
I welcome the clear intent behind these regulations and acknowledge the responsiveness of the Government and Ofcom to the consultation process—not always the case. Several positive changes have been made in response to stakeholder feedback, strengthening the regime’s accessibility and effectiveness. The removal of a statutory pre-notification period is a crucial improvement, enabling more timely responses to urgent online safety issues. There is the reduced administrative burden for organisations that have previously been deemed eligible. The reduction in assessment periods from 30 to 15 days demonstrates a certain sensitivity to concerns about administrative burden and procedural delays. Then there are restrictions on Ofcom’s ability to pause timelines; placing limits on Ofcom’s ability to stop the clock when seeking further information from complainants is a welcome development, addressing fears about unnecessary delays in addressing urgent harms and improving transparency.
The regulations have expanded the eligibility criteria to include newer expert organisations, which directly addresses concerns about barriers facing emerging voices in what is a rapidly evolving field, in our view allowing for greater inclusivity. This approach seeks to provide a future-proofed way of enabling a range of organisations to access the super-complaints mechanism in a fast-changing online environment. Then there is the flexibility in complaints submission. The ability for an eligible entity to withdraw an initial complaint and submit a replacement, effectively prioritising a different issue, is a helpful measure to ensure that the most important concerns are addressed.
(1 year, 7 months ago)
Lords ChamberI thank the noble Baroness for that question and reiterate that steel is an absolute top priority for this Government. We have made a generous conditional offer on financial support for British Steel, and negotiations are continuing with the company and trade unions to find the best possible outcome that will protect jobs, steel-making and taxpayers’ money.
We obviously cannot pre-empt the outcome of the consultation process. However, we have extensive cross-departmental contingency plans in place to ensure that British Steel workers, their families and the wider Scunthorpe community will be protected. They include plans to establish a task force, should this become necessary, which will consider and prioritise measures that create jobs and support the local economy through recovery.
My Lords, is it really the case that neither the Scunthorpe nor the Teesside steelworks will remain open? Does that leave us as the only major country in Europe without any steel-producing facility?
The Government will simply not allow the end of steel-making in the UK. We are looking seriously at options for primary steel-making here. With the help of independent experts, we are reviewing the requirements and viabilities of technologies for the production of primary steel in the UK, including direct reduced iron. As I say, steel is an absolute priority for this Government, and we will be producing a steel strategy very soon.
(1 year, 11 months ago)
Lords ChamberI will need to double check that. One of the complications is that there are already four schemes running on different principles. I will need to double check the definitions of the groups the noble Lord is talking about, but I believe that they are included. If I am mistaken, I am sorry, but I believe they are included in one of the schemes. I understand that people who left before the Horizon scandal came to light—I apologise if I have got this wrong—will be included in one of the schemes.
My Lords, I add my voice to others speaking up for the rural network. Could the noble Baroness examine the model currently on the table, which seems defective? The price of stamps has gone up incrementally over the past two years, yet the service has gone down. Saturday deliveries have been taken away and I understand that posties, who are the heroes on the ground delivering the post in all weathers, have been told they can have no overtime this autumn. Could she use her good offices to examine that and make sure that we have a rural network that is fit for purpose?
The noble Baroness is talking about the Royal Mail service, rather than the Post Office. I know that there are separate discussions with the Royal Mail about the future delivery programme. I do not have the details in front of me, but if I can find details, I will write to the noble Baroness.