Great British Energy Bill

Baroness McIntosh of Pickering Excerpts

Committee stage
Monday 13th January 2025 Lords Chamber

Such is the great lack of clarity in how GBE will operate that I believe there is even justification for Amendment 87, in the name of my noble friend Lady McIntosh, to which I have added my name. This would require a Motion for resolution in both Houses before the Secretary of State could issue any directions. I look forward to hearing my noble friend introduce her amendment. I expect that the Minister will not be inclined to accept it in its present form, but I certainly look forward to hearing from him about how he proposes to ensure that GBE is more accountable and more transparent in pursuing its objectives and believe that the Government need to bring forward their own amendments on Report.

[Baroness McIntosh of Pickering (Con)]

My Lords, I wish to speak to Amendment 87 in my name and to take this opportunity to thank my noble friend Lord Trenchard for lending his most welcome support to the amendment and the noble Earl, Lord Russell, for introducing this little group so eloquently and strategically. He is absolutely right to point out that the difference between his amendment and the amendment in my name and that of my noble friend Lord Trenchard is the difference between an Oral Statement which can just be debated and, in our case, the need for a Motion of resolution in each House of Parliament. To put his mind at rest, I cannot believe that that would need to delay the process at all. It could be called in exactly the same amount of time—probably half a day, an Oral Statement possibly taking an hour, or 30 minutes in each House.

The Minister, who I do not think is replying to this group, said in response to the first group that he believes and hopes that Clause 6 will never be used. But the very fact that it is in the Bill means that it is there to be used should the circumstances arise and I believe that the magnitude is such that it is important to debate it and to carry each House with the Government. I cannot believe that that would be a delaying tactic; I think it is absolutely essential. The noble Lord also, in reference to the question of giving directions, equated the situation to that of the National Health Service. It is clear to me that, were such a direction to be given to the National Health Service, that would be debated in each House of Parliament as well, particularly in the circumstances that the noble Earl, Lord Russell, related of a potentially dangerous one-off situation which we understand Clause 6 envisages.

Words were said earlier about Drax and I do not wish to dwell on that, but Drax is a major contributor to the whole of the Yorkshire and Humberside regional economy. I believe that we should go back to growing the fast-growing willow coppice and—a name I can never pronounce—miscanthus, as that would help Drax to have a local source of produce on which to rely. It would also help the farmers at this very difficult time for them.

On the question of directions and consultation raised by the noble Lord, Lord Cameron, and others such as my noble friend Lord Trenchard, it is important for it to be in the Bill that, before giving a direction, the Secretary of State must consult. Clause 6(3)(b) simply says

“such other persons as the Secretary of State considers appropriate”.

Well, it would be helpful, if there were a situation of some danger, for local authorities to be consulted, because they are the first responders in many cases. I am slightly baffled that they have not been mentioned so far. Do the Government intend to consult them? In previous debates it was also raised by the Association of British Insurers that, in these circumstances, potential and actual investors may need to be consulted if such an emergency were to arise. I do not think they have been mentioned so far. Again, is that something the Government have in mind?

I want to sound fairly relaxed about this, but I do believe that the amendment in the names of myself and my noble friend Lord Trenchard is preferable to the wording of the noble Earl’s Amendment 66 and I hope that the Government will respond favourably to our very modest request that a resolution should be debated in each House of Parliament and potentially voted on before the directions are adopted. I hope the Minister will also respond to my queries about who is to be consulted and why there are not more of them listed in the Bill. With those few remarks, I commend my amendment.

[Lord Howell of Guildford (Con)]

My Lords, it must be maddening for the Minister that a Bill specifically designed to exclude investment in the nuclear sector keeps on dragging back to the nuclear sector. This is for the obvious reason that these issues are completely and utterly inseparable. Investment in the energy sector generally has got to take account of all the different aspects, and nuclear is obviously one of them.

The Minister raised the question yet again of Sizewell C being a replica, and obviously he thinks I am being very boring on this, but can I plead with him to go back to his department and point out the obvious fallacies in the whole replica concept? If Sizewell C were to go ahead, it would be being constructed in the late 2020s and the early 2030s, probably for completion and producing kilowatts in the late 2030s or later. That will be approximately 25 years beyond the original design of Hinkley C, which was originally conceived under the Blair/Brown Government in the late 2010s.

Everyone in the civil nuclear sector knows that this is a highly fluid situation in which technology is rapidly developing and is going to create, along with the arrival of new things such as AI, a completely new set of designs, which will mean that by the late 2020s the Hinkley design will be frankly out of date. The idea that something that is 20 years old should be replicated is absurd in any advanced technology, and particularly absurd when it comes to electricity generation and civil nuclear power. If one just thinks about it for a moment, one will realise the replica argument carries absolutely no weight at all. I very much hope that any new nuclear installations—whether 300, 500 or gigawatt size—are definitely not going to be a replica of what has occurred at Hinkley C.

This is a view that is held very widely in France, where they say this design is unbuildable and should never be repeated, and it is the view of many other technicians involved in new nuclear development, which I strongly welcome in all sorts of shapes and sizes, but the idea that we should build a replica 20 years after the last one is frankly absurd. Please would the Minister go back to his department and point this out?

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[Baroness McIntosh of Pickering (Con)]

My Lords, I lend my support to my noble friend and congratulate him on moving his first amendment. As in Norfolk, there is a huge problem across North and East Yorkshire, where tenant farmers face being bounced off the land that they currently farm for solar panels. I hope that the Minister responding to this little group of amendments will use their good offices to ensure that solar panels are best built in more appropriate places. I say that as honorary president of the UK Warehousing Association, which has a campaign—of which the Minister, the noble Lord, Lord Hunt, is aware and, I hope, supportive—to ensure that we can get solar panels off the ground, particularly in productive grade 1, 2 and 3 agricultural land, while also helping warehouses to create more of their own energy.

I believe this is a debate to be had. I support those who say that it is perhaps not the role of Great British Energy to do this, but we have to raise this at every turn. If we run out of productive farmland on which to grow food—and to allow tenant farmers of every generation, including new entrants, to enter the market—it would be a very sorry state indeed.

Great British Energy Bill

Baroness McIntosh of Pickering Excerpts

Committee stage
Tuesday 17th December 2024 Lords Chamber

[Lord Whitty (Lab)]

My Lords, I have a short but crucial amendment in this group—Amendment 51A—which deals with the key issue of employment. It rather shocked me when I checked the wording of the Bill that the words “employment”, “skills” “training”, “retraining”, “upgrading” or even “fair transition” are not mentioned in it. At one of his briefing meetings, I asked my noble friend the Minister for a clear chart of the various bodies we are now envisaging having influence on energy policy—NESO, Ofgem and now Great British Energy and Great British Nuclear. None of them have as a central mission to provide the new and upskilled workforce that will be needed to deliver both the grid and the new forms of energy which will take us to clean energy by 2030 or 2035.

I also looked through the previous Act of the last government—the Energy Act 2023—which is 473 pages long. It provides much of the body of approach to energy policy which the new Government have largely adopted. From a rough-and-ready word check, I do not think that the words “employment”, “skills” and “new skills” appear in that either.

If we are to deliver a clean energy system, from generation to delivery, and energy efficiency in our homes, offices and buildings, as well as a transformation of our industry and transport, we will need a much more skilled, or differently skilled, workforce than the one we have at the moment. That requires somebody to take responsibility for that. None of the bodies has that as one of its central tasks. That needs to be remedied before this Bill disappears from this House.

We need to ensure that those currently employed in sectors of energy which will reduce in gas and oil have a high level of skills which will be relatively easily transformed into skills delivering the new clean energy—or those further down the line delivering home efficiency and other forms. We do not have that in the energy policy. It is mentioned in passing in one of the White Papers, but it is nowhere in proposed legislation. This amendment would at least put it in the statement of priorities required to be issued by NESO early in the transition. It will need following up; it will need more than that. It will need substantial intervention, provision of retraining, apprenticeships and skills, and redefinition of jobs if we are to achieve the timescale and trajectory to net zero that we are envisaging.

This amendment, which is supported by the TUC, would put a marker down that we need to address this issue. Without a transformation and extension of the workforce, we will not deliver the full energy system in anything like the timescale currently envisaged. Can my noble friend the Minister ensure that the Government come back with some way of reflecting in this Bill that employment and the transformation of employment are an important priority, as is assigning responsibility for them to one of the many bodies now in this arena? It may not be regarded by many as central to this Bill, but it is central to the delivery of the outcome. I put down this simple amendment at this point, and I will return to it at a later stage.

[Baroness McIntosh of Pickering (Con)]

My Lords, there are a number of interesting and thought-provoking amendments in this group. I am delighted to follow the noble Lord, Lord Whitty, in speaking to his. I will speak to my Amendment 55 and ask the Minister to respond on a number of issues when he winds up on this group.

I felt that this amendment was necessary to probe the thinking of the Government. Clause 5(7), on strategic priorities and plans, says:

“The duties to consult imposed by subsections (4) to (6) may be satisfied by consultation carried out before this Act comes into force”.


What is the timetable for those consultations? Can the Minister assure the Committee that they will be meaningful and last, as in the terms of my Amendment 55, for the usual 12 weeks—ideally not covering the summer or Christmas holidays, which is so often the case? Will they be meaningful and be over a 12-week period, and will they consult farmers, fishermen and local communities?

Why are those three groups important? With farmers, as the Minister knows because we debated this in Questions and earlier in Committee, the Government are minded to take over highly productive land—often grade 2 or 3 land—for solar farms. In preparing for today, I have been issued information from David Rogers, an emeritus professor of ecology at the Department of Zoology at the University of Oxford. He is not personally known to me, but he has some very good figures.

I think the Government are underestimating, as of today, the amount of agricultural land that will be taken out of useful production. Let us look at the five most affected constituencies. In Newark, it is a land take of 7.9%. In Rayleigh and Wickford—I declare that I represented Rayleigh many years ago in the European Parliament—4.9% would be taken out of production. Sleaford and North Hykeham will have a reduction of 4.62%. In Newport East, the figure will be 4.6%, and Bicester and Woodstock will see 3.96% out of production.

We have to have a very grown-up debate about what the land use framework will be. I do not think that it will be published before this Bill passes, but I pay tribute to the work of the noble Baroness, Lady Young, in this regard. She has put an inordinate amount of work into this. There will be other opportunities to discuss the impact on farming. I hope the Minister will give us an assurance today that farmers will be included in the consultation and say what form the consultation will take.

I turn now to fishers and the spatial squeeze they face. The National Federation of Fishermen’s Organisations provided a briefing, at my request. It is the first to understand that fishers must share the sea, and if other industries expand so much that fishing is squeezed out of its traditional grounds, they obviously do not want to see the industry collapse. In the NFFO’s view, it is a mistake that when a new wind power station is built or protected areas are designated, the fishers who previously worked there are deemed simply to go and fish somewhere else; that is often not the case. Fish can be caught only in the places where they live and breed. They have been caught commercially in UK waters for centuries, and the areas where they feed, migrate and breed are well known, so expecting displaced fishing efforts to simply resume somewhere else entirely misses the point.

In the NFFO’s view, there is an absolute need for a strategic approach. The UK’s needs for food, energy, communication, transportation, waste disposal and recreation all intersect at sea, and the interests of fishers —and, in fact, of all users—can be met only with a strategic approach to using the marine space. How will the Government use the consultation to ensure that that is achieved, and that fishers’ voices will be heard when such a plan is developed, to ensure their future?

I turn to the work we did on the EU Environment Sub-Committee, chaired by the noble Lord, Lord Teverson. We took evidence on the environmental impacts of these developments, particularly offshore wind farms and their future replacements, on marine life and the future of the fishers. The NFFO views with increasing concern the environmental impacts of such vast industrial developments in the sea. It makes a plea that, as we go forward, any strategic overview will be consulted on. A ban on fishing is obviously not an option, in its view. We hope that fishing will not be automatically damaged through any development of the marine environment, but that common ground will be found, so to speak, in any consultations on developing strategic priorities and plans within the remit of Clause 5.

I turn finally to local communities. It is regrettable that in the past, planning permission has been granted separately for offshore and onshore wind farms, because then, a separate planning application takes place, particularly for offshore windfarms, wherever the energy reaches the shore. That poses all sorts of problems that really came to life during the general election. Perhaps it is no surprise that we have a Green Member of Parliament for part of the Suffolk coast, because if you are going to have a large substation created separately from the original planning application for the offshore windfarm, that poses problems for the Government—whichever Government it happens to be.

Also, there is alarm that the Government are planning to take back control, so to speak, of planning decisions. Under the proposals the Government envisage, we are taking the decision away from local communities— I pay tribute to all who have served and who continue to serve as local council representatives—and giving it to the Secretary of State. That is wrong, because local communities should be asked to decide where these electricity substation superstructures will be placed and, just as woefully, where the overhead pylons will be placed. I still bear the scars, as the then newly elected Member for the Vale of York, from when we were deemed to take an additional, second overhead line of pylons. This does not go down well with local communities.

I hope the Minister will look kindly on the points I have made and listen to the voices of the farmers, fishermen and local communities as the Government proceed to develop their strategic priorities and plans.

--- Later in debate ---

This has been an interesting debate. We think we have got the balance right between what should be in the legislation and what should be left to a proper government statement of strategic priorities, within the constraints set by Clause 3. I have no doubt that we will have further debates on this, but this has been a very good airing of some of these important issues.

[Baroness McIntosh of Pickering (Con)]

May I have a reply, if possible, on having joined-up planning applications for offshore oilfields and substations or pylons, so there is one planning application for the whole project?

[Lord Hunt of Kings Heath (Lab)]

I am sorry, I should have responded. Clearly, the noble Baroness will know from the Clean Power 2030 Action Plan the Government’s intent with regard to planning generally. She will have seen what we said in it about seeking to reform the whole planning process. I will ensure that the point she makes is embraced within that. I see the force of her arguments.

--- Later in debate ---

[Baroness Noakes (Con)]

My Lords, I have added my name to Amendment 51 from the noble Lord, Lord Vaux, and I also have four other amendments in this group. One of my concerns about the Bill is that Great British Energy is the last in a long line of unelected quangos, which have precious little parliamentary oversight and weak accountability processes. All the amendments in this group in one way or another seek to increase the role of Parliament, and thereby go some way towards remedying the accountability deficit that exists in the Bill.

As the noble Lord, Lord Vaux, has already reminded the Committee, the Constitution Committee has called out Clause 5 as being disguised legislation. I agree with that. I do not agree with it in relation to Clause 6, which I will explain when we get to that clause. The important thing is that this underlines the need for strong parliamentary processes around Clause 5.

Amendment 51 from the noble Lord, Lord Vaux, is important. If the Secretary of State delays setting out his strategic priorities, the company, Great British Energy, will be left rudderless and may start to spend taxpayers’ money in ways that are not in line with what the Secretary of State wishes to prioritise. Alternatively, a less generous perspective is that the Secretary of State might delay issuing the statement of strategic priorities in order to delay laying it before Parliament and thereby exposing it to public scrutiny.

There is no unanimity even among the green lobby as to what would amount to a good use of taxpayers’ money under the Great British Energy banner. Some of the things that the Secretary of State might choose to prioritise may well horrify some of the climate activists. We might expect nuclear to be one of those examples. The Secretary of State could probably get Great British Energy to act in accordance with his wishes without going through the Clause 5 process by using—or more likely, threatening to use—the Clause 6 power of direction, which we will debate later. He could thereby sidestep public and parliamentary scrutiny for quite some time.

Whichever analysis is the correct one, it is clearly important that we ensure that there is a public statement of priorities as soon as possible. The amendment from the noble Lord, Lord Vaux, generously allows for six months after the Act comes into force. I could easily argue for less time, but six months is good enough for today’s debate.

On the question of timing, I also note that in Clause 3 there is no time limit for the Secretary of State to lay his statement after he has prepared it. Amendment 51 concentrates on a time limit for the preparation of the statement, but similarly does not have a time for when it has to be laid before Parliament. That is another defect in this clause that we will need to seek to remedy on Report.

The noble Lord, Lord Vaux, has already referred to some of my amendments. Amendment 119 is another way of making sure that the strategic priorities statement is pursued quickly. It allows Clause 5 to come into effect immediately after Royal Assent, but the rest of the Bill cannot come into effect until the statement is laid before Parliament. Importantly, that means that Great British Energy could not make any practical progress until the statement of strategic priorities had been dealt with in accordance with Clause 5.

Amendment 52 tackles a different problem, namely the toothless involvement of Parliament in the statement of strategic priorities. As we have heard, under Clause 5 the Secretary of State merely has to lay a copy of that statement, or any replacement statement, before Parliament. That is it. Parliament has no say whatever. My Amendment 52 gives each House of Parliament 40 sitting days to resolve not to approve it, and in that event the Secretary of State has to withdraw it and have another go. That is the procedure adopted, for example, in relation to the national procurement policy statement published under Section 13 of the Procurement Act 2023. As the noble Lord, Lord Vaux, has suggested, it is probably the lightest of the parliamentary procedures that are available to give Parliament some opportunity to challenge the Secretary of State’s priorities.

The amendment from the noble Earl, Lord Russell, is in similar territory but would require the Secretary of State to table a Motion. It does not, however, specify what that Motion might be or the consequences if the Motion were not agreed. There could be other formulations for parliamentary oversight of the strategic priorities. The important point is that it should not be a “take it or leave it” situation when Parliament is given the statement of strategic priorities. Parliament is entitled to some substantive involvement in the priorities.

My Amendment 128 is a companion amendment to Amendment 52. It is similar in structure to Amendment 119 so that the commencement of the Act after Royal Assent, other than in relation to Clause 5, would be delayed until 40 sitting days had passed. That would ensure that GBE could not be operationalised until Parliament had had an opportunity to consider the statement of priorities. That is a belt-and-braces addition to Amendment 52.

Lastly, my Amendment 58 in this group is also intended to enhance Parliament’s oversight of Great British Energy. Under Clause 5(8), Great British Energy’s articles of association have to ensure that GBE will publish its own strategic plans and act in accordance with the statement of strategic priorities. My Amendment 58 goes further and would require GBE to send a copy of the plans to the Secretary of State, who then has to lay them before Parliament. It is clearly insufficient for Great British Energy simply to upload its strategic plans to its website. There needs to be a formal communication of those plans to Parliament. That is all that my amendment is aimed at, and I hope that is not controversial.

The broad thrust of all the amendments in this group is effective parliamentary engagement. The Minister might not like the detail of the amendments, but he ought to subscribe to the notion that effective parliamentary engagement in the work of quangos is necessary. I hope he will see that the parliamentary involvement allowed for in the Bill falls short by some way. I am sure the whole Committee would be delighted if the Minister were to take this issue away and bring forward government amendments to achieve proper recognition of the role of Parliament in Great British Energy’s scrutiny. If he is unable to do that, I am sure we will need to return to this aspect on Report.

[Baroness McIntosh of Pickering (Con)]

I will speak to Amendments 53 and 90 in my name. Before I do, I lend my support to the two authors of the other amendments who have spoken. In particular, I congratulate the noble Lord, Lord Vaux, on his amendment and on setting out the problems of Clause 5.

I am a fan of the National Wealth Fund. I have been watching the Norwegian series on BBC Four, which ended at the point when Norway set up its sovereign wealth fund with the proceeds from oil and gas in the North Sea. I could not quite understand why we did not do the same when we were receiving all the profits that we did. We have fallen behind Norway in living standards in that time.

The points from the noble Lord, Lord Vaux, about the relationships of GBE and its ability to raise funds, were very well made. Previously in Committee we have questioned what its relationship to the National Wealth Fund will be. This goes to the heart of what the national transition plan for the National Wealth Fund will be. We keep hearing that there will be a transition plan, but I would be interested to know what that plan will be and what its relationship with the National Wealth Fund and GB Energy will be.

When will we see the sector-specific road maps for the five priority sectors? Will they be in the impact assessment or come at a later stage? Some clarity in this regard would be good, as well as some greater engagement at this stage between investors, both those of the National Wealth Fund and GBE, to raise these new funds, and to have local authorities develop projects and propositions which are investable as well. I lend my support to the amendments in this group in the names of the noble Lord, Lord Vaux, and my noble friend Lady Noakes.

Private Low-carbon Investment: Green Finance Institute Report

Baroness McIntosh of Pickering Excerpts

Monday 9th December 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, the noble Lord is absolutely right that this is an important area of policy. We reckon that buildings account for 31% of total UK emissions, and heating is 75% of that proportion of emissions, so I very much take his point that there is an urgent need to make progress. I cannot give him an exact time. Looking at international experience of these kinds of schemes, it is not altogether positive. In the US experience, for instance, it may have worked for multi-occupational commercial properties but, for individuals, it does not seem to have made much progress.

[Baroness McIntosh of Pickering (Con)]

My Lords, does the Minister not share my disappointment that his Government have no plans to review the level of the warm homes discount? Given that there does not seem to be any urgency in renovating existing homes, will he use his good offices to put pressure on the Government to review the level of the warm homes discount? I refer to my interest as president of National Energy Action.

[Lord Hunt of Kings Heath (Lab)]

My Lords, this is the third time the noble Baroness has asked me this question in the last two weeks. I am afraid that we have not moved on from that position. On the warm homes plan, as she will know, we made it clear in the Budget that we will see a total investment of £3.2 billion in warmer homes across 2025-26. She is right that making progress in relation to energy-efficient homes is very important indeed.

Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2024

Baroness McIntosh of Pickering Excerpts

Monday 2nd December 2024 Grand Committee

[The Minister of State, Department for Energy Security and Net Zero (Lord Hunt of Kings Heath) (Lab)]

My Lords, the draft order was laid before Parliament on 22 October. The UK Emissions Trading Scheme, the UK ETS, was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020, otherwise known as the 2020 order, as a UK-wide greenhouse gas emissions trading scheme contributing to the UK’s emissions reduction targets and net-zero goal. The scheme is run by the UK ETS authority, a joint body comprising the UK Government and the devolved Governments. Our aim is to be predictable and responsible guardians of the scheme and its markets.

We have brought forward this SI to enable several important changes and improvements to the scheme. It resets the UK ETS cap to be in line with the top of the net-zero consistent range. The cap sets a limit on how many allowances can be created over the trading period, which runs from 2021 to 2030, and in each year. That level reduces over time to drive down total emissions. When this scheme was established, the cap for the legislated period of the UK ETS, from 2021 to 2030, was set at 5% below the UK’s expected notional share of the EU ETS cap for the same period. However, this was not consistent with the UK’s net-zero trajectory for the traded sector. This instrument brings the overall UK ETS cap in line with our net-zero target and carbon budgets under the Climate Change Act.

This statutory instrument also reduces the industry cap, which is the total number of allowances which can be made available to existing installations for free, if no cross-sectoral correction factor mitigation is applied. This SI reduces the absolute level of the industry cap while increasing its proportion of the overall cap. While the share of allowances set aside for this purpose will increase from 37% to 40%, the reduction in the overall UK ETS cap means that the industry cap will fall. That will help to mitigate the risk of carbon leakage across participating sectors while maintaining an effective incentive to decarbonise.

The statutory instrument creates a flexible reserve of allowances for maintaining market stability and sufficient carbon leakage mitigation. In addition to allowances specifically created for this reserve, unallocated free allowances from the industry cap and designated free allowances that are returned by operators due to changes in participant eligibility or activity level reductions will also stock the flexible reserve. The flexible reserve can be used to increase allowance supply for market stability purposes, if the cost containment mechanism is triggered. The flexible reserve can also mitigate application of the CSCF through a uniform reduction to all eligible existing participants’ free allocation if the eligibility for free allocation exceeds the industry cap.

Under current legislation, carbon dioxide released through flaring in the upstream oil and gas sector is included in the UK ETS, as it is within the scope of the regulated activity of combustion. This SI introduces CO₂ released through venting in the upstream oil and gas sector into the scope of the UK ETS for installations already covered by the scheme. That means that such emissions will also be subject to a carbon price.

The controlled processes of venting and flaring can sometimes be essential for safety purposes. They are also used in more routine situations where the oil and gas hydrocarbons are unable to be used, exported or reinjected without the CO₂ being removed. The removed CO₂ can then be released in the process of flaring, when waste gas—including the stripped-out CO₂, as well as combustible elements—is ignited, or venting, where unignited gas is released through a vent. The legislation will remove a perverse incentive whereby operators could routinely vent gas that contains carbon dioxide without it being subject to a carbon price, even though it would, if flared, constitute reportable emissions for the purpose of the scheme.

In line with the original policy intent, the instrument extends legislative amendments made by the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 2) Order 2023 to Northern Ireland. The amendments include capping aviation free allocation at 100% of emissions, clarifying the treatment of carbon capture and storage plants, and amendments to free allocation rules for electricity generation.

In 2022, a memorandum of understanding between the UK Government and the Swiss Government was signed, setting out the intention to include flights from the UK to Switzerland in the UK ETS. Flights from Great Britain to Switzerland were brought into the scope of the UK ETS on 1 January 2023 by the Greenhouse Gas Emissions Trading Scheme (Amendment) (No. 3) Order 2022. The statutory instrument before us extends the scope to cover flights that depart from an aerodrome in Northern Ireland and arrive at an aerodrome in Switzerland.

On enforcement and penalties, scheme regulators are responsible for enforcing compliance, including operational functions such as issuing penalties. The statutory instrument makes a number of amendments to the levels of scheme penalties to ensure consistency and proportionality of enforcement for all operators. It also introduces a new deficit notice, with an associated penalty, to strengthen enforcement of the fundamental scheme obligation to surrender allowances equal to an operator’s annual emissions.

Finally, this instrument makes several corrections and clarifications to existing legislation. The changes follow appropriate and comprehensive consultation with stakeholders. In the Developing the UK Emissions Trading Scheme (UK ETS) consultation in 2022, the UK ETS Authority considered proposals on changes to the rules for sectors covered by the UK ETS to ensure that more greenhouse gas emissions were covered by the scheme, along with changes to the cap.

The authority’s response to this consultation was published in two parts: in August 2023 and July 2023. A majority of respondents agreed with the UK ETS Authority’s proposals on creating a flexible share reserve of allowances; on bringing venting in the upstream oil and gas sector into the scope of the ETS; and on the addition of a new penalty and deficit notice. Several respondents expressed concern regarding the reduction of the cap and the changes to the industry cap.

An assessment of these responses informed the decision to set the cap at the top of the net-zero consistent range. Between 23 February 2024 and 8 March 2024, the UK ETS Authority ran a targeted consultation on the minor penalty amendments. The responses to this consultation were in broad agreement with the proposals or noted that they were not affected by them. The authority’s response to this targeted consultation has been published in advance of the laying of this statutory instrument.

In conclusion, the changes in the draft order will deliver on commitments made by the UK ETS Authority and improve the operation of the scheme. The alterations to the UK Emissions Trading Scheme will support its role as a key pillar of the UK’s climate policy. They show that we will take action to extend and improve the scheme where necessary. I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank the Minister for setting out the contents of the instrument so concisely but comprehensively. I support it but have a number of questions. Obviously, the issue of flaring would arise if the Government were to introduce a policy of fracking—hydraulic fracturing. Can the Minister confirm that the Government have a moratorium on fracking? It was a very real issue in North Yorkshire when I was still a Member of Parliament there; it caused real concern among the locals. It would be interesting to know the answer because flaring would be an issue there.

Secondly, I see that an impact assessment has not been prepared on this occasion because it is not a regulatory provision, but in fact one was done already in 2023, and before that in 2020. Can the Minister confirm that the costs in light of the change to the cap will not be deemed wildly different from the results of those impact assessments in 2020 and 2023, which I understand were different in nature in each case?

It is interesting that the Minister, the instrument and the Explanatory Memorandum refer to the amendment to include flights from Great Britain to Switzerland within the scope. Why was this excluded in the first instance? Were there no flights from that airport? Have they suddenly increased in capacity? Out of interest, which flights are included? In the normal scheme of things, would all major airports and flights to the European Union and Switzerland be included? I imagine they would be, but it would be helpful if the Minister could confirm that.

COP 29

Baroness McIntosh of Pickering Excerpts

Thursday 28th November 2024 Lords Chamber

[Lord Hunt of Kings Heath (Lab)]

My Lords, it is clearly an interesting question. The noble Lord will have seen that some of the country participants in Baku were very unhappy with parts of the process. Some felt excluded from some of the key corridor discussions, if I can put it that way. The problem is that it is the only forum that we have for discussing and negotiating these important matters. Whatever fora you have, if you have over 190 countries involved, it is going to be very complex. Notwithstanding that I understand the frustrations of many countries and the difficulties, the fact that agreement was reached and we can now see clear a line to Brazil next year means that we need to continue to work with the process and encourage it to be run as effectively as possible. I do not see any option but to go with the COP process.

[Baroness McIntosh of Pickering (Con)]

The noble Earl, Lord Russell, raised the warm homes discount. I am the honorary president of National Energy Action. I see that the discount rate is still £150. Given the current level of electricity bills, this seems quite low and not to have been reviewed for some time. Will the Minister review this and look at the level of the warm homes discount?

[Lord Hunt of Kings Heath (Lab)]

My Lords, I have to say to the noble Baroness that at the moment we do not have any plans to review it.

Great British Energy Bill

Baroness McIntosh of Pickering Excerpts

2nd reading
Monday 18th November 2024 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I declare my interests, especially as honorary president of National Energy Action. I congratulate the noble Baroness, Lady Beckett, and the noble Lord, Lord Mackinlay, on their excellent maiden speeches. They are both remarkable role models in their own right. I also congratulate the Minister, who has sat through all the speeches today and displayed his staying power and great interest in this subject. I wish him well through the passage of the Bill.

The country is facing twin challenges of energy and food security. They are both extremely serious and should be tackled together. Specifically, I agree with all those who have said that the remit of the Bill is extremely broad—too broad. I hope we can clarify that through its passage, as one of my concerns is that this is a potentially massive land grab.

I would like to explore how relationships with those affected by the decisions will be handled. There is talk of consultations, but there must be more joined-up decisions between the Government, investors, local authorities, local communities and consumers. Take the position of offshore wind farms: consent for the wind farm is currently given separately from consent for the substation needed to land the energy onshore, then separate planning permission is sought for the overhead power lines. These pylons to transfer electricity long distances, losing up to 10% of the energy in transmission, are deeply unpopular among those in rural communities, who have to live with them but recognise that they have absolutely no benefit to those living there. Can the Minister explain and define the engagement process with interested parties—for example, farmers, fishermen, residents, consumers and industry? What form will that consultation take?

The Bill seems to give a blanket power to the Secretary of State to decide. There is very little parliamentary oversight, merely reports to Parliament. In Clause 5:

“The Secretary of State must prepare a statement of strategic priorities for Great British Energy”.


He

“may revise or replace the statement”,

but need only

“lay a copy of the statement, and of any revised … statement, before Parliament”.

We need to amend that to have greater parliamentary oversight over the Secretary of State’s powers, so that they are not completely untrammelled.

There needs to be formal consultation with the interested parties before decisions are made. Take the example of the spatial squeeze; it has raised very real concerns among fishermen about how their fishing grounds risk being squeezed out by offshore wind. I wonder whether the Minister has already had the opportunity to meet with farmers, and particularly with fishermen, to address their concern about this spatial squeeze. What form does the Minister expect the relationship with these interested parties to take—not just with farmers and fishermen but with intensive energy users, such as brickmakers, those in ceramics and others in the manufacturing sector? What form of consultation will there be?

The Minister referred briefly to finance and talked about some finance coming from the national wealth fund. He will be aware that the Association of British Insurers has been closely engaging with the Treasury on the development of this fund, and I was very pleased to receive a briefing from it. The ABI hopes that the national wealth fund’s success will be in

“unlocking investment, delivering economic growth and creating new green high skilled jobs”,

but it has identified current barriers that could prevent this happening. They include the need for

“a national transition plan … sector specific investment roadmaps, especially for the five priority sectors identified by government”.

I will name them:

“green steel, green hydrogen, industrial decarbonisation, gigafactories, and ports”.

It also identifies the need for

“greater engagement between investors and local authorities to develop investable propositions”.

To ensure the success of Great British Energy and the funding from the national wealth fund, how does the Minister expect the current barriers identified by the ABI to be addressed?

I turn to sustainable sources of energy. We had a little debate on Drax at Oral Questions last week. It raised the question of why we are importing woodchip from abroad when we could use more sustainable, locally produced willow coppice and miscanthus, easily meeting the Government’s own sustainability criteria. Equally, we should use offshore and onshore wind energy locally, close to where it was produced. That would reduce the need for pylons; as I fear the Minister will find out, rural dwellers do not accept them criss-crossing the countryside, bringing no benefit to them locally.

The Minister did not mention energy from waste. Together with renewable energy, this is a very powerful strand of energy source in Denmark, Sweden, Austria, Germany and other European countries. It disposes of household waste and creates energy. What is the Government’s position on this?

Environmental levies of £2 billion are added to energy bills, primarily in the standing charge to every household and business, which goes towards future infrastructure. I ask the Minister to name any other utility or public service whose future infrastructure is paid for up front by the consumer.

Offshore-generated wind coming on shore at massive power stations poses problems, particularly when transported long distances to the national grid. We are soon to see offshore floating turbines to replace fixed turbines at sea. I urge the Minister to address these problems and to meet with the fishing fleet to avoid dangers not just of their grounds being squeezed but to marine life, porpoises and dolphins from the constant buzz of turbines. What happens to wind turbines and electric vehicle batteries at the end of their working lives? How will they be disposed of? These two issues alone, among others, create real environmental challenges.

At COP 24 the Prime Minister agreed and signed up to an 80% reduction in emissions. This will impose a heavy burden on households and businesses alike going forward, while countries that deny climate change, such as the US, China, India and Brazil, continue to pollute regardless to ensure that their industries remain competitive.

In conclusion, I simply ask how this Bill to create Great British Energy will benefit Great Britain, given the massive impact the work of the company will have on the countryside, local communities, industry and consumers.

King’s Speech

Baroness McIntosh of Pickering Excerpts

Thursday 18th July 2024 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

It is a pleasure to contribute to the humble Address, and I take the opportunity to congratulate the incoming Government and to welcome the Ministers to their new positions. I also add my congratulations to my noble friend on his maiden speech.

I declare my interests as honorary president of National Energy Action, honorary vice-president of Association of Drainage Authorities, and honorary associate of the British Veterinary Association. I co-authored a number of reports on bricks and water with the Westminster Sustainable Business Forum, and on rural housing from the Rural Economy Research Group. I would like to share these with the noble Baroness, Lady Hayman, for her greater enjoyment and education in her new role.

In exploring the impact of housebuilding and energy proposals for more onshore wind farms, I urge a degree of caution. I pay tribute to the late Professor Mike O’Carroll, who set up REVOLT—Rural England Versus Overhead Line Transmission—opposing the erection of pylons in the north of England.

As a newly elected MP for the Vale of York in 1997 —I was elected on the same day as the newly installed noble Baroness, Lady Smith of Malvern—I was faced with Labour’s plan to build a second line of pylons down the spine of the constituency, transporting electricity all the way from Middlesbrough, across North Yorkshire to the south, through the national grid to serve the south of England. This attracted public outrage.

At the very least, these power lines should be placed underground. Alternatively, electricity generated from renewables should serve those closest to the source of the power generated. That includes energy from waste, on which this Government have so far remained silent. Will the Government commit to new energy from waste plants, again to serve the local community with a sustainable source of energy, but also disposing of household waste that might otherwise go to landfill? We should aim to use energy where it is created to the benefit of the local community.

In addition, between 3% and 7% of energy is lost in overhead line transmission. It is vulnerable to extreme weather. During Storm Arwen, for example, power was lost in the north-east of England and North Yorkshire for up to nine days. Will the Government be minded to revise the National Planning Policy Framework and planning practice guidance to ensure joined-up planning applications so that planning for offshore and onshore wind farms include the siting of substations as part of the original planning application?

Labour has rightly prioritised cleaning up the rivers and waterways of sewage, but the problem of sewage in rivers and sea starts with the mass building of four and five-bedroom houses in inappropriate places, pushing four or five times the amount of sewage into inadequate water pipes. Will the Government make an early pledge to end the automatic right to connect, promised since Sir Michael Pitt’s review after the 2007 floods? Will the Government commit today to implementing Schedule 3 to the Flood and Water Management Act 2010? Equally, will they introduce mandatory sustainable drainage systems for all new housing developments? That is a single measure that would help to prevent sewage overflow into the combined sewers and, from there, into our rives and seas.

Defra must make water companies statutory consultees in the planning application process, particularly where it is impossible to connect safely to existing pipes, which are often antiquated and from the Victorian era. Planning applications must take into account that they cannot simply fit and must ensure that the developers pay for the connections.

What is the position of the Government on building on functional flood plains? Labour, in opposition, supported the amendment in my name and that of the noble Baroness, Lady Hayman of Ullock, to the then Levelling-up and Regeneration Bill to prevent building on functional flood plains. Will the Government now honour that commitment? In particular, will they provide resources to local authorities to undertake the essential mapping exercise to establish which zones fall under zone 3b so as to exclude them from major developments, which is so essential to prevent future flooding?

There are specific needs for housing in rural areas, as specified by the right reverend Prelate the Bishop of St Albans. In particular, there is a crying need for one or two-bedroom homes that are affordable. We have identified initiatives such as rural exception and making a planning passport for all exception sites, which would help to remedy this.

The Government have pledged to grow the economy through reforming the planning system, but they must never lose sight of the fact that an Englishman’s home is his castle, nor that it is local planning authorities that are best placed to take planning decisions. The British public will not take kindly to housing developments built on areas prone to flooding, nor to having unsightly overhead power lines and pylons built alongside their houses. If the energy generated was used close to the source of supply, the need for overhead line transmission would be removed.

Now, we have to eat. I applaud all our farmers do to put food on our table. I pay tribute to the Yorkshire Agricultural Society, Upper Teesdale Agricultural Support Services, of which I am a patron, RABI and FCN. These charities support farmers in the difficult times we face currently. I make a plea to the new Government to give farmers certainty to ensure that food security and self-sufficiency in production at home ensure a safe and affordable supply of food. Large rafts of land should not be lost to rewilding, solar energy production and tree planting. The role of farming in bringing environmental benefits, such as the sequestration and storage of carbon, should be recognised, celebrated and encouraged. Giving those farms currently in higher-level stewardship agreements the right to exit the old schemes early, to move to a Countryside Stewardship agreement in the next few months, would greatly assist them in this period of transition, with the rapid reduction in basic farm payments.

I urge the new Government to support our farmers in exporting their goods by creating export opportunities in Europe and further afield. I applaud the introduction by the last Government of agricultural attachés, who worked effectively to promote our food and farming exports. I would welcome the negotiation by the Government of a sanitary and phytosanitary agreement with our European neighbours, which I believe is more appropriate than the negotiation of a veterinary agreement. The incoming Government must strive to ensure that any food imported into the UK meets the same high standard of animal health, animal welfare and environment as food produced here.

Farm tenancy agreements are in urgent need of reform, and I urge the Government to tackle this as a priority. Fifty per cent of farms in the North Yorkshire and County Durham are tenanted, and these tenant farmers deserve certainty and access to funds through LMS.

Finally, will the Government take the opportunity of the debate today to ensure a vibrant future for our rural communities across Britain, with a strong and sustainable farming sector and housing which is fit and affordable for those starting out on their career, as well as for those nearer their retirement?